O-1673-1-99ORDINANCE NO. 1673-1-99
AN ORDINANCE authorizing the issuance of "CITY OF ALLEN, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING AND
IMPROVEMENT BONDS, SERIES 1999"; pledging the net revenues of the
City's combined Waterworks and Sewer System to the payment of the
principal of and interest on said Bonds; enacting provisions incident and
related to the issuance, payment, security and delivery of said bonds,
including the approval and execution of a Paying Agent/Registrar
Agreement, a Purchase Contract and a Special Escrow Agreement and the
approval and distribution of an Official Statement pertaining thereto; and
providing an effective date.
WHEREAS, the City Council of the City of Allen, Texas (the "City") has heretofore issued,
sold, and delivered City of Allen, Texas, Waterworks and Sewer System Revenue Refunding and
Improvement Bonds, Series 1992, dated July 15, 1992, with maturities in the years 2003 through
2012 that aggregate in original principal amount $4,240,000, and, based on federal tax law
considerations an allocated portion of the principal amounts of each such maturity totaling in the
principal amount $3,285,000 can be advance refunded (hereinafter referred to as the "Refunded
Obligations") as follows:
AND WHEREAS, pursuant to the provisions of Article 717k, V.A.T.C.S., as amended, the
City Council is authorized to issue refunding bonds and deposit the proceeds of sale directly with
the place of payment for the Refunded Obligations, and such deposit, when made in accordance
with said statute, shall constitute the making of firm banking and financial arrangements for the
discharge and final payment of the Refunded Obligations; and
WHEREAS, the City Council hereby finds and determines that refunding bonds should be
issued at this time to refund the Refunded Obligations, and such refunding will result in a gross
dollarsavings of approximately $179,392.73 and provide a presentvalue savings of approximately
$149,289.48; and
Amount
Total
Eligible
Year of
Principal
to be
Maturity
Amount
Refunded
2003
$ 555,000
$ 430,000
2004
590,000
455,000
2005
625,000
485,000
2006
665,000
515,000
2007
705,000
545,000
2008
670,000
520,000
2009
95,000
75,000
2010
105,000
80,000
2011
110,000
85,000
2012
120,000
95,000
AND WHEREAS, pursuant to the provisions of Article 717k, V.A.T.C.S., as amended, the
City Council is authorized to issue refunding bonds and deposit the proceeds of sale directly with
the place of payment for the Refunded Obligations, and such deposit, when made in accordance
with said statute, shall constitute the making of firm banking and financial arrangements for the
discharge and final payment of the Refunded Obligations; and
WHEREAS, the City Council hereby finds and determines that refunding bonds should be
issued at this time to refund the Refunded Obligations, and such refunding will result in a gross
dollarsavings of approximately $179,392.73 and provide a presentvalue savings of approximately
$149,289.48; and
WHEREAS, in combination with the revenue bonds issued to refund the Refunded
Obligations, the City Council further finds and determines that revenue bonds in the principal
amount of $9,000,000 should be issued for the purpose of making improvements and extensions
to the City's combined Waterworks and Sewer System; and
WHEREAS, a "Notice of Intention To Issue City of Allen, Texas, Revenue Bonds" in the
principal amount not to exceed $ 9,000,000, maturing not later than December 31, 2025 and
bearing interest at a rate not to exceed 8% per annum, for the purpose of making improvements
and extensions to the City's combined Waterworks and Sewer System has been duly published
in the Allen American, a newspaper published and of general circulation in the City of Allen,
Texas, in the issues dated December 12, 1998 and December 19, 1998, the date of the first
publications of such notice being at least fourteen (14) days prior to January 7, 1999, the date
stated therein when this ordinance was scheduled to be considered for passage and adoption by
the City Council; and
WHEREAS, the City Council hereby finds and determines that no petition, bearing the valid
petition signatures of 5% or more of the qualified voters of the City, requesting that an election be
held on the issuance of such revenue bonds has been filed with the City Secretary or any other
officer of the City and all of the revenue bonds described in the aforesaid notice should be issued
and sold at this time; and
WHEREAS, the Council hereby further finds and determines that all of such revenue
bonds can and should be issued on a parity with the City's outstanding revenue bonds (hereinafter
defined and identified as "Previously Issued Bonds") payable from and equally secured by a first
lien on and pledge of the Net Revenues of the City's combined Waterworks and Sewer System
(the "System") in that (i) the Director of Finance of the City will execute a certificate stating (a) that,
to the best of her knowledge and belief, the City is not now in default as to any covenant,
obligation oragreement contained in any ordinance or other proceeding relating to any obligations
of the City payable from and secured by a lien on and pledge of the Net Revenues of the System
that would materially affect the security or payment of such obligations and (b) payments into all
special funds or accounts created and established for the payment and security of all outstanding
obligations payable from and secured by a lien on and pledge of the Net Revenues of the System
have been made and that the amounts on deposit in such special funds or accounts are the
amounts now required to be on deposit therein; (ii) the bonds herein authorized shall be scheduled
to mature as to principal on June 1 in each year; and (iii) the City has secured a certificate or
opinion of a Certified Public Accountant to the effect that, according to the books and records of
the City, the Net Earnings, for the last completed Fiscal Year, are at least equal to 1.20 times the
"Average Annual Debt Service" for all "Bonds Similarly Secured" to be outstanding after giving
effect to the issuance of the bonds herein being issued; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN, TEXAS:
SECTION I: Authorization-Desionation-Principal Amount -Purpose. Revenue bonds of the
City shall be and are hereby authorized to be issued in the aggregate principal amount of
$12,545,000 to be designated and bearthe title "CITY OF ALLEN, TEXAS, WATERWORKS AND
SEWER SYSTEM REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 1999-
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(hereinafter referred to as the "Bonds', for the purpose of providing funds for the discharge and
final payment of certain outstanding obligations of the City (identified in the preamble hereof and
referred to as the "Refunded Obligations'), paying costs of issuance, and to provide funds in the
amount of $9,000,000 for making improvements and extensions to the City's combined
Waterworks and Sewer System, in conformity with the Constitution and laws of the State of Texas,
including Articles 717k and 1111, at. seq., as amended, V.A.T. C. S.
SECTION 2: Fully Registered Obligations- Authorized Denominations- Stated Maturities
-Date. The Bonds shall be issued as fully registered obligations, without coupons, shall be dated
February 1, 1999 (the "Bond Date") and, other than the single fully registered Initial Bond
referenced in Section 8 hereof, shall be in denominations of $5,000 or any integral multiple thereof
(within a Stated Maturity), shall be numbered consecutively from One (1) upward and shall
become due and payable on June 1 in each of the years and in principal amounts (the "Stated
Maturities") and bear interest at per annum rates in accordance with the following schedule:
Year of
Principal
Interest
Stated Maturity
Amount
Rate(s)
2000
$ 330,000
3.55%
2001
345,000
3.75%
2002
355,000
3.85%
2003
805,000
3.95%
2004
835,000
5.00%
2005
885,000
4.15%
2006
915,000
4.20%
2007
950,000
4.30%
2008
930,000
5.00%
2009
500,000
4.40%
2010
520,000
4.40%
2011
545,000
4.50%
2012
575,000
4.60%
2013
505,000
4.70%
2014
525,000
4.80%
2015
550,000
4.90%
2016
575,000
4.90%
2017
600,000
4.90%
2019
1,300,000
4.75%
The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the
rate(s) per annum shown in the above schedule (calculated on the basis of a 380 -day year of
twelve 30 -day months). Interest on the Bonds shall be payable on June 1 and December 1 in
each year, commencing June 1, 1999.
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SECTION 3: Terms of Payment - Paving Agent/Registrar. The principal of, premium, if
any, and the interest on the Bonds, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter
called the "Holders") appearing on the registration and transfer books maintained by the Paying
Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of
America, which at the time of payment is legal tender for the payment of public and private debts,
and shall be without exchange or collection charges to the Holders.
The selection and appointment of Chase Bank of Texas, National Association to serve as
Paying AgenURegistrar for the Bonds is hereby approved and confirmed. Books and records
relating to the registration, payment, transfer and exchange of the Bonds (the "Security Register")
shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, as
provided herein and in accordance with the terms and provisions of a "Paying Agent/ Registrar
Agreement", substantially in the forth attached hereto as Exhibit A, and such reasonable rules
and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City
Secretary are 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 Agent/Registrar. Upon any change in the
Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof
to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also
give the address of the new Paying Agent/Registrar.
Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities
or upon the earlier redemption thereof, only upon presentation and surrender of the Bonds to the
Paying Agent/Registrar at its designated offices in Dallas, Texas (the "Designated
Payment/Transfer Office"). Interest on the Bonds shall be paid to the Holders whose names
appear in the Security Register at the close of business on the Record Date (the 15th day of the
month next preceding each interest payment date) and shall be paid by the Paying
Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address
of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for
the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal
holiday, or a day when banking institutions in the City where the Designated Paymentrrransfer
Office of the Paying Agent/ Registrar is located are authorized by law or executive order to close,
then the date for such payment shall be the next succeeding day which is not such a Saturday,
Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on
such date shall have the same force and effect as if made on the original date payment was due.
In the event of a non-payment of interest on one or more maturities on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment for
such maturity or maturities (a "Special Record Date") will be established by the Paying
AgenURegistrar, 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)
11:151. -4-
business days prior to the Special Record Date by United States Mail, first class postage prepaid,
to the address of each Holder of such maturity or maturities appearing on the Security Register
at the Gose of business on the last business day next preceding the date of mailing of such notice.
SECTION 4: Redemption. (a) Optional Redemotion. The Bonds maturing on and after
June 1, 2010 shall be subject to redemption prior to maturity, at the option of the City, in whole or
in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated
Maturity by lot by the Paying Agent/ Registrar), on June 1, 2009 or on any date thereafter at the
redemption price of par plus accrued interest to the date of redemption.
At least forty-five (45) days priorto a date setforthe redemption of Bonds (unless a shorter
notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the
Paying Agent Registrar of its decision to exercise the right to redeem Bonds, the principal amount
of each Stated Maturity to be redeemed, and the date set for the redemption thereof. The
decision of the City to exercise the right to redeem Bonds shall be entered in the minutes of the
governing body of the City.
(b) Mandatory Redemption. The Bonds having Stated Maturities of June 1, 2019
("Term Bonds") shall be subject to mandatory redemption priorto maturity atthe redemption price
of par and accrued interest to the date of redemption on June 1, 2018 and in the principal amount
of $635,000.
Approximately forty-five (45) days prior to such mandatory redemption date specified
above, the Paying Agent/Registrar shall select by lot the numbers of the Term Bonds to be
redeemed on the next following June 1 from moneys set aside forthat purpose in the Bond Fund
(as hereinafter defined). Any Term Bonds not selected for prior redemption shall be paid on the
date of their Stated Maturity.
The principal amount of the Term Bonds required to be redeemed pursuant to the
operation of such mandatory redemption provisions may be reduced, at the option of the City, by
the principal amount of Tenn Bonds which, at least 50 days prior to the mandatory redemption
date, (1) shall have been acquired by the City at a price not exceeding the principal amount of
such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the
Paying Agent/Registrar for cancellation or (2) shall have been redeemed pursuant to the optional
redemption provisions set forth in paragraph(a) of this Section and not theretofore credited against
a mandatory redemption requirement.
(c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same
Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat
such Bonds as representing the number of Bonds Outstanding which is obtained by dividing the
principal amount of such Bond by $5,000 and shall select the Bonds, or principal amount thereof,
to be redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the
Bonds, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in
the name of the City and at the City's expense, to each Holder of a Bond to be redeemed in whole
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or in part at the address of the Holder appearing on the Security Register at the dose of business
on the business day next preceding the date of mailing such notice, and any notice of redemption
so mailed shall be conclusively presumed to have been duly given irrespective of whether received
by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify
the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed,
the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the
Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and
payable on the redemption date specified, and the interest thereon, or on the portion of the
principal amount thereof to be redeemed, shall cease to accrue from and after the redemption
date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount
thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying
Agent/ Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject
by its terms to prior redemption and has been called for redemption and notice of redemption
thereof has been duly given or waived as herein provided, such Bond (or the principal amount
thereof to be redeemed) shall become due and payable, and interest thereon shall cease to
accrue from and after the redemption date therefor, provided moneys sufficient for the payment
of such Bonds (or of the principal amount thereof to be redeemed) at the then applicable
redemption price are held for the purpose of such payment by the Paying Agent/Registrar.
SECTION 5: Registration - Transfer - Exchange of Bonds - Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each registered owner of the Bonds issued underand pursuant to the provisions of this
Ordinance. Any Bond may, in accordance with its terms and the terms hereof, be transferred or
exchanged for Bonds of other authorized denominations upon the Security Register by the Holder,
in person or by his duly authorized agent, upon surrender of such Bond to the Designated
Payment/Transfer Office of the Paying Agent/Registrar for cancellation, accompanied by a written
instrument of transfer or request for exchange duly executed by the Holder or by his duly
authorized agent, in form satisfactory to the Paying Agent/ Registrar.
Upon surrender for transfer of any Bond (other than the Initial Bonds authorized in Section
8 hereof) at the Designated Paymentrrransfer 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 Initial Bonds authorized in Section 8
hereof) may be exchanged for other Bonds of authorized denominations and having the same
Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the
Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the
Designated Payment/Transfer Office of the Paying Agent/ Registrar. Whenever any Bonds are
surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds,
executed on behalf of, and fumished by, the City, to the Holder requesting the exchange.
7455541 -6-
All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the
Designated Payment/Transfer Office of the Paying Agent/Registrar, or sent by United States Mail,
first class postage prepaid, to the Holder and, upon the delivery thereof, the same shall be valid
obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits
under this Ordinance, as the Bonds surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that the
Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange
of any tax or other governmental charges required to be paid with respect to such transfer or
exchange.
Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof
are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be,
of the same obligation to pay evidenced by the Bond or Bonds registered and delivered in the
exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered and delivered in lieu thereof pursuant to Section 30 hereof and such new replacement
Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen
Bond.
Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange
any Bond called for redemption, in whole or in part, within 45 days of the date fixed for redemption
of such Bond; provided, however, such limitation on transferability shall not be applicable to an
exchange by the Holder of the unredeemed balance of a Bond called for redemption in part.
SECTION& Book -Entry Only Transfers and Transactions. Notwithstandingtheprovisions
contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer/exchange of the
Bonds, the City hereby approves and authorizes the use of "Book -Entry Only" securities
clearance, settlement and transfer system provided by The Depository Trust Company (DTC), a
limited purpose trust company organized under the laws of the State of New York, in accordance
with the requirements and procedures identified in the Letter of Representation, by and between
the City, the Paying Agent/Registrarand DTC (the "Depository Agreement") relating to the Bonds.
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 forthe 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
�nsss�.i
-7-
delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the Bonds
in definitive forth shall be assigned, transferred and exchanged on the Security Register
maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in
accordance with the provisions of Sections 3, 4 and 5 hereof.
SECTION 7: Execution - Reoistration. The Bonds shall be executed on behalf of the City
by the Mayor under its seal reproduced or impressed thereon and countersigned by the City
Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds
bearing the manual or facsimile signatures of individuals who are or were the proper officers of
the City on the Bond Date shall be deemed to be duly executed on behalf of the City,
notwithstanding that such individuals or either of them shall cease to hold such offices at the time
of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in
subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act
of 1981, as amended.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 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 upon any
Bond duly signed 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 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
(hereinafter called the 'Initial Bond") and the Initial Bond shall be registered in the name of the
initial purchaser(s) or the designee thereof. The Initial Bond shall be the Bonds submitted to the
Office of the Attorney General of the State of Texas for approval, certified and registered by the
Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial
purchaser(s). Any time after the delivery of the Initial Bond, the Paying Agent/Registrar, pursuant
to written instructions from the initial purchaser(s), orthe designee thereof, shall cancel the Initial
Bond delivered hereunder and exchange therefor definitive Bonds of authorized denominations,
Stated Maturities, principal amounts and bearing applicable interest rates fortransferand 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. Fortes Generally. The Bonds, the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas, the Certificate of Registration, and the forth
of Assignment to be printed on each of the Bonds, shall be substantially in the forms set forth in
this Section with such appropriate insertions, omissions, substitutions, and other variations as are
permitted or required by this Ordinance and may have such letters, numbers, or other marks of
identification (including identifying numbers and letters of the Committee on Uniform Securities
Identification Procedures of the American Bankers Association) and such legends and
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endorsements (including insurance legends in the event the Bonds, or any maturities thereof, are
purchased with insurance and any reproduction of an opinion of counsel) thereon as may,
consistently herewith, be established by the City or determined by the officers executing such
Bonds as evidenced by their execution thereof. Any portion 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 shall be printed, lithographed, or engraved,
typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined
by the officers executing such Bonds as evidenced by their execution thereof.
REGISTERED
NO.
