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HomeMy WebLinkAboutO-2382-3-05ORDINANCE NO. 2382-3-05 AN ORDINANCE authorizing the issuance of "CITY OF ALLEN, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005"; 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, a Purchase Agreement and a Special Escrow Agreement and the approval and distribution of an Official Statement; providing for the redemption of certain outstanding obligations of the City; and providing an effective date. WHEREAS, the City Council of the City of Allen, Texas (the "City") has heretofore issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal amount $32,170,000 (collectively, the "Refunded Obligations") more particularly described as follows: (1) City of Allen, Texas, General Obligation Bonds, Series 1996, dated July 1, 1996, scheduled to mature on September 1 in each of the years 2007 through 2016, and aggregating in principal amount $4,580,000; (2) City of Allen, Texas, General Obligation Bonds, Series 1998, dated April 1, 1998, scheduled to mature on September 1 in each of the years 2009 through 2018, and aggregating in principal amount $6,375,000; (3) City of Allen, Texas, General Obligation Bonds, Series 1999, dated August 1, 1999, scheduled to mature on September 1 in each of the years 2010 through 2019, and aggregating in principal amount $8,435,000; (4) City of Allen, Texas, General Obligation Bonds, Series 2000, dated May 1, 2000, scheduled to mature on September 1 in each of the years 2011 through 2020, and aggregating in principal amount $7,190,000; and (5) City of Allen, Texas, General Obligation Refunding and Improvement Bonds, Series 2001, dated May 1, 2001, being the portion of such bonds eligible to be refunded under current federal tax law scheduled to mature on September 1 in each of the years 2012 through 2021, aggregating in principal amount $5,590,000, and more particularly described as follows: 45571707.2 AND WHEREAS, pursuant to the provisions of V.T.C.A., Government Code, Chapter 1207, as amended, the City Council is authorized to issue refunding bonds and deposit the proceeds of sale directly with any place of payment for the Refunded Obligations, or other authorized depository, and such deposit, when made in accordance with said statute, and ordinances authorizing the issuance of the Refunded Obligations, shall constitute the making of firm banking and financial arrangements for their discharge and final payment; and WHEREAS, the City Council hereby finds and determines that general obligation refunding bonds should be issued at this time to refund the Refunded Obligations, and such refunding will result in the City saving approximately $1,539,532.42 in debt service payments on such indebtedness and further provide present value savings of approximately $1,057,104.65; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN, TEXAS: SECTION 1: Authorization - Designation - Principal Amount -Purpose. General obligation refunding bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $32,330,000 to be designated and bear the title "CITY OF ALLEN, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005" (hereinafter referred to as the "Bonds"), for the purpose of refunding certain outstanding obligations of the City (identified in the preamble hereof and referred to as the "Refunded Obligations) and to pay costs of issuance, 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 1207. SECTION 2: Fully Registered Obligations - Bond Date - Authorized Denomination Stated Maturities - Interest Rates. The Bonds shall be issued as fully registered obligations only, shall be dated March 1, 2005 (the "Bond Date"), shall be in denominations of $5,000 or any integral multiple (within a Stated Maturity) thereof, and shall become due and payable on August 15 in each of the years and in principal amounts (the "Stated Maturities") and bear interest at the rate(s) per annum in accordance with the following schedule: 45571707.2 Principal Amount Year of Principal Amount Eligible to be Maturity Outstanding ($) Refunded f$1 2012 1,085,000 635,000 2013 1,130,000 665,000 2014 1,190,000 700,000 2015 1,250,000 735,000 2016 720,000 425,000 2017 750,000 440,000 2018 785,000 460,000 2019 830,000 485,000 2020 865,000 510,000 2021 915,000 535,000 AND WHEREAS, pursuant to the provisions of V.T.C.A., Government Code, Chapter 1207, as amended, the City Council is authorized to issue refunding bonds and deposit the proceeds of sale directly with any place of payment for the Refunded Obligations, or other authorized depository, and such deposit, when made in accordance with said statute, and ordinances authorizing the issuance of the Refunded Obligations, shall constitute the making of firm banking and financial arrangements for their discharge and final payment; and WHEREAS, the City Council hereby finds and determines that general obligation refunding bonds should be issued at this time to refund the Refunded Obligations, and such refunding will result in the City saving approximately $1,539,532.42 in debt service payments on such indebtedness and further provide present value savings of approximately $1,057,104.65; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN, TEXAS: SECTION 1: Authorization - Designation - Principal Amount -Purpose. General obligation refunding bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $32,330,000 to be designated and bear the title "CITY OF ALLEN, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005" (hereinafter referred to as the "Bonds"), for the purpose of refunding certain outstanding obligations of the City (identified in the preamble hereof and referred to as the "Refunded Obligations) and to pay costs of issuance, 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 1207. SECTION 2: Fully Registered Obligations - Bond Date - Authorized Denomination Stated Maturities - Interest Rates. The Bonds shall be issued as fully registered obligations only, shall be dated March 1, 2005 (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: 45571707.2 Year of Principal Interest Maturity Amount Rate(s) 2005 $ 130,000 3.00% 2006 75,000 3.00% 2007 425,000 3.00% 2008 435,000 3.00% 2009 945,000 3.00% 2010 1,155,000 3.50% 2010 500,000 4.50% 2011 2,270,000 4.00% 2012 3,015,000 5.00% 2013 2,540,000 5.00% 2013 630,000 3.60% 2014 2,950,000 5.00% 2014 385,000 3.70% 2015 3,505,000 5.00% 2016 3,345,000 4.00% 2017 2,865,000 5.00% 2018 3,015,000 5.00% 2019 2,345,000 5.00% 2020 1,355,000 4.25% 2021 445,000 4.30% The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the rate(s) per annum shown above in this Section (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 August 15, 2005. SECTION 3: Terms of Payment Paving Agent/Registrar. The principal of, premium, if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter called the 'Holders') appearing on the registration and transfer books maintained by the Paying Agent/Registrar, and the payment thereof shall be in any coin or currency of the United States of 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 JPMorgan Chase Bank, National Association, Dallas, to serve as Paying AgenURegistrar 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 Agent/Registrar Agreement", substantially in the form attached hereto as Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor or Mayor Pro Tem and City Secretary are hereby authorized to execute and deliver such Agreement in connection with the delivery of the Bonds. The City covenants to 45571707.2 maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor Paying AgentlRegistrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the City agrees to prompfly 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 AgenURegistrar. Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or redemption, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in Dallas, Texas (the "Designated Payment/Transfer Office"). Interest on the Bonds shall be paid to the Holders whose name appears 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 (1) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/ Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated PaymentfTransfer 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. ' 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 Agent/ Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the dose of business on the last business day next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. The Bonds having Stated Maturities on and after August 15, 2016 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, 2015 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption Option. At least forty five (45) days prior to a redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar 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 the right to redeem Bonds shall be entered in the minutes of the governing body of the City. (c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by 45571707.3 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 Holder. All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specked, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given as hereinabove provided, such Bond (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys sufficient for the payment of such Bond (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. 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 Paying Agent/Registrar at the Designated Payment(Transfer Office for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender of any Bond (except for the single Initial Bond referenced in Section 8 hereof) for transfer at the Designated Payment/Transfer Office of the Paying AgenU Registrar, 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 single Initial Bond referenced in Section 8) may be exchanged for other Bonds of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated Payment(Transfer Office of the Paying Agent/ Registrar. Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to the Holder requesting the exchange. 45571707.2 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 the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange. All transfers or exchanges of Bonds pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. 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. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of a Holder any Bond called for redemption, in whole or in part, within 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 in Sections 3, 4 and 5 hereof relating to the payment, and transfer/exchange of the Bonds, the City hereby approves and authorizes the use of "Book Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (DTC), a limited purpose trust company organized under the laws of the State of New York, in accordance with the operational arrangements referenced in a Blanket Issuer Letter of Representations by and between the City and DTC (the "Depository Agreement"). Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants"). While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book entry clearance and settlement of securities transactions in general or the City determines that DTC is incapable of property 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 45571707.2 6 Security Register maintained by the Paying AgenURegistrar 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 such individuals or either of them shall cease to hold such offices at the time of delivery of the Bonds to the initial purchaser(s) and with respect to 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. SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond in the total principal amount noted in Section 1 with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as multiple fully registered bonds, being one bond for each stated maturity in the applicable principal amount and denomination and to be numbered consecutively from T- 1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the inifial 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 45571707.2 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, or engraved or 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. (b) Form of Definitive Bond. REGISTERED REGISTERED NO. $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF ALLEN, TEXAS GENERAL OBLIGATION REFUNDING BOND SERIES 2005 Bond Date: Interest Rate: Stated Maturity: CUSIP NO.: March 1, 2005 % August 15, 20_ Registered Owner: Principal Amount: 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 the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specked 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 Bond Date at the per annum rate 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, commencing August 15, 2005. Principal of this Bond is payable at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated Payment[Transfer Office of the Paying AgenURegistrar executing the registration certificate appearing hereon, or its successor. Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register maintained by the Paying AgenURegistrar 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. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of the series specked in its title issued in the aggregate principal amount of $32,330,000 (herein referred to as the "Bonds") for the purpose of refunding certain outstanding obligations of the City (identified in the Ordinance hereinafter referenced 45571707.2 ' and referred to as the "Refunded Obligations") and to pay costs of issuance, under and in strict conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Government Code, Chapter 1207, and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds maturing on and after August 15, 2016 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 Staled Maturity by lot by the Paying AgenURegistrar), on August 15, 2015, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to the date fixed for any redemption of Bonds, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of each Bond to be redeemed at the address shown on the Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If a Bond (or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon such redemption date such Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys for the payment of the redemption price and the interest on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar. ' In the event a portion of the principal amount of a Bond is to be redeemed and the registered owner is someone other than Cede & Co., payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to the registered owner, without charge. If a Bond is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such Bond to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Bond redeemed in part. The Bonds are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City. Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which this Bond may be discharged at or prior to its maturity, and deemed to be no longer Outstanding thereunder; and for other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. ' This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly 45571707.9 endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying AgentlRegistrar 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 redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/ Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date) will be established by the Paying AgenVRegistrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. 4e571707.2 10 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. CITY OF ALLEN, TEXAS Mayor COUNTERSIGNED: City Secretary (Seal) (c) 'Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Bond(s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER ) OF PUBLIC ACCOUNTS ) REGISTER NO. THE STATE OF TEXAS ) I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this Comptroller of Public Accounts of the State of Texas (SEAL) *NOTE TO PRINTER: Do not print on definitive bonds 45571707.2 11 (d) Form of Certificate of Paving AgentlRegistrar to aooear on Definitive Bonds only. This Bond has been duly issued and registered in the name of the Registered Owner shown above 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 AgentlRegistrar. The designated offices of the Paying Agent/Registrar in Dallas, Texas, is the Designated Payment/Transfer Office for this Bond. Registration date: (e) Form of Assignment. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, Dallas, Texas, as Paying Agent/Registrar Authorized Signature ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, ana 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 Signature guaranteed: name of the 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: 45571707.2 12 REGISTERED NO. T-1 UNITED STATES OF AMERICA STATE OF TEXAS CITY OF ALLEN, TEXAS GENERAL OBLIGATION REFUNDING BOND SERIES 2005 Bond Date: March 1, 2005 Registered Owner. REGISTERED $32,330,000 Principal Amount: THIRTY TWO MILLION THREE HUNDRED THIRTY THOUSAND 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, or the registered assigns thereof, the Principal Amount hereinabove stated on August 15 in each of the years and in principal installments in accordance with the following schedule: Year of Principal Interest Maturi Installments Rate (information to be inserted from schedule in Section 2 hereof) (or so much principal thereof as shall not have been prepaid prior to maturity) 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, commencing August 15, 2005. Principal installments of this Bond are payable in the year of maturity to the registered owner hereof by JPMorgan Chase Bank, National Association, Dallas, Texas (the "Paying Agent/Registrar"), upon presentation and surrender, at its designated offices Dallas, Texas (the "Designated Paymentrrransfer Office"). Interest is payable to the registered owner of this Bond whose name appears on the "Security Register' maintained by the Paying AgenttRegistrar 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 AgenttRegistrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent(Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Lew 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 45571707.2 13 manner, a tax on all taxable property in the City, within the limitations prescribed by law, and such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be ample and sufficient to provide funds each year to pay the principal of and interest on said Bonds while Outstanding; full 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 2005 Refunding Bond Account" (the "Interest and Sinking Fund") maintained on the records of the City and deposited in a special fund maintained at an official depository of the City's funds; and such tax hereby levied, and to be assessed and collected annually, is hereby pledged to the payment of the Bonds. Proper officers of the City are hereby authorized and directed to cause to be transferred to the Paying Agent/ Registrar for the Bonds, from funds on deposit in the Interest and Sinking Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Bonds as the same accrues or matures; such transfers of funds to be made in such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on or before each principal and interest payment date for the Bonds. PROVIDED, however, in regard to the payments to become due on the Bonds on August 15, 2005, sufficient current funds will be available and are hereby appropriated to make such payments; and proper officials of the City are hereby authorized and directed to transfer and deposit in the Interest and Sinking Fund such current funds which, together with the accrued interest received from the initial purchasers, will be sufficient to pay the payments on the Bonds on August 15, 2005. SECTION 11: Mutilated Destroyed Lost and Stolen Bonds. In case any Bond shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent! Registrar of evidence satisfactory to the Paying Agent/ Registrar of the destruction, loss or theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Ageng Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond shall be bome by the Holder of the Bond mutilated, or destroyed, lost or stolen. Every 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 exdusive 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. 65571707.2 14 SECTION 12: Satisfaction of Obligation of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) 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 fine 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 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 AgenttRegistrar 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 state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating fine 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, 45571707.2 15 and shall not be amended or repealed by the City so long as any Bond remains Outstanding except as permitted in this Section and in Section 31 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, 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, 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: (1) those Bonds cancelled by the Paying AgentlRegistrar or delivered to the Paying Agent/ Registrar for cancellation; (2) those Bonds deemed to be duty 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 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148 1(b) of the Regulations. "Gross Proceeds" means any proceeds as defined in Section 1.148 1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148 1(c) of the Regulations, of the Bonds. "Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations. "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. 455717072 16 "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 spec 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 (i) any Investment has the meaning set forth in Section 1.148-5 of the Regulations; and (ii) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Bond to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Bonds: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds (including property financed with Gross Proceeds of the Refunded Obligations), and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds (including property financed with Gross Proceeds of the Refunded Obligations), 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 45571707.2 17 make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if. (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take or pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. (f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. (g) Information Report. The City shall timely file the information required by section 149(e) of the Code with the Secretary of the Treasury on Forth 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 out of the Interest and Sinking Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount 45571707.2 18 that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148 3(h) of the Regulations. (i) Not to Divert 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, and 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. (k) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the Bonds were issued, the City reasonably expected to spend at least 85% of the spendable proceeds of such bonds within three years after such bonds were issued and (2) not more than 50% of the proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose Investments having a substantially guaranteed Yield for a period of 4 years or more. (1) Qualified Advance Refunding. The Bonds are issued to refund the Refunded Obligations, and the Bonds will be issued more than 90 days before the redemption of the Refunded Obligations. The City represents as follows: (1) The Bonds are the first advance refunding of the Refunded Obligations, within the meaning of section 149(d)(3) of the Code. (2) The Refunded Obligations are being called for redemption, and will be redeemed not later than the earliest date on which such bonds may be redeemed. 455717071 19 approved as to form and content, and such Agreement in substantially the form and substance attached hereto, together with such changes or revisions as may be necessary to accomplish the refunding or benefit the City, is hereby authorized to be executed by the Mayor or Mayor Pro Tem and City Secretary for and on behalf of the City and as the act and deed of this City Council; and such Agreement as executed by said officials shall be deemed approved by the City Council and constitute the Agreement herein approved. Furthermore, appropriate officials of the City in cooperation with the Escrow Agent are hereby authorized and directed to make the necessary arrangements for the purchase of the Escrowed Securities referenced in the Agreement and the delivery thereof to the Escrow Agent on the day of delivery of the Bonds to the Purchasers for deposit to the credit of the "SPECIAL 2005 CITY OF ALLEN, TEXAS, REFUNDING BOND ESCROW FUND" (the "Escrow Fund"); all as contemplated and provided in V.T.C.A., Government Code, Chapter 1207, as amended, this Ordinance and the Agreement. SECTION 17: 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 Purchasers. Furthermore, the Mayor, Mayor Pro Tem, City Manager, Assistant 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 Purchasers, and, together with the City's bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond(s) to the Purchasers and the initial exchange thereof for definitive Bonds. SECTION 18: Proceeds of Sale. Immediately following the delivery of the Bonds, proceeds of sale in the sum of (i) $33,690,664.10 shall be deposited to the credit of the Escrow Fund and (it) the $139,137.68 shall be deposited to the credit of the Interest and Sinking Fund. The balance of the proceeds of sale of the Bonds shall be expended to pay costs of issuance and municipal bond insurance premium and any excess amount budgeted for such purpose shall be deposited to the credit of the Interest and Sinking Fund. Additionally, on or immediately prior to the date of the delivery of the Bonds to the Purchasers, the Finance Director shall cause to be transferred in immediately available funds to the Escrow Agent from moneys on deposit in the interest and sinking funds maintained for the payment of the Refunded Obligations the sum of $154,813.69 to accomplish the refunding. SECTION 19: Redemption of Refunded Obligations. (a) The bonds of that series known as "City of Allen, Texas, General Obligation Bonds, Series 1996", dated July 1, 1996, maturing in the years 2007 through 2016, and aggregating in principal amount $4,580,000, shall be redeemed and the same are hereby called for redemption on September 1, 2006, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby 45571707.2 21 (3) The initial temporary period under section 148(c) of the Code will end: (i) with respect to the proceeds of the Bonds not later than 30 days after the date of issue of such Bonds; and (ii) with respect to proceeds of the Refunded Obligations on the Closing Date if not ended prior thereto. (4) On and after the date of issue of the Bonds, no proceeds of the Refunded Obligations will be invested in Nonpurpose Investments having a Yield in excess of the Yield on such Refunded Obligations. (5) The Bonds are being issued for the purposes stated in the preamble of this Ordinance. There is a present value savings associated with the refunding. In the issuance of the Bonds the City has neither: (i) overburdened the tax exempt bond market by issuing more bonds, issuing bonds earlier or allowing bonds to remain outstanding longer than reasonably necessary to accomplish the govemmental purposes for which the Bonds were issued; (ii) employed on "abusive arbitrage device" within the meaning of Section 1.148-10(a) of the Regulations; nor (iii) employed a "device" to obtain a material financial advantage based on arbitrage, within the meaning of section 149(d)(4) of the Code, apart from savings attributable to lower interest rates and reduced debt service payments in early years. SECTION 15: Sale of Bonds — Official Statement Approval. The Bonds authorized by this Ordinance are hereby sold by the City to A. G. Edwards & Sons, Inc., First Southwest Company, and Southwest Securities Inc. (herein referred to as the "Purchasers") in accordance with the Purchase Agreement, dated March 8, 2005, attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor or Mayor Pro Tem and City Secretary are hereby authorized and directed to execute said Purchase Agreement for and on behalf of the City and as the act and deed of this Council, and in regard to the approval and execution of the Purchase Agreement, the Council hereby finds, determines and declares that the representations, warranties and agreements of the City contained in the 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 February 28, 2005, by the Purchasers in connection with the public offering and sale of the Bonds is hereby ratified, confirmed and approved in all respects. The final Official Statement, which reflects the terms of sale (together with such changes approved by the Mayor, City Manager, Finance Director, Assistant Finance Director, or City Secretary, one or more of said officials), shall be and is hereby in all respects approved and the Purchasers are hereby authorized to use and distribute said final Official Statement, dated March 8, 2005, in the reoffering, sale and delivery of the Bonds to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Official Statement in final form as may be required by the Purchasers, and such 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 Purchasers. SECTION 16: Special Escrow Agreement Approval and Execution. The "Special Escrow Agreement" (the "Agreement") by and between the City and JPMorgan Chase Bank, National Association, Dallas, Texas (the "Escrow Agent"), attached hereto as Exhibit C and incorporated herein by reference as a part of this Ordinance for all purposes, is hereby 45571707.2 20 authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agentiregistrar to Texas Commerce Bank, National Association), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit D and incorporated herein by reference as a part of this Ordinance for all purposes. (b) The bonds of that series known as "City of Allen, Texas, General Obligation Bonds, Series 1998", dated April 1, 1998, maturing in the years 2009 through 2018, and aggregating in principal amount $6,375,000, shall be redeemed and the same are hereby called for redemption on September 1, 2008, at the price of par plus accrued interest to such date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Chase Bank of Texas, National Association), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit E and incorporated herein by reference as a part of this Ordinance for all purposes. (c) The bonds of that series known as "City of Allen, Texas, General Obligation Bonds, Series 1999", dated August 1, 1999, maturing in the years 2010 through 2019, and aggregating in principal amount $8,435,000, shall be redeemed and the same are hereby called for redemption on September 1, 2009, at the price of par plus accrued interest to such date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Chase Bank of Texas, National Association), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit F and incorporated herein by reference as a part of this Ordinance for all purposes. (d) The bonds of that series known as "City of Allen, Texas, General Obligation Bonds, Series 2000", dated May 1, 2000, maturing in the years 2011 through 2020, and aggregating in principal amount $7,190,000, shall be redeemed and the same are hereby called for redemption on September 1, 2010, at the price of par plus accrued interest to such date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Chase Bank of Texas, National Association), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit G and incorporated herein by reference as a part of this Ordinance for all purposes. (e) A portion of the bonds of that series known as "City of Allen, Texas, General Obligation Refunding and Improvement Bonds, Series 2001", dated May 1, 2001, maturing in the years 2012 through 2021, and aggregating in principal amount $5,590,000, shall be redeemed and the same are hereby called for redemption on September 1, 2011, at the price of par plus accrued interest to such date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested forth of notice of redemption to be sent to bondholders, with JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to The Chase Manhattan Bank), in accordance 455717072 22 with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit H and incorporated herein by reference as a part of this Ordinance for all purposes. Additionally, in accordance with the terms of the ordinance authorizing the issuance of such bonds, the Paying Agent/Registrar is hereby authorized and directed to make a lot selection of the bonds of each maturity to be redeemed in part and make arrangements to notify bondholders of such lot selection as soon as possible. The redemption of the obligations described above being associated with the refunding of such obligations, the approval, authorization and arrangements herein given and provided for the redemption of such obligations on the redemption dates designated therefor and in the manner provided shall be irrevocable upon the issuance and delivery of the Bonds; and the City Secretary is hereby authorized and directed to make all arrangements necessary to notify the holders of such obligations of the City's decision to redeem such obligations on the date and in the manner herein provided and in accordance with the ordinances authorizing the issuance of the obligations and this Ordinance. SECTION 20: Notices to Holders Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. 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 21: 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 AgenURegistrar 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 AgenURegistrar. All cancelled Bonds held by the Paying Agent/Registrar shall be returned to the City. SECTION 22: Legal Opinion. The obligation of the Purchasers to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. A true and correct reproduction of said opinion or an executed counterpart thereof is hereby authorized to be either printed on definitive printed obligations or deposited with DTC along with the global bonds for the implementation and use of the Book -Entry -Only System used in the settlement and transfer of the Bonds. SECTION 23: CUSIP Numbers. CUSIP numbers may be printed or typed on the Bonds deposited with The Depository Trust Company or on printed definitive Bonds. It is expressly 45571707.2 23 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 24: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent(Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, and this Ordinance and all its provisions is intended to be and shall be for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 25: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 26: 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 27: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 28: Construction of Terns. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 29: 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 30: 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 31: Continuing Disclosure Undertaking. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: WSW 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. 45571707.2 24 "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, 2005) 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 I hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit I 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. 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. (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 difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of holders of the Bonds; 8. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; and 11. Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such Section. (d) Limitations. Disclaimers. and Amendments. The City shall be obligated to observe and perform the covenants specked in this Section while, but only while, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except 45571707.2. 25 that the City in any event will give the notice required by subsection (c) hereof of any Bond calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Bands, 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. Notwithstanding anything to the contrary in this Ordinance, the provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a Person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Holders and beneficial owners of the Bonds. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only N 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 filed with each NRMSIR and SID pursuant to 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. 45571707.2 26 SECTION 32: Insurance. The Bonds have been offered and sold with the principal of and interest thereon being insured by Ambac Assurance Corporation (hereinafter called "Ambac") pursuant to a Financial Guaranty Insurance Policy (the "Policy"). In accordance with the terms and conditions applicable to insurance provided by Ambac, the City covenants and agrees that, in the event the principal and interest due on the Bonds shall be paid by Ambac pursuant to the Policy, the Bonds shall remain Outstanding for all purposes, the assignment and pledge of all funds and all covenants, agreements and other obligations of the City to the Holders shall continue to exist and Ambac shall be subrogated to the rights of such Holders; and furthermore, the City covenants and agrees that: (a) Consent of Ambac in addition to Holder Consent. Ambac's consent shall be required in addition to Holder consent, when required, for the following purposes (i) execution and delivery of any amendment, change or modification of this Ordinance and (ii) initiation or approval of any action not described in (i) which requires Holder consent. Ambac reserves the right to charge the City a fee for any consent or amendment to the Ordinance so long as the Policy is in effect. (b) Defeasance. In the event that the principal and redemption price, if applicable, and interest due on the Bonds shall be paid by Ambac pursuant to the policy referred to in this Section, all covenants, agreements and other obligations of the City to the Holders shall continue to exist and Ambac shall be subrogated to the rights of such Holders. (c) Notices to be Given to Ambac. While the Policy is in effect, the City shall furnish to Ambac: (1) uponrequest of Ambac, a copy of any financial statement of the City and a copy of any audit and annual report of the City; (2) a copy of any notice to be given to the registered owners of the Bonds, including, without limitation, notice of any redemption or defeasance of Bonds, and any certificate rendered pursuant to this Ordinance relating to the security for the Bonds; and (3) such additional information as it may reasonably request. The City will permit Ambac to discuss the affairs, finances and accounts of the City, or any information Ambac may reasonably request regarding the security for the Bonds with appropriate officers of the City. The City will permit Ambac to have access to and make copies of all books and records relating to the Bonds at any reasonable time. Notwithstanding any other provision of this Ordinance, the Paying Agent/Registrar shall immediately notify the General Counsel Office of Ambac if at any time there are insufficient moneys to make payments of principal and/or interest as required and immediately upon the occurrence of any event of default hereunder. The Paying Agent/Registrar shall also notify the General Counsel Office of Ambac is any failure of the City to provide relevant notices, certificates, etc. (d) Consent of Ambac. Any provision of this Ordinance expressly recognizing or granting rights in or to Ambac may not be amended in any manner which affects the rights of Ambac hereunder without the prior written consent of Ambac. Furthermore, anything in this Ordinance to the contrary notwithstanding, upon the occurrence and continuance of an event of 45571707.2 27 default, Ambac shall be entitled to control and direct the enforcement of all rights and remedies granted to the Holders of the Bonds for the benefit of such Holders. Any reorganization or liquidation plan with respect to the City must be acceptable to Ambac. In the event of any reorganization or liquidation, Ambac shall have the right to vote on behalf of all Holders who hold Ambac-insured Bonds absent a default by Ambac under the applicable Policy insuring the Bonds. (e) Concerning the Bond Insurance Policy. As long as insurance for the Bonds shall be in full force and effect, the City agrees to comply with the following provisions: (1) if one (1) business day prior to an interest payment date for the Bonds the City determines that there will be insufficient funds in the Interest and Sinking Fund to pay the principal of or interest on the Bonds on such interest payment date, the City shall so notify Ambac. Such notice shall specify the amount of the anticipated deficiency, the Bonds to which such deficiency is applicable and whether such Bonds will be deficient as to principal or interest, or both. (2) the City shall, after giving notice to Ambac as provided in (1) above, make available to Ambac and at Ambac's direction, The Bank of New York, as insurance trustee for Ambac, or any successor insurance trustee (the "Insurance Trustee"), the registration books of the City maintained by the Paying Agent/Registrar, and all records relating to the funds and accounts maintained under this Ordinance. (3) the City shall cause the Paying Agent/Registrar to provide Ambac and the Insurance Trustee with a list of registered owners of Bonds entitled to receive principal or interest payments from Ambac under the terms of the Policy, and shall cause the Paying Agent/Registrar to make arrangements with the Insurance Trustee (1) to mail checks or drafts to the registered owners of Bonds entitled to receive full or partial interest payments from Ambac, and (ii) to pay principal upon Bonds surrendered to Insurance Trustee by the registered owners of Bonds entitled to receive full or partial principal payments from Ambac. (4) the Paying Agent(Registrar shall, at the time it provides notice to Ambac pursuant to (1) above, notify the registered owners of Bonds entitled to receive the payment of principal or interest thereon from Ambac (i) as to the fact of such entitlement, (ii) that Ambac will remit to them all or a part of the interest payments next coming due upon proof of Holder entitlement to interest payments and delivery to the Insurance Trustee, in form satisfactory to the Insurance Trustee, of an appropriate assignment of the registered owner's right to payment, (iii) that should they be entitled to receive full payment of principal from Ambac they must tender their Bonds (along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee to permit ownership of such Bonds to be registered in the name of Ambac) for payment to the Insurance Trustee, and not the Paying Agent/Registrar, and (iv) that should they be entitled to receive partial payment of principal from Ambac they must tender their Bonds for payment thereon first to the Paying Agent/Registrar, who shall note on such Bonds the portion of the principal paid by the Paying Agent/Registrar, and then, along with an appropriate instrument of assignment in form satisfactory to the 45571707.2 28 Insurance Trustee, to the Insurance Trustee, which will then pay the unpaid portion of principal. (5) In the event the Paying AgentlRegistrar has notice that any payment of principal of or interest on a Bond which has become Due for Payment and which is made to a Holder by or on behalf of the City has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Paying AgentlRegistrar shall, at the time Ambac is notified pursuant to (1) above, notify all registered owners that in the event that any registered owner's payment is so recovered, such registered owner will be entitled to payment from Ambac to the extent of such recovery if sufficient funds are not otherwise available, and the Paying AgentlRegistrar shall furnish to Ambac its records evidencing the payments of principal of and interest on the Bonds which have been made by the Paying AgentlRegistrar and subsequently recovered from registered owners and the dates on which such payments were made. Ambac shall, to the extent it makes a payment of principal of or interest on Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Policy, and to evidence such subrogation (1) in the rase of subrogation as to claims for past due interest, the City shall cause the Paying Agent/Registrar to note Ambac's rights as subrogee on the registration books of the City maintained by the Paying AgentlRegistrar upon receipt from Ambac of proof of the payment of interest thereon to the registered owners of the Bonds, and (ii) in the case of subrogation as to claims for past due principal, the City shall cause the Paying Agent/Registrar to note Ambac s rights as subrogee on the registration books of the City maintained by the Paying Agent/ Registrar upon surrender of the Bonds by the registered owners thereof together with proof of the payment of principal thereof. (f) Ambac as Third Party Beneficiary. To the extent that this Ordinance confers upon or gives or grants to Ambac any right, remedy or claim under or by reason of this Ordinance, Ambac is hereby explicitly recognized as being a third -party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder. SECTION 33: Public Meeting. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. SECTION 34: Effective Date. This Ordinance shall take effect and be in full force from and after its adoption on the date shown below in accordance with V.T.C.A., Government Code, Section 1201.028. [remainder of page left blank intentionally] 65671707.2 29 PASSED AND ADOPTED, this March 8, 2005. CITY OF ALLEN, TEXAS ATTEST: Ci Secretary (City Sea[) 45571707s S-1 PAYING AGENT/REGISTRAR AGREEMENT THIS AGREEMENT entered into as of March 8, 2005 (this "Agreement"), by and between the City of Allen, Texas (the 'Issuer"), and JPMorgan Chase Bank, National Association, a banking corporation 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 Refunding Bonds, Series 2005" (the "Securities"), dated March 1, 2005, such Securities scheduled to be delivered to the initial purchasers thereof on or about April 5, 2005; and WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest on said Securities and with respect to the registration, transfer and exchange thereof by the registered owners thereof; and WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities; NOW, THEREFORE, it is mutually agreed as 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, 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 Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Annex A attached hereto for the first year of this Agreement and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying AgenURegistrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the dose of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. 45571740.1 Exhibit A In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its agents and counsel). ARTICLE TWO DEFINITIONS Section 2.01 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "Bank Office" means the designated office of the Bank in Dallas, Texas at the address shown in Section 3.01 hereof. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Bond Resolution" means the resolution, order, or ordinance of the governing body of the Issuer pursuant to which the Securities 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 30th. "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, City Secretary, City Manager, Assistant City Manager, Finance Director, or Assistant Finance Director, 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 Resolution). 45571740.1 2 Exhibit A "Redemption Date" when used with respect to any Security to be redeemed means the date fixed for such redemption pursuant to the terms of the Bond Resolution. "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, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfers of Securities. "Stated Maturity" means the date specified in the Bond Resolution the principal of a Security is scheduled to be due and payable. Section 2.02 Other Definitions. The terms "Bank; "Issuer," 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 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, 9r" Floor, Dallas, Texas 75201, Attention: Operations. 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 paying agent account provided in Section 5.05 hereof, sent by United States mail, first class, postage prepaid, to the address appearing on the Security Register or (2) by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and expense. Section 3.02 Payment Dates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities at the dates specified in the Bond Resolution. 45571740.1 3 Exhibit A 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 Bank may prescribe. All transfers, exchanges and replacement of Securities shall be noted in the Security Register. Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing. The Bank may request any supporting documentation it feels necessary to effect a re -registration, transfer or exchange of the Securities. To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4.02 Certificates. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeeping pending their use and reasonable care will be exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than the care maintained by the Bank for debt securities of other governments or corporations for which it serves as registrar, or that is maintained for its own securities. Section 4.03 Form of Security Register. The Bank, as Registrar, will maintain the Security Register relating to the registration, payment, transfer and exchange of the Securities in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Security Register in any form other than those which the Bank has currently available and currently utilizes at the time. The Security Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04 List of Security Holders. The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the Security 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 forth. 45571740.1 4 Exhibit A The Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the Security Register. Section 4.05 Return of Cancelled Certificates. The Bank will, at such reasonable intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for which other Securities have been issued, or which have been paid. Section 4.06 Mutilated, Destroyed. Lost or Stolen Securities. The Issuer hereby instructs the Bank, subject to the provisions of the Bond Resolution, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the same does not result in an overissuance. In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may execute and deliver a replacement Security of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (it) 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, or destroyed, lost or stolen. Section 4.07 Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06. ARTICLE FIVE THE BANK Section 5.01 Duties of Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02 Reliance on Documents. Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or 45571740.1 5 Exhibit A 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 Securtties 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 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 directly or by or through agents or attorneys of the Bank. Section 5.03 Recitals of Issuer. The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. Section 5.04 May Hold Securities. The Bank, in its individual or any other rapacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05 Moneys Held by Bank - Paving Agent Account/Collateralization. Money deposited by the Issuer with the Bank of the principal (or Redemption Price, if applicable) of or interest on any Securities shall be segregated from other funds of the Bank and the Issuer and shall be held in trust for the benefit of the Holders of such Securities. All money deposited with the Bank hereunder shall be secured in the manner and to the fullest extent required by law for the security of funds of the Issuer. Amounts held by the Bank which represent principal of and interest on the Securities remaining unclaimed by the owner after the expiration of three years from the date such amounts have become due and payable shall be reported and disposed of by the Bank in accordance with the provisions of Texas law including, to the extent applicable, Title 6 of the Texas Property Code, as amended. The Bank shall have no liability by virtue of actions taken in compliance with this provision. The Bank is not obligated to pay interest on any money received by it hereunder. 45571740.1 6 Exhibit A This Agreement relates solely to money deposited for the purposes described herein, and the parties agree that the Bank may serve as depository for other funds of the Issuer, act as trustee under indentures authorizing other bond transactions of the Issuer, or act in any other capacity not in conflict with its duties hereunder. Section 5.06 Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred without negligence or bad faith on its part, arising out of or in connection with its acceptance or administration of its duties hereunder, including the cost and expense against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07 Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the State and County where the administrative offices of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction in the State of Texas to determine the rights of any Person claiming any interest herein. Section 5.08 DT 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. 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 page 9. Section 6.04 Effect of Headings. The Article and Section headings herein are for convenience 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. 45571740.1 7 Exhibit A 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 or equitable right, remedy, or claim hereunder. Section 6.08 Entire Agreement. This Agreement and the Bond Resolution constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar and If any conflict exists between this Agreement and the Bond Resolution, the Bond Resolution shall govern. Section 6.09 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10 Termination. This Agreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice given to the Holders of the Securities of the appointment of a successor Paying Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver the Security Register (or a copy thereof), together with other pertinent books and records relating to the Securities, to the successor Paying AgenURegistrar 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. 45571740.1 8 Exhibit A IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. [SEAL] Attest: Title: (CITY SEAL) Attest: City Secretary JPMORGAN CHASE BANK, NATIONAL ASSOCIATION BY: Title: Address: 2001 Bryan Street, a Floor Dallas, Texas 75201 CITY OF ALLEN, TEXAS BY: Mayor Address: One Allen Civic Plaza Allen, Texas 75013 45571740.1 9 Exhibit A $32,330,000 CITY OF ALLEN, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005 PURCHASE AGREEMENT March 8, 2005 The Honorable Mayor and City Council City of Allen, Texas One Allen Civic Plaza Allen, Texas 75013 Dear Mayor and Members of the City Council: The undersigned (hereinafter sometimes called the "Representative"), acting on behalf of itself and on behalf of the other underwriters named in the list attached as Schedule I hereto (the Representative and such other underwriters being collectively called the "Underwriters"), offers to enter into the following agreement with the City of Allen, Texas (hereinafter called the `Issuer"), which, upon the Issuer's written acceptance of this offer, will be binding upon the Issuer and upon the Underwriters. This offer is made subject to the Issuer's written acceptance hereof on or before 10:00 p.m., Dallas, Texas time on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriters upon notice delivered to the Issuer at any time prior to the acceptance hereof by the Issuer. 1. Purchase and Sale of the Bonds. Subject to the terns and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriters hereby agree to purchase 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 General Obligation Refunding Bonds, Series 2005 (the `Bonds'). The principal amounts of the Bonds to be issued, the dated date therefor, the maturities and optional redemption provisions and interest rates per annum shall be as set forth in Schedule II attached hereto. The Bonds shall be as described in, and secured under and pursuant to the provisions of the ordinance adopted by the Issuer's City Council on March 8, 2005 (the "Ordinance"). The purchase price for the Bonds shall be $33,897,354.40 (representing the par amount of the Bonds of $32,330,000, plus a net reoffering premium of $1,763,597.50 and less the underwriters' discount on the Bonds of $196,243.10), plus interest accrued on the Bonds from the dated date of the Bonds to the Closing Date (as hereinafter defined). Delivered to the Issuer herewith is a corporate check of the Representative payable to the order of the Issuer in the amount of $304,600.00. The Issuer agrees to hold such check uncashed until the Closing (as hereinafter defined) to ensure the performance by the Underwriters of their EDw4W71W7 DWW 935292 2.DOC Exhibit B obligations to purchase, accept delivery of and pay for the Bonds at the Closing. Concurrently with the payment by the Underwriters of the purchase price of the Bonds, the Issuer shall return such check to the Representative as provided in Paragraph 6 hereof. 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 Purchase Agreement (unless waived by the Underwriters), or should such obligations of the Underwriters be terminated for any reason permitted by this Purchase Agreement, such check shall immediately be returned to the Representative. In the event the Underwriters fail (other than for a reason permitted hereunder) to purchase, accept delivery of and pay for the Bonds at the Closing as herein provided, such check shall be retained by the Issuer as full liquidated damages for such failure of the Underwriters and for any defaults hereunder on the part of the Underwriters. The Underwriters hereby agree not to stop or cause payment on said check to be stopped unless the Issuer has breached any of the terms of this Purchase Agreement. Inasmuch as this purchase and sale represents a negotiated transaction, the Issuer understands, and hereby confirms, that the Underwriters are not acting as a fiduciary of the Issuer, but rather are acting solely in their individual capacities as Underwriters for their own account. 2. The Bonds and the Official Statement, End of the Underwriting Period. (a) The Bonds shall be as described in, and shall be issued and secured under and pursuant to the provisions of the Bond Ordinance. (b) The Preliminary Official Statement of the Issuer, dated March 1, 2005, including the cover page and Appendices thereto, relating to the Bonds (the "Preliminary Official Statement'), as amended to conform to the terms of this Purchase Agreement and with such changes and amendments to the date hereof as have been mutually agreed to by the Issuer and the Underwriters, as indicated on Exhibit A attached hereto, is hereinafter called the "Official Statement." (c) The Issuer hereby represents and warrants that the Preliminary Official Statement previously delivered to the Underwriters was deemed final by the Issuer as of its date, except for the omission of such information which is dependent upon the final pricing of the Bonds for completion, all as permitted to be excluded by Rule 15c2-12 under the Securities Exchange Act of 1934 ("Rule 15c2-12"). (d) The Issuer has duly authorized, approved and executed the Official Statement, which is final for purposes of Rule 15c2-12. (e) Unless otherwise notified in writing by the Representative by the Closing Date, the Issuer can assume that the "end of the underwriting period' for purposes of Rule 15c2-12 shall be the Closing Date. In the event such notice is so given in writing by the Representative, the Representative agrees to notify the Issuer in writing following the occurrence of the "end of the underwriting period' as defined in Rule 15c2-12. The "end of the underwriting period' as used in this Purchase Agreement shall mean the Closing Date or such later date as to which notice is given by the Representative in accordance with the preceding sentence. EDW40011007 Dallas93 M3 2.DOC -2- Exhibit B 3. Sale to Underwriters. It shall be a condition to the Issuer's obligations to sell and deliver the Bonds to the Underwriters and to the Underwriters' obligation to purchase, to accept delivery of and to pay for the Bonds that the entire principal amount of the Bonds authorized by the Ordinance shall be issued, sold and delivered by the Issuer and purchased, accepted and paid for by the Underwriters at the Closing. The Underwriters agree to offer the Bonds at prices not in excess of the initial offering prices or yields set forth on the inside cover page of the Official Statement, plus interest accrued thereon from the date of the Bonds, and further represent that at least ten percent (100/6) of the principal amount or maturity of the Bonds of each maturity shall be sold to the "public" (exclusive of dealers, brokers, investment bankers, etc.) at the offering price set forth on the inside cover page of the Official Statement. 4. Use of Documents; Certain Covenants and Agreements of the Issuer. (a) The Issuer hereby authorizes the use by the Underwriters of the Bond Ordinance and the Official Statement, including any supplements or amendments thereto, and the information therein contained in connection with the public offering and sale of the Bonds. The Issuer ratifies and confirms the use by the Underwriters prior to the date hereof of the Preliminary Official Statement in connection with the public offering of the Bonds. (b) The Issuer covenants and agrees (i) To cause reasonable quantities of the Official Statement, as requested by the Underwriters, to be delivered to the Underwriters, without charge, within seven business days of the date hereof. (ii) To provide such information as necessary for the Underwriters to comply with the filing requirements of Rule G-36 of the Municipal Securities Rulemaking Board. (iii) To apply the proceeds from the sale of the Bonds as provided in and subject to all of the terns and provisions of the Bond Ordinance. (iv) If, after the date of this Purchase Agreement to and including the date the Underwriters are no longer required pursuant to Rule 15c2-12 to provide the Official Statement to potential customers requesting an Official Statement (such date being the earlier of (A) 90 days from the end of the underwriting period and (B) the time when the Official Statement is available to any person from a nationally recognized municipal securities repository, but in no case less than 25 days after the end of the underwriting period), any event shall occur as a result of which it is necessary to amend or supplement the Official Statement in order to make the statements therein, in the light of the circumstances when the Official Statement is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Official Statement to comply with law, to notify the Representative (and for the purposes of this clause (iv) to provide the Underwriters with such information as they may from time to time request), and to cooperate with the Representative in the preparation of either amendments or supplements to the Official Statement so that the statements in the Official Statement as so amended and supplemented will not, in light of the circumstances when the Official Statement is delivered to a purchaser, be misleading or so that the Official Statement will comply with law. EDW40a/raa7 D&11.935292 2 -DOC -3- Exhibit B (v) To advise the Underwriters immediately of receipt by the Issuer of any 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. 5. Representations and Warranties of the Issuer. The Issuer hereby represents and warrants to the Underwriters as of the date hereof and as of the Closing Date, which representations and warranties shall survive the purchase and offering of the Bonds as follows: (a) The Issuer is a duly organized municipal corporation and a political subdivision duly created and validly existing under the Constitution and the laws of the State of Texas and has full legal right, power and authority pursuant to the Constitution and laws of the State of Texas, including particularly Chapter 1207, Texas Government Code, as amended (the "Act"), and at the date of the Closing will have, full legal right, power and authority to (i) enter into this Purchase Agreement, and the escrow agreement between the Issuer and JPMorgan Chase Bank, Dallas, Texas (the "Escrow Agreement"), (ii) adopt the Bond Ordinance, (iii) sell, issue and deliver the Bonds to the Underwriters as provided herein, (iv) secure the payment of the Bonds as provided in the Bond Ordinance, and (v) carry out and consummate the transactions contemplated by this Purchase Agreement, the Escrow Agreement, the Bond Ordinance and 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 Bond Ordinance 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 adopted the Bond Ordinance, has duly authorized and approved the execution and delivery of, and the performance by the Issuer of the obligations on its part contained in the Bonds, the Bond Ordinance, this Purchase Agreement, the Escrow Agreement and the consummation by it of all other transactions contemplated by the Official Statement, the Bond Ordinance and this Purchase Agreement; the Bond Ordinance, the Escrow Agreement and this Purchase Agreement each constitute legal, valid and binding obligations of the Issuer, enforceable 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, authenticated and delivered to the Underwriters in accordance with the Bond Ordinance and this Purchase Agreement, will be payable from an ad valorem tax levied, within the limits prescribed by law, against all taxable property within the Issuer, will be entitled to the benefits of the Bond Ordinance and will be enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights. (c) The Issuer is not in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of Texas or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, note, ordinance, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer or any of its property or assets are otherwise subject, and no event has occurred and is continuing which constitutes or with the passage of time or the giving of notice, or both, would constitute a default or event of default by the Issuer under any such instrument except as are not material to a decision to invest in the Bonds or as may be disclosed in the Official Statement; and the EDW40Q/71W7 Daaas 935292_2.DDC Exhibit B execution and delivery of the Bonds, the Escrow Agreement and this Purchase Agreement, adoption of the Bond Ordinance and compliance on the Issuer's part with the provisions contained therein, will not conflict with or constitute a breach of or default under any constitutional provision, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, ordinance, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer or any of its property or assets are otherwise subject, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Issuer under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Bond Ordinance. (d) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction over the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would have a material adverse effect on the due performance by the Issuer of its obligations under, this Purchase Agreement, the Bond. Ordinance, the Escrow Agreement and the Bonds have been duly obtained, except for the approval of the Bonds by the Attorney General of the State of Texas (and the registration of the Bonds by the Comptroller of Public Accounts of the State of Texas). (e) To the best knowledge and belief of the Issuer, the Official Statement contains information, including financial information or operating data, concerning every entity, enterprise, fund, account, or person that is material to an evaluation of the offering of the Bonds. Except to the extent described in the Official Statement, the Issuer has complied in all material respects with all continuing disclosure agreements made by it in accordance with Rule 15c2-12. (f) The Bonds conform to the description thereof contained in the Official Statement under the caption "THE BONDS" (except under the subcaption "Book -Entry -Only System") and the proceeds of the Bonds will be applied generally as described in the Official Statement. (g) There is no legislation, 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 after due inquiry, threatened against the Issuer, affecting the corporate existence of the Issuer or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the levy, collection or application of the ad valorem taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Bond Ordinance, the Escrow Agreement or this Purchase Agreement, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, or