O-2124-12-02ORDINANCE NO. 2124-12-02
AN ORDINANCE authorizing the issuance of "CITY OF ALLEN, TEXAS,
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2003";
specifying the terms and features of said bonds; levying a continuing
direct annual ad valorem tax for the payment of said bonds; and
resolving other matters incident and related to the issuance, sale,
payment and delivery of said bonds, including the approval and
execution of a Paying Agent(Registrar Agreement and a Purchase
Contract 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 $2,645,000, more particularly described as follows: City of Allen, Texas, General
Obligation Refunding and Improvement Bonds, Series 1992, dated October 1, 1992, and being
the principal amount of bonds remaining outstanding that are scheduled to mature on
September 1 in each of the years 2003, 2004 and 2007 ("Refunded Obligations°);and
WHEREAS, pursuant to the provisions of V.T.C.A., Government Code, Chapter 1207,
as amended, the City Council is authorized to issue bonds to refund the Refunded Obligations
for purposes of reducing the aggregate amount of payments to be made on such obligations;
and ,V
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 $131,902.98 in debt service payments on
such indebtedness and further provide present value savings of approximately $129,562.27;
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 $2,705,000 to be designated and bear the title "CITY OF
ALLEN, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2003" (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 Denominations
Stated Maturities - Interest Rates. The Bonds shall be issued as fully registered obligations
only, shall be dated January 1, 2003 (the "Issue Date'), shall be in denominations of $5,000 or
any integral multiple (within a Stated Maturity, except for the single Initial Bond referenced in
Section 8) thereof, and shall become due and payable on September 1 in each of the years
45252942.1
and in principal amounts (the "Stated Maturities") and bear interest at the rate(s) per annum in
accordance with the following schedule:
YEAR OF
PRINCIPAL
INTEREST
MATURITY
AMOUNT
RATE(S)
2003
$780,000
2.00%
2004
955,000
2.00%
2005
25,000
2.20%
2006
25,000
2.50%
2007
920,000
3.00%
The Bonds shall bear interest on the unpaid principal amounts from the Issue 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 March 1 and September
1 in each year, commencing March 1, 2003.
SECTION 3: Terms of Payment - Paying Agent/Registrar. The principal of, premium,
if any, and the interest on the Bonds, due and payable by reason of maturity 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
AgenttRegistrar, 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, Dallas, Texas, to serve as
Paying AgentlRegistrar 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
AgentlRegistrar, all as provided herein, in accordance with the terms and provisions of a
"Paying AgentlRegistrar Agreement', substantially in the form attached hereto as Exhibit A,
and such reasonable rules and regulations as the Paying AgentlRegistrar and the City may
prescribe. The Mayor and City Secretary are hereby authorized to execute and deliver such
Agreement in connection with the delivery of the Bonds. The City covenants to maintain and
provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any
successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other
entity qualified and authorized to serve in such capacity and perform the duties and services of
Paying AgentlRegistrar. Upon any change in the Paying Agent/Registrar for the Bonds, the
City agrees to promptly cause a written notice thereof to be sent to each Holder by United
States Mail, first class postage prepaid, which notice shall also give the address of the new
Paying AgentlRegistrar.
Principal of and premium, if any, on the Bonds shall be payable at the Stated
Maturities, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at
its designated offices in Dallas, Texas (the "Designated Paymentrrransfer 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 15' day of the month next preceding each interest
payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States
Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register
or (it) by such other method, acceptable to the Paying Agentl Registrar, requested by, and at
the risk and expense of, the Holder. If the date for the payment of the principal of or interest
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on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions
in the City where the Designated Payment/Transfer Office of the Paying Agent/Registrar is
located are authorized by law or executive order to close, then the date for such payment shall
be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when
banking institutions are authorized to close; and payment on such date shall have the same
force and effect as if made on the original date payment was due.
In the event of a nonpayment of interest on a scheduled payment date, and for thirty
(30) days thereafter, a new record date for such interest payment (a "Special Record Date")
will be established by the Paying Agent! Registrar, if and when funds for the payment of such
interest have been received from the City. Notice of the Special Record Date and of the
scheduled payment date of the past due interest (which shall be 15 days after the Special
Record Date) shall be sent at least five (5) business days prior to the Special Record Date by
United States Mail, first class postage prepaid, to the address of each Holder appearing on the
Security Register at the close of business on the last business day next preceding the date of
mailing of such notice.
SECTION 4: Non -Redeemable. The Bonds shall not be subject to redemption prior to
maturity at the option of the City.
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 Agent/ 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.
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.
45252942.1 -3-
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 tens "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.
SECTION 6: Book -Entry Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3 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 properly discharging its
duties as securities depository for the Bonds, the City covenants and agrees with the Holders
of the Bonds to cause Bonds to be printed in definitive form and provide for the Bond
certificates to be issued and delivered to DTC Participants and Beneficial Owners, as the case
may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged
on the Security Register maintained by the Paying Agent/Registrar and payment of such
Bonds shall be made in accordance with the provisions of Sections 3 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 Issue Date shall be deemed to be duly executed on behalf of the
City, notwithstanding that such individuals or either of them shall cease to hold such offices at
the time of delivery of the Bonds to the initial 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.
45252942.1 -4-
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 9C, 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 9D, 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 initial purchaser(s). Any time after
the delivery of the Initial Bond(s), the Paying Agent/ Registrar, pursuant to written instructions
from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered
hereunder and exchange therefor definitive Bonds of authorized denominations, Stated
Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to
the Holders named at the addresses identified therefor; all pursuant to and in accordance with
such written instructions from the initial purchaser(s), or the designee thereof, and such other
information and documentation as the Paying Agent/Registrar may reasonably require.
SECTION 9: Forms. A. Forms Generally. The Bonds, the Registration Certificate
of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of
Paying AgenttRegistrar, and the form of Assignment to be printed on each of the Bonds, shall
be substantially in the fortes set forth in this Section with such appropriate insertions,
omissions, substitutions, and other variations as are permitted or required by this Ordinance
and may have such letters, numbers, or other marks of identification (including identifying
numbers and letters of the Committee on Uniform Securities Identification Procedures of the
American Bankers Association) and such legends and endorsements (including insurance
legends on insured Bonds and any reproduction of an opinion of counsel) thereon as may,
consistently herewith, be established by the City or determined by the officers executing such
Bonds as evidenced by their execution. Any portion of the text of any Bonds may be set forth
on the reverse thereof, with an appropriate reference thereto on the face of the Bond.
The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, 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.
45292942.1 -5-
(B) Form of Definitive Bond.
REGISTERED
NO.
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF ALLEN, TEXAS,
GENERAL OBLIGATION REFUNDING BOND,
SERIES 2003
Issue Date: Interest Rate:
January 1, 2003
Registered Owner:
REGISTERED
Stated Maturity: CUSIP NO:
Principal Amount: DOLLARS
The City of Allen (hereinafter referred to as the "City"), a body corporate and municipal
corporation in the County of Collin, State of Texas, for value received, acknowledges itself
indebted to and hereby promises to pay to the order of the Registered Owner named above, or
the registered assigns thereof, on the Stated Maturity date specked above the Principal
Amount hereinabove stated, without right of prior redemption, and to pay interest on the
unpaid principal amount hereof from the Issue 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 March 1 and September 1 in each year, commencing March 1, 2003. Principal of
this Bond is payable at its Stated Maturity to the registered owner hereof, upon presentation
and surrender, at the Designated Payment(fransfer Office of the Paying Agent/Registrar
executing the registration certificate appearing hereon, or its successor. Interest is payable
to the registered owner of this Bond (or one or more Predecessor Bonds, as defined in the
Ordinance hereinafter referenced) whose name appears on the "Security Register" maintained
by the Paying Agent/Registrar at the close of business on the "Record Date% which is the 15th
day of the month next preceding each interest payment date, and interest shall be paid by the
Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the
address of the registered owner recorded in the Security Register or by such other method,
acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the
registered owner. All payments of principal of, premium, if any, and interest on this Bond shall
be without exchange or collection charges to the owner hereof and in any coin or currency of
the United States of America which at the time of payment is legal tender for the payment of
public and private debts.
This Bond is one of the series specified in its title issued in the aggregate principal
amount of $2,705,000 (herein referred to as the "Bonds") for the purpose of refunding certain
outstanding obligations of the City (identified in the Ordinance hereinafter referenced 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.,
45252942.1 -6-
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 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 Paymentffransfer Office of the
Paying AgentlRegistrar, 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 AgentlRegistrar; the terms and provisions upon
which this Bond may be discharged at or prior to its maturity, and deemed to be no longer
Outstanding thereunder; and for other terms and provisions contained therein. Capitalized
terms used herein have the meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
Payment(Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered
Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of
interest, and of the same aggregate principal amount will be issued by the Paying
AgentlRegistrar 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, and (iii) on any other date
as the owner for all other purposes, and neither the City nor the Paying Agent/ Registrar, or
any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of
interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for
such interest payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from
the City. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (which shall be 15 days after the Special Record Date) shall be sent at least five
(5) business days prior to the Special Record Date by United States Mail, first class postage
prepaid, to the address of each Holder appearing on the Security Register at the dose 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
45252902.1 -7-
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby. The terms and provisions of this Bond and the
Ordinance shall be construed in accordance with and shall be governed by the laws of the
State of Texas.
IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly
executed under the official seal of the City as of the Issue 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
45252942.1 -8-
(D) Form of Certificate of Paying AgenURegistrar to appear on Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered in the name of the Registered Owner
shown above under the provisions of the within -mentioned Ordinance; the bond or bonds of
the above entitled and designated series originally delivered having been approved by the
Attorney General of the State of Texas and registered by the Comptroller of Public Accounts,
as shown by the records of the Paying Agent/Registrar.
The designated offices of the Paying Agent/Registrar in Dallas, Texas, is the
Designated Payment/Transfer Office for this Bond.
Registration date:
(E) Form of Assignment.
JPMORGAN CHASE BANK, Dallas, Texas,
as Paying Agent/Registrar
By
Authorized Signature
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number 1 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:
(i) immediately under the name of the bond the headings "Interest Rate" and
"Stated Maturity" shall both be omitted;
45252942.1 -9-
(ii) Paragraph one shall read as follows:
Registered Owner:
Principal Amount: DOLLARS
The City of Allen (hereinafter referred to as the "City"), a body corporate and municipal
corporation in the County of Collin, State of Texas, for value received, acknowledges itself
indebted to and hereby promises to pay to the order of the Registered Owner named above, or
the registered assigns thereof, the Principal Amount hereinabove stated on September 1 in
each of the years and in principal installments in accordance with the following schedule:
YEAR OF PRINCIPAL INTEREST
MATURITY INSTALLMENTS RATE
(INFORMATION TO BE INSERTED FROM SCHEDULE IN SECTION 2 HEREOF)
(without right of prepayment prior to maturity) and to pay interest on the unpaid Principal
Amount hereof from the Issue 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 March 1 and September 1 in each year, commencing March 1, 2003. Principal
installments of this Bond are payable in the year of maturity to the registered owner hereof by
JPMorgan Chase Bank, Dallas, Texas (the "Paying Agent/Registrar"), upon presentation and
surrender, at its designated offices Dallas, Texas (the "Designated Payment/Transfer Office").
Interest is payable to the registered owner of this Bond whose name appears on the "Security
Register" maintained by the Paying Agent/Registrar at the close of business on the "Record
Date", which is the 15" day of the month next preceding each interest payment date, and
interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first
class postage prepaid, to the address of the registered owner recorded in the Security
Register or by such other method, acceptable to the Paying Agent/Registrar, requested by,
and at the risk and expense of, the registered owner. All payments of principal of, premium, If
any, and interest on this Bond shall be without exchange or collection charges to the owner
hereof and in any coin or currency of the United States of America which at the time of
payment is legal tender for the payment of public and private debts.
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
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 2003
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;
65252962.1 _10_
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.
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 (1) the filing by the Holder thereof with the Paying Agent/
Registrar of evidence satisfactory to the Paying Agent/ Registrar of the destruction, loss or
theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the
Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the
Paying Agent/ Registrar harmless. All expenses and charges associated with such indemnity
and with the preparation, execution and delivery of a replacement Bond shall be bome by the
Holder of the Bond mutilated, or destroyed, lost or stolen.
Every replacement Bond issued pursuant to this Section shall be a valid and binding
obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all
other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the
destroyed, lost, or stolen Bonds.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated,
destroyed, lost or stolen Bonds.
SECTION 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 firm to mature as to principal and interest in such amounts and at
such times as will insure the availability, without reinvestment, of sufficient money, together
with any moneys deposited therewith, if any, to pay when due the principal of and interest on
such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof.
The City covenants that no deposit of moneys or Government Securities will be made under
45252942.1 -11-
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 of the Bonds such moneys were deposited and are held in trust to
pay shall upon the request of the City be remitted to the City against a written receipt therefor.
Notwithstanding the above and foregoing, any remittance of funds from the Paying
Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the
State of Texas.
The term "Government Securities", as used herein, means (i) direct noncallable
obligations of the United States of America, including obligations the principal of and interest
on which are unconditionally guaranteed by the United States of America, (it) 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 firth not less than AAA or its equivalent and (iii) noncallable
obligations of a state or an agency or a county, municipality, or other political subdivision of a
state that have been refunded and on the date of their acquisition or purchase by the City, are
rated as to investment quality by a nationally recognized investment rating firm not less than
AAA or its equivalent.
SECTION 13: Ordinance a Contract - Amendments - Outstandino Bonds. This
Ordinance shall constitute a contract with the Holders from time to time, be binding on the City,
and shall not be amended or repealed by the City so long as any Bond remains Outstanding
except as permitted in this Section. The City may, without the consent of or notice to any.
Holders, from time to time and at any time, amend this Ordinance in any manner not
detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency,
or formal defect or omission herein. In addition, the City may, with the consent of Holders
holding a majority in aggregate principal amount of the Bonds then Outstanding affected
thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that,
without the consent of all Holders of Outstanding Bonds, no such amendment, addition, or
rescission shall (1) extend the time or times of payment of the principal of, premium, If any,
and interest on the Bonds, reduce the principal amount thereof, the redemption price, 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:
45252M.1 -12-
(1) those Bonds cancelled by the Paying Agent/Registrar or delivered to
the Paying Agent/ Registrar for cancellation;
(2) those Bonds deemed to be duly paid by the City in accordance with
the provisions of Section 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.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue
Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation
designed to supplement, amend or replace the specific Regulation referenced.
"Yield" of (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
45252942.1 -13-
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 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.
45252s42.1 -14-
(g) Information Report. The City shall timely file the information required by
section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other
form and in such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in
section 148(f) of the Code and the Regulations and rulings thereunder.
(i) 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.
(ii) 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.
(iii) 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
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.
(iv) 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
46252942.1 -15-
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) Current Refunding. The Bonds are issued exclusively to refund the
Refunded Obligations, and the Bonds will be issued less than 90 days before the redemption
of the Refunded Obligations.
SECTION 15: Sale of Bonds — Official Statement Approval. The Bonds authorized by
this Ordinance are hereby sold by the City to Estrada Hinojosa & Company, Inc. (herein
referred to as the "Purchasers") in accordance with the Purchase Contract, dated
December 10, 2002, attached hereto as Exhibit B and incorporated herein by reference as a
part of this Ordinance for all purposes. The Mayor is hereby authorized and directed to
execute said Purchase Contract for and on behalf of the City and as the act and deed of this
Council, and in regard to the approval and execution of the Purchase Contract, the Council
hereby finds, determines and declares that the representations, warranties and agreements of
the City contained in the Purchase Contract are true and correct in all material respects and
shall be honored and performed by the City.
Furthermore, the use of the Official Statement 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
December 10, 2002, 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: 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
45252942.1 -16-
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, 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 17: Proceeds of Sale. Immediately following the delivery of the Bonds,
proceeds of sale in the sum of (1) $2,645,000 shall be deposited to with JPMorgan Chase
Bank, Dallas, Texas (the "Deposit Agent") to beusedto redeem the Refunded Obligations on
January 14, 2003, and (ii) $2,292.15 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, including 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 Manager shall cause to be transferred in immediately available funds
to the Deposit Agent from moneys on deposit in the interest and sinking fund maintained for
the payment of the Refunded Obligations the sum of $56,857.50 to accomplish the refunding.
SECTION 18: Redemption of Refunded Obligations. The bonds currently outstanding
of that series known as "City of Allen, Texas, General Obligation Refunding and Improvement
Bonds, Series 1992", dated October 1, 1992, maturing in the years 2003, 2004 and 2007, and
aggregating in principal amount $2,645,000, shall be redeemed and the same are hereby
called for redemption on January 14, 2003, at the price of par and accrued interest to the date
of redemption. The City Secretary is hereby authorized and directed to file a copy of this
Ordinance, together with a suggested form of notice of redemption to be sent to bondholders,
with JPMorgan Chase Bank, Dallas, Texas (successor paying agent/registrar to Ameritrust
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 C and
incorporated herein by reference as a part of this Ordinance for all purposes.
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 19: Notices to Holders - Waiver. Wherever this Ordinance provides for
notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
45252912.1 -17-
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 20: Cancellation. All Bonds surrendered for payment, redemption, transfer,
exchange, or replacement, if surrendered to the Paying AgenURegistrar, 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
Agent/Registrar. All cancelled Bonds held by the Paying AgenURegistrar shall be returned to
the City.
