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2001-05-09City of Southlake, Texas
MEMORANDUM
May 9, 2001
TO: SPDC Members
FROM: Kevin Hugman, Director of Community Services (xt. 1527)
SUBJECT: Approval of change order with Botanical Technologies to construct restroom
building #2 at Bob Jones Park
Action Requested: SPDC approval of change order with Botanical Technologies to construct
restroom building #2 at Bob Jones Park.
Background
Information: At the July 10, 2000 SPDC meeting, SPDC approved the proposed materials
palette and design of Bob Jones Park components. During the discussions,
SPDC directed staff to pursue adding a second restroom facility at Bob Jones
Park to service the planned six practice ballfields.
At the September 25, 2000 meeting SPDC approved the fiscal year 2000-01
Capital Improvements Plan (CIP) which included an additional $450,000 for
improvements at Bob Jones Park. The added funding is intended to provide
for design and construction of a second restroom facility to be located near
the practice ball fields, a second well and well pump house for the proposed
south ponds, water aeration features, and corresponding electrical.
At the October 23, 2000 SPDC meeting and the November 7, 2000 City
Council meeting, an agreement was approved with Cheatham and Associates
to do the additional design and engineering at a cost of $30,000,
approximately 7% based on a construction budget of $420,000. The bulk of
the design fees, approximately $25,000, was for architectural services
relating to the restroom building and the pump house building. While the
complete restroom/concession structure was designed, it was done in such a
manner as to allow only the restroom portion to be constructed presently.
On January 2, 2001, SPDC and City Council awarded the bid for
construction of Bob Jones Park Phase II construction to Botanical
Technologies in the amount of $2,529,041.23. The major components of the
project include six (6) practice ballfields, parking lots, small pond,
amphitheater, multi -use trails (hard and soft), north concession/restroom
building near the existing soccer fields, pavilion/boardwalk, day camp area, a
portion of the loop road, and associated infrastructure.
Botanical Technologies recently submitted a change order proposal in the
amount of $292,306 to the City for construction of the second restroom to be
located between the six practice fields at Bob Jones Park. The restroom
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SPDC Members
May 9, 2001
Page 2
Financial
Considerations:
Citizen Input/
Board Review:
f
Legal Review:
Alternatives:
Supporting
Documents:
Staff
Recommendation:
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building will utilize the same basic construction design and materials (stone
facade and metal roof), but will not include a concessions stand, storage area,
or covered breezeway, although it can be expanded at a later date to include
these components if desired. Staff is presently working with Botanical
Technologies to reduce the change order request amount through the
elimination or reduction of the administrative costs (telephone, project
manager, trailer, job superintendent, etc.)
Funding in the amount of $450,000 is available in the FY 2000-01 SPDC
Fund, of which $300,000 was encumbered for the second restroom building.
Approval of the change order would account for an increase of approximately
11.5 % of the contract amount with Botanical Technologies ($2,529,041),
well below the 25 % maximum allowed by State law.
SPDC approved funding for the second restroom at their September 25, 2000
meeting as part of the SPDC CIP approval process. An amendment with
Cheatham and Associates for the design work was approved by SPDC at the
October 23, 2000 meeting (5-0), and by City Council at the November 7,
2000 meeting (6-0) .
Not Applicable.
SPDC consideration of change order with Botanical Technologies for
restroom building #2 at Bob Jones Park.
Supporting documents include the following items:
■ Change order proposal submitted by Botanical Technologies
■ Bob Jones Concept Plan
■ Restroom building front elevation
■ Restroom building floor plan
SPDC approval of change order with Botanical Technologies to construct
restroom building #2 at Bob Jones Park for an amount not to exceed
$292,306.
H
OTANICAL TECHNOLOGIES ° Proposal
Ns aYF{Dw 6 MakilP two Weeks Nall We of Q10laft,
RFP Description. RFP 002 - Add Concession Stand/Restroom No. 2
PROJECT NUMBER: BJP00033
RFP To Company Name: City of Southlake
Address: 400 N. White Chapel Blvd.
City Southlake
Region: Tx
Postal Code: 76092
Customer ID: Contact RFP Date
The Proiect is:
SLAKE Bob Pasternak 20-Apr-01
Bob Jones
Park - Phase it
CSI Description:
Units
Unit Price:
Extended Nice:
_a70.30 SUBCONTRACTOR STRUCTU 228458
EA
51.150000
$262,726 '0
wool
l%4 BONDING 4TH 2.5M-5M of bid 283110
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$0 007500L
- -
SUP /FULL7IME!1 EEKjWTRUCK
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$1,312000000
' .3 TELEPHONE PER MONTH
3
EA
$229.000000
TEMP POWER POLE PER MONTH
3
EA
$115 000000
5345 :3
TEMP TOILET PER MONTH
3
EA
$100.000000
3 •_.0�'
P TRAILER 8'x 2'3' R-ENTALI
3
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$400 �100000
:�'.2
:" PROD MAN. /FULL TIME/WEEK
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51..530.000000
$5.1 _0.00
Page 1 4 (� . 5
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OTANICAL TECHNOLOGIES ' Proposal
'21 d
TIN W%m is veld for two was hw mte of muft
RFP Description: RFP 002 -Add Concession Stand/Restroom No. 2
PROJECT NUMBER: BJP00033
Total including all applicable taxes $292,30F,
0thgrfX8lVS18nS: No civil plans were provided for this change order. This price does not include utility connections ne.icnd 5' of
building
Other Clarifications: Add 12 weeks to contract.
Siliel AKk@Hzatl@j:.
Date:
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City of Southlake, Texas
MEMORANDUM
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May 11, 2001
TO: SPDC Board of Directors
FROM: Kevin Hugman, Director of Community Services
SUBJECT: Board Meeting — day, May 15, 2001
1. Agenda Item No. 2. Executive Session. Due to the shortness of the planned meeting, we
do not have plans at this time to discuss any items during executive session.
Agenda Item No. 4A. Resolution No. SPDC 01-02, authorizing the issuance of SPDC
Sales tax Revenue Bonds, Series 2001. As you recall, in March the Corporation authorized
a public hearing be set for the purpose of issuing SPDC bonds to fund capital projects.
This item is the public hearing that was scheduled, and if approved, will authorize the
issuance of $4,690,000 in bonds. This is the planned issuance that is accounted for in this
years SPDC CIP. If you have any questions, please contact Sharen Elam.
2. Agenda Item No. 4B Approval of Change Order No. 1 with Botanical Technologies to
construct restroom building #2 at Bob Jones Park. During the Capital Improvements Plan
(CIP) discussions with SPDC last summer, the Board requested that staff pursue moving up
the construction of restroom #2 at Bob Jones Park (south area by practice ballfields) to the
current project year. SPDC subsequently approved the FY 2001-2002 CIP with an
additional $450,000 in the Bob Jones Park project for the addition of this restroom and
features associated with the second pond (south of the practice ballfields). After
completing construction drawings for the second restroom (the design is similar to the north
restroom/concession building, except for the breezeway and concession area), staff pursued
a change order with the contractor currently on the project — Botanical Technologies. The
proposed change order amount is $292,306, which is within the estimated $300,000
allocated for the facility, and is well within the maximum.25% increase of an awarded
contract (being 11.5% of the awarded contract of $2,529,041).
Staff is presently working with the contractor to reduce this amount for some costs we feel
are unnecessary, and will be prepared to discuss the results of these efforts at your meeting
on Tuesday.
At last month's meeting during the discussions on the softball complex, there was some
discussion by Board members about not doing this facility at this time. If the Board desires
to delay this project, we will only incur the design fees at this time and the bulk of the
funding for the restroom can be held in reserve. However, it is likely the facility will cost
more to construct at a later date due to the fact that a contractor is already on site at this
time. Additionally, there is still a need for a restroom building at that end of the park.
Since the building also accommodates the electrical panels necessary for the parking lot
SPDC Board of Directors
Board Meeting — Monday, April 23, 2001
Page 2
lighting and well pump, staff needs direction on this project soon in order to continue
progress on the construction.
We appreciate your commitment and service to the City. If you have any questions regarding
the agenda or materials, please feel free to contact me at 481-1527.
KH
STAFF CONTACT INFORMATION:
Sharen Elam, Director of Finance, 481-1713
Kevin Hugman, Director of Community Services, 481-1527
Steve Polasek, Deputy Director of Community Services, 481-1543
Ben Henry, Park Planning and Construction Superintendent, 481-1584
Chris Carpenter, Senior Parks Planner, 481-1585
City of Southlake, Texas
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SPECIAL SOUTHLAKE PARKS DEVELOPMENT CORPORATION MEETING:
Tuesday, May 15, 2001
LOCATION: Town Hall
1400 Main Street, Southlake, Texas
REGULAR SESSION 5:00 P.M. (Prior to the Regular City Council Meeting):
1. Call to order.
2. Executive Session: Pursuant to the Open Meetings Act, Chapter 551 of the Texas
Government Code, Section 551.071, consultation with attorney, Section 551.072,
deliberation regarding real property, and/or Section 551.073, deliberation regarding
prospective gift.
3. Reconvene: Action necessary on items discussed in executive session
REGULAR AGENDA:
4. Consider:
A. Resolution No. SPDC 01-02, authorizing the issuance of "Southlake Parks Development
Corporation Sales Tax Revenue Bonds, Series 2001 "; pledging certain "Pledged
Revenues" of the Corporation, including "Gross Sales Tax Revenues," to the payment of
the principal of and interest on said Bonds and enacting other provisions incident and
related to the issuance, payment, security and delivery of said bonds, including the
approval and execution of a Paying Agent/Registrar Agreement, a Purchase Contract and
a Financing/Use Agreement with the City and the approval and distribution of an Official
Statement, and resolving other matters incident and related to the issuance and sale of the
Bonds. Public Hearing.
B. Approval of Change Order No. 1 with Botanical Technology to construct restroom
building #2 at Bob Jones park. Public Hearing.
5. Adjournment
CERTIFICATE
I hereby certify that the above agenda was posted on the Official Bulletin Boards at Town Hall, 1400
Main Street, on Friday, May 11, 2001, at 6:00 p.m. pursuant to the Texas Government Code,
Chapter 551. _
h*4" A "Wot,
Sandra L. LeGrand
City Secretary
If you plan to attend this meeting and QN614; igalbility that requires special needs, please advise the
City Secretary 48 hours in advance at 481-1519, and reasonable accommodations will be made to
assist you.
F1
SPECIAL SOUTHLAKE PARKS DEVELOPMENT CORPORATION MEETING
May 15, 2001
MINUTES
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Board Members Present: President Ronnie Kendall; Members: Sherry Berman, Rex Potter, Rick
Stacy, Tad Stephens, and Cara White.
Board Members Absent: Gary Fawks
Staff Present: Director of Community Services Kevin Hugman, Deputy Director of Community
Services Steve Polasek, Finance Director Sharen Elam, Financial Consultant Jim Sabonis, and
Secretary to the City Manager Kim Bush.
Agenda Item No. 1, Call to order. The meeting was called to order by President Ronnie Kendall at
5:04 p.m.
Agenda Item No. 2, Executive Session.
No executive session was necessary.
REGULAR AGENDA:
L'01 Agenda Item No. 4A. Resolution No. SPDC 01-02, authorizing the issuance of "Southlake Parks
Development Corporation Sales Tax Revenue Bonds, Series 2001"; pledging certain "Pledged
Revenues" of the Corporation, including "Gross Sales Tax Revenues," to the payment of the principal
of and interest on said Bonds and enacting other provisions incident and related to the issuance,
payment, security and delivery of said bonds, including the approval and execution of a Paying
Agent/Registrar Agreement, a Purchase Contract and a Financing/Use Agreement with the City and
the approval and distribution of an Official Statement, and resolving.
Finance Director Sharen Elam reminded the Board that in March SPDC authorized a public hearing to
be set on this date for the purpose of issuing SPDC bonds to fund capital projects. Approval of
Resolution No. SPDC 01-02 authorizes the issuance of $4,690,000 in bonds, which is accounted for
in this years' SPDC CIP. Ms. Elam further explained that in order for the sales tax revenue bonds to
be issued, the City Council must also consider a resolution that authorizes SPDC to issue the bonds.
This is required under Section 4B of the Development Corporation Act of 1979. The resolution will
also include a Financing/Use Agreement with SPDC, in which the Board authorizes the City to
construct projects and to invest and disburse funds.
f Financial Consultant Jim Sabonis made a brief presentation and handed out a "Summary of Bond
Sale" to the Board for reference. Mr. Sabonis explained that due to the market, interest rates have
increased slightly, but the rate for these bonds is still very good. He emphasized that SPDC's rate is
based on historical sales tax collections. He also informed the Board that if rates should come down
and sales tax collections increase, the Board could look at refunding, but he would not look at this as
a temporary financial obligation - still need to plan on long term financing. Mayor Stacy asked if the
SPECIAL SPDC MEETING MINUTES - MAY 15, 2001, PAGE 1 OF 3
L
Board could reallocate the money to different projects than what was originally planned. Mr. Sabonis
commented that there is some flexibility if it were based on the changing needs of the community.
Mayor Stacy commented that SPDC needs the cash flow now, but he does not want to see a 30-year
debt. He commented that SPDC should be able to look at refunding in a couple of years.
Councilmember Potter agreed that SPDC should be able to look at it again in at least five years.
There were no comments during the Public Hearing.
Motion was made to adopt Resolution No. SPDC 01-02 authorizing the issuance of "Southlake Parks
Development Corporation Sales Tax Subordinate Lien Revenue Bonds, Series 2001" in the aggregate
principal amount of $4,690,000 at a true interest cost rate of 5.6508938%; approving and authorizing
the execution of a Paying Agent/Registrar Agreement with the Chase Manhattan Bank, a
Financing/Use Agreement with the City, and a Bond Purchase Contract with J.P. Morgan in relation
to such Bonds; approving the insurance commitment and Guaranty Agreement with Ambac Assurance
Corporation and approving and authorizing distribution of the Official Statement.
Motion: Potter
Second: White
Ayes: Berman, Kendall, Potter, Stacy, Stephens, White
Nays: none
Approved: 6-0
Agenda Item No. 4B. Approval of Change Order No. 1 with Botanical Technology to construct
restroom building #2 at Bob Jones Park.
Community Services Director Kevin Hugman explained that during the CIP discussions with SPDC
last summer, the Board requested that staff pursue moving up the construction of restroom #2 at Bob
Jones Park. SPDC subsequently approved the FY 2001-2002 CIP with an additional $450,000 in the
Bob Jones Park project for the addition of this restroom. Staff then pursued a change order with the
contractor currently on the project - Botanical Technologies. The proposed change order amount is
$292,306 which is well within the maximum 25 % increase of an awarded contract (being 11.5 % of
the awarded contract of $2,529,045). Staff tried to work with the contractor to reduce this amount
because they felt some costs were unnecessary. The contractor was not willing to delete the costs
recommended by staff, therefore, staff recommends the bid be rejected and staff be authorized to put
the facility out for competitive bidding. Mr. Hugman said they felt comfortable that the cost would
decrease substantially if it were competitively bid. He also reminded the Board that at the last SPDC
meeting during the discussion on the softball complex, there was some discussion by Board members
about not doing restroom #2 at this time and possibly reallocating the funds to the softball complex
project at Bicentennial Park. If the Board desires to delay the project, we will only incur the design
fees at this time and the bulk of the funding for the restroom can be held in reserve.
The Board agreed that before committing the funds to restroom #2 at Bob Jones, they would like to
see the project bid and look more closely at alternatives for the softball complex.
There were no comments from the audience during the public hearing.
SPECIAL SPDC MEETING MINUTES - MAY 15, 2001, PAGE 2 OF 3
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Motion was made to deny Change Order #1 with Botanical Technologies to construct restroom facility
#2 at Bob Jones Park and authorize staff to seek competitive bids for this facility.
Motion: Stacy
Second: Potter
Ayes: Berman, Kendall, Potter, Stacy, Stephens, White
Nays: none
Approved: 6-0
Agenda Item No. 5. Adjournment.
Motion was made and carried to adjourn the meeting at 5:40 p.m.
ATTEST:
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tjimpiv"sh
"'Ee Secretary
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Vice Pre dent Rex Potter
SPECIAL SPDC MEETING MINUTES - MAY 15, 2001, PAGE 3 OF 3
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City of Sbuthlake, Texas
MEMORANDUM
TO: SPDC Board of Directors
FROM: Sharen Elam, Director of Finance, Ext. 1713
SUBJECT: Resolution No. SPDC O1-02
Action Requested: Approval of Resolution No. SPDC 01-02 as the final step to issue certificates
of obligation for capital improvement projects.
Background
Information: Approval this resolution is the final step in the process to issue sales tax
revenue bonds. The Board will hold a public hearing on the projects at a
special meeting Tuesday, May 15, 2001 prior to the regular City Council
meeting.
In order for the sales tax revenue bonds to be issued, the City Council must
consider a resolution that approves the SPDC's resolution to issue the bonds.
This is required under Section 4B of the Development Corporation Act of
1979. The resolution will also include a Financing/Use Agreement with
SPDC, in which the Board authorizes the City to construct projects and to
invest and disburse funds.
Financial
Considerations: This will be repaid through the %2 cent sales tax.
Citizen Input/
Board Review: Public hearing is scheduled for May 15, 2001 at 5:00.
Legal Review: Ed Esquivel with the law firm Fulbright and Jaworski serves as the City's bond
counsel, and as such has prepared the Resolution.
Alternatives: In the absence of issuing certificates, capital projects would be funded on a
pay-as-you-go basis. Budgets and the timing of projects would be prioritized
based on the amount of revenue projected by fiscal year.
Supporting
Documents: Resolution No SPDC 01-02
Staff
Recommendation: Approval of Resolution No. SPDC 01-01
sobs
RESOLUTION NO^01-n1a-
A RESOLUTION authorizing the issuance of "SOUTHLAKE PARKS
DEVELOPMENT CORPORATION SALES TAX SUBORDINATE LIEN
REVENUE BONDS, SERIES 2001"; pledging certain "Pledged
Revenues" of the Corporation, including "Gross Sales Tax Revenues", to
the payment of the principal of and interest on said Bonds and enacting
other provisions incident and related to the issuance, payment, security
and delivery of said bonds, including the approval and execution of a
Paying Agent/Registrar Agreement, a Purchase Contract and a
Financing/Use Agreement with the City, resolving other matters incident
and related to the issuance and sale of the Bonds, including the approval
® and distribution of an Official Statement; and providing an effective date.
WHEREAS, the Board of Directors of the Southlake Parks Development Corporation
(the "Corporation") hereby finds and determines that bonds of the Corporation in the principal
amount of $4,690,000 should be issued and sold at this time to finance the costs of purchasing
land and making improvements thereto for neighborhood parks and making additional
improvements to existing park land, including related road and streets improvements that
enhance such park facilities (the "Projects"); and
WHEREAS, in accordance with a "Notice of Public Hearing Relating to Southlake Parks
Development Corporation Projects" duly published on 1, 2001 and
2001, in the Fort Worth Star -Telegram, a newspaper of general circulation in
the City of Southlake, Texas, a public hearing was duly held and conducted on the date hereof
prior to the adoption of this resolution by the Board of Directors on the Corporation's intention to
,,. undertake and spend funds on said Projects; and
WHEREAS, the Board of Directors has, further determined and hereby finds that the
Projects to be financed by the issuance of the bonds are for and on behalf of the City of
Southlake, Texas, and the principal amount of such bonds and other obligations of the
Corporation payable in whole or in part from the "Gross Sales Tax Revenues" (hereinafter
defined), together with the amount of the costs of other projects (other than such bonds and
other obligations) for which payments to be made in cash directly from such "Gross Sales Tax
Revenues" do not, in the aggregate, exceed $135,000,000; and
WHEREAS, the Board of Directors further finds and determines that the bonds herein
authorized should be payable from a lien on and pledge of the Pledged Revenues (as defined
herein) junior and subordinate to the lien on and pledge of such Pledged Revenues securing the
payment of the Priority Bonds (hereinafter identified and defined); now, therefore,
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE SOUTHLAKE PARKS
DEVELOPMENT CORPORATION:
SECTION 1: Authorization - Desianation - Principal Amount - Purpose. Bonds of the
Corporation shall be and are hereby authorized to be issued in the aggregate principal amount
of $4,690,000 to be designated and bear the title "SOUTHLAKE PARKS DEVELOPMENT
CORPORATION SALES TAX SUBORDINATE LIEN REVENUE BONDS, SERIES 2001",
hereinafter referred to as the "Bonds" to finance the costs of purchasing land and making
improvements thereto for neighborhood parks and making additional improvements to existing
park land, including related road and streets improvements that enhance such park facilities, in
45031282
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conformity with the Constitution and laws of the State of Texas, including Vernon's Ann. Civ.
%W Stat., Section 4B of Article 5190.6.
SECTION 2: Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Date. The Bonds shall be issued as fully registered obligations, without coupons,
shall be dated May 15, 2001 (the "Issue Date") and 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 annually on August 15 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
2025
560,000
%
2026
590,000
%
2027
620,000
2028
660,000
%
2029
695,000
%
2030
730,000
%
2031
835,000
%
The Bonds shall bear interest on the unpaid principal amounts from the Issue Date at the
per annum rates shown above (calculated on the basis of a 360-day year of twelve 30-day
months). Interest on the Bonds shall be payable on February 15 and August 15 in each year,
, W commencing August 15, 2001.
SECTION 3: Terms of Payment - Paying Agent/Registrar. The principal of, and the
interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be
payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders")
appearing on the registration and transfer books maintained by the Paying Agent/Registrar and
the payment thereof shall be in any coin or currency of the United States of America, which at
the time of payment is legal tender for the payment of public and private debts, and shall be
without exchange or collection charges to the Holders.
The selection and appointment of The Chase Manhattan Bank, as Paying
Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to
the registration, payment, exchange and transfer of the Bonds (the "Security Register") shall at
all times be kept and maintained on behalf of the Corporation by the Paying Agent/Registrar, all
as provided herein, in accordance with the terms and provisions of a "Paying Agent/Registrar
Agreement", substantially in the form attached hereto as Exhibit A and such reasonable rules
and regulations as the Paying Agent/Registrar and the Corporation may prescribe. The
President and Secretary of the Board of Directors are hereby authorized to execute and deliver
such Agreement in connection with the delivery of the Bonds. The Corporation covenants to
maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid in full and
discharged. Any successor Paying Agent/Registrar shall be a bank, trust company, financial
institution or other entity qualified and authorized to serve in such capacity and perform the
duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar
for the Bonds, the Corporation agrees to promptly cause a written notice to be sent to the
45031282 2
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Holder affected by United States Mail, first class postage prepaid, which notice shall identify and
IL give the address of the new Paying Agent/Registrar.
Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities
or upon their earlier redemption, only upon presentation and surrender of the Bonds to the
Paying Agent/Registrar at its principal offices in Dallas, Texas (the "Designated
Payment/Transfer Office"). Interest on the Bonds shall be paid to the Holders whose name
appear in the Security Register at the close of business on the Record Date (the last business
day of the month next preceding each interest payment date) and shall be paid by the Paying
Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address
of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for
the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal
holiday, or a day when banking institutions in the city where the Designated Payment/Transfer
Office of the Paying Agent/Registrar is located is authorized by law or executive order to close,
then the date for such payment shall be the next succeeding day which is not such a Saturday,
Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on
such date shall have the same force and effect as if made on the original date payment was
due.
In the event of a non-payment of interest on one or more maturities on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment
for such maturity or maturities (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from
the Corporation. Notice of the Special Record Date and of the scheduled payment date of the
past due interest (which shall be 15 days after the Special Record Date) shall be sent at least
five (5) business days prior to the Special Record Date by United States Mail, first class postage
prepaid, to the address of each Holder of such maturity or maturities appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
SECTION 4: Redemption. (a) Optional Redemption. The Bonds shall be subject to
redemption prior to maturity, at the option of the Corporation, 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 February 15, 2011 or on any date thereafter at the redemption
price of par plus accrued interest to the date of redemption.
At least forty-five (45) days prior to a date set for the redemption of Bonds (unless a
shorter notification period shall be satisfactory to the Paying Agent/Registrar), the Corporation
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 Corporation to exercise the right to redeem Bonds shall be entered
in the minutes of the governing body of the Corporation.
(b) Mandatory Redemption. The Bonds having Stated Maturities of
and ("Term Bonds") shall be subject to mandatory redemption prior to maturity
at the redemption price of par and accrued interest to the date of redemption on the respective
dates and in principal amounts as follows:
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Term Bonds due August 15, 20 Term Bonds due August 15, 20
%W Redemption Date Principal Amount Redemption Date Principal Amount
August 15, 20 $ ,000 August 15, 20 $ '000
August 15, 20 ,000 August 15, 20 '000
August 15, 20 '000
Approximately forty-five (45) days prior to each mandatory redemption date for the Term
Bonds, the Paying Agent/Registrar shall select by lot the numbers of the Term Bonds within the
applicable Stated Maturity to be redeemed on the next following August 15 from moneys set
aside for that 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 for a Stated Maturity required to be redeemed
pursuant to the operation of such mandatory redemption provisions may be reduced, at the
option of the Corporation, by the principal amount of Term Bonds of like Stated Maturity which,
at least 50 days prior to the mandatory redemption date, (1) shall have been acquired by the
Corporation 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
414r 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 Corporation and at the Corporation's expense, to each Holder of a
Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security
Register at the close of business on the business day next preceding the date of mailing such
notice, and any notice of redemption so mailed shall be conclusively presumed to have been
duly given irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii)
identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall
become due and payable on the redemption date specified, and the interest thereon, or on the
portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the
redemption date, and (v) specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer
Office of the Paying Agent/ Registrar only upon presentation and surrender thereof by the
Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption
and notice of redemption thereof has been duly given or waived as herein provided, such Bond
(or the principal amount thereof to be redeemed) shall become due and payable, and interest
thereon shall cease to accrue from and after the redemption date therefor, provided moneys
45031282 4
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sufficient for the payment of such Bonds (or of the principal amount thereof to be redeemed) at
the then applicable redemption price are held for the purpose of such payment by the Paying
Agent/Registrar.
SECTION 5: Registration - Transfer - Exchange of Bonds - Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each registered owner of the Bonds issued under and pursuant to the provisions of
this Resolution. Any Bond may, in accordance with its terms and the terms hereof, be
transferred or exchanged for Bonds of other authorized denominations upon the Security
Register by the Holder, in person or by his duly authorized agent, upon surrender of such Bond
to the Designated Payment/Transfer Office of the Paying Agent/Registrar for cancellation,
accompanied by a written instrument of transfer or request for exchange duly executed by the
Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar.
Upon surrender for transfer of a Bond at the Designated Payment/Transfer Office of the
Paying Agent/Registrar, one or more new certificates evidencing the Bonds, in authorized
denominations, of like Stated Maturity and of a like aggregate principal amount as the Bond or
Bonds surrender for transfer shall be registered and issued to the assignee or transferee of the
previous Holders.
At the option of the Holder, Bonds may be exchanged for other Bonds of authorized
denominations and having the same Stated Maturity, bearing the same rate of interest and of
like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the
Bonds to be exchanged at the Designated Payment/Transfer Office of the Paying
Agent/Registrar. Whenever any Bonds are surrendered for exchange, the Paying
Agent/Registrar shall register and deliver new printed certificates evidencing the Bonds,
,. executed on behalf of, and furnished by, the Corporation, to the Holder requesting the
exchange.
All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the
Designated Payment/Transfer Office of the Paying Agent/Registrar, or sent by United States
Mail, first class postage prepaid, to the Holder and, upon the delivery thereof, the same shall be
valid obligations of the Corporation, evidencing the same obligation to pay, and entitled to the
same benefits under this Resolution, as the Bonds surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereof
are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be,
of the same obligation to pay evidenced by the Bond or Bonds registered and delivered in the
exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered and delivered in lieu thereof pursuant to Section 26 hereof and such new
replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost,
destroyed, or stolen Bond.
45031282 5
SECTION 6: Book -Entry Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and
%W transfer/exchange of the Bonds, the Corporation hereby approves and authorizes the use of
"Book -Entry Only" securities clearance, settlement and transfer system provided by The
Depository Trust Company (DTC), a limited purpose trust company organized under the laws of
the State of New York, in accordance with the operational arrangements referenced in the
Blanket Issuer Letter of Representation, by and between the Corporation and DTC (the
"Depository Agreement").
Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be
deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants").
While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on
the Security Register for all purposes, including payment and notices, shall be Cede & Co., as
nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each
Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants.
In the event DTC determines to discontinue serving as securities depository for the
Bonds or otherwise ceases to provide book -entry clearance and settlement of securities
transactions in general or the Corporation determines that DTC is incapable of properly
discharging its duties as securities depository for the Bonds, the Corporation covenants and
agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide
for the Bond certificates to be issued and delivered to DTC Participants and Beneficial Owners,
as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and
exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of
such Bonds shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof.
low SECTION 7: Execution - Registration. The Bonds shall be executed on behalf of the
Corporation by the President of the Board of Directors under its seal reproduced or impressed
thereon and attested by the Secretary of -the Board of Directors of the Corporation. The
signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual
or facsimile signatures of individuals who are or were the proper officers of the Corporation on
the Issue Date shall be deemed to be duly executed on behalf of the Corporation,
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 purchasers and with respect to Bonds delivered in
subsequent exchanges and transfers.
No Bond shall be entitled to any right or benefit under this Resolution, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 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
either (i) as a single fully registered bond in the total principal amount noted in Section 1 with
principal installments to become due and payable as provided in Section 2 hereof and
numbered T-1, or (ii) as multiple fully registered bonds, being one bond for each year of maturity
in the applicable principal amount and denomination and to be numbered consecutively from
T-1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s)
45031282 6
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shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial
Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas
%W for approval, certified and registered by the Office of the Comptroller of Public Accounts of the
State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial
Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial
purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and
exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal
amounts and bearing applicable interest rates for transfer and delivery to the Holders named at
the addresses identified therefor; all pursuant to and in accordance with such written
instructions from the initial purchaser(s), or the designee thereof, and such other information
and documentation as the Paying Agent/Registrar may reasonably require.
SECTION 9: Forms. A. Forms Generally. The Bonds, the Registration Certificate of
the Comptroller of Public Accounts of the State of Texas (to be printed on the Initial Bond(s)
only), the Certificate of Registration, and the form of Assignment to be printed on each of the
Bonds, shall be substantially in the forms set forth in this Section with such appropriate
insertions, omissions, substitutions, and other variations as are permitted or required by this
Resolution and may have such letters, numbers, or other marks of identification (including
identifying numbers and letters of the Committee on Uniform Securities Identification
Procedures of the American Bankers Association) and such legends and endorsements
(including insurance legends on insured Bonds and any reproduction of an opinion of counsel)
thereon as may, consistently herewith, be established by the Board of Directors of the
Corporation or determined by the officers executing such Bonds as evidenced by the execution
thereof. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Bond.
AW The Bonds, including the Initial Bond(s), shall be typewritten, printed, lithographed, or
engraved or produced in any other similar manner, all as determined by the officers executing
such Bonds as evidenced by their execution thereof.
B. Form of Bond.
REGISTERED
NO.
Issue Date:
May 15, 2001
REGISTERED
UNITED STATES OF AMERICA
STATE OF TEXAS
SOUTHLAKE PARKS DEVELOPMENT CORPORATION
SALES TAX SUBORDINATE LIEN REVENUE BOND, SERIES 2001
Registered Owner:
Principal Amount:
Interest Rate: Stated Maturity: CUSIP NO:
DOLLARS
The Southlake Parks Development Corporation (hereinafter referred to as the
"Corporation"), a non-profit industrial development corporation organized and existing under the
laws of the State of Texas, including Section 4B of Article 5190.6, Tex. Rev. Civ. St. Ann., as
45031282 7
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amended, (the "Act"), with its principal office located in Tarrant County, Texas, for value
received, hereby promises to pay to the order of the Registered Owner named above, or the
%W registered assigns thereof, solely from the revenues and sources pledged under the Resolution
identified below, the Principal Amount stated above (or so much thereof as shall not have been
paid upon prior redemption) on the Stated Maturity date specified above and to pay interest
(computed on the basis of a 360-day year of twelve 30-day months) on the unpaid Principal
Amount hereof from the Issue Date at the per annum rate of interest specified above; such
interest being payable on February 15 and August 15 of each year, commencing August 15,
2001. Principal of this Bond is payable at its Stated Maturity or redemption to the registered
owner hereof, upon presentation and surrender, at the Designated Payment/Transfer Office of
the Paying Agent/Registrar executing the registration certificate appearing hereon, or its
successor; provided, however, while this Bond is registered to Cede & Co., the payment of
principal upon a partial redemption of the principal amount hereof may be accomplished without
presentation and surrender of this Bond. Interest is payable to the registered owner of this
Bond (or one or more Predecessor Bonds, as defined in the resolution hereinafter referenced)
whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at
the close of business on the "Record Date", which is the last business day of the month next
preceding each interest payment date and interest shall be paid by the Paying Agent/Registrar
by check sent United States Mail, first class postage prepaid, to the address of the registered
owner recorded in the Security Register or by such other method, acceptable to the Paying
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.
AW This Bond is one of the series specified in its title issued in the aggregate principal
amount of $4,690,000 (herein referred to as the "Bonds") to finance the costs of purchasing land
and making improvements thereto for neighborhood parks and making additional improvements
to existing park land, including related road and streets improvements that enhance such park
facilities, in conformity with the Constitution and laws of the State of Texas, including the Act,
and pursuant to a Resolution adopted by the governing body of the Corporation (herein referred
to as the "Resolution").
The Bonds maturing August 15, and August 15, ("Term Bonds") shall be
subject to mandatory redemption prior to maturity at the redemption price of par and accrued
interest to the date of redemption on the respective dates and in principal amounts as follows:
Term Bonds due August 15, 20
Redemption Date
August 15, 20
August 15, 20
Principal Amount
$ '000
,000
Term Bonds due August 15, 20
Redemption Date
August 15, 20
August 15, 20
August 15, 20
Principal Amount
$ '000
'000
'000
I The particular Term Bonds to be redeemed on each redemption date shall be chosen by lot by
the Paying Agent/Registrar; provided, however, that the principal amount of Term Bonds for a
E�W Stated Maturity required to be redeemed pursuant to the operation of such mandatory
redemption provisions may be reduced, at the option of the Corporation, by the principal amount
of Term Bonds of like maturity which, at least 50 days prior to a mandatory redemption date, (1)
45031282 8
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shall have been acquired by the Corporation 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
%W 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 are subject to being redeemed prior to their Stated Maturities, at the option of
the Corporation, in whole or in part in principal amounts of $5,000 or any integral multiple
thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on August 15,
2011 or on any date thereafter at the redemption price of par plus accrued interest thereon to
the redemption date.
At least thirty days prior to a redemption date, the Corporation shall cause a written
notice of such redemption to be sent by United States Mail, first class postage prepaid, to the
registered owners of the Bond to be redeemed at the address shown on the Security Register
and subject to the terms and provisions relating thereto contained in the Resolution. If a Bond
(or any portion of its principal sum) shall have been duly called for redemption and notice of
such redemption duly given, then upon such redemption date such Bond (or the portion of its
principal sum to be redeemed) shall become due and payable, and, if moneys for the 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 Agent/Registrar,
interest shall cease to accrue and be payable from and after the redemption date on the
principal amount of such Bond redeemed.
In the event of a portion of the principal amount of a Bond is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new
Bond or Bonds of like maturity and interest rate in any authorized denominations provided by
the Resolution for the then unredeemed balance of the principal sum thereof will be issued to
the registered owner, without charge. If a Bond is selected for redemption, in whole or in part,
the Corporation and the Paying Agent/Registrar shall not be required to transfer such 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 of a Bond redeemed in part.