B. Form of Definitive Bond.
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF ALLEN, TEXAS,
WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING AND IMPROVEMENT BOND
SERIES 1999
REGISTERED
Bond Date: Interest Rate: Stated Maturity: CUSIP NO:
February 1, 1999
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, hereby promises to pay to
the order of the Registered Owner named above, or the registered assigns thereof, solely from
the revenues hereinafter identified, on the Stated Maturity date specified above the Principal
Amount stated above (or so much thereof as shall not have been paid upon prior redemption) and
to pay interest (computed on the basis of a 360 -day year of twelve 30 -day months) on the unpaid
Principal Amount hereof from the Bond Date at the per annum rate of interest specified above;
such interest being payable on June 1 and December 1 of each year, commencing June 1, 1999.
Principal of this Bond is payable at its Stated Maturity or redemption to the registered owner
hereof, upon presentation and surrender at the Designated Payment Transfer/Office of the Paying
AgenttRegistrer 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 dose 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
145551.1 -9-
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 $12,545,000 (herein referred to as the "Bonds") for the purpose of refunding certain
outstanding obligations, paying costs of issuance and to provide funds in the amount of
$9,000,000 for making improvements and extensions to the City's combined Waterworks and
Sewer System, under and in strict conformity with the Constitution and laws of the State of Texas,
including Articles 717k and 1111 at. seq., V.A.T. C. S., and pursuant to an Ordinance adopted by
the City Council of the City (herein referred to as the "Ordinance").
The Bonds maturing on June 1, 2019 (the "Tenn Bonds") are subject to mandatory
redemption in part on June 1, 2018 in the amount set forth in the Ordinance with funds on deposit
in the Bond Fund established and maintained for the payment thereof in the Ordinance, at the
price of par and accrued interest thereon to the date of redemption, and without premium. The
particular Term Bonds to be redeemed on such redemption date shall be chosen by lot by the
Paying Agent/Registrar; provided, however, that the principal amount of Tenn Bonds required to
be redeemed pursuant to the operation of such mandatory redemption provisions may be reduced,
at the option of the City, by the principal amount of Term Bonds which, at least 50 days prior to
a mandatory redemption date, (1) shall have been acquired by the City at a price not exceeding
the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof,
and delivered to the Paying Agent/Registrar for cancellation or (2) shall have been redeemed
pursuant to the optional redemption provisions appearing below and not theretofore credited
against a mandatory redemption requirement.
The Bonds maturing on and after June 1, 2010 may be redeemed prior to their Stated
Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any
integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on
June 1, 2009 or on any date thereafter at the redemption price of par plus accrued interest
thereon to the redemption date.
At least thirty days pdorto the date fixed forany redemption of Bonds, the City shall cause
a written notice of such redemption to be sent by United States Mail, first class postage prepaid,
to the registered owners of each Bond to be redeemed at the address shown on the Security
Register and subject to the terms and provisions relating thereto contained in the Ordinance. If
this Bond (or any portion of the principal sum hereof) shall have been duly called for redemption
and notice of such redemption duly given, then upon such redemption date this Bond (or the
portion of the principal sum hereof to be redeemed) shall become due and payable, and, if
moneys forthe payment of the redemption price and the interest accrued on the principal amount
to be redeemed to the date of redemption are held for the purpose of such payment by the Paying
745554.1 -10-
Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption date
on the principal amount hereof redeemed.
In the event of a partial redemption of the principal amount of this Bond, payment of the
redemption price of such principal amount shall be made to the registered owner only upon
presentation and surrender of this Bond to the Designated Payment/Transfer Office of the Paying
Agent/Registrar, and there shall be issued to the registered owner hereof, without charge, a new
Bond or Bonds of like maturity and interest rate in any authorized denominations provided in the
Ordinance for the then unredeemed balance of the principal sum hereof. If this Bond is called for
redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to
transfer this Bond to an assignee of the Holder within 45 days of the redemption date therefor;
provided, however, such limitation on transferability shall not be applicable to an exchange by the
Holder of the unredeemed balance hereof in the event of its redemption in part.
The Bonds are special obligations of the City, and, togetherwith the outstanding Previously
Issued Bonds (identified and defined in the Ordinance), are payable solely from and equally and
ratably secured by a first lien on and pledge of the Net Revenues (as defined in the Ordinance)
of the City's combined Waterworks and Sewer System (hereinafter referred to as the "System").
The Bonds do not constitute a legal or equitable pledge, charge, lien or encumbrance upon any
property of the City or the System, except with respect to the Net Revenues. The holder hereof
shall never have the right to demand payment of this obligation out of any funds raised or to be
raised by taxation.
Subject to satisfying the terms and conditions prescribed therefor, the City has reserved
the right to issue additional revenue obligations payable from and equally and ratably secured by
a parity lien on and pledge of the Net Revenues of the System, in the same manner and to the
same extent as the Bonds.
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the
Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and
the nature and extent of the security for the Bonds; the properties constituting the System; the Net
Revenues pledged to the payment of the principal of and interest on the Bonds; the nature and
extent and manner of enforcement of the lien and pledge securing the payment of the Bonds; the
terms and conditions forthe issuance of additional revenue obligations; the terms and conditions
relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may
be amended or supplemented with or without the consent of the Holders; the rights, duties, and
obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which the
liens, pledges, charges and covenants made therein may be discharged at or priorto the maturity
or redemption of this Bond, and this Bond deemed to be no longer Outstanding thereunder; and
for the other terms and provisions contained therein. Capitalized terms used herein have the
same meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
Paymentrrransfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
115554.1 -11-
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 amountwill be issued by the Paying Agent/Registrar to the designated
transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, may treat the registered
owner whose name appears on the Security Register (I) on the Record Date as the owner entitled
to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner entitled to
payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on
any other date as the owner for all other purposes, and neither the City nor the Paying
Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event
of non-payment of interest on a scheduled payment date and forthirty (30) days thereafter, a new
record date for such interest payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the
City. Notice of the Special Record Date and of the scheduled payment date of the past due
interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5)
business days prior to the Special Record Date by United States Mail, first class postage prepaid,
to the address of each Holder appearing on the Security Register at the close of business on the
last business day next preceding the date of mailing of such notice.
It is hereby certified, recited, represented and covenanted that the City is a duly organized
and legally existing municipal corporation 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, forth 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
pdncipai of and interest on the Bonds by a pledge of the Net Revenues of the System as
aforestated. In case any provision in this Bond or any application thereof shall be invalid, illegal,
or unenforceable, the validity, legality, and enforceability of the remaining provisions and
applications shall not in any way be affected or impaired thereby. The terms and provisions of this
Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws
of the State of Texas.
145554.1 -12-
IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly
executed under the official seal of the City as of the Bond Date.
COUNTERSIGNED:
CITY OF ALLEN, TEXAS
mayor
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 )
REGISTER NO.
OF PUBLIC ACCOUNTS )
THE STATE OF TEXAS )
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
(SEAL)
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
'NOTE TO PRINTER: Do not print on definitive bonds
„5,s,. � -13-
D. Form of Certificate of Paving Agent/Registrar to Appear on Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered 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 located in Dallas, Texas, is the
"Designated Payment/Transfer Office" for this Bond.
CHASE BANK OF TEXAS
NATIONAL ASSOCIATION,
as Paying Agent/RegistrarRegistration date:
By:
Authorized Signature
E. Forth of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers
unto (Print or typewrite name, address, and zip code of transferee:)
number: ) the within Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints
attorney to transfer the
within Bond on the books kept for registration thereof, with full power of substitution in the
premises.
DATED:
Signature guaranteed:
NOTICE: The signature on this assignment must
correspond with the name of the registered owner
as it appears on the face of the within Bond in
every particular.
The Initial Bond(s) shall be in the form set forth in Paragraph B of this Section except
that the form of a sinale 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",
(ii) Paragraph one shall read as follows:
111s 1.1 -14-
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, hereby promises to pay to
the order of the Registered Owner named above, or the registered assigns thereof, solely from
the revenues hereinafter identified, the Principal Amount hereinabove stated on June 1 in each
of the years and in principal installments in accordance with the following schedule:
PRINCIPAL INTEREST
YEAR INSTALLMENTS RATE
(Information to be inserted from schedule in Section 2 hereof).
(or so much thereof as shall not have been prepaid prior to maturity) and to pay interest, computed
on the basis of a 380 -day year of twelve 30 -day months, on the unpaid principal amounts hereof
from the Bond Date at the per annum rates of interest specified above; such interest being
payable on June 1 and December 1 in each year, commencing June 1, 1999. Principal
installments of this Bond are payable in the year of maturity or on a prepayment date to the
registered owner hereof by Chase Bank of Texas National Association (the 'Paying
Agent/Registrar"), upon presentation and surrender, at its designated offices in Dallas, Texas (the
"Designated Payment transfer Office"). Interest is payable to the registered owner of this Bond
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 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: Definitions. For all purposes of this Ordinance and in particular for clarity
with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of
revenues to the payment of the Bonds, the following definitions are provided:
"Additional Parity Bonds" - Revenue bonds or other evidences of
indebtedness which the City reserves the right to issue or enter into, as the case
may be, in the future in accordance with the terns and conditions provided in
Section 18 hereof and which are equally and ratably secured by a first lien on and
pledge of the Net Revenues of the System.
"Average Annual Debt Service" - That amount which, at the time of
computation, is derived by dividing the total amountof Debt Service to be paid over
a period of years as the same is scheduled to become due and payable by the
number of years taken into account in determining the total Debt Service.
Capitalized interest payments provided from bond proceeds shall be excluded in
making the aforementioned computation.
,15551.1 -15-
"Bond Insurance Policy" shall mean the municipal bond new issue
insurance policy of the Bond Insurer which guarantees payment of principal of and
interest on the Bonds.
"Bond Insurer"shall mean Financial Guaranty Insurance Company, a New
York stock insurance company, or any successor thereto.
"Bonds" - The "City of Allen, Texas, Waterworks and Sewer System
Revenue Refunding and Improvement Bonds, Series 1999", dated February 1,
1999, authorized by this Ordinance.
"Bonds Similarly Secured" - Collectively, the Previously Issued Bonds, the
Bonds and Additional Parity Bonds.
"City" - The City of Allen located in the County of Collin, Texas.
"Debt Service" - As of any particular date of computation, with respect to
any obligations and with respect to any period, the aggregate of the amounts to be
paid or set aside by the City as of such date or in such period for the payment
of the principal of, premium, if any, and interest (to the extent not capitalized) on
such obligations; assuming, in the case of obligations without a fixed numerical
rate, that such obligations bear, or would have borne, interest at the highest rate
reached, or that would have been applied to such obligations (using the index or
measure for computing interest applicable to such obligations) during the
twenty-four (24) month period next preceding the date of computation, and further
assuming in the case of obligations required to be redeemed or prepaid as to
principal prior to maturity, the principal amounts thereof will be redeemed prior to
maturity in accordance with the mandatory redemption provisions applicable
thereto.
"Fiscal Year' - The twelve month accounting period used by the City in
connection with the operation of the System which may be any twelve consecutive
month period established by the City.
"Government Obligations" - Direct obligations of the United States of
America, including obligations the principal of and interest on which are fully and
unconditionally guaranteed by the United States of America, and United States
Treasury obligations such as its State and Local Government Series in book -entry
form.
"Gross Revenues" - All income, receipts and revenues of every nature
derived or received from the operation and ownership (excluding refundable meter
deposits, restricted gifts and grants in aid of construction) of the System, including
earnings and income derived from the investment or deposit of moneys in any
special funds or accounts created and established for the payment and security of
145554.1 -16-
the Bonds Similarly Secured and other obligations payable solely from and secured
only by a lien on and pledge of the Net Revenues.
"Net Earnings" - The meaning assigned to such tern in Section 18 hereof.
"Net Revenues" - Gross Revenues of the System, with respect to any
period, after deducting the System's Operating and Maintenance Expenses during
such period.
"Operating and Maintenance Expenses" -All current expenses of operating
and maintaining the System, including all salaries, labor, materials, repairs and
extensions necessaryto render efficient service; provided, however, that only such
repairs and extensions, as in the judgment of the City Council, reasonably and
fairly exercised, are necessary to maintain the operations and render adequate
service to the City and the inhabitants thereof, or such as might be necessary to
meet some physical accident or condition which would otherwise impair obligations
payable from Net Revenues shall be deducted in determining "Net Revenues".
Depreciation charges shall not be considered Operating and Maintenance
Expenses. Operating and Maintenance Expenses shall include payments under
contracts for the purchase of water supply or the treatment of sewage or other
materials, goods, services or facilities for the System to the extent authorized by
law and the provisions of such contract.
"Outstanding" - When used in this Ordinance with respect to Bonds or
Bonds Similarly Secured, as the case may be, means, as of the date of
determination, all Bonds and Bonds Similarly Secured theretofore sold, issued and
delivered by the City, except:
(1) those Bonds or Bonds Similarly Secured cancelled
or delivered to the transfer agent or registrar for cancellation in
connection with the exchange or transfer of such obligations;
(2) those Bonds or Bonds Similarly Secured paid or
deemed to be paid in accordance with the provisions of Section 28
hereof: and
(3) those Bonds or Bonds Similarly Secured that have
been mutilated, destroyed, lost, or stolen and replacement bonds
have been registered and delivered in lieu thereof.
"Previously Issued Bonds" - The presently outstanding and unpaid revenue
bonds payable from and secured by a first lien on and pledge of the Net Revenues
of the System, more particularly described as follows: "City of Allen, Texas,
Waterworks and Sewer System Refunding and Improvement Revenue Bonds,
Series 1992", dated July 15, 1992, and originally issued in the aggregate principal
amount of $8,545,000, and the "City of Allen, Texas, Waterworks and Sewer
1 1s 1".1 -17—
System Revenue Bonds, Series 1995', dated September 1, 1995, originally issued
in the aggregate principal amount of $4,100,000.
"Required Reserve" - The amount required to be accumulated and
maintained in the Reserve Fund under the provisions of Section 14 hereof.
"System" - All properties, facilities and plants owned, operated and
maintained by the City for the supply, treatment and transmission of potable water
and for the collection, treatment and disposal of water -carried wastes, togetherwith
all future extensions, improvements, replacements and additions thereto; provided,
however, that notwithstanding the foregoing, and to the extent now or hereafter
authorized or permitted by law, the term "System' shall not mean to include
facilities of any kind which are declared not to be a part of the System and which
are hereafter acquired or constructed by or on behalf of the City with the proceeds
from the issuance of "Special Facilities Bonds", which are hereby defined as being
special revenue obligations of the City which are not Bonds Similarly Secured but
which are payable from and secured by other liens on and pledges of any
revenues, sources or payments, not pledged to the payment of the Bonds Similarly
Secured including, but not limited to, special contract revenues or payments
received from any other legal entity in connection with such facilities.
SECTION 11: Pledge. The City hereby covenants and agrees that the Net Revenues of
the System, with the exception of those in excess of the amounts required for the payment and
security of the Bonds Similarly Secured, are hereby irrevocably pledged, to the payment and
security of the Previously Issued Bonds, the Bonds and Additional Parity Bonds, if issued,
including the establishment and maintenance of the special funds created and established by this
Ordinance, all as hereinafter provided, and it is hereby ordained that the lien on and pledge of the
Net Revenues securing the payment of the Bonds Similarly Secured and interest thereon shall be
valid and binding in accordance with the terms hereof without any filing or recording thereof,
except in the official records of the City, or physical delivery of such Net Revenues or further act
by the City.
SECTION 12: System Fund. The City hereby covenants and agrees that Gross Revenues
of the System (excluding earnings and income derived from investments held in the Bond Fund
and Reserve Fund) shall be deposited as collected to the credit of a fund maintained at an official
depository of City funds and known on the books and records of the City as the "Waterworks and
Sewer System Fund" (herein called the "System Fund"), and such revenues of the System shall
be kept separate and apart from all other funds of the City. All revenues deposited in the System
Fund shall be pledged and appropriated to the extent required for the following uses and in the
order of priority shown:
(1) To the payment of all necessary and reasonable Operating and
Maintenance Expenses of the System as defined herein or required by statute to
be a first charge on and claim against the Gross Revenues thereof.
`I Is,,.1 -18-
(2) To the payment of the amounts required to be deposited in the Bond
Fund for the payment of Debt Service on the Bonds Similarly Secured as the same
becomes due and payable.
(3) To the payment of the amounts required to be deposited in the
Reserve Fund to establish and maintain the Required Reserve in accordance with
the provisions of this Ordinance or any other ordinance relating to issuance of
Bonds Similarly Secured.
Any Net Revenues remaining in the System Fund after satisfying the foregoing payments,
or making adequate and sufficient provision for the payment thereof, may be appropriated and
used for any other City purpose now or hereafter permitted by law.