SECTION 21: 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
certificates for the implementation and use of the Book Entry Only System used in the
settlement and transfer of the Bonds.
SECTION 22: 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 provided, however, that the presence or absence of CUSIP numbers on the
definitive Bonds shall be of no significance or effect as regards the legality thereof and neither
the City nor attorneys approving the Bonds as to legality are to be held responsible for CUSIP
numbers incorrectly printed or typed on the definitive Bonds.
SECTION 23: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied,
is intended or shall be construed to confer upon any person other than the City, the Paying
AgentlRegistrar 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 24: 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.
45252942.4 -18-
SECTION 25: Governing Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 26: Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 27: 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 28: Severabililv. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and the City Council
hereby declares that this Ordinance would have been enacted without such invalid provision.
SECTION 29: Incorporation of Findings and Determinations. The findings and
determinations of the City Council contained in the preamble hereof are hereby incorporated
by reference and made a part of this Ordinance for all purposes as if the same were restated
in full in this Section.
SECTION 30: Continuing Disclosure Undertaking. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the
Rule from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized
department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state
information depository within the meaning of the Rule from time to time.
(b) Annual Reports. The City shall provide annually to each NRMSIR and
any SID, within six months after the end of each fiscal year (beginning with the fiscal year
ending September 30, 2002) 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 D hereto. Financial statements to be
provided shall be (1) prepared in accordance with the accounting principles described in
Exhibit D 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.
45252942.1 -19-
If the City changes its fiscal year, it will notify each NRMSfR 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 speck 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 specified in this Section while, but only while, the City
remains an "obligated person" with respect to the Bonds within the meaning of the Rule,
except that the City in any event will give the notice required by subsection (c) hereof of any
Bond calls and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or
any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to
update any information provided in accordance with this Section or otherwise, except as
expressly provided herein. The City does not make any representation or warranty concerning
such information or its usefulness to a decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE
45252942.1 -20-
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.
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 K (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule to the date of such amendment, as well as
such changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal
amount (or any greater amount required by any other provision of this Ordinance that
authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b)
a Person that is unaffiliated with the City (such as nationally recognized bond counsel)
determines that such amendment will not materially impair the interests of the Holders and
beneficial owners of the Bonds. The provisions of this Section may also be amended from
time to time or repealed by the City if the SEC amends or repeals the applicable provisions of
the Rule or a court of final jurisdiction determines that such provisions are invalid, but only If
and to the extent that reservation of the City's right to do so would not prevent underwriters of
the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such
offering. If the City so amends the provisions of this Section, it shall include with any amended
financial information or operating data 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.
SECTION 31: MBIA Insurance. The Bonds have been sold with the principal of and
interest thereon being insured by MBIA Insurance Corporation (hereinafter called "MBIA°)
pursuant to a Financial Guaranty Insurance Policy. In accordance with the terms and
conditions applicable to insurance provided by MBIA, the City covenants and agrees that, in
the event the principal and interest due on the Bonds shall be paid by MBIA pursuant to the
policy referred to this Section, the assignment and pledge of all funds and all covenants,
agreements and other obligations of the City to the Holders shall continue to exist and MBIA
shall be subrogated to the rights of such Holders; and furthermore, the City covenants and
agrees that:
(a) In the event that, on the second business day, and again on the
business day, prior to the payment date on the Bonds, the Paying Agent(Registrar has not
received sufficient moneys to pay all principal of and interest on the Bonds due on the second
following or following, as the case may be, business day, the Paying Agent/Registrar shall
immediately notify MBIA or its designee on the same business day by telephone or telegraph,
confirmed in writing by registered or certified mail, of the amount of the deficiency.
45252942.1 -21-
(b) If the deficiency is made up in whole or in part prior to or on the payment
date, the Paying Agent/Registrar shall so notify MBIA or its designee.
(c) In addition, it the Paying Agent/Registrar has notice that any Holder has
been required to disgorge payments of principal of or interest on the Bonds to a trustee in
bankruptcy or creditors or others pursuant to a final judgment by a court of competent
jurisdiction that such payment constitutes avoidable preference to such Holder within the
meaning of any applicable bankruptcy laws, then the Paying Agent/Registrar shall notify the
MBIA or its designee of such fact by telephone or telegraphic notice, confirming in writing by
registered or certified mail.
(d) The Paying Agent/Registrar is hereby irrevocably designated,
appointed, directed and authorized to act as attomey-in-fad for Holders of theBondsas
follows:
(1) If and to the extent there is a deficiency in amounts
required to pay interest on the Bonds, the Paying Agent/Registrar shall (a)
execute and deliver to State Street Bank and Trust Company, N.A., or its
successors under the Policy (the "Insurance Paying Agent'), in form satisfactory
to the Insurance Paying Agent, an instrument appointing the MBIA as agent for
such Holders in such legal proceeding related to the payment of such interest
and an assignment to the MBIA of the claims for interest to which such
deficiency relates and which are paid by MBIA, (b) receive as designee to the
respective Holders (and not as Paying Agent/Registrar) in accordance with the
tenor of the Policy payment from the Insurance Paying Agent with respect to
the claims for interest so assigned, and (c) disburse the same to such
respective Holders; and
(2) If and to the extent of a deficiency in amounts required to
pay principal of the Bonds, the Paying Agent/Registrar shall (a) execute and
deliver to the Insurance Paying Agent in form satisfactory to the Insurance
Paying Agent an instrument appointing MBIA as agent for such Holder in any
legal proceeding relating to the payment of such principal and an assignment to
MBIA of any of the Bonds surrendered to the Insurance Paying Agent or so
much of the principal thereof as has not previously been paid or for which
moneys are not held by the Paying Agent/Registrar and available for such
payment (but such assignment shall be delivered only if payment from the
Insurance Paying Agent is received), (b) receive as designee of the respective
Holders (and not as Paying Agent/Registrar) in accordance with the tenor of the
Policy payment therefor from the Insurance Paying Agent, and (c) disburse the
same to such Holders. _
(e) Payments with respect to claims for interest on and principal of Bonds
disbursed by the Paying Agent/Registrar from proceeds of the Policy shall not be considered
to discharge the obligation of the City with respect to such Bonds, and MBIA shall become of
the owner of such unpaid Certificate and claims for the interest in accordance with the tenor of
the assignment made to it under the provisions of this subsection or otherwise.
(f) Irrespective of whether any such assignment is executed and delivered,
MBIA and the Paying Agent/Registrar hereby agree for the benefit of the MBIA that:
45252942.1 -22-
(1) They recognize that to the extent MBIA makes payments,
directly or indirectly (as by paying through the Paying Agent/Registrar), on
account of principal of and interest on the Bonds, MBIA will be subrogated to
the rights of such Holders to receive the amount of such principal and interest
from the City as provided and solely from the sources stated in this Ordinance
and the Bonds; and
(2) They will accordingly pay to MBIA the amount of such
principal and interest (including principal and interest recovered under
subparagraph (ii) of the first paragraph of the Policy, which principal and
interest shall be deemed past due and not to have been paid) as provided in
this Ordinance and the Bonds, but only from the sources and in the manner
provided herein for the payment of principal of and interest on the Bonds to
Holders, and will otherwise treat the MBIA as the owner of such rights to the
amount of such principal and interest.
(g) In connection with the issuance of additional obligations, the City shall
deliver to the MBIA a copy of the disclosure document, if any, circulated with respect to such
additional obligations.
(h) No amendment or supplement to this Order may become effective
without prior consent of MBIA. Copies of any amendments made to the documents executed
in connection with the issuance of the Bonds which are consented to by the MBIA shall be
sent to Standard & Poor's Corporation.
(i) MBIA shall receive notice of the resignation or removal of the Paying
Agent/Registrar and the appointment of a successor thereto.
0) MBIA shall receive copies of all notices required to be delivered to
Holders and, on an annual basis, copies of the City's audited financial statements and annual
budget.
(k) Any notice that is required to be given to a Holder of the Bonds or to the
Paying Agent/Registrar pursuant to the Ordinance shall also be provided to MBIA. All notices
required to be given to MBIA under the Ordinance shall be in writing and shall be sent by
registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street,
Armonk, New York 10504, Attention: Surveillance.
(1) MBIA, acting alone, shall have the right to direct all remedies in the
event of a default. MBIA shall be recognized as the registered owner of each bond which it
insures for the purposes of exercising all rights and privileges available to Holders. For Bonds
which it insures, MBIA shall have the right to institute any suit, action, or proceeding at law or
in equity under the same terns as the Holder in accordance with the applicable provisions of
this Ordinance.
SECTION 32: 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.
4SM962.1 -23-
SECTION 33: 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.
PASSED AND ADOPTED, this December 10, 2002.