The Bonds are special obligations of the Corporation payable solely from and, together
with the Previously Issued Bonds (identified and defined in the Resolution), equally and ratably
secured by a lien on and pledge of the 'Pledged Revenues" (as defined in the Resolution) of the
Corporation, including the receipts from a Sales Tax levied for the benefit of the Corporation
pursuant to the Act; provided, however, the lien on and pledge of the "Pledged Revenues"
securing the payment of the Bonds is junior and subordinate to the prior lien on and pledge of
such Pledged Revenues securing the payment of Priority Bonds (identified and defined in the
Resolution)now outstanding and hereafter issued by the Corporation. The Bonds do not
constitute a legal or equitable, pledge, charge, lien or encumbrance upon any property of the
Corporation or the City of Southlake, Texas (the "City") except with respect to the 'Pledged
Revenues". This Bond may not be paid in whole or in part from any property taxes raised or to
be raised by the City and is not a debt of and does not give rise to a claim for payment against
the City, except as to the sales and use tax revenues held by the City and required under the
Act to be paid over to the Corporation. Neither the State of Texas, the City or any political
corporation, subdivision or agency of the State of Texas shall be obligated to pay this Bond or
45031282 9
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the interest hereon and neither the faith and credit nor the taxing power of the State, the City or
W4w any other political corporation, subdivision or agency thereof is pledged to the payment of the
principal of and interest on this Bond except as noted above.
Subject to satisfying the terms and conditions prescribed therefor, the Corporation has
reserved the right to issue additional revenue obligations payable, in whole or in part, from the
"Pledged Revenues" and (i) equally and ratably secured by a parity first lien on and pledge of
such "Pledged Revenues" securing the payment of the Priority Bonds currently outstanding or
(ii) equally and ratably secured by the parity junior lien on and pledge of the "Pledged
Revenues" securing the payment of the Bonds.
Reference is hereby made to the Resolution, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the
Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and
the nature and extent of the security for the payment of the Bonds; the rights of Holders of the
Bonds the terms and conditions for the issuance of additional obligations; the terms and
conditions relating to the payment, transfer or exchange of this Bond; the conditions upon which
the Resolution may be amended or supplemented with or without the consent of the Holders;
the rights, duties, and obligations of the Corporation and the Paying Agent/Registrar; the terms
and provisions upon which the encumbrances, pledges, charges and covenants made therein
may be discharged; and for the other terms and provisions contained therein. Capitalized terms
used herein have the same meanings assigned in the Resolution.
i This Bond, subject to certain limitations contained in the Resolution, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
141r endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered
Bonds of the same Stated Maturity, of authorized denominations; bearing the same rate of
interest, and of the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The Corporation and the Paying Agent/Registrar, and any agent of either, may treat the
registered owner hereof whose name appears on the Security Register (i) on the Record Date
as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as
the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in
whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the
Corporation nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to
the contrary. In the event of non-payment of interest on a scheduled payment date and for
thirty (30) days thereafter, a new record date for such interest payment (a "Special Record
Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of
such interest have been received from the Corporation. Notice of the Special Record Date and
of the scheduled payment date of the past due interest (which shall be 15 days after the Special
Record Date) shall be sent at least five (5) business days prior to the Special Record Date by
United States Mail, first class postage prepaid, to the address of each Holder appearing on the
Security Register at the close of business on the last business day next preceding the date of
mailing of such notice.
It is hereby certified, recited, represented and covenanted that the Corporation is a
�4w non-profit industrial development corporation duly organized and legally existing under and by
45031282 10
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virtue of the Constitution and laws of the State of Texas, including the Act; that all acts,
conditions and things required to exist and be done precedent to and in the issuance of the
Bonds to render the same lawful and valid special obligations of the Corporation have been
properly done, have happened and have been performed in regular and due time, form and
manner as required by law; and that due provision has been made for the payment of the
principal of and interest on the Bonds from the sources and in the manner provided in the
Resolution. In case any provision in this Bond or any application thereof shall be invalid, illegal,
or unenforceable, the validity, legality, and enforceability of the remaining provisions and
applications shall not in any way be affected or impaired thereby. The terms and provisions of
this Bond and the Resolution shall be construed in accordance with and shall be governed by
the laws of the State of Texas.
IN WITNESS WHEREOF, the Board of Directors of the Corporation has caused this
Bond to be duly executed under the official seal of the Corporation as of the Issue Date.
ATTEST:
Secretary, Board of Directors
(SEAL)
45031282
11
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
President, Board of Directors
H
*Form of
on Initial E
istration Certificate of Comptroller of Public Accounts to Appear
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER )
OF PUBLIC ACCOUNTS ) REGISTER NO.
THE STATE OF TEXAS )
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
*NOTE TO PRINTER: Do not print on definitive bonds
+ter
D. Form of Certificate of Paying Agent/Registrar to Appear on definitive Bonds.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered in the name of the Registered Owner
shown above under the provisions of the within -mentioned Resolution and duly approved, or a
Predecessor Bond hereof duly approved, by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts, as shown by the records of the Paying
Agent/Registrar.
The designated offices of the Paying Agent/Registrar located in Dallas, Texas, is the
"Designated Payment/Transfer Office" for this Bond.
THE CHASE MANHATTAN BANK
as Paying Agent/Registrar
Registration date:
By
Authorized Signature
45031282 12
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E. Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number ) the within
Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
97_N1:4 9-1
NOTICE: The signature on this
assignment must correspond with the
Signature guaranteed: name of the registered owner as it
appears on the face of the within Bond in
every particular.
F. The Initial Bond(s) shall be in the form set forth in paragraph B of this Section,
except that the form of a single fully registered Initial Bond shall be modified as
follows::
(i) immediately under the name of the bond the headings "Interest Rate " and
"Stated Maturity_" shall both be omitted;"
(ii) Paragraph one shall read as follows:
The Southlake Parks Development Corporation (hereinafter referred to as the
"Corporation"), a non-profit industrial development corporation organized and existing under the
laws of the State of Texas, including Section 4B of Article 5190.6, Tex. Rev. Civ. St. Ann., as
amended, (the "Act"), with its principal office located in Tarrant County, 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 and sources pledged under the Resolution
identified below, the Principal Amount hereinabove stated on August 15 in each of the years
and in principal amounts and bearing interest at per annum rates 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 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 Issue Date at the per annum rate of interest specified above; such
interest being payable on February 15 and August 15 of each year, commencing August 15,
2001. Principal installments of this Bond are payable at its Stated Maturity or on a prepayment
date to the registered owner hereof by The Chase Manhattan Bank (the "Paying
Agent/Registrar"), upon its presentation and surrender, at its principal offices in Dallas, Texas
45031282 13
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H1,
(the "Designated Payment/Transfer Office"). Interest is payable to the registered owner of this
Bond (or one or more Predecessor Bonds, as defined in the resolution hereinafter referenced)
whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at
the close of business on the "Record Date", which is the last business day of the month next
preceding each interest payment date and interest shall be paid by the Paying Agent/Registrar
by check sent United States Mail, first class postage prepaid, to the address of the registered
owner recorded in the Security Register or by such other method, acceptable to the Paying
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 Resolution and in particular for clarity
with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of
revenues to the payment of the Bonds, the following definitions are provided:
"Act" - The Development Corporation Act of 1979, Vernon's Ann. Civ. St.,
Art. 5190.6, as amended at any time.
"Additional Obligations" - Bonds, notes or other evidences of
indebtedness which the Corporation reserves the right to issue or enter into, as
the case may be, in the future in accordance with the terms and conditions
provided in Section 18 hereof and which, together with the Bonds, are equally
and ratably secured by a parity pledge of and claim on the Pledged Revenues
under the terms of this Resolution and a Supplemental Resolution.
"Average Annual Debt Service" - That amount which, at the time of
computation, is derived by dividing the total amount of Debt Service to be paid
over a period of years as the same is scheduled to become due and payable by
the number of years taken into account in determining the total Debt Service.
Capitalized interest payments provided from proceeds or borrowings of the
Corporation shall be excluded in making the aforementioned computation.
"Board" - The Board of Directors of the Corporation.
"Bonds" - The "Southlake Parks Development Corporation Sales Tax
Subordinate Lien Revenue Bonds, Series 2001", dated May15, 2001, authorized
by this Resolution.
"City" - The City of Southlake, Texas.
"Corporation" - The Southlake Parks Development Corporation, a
non-profit industrial development corporation organized and existing under and
pursuant to the laws of the State of Texas, including Section 413 of the Act, with
its principal place of business in Tarrant County, Texas.
"Debt Service" - As of any particular date of computation, with respect to
any obligations and with respect to any period, the aggregate of the amounts to
be paid or set aside by the Corporation as of such date or in such period for the
payment of the principal of, premium, if any, and interest (to the extent not
45031282 14
D
capitalized) on such obligations; assuming, in the case of obligations without a
fixed numerical rate, that such obligations bear, or would have borne, interest at
the maximum legal per annum rate applicable to such obligations, and further
assuming in the case of obligations required to be redeemed or prepaid as to
principal prior to maturity, the principal amounts thereof will be redeemed prior to
maturity in accordance with the mandatory redemption provisions applicable
thereto.
"Depository" - A commercial bank or other qualified financial institution
eligible and qualified to serve as the custodian of the Corporation's monetary
accounts and funds.
"Fiscal Year'- The twelve month financial accounting period used by the
Corporation ending September 30 in each year, or such other twelve consecutive
month period established by the Corporation.
"Government Obligations" - (i) direct noncallable obligations of the United
States of America, including obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America, (ii) noncallable
obligations of an agency or
instrumentality
of the United
States, including
obligations unconditionally
guaranteed or
insured by
the agency or
instrumentality and on the
date of their
acquisition or
purchase by the
Corporation are rated as to investment quality by a nationally recognized
investment rating firm not less than AAA or its equivalent and (iii) noncallable
obligations of a state or an agency or a county, municipality, or other political
subdivision of a state that have been refunded and on the date of their
VW acquisition or purchase by the Corporation, are rated as to investment quality by
a nationally recognized investment rating firm not less than AAA or its equivalent.
"Gross Sales Tax Revenues" - All of the Sales Tax revenues or receipts
due or owing to, or collected or received by or on behalf of the Corporation by the
City or otherwise pursuant to Section 4B of the Act and the election held
November 2, 1993, less any amounts due and owed to the Comptroller of Public
Accounts of the State of Texas as charges for the collection of the Sales Tax or
retention by said Comptroller for refunds and to redeem dishonored checks and
drafts, to the extent such charges and retention are authorized or required by
law.
"Outstanding" - When used in this Resolution with respect to Bonds or
Parity Obligations, as the case may be, means, as of the date of determination,
all Bonds and Parity Obligations theretofore sold, issued and delivered by the
Corporation, except:
(1) those Bonds or Parity Obligations canceled or delivered to the
transfer agent or registrar for cancellation in connection with the exchange or
transfer of such obligations;
(2) those Bonds or Parity Obligations paid or deemed to be paid in
accordance with the provisions of Section 25 hereof or similar provisions of any
Supplemental Resolution authorizing the issuance of Additional Obligations.
45031282 15
D
(3) those Bonds or Parity Obligations that have been mutilated,
destroyed, lost, or stolen and replacement obligations have been registered and
delivered in lieu thereof.
"Parity Obligations" - Collectively, the Previously Issued Bonds, the Bonds
and Additional Obligations.
"Pledged Revenues" - Collectively (i) Gross Sales Tax Revenues from
time to time deposited or owing to the Pledged Revenue Fund and (ii) such other
money, income, revenue, receipts or other property as may be specifically
dedicated, pledged or otherwise encumbered in a Supplemental Resolution for
the payment and security of Parity Obligations.
"Previously Issued Bonds" - The outstanding and unpaid "Southlake
Parks Development Corporation Sales Tax Subordinate Lien Revenue Bonds,
Series 2000", dated March 1, 2000, originally issued in the principal amount of
$4,180,000.
"Priority Bonds" - The outstanding and unpaid (i) "Southlake Parks
Development Corporation Refunding and Improvement Sales Tax Revenue
Bonds, Series 1997", dated February 15, 1997, and (ii) "Southlake Parks
Development Corporation Sales Tax Revenue Bonds, Series 1999", dated
April 1, 1999, originally issued in the principal amount of $4,655,000 and
obligations issued on a parity therewith.
"Required Reserve" - The amount required to be accumulated and
4W maintained in the Reserve Fund under the provisions of Section 14 hereof.
"Sales Tax" - The local sales and, use tax authorized under Section 4B of
the Act, approved at an election held on November 2, 1993, and the effective
date for the imposition and application of such Sales Tax within the corporate
limits of the City by the Comptroller of Public Accounts of the State of Texas
being April 1, 1994, together with any increases in the rate of such Sales Tax
authorized and provided by law.
"Supplemental Resolution" - Any resolution of the Board supplementing
this Resolution for the purpose of authorizing and providing the terms and
provisions of the Bonds or Additional Obligations, or supplementing or amending
this Resolution for any other authorized purpose permitted in Section 18 or 25
hereof, including resolutions authorizing the issuance of Additional Obligations or
pledging and encumbering income, revenues, receipts or property other than the
Gross Sales Tax Revenues to the payment and security of the Parity Obligations.
SECTION 11: Pledge. The Corporation hereby covenants and agrees that, subject only
to the prior claim on and pledge of the Pledged Revenues to the payment and security of the
Priority Bonds (including the establishment and maintenance of the special funds created for the
payment and security of such bonds) under the terms and provisions of the resolutions and
proceedings pertaining to their authorization, the Pledged Revenues, with the exception of
those in excess of the amounts required for the payment and security of the Parity Obligations,
are hereby irrevocably pledged to the payment and security of the Previously Issued Bonds, the
Bonds and Additional Obligations, if issued, including the establishment and maintenance of the
45031282
16
I
special funds created and established in this Resolution and any Supplemental Resolution, all
as hereinafter provided. The Corporation hereby resolves the Parity Obligations shall constitute
a lien on the Pledged Revenues in accordance with the terms of this Resolution and any
Supplemental Resolution, which lien shall be valid and binding without any further action by the
Corporation and without any filing or recording with respect thereto except in the records of the
Corporation.
SECTION 12: Pledged Revenue Fund. In accordance with the provisions of the
resolutions authorizing the issuance of the Priority Bonds and while the Bonds are Outstanding,
the Corporation hereby agrees and covenants to maintain a fund or account at a Depository for
the deposit of the Pledged Revenues as received by the Corporation, which fund or account
shall be known on the books and records of the Corporation as the "Pledged Revenue Fund".
All Pledged Revenues deposited to the credit of such Fund shall be accounted for separate and
apart from all other revenues, receipts and income of the Corporation and, with respect to the
Gross Sales Tax Revenues, the Corporation shall further account for such funds separate and
apart from the other Pledged Revenues deposited to the credit of the Pledged Revenue Fund.
All Pledged Revenues deposited to the credit of the Pledged Revenue Fund shall be
appropriated and expended to the extent required by this Resolution and any Supplemental
Resolution for the following uses and in the order of priority shown:
First: To the payment of the amounts required to be deposited in the
special funds and accounts maintained for the payment and security of the
Priority Bonds; -
Second: To the payment of the amounts required to be deposited in the
Bond Fund for the payment of Debt Service on the Parity Obligations as the
..► same becomes due and payable;
Third: 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 Resolution and any Supplemental Resolution;
Fourth: To the payment of amounts required to be deposited in any other
fund or account required by any Supplemental Resolution authorizing the
issuance of Parity Obligations; and
Fifth: To any fund or account held at any place or places, or to any
payee, required by any other resolution of the Board which authorized the
issuance of obligations or the creation of debt of the Corporation having a lien on
the Pledged Revenues subordinate to the lien created herein on behalf of the
Parity Obligations.
Any Pledged Revenues remaining in the Pledged Revenue Fund after satisfying the
foregoing payments, or making adequate and sufficient provision for the payment thereof, may
be appropriated and used for any other lawful purpose now or hereafter permitted by law.
SECTION 13: Bond Fund. For the purpose of providing funds to pay the principal of and
interest on Parity Obligations, the Corporation agrees and covenants to maintain a separate and
special account or fund on the books and records of the Corporation known as the "Southlake
kw Parks Development Corporation Subordinate Lien Debt Service Account" (the 'Bond Fund"),
and all monies deposited to the credit of such Fund shall be held in a special banking fund or
45031282 17
I+
account maintained at a Depository of the Corporation. In addition to the deposits for the
payment of the Previously Issued Bonds, the Corporation covenants that, after paying or making
provision for all priority payments for the Priority Bonds, there shall be deposited into the Bond
Fund prior to each principal and interest payment date from the Pledged Revenues an amount
equal to one hundred per centum (100%) of the interest on and the principal of the Bonds then
failing due and payable, and such deposits to pay principal and accrued interest on the Bonds
shall be made in substantially equal monthly installments on or before the 10th day of each
month, beginning on or before the 10th day of the month next following the delivery of the
Bonds to the initial purchasers.
The required deposits to the Bond Fund for the payment of principal of and interest on
the Bonds shall continue to be made as hereinabove provided until (i) the total amount on
deposit in the Bond Fund and Reserve Fund is equal to the amount required to fully pay and
discharge all Parity Obligations (principal and interest) then Outstanding or (ii) the Bonds are no
longer Outstanding.
SECTION 14: Reserve Fund. (a) General Provisions. The Corporation agrees and
covenants to create and maintain on the books and records of the Corporation a separate and
special fund or account to be known as the "Subordinate Lien Reserve Account' (the 'Reserve
Fund"), which fund or account shall be a special banking fund maintained at a Depository. The
amounts deposited to the credit of such fund or account shall be used solely for the payment of
(i) the principal of and interest on the Parity Obligations when (whether at maturity, upon a
redemption date or any interest payment date) other funds available for such purposes are
insufficient, (ii) the amounts required to restore or replenish in full the surety bond coverage
afforded by a surety bond representing all or a portion of the Required Reserve, and, in addition,
may be used to the extent not required to maintain the "Required Reserve", to pay, or provide
V,. for the payment of, the final principal amount of a series of Parity Obligations so that such series
of Parity Obligations is no longer deemed to be "Outstanding" as such term is defined herein.
The Required Reserve shall be established and maintained with Pledged Revenues, the
proceeds of sale of Parity Obligations or by depositing to the credit of the Reserve Fund one or
more surety bonds issued by a company or institution having a rating in the highest rating
category by two nationally recognized rating agencies or services, or any combination thereof.
In accordance with the provisions of the resolution authorizing the issuance of the
Previously Issued Bonds, the amount currently on deposit to the credit of the Reserve Fund is
$302,900 (the "Current Reserve") which amount is fully funded with a surety obligation issued
by Ambac Assurance Corporation. As a result of the issuance of the Bonds, the Required
Reserve is hereby recalculated and determined to be $ , and the
Corporation hereby covenants and agrees to cause any deficiency in the Required Reserve to
be funded in full on the date of the delivery of the Bonds with available Pledged Revenues, the
proceeds of sale of Bonds or by depositing to the credit of the Reserve Fund one or more surety
bonds issued by a company or institution having a rating in the highest rating category by two
nationally recognized rating agencies or services, or any combination thereof. On the date the
Bonds are delivered to the initial purchasers, the Corporation shall deposit to the credit of the
Reserve Fund an additional surety bond provided by Ambac Assurance Corporation ("Ambac")
with surety bond coverage in an amount equal to the difference between the Required Reserve
and the Current Reserve.
As and when Additional Obligations are delivered or incurred, the Required Reserve
shall be increased, if required, to an amount equal to the lesser of either (i) the maximum annual
Debt Service (calculated on a Fiscal Year basis) for all Parity Obligations then Outstanding
45031282 18
11
(after giving effect to the issuance of the Additional Obligations), as determined on the date
each series of Additional Obligations are delivered or incurred, as the case may be, or (ii) the
maximum amount that can be invested without restriction as to yield in a reasonably required
reserve fund pursuant to Subsection (d) of Section 148 of the Internal Revenue Code of 1986,
as amended, and regulations promulgated thereunder. Any additional amount required to be
maintained in the Reserve Fund shall be accumulated (i) by depositing to the credit of the
Reserve Fund (immediately after the delivery of the then proposed Additional Obligations) cash
or an additional surety bond or revised surety bond with surety bond coverage in an amount
sufficient to provide for the new Required Reserve to be fully or partially funded, or (ii) at the
option of the Corporation, by making monthly deposits from funds in the Pledged Revenue
Fund, after paying or making provision for all priority payments for the Priority Bonds, on or
before the 10th day of each month following the month of delivery of the then proposed
Additional Obligations, of not less than 1/36th of the additional amount to be maintained in said
Fund by reason of the issuance of the Additional Obligations then being issued (or 1/36th of the
balance of the additional amount not deposited immediately in cash or provided by a surety
bond).
While the cash and investments and/or surety bond coverage in the Reserve Fund total
not less than the Required Reserve, no deposits need be made to the credit of the Reserve
Fund. Should the Reserve Fund at any time contain less than the Required Reserve (or so
much thereof as shall then be required to be contained therein if Additional Obligations have
been issued and the Corporation has elected to accumulate all or a portion of the Required
Reserve with Pledged Revenues) or should the Corporation be obligated to repay or reimburse
an issuer of a surety bond to replenish and restore the full amount of surety bond coverage
provided by a surety bond held for the account of the Reserve Fund, the Corporation covenants
and agrees to cause monthly deposits to be made to the Reserve Fund on or before the 10th
irrr day of each month (beginning the month next following the month the deficiency in the
Required Reserve occurred by reason of a draw on the Reserve Fund or as a result of a
reduction in the market value of investments held for the account of the Reserve Fund) from
Pledged Revenues in an amount equal to (i) 1/36th of the Required Reserve until the total
Required Reserve then required to be maintained in said Fund has been fully restored or (ii) the
amounts required to be reimbursed and repaid to the issuer of the surety bond in the event of a
draw upon a surety bond. The Corporation further covenants and agrees that the Pledged
Revenues shall be applied and appropriated and used to establish and maintain the Required
Reserve and to cure any deficiency in such amounts as required -by the terms of this Resolution
and any Supplemental Resolution.
During such time as the Reserve Fund contains the total Required Reserve, the
Corporation may, at its option, withdraw any amount in the Reserve Fund in excess of the
Required Reserve and deposit such surplus in the Bond Fund.
(b) Surety Obligation Provisions. As noted above, the Required Reserve to be
accumulated and maintained in the Reserve Fund by reason of the issuance of the Bonds is
initially to be provided by a Municipal Bond Debt Service Reserve Insurance Policy" issued by
Ambac Indemnity Corporation, a Wisconsin domiciled stock insurance company (hereinafter
referred to as "Ambac") with surety bond coverage in the maximum amount of the Required
Reserve (the "Surety Obligation"). In accordance with Ambac 's terms for the issuance of such
Surety Obligation, it is hereby expressly provided:
45031282 19
A,
C
(i) Any provision of this Resolution expressly recognizing or granting
rights in or to Ambac may not be amended in any manner which affects the rights
of Ambac hereunder without the prior written consent of Ambac.
(ii) Unless otherwise provided in this Section, Ambac 's consent shall
be required in addition to the consent of the Holders of the Bonds, when
required, for the following purposes: (A) execution and delivery of any
supplement to this Resolution; (B) removal of the Paying Agent/Registrar or
selection and appointment of any successor paying agent; and (C) initiation or
approval of any action not described in (A) or (B) above which requires consent
of the Holders of the Bonds.
(iii) While the Surety Obligation is in effect, the Corporation or the Paying
Agent/Registrar, as appropriate, shall furnish to Ambac:
(A) as soon as practicable after the filing thereof, a copy of any
audited financial statement of the Corporation and a copy of any audit and
annual report of the Corporation;
(B) a copy of any notice to be given to the registered owners of the
Bonds and any certificate rendered pursuant to this Resolution relating to the
security for the Bonds; and
(C) such additional information it may reasonably request.
(iv) The Corporation will permit Ambac to discuss the affairs, finances
and accounts of the Corporation or any information Ambac may reasonably
request regarding the security for the Bonds with appropriate officers of the
Corporation. The. Paying Agent/Registrar or Corporation, as appropriate, will
permit Ambac to have access to and to make copies, at Ambac's expense, of all
books and records relating to the Bonds at any reasonable time.
(v) Notwithstanding any other provision of this Resolution, the Paying
Agent/Registrar shall immediately notify Ambac if at any time there is insufficient
money to make any payments of principal and interest as required and
immediately upon the occurrence of (A) any event of default under this
Resolution or (B) any payment default under any related security agreement.
(vi) To the extent that the Corporation enters into a continuing
disclosure agreement with respect to the Bonds, Ambac shall be included as
party to be notified.
(vii) As long as the Surety Obligation shall be in full force and effect, the
Corporation and the Paying Agent/Registrar, if appropriate, agree to comply with
the following provisions:
(A) In the event and to the extent that money on deposit in the Bond
Fund, plus all amounts on deposit in and credited to the Reserve Fund in excess
of the amount of the Surety Obligation, are insufficient to pay the amount of
principal and interest coming due, then upon the later of: (i) one (1) day after
receipt by the General Counsel of Ambac of a demand for payment in the form
45031282 20
11
attached to the Surety Obligation as Attachment 1 (the "Demand for Payment'),
duly executed by the Paying Agent/Registrar certifying that payment due under
the Resolution has not been made to the Paying Agent/Registrar; or (ii) the
payment date of the Obligations as specified . in the Demand for Payment
presented by the Paying Agent/Registrar to the General Counsel of Ambac,
Ambac will make a deposit of funds in an account with the Paying
Agent/Registrar or its successor, in New York, New York, sufficient for the
payment to the Paying Agent/Registrar, of amounts which are then due to the
Paying Agent/Registrar under the Resolution (as specified in the Demand for
Payment) up to but not in excess of the "Surety Obligation Coverage", as defined
in the Surety Obligation; provided, however, that in the event that the amount on
deposit in, or credit to, the Reserve Fund, in addition to the amount available
under the Surety Obligation, includes amounts available under a letter of credit,
insurance policy, Surety Obligation or other such funding instrument (the
"Additional
Funding Instrument'), draws on the Surety Obligation and the
Additional Funding Instrument shall be made on a pro rata basis to fund the
insufficiency.
(B) the Paying Agent/Registrar, if appropriate, shall, after submitting
to Ambac the Demand for Payment as provided in subparagraph (vii)(A) above,
make available to Ambac all records relating to the funds and accounts
maintained under this Resolution.
(C) the Paying Agent/Registrar, if appropriate, shall, upon receipt of
money received from the draw on the Surety Obligation, as specified in the
Demand for Payment, credit the Reserve Fund to the extent of money received
pursuant to such Demand for Payment.
(D) the Reserve Fund -shall be replenished in the following priority: (i)
principal and interest on the Surety Obligation shall be paid from first available
Pledged Revenues or principal and interest on the Surety Obligation and on the
Additional Funding Instrument shall be paid from first available Pledged
Revenues on a pro rata basis; (ii) after all such amounts are paid in full, amounts
necessary to fund the Reserve Fund to the required level, after taking into
account the amounts available under the Surety Obligation and the Additional
Funding Instrument shall be deposited from next available Pledged Revenues.
Furthermore, the "Guaranty Agreement" (the "Guaranty Agreement') by and between
the Corporation and Ambac, attached hereto as Exhibit B and incorporated herein by reference
as a part of this Resolution for all purposes, is hereby approved as to form and content, and
such Guaranty Agreement in substantially the form and substance attached hereto, together
with such changes or revisions as may be necessary to comply with Texas law, is hereby
authorized to be executed by the President of the Board of Directors of the Corporation for and
on behalf of the Corporation and as the act and deed of this Board of Directors; and such
Guaranty Agreement as executed by said officials shall be deemed approved by the Board of
Directors and constitute the Guaranty Agreement herein approved. Unless otherwise provided
herein, the terms capitalized in this Section relating to the Surety Obligation and the Guaranty
Agreement shall have the meanings specified in Guaranty Agreement.
Er SECTION 15: Deficiencies. If on any occasion there shall not be sufficient Pledged
Revenues to make the required deposits into the Bond Fund or Reserve Fund, such deficiency
45031282 21
shall be cured as soon as possible from the next available Pledged Revenues, or from any other
IL sources available for such purpose.
SECTION 16: Payment of Bonds. While any of the Bonds are Outstanding, the
Treasurer of the Corporation (or other designated financial officer of the Corporation) shall
cause to be transferred to the Paying Agent/Registrar, from funds on deposit in the Bond Fund,
and, if necessary, in the Reserve Fund, amounts sufficient to fully pay and discharge promptly
as each installment of interest and principal of the Bonds accrues or matures; such transfer of
funds to be made in such manner as will cause immediately available funds to be deposited with
the Paying Agent/Registrar for the Bonds at the close of the business day next preceding the
date of payment for the Bonds.
SECTION 17: Investments - Security of Funds. (a) Money in any Fund required to be
maintained pursuant to this Resolution may, at the option of the Corporation, be invested in
obligations and in the manner prescribed by the Public Funds Investment Act (V.T.C.A.,
Government Code, Chapter 2256), including investments held in book -entry form; provided that
all such deposits and investments shall be made in such a manner that the money required to
be expended from any Fund will be available at the proper time or times and provided further
the maximum stated maturity for any investment acquired with money deposited to the credit of
the Reserve Fund shall be limited to five (5) years from the date of the investment of such
money. Such investments shall be valued in terms of current market value within 45 days of the
close of each Fiscal Year and, with respect to investments held for the account of the Reserve
Fund, within 45 days of the date of passage of each authorizing document of the Board
pertaining to the issuance of Additional Obligations. All interest and income derived from
deposits and investments in the Bond Fund immediately shall be credited to, and any losses
debited to, the appropriate account of the Bond Fund. All interest and interest income derived
VAW from deposits in and investments of the Reserve Fund shall, subject to the limitations provided
in Section 14 hereof, be credited to and deposited in the Pledged Revenue Fund. All such
investments shall be sold promptly when necessary to prevent any default in connection with
the Parity Obligations.
(b) Money deposited to the credit of the Pledged Revenue Fund, Bond Fund and
Reserve Fund, to the extent not invested and not otherwise insured by the Federal Deposit
Insurance Corporation or similar agency, shall be secured by a pledge of direct obligations of
the United States of America, or obligations unconditionally guaranteed by the United States of
America.
SECTION 18: Issuance of Additional Parity Obligations. Subject to the provisions
hereinafter appearing as to conditions precedent which must be satisfied, the Corporation
reserves the right to issue, from time to time as needed, Additional Obligations for any lawful
purpose. Such Additional Obligations may be issued in such form and manner as the
Corporation shall determine, provided, however, prior to issuing or incurring such Additional
Obligations, the following conditions precedent for the authorization and issuance of the same
are satisfied, to wit:
(1) The Treasurer of the Corporation (or other officer of the
Corporation then having the primary responsibility for the financial affairs of the
Corporation) shall have executed a certificate stating that, to the best of his or
her knowledge and belief, the Corporation is not then in default as to any
covenant, obligation or agreement contained in the Resolution or a Supplemental
Resolution.
45031282 22
r
(2) The Corporation has secured from a certified public accountant a
certificate or opinion to the effect that, according to the books and records of the
Corporation, the Gross Sales Tax Revenues received by the Corporation for
either (i) the last completed Fiscal Year next preceding the adoption of the
Supplemental Resolution authorizing the issuance of the proposed Additional
Obligations or (ii) any twelve (12) consecutive months out of the previous
eighteen (18) months next preceding the adoption of the Supplemental
Resolution authorizing the Additional Obligations were equal to not less than 1.25
times the maximum annual Debt Service for all Priority Bonds and Parity
Obligations then Outstanding and after giving effect to the issuance of the
Additional Obligations then being issued. Additionally, for the purpose of
providing this certificate or opinion, if the Corporation shall not have received
Gross Sales Tax Revenues for a full 12 month period, one-half of the amount of
sales tax revenues actually received by the City under Chapter 321, TEX.TAX
CODE, may be used for the months during which the Corporation did not receive
Gross Sales Tax Revenues.
P
P
(3) The Required Reserve to be accumulated and maintained in the
Reserve Fund is increased to the extent required by Section 14.
SECTION 19: Refunding Bonds. The Corporation reserves the right to issue refunding
bonds to refund all or any part of the Parity Obligations (pursuant to any law then available)
upon such terms and conditions as the Board may deem to. be in the best interest of the
Corporation, and if less than all such Parity Obligations then Outstanding are refunded, the
conditions precedent prescribed (for the issuance of Additional Obligations) set forth in
Section 18 hereof shall be satisfied, and shall give effect to the refunding.
SECTION 20: Right to Issue Additional Priority Bonds - Right to Create Subordinate
Debt. The Corporation expressly reserves the right to issue Priority Bonds, without limitation as
to principal amount or complying with any terms and conditions contained in this Resolution, but
subject to any terms, conditions or restrictions applicable thereto under law or otherwise.
Furthermore, except as may be limited by a Supplemental Resolution, the Corporation hereby
expressly retains the right to issue or create obligations payable from and secured by a lien on
all or any part of the Pledged Revenues for any lawful purpose without complying with the
provisions of Section 18 or 19 hereof, provided the pledge and the lien securing the payment of
such obligations is junior and subordinate to the lien and pledge securing the payment of the
Parity Obligations.
SECTION 21: Confirmation and Levy of Sales Tax. (a) The Board hereby represents
the City has duly complied with the provisions of the Act for the levy of the Sales Tax at the rate
voted at the election held by and within the City on November 2, 1993, and such Sales Tax is
being imposed within the corporate limits of the City and the receipts of such Sales Tax are
being remitted to the City by the Comptroller of Public Accounts on a monthly basis.
(b) While any Bonds are Outstanding, the Corporation covenants, agrees and
warrants to take and pursue all action permissible to cause the Sales Tax, at said rate or at a
higher rate if legally permitted, to be levied and collected continuously, in the manner and to the
maximum extent permitted by law, and to cause no reduction, abatement or exemption in the
Sales Tax or rate of tax below the rate stated, confirmed and ordered in subsection (a) of this
Section to be ordered or permitted while any Bonds shall remain Outstanding.
45031282 23
(c) If hereafter authorized by law to apply, impose and levy the Sales Tax on any
taxable items or transactions that are not subject to the Sales Tax on the date of the adoption
hereof, to the extent it legally may do so, the Corporation agrees to use its best efforts to cause
the City to take such action as may be required to subject such taxable items or transactions to
the Sales Tax.
(d) The Corporation agrees to take and pursue all action legally permissible to cause
the Sales Tax to be collected and remitted and deposited as herein required and as required by
Section 4B of the Act, at the earliest and most frequent times permitted by law.
(e) The Corporation agrees to use its best efforts to cause the City to comply with
Section 4B of the Act and shall cause the Gross Sales Tax Revenues to be deposited to the
credit of the Pledged Revenue Fund in their entirety immediately upon receipt by the City. In
the alternative and if legally authorized, the Corporation shall, by appropriate notice, direction,
request or other legal method, use its good -faith efforts to cause the Comptroller of Public
Accounts of the State of Texas (the "Comptroller") to pay all Gross Sales Tax Revenues directly
to the Corporation for deposit to the Pledged Revenue Fund.
SECTION 22: Records and Accounts. The Corporation hereby covenants and agrees
that while any of the Bonds are Outstanding, it will keep and maintain complete records and
accounts in accordance with generally accepted accounting principles, and following the close
of each Fiscal Year, it will cause an audit of such books and accounts to be made by an
independent firm of certified public accountants. Each such audit, in addition to whatever other
matters may be thought proper by the accountant, shall particularly include the following:
(1) A statement in reasonable detail regarding the receipt and
sir disbursement of the Pledged Revenues for such Fiscal Year; and
(2) A balance sheet for thes Corporation as of the end of such Fiscal
Year.
Such annual audit of the records and accounts of the Corporation shall be in the form of
a report and be accompanied by an opinion of the accountant to the effect that such
examination was made in accordance with generally accepted auditing standards and contain a
statement to the effect that in the course of making the examination necessary for the report
and opinion, the accountant obtained no knowledge of any default. of the Corporation on the
Bonds or in the fulfillment of any of the terms, covenants or provisions of this Resolution, or
under any other evidence of indebtedness, or of any event which, with notice or lapse of time, or
both, would constitute a failure of the Corporation to comply with the provisions of this
Resolution or if, in the opinion of the accountants, any such failure to comply with a covenant or
agreement hereof, a statement as to the nature and status thereof shall be included.