SECTION 13: Bond Fund. For purposes of providing funds to pay the principal of and
interest on the Bonds as the same becomes due and payable, the City agrees to maintain a
separate and special account or fund on the books and records of the City known as the "City of
Allen Interest and Sinking Revenue Bond Fund" (the "Bond Fund"), and all monies deposited to
the credit of such Fund shall be held in a special banking fund or account maintained at an official
depository of the City. In addition to the deposits to the Bond Fund for the payment of the
Previously Issued Bonds, the City covenants that there shall be deposited into the Bond Fund prior
to each principal and interest payment date from the Net Revenues an amount equal to one
hundred per centum (100%) of the interest on and the principal of the Bonds then falling due and
payable by reason of maturity or redemption, and such deposits to pay principal and accrued
interest on the Bonds shall be made in substantially equal monthly installments on or before the
25th day of each month, beginning on or before the 25th day of the month next following the
delivery of the Bonds to the initial purchaser.
The required monthly deposits to the Bond Fund for the payment of principal of and
interest on the Bonds shall continue to be made as hereinabove provided until (i) the total amount
on deposit in the Bond Fund and Reserve Fund is equal to the amount required to fully pay and
discharge all Outstanding Bonds Similarly Secured (principal and interest) or (it) the Bonds are no
longer Outstanding.
Accrued interest and premium, if any, received from the purchaser(s) of the Bonds, as well
as earnings derived from the investment of moneys in the Bond Fund, shall be deposited to the
credit of the Bond Fund and taken into consideration and reduce the amount of the monthly
deposits hereinabove required to be deposited in the Bond Fund from the Net Revenues of the
System.
SECTION 14: Reserve Fund. For purposes of accumulating and maintaining funds as a
reserve for the payment of the Bonds Similarly Secured, the City reaffirms its covenant with the
owners of the Previously Issued Bonds and agrees with the Holders of the Bonds to maintain a
separate and special fund or account at a depository of city funds to be known as the "City of Allen
Revenue Bond Reserve Fund" (the "Reserve Fund"), and all funds deposited therein (excluding
earnings and income derived or received from deposits or investments which may be transferred
to the System Fund established in Section 12 hereof during such periods as there is on deposit
,1111,., -19-
in the Reserve Fund the Required Reserve) shall be used solely for the payment of the principal
of and interest on the Bonds Similarly Secured when (whether at maturity, upon a mandatory
redemption date or any interest payment date) other funds available for such purposes are
insufficient, and, in addition, may be used to the extent not required to maintain the "Required
Reserve", to pay, or provide for the payment of, the final principal amount of a series of Bonds
Similarly Secured so that such series of Bonds Similarly Secured is no longer deemed to be
"Outstanding" as such term is defined herein.
In accordance with the provisions of the ordinances authorizing the issuance of the
Previously Issued Bonds, the amount currently on deposit in the Reserve Fund exceeds $895,586
(the "Old Reserve"). By reason of the issuance of the Bonds, the total amount required to be
accumulated and maintained in said Fund is hereby determined to be $ (the
"Required Reserve") which amount is hereby found to equal or exceed the Average Annual Debt
Service for the Bonds and the Previously Issued Bonds (calculated on a Fiscal Year basis as of
the date the Bonds are to be delivered). The City agrees that beginning on or before the 25th day
of the month next following the month the Bonds are delivered to the initial purchasers and on or
before the 25th day of each following month until the Required Reserve has been fully
accumulated, there shall be deposited into the Reserve Fund from the Net Revenues of the
System an amount equal to at least 1/60th of the difference between the Required Reserve and
the Old Reserve.
When and so long as the cash and investments in the Reserve Fund total not less than
the Required Reserve, no deposits need be made to the credit of the Reserve Fund; but, if and
when the Reserve Fund at any time contains less than the Required Reserve (other than as the
result of the issuance of Additional Parity Bonds as provided in the paragraph below), the City
covenants and agrees to cure the deficiency in the Required Reserve by making monthly deposits
to said Fund from the Net Revenues of the System; such monthly deposits to be in amounts equal
to not less than 1/60th of the then total Required Reserve to be maintained in said Fund and to
be made on or before the 25th day of each month until the total Required Reserve then to be
maintained in said Fund has been fully restored. The City further covenants and agrees that,
subject only to the payments to be made to the Bond Fund, the Net Revenues shall be applied
and appropriated and used to establish and maintain the Required Reserve and to cure any
deficiency in such amounts as required by the terms of this Ordinance and any other ordinance
pertaining to the issuance of Additional Parity Bonds.
As and when Additional Parity Bonds are delivered or incurred, the Required Reserve shall
be increased, if required, to an amount equal to the lesser of (i) the Average Annual Debt Service
(calculated on a Fiscal Year basis) for all Bonds Similarly Secured then Outstanding, as
determined on the date each series of Additional Parity Bonds are delivered or incurred, as the
case may be, or (ii) the maximum amount in a reasonably required reserve fund that can be
invested without restriction as to yield pursuant to Subsection (d) of Section 148 of the Internal
Revenue Code of 1986, as amended, and regulations promulgated thereunder. Any additional
amount required to be maintained in the Reserve Fund shall be so accumulated by the deposit
in the Reserve Fund of all or any part thereof in cash immediately after the delivery of the then
proposed Additional Parity Bonds, or, at the option of the City, by the deposit of monthly
installments, made on or before the 25th day of each month following the month of delivery of the
„555,. -20-
then proposed Additional Parity Bonds, of not less than 1/80th of the additional amount to be
maintained in said Fund by reason of the issuance of the Additional Parity Bonds then being
issued (or 1/60th of the balance of the additional amount not deposited immediately in cash).
During such time as the Reserve Fund contains the total Required Reserve, the City may,
at its option, withdraw all surplus in the Reserve Fund in excess of the Required Reserve and
deposit such surplus in the System Fund.
SECTION 15: Deficiencies; Excess Net Revenues. (a) If on any occasion there shall not
be sufficient Net Revenues of the System to make the required deposits into the Bond Fund and
the Reserve Fund, then such deficiency shall be cured as soon as possible from the next available
Net Revenues of the System, or from any other sources available for such purpose.
(b) Subject to making the required deposits to the Bond Fund and the Reserve Fund
when and as required by this Ordinance, or any ordinance authorizing the issuance of Additional
Parity Bonds, the excess Net Revenues may be used by the City for any lawful purpose.
SECTION 16: Payment of Bonds. While any of the Bonds are Outstanding, the Director
of Finance (or other designated financial officer of the City) shall cause to be transferred to the
Paying Agent/Registrar, from funds on depositin the Bond Fund, and, if necessary, in the Reserve
Fund, amounts sufficient to fully pay and discharge promptly as each installment of interest and
principal of the Bonds accrues or matures or comes due by reason of redemption prior to maturity;
such transfer of funds to be made in such manner as will cause immediately available funds to be
deposited with the Paying Agent/Registrar for the Bonds at the close of the business day next
preceding the date of payment for the Bonds.
SECTION 17: Investments - Security of Funds. (a) Money in any Fund established
pursuant to this Ordinance may, at the option of the City, be placed in time deposits or certificates
of deposit secured (to the extent not insured by the Federal Deposit Insurance Corporation) by
obligations of the type hereinafter described, or be invested, including investments held in
book -entry form, in direct obligations of the United States of America and obligations guaranteed
or insured by the United States of America, which, in the opinion of the Attorney General of the
United States, are backed by its full faith and credit or represent its general obligations; provided
that all such deposits and investments shall be made in such a manner that the money required
to be expended from any Fund will be available at the proper time or times and provided further
the maximum stated maturity for any investment acquired with money in the Reserve Fund shall
be limited to five (5) years from the date of the investment of such money. Such investments
(except State and Local Government Series investments held in book entry form, which shall at
all times be valued at cost) shall be valued in terms of current market value within 45 days of the
close of each Fiscal Year and, with respect to investments held for the account of the Reserve
Fund, within 30 days of the date of passage of each ordinance authorizing the issuance of
Additional Parity Bonds. All interest and income derived from deposits and investments in the
Bond Fund immediately shall be credited to, and any losses debited to, the Bond Fund. All
interest and interest income derived from deposits in and investments of the Reserve Fund shall,
subject to the limitations provided in Section 14 hereof, be credited to and deposited in the System
".11, -21-
Fund. All such investments shall be sold promptly when necessary to prevent any default in
connection with the Bonds.
(b) Money in all Funds created by this Ordinance, to the extent not invested, shall be
secured in the manner and to the fullest extent required by the laws of the State of Texas for the
security of public funds.
SECTION 18: Issuance of Additional Parity Obligations. Subject to the provisions
hereinafter appearing as to conditions precedent which must be satisfied, the City reserves the
right to issue, from time to time as needed, Additional Parity Bonds for any lawful purpose. Such
Additional Parity Bonds may be issued in such form and manner as now or hereafter authorized
by the laws of the State of Texas for the issuance of evidences of indebtedness or other
instruments, and should new methods or financing techniques be developed that differfrom those
now available and in normal use, the City reserves the right to employ the same in its financing
arrangements provided only that the following conditions precedent for the authorization and
issuance of the same are satisfied, to wit:
(1) The Director of Finance of the City (or other officer of the City then
having the primary responsibility for the financial affairs of the City) shall have
executed a certificate stating (a) that, to the best of his knowledge and belief, the
City is not then in default as to any covenant, obligation or agreement contained
in any ordinance or other proceeding relating to any obligations of the City payable
from and secured by a lien on and pledge of the Net Revenues of the System that
would materially affect the security or payment of such obligations and (b) either
(i) payments into all special funds or accounts created and established for the
payment and security of all outstanding obligations payable from and secured by
a lien on and pledge of the Net Revenues of the System have been made and that
the amounts on deposit in such special funds or accounts are the amounts then
required to be on deposit therein or (ii) the application of the proceeds of sale of
such obligations then being issued will cure any such deficiency.
(2) The Additional Parity Bonds shall be scheduled to mature or be
payable as to principal on June 1 or December 1 (or both) in each year the same
are to be outstanding or during the term thereof.
(3) The City has secured a certificate or opinion of a Certified Public
Accountant to the effect that, according to the books and records of the City, the
Net Earnings for the last completed Fiscal Year, or for 12 consecutive months out
of the 15 months, immediately preceding the month the ordinance authorizing the
issuance of the Additional Parity Bonds is adopted are at least equal to 1.20 times
the Average Annual Debt Service for all Outstanding Bonds Similarly Secured after
giving effect to the issuance of the Additional Parity Bonds then being issued. In
making a determination of the Net Earnings, the Accountant may take into
consideration a change in the rates and charges for services and facilities afforded
by the System that became effective at least sixty (60) days prior to the last day of
the period for which Net Earnings are determined and, for purposes of satisfying
-22-
the above Net Earnings test, make a pro fora determination of the Net Earnings
of the System for the period of time covered by his certification or opinion based
on such change in rates and charges being in effect for the entire period covered
by the Accountants certificate or opinion.
As used in this Section, the ter "Net Earnings" shall mean the Gross Revenues of the
System after deducting the Operating and Maintenance Expenses of the System, but not
depreciation charges or other expenditures which, undergenerally accepted accounting principles,
should be treated as capital expenditures.
SECTION 19: Refunding Bonds. The City reserves the right to issue refunding bonds to
refund all or any part of the Bonds Similarly Secured (pursuant to any law then available) upon
such terms and conditions as the City Council of the City may deem to be in the best interest of
the City and its inhabitants, and if less than all such Bonds Similarly Secured then outstanding are
refunded, the conditions precedent prescribed (for the issuance of Additional Parity Bonds) set
forth in subparagraph (3) of Section 18 hereof shall be satisfied and the Accountants certificate
or opinion required in subparagraph (3) shall give effect to the Debt Service of the proposed
refunding bonds (and shall not give effect to the Debt Service of the Bonds Similarly Secured
being refunded following their cancellation or provision being made for their payment).
SECTION 20: Obligations of Inferior Lien and Pledoe. The City hereby reserves the right
to issue obligations payable from and secured by a lien on and pledge of the Net Revenues of the
System, junior and subordinate in rank and dignity to the lien and pledge securing the payment
of the Bonds Similarly Secured, as may be authorized by the laws of the State of Texas.
SECTION 21: Rates and Charges. For the benefit of the Holders of the Bonds and in
addition to all provisions and covenants in the laws of the State of Texas and in this Ordinance,
the City hereby expressly stipulates and agrees, while any of the Bonds are Outstanding, to
establish and maintain rates and charges for facilities and services afforded by the System that
are reasonably expected, on the basis of available information and experience and with due
allowance for contingencies, to produce Gross Revenues in each Fiscal Year sufficient:
(1) To pay Operating and Maintenance Expenses, depreciation charges
and replacement and betterment costs,
(2) To produce Net Revenues sufficient to pay the principal of and
interest on the Bonds Similarly Secured and the amounts required to be deposited
in any reserve or contingency fund created for the payment and security of the
Bonds Similarly Secured, and other obligations or evidences of indebtedness
issued or incurred that are payable only from and secured solely by a lien on and
pledge of the Net Revenues of the System, and
(3) To produce Net Revenues equal to at least 1.20 times the annual
Debt Service for the Fiscal Year on the Outstanding Bonds Similarly Secured.
�aosm. 1 —23—
(4) To pay all other indebtedness payable from the Net Revenues and/or
secured by a lien on the properties or the revenues of the System.
SECTION 22: Maintenance and Operation- Insurance. The City shall maintain the System
in good condition and operate the System in an efficient manner and at reasonable cost. While
any Bonds are Outstanding, the City agrees to maintain casualty and other insurance on the
System of a kind and in an amount customarily carried by municipal corporations owning and
operating similar properties. Nothing in this Ordinance shall be construed as requiring the City to
expend any funds derived from sources other than the operation of the System, but nothing herein
shall be construed as preventing the City from doing so.
SECTION 23: Sale or Lease of Properties. The City, to the extent and in the manner
authorized by law, may sell or exchange for consideration representing the fair value thereof, as
determined by the City Council of the City, any property not necessary or required in the efficient
operations of the System, or any equipment not necessary or useful in the operations thereof or
which is obsolete, damaged or wom out or otherwise unsuitable for use in the operation of the
System. The proceeds of any sale of properties of the System shall be deposited in the System
Fund.
SECTION 24: Records and Accounts. The City hereby covenants and agrees that so long
as any of the Bonds are Outstanding, it will keep and maintain separate and complete records and
accounts pertaining to the operations of the System in which complete and correct entries shall
be made of all transactions relating thereto, as provided by Article 1113, V.A.T.C.S. or other
applicable law. The Holders of any Bonds or any duly authorized agent or agents of such Holders
shall have the right at all reasonable times to inspect such records, accounts and data relating
thereto, and to inspect the System and all properties comprising same. The City further agrees
that following the close of each Fiscal Year, it will cause an audit of such books and accounts to
be made by an independent firth of Certified Public Accountants. Each such audit, in addition to
whatever other matters may be thought proper by the accountant, shall particularly include the
following:
(1) A statement of the income and expenses of the System for such
Fiscal Year.
(2) A balance sheet for the System as of the end of such Fiscal Year.
(3) A statement describing the sources and application of funds of the
System for such Fiscal Year.
(4) The Accountants comments regarding the manner in which the City
has carried out the requirements of this Ordinance and any other ordinance
authorizing the issuance of Additional Partly Bonds and his recommendations for
any changes or improvements in the operations, records and accounts of the
System.
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(5) A list of insurance policies in force at the end of the Fiscal Year
covering the properties of the System, setting out as to each policy the amount
thereof, the risk covered, the name of the insurer and the policy's expiration date.
Expenses incurred in making an annual audit of the operations of the System are to be
regarded as Operating and Maintenance Expenses. Copies of each annual audit shall be
furnished to the Executive Director of the Municipal Advisory Council of Texas at his office in
Austin, Texas, the Bond Insurer, and, upon request, to the initial purchasers of the Bonds and
subsequent Holders of any of said Bonds. The audits herein required shall be made within 120
days following the close of each Fiscal Year insofar as is possible.
SECTION 24: Special Covenants. The City further covenants and agrees by and through
this Ordinance as follows:
(1) It has the lawful power to pledge the Net Revenues of the System
to the payment of the Bonds to the extent provided herein and has lawfully
exercised said power under the Constitution and laws of the State of Texas, and
that the Previously Issued Bonds, the Bonds issued hereunder, together with the
Additional Parity Bonds, shall be ratably secured in such manner that no one bond
shall have preference over any other bond of said issues.
(2) The Net Revenues of the System have not been in any manner
pledged or encumbered to the payment of any debt or obligation of the City or the
System, save and except for the Previously Issued Bonds and the Bonds.
(3) No free services of the System shall be allowed, and should the City
or any of its agents or instrumentalities make use of the services and facilities of
the System, payment of the reasonable value thereof shall be made by the City out
of funds from sources other than the revenues and income of the System.
(4) To the extent that it legally may and while any of the Bonds are
Outstanding, no franchise shall be granted for the installation or operation of any
competing waterworks or sewer system facilities.
(5) The City will comply with all of the terms and conditions of any and
all franchises, permits and authorizations applicable to or necessary with respect
to the ownership and operation of municipal facilities for the supply and distribution
of potable water and the collection, treatment and disposal of water -carried wastes,
and which have been obtained from any governmental agency; and the City has
orwill obtain and keep in full force and effect all franchises, permits, authorizations
and other requirements applicable to or necessary with respect to the acquisition,
construction, equipment, operation and maintenance of such properties and
facilities.