CITY OF ALLEN, TEXAS
Mayor
ATTEST:
(City Seal)
45252942.1 -24-
y Sec
ry
(City Seal)
45252942.1 -24-
THIS AGREEMENT entered into as of December 10, 2002 (this "Agreement), by and
between the City of Allen, Texas (the "Issued'), and JPMorgan Chase Bank, Dallas, Texas, a
New York banking corporation organized and existing under the laws of the State of New York
and authorized to do business in the State of Texas, or its successors,
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 2003" (the "Securities ),
dated January 1, 2003, and such Securities are scheduled to be delivered to the initial
purchasers thereof on or about January 14, 2003; 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
Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days
prior to the Gose of the Fiscal Year of the Issuer, and shall be effective upon the first day of the
following Fiscal Year.
45252953.1 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, Mayor Pro Tem, City Manager,
Finance Director, Assistant Finance Director, or City Secretary, any one or more
of said officials, and delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized
to be closed.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision of a government.
"Predecessor Securities" of any particular Security means every previous
Security evidencing all or a portion of the same obligation as that evidenced by
such particular Security (and, for the purposes of this definition, any mutilated,
lost, destroyed, or stolen Security for which a replacement Security has been
registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the
Resolution).
45252853.1 -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 specked in the Bond Resolution the
principal of a Security is scheduled to be due and payable.
Section 2.02 Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties
and functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01 Duties of 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, 9' 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.
45252ss1 -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 "Securely 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 forth 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 form.
45252953.1 -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 Section 11 of the Bond Resolution, to deliver and
issue Securities in exchange for or In lieu of mutilated, destroyed, lost, or stolen Securities as
long as the same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may
execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or
stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof
with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such
Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of
indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All
expenses and charges associated with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be borne 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
45252959.1 -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 Securities containing an endorsement or
instruction of transfer or power of transfer which appears on its face to be signed by the Holder
or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts
or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note, security, or other paper or document supplied by
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 capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying AgentJRegistrar, or any other agent.
Section 5.05 Moneys Held by Bank - Paying Agent AccountlCollateralization. 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.
45252953.1 -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.
45252953.1 -7- EXHIBIT A
Section 6.06 Severabililv. 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 Agent/Registrar designated and appointed by
the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force
and effect following the termination of this Agreement.
Section 6.11 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
05252953.1 -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, Dallas, Texas,
BY:
Title:
Address: 2001 Bryan Street, le Floor
Dallas, Texas 75201
CITY OF ALLEN, TEXAS
BY:
Mayor
Address: One Allen Civic Plaza
Allen, Texas 75013
45=053.1 -9- EXHIBIT A
B
$2,705,000
CITY OF ALLEN, TEXAS
General Obligation Refunding Bonds,
Series 2003
PURCHASE CONTRACT
December 10, 2002
The Honorable Mayor and Members of the City Council
City of Allen
One Allen Civic Plaza
305 Century Parkway
Allen, Texas 75013
Dear Mayor and Members of the City Council:
Ladies and Gentlemen:
The undersigned, Estrada Hinojosa & Company, Inc. (the "Underwriter"), hereby 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 Underwriter and the Issuer. This offer is
made subject to the Issuer's written acceptance hereof on or before 10:00 P.M., Central Time, on the date
hereof, and, if not so accepted, will be subjectto withdrawal by the Underwriter upon notice delivered to the
Issuer at any time prim to the acceptance hereof by the Issuer. Terms not otherwise defined in this Purchase
Contract shall have the same meanings set forth in the Ordinance (as defined herein) or in the Official
Statement (as defined herein).
1. Purchase and Sale of Bonds. (a) Subject to the terms and conditions and in reliance
upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to
purchase from the Issuer, and the Issuer hereby agrees to sell and deliver to the Underwriter, all, but not less
than all, of an aggregate of $2,705,000 in principal amount of City of Allen, Texas General Obligation
Refunding Bonds, Series 2003 (the "Bonds'). Inasmuch as this purchase and sale represents a negotiated
transaction, the Issuer understands, and hereby confirms, that the Underwriter is not acting as a fiduciary of
the Issuer, but rather is acting solely in its individual capacity as an underwriter for its own account.
(b) The principal amount of the Bonds to be issued, the dated date therefor, the maturities,
redemption previsions and interest rates per arm on are set forth in Schedule I hereto. The Bonds shall be
as described in, and shall be issued and secured under and pursuant to the provisions of the Ordinance
adopted by the City Council of the Issuer on December 10, 2002 (the "Ordinance').
(c) The purchase price for the Bonds shall be $2,698,445.85, representing the aggregate principal
amount of the Bonds of $2,705,000, plus a reoffering premium of $12,742.45, less an Underwriter's discount
of $21,588.75, and plus awned interest on the Bonds in the amount of $2,292.15 from the dated date of the
Bonds to, but not including, the Closing Date (as hereinafter defined).
(d) Deliveredto the Issuer herewith is a corporate check of the Underwriter payable to the order
of the Issuer in the amount of $27,150 (the "Check"). In the event that the Issuer does not accept this offer,
the Check shall be returned uncashed to the Underwriter. Upon the Issuer's acceptance and countersignature
of this offer, the Check (i) shall not be cashed or negotiated but shall be held and retained in safekeeping by
the Issuer as security for the performance by the Underwriter of its obligations, subject to the teams and
conditions herein set forth, to purchase and accept delivery of the Bonds at the Closing and )ii) shall be
applied and disposed of by the Issuer solely as provided in this Purchase Contract. In the event of the
Underwriter's compliance with such obligation to purchase and accept delivery of the Bonds as herein
provided, the Check shall be returned to the Underwriter at Closing. In the event of the failure by the Issuer
to deliver the Bonds at Closing, or if the Issuer shall be unable to satisfy the conditions to the obligation of the
Underwriter contained in this Purchase Contract, or it the obligations of the Underwriter shall be ternwrated
for my reason permitted by this Purchase Contract, the Check shall be returned promptly to the Underwriter.
In the event that the Underwriter fails (other than for a reason permitted hereunder) to purchase and accept
defiveryof the Bonds as herein provided, the Issuer shall become entitled to cash or negotiate the Check, and
the proceeds thereof shall be retained by the Issuer as and for full liquidated damages for such failure and
for any and all defaults on the part of the Underwriter and such proceeds shall constitute a full release and
discharge of all claims and damages for such failure and for any and all defaults, and except as set forth in
Sections 8 and 10 hereof, no party shall have any further rights against the other hereunder. The Underwriter
and the Issuer understand that in such event the Issuer's actual damages may be greater or may be less than
such amount. Accordingly, the Underwriter hereby waives any right to claim that the Issuer's actual
damages are less than such amount, and the Issuer's acceptance of this offer shall constitute a waiver of any
right the Issuer may have to additional damages from the Underwriter.
2. Public Offering. The Underwriter agrees to make a bona fide public offering of all of the
Bonds at prices not to exceed the respective public offering prices set forth on the inside cover pages of the
Official Statement and in Schedule I attached hereto and may subsequently change such offering prices
without any requirement of prior notice. The Underwriter may offer and sell Bonds to certain dealers
(including dealers depositing Bonds into investment trusts) and others at prices lower than the respective
public offering prices stated on the inside cover page of the Official Statement, provided, however, that at
least ten percent (10%) of the principal amount of the Bonds of each maturity shall be sold to the "public"
(exclusive of dealers, brokers and investment bankers, etc.) at the offering price set forth on the inside cover
page of the Official Statement. On or before Closing, the Underwriter shall execute an Issue Price
Certificate prepared by Bond Counsel verifying the initial offering prices to the public at which a substantial
amount of each stated maturity of the Bonds was sold to the public.
The Official Statement
(a) Attached hereto as Exhibit A is either a draft of the final Official Statement or a copy of the
Preliminary Official Statement dated December 2, 2002 (the "Preliminary Official Statement'), including the
cover page and Appendices thereto, of the Issuer relating to the Bonds. Such draft of the final Official
Statement or copy of the Preliminary Official Statement, as amended to conform to the terms of this Purchase
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EXHIBIT B
Contract and with such other changes and amendments to the date hereof as have been mutually agreed to
by the Issuer and the Underwriter, is referred to herein as the "Official Statement"
(b) The Preliminary Official Statement has been prepared for use in connection with the public
offering, sale and distribution of the Bonds by the Underwriter. The Issuer hereby represents and warrants
thatthe Preliminary Official Statement has been deemed final by the Issuer as of its date within the meaning,
and for the purposes, of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (the "Rule'7.
(c) The Issuer hereby authorizes the Official Statement and the information therein contained
to be used by the Underwriter in connection with the public offering and the sale of the Bonds. The Issuer
consents to the use by the Underwriter prior to the date hereof of the Preliminary Official Statement in
connection with public offering of the Bonds. The Issuer shall provide, or cause to be provided, to the
Underwriter as soon as practicable after the date of the Issuer's acceptance of this Purchase Contract (but,
in any event, not later than within seven business days after the Issuer's acceptance of this Purchase
Contract and in sufficient time to accompany, any confirmation that requests payment from any customer)
copies of the Official Statement which is complete as of the date of its delivery to the Underwriter in such
quantity as the Underwriter shall request in order for the Underwriter to comply with Section (bx4) of the
Rule and the riles of the Municipal Securities Rulemaking Board.