contesting the powers of the Issuer or any authority for the issuance of the Bonds, the adoption of the Bond Ordinance or the execution and delivery of this Purchase Agreement, nor, to the best knowledge of the Issuer, is there any basis therefor, wherein an unfavorable decision, ruling or finding would have a material adverse effect on the validity or enforceability of the Bonds, the Bond Ordinance, the Escrow Agreement or this Purchase Agreement. EDW400/71007 DaaeaMN2_2DOC -5- Exhibit B (b) As of the date thereof, the Preliminary Official Statement did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) At the time of the Issuer's acceptance hereof and (unless an event occurs of the nature described in Paragraph 4(b)(iv)) at all times subsequent thereto during the period up to and including the date the Underwriters are no longer required pursuant to Rule 15c2-12 to provide the Official Statement to potential customers requesting an Official Statement (as more particularly described in Paragraph 4(b)(iv)), the Official Statement does not and will not contain any untrue statement of a material fact or omit to state any material fad 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. Q) If the Official Statement is supplemented or amended pursuant to Paragraph 4(b)(iv), at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto during the period up to and including the date the Underwriters are no longer required pursuant to Rule 15c2-12 to provide the Official Statement to potential customers requesting an Official Statement (as more particularly described in Paragraph 4(b)(iv)), the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state any material fad required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (k) The Issuer will apply, or cause to be applied, the proceeds from the sale of the Bonds as provided in and subject to all of the terms and provisions of the Ordinance, (1) The Issuer will famish such information and execute such instruments and take such action in cooperation with and at the expense of the Underwriters as the Underwriters may reasonably request (A) to (y) qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions in the United States as the Underwriters may designate and (z) determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions and (B) to continue such qualifications in effect so long 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 of special consents to service of process under the laws of any jurisdiction) and will advise the Underwriters immediately of receipt by the Issuer of any 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. (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 operations of the Issuer as of the dates and for the periods therein set 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 nature 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, MWIW7 D.11.935292_2nOC -6- Exhibit B threatened which, if decided adversely to the Issuer, would have a materially adverse effect on the financial condition of the Issuer. (n) Prior to the Closing, the Issuer will not offer or issue any bonds, notes or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by any of the taxes, revenues or assets which will secure the Bonds without the prior written consent of the Underwriters. (o) Any certificate signed by any official of the Issuer authorized to do so in connection with the transactions contemplated by this Purchase Agreement shall be deemed a representation and warranty by the Issuer to the Underwriters as to the statements made therein. 6. Closing. (a) At 10:00 a.m., Dallas, Texas time, on April 5, 2005, 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 Underwriters 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 The Depository Trust Company, New York, New York ("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 contemplated below, and the Underwriters will, subject to the terms and conditions hereof, accept such delivery and pay the purchase price of the Bonds as set forth in Paragraph 1 hereof in immediately available funds (such events being referred to herein as the "Closing"). Concurrently with such payment by the Underwriters, the Issuer shall return to the Representative, the check referred to in Paragraph 1 hereof. Payment for the Bonds as aforesaid shall be made at the offices of the Paying Agent/Registrar, or such other place as shall have been mutually agreed upon by the Issuer and the Representative. (b) Delivery of the definitive Bonds in exchange for the initial Bonds shall be made through DTC, utilizing a book-entry only form of issuance, and the Issuer agrees to cooperate and execute such agreements as may be required to allow for the use of such book-entry only system. The definitive Bonds shall be delivered in fully registered form bearing 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, or the consequences thereof, shall not be a default under this Purchase Agreement. 7. Closing Conditions. The Underwriters have entered into this Purchase Agreement in reliance upon the representations, warranties and agreements of the Issuer contained herein, and in reliance upon the representations, warranties and agreements to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Issuer of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriters' obligations under this Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the EDW/00/71007 Dallas 935292 2.DOC -7- Exhibit B 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: (a) The representations and warranties of the Issuer contained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing. (b) The Issuer shall have performed and complied with all agreements and conditions required by this Purchase Agreement to be performed or complied with by it prior to or at the Closing. (c) At the time of the Closing, the Bond Ordinance shall be in full force and effect and shall not have been amended, modified or supplemented, and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Representative. (d) At or prior to the Closing, the Ordinance shall have been duly adopted and filed in the records of the Issuer and the Issuer shall have duly executed and delivered and the Paying Agent/Registrar shall have duly authenticated the Bonds. (e) At the time of the Closing, all official action of the Issuer relating to this Purchase Agreement, the Bonds and the Bond Ordinance shall be in full force and effect and shall not have been amended, modified or supplemented; and the Representative shall have received, in appropriate form, evidence thereof. (f) The Issuer shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money. (g) All steps to be taken and all instruments and other documents to be executed, and all other legal matters in connection with the transactions contemplated by this Purchase Agreement shall be reasonably satisfactory in legal form and effect to the Underwriters. (h) At the time of the Closing, there shall not have occurred any change in the condition, financial or otherwise, or in the earnings 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 to market the Bonds on the terms and in the manner contemplated in the Official Statement. (i) At or prior to the Closing, the Representative shall have received copies of each of the following documents: (1) The Official Statement, and each supplement or amendment, if any, thereto, executed on behalf of the Issuer by the Mayor and the City Secretary of the Issuer. EDwCaaln W Albs 935292_2DOC _g_ Exhibit B (2) The Bond Ordinance certified by the City Secretary under the Issuer's seal as having been duly adopted by the Issuer and as being in effect, with such changes or amendments as may have been agreed to by the Representative, and containing therein the agreement of the Issuer to provide certain periodic information and notices of material events in accordance with Rule 15c2-12, as described in the Official Statement under the caption "CONTINUING DISCLOSURE OF INFORMATION." (3) The opinion of Fulbright & Jaworski L.L.P., Bond Counsel, in substantially the form and substance of Appendix C to the Official Statement. (4) An opinion or certificate, dated on or prior to the date of Closing, of the Attorney General of the State of Texas, approving the Bonds, as required by law, and the registration certificates of the Comptroller of Public Accounts of the State of Texas for the Bonds. (5) The supplemental opinion, dated the date of the Closing, of Fulbright & Jaworski L.L.P., addressed to the Issuer and the Underwriters to the effect that: (i) the Bonds are exempt securities within the meaning of Section 3(a)(2) of the Securities Act of 1933, as amended, and it is not necessary in connection with the sale of the Bonds to the public to register the Bonds under the Securities Act of 1933, as amended, or to qualify the Bond Ordinance under the Trust Indenture Act of 1939, as amended, and (ii) except to the extent noted therein, said firm has not verified and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Official Statement but that said firm has reviewed the information contained in the Official Statement under the captions "PLAN OF FINANCING" (except under the subcaption "Use of Proceeds"), "THE BONDS" (other than information under the subcaption "Book -Entry -Only System" and "Bondholder's Remedies"), "TAX MATTERS," "CONTINUING DISCLOSURE OF INFORMATION" (other than the information under the subcaption "Compliance with Prior Undertakings" and under the subcaptions "Legal Matters" and "Legal Investments and Eligibility to Secure Public Funds in Texas" under the caption "OTHER INFORMATION" and such firm is of the opinion that the information relating to the Bonds and the Bond Ordinance contained therein is an accurate and fair description of the laws and legal issues addressed therein. (6) An opinion, dated the date of the Closing and addressed to the Underwriters, of Vinson & Elkins L.L.P., Dallas, Texas ("Underwriters' Counsel"), in substantially the form of Exhibit B hereto. (7) A certificate, dated the date of the Closing, signed by the Mayor and the City Manager, to the effect that (i) the representations and warranties of the Issuer contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (ii) except to the extent disclosed in the Official Statement, no litigation is pending or, to the knowledge EDW4 1007 Ddb. 935292_2DOC 0 Fxhibd B of such persons, threatened in any court to restrain or enjoin the issuance or delivery of the Bonds or the levy, collection or application of the ad valorem taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity of the Bonds, the Bond Ordinance, the Escrow Agreement or this Purchase Agreement, or contesting the powers of the Issuer or contesting the authorization of the Bonds or the Bond Ordinance, or contesting in any way the accuracy, completeness or fairness of the Official Statement (but in lieu of or in conjunction with such certificate, the Representative may, in its sole discretion, accept certificates or opinions of the General Counsel of the Issuer that, in his or her opinion, the issues raised in any such pending or threatened litigation are without substance or that the contentions of all plaintiffs therein are without merit); (iii) 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 not misleading in any material respect; (iv) the descriptions and statements of or pertaining to the Issuer contained in the Official Statement, on the date of sale of the Bonds and on the date of the delivery of the Bonds, were and are true and correct in all material respects; (v) insofar as the Issuer and its affairs, including its financial affairs, are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (vi) insofar as the descriptions and statements including financial data, of or pertaining to entities, other than the Issuer, and their activities contained in the Official Statement are concerned, such statements and data have been obtained from sources which the Issuer believes to be reliable and the Issuer has no reason to believe that they are untrue in any material respect; and (vii) there has not been any material and adverse change in the affairs or financial condition of the Issuer since September 30, 2004, the latest date as to which audited financial information is available. (8) Any other certificates and opinions required by the Ordinance for the issuance thereunder of the Bonds. (9) Evidence satisfactory to the Representative that the Bonds have been rated "Aaa" by Moody's Investors Service, Inc. and "AAA" by Standard & Poor's Ratings Services, A Division of the McGraw-Hill Companies, Inc. and that all such ratings are in effect as of the date of Closing. (10) Such additional legal opinions, certificates, instruments and other documents as the Representative or Underwriters' Counsel may request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the Issuer's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Issuer on or prior to the date of the Closing of EDW4aWnW7 Deas 9352W LDDC -t0- Exhibit B all the respective agreements then to be performed and conditions then to be satisfied by the Issuer. All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Representative. If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriters nor the Issuer shall be under any father obligation hereunder, except that (i) the check referred to in Paragraph 1 hereof shall be immediately returned to the Representative by the Issuer and (ii) the respective obligations of the Issuer and the Underwriters set forth in Paragraph 9 hereof shall continue in full force and effect 8. Termination. The Underwriters shall have the right to cancel its obligation to purchase the Bonds if, between the date of this Purchase Agreement and the Closing, the market price or marketability of the Bonds shall be materially adversely affected, in the judgment of the Representative reasonably exercised, by the occurrence of any of the following: (a) Legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree, or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the 1933 Act, or that the Ordinance is not exempt from qualification under or other requirements of the Trust Indenture Act, or that the issuance, offering, or sale of obligations of the general character of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise, is or would be in violation of the federal securities law as amended and then in effect. (b) Any state blue sky or securities commission or other governmental agency or body in which at least 10% of Bonds have been sold shall have withheld registration, exemption or clearance of the offering of the Bonds as described herein, or issued a stop order or similar oiling relating thereto. (c) 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 restrictions (not in force as of the date hereof) upon trading securities generally by any governmental authority or any national securities exchange, a general banking moratorium declared by federal, State of New York, or State officials authorized to do so. EDW400/71007 Dallas 935292_2.DOC Exhibit B (d) The New York Stock Exchange or other national securities exchange or any governmental authority, shall impose, as to the Bonds or as to obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriters. (e) Any amendment to the federal or state Constitution or action by any federal or state court, legislative body, regulatory body, or other authority materially adversely affecting the tax status of the Issuer, its property or income securities (or interest thereon). (f) Any event occurring, or information becoming known which, in the reasonable judgment of the Representative, makes untrue in any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of material fad or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (g) There shall have occurred since the date of this Purchase Agreement any materially adverse change in the affairs or financial condition of the Issuer, except for changes which the Official Statement discloses are expected to occur. (h) The United States shall have become engaged in hostilities (including, without limitation, an act of terrorism) which have resulted in a declaration of war or a national emergency or there shall have occurred any other outbreak or escalation of hostilities (including without limitation, an ad of terrorism) that existed prior to the date hereof or a national or international calamity or crisis, financial or otherwise. (i) Any fad 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. 0) There shall have occurred any downgrading, or any notice shall have been given of (i) any intended or potential downgrading or (ii) any review or possible change that does not indicate the direction of a possible change, in the rating accorded any of the Issuer's obligations (including the ratings to be accorded the Bonds). (k) 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 herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission and such prohibition is not the result of the Underwriters' ads or failures to act 9. 