SECTION 26: Remedy in Event of Default. In addition to all rights and remedies provided
by the laws of the State of Texas, the City covenants and agrees particularly that in the event the
145554.1 -25-
City (a) defaults in payments to be made to the Bond Fund or the Reserve Fund as required by
this Ordinance or (b) defaults in the observance or performance of any other of the covenants,
conditions or obligations set forth in this Ordinance, the Holders of any of the Bonds shall be
entitled to a writ of mandamus issued by a court of proper jurisdiction, compelling and requiring
the City and its officers to observe and perform any covenant, condition or obligation prescribed
in this Ordinance. No delay or omission to exercise any right or power accruing upon any default
shall impair any such right or power, or shall be construed to be a waiver of any such default or
acquiescence therein, and every such right and power may be exercised from time to time and
as often as may be deemed expedient.
The specific remedy herein provided shall be cumulative of all other existing remedies and
the specification of such remedy shall not be deemed to be exclusive.
Notwithstanding the above and foregoing, the City agrees and covenants that (i) in
determining whether a payment default has occurred or whether a payment on the Bonds has
been made under this Ordinance, no effect shall be given to payments made under the Bond
Insurance Policy, (ii) the Bond Insurer shall receive immediate notice of any payment default and
notice of any other default known to the Paying Agent/Registrar or any other fiduciary acting on
behalf of the Holders within 30 days of such entity's knowledge thereof, and (iii) for all purposes
of this Section, except the giving of notice of defaultto Holders, the Bond Insurer shall be deemed
to be the sole holder of the Bonds it has insured for so long as it has not failed to comply with its
payment obligations under the Bond Insurance Policy.
SECTION 27: Special Obligations. The Bonds are special obligations of the City payable
from the pledged Net Revenues of the System and the Holders thereof shall never have the right
to demand payment thereof out of funds raised or to be raised by taxation.
SECTION 28: 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 the Net
Revenues of the System under this Ordinance and all other obligations of the City to the Holders
shall thereupon cease, terminate, and become void 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) non -callable Government
Obligations shall have been irrevocably deposited in trust with the Paying Agent/ Registrar, or an
authorized escrow agent, which Government Obligations have been certified by an independent
accounting fine to mature as to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money, together with any moneys
deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the
principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption
has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying
Agent/Registrar have been made) the redemption date thereof. The City covenants that no
745554.1 -26-
deposit of moneys or Government Obligations will be made under this Section and no use made
of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the
meaning of Section 148 of the Internal Revenue Code of 1988, as amended, or regulations
adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/ Registrar, oran authorized escrow agent,
and all income from Government Obligations held in trust by the Paying Agent Registrar or an
authorized escrow agent, pursuant to this Section 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 four (4) years after the Stated
Maturity, or applicable redemption date, of the Bonds such moneys were deposited and are held
in trust to pay shall, upon the request of the City, be remitted to the City against a written receipt
therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying
AgentlRegistrarto the City shall be subject to any applicable unclaimed property laws of the State
of Texas.
In the event of an advance refunding of the Bonds under this Section, the City agrees and
covenants to cause to be delivered to the Bond Insurer a verification report of an independent
nationally recognized certified public accountant.
SECTION 29: Ordinance a Contract - Amendments. 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 exceptas permitted in this Section.
The Ciry, 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 defector omission herein. In addition, the City
may, with the written consent from the owners holding a majority in aggregate principal amount
of the Bonds Similarly Secured then Outstanding affected thereby, amend, add to, or rescind any
of the provisions of this Ordinance; provided that, without the written consent of all Holders of
Outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or times
of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal
amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way
modify the terms of payment of the principal of, premium, if any, or interest on the Bonds, (2) give
any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount
of Bonds or Bonds Similarly Secured, as the case may be, required to be held for consent to any
such amendment, addition, or rescission.
Notice of any amendment requiring the consent of the Bond Insurer and all Holders of the
Bonds shall be furnished to any rating agency rating the Bonds at least 15 days prior to the
execution or adoption of such amendment. Additionally, the Bond Insurer shall be furnished a full
transcript of all proceedings relating to the execution of any amendment or supplement to this
Ordinance.
nsssaa -27-
SECTION 30: Mutilated - Destroyed - Lost and Stolen Bonds. In case any Bond shall be
mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a
replacement Bond of like form and tenor, and in the same denomination and bearing a number
not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in
lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the
City and after (i) the filing by the Holder thereof with the Paying Agent/ Registrar of evidence
satisfactory to the Paying Agent/ Registrar of the destruction, loss or theft of such Bond, and of
the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of
indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar
harmless. All expenses and charges associated with such indemnity and with the preparation,
execution and delivery of a replacement Bond shall be bome by the Holder of the Bond mutilated,
or destroyed, lost or stolen.
Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost,
or stolen Bond shall constitute a replacement of the prior obligation of the City, whether or not the
mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding
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 31: Notices to Holders -Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and sent by United States Mail, first class postage prepaid, to the address
of each Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail, neither the failure to mail such notice
to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of
such notice with respect to all other Bonds. Where this 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 fled with the Paying
Agent/Registrar, but such fling shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 32: Cancellation. All Bonds surrendered for payment, redemption, transfer or
exchange, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if
surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already
cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time
deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or registered
and delivered which the City may have acquired in any manner whatsoever, and all Bonds so
delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled Bonds held by
the Paying Agent/Registrar shall be destroyed as directed by the City.
745554.1 -28-
SECTION 33: Covenants to Maintain Tax -Exempt Status. (a) Definitions. When used
in this Section 33, the following terms have the following meanings:
"Closing Date" means the date on which the Bonds are first authenticated
and delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all
legislation, if any, effective on or before the Closing Date.
"Computation Date"has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of
the Regulations, and any replacement proceeds as defined in Section 1.148-1(c)
of the Regulations, of the Bonds.
"Investment" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Nonpurpose Investment" means any investment property, as defined in
section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested
and which is not acquired to carry out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Regulations" means any proposed, temporary, or final Income Tax
Regulations issued pursuant to Sections 103 and 141 through 150 of the Code,
and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds.
Any reference to any specific Regulation shall also mean, as appropriate, any
proposed, temporary or final Income Tax Regulation designed to supplement,
amend or replace the specific Regulation referenced.
"Yield"of (1) any Investment has the meaning set forth in Section 1.148-5
of the Regulations and (2) the Bonds has the meaning set forth in Section 1.148-4
of the Regulations.
(b) Not to Cause Interest to Become Taxable. The 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 ownerthereof
for federal income tax purposes. Without limiting the generality of the foregoing, unless and until
the City receives a written opinion of counsel nationally recognized in the field of municipal bond
law to the effect that failure to comply with such covenant will not adversely affect the exemption
1111m.1 -29-
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 (including property financed with Gross Proceeds of the Refunded
Obligations) or any property the acquisition, construction or improvement of which
is to be financed or refinanced directly or indirectly with such Gross Proceeds,
other than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to
make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a
person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens
and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or
improved with such Gross Proceeds are otherwise transferred in a transaction which is the
economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the
Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final
Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use
Gross Proceeds to replace money so invested), if as a result of such investment the Yield from
the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced
thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds.
M Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the
Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action
which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of
the Code and the Regulations and rulings thereunder.
(g) Information Report. The City shall timely file the information required by section
149(e) of the Code with the Secretary of the Treasury on Forth 8038-G or such other form and in
such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section
148(0 of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and
apartfrom all otherfunds (and receipts, expenditures and investments thereof) and
shall retain all records of accounting for at least six years after the day on which the
last Outstanding Bond is discharged. However, to the extent permitted by law, the
City may commingle Gross Proceeds of the Bonds with other money of the City,
provided that the City separately accounts for each receipt and expenditure of
Gross Proceeds and the obligations acquired therewith.
(2) Not less frequently than each Computation Date, the City shall calculate
the Rebate Amount in accordance with rules set forth in section 148(f) of the Code
and the Regulations and rulings thereunder. The City shall maintain such
calculations with its official transcript of proceedings relating to the issuance of the
Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to induce
such purchase by measures designed to insure the excludability of the interest
thereon from the gross income of the owners thereof for federal income tax
purposes, the City shall pay to the United States out of the Bond Fund or its
general fund, as permitted by applicable Texas statute, regulation or opinion of the
Attorney General of the State of Texas, the amount that when added to the future
value of previous rebate payments made for the Bonds equals (i) in the case of a
Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one
hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case
of any other Computation Date, ninety percent (90%) of the Rebate Amount on
such date. In all rases, 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 Forth 8038-T or such other forms and information as is or may be
required by Section 148(f) of the Code and the Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to assure that no errors are
made in the calculations and payments required by paragraphs (2) and (3), and if
1.55,,.= -31-
an error is made, to discover and promptly correct such error within a reasonable
amount of time thereafter (and in all events within one hundred eighty (180) days
after discovery of the error), including payment to the United States of any
additional Rebate Amount owed to it, interest thereon, and any penalty imposed
under Section 1.148-3(h) of the Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the
Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier
of the Stated Maturity or final payment of the Bonds, enter into any transaction that reduces the
amount required to be paid to the United States pursuant to Subsection H of this Section because
such transaction results in a smaller profit or a larger loss than would have resulted if the
transaction had been at arm's length and had the Yield of the Bonds not been relevant to either
party.
0) Elections. The City hereby directs and authorizes the Mayor, City Manager, Director
of Finance and City Secretary, either individually orjointly, to make elections permitted or required
pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate
in connection with the Bonds, in the Certificate as to Tax Exemption or similar or other appropriate
certificate, form or document.
(k) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the Bonds
were issued, the City reasonably expected to spend at least 85% of the spendable proceeds of
such bonds within three years after such bonds were issued and (2) not more than 50% of the
proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose Investments
having a substantially guaranteed Yield for a period of 4 years or more.
(1) Qualified Advance Refunding. The Bonds are issued exclusively to refund the
Refunded Obligations, and the Bonds will be issued more than 90 days before the redemption of
the Refunded Obligations. The City represents as follows:
(a) The Bonds are the second advance refunding of the original bonds
refunded by the refunding portion of the Refunded Obligations and the first
advance refunding of the new money portion of the Refunded Obligations within
the meaning of section 149(d)(3) of the Code.
(b) The Refunded Obligations are being called for redemption, and will be
redeemed not laterthan the earliest date on which such bonds may be redeemed.
(c) The initial temporary period under section 148(c) of the Code will end:
(i) with respect to the proceeds of the Bonds not later than 30 days after the date
of issue of such Bonds; and (ii) with respect to proceeds of the Refunded
Obligations on the Closing Date if not ended prior thereto.
(d) On and after the date of issue of the Bonds, no proceeds of the
Refunded Obligations will be invested in Nonpurpose Investments having a Yield
in excess of the Yield on such Refunded Obligations.
�11151.1 -32-
(e) The Bonds are being issued for the purposes stated in the preamble of
this Ordinance. There is a present value savings associated with the refunding.
In the issuance of the Bonds the City has neither: (i) overburdened the tax-exempt
bond market by issuing more bonds, issuing bonds earlier or allowing bonds to
remain outstanding longer than reasonably necessary to accomplish the
governmental purposes forwhich the Bonds were issued; (ii) employed on "abusive
arbitrage device" within the meaning of Section 1.148-10(a) of the Regulations; nor
(iii) employed a "device" to obtain a material financial advantage based on
arbitrage, within the meaning of section 149(d)(4) of the Code, apart from savings
attributable to lower interest rates and reduced debt service payments in early
years.
SECTION 34: Sale of Bonds - Official Statement Approval. The Bonds authorized by this
Ordinance are hereby sold by the City to First Southwest Company and Estrada Hinojosa &
Company, Inc. (herein referred to as the "Purchasers') in accordance with the Purchase Contract,
dated January 7, 1999, 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, attached as Exhibit A to the Purchase
Contract (togetherwith such changes approved by the Mayor, Mayor Pro Tem, City Secretary, City
Manager, or Director of Finance, one or both 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 January 7, 1999, 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 forth 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 35: Special Escrow Agreement Approval and Execution. The "Special Escrow
Agreement" (the "Agreement") by and between the City and Chase Bank of Texas, National
Association (the "Escrow Agent"), attached hereto as Exhibit C and incorporated herein by
reference as a part of this Ordinance for all purposes, is hereby approved as to forth and content,
and such Agreement in substantially the form and substance attached hereto, together with such
changes or revisions as may be necessary to accomplish the refunding or benefit the City, is
hereby authorized to be executed by the Mayor and City Secretary for and on behalf of the City
and as the act and deed of this City Council; and such Agreement as executed by said officials
shall be deemed approved by the City Council and constitute the Agreement herein approved.
-33-
Furthermore, appropriate officials of the City in cooperation with the Escrow Agent are
hereby authorized and directed to make the necessary arrangements for the purchase of the
Federal Securities referenced in the Agreement and the delivery thereof to the Escrow Agent on
the day of delivery of the Bonds to the Purchasers for deposit to the credit of the "SPECIAL 1999
CITY OF ALLEN, TEXAS, REVENUE REFUNDING BOND ESCROW FUND" (the "Escrow Fund");
all as contemplated and provided in Article 717k, V.A.T.C.S., as amended, this Ordinance and the
Agreement.
SECTION 36: Control and Custody of Bonds. The Mayor of the City shall be and is hereby
authorized to take and have charge of all necessary orders and records pending investigation by
the Attorney General of the State of Texas, including the printing and supply of definitive Bonds,
and shall take and have charge and control of the Initial Bond(s) pending the approval thereof by
the Attorney General, the registration thereof by the Comptroller of Public Accounts and the
delivery thereof to the Purchasers.
Furthermore, the Mayor, Mayor Pro Tem, City Secretary, City Manager and Director of
Finance, any one or more of said officials, are hereby authorized and directed to furnish and
execute such documents and certifications relating to the City and the issuance of the Bonds,
including certifications as to facts, estimates, circumstances and reasonable expectations
pertaining to the use, expenditure and investment of the proceeds of the Bonds, as may be
necessary for the approval of the Attorney General, their registration by the Comptroller of Public
Accounts and the delivery of the Bonds to the Purchasers, and, together with the City's financial
advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the
delivery of the Initial Bond(s) to the Purchasers and the initial exchange thereof for definitive
Bonds.
SECTION 37: Proceeds of Sale. Immediately following the delivery of the Bonds, the
proceeds of sale thereof (less certain costs of issuance, the accrued interest received from the
Purchasers of the Bonds and the amounts to be deposited to the construction fund) shall be
deposited with the Escrow Agent for application and disbursement in accordance with the
provisions of the Agreement. The proceeds of sale of the Bonds not so deposited with the Escrow
Agent forthe refunding of the Refunded Obligations shall be disbursed and deposited for payment
of costs of issuance and deposited in the construction fund and the Bond Fund in accordancewith
written instructions from the City. Pending expenditure forauthorized projects and purposes, such
proceeds of sale deposited in the construction fund may be invested in authorized investments
and, subject to the provisions of Section 28(h) hereof, any investment earnings realized shall be
expended for such authorized projects and purposes or deposited in the Bond Fund as shall be
determined by the City Council.
SECTION 38: 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 is hereby authorized to be printed on the definitive Bonds or an executed counterpart
thereof shall accompany the global Bonds deposited with the Depository Trust Company.
-34-
SECTION 39: CUSIP Numbers. CUSIP numbers may be printed ortyped on the definitive
Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the
definitive Bonds shall be of no significance or effect as regards the legality thereof and neither
the City nor attorneys approving said Bonds as to legality are to be held responsible for CUSIP
numbers incorrectly printed or typed on the definitive Bonds.
SECTION 40: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is
intended or shall be construed to confer upon any person other than the City, the Paying
Agent/Registrar and the Holders, any fight, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being
intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar
and the Holders.
SECTION 41: Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 42: Govemina 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 43: Severability. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and the Council hereby
declares that this Ordinance would have been enacted without such invalid provision.
SECTION 44: Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural number
shall be considered to include the singular, and words of the masculine, feminine or neuter gender
shall be considered to include the other genders.
SECTION 45: Continuina 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.
-35-
"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, 1998) financial information and operating data with respect to the City of the
general type included in the final Official Statement approved by Section 34 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 yearto each NRMSIR and any SID
with the financial information and operating data and will file the audited financial statements,
when and if audited financial statements become available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the City
otherwise would be required to provide financial information and operating data pursuant to this
Section.