(d) The Issuer hereby consents to and ratifies the use of the Preliminary Official Statement and
authorizes the Official Statement to be used in connection with the offering of the Bonds, and ratifies and
approves the prior distribution of the current drafts of each thereof by the Underwriter prior to the availability
of the final version thereof.
(e) If, after the date of this Purchase Contract up to and including the date the Underwriter is
no longer required pursuant to the Rule to provide an Official Statement to potential customers who request
an Official Statement (the earlier of (i) 90 days from the "end of the underwriting period" (as defined in the
Rule) and (ii) the time when the Official Statement is available to any person from a nationally recognized
municipalsecurities information repository, but in no case less than 25 days after the "end of the underwriting
period" for the Bonds), the Issuer becomes aware of any fact or event that might or would cause the Official
Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit
to state a material fact required to be stated therein or necessary to make the statements therein, in the light
of the circumstances when the Official Statement is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Official Statement to comply with law, the Issuer will notify the
Underwriter (and for the purposes of this clause provide the Underwriter with such information as it may
from time to time request), and if, in the reasonable opinion of the Underwriter, such fact or event requires
preparation and publication of a supplement or amendment to the Official Statement, the Issuer will forthwith
prepare and famish, at the Issuer's own expense (in a forth and manner approved by the Underwriter), a
reasonable number of copies of either such amendments or supplements to the Official Statement so that the
statements in the Official Statement as so amended and supplemented will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or so that the Official Statement will comply with law. If such notification
shall be subsequent to the Closing, the Issuer shall famish such legal opinions, certificates, instruments and
other documents as the Underwriter may deem necessary to evidence the truth and accuracy of such
supplement or amendment to the Official Statement.
(f) The Underwriter hereby agrees to timely file the Official Statement with a nationally
recognized municipal securities information repository. Unless otherwise notified in writing by the
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EXHIBIT B
Underwriter, the Issuer can assume that the "end of the underwriting period' for purposes of the Rule is the
date of the Closing.
(g) 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
relating to the Issuer that is material to an evaluation of the offering of the Bonds. The Issuer has not failed
to substantially comply with any undertaking specified in paragraph (b)(5)(i) of the Rule within the last five
years.
4. Representations, Warranties and Covenants of the Issuer. The Issuer hereby
represents and warrants to and covenants with the Underwriter that:
(a) The Issuer is a municipality and a body corporate and politic of the State of Texas and has
on the date hereof and on the date of Closing will have, full legal right, power and authority to enter into this
Purchase Contract and to refund the bonds being refunded by the Bonds (the "Refunded Bonds"), to sell the
Bonds, and to issue and deliver the Bonds to the Underwriter as provided herein and to carry out and
consummate all other transactions contemplated by the Ordinance and this Purchase Contract;
(b) By all necessary official action of the Issuer prior to or concurrently with the acceptance
hereof, the Issuer has duly authorized all necessary action to be taken by it for (i) the adoption of the
Ordinance and the issuance and sale of the Bonds, (ii) the approval, execution and delivery of, and the
performance by the Issuer on its part of the obligations contained in, the Bonds and the Ordinance, (iii) the
execution and delivery of this Purchase Contract and compliance on its part with the provisions thereof, and
(iv) the consurmnation by it of all other transactions described in the Official Statement, the Ordinance, this
Purchase Contract and any and all such other agreements and documents as may be required to be executed,
delivered and/or received by the Issuer in order to carry out, give effect to, and consummate the transactions
contemplated herein and in the Official Statement;
(c) The Bonds, when issued, delivered and paid for, in accordance with the Ordinance and this
Purchase Contract, will constitute legal, valid and binding obligations of the Issuer entitled to the benefits of
the Ordinance and be enforceable in accordance with their respective terms, subject in bankruptcy,
insolvency, reorganization, moratorium and other similar laws and principles of equity relating to in affecting
the enforcement of creditors' rights;
(d) The Issuer is not in breach of or default under any applicable constitutional provision, law or
administrative regulation of the State or the United States; or any applicablejudgment or decree; or any loan
agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party or
to which the Issuer is otherwise subject; and no event has occurred and is continuing that 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; and the execution, delivery and sale of the Bonds and the adoption of the
Ordinance and compliance with the provisions on the Issuer's part contained therein and in this Purchase
Contract, will not conflict with or constitute a breach of or default under any constitutional provision,
administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or
other instrument to which the Issuer is a party or to which the Issuer is otherwise subject or under the terms
of any such law, regulation or instrument, except as provided by the Bonds and the Ordinance;
(e) All authorizations, approvals, licenses, permits, consents and orders of any governmental
authority, legislative body, board, agency or commission having j urisdiction of the matters which are required
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for the due authorization of, which would constitute a condition precedent to, or the absence of which would
materially adversely affect the due performance by the Issuer of its obligations under the Ordinance and the
Bonds have been duly obtained, except for the approval of the Bonds by the Texas Attorney General and the
registration of the Bonds by the Comptroller of Public Accounts of the State of Texas, which approval and
registration shall be obtained prior to the Closing or any state securities law approvals;
(i) The Bonds and the Ordinance conform to the descriptions thereof contained in the Official
Statement under the caption "THE. BONDS", the proceeds of the sale of the Bonds will be applied generally
as described in the Official Statement under the captions "PLAN OF FINANCING" and "SOURCES AND
USES OF FUNDS" and the Undertaking (as defined in Section 6(ix2) hereof) conforms to the description
thereof contained in the Official Statement under the caption "CONTINUING DISCLOSURE OF
INFORMATION";
(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 existence of the Issuer or the titles of
its officers to their respective offices, or affecting or seeking to probibit, restrain or enjoin the We, issuance
or delivery ofthe Bonds or the levy, and collection of taxes pledged to the payment ofprincipal of and interest
on the Bonds, pursuant to the Ordinance or in any way contesting or affecting the validity or enforceability
of the Bonds or the issuance and sale thereof or of the Ordinance, or contesting the exclusion from gross
income of interest on the Bonds for federal income tax purposes, or contesting in any way the completeness
or accuracy 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 or sale of the Bonds, the
adoption of the Ordinance, nor, to the best knowledge of the Issuer, is there any basis therefor, wherein an
unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the
Bonds or the Ordinance.
(h) 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;
() At the time of the Issuer's acceptance hereof and (unless an event occurs of the nature
described in paragraph (e) of Section 3 of this Purchase Contract) at all times subsequent thereto during the
period up to and including twenty-five (25) days subsequent to the "end of the underwriting period," the
Official Statement does not and will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
6) If the Official Statement is supplemented or amended pursuant to Section 3(e) of this
Purchase Contract, 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 thirty (30) days subsequent to the date of Closing, the Official Statement as so supplemented
or amended will not contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances under which
made, not misleading; and
(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 and will not take or omit to take
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any action which action or omission will adversely affect the exclusion from gross income for federal income
tax purposes of the interest on the Bonds;
p) The Issuer will furnish such information and execute such instruments and take such action
in cooperation with the Underwriter as the Underwriter may reasonably request (A) to (i) qualify the Bonds
for offer and sale under the Blue Sky or other securities laws and regulations of such states and other
jurisdictions in the United States as the Underwriter may designate and (ii) 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 or special consents to service of
process =der the laws of any jurisdiction) and will advise the Underwriter immediately of receipt by the
Issuer of my 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 fainly present the financial position and results of operations of the Issuer as of the dates
and for the periods therein set forth. Prior to the Closing, there will be no adverse change of a material mture
in such financial position, results of operations or condition, financial or otherwise, of the Issuer. The Issuer
is not a party to my litigation or other proceeding pending or, to its knowledge, threatened that, 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 ad valorem
taxes without the prior approval of the Underwriter,
(o) Any certificate, signed by any official of the Issuer authorized to do so in connection with the
transactions contemplated by this Purchase Contract, shall be deemed a representation and warranty by the
Issuer to the Underwriter as to the statements made therein; and
(p) The Issuer covenants that between the date hereof and the Closing it will take no actions
which will cause the representations and warranties made in this Section to be untrue as of the Closing.
By delivering an executed copy of the Official Statement to the Underwriter, the Issuer shall be
deemed to have reaffirmed, with respect to such Official Statement, the representations, warranties and
covenants set forth above with respect to the Preliminary Official Statement.