Copies of each annual audit report shall be furnished upon written request, to any
Holders of any of said Bonds. The audits herein required shall be made within 120 days
following the close of each Fiscal Year insofar as is possible.
The Holders of any Bonds or any duly authorized agent or agents of such Holders shall
have the right to inspect such records, accounts and data of the Corporation during regular
business hours.
45031282 24
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SECTION 23: Representations as to Security for the Bonds. (a) The Corporation
represents and warrants that, except for the Priority Bonds and the Parity Obligations, the
Pledged Revenues are and will be and remain free and clear of any pledge, lien, charge or
encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge and lien
created in or authorized by this Resolution except as expressly provided herein.
(b) The Bonds and the provisions of this Resolution are and will be the valid and
legally enforceable obligations of the Corporation in accordance with their terms and the terms
of this Resolution, subject only to any applicable bankruptcy or insolvency laws or to any laws
affecting creditors rights generally.
(c) The Corporation shall at all times, to the extent permitted by law, defend,
preserve and protect the pledge of the Pledged Revenues and all the rights of the Holders
against all claims and demands of all persons whomsoever.
(d) The Corporation will take, and use its best efforts to cause the City to take, all
steps reasonably necessary and appropriate to collect all delinquencies in the collection of the
Sales Tax to the fullest extent permitted by the Act.
(e) The provisions, covenants, pledge and lien on and against the Pledged
Revenues, as herein set forth, are established and shall be for the equal benefit, protection and
security of the owners and holders of Parity Obligations without distinction as to priority and
rights under this Resolution.
(f) The Parity Obligations shall constitute special obligations of the Corporation,
payable solely from, and equally and ratably secured by a parity pledge of and lien on, the
Pledged Revenues, and not from any other revenues, properties or income of the Corporation;
such pledge of and lien on the Pledged Revenues being junior and subordinate to the pledge of
and lien on the Pledged Revenues securing the payment of the Priority Bonds. The Bonds may
not be paid in whole or in part from any property taxes raised or to be raised by the City and
shall not constitute debts or obligations of the State or of the City, and the Holders, shall never
have the right to demand payment out of any funds raised or to be raised by any system of ad
valorem taxation.
SECTION 24:.Satisfaction of Obligation of Corporation. If the Corporation shall pay or
cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if
any, and interest on the Bonds, at the times and in the manner stipulated in this Resolution,
then the pledge of the Pledged Revenues under this Resolution and all other obligations of the
Corporation to the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Bonds or any principal amount(s) shall be deemed to have been paid within the meaning
and with the effect expressed above in this Section when (i) money sufficient to pay in full such
Bonds at maturity or to the redemption date therefor, together with all interest due thereon, shall
have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an
authorized escrow agent, or (ii) Government Obligations shall have been irrevocably deposited
in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government
Obligations have been certified by an independent accounting firm to mature as to principal and
interest in such amounts and at such times as will insure the availability, without reinvestment,
of sufficient money, together with any moneys deposited therewith, if any, to pay when due the
Bonds on the Stated Maturities thereof or (if notice of redemption has been duly given or waived
or if irrevocable arrangements therefor accepted to the Paying Agent/Registrar have been
45031282 25
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made) the redemption date thereof. The Corporation covenants that no deposit of moneys or
Government Obligations will be made under this Section and no use made of any such deposit
which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of
Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted
pursuant thereto.
Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow
agent, and all income from Government Obligations held in trust by the Paying Agent/Registrar,
or an authorized escrow agent, pursuant to this Section in excess of the amount required for the
payment of the Bonds shall be remitted to the Corporation or deposited as directed by the
Corporation. Furthermore, any money held by the Paying Agent/Registrar for the payment of
the principal of and interest on the Bonds and remaining unclaimed for a period of three (3)
years after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were
deposited and are held in trust to pay shall, upon the request of the Corporation, be remitted to
the Corporation against a written receipt therefor. Notwithstanding the above and foregoing,
any remittance of funds from the Paying Agent/Registrar to the Corporation shall be subject to
any applicable unclaimed property laws of the State of Texas.
SECTION 25: Resolution a Contract - Amendments. This Resolution shall constitute a
contract with the Holders from time to time, be binding on the Corporation, and shall not be
amended or repealed by the Corporation while any Bond remains Outstanding except as
permitted in this Section. The Corporation, may, without the consent of or notice to any
Holders, from time to time and at any time, amend this Resolution in any manner not detrimental
to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal
defect or omission herein. In addition, the Corporation may, with the written consent from the
owners holding a majority in aggregate principal amount of the Parity Obligations then
14r Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Resolution;
provided that, without the written consent of all Holders of Outstanding Bonds effected, no such
amendment, addition, or rescission shall (1)extend the time or times of payment of the
principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof,
the redemption price therefor, or the rate of interest thereon, or in any other way modify the
terms of payment of the principal of, premium, if any, or interest on the Bonds, (2) give any
preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of
Bonds or Parity Obligations, as the case may be, required to be held for consent to any such
amendment, addition, or rescission.
SECTION 26: Mutilated - Destroyed - Lost and Stolen Bonds. In case any Bond shall
be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a
replacement Bond of like form and tenor, and in the same denomination and bearing a number
not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in
lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the
Corporation and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of
evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such
Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying
Agent/Registrar of indemnification in an amount satisfactory to hold the Corporation and the
Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity
and with the preparation, execution and delivery of a replacement Bond shall be borne by the
Holder of the Bond mutilated, or destroyed, lost or stolen.
Ef, Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost,
or stolen Bond shall constitute a replacement of the prior obligation of the Corporation, whether
45031282 26
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or not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Resolution equally and ratably with all other
•�' Outstanding Bonds.
SECTION 27: Covenants Regarding Tax -Exempt Status.
(a) Definitions. When used in this Section 27, the following terms have the following
meanings:
f`
I
"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 Sectiort 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 Corporation shall not use, permit
the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Bond to become includable in the gross income, as defined in section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the Corporation receives a written opinion of counsel nationally recognized in
the field of municipal bond law to the effect that failure to comply with such covenant will not
45031282
27
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adversely affect the exemption from federal income tax of the interest on any Bond, the
IL Corporation shall comply with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. The Bonds are being issued to finance the
costs of the Projects for and on behalf of the City, a political subdivision of the State of Texas
and, in connection therewith, the City and the Corporation will execute an agreement relating to
the ownership, operation and maintenance of the Projects while the Bonds are outstanding and
unpaid, which agreement provides that, except as permitted by section 141 of the Code and the
Regulations and rulings thereunder, the Projects shall at all times prior to the last Stated
Maturity of Bonds:
(1) be exclusively owned, operated and maintained by the City, and
prohibits the City from using or permitting the use of such Gross Proceeds or any
property acquired, constructed or improved with such Gross Proceeds in any
activity carried on by any person or entity other than a state or local government,
unless such use is solely as a member of the general public; and
(2) prohibits the City from directly or indirectly imposing or accepting
any charge or other payment for use of Gross Proceeds of the Bonds or for any
property the acquisition, construction or improvement of which is to be financed
or refinanced directly or indirectly with such Gross Proceeds, 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 Corporation shall not use Gross Proceeds of the
Bonds to make or finance loans to any person or entity other than a state or local government.
For purposes of the foregoing covenant, such Gross Proceeds are considered to be 'loaned" to
a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the Corporation shall not at any time prior
to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or
with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of
the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of
the Code and the Regulations and rulings thereunder, the Corporation shall not take or omit to
take any action which would cause the Bonds to be federally guaranteed within the meaning of
section 149(b) of the Code and the Regulations and rulings thereunder.
45031282 28
(g) Information Report. The Corporation shall timely file the information required by
section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other
form and in such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section
148(f) of the Code and the Regulations and rulings thereunder:
(1) The Corporation and the City shall account for all Gross Proceeds
(including all receipts, expenditures and investments thereof) on its books of
account separately and apart from all other funds (and receipts, expenditures
and investments thereof) and shall retain all records of accounting for at least six
years after the day on which the last Outstanding Bond is discharged. However,
to the extent permitted by law, the Corporation may commingle Gross Proceeds
of the Bonds with other money of the Corporation, provided that the Corporation
separately accounts for each receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
(2) Not less frequently than each Computation Date, the Corporation
shall calculate the Rebate Amount in accordance with rules set forth in section
148(f) of the Code and the Regulations and rulings thereunder. The Corporation
shall maintain such calculations with its official transcript of proceedings relating
to the issuance of the Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the Corporation shall pay to the United States out of the Bond
Fund or its general fund, as permitted by applicable Texas statute, regulation or
opinion of the Attorney General of the State of Texas, the amount that when
added to the future value of previous rebate payments made for the Bonds
equals (i) in the case of a Final Computation Date as defined in Section 1.148-
3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount
on such date; and (ii) in the case of any other Computation Date, ninety percent
(90%) of the Rebate Amount on such date. In all cases, the rebate payments
shall be made at the times, in the installments, to the place and in the manner as
is or may be required by section 148(f) of the Code and the Regulations and
rulings thereunder, and shall be accompanied by Form 8038-T or such other
forms and information as is or may be required by Section 148(f) of the Code and
the Regulations and rulings thereunder.
(4) The Corporation shall exercise reasonable diligence to assure that
no errors are made in the calculations and payments required by paragraphs (2)
and (3), and if an error is made, to discover and promptly correct such error
within a reasonable amount of time thereafter (and in all events within one
hundred eighty (180) days after discovery of the error), including payment to the
United States of any additional Rebate Amount owed to it, interest thereon, and
any penalty imposed under Section 1.148-3(h) of the Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the Corporation shall not, at any time
45031282
29
IF prior to the earlier of the Stated Maturity or final payment of the Bonds, enter into any
transaction that reduces the amount required to be paid to the United States pursuant to
Subsection (h) of this Section because such transaction results in a smaller profit or a larger
loss than would have resulted if the transaction had been at arm's length and had the Yield of
the Bonds not been relevant to either party.
0) Elections. The Corporation hereby directs and authorizes the President and
Secretary of the Board of Directors, or the Treasurer for the Corporation, individually or jointly,
to make elections permitted or required pursuant to the provisions of the Code or the
Regulations, as they deem necessary or appropriate in connection with the Bonds, in the
Certificate as to Tax Exemption or similar or other appropriate certificate, form or document.
SECTION 28: Notices to Holders - Waiver. Wherever this Resolution provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to
the address of each Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any 'defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Bonds. Where this Resolution provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
," SECTION 29: Cancellation. All Bonds surrendered for payment, redemption, transfer or
exchange, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if
surrendered to the Corporation, shall be delivered to the Paying Agent/Registrar and, if not
already canceled, shall be promptly canceled by the Paying Agent/Registrar. The Corporation
may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously
certified or registered and delivered which the Corporation may have acquired in any manner
whatsoever, and all Bonds so delivered shall be promptly canceled by the Paying
Agent/Registrar. All canceled Bonds held by the Paying Agent/Registrar shall be destroyed as
directed by the Corporation.
SECTION 30: Sale of Bonds - Execution of Purchase Contract. The Bonds authorized
by this Resolution are hereby sold to J. P. Morgan Securities, Inc. (herein referred to as the
"Purchasers") in accordance with a Bond Purchase Contract (the "Contract"), dated May 15,
2001, attached hereto as Exhibit C and incorporated herein by reference as a part of this
Resolution for all purposes. The President of the Board of Directors is hereby authorized and
directed to execute said Contract for and on behalf of the Corporation and as the act and deed
of this Board, and in regard to the approval and execution of the Contract, the Board hereby
finds, determines and declares that the representations, warranties and agreements of the
Corporation contained therein are true and correct in all material respects and shall be honored
and performed by the City.
SECTION 31: Approval and Execution of Financing/Use Agreement with the City. The
"Financing/Use Agreement" (the "Agreement") by and between the Corporation and the City,
attached hereto as Exhibit D and incorporated herein by reference as a part of this Resolution
for all purposes, is hereby approved as to form and content, and such Agreement in
45031282 30
substantially the form and substance attached hereto, together with such changes or revisions
as may be necessary to accomplish the financing or benefit the Corporation, is hereby
authorized to be executed by the President and Secretary of the Board of Directors of the
Corporation and as the act and deed of this Board; and such Agreement as executed by said
officials shall be deemed approved by the Board and constitute the Agreement herein approved.
SECTION 32: Official Statement. The use of the Preliminary 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 (together with such changes approved by
the President, Vice President or Secretary of the Board of Directors, or Treasurer of the
Corporation, any one or more of said officials), shall be and is hereby in all respects approved
and the Purchasers are hereby authorized to use and distribute said final Official Statement,
dated May 15, 2001, in the reoffering, sale and delivery of the Bonds to the public. The
President and Secretary of the Board of Directors of the Corporation are further authorized and
directed to manually execute and deliver for and on behalf of the Corporation copies of said
Official Statement in final form as may be required by the Purchasers, and such final Official
Statement in the form and content manually executed by said officials shall be deemed to be
approved by the Board of Directors and constitute the Official Statement authorized for
distribution and use by the Purchasers.
SECTION 33: Proceeds of Sale. The proceeds of sale of the Bonds, excluding the
accrued interest and premium, if any, received from the Purchasers and the amount being
deposited to the Reserve Fund, shall be deposited in a construction fund in accordance with the
Agreement. Pending expenditure for the Project, such proceeds of sale may be invested in
authorized investments in accordance with the provisions of V.T.C.A., Government Code,
%W Chapter 2256, including specifically guaranteed investment contracts permitted in V.T.C.A.,
Section 2256.015, et seq, and, subject to the provisions of Section 27(h) hereof, any
investment earnings realized shall be expended'for the Projects or deposited in the Bond Fund.
All surplus proceeds of sale of the Bonds, including investment earnings, remaining after
completion of the Projects and paying or making provision for the payment of the amounts owed
pursuant to Section 27(h)(2) hereof, together with the accrued interest and premium, if any,
received from the Purchasers, shall be deposited to the credit of the Bond Fund.
SECTION 34: 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.
SECTION 35: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Bonds shall be of no significance or effect as regards the legality
thereof and neither the Corporation nor attorneys approving said Bonds as to legality are to be
held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds.
SECTION 36: Control and Custody of Bonds. The President of the Board shall be and
is hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, and shall take and have charge and
control of the Initial Bond(s) pending the approval thereof by the Attorney General, the
45031282 31
registration thereof by the Comptroller of Public Accounts and the delivery thereof to the
Purchasers.
Furthermore, the President, Vice President or Secretary of the Board of Directors or the
Treasurer of the Corporation, any one or more of said officials, are hereby authorized and
directed to furnish and execute such documents and certifications relating to the Corporation
and the issuance of the Bonds, as may be necessary for the approval of the Attorney General,
registration by the Comptroller of Public Accounts and delivery of the Bonds to the initial
purchasers and, together with the Corporation's financial advisor, general counsel, bond
counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of
the Initial Bond(s) to the Purchasers and the initial exchange thereof for definitive Bonds.
SECTION 37: Benefits of Resolution. Nothing in this Resolution, expressed or implied,
is intended or shall be construed to confer upon any person other than the Corporation, the
Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or
by reason of this Resolution or any provision hereof, this Resolution and all its provisions being
intended to be and being for the sole and exclusive benefit of the Corporation, the Paying
Agent/Registrar and the Holders.
SECTION 38: Inconsistent Provisions. All orders or resolutions, or parts thereof, which
are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the
extent of such conflict and the provisions of this Resolution shall be and remain controlling as to
the matters contained herein.
SECTION 39: Governing Law. This Resolution shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 40: Severability. If any provision of this Resolution or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Resolution and the
application thereof to other circumstances shall nevertheless be valid, and the Board hereby
declares that this Resolution would have been enacted without such invalid provision.
SECTION 41: Construction of Terms. If appropriate in the context of this Resolution,
words of the singular number shall be considered to include the plural, words of the plural
number shall be considered to include the singular, and words of the masculine, feminine or
neuter gender shall be considered to include the other genders.
SECTION 42: Continuing Disclosure Undertaking. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
WSRB" 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.
45031282
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC' means the United States Securities and Exchange Commission.
32
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"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 Corporation 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, 2001) financial information and operating data with respect to the
Corporation of the general type included in the final Official Statement approved by Section 32
of this Resolution and described in Exhibit E hereto. Financial statements to be provided shall
be (1) prepared in accordance with the accounting principles described in Exhibit E hereto and
(2) audited, if the Corporation 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 Corporation shall provide unaudited financial statements for the applicable fiscal year to
each NRMSIR and any SID with the financial information and operating data and will file the
annual audit report when and if the same becomes available.
If the Corporation changes its fiscal year, it will notify each NRMSIR and Y fY any SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the
Corporation 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 Corporation shall notify any SID and either each
NRMSIR or the MSRB, in a timely manner, -of any of the following events with respect to the
Bonds, if such event is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial
difficulties;
4. Unscheduled draws on credit enhancements reflecting financial
difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the
Bonds;
7. Modifications to rights of holders of the Bonds;
8. Bond calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the
Bonds; and
11. Rating changes.
The Corporation shall notify any SID, in a timely manner, of any failure by the
Corporation to provide financial information or operating data in accordance with subsection (b)
of this Section by the time required by such Section.
45031282 33
(d) Limitations, Disclaimers, and Amendments. The Corporation shall be obligated
to observe and perform the covenants specified in this Section while, but only while, the
Corporation remains an "obligated person" with respect to the Bonds within the meaning of the
Rule, except that the Corporation in any event will give the notice required by subsection (c)
hereof of any Bond calls and defeasance that cause the Corporation 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 Corporation
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 Corporation'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 Corporation 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 CORPORATION BE LIABLE TO THE
HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY
BREACH BY THE CORPORATION, WHETHER NEGLIGENT,OR WITHOUT FAULT ON ITS
PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
rr PERFORMANCE.
No default by the Corporation in observing or performing its obligations under this
Section shall constitute a breach of or default under this Resolution for purposes of any other
provision of this Resolution.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Corporation under federal and state securities laws:
The provisions of this Section may be amended by the Corporation 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 Corporation, but only if (1)
the provisions of this Section, as so amended, would have permitted an underwriter to purchase
or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into
account any amendments or interpretations of the Rule to the date of such amendment, as well
as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate
principal amount (or any greater amount required by any other provision of this Resolution that
authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a
Person that is unaffiliated with the Corporation (such as nationally recognized bond counsel)
determines that such amendment will not materially impair the interests of the Holders and
beneficial owners of the Bonds. The provisions of this Section may also be amended from time
to time or repealed by the Corporation if the SEC amends or repeals the applicable provisions of
the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and
to the extent that reservation of the Corporation's right to do so would not prevent underwriters
of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such
45031282 34
offering. If the Corporation so amends the provisions of this Section, it shall include with any
amended financial information or operating data filed with each NRMSIR and SID pursuant to
subsection (b) of this Section an explanation, in narrative form, of the reasons for the
amendment and of the impact of any change in the type of financial information or operating
data so provided.
SECTION 43: Insurance. The Bonds have been sold with the principal of and interest
thereon being insured by Ambac Indemnity Corporation (hereinafter called "Ambac") pursuant to
a Municipal Bond Insurance Policy. In accordance with the terms and conditions applicable to
insurance provided by Ambac, the Corporation covenants and agrees that, in the event the
principal and interest due on the Bonds shall be paid by Ambac pursuant to the policy referred
to this Section, the assignment and pledge of all funds and all covenants, agreements and other
obligations of the Corporation to the Holders shall continue to exist and Ambac shall be
subrogated to the rights of such Holders; and furthermore, the Corporation covenants and
agrees that:
(a) Consent of Ambac where Holder Consent Required. Ambac shall be deemed
to be the holder of the Bonds insured by Ambac at all times for the purpose of the execution and
delivery of any amendment, change or modification of this Resolution or the initiation by Holders
of any action to be taken under this Resolution at the Holder's request, which under this
Resolution (or under such underlying documents requires the written approval or consent of or
can be initiated by the Holders of a majority (50% percent) in aggregate principal amount of the
Bonds at the time Outstanding.
(b) Defeasance. In the event that the principal and redemption price, if applicable,
and interest due on the Bonds shall be paid by Ambac pursuant to the policy referred to in this
Section, all covenants, agreements and other obligations of the Corporation to the Holders shall
continue to exist and Ambac shall be subrogated to the rights of such Holders.
(c) Notices to be Given to Ambac. While the Municipal Bond Guaranty Insurance
Policy is in effect, the Corporation shall furnish to Ambac:
(1) as soon as practicable after the filing thereof, a copy of any financial
statement of the Corporation and a copy of any audit and annual report of the
Corporation;
(2) a copy of any notice to be given to the registered owners of the
Bonds, including, without limitation, notice of any redemption or defeasance of
Bonds, and any certificate rendered pursuant to this Resolution relating to the
security for the Bonds; and
(3) such additional information as it may reasonably request.
The Corporation will permit Ambac to discuss the affairs, finances and accounts of the
Corporation, or any information Ambac may reasonably request regarding the security for the
Bonds with appropriate officers of the Corporation. The Corporation will permit Ambac to have
access to and make copies of all books and records relating to the Bonds at any reasonable
time.
(d) Consent of Ambac. Any provision of this Resolution expressly recognizing or
granting rights in or to Ambac may not be amended in any manner which affects the rights of
45031282 35
Ij
Ambac hereunder without the prior written consent of Ambac. Furthermore, anything in this
Resolution to the contrary notwithstanding, upon the occurrence and continuance of an event of
default, Ambac shall be entitled to control and direct the enforcement of all rights and remedies
granted to the Holders of the Bonds for the benefit of such Holders.
(e) Concerning the Bond Insurance Policy. As long as insurance for the Bonds shall
be in full force and effect, the Corporation agrees to comply with the following provisions:
(1) if five (5) days prior to an interest payment date for the Bonds the
Corporation determines that there will be insufficient funds in the Interest and
Sinking Fund to pay the principal of or interest on the Bonds on such interest
payment date, the Corporation shall so notify Ambac. Such notice shall specify
the amount of the anticipated deficiency, the Bonds to which such deficiency is
applicable and whether such Bonds will be deficient as to principal or interest, or
both.
(2) the Corporation shall, after giving notice to Ambac as provided in (1)
above, make available to Ambac and the United States Trust Company of New
York, as insurance trustee for Ambac, the registration books of the Corporation
maintained by the Paying Agent/Registrar, and all records relating to the funds
and accounts maintained under this Resolution.
(3) the Corporation shall cause the Paying Ag,ent/Registrar to provide
Ambac and the United States Trust Company of New York with a list of
registered owners of Bonds entitled to receive principal or interest payments from
Ambac under the terms of the Municipal Bond Insurance Policy, and shall cause
,. the Paying Agent/Registrar to make arrangements with United States Trust
Company of New York (i) to mail checks or drafts to the registered owners of
Bonds entitled to receive full or partial interest payments from Ambac, and (ii) to
pay principal upon Bonds surrendered to United States Trust Company of New
York by the registered owners of Bonds entitled to receive full or partial principal
r
payments from Ambac.
(4) the Corporation shall cause the Paying Agent/Registrar to notify, at
the time it provides notice to Ambac pursuant to (1) above, the registered owners
of Bonds entitled to receive the payment of principal or interest thereon from
Ambac (i) as to the fact of such entitlement, (ii) that Ambac will remit to them all
or a part of the interest payments next coming due, (iii) that should they be
entitled to receive full payment of principal from Ambac they must tender their
Bonds (along with a form of transfer of title thereto) for payment to United States
Trust Company of New York, as insurance trustee for Ambac, and not the Paying
Agent/ Registrar, and (iv) that should they be entitled to receive partial payment
of principal from Ambac they must tender their Bonds for payment thereon first to
the Paying Agent/Registrar, who shall note on such Bonds the portion of the
principal paid by the Paying Agent/Registrar, and then, along with a form of
transfer of title thereto, to Ambac, which will then pay the unpaid portion of
principal.
(5) Ambac shall, to the extent it makes a payment of principal of or
interest on Bonds, become subrogated to the rights of the recipients of such
payments in accordance with the terms of the Municipal Bond Insurance Policy,
45031282 36
k
and to evidence such subrogation (i) in the case of subrogation as to claims for
past due interest, the Corporation shall cause the Paying Agent/Registrar to note
Ambac's rights as subrogee on the registration books of the Corporation
maintained by the Paying Agent/Registrar upon receipt from Ambac of proof of
the payment of interest thereon to the registered owners of the Bonds, and (ii) in
the case of subrogation as to claims for past due principal, the Corporation shall
cause the Paying Agent/Registrar to note Ambac's rights as subrogee on the
registration books of. the Corporation maintained by the Paying Agent/ Registrar
upon surrender of the Bonds by the registered owners thereof together with proof
of the payment of principal thereof.
SECTION 44: Public Meeting. It is officially found, determined, and declared that the
meeting at which this Resolution is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Resolution, was given, all as required by V.T.C.A., Government Code, Chapter 551, as
amended.
SECTION 45: Effective Date. This Resolution shall be in force and effect from and
after its passage on tFse date shown below.
PASSED AND ADOPTED, this May 15, 2001.
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
President, Board of Directors
ATTEST:
Secretary, Board of Directors
(Corporation Seal)
L
45031282
37
G,XMIT A
11 PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of May 15, 2001 (this "Agreement"), by and between
the Southlake Parks Development Corporation (the "Issuer"), and The Chase Manhattan Bank,
a New York banking corporation organized and existing under the laws of the State of New York
and authorized to do business in the State of Texas (the "Bank"),
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its
Southlake Parks Development Corporation Sales Tax Subordinate Lien Revenue Bonds,
Series 2001" (the "Securities") in the aggregate principal amount of $4,690,000, which
Securities are scheduled to be delivered to the initial purchasers on or about June 14, 2001; 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
L14W APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof; all in
accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Bond Resolution".
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02. Compensation. As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Annex A attached hereto for the first year of this Agreement and thereafter the fees and
amounts set forth in the Bank's current fee schedule then in effect for services as Paying
Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days
prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the
following Fiscal Year.
a
45034319.1
H
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any
of the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which
the principal or any or all installments of interest, or both, are due and payable on
any Security which has become accelerated pursuant to the terms of the
Security.
"Bank Office" means the designated office of the Bank as indicated in
Section 3.01 hereof. The Bank will notify the Issuer in writing of any change in
location of the Bank Office.
"Bond Resolution" means the resolution, order, or ordinance of the
governing body of the Issuer pursuant to which the Securities are issued,
certified by the Secretary or any other officer of the Issuer and delivered to the
Bank.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30th.
"Holder" and "Security Holder" each means the Person in whose name a
Security is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order
signed in the name of the Issuer by the President, Vice President or Secretary of
the Board of Directors of Treasurer of the Corporation, any one or more of said
officials, and delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized
to be closed.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision of a government.
"Predecessor Securities" of any particular Security means every previous
Securityevidencing all or a portion of the same obligation as that evidenced by
such particular Security (and, for the purposes of this definition, any mutilated,
lost, destroyed, or stolen Security for which a replacement Security has been
registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the
Resolution).
45034319.1 2
TIT A
"Redemption Date" when used with respect to any Security to be
redeemed means the date fixed for such redemption pursuant to the terms of the
Bond Resolution.
"Responsible Officer" when used with respect to the Bank means the
Chairman or Vice -Chairman of the Board of Directors, the Chairman or
Vice -Chairman of the Executive Committee of the Board of Directors, the
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any
Trust Officer or Assistant Trust Officer, or any other officer of the Bank
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of
the Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the
principal of a Security is scheduled to be due and payable.
Section 2.02. Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties
and functions of this Agreement.
+rr ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the
Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity,
Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the
Bank at the following address: P. O. Box 2320, Dallas, Texas 75221-2320 or 1201 Main Street,
One Main Place, 18th Floor, Dallas, Texas 75201, Attention: Corporate Trust Services.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
each Security when due, by computing the amount of interest to be paid each Holder and
making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the
Record Date. All payments of principal and/or interest on the Securities to the registered
owners shall be accomplished (1) by the issuance of checks, payable to the registered owners,
drawn on the fiduciary account provided in Section 5.05 hereof, sent by United States mail, first
class, postage prepaid, to the address appearing on the Security Register or (2) by such other
method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and
expense.
Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal
Ei of and interest on the Securities at the dates specified in the Bond Resolution.
45034319.1
R
3
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register - Transfers and Exchanges. The Bank agrees to keep
and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and Bank may prescribe. All transfers, exchanges and replacement of
Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed
by an officer of a federal or state bank or a member of the National Association of Securities
Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly
authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re -registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in
not more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly
AW executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the
Paying Agent/Registrar.
Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use and reasonable care will be
exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less
than the care maintained by the Bank for debt securities of other governments or corporations
for which it serves as registrar, or that is maintained for its own securities.
Section 4.03. Form of Security Register. The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities
in accordance with the Bank's general practices and procedures in effect from time to time. The
Bank shall not be obligated to maintain such Security Register in any form other than those
which the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
'in the Security Register. The Issuer may also inspect the information contained in the Security
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank to provide an up-to-date listing or to convert the information into written form.
45034319.1 4
�X1�IBIT A
11
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 26 of the Bond Resolution, to deliver and
issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as
long as the same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may
execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in -lieu of and in substitution for such destroyed lost or
stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof
with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such
Security, and of the authenticity of the ownership thereof and {ii) the furnishing to the Bank of
indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All
expenses and charges associated with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or
destroyed, lost or stolen.
Section 4.07. Transaction Information► td-Issuer. The Bank will, within a reasonable time
after receipt of written request from the Issuer, furnish the Issuer information as to the Securities
it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of
any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu
of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof.
Section 5.02. Reliance on Documents, Etc (a) The Bank may conclusively
rely, as to the truth of the statements and correctness of the opinions expressed therein, on
certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing
45034319.1 5
4XIMT A
that repayment of such funds or adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine the ownership of any
Securities, but is protected in acting upon receipt of Securities containing an endorsement or
instruction of transfer or power of transfer which appears on its face to be signed by the Holder
or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts
or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note, security, or other paper or document supplied by
Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or
any opinion of counsel shall be full and complete authorization and protection with respect to
any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer
and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
„ w The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05. Moneys Held by Bank - Paying agent Account/Collateralization. A
paying agent 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 paying agent accounts to the extent such
money is not insured by the Federal Deposit Insurance Corporation. Payments made from such
account shall be made by check drawn on such account unless the owner of such Securities
shall, at its own expense and risk, request such other medium of payment.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal, premium (if any), or interest on any
Security and remaining unclaimed for three 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
45034319.1 6
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", which establishes
requirements for securities to be eligible for such type depository trust services, including, but
not limited to, requirements for the timeliness of payments and funds availability, transfer
turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6.02. Assignment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on page 9.
Section 6.04. Effect of Headings The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 6.05. Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
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.
45034319.1 7
Ldl"1T A
1A
Section 6.07. Benefits of Agreement Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement. This Agreement and the Bond Resolution constitute
the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the
Bond Resolution shall govern.
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one
and the same Agreement.
Section 6.10. Termination. This Agreement will terminate (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (60) days written notice; provided, however, an
early termination of this Agreement by either party shall not be effective until (a) a successor
Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and
(b) notice given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an
early termination of this Agreement shall not occur at any time which would disrupt, delay or
otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
law the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force
and effect following the termination of this Agreement.
Section 6.11. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
45034319.1 8
Pr AO
rq
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
THE CHASE MANHATTAN BANK
BY
Title:
[SEAL]
Address:
Attest: 600 Travis, Suite 1150
Houston, Texas 77002
Title:
(CORPORATION SEAL)
Attest:
Secretary, Board of Directors
45034319.1
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
President, Board of Directors
Address:
667 N. Carroll Avenue
Southlake, Texas 76092
9
ENMIT
11
PT D
A
R
FINANCING/USE AGREEMENT
This Financing/Use Agreement (this "Agreement') is made to be effective as of the 151h
day of May, 2001, by and between the City of Southlake, Texas, a duly incorporated and
existing municipal corporation and political subdivision of the State of Texas (the "City") and the
Southlake Parks Development Corporation, a non-profit industrial development corporation
organized and existing under the laws of the State of Texas, including Vernon's Ann. Civ. St.,
Section 4B of Article 5190.6, (the "Corporation")
RECITALS
WHEREAS, the Corporation on behalf of the City is to finance the purchase of land and
making improvements thereto for neighborhood parks and making additional improvements to
existing park land, including related road and streets improvements that enhance such park
facilities (collectively, the "Project"); and
WHEREAS, such financing contemplates the issuance and sale of the Corporation's tax
exempt bonds in the principal amount of $4,690,000, and the proceeds of sale are to be used by
the City to design and construct the Project; and
WHEREAS, the City will have full responsibility for the design and construction of the
Project and the Corporation shall have no duties or responsibilities with respect to the Project
other than to provide for the financing of its costs;
AGREEMENT
1. Financing of Project: For and in consideration of the City's covenants and
"�'r agreements herein contained and subject to the terms contained herein, the Corporation hereby
agrees to issue a series of obligations to, be known as "Southlake Parks Development
Corporation Sales Tax Subordinate Lien Revenue Bonds, Series 2001 ", hereinafter called the
"Bonds", and deposit proceeds of sale of the Bonds (less amounts to pay costs of issuance,
municipal bond insurance premium, surety bond insurance premium, and accrued interest) to
the credit of a construction fund or account designated by the City, and the City hereby agrees
and covenants that the proceeds of sale deposited to the credit of such construction account
shall be used solely to pay the costs of the Project.
2. Use of Project. Until all the Bonds have been fully paid, discharged and retired, the
upkeep and maintenance of the Project will be the responsibility of the City and the Corporation
shall have no responsibility with respect to the operation, upkeep and maintenance of the
Project.
3. Recognition of Tax Exempt Financing. The City hereby acknowledges and
recognizes that the Bonds are being issued as "state or local bonds" under and pursuant to
section 103(a) of the Internal Revenue Code of 1986, as amended, and the City hereby
covenants and agrees with respect to the use of proceeds of sale of the Bonds and the use of
the Project as follows:
(a) Definitions. When used in this Section, the following terms have the following
meanings:
45034291.1 1
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"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
4W 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
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
45034291.1 2
N
indirectly with Gross Proceeds of the Bonds, and not use or permit the use of
such Gross Proceeds (including all contractual arrangements with terms different
than those applicable to the general public) or any property acquired, constructed
or improved with such Gross Proceeds in any activity carried on by any person or
entity (including the United States or any agency, department and instrumentality
thereof) other than a state or local government, unless such use is solely as a
member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Bonds or any property the acquisition, construction or improvement of which is to
be financed or refinanced directly or indirectly with such Gross Proceeds, 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
+err which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. - Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment
(or use Gross Proceeds to replace money so invested), if as a result of such investment the
Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money
replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed within the meaning of section
149(b) of the Code and the Regulations and rulings thereunder.
(g) Payment of Rebatable Arbitrage. Except to the extent otherwise provided in
section 148(f) of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and
apart from all other funds (and receipts, expenditures and investments thereof)
and shall retain all records of accounting for at least six years after the day on
which the last Outstanding Bond is discharged. However, to the extent permitted
by law, the City may commingle Gross Proceeds of the Bonds with other money
of the City, provided that the City separately accounts for each receipt and
expenditure of Gross Proceeds and the obligations acquired therewith.
45034291.1
3
(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 use 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 remit to the Corporation for payment to the United States
the amount described in paragraph (g)(2) above and the amount described in
paragraph (g)(4) below, at the times, in the manner and accompanied by such
forms or other 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 paragraph (g)(2), and if
an error is made, to discover and promptly correct such error within a reasonable
amount of time thereafter (and in all events within one hundred eighty (180) days
after discovery of the error), including the amount remitted to the Corporation for
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.
4. Receipt and Transfer of Proceeds of Sales Tax. The City agrees, in cooperation with
1%W the Corporation, to take such actions as are required to cause the "Gross Sales Tax Revenues"
(as such term is defined in the resolution authorizing the issuance of the Bonds) received from
the Comptroller of Public Accounts of the State of Texas for and on behalf of the Corporation to
be transferred and deposited immediately upon receipt by the City to the credit of the banking or
monetary fund maintained at the depository designated by the Corporation and known on the
books and records of the Corporation as the "Pledged Revenue Fund".