The financial information and operating data to be provided pursuant to this Section
may be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The City shall notify any SID and either each NRMSIR or
the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such
event is material within the meaning of the federal securities laws:
Bonds;
and
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;
G. Adverse tax opinions or events affecting the tax-exempt status of the
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;
11. Rating changes.
„1111.1 -36-
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, andAmendments. 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 OW NER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT,
FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED
IN THIS SECTION, BUT EVERY RIGHTAND REMEDYOFANYSUCH 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 if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule to the date of such amendment, as well as such
changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal amount
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. If the City so
1111, -37-
amends the provisions of this Section, it shall include with any amended financial information or
operating data next provided in accordance with subsection (b) 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 46: Covenants With Respect to Insurance. The Bonds have been offered and
sold with the principal of and interest thereon being insured by the Bond Insurer. In accordance
with the terms and conditions applicable to insurance provided by the Bond Insurer, the City
covenants and agrees as follows:
(a) The Bond Insurer shall be provided with the following information:
(i) within 120 days after the end of each Fiscal Year, a
budget for the succeeding year and annual audited financial
statements, a statement of the amount on deposit in the Reserve
Fund as of the last valuation, and, if not presented in the audited
financial statements, a statement of the Net Revenues pledged to
the payment of the Bonds in each such Fiscal Year,
(ii) the official statement orother disclosure, if any, prepared
in connection with the issuance of Additional Parity Bonds and any
other obligations of the City within 30 days after the sale thereof;
(iii) notice of any draw upon or deficiency due to market
fluctuation in the amount, if any, on deposit in the Reserve Fund;
(iv) notice of the redemption, of any of the Bonds, including
the principal amount, maturities and CUSIP numbers thereof;
(v) Simultaneously with the delivery of the annual audited
financial statements (A) the number of System users as of the end
of the Fiscal Year, (B) notification of the withdrawal of any System
user comprising 4% or more of System sales measured in terms of
revenue dollars since the last reporting date; (C) any significant
plant retirements or expansion planned or undertaken since the last
reporting date; (D) maximum and average daily usage forthe Fiscal
Year, (E) updated capital plans for expansion and improvement
projects; and (F) results of annual engineering inspections, if any,
occurring at the end of the Fiscal Year; and
(vi) such additional information as the Bond Insurer may
reasonably request from time to time.
(b) If, on the third day preceding any interest payment date for the Bonds
there is not on deposit with the Paying Agent/Registrar sufficient moneys available
to pay all principal of and interest on the Bonds due on such date, the Paying
Agent/Registrar shall immediately notify the Bond Insurer and State Street Bank
and Trust Company, N.A., New York, New York, or its successor as its Fiscal Agent
(the "Fiscal Agent") of the amount of such deficiency. If, by said interest payment
date, the City has not provided the amount of such deficiency, the Paying
745554.1 -38-
Agent/Registrar shall simultaneously make available to the Bond Insurerand to the
Fiscal Agent the registration books for the Bonds maintained by the Paying
Agent/Registrar. In addition, (A) the Paying Agent/Registrarshall provide the Bond
Insurer with a list of the Holders entitled to receive principal or interest payments
from the Bond Insurer under the terms of the Bond Insurance Policy and shall
make arrangements for the Bond Insurer and its Fiscal Agent (1) to mail checks or
drafts to Holders entitled to receive full or partial interest payments from the Bond
Insurerand (2) to pay principal of the Bonds surrendered to the Fiscal Agent by the
Holders entitled to receive full or partial principal payments from the Bond Insurer;
and (B) the Paying Agent/Registrarshall, at the time it makes the registration books
available to the Bond Insurer pursuant to (A) above, notify Holders entitled to
receive the payment of principal of and interest on the Bonds from the Bond
Insurer (1) as to the fad of such entitlement, (2) that the Bond Insurer will remit to
them all or part of the interest payments coming due subject to the terms of the
Bond Insurance Policy, (3) that, except as provided in paragraph (c) below, in the
event that any Holder is entitled to receive full payment of principal from the Bond
Insurer, such Holder must tender his Bond with the instrument of transfer in the
forth provided on the Bond executed in the name of the Bond Insurer and (4) that,
except as provided in paragraph (c) below, in the event that such Holder is entitled
to receive partial payment of principal from the Bond Insurer, such Holder must
tender his Bond for payment first to the Paying Agent/Registrar, which shall note
on such Bond the portion of principal paid by the Paying Agent/Registrar, and then,
with an acceptable forth of assignment executed in the name of the Bond Insurer,
to the Fiscal Agent, which will then pay the unpaid portion of principal to the Holder
subject to the terms of the Bond Insurance Policy.
(c) In the event that the Paying Agent/Registrar has notice that any
payment of principal of or interest on a Bond has been recovered from a Holder
pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in
accordance with the final, nonappealable order of a court having competent
jurisdiction, the Paying Agent/Registrar shall, at the time it provides notice to the
Bond Insurer, notify all Holders that in the event that any Holder's payment is so
recovered, such Holder will be entitled to payment from the Bond Insurer to the
extent of such recovery, and the Paying Agent/Registrar shall furnish to the Bond
Insurer its records evidencing the payments of principal of and interest on the
Bonds which have been made by the Paying AgenURegistrar and subsequently
recovered from the Holders, and the dates on which such payments were made.
(d) The Bond Insurer shall, to the extent it makes payments of principal of
and interest on the Bonds, become subrogated to the rights of the recipients of
such payments in accordance with the terms of the Bond Insurance Policy and, to
evidence such subrogation, (1) in the rase of subrogation as to claims for past due
interest, the Paying Agent/Registrar shall note the Bond Insurer's rights as
subrogee on the registration books maintained by the Paying Agent/Registrar upon
receipt from the Bond Insurer of proof of the payment of interest thereon to the
Holders of such Bonds and (2) in the case of subrogation as to claims for past due
principal, the Paying Agent/Registrar shall note the Bond Insurer's rights as
subrogee on the registration books for the Bonds maintained by the Paying
Agent'Registrar upon receipt of proof of the payment of principal thereof to the
Holders of such Bonds. Notwithstanding anything in this Ordinance or the Bonds
,«ss<.' -39-
to the contrary, the Paying Agent/Registrar shall make payment of such past due
interest and past due principal directly to the Bond Insurer to the extent that the
Bond Insurer is a subrogee with respect thereto.
(e) The notice addresses for the Bond Insurer and the Fiscal Agent are as
follows:
Financial Guaranty Insurance Company
115 Broadway
New York, New York 10006
Attention: Risk Management
State Street Bank and Trust Company, N.A.
61 Broadway
New York, New York 10006
Attention: Corporate Trust Department
(f) The Bond Insurer shall be included as a part in interest and as a party
entitled to (1) notify the City, the Paying Agent/Registrar, or any applicable receiver
of the occurrence of an event of default and (2) request the Paying Agent/Registrar
or receiver to intervene in judicial proceedings that affect the Bonds or the security
therefor. The Paying Agent/Registraror receiver shall be required to accept notice
of default from the Bond Insurer.
SECTION 47: 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, Chapter551, as amended.
SECTION 48: Effective Date. This Ordinance shall take effective immediately upon its
passage and adoption on the date shown below.
745551.1 -40-
PASSED AND ADOPTED, this January 7, 1999.
ATTEST:
���Or-
Qity Sedrktary
(City Seal)
CITY OF ALLEN, TEXAS
115511. � -41-
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of January 7, 1999 (this "Agreement"), by and
between the City of Allen, Texas (the "Issuer"), and Chase Bank of Texas, National Association,
Dallas, Texas, a banking association duly organized and existing under the laws of the United
States of America, (the "Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the execution and delivery
Of its "City of Allen, Texas, Waterworks and Sewer System Revenue Refunding and
Improvement Bonds, Series 1999" (the "Securities"), dated February 1, 1999, such Securities
scheduled to be delivered to the initial purchasers thereof on or about February 9, 1999; 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 Issuerthe 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
]46485.1
for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close
of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal
Year.
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:
]46485.1
"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 principal office of the Bank as indicated on page
9 hereof. The Bank will notify the Issuer in writing of any change in location of the Bank
Office.
"Bond Resolution" means the resolution, order, or ordinance of the governing
body of the Issuer pursuant to which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30th.
"Holder" and "Security Holder" each means the Person in whose name a Security
is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order signed in
the name of the Issuer by the Mayor, City Secretary, City Manager, or Director of
Finance, any one or more of said officials, and delivered to the Bank.
closed. "Legal Holiday" means a day on which the Bank is required or authorized to be
"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
-2-
EXHIBIT A
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).
"Redemption Date" when used with respect to any Security to be redeemed
means the date fixed for such redemption pursuant to the terns of the Bond Resolution.
"Responsible Officer" when used with respect to the Bank means the Chairman
or Vice -Chairman of the Board of Directors, the Chairman or Vice -Chairman of the
Executive Committee of the Board of Directors, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier,
any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of
the Bank customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of the
Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the principal
of a Security is scheduled to be due and payable.
Section 2.02. Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar' refers to the Bank in the performance of the duties
and functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paving Agent. As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer,
pay on behalf of the Issuerthe 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 Bank
Office.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
each Security when due, by computing the amount of interest to be paid each Holder and
making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the
Record Date. All payments of principal and/or interest on the Securities to the registered owners
shall be accomplished (1) by the issuance of checks, payable to the registered owners, drawn
on the fiduciary account provided in Section 5.05 hereof, sent by United States mail, first class,
746<85.1 _3_
EXHIBIT A ,
postage prepaid, to the address appearing on the Security Register or (2) by such other method,
acceptable to the Bank, requested in writing by the Holder at the Holders risk and expense.
Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities at the dates specified in the Bond Resolution.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register- Transfers and Exchanges. The Bank agrees to keep
and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and Bank may prescribe. All transfers, exchanges and replacement
of Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed
by an officer of a federal or state bank or a member of the National Association of Securities
Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly
authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re -registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange ortransferof Securities, the exchange ortransfer 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 bythe 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
746486.1 _4_
EXHIBIT A
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 forth capable of
being converted into written form within a reasonable time.
Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
Register at any time the Bank is customarily open for business, provided that reasonable time
is allowed the Bank to provide an up-to-date listing or to convert the information into written forth.
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 forth 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 bome by the Holder of the Security mutilated, or destroyed, lost
or stolen.
Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time
after receipt of written request from the Issuer, furnish the Issuer information as to the Securities
it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange
of any Securities pursuant to Section 4.0 1, and Securities it has delivered in exchange for or in
lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
746466.1 -5-
EXHIBIT A
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
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 ordocument 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 consultwith counsel, and thewntten 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 orany othercapacity, may
become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent/Registrar, or any other agent.
745495.1 _(_
EXHIBIT A
Section 5.05. Moneys Held by Bank -Fiduciary Account/Collateralizaton. Afiduciary
account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and
disbursement of moneys received from the Issuer hereunder for the payment of the Securities,
and money deposited to the credit of such account until paid to the Holders of the Securities
shall be continuously collateralized by securities or obligations which qualify and are eligible
under both the laws of the State of Texas and the laws of the United States of America to secure
and be pledged as collateral for fiduciary accounts to the extent such money is not insured by
the Federal Deposit Insurance Corporation. Payments made from such fiduciary account shall
be made by check drawn on such fiduciary account unless the owner of such Securities shall,
at its own expense and risk, request such other medium of payment.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal, premium (if any), or interest on any
Security and remaining unclaimed for four years after final maturity of the Security has become
due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall
thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to
such moneys shall thereupon cease.
Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank 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 either
the Bank Office or 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 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", effective
December 12, 1994, 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.
746485.1 -7-
EXHIBIT A
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.
Section6.02. 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
orthe Bank shall be mailed ordelivered to the Issuer orthe 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.
Section 6.06. Severability. In case any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
Section 6.07. Benefits of Agreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement. This Agreement and the Bond Resolution constitute
the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the
Bond Resolution shall govern.
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one and
the same Agreement.
Section 6.10. Termination. This Agreement will terminate (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (60) days written notice; provided, however, an early
termination of this Agreement by either party shall not be effective until (a) a successor Paying
AgenVRegistrar 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.
746485.1
FXHIBIT A,
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. GOyerninO Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, Dallas, Texas
BY
[SEAL] Title:
Attest:
Mailing Address:
Title: Corporate Trust Department
P. 0. Box 660197
Dallas, Texas 75266-0197
Delivery Address:
Corporate Trust Department
2200 Ross Avenue, 5th Floor
Dallas, Texas 75201
CITY OF ALLEN, TEXAS
M
(CITY SEAL)
Address: One Butler Circle
Attest: Allen, Texas 75013
City Secretary
]46485.1
EXHIBIT A..'
EXHIBIT B
CITY OF ALLEN, TEXAS
$12,545,000
WATERWORKS AND SEWER SYSTEM, REVENUE
REFUNDING AND IMPROVEMENT BONDS,
Series 1999
PURCHASE CONTRACT
January 7, 1999
THE HONORABLE MAYOR AND CITY COUNCH, MEMBERS
City of Allen
One Butler Circle
Allen, Texas 75013
Dear Mayor and City Members:
First Southwest Company and Estrada, Mncjosa & Company, Inc. (the "Underwriters"), offer to enter into
this Purchase Contract with the City of Allen, Texas (the "City"). This offer is made subject to the City's acceptance
of this Purchase Contract on or before 9:00 p.m., Cenral Time on January 7, 1999.
I. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the basis of the
representations or forth herein, the Underwriters hereby agree, jointly and severally, to purchase from the City, and
the City hereby agrees to sell and deliver to the Underwriters 512,545,000 principal amount of City of Allen, Texas
Waterworks and Sewer System Revenue Refunding and Improvement Bonds, Series 1999, (the "Obligations"). The
Obligations shall be dated February 1, 1999, and shall have the maturities and bear interest from their date at the rate
or rates per annum as shown on the cover page of the Official Statement (hereinafter defined), such interest being
payable initially as indicted on the cover page of the Official Statement and semi-annually thereafter on June 1 and
December l in each year. The purchase price for the Obligations shall be S 12,438,419.60 (representing an aggregate
principal amount of the Obligations ofS12,545,000 less an Underwriters' discount ofS85,933.25 and an original issue
discount of 520,647.15) plus interest accrued on the Obligations from their date to the date of the payment for and
delivery of the Obligations (the "Closing"). Exhibit A hereto is the Official Statement, including the cover page and
Appendices thereto, of the City dated January 7, 1999, with respect to the Obligations. The Official Statement,
including the cover page and Appendices thereto, as further amended only in the manner hereinafter provided, is
hereinafter called the "Official Statement."
2. Ordinance The Obligations shall be as described in and shall be issued and secured under the
provisions of an ordinance with respect to the Obligations to be adopted on January 7, 1999 (the "Ordinance"). The
Obligations shall be subject to redemption and shall be payable as provided in the Ordinance.
3. Public Offering. It shall be a condition of the obligation of the City to sell and deliver the
Obligations to the Underwriters, and of the obligation of the Underwriters to purchase and accept delivery of the
Obligations, that the entire principal amount of the Obligations authorized by the Ordinance shall be sold and delivered
by the City and accepted and paid for by the Underwriters at the Closing. The Underwriters agree to make a bona fide
Public offering of all of the Obligations, at not in excess of the initial public offering prices, as set forth on the cover
page of the Official Statement, plus interest accrued thereon from the date of the Obligations and confirr a in writing
to the City the principal amount (or percentage of principal amount) of each matunty and the corresponding price for
each maturity (or the yield from each maturity resulting from such price) at which at least 10% of each such maturity
of the Obligations were sold pursuant to such bona fide public offering. Unless otherwise notified in writing by the
Underwriters by the Closing, the City can assume that the "end of the underwriting period" for purposes of Role the
12 of the federal Securities Exchange Act of 1934 (the"Rule") shall be the Closing. In the event such notice is se given
in writing by the Underwriters, lire Underwriters agree to notify the City in writing following the occurrence of the "end
of the underwriting period" as defined in the Rule.
4. Security Deposit. Delivered to the City herewith is a corporate check of First Southwest Company
payable to the order of the City in the amount of S125,350. The City agrees to hold such check uncashed road the
Closing to ensure the performance by the Underwriters of its obligation to purchase, accept delivery of and pay for the
Obligations at the Closing. Concurrently with the payment by the Underwriters of the purchase price of the
Obligations, the City shall return such check to First Southwest Company as provided in paragraph l hereof. Should
the City fail to deliver the Obligations at the Closing, or should the City be unable to satisfy the conditions of the
obligations of the Underwriters to purchase, accept delivery of and pay for the Obligations, as set forth in this purchase
Contract (unless waived by the Underwriters), or should such obligation of the Underwriters be terminated for any
reason permitted by this Purchase Contract, such check shall immediately be mrurried to First Southwest Company.
In the event the Underwriters fail (other than for a reason permitted hereunder) to purchase, accept delivery of and pay
for the Obligations at the Closing as herein provided, such check shag be retained by the City as and for full liquidated
damages for such failure of the Underwriters and for any defaults hereunder on the pan of the Underwriters. The
Underwriters hereby agree not to stop. wase payment on said check to be stopped unless the City has breached any
of the terns of this Purchase Contract.