5. Closing.
(a) At 10:00 a.m., Central Time, on January 14, 2003, or at such othertime and date as shall have
been mutually agreed upon by the Issuer and the Underwriter (the "Closing Date'), the Issuer will, subject
to the mma and conditions hereof, deliver to the Underwriter the initial Bond registered in the name of the
Underwriter, in temporary form, together with the other documents hereinafter mentioned, and will have
available forimmediate exchange definitive Bonds deposited with The DepositoryTmstCmnpany,NewYork,
New York, duly executed and authenticated in the form and manner contemplated below, and the
Underwriter will, subject to the terns and conditions hereof, accept such delivery and pay the purchase price
of the Bonds, as set forth in Section I hereof, in immediately available funds by wire transfer to or for the
account of the Issuer (such events being referred to herein as the "Closing'). Concurrently with such
payment by the Underwriter, the Issuer shall return to the Underwriter the check referred to in Section I
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hereof. Payment for the Bonds as aforesaid shall be made at the offices of Wachovia Bank, National
Association, Houston, Texas, or at such other place as shall have been mutually agreed upon by the Issuer
and the Underwriter.
(b) Delivery of the definitive Bonds in exchange for the initial Bond shall be made to the
Underwriter through The Depository Trust Company, New York, New York, utilizing the book- try only
form of issuance, and the Issuer agrees to take such actions as are necessary on its part to allow for the use
of such book- ny only system. The definitive Bonds shall be delivered in fully registered form, bearing
CUSIP numbers, without coupons, with one definitive Bond for each maturity registered in the name of
CEDE & CO., and shall be made available to the Underwriter for purposes of inspection at the offices of The
Depository Trust Company in New York, New York, at least one business day before the Closing.
6. Closing Conditions. The Underwriter has entered into this Purchase Contract 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 ofits obligations hereunder, both as of the date hereof
and as of the date of the Closing. Accordingly, the Underwriter's obligations under this Purchase Contract
to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the
Issuer of its obligations to be performed hereunder and under such documents and instruments at or prior to
the Closing, and shall also be subject to the following additional conditions, including the delivery by the Issuer
of such documents as are enumerated herein, in form and substance reasonably satisfactory to the
Underwriter.
(a) The representations and warranties of the Issuer contained herein shall be true, complete and
correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing;
(b) The Issuer shall have performed and complied with all agreements and conditions required
by this Purchase Contract to be performed or complied with by it prior to or at the Closing;
(c) At the time of the Closing, (i) the Bonds and the Ordinance shall be in full force and effect
in the form approved by the Underwriter 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 Underwater, (ii) the net proceeds of the sale of the Bonds and any funds to be provided
by the Issuer shall be deposited and applied as described in the Official Statement and in the Ordinance and
(ut) all actions of the Issuer required to be taken by the Issuer shall be performed in order frr Bond Counsel
and counsel to the Underwater to deliver thein respective opinions referred to hereafter,
(d) At the time of the Closing, all official action of the Issuer relating to this Purchase Contract,
the Bonds and the Ordinance shall be in full force and effect and shall not have been amended, modified or
supplemented, in any material respect, except as may have been approved by the Underwriter; and in the
event of any (without regard to materiality) amendment, modification or supplement, the Underwater shall
have received, in appropriate form, evidence of any amendment, modification or supplement;
(e) At or prior to the Closing, the Ordinance shall have been duly adopted and filed in the official
records of the Issuer, the Issuer shall have duly executed and delivered the Bonds and the Bonds shall have
been duly authenticated in accordance with the Ordinance,
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(f) At the time of the Closing, there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or in the operations of the Issuer, from
that set forth in the Official Statement that, in the judgement of the Underwriter, is material and adverse and
that makes it, in the judgment of the Underwriter, impracticable to market the Bonds on the terms and in the
manner contemplated in the Official Statement;
(g) The Issuer shall not have failed to pay principal or interest when due on any of its outstanding
obligations for borrowed money;
(h) All steps to be taken and all instruments and other documents to be executed, and all other
legalmatters in connection with the transactions contemplated by this Purchase Contract shall be reasonably
satisfactory in legal foam and effect to the Underwriter;
(i) At or prior to the Closing, the Underwriter shall have received one (1) copy of each of the
following documents:
(1) The Official Statement, and each supplement or amendment thereto, if any, as may
have been agreed to by the Underwriter, executed on behalf of the Issuer by the manual or facsimile
signature of the Mayor and City Secretary of the Issuer and the audit report refereed to or appearing
in the Official Statement;
(2) The Ordinance certified by the City Secretary as having been duly adopted by the
Issuer and as being in fall force and effect, with such changes, supplements or amendments as may
have been agreed to by the Underwriter, and such Ordinance 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" (the "Undertaking");
(3) The opinion of Fulbright & Jaworski L.L.P., Bond Counsel, in substantially the form
and substance of Appendix C to the Official Statement, dated the date of Closing;
(4) The supplemental opinion dated the date of the Closing, of Bond Counsel, addressed
to the Underwriter to the effect that:
(i) the Bonds are exempt securities within the meaning of Section 3(aX2) of the Securities
Act of 1933, as amended, and it is not necessary in connection with the offering and sale of
the Bonds to register any securities =der the Securities Act of 1933, as amended, or to
qualify the Ordinance under the Trust Indenture Act of 1939, as amended, and
(u) except to the extent noted therein, said from has not assumed any responsibility with
respect to the Official Statement or undertaken independently to verify any of the
information contained therein except that in its capacity as Bond Counsel, such turn has
reviewed the information appearing under captions or subcaptions "Plan of Financing; The
Bonds", (except under the subceptions "Payment Record" and "Default and Remedies"),
"Registration, Transfer and Exchange;' "Tax Matters," "Continuing Disclosure of
Information" (except under the subcaption "Compliance with Prior Agreements') "Other
Pertinent Information - Legal Matters," "Other Pertinent Information - Registration and
Qualification of Bonds for Sale", and "Other Pertinent hd'ormation - Legal Investments and
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Eligibility to Secure Public Funds in Texas" and such firm is of the opinion that the
information relating to the Bonds and legal matters contained under such captions and
subcaptions is an accurate and fair description of the laws and legal issues addressed therein
and, with respect to the Bonds, such information conforms to the Ordinance.
(Q The Underwriter is entitled to rely upon the opinion of Bond Counsel delivered in
accordance with the provisions of Section 6(i)(3) of this Purchase Contract;
(5) An opinion of counsel for the Underwriter, dated the date of the Closing,
addressed to the Underwriter, substantially in the form attached hereto as Exhibit B;
(6) Opinions or certificates, dated on or prior to the date of Closing, of the Attorney
Genemlof the State of Texas, approving the Certificates of Obligation as required by law and the registration
certificates of the Comptroller of Public Accounts of the State of Texas;
(7) A certificate, dated the date of the Closing, signed by the City Manager and the
Finance Director of the Issuer, to the effect that (i) all official action of the Issuer relating to the Bonds, the
Order, this Purchase Contract and the Official Statement are in full force and effect and have not been
amended, modified, supplemented or repealed; (ii) 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; (iii) no litigation or proceeding against the Issuer is pending or, to the knowledge of such persons,
threatened in any court or administrative body to restrain or enjoin the issuance ordelivery of the Bonds, 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, due
authorization and execution of this Purchase Contract, the Bonds or the Ordinance, or contesting the powers,
authority or existence of the Issuer or the right and authority of members of the City Council and other
officials of the Issuer to hold and exercise their respective positions, or contesting in any way the accuracy,
completeness or faimess of the Official Statement (but in fieu of or in conjunction with such certificate, the
Underwriter may, in its sole discretion, accept certificates or opinions of the City Attorney that, in the opinion
of the City Attorney, the issues raised in any such pending or threatened litigation are without substance or
that the contentions of all plaintiffs therein are without merit); (iv) no event affecting the Issuer has occurred
since the date of the Official Statement which should be disclosed in the Official Statement for the purpose
for which it is to be used or which it is necessary to disclose therein in order to make the statements and
information therein, in the fight of the circumstances under which they were made, not misleading in any
material respect; (v) the descriptions and statements of or pertaining to the Issuer contained in its 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; (vi) insofar as the Issuer and its affahs, 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; (vii) insofar as the descriptions and
statements including financial data, of or pertaining to entities, other dram the Issuer, and thein 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 (viii) there has not been any material and adverse change in the
affairs or financial condition of the Issuer since the latest date as to which audited financial information is
available;
(8) A certificate of the Issuer in form and substance satisfactory to Bond Counsel and
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counsel to the Underwriter (a) setting forth the facts, estimates and circumstances in existence on the date
of the Closing that establish that the proceeds of the Bonds are not expected to be used in a manner that
would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue
Code of 1986, as amended (the "Code"), and any applicable regulations (whether final, temporary or
proposed), issued pursuant to the Code, and (b) certifying that to the best ofthe knowledge and belief of the
Issuer there are no other facts, estimates or circumstances that would materially change the conclusions,
representations and expectations contained in such certificate;
(9) An opinion of the City Attorney addressed to the Underwriter and dated the date of
Closing substantially in the form and substance of Exhibit C hereto;
(10) Evidence satisfactory to the Underwriter that firm banking and financial
arrangements have been made for the discharge and final payment of the Refunded Bonds, being refunded
with a portion of the proceeds of the Bonds;
(11) Evidence satisfactory to the Underwriter that the Bonds have been rated "Am" and
"AAA" by Moody's Investors Service and Standard & Poor's Ratings Services, A Division of the McGraw-
Hill Companies, respectively, and that such ratings are in effect as of the date of Closing;
(12) An executed copy ofthe sufficiency certificate ofthe Deposit Agent, acknowledging
that the amount in be deposited with the Deposit Agent on the Closing Date is sufficient to pay the principal
and interest due on the Refunded Bonds on the redemption date for the Refunded Bonds.