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 hereunder, including, but not limited to (i) the cost of preparation, printing and delivery of the Preliminary Official Statement and the Official Statement; (ii) the cost of preparation and printing of the Bonds; (iii) the fees and disbursements of Fulbright & Jaworski L.L.P. for their services as Bond Counsel to the Issuer, (iv) the fees and disbursements of the financial advisor to the Issuer, (v) EDWi00M007 Dallas 915292 2.DOC _12_ Exhibit B the fees and disbursements of any other engineers, accountants, and other experts, consultants or advisers retained by the Issuer, and (vi) the fees, if any, for bond ratings. (b) The Underwriters shall pay (i) the cost of preparation and printing of this Purchase Agreement; (ii) all advertising expenses in connection with the public offering of the Bonds; and (iii) all other expenses incurred by them or any of them in connection with the public offering of the Bonds, including the fees and disbursements of Underwriters' Counsel. 10. Notices. Any notice or other communication to be given to the Issuer under this Purchase Agreement may be given by delivering the same in writing at City of Allen, Texas, One Allen Civic Plaza, Allen, Texas 75013, Attention: Mayor, and any notice or other communication to be given to the Underwriters under this Purchase Agreement may be given by delivering the same in writing to A.G. Edwards & Sons, Inc., Renaissance Plaza, 70 N.E. Loop 410, Suite 915, San Antonio, Texas 78216, Attention: Nora Chavez. 11. Parties in Interest. This Purchase Agreement as 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 Purchase Agreement may not be assigned by the Issuer. All of the Issuer's representations, warranties and agreements contained in this Purchase Agreement shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriters; (ii) delivery of and payment for the Bonds pursuant to this Purchase Agreement; and (iii) any termination of this Purchase Agreement. 12. Effectiveness. This Purchase Agreement shall become effective upon the acceptance hereof by the Issuer and shall be valid and enforceable at the time of such acceptance. 13. CHOICE OF LAW. THIS PURCHASE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS. 14. Severability. If any provision of this Purchase Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any Constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions of this Purchase Agreement invalid, inoperative or unenforceable to any extent whatever. 15. Business Dav. For purposes of this Purchase Agreement, "business day" means any day on which the New York Stock Exchange is open for trading. 16. Paraeraoh Headines. Paragraph headings have been inserted in this Purchase Agreement as a matter of convenience of reference only, and it is agreed that such paragraph EDW4W/71007 WW935272_2000 13 - Exhibit B headings are not a part of this Purchase Agreement and will not be used in the interpretation of any provisions of this Purchase Agreement. 17. Counterparts. This Purchase Agreement may be executed in several counterparts each of which shall be regarded as an original (with the same effect as if the signatures thereto and hereto were upon the same document) and all of which shall constitute one and the same document. aowmommr DO. 935292_2DOC -14- Exhibit B Very truly yours, A.G. EDWARDS & SONS, INC. as Representative for the Underwriters identified on Schedule I Lm Accepted and agreed to this 8th day of March, 2005 CITY OF ALLEN, TEXAS By: Title: Mayor ATTEST: By: Title: City Secretary EDW400/MOr Dalim 9J5292_iDOC Authorized Officer 15 - Exhibit B SCHEDULEI LIST OF UNDERWRITERS A.G. EDWARDS & SONS, INC. FIRST SOUTHWEST COMPANY SOUTHWEST SECURITIES EDW400l/! 100) W9 935292_2.DOC Exhibit B SCHEDULEII Principal (August 15) Amount Maturity Interest Rale Price or Yield $ 130,000 2005 3.000% 2.300°/9 75,000 2006 3.000% 2.450°/9 425,000 2007 3.000% 2.700% 435,000 2008 3.000% 2.860% 945,000 2009 3.000% 3.060% 1,155,000 2010 3.500% 3.230% 500,000 2010 4.500% 3.230% 2,270,000 2011 4.000% 3.440% 3,015,000 2012 5.000% 3.600% 2,540,000 2013 5.000% 3.750% 630,000 2013 3.600% 3.750% 2,950,000 2014 5.000% 3.850% 385,000 2014 3.700°/9 3.850% 3,505,000 2015 5.000°/9 3.940% 3,345,000 2016 4.000% 4.050% 2,865,000 2017 5.000% 4.050% 3,015,000 2018 5.000% 4.110°/9 2,345,000 2019 5.000% 4.170% 1,355,000 2020 4.250% 4.350% 445,000 2021 4.300% 4.410% (Interest Accrues from March 1, 2005) The Bonds maturing August 15, 2016 and thereafter, are subject to optional redemption on August 15, 2015 or any date thereafter, at par plus accrued interest to the redemption date. EDW4 0/71W] DW935292_2.DOC Exhibit B Exhibit A [Attach form of Official Statement completed as provided in Section 1 hereof) EDwJW 107 Dallas 935292_2 DDC A-1 Exhibit B Exhibit B April 5, 2005 A.G. Edwards & Sons, Inc. First Southwest Company Southwest Securities c/o A.G. Edwards & Sons, Inc. Renaissance Plaza 70 N.E: Loop 10, Ste 915 San Antonio, Texas 78216 Re: City of Allen, Texas, General Obligation Refunding Bonds, Series 2005 Ladies and Gentlemen: We have acted as counsel to you as Underwriters of $32,330,000 aggregate principal amount of the captioned Bonds (the "Bonds") issued by the City of Allen, Texas (the "Issuer"), pursuant to an ordinance adopted by the City Council of the Issuer on March 8, 2005 (the "Ordinance"). The Underwriters are purchasing the Bonds pursuant to the Purchase Agreement (the "Purchase Agreement") with respect thereto, dated March 8, 2005. Unless otherwise expressly provided herein, capitalized terms used in this opinion shall have the meanings ascribed to them in the Purchase Agreement. As your counsel, we have examined executed copies of the Ordinance, the Purchase Agreement and the Official Statement and the certificates and opinions referred to in Paragraph 7(i) of the Purchase Agreement. In addition, we have examined the originals or copies, certified or otherwise identified to our satisfaction, of such records of the Issuer, agreements and other instruments, certificates of public officials and representatives of the Issuer, and such other documents as we have deemed necessary or advisable as a basis for the opinions hereinafter expressed. Based on the foregoing and in reliance on the matters described below, we are of the opinion that the offer and sale of the Bonds by you do not require the registration of any security under the Securities Act of 1933, as amended and now in effect, and no instrument need be qualified under the Trust Indenture Act of 1939, as amended and now in effect, in connection therewith. Because the primary purpose of our professional engagement was not to establish factual matters and because of the wholly or partially non -legal character of many determinations EDWCaalnaar Albs 935292_2.DOC B -I Exhibit B involved in the preparation of the Official Statement, we are not passing upon and do not assume any responsibility for the accuracy, completeness, or fairness of the statements contained in the Official Statement, and make no representation that we have independently verified the accuracy, completeness or fairness of any such statements. At your request, we have participated as your counsel in conferences with representatives of the Issuer, bond counsel to the Issuer, the financial advisors to the Issuer and your representatives, at which conferences the contents of the Official Statement and related matters were discussed. Based on our participation in the above- mentioned conferences and in reliance thereon and on the certificates, opinions and other documents herein mentioned, we advise you that no facts have come to our attention that lead us to believe that the Official Statement (except as to any statistical or financial data included in the Official Statement, as to which we are not called upon to express any opinion or belief) contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The opinions expressed herein are expressed only insofar as the laws of the State of Texas and the United States of America may be applicable. This opinion may be relied upon only by the addressees hereof and may not be used or relied upon by any other person for any purpose whatsoever without, in each instance, our prior written consent. EDWMIa IW7 Dallas 935292_2DOC Very truly yours, M Exhibit B SPECIAL ESCROW AGREEMENT THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and entered into as of March 8, 2005, by and between the City of Allen, Texas, a duly incorporated municipal corporation in Collin County, Texas (the "City") acting by and through the Mayor and City Secretary, and JPMorgan Chase Bank, National Association, Dallas, Texas, a banking association organized and existing under the laws of the United States of America, or its successors or assigns hereunder (the "Bank"), WITNESSETH: WHEREAS, the City Council of the City of Allen, Texas (the "City") has heretofore issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal amount $32,170,000 (collectively, the "Refunded Obligations") more particularly described as follows: (1) City of Allen, Texas, General Obligation Bonds, Series 1996, dated July 1, 1996, scheduled to mature on September 1 in each of the years 2007 through 2016, and aggregating in principal amount $4,580,000; (2) City of Allen, Texas, General Obligation Bonds, Series 1998, dated April 1, 1998, scheduled to mature on September 1 in each of the years 2009 through 2018, and aggregating in principal amount $6,375,000; (3) City of Allen, Texas, General Obligation Bonds, Series 1999, dated August 1, 1999, scheduled to mature on September 1 in each of the years 2010 through 2019, and aggregating in principal amount $8,435,000; (4) City of Allen, Texas, General Obligation Bonds, Series 2000, dated May 1, 2000, scheduled to mature on September 1 in each of the years 2011 through 2020, and aggregating in principal amount $7,190,000; and (5) City of Allen, Texas, General Obligation Refunding and Improvement Bonds, Series 2001, dated May 1, 2001, being the portion of such bonds eligible to be refunded under current federal tax law scheduled to mature on September 1 in each of the years 2012 through 2021, aggregating in principal amount $5,590,000; and AND WHEREAS, in accordance with the provisions of V.T.C.A., Government Code, Chapter 1207, as amended (the "Act"), the City is authorized to sell refunding bonds in an amount sufficient to provide for the payment of obligations to be refunded, deposit the proceeds of such refunding bonds with any place of payment for the obligations being refunded, or other authorized depository, and enter into an escrow or similar agreement with such depository for the safekeeping, investment, reinvestment, administration and disposition of such deposit, upon such terms and conditions as the parties may agree, provided such deposits may be invested only in (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 theiracquisition 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 45571734.1 Exhibit C (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent that mature and/or bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment of the Refunded Obligations; and WHEREAS, in accordance with the provisions of the ordinances authorizing the Series 1996, Series 1998 and Series 1999 Refunded Obligations, the deposits to refund and defease such Refunded Obligations shall be invested only in direct obligations of the United States of America, including obligations the principal of and interest on are unconditionally guaranteed by the United States of America (the "Escrowed Securities"); and WHEREAS, the Refunded Obligations are scheduled to mature, or be redeemed, and interest thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto and incorporated herein by reference as a part of this Agreement for all purposes; and WHEREAS, the City on the 8' day of March, 2005, pursuant to an ordinance (the "Bond Ordinance") finally passed and adopted by the City Council, authorized the issuance of bonds known as "City of Allen, Texas, General Obligation Refunding Bonds, Series 2005" (the "Bonds"), and such Bonds are being issued to refund, discharge and make final payment of the principal of and interest on the Refunded Obligations; and WHEREAS, upon the delivery of the Bonds, a portion of the proceeds of sale, together with other available funds of the City, are to be deposited with the Bank and used in part to purchase the Escrowed Securities listed and identified in Exhibit B attached hereto and incorporated by reference as a part of this Agreement for all purposes; and WHEREAS, the Escrowed Securities shall be held and deposited to the credit of the "Escrow Fund" to be established and maintained by the Bank in accordance with this Agreement; and WHEREAS, the Escrowed Securities, together with the beginning cash balance in the Escrow Fund, shall mature and the interest thereon shall be payable at such times to insure the existence of monies sufficient to pay the principal amount of the Refunded Obligations and the accrued interest thereon, as the same shall become due in accordance with the terms of the ordinances authorizing the issuance of the Refunded Obligations and as set forth in Exhibit A attached hereto; and WHEREAS, the City has completed all arrangements for the purchase of the Escrowed Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund as provided herein; and WHEREAS, the Bank is a banking association organized and existing under the laws of the United States of America, possessing trust powers and is fully qualified and empowered to enter into this Agreement; and WHEREAS, in Section 16 of the Bond Ordinance, the City Council duly approved and authorized the execution of this Agreement; and 45571734.1 2 Exhibit C WHEREAS, the City and the Escrow Agent, as the case may be, shall take all action necessary to call, pay, redeem and retire said Refunded Obligations in accordance with the provisions thereof, including, without limitation, all actions required by the ordinances authorizing the Refunded Obligations, the Act, the Bond Ordinance and this Agreement; NOW, THEREFORE, in consideration of the mutual agreements herein contained, and to secure the payment of the principal of and the interest on the Refunded Obligations as the same shall become due, the City and the Bank hereby mutually undertake, promise and agree as follows: SECTION 1: Receipt of Refunded Bond Ordinances. Receipt of copies of the ordinances authorizing the issuance of the Refunded Obligations and the Bond Ordinance are hereby acknowledged by the Bank. Reference herein to or citation herein of any provision of said documents shall be deemed an incorporation of such provision as a part hereof in the same manner and with the same effect as if it were fully set forth herein. SECTION 2: Escrow Fund Creation/Funding. There is hereby created by the City with the Bank a special segregated and irrevocable trust fund designated "SPECIAL 2005 CITY OF ALLEN, TEXAS, REFUNDING BOND ESCROW FUND" (hereinafter called the "Escrow Fund") for the benefit of the holders of the Refunded Obligations, and, immediately following the delivery of the Bonds, the City agrees and covenants to cause to be deposited with the Bank the following amounts: $33,845,476.00 For the purchase of Escrowed Securities identified in Exhibit B to be held for the account of the Escrow Fund 1.79 For deposit in the Escrow Fund as a beginning cash balance. The Bank hereby accepts the Escrow Fund and further agrees to receive said moneys, apply the same as set forth herein, and to hold the cash and Escrowed Securities deposited and credited to the Escrow Fund for application and disbursement for the purposes and in the manner provided in this Agreement. SECTION 3: Escrow Fund Sufficiency Warranty. The City hereby represents that the cash and Escrowed Securities, together with the interest to be earned thereon, deposited to the credit of the Escrow Fund will be sufficient to pay the principal of and premium and interest on the Refunded Obligations as the same shall become due and payable, and such Refunded Obligations, and the interest thereon, are to mature or be redeemed and shall be paid at the times and in the amounts set forth and identified in Exhibit A attached hereto. FURTHERMORE, the Bank acknowledges receipt of a copy of the Bond Ordinance which also provides for the redemption of (a) the Series 1996 Refunded Obligations on September 1, 2006, (b) the Series 1998 Refunded Obligations on September 1, 2008, (c) the Series 1999 Refunded Obligations on September 1, 2009, (d) the Series 2000 Refunded Obligations on September 1, 2010 and (e) the Series 2001 Refunded Obligations on September 1, 2011; all in accordance with the provisions of the notice requirements applicable to said Refunded Obligations and the notice requirements contained in the respective ordinances authorizing such Refunded Obligations. 