5. Official Statement. The City hereby authorizes the Ordinance and the Official Statement and the
information therein contained to be used by the Underwriters in connection with the public offering and sale of the
Obligations. The City hereby ratifies and confirms the use by the Underwriters in the offering of the Obligations prior
to the date hereof of the Preliminary Official Statement for the Obligations dated December 28, 1998, and that the
Preliminary Official Statement was "deemed final" by the City, as of the date of its initial mailing within the meaning,
and for the purposes, of the Rule. The City agrees to cooperate with the Underwriters to provide a supply of final
Official Statements within seven business days of the date hereof in sufficient quantities to comply with the
Underwriters' obligations under applicable MSRB Roles and the Role. The Underwriters will use their best efforts to
assist the City in the preparation of the final Official Statement in order to ensure compliance with the aforementioned
riles.
6. Representations, Warranties and Agreements of City. On the date hereof, the City represents,
warrants and agrees as follows:
(a) The City is a municipal corporation, a political subdivision of the State of Texas and a body
politic and corporate, and has full legal right, power and authority to enter into this Purchase Contract to
adopt the Ordinance, to sell the Obligations, and to issue and deliver the Obligations to the Underwriters as
Provided herein and to carry out and consummate all other transactions contemplated by the Ordinance, the
Escrow Agreement with Chase Bards of Texas, National Association (the "Escrow Agreement") and this
Purchase Contract;
(b) By official action of the City prior to or concurrently with the acceptance hereof, the City
has duly adopted the Ordinance, has duly authorized and approved the execution and delivery of and the
performance by the City of the obligations contained in the Obligations, the Escrow Agreement and this
Purchase Contract and has duly authorized and approved the performance by the City of its obligations
contained in the Ordinance, the Escrow Agreement and in this Purchase Contract;
EXHIBIT g
(c) The City is not in breach of or default under any applicable law or administrative regulation
of the State of Texas Or the United Slates or any applicable judgment or decree or any loan agreement, note,
resolution, agreemem or other instrument, except as may be disclosed in the Official Statement, to which the
City is a party or is otherwise subject, which would have a material and adverse effect upon the business or
Financial condition of the City, including the combined Waterworks and Sewer System of the City (the
"System"); and the execution and delivery of this Purchase Contract and the Escrow Agreement by the City
and the execution and delivery of the Obligations and the adoption of the Ordinance by the City and
compliance with the provisions of each theteef will not violate or constitute a breach of or default under any
existing law, administrative regulation, judgment, decree or any agreement or other instrument to which the
City is a parry or is otherwise subject;
(d) All approvals, consents and orders of any governmental authority or agency having
jurisdiction of my matter which would constitute a condition precedent to the performance by the City of its
obligations to sell and deliver the Obligations hereunder will have been obtained prior to the Closing and the
City is in compliance with all continuing disclosure obligations undertaken with respect to any prior issuance
by the City of any type of debt instrument subject to the Rule;
(e) At the time of the City's acceptance hereof and at the time of the Closing, the Official
Statement does not and will not contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(I) Between the date of this purchase Contract and Closing the Citywill not, without the prior
written consent of the Underwriters, issue any additional bonds, certificates of obligation, notes or other
obligations for borrowed money payable in whole or in part from the Net Revenues of the System, and the City
will not incur any material liabilities, direct or contingent, relating to, nor will them be any adverse change
of a material nature in the financial position of, the City or the System;
(g) Except as described in the Official Statement, no litigation is pending or, to the knowledge
Of the City, threatened in any court affecting the corporate existence of the City, the title of its officers to their
respective offices, or seeking to remain or enjoin the issuance or delivery of the Obligations, or the collation
Of Net Revenues of the System pledged or to be pledged to pay the principal ofand interest on the Obligations,
or in any way contesting or affecting the issuance, execution, delivery, payment, security or validity of the
Obligations, or in any way contesting or affecting the validity or enforceability of the Ordinance, the Escrow
Agreement or this Purchase Contract, or contesting the powers of the City, or any authority for the
Obligations, the Ordinance, the Escrow Agreement or this purchase Contract or contesting in any way the
completeness, accuracy or fairness of the preliminary Official Statement or the Official Statement or
materially and adversely affecting the financial condition of the City or the System;
(h) The City will cooperate with the Underwriters in arranging for the qualification of the
Obligations for sale and the determination of their eligibility for investment under the laws of such
jurisdictions as the Underwriters designate, and will use their best efforts to continue such qualifications in
effect so long as required for distribution of the Obligations; provided, however, that the City will not be
required to execute a general consent to service of process or to qualify to do business in connection with any
such qualification in anyjurisdiction;
W The descriptions contained in the Official Statement of the Obligations, the Escrow
Agreement and the Ordinance accurately reflect the provisions of such instruments, and the Obligations, when
validly executed, authenticated and delivered in accordance with the Ordinance and sold to the Underwriters
as provided herein, will be validly issued and outstanding obligations of the City entitled to the benefits of,
and subject to the limitations contained in, the Ordinance;
EXHIBIT B
0) If prior to the Closing an event occurs affecting the City which is materially adverse for the purpose
for which the Official Statement's to be used and is not disclosed in the Official Statement, the City shall notify the
Underwriters, and if in the opinion of the Underwriters such event requires a supplement or amendment to the Official
Statement, the City will supplement or amend the Official Statement in a form and in a manner approved by the
Underwriters' Counsel; and
(k) If, after the Closing and will tweny-five(25) days after the end of the underwriting period,
any event shall Occur as a result of which it is necessary to amend or supplement the Official Statement in
order to make the statements therein, in the light of the circumstances when the Official Statement is
delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Official Statement
to comply with law, the City agrees to notify First Southwest Company (and for the purposes of this clause
(k) to Provide the Underwriters with such information as they may from time to time request), and to forthwith
prepare and furnish, at its own expense (in a form and manner approved by First Southwest Company), a
reasonable number of copies of either amendments or supplements to the Official Statement so that the
statements in the Official Statement as so amended and supplemented will not, in light of the circumstances
when the Official Statement is delivered to a purchaser, be misleading or so that the Official Statement will
comply with law.
7. Closing. At 10:00 a.m., Central Time, on February 9, 1999, or such other time and date as shall be
mutually agreeable to the City and the Underwriters, The City will deliver the initial bond or bonds to the Underwriters
and will have the Obligations available at The Depository Trust Company as hereinafter required, for immediate;
exchange, together with the other documents hereinafter mentioned, and the Underwriters will accept such delivery
and Pay the purchase price of the Obligations as set forth in Paragraph 1 hereof in immediately available funds.
Concurrently with such payment by the Underwriters, the City shall return to First Southwest Company the check
referred to in Paragraph 4 hereof. Delivery and payment as aforesaid shall be made at the offices of Fulbright &
Jaworski, L.L.P., 2800 Texas Commerce Bank Tower, 2200 Ross Avenue, Dallas, Texas 75201, or such other place,
as shall have been mutually agreed upon by the City and the Underwriters. Delivery of the Obligations in definitive
form shall be made at The Depository Trust Company New York, New York. The Obligations shall be delivered in
fully registered form bearing CUSIP numbers without coupons with one Bond for each maturity registered in the name
of CEDE & CO.
8. Conditions. The Underwriters have entered into this Purchase Contract in reliance upon the
representations and warranties of the City contained herein and to be contained in the documents and instruments to
be delivered at the Closing, and upon the performance by the City of its obligations hereunder, both as of the date
hereof and as of the date of Closing. Accordingly, the Underwriters' obligations under this Purchase Contract to
purchase and pay for the Obligations shall be subject to the performance by the City of its obligations to be performed
hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the
following conditions:
(a) The representations and warrantim of the City contained herein shall be true, complete and
correct in all material respects on the date hereof and on and as of the date of Closing, as if made on the date
of Closing;
(b) At the time of the Closing, the Ordinance shall be in full force and effect, and the Ordinance
shall not have been amended, or supplemented and the Official Statement shall not have been amended,
modified or supplemented, except as may have been agreed to by the Underwriters;
(c) At the time of the Closing, all official action of the City related to the Ordinance and the
Escrow Agreement shall be in full force and effect and shall not have been amended, modified or
supplemented;
EXHINT B
(d) The City shall not have failed to pay principal or interest when due on any of its outstanding
obligations for borrowed money;
(e) At or prior to the Closing, the Underwriters shall have received hro copies of each of the
following documents;
(1) The Oficial Statement of the City executed on behalf of the City by the Mayorand
City Secretary of the City;
(2) The Ordinance certified by the City Secretary of the City under its seal as having
been duly adopted by the City and u being in effect, with such changes or amendments as may have
been agreed to by the Underwriters;
(3) An unqualified opinion, dated the date of Closing, ofFulbright&Jaworski, L.L.P.
Bond Counsel to the City, in substantially the forms and substance of Appendix C to the Official
Statement;
(4) An unqualified opinion or ceftificate, dated on or prior to the date of Closing, of
the Attorney General of Texas, approving the Obligations as required by law and a certificate of the
Comptroller of Public Accounts of the State of Texas regarding the registration of the Obligations
as required by law;
(5) The supplemental opinion, dated the date of Closing, of Fulbright &
Jawondd, L.L.P., Bond Counsel to the City, addressed to the City and the Underwriters, to the effect
that (A) in its capacity as Bond Counsel, such firm has reviewed the information in the Official
Statement under the captions, "Plan of Financing", "The Bonds", "Registered Owner's Remedies",
"Registration, Transfer and Exchange", "Continuing Disclosure of Information", and the following
subcaption under the heading "Other Pertinent Information", " Legal Investments and Eligibility to
Secure Public Finance in Texas" and in Appendix D and such firm is of the opinion that the
information relating to the Obligations, the Escrow Agreement and the Ordinance contained under
such captions in all respects accurately and fairly reflects the provisions thereof; (B) the Obligations
are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Ordinance
is exempt firm qualification as an indenture pursuant to the Trust Indenture Act of 1939, as
amended; (C) in the performance of their duties as Bond Counsel for the City, without having
undertaken to determine independently the accuracy and completeness of the statements contained
in the Official Statement, nothing has come to the attention of such counsel which would lead them
to believe that the Oficial Statement (excluding the financial and statistical data and forecasts
included therein, all as to which no view need be expressed) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements therein, in fight of the
circumstances under which they were made, not misleading;
(6) The opinion of McCall, Parkhurst & Horton L.L.P., as Underwriters' Counsel,
dated the date of the Closing addressed to the Underwriters to the effect that the Obligations are
exempt from registration pursuant to the Securities Act of 1933, as amended, and the Ordinance is
exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended.
The opinion of such Counsel shall also sate that, based upon their participation in the preparation
of the Official Statement, such Counsel has no reason to believe that the Official Statement (except
for the financial statements and other financial and statistical data contained therein, as to which no
view need be expressed), as of the date of the Official Statement, contained any unwe 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;
EXHIBIT g
(7) A cenificatq dated the date of Closing, signed by the City Manager and the
Director of Finance of the City, to the effect that (i) the representations and warranties of the City
contained herein are true and correct in all material respects on and as of the date of Closing as if
made on the date of Closing (it) except to the extent disclosed in the Official Statement, no litigation
is pending or, to the knowledge of such persons, threatened in any court to restrain or enjoin the
issuance or delivery of the Obligations, or the collection of the Net Revenues of the System pledged
or to be pledged to pay the principal of and interest on the Obligations, or the pledge thereof, or in
anyway contesting or affecting the validity of the Obligations, the Ordinance, the Escrow Agreement
or this Purchase Contract, or contesting the powers of the City or contesting the authorization of the
Obligations or the Ordinance, or contesting in any way the accuracy, completeness or fairness of the
Preliminary Official Statement or the Official Statement (but in lieu of or in conjunction with such
certificate the Underwriters may, in their discretion, accept certificates or opinions of the City
Attorney that, in his or her opinion, the issues raised in any such pending or threatened litigation
are without substance or that the contentions of all plaintiffs therein are without merit); and (iii) to
the best of their knowledge, no event affecting the City has occurred since the date of the Official
Statement which should be disclosed in the Official Statement for the purpose for which it is to be
used or which it is necessary to disclose therein in order to make the statements and information
therein not misleading in any respect;
(8) A certificate, dated the date of Closing, of the Director of Finance of the City to
the effect that there has not been any material and adverse change in the affairs or financial .
condition of the City or the System since September 30, 1997, the latest date as to which audited
financial information is available;
(9) A certificate, dated the date of the Closing, of an appropriate official of the City
to the effect that, on the basis of the facts, estimates and circumstances in effect on the date of
delivery of the Obligations, it is not reasonably expected that the proceeds of the Obligations will be
used in a manner that would cause the Obligations to be arbitrage bonds within the meaning of
Section 148(a) of the Internal Revenue Code of 1986, as amended;
(10) Evidence of the issuance of the municipal bond insurance policy of the Insurer
named in the Official Statement and the ratings of the Bonds as "Am" and "AAA" by Moody's
Investors Service, Inc. and Standard and Poor's Corporation, respectively;
(11) A Verification Report of the Independent Accountant identified in the Official
Statement in form satisfactory to the Underwriters and Underwriters' Counsel; and
(12) Such additional legal opinions, certificates, instruments and other documents as
Bond Counsel or the Underwriters may reasonably request to evidence the cath, accuracy and
completeness, as of the date hemof and as of the date of Closing, of the City's representations and
warranties contained herein and of the statements and information contained in the Oficial
Statement and the due performance and satisfaction by the City at or prior to the date of Closing of
all agreements then to be performed and all conditions then to be satisfied by the City.
All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in
this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are
satisfactory to the Underwriters.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept
delivery ofand to pay for the Obligations sa set forth in this Purchase Contract, or if the obligations of the Underwriters
to purchase, to accept delivery of and to pay for the Obligations shall be terminated for any reason permitted by this
Purchase Contract, this Purchase Contract shall terminate and neither the Underwriters nor the City shall be under
EXHIBIT B
further obligation hereunder, except that (i) the check referred to in Pamgmph A hereof shall be immediately returned
to Para Southwest Company
in Paraby the City, and (ii) the respective obligations of the City and the Underwriters set forth
Paragraphs 10 and 12 hereof shall continue in full form and effect.
9. Termination. The Underwriters may terminate its obligation to purchase at any time before the
Closing if any of the following should occur,
(a) (i) Legislation (including any amendment thereto) shall have been introduced in or adopted by
either House of the Congress of the United States, or recommended to the Congress for passage by the
President of the United States or favorably reported for passage to either House of the Congress by any
Committee of such House, or (ii) a decision shall have been rendered by a cant established under Article III
Of the Constitution of the United States or by the United Suites Tax Court, or (iii) an order, oiling or
regulation shall have been issued or proposed by or on behalf of the Treasury Department of the United Suites
or the Internal Revenue Service or any other agency of the United States, or (iv) a release or official statement
shall have been issued by the president of the United Suites or by the Treasury Department of the United
Suites or by the Internal Revenue Service, the effect of which, in any such case described in clause (i), (ii),
(iii), or (iv), would be to impose, directly or indirectly, federal income taxation upon interest received on
obligations of the general character of the Obligations or upon income of the general character to be derived
by the City, other than as imposed on the Obligations and income therefrom under the federal tax laws in
effect on the date hereof, in such a warmer as in the judgment of the Underwriters would materially impair
the marketability or materially reduce the market price of obligations of the general character of the,.:
Obligations.
(b) Any action shall have been taken by the Securities and Exchange Commission or by a court
which would require registration ofarrysecurity under the Securities Act of 1933, as amended, or qualification
Of MY indenture under the Trust Indenture Act of 1939, as amended, in connection with the public offering
of the Obligations, or any action shall have been taken by any court or by any governmental authority
suspending the use of the Official Statement or any amendment or supplement thereto, or any proceeding for
that purpose shall have been initiated or threatened in any such court or by any such authority.
(c) (i) The Constitution of the State of Texas shall be amended or an amendment shall be
proposed, or (it) legislation shall be enacted, or (iii) a decision shall have been rendered as to matters of Texas
law, or (iv) any order, ruling or regulation shall have been issued or proposed by or on behalf of the State of
Texas by an official, agency or department thereof, affecting the tax status of the City, its property or income,
its bonds (including the Obligations) or the interest thereon, which in thejudgment of the Underwriters would
materially affect the market price of the Obligations.
(d) (i) A general suspension of trading in securities shall have occurred on the New York Stock
Exchange, or (ii) the United Suites becomes engaged in any outbreak of armed hostilities (whether or not
foreseeable at the time of execution hereof) or hostilities previously commenced shall escalate, the effect of
which, in either case described in clause (i) and (u), is, in the judgment of the Underwriters, so material and
adverse a to make it impracticable or inadvisable to proceed with the public offering or the delivery of the
Obligations on the terms and in the manner contemplated in this Purchase Contract and the Official
Statement including without limimtion arty material adverse effect on the market price of the Obligations.
(e) An event described in Paragraph 6() hereof Omura which, in the opinion of the
Underwriters, requires a supplement or amendment to the Official Statement.
(f) A general banking moratorium shall have been declared by authorities of the United States,
the Suite of New York or the State of Texas.