5. Modifications. This Agreement shall not be changed orally, and no executory
agreement shall be effective to waive, change, modify or discharge this Agreement in whole or
in part unless such executory agreement is in writing and is signed by the parties against whom
enforcement of any waiver, change, modification or discharge is sought.
6. Entire Agreement. This Agreement, including the Exhibits, contains the entire
agreement between the parties pertaining to the subject matter hereof and fully supersedes all
prior agreements and understandings between the parties pertaining to such subject matter.
7. Counterparts. This Agreement may be executed in several counterparts, and all
such executed counterparts shall constitute the same agreement. It shall be necessary to
account for only one such counterpart in proving this Agreement.
8. Severabili . If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall
" nonetheless remain in full force and effect.
i�
45034291.1 4
I
1:11i _4_
9. Applicable Law. This Agreement shall in all respects be governed by, and
construed in accordance with, the substantive federal laws of the United States and the laws of
the State of Texas.
10. Captions. The section headings appearing in this Agreement are for
convenience of reference only and are not intended, to any extent and for any purpose, to limit
or define the text of any section or any subsection hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date and year first above written.
ATTEST:
Secretary, Board of Directors
(Corporation Seal)
ATTEST:
City Secretary
(City Seal)
45034291.1
5
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
President, Board of Directors
CITY OF SOUTHLAKE, TEXAS
Mayor
Exhibit E
to
Resolution
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 42 of this Resolution.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below:
1. The financial statements of the Corporation appended to the
Official Statement as Appendix B, but for the most recently concluded fiscal year.
2. The information in Tables 1 through 5 of the Official Statement.
Accounting Principles
The accounting principles referred to in such Section are the generally accepted
accounting principles as applicable to governmental units as prescribed by The Government
Accounting Standards Board.
45031282
E-1
f�
RESOLUTION NO. 01-02
A RESOLUTION authorizing the issuance of "SOUTHLAKE PARKS
DEVELOPMENT CORPORATION SALES TAX SUBORDINATE LIEN
REVENUE BONDS, SERIES 2001"; pledging certain "Pledged
Revenues" of the Corporation, including "Gross Sales Tax Revenues", to
the payment of the principal of and interest on said Bonds and enacting
other provisions incident and related to the issuance, payment, security
and delivery of said bonds, including the approval and execution of a
Paying Agent/Registrar Agreement, a Purchase Contract and a
Financing/Use Agreement with the City, resolving other matters incident
and related to the issuance and sale of the Bonds, including the approval
and distribution of an Official Statement; and providing an effective date.
WHEREAS, the Board of Directors of the Southlake Parks Development Corporation
(the "Corporation") hereby finds and determines that bonds of the Corporation in the principal
amount of $4,690,000 should be issued and sold at this time to finance the costs of purchasing
land and making improvements thereto for neighborhood parks and making additional
improvements to existing park land, including related road and streets improvements that
enhance such park facilities (the "Projects"); and
WHEREAS, in accordance with a "Notice of Public Hearing Relating to Southlake Parks
Development Corporation Projects" duly published on April 18, 2001, in the Fort Worth Star -
Telegram, a newspaper of general circulation in the City of Southlake, Texas, a public hearing
was duly held and conducted on the date hereof prior to the adoption of this resolution by the
Board of Directors on the Corporation's intention to undertake and spend funds on said
.r% Projects; and
WHEREAS, the Board of Directors has further determined and hereby finds that the
Projects to be financed by the issuance of the bonds are for and on behalf of the City of
Southlake, Texas, and the principal amount of such bonds and other obligations of the
Corporation payable in whole or in part from the "Gross Sales Tax Revenues" (hereinafter
defined), together with the amount of the costs of other projects (other than such bonds and
other obligations) for which payments to be made in cash directly from such "Gross Sales Tax
Revenues" do not, in the aggregate, exceed $135,000,000; and
WHEREAS, the Board of Directors further finds and determines that the bonds herein
authorized should be payable from a lien on and pledge of the Pledged Revenues (as defined
herein) junior and subordinate to the lien on and pledge of such Pledged Revenues securing the
payment of the Priority Bonds (hereinafter identified and defined); now, therefore,
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE SOUTHLAKE PARKS
DEVELOPMENT CORPORATION:
SECTION 1: Authorization - Designation - Principal Amount - Purpose. Bonds of the
Corporation shall be and are hereby authorized to be issued in the aggregate principal amount
of $4,690,000 to be designated and bear the title "SOUTHLAKE PARKS DEVELOPMENT
CORPORATION SALES TAX SUBORDINATE LIEN REVENUE BONDS, SERIES 2001",
hereinafter referred to as the "Bonds" to finance the costs of purchasing land and making
improvements thereto for neighborhood parks and making additional improvements to existing
kw park land, including related road and streets improvements that enhance such park facilities, in
45035982.1
Ll
conformity with the Constitution and laws of the State of Texas, including Vernon's Ann. Civ.
Stat., Section 4B of Article 5190.6.
SECTION 2: Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Date. The Bonds shall be issued as fully registered obligations, without coupons,
shall be dated May 15, 2001 (the "Issue Date") and 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 annually on August 15, 2031 (the "Stated
Maturity") and bear interest at the rate of 5.60% per annum rates.
The Bonds shall bear interest on the unpaid principal amounts from the Issue Date at the
per annum rates shown above (calculated on the basis of a 360-day year of twelve 30-day
months). Interest on the Bonds shall be payable on February 15 and August 15 in each year,
commencing August 15, 2001.
SECTION 3: Terms of Payment - Paying Agent/Registrar. The principal of, and the
interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be
payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders")
appearing on the registration and transfer books maintained by the Paying Agent/Registrar and
the payment thereof shall be in any coin or currency of the United States of America, which at
the time of payment is legal tender for the payment of public and private debts, and shall be
without exchange or collection charges to the Holders.
The selection and appointment of The Chase Manhattan Bank, as Paying
Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to
the registration, payment, exchange and transfer of the Bonds (the "Security Register') shall at
40, all times be kept and maintained on behalf of the Corporation by the Paying Agent/Registrar, all
as provided herein, in accordance with the terms and provisions of a "Paying Agent/Registrar
Agreement", substantially in the form attached hereto as Exhibit A and such reasonable rules
and regulations as the Paying Agent/Registrar and the Corporation may prescribe. The
President and Secretary of the Board of Directors are hereby authorized to execute and deliver
such Agreement in connection with the delivery of the Bonds. The Corporation covenants to
maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid in full and
discharged. Any successor Paying Agent/Registrar shall be a bank, trust company, financial
institution or other entity qualified and authorized to serve in such capacity and perform the
duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar
for the Bonds, the Corporation agrees to promptly cause a written notice to be sent to the
Holder affected by United States Mail, first class postage prepaid, which notice shall identify and
give the address of the new Paying Agent/Registrar.
Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities
or upon their earlier redemption, only upon presentation and surrender of the Bonds to the
Paying Agent/Registrar at its principal offices in Dallas, Texas (the "Designated
Payment/Transfer Office"). Interest on the Bonds shall be paid to the Holders whose name
appear in the Security Register at the close of business on the Record Date (the last business
day of the month next preceding each interest payment date) and shall be paid by the Paying
Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address
of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for
the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal
holiday, or a day when banking institutions in the city where the Designated Payment/Transfer
45035982.1 2
H
Office of the Paying Agent/Registrar is located is authorized by law or executive order to close,
then the date for such payment shall be the next succeeding day which is not such a Saturday,
Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on
such date shall have the same force and effect as if made on the original date payment was
due.
In the event of a non-payment of interest on one or more maturities on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment
for such maturity or maturities (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from
the Corporation. Notice of the Special Record Date and of the scheduled payment date of the
past due interest (which shall be 15 days after the Special Record Date) shall be sent at least
five (5) business days prior to the Special Record Date by United States Mail, first class postage
prepaid, to the address of each Holder of such maturity or maturities appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
SECTION 4: Redemption. (a) Optional Redemption. The Bonds shall be subject to
redemption prior to maturity, at the option of the Corporation, 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 February 15, 2011 or on any date thereafter at the redemption
price of par plus accrued interest to the date of redemption.
At least forty-five (45) days prior to a date set for the redemption of Bonds (unless a
shorter notification period shall be satisfactory to the Paying Agent/Registrar), the Corporation
shall notify the Paying Agent/Registrar of its decision to exercise the right to redeem Bonds, the
40, principal amount of each Stated Maturity to be redeemed, and the date set for the redemption
thereof. The decision of the Corporation to exercise the right to redeem Bonds shall be entered
in the minutes of the governing body of the Corporation.
(b) Mandatory Redemption. The Bonds shall be subject to mandatory redemption
prior to maturity at the redemption price of par and accrued interest to the date of redemption on
the respective dates and in principal amounts as follows:
Redemption Date Principal Amount
August 15, 2025
$560,000
August 15, 2026
590,000
August 15, 2027
620,000
August 15, 2028
August 15, 2029
660,000
695,000
August 15, 2030
730,000
Approximately forty-five (45) days prior to each mandatory redemption date for the
Bonds, the Paying Agent/Registrar shall select by lot the numbers of the Bonds to be redeemed
on the next following August 15 from moneys set aside for that purpose in the Bond Fund (as
hereinafter defined). Any Bonds not selected for prior redemption shall be paid on the date of
their Stated Maturity.
The principal amount of the Bonds required to be redeemed pursuant to the operation of
such mandatory redemption provisions may be reduced, at the option of the Corporation, by the
kaw
principal amount of Bonds which, at least 50 days prior to the mandatory redemption date, (1)
45035982.1 3
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shall have been acquired by the Corporation at a price not exceeding the principal amount of
such Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying
Agent/Registrar for cancellation 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 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 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 Corporation and at the Corporation's expense, to each Holder of a
Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security
Register at the close of business on the business day next preceding the date of mailing such
notice, and any notice of redemption so mailed shall be conclusively presumed to have been
duly given irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii)
identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall
become due and payable on the redemption date specified, and the interest thereon, or on the
portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the
s redemption date, and (v) specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer
Office of the Paying Agent/ Registrar only upon presentation and surrender thereof by the
Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption
and notice of redemption thereof has been duly given or waived as herein provided, such Bond
(or the principal amount thereof to be redeemed) shall become due and payable, and interest
thereon shall cease to accrue from and after the redemption date therefor, provided moneys
sufficient for the payment of such Bonds (or of the principal amount thereof to be redeemed) at
the then applicable redemption price are held for the purpose of such payment by the Paying
Agent/Registrar.
SECTION 5: Registration - Transfer - Exchange of Bonds - Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each registered owner of the Bonds issued under and pursuant to the provisions of
this Resolution. Any Bond may, in accordance with its terms and the terms hereof, be
transferred or exchanged for Bonds of other authorized denominations upon the Security
Register by the Holder, in person or by his duly authorized agent, upon surrender of such Bond
to the Designated Payment/Transfer Office of the Paying Agent/Registrar for cancellation,
accompanied by a written instrument of transfer or request for exchange duly executed by the
Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar.
Upon surrender for transfer of a Bond at the Designated Payment/Transfer Office of the
Paying Agent/Registrar, one or more new certificates evidencing the Bonds, in authorized
denominations, of like Stated Maturity and of a like aggregate principal amount as the Bond or
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45035982.1 4
i
Bonds surrender for transfer shall be registered and issued to the assignee or transferee of the
previous Holders.
At the option of the Holder, Bonds may be exchanged for other Bonds of authorized
denominations and having the same Stated Maturity, bearing the same rate of interest and of
like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the
Bonds to be exchanged at the Designated Payment/Transfer Office of the Paying
Agent/Registrar. Whenever any Bonds are surrendered for exchange, the Paying
Agent/Registrar shall register and deliver new printed certificates evidencing the Bonds,
executed on behalf of, and furnished by, the Corporation, to the Holder requesting the
exchange.
All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the
Designated Payment/Transfer Office of the Paying Agent/Registrar, or sent by United States
Mail, first class postage prepaid, to the Holder and, upon the delivery thereof, the same shall be
valid obligations of the Corporation, evidencing the same obligation to pay, and entitled to the
same benefits under this Resolution, as the Bonds surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereof
are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be,
44, 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 26 hereof and such new
replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost,
destroyed, or stolen Bond.
SECTION 6: Book -Entry Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and
transfer/exchange of the Bonds, the Corporation hereby approves and authorizes the use of
"Book -Entry Only" securities clearance, settlement and transfer system provided by The
Depository Trust Company (DTC), a limited purpose trust company organized under the laws of
the State of New York, in accordance with the operational arrangements referenced in the
Blanket Issuer Letter of Representation, by and between the Corporation and DTC (the
"Depository Agreement').
Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be
deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants").
While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on
the Security Register for all purposes, including payment and notices, shall be Cede & Co., as
nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each
Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants.
In the event DTC determines to discontinue serving as securities depository for the
Bonds or otherwise ceases to provide book -entry clearance and settlement of securities
45035982.1 5
transactions in general or the Corporation determines that DTC is incapable of properly
discharging its duties as securities depository for the Bonds, the Corporation covenants and
agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide
for the Bond certificates to be issued and delivered to DTC Participants and Beneficial Owners,
as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and
exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of
such Bonds shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof.
SECTION 7: Execution - Registration. The Bonds shall be executed on behalf of the
Corporation by the President of the Board of Directors under its seal reproduced or impressed
thereon and attested by the Secretary of the Board of Directors of the Corporation. The
signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual
or facsimile signatures of individuals who are or were the proper officers of the Corporation on
the Issue Date shall be deemed to be duly executed on behalf of the Corporation,
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 purchasers and with respect to Bonds delivered in
subsequent exchanges and transfers.
No Bond shall be entitled to any right or benefit under this Resolution, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 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.
L 4W
SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued
either (i) as a single fully registered bond in the total principal amount noted in Section 1 with
principal installments to become due and payable as provided in Section 2 hereof and
numbered T-1, or (ii) as multiple fully registered bonds, being one bond for each year of maturity
in the applicable principal amount and denomination and to be numbered consecutively from
T-1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s)
shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial
Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas
for approval, certified and registered by the Office of the Comptroller of Public Accounts of the
State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial
Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial
purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and
exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal
amounts and bearing applicable interest rates for transfer and delivery to the Holders named at
the addresses identified therefor; all pursuant to and in accordance with such written
instructions from the initial purchaser(s), or the designee thereof, and such other information
and documentation as the Paying Agent/Registrar may reasonably require.
SECTION 9: Forms. A. Forms Generally. The Bonds, the Registration Certificate of
the Comptroller of Public Accounts of the State of Texas (to be printed on the Initial Bond(s)
only), the Certificate of Registration, and the form of Assignment to be printed on each of the
Bonds, shall be substantially in the forms set forth in this Section with such appropriate
insertions, omissions, substitutions, and other variations as are permitted or required by this
Resolution and may have such letters, numbers, or other marks of identification (including
45035982.1 6
L
C
U
identifying numbers and letters of the Committee on Uniform Securities Identification
Procedures of the American Bankers Association) and such legends and endorsements
(including insurance legends on insured Bonds and any reproduction of an opinion of counsel)
thereon as may, consistently herewith, be established by the Board of Directors of the
Corporation or determined by the officers executing such Bonds as evidenced by the execution
thereof. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Bond.
The Bonds, including the Initial Bond(s), shall be typewritten, printed, lithographed, or
engraved or produced in any other similar manner, all as determined by the officers executing
such Bonds as evidenced by their execution thereof.
B. Form of Bond.
REGISTERED
NO.
REGISTERED
UNITED STATES OF AMERICA
STATE OF TEXAS
SOUTHLAKE PARKS DEVELOPMENT CORPORATION
SALES TAX SUBORDINATE LIEN REVENUE BOND, SERIES 2001
Issue Date: Interest Rate: Stated Maturity: CUSIP NO:
May 15, 2001
,w, Registered Owner:
Principal Amount: DOLLARS
■i The Southlake Parks Development Corporation (hereinafter referred to as the
"Corporation"), a non-profit industrial development corporation organized and existing under the
laws of the State of Texas, including Section 4B of Article 5190.6, Tex. Rev. Civ. St. Ann., as
amended, (the "Act"), with its principal office located in Tarrant County, 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 and sources pledged under the Resolution
identified below, the Principal Amount stated above (or so much thereof as shall not have been
paid upon prior redemption) on the Stated Maturity date specified above and to pay interest
(computed on the basis of a 360-day year of twelve 30-day months) on the unpaid Principal
Amount hereof from the Issue Date at the per annum rate of interest specified above; such
interest being payable on February 15 and August 15 of each year, commencing August 15,
2001. Principal of this Bond is payable at its Stated Maturity or redemption to the registered
owner hereof[, upon presentation and surrender, at the Designated Payment/Transfer Office of
the Paying Agent/Registrar executing the registration certificate appearing hereon, or its
successor]'; provided, however, while this Bond is registered to Cede & Co., the payment of
principal upon a partial redemption of the principal amount hereof may be accomplished without
presentation and surrender of this Bond. Interest is payable to the registered owner of this
' Language in brackets to be omitted in the Initial Bond and the following language insert: by The Chase
Manhattan Bank (the "Paying Agent/Registrar'), upon presentation and surrender at its designated offices
in Dallas, Texas (the "Designated Payment/Transfer Office")"
45035982.1 7
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Bond (or one or more Predecessor Bonds, as defined in the resolution hereinafter referenced)
whose name appears on the "Security Register' maintained by the Paying Agent/Registrar at
the close of business on the "Record Date", which is the last business day of the month next
preceding each interest payment date and interest shall be paid by the Paying Agent/Registrar
by check sent United States Mail, first class postage prepaid, to the address of the registered
owner recorded in the Security Register or by such other method, acceptable to the Paying
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 $4,690,000 (herein referred to as the "Bonds") to finance the costs of purchasing land
and making improvements thereto for neighborhood parks and making additional improvements
to existing park land, including related road and streets improvements that enhance such park
facilities, in conformity with the Constitution and laws of the State of Texas, including the Act,
and pursuant to a Resolution adopted by the governing body of the Corporation (herein referred
to as the "Resolution").
The Bonds shall be subject to mandatory redemption prior to maturity at the redemption
price of par and accrued interest to the date of redemption on the respective dates and in
principal amounts -as follows:
Redemption Date Principal Amount
August 15, 2025
44W August 15, 2026
$560,000
590,000
August 15, 2027
620,000
August 15, 2028
660,000
August 15, 2029
695,000
August 15, 2030
730,000
The particular Bonds to be redeemed on each redemption date shall be chosen by lot by the
Paying Agent/Registrar; provided, however, that the principal amount of Bonds required to be
redeemed pursuant to the operation of such mandatory redemption provisions may be reduced,
at the option of the Corporation, by the principal amount of Bonds which, at least 50 days prior
to a mandatory redemption date, (1) shall have been acquired by the Corporation at a price not
exceeding the principal amount of such Bonds plus accrued interest to the date of purchase
thereof, and delivered to the Paying Agent/Registrar for cancellation 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 are subject to being redeemed prior to their Stated Maturities, at the option of
the Corporation, in whole or in part in principal amounts of $5,000 or any integral multiple
thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on August 15,
2011 or on any date thereafter at the redemption price of par plus accrued interest thereon to
the redemption date.
45035982.1 8
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At least thirty days prior to a redemption date, the Corporation shall cause a written
notice of such redemption to be sent by United States Mail, first class postage prepaid, to the
registered owners of the Bond to be redeemed at the address shown on the Security Register
and subject to the terms and provisions relating thereto contained in the Resolution. If a Bond
(or any portion of its principal sum) shall have been duly called for redemption and notice of
such redemption duly given, then upon such redemption date such Bond (or the portion of its
principal sum to be redeemed) shall become due and payable, and, if moneys for the 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 Agent/Registrar,
interest shall cease to accrue and be payable from and after the redemption date on the
principal amount of such Bond redeemed.
In the event of a portion of the principal amount of a Bond is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new
Bond or Bonds of like maturity and interest rate in any authorized denominations provided by
the Resolution for the then unredeemed balance of the principal sum thereof will be issued to
the registered owner, without charge. If a Bond is selected for redemption, in whole or in part,
the Corporation and the Paying Agent/Registrar shall not be required to transfer such 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 of a Bond redeemed in part.
The Bonds are special obligations of the Corporation payable solely from and, together
with the Previously Issued Bonds (identified and defined in the Resolution), equally and ratably
4W secured by a lien on and pledge of the "Pledged Revenues" (as defined in the Resolution) of the
Corporation, including the receipts from a Sales Tax levied for the benefit of the Corporation
pursuant to the Act; provided, however, the lien on and pledge of the "Pledged Revenues"
securing the payment of the Bonds is junior and subordinate to the prior lien on and pledge of
such Pledged Revenues securing the payment of Priority Bonds (identified and defined in the
Resolution)now outstanding and hereafter issued by the Corporation. The Bonds do not
constitute a legal or equitable, pledge, charge, lien or encumbrance upon any property of the
Corporation or the City of Southlake, Texas (the "City") except with respect to the "Pledged
Revenues". This Bond may not be paid in whole or in part from any property taxes raised or to
be raised by the City and is not a debt of and does not give rise to a claim for payment against
the City, except as to the sales and use tax revenues held by the City and required under the
Act to be paid over to the Corporation. Neither the State of Texas, the City or any political
corporation, subdivision or agency of the State of Texas shall be obligated to pay this Bond or
the interest hereon and neither the faith and credit nor the taxing power of the State, the City or
any other political corporation, subdivision or agency thereof is pledged to the payment of the
principal of and interest on this Bond except as noted above.
® Subject to satisfying the terms and conditions prescribed therefor, the Corporation has
reserved the right to issue additional revenue obligations payable, in whole or in part, from the
"Pledged Revenues" and (i) equally and ratably secured by a parity first lien on and pledge of
such "Pledged Revenues" securing the payment of the Priority Bonds currently outstanding or
(ii) equally and ratably secured by the parity junior lien on and pledge of the "Pledged
Revenues" securing the payment of the Previously Issued Bonds and the Bonds.
45035982.1 9
Reference is hereby made to the Resolution, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the
Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and
the nature and extent of the security for the payment of the Bonds; the rights of Holders of the
Bonds the terms and conditions for the issuance of additional obligations; the terms and
conditions relating to the payment, transfer or exchange of this Bond; the conditions upon which
the Resolution may be amended or supplemented with or without the consent of the Holders;
the rights, duties, and obligations of the Corporation and the Paying Agent/Registrar; the terms
and provisions upon which the encumbrances, pledges, charges and covenants made therein
may be discharged; and for the other terms and provisions contained therein. Capitalized terms
used herein have the same meanings assigned in the Resolution.
This Bond, subject to certain limitations contained in the Resolution, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered
Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of
interest, and of the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The Corporation and the Paying Agent/Registrar, and any agent of either, may treat the
registered owner hereof whose name appears on the Security Register (i) on the Record Date
as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as
the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in
„W whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the
Corporation nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to
the contrary. In the event of non-payment of interest on a scheduled payment date and for
thirty (30) days thereafter, a new record date for such interest payment (a "Special Record
Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of
such interest have been received from the Corporation. Notice of the Special Record Date and
of the scheduled payment date of the past due interest (which shall be 15 days after the Special
Record Date) shall be sent at least five (5) business days prior to the Special Record Date by
United States Mail, first class postage prepaid, to the address of each Holder appearing on the
Security Register at the close of business on the last business day next preceding the date of
mailing of such notice.
It is hereby certified, recited, represented and covenanted that the Corporation is a
non-profit industrial development corporation duly organized and legally existing under and by
virtue of the Constitution and laws of the State of Texas, including the Act; that all acts,
conditions and things required to exist and be done precedent to and in the issuance of the
Bonds to render the same lawful and valid special obligations of the Corporation have been
properly done, have happened and have been performed in regular and due time, form and
manner as required by law; and that due provision has been made for the payment of the
principal of and interest on the Bonds from the sources and in the manner provided in the
Resolution. In case any provision in this Bond or any application thereof shall be invalid, illegal,
or unenforceable, the validity, legality, and enforceability of the remaining provisions and
applications shall not in any way be affected or impaired thereby. The terms and provisions of
this Bond and the Resolution shall be construed in accordance with and shall be governed by
kw the laws of the State of Texas.
45035982.1 10
H
IN WITNESS WHEREOF, the Board of Directors of the Corporation has caused this
Bond to be duly executed under the official seal of the Corporation as of the Issue Date.
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
President, Board of Directors
ATTEST:
Secretary, Board of Directors
(SEAL)
C. *Form of Registration Certificate of Comptroller of Public Accounts to Appear
on Initial Bonds only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER )
4w )
OF PUBLIC ACCOUNTS ) REGISTER NO.
THE STATE OF TEXAS )
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accou
of the State of Texas
(SEAL)
*NOTE TO PRINTER: Do not print on definitive bonds
11
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11 45035982.1
H-1
11
H
D. Form of Certificate of Paying Agent/Registrar to Appear on definitive Bonds.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
i This Bond has been duly issued and registered in the name of the Registered Owner
shown above under the provisions of the within -mentioned Resolution and duly approved, or a
Predecessor Bond hereof duly approved, by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts, as shown by the records of the Paying
Agent/Registrar.
The designated offices of the Paying Agent/Registrar located in Dallas, Texas, is the
"Designated Payment/Transfer Office" for this Bond.
THE CHASE MANHATTAN BANK
as Paying Agent/Registrar
Registration date:
By
Authorized Signature
E. Form of Assignment
ASSIGNMENT
4W FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number ) the within
Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
c�
i
DATED:
NOTICE: The signature on this
assignment must correspond with the
Signature guaranteed: name of the registered owner as it
appears on the face of the within Bond in
every particular.
SECTION 10: Definitions. For all purposes of this Resolution and in particular for clarity
with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of
revenues to the payment of the Bonds, the following definitions are provided:
"Act" - The Development Corporation Act of 1979, Vernon's Ann. Civ. St.,
Art. 5190.6, as amended at any time.
45035982.1
12
�_I
"Additional Obligations" - Bonds, notes or other evidences of
indebtedness which the Corporation reserves the right to issue or enter into, as
IF the case may be, in the future in accordance with the terms and conditions
provided in Section 18 hereof and which, together with the Bonds, are equally
and ratably secured by a parity pledge of and claim on the Pledged Revenues
under the terms of this Resolution and a Supplemental Resolution.
"Average Annual Debt Service" - That amount which, at the time of
computation, is derived by dividing the total amount of Debt Service to be paid
over a period of years as the same is scheduled to become due and payable by
the number of years taken into account in determining the total Debt Service.
Capitalized interest payments provided from proceeds or borrowings of the
Corporation shall be excluded in making the aforementioned computation.
Board - The Board of Directors of the Corporation.
"Bonds" - The "Southlake Parks Development Corporation Sales Tax
Subordinate Lien Revenue Bonds, Series 2001 ", dated May 15, 2001, authorized
by this Resolution.
L 4W
t`
e
"City" - The City of Southlake, Texas.
"Corporation" - The Southlake Parks Development Corporation, a
non-profit industrial development corporation organized and existing under and
pursuant to the laws of the State of Texas, including Section 4B of the Act, with
its principal place of business in Tarrant County, Texas.
"Debt Service" - As of any particular date of computation, with respect to
any obligations and with respect to any period, the aggregate of the amounts to
be paid or set aside by the Corporation as of such date or in such period for the
payment of the principal of, premium, if any, and interest (to the extent not
capitalized) on such obligations; assuming, in the case of obligations without a
fixed numerical rate, that such obligations bear, or would have borne, interest at
the maximum legal per annum rate applicable to such obligations, and further
assuming in the case of obligations required to be redeemed or prepaid as to
principal prior to maturity, the principal amounts thereof will be redeemed prior to
maturity in accordance with the mandatory redemption provisions applicable
thereto.
"Depository" - A commercial bank or other qualified financial institution
eligible and qualified to serve as the custodian of the Corporation's monetary
accounts and funds.
"Fiscal Year'- The twelve month financial accounting period used by the
Corporation ending September 30 in each year, or such other twelve consecutive
month period established by the Corporation.
"Government Obligations" - (i) direct noncallable obligations of the United
States of America, including obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America, (ii) noncallable
obligations of an agency or instrumentality of the United States, including
45035982.1
13
obligations unconditionally guaranteed or insured by the agency or
instrumentality and on the date of their acquisition or purchase by the
Corporation are rated as to investment quality by a nationally recognized
investment rating firm not less than AAA or its equivalent and (iii) noncallable
obligations of a state or an agency or a county, municipality, or other political
subdivision of a state that have been refunded and on the date of their
acquisition or purchase by the Corporation, are rated as to investment quality by
a nationally recognized investment rating firm not less than AAA or its equivalent.
"Gross Sales Tax Revenues" - All of the Sales Tax revenues or receipts
due or owing to, or collected or received by or on behalf of the Corporation by the
City or otherwise pursuant to Section 4B of the Act and the election held
November 2, 1993, less any amounts due and owed to the Comptroller of Public
Accounts of the State of Texas as charges for the collection of the Sales Tax or
retention by said Comptroller for refunds and to redeem dishonored checks and
drafts, to the extent such charges and retention are authorized or required by
law.
"Outstanding" - When used in this Resolution with respect to Bonds or
Parity Obligations, as the case may be, means, as of the date of determination,
all Bonds and Parity Obligations theretofore sold, issued and delivered by the
Corporation, except:
(1) those Bonds or Parity Obligations canceled or delivered to the
transfer agent or registrar for cancellation in connection with the exchange or
transfer of such obligations;
(2) those Bonds or Parity Obligations paid or deemed to be paid in
accordance with the provisions of Section 25 hereof or similar provisions of any
Supplemental Resolution authorizing the issuance of Additional Obligations.
(3) those Bonds or Parity Obligations that have been mutilated,
destroyed, lost, or stolen and replacement obligations have been registered and
delivered in lieu thereof.
"Parity Obligations" - Collectively, the Previously Issued Bonds, the Bonds
and Additional Obligations.
"Pledged Revenues" - Collectively (i) Gross Sales Tax Revenues from
time to time deposited or owing to the Pledged Revenue Fund and (ii) such other
money, income, revenue, receipts or other property as may be specifically
dedicated, pledged or otherwise encumbered in a Supplemental Resolution for
the payment and security of Parity Obligations.
"Previously Issued Bonds" - The outstanding and unpaid "Southlake
Parks Development Corporation Sales Tax Subordinate Lien Revenue Bonds,
Series 2000", dated March 1, 2000, originally issued in the principal amount of
$4,180,000.
"Priority Bonds" - The outstanding and unpaid (i) "Southlake Parks
Development Corporation Refunding and Improvement Sales Tax Revenue
45035982.1
14
r
E %W Bonds, Series 1997", dated February
Development Corporation Sales Tax
April1, 1999, originally issued in the
obligations issued on a parity therewith.
15, 1997, and (ii) "Southlake Parks
Revenue Bonds, Series 1999", dated
principal amount of $4,655,000 and
"Required Reserve" - The amount required to be accumulated and
maintained in the Reserve Fund under the provisions of Section 14 hereof.
"Sales Tax" - The local sales and use tax authorized under Section 413 of
the Act, approved at an election held on November 2, 1993, and the effective
date for the imposition and application of such Sales Tax within the corporate
limits of the City by the Comptroller of Public Accounts of the State of Texas
being April 1, 1994, together with any increases in the rate of such Sales Tax
authorized and provided by law.
"Supplemental Resolution" - Any resolution of the Board supplementing
this Resolution for the purpose of authorizing and providing the terms and
provisions of the Bonds or Additional Obligations, or supplementing or amending
this Resolution for any other authorized purpose permitted in Section 18 or 25
hereof, including resolutions authorizing the issuance of Additional Obligations or
pledging and encumbering income, revenues, receipts or property other than the
Gross Sales Tax Revenues to the payment and security of the Parity Obligations.
SECTION 11: Pledge. The Corporation hereby covenants and agrees that, subject only
to the prior claim on and pledge of the Pledged Revenues to the payment and security of the
Priority Bonds (including the establishment and maintenance of the special funds created for the
,,,. payment and security of such bonds) under the terms and provisions of the resolutions and
proceedings pertaining to their authorization, the Pledged Revenues, with the exception of
those in excess of the amounts required for the payment and security of the Parity Obligations,
are hereby irrevocably pledged to the payment and security of the Previously Issued Bonds, the
Bonds and Additional Obligations, if issued, including the establishment and maintenance of the
special funds created and established in this Resolution and any Supplemental Resolution, all
as hereinafter provided. The Corporation hereby resolves the Parity Obligations shall constitute
a lien on the Pledged Revenues in accordance with the terms of this Resolution and any
Supplemental Resolution, which lien shall be valid and binding without any further action by the
Corporation and without any filing or recording with respect thereto except in the records of the
Corporation.
SECTION 12: Pledged Revenue Fund. In accordance with the provisions of the
resolutions authorizing the issuance of the Priority Bonds and while the Bonds are Outstanding,
the Corporation hereby agrees and covenants to maintain a fund or account at a Depository for
the deposit of the Pledged Revenues as received by the Corporation, which fund or account
shall be known on the books and records of the Corporation as the "Pledged Revenue Fund".
All Pledged Revenues deposited to the credit of such Fund shall be accounted for separate and
apart from all other revenues, receipts and income of the Corporation and, with respect to the
Gross Sales Tax Revenues, the Corporation shall further account for such funds separate and
apart from the other Pledged Revenues deposited to the credit of the Pledged Revenue Fund.
All Pledged Revenues deposited to the credit of the Pledged Revenue Fund shall be
appropriated and expended to the extent required by this Resolution and any Supplemental
Resolution for the following uses and in the order of priority shown:
45035982.1 15
r,
First: To the payment of the amounts required to be deposited in the
special funds and accounts maintained for the payment and security of the
Priority Bonds;
Second: To the payment of the amounts required to be deposited in the
Bond Fund for the payment of Debt Service on the Parity Obligations as the
same becomes due and payable;
Third: 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 Resolution and any Supplemental Resolution;
Fourth: To the payment of amounts required to be deposited in any other
fund or account required by any Supplemental Resolution authorizing the
issuance of Parity Obligations; and
Fifth: To any fund or account held at any place or places, or to any
payee, required by any other resolution of the Board which authorized the
issuance of obligations or the creation of debt of the Corporation having a lien on
the Pledged Revenues subordinate to the lien created herein on behalf of the
Parity Obligations.
Any Pledged Revenues remaining in the Pledged Revenue Fund after satisfying the
foregoing payments, or making adequate and sufficient provision for the payment thereof, may
be appropriated and used for any other lawful purpose now or hereafter permitted by law.
4W11 SECTION 13: Bond Fund. For the purpose of providing funds to pay the principal of and
interest on Parity Obligations, the Corporation agrees and covenants to maintain a separate and
special account or fund on the books and records of the Corporation known as the "Southlake
Parks Development Corporation Subordinate Lien Debt Service Account' (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 a Depository of the Corporation. In addition to the deposits for the
payment of the Previously Issued Bonds, the Corporation covenants that, after paying or making
provision for all priority payments for the Priority Bonds, there shall be deposited into the Bond
Fund prior to each principal and interest payment date from the Pledged Revenues an amount
equal to one hundred per centum (100%) of the interest on and the principal of the Bonds then
falling due and payable, and such deposits to pay principal and accrued interest on the Bonds
shall be made in substantially equal monthly installments on or before the 10th day of each
month, beginning on or before the 10th day of the month next following the delivery of the
Bonds to the initial purchasers.
The required deposits to the Bond Fund for the payment of principal of and interest on
the Bonds shall continue to be made as hereinabove provided until (i) the total amount on
deposit in the Bond Fund and Reserve Fund is equal to the amount required to fully pay and
discharge all Parity Obligations (principal and interest) then Outstanding or (ii) the Bonds are no
longer Outstanding.