(13) A copy of the municipal bond insurance policy issued by MBIA Insurance
Corporation (the "Insurer") for the Bonds; opinion of counsel to the Insurer in form and substance satisfactory
to the Underwriter; and a certificate of the Insurer with respect to the accuracy of the statements contained
in the Official Statement regarding the municipal bond insurance policy for the Bonds;
(14) Such opinions of counsel as are required in connection with the refunding of the
Refunded Bonds and such additional legal opinions, certificates, instruments and other documents as the
Underwriter or Underwriter's 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 all the respective agreements then in be performed and
conditioned then in be satisfied by the Issuer.
All of the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but
only if, they are in form and substance satisfactory to the Underwriter.
If the Issuer shall be unable to satisfy the conditions in the obligation of the Underwriter to purchase,
to accept delivery of and to pay for the Bonds contained in this Purchase Contract, or if the obligation of the
Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason
permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriter nor
the Issuer shall be under any further obligation hereunder, except that the respective obligations of the Issuer
and the Underwriter set forth in Sections 1 (with respect to the Check), 4 and 8 hereof shall continue in full
force and effect.
EXHIBIT 13
7. Termination. The Underwriter shall have the right to cancel its obligation to purchase the
Bonds if, between the date of this purchase Contract and the Closing, the market price or marketability of
the Bonds shall be materially adversely affected, in the solejudgment of the Underwriter, by the occurrence
of any of the following:
(a) Legislation shall be enacted by or introduced in the Congress of the United States or
recommended to the Congress forpassage by the president of the United States, or the Treasury Department
of the United States or the Internal Revenue Service or any member of the Congress or favorably reported
for passage to either House of the Congress by any committee of such House to which such legislation has
been referred for consideration, a decision by a court of the United States or of the State or the United States
Tax Court shall be rendered, or an order, ruling, regulation (final, temporary or proposed), press release,
statement or other form of notice by or on behalf of the Treasury Department of the United States, the
Internal Revenue Service or other governmental agency shall be made or proposed, the effect of any or all
of which would be to impose, directly or indirectly, federal income taxation upon interest received on
obligations of the general character of the Bonds or the interest on the Bonds as described in the Official
Statement, or other action or events shall have transpired which may have the purpose or effect, directly or
indirectly, of changing the federal income tax consequences of any of the transactions contemplated herein;
(b) Legislation introduced in or enacted (or resolution passed) by the Congress or an order,
decree, or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final,
temporary, orproposed), press release mother formof notice issued ormade by cr on behalf ofthe Securities
and Exchange Commission, or any other governmental agency havingjurisdiction of the subject matter, to the
effect that obligations of the general character of the Bonds, including any or all underlying arrangements,
are not exempt from registration =der 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 res amended and then in effect;
(c) Any state blue sky or securities commission or other governmental agency or body of a
jurisdiction in which 15% or more of the Securities 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 srnilar ruling relating
thereto;
(d) A general suspension of trading in securities on the New York Stock Exchange or the
American Stock Exchange, the establishment of 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, or a general banking moratorium declared by
federal, State of New York, or State of Texas officials authorized to do so;
(e) The New York Stock Exchange or other national securities exchange or any govemm=tal
authority shall impose, as to the Bonds or as to obligations of the general character of the Bonds, any material
restrictions not now in force, or increase materially those now in force, with respect to the extension of credit
by, or the charge to the net capital requirements of, the Underwriter,
(f) Any amendment to the federal or 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, income securities (or interest thereon);
-I1-
EXHIBIT B
(g) Any event occurring, or information becoming (mown which, in the masonablejudgmem of
the Underwriter, makes untrue in any material respect any statement or information contained in the Official
Statement, or has the effect that the Official Statement contains any untrue statement of material fact or
ornits to state a material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(h) There shall have occurred since the date of this Purchase Contract any materially adverse
change in the affairs or financial condition of the Issuer,
(i) The United States shall have become engaged in hostilities which have resulted in a
declaration of war or a national emergency or there shall have occurred any other outbreak or escalation of
hostilities or a national or international calamity or crisis, fmancial or otherwise;
6) Any fact or event shall exist or have existed that, in the reasonable judgment of the
Underwriter, either makes untrue or incorrect in any material respect any statement or information contained
in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order
to make the statements and information contained therein not misleading in any material respect;
(k) There shall have occurred any downgrading, or any notice shall have been given of (A) any
intended or potential downgrading or (B) 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 rating to be accorded
the Bonds);
0) The purchase of and payment for the Bonds by the Underwriter, or the resale of the Bonds
by the Underwriter, on the terms and conditions herein provided shall be prohibited by any applicable law,
govemmentalauthority, board, agency or commission, which prohibition shall not be due to the malfeasance,
misfeasance or nonfeasance of the Underwriter.
Expenses.
(a) The Underwriter shall be under no obligation to pay, and the Issuer shall pay, any expenses
incident to the perfomunce 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 Bond Counsel; (iv) the fees and
disbursements of the FinancialAdvisor to the Issuer; (v) the fees and disbursements of any other engineers,
accountants, and other experts, consultants or advisers retained by the Issuer, (vi) the premium or premiums
for municipal bond insurance for the Bonds; and (vii) the fees, if any, for bond ratings.
(b) The Underwriter shall pay (i) the cost ofpreparation and printing of this Purchase Contract;
(u) all advertising expenses in connection with the public offering of the Bonds; and (iii) all other expenses
incurred by the Underwriter in connection with the public offering of the Bonds, including the fees and
disbursements of Underwriter's Counsel.
9. Notices. Any notice or other communication to be given to the Issuer under this Purchase
Contract may be given by delivering the same in writing at One Allen Civic Plaza, 305 Century Parkway
Allen, Texas 75013, Attention: Director of Finance, and any notice or other communication to be given to the
Underwriter under this Purchase Contract may be given by delivering the same in writing to Estrada Hinojum
& Company, Inc., 1717 Main Street, Suite 4760, LB 47, Dallas, Texas 75201, Atm: Noe Hinojosa, Jr..
_12_
EXHIBIT B
10. Parties in Interest. This Purchase Contract as heretofore specified shall constitute the
entire agreement between us and is made solely for the benefit of the Issuer and the Underwriter (including
successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or
by virtue thereof. This Purchase Contract may not be assigned by the Issuer. All of the Issuer's
representations, warranties and agreements contained in this Purchase Contract shall remain operative and
in full force and effect, regardless of (i)any investigations made by or on behalf of the Underwriter; (ii)
delivery of and payment for the Bonds pursuant to this Purchase Contract; and (iii) any termination of this
Purchase Contract.
11. Effectiveness. This Purchase Contract shall become effective upon the acceptance hereof
by the Issuer and shall be valid and enforceable at the time of such acceptance.
12. CHOICE OF LAW. THIS PURCHASE CONTRACT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS.
13. Severability. If my provision of this Purchase Contract shall be held or deemed to be or
shall, in fact, be invalid inoperative or =enforceable as applied in my particular case in my jurisdiction or
jurisdictions, or in all jurisdictions because it conflicts with my provisions of my Constitution, statute, ale of
public policy, or my other reason, such circumstances shall not have the effect ofrmdming the provision in
question invalid, inoperative or =enforceable in my other case or circumstance, or of rendering my other
provision or provisions of this Purchase Contract invalid, inoperative or unenforceable to my extent whatever.
14. Business Day. For purposes of this Purchase Contract, "business day" means any day on
which the New York Stock Exchange is open for trading.
15. Section Headings. Section headings have been inserted in this Purchase Contract as a
matter of convenience of reference only, and it is agreed that such section headings are not a part of this
Purchase Contract and will not be used in the interpretation of my provisions of this Purchase Contract.
16. Counterparts. This Purchase Contract 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 more document) and all of which shall constitute one and the same docummt
17. Status of the Underwriter. It is understood and agreed that for all purposes of this
Purchase Contact and the transactions contemplated hereby the Underwriter has, in its role as underwriter,
acted solely as independent contractors and have not acted as financial or investment advisors, fiduciaries
or agents to or for the Issuer, whether directly or indirectly through any person. The Issuer recognizes that
the Underwriter expect m profit from the acquisition and potential distribution of the Bonds.