EXHIBIT g
(PJ A lowering of the ratings initially assigned to the Obligations below "Am" and "AAA" by
Moody's Investors Service, Inc. and Standard and Poor's Corporation, respectively, shall occur prior to
Closing or failure to provide evidence of the confirmation of such rating.
10. Expenses. (a) The Underwriters shall be under no obligation to pay, and the City shall pay,
any expenses incident to the performance of the City's obligations hereunder, including but not limited to:
(Q the cost of the preparation, printing and distribution of the Official Statement; (ii) the cost of the
preparation and printing of the Obligations; (iii) the fees and expenses of Bond Counsel and the Financial
Advisor to the City; (iv) the fees and disbursements of the City's accountants, advisors, and of any other
experts or consultants retained by the City; and (v) fees and premiums for bond ratings and bond insurance,
respectively, and any travel or other expenses incurred incident thereto.
(b) The Underwriters shall pay: (i) all advertising expenses of the Underwriters in connection
with the offering of the Obligations; (ii) the cost of the preparation and printing of all the underwriting
documents, including this Purchase Contract and (iii) all other expenses incurred by them in connection with
their offering and distribution of the Obligations, including the fees of Counsel to the Underwriters.
11. Notices. Any notice or other communication to be given to the City under this Purchase
Contract may be given by delivering the same in writing at the address for the City set forth above, and any
notice or other communication to be given to the Underwriters under this Purchase Contract may be given
by delivering the same in writingto Fust Southwest Company, 1700 Pacific Avenue, Suite 500, Dallas, Texas
75201, Attention: Peter B. Stare.
12. Parties in Interest. This Purchase Contract is made solely for the benefit of the City and
the Underwriters (including the successors or assigns of the Underwriters) and no other person shall acquire
or have any right hereunder or by virtue hereof. The City's representations, warranties and agreements
contained in this Purchase Contract shall remain operative and in full force and effect, regardless of (i) any
investigations made by or on behalf of the Underwriters and (ii) delivery of any payment for the Obligations
hereunder; and the City's representations and warranties contained in Paragraph 6 of this Purchase Contract
shall remain operative and in full fora and effect, regardless of any termination of this Purchase Contract.
13. Effective Date. This Purchase Contract shall become effective upon the execution of the
acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time of such
acceptance.
Very truly yours,
FIRST SOUTHWEST COMPANY
ESTRADA, HINOJOSA & COMPANY, INC.
By: First Southwest Company
Authorized Representative
EXHIBIT 19
Accepted:
This 7th day of lanoary, 1999
By:
Mayor,
City of Allen, Texas
(SEAL)
Attest:
City Secretary,
City of Allen, Texas
EXHIBIT B
Exhibit A
Official Statement
10 FxHUT B
SPECIAL ESCROW AGREEMENT
THE STATE OF TEXAS
COUNTY OF DALLAS
EXHIBIT C H
THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and entered into as of
January 7, 1999, by and between the City of Allen, Texas, a duly incorporated municipal
corporation in Collin County, Texas (the "City") acting by and through the Mayor and City
Secretary, and Chase Bank of Texas, National Association, a national banking association
organized and existing under the laws of the United States of America, or its successors or
assigns hereunder (the "Bank"),
WITNESSETH:
WHEREAS, the City Council of the City of Allen, Texas (the "City") has heretofore issued,
sold, and delivered City of Allen, Texas, Waterworks and Sewer System Revenue Refunding and
Improvement Bonds, Series 1992, dated July 15, 1992, with maturities in the years 2003 through
2012 that aggregate in principal amount $4,240,000, and, based on federal tax law considerations
an allocated portion of the principal amounts of each such maturity totaling in principal amount
$3,285,000 can be advance refunded (hereinafter referred to as the "Refunded Obligations") as
follows:
AND WHEREAS, in accordance with the provisions of Article 717k, V.A.T.C.S., as
amended (the "Acrj, the City is authorized to sell refunding bonds in an amount sufficient to
provide for the payment of obligations to be refunded, deposit the proceeds of such refunding
bonds with the place of payment for the obligations being refunded and enter into an escrow or
similar agreement with such place of payment for the safekeeping, investment, reinvestment,
administration and disposition of such deposit, upon such terms and conditions as the parties may
agree, provided such deposits may be invested only in direct obligations of the United States of
America, including obligations the principal of and interest on are unconditionally guaranteed by
746494.1
Amount
Total
Eligible
Year of
Principal
to be
Maturity
Amount
Refunded
2003
$ 555,000
$ 430,000
2004
590,000
455,000
2005
625,000
485,000
2006
665,000
515,000
2007
705,000
545,000
2008
670,000
520,000
2009
95,000
75,000
2010
105,000
80,000
2011
110,000
85,000
2012
120,000
95,000
AND WHEREAS, in accordance with the provisions of Article 717k, V.A.T.C.S., as
amended (the "Acrj, the City is authorized to sell refunding bonds in an amount sufficient to
provide for the payment of obligations to be refunded, deposit the proceeds of such refunding
bonds with the place of payment for the obligations being refunded and enter into an escrow or
similar agreement with such place of payment for the safekeeping, investment, reinvestment,
administration and disposition of such deposit, upon such terms and conditions as the parties may
agree, provided such deposits may be invested only in direct obligations of the United States of
America, including obligations the principal of and interest on are unconditionally guaranteed by
746494.1
the United States of America, (hereinafter called the "Federal Securities") that mature and/or bear
interest payable at such times and in such amounts as will be sufficient to provide for the
scheduled payment of Refunded Obligations; and
WHEREAS, the Refunded Obligations are scheduled to mature, or be redeemed, and
interest thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto
and incorporated herein by reference as a part of this Agreement for all purposes; and
WHEREAS, the City on the 7" day of January, 1999, pursuant to an ordinance (the "Bond
Ordinance") finally passed and adopted by the City Council, authorized the issuance of bonds
known as "City of Allen, Texas, Waterworks and Sewer System Revenue Refunding and
Improvement Bonds, Series 1999" (the "Bonds'), and such Bonds are being issued in part to
refund, discharge and make final payment of the principal of and interest on the Refunded
Obligations; and
WHEREAS, upon the delivery of the Bonds, the proceeds of sale, together with other
available funds of the City, are to be deposited with the Bank and used in part to purchase the
Federal Securities listed and identified in Exhibit B attached hereto and incorporated by reference
as a part of this Agreement for all purposes; and
WHEREAS, the Federal Securities shall be held and deposited to the credit of the "Escrow
Fund" to be established and maintained by the Bank in accordance with this Agreement; and
WHEREAS, the Federal Securities, togetherwith the beginning cash balance in the Escrow
Fund, shall mature and the interestthereon shall be payable at such times to insure the existence
of monies sufficient to pay the principal amount of the Refunded Obligations and the accrued
interest thereon, as the same shall become due in accordance with the terms of the ordinances
authorizing the issuance of the Refunded Obligations and as set forth in Exhibit A attached hereto;
and
WHEREAS, the City has completed all arrangements for the purchase of the Federal
Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund as
provided herein; and
WHEREAS, the Bank is a national banking association organized and existing under the
laws of the United States of America, possessing trust powers and is fully qualified and
empowered to enter into this Agreement; and
WHEREAS, in Section 35 of the Bond Ordinance, the City Council duly approved and
authorized the execution of this Agreement; and
WHEREAS, the City and the Escrow Agent, as the case may be, shall take all action
necessary to call, pay, redeem and retire said Refunded Obligations in accordance with the
provisions thereof, including, without limitation, all actions required by the ordinance authorizing
the Refunded Obligations, the Act, the Bond Ordinance and this Agreement;
746494.1 _Q_
EXHIBIT c
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and to
secure the payment of the principal of and the interest on the Refunded Obligations as the same
shall become due, the City and the Bank hereby mutually undertake, promise and agree as
follows:
SECTION 1: Receipt of Refunded Bond Ordinances. Receipt of a copy of the ordinance
authorizing the issuance of the Refunded Obligations and the Bond Ordinance are hereby
acknowledged by the Bank. Reference herein to or citation herein of any provision of said
documents shall be deemed an incorporation of such provision as a part hereof in the same
manner and with the same effect as if it were fully set forth herein.
SECTION 2: Escrow Fund Creation/Funding. There is hereby created by the City with the
Bank a special segregated and irrevocable trust fund designated "SPECIAL 1999 CITY OF
ALLEN, TEXAS, REVENUE REFUNDING BOND ESCROW FUND" (hereinafter called the
"Escrow Fund") for the benefit of the holders of the Refunded Obligations, and, immediately
following the delivery of the Bonds, the City agrees and covenants to cause to be deposited with
the Bank the following amounts:
$3,488,900.00 for the purchase of Federal Securities identified in Exhibit B to be
held for the account of the Escrow Fund
75.00 for deposit in the Escrow Fund as a beginning cash balance.
The Bank hereby accepts the Escrow Fund and further agrees to receive said moneys,
apply the same as set forth herein, and to hold the cash and Federal Securities deposited and
credited to the Escrow Fund for application and disbursement forthe purposes and in the manner
provided in this Agreement.
SECTION 3: Escrow Fund Sufficiency warranty. The City hereby represents that the cash
and Federal Securities, together with the interest to be earned thereon, deposited to the credit of
the Escrow Fund will be sufficient to pay the principal of and premium and interest on the
Refunded Obligations as the same shall become due and payable, and such Refunded
Obligations, and the interest thereon, are to mature or be redeemed and shall be paid at the times
and in the amounts set forth and identified in Exhibit A attached hereto.
FURTHERMORE, the Bank acknowledges receipt of a copy of the resolution providing for
the redemption of the Refunded Obligations on June 15, 2002 at the redemption price of par plus
accrued interest thereon; all in accordance with the provisions of the notice requirements
applicable to said Refunded Obligations and the notice requirements contained in the ordinance
authorizing such Refunded Obligations.
The Bank agrees to cause a notice of redemption pertaining to the Refunded Obligations
to be sent to the registered owners thereof appearing on the registration books at least thirty (30)
days prior to the redemption date therefor.
746494.1 -3-
SECTION 4: Pledge of Escrow. The Bank agrees that all cash and Federal Securities,
together with any income or interest earned thereon, held in the Escrow Fund shall be and is
hereby irrevocably pledged to the payment of the principal of and interest on the Refunded
Obligations which will mature and become due on and after the date of this Agreement, and such
funds initially deposited and to be received from maturing principal and interest on the Federal
Securities in the Escrow Fund shall be applied solely in accordance with the provisions of this
Agreement.
SECTION 5: Escrow Insufficiency - City Warranty to Cure. If, for any reason, the funds
on hand in the Escrow Fund shall be insufficient to make the payments set forth in Exhibit A
attached hereto, as the same becomes due and payable, the City shall make timely deposits to
the Escrow Fund, from lawfully available funds, of additional funds in the amounts required to
make such payments. Notice of any such insufficiency shall be immediately given by the Bank
to the City by the fastest means possible, but the Bank shall in no manner be responsible for the
City's failure to make such deposits.
SECTION 5: Escrow Fund Securities/Segregation. The Bank shall hold said Federal
Securities and moneys-in the Escrow Fund at all times as a special and separate trust fund for the
benefit of the holders of the Refunded Obligations, wholly segregated from other moneys and
securities on deposit with the Bank; shall never commingle said Federal Securities and moneys
with other moneys or securities of the Bank; and shall hold and dispose of the assets therein only
asset forth herein. Nothing herein contained shall be construed as requiring the Bank to keep the
identical moneys, or any part thereof, in said Escrow Fund, if it is impractical, but moneys of an
equal amount, except to the extent such are represented by the Federal Securities, shall always
be maintained on deposit in the Escrow Fund by the Bank, as trustee; and a special account
evidencing such facts shall at all times be maintained on the books of the Bank.
SECTION 7: Escrow Fund Collections/Payments. The Bank shall from time to time collect
and receive the principal of and interest on the Federal Securities as they respectively mature and
become due and credit the same to the Escrow Fund. On or before each principal and/or interest
payment date or redemption date, as the case may be, for the Refunded Obligations shown in
Exhibit A attached hereto, the Bank, without further direction from anyone, including the City, shall
cause to be withdrawn from the Escrow Fund the amount required to pay the accrued interest on
the Refunded Obligations due and payable on said payment date and the principal of the
Refunded Obligations due and payable on said payment dale or redemption date, as the case
may be, and the amount withdrawn from the Escrow Fund shall be immediately transmitted and
deposited with the paying agent for the Refunded Obligations to be paid with such amount. The
paying agent for the Refunded Obligations is the Bank.
If any Refunded Obligation thereon shall not be presented for payment when the principal
thereof or interest thereon shall have become due, and if cash shall at such times be held by the
Bank in trust for that purpose sufficient and available to pay the principal of such Refunded
Obligation and interest thereon it shall be the duty of the Bank to hold said cash without liability
to the holder of such Refunded Obligation for interest thereon after such maturity or redemption
date, in trust for the benefit of the holder of such Refunded Obligation, who shall thereafter be
restricted exclusively to said cash for any claim of whatever nature on his part on or with respect
746494.1
EXHIBIT C j
to said Refunded Obligation, including for any claim for the payment thereof and interest thereon.
All cash required by the provisions hereof to be set aside or held in trust for the payment of the
Refunded Obligations, including interest thereon, shall be applied to and used solely for the
payment of the Refunded Obligations and interest thereon with respect to which such cash has
been so set aside in trust.
Subject to the provisions of the last sentence of Section 25 hereof, cash held by the Bank
in trust for the payment and discharge of any of the Refunded Obligations and interest thereon
which remains unclaimed fora period of four (4) years after the stated maturity date or redemption
date of such Refunded Obligations shall be returned to the City. Notwithstanding the above and
foregoing, any remittance of funds from the Bank to the City shall be subject to any applicable
unclaimed property laws of the State of Texas.
SECTION 8: Disoosal of Refunded Obligations. All Refunded Obligations cancelled on
account of payment by the Bank shall be disposed of or otherwise destroyed by the Bank, and an
appropriate certificate of destruction furnished the City.
SECTION g: Escrow Fund Encumbrance. The escrow created hereby shall be irrevocable
and the holders of the Refunded Obligations shall have an express lien on all moneys and Federal
Securities in the Escrow Fund until paid out, used and applied in accordance with this Agreement.
Unless disbursed in payment of the Refunded Obligations, all funds and the Federal
Securities received by the Bank for the account of the City hereunder shall be and remain the
property of the Escrow Fund and the City and the owners of the Refunded Obligations shall be
entitled to a preferred claim and shall have a first lien upon such funds and Federal Securities
enjoyed by a trust beneficiary. The funds and Federal Securities received by the Bank under this
Agreement shall not be considered as a banking deposit by the City and the Bank and the City
shall have no right or title with respect thereto, except as otherwise provided herein. Such funds
and Federal Securities shall not be subject to checks or drafts drawn by the City.
SECTION 10: Absence of Bank Claim/Lien on Escrow Fund. The Bank shall have no lien
whatsoever upon any of the moneys or Federal Securities in the Escrow Fund for payment of
services rendered hereunder, services rendered as paying agent/registrar for the Refunded
Obligations, or for any costs or expenses incurred hereunder and reimbursable from the City.
SECTION 11: Substitution of Investments/Reinvestments. The Bank shall be authorized
to accept initially and temporarily cash and/or substituted Federal Securities pending the delivery
of the Federal Securities identified in the Exhibit B attached hereto, or shall be authorized to
redeem the Federal Securities and reinvest the proceeds thereof, togetherwith other moneys held
in the Escrow Fund in noncallable direct obligations of the United States of America provided such
early redemption and reinvestment of proceeds does not change the repayment schedule of the
Refunded Obligations appearing in Exhibit A and the Bank receives the following:
(1) an opinion by an independent certified public accountant to the effect
that (i) the initial and/or temporary substitution of cash and/or securities for one
or more of the Federal Securities identified in Exhibit B pending the receipt and
146494.1
-5-
LAHIBIT CJ
delivery thereof to the Escrow Agent or (ii) the redemption of one or more of the
Federal Securities and the reinvestment of such funds in one or more substituted
securities (which shall be noncallable direct obligations of the United States of
America), togetherwith the interest thereon and other available moneys then held
in the Escrow Fund, will, in either case, be sufficient, without reinvestment, to pay,
as the same become due in accordance with Exhibit A, the principal of, and
interest on, the Refunded Obligations which have not previously been paid, and
(2) with respect to an early redemption of Federal Securities and the
reinvestment of the proceeds thereof, an unqualified opinion of nationally
recognized municipal bond counsel to the effect that (a) such investment will not
cause interest on the Bonds or Refunded Obligations to be included in the gross
income forfederal income tax purposes, under the Code and related regulations
as in effect on the date of such investment, or otherwise make the interest on the
Bonds or the Refunded Obligations subject to Federal income taxation and (b)
such reinvestment complies with the Constitution and laws of the State of Texas
and with all relevant documents relating to the issuance of the Refunded
Obligations and the Bonds.
SECTION 12: Restriction on Escrow Fund Investments - Reinvestment.