SECTION 14: Reserve Fund. (a) General Provisions. The Corporation agrees and
covenants to create and maintain on the books and records of the Corporation a separate and
special fund or account to be known as the "Subordinate Lien Reserve Account' (the "Reserve
Fund"), which fund or account shall be a special banking fund maintained at a Depository. The
45035982.1 16
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amounts deposited to the credit of such fund or account shall be used solely for the payment of
t (i) the principal of and interest on the Parity Obligations when (whether at maturity, upon a
redemption date or any interest payment date) other funds available for such purposes are
insufficient, (ii) the amounts required to restore or replenish in full the surety bond coverage
afforded by a surety bond representing all or a portion of the Required Reserve, and, in addition,
may be used to the extent not required to maintain the 'Required Reserve", to pay, or provide
for the payment of, the final principal amount of a series of Parity Obligations so that such series
of Parity Obligations is no longer deemed to be "Outstanding" as such term is defined herein.
The Required Reserve shall be established and maintained with Pledged Revenues, the
proceeds of sale of Parity Obligations or by depositing to the credit of the Reserve Fund one or
more surety bonds issued by a company or institution having a rating in the highest rating
category by two nationally recognized rating agencies or services, or any combination thereof.
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In accordance with the provisions of the resolution authorizing the issuance of the
Previously Issued Bonds, the amount currently on deposit to the credit of the Reserve Fund is
$302,900 (the "Current Reserve") which amount is fully funded with a surety obligation issued
by Ambac Assurance Corporation. As a result of the issuance of the Bonds, the Required
Reserve is hereby recalculated and determined to be $1,184,660, and the Corporation hereby
covenants and agrees to cause any deficiency in the Required Reserve to be funded in full on
the date of the delivery of the Bonds with available Pledged Revenues, the proceeds of sale of
Bonds or by depositing to the credit of the Reserve Fund one .or more surety bonds issued by a
company or institution having a rating in the highest rating category by two nationally recognized
rating agencies or services, or any combination thereof. On the date the Bonds are delivered to
the initial purchasers, the Corporation shall deposit to the credit of the Reserve Fund an
additional surety bond provided by Ambac Assurance Corporation ("Ambac") with surety bond
coverage in an amount equal to the difference between the Required Reserve and the Current
Reserve.
As and when Additional Obligations are delivered or incurred, the Required Reserve
shall be increased, if required, to an amount equal to the lesser of either (i) the maximum annual
Debt Service (calculated on a Fiscal Year basis) for all Parity Obligations then Outstanding
(after giving effect to the issuance of the Additional Obligations), as determined on the date
each series of Additional Obligations are delivered or incurred, as the case may be, or (ii) the
maximum amount that can be invested without restriction as to yield in a reasonably required
reserve fund pursuant to Subsection (d) of Section 148 of the Internal Revenue Code of 1986,
as amended, and regulations promulgated thereunder. Any additional amount required to be
maintained in the Reserve Fund shall be accumulated (i) by depositing to the credit of the
Reserve Fund (immediately after the delivery of the then proposed Additional Obligations) cash
or an additional surety bond or revised surety bond with surety bond coverage in an amount
sufficient to provide for the new Required Reserve to be fully or partially funded, or (ii) at the
option of the Corporation, by making monthly deposits from funds in the Pledged Revenue
Fund, after paying or making provision for all priority payments for the Priority Bonds, on or
before the 10th day of each month following the month of delivery of the then proposed
Additional Obligations, of not less than 1/36th of the additional amount to be maintained in said
Fund by reason of the issuance of the Additional Obligations then being issued (or 1/36th of the
balance of the additional amount not deposited immediately in cash or provided by a surety
bond).
While the cash and investments and/or surety bond coverage in the Reserve Fund total
not less than the Required Reserve, no deposits need be made to the credit of the Reserve
Fund. Should the Reserve Fund at any time contain less than the Required Reserve (or so
45035982.1 17
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much thereof as shall then be required to be contained therein if Additional Obligations have
been issued and the Corporation has elected to accumulate all or a portion of the Required
Reserve with Pledged Revenues) or should the Corporation be obligated to repay or reimburse
an issuer of a surety bond to replenish and restore the full amount of surety bond coverage
provided by a surety bond held for the account of the Reserve Fund, the Corporation covenants
and agrees to cause monthly deposits to be made to the Reserve Fund on or before the 10th
day of each month (beginning the month next following the month the deficiency in the
Required Reserve occurred by reason of a draw on the Reserve Fund or as a result of a
reduction in the market value of investments held for the account of the Reserve Fund) from
Pledged Revenues in an amount equal to (i) 1/36th of the Required Reserve until the total
Required Reserve then required to be maintained in said Fund has been fully restored or (ii) the
amounts required to be reimbursed and repaid to the issuer of the surety bond in the event of a
draw upon a surety bond. The Corporation further covenants and agrees that the Pledged
Revenues shall be applied and appropriated and used to establish and maintain the Required
Reserve and to cure any deficiency in such amounts as required by the terms of this Resolution
and any Supplemental Resolution.
During such time as the Reserve Fund contains the total Required Reserve, the
Corporation may, at its option, withdraw any amount in the Reserve Fund in excess of the
Required Reserve and deposit such surplus in the Bond Fund.
(b) Surety Obligation Provisions. As noted above, the Required Reserve to be
accumulated and maintained in the Reserve Fund by reason of the issuance of the Bonds is
initially to be provided by a Municipal Bond Debt Service Reserve Insurance Policy" issued by
Ambac Indemnity Corporation, a Wisconsin domiciled stock insurance company (hereinafter
referred to as "Ambac") with surety bond coverage in the maximum amount of the Required
aw Reserve (the "Surety Obligation"). In accordance with Ambac 's terms for the issuance of such
Surety Obligation, it is hereby expressly provided:
(i) Any provision of this Resolution expressly recognizing or granting
rights in or to Ambac may not be amended in any manner which affects the rights
of Ambac hereunder without the prior written consent of Ambac.
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(ii) Unless otherwise provided in this Section, Ambac 's consent shall
be required in addition to the consent of the Holders of the Bonds, when
required, for the following purposes: (A) execution and delivery of any
supplement to this Resolution; (B) removal of the Paying Agent/Registrar or
selection and appointment of any successor paying agent; and (C) initiation or
approval of any action not described in (A) or (B) above which requires consent
of the Holders of the Bonds.
(iii) While the Surety Obligation is in effect, the Corporation or the Paying
Agent/Registrar, as appropriate, shall furnish to Ambac:
(A) as soon as practicable after the filing thereof, a copy of any
audited financial statement of the Corporation and a copy of any audit and
annual report of the Corporation;
(B) a copy of any notice to be given to the registered owners of the
Bonds and any certificate rendered pursuant to this Resolution relating to the
security for the Bonds; and
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(C) such additional information it may reasonably request.
"' (iv) The Corporation will permit Ambac to discuss the affairs, finances
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and accounts of the Corporation or any information Ambac may reasonably
request regarding the security for the Bonds with appropriate officers of the
Corporation. The Paying Agent/Registrar or Corporation, as appropriate, will
permit Ambac to have access to and to make copies, at Ambac's expense, of all
books and records relating to the Bonds at any reasonable time.
(v) Notwithstanding any other provision of this Resolution, the Paying
Agent/Registrar shall immediately notify Ambac if at any time there is insufficient
money to make any payments of principal and interest as required and
immediately upon the occurrence of (A) any event of default under this
Resolution or (B) any payment default under any related security agreement.
(vi) To the extent that the Corporation enters into a continuing
disclosure agreement with respect to the Bonds, Ambac shall be included as
party to be notified.
(vii) As long as the Surety Obligation shall be in full force and effect, the
Corporation and the Paying Agent/Registrar, if appropriate, agree to comply with
the following provisions:
(A) In the event and to the extent that money on deposit in the Bond
Fund, plus all amounts on deposit in and credited to the Reserve Fund in excess
of the amount of the Surety Obligation, are insufficient to pay the amount of
principal and interest coming due, then upon the later of: (i) one (1) day after
receipt by the General Counsel of Ambac of a demand for payment in the form
attached to the Surety Obligation as Attachment 1 (the "Demand for Payment"),
duly executed by the Paying Agent/Registrar certifying that payment due under
the Resolution has not been made to the Paying Agent/Registrar; or (ii) the
payment date of the Obligations as specified in the Demand for Payment
presented by the Paying Agent/Registrar to the General Counsel of Ambac,
Ambac will make a deposit of funds in an account with the Paying
Agent/Registrar or its successor, in New York, New York, sufficient for the
payment to the Paying Agent/Registrar, of amounts which are then due to the
Paying Agent/Registrar under the Resolution (as specified in the Demand for
Payment) up to but not in excess of the "Surety Obligation Coverage", as defined
in the Surety Obligation; provided, however, that in the event that the amount on
deposit in, or credit to, the Reserve Fund, in addition to the amount available
under the Surety Obligation, includes amounts available under a letter of credit,
insurance policy, Surety Obligation or other such funding instrument (the
"Additional Funding Instrument"), draws on the Surety Obligation and the
Additional Funding Instrument shall be made on a pro rata basis to fund the
insufficiency.
(B) the Paying Agent/Registrar, if appropriate, shall, after submitting
to Ambac the Demand for Payment as provided in subparagraph (vii)(A) above,
make available to Ambac all records relating to the funds and accounts
maintained under this Resolution.
45035982.1
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(C) the Paying Agent/Registrar, if appropriate, shall, upon receipt of
money received from the draw on the Surety Obligation, as specified in the
Demand for Payment, credit the Reserve Fund to the extent of money received
pursuant to such Demand for Payment.
(D) the Reserve Fund shall be replenished in the following priority: (i)
principal and interest on the Surety Obligation shall be paid from first available
Pledged Revenues or principal and interest on the Surety Obligation and on the
Additional Funding Instrument shall be paid from first available Pledged
Revenues on a pro rata basis; (ii) after all such amounts are paid in full, amounts
necessary to fund the Reserve Fund to the required level, after taking into
account the amounts available under the Surety Obligation and the Additional
Funding Instrument shall be deposited from next available Pledged Revenues.
Furthermore, the "Guaranty Agreement' (the "Guaranty Agreement') by and between
the Corporation and Ambac, attached hereto as Exhibit B and incorporated herein by reference
as a part of this Resolution for all purposes, is hereby approved as to form and content, and
such Guaranty Agreement in substantially the form and substance attached hereto, together
with such changes or revisions as may be necessary to comply with Texas law, is hereby
authorized to be executed by the President of the Board of Directors of the Corporation for and
on behalf of the Corporation and as the act and deed of this Board of Directors; and such
Guaranty Agreement as executed by said officials shall be deemed approved by the Board of
Directors and constitute the Guaranty Agreement herein approved. Unless otherwise provided
herein, the terms capitalized in this Section relating to the Surety Obligation and the Guaranty
Agreement shall have the meanings specified in Guaranty Agreement.
dw SECTION 15: Deficiencies. If on any occasion there shall not be sufficient Pledged
Revenues to make the required deposits into the Bond Fund or Reserve Fund, such deficiency
shall be cured as soon as possible from the next available Pledged Revenues, or from any other
sources available for such purpose.
SECTION 16: Payment of Bonds. While any of the Bonds are Outstanding, the
Treasurer of the Corporation (or other designated financial officer of the Corporation) shall
cause to be transferred to the Paying Agent/Registrar, from funds on deposit in the Bond Fund,
and, if necessary, in the Reserve Fund, amounts sufficient to fully pay and discharge promptly
as each installment of interest and principal of the Bonds accrues or matures; such transfer of
funds to be made in such manner as will cause immediately available funds to be deposited with
the Paying Agent/Registrar for the Bonds at the close of the business day next preceding the
date of payment for the Bonds.
SECTION 17: Investments - Security of Funds. (a) Money in any Fund required to be
maintained pursuant to this Resolution may, at the option of the Corporation, be invested in
obligations and in the manner prescribed by the Public Funds Investment Act (V.T.C.A.,
Government Code, Chapter 2256), including investments held in book -entry form; provided that
all such deposits and investments shall be made in such a manner that the money required to
be expended from any Fund will be available at the proper time or times and provided further
the maximum stated maturity for any investment acquired with money deposited to the credit of
the Reserve Fund shall be limited to five (5) years from the date of the investment of such
money. Such investments shall be valued in terms of current market value within 45 days of the
close of each Fiscal Year and, with respect to investments held for the account of the Reserve
Fund, within 45 days of the date of passage of each authorizing document of the Board
45035982.1 20
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pertaining to the issuance of Additional Obligations. All interest and income derived from
deposits and investments in the Bond Fund immediately shall be credited to, and any losses
debited to, the appropriate account of the Bond Fund. All interest and 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 Pledged Revenue Fund. All such
investments shall be sold promptly when necessary to prevent any default in connection with
the Parity Obligations.
(b) Money deposited to the credit of the Pledged Revenue Fund, Bond Fund and
Reserve Fund, to the extent not invested and not otherwise insured by the Federal Deposit
Insurance Corporation or similar agency, shall be secured by a pledge of direct obligations of
the United States of America, or obligations unconditionally guaranteed by the United States of
America.
SECTION 18: Issuance of Additional Parity Obligations. Subject to the provisions
hereinafter appearing as to conditions precedent which must be satisfied, the Corporation
reserves the right to issue, from time to time as needed, Additional Obligations for any lawful
purpose. Such Additional Obligations may be issued in such form and manner as the
Corporation shall determine, provided, however, prior to issuing or incurring such Additional
Obligations, the following conditions precedent for the authorization and issuance of the same
are satisfied, to wit:
(1) The Treasurer of the Corporation (or other officer of the
Corporation then having the primary responsibility for the financial affairs of the
Corporation) shall have executed a certificate stating that, to the best of his or
her knowledge and belief, the Corporation is not then in default as to any
.4W covenant, obligation or agreement contained in the Resolution or a Supplemental
Resolution.
(2) The Corporation has secured from a certified public accountant a
certificate or opinion to the effect that, according to the books and records of the
Corporation, the Gross Sales Tax Revenues received by the Corporation for
either (i) the last completed Fiscal Year next preceding the adoption of the
Supplemental Resolution authorizing the issuance of the proposed Additional
Obligations or (ii) any twelve (12) consecutive months out of the previous
eighteen (18) months next preceding the adoption of the Supplemental
Resolution authorizing the Additional Obligations were equal to not less than 1.25
times the maximum annual Debt Service for all Priority Bonds and Parity
Obligations then Outstanding and after giving effect to the issuance of the
Additional Obligations then being issued. Additionally, for the purpose of
providing this certificate or opinion, if the Corporation shall not have received
Gross Sales Tax Revenues for a full 12 month period, one-half of the amount of
sales tax revenues actually received by the City under Chapter 321, TEX.TAX
CODE, may be used for the months during which the Corporation did not receive
Gross Sales Tax Revenues.
(3) The Required Reserve to be accumulated and maintained in the
Reserve Fund is increased to the extent required by Section 14.
SECTION 19: Refunding Bonds. The Corporation reserves the right to issue refunding
kw bonds to refund all or any part of the Parity Obligations (pursuant to any law then available)
45035982.1 21
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upon such terms and conditions as the Board may deem to be in the best interest of the
Corporation, and if less than all such Parity Obligations then Outstanding are refunded, the
conditions precedent prescribed (for the issuance of Additional Obligations) set forth in
Section 18 hereof shall be satisfied, and shall give effect to the refunding.
SECTION 20: Right to Issue Additional Priority Bonds - Right to Create Subordinate
Debt. The Corporation expressly reserves the right to issue Priority Bonds, without limitation as
to principal amount or complying with any terms and conditions contained in this Resolution, but
subject to any terms, conditions or restrictions applicable thereto under law or otherwise.
Furthermore, except as may be limited by a Supplemental Resolution, the Corporation hereby
expressly retains the right to issue or create obligations payable from and secured by a lien on
all or any part of the Pledged Revenues for any lawful purpose without complying with the
provisions of Section 18 or 19 hereof, provided the pledge and the lien securing the payment of
such obligations is junior and subordinate to the lien and pledge securing the payment of the
Parity Obligations.
SECTION 21: Confirmation and Levy of Sales Tax. (a) The Board hereby represents
the City has duly complied with the provisions of the Act for the levy of the Sales Tax at the rate
voted at the election held by and within the City on November 2, 1993, and such Sales Tax is
being imposed within the corporate limits of the City and the receipts of such Sales Tax are
being remitted to the City by the Comptroller of Public Accounts on a monthly basis.
(b) While any Bonds are Outstanding, the Corporation covenants, agrees and
warrants to take and pursue all action permissible to cause the Sales Tax, at said rate or at a
higher rate if legally permitted, to be levied and collected continuously, in the manner and to the
maximum extent permitted by law, and to cause no reduction, abatement or exemption in the
AW Sales Tax or rate of tax below the rate stated, confirmed and ordered in subsection (a) of this
Section to be ordered or permitted while any Bonds shall remain Outstanding.
(c) If hereafter authorized by law to apply, impose and levy the Sales Tax on any
taxable items or transactions that are not subject to the Sales Tax on the date of the adoption
hereof, to the extent it legally may do so, the Corporation agrees to use its best efforts to cause
the City to take such action as may be required to subject such taxable items or transactions to
the Sales Tax.
(d) The Corporation agrees to take and pursue all action legally permissible to cause
the Sales Tax to be collected and remitted and deposited as herein required and as required by
Section 413 of the Act, at the earliest and most frequent times permitted by law.
(e) The Corporation agrees to use its best efforts to cause the City to comply with
Section 4B of the Act and shall cause the Gross Sales Tax Revenues to be deposited to the
credit of the Pledged Revenue Fund in their entirety immediately upon receipt by the City. In
the alternative and if legally authorized, the Corporation shall, by appropriate notice, direction,
request or other legal method, use its good -faith efforts to cause the Comptroller of Public
Accounts of the State of Texas (the "Comptroller") to pay all Gross Sales Tax Revenues directly
to the Corporation for deposit to the Pledged Revenue Fund.
SECTION 22: Records and Accounts. The Corporation hereby covenants and agrees
that while any of the Bonds are Outstanding, it will keep and maintain complete records and
accounts in accordance with generally accepted accounting principles, and following the close
of each Fiscal Year, it will cause an audit of such books and accounts to be made by an
45035982.1 22
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independent firm of certified public accountants. Each such audit, in addition to whatever other
%W matters may be thought proper by the accountant, shall particularly include the following:
(1) A statement in reasonable detail regarding the receipt and
disbursement of the Pledged Revenues for such Fiscal Year; and
(2) A balance sheet for the Corporation as of the end of such Fiscal
Year.
Such annual audit of the records and accounts of the Corporation shall be in the form of
a report and be accompanied by an opinion of the accountant to the effect that such
examination was made in accordance with generally accepted auditing standards and contain a
statement to the effect that in the course of making the examination necessary for the report
and opinion, the accountant obtained no knowledge of any default of the Corporation on the
Bonds or in the fulfillment of any of the terms, covenants or provisions of this Resolution, or
under any other evidence of indebtedness, or of any event which, with notice or lapse of time, or
both, would constitute a failure of the Corporation to comply with the provisions of this
Resolution or if, in the opinion of the accountants, any such failure to comply with a covenant or
agreement hereof, a statement as to the nature and status thereof shall be included.
Copies of each annual audit report shall be furnished upon written request, to any
Holders of any of said Bonds. The audits herein required shall be made within 120 days
following the close of each Fiscal Year insofar as is possible.
The Holders of any Bonds or any duly authorized agent or agents of such Holders shall
have the right to inspect such records, accounts and data of the Corporation during regular
low business hours.
SECTION 23: Representations as to Security for the Bonds. (a) The Corporation
represents and warrants that, except for the Priority Bonds and the Parity Obligations, the
Pledged Revenues are and will be and remain free and clear of any pledge, lien, charge or
encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge and lien
created in or authorized by this Resolution except as expressly provided herein.
(b) The Bonds and the provisions of this Resolution are and will be the valid and
legally enforceable obligations of the Corporation in accordance with their terms and the terms
of this Resolution, subject only to any applicable bankruptcy or insolvency laws or to any laws
affecting creditors rights generally.
(c) The Corporation shall at all times, to the extent permitted by law, defend,
preserve and protect the pledge of the Pledged Revenues and all the rights of the Holders
against all claims and demands of all persons whomsoever.
(d) The Corporation will take, and use its best efforts to cause the City to take, all
steps reasonably necessary and appropriate to collect all delinquencies in the collection of the
Sales Tax to the fullest extent permitted by the Act.
(e) The provisions, covenants, pledge and lien on and against the Pledged
Revenues, as herein set forth, are established and shall be for the equal benefit, protection and
security of the owners and holders of Parity Obligations without distinction as to priority and
rights under this Resolution.
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(f) The Parity Obligations shall constitute special obligations of the Corporation,
payable solely from, and equally and ratably secured by a parity pledge of and lien on, the
Pledged Revenues, and not from any other revenues, properties or income of the Corporation;
such pledge of and lien on the Pledged Revenues being junior and subordinate to the pledge of
and lien on the Pledged Revenues securing the payment of the Priority Bonds. The Bonds may
not be paid in whole or in part from any property taxes raised or to be raised by the City and
shall not constitute debts or obligations of the State or of the City, and the Holders, shall never
have the right to demand payment out of any funds raised or to be raised by any system of ad
valorem taxation.
SECTION 24: Satisfaction of Obligation of Corporation. If the Corporation shall pay or
cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if
any, and interest on the Bonds, at the times and in the manner stipulated in this Resolution,
then the pledge of the Pledged Revenues under this Resolution and all other obligations of the
Corporation to the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Bonds or any principal amount(s) shall be deemed to have been paid within the meaning
and with the effect expressed above in this Section when (i) money sufficient to pay in full such
Bonds at maturity or to the redemption date therefor, together with all interest due thereon, shall
have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an
authorized escrow agent, or (ii) Government Obligations shall have been irrevocably deposited
in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government
Obligations have been certified by an independent accounting firm to mature as to principal and
interest in such amounts and at such times as will insure the availability, without reinvestment,
of sufficient money, together with any moneys deposited therewith, if any, to pay when due the
Bonds on the Stated Maturities thereof or (if notice of redemption has been duly given or waived
or if irrevocable arrangements therefor accepted to the Paying Agent/Registrar have been
made) the redemption date thereof. The Corporation covenants that no deposit of moneys or
Government Obligations will be made under this Section and no use made of any such deposit
which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of
Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted
pursuant thereto.
Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow
agent, and all income from Government Obligations held in trust by the Paying Agent/Registrar,
or an authorized escrow agent, pursuant to this Section in excess of the amount required for the
payment of the Bonds shall be remitted to the Corporation or deposited as directed by the
Corporation. Furthermore, any money held by the Paying Agent/Registrar for the payment of
the principal of and interest on the Bonds and remaining unclaimed for a period of three (3)
years after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were
deposited and are held in trust to pay shall, upon the request of the Corporation, be remitted to
the Corporation against a written receipt therefor. Notwithstanding the above and foregoing,
any remittance of funds from the Paying Agent/Registrar to the Corporation shall be subject to
any applicable unclaimed property laws of the State of Texas.
SECTION 25: Resolution a Contract - Amendments. This Resolution shall constitute a
contract with the Holders from time to time, be binding on the Corporation, and shall not be
amended or repealed by the Corporation while any Bond remains Outstanding except as
permitted in this Section. The Corporation, may, without the consent of or notice to any
Holders, from time to time and at any time, amend this Resolution in any manner not detrimental
to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal
45035982.1 24
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defect or omission herein. In addition, the Corporation may, with the written consent from the
%W owners holding a majority in aggregate principal amount of the Parity Obligations then
Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Resolution;
provided that, without the written consent of all Holders of Outstanding Bonds effected, no such
amendment, addition, or rescission shall (1) extend the time or times of payment of the
principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof,
the redemption price therefor, or the rate of interest thereon, or in any other way modify the
terms of payment of the principal of, premium, if any, or interest on the Bonds, (2) give any
preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of
Bonds or Parity Obligations, as the case may be, required to be held for consent to any such
amendment, addition, or rescission.
SECTION 26: Mutilated - Destroyed - Lost and Stolen Bonds. In case any Bond shall
be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a
replacement Bond of like form and tenor, and in the same denomination and bearing a number
not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in
lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the
Corporation and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of
evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such
Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying
Agent/Registrar of indemnification in an amount satisfactory to hold the Corporation and the
Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity
and with the preparation, execution and delivery of a replacement Bond shall be borne by the
Holder of the Bond mutilated, or destroyed, lost or stolen.
Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost,
AW or stolen Bond shall constitute a replacement of the prior obligation of the Corporation, whether
or not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Resolution equally and ratably with all other
Outstanding Bonds.
SECTION 27: Covenants Regarding Tax -Exempt Status.
(a) Definitions. When used in this Section 27, 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.
45035982.1 25
3
,A
"Nonpurpose Investment" means any investment property, as defined in
E�w section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested
and which is not acquired to carry out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Regulations" means any proposed, temporary, or final Income Tax
Regulations issued pursuant to Sections 103 and 141 through 150 of the Code,
and 103 of the Internal Revenue Code of 1954, which are applicable to the
Bonds. Any reference to any specific Regulation shall also mean, as
appropriate, any proposed, temporary or final Income Tax Regulation designed
to supplement, amend or replace the specific Regulation referenced.
"Yield" of (1) any Investment has the meaning set forth in Section 1.148-5
of the Regulations and (2) the Bonds has the meaning set forth in Section 1.148-
4 of the Regulations.
(b) Not to Cause Interest to Become Taxable. The Corporation shall not use, permit
the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Bond to become includable in the gross income, as defined in section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the Corporation receives a written opinion of counsel nationally recognized in
the field of municipal bond law to the effect that failure to comply with such covenant will not
adversely affect the exemption from federal income tax of the interest on any Bond, the
Corporation shall comply with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. The Bonds are being issued to finance the
costs of the Projects for and on behalf of the City, a political subdivision of the State of Texas
and, in connection therewith, the City and the Corporation will execute an agreement relating to
the ownership, operation and maintenance of the Projects while the Bonds are outstanding and
unpaid, which agreement provides that, except as permitted by section 141 of the Code and the
Regulations and rulings thereunder, the Projects shall at all times prior to the last Stated
Maturity of Bonds:
(1) be exclusively owned, operated and maintained by the City, and
prohibits the City from using or permitting the use of such Gross Proceeds or any
property acquired, constructed or improved with such Gross Proceeds in any
activity carried on by any person or entity other than a state or local government,
unless such use is solely as a member of the general public; and
(2) prohibits the City from directly or indirectly imposing or accepting
any charge or other payment for use of Gross Proceeds of the Bonds or for any
property the acquisition, construction or improvement of which is to be financed
or refinanced directly or indirectly with such Gross Proceeds, 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.
k
45035982.1 26
P
it
(d) No Private Loan. Except to the extent permitted by section 141 of the Code and
the Regulations and rulings thereunder, the Corporation shall not use Gross Proceeds of the
Bonds to make or finance loans to any person or entity other than a state or local government.
For purposes of the foregoing covenant, such Gross Proceeds are considered to be 'loaned" to
a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the Corporation shall not at any time prior
to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or
with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of
the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of
the Code and the Regulations and rulings thereunder, the Corporation shall not take or omit to
take any action which would cause the Bonds to be federally guaranteed within the meaning of
section 149(b) of the Code and the Regulations and rulings thereunder.
(g) Information Report The Corporation shall timely file the information required by
,.r section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other
form and in such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section
148(f) of the Code and the Regulations and rulings thereunder:
(1) The Corporation and the City shall account for all Gross Proceeds
(including all receipts, expenditures and investments thereof) on its books of
account separately and apart from all other funds (and receipts, expenditures
and investments thereof) and shall retain all records of accounting for at least six
years after the day on which the last Outstanding Bond is discharged. However,
to the extent permitted by law, the Corporation may commingle Gross Proceeds
of the Bonds with other money of the Corporation, provided that the Corporation
separately accounts for each receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
(2) Not less frequently than each Computation Date, the Corporation
shall calculate the Rebate Amount in accordance with rules set forth in section
148(f) of the Code and the Regulations and rulings thereunder. The Corporation
shall maintain such calculations with its official transcript of proceedings relating
to the issuance of the Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to
kinduce such purchase by measures designed to insure the excludability of the
45035982.1 27
I
interest thereon from the gross income of the owners thereof for federal income
kw tax purposes, the Corporation shall pay to the United States out of the Bond
Fund or its general fund, as permitted by applicable Texas statute, regulation or
opinion of the Attorney General of the State of Texas, the amount that when
added to the future value of previous rebate payments made for the Bonds
equals (i) in the case of a Final Computation Date as defined in Section 1.148-
3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount
on such date; and (ii) in the case of any other Computation Date, ninety percent
(90%) of the Rebate Amount on such date. In all cases, the rebate payments
shall be made at the times, in the installments, to the place and in the manner as
is or may be required by section 148(f) of the Code and the Regulations and
rulings thereunder, and shall be accompanied by Form 8038-T or such other
forms and information as is or may be required by Section 148(f) of the Code and
the Regulations and rulings thereunder.
(4) The Corporation shall exercise reasonable diligence to assure that
no errors are made in the calculations and payments required by paragraphs (2)
and (3), and if an error is made, to discover and promptly correct such error
within a reasonable amount of time thereafter (and in all events within one
hundred eighty (180) days after discovery of the error), including payment to the
United States of any additional Rebate Amount owed to it, interest thereon, and
any penalty imposed under Section 1.148-3(h) of the Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the Corporation shall not, at any time
prior to the earlier of the Stated Maturity or final payment of the Bonds, enter into any
i A,, transaction that reduces the amount required to be paid to the United States pursuant to
�i Subsection (h) of this Section because such transaction results in a smaller profit or a larger
loss than would have resulted if the transaction had been at arm's length and had the Yield of
the Bonds not been relevant to either party.
0) Elections. The Corporation hereby directs and authorizes the President and
Secretary of the Board of Directors, or the Treasurer for the Corporation, individually or jointly,
to make elections permitted or required pursuant to the provisions of the Code or the
Regulations, as they deem necessary or appropriate in connection with the Bonds, in the
Certificate as to Tax Exemption or similar or other appropriate certificate, form or document.
SECTION 28: Notices to Holders - Waiver. Wherever this Resolution provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to
the address of each Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Bonds. Where this Resolution provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
45035982.1 28
f�
{
SECTION 29: Cancellation. All Bonds surrendered for payment, redemption, transfer or
exchange, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if
kw surrendered to the Corporation, shall be delivered to the Paying Agent/Registrar and, if not
already canceled, shall be promptly canceled by the Paying Agent/Registrar. The Corporation
may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously
certified or registered and delivered which the Corporation may have acquired in any manner
whatsoever, and all Bonds so delivered shall be promptly canceled by the Paying
Agent/Registrar. All canceled Bonds held by the Paying Agent/Registrar shall be destroyed as
directed by the Corporation.
SECTION 30: Sale of Bonds - Execution of Purchase Contract. The Bonds authorized
by this Resolution are hereby sold to J. P. Morgan Securities, Inc. (herein referred to as the
"Purchasers") in accordance with a Bond Purchase Contract (the "Contract'), dated May 15,
2001, attached hereto as Exhibit C and incorporated herein by reference as a part of this
Resolution for all purposes. The President of the Board of Directors is hereby authorized and
directed to execute said Contract for and on behalf of the Corporation and as the act and deed
of this Board, and in regard to the approval and execution of the Contract, the Board hereby
finds, determines and declares that the representations, warranties and agreements of the
Corporation contained therein are true and correct in all material respects and shall be honored
and performed by the City.
SECTION 31: Approval and Execution of Financing/Use Agreement with the City. The
"Financing/Use Agreement" (the "Agreement') by and between the Corporation and the City,
attached hereto as Exhibit D and incorporated herein by reference as a part of this Resolution
for all purposes, is hereby approved as to form and content, and such Agreement in
substantially the form and substance attached hereto, together with such changes or revisions
.,,,, as may be necessary to accomplish the financing or benefit the Corporation, is hereby
authorized to be executed by the President and Secretary of the Board of Directors of the
Corporation and as the act and deed of this Board; and such Agreement as executed by said
officials shall be deemed approved by the Board and constitute the Agreement herein approved.
SECTION 32: Official Statement. The use of the Preliminary 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 (together with such changes approved by
the President, Vice President or Secretary of the Board of Directors, or Treasurer of the
Corporation, any one or more of said officials), shall be and is hereby in all respects approved
and the Purchasers are hereby authorized to use and distribute said final Official Statement,
dated May 15, 2001, in the reoffering, sale and delivery of the Bonds to the public. The
President and Secretary of the Board of Directors of the Corporation are further authorized and
directed to manually execute and deliver for and on behalf of the Corporation copies of said
Official Statement in final form as may be required by the Purchasers, and such final Official
Statement in the form and content manually executed by said officials shall be deemed to be
approved by the Board of Directors and constitute the Official Statement authorized for
distribution and use by the Purchasers.
SECTION 33: Proceeds of Sale. The proceeds of sale of the Bonds, excluding the
accrued interest and premium, if any, received from the Purchasers and the amount being
deposited to the Reserve Fund, shall be deposited in a construction fund in accordance with the
Agreement. Pending expenditure for the Project, such proceeds of sale may be invested in
authorized investments in accordance with the provisions of V.T.C.A., Government Code,
45035982.1 29
LJ
Chapter 2256, including specifically guaranteed investment contracts permitted in V.T.C.A.,
kw Section 2256.015, et seq, and, subject to the provisions of Section 27(h) hereof, any
investment earnings realized shall be expended for the Projects or deposited in the Bond Fund.
All surplus proceeds of sale of the Bonds, including investment earnings, remaining after
completion of the Projects and paying or making provision for the payment of the amounts owed
pursuant to Section 27(h)(2) hereof, together with the accrued interest and premium, if any,
received from the Purchasers, shall be deposited to the credit of the Bond Fund.
SECTION 34: 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.
SECTION 35: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Bonds shall be of no significance or effect as regards the legality
thereof and neither the Corporation nor attorneys approving said Bonds as to legality are to be
held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds
SECTION 36: Control and Custody of Bonds. The President of the Board shall be and
is hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, and shall take and have charge and
control of the Initial Bond(s) pending the approval thereof by the Attorney General, the
registration thereof by the Comptroller of Public Accounts and the delivery thereof to the
.,ter Purchasers.
Furthermore, the President, Vice President or Secretary of the Board of Directors or the
Treasurer of the Corporation, any one or more of said officials, are hereby authorized and
directed to furnish and execute such documents and certifications relating to the Corporation
and the issuance of the Bonds, as may be necessary for the approval of the Attorney General,
registration by the Comptroller of Public Accounts and delivery of the Bonds to the initial
purchasers and, together with the Corporation's financial advisor, general counsel, bond
counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of
the Initial Bond(s) to the Purchasers and the initial exchange thereof for definitive Bonds.
SECTION 37: Benefits of Resolution. Nothing in this Resolution, expressed or implied,
is intended or shall be construed to confer upon any person other than the Corporation, the
Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or
by reason of this Resolution or any provision hereof, this Resolution and all its provisions being
intended to be and being for the sole and exclusive benefit of the Corporation, the Paying
Agent/Registrar and the Holders.
SECTION 38: Inconsistent Provisions. All orders or resolutions, or parts thereof, which
are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the
extent of such conflict and the provisions of this Resolution shall be and remain controlling as to
the matters contained herein.
SECTION 39: Governing Law. This Resolution shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
45035982.1 30
L
SECTION 40: Severability. If any provision of this Resolution or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Resolution and the
application thereof to other circumstances shall nevertheless be valid, and the Board hereby
declares that this Resolution would have been enacted without such invalid provision.
SECTION 41: Construction of Terms. If appropriate in the context of this Resolution,
words of the singular number shall be considered to include the plural, words of the plural
number shall be considered to include the singular, and words of the masculine, feminine or
neuter gender shall be considered to include the other genders.
SECTION 42: Continuing Disclosure Undertaking. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC' means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
low (b) Annual Reports. The Corporation 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, 2001) financial information and operating data with respect to the
Corporation of the general type included in the final Official Statement approved by Section 32
of this Resolution and described in Exhibit E hereto. Financial statements to be provided shall
be (1) prepared in accordance with the accounting principles described in Exhibit E hereto and
(2) audited, if the Corporation 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 Corporation shall provide unaudited financial statements for the applicable fiscal year to
each NRMSIR and any SID with the financial information and operating data and will file the
annual audit report when and if the same becomes available.