45571734.1 3 Exhibit C The Bank agrees to cause a notice of redemption pertaining to the Refunded Obligations to be sent to the registered owners thereof appearing on the registration books at least thirty (30) days prior to the respective redemption dates therefor. SECTION 4: Pledge of Escrow. The Bank agrees that all cash and Escrowed Securities, together with any income or interest earned thereon, held in the Escrow Fund shall be and is hereby irrevocably pledged to the payment of the principal of and interest on the Refunded Obligations which will mature and become due on and after the date of this Agreement, and such funds initially deposited and to be received from maturing principal and interest on the Escrowed Securities in the Escrow Fund shall be applied solely in accordance with the provisions of this Agreement. SECTION 5: Escrow Insufficiency - City Warranty to Cure. If, for any reason, the funds on hand in the Escrow Fund shall be insufficient to make the payments set forth in Exhibit A attached hereto, as the same becomes due and payable, the City shall make timely deposits to the Escrow Fund, from lawfully available funds, of additional funds in the amounts required to make such payments. Notice of any such insufficiency shall be immediately given by the Bank to the City by the fastest means possible, but the Bank shall in no manner be responsible for the City's failure to make such deposits. SECTION 6: Escrow Fund Securities/Segregation. The Bank shall hold said Escrowed Securities and moneys in the Escrow Fund at all times as a special and separate trust fund for the benefit of the holders of the Refunded Obligations, wholly segregated from other moneys and securities on deposit with the Bank; shall never commingle said Escrowed Securities and moneys with other moneys or securities of the Bank; and shall hold and dispose of the assets therein only as set forth herein. Nothing herein contained shall be construed as requiring the Bank to keep the identical moneys, or any part thereof, in said Escrow Fund, if it is impractical, but moneys of an equal amount, except to the extent such are represented by the Escrowed Securities, shall always be maintained on deposit in the Escrow Fund by the Bank, as escrow agent; and a special account evidencing such facts shall at all times be maintained on the books of the Bank. SECTION 7: Escrow Fund Collections/Payments. The Bank shall from time to time collect and receive the principal of and interest on the Escrowed Securities as they respectively mature and become due and credit the same to the Escrow Fund. On or before each principal and/or interest payment date or redemption date, as the case may be, for the Refunded Obligations shown in Exhibit A attached hereto, the Bank, without further direction from anyone, including the City, shall cause to be withdrawn from the Escrow Fund the amount required to pay the accrued interest on the Refunded Obligations due and payable on said payment date and the principal of the Refunded Obligations due and payable on said payment date or redemption date, as the case may be, and the amount withdrawn from the Escrow Fund shall be immediately transmitted and deposited with the paying agent for the Refunded Obligations to be paid with such amount. The paying agent for the Refunded Obligations is the Bank. If any Refunded Obligation thereon shall not be presented for payment when the principal thereof or interest thereon shall have become due, and if cash shall at such times be held by the Bank in trust for that purpose sufficient and available to pay the principal of such Refunded Obligation and interest thereon it shall be the duty of the Bank to hold said cash without liability to the holder of such Refunded Obligation for interest thereon after such maturity or redemption date, in trust for the benefit of the holder of such Refunded Obligation, who shall thereafter be restricted exclusively to said cash for any claim of whatever nature on his part on 45571734.1 4 Exhibit C or with respect to said Refunded Obligation, including for any claim for the payment thereof and interest thereon. All cash required by the provisions hereof to be set aside or held in trust for the payment of the Refunded Obligations, including interest thereon, shall be applied to and used solely for the payment of the Refunded Obligations and interest thereon with respect to which such cash has been so set aside in trust. Subject to the provisions of the last sentence of Section 25 hereof, cash held by the Bank in trust for the payment and discharge of any of the Refunded Obligations and interest thereon which remains unclaimed for a period of three (3) years after the stated maturity date or redemption date of such Refunded Obligations shall be returned to the City. Notwithstanding the above and foregoing, any remittance of funds from the Bank to the City shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 8: Disposal of Refunded Obligations. All Refunded Obligations cancelled on account of payment by the Bank shall be disposed of or otherwise destroyed by the Bank, and an appropriate certificate of destruction furnished the City. SECTION 9: Escrow Fund Encumbrance. The escrow created hereby shall be irrevocable and the holders of the Refunded Obligations shall have an express lien on all moneys and Escrowed Securities in the Escrow Fund until paid out, used and applied in accordance with this Agreement. Unless disbursed in payment of the Refunded Obligations, all funds and the Escrowed Securities received by the Bank for the account of the City hereunder shall be and remain the property of the Escrow Fund and the City and the owners of the Refunded Obligations shall be entitled to a preferred claim and shall have a first lien upon such funds and Escrowed Securities enjoyed by a trust beneficiary. The funds and Escrowed Securities received by the Bank under this Agreement shall not be considered as a banking deposit by the City and the Bank and the City shall have no right or title with respect thereto, except as otherwise provided herein. Such funds and Escrowed Securities shall not be subject to checks or drafts drawn by the City. SECTION 10: Absence of Bank Claim/Lien on Escrow Fund. The Bank shall have no lien whatsoever upon any of the moneys or Escrowed Securities in the Escrow Fund for payment of services rendered hereunder, services rendered as paying agent/registrar for the Refunded Obligations, or for any costs or expenses incurred hereunder and reimbursable from the City. SECTION 11: Substitution of Investments/Reinvestments. The Bank shall be authorized to accept initially and temporarily cash and/or substituted Escrowed Securities pending the delivery of the Escrowed Securities identified in the Exhibit B attached hereto, or shall be authorized to redeem the Escrowed Securities and reinvest the proceeds thereof, together with other moneys held in the Escrow Fund in noncallable direct obligations of the United States of America provided such early redemption and reinvestment of proceeds does not change the repayment schedule of the Refunded Obligations appearing in Exhibit A and the Bank receives the following: (1) an opinion by an independent certified public accountant to the effect that (i) the initial and/or temporary substitution of cash and/or securities for one or more of the Escrowed Securities identified in Exhibit B pending the receipt and delivery thereof to the Escrow Agent or (ii) the redemption of one or more of the Escrowed Securities and the reinvestment of such funds in one or more 455717U.1 5 Exhibit C substituted securities (which shall be noncallable direct obligations of the United States of America), together with the interest thereon and other available moneys then held in the Escrow Fund, will, in either case, be sufficient, without reinvestment, to pay, as the same become due in accordance with Exhibit A, the principal of, and interest on, the Refunded Obligations which have not previously been paid, and (2) with respect to an early redemption of Escrowed Securities and the reinvestment of the proceeds thereof, an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such investment will not cause interest on the Bonds or Refunded Obligations to be included in the gross income for federal income tax purposes, under the Code and related regulations as in effect on the date of such investment, or otherwise make the interest on the Bonds or the Refunded Obligations subject to Federal income taxation and (b) such reinvestment complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Refunded Obligations and the Bonds. SECTION 12: Restriction on Escrow Fund Investments - Reinvestment. Except as provided in Section 11 hereof, moneys in the Escrow Fund will be invested only in the Escrowed Securities listed in Exhibit B and neither the City nor the Bank shall reinvest any moneys deposited in the Escrow Fund except as specifically provided by this Agreement. SECTION 13: Excess Funds. If at any time through redemption or cancellation of the Refunded Obligations there exists or will exist excesses of interest on or maturing principal of the Escrowed Securities in excess of the amounts necessary hereunder for the Refunded Obligations, the Bank may transfer such excess amounts to or on the order of the City, provided that the City delivers to the Bank the following: (1) an opinion by an independent certified public accountant that after the transfer of such excess, the principal amount of securities in the Escrow Fund, together with the interest thereon, and other available monies then held in the Escrow Fund, will be sufficient to pay, as the same become due and without reinvestment, in accordance with Exhibit A, the principal of, and interest on, the Refunded Obligations which have not previously been paid, and (2) an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such transfer will not cause interest on the Bonds or the Refunded Obligations to be included in gross income for federal income tax purposes, under the Code and related regulations as in effect on the date of such transfer, or otherwise make the interest on the Bonds or the Refunded Obligations subject to Federal income taxation, and (b) such transfer complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Refunded Obligations or the Bonds. SECTION 14: Collateralization. The Bank shall continuously secure the monies in the Escrow Fund not invested in Escrowed Securities by a pledge of direct obligations of the United States of America, in the par or face amount at least equal to the principal amount of said uninvested monies to the extent such money is not insured by the Federal Deposit Insurance Corporation. 45571734.1 6 Exhibit C SECTION 15: Absence of Bank's Liability for Investments. The Bank shall not be liable or responsible for any loss resulting from any investment made in the Escrowed Securities or substitute securities as provided in Section 11 hereof. SECTION 16: Bank's Compensation - Escrow Administration/Settlement of Paving Agent's Charges. The City agrees to pay the Bank for the performance of services hereunder and as reimbursement for anticipated expenses to be incurred hereunder the amount of $4,250.00 and, except for reimbursement of costs and expenses incurred by the Bank pursuant to Sections 3, 11 and 19 hereof, the Bank hereby agrees said amount is full and complete payment for the administration of this Agreement. The City also agrees to deposit with the Bank on the effective date of this Agreement, the sum of $3,000.00, which represents the total charges due the Bank as paying agent for the Refunded Obligations and the Bank acknowledges and agrees that above amount is and represents the total amount of compensation due the Bank for services rendered as paying agent for the Refunded Obligations. The Bank hereby agrees to pay, assume and be fully responsible for any additional charges that it may incur in the performance of its duties and responsibilities as paying agent for the Refunded Obligations. SECTION 17: Escrow Agents Duties / Responsibilities/Liability. The Bank shall not be responsible for any recital herein, except with respect to its organization and its powers and authority. As to the existence or nonexistence of any fact relating to the City or as to the sufficiency or validity of any instrument, paper or proceedings relating to the City, the Bank shall be entitled to rely upon a certificate signed on behalf of the City by its City Secretary or Mayor and/or City Secretary of the City as sufficient evidence of the facts therein contained. The Bank may accept a certificate of the City Secretary under the City's seal, to the effect that a resolution or other instrument in the forth therein set forth has been adopted by the City Council of the City, as conclusive evidence that such resolution or other instrument has been duly adopted and is in full force and effect. The duties and obligations of the Bank shall be determined solely by the express provisions of this Agreement and the Bank shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement, and no implied covenants or obligations shalt be read into this Agreement against the Bank. In the absence of bad faith on the part of the Bank, the Bank may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificate or opinion furnished to the Bank, conforming to the requirements of this Agreement; but notwithstanding any provision of this Agreement to the contrary, in the case of any such certificate or opinion or any evidence which by any provision hereof is specifically required to be furnished to the Bank, the Bank shall be under a duty to examine the same to determine whether it conforms to the requirements of this Agreement. The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Bank unless it shall be proved that the Bank was negligent in ascertaining or acting upon the pertinent facts. The Bank shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in aggregate principal amount of all said Refunded Obligations at the time outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Bank 4W1734.1 7 Exhibit C not in conflict with the intent and purpose of this Agreement. For the purposes of determining whether the holders of the required principal amount of said Refunded Obligations have concurred in any such direction, Refunded Obligations owned by any obligor upon the Refunded Obligations, or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with such obligor, shall be disregarded, except that for the purposes of determining whether the Bank shall be protected in relying on any such direction only Refunded Obligations which the Bank knows are so owned shall be so disregarded. The term "Responsible Officers" of the Bank, as used in this Agreement, shall mean and include the Chairman of the Board of Directors, the President, any Vice President and any Second Vice President, the Secretary and any Assistant Secretary, the Treasurer and any Assistant Treasurer, and every other officer and assistant officer of the Bank customarily performing functions similar to those performed by the persons who at the time shall be officers, respectively, or to whom any corporate trust matter is referred, because of his knowledge of and familiarity with a particular subject; and the term "Responsible Officer" of the Bank, as used in this Agreement, shall mean and include any of said officers or persons. SECTION 18: Limitation Rel Bank's Duties/Responsibilities/Liabilities to Third Parties. The Bank shall not be responsible or liable to any person in any manner whatever for the sufficiency, correctness, genuineness, effectiveness, or validity of this Agreement with respect to the City, or for the identity or authority of any person making or executing this Agreement for and on behalf of the City. The Bank is authorized by the City to rely upon the representations of the City with respect to this Agreement and the deposits made pursuant hereto and as to the City's right and power to execute and deliver this Agreement, and the Bank shall not be liable in any manner as a result of such reliance. The duty of the Bank hereunder shall only be to the City and the holders of the Refunded Obligations. Neither the City nor the Bank shall assign or attempt to assign or transfer any interest hereunder or any portion of any such interest. Any such assignment or attempted assignment shall be in direct conflict with this Agreement and be without effect. SECTION 19: Interpleader. In the event conflicting demands or notices are made upon the Bank growing out of or relating to this Agreement or the Bank in good faith is in doubt as to what action should be taken hereunder, the Bank shall have the right at its election to: (1) Withhold and stop all further proceedings in, and performance of, this Agreement with respect to the issue in question and of all instructions received hereunder in regard to such issue; and (2) File a suit in interpleader and obtain an order from a court of appropriate jurisdiction requiring all persons involved to interplead and litigate in such court their several claims and rights among themselves. In the event the Bank becomes involved in litigation in connection with this Section, the City, to the extent permitted by law, agrees to indemnify and save the Bank harmless from all loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result thereof. The obligations of the Bank under this Agreement shall be performable at the corporate office of the Bank in the City of Dallas, Texas. The Bank may advise with legal counsel in the event of any dispute or question regarding the construction of any of the provisions hereof or its duties hereunder, and in the absence of negligence or bad faith on the part of the Bank, no liability shall be incurred by the 4s 1734.1 8 Exhibit C Bank for any action taken pursuant to this Section and the Bank shall be fully protected in acting in accordance with the opinion and instructions of legal counsel that is knowledgeable and has expertise in the field of law addressed in any such legal opinion or with respect to the instructions given. SECTION 20: Accounting - Annual Report. Promptly after September 30th of each year, commencing with the year 2005, while the Escrow