If you agree with the foregoing, please sign the enclosed counterpart of this Purchase Contract and
acetum it to the Underwriter. This Purchase Contract shall become a binding agreement between you and the
Underwriter when at least the counterpart of this Purchase Contact shall have been signed by or on behalf
of each of the parties herem.
.13 -
EXHIBIT B
[The remainder of this page is left blank intentionally]
Accepted and agreed to as of the date hereof.
CITY OF ALLEN, TEXAS
Mayor
Very truly yours,
ESTRADA HINOJOSA & COMPANY, INC..
Authorized Officer
LEX, IBIT B
Signature page for Purchase Contract
EXHIBIT B
SCHEDULEI
The Bonds are not subject to redemption prior to maturity. Interest on the Bonds is payable
on March 1, 2003, and on each September 1 and March I thereafter.
EXHIBIT B
$2,705,000
CITY OF ALLEN, TEXAS
GENERAL OBLIGATION REFUNDING
BONDS
SERIES 2003
Dated Date: January 1, 2003
Maturity
Principal Rate
Price or Yield
(911)
Amount
2003
$780,000 2.0000%
1.40%
2004
$955,000 2.000%
1.77%
2005
$25,000 2.200%
220%
2006
$25,000 2.500%
2.50%
2007
$920,000 3.000%
2.84%
The Bonds are not subject to redemption prior to maturity. Interest on the Bonds is payable
on March 1, 2003, and on each September 1 and March I thereafter.
EXHIBIT B
Exhibit A
[Attach form of Official Statement completed as provided in
Section 3 hemot]
EXHIBIT B
Exhibit B
Proposed Form of Underwriter's Counsel Opinion of
McCall, Parkhurst & Horton L.L.P.
January _, 2003
Estrada, Hinojosa & Company, Inc.
1717 Main S4 Suite 4760
Lockbox 47
Dallas, Texas 75201
Re: $2,705,000 City of Allen, Texas General Obligation Refunding Bonds, Series 2003
Ladies and Gentlemen
We have acted as counsel for you as the underwriter of the Bonds described above (the "Bonds"),
issued under and pursuant to an ordinance (the "Ordinance") of the City of Allen, Texas (the "City"),
authorizing the issuance of the Bonds, which Bonds you are purchasing pursuant to a Purchase Contract,
dated December 10, 2002. All capitalized undefined terms used herein shall have the meaning set forth in
the Purchase Contract.
In connection with this opinion letter, we have considered such matters of law and of fact, and have
relied upon such certificates and other information fiunished m us, as we have deemed appropriate as a basis
for our opinion set forth below. We are not expressing any opinion or views herein on the authorization,
issuance, delivery, validity of the Bonds and we have assumed, but not independently verified, that the
signatures on all documents and certificates that we have examined are genuine.
Based on and subject to the foregoing, we are of the opinion that, under existing laws, the Bonds are
not subject to the registration requirements of the Securities Act of 1933, as amended, and the Ordinance is
not required in be qualified under the Trust Indenture Act of 1939, as amended.
Because the primary purpose of our professional engagement as your counsel was not in establish
factual matters, and because of the wholly or partially nonlegal character of many of the determinations
involved in the preparation of the Official Statement dated December _, 2002 (the "Official Statement") and
because the information in the Official Statement under the headings "Bond Insurance,""Book-Entry-Only
System," "rax Matters," " Continuing Disclosure of Information — Compliance with Prior Agreements" and
the Appendices thereto were prepared by others who have been engaged to review or provide such
information, we are not passing on and do not assume any responsibility for, except as set forth in the last
sentence of this paragraph, the accuracy, completeness or fairness of the statements contained in the Official
Statement (including any appendices, schedules and exhibits thereto) and we make no representation that we
have independently verified the accuracy, completeness or fairness of such statements. In the course of our
participation in the preparation of the Official Statement as your counsel, we had discussions with
representatives of the City, including its Financial Advisor, regarding the contents of the Official Statement.
In the course of such activities, no facts came to our attention which would lead us in believe that the Official
EXHIBIT B
Statement (except for the financial statements and other financial and statistical data contained therein, the
information set forth under the headings 'Bond Insurance ,""Book -Entry -Only System," "Tax Matters," "
Continuing Disclosure of Information — Compliance with Prior Agreements" and the Appendices thereto, as
to which we express no opinion), as of its date contained any untrue statement of a material fact or omitted
to state any material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
This opinion lettermay be relied upon by onlyyou and only in connection with the transaction to which
reference is made above and may not be used or relied upon by any other person for any purposes
whatsoever without our prior written consent.
Respectfidly,
LXHIBIT B
EXHIBIT C
Suggested Opinion of the City Attorney
Estrada Hinojosa & Company, hrc.
1717 Main Street, Suite 4760
LB 47
Dallas, Texas 75201
Re: City of Allen, Texas General Obligation Refunding Bonds, Series 2003
Ladies and Gentlemen:
I am the City Attorney for the City of Allen, Texas (the "City") and have acted as such in connection
with the issuance of"City of Allen, Texas General Obligation Refunding Bonds, Series 2003," in the aggregate
principalamount of $2,704,000 (the "Bonds"), Pursuant to the provisions of the ordinance duly adopted by the
City Council of the City on December 10, 2002 (the "Ordinance"). Capitalized terms not otherwise defined
in this opinion have the meanings assigned in the Purchase Contract
In my capacity as City Attorney to the City, I have reviewed such agreements, documents,
certificates, opinions, letters, and other papers as I have deemed necessary or appropriate in rendering the
opinions set forth below.
In making my review, I have assumed the authenticity of all documents and agreements submitted
to me as originals conforming to the originals of all documents and agreements submitted to me as certified
or photostatic copies, the authenticity of the originals of such latter documents and agreements, and the
accuracy of the statement contained in such documents.
Based upon the foregoing, and subject to the qualifications and exceptions hereinafter set forth, I am
of the opinion that under the applicable laws of the United States of America and the State of Texas in force
and effect on the date hereof:
No litigation is pending, or, to my knowledge, threatened, in any court in any way (a) challenging the
titles of the Mayor or any of the other members of the City Council to thew respective offices; (b) seeking
to restrain or enjoin the issuance or delivery of any of the Bonds, or the levy, collection or application of the
ad valorem taxes pledged to pay the principal of and interest on the Bonds or the pledge thereof to the
payment of the Bonds; (c) contesting or affecting the validity or enforceability of the Bonds, the Ordinance
or the purchase Contract; (d) contesting the powers of the City or any authority for the issuance of the
Bonds, or the adoption of the Ordinance; or (e) that would have a material and adverse effect on the financial
condition of the City.
This opinion is famished solely for you benefit and may be relied upon only by the addressees hereof
or anyone to whom specific permission is given in writing by me.
EXHIBIT B
Very truly yours,
EXHIBIT B
EXHIBIT C
NOTICE OF REDEMPTION
CITY OF ALLEN, TEXAS,
GENERAL OBLIGATION REFUNDING
AND IMPROVEMENT BONDS
SERIES 1992
DATED OCTOBER 1, 1992
NOTICE IS HEREBY GIVEN that all bonds of the above series maturing on September
1 in each of the years 2003, 2004 and 2007 and aggregating in principal amount $2,645,000
have been called for redemption on January 14, 2003 at the redemption price of par and
accrued interest to the date of redemption, such bonds being identified as follows:
YEAR OF PRINCIPAL AMOUNT
MATURITY OUTSTANDING CUSIP NUMBER
2003 $850,000
2004 900,000
2007 895,000
ALL SUCH BONDS shall become due and payable on January 14, 2003, 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 obligations only
upon presentation and surrender of such bonds to JPMorgan Chase Bank, Dallas, Texas
(successor paying agent/registrar to Ameritmst Texas, National Association) at its designated
offices at the following addresses:
First Class/
Registered/Certified Express Delivery/Courier By Hand Only
JPMorgan Chase Bank JPMorgan Chase Bank JPMorgan Chase Bank
Institutional Trust Services Institutional Trust Services Room 234 -North Building
P. O. Box 2320 2001 Bryan Street, 9' Floor Institutional Trust Securities Window
Dallas, Texas 75221-2320 Dallas, Texas 75201 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 BANK
Address: 2001 Bryan Street, 1 e Floor
Dallas, Texas 75201
45252942.1
Exhibit D
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION AND OPERATING DATA
The following information is referred to in Section 30 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 D, but for the most recently concluded fiscal year.
2. The information under "Investment Policies — Current Investments" and in
Tables 1, 2, 6, 12 through 14 and 19 of Appendix A in the Official Statement.
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.
45252902.1