If the Corporation 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
Corporation 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.
45035982.1 31
D
L
(c) Material Event Notices. The Corporation shall notify any SID and either each
NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the
Bonds, if such event
is material within the meaning of the federal securities laws:
1.
Principal and interest payment delinquencies;
2.
Non-payment related defaults;
3.
Unscheduled draws on debt service reserves reflecting financial
difficulties;
4.
Unscheduled draws on credit enhancements reflecting financial
difficulties;
5.
Substitution of credit or liquidity providers, or their failure to perform;
6.
Adverse tax opinions or events affecting the tax-exempt status of the
Bonds;
7.
Modifications to rights of holders of the Bonds;
8.
Bond calls;
9.
Defeasances;
10.
Release, substitution, or sale of property securing repayment of the
Bonds; and
11.
Rating changes.
The Corporation shall notify any SID, in a timely manner, of any failure by the
Corporation to provide financial information or operating data in accordance with subsection (b)
of this Section by the time required by such Section.
(d) Limitations, Disclaimers, and Amendments. The Corporation shall be obligated
to observe and perform the covenants specified in this Section while, but only while, the
AW Corporation remains an "obligated person" with respect to the Bonds within the meaning of the
Rule, except that the Corporation in any event will give the notice required by subsection (c)
hereof of any Bond calls and defeasance that cause the Corporation 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 Corporation
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 Corporation'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 Corporation 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 CORPORATION BE LIABLE TO THE
HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY
BREACH BY THE CORPORATION, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS
PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
45035982.1 32
D
0
No default by the Corporation in observing or performing its obligations under this
Section shall constitute a breach of or default under this Resolution for purposes of any other
provision of this Resolution.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Corporation under federal and state securities laws.
The provisions of this Section may be amended by the Corporation 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 Corporation, but only if (1)
the provisions of this Section, as so amended, would have permitted an underwriter to purchase
or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into
account any amendments or interpretations of the Rule to the date of such amendment, as well
as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate
principal amount (or any greater amount required by any other provision of this Resolution that
authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a
Person that is unaffiliated with the Corporation (such as nationally recognized bond counsel)
determines that such amendment will not materially impair the interests of the Holders and
beneficial owners of the Bonds. The provisions of this Section may also be amended from time
to time or repealed by the Corporation if the SEC amends or repeals the applicable provisions of
the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and
to the extent that reservation of the Corporation's right to do so would not prevent underwriters
of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such
offering. If the Corporation so amends the provisions of this Section, it shall include with any
amended financial information or operating data filed with each NRMSIR and SID pursuant to
subsection (b) of this Section an explanation, in narrative form, of the reasons for the
amendment and of the impact of any change in the type of financial information or operating
data so provided.
SECTION 43: Insurance. The Bonds have been sold with the principal of and interest
thereon being insured by Ambac Indemnity Corporation (hereinafter called "Ambac") pursuant to
a Municipal Bond Insurance Policy. In accordance with the terms and conditions applicable to
insurance provided by Ambac, the Corporation covenants and agrees that, in the event the
principal and interest due on the Bonds shall be paid by Ambac pursuant to the policy referred
to this Section, the assignment and pledge of all funds and all covenants, agreements and other
obligations of the Corporation to the Holders shall continue to exist and Ambac shall be
subrogated to the rights of such Holders; and furthermore, the Corporation covenants and
agrees that:
(a) Consent of Ambac where Holder Consent Required. Ambac shall be deemed
to be the holder of the Bonds insured by Ambac at all times for the purpose of the execution and
delivery of any amendment, change or modification of this Resolution or the initiation by Holders
of any action to be taken under this Resolution at the Holder's request, which under this
Resolution (or under such underlying documents requires the written approval or consent of or
can be initiated by the Holders of a majority (50% percent) in aggregate principal amount of the
Bonds at the time Outstanding.
(b) Defeasance. In the event that the principal and redemption price, if applicable,
and interest due on the Bonds shall be paid by Ambac pursuant to the policy referred to in this
,�W Section, all covenants, agreements and other obligations of the Corporation to the Holders shall
continue to exist and Ambac shall be subrogated to the rights of such Holders.
11 45035982.1 33
11
j
(c) Notices to be Given to Ambac. While the Municipal Bond Guaranty Insurance
E-16W Policy is in effect, the Corporation shall furnish to Ambac:
H
(1) as soon as practicable after the filing thereof, a copy of any financial
statement of the Corporation and a copy of any audit and annual report of the
Corporation;
(2) a copy of any notice to be given to the registered owners of the
Bonds, including, without limitation, notice of any redemption or defeasance of
Bonds, and any certificate rendered pursuant to this Resolution relating to the
security for the Bonds; and
(3) such additional information as it may reasonably request.
The Corporation will permit Ambac to discuss the affairs, finances and accounts of the
Corporation, or any information Ambac may reasonably request regarding the security for the
Bonds with appropriate officers of the Corporation. The Corporation will permit Ambac to have
access to and make copies of all books and records relating to the Bonds at any reasonable
time.
(d) Consent of Ambac. Any provision of this Resolution expressly recognizing or
granting rights in or to Ambac may not be amended in any manner which affects the rights of
Ambac hereunder without the prior written consent of Ambac. Furthermore, anything in this
Resolution to the contrary notwithstanding, upon the occurrence and continuance of an event of
default, Ambac shall be entitled to control and direct the enforcement of all rights and remedies
granted to the Holders of the Bonds for the benefit of such Holders.
(e) Concerning the Bond Insurance Policy. As long as insurance for the Bonds shall
be in full force and effect, the Corporation agrees to comply with the following provisions:
(1) if five (5) days prior to an interest payment date for the Bonds the
Corporation determines that there will be insufficient funds in the Interest and
Sinking Fund to pay the principal of or interest on the Bonds on such interest
payment date, the Corporation shall so notify Ambac. Such notice shall specify
the amount of the anticipated deficiency, the Bonds to which such deficiency is
applicable and whether such Bonds will be deficient as to principal or interest, or
both.
(2) the Corporation shall, after giving notice to Ambac as provided in (1)
above, make available to Ambac and the United States Trust Company of New
York, as insurance trustee for Ambac, the registration books of the Corporation
maintained by the Paying Agent/Registrar, and all records relating to the funds
and accounts maintained under this Resolution.
(3) the Corporation shall cause the Paying Agent/Registrar to provide
Ambac and the United States Trust Company of New York with a list of
registered owners of Bonds entitled to receive principal or interest payments from
Ambac under the terms of the Municipal Bond Insurance Policy, and shall cause
the Paying Agent/Registrar to make arrangements with United States Trust
Company of New York (i) to mail checks or drafts to the registered owners of
Bonds entitled to receive full or partial interest payments from Ambac, and (ii) to
45035982.1
34
pay principal upon Bonds surrendered to United States Trust Company of New
York by the registered owners of Bonds entitled to receive full or partial principal
payments from Ambac.
(4) the Corporation shall cause the Paying Agent/Registrar to notify, at
the time it provides notice to Ambac pursuant to (1) above, the registered owners
of Bonds entitled to receive the payment of principal or interest thereon from
Ambac (i) as to the fact of such entitlement, (ii) that Ambac will remit to them all
or a part of the interest payments next coming due, (iii) that should they be
entitled to receive full payment of principal from Ambac they must tender their
Bonds (along with a form of transfer of title thereto) for payment to United States
Trust Company of New York, as insurance trustee for Ambac, and not the Paying
Agent/ Registrar, and (iv) that should they be entitled to receive partial payment
of principal from Ambac they must tender their Bonds for payment thereon first to
the Paying Agent/Registrar, who shall note on such Bonds the portion of the
principal paid by the Paying Agent/Registrar, and then, along with a form of
transfer of title thereto, to Ambac, which will then pay the unpaid portion of
principal.
(5) Ambac shall, to the extent it makes a payment of principal of or
interest on Bonds, become subrogated to the rights of the recipients of such
payments in accordance with the terms of the Municipal Bond Insurance Policy,
and to evidence such subrogation (i) in the case of subrogation as to claims for
past due interest, the Corporation shall cause the Paying Agent/Registrar to note
Ambac's rights as subrogee on the registration books of the Corporation
maintained by the Paying Agent/Registrar upon receipt from Ambac of proof of
the payment of interest thereon to the registered owners of the Bonds, and (ii) in
the case of subrogation as to claims for past due principal, the Corporation shall
cause the Paying Agent/Registrar to note Ambac's rights as subrogee on the
registration books of the Corporation maintained by the Paying Agent/ Registrar
upon surrender of the Bonds by the registered owners thereof together with proof
of the payment of principal thereof.
SECTION 44: Public Meeting. It is officially found, determined, and declared that the
meeting at which this Resolution is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Resolution, was given, all as required by V.T.C.A., Government Code, Chapter 551, as
amended.
11 45035982.1
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35
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SECTION 45: Effective Date. This Resolution shall be in force and effect from and
%W after its passage on the date shown below.
PASSED AND ADOPTED, this May 15, 2001.
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
President, Board of Directors
A T:
f
Secretary, Board of Directors
(C poraticn Seal)
L-
45035982.1
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36
EXIT A '
le
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of May 15, 2001 (this "Agreement"), by and between
the Southlake Parks Development Corporation (the "Issuer"), and The Chase Manhattan Bank,
a New York banking corporation organized and existing under the laws of the State of New York
and authorized to do business in the State of Texas (the "Bank"),
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its
"Southlake Parks Development Corporation Sales Tax Subordinate Lien Revenue Bonds,
Series 2001" (the "Securities") in the aggregate principal amount of $4,690,000, which
Securities are scheduled to be delivered to the initial purchasers on or about June 14, 2001; and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in
connection with the payment of the principal of, premium, if any, and interest on said Securities
and with respect to the registration, transfer and exchange thereof by the registered owners
thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the
Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the
Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof; all in
accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Bond Resolution".
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02. Compensation. As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Annex A attached hereto for the first year of this Agreement and thereafter the fees and
amounts set forth in the Bank's current fee schedule then in effect for services as Paying
Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days
prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the
following Fiscal Year.
kw
1 45034319.1 1
A
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any
of the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE TWO
.r DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which
the principal or any or all installments of interest, or both, are due and payable on
any Security which has become accelerated pursuant to the terms of the
Security.
"Bank Office" means the designated office of the Bank as indicated in
Section 3.01 hereof. The Bank will notify the Issuer in writing of any change in
location of the Bank Office.
"Bond Resolution" means the resolution, order, or ordinance of the
governing body of the Issuer pursuant to which the Securities are issued,
certified by the Secretary or any other officer of the Issuer and delivered to the
Bank.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30th.
"Holder" and "Security Holder" each means the Person in whose name a
Security is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order
signed in the name of the Issuer by the President, Vice President or Secretary of
the Board of Directors of Treasurer of the Corporation, any one or more of said
officials, and delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized
to be closed.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision of a government.
"Predecessor Securities" of any particular Security means every previous
Security evidencing all or a portion of the same obligation as that evidenced by
such particular Security (and, for the purposes of this definition, any mutilated,
lost, destroyed, or stolen Security for which a replacement Security has been
registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the
Resolution).
45034319.1
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EXRMIT A 4
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L ow
a
"Redemption Date" when used with respect to any Security to be
redeemed means the date fixed for such redemption pursuant to the terms of the
Bond Resolution.
"Responsible Officer" when used with respect to the Bank means the
Chairman or Vice -Chairman of the Board of Directors, the Chairman or
Vice -Chairman of the Executive Committee of the Board of Directors, the
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any
Trust Officer or Assistant Trust Officer, or any other officer of the Bank
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of
the Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the
principal of a Security is scheduled to be due and payable.
Section 2.02. Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar' refers to the Bank in the performance of the duties
and functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the
Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity,
Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the
Bank at the following address: P. O. Box 2320, Dallas, Texas 75221-2320 or 1201 Main Street,
One Main Place, 18th Floor, Dallas, Texas 75201, Attention: Corporate Trust Services.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
each Security when due, by computing the amount of interest to be paid each Holder and
making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the
Record Date. All payments of principal and/or interest on the Securities to the registered
owners shall be accomplished (1) by the issuance of checks, payable to the registered owners,
drawn on the fiduciary account provided in Section 5.05 hereof, sent by United States mail, first
class, postage prepaid, to the address appearing on the Security Register or (2) by such other
method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and
expense.
Section 3.02. Payment Dates, The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities at the dates specified in the Bond Resolution.
45034319.1
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EXMrf A I
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ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register -Transfers and Exchanges. The Bank agrees to keep
and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register') for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and Bank may prescribe. All transfers, exchanges and replacement of
Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed
by an officer of a federal or state bank or a member of the National Association of Securities
Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly
authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re -registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in
not more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly
executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the
Paying Agent/Registrar.
Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use and reasonable care will be
exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less
than the care maintained by the Bank for debt securities of other governments or corporations
for which it serves as registrar, or that is maintained for its own securities.
Section 4.03. Form of Security Register. The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities
in accordance with the Bank's general practices and procedures in effect from time to time. The
Bank shall not be obligated to maintain such Security Register in any form other than those
which the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank to provide an up-to-date listing or to convert the information into written form.
45034319.1
4
TiAMU A "
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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 26 of the Bond Resolution, to deliver and
issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as
long as the same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may
execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or
stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof
with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such
Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of
indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All
expenses and charges associated with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be bome by the Holder of the Security mutilated, or
destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time
after receipt of written request from the Issuer, furnish the Issuer information as to the Securities
it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of
any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu
of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof.
Section 5.02. Reliance on Documents, Etc (a) The Bank may conclusively
rely, as to the truth of the statements and correctness of the opinions expressed therein, on
certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing
45034319.1
5
EXffiB1T A 4
L
that repayment of such funds or adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document believed by it to be genuine
and to have been signed or presented by the proper parry or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine the ownership of any
Securities, but is protected in acting upon receipt of Securities containing an endorsement or
instruction of transfer or power of transfer which appears on its face to be signed by the Holder
or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts
or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note, security, or other paper or document supplied by
Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or
any opinion of counsel shall be full and complete authorization and protection with respect to
any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer
and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
4W or any other Person for any amount due on any Security from its own funds.
E
�
1
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Section 5.04. May Hold Securities The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05. Moneys Held by Bank - Paying agent Account/Collateralization. A
paying agent 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 paying agent accounts to the extent such
money is not insured by the Federal Deposit Insurance Corporation. Payments made from such
account shall be made by check drawn on such account unless the owner of such Securities
shall, at its own expense and risk, request such other medium of payment.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal, premium (if any), or interest on any
Security and remaining unclaimed for three 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
45034319.1
0
FX=ff A
thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to
such moneys shall thereupon cease.
4W
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", 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.
L"' ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6.02. Assignment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on page 9.
Section 6.04. Effect of Headings The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 6.05. Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
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.
45034319.1
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7
EXMff A
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
%W 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.
C
H
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one
and the same Agreement.
Section 6.10. Termination. This Agreement will terminate (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (60) days written notice; provided, however, an
early termination of this Agreement by either party shall not be effective until (a) a successor
Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and
(b) notice given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an
early termination of this Agreement shall not occur at any time which would disrupt, delay or
otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force
and effect following the termination of this Agreement.
Section 6.11. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
1�w
1 45034319.1
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EXHIBIT A
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
THE CHASE MANHATTAN BANK
BY
Title:
(SEAL]
Address:
Attest: 600 Travis, Suite 1150
Houston, Texas 77002
Title:
(CORPORATION SEAL)
Attest:
Secretary, Board of Directors
45034319.1
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
President, Board of Directors
Address:
667 N. Carroll Avenue
Southlake, Texas 76092
4,
E%W
GL'ARANTY AGREEMENT
GUARANTY AGREEMENT dated as of -'pp
. a public body corporate organized and existing under the laws of the State of
"Obligor"); and AMBAC ASSURANCE CORPORATION ("Ambac"). a Wisconsin
insurance company.
WITNESSETH:
WHEREAS, the Obligor has or will issue -(the "Obligations"); and
EXMIT B
by and bet�keen
the
domiciled stock
WHEREAS, Ambac will issue its Surety Bond (the "Surety Bond"), substantially in the form set
forth in Annex A to this Agreement, guaranteeing certain payments by the Obligor subject to the terms
and limitations of the Surety Bond; and
WHEREAS, to induce Ambac to issue the Surety Bond, the Obligor has agreed to pay the
premium for such Surety Bond and to reimburse Ambac for all payments made by Ambac under the
Surety Bond from Legally Available Funds, all as more fully set forth in this Agreement; and
WHEREAS, the Obligor understands that Ambac expressly requires the delivery of this
Agreement as part of the consideration for the execution by Ambac of the Surety Bond; and
NOW, THEREFORE, in consideration of the premises and of the agreements herein contained
and of the execution of the Surety Bond, the Obligor and Ambac agree as follows:
ARTICLE I
4W DEFIPIITIONS; SURETY BOND
Section 1.01. Definitions. Except as otherwise expressly provided herein or unless the context otherwise
requires, the terms which are capitalized herein shall have the meanings specified in Annex B hereto.
Section 1.02. Surety Bond.
(a) Ambac will issue the Surety Bond in accordance with and subject to the terms and conditions of the
Commitment.
(b) The maximum liability of Ambac under the Surety Bond and the coverage and term thereof shall be
subject to and limited by the Surety Bond Coverage and the terms and conditions of the Surety Bond.
(c) Payments made under the Surety Bond will reduce the Surety Bond Coverage to the extent of that
payment, provided that the Surety Bond Coverage shall be automatically reinstated to the extent of the
reimbursement of principal by the Obligor of any payment made by Ambac. Ambac shall notify the
Paying Agent in writing no later than the fifth (5th) day following the reimbursement by the Obligor that
the Surety Bond has been reinstated to the extent of such reimbursement.
Section 1.03. Premium. In consideration of Ambac agreeing to issue the Surety Bond hereunder, the
Obligor hereby agrees to pay or cause to be paid from Legally Available Funds the premium set forth in
the Commitment.
Section 1.04. Certain Other Expenses. The Obligor will pay all reasonable fees and disbursements of
Ambac's counsel related to any modification of this Agreement or the Surety Bond.
V,
d
ARTICLE II
REIMBURSEMENT OBLIGATIO S OF OBLIGOR ND SECURITY THEREFORE
�Section 2.01. Reimbursement for Payments Under the , v Surety Bond and Expenses.
(a) The Obligor will reimburse Ambac, from Legally Available Funds within the Reimbursement Period.
without demand or notice by Ambac to the Obligor or any other person, to the extent of each Surety Bond
Payment with interest on each Surety Bond Payment from and including the date made to the date of the
reimbursement by the Obligor at the Effective Interest Rate. The Obligor agrees that it shall make
monthly level principal repayments for each Surety Bond Payment during the Reimbursement Period.
Interest on each Surety Bond Payment shall be paid monthly during the Reimbursement Period. To the
extent that interest payments due hereunder are not paid on a monthly basis, or are not paid as each
principal repayment is made, interest shall accrue on such unpaid amounts at a rate equal to the Effective
Interest Rate.
(b) The Obligor also agrees to reimburse Ambac, from Legally Available Funds, immediately and
unconditionally upon demand for all reasonable expenses incurred by Ambac in connection with the
Surety Bond and the enforcement by Ambac of the Obligor's obligations under this Agreement together
with interest on all such expenses from and including the date which is 30 days from the date a statement
for such expenses is received by the Obligor incurred to the date of payment at the rate set forth in
subsection (a) of this Section 2.01.
Section 2.02. Allocation of Payments. Ambac and the Obligor hereby agree that each repayment of
principal received by Ambac from or on behalf of the Obligor as a reimbursement to Ambac as required
by Section 2.01(a) hereof shall be applied to reinstate all or a portion of the Surety Bond Coverage to the
extent of such repayment. Any interest payable pursuant to Section 2.01(a) hereof shall not be applied to
the reinstatement of any portion of the Surety Bond Coverage.
AW Section 2.03. Security for Payments,• Instruments of Further Assurance. To the extent, but only to the
extent, that the Resolution pledges to the Owners or any paying agent therefor, or grants a security
interest or lien in or on any collateral property, revenue or other payments ("Collateral and Revenues") in
order to secure the Obligations or provide a source of payment for the Obligations, the Obligor hereby
grants to Ambac a security interest in or lien on, as the case may be, and pledges to Ambac all such
Collateral and Revenues as security for payment of all amounts due hereunder, which security interest,
lien and/or pledge created or granted under this Section 2.03 shall be subordinate only to the interests of
the Owners and any paying agent therefor in such Collateral and Revenues. The Obligor agrees that it
will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any and all financing statements, if applicable, and all other further instruments as may be
required by law or as shall reasonably be requested by Ambac for the perfection of the security interest, if
any, granted under this Section 2.03 and for the preservation and protection of all rights of Ambac under
this Section 2.03.
Section 2.04. Unconditional Obligation. The obligations of the Obligor hereunder are absolute and
unconditional and will be paid or performed strictly in accordance with this Agreement, irrespective of:
(a) any lack of validity or enforceability of, or any amendment or other modification of, or waiver with
respect to the Resolution or the Obligations;
(b) any exchange, release or nonperfection of any security interest in property securing the Obligations or
this Agreement or any obligations hereunder;
(c) any circumstances which might otherwise constitute a defense available to, or discharge of, the
Obligor with respect to the Obligations;
16
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I
(d) whether or not such obligations are contingent or matured. disputed or undisputed. liquidated or
unliquidated.
ARTICLE III
EVENTS OF DEFAULT; REMEDIES
Section 3.01. Events of Default. The following events shall constitute Events of Default hereunder:
(a) The Obligor shall fail to pay to Ambac any amount payable under Sections 1.04 and 2.01 hereof and
such failure shall have continued for a period in excess of the Reimbursement Period;
(b) Any material representation or warranty made by the Obligor hereunder or under the Resolution or
any statement in the application for the Surety Bond or any report, certificate, financial statement or other
instrument provided in connection with the Commitment, the Surety Bond or herewith shall have been
materially false at the time when made;
(c) Except as otherwise provided in this Section 3.01, the Obligor shall fail to perform any of its other
obligations under this Agreement or hereunder, provided that such failure continues for more than thirty
(30) days after receipt by the Obligor of notice of such failure to perform;
(d) The Obligor shall (i) voluntarily commence any proceeding or file any petition seeking relief under
the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or
similar law, (ii) consent to the institution of, or fail to controvert in a timely and appropriate manner, any
such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a
""' receiver, paying agent, custodian, sequestrator or similar official for the Obligor or for a substantial part
of its property, (iv) file an answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due or (vii) take action for the
purpose of effecting any of the foregoing; or
(e) An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of
competent jurisdiction seeking (i) relief in respect of the Obligor, or of a substantial part of its property,
under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or
similar law or (ii) the appointment of a receiver, paying agent, custodian, sequestrator or similar official
for the Obligor or for a substantial part of its property; and such proceeding or petition shall continue
undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall
continue unstayed and in effect for thirty (30) days.
Section 3.02. Remedies. If an Event of Default shall occur and be continuing, then Ambac may take
whatever action at law or in equity may appear necessary or desirable to collect the amounts then due and
thereafter to become due under this Agreement or any related instrument and enforce any obligation,
agreement or covenant of the Obligor under this Agreement; provided, however, that Ambac may not take
any action to direct or require acceleration or other early redemption of the Obligations or adversely affect
the rights of the Owners. All rights and remedies of Ambac under this Section 3.02 are cumulative and the
exercise of any one remedy does not preclude the exercise of one or more of the other available remedies.
'�W
17
ARTICLE I`'
SETTLEti ti . 1E� T
Ambac shall have the exclusive right to decide and determine whether an claim, liability, suit or
y ,
judgment made or brought against Ambac. the Obligor or any other party on the Surety Bond shall or
shall not be paid, compromised, resisted, defended. tried or appealed. and Ambac's decision thereon. if
made in good faith, shall be final and binding upon the Obligor. An itemized statement of payments made
by Ambac, certified by an officer of Ambac, or the voucher or vouchers for such payments, shall be prima
facie evidence of the liability of the Obligor, and if the Obligor fails to reimburse Ambac, pursuant to
subsection (b) of Section 2.01 hereof, upon the receipt of such statement of payments, interest shall be
computed on such amount from the date of any payment made by Ambac at the rate set forth in
subsection (a) of Section 2.01 hereof.
ARTICLE V
MISCELLANEOUS
Section 5.01. Computations. All computations of premium, interest and fees hereunder shall be made on
the basis of the actual number of days elapsed over a year of 360 days.
Section 5.02. Exercise of Rights. No failure or delay on the part of Ambac to exercise any right, power
or privilege under this Agreement and no course of dealing between Ambac and the Obligor or any other
party shall operate as a waiver of any such right, power or privilege, nor shall any single or partial
exercise of any such right, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which Ambac would otherwise have pursuant to
law or equity. No notice to or demand on any party in any case shall entitle such party to any other or
4W further notice or demand in similar or other circumstances, or constitute a waiver of the right of the other
party to any other or further action in any circumstances without notice or demand.
Section 5.03. Amendment and Waiver. Any provision of this Agreement may be amended, waived,
supplemented, discharged or terminated only with the prior written consent of the Obligor and Ambac.
The Obligor hereby agrees that upon the written request of the Paying Agent, Ambac may make or
consent to issue any substitute for the Surety Bond to cure any ambiguity or formal defect or omission in
the Surety Bond which does not materially change the terms of the Surety Bond nor adversely affect the
rights of the Owners, and this Agreement shall apply to such substituted Surety Bond. Ambac agrees to
deliver to the Obligor and to the company or companies, if any, rating the Obligations, a copy of such
substituted Surety Bond.
Section 5.04. Successors and Assigns, Descriptive Heading.
(a) This Agreement shall bind, and the benefits thereof shall inure to, the Obligor and Ambac and their
respective successors and assigns; provided, that the Obligor may not transfer or assign any or all of its
rights and obligations hereunder without the prior written consent of Ambac.
(b)' The descriptive headings of the various provisions of this Agreement are inserted for convenience of
reference only and shall not be deemed to affect the meaning or construction of any of the provisions
hereof.
Section 5.05. Other Sureties. If Ambac shall procure any other surety to reinsure the Surety Bond, this
Agreement shall inure to the benefit of such other surety, its successors and assigns, so as to give to it a
direct right of action against the Obligor to enforce this Agreement, and "Ambac," wherever used herein,
shall be deemed to include such reinsuring surety, as its respective interests may appear.
18
IRYMW R
Section 5.06. Signature on Obligation. The Obligor's liability shall not be aff
ected b" its failure to sicn
the Surety Bond nor by any claim that other indemnity or security was to have been obtained nor b� the
release of any indemnity, nor the return or exchange of any collateral that may have been obtained.
Section 5.07. Waiver. The Obligor waives any defense that this Agreement was executed subsequent to
the date of the Surety Bond. admitting and covenanting that such Surety Bond was executed pursuant to
the Obligor's request and in reliance on the Obligor's promise to execute this Agreement.
Section 5.08. Notices, Requests, Demands. Except as otherwise expressly provided herein. all written
notices, requests, demands or other communications to or upon the respective parties hereto shall be
deemed to have been given or made when actually received, or in the case of telex or telecopier notice
sent over a telex or a telecopier machine owned or operated by a party hereto, when sent, addressed as
specified below or at such other address as either of the parties hereto or the Paying Agent may hereafter
specify in writing to the others:
If to the Obligor: >
If to the Paying Agent: >
If to Ambac: Ambac Assurance Corporation
One State Street Plaza
17th Floor
New York, New York 10004
Attention: General Counsel
Section 5.09. Survival of Representations and Warranties. All representations, warranties and
obligations contained herein shall survive the execution and delivery of this Agreement and the Surety
Bond.
L low
Section 5.10. Governing. Law. This Agreement and the rights and obligations of the parties under this
Agreement shall be governed by and construed and interpreted in accordance with the laws of the State.
Section 5.11. Counterparts. This Agreement may be executed in any number of copies and by the
different parties hereto on the same or separate counterparts, each of which shall be deemed to be an
original instrument. Complete counterparts of this Agreement shall be lodged with the Obligor and
Ambac.
Section 5.12. Severability. In the event any provision of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be
duly executed and delivered as of the date first above written.
[OBLIGOR)
(Seal)
Attest: By
Title: Title:
Attest:
r Title:
11
AMBAC ASSURANCE CORPORATION
By
Title:
/;11:
19
FINANCING/USE AGREEMENT
i 1W This Financing/Use Agreement (this "Agreement') is made to be effective as of the 15''
day of May, 2001, by and between the City of Southlake, Texas, a duly incorporated and
existing municipal corporation and political subdivision of the State of Texas (the "City") and the
Southlake Parks Development Corporation, a non-profit industrial development corporation
organized and existing under the laws of the State of Texas, including Vernon's Ann. Civ. St.,
Section 4B of Article 5190.6, (the "Corporation")
RECITALS
WHEREAS, the Corporation on behalf of the City is to finance the purchase of land and
making improvements thereto for neighborhood parks and making additional improvements to
existing park land, including related road and streets improvements that enhance such park
facilities (collectively, the "Project"); and
WHEREAS, such financing contemplates the issuance and sale of the Corporation's tax
exempt bonds in the principal amount of $4,690,000, and the proceeds of sale are to be used by
the City to design and construct the Project; and
WHEREAS, the City will have full responsibility for the design and construction of the
Project and the Corporation shall have no duties or responsibilities with respect to the Project
other than to provide for the financing of its costs;
AGREEMENT
1. Financing of Project: For and in consideration of the City's covenants and
agreements herein contained and subject to the terms contained herein, the Corporation hereby
agrees to issue a series of obligations to be known as "Southlake Parks Development
Corporation Sales Tax Subordinate Lien Revenue Bonds, Series 2001", hereinafter called the
"Bonds", and deposit proceeds of sale of the Bonds (less amounts to pay costs of issuance,
municipal bond insurance premium, surety bond insurance premium, and accrued interest) to
the credit of a construction fund or account designated by the City, and the City hereby agrees
and covenants that the proceeds of sale deposited to the credit of such construction account
shall be used solely to pay the costs of the Project.
2. Use of Project. Until all the Bonds have been fully paid, discharged and retired, the
upkeep and maintenance of the Project will be the responsibility of the City and the Corporation
shall have no responsibility with respect to the operation, upkeep and maintenance of the
Project.
3. Recognition of Tax Exempt Financing. The City hereby acknowledges and
recognizes that the Bonds are being issued as "state or local bonds" under and pursuant to
section 103(a) of the Internal Revenue Code of 1986, as amended, and the City hereby
covenants and agrees with respect to the use of proceeds of sale of the Bonds and the use of
the Project as follows:
(a) Definitions. When used in this Section, the following terms have the following
meanings:
45034291.1
11
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"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 cant' 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
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
45034291.1
2
/C11�
indirectly with Gross Proceeds of the Bonds, and not use or permit the use of
such Gross Proceeds (including all contractual arrangements with terms different
;kw 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
r member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Bonds or any property the acquisition, construction or improvement of which is to
be financed or refinanced directly or indirectly with such Gross Proceeds, other
than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to
make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a
person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
tow which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. - Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment
(or use Gross Proceeds to replace money so invested), if as a result of such investment the
Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money
replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed within the meaning of section
149(b) of the Code and the Regulations and rulings thereunder.
(g) Payment of Rebatable Arbitrage. Except to the extent otherwise provided in
section 148(f) of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and
apart from all other funds (and receipts, expenditures and investments thereof)
and shall retain all records of accounting for at least six years after the day on
which the last Outstanding Bond is discharged. However, to the extent permitted
by law, the City may commingle Gross Proceeds of the Bonds with other money
of the City, provided that the City separately accounts for each receipt and
expenditure of Gross Proceeds and the obligations acquired therewith.
45034291.1
K?
(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 use 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 remit to the Corporation for payment to the United States
the amount described in paragraph (g)(2) above and the amount described in
paragraph (g)(4) below, at the times, in the manner and accompanied by such
forms or other 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 paragraph (g)(2), and if
an error is made, to discover and promptly correct such error within a reasonable
amount of time thereafter (and in all events within one hundred eighty (180) days
after discovery of the error), including the amount remitted to the Corporation for
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.
4. Receipt and Transfer of Proceeds of Sales Tax. The City agrees, in cooperation with
the Corporation, to take such actions as are required to cause the "Gross Sales Tax Revenues"
"r (as such term is defined in the resolution authorizing the issuance of the Bonds) received from
the Comptroller of Public Accounts of the State of Texas for and on behalf of the Corporation to
be transferred and deposited immediately upon receipt by the City to the credit of the banking or
monetary fund maintained at the depository designated by the Corporation and known on the
books and records of the Corporation as the "Pledged Revenue Fund".
5. Modifications. This Agreement shall not be changed orally, and no executory
agreement shall be effective to waive, change, modify or discharge this Agreement in whole or
in part unless such executory agreement is in writing and is signed by the parties against whom
enforcement of any waiver, change, modification or discharge is sought.
6. Entire Agreement This Agreement, including the Exhibits, contains the entire
agreement between the parties pertaining to the subject matter hereof and fully supersedes all
prior agreements and understandings between the parties pertaining to such subject matter.
7. Counterparts. This Agreement may be executed in several counterparts, and all
such executed counterparts shall constitute the same agreement. It shall be necessary to
account for only one such counterpart in proving this Agreement.
8. Severability. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall
nonetheless remain in full force and effect.
45034291.1
4
9. Applicable Law. This Agreement shall in all respects be governed by, and
construed in accordance with, the substantive federal laws of the United States and the laws of
the State of Texas.
10. Captions. The section headings appearing in this Agreement are for
convenience of reference only and are not intended, to any extent and for any purpose, to limit
or define the text of any section or any subsection hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date and year first above written.
ATTEST:
Secretary, Board of Directors
(Corporation Seal)
ATTEST:
City Secretary
(City Seal)
45034291.1
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
President, Board of Directors
CITY OF SOUTHLAKE, TEXAS
Mayor
5
/:11"
E�W
SOUTHLAKE PARKS
DEVELOPMENT CORPORATION
(Tarrant and Denton Counties)
$4,690,000 SALES TAX SUBORDINATE LIEN
REVENUE BONDS, SERIES 2001
BOND PURCHASE CONTRACT
May 15, 2001
President and Members of the
Board of Directors
Southlake Parks Development Corporation
4W 1400 Main Street
Southlake, Texas 76092
Ladies and Gentlemen:
The undersigned (the "Underwriter', acting on its own behalf and not acting as fiduciary
or agent for you, offers to enter into this Bond Purchase Contract (this "Purchase Contract") with
the Southlake Parks Development Corporation (the "Issuer's which, upon the Issuer's acceptance
of this offer as evidenced by its execution by the President, shall be binding upon the Issuer and
upon the Underwriter. This offer is made subject to its acceptance by the execution of this
Purchase Contract on or before 10:00 p.m., Central Time, on the date set out above, and, if not
so accepted by the execution, will be subject to withdrawal by the Underwriter upon notice
delivered to the Issuer at any time prior to its acceptance by the execution hereof.
1. Purchase Price. Upon the terms and conditions and upon the basis of the
representations, warranties and covenants set forth herein, the Underwriter hereby agrees to
purchase from the Issuer, and the Issuer hereby agrees to sell to the Underwriter, all (but not less
than all) of the Issuer's $4,690,000 Sales Tax Subordinate Lien Revenue Bonds, Series 2001 (the
`Bonds'), which Bonds have the terms and features (including those with respect to redemption)
P:\ WDOX\CLIENTS`AW206\=MI0000672. WPD / 2
set forth in the Official Statement (as hereinafter defined in Paragraph 4 hereofl . The Bonds shall
have the maturities, bear interest from the specified date at the rates, and have the other
characteristics and terms as set forth on Exhibit "A," which is attached hereto and incorporated
herein by reference.