Fund is maintained under this Agreement, the Bank shall forward to the City, to the attention of the Finance Director, or other designated official of the City, a statement in detail of the Escrowed Securities and monies held, and the current income and maturities thereof, and the withdrawals of money from the Escrow Fund for the preceding 12 month period ending September 30th of each year. SECTION 21: Notices. Any notice, authorization, request or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed as follows: CITY OF ALLEN, TEXAS One Allen Civic Plaza Allen, Texas 75013 Attention: Finance Director JPMORGAN CHASE BANK 2001 Bryan Street, P Floor Dallas, Texas 75201 Attention: Issuer Administrative Services The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than ten (10) days prior notice thereof. SECTION 22: Performance Date. Whenever under the terms of this Agreement the performance date of any provision hereof, including the date of maturity of interest on or principal of the Refunded Obligations, shall be a Sunday or a legal holiday or a day on which the Bank is authorized by law to close, then the performance thereof, including the payment of principal of and interest on the Refunded Obligations, need not be made on such date but may be performed or paid, as the case may be, on the next succeeding business day of the Bank with the same force and effect as if made on the date of performance or payment and with respect to a payment, no interest shall accrue for the period after such date. SECTION 23: Warranty of Parties Re: Power to Execute and Deliver Escrow Agreement. The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Agreement, in any and every said Refunded Obligation as executed, authenticated and delivered and in all proceedings pertaining thereto as said Refunded Obligations shall have been modified as provided in this Agreement. The City covenants that it is duly authorized under the Constitution and laws of the State of 45571734.1 9 Exhibit C Texas to execute and deliver this Agreement, that all actions on its part for the payment of said Refunded Obligations as provided herein and the execution and delivery of this Agreement have been duly and effectively taken and that said Refunded Obligations and coupons in the hands of the holders and owners thereof are and will be valid and enforceable obligations of the City according to the import thereof as provided in this Agreement. SECTION 24: Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the parties to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. In the event any covenant or agreement contained in this Agreement is declared to be severable from the other provisions of this Agreement, written notice of such event shall immediately be given to each national rating service (Moody's Investors Service, Standard & Poor's Corporation or Fitch Investors Service) which has rated the Refunded Obligations on the basis of this Agreement. SECTION 25: Termination. This Agreement shall terminate when the Refunded Obligations, including interest due thereon, have been paid and discharged in accordance with the provisions of this Agreement. If any Refunded Obligations are not presented for payment when due and payable, the nonpayment thereof shall not prevent the termination of this Agreement. Funds for the payment of any nonpresented Refunded Obligations and accrued interest thereon shall upon termination of this Agreement be held by the Bank for such purpose in accordance with Section 7 hereof. Any moneys or Escrowed Securities held in the Escrow Fund at termination and not needed for the payment of the principal of or interest on any of the Refunded Obligations shall be paid or transferred to the City. SECTION 26: Time of the Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Bank by this Agreement. SECTION 27: Successors/Assigns. (a) Should the Bank not be able to legally serve or perform the duties and obligations under this Agreement, or should the Bank be declared to be insolvent or closed for any reason by federal or state regulatory authorities or a court of competent jurisdiction, the City, upon being notified or discovering the Bank's inability or disqualification to serve hereunder, shall forthwith appoint a successor to replace the Bank, and upon being notified of such appointment, the Bank shall (i) transfer all funds and securities held hereunder, together with all books, records and accounts relating to the Escrow Fund and the Refunded Obligations, to such successor and (ii) assign all rights, duties and obligations under this Agreement to such successor. If the City should fail to appoint such a successor within ninety (90) days from the date the City discovers, or is notified of, the event or circumstance causing the Bank's inability or disqualification to serve hereunder, the Bank, or a bondholder of the Refunded Obligations, may apply to a court of competent jurisdiction to appoint a successor or assigns of the Bank and such court, upon determining the Bank is unable to continue to serve, shall appoint a successor to serve under this Agreement and the amount of compensation, if any, to be paid to such successor for the remainder of the term of this Agreement for services to be rendered both for administering the Escrow Fund and for paying agent duties and responsibilities for the Refunded Obligations. (b) Furthermore, the Bank may resign and be discharged from performing its duties and responsibilities under this Agreement upon notifying the City in writing of its intention to resign and requesting the City to appoint a successor. No such resignation shall take effect until a successor has been appointed by the City and such successor has accepted such appointment a 571734.1 10 Exhibit C and agreed to perform all duties and obligations hereunder for a total compensation equal to the unearned proportional amount paid the Bank under Section 16 hereof for the administration of this Agreement and the unearned proportional amount of the paying agents fees for the Refunded Obligations due the Bank. Any successor to the Bank shall be a bank, trust company or other financial institution that is duly qualified under applicable law (the Act or other appropriate statute) to serve as escrow agent hereunder and authorized and empowered to perform the duties and obligations contemplated by this Agreement and organized and doing business under the laws of the United States or the State of Texas, having its principal office and place of business in the State of Texas, having a combined capital and surplus of at least $5,000,000 and be subject to the supervision or examination by Federal or State authority. Any successor or assigns to the Bank shall execute, acknowledge and deliver to the City and the Bank, or its successor or assigns, an instrument accepting such appointment hereunder, and the Bank shall execute and deliver an instrument transferring to such successor, subject: to the terms of this Agreement, all the rights, powers and trusts created and established and to be performed under this Agreement. Upon the request of any such successor Bank, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Bank all such rights, powers and duties. The term "Bank" as used herein shall be the Bank and its legal assigns and successor hereunder. SECTION 28: Escrow Agreement - AmendmenUModification. This Agreement shall be binding upon the City and the Bank and their respective successors and legal representatives and shall inure solely to the benefit of the holders of the Refunded Obligations, the City, the Bank and their respective successors and legal representatives. Furthermore, no alteration, amendment or modification of any provision of this Agreement shall (1) alter the firm financial arrangements made for the payment of the Refunded Obligations or (2) be effective unless (i) prior written consent of such alteration, amendment or modification shall have been obtained from the holders of all Refunded Obligations outstanding at the time of such alteration, amendment or modification and (ii) such alteration, amendment or modification is in writing and signed by the parties hereto; provided, however, the City and the Bank may, without the consent of the holders of the Refunded Obligations, amend or modify the terms and provisions of this Agreement to cure in a manner not adverse to the holders of the Refunded Obligations any ambiguity, formal defect or omission in this Agreement. If the parties hereto agree to any amendment or modification to this Agreement, prior written notice of such amendment or proposed modification, together with the legal documents amending or modifying this Agreement, shall be furnished to each national rating service (Standard & Poor's Corporation, Moody's Investors Service or Fitch Investors Service) which has rated the Refunded Obligations on the basis of this Agreement, prior to such amendment or modification being executed. SECTION 29: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 30: Executed Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. SECTION 31: Governing Law. This Agreement shall be governed by the laws of the State of Texas and shall be effective as of the date of the delivery of the Bonds. 45571734.1 11 Exhibit C IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers and their corporate seals to be hereunto affixed and attested as of the date first above written. CITY OF ALLEN, TEXAS ATTEST: City Secretary (City Seal) JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, Dallas, Texas, as Escrow Agent ATTEST: Authorized Signer (Bank Seal) 45571734.1 S-1 Exhibit C EXHIBIT D NOTICE OF REDEMPTION CITY OF ALLEN, TEXAS GENERAL OBLIGATION BONDS SERIES 1996 DATED JULY 1, 1996 NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on and after September 1, 2007, and aggregating in principal amount $4,580,000 have been called for redemption on September 1, 2006 at the redemption price of par and accrued interest to the date of red8mption, such bonds being identified as follows: Year of CUSIP Year of CUSIP Maturity Principal Amount Number Maturity Princioal Amount Number 2007 $350,000 2012 $465,000 2008 $370,000 2013 $495,000 2009 $390,000 2014 $520,000 2010 $415,000 2015 $550,000 2011 $440,000 2016 $585,000 ALL SUCH BONDS shall become due and payable on September 1, 2006, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender thereof to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Texas Commerce Bank National Association) at its designated offices at the following addresses: First Class/ Registered/Certified JPMorgan Chase Bank, N.A. Institutional Trust Services P. O. Bax 2320 Dallas, Texas 75221-2320 Express Delivery/Courier JPMorgan Chase Bank, N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only JPMorgan Chase Bank, N.A. Room 234 -North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of Allen, Texas. JPMORGAN CHASE ASSOCIATION, Address: 2001 Bryan Dallas, Texas 75201 45571707.2 BANK, NATIONAL Street, 8th Floor EXHIBIT E NOTICE OF REDEMPTION CITY OF ALLEN, TEXAS GENERAL OBLIGATION BONDS SERIES 1998 DATED APRIL 1, 1998 NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on and after September 1, 2009, and aggregating in principal amount $6,375,000 have been called for redemption on September 1, 2008 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Yearof CUSIP Yearof CUSIP Maturity Principal Amount Number Maturity Principal Amount Number 2009 $500,000 2014 $645,000 2010 $530,000 2015 $680,000 2011 $555,000 2016 $715,000 2012 $585,000 2017 $755,000 2013 $615,000 2018 $795,000 ALL SUCH BONDS shall become due and payable on September 1, 2008, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender thereof to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Chase Bank of Texas, National Association) at its designated offices at the following addresses: First Class/ Registered/Certified JPMorgan Chase Bank, N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Delivery/Courier JPMorgan Chase Bank, N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only JPMorgan Chase Bank, N.A. Room 234 -North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of Allen, Texas. JPMORGAN CHASE ASSOCIATION, Address: 2001 Bryan Dallas, Texas 75201 45571707.2 BANK, NATIONAL Street, 8th Floor EXHIBIT F NOTICE OF REDEMPTION CITY OF ALLEN, TEXAS GENERAL OBLIGATION BONDS SERIES 1999 DATED AUGUST 1, 1999 NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on and after September 1, 2010, and aggregating in principal amount $8,435,000 have been called for redemption on September 1, 2009 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of CUSIP Year of CUSIP Maturity Principal Amount Number Maturity Principal Amount Number 2010. $665,000 2015 $ 855,000 2011 $695,000 2016 $ 900,000 2012 $735,000 2017 $ 950,000 2013 $770,000 2018 $1,000,000 2014 $810,000 2019 $1,055,000 ALL SUCH BONDS shall become due and payable on September 1, 2009, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender thereof to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Chase Bank of Texas, National Association) at its designated offices at the following addresses: First Class/ Registered/Certified JPMorgan Chase Bank, N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Delivery/Courier JPMorgan Chase Bank, N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only JPMorgan Chase Bank, N.A. Room 234 -North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of Allen, Texas. JPMORGAN CHASE ASSOCIATION, Address: 2001 Bryan Dallas, Texas 75201 45571707.2 BANK, NATIONAL Street, 8th Floor EXHIBIT G NOTICE OF REDEMPTION CITY OF ALLEN, TEXAS GENERAL OBLIGATION BONDS SERIES 2000 DATED MAY 1, 2000 NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on and after September 1, 2011, and aggregating in principal amount $7,190,000 have been called for redemption on September 1, 2010 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of CUSIP Year of CUSIP Maturity Principal Amount Number Maturity Principal Amount Number 2011 $550,000 2016 $730,000 2012 $585,000 2017 $770,000 2013 $615,000 2018 $815,000 2014 $655,000 2019 $865,000 2015 $690,000 2020 $915,000 ALL SUCH BONDS shall become due and payable on September 1, 2010, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender thereof to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Chase Bank of Texas, National Association) at its designated offices at the following addresses: First Class/ Registered/Certified JPMorgan Chase Bank, N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Delivery/Courier JPMorgan Chase Bank, N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only JPMorgan Chase Bank, N.A. Room 234 -North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of Allen, Texas. JPMORGAN CHASE ASSOCIATION, Address: 2001 Bryan Dallas, Texas 75201 45571707.2 BANK, NATIONAL Street, 8th Floor 1 NOTICE IS HEREBY GIVEN that a portion of the bonds of the above series maturing on and after September 1, 2012, and aggregating in principal amount $5,590,000 have been called for redemption on September 1, 2011 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of EXHIBIT H Principal Amount NOTICE OF REDEMPTION Maturity CITY OF ALLEN, TEXAS Beino Redeemed GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS SERIES 2001 DATED MAY 1. 2001 1 NOTICE IS HEREBY GIVEN that a portion of the bonds of the above series maturing on and after September 1, 2012, and aggregating in principal amount $5,590,000 have been called for redemption on September 1, 2011 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of Outstanding Principal Amount Remaining CUSIP Maturity Principal Amount Beino Redeemed Principal Amount Number 2012 $1,085,000 $635,000 $450,000 2013 $1,130,000 $665,000 $465,000 2014 $1,190,000 $700,000 $490,000 2015 $1,250.000 $735,000 $515,000 2016 $ 720,000 $425,000 $295,000 2017 $ 750,000 $440,000 $310,000 2018 $ 785,000 $460,000 $325,000 2019 $ 830,000 $485,000 $345,000 2020 $ 865,000 $510,000 $355,000 2021 $ 915,000 $535,000 $380,000 A LOT SELECTION has been made and your Bond has been selected for redemption. The bonds selected for redemption shall become due and payable on September 1, 2011 and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to The Chase Manhattan Bank) at its designated offices at the following address First Class/ Registered/Certified JPMorgan Chase Bank, N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Delivery/Courier JPMorgan Chase Bank, N.A. Institutional Trust Services 2001 Bryan Street, 9'6 Floor Dallas, Texas 75201 By Hand Only JPMorgan Chase Bank, N.A. Room 234 -North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of Allen, Texas. 45571707.3 JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, Dallas, Texas, as Paying Agent/Registrar Address: 2001 Bryan Street, 8'h Floor Dallas, Texas 75201 ly7•IWIa DESCRIPTION OF ANNUAL FINANCIAL INFORMATION AND OPERATING DATA The following information is referred to in Section 31 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 appended to the Official Statement as Appendix B for the most recently concluded fiscal year. The information in the Official Statement contained in Tables 1 through 6 and 8 through 14. Accounting Principles The accounting principles referred to in such Section are the generally accepted accounting principles as applicable to governmental units as prescribed by The Government Accounting Standards Board. 45571707.2