Except as provided in Section 11 hereof, moneys in the Escrow Fund will be invested
only in the Federal Securities listed in Exhibit B and neither the City nor the Bank shall
reinvest any moneys deposited in the Escrow Fund except as specifically provided by this
Agreement.
SECTION 13: Excess Funds. If at any time through redemption or cancellation
of the Refunded Obligations there exists or will exist excesses of interest on or maturing
principal of the Federal Securities in excess of the amounts necessary hereunder forthe
Refunded Obligations, the Bank may transfer such excess amounts to or on the order
of the City, provided that the City delivers to the Bank the following:
]46494.1
(1) an opinion by an independent certified public accountant that after the
transfer of such excess, the principal amount of securities in the Escrow Fund,
together with the interest thereon, and other available monies then held in the
Escrow Fund, will be sufficient to pay, as the same become due and without
reinvestment, in accordance with Exhibit A, the principal of, and interest on, the
Refunded Obligations which have not previously been paid, and
(2) an unqualified opinion of nationally recognized municipal bond
counsel to the effect that (a) such transferwill not cause interest on the Bonds or
the Refunded Obligations to be included in gross income for federal income tax
purposes, under the Code and related regulations as in effect on the date of such
transfer, or otherwise make the interest on the Bonds or the Refunded
Obligations subject to Federal income taxation, and (b) such transfer complies
with the Constitution and laws of the State of Texas and with all relevant
documents relating to the issuance of the Refunded Obligations or the Bonds.
0
EXHIBIT C ,
SECTION 14: Collateralization. The Bank shall continuously secure the monies in the
Escrow Fund not invested in Federal Securities by a pledge of direct obligations of the United
States of America, in the par or face amount at least equal to the principal amount of said
uninvested monies to the extent such money is not insured by the Federal Deposit Insurance
Corporation.
SECTION 15: Absence of Bank's Liabil' for Investments. The Bank shall not be liable
or responsible for any loss resulting from any investment made in the Federal Securities or
substitute securities as provided in Section 11 hereof.
SECTION 18: Bank's Compensation - Escrow Administration/Settlement of Paving
Agent's Charges. The Gty agrees to pay the Bank for the performance of services hereunder
and as reimbursement for anticipated expenses to be incurred hereunder the amount of
$3,550.00 and, except for reimbursement of costs and expenses incurred by the Bank pursuant
to Sections 3, 11 and 19 hereof, the Bank hereby agrees said amount is full and complete
payment for the administration of this Agreement.
The City also agrees to deposit with the Bank on the effective date of this Agreement,
the sum of $1,500.00, and the Bank acknowledges and agrees that such amount is and
represents the total amount of compensation due the Bank for services rendered as paying
agent for the Refunded Obligations. The Bank hereby agrees to pay, assume and be fully
responsible for any additional charges that it may incur in the performance of its duties and
responsibilities as paying agent for the Refunded Obligations.
The City acknowledges and agrees that the above amount deposited with the Escrow
Agent to cover paying agents' charges and expenses does not include amounts which shall
become due and payable for services rendered as registrar and transfer agent for fully registered
Refunded Obligations, and the City agrees to pay directly to each "registrar' for the Refunded
Obligations all reasonable costs, expenses and charges incurred in connection with the
maintenance of the registration books and records and the transfer of such fully registered
obligations as and when such costs, expenses and charges are incurred and against written
invoices, statements or bills submitted therefor.
SECTION 17: Escrow Agent's Duties/ Responsibilities/Liability. The Bank shall not be
responsible for any rental herein, except with respect to its organization and its powers and
authority. As to the existence or nonexistence of any fact relating to the City or as to the
sufficiency or validity of any instrument, paper or proceedings relating to the City, the Bank shall
be entitled to rely upon a certificate signed on behalf of the City by its City Manager or Mayor
and/or City Secretary of the City as sufficient evidence of the facts therein contained. The Bank
may accept a certificate of the City Secretary under the City's seal, to the effect that a resolution
or other instrument in the forth therein set forth has been adopted by the City Council of the City,
as conclusive evidence that such resolution or other instrument has been duly adopted and is
in full force and effect.
The duties and obligations of the Bank shall be determined solely by the express
provisions of this Agreement and the Bank shall not be liable except for the performance of such
]46494.1 _ �-
EXHIBIT c
duties and obligations as are specifically set forth in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Bank.
In the absence of bad faith on the part of the Bank, the Bank may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed therein, upon any
certificate or opinion furnished to the Bank, conforming to the requirements of this Agreement;
but notwithstanding any provision of this Agreement to the contrary, in the case of any such
certificate or opinion orany evidence which by any provision hereof is specifically required to be
furnished to the Bank, the Bank shall be undera duty to examine the same to determine whether
it conforms to the requirements of this Agreement.
The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Bank unless it shall be proved that the Bank was negligent
in ascertaining or acting upon the pertinent fads.
The Bank shall not be liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the holders of not less than a majority in
aggregate principal amount of all said Refunded Obligations at the time outstanding relating to
the time, method and place of conducting any proceeding for any remedy available to the Bank
not in conflict with the intent and purpose of this Agreement. For the purposes of determining
whether the holders of the required principal amount of said Refunded Obligations have
concurred in any such direction, Refunded Obligations owned by any obligor upon the Refunded
Obligations, or by any person directly or indirectly controlling or controlled by or under direct or
indirect common control with such obligor, shall be disregarded, except that for the purposes of
determining whether the Bank shall be protected in relying on any such direction only Refunded
Obligations which the Bank knows are so owned shall be so disregarded.
The term "Responsible Officers" of the Bank, as used in this Agreement, shall mean and
include the Chairman of the Board of Directors, the President, any Vice President and any
Second Vice President, the Secretary and any Assistant Secretary, the Treasurer and any
Assistant Treasurer, and every other officer and assistant officer of the Bank customarily
performing functions similar to those performed by the persons who at the time shall be officers,
respectively, or to whom any corporate trust matter is referred, because of his knowledge of and
familiarity with a particular subject; and the term "Responsible Officer" of the Bank, as used in
this Agreement, shall mean and include any of said officers or persons.
SECTION 18: Limitation Re: Bank's Duties/Responsibilities/Liabilities to Third Parties.
The Bank shall not be responsible or liable to any person in any manner whatever for the
sufficiency, correctness, genuineness, effectiveness, or validity of this Agreement with respect
to the City, or for the identity or authority of any person making or executing this Agreement for
and on behalf of the City. The Bank is authorized by the City to rely upon the representations
of the City with respect to this Agreement and the deposits made pursuant hereto and as to the
City's right and power to execute and deliver this Agreement, and the Bank shall not be liable
in any manner as a result of such reliance. The duty of the Bank hereunder shall only be to the
City and the holders of the Refunded Obligations. Neither the City nor the Bank shall assignor
attempt to assign or transfer any interest hereunder or any portion of any such interest. Any
746494.1
EXHIBIT C j
such assignment or attempted assignment shall be indirect conflict with this Agreement and be
without effect.
SECTION 19: Interpleader. In the event conflicting demands or notices are made upon
the Bank growing out of or relating to this Agreement or the Bank in good faith is in doubt as to
what action should be taken hereunder, the Bank shall have the right at its election to:
(a) Withhold and stop all further proceedings in, and performance of, this
Agreement with respect to the issue in question and of all instructions received
hereunder in regard to such issue; and
(b) File a suit in interpleader and obtain an order from a court of
appropriate jurisdiction requiring all persons involved to interplead and litigate in
such court their several claims and rights among themselves.
In the event the Bank becomes involved in litigation in connection with this Section, the
City, to the extent permitted by law, agrees to indemnify and save the Bank harmless from all
loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result
thereof. The obligations of the Bank under this Agreement shall be performable at the corporate
office of the Bank in the City of Dallas, Texas.
The Bank may advise with legal counsel in the event of any dispute or question regarding
the construction of any of the provisions hereof or its duties hereunder, and in the absence of
negligence or bad faith on the part of the Bank, no liability shall be incurred by the Bank for any
action taken pursuant to this Section and the Bank shall be fully protected in acting in
accordance with the opinion and instructions of legal counsel that is knowledgeable and has
expertise in the field of law addressed in any such legal opinion orwith respectto the instructions
given.
SECTION 20: Accounting -Annual Report. Promptly after September 30th of each year,
commencing with the year 1999, while the Escrow Fund is maintained under this Agreement, the
Bank shall forward to the City, to the attention of the Director of Finance, or other designated
official of the City, a statement in detail of the Federal Securities and monies held, and the
current income and maturities thereof, and the withdrawals of money from the Escrow Fund for
the preceding 12 month period ending September 30th of each year.
SECTION 21: Notices. Any notice, authorization, request or demand required or
permitted to be given hereunder shall be in writing and shall be deemed to have been duly given
when mailed by registered or certified mail, postage prepaid addressed as follows:
CITY OF ALLEN, TEXAS
One Butler Circle
Allen, Texas 75013
Attention: Director of Finance
756494.1 _9_
EXHIBIT c `
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
P. O. Box 660197
Dallas, Texas 75266-0197
Attention: Corporate Trust Department
The United States Post Office registered or certified mail receipt showing delivery of the
aforesaid shall be conclusive evidence of the date and fact of delivery.
Any party hereto may change the address to which notices are to be delivered by giving
to the other parties not less than ten (10) days prior notice thereof.
SECTION 22: Performance Date. Whenever under the terms of this Agreement the
performance date of any provision hereof, including the date of maturity of interest on or principal
of the Refunded Obligations, shall be a Sunday or a legal holiday or a day on which the Bank
is authorized by law to dose, then the performance thereof, including the payment of principal
of and interest on the Refunded Obligations, need not be made on such date but may be
performed or paid, as the case may be, on the next succeeding business day of the Bank with.
the same force and effect as if made on the date of performance or payment and with respect
to a payment, no interest shall accrue for the period after such date.
SECTION 23: Warranty of Parties Re, PowertoExecute and Deliver Escrow Adreement.
The City covenants that it will faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions contained in this Agreement, in any and every said Refunded
Obligation as executed, authenticated and delivered and in all proceedings pertaining thereto
as said Refunded Obligations shall have been modified as provided in this Agreement. The City
covenants that it is duly authorized under the Constitution and laws of the State of Texas to
execute and deliver this Agreement, that all actions on its part for the payment of said Refunded
Obligations as provided herein and the execution and delivery of this Agreement have been duly
and effectively taken and that said Refunded Obligations and coupons in the hands of the
holders and owners thereof are and will be valid and enforceable obligations of the City
according to the import thereof as provided in this Agreement.
SECTION 24: Severabililv. If any one or more of the covenants or agreements provided
in this Agreement on the part of the parties to be performed should be determined by a court of
competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and
construed to be severable from the remaining covenants and agreements herein contained and
shall in noway affect the validity of the remaining provisions of this Agreement. In the event any
covenant or agreement contained in this Agreement is declared to be severable from the other
provisions of this Agreement, written notice of such event shall immediately be given to each
national rating service (Moody's Investors Service, Standard & Poor's Corporation or Fitch
Investors Service) which has rated the Refunded Obligations on the basis of this Agreement.
SECTION 25: Termination. This Agreement shall terminate when the Refunded
Obligations, including interest due thereon, have been paid and discharged in accordance with
746494.1 _ t 0_
XHIBIT C I
the provisions of this Agreement. If any Refunded Obligations are not presented for payment
when due and payable, the nonpayment thereof shall not prevent the termination of this
Agreement. Funds for the payment of any nonpresented Refunded Obligations and accrued
interest thereon shall upon termination of this Agreement be held by the Bank for such purpose
in accordance with Section 7 hereof. Any moneys or Federal Securities held in the Escrow Fund
at termination and not needed for the payment of the principal of or interest on any of the
Refunded Obligations shall be paid or transferred to the City.
SECTION 26: Time of the Essence. Time shall be of the essence in the performance
of obligations from time to time imposed upon the Bank by this Agreement.
SECTION 27: Successors/Assigns. (a) Should the Bank not be able to legally serve or
perform the duties and obligations under this Agreement, or should the Bank be declared to be
insolvent or closed for any reason by federal or state regulatory authorities or a court of
competent jurisdiction, the City, upon being notified or discovering the Bank's inability or
disqualification to serve hereunder, shall forthwith appoint a successor to replace the Bank, and
upon being notified of such appointment, the Bank shall (i) transfer all funds and securities held
hereunder, together with all books, records and accounts relating to the Escrow Fund and the
Refunded Obligations, to such successor and (ii) assign all rights, duties and obligations under
this Agreement to such successor. If the City should fail to appoint such a successor within
ninety (90) days from the date the City discovers, or is notified of, the event or circumstance
causing the Bank's inability or disqualification to serve hereunder, the Bank, or a bondholder of
the Refunded Obligations, may apply to a court of competentjuhsdiction to appoint a successor
or assigns of the Bank and such court, upon determining the Bank is unable to continue to serve,
shall appoint a successor to serve under this Agreement and the amount of compensation, if
any, to be paid to such successor for the remainder of the term of this Agreement for services
to be rendered both for administering the Escrow Fund and for paying agent duties and
responsibilities for the Refunded Obligations.
(b) Furthermore, the Bank may resign and be discharged from performing its duties and
responsibilities under this Agreement upon notifying the City in writing of its intention to resign
and requesting the City to appoint a successor. No such resignation shall take effect until a
successor has been appointed by the City and such successor has accepted such appointment
and agreed to perform all duties and obligations hereunder for a total compensation equal to the
unearned proportional amount paid the Bank under Section 16 hereof for the administration of
this Agreement and the unearned proportional amount of the paying agents fees for the
Refunded Obligations due the Bank.
Any successor to the Bank shall be a bank, trust company or other financial institution
that is duly qualified under applicable law (the Act or other appropriate statute) to serve as
escrow agent hereunder and authorized and empowered to perform the duties and obligations
contemplated by this Agreement and organized and doing business underthe laws of the United
States or the State of Texas, having its principal office and place of business in the State of
Texas, having a combined capital and surplus of at least $5,000,000 and be subject to the
supervision or examination by Federal or State authority.
746494.1 -11-
EXHIBIT G.
Any successor or assigns to the Bank shall execute, acknowledge and deliver to the City
and the Bank, or its successor or assigns, an instrument accepting such appointment hereunder,
and the Bank shall execute and deliver an instrument transferring to such successor, subject to
the terms of this Agreement, all the rights, powers and trusts created and established and to be
performed under this Agreement. Upon the request of any such successor Bank, the City shall
execute any and all instruments in writing for more fully and certainly vesting in and confirming
to such successor Bank all such rights, powers and duties. The term "Bank" as used herein shall
be the Bank and its legal assigns and successor hereunder.
SECTION28: Escrow Agreement- Amendment/Modification. This Agreement shall be
binding upon the City and the Bank and their respective successors and legal representatives
and shall inure solely to the benefit of the holders of the Refunded Obligations, the City, the
Bank and their respective successors and legal representatives. Furthermore, no alteration,
amendment or modification of any provision of this Agreement shall (1) alter the firm financial
arrangements made for the payment of the Refunded Obligations or (2) be effective unless (i)
prior written consent of such alteration, amendment or modification shall have been obtained
from the holders of all Refunded Obligations outstanding at the time of such alteration,
amendment or modification and (ii) such alteration, amendment or modification is in writing and
signed by the parties hereto; provided, however, the City and the Bank may, without the consent
of the holders of the Refunded Obligations, amend or modify the terms and provisions of this
Agreement to cure in a manner not adverse to the holders of the Refunded Obligations any
ambiguity, formal defect or omission in this Agreement. If the parties hereto agree to any
amendment or modification to this Agreement, prior written notice of such amendment or
proposed modification, together with the legal documents amending or modifying this
Agreement, shall be fumished to each national rating service (Standard & Poor's Corporation,
Moody's Investors Service or Fitch Investors Service) which has rated the Refunded Obligations
on the basis of this Agreement, prior to such amendment or modification being executed.
SECTION 29: Effect of Headings. The Section headings herein are forconvenience only
and shall not affect the construction hereof.
SECTION 30: Executed Counterparts. This Agreement may be executed in several
counterparts, all or any of which shall be regarded for all purposes as one original and shall
constitute and be but one and the same instrument. This Agreement shall be governed by the
laws of the State of Texas and shall be effective as of the date of the delivery of the Bonds.
]46494.1 -12-
EXHIBIT C
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their duly authorized officers and their corporate seals to be hereunto affixed and
attested as of the date first above written.
CITY OF ALLEN, TEXAS
ATTEST: Mayor
Secretary
(City Seal)
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
as Escrow Agent
ATTEST: Title:
Authorized Signer
(Bank Seal)
»ustr
13 -
EXHIBIT C
Exhibit D
to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 46 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 portions of the financial statements of the City appended to the Official
Statement as Appendix E, but for the most recently concluded fiscal year.
2. The
e heading "Investment Policies -Current
Investments" in he information
(contained
State ent and in Tables 1 through 13 of Appendix A to the
Official Statement.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to he financial statements referred to in paragraph 1 above
u I'll.i