The purchase price for all of the Bonds will be (i) $4,657,188.80 (which represents the par
amount of the Bonds, less an underwriting discount of $32,811.20), plus (ii) accrued interest on
the Bonds, calculated on the basis of a 360-day year of twelve 30-day months, from May 15,
2001 to the date of Closing.
The Bonds shall be as described in, and shall be issued pursuant to a resolution adopted
by the Issuer's Board of Directors (the "Resolution's authorizing the issuance of the Bonds. The
Bonds shall be issued in accordance with the provisions of the Resolution and secured as provided
therein and as described in the Official Statement. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed to them in the Resolution.
2. Security Deposit. Delivered to the Issuer herewith is the good -faith corporate
check of the Underwriter, payable to the order of the Issuer in an amount equal to one percent
(1 %) of the aggregate par amount of the Bonds (the "Check"). In the event the Issuer does not
accept this offer, the Check shall be promptly returned to the Underwriter. Upon the Issuer's
acceptance of this offer by the execution hereof, the Check (i) shall not be cashed or negotiated
but shall be held and retained in safekeeping by the Issuer as security for the performance by the
wr
Underwriter of its obligations, subject to the terms and conditions herein set forth, to purchase and
accept delivery of the Bonds at the Closing, and (ii) shall be applied and disposed of by the Issuer
solely as provided in this Purchase Contract. In the event of the Underwriter's compliance with
such obligations to purchase and accept delivery of the Bonds at the Closing, the Check shall be
returned to the Underwriter at the Closing. In the event of the failure by the Issuer to deliver the
Bonds at the Closing or if the Issuer shall be unable to satisfy the conditions to the obligations of
the Underwriter contained in this Purchase Contract, or if the obligations of the Underwriter shall
be terminated for any reason permitted by this Purchase Contract, the Check shall be returned
promptly to the Underwriter. In the event that the Underwriter fails (other than for a reason
permitted hereunder) to purchase and accept delivery of the Bonds at the Closing, then the Issuer
shall become entitled to cash or to negotiate the Check and the proceeds thereof shall be retained
by the Issuer as and for full liquidated damages for such failure and for any and all defaults on the
part of the Underwriter and such proceeds shall constitute a full release and discharge of all claims
and damages for such failure and for any and all such defaults. The Underwriter agrees not to stop
payment on the Check unless the Issuer has breached the terms of this Purchase Contract.
3. Pubfic Offering. The Underwriter hereby agrees to make an initial bona fide
public offering of all the Bonds at prices not in excess of the initial offering prices (or yields) set
forth on the inside cover pages of the Official Statement, plus accrued interest on the Bonds,
F:\WDOX\CLIENTS\OW206\OW17\10000672.%VM / 2 2
'E)UMIT
D
reserving the right to change such prices or yields as the Underwriter shall deem necessary in
connection with the offering of the Bonds without any requirement of prior notice. The Underwriter
may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into investment
trusts) and others at prices lower than the public offering prices (or yields higher than the public
offering yields) stated on the inside cover page of the Official Statement; provided however, that
at least ten (10) percent of each maturity of the Bonds sold shall be at the prices set forth in the
Official Statement.
4. Resolution: Official Statement. Simultaneously with the execution of this
Purchase Contract, the Issuer will deliver (or cause to be delivered) to the Underwriter one copy
of the Resolution, duly executed, approved and adopted and in full force and effect. The Issuer
hereby authorizes the Underwriter to use the Resolution in connection with the public offering and
sale of the Bonds.
The Issuer has heretofore delivered to the Underwriter copies of the Preliminary Official
Statement related to the Bonds, dated May 1, 2001 (the "Preliminary Official Statement'), for the
Underwriter's use in determining interest in the Bonds. The Issuer ratifies, confirms and approves
the use by the Underwriter, prior to the date hereof, of the Preliminary Official Statement and the
information contained therein in connection with the public offering of the Bonds under the
circumstances and conditions contained therein and herein.
On a date no more than seven (7) business days following the date of the Issuer's
acceptance hereof, the Issuer shall deliver to the Underwriter copies of the final Official Statement
related to the Bonds approved by duly authorized officials of the Issuer in sufficient number to
permit the Underwriter to comply with the requirements of Rule 15c2-12 (the "Rule") of the
Securities and Exchange Commission. Such final Official Statement shall be dated the date hereof
and shall be substantially in the form of the Preliminary Official Statement (which Official Statement,
including the cover page thereto, all exhibits, appendices, maps, pictures, diagrams, reports and
statements included or incorporated therein or attached thereto, and all amendments and
supplements that may be authorized for use with respect to the Bonds approved by duly authorized
officials of the Issuer, is herein called the "Official Statement") with such changes as are permitted
by the Rule to reflect the pricing of the Bonds.
The Issuer authorizes the preparation of the Official Statement and the information
contained therein to be used in connection with the public offering and sale of the Bonds under the
circumstances and conditions contained therein and herein.
5. Representations. Warranties and Covenants. The Issuer represents and
warrants to the Underwriter (and it shall be a condition of the obligation of the Underwriter to
purchase and accept delivery of the Bonds that the Issuer shall so represent and warrant as of the
date of the Closing) that:
F:\W DOX\CLIENTS\0"2o6\OW17\l00006n. WM I z 3
Ll
(a) Existence: Power: and Authority. The Issuer is a non-profit industrial
development corporation duly organized and operating under the laws of the State of
Texas and has full legal right, power and authority (i) to issue the Bonds, 00 to authorize
the preparation of the Preliminary Official Statement and the Official Statement and to
authorize their use and distribution by the Underwriter, (iii) to enter into this Purchase
Contract and to sell and deliver the Bonds to the Underwriter as provided herein, (iv) to
adopt the Resolution and to carry out and consummate the actions contemplated thereby,
and (v) to carry out and consummate all other transactions contemplated by each of the
aforesaid documents;
(b) Due Authorization The Issuer's Board of Directors has duly adopted
the Resolution (which is in full force and effect at the time of the execution hereon and has
duly approved the execution and delivery of this Purchase Contract, the Official Statement
and the Bonds, and has duly authorized the taking of any and all such actions as may be
required on the part of the Issuer to carry out, give effect to and consummate the
transactions contemplated by this Purchase Contract, the Official Statement and the
Bonds;
(c) No Adverse Actions. At the time of the Issuer's acceptance of this offer
by the execution hereof, there is, and at the date of the Closing there will be, no action,
suit, proceeding, inquiry or investigation, at law or in equity, or before or by any court,
public board or body, pending or known to be threatened against or affecting the existence
of the Issuer or the title of its officials to their respective positions, nor to the best of the
4W knowledge of the Issuer is there any basis therefor, wherein an unfavorable decision, ruling
or finding would adversely affect the validity or enforceability of the Resolution, the Bonds,
this Purchase Contract or any agreement or instrument relating thereto, used or
contemplated for use in the consummation of the transactions contemplated by this
Purchase Contract or the Official Statement;
(d) No Defaults. The Issuer is not, in any material respect which would
adversely affect the validity of the Bonds, in breach of or default under any applicable law
or administrative regulation of the State of Texas or any department, division, agency or
ins imentality thereof, or of the United States or any agency or instrumentality thereof or
any applicable judgment or decree or any loan agreement, note, resolution, certificate,
agreement or other instrument to which the Issuer is a party or is otherwise subject; and
to the knowledge of the Issuer after due diligence the execution and delivery of the Official
Statement and the execution and delivery of this Purchase Contract, the Bonds and the
Resolution, and compliance with the provisions of each thereof, will not conflict with or
constitute a material breach of or default under any applicable law or administrative
regulation of the State of Texas or any department, division, agency or instrumentality
thereof, or of the United States or any agency or instrurrientality thereof or any applicable
F:\ WWX\CLIE NTS=4206"17NI OMn.wro / z 4
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judgment or decree or any loan agreement, note, resolution, certificate, agreement or other
instrument to which the Issuer is a party or is otherwise subject;
(e) All Approvals. As of the Closing, all approvals, consents and orders of
any governmental authority, board, agency or commission having jurisdiction which would
constitute a condition precedent to the performance by the Issuer of its obligations
hereunder and under the Resolution, the Bonds and this Purchase Contract will have been
obtained;
(f) Validity of the Bonds. The Bonds, this Purchase Contract and the
Resolution conform to the descriptions thereof contained in the Official Statement; and the
Bonds, when issued, authenticated and delivered in accordance with the Resolution and
sold to the Underwriter, as provided in this Purchase Contract, will be duly authorized,
validly issued and outstanding obligations of the Issuer secured in the manner provided in
the Resolution and described in the Official Statement and entitled to the benefits of the
Resolution;
(g) Financial Information The financial information of the Issuer, including
the historical sales tax information contained in the Official Statement, and the excerpts
from the financial statements of the City of Southlake, Texas contained in the Official
Statement present fairly the financial position of the Issuer as of September 30, 2000, and
the results of its operations for its fiscal year then ended, in conformity with generally
accepted accounting principles applied on a basis consistent with that of the preceding year
(except as noted therein), and except as described in the Official Statement, there has been
no material adverse change in the financial position of the Issuer since such date;
(h) Accuracy of Information in Official Statement. At the time of the
Issuer's acceptance hereof and (unless the Official Statement is amended or supplemented
pursuant to subparagraph 0) of this Paragraph 5) at all times subsequent thereto up to and
including the date of the Closing, the Official Statement (including the excerpts from the
financial statements and other financial and statistical data included therein) does not and
will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(i) Accuracy of Information in Official Statement After Amendment or
Supplement. If the Official Statement is amended or supplemented pursuant to
subparagraph 0) of this Paragraph 5, at the time of each supplement or amendment thereto
and at all times subsequent thereto up to and including the date of the Closing, the Official
Statement, as so supplemented or amended (including the financial statements and other
financial and statistical data included therein), will not contain any untrue statement of a
F:\woox\CLIEM S\004206NMM100006n.wrn/2
10
material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were
made, not misleading;
(j) Amending or Supplementing Official Statement. The Issuer shall not
revise, amend or supplement the Official Statement unless such revision, amendment or
supplement has been previously approved by the Underwriter. If between the date of this
Purchase Contract and the 91st day following the date of the Closing an event occurs of
which the Issuer has knowledge and which would cause the Official Statement to contain
any untrue statement of a material fact or to omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, the Issuer shall notify the Underwriter, and
if� in the opinion of the Issuer or the Underwriter, such event requires an amendment or
supplement to the Official Statement, the Issuer will, at its expense, amend and supplement
the Official Statement in a form and in a manner jointly approved by the Issuer and the
Underwriter;
(k) ProhibitionAgainst Incurring Debt. Except as described in the Official
Statement, between the date of this Purchase Contract and the delivery of the Bonds, the
Issuer will not, without the prior written consent of the Underwriter, issue bonds,
certificates, notes or other obligations for borrowed money which are or would be payable
from or constitute a charge on the taxes or revenues pledged to secure the payment of the
Bonds in the Resolution, and between the respective dates as of which information is given
..� in the Official Statement and the date of the delivery of the Bonds, the Issuer has not
incurred and will not incur any material long-term liabilities (except that the Issuer may issue
or incur, without the prior written consent of the Underwriter, any debt described in the
Official Statement);
p) Application of Proceeds. The Issuer will apply the proceeds of the
Bonds for the purposes, and in accordance with the description of the application of such
proceeds, set forth in the Official Statement;
(m) Maintaining Tax -Exemption of Interest on the Bonds. The Issuerwill
not take or omit to take any action which will adversely affect the exclusion from income
for federal income tax purposes of the interest on the Bonds; and the Issuer has not been
notified of any listing or proposed listing by the Internal Revenue Service to the effect that
the Issuer is a bond issuer whose arbitrage certificates may not be relied upon; and
(n) Blue Sky. The Issuer will firmish such information, execute such
instruments and take such action in cooperation with the Underwriter as the Underwriter
may reasonably request (i) to qualify the Bonds for offer and sale under the Blue Sky or
. FAWDO7 O1EMS=4206"17k100W72.WPD/ 2 V
fi
other securities laws and regulations of such state and other jurisdictions in the United
States as the Underwriter may designate, and (ii) to continue such qualifications in effect
so long as required for the distribution of the Bonds; provide however, that the Issuer will
not be required to qualify as a foreign corporation or otherwise to do business or to file any
general or special consents to service of process under the laws of any state.
6. Delivery of, and Payment for, the Bonds. At or before 10:00 a.m., Central
Time, on June 14, 2001, or on such other date as may be mutually agreed upon by the Issuer and
the Underwriter, the Issuer will deliver the Bonds to The Depository Trust Company ("DTC") in
New York, New York in such form as shall be acceptable to DTC (which shall include printed or
typewritten obligations if and to the extent required by DTC), registered in the name of such
nominee of DTC as it shall require, and deliver to the Underwriter the other documents required
by this Agreement. Subject to the terms and conditions hereof, the Underwriter will accept such
delivery and pay the purchase price of the Bonds as set forth in Paragraph 1 hereof in immediately
available funds. Concurrent with such payment, the Issuer shall return the Check to the
Underwriter. The actions relating to the payment for, and delivery of the Bonds, is herein above
and hereafter called the "Closing." The Underwriter shall furnish, and the Issuer shall cause,
CUSIP identification numbers to be inserted on the Bonds, but neither the failure to insert such
numbers on any Bonds nor any error with respect thereto shall constitute cause for a failure or
refusal by the Underwriter to accept and pay for the Bonds in accordance with the terms of this
Agreement.
7. Survival of Representations and Warranties. Unless otherwise set forth
"�
herein, the representations and agreements in this Purchase Contract shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of the Underwriter and
shall survive the delivery of the Bonds hereunder for a period of ninety (90) days following the
Closing.
8. Certain Conditions to Underwriter's Obligations. The Underwriter's
obligation hereunder to purchase and pay for the Bonds shall be subject to the performance by the
Issuer of its obligations hereunder in all material respects at or prior to the Closing and the accuracy
in all material respects of the Issuer's representations and warranties contained herein and shall also
be subject to the following conditions, any one or more of which may be waived by the
Underwriter:
(a) Continued Full Force and Effect of Documents. That at the time of
the Closing, the Resolution, the Official Statement and all related actions of the Issuer with
respect to the issuance of the Bonds shall be in full force and effect and shall not have been
amended, modified or supplemented, except as may have been agreed to by the
Underwriter;
F:\woox\CLIEN S\0042oswoorn1000%n."D/z 7
ri
(b) No Default in Payment of Debt Service. That the Issuer shall not have
failed to pay principal of or interest on, when due, any of its outstanding obligations for
borrowed money;
(c) Documents to be Received by the Underwriter. That, at the Closing,
the Underwriter shall receive a copy of each of the following documents:
(1) Official Statement. The Official Statement of the Issuer
executed on behalf of the Issuer, with such amendments, modifications or
supplements thereto as may have been previously approved by the
Underwriter;
(2) Resolution. The Resolution certified by the Issuer's
Secretary as having been duly adopted by the Board of Directors of the
Issuer;
(3) Issuer's Certificate. A certificate of a duly authorized
official of the Issuer that the Resolution has not been amended, modified,
supplemented or repealed, except as contemplated hereby or as may have
been agreed to by the Underwriter in writing, and are in full force and
effect;
(4) Bond Counsel's Opinion Opinion of bond counsel,
41W Fulbright & Jaworsld L.L.P., Dallas, Texas ("Bond Counsel'), dated as
ofthe date of Closing, in form and substance of Appendix C to the Official
If Statement;
(5) Bond Counsel's Supplemental Opinion A
supplemental opinion of the Issuer's Bond Counsel, dated as of the date
of Closing, addressed to the Issuer and the Underwriter, to the effect that
(i) this Purchase Contract has been duly authorized, executed and
delivered by the Issuer and is a legal, valid and binding agreement,
enforceable in accordance with its terms (provided that such opinion may
contain the customary exceptions regarding bankruptcy and equitable
principles); (ii) the Bonds and the Resolution conform with the terms and
provisions thereof summarized in the Official Statement; (m) the offering
and sale of the Bonds are not required to be registered under the
Securities Act of 1933, as amended, (iv) the Resolution is not required to
be qualified under the Trust Indenture Act of 1939, as amended, and (v)
the information relating to the Bonds and the Resolution appearing in the
Official Statement under the captions "INTRODUCTION," "THE
F:\WDOkCueNTsw04206w0017\10000672.W?D / z 8
:` r D
ii
BONDS" (except for the subcaptions "Book -Entry -Only System" and
"Use of Bond Proceeds"), "SELECTED PROVISIONS OF THE
BOND RESOLUTION," "TAX MATTERS," and the subcaptions
"Legal Investments and Eligibility to Secure Public Funds in Texas,"
"Registration and Qualification of Bonds for Sale," "Legal Matters," and
"Continuing Disclosure ofInformation" (except for "Compliance with Prior
Undertakings") under the caption "OTHER INFORMATION" fairly and
accurately summarizes the provisions of the law, documents and other
matters referred to therein; such opinion also shall contain a provision to
the effect that the opinion referred to in subparagraph (4) above may be
relied upon by the Underwriter to the same extent as if such opinion were
addressed to them;
(6) Certificate as to Tax Exemption A certificate signed
by an authorized official of the Issuer setting forth facts, estimates and
circumstances in existence on the date of the Closing, which facts,
estimates and circumstances shall be sufficiently set forth therein to support
the conclusion that it is not expected that the proceeds of the Bonds will
be used in a manner or that the Issuer will take any action or omit to take
any action that would cause the Bonds to be "arbitrage bonds," within the
meaning of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations, temporary regulations and proposed
regulations promulgated under the Code, and stating that to the best of the
knowledge and belief of such official there are no other facts, estimates or
circumstances that would materially affect such expectations;
(7) Counsel to the Underwriter's Opinion An opinion,
dated as of the date of Closing and addressed to the Underwriter, of
Delgado, Acosta, Braden & Jones, P.C., El Paso, Texas ("Counsel to the
Underwriter'), to the effect that (i) the offer and sale of the Bonds are not
required to be registered under the Securities Act of 1933, as amended,
and (ii) the Resolution is not required to be qualified under the Trust
Indenture Act of 1939, as amended. In addition, such firm shall state that
without having undertaken to determine independently the accuracy or
completeness of the statements contained in the Official Statement, based
upon such counsel's participation in the preparation of the Official
Statement, nothing has come to such counsel's attention which gives such
counsel reason to believe that the Official Statement as of the date of this
Purchase Contract and as of the date of the Closing (except for financial
statements and other financial and statistical data as to which no view need
be expressed) contained or contains any untrue statement of a material
F:\woox\CLIENrswa206\MI7\IOW%n.%VM / z 9
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I
L 4W
I
fact or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(8) Issuer's Closing Certificate. A certificate, dated as of
the date of the delivery of the Bonds and signed by a duly authorized
official of the Issuer to the effect that (i) the representations, warranties
and covenants of the Issuer contained herein are true and convect in all
material respects on and as of the date of the delivery of the Bonds, with
the same effect as if made on the date of the delivery of the Bonds by the
Issuer; (ii) except as described in the Official Statement, no litigation is
pending or, to the best of such official's knowledge and belief, threatened
in any court in any way affecting the existence of the Issuer or the titles of
its officials to their respective positions, or seeking to restrain or to enjoin
the issuance, sale or delivery of the Bonds, or the levy and collection of ad
valorem taxes by the Issuer (other than appeals of tax assessments) or the
application of revenues and assets of the Issuer or in any way contesting
or affecting the validity or enforceability of the Bonds, the Resolution or
this Purchase Contract, or contesting in any way the completeness or
accuracy of the Preliminary Official Statement or the Official Statement,
or contesting the powers of the Issuer or its authority with respect to the
Bonds, the Resolution or this Purchase Contract; (iii) as of the date of the
Closing, the Official Statement (including the appendices thereto) of the
Issuer does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; (iv) no event affecting the Issuer has occurred
since the date of the Official Statement to the date of the Closing which
should be disclosed in the Official Statement for the purposes 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; and
(v) the Issuer has complied in all material respects with all the agreements
and satisfied all material conditions on its part to be performed or satisfied
at or prior to the delivery of the Bonds;
(9) Attorney General's Opinion The approving opinion
of the Attorney General of the State of Texas in respect of the Bonds;
(10) Comptroller's Registration Certificate. The
registration certificate of the Comptroller of Public Accounts ofthe State
of Texas in respect of the Bonds;
F:\WDOX\CLIENTS\004206W00IT10000672.WPD/ 2
to
a, .'11 '
74
(11) Rating Letters. Evidence of minimum ratings of
Moody's Investors Service, Inc. of"Aaa," Standard & Poor's, A Division
of The McGraw-Hill Companies, Inc. of "AAA," and Fitch Inc. of
"AAA" on the Bonds, in a form acceptable to the Underwriter;
(12) Bond Insurance Policx. Copy of the policy of municipal
bond guaranty insurance issued by Ambac Assurance Corporation (or
such other municipal bond insurer which is acceptable to the Underwriter)
insuring payment of the principal of, and interest on, the Bond, together
with the customary opinions of its legal counsel in a form satisfactory to
Bond Counsel and Counsel to the Underwriter;
(13) Additional Certificates. Instruments and Opinions.
Such additional certificates, instruments or opinions as Bond Counsel or
Counsel to the Underwriter may deem necessary or desirable.
(d) Issuer's Performance of Obligations. That the Issuer shall perform or
have performed in all material respects at or prior to the Closing all of the Issuer's
obligations required under or specified in this Purchase Contract to be performed at or
prior to the Closing.
4W All certificates, instruments, opinions and documents referred to above shall be in form and
substance satisfactory to Bond Counsel and Counsel to the Underwriter. If the Issuer should be
unable to satisfy the conditions to the obligations of the Underwriter to pay for the Bonds contained
in this Purchase Contract or if the obligations of the Underwriter shall be terminated for any reason
permitted hereby, this Purchase Contract shall terminate, the Check shall be returned to the
Underwriter and neither the Underwriter nor the Issuer shall be under further obligation hereunder,
except that the respective obligations of the Issuer and the Underwriter set forth in Paragraphs 7
and 12 hereof shall continue in full force and effect.
9. Termination of Purchase Contract by the Underwriter. The Underwriter may
terminate this Purchase Contract by notification in writing or by telegram to the Issuer if at any time
subsequent to the date hereof and at or prior to the Closing: (i) in the Congress of the United
States, legislation shall be enacted, a bill shall be favorably reported out of committee to either
house or a bill to amend the Internal Revenue Code of 1986, as amended (which, if enacted, would
take effect in whole or in part as of a date prior to the Closing or be applied to the Bonds), shall
be filed in either house, or a decision by a court of the United States shall be rendered, or a
regulation or ruling shall be issued or proposed by or on behalf of the Department of the Treasury
or the Internal Revenue Service of the United States, or any other agency of the federal
govemment, or a release or official statement shall be issued by the President, the Department of
e:\woox\cuENTsw04206\00017\10000672.wrn i z 11
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L
c-
the Treasury or the Internal Revenue Service ofthe United States, with respect to federal taxation
of interest received on obligations of the same character as the Bonds, which, in the reasonable
opinion of the Underwriter, materially adversely affects the market for the Bonds or the sale, at the
contemplated offering price, by the Underwriter of the Bonds; or (ii) a stop order, riling, regulation
proposed regulation or statement by or on behalf of the Securities and Exchange Commission shall
be issued or made to the effect that the issuance, offering or sale of the Bonds without registration
thereof, or obligations of the general character of the Bonds without registration thereof, is in
violation of any provisions of the Securities Act of 1933, as amended; or (iii) in the Congress of
the United States, legislation shall be enacted or a bill shall be favorably reported out of committee
ofeither house, or a decision by a court of the United States shall be rendered, or ruling, regulation,
proposed regulation or statement by or on behalf of the Securities and Exchange Commission or
other governmental agency having jurisdiction of the subject matter shall be made, to the effect that
securities of the Issuer or of any similar public body are not exempt from the registration,
qualification or other requirements of the Securities Act of 1933, as amended, or that the
Resolution or similar documents authorizing the issuance of the Bonds or debt instruments of the
general character of the Bonds are required to be qualified under the Trust Indenture Act of 1939,
as amended; or (iv) the United States shall have become engaged in hostilities (including the
escalation of any hostility existing on the date hereof, whether or not foreseeable), the effect of
which, in the Underwriter's sole opinion, would materially adversely affect the market price of the
Bonds; or (v) there shall have occurred a general suspension of trading on the New York Stock
Exchange, Inc. or there shall be imposed upon trading in securities generally by any governmental
authority or by any national securities exchange any material restrictions (other than a limitation on
the hours of trading) not in force on the date hereof, or (vi) a general banking moratorium shall have
been declared by the United States, State of Texas or State of New York authorities; or (vii) an
event shall have occurred which, in the opinion of the Underwriter, requires an amendment or
supplement to the Official Statement and which, in the reasonable judgment of the Underwriter,
materially adversely affects the marketability of the Bonds or the market price thereof, or (vui) the
ratings of the Bonds (or of the Issuer's other outstanding debt obligations) are revised downward
(or withdrawn completely) from those established as of the date of this Purchase Contract.
10. Receipt for the Bonds. At the Closing, contemporaneously with the receipt of
the Bonds by the Underwriter, the Underwriter will, if requested, deliver to the Issuer a receipt
therefor, in form satisfactory to Bond Counsel, signed by the Underwriter.
11. Reproductionof Bond Counsel's Opinion on the Bonds. The opinion of Bond
Counsel as described in Paragraph 8(c)(4) shall accompany the Bonds deposited with DTC, and
may be reproduced on, or attached to, the Bonds in the event of discontinuance of the Book -
Entry -Only System.
12. Payment of Expenses. The Issuer shall pay, from the proceeds of the sale of the
Bonds or other available funds, upon or promptly after the Closing: (a) the cost of the preparation
12
F:\wp MCLIEWTsb042o6WW17\10OM72.V/M/2
=IB1T D
0
and printing of the Bonds, if any; (b) the costs of obtaining credit ratings and the cost of bond
insurance premiums, if any; (c) the fees and disbursements of Bond Counsel and of any other
counsel or consultants retained by the Issuer; (d) the costs of preparing, printing and mailing the
Preliminary Official Statement and the Official Statement; (e) the fees and expenses of the Paying
Agent/Registrar; (f) any legally required publication expenses; (g) the out-of-pocket expenses,
including the cost of travel, of any officials of the Issuer; and (h) any other expenses agreed to by
the Issuer to be reasonably considered expenses of the Issuer which are incident to the
transactions contemplated hereby.
The Underwriter shall pay the fees and disbursements of Counsel to the Underwriter and
the out-of-pocket expenses incurred by the Underwriter. The Issuer shall be under no obligation
to pay any fees or expenses other than those specified in the preceding paragraph.
13. Continuing Disclosure. The Issuer shall provide certain periodic information and
notices of material events relating to the Bonds at the times and in the manner specified in Section
42 of the Resolution relating to the Bonds and in accordance with the Rule.
14. Notices. Any notice to be given to the Issuer under this Purchase Contract may
be given by delivering the same to the Issuer, at the address indicated above, Attention: President
(with copies to the Board of Directors), and any such notice to be given to the Underwriter may
be given by delivering such notice to J. P. Morgan Securities, Inc., 2200 Ross Avenue, 8`h Floor,
Dallas, Texas 75201, Attention: Joseph T. LaBate.
'W 15. Benefit of Representations and Warranties. The agreements and all
representations and warranties herein set forth have been and are made for the benefit of the
Underwriter and the Issuer, and no other person shall acquire or have any right under or by virtue
of this Purchase Contract. Any certificate, document or other instrument signed by an authorized
officer or agent of the Issuer and delivered to the Underwriter pursuant to the terms and provisions
hereof shall be deemed to be a representation and warranty made by the Issuer to the Underwriter
as to the statements made therein.
16. Entire Agreement. This Purchase Contract constitutes the entire agreement,
understanding, representations, warranties and obligations of the parties hereto with respect to the
transactions contemplated hereby and shall become effective upon the acceptance of this offer by
the execution and the counter execution hereof as provided, and shall be valid and enforceable as
of the time of such acceptance.
17. Counterparts. This Purchase Contract and any amendments hereto maybe
executed in one or more counterparts, each of which shall be deemed to be an original by the party
executing such counterpart, but all of which shall be considered one and the same instrument.
F:\WMX\CLIEWSwa2061=17\10O 72.wrn/2 13
k
''IBiT D
18. Governing Law This Purchase Contract shall be governed by and construed in
accordance with the laws of the State of Texas and the United States of America.
19. Section Headings. The section headings of this Purchase Contract are for
convenience of reference only and shall not affect its interpretation.
20. UnderwriterCapacity. Any authority, right, discretion or other power conferred
upon the Underwriter under any provision of this Purchase Contract may be exercised by the
Underwriter, and the Issuer shall be entitled to rely upon any request, notice or statement if the
same shall have been given or made by the Underwriter.
[Execution page follows]
F:\ WDOX\CL.IENTSW0,6206 =17\10000672. WPD / 2 14
Very truly yours,
JPMORGAN
By.
Name:
Title:
APPROVED AND ACCEPTED AS
OF THE DATE FIRST ABOVE WRITTEN:
SOUTHLAKE PARKS
DEVELOPMENT CORPORATION
By:
Name:
Title:
ATTEST:
Secretary
SIGNATURE PAGE TO BOND PURCHASE CONTRACT
F:\ WDOX\CLIENTS\UW206\000IT10000672. WPD / 2
EXHIBIT "A"
SOUTHLAKE PARKS DEVELOPMENT CORPORATION
$4,690,000 SALES TAX SUBORDINATE LIEN
REVENUE BONDS, SERIES 2001
MATURITY SCHEDULE
The Bonds shall become due and payable on the dates, in principal amounts and bear interest
at the rate(s) per annum in accordance with the following schedule:
$4,690,000 5.600% Term Bonds Due August 15, 2031, Yield 5.600%
The Terms Bonds are subject to mandatory sinking fund redemption on the dates and in the
amounts set forth below:
Principal
Amount
Date
(August 151
$560,000.00
2025
$590,000.00
2026
$620,000.00
2027
$660,000.00
2028
$695,000.00
2029
$730,000.00
2030
$835,000.00
2031
(Accrued interest from May 15, 2001 to be added.)
DATED DATE: May 15, 2001
REDEMPTION OPTION
The Issuer reserves the right, at its option, to redeem Bonds having stated maturities on and after
August 15, 2025, in whole or in part in principal amounts of $5,000 or any integral multiple thereof,
on February 15, 2011, or any date thereafter, at the par value thereof plus accrued interest to the date
of redemption.
F:\WDOX\CUENTSW04206\OOOIM 0006n.WPD/2 A - 1
�i 1
Exhibit E
to
Resolution
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 42 of this Resolution.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below:
1. The financial statements of the Corporation appended to the
Official Statement as Appendix B, but for the most recently concluded fiscal year.
2. The information in Tables 1 through 5 of the Official Statement.
Accounting Principles
The accounting principles referred to in such Section are the generally accepted
accounting principles as applicable to governmental units as prescribed by The Government
Accounting Standards Board.
E,
45031282
E-1
SOUTHLAKE PARKS DEVELOPMENT CORPORATION
$45690,000
SALES TAX SUBORDINATE LIEN REVENUE BONDS, SERIES 2001
I I SUMMARY OF BOND SALE
H
MAY 15, 2001
PRESENTED BY:
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SOUTHLAKE PARKS DEVELOPMENT CORPORATION
$4,690,000
SALES TAX SUBORDINATE LIEN REVENUE BONDS, SERIES 2001
--------------
TABLE OF CONTENTS
TAB
PRELIMINARY OFFICIAL STATEMENT......................................................................... 1
BOND RATING RESULTS AND REPORTS................................................:..................... 2
FITCHINC. "A"........................................................................................................................ A
MOODY'S INVESTORS SERVICE"Baal .................................................................................... B
STANDARD & POOR'S RATING GROUP "BBB +"................................................................. C
BONDINSURANCE BIDS................................................................................................ 3
CURRENT & HISTORICAL INTEREST RATES............................................................................ 4
FINAL FINANCIAL SCHEDULES.................................................................................... 5
SOUTHLAKE PARKS DEVELOPMENT CORPORATION
$4,690,000
SALES TAX SUBORDINATE LIEN REVENUE BONDS, SERIES 2001
TABLE OF CONTENTS
TAB
PRELIMINARY OFFICIAL STATEMENT 1
.........................................................................
BOND RATING RESULTS AND REPORTS ......................................... ....... :............ 1........ 2
FITCHINC. «A"........................................................................................................................ A
MOODY'S INVESTORS SERVICE"Baal .................................................................................... B
STANDARD & POOR'S RATING GROUP "BBB +"................................................................. C
BONDINSURANCE BIDS................................................................................................ 3
CURRENT & HISTORICAL INTEREST RATES............................................................................ 4
FINAL FINANCIAL SCHEDULES.................................................................................... 5
PRELIMINARY OFFICIAL STATEMENT Ratings: Moody's: "Aaa"
S&P: "AAA"
Dated: May 1, 2001 Fitch: "AAA"
(AMBAC Insured See "Municipal
NEW ISSUE - Book -Entry -Only Bond Insurance" and "Other
Information Ratings" herein)
In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes
under existing law, subject to the matters described under "Tax Exemption" herein, including the alternative minimum tax on
corporations.
THE BONDS WILL NOT BE DESIGNATED AS
"QUALIFIED TAX-EXEMPT OBLIGATIONS" FOR FINANCIAL INSTITUTIONS
$4,690,000*
SOUTHLAKE PARKS DEVELOPMENT CORPORATION
(Tarrant and Denton Counties)
SALES TAX SUBORDINATE LIEN REVENUE BONDS, SERIES 2001
Dated Date: May 15, 2001 Due: August 15, as shown on inside cover
PAYMENT TERMS ... Interest on the $4,690,000* Southlake Parks Development Corporation Sales Tax Subordinate Lien
Revenue Bonds, Series 2001 (the `Bonds") will accrue from May 15, 2001, (the "Dated Date") and will be payable February 15
and August 15 of each year commencing August 15, 2001, and will be calculated on the basis of a 360-day year consisting of
twelve 30-day months. The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The
Depository Trust Company ("DTC") pursuant to the Book -Entry -Only System described herein. Beneficial ownership of the
Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be
made to the owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying
Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for
subsequent payment to the beneficial owners of the Bonds. See "The Bonds - Book -Entry -Only System" herein. The initial
Paying Agent/Registrar is The Chase Manhattan Bank of Texas, Houston, Texas (see "The Bonds - Paying Agent/Registrar").
AUTHORITY FOR ISSUANCE ... The Bonds are being issued by Southlake Parks Development Corporation (the "Corporation")
pursuant to the Development Corporation Act of 1979, Article 5190.6, Tex. Rev. Civ. Stat., as amended (the "Act"), including
Section 4B of the Act. The Bonds and their terms are governed by the provisions of a resolution (the "Resolution") adopted by the
Board of Directors of the Corporation (see "The Bonds - Authority for Issuance").
The Bonds are special obligations of the Corporation payable solely from and, together with the Previously Issued Bonds, equally and
ratably secured by a lien on and pledge of the "Pledged Revenues" (as defined in the Resolution) of the Corporation, including the
receipts from a Sales Tax levied for the benefit of the Corporation pursuant to the Act; provided, however, the lien on and pledge of
the "Pledged Revenues" securing the payment of the Bonds is junior and subordinate to the prior lien on and pledge of such Pledged
Revenues securing the payment of Priority Bonds (identified and defined in the Resolution) now outstanding and hereafter issued by
the Corporation. See "Security and Source of Payment" herein for a more complete description of the revenues pledged and the
security for the payment of the Bonds.
The Bonds do not constitute a legal or equitable, pledge, charge lien, or encumbrance upon any property of the Corporation or
the City of Southlake, Texas (the "City") except with respect to the "Pledged Revenues". Neither the State, the City, the Counties
of Tarrant and Denton, or any political corporation, subdivision, or agency of the State shall be obligated to pay the Bonds or the
interest thereon and neither the faith and credit nor the taxing power of the State, the City, the Counties of Tarrant and Denton,
or any political corporation, subdivision, or agency thereof, except as authorized by Section 4B of the Ac4 as herein definer, is
pledged to the payment of theprincoal of or interest on the Bonds.
PURPOSE ... Proceeds from the sale of the Bonds will be used for (i) the purchase of land and making improvements thereto for
neighborhood parks and making additional improvements to existing park land, including related road and street improvements
that enhance such park facilities; and (ii) paying the costs associated with the issuance of the Bonds.
INSURANCE ... Payment of the principal of and interest on the Bonds when due will be insured by a���
municipal bond insurance policy to be issued by Ambac Assurance Corporation simultaneously with
the delivery of the Bonds (see "Bond Insurance" herein).
MATURITY SCHEDULE
See Schedule on Inside of Cover
DELIVERY ...It is expected that the Bonds will be available for delivery through The Depository Trust Company on
June 14, 2001.
* Preliminary, subject to change.
JPMORGAN
MATURITY SCHEDULE*
Price
15-Aug or
Amount Maturity Rate Yield
$ 560,000 2025
590,000 2026
620,000 2027
660,000 2028
695,000 2029
730,000 2030
835,000 2031
(Accrued interest from May 15, 2001 to be added.)
REDEMPTION PROVISIONS ... The Corporation reserves the right, at its option, to redeem B(
after August 15, 2025, in whole or in part in principal amounts of $5,000 or any integral mul
or any date thereafter, at the par value thereof plus accrued interest to the date of reden
Redemption")
LEGALITY ... The Bonds are offered for delivery when, as and if issued and received by
approving opinion of the Attorney General of Texas and the opinion of Fulbright & Jaw(
Texas (see Appendix C, "Form of Bond Counsel's Opinion"). Certain legal matters will be
Delgado, Acosta, Braden & Jones, P.C., El Paso, Texas, Counsel for the Underwriter.
* Preliminary, subject to change.
2
having stated maturities on and
thereof, on February 15, 2011,
a (see "The Bonds — Optional
Underwriter and subject to the
L.L.P., Bond Counsel, Dallas,
-d upon for the Underwriter by
For purposes of compliance with Rule 15c2-12 of the Securities Exchange Commission, this document constitutes an Official
Statement of the City with respect to the Bonds that has been deemed `final " by the City date
as of its except for the omission of
no more than the information permitted by Rule 15c2-12.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER -ALLOT OR EFFECT TRANSACTIONS
WHICH STABILIZE THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAYBE DISCONTINUED AT ANY TIME.
This Official Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the
solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale.
No dealer, broker, salesperson or other person has been authorized to give information or to make any representation other
than those contained in this Official Statement, and, if given or made, such other information or representations must not be
relied upon.
The information set forth herein has been obtained from the Corporation and other sources believed to be reliable, but such
information is not guaranteed as to accuracy or completeness and is not to be construed as the promise or guarantee of the
Financial Advisor. This Official Statement contains, in part, estimates and matters of opinion which are not intended as
statements of fact, and no representation is made as to the correctness of such estimates and opinions, or that they will be
realized.
The information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of
this Official Statement nor any sple made hereunder shall, ender any circumstances, create any implication that there has been
no change in the affairs of the Corporation or other matters described.
TABLE OF CONTENTS
OFFICIAL STATEMENT SUMMARY ........................
4 REGISTRATION AND QUALIFICATION OF BONDS FOR
CORPORATION ADMINISTRATION ........................
6 SALE ............................................................... 33
THE CORPORATION'S BOARD OF DIRECTORS ..............
6 LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE
THE CORPORATION'S SELECTED ADMINISTRATIVE
PUBLIC FUNDS IN TEXAS ................................. 33
STAFF...............................................................
6 LEGAL MATTERS......................................................33
CONSULTANTS AND ADVISORS ...................................
6 CONTINUING DISCLOSURE OF INFORMATION ............. 34
CITY OFFICIALS, STAFF AND CONSULTANTS
7 FINANCIAL ADVISOR.................................................35
....
ELECTED OFFICIALS ...................................................
UNDERWRITING ........................................................ 35
7
THE CITY's SELECTED ADMINISTRATIVE STAFF..........
MISCELLANEOUS...................................................... 36
7
INTRODUCTION............................................................ 9
THEBONDS.................................................................... 9
BOND INSURANCE...................................................... 15
DEBT INFORMATION ................................................ 17
TABLE I — PRO -FORMA DEBT SERVICE
REQUIREMENTS .............................................. 17
THESALES TAX .......................................................... 18
TABLE 2 - HISTORICAL CORPORATION RECEIPTS OF
%z% SALES TAX .............................................. 20
TABLE 3 - CALCULATION OF COVERAGE FOR THE
ISSUANCE OF ADDITIONAL BONDS ................... 20
TABLE 4 - HISTORICAL CORPORATION REVENUES AND
EXPENDITURES ............................................... 21
SELECTED PROVISIONS OF THE BOND
RESOLUTION...................................................... 22
INVESTMENTS............................................................. 29
TABLE 5 - CURRENT INVESTMENTS ........................... 30
TAXMATTERS............................................................. 31
OTHER INFORMATION ............................................. 33
RATINGS.................................................................. 33
LITIGATION.............................................................. 33
APPENDICES
GENERAL INFORMATION REGARDING THE
CORPORATION................................................... A
EXCERPTS FROM THE ANNUAL FINANCIAL REPORT.. B
FORM OF BOND COUNSEL'S OPINION ....................... C
SPECIMEN OF MUNICIPAL BOND INSURANCE............ D
The cover page hereof, this page, the appendices included
herein and any addenda, supplement or amendment hereto,
are part of the Official Statement.
OFFICIAL STATEMENT SUMMARY
This summary is subject in all respects to the more complete information and definitions
Official Statement. The offering of the Bonds to potential investors is made only by means o
person is authorized to detach this summary from this Official Statement or to otherwise
Statement.
wined or incorporated in this
entire Official Statement. No
it without the entire Official
THE CORPORATION .....................
The Corporation is a non-profit industrial development corporation
of the State, created,
the Act is a
organized and existing under the laws of the State of Texas,
particularly and
constituted authority and instrumentality acting on behalf of
the City of Southlake, Texas (see
"Introduction - Description of the Corporation").
Tax Subordi
Lien Revenue Bonds, Series
THE BONDS .................................
The Bonds are issued as $4,690,000* Sales
ate
2001. The Bonds are issued to mature on August 15, 202
i through August 15, 2031. (see
"The Bonds - Description of the Bonds").
Bonds from May 15, 2001, and is
August 15, 2001, and each
PAYMENT OF INTEREST ..............
Interest on the accrues p
yable
February 15 and August 15 thereafter until maturity or prior
redemption (see "The Bonds -
Description of the Bonds" and "The Bonds - Optional Redemption").
AUTHORITY FOR ISSUANCE .........
The Bonds are being issued by the Corporation pursuant to th,
Development Corporation Act of
1979, Ariicie 517�.v, Y'm Rev. Civ. Stat. as amended, -including
Sectiuti 4B of file Act; ffiu a
resolution adopted by the Board of Directors of the Corporation.
SECURITY FOR THE BOND..........
The Bonds are special obligations of the Corporation payable
solely from and, together with the
Previously Issued Bonds, equally and ratably secured only
by a lien on and pledge of the
"Pledged Revenues" (as defined in the Resolution) of the Corporation,
including the receipts
from a Sales Tax levied for the benefit of the Corporati
n pursuant to the Act; provided,
however, the lien on and pledge of the "Pledged Revenues" securing
the payment of the Bonds is
junior and subordinate to the prior lien on and pledge of su-.h
Pledged Revenues securing the
payment of Priority Bonds (identified and defined in the
Resolution) now outstanding and
hereafter issued by the Corporation. See "Security and Source
of Payment" herein for a more
complete description of the revenues pledged and the securi
for the payment of the Bonds (see
"Bond Information- Authority for Issuance").
REDEMPTION PROVISIONS..........
The Corporation reserves the right, at its option, to redeerr
the Bonds in whole or in part in
principal amounts of $5,000 or any integral multiple there
of, on February 15, 2011, or any
date thereafter, at the par value thereof plus accrued interest
to the date of redemption (see
"The Bonds — Optional Redemption").
TAX EXEMPTION .........................
In the opinion of Bond Counsel, the interest on the Bonds
will be excludable from gross
income for federal income tax purposes under existing laA,
subject to the matters described
under the caption "Tax Matters — Tax Exemption" herein, including
the alternative minimum
tax on corporations.
USE OF PROCEEDS .......................
Proceeds from the sale of the Bonds will be used for (i)
the purchase of land and making
improvements thereto for neighborhood parks and maling
additional improvements to
existing park land, including related road and street improvements
that enhance such park
facilities; bond proceeds not to be used for maintenance and
operation; and (ii) paying the
costs associated with the issuance of the Bonds.
RATINGS .....................................
The Bonds are rated "Aaa" by Moody's Investors Service
"Moody's") and "AAA' Standard
& Poor's Rating Services, A Division of McGraw-Hill Companies
Inc. ("S&P") and Fitch
Inc. ("Fitch") with the understanding that, upon delivery
of the Bonds, a municipal bond
insurance policy will be issued by Ambac. The outstanding
Priority Bonds of the Corporation
have an underlying rating of "AY' from Moody's, "A-" fr
m S&P and "A" from Fitch. The
underlying rating for the outstanding subordinate lien revenue
debt of the Corporation is rated
"Baal" by Moody's, "BBB+" S&P and "A-" by Fitch.
The Corporation also has several
issues outstanding which are rated "Aaa" by Moody's and
`AAA" by S&P and Fitch through
various insurance companies. (see "Other Information — Ratings").
* Preliminary, subject to change.
4
'
i
LAW
BooK-ENTRY-ONLY
SYSTEM ...................................... The definitive Bonds will be initially registered and delivered only to Cede & Co., the
nominee of DTC pursuant to the Book -Entry -Only System described herein. Beneficial
ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples
thereof. No physical delivery of the Bonds will be made to the beneficial owners thereof.
Principal of, premium, if any, and interest on the Bonds will be payable by the Paying
Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the
participating members of DTC for subsequent payment to the beneficial owners of the Bonds
(see "The Bonds - Book -Entry -Only System").
PAYMENT RECORD ...................... The Corporation has never defaulted in payment of its bonds
For additional information regarding the Corporation, please contact:
Sharen Elam, CPA
Southlake Parks Development Corporation
Administrative Offices
1400 Main Street
Southlake, Texas 76092
(817)481-1713
5
James S. Sabonis
Beth Bankhead
Or First Southwest Company
1700 Pacific Avenue, Suite 500
Dallas, Texas 75201
(214)953-4000
CORPORATION ADMINISTRATION
THE CORPORATIONS BOARD OF DIRECTORS
Length of
Term
Director
Service
Expires
O
Veronica "Ronnie" Kendall
2 Years
May-01
Community Volunteer
President
Tad Stevens
1 Year
May-01
Consultant
Board Member
Sherry Berman
2 Years
May-01
Community Volunteer
Board Member
Cara O. White
2 Years
May-01
Insurance
Board Member
Rick Stacy
4 Years
May-01
Owner & President of
Board Member
Rex Potter
1 Year
May-01
Manager of Business
Board Member
Gary Fawks
1 Year
May-01
International ImporUE
Board Member
THE CORPORATION'S SELECTED ADMINISTRATIVE STAFF
Length of
Name Position Service
Kim Bush Recording Secretary 11 Years
Sharen Elam Treasurer 2 Years
CONSULTANTS AND ADVISORS
Auditors........................................................................................................................................
BondCounsel............................................................................................................................
FinancialAdvisor.........................................................................................................................
6
Store
Trading
.......... Weaver and Tidwell, L.L.P.
Dallas, Texas
......... Fulbright & Jaworski L.L.P.
Dallas, Texas
............. First Southwest Company
Dallas, Texas
t
t
t
ELECTED OFFICIALS
CITY OFFICIALS, STAFF AND CONSULTANTS
Length of Term
City Council
Service
Expires
Occupation
Rick Stacy
4 Years
May-03
Owner & President of Furniture Store
Mayor
Gary Fawks
4 Years
May-01
International
Mayor Pro Tem
Import/Export Trading
Veronica Ronnie Kendall
2 Years
May-01
Community Volunteer
Deputy Mayor Pro-Tem
Keith Shankland
3 Years
May-03
Airline Pilot
Councilmember
Greg S+anderfer
2 Years
May-01
Attorney v
Councilmember
Patsy DuPre
2 Years
May-02
Community Volunteer
Councilmember
Rex Potter
2 Years
May-02
Manager of Business Ventures
Councilmember
THE CITY'S SELECTED ADMINISTRATIVE STAFF
Length of
Name
Position
Service
Billy Campbell
City Manager
2 Years
Sandra L. LeGrand
City Secretary
22 Years
Sharen Elam
Director of Finance
2 Years
Pedram Frahnak
Director of Public Works
9 Months
Shana Yelverton
Assistant City Manager
7 Years
7
Ratings
New Issue
Sales Tax Subordinate Lien
Revenue Bonds, Series 2001........... A —
Outstanding Debt
Sales Tax Priority Lien
Revenue Bonds ............................... A
Sales Tax Subordinate Lien
Revenue Bonds ............................... A —
Analyst
Josh A. Hernandez
1 512 322-5317
jose.hemandez@fitchratings.com
Issuer Contact
Sharen Elam
Treasurer
1 817 481-1713
selam@cityofsouthlake.com
L
.✓
New Issue Details
$4,690,000 Sales Tax Subordinate Lien
Revenue Bonds, Series 2001, are scheduled to
sell on May 15 via negotiation through
JPMorgan. Dated May 15, the bonds will mature
serially from Aug. 15, 2025-2031. Bonds
maturing on and after Aug. 15, 2025 are subject
to optional redemption on Feb. 15, 2011 or any
date thereafter at par plus accrued interest.
Security: The bonds are special obligations of
the corporation, payable solely from and
secured only by a lien on the pledged
revenues, including the receipts of sales taxes
levied for the benefit of the corporation.
However, the lien on pledged revenues
securing payment is junior and subordinate to
the prior lien on pledged revenues securing
the payment of priority bonds.
Purpose: Bond proceeds will be used to
purchase land and to make improvements in
new and existing neighborhood parks,
including related road and street enhancements.
May 14, 2001
Public Finance
Southlake Parks Development
Corporation, Texas
Outlook
The `A—' rating on the subordinate lien bonds reflects the healthy growth
of dedicated sales tax revenues, adequate legal provisions and debt
service coverage, and manageable future borrowing plans. The local and
surrounding economic service area has performed well, with admirable
income and employment levels. Southlake is experiencing dynamic
growth, guided by a focused economic development strategy to attract
additional retail and commercial concerns. The additional parity
obligations requirement calls for 1.25 times (x) debt service coverage for
the issuance of subordinate lien obligations. The capital plan includes a
fiscal 2003 subordinate lien bond issue of approximately $5.5 million to
fund park development projects. Given the rapid growth of the
community, expansion of the sales tax base, and priority of capital
funding for the park system, the outlook for this credit is stable.
Rating Considerations
On Nov. 3, 1993, the voters in Southlake approved the levy of a''/z cent
sales tax for the benefit of the Southlake Parks Development
Corporation. The corporation promotes and provides for economic
development within the city and state to eliminate unemployment and
underemployment by developing and financing municipally owned
projects, such as public parks and related facilities. The city council
appoints the members of the board of directors of the corporation, and
the city must approve certain actions of the corporation, including the
issuance of bonds and undertaking of projects.
Collection of the municipal sales tax for the corporation commenced in
April 1994. Receipts for fiscal 1995 totaled over $516,000 and grew to
more than $1.8 million at the end of fiscal 2000. A 15% increase is
projected for fiscal 2001, bringing total projected collections to just
under $2 million; year-to-date collections are slightly over budget.
Projected growth is attributable to the completion of new retail
establishments in the city. Two new developments are under varying
stages of completion and construction, Town Square and Gateway
Plaza, which will include numerous retail opportunities for residents.
Also, Sabre Corp., a leader in the travel and transportation information
and technology industry, has selected a Southlake site for its corporate
campus headquarters, which is expected to employ 10,000. The city
has experienced explosive population growth, from 7,409 in 1990 to an
estimated 24,075 for 2001. Residential development has slowed
slightly; however, the new home construction values averaged over
$298,000 in fiscal 2000, excluding land. Demographic information
reports high household income levels for Southlake residents.
The corporation currently has $12.9 million of priority bonds
outstanding from two previous issues. This is the second issue of
www.fitchratings.com
FITCH IBCA, DUFF & PHELPS
subordinate lien debt, with $4.2 million outstanding.
Capital projects are also funded on a pay-as-you-go
basis by transfers from the corporation. The only
operational expenditure currently funded from the
corporation is the salary of one staff member,
although future operational expenses may be funded
from this source. Ending fund balances for the
corporation ranged from $393,000 in fiscal 1995 to
$1.1 million in 2000. Projected maximum annual debt
service (MADS) for all outstanding obligations,
including the subordinate lien bonds, occurs in 2015 at
approximately $1.5 million. Coverage of MADS is
1.36x based on the last 12 consecutive months of sales
tax receipts, and average annual debt service coverage
is 1.46x. The corporation is considered a component
unit of the city and, therefore, is included in its
financial reporting.
Strengths
• Favorable local and regional income and
economic environment.
• Recent and future development of additional
retail establishments.
• Impressive historical sales tax receipt growth.
Risks
• Potential volatility in sales tax collection
repayment source.
Very slow amortization rate.
Security Provisions
The bonds are special obligations of the corporation,
payable solely from and secured by a lien of and
pledge of pledged revenues of the corporation.
However, the lien on and pledge of the pledged
revenues are junior and subordinate to the prior lien
on and pledge to the payment of priority bonds now
outstanding or hereafter issued. The pledged revenues
include the revenues from a sales and use tax levied
within the city.
Flow of Funds: The sales tax is collected by the state
comptroller of public accounts and then remitted to
the city, followed by a transfer to the corporation.
The pledged revenues are then deposited sequentially
blic Finance
into: the special funds and accounts maintained for
the payment and security of the priority bonds; the
bond fund for the payment of debt service on parity
obligations as the debt service becomes due and
payable; the reserve fund to establish and maintain
the required reserve; any other fund or account
required by any supplemental resolution authorizing
the issuance of parity obligations; and any fund or
account or to any payee having a lien on pledged
revenues subordinate to the lien created on behalf of
the parity obligations. Any pledged revenues
remaining after satisfying the foregoing payments may
be appropriated and used for any other lawful purpose.
Additional Parity
obligations may be au
the corporation securit
a certified public accl
tax revenues received
fiscal year or any 1
previous 18 months w
average annual debt
priority and subordin
the additional obligati(
Reserve Fund: The c
maintain a separate
reserve fund or accoi
account shall solely b,
interest on parity obli;
insufficient and am(
replenish in full the ,
by a surety bond repr
required reserve. The
and maintained in
established and main
proceeds of the sale
depositing one or more
For more informati,
"Southlake, Texas,"
on Fitch's web site at
Copyright ® 2001 by Fitch, One State Street Plaza, NY, NY 10004
Telephone: New York, 1-800-753-4824, (212) 908-0500, In (212) 480-4435; Chicago, IL, (312) 368-3100, Fax (312) 263-1032;
London, Olt 44 20 7417 4222, Fax 01144 20 7417 4242; San Francisco, CA, 1-800-953-4824, (415) 732-5770, Fax (415) 732-5610
Printed by American Direct Mail Co., Inc. NY, NY 10014. Reproduction in whole or in part prohibited except by permission.
Fitch ratings are based on information obtained from issuers, other obligors, underwriters, their experts, and other sources Fitch believes to b
accuracy of such information. Ratings may be changed, suspended, or withdrawn as a result of changes in, or the unavailability of, in
recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security I
taxability of paymems made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters
$1,000 to $750,000 per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guarante
annual fee. Such fees are expected to vary from $10,000 to $1,500,000. The assignment, publication, or dissemination of a rating by Fitch shal
an expert in connection with any registration statement filed under the federal securities laws. Due to the relative efficiency of electronic
available to electronic subscribers up to three days earlier than prim subscribers.
Southlake Parks Development Corporation, Texas
Obligations: Additional
iorized and issued, subject to
a certificate or opinion from
mtant stating the gross sales
for either the last completed
consecutive months of the
re equal to no less than 1.25x
service for all outstanding
to lien obligations, including
rporation agrees to create and
.nd special subordinate lien
It. Amounts deposited to the
used to pay the principal and
ttions when other sources are
Ints required to restore or
rety bond coverage provided
venting all or a portion of the
Ital amount to be accumulated
he reserve fund shall be
.fined with pledged revenues,
of parity obligations, or by
surety bonds.
see Fitch Research on
1 Dec. 1, 2000, available
reliable. Fitch does not audit or verify the truth or
brmation or for other reasons. Ratings are not a
,r a particular investor, or the tax-exempt nature or
for rating securities. Such fees generally vary from
A by a particular insurer or guarantor, for a single
not constitute a consent by Fitch to use its name as
publishing and distribution, Fitch Research may be
r
t
MoodysResearch.com I Home
Moody's Investors Service
Gabel Credit Research
Southlake Park Development Corporation, TX
Contacts
Douglas Benton 214-220-4381
Dwight Burns 214-220-4389
Steven Levine 212-553-4097
Moody's Rating
Issue
Sales Tax Subordinate Lien Revenue Bonds, Series 2001
Sale Amount $4,690,000
Expected Sale Date 05/15/01
Rating Description Sales Tax Revenue
Municipal Credit Research
New Issue
Published 14 May 2001
Rating
Baal
MOODY'S ASSIGNS Baal TO SOUTHLAKE PARK DEVELOPMENT CORPORATION'S SALES TAX
SUBORDINATE LIEN REVENUE DEBT, SERIES 2001
Affects Approximately $8 million of Debt
Opinion
Moody's Investors Service has assigned a rating of Baal to the upcoming sale of $4.69 million of Southlake
Park Development Corporation Sales Tax Subordinate Lien Revenue Bonds, Series 2001. This rating
assignment reflects, narrow coverage levels while considering the growing sales tax base along with the
anticipation that this growth will continue for the foreseeable future. This issue is expected to be insured and will
carry the insurer's current financial strength rating upon Moody's review and approval of the insurance policy
and other relevant documentation. Also Moody's has affirmed the A3 rating on the Southlake Park Development
Corporation Sales Tax Senior Lien Revenue Bonds, Series 1997 and 1999. Southlake's general obligation
rating is Al.
SPDC approved a half -percent sales tax in November 1993 and began full year collections in 1995. Over the
five-year time period from fiscal 1996 to 2000 sales tax growth has averaged over 25%. This growth has
occurred as Southlake's development has included a notable increase in the amount of retail establishments
located in the city. Moody's believes that this trend will continue as city officials have indicated that future
development efforts are targeted at commercial retail projects like the mixed use Town Square project as well as
other retail developments like Gateway Plaza.
These bonds will be secured by a half -percent sales and use tax, which is dedicated to the capital
improvements of park facilities in the city of Southlake. Prior debt issuance included two Senior Lien debt issues
that were sold in 1997 and 1999 for a total of approximately $14 million along with a $4.18 million junior lien
issue sold in early 2000. City officials have indicated that the proceeds from this issue will be used primarily for
major capital improvements to an existing park. SPDC's capital plan anticipates the issuance of additional junior
lien debt for $5.8 million in fiscal 2003 with future debt issuance to be calibrated by the growth in SPDC's sales
tax revenue.
SPDC's debt position remains high with narrow coverage. Calculations for the most recent fiscal year reflect that
SPDC's pledged revenues provided 1.22 times coverage of projected Maximum Annual Debt service. This
coverage level is below the Senior Lien additional bonds test limitation of 1.40 Maximum Annual Debt service
and the weaker Junior Lien additional bonds test of 1.25 times for the combined junior and senior lien debt.
However, the tax collections for the 12 month period ending February 2001 yields total collections of $2.03
million and a maximum annual debt service coverage of 1.7x and 1.55x for the Senior and Junior Lien
SOUTH -LAKE PARKS DEVELOPMENT
$4,6905000
SALES TAX SUBORDINATE LIEN REVENUE BONDS, SERIES 2001
SUMMARY OF BOND INSURANCE BIDS
"AAA" INSURANCE
COa:IPAN'IES
Ambac Indemnity Corporation
BOND INSURANCE PREMIUM
(% OF TOTAL
PRINCIPAL & INTEREST) -
75 Basis Points
SURETY BOND
$22,700
i00Z/1/9
OOOZ/1/S
6661/i/9
866UUS
L661/1/9
9661/i/S
9661/i/9
b661/1/S
£661/i/S
Z66I/1/9
1661/i/S
0661/i/9
6861/i/S
8861/i/9
L8611119
9861/i/S
9861/i/9
b861/i/S
£861/i/S
Z861/1/S
o 0 0 0 0 o a o
0 0 0 0 0 0 0 0 0
�D N O oo N O
FIRST SOUTHWEST COMPANY
"Bond Buyer's" Index of 25 Revenue Bonds
Basis Valuation of Par Bonds
E kaw
t
t
The most important guide as to what the Municipal Revenue Bond Market has done in one time period versus another is the "Bond Buyer's" 25
Revenue Bond
Index. Published on Thursday of
each week, it is the accepted guide
of the
Municipal Bond Industry to determine
trends and
movements of
interest rates in the market. The Index is based on 30 year revenue bonds of 25 issuers rated from "Aaa" to "Baa V by
Moody's Investors Service, Inc. and from "AAA" to "A"
by Standard & Poor's Corporation.
Bonds in
the Index
include
Housing,
Transportation,
Hospital and Pollution
Control Credits.
Week
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
January
1
7.32
6
6.44
5.56
6.94
5.63
5.96.68
5.32
5.27
6.25
5.40
2
7.40
6.53
6.41
5.54
6.87
5.79
5.96
5.25
5.25
6.29
5.32
3
7.34
6.66
6.40
5.54
6.78
5.70
6.01
5.30
5.24
6.35
5.36
4
7.31
6.70
6.36
5.50
6.78
5.77
6.00
5.33
5.17
6.34
5.47
5
7.24
6.76
6.02
February
1
7.08
6.79
6.29
5.49
6.63
5.69
5.95
5.35
5.22
6.31
5.43
2
7.07
6.85
6.22
5.58
6.44
5.67
5.87
5.31
5.22
6.29
5.44
3
7.23
6.85
6.06
5.64
6.40
5.67
5.84
5.29
5.23
6.27
5.49
4
7.31
6.82
5.89
5.88
6.34
5.76
5.93
5.36
5.29
6.27
5.52
5
5.86
March
1
7.30
6.82
5.69
6.07
6.31
5.88
5.97
5.45
5.34
6.26
5.47
2
7.29
6.86
5.83
6.13
6.40
6.13
6.02
5.40
5.31
6.20
5.45
3
7.33
6.87
5.90
6.06
6.25
6.10
6.06
5.36
5.29
6.16
5.40
4
7.35
6.87
5.99
6.16
6.34
6.15
6.09
5.42
5.29
6.08
5.38
5
6.39
6.29
5.29
6.03
5.44
April
1
7.29
6.85
6.07
6.55
6.22
6.11
6.14
5.39
5.29
5.98
5.46
2
7.27
6.78
6.06
6.50
6.19
6.32
6.14
5.40
5.28
5.98
5.54
3
7.19
6.74
5.91
6.45
6.17
6.19
6.13
5.40
5.30
6.00
5.62
4
7.22
6.82
5.95
6.42
6.29
6.16
6.13
5.47
5.29
6.07
5.63
5
6.83
5.98
5.52
May 0
1
7.14
6.77
5.88
6.43
6.30
6.32
6.01
5.49
5.35
6.15
5.60
2
7.09
6.70
5.90
6.60
6.18
6.32
5.98
5.48
5.34
6.23
5.56
3
7.14
6.69
5.97
6.41
6.15
6.17
5.91
5.42
5.37
6.28
4
7.16
6.74
5.94
6.41
6.02
6.10
5.91
5.39
5.41
6.27
5
7.13
6.17
5.91
June
1
7.24
6.73
5.91
6.38
6.00
6.20
5.85
5.40
5.46
6.20
2
7.36
6.69
5.92
6.20
5.94
6.34
5.77
5.32
5.53
6.07
3
7.31
6.62
5.86
6.34
6.10
6.27
5.72
5.36
5.52
6.01
4
7.30
6.58
5.79
6.43
6.05
6.20
5.82
5.36
5.62
5.99
5
6.56
6.28
5.98
July
1
7.24
6.55
5.75
6.52
6.21
6.15
5.78
5.34
5.61
5.95
2
7.19
6.36
5.76
6.47
6.05
6.24
5.68
5.33
5.61
5.87
3
7.17
6.33
5.74
6.46
6.30
6.10
5.59
5.37
5.59
5.89
4
7.13
6.22
5.87
6.47
6.27
6.10
5.54
5.35
5.59
5.85
5
6.12
5.87
5.49
5.36
5.65
August
- i
7.10
6.24
5.83
6.37
-6.35
6.02
5.62
5.37
5.71-
5.82
2
7.07
6.20
5.68
6.49
6.40
5.92
5.71
5.34
5.84
5.77
3
7.03
6.36
5.61
6.45
6.44
5.98
5.69
5.32
5.86
5.76
4
7.03
6.45
5.56
6.46
6.40
6.00
5.68
5.26
5.83
5.73
5
7.00
6.26
6.09
5.72
September
1
7.02
6.38
5.52
6.43
6.16
6.19
5.66
5.25
5.89
5.71
2
7.00
6.31
5.44
6.46
6.09
6.12
5.69
5.22
5.90
5.74
3
6.95
6.43
5.49
6.51
6.18
6.10
5.58
5.20
5.92
5.81
4
6.91
6.49
5.51
6.66
6.27
6.01
5.63
5.17
5.93
5.85
5
5.53
6.70
5.96
October
1
6.87
6.45
5.52
6.82
6.14
5.95
5.59
5.09
6.02
5.85
2
6.90
6.49
5.41
6.73
6.08
5.99
5.64
5.17
6.11
5.83
3
6.91
6.51
5.44
6.81
5.97
5.97
5.67
5.21
6.17
5.79
4
6.93
6.71
5.56
6.95
6.02
6.01
5.66
5.25
6.18
5.75
5
6.86
6.81
5.94
5.60
5.24
November
1
6.87
6.70
5.72
7.16
5.93
5.92
5.65
5.29
6.09
5.74
2
6.86
6.57
5.69
7.23
5.94
5.86
5.60
5.28
6.08
5.79
3
6.91
6.48
5.70
7.37
5.89
5.83
5.57
5.27
6.10
5.76
4
6.93
6.47
5.74
7.32
5.89
5.80
5.55
5.25
6.11
5.76
5
5.78
5.73
December
1
6.96
6.48
5.71
7.18
5.65
5.83
5.48
5.21
6.14
5.68
2
6.90
6.42
5.53
7.17
5.79
5.93
5.45
5.18
6.13
5.59
3
6.84
6.44
5.62
7.02
5.79
5.95
5.41
5.21
6.17
5.55
4
6.76
6.41
5.58
6.99
5.71
5.92
5.40
5.28
6.22
5.48
5
6.40
5.52
6.97
5.41
5.26
6.23
E
L-
'Final
Southlake Parks Development Corporation
Sales Tax Subordinate Lien Revenue Bonds, Series 2001
Final Pricing
SOURCES & USES
Dated 05/15/2001 Delivered 06/14/2001
SOURCES OF FUNDS
Par Amount of Bonds.........................................................................
$4,690,000.00
Accrued Interest from 05/15/2001 to 06/14/2001................................
21.157.11
TOTALSOURCES.............................................................................
$4,711,157.11
USES OF FUNDS
Total Underwriters Discount(0.700%)..............................................
32,811.20
Costsof Issuance ..............................................................................
90,000.00
Gross Bond Insurance Premium (75.0 bp) ........................................
89,347.65
SuretyBond.......................................................................................
22.700.00
Deposit to Debt Service Fund.............................................................
21,157.11
Deposit to Project Construction Fund .................................................
4,455,000.00
RoundingAmount..............................................................................
141.15
TOTALUSES..................................................................................... $4,711,157.11
First Southwest Company File = 2001.SF-Final Pricing
Public Finance 5/14/2001 4:29 PM
Page 1
U
kw
no
kw
E
11
Final
Southlake Parks Development Corporation
Sales Tax Subordinate Lien Revenue Bonds, Series 2001
Final Pricing
Date
6/14/2001
8/15/2001
9/30/2001
2/15/2002
8/15/2002
9/30/2002
2/15/2003
8/15/2003
9/30/2003
2/15/2004
8/15/2004
9/30/2004
2/15/2005
8/15/2005
9/30/2005
2/15/2006
8/15/2006
9/30/2006
2/15/2007
8/15/2007
9/30/2007
2/15/2008
8/15/2008
9/30/2008
2/15/2009
8/15/2009
9/30/2009
2/15/2010
8/15/2010
9/30/2010
2/15/2011
8/15/2011
9/30/2011
2/15/2012
8/15/2012
9/3012012
2/15/2013
8/15/2013
9/30/2013
2/15/2014
8/15/2014
9/30/2014
2/15/2015
8/15/2015
9/30/2015
First Southwest Company
Public Finance
Principal
DEBT SERVICE SCHEDULE
Coupon Interest
65,660.00
131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
- 131,320.00
131,320.00
131,320.00
- 131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
- 131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
131,320.00
Page 2
Total P+I
FISCAL TOTAL
65,660.00
-
-
65,660.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
131,320.00
-
131,320.00
-
-
262,640.00
File = 2001.SF-Final Pricing
504/2001 4:29 PM
11
kw
Final .
Southlake Parks Development Corporation
Sales Tax Subordinate Lien Revenue Bonds, Series 2001
Final Pricing
DEBT SERVICE SCHEDULE
Date
Principal
Coupon Interest
Total P+I
FISCAL TOTAL
2/15/2016
-
131,320.00
131,320.00
-
8/15/2016
-
- 131,320.00
131,320.00
-
9/30/2016
-
- -
-
262,640.00
2/15/2017
-
- 131,320.00
131,320.00
-
8/15/2017
-
- 131.320.00
131,320.00
-
9/30/2017
-
- -
-
262,640.00
2/15/2018
-
- 131,320.00
131,320.00
-
8/15/2018
-
- 131,320.00
131,320.00
-
9/30/2018
-
- -
-
262,640.00
2/15/2019
-
- 131,320.00
131,320.00
-
8/15/2019
-
- 131,320.00
131,320.00
-
9/30/2019
-
- -
-
262,640.00
2/15/2020
-
- 131,320.00
131,320.00
-
8/15/2020
-
- 131,320.00
131,320.00
-
9/30/2020
-
- -
-
262,640.00
2/15/2021
-
- 131.320.00
131,320.00
-
8/15/2021
-
- 131,320.00
131,320.00
-
9/30/2021
-
- -
-
262,640.00
2/15/2022
-
- 131,320.00
131,320.00
-
8/15/2022
-
- 131,320.00
131,320.00
-
9/30/2022
-
- -
-
262,640.00
2/15/2023
-
- 131,320.00
131,320.00
-
8/15/2023
-
- 131,320.00
131,320.00
-
9/30/2023
-
- -
-
262,640.00
2/15/2024
-
- 131,320.00
131,320.00
-
8/15/2024
-
- 131,320.00
131,320.00
-
9/30/2024
-
- -
-
262,640.00
2/15/2025
-
- 131,320.00
131,320.00
-
8/15/2025
560.000.00
5.600% 131,320.00
691,320.00
-
9/30/2025
-
- -
-
822,640.00
2/15/2026
-
- 115,640.00
115,640.00
-
8/15/2026
590,000.00
5.600% 115,640.00
705,640.00
-
9/30/2026
-
- -
-
821,280.00
2/15/2027
-
- 99,120.00
99.120.00
-
8/15/2027
620,000.00
5.600% 99,120.00
719,120.00
-
9/30/2027
-
- -
-
818,240.00
2/15/2028
-
- 81,760.00
81,760.00
-
8/15/2028
660,000.00
5.600% 81,760.00
741.760.00
-
9/30/2028
-
- -
-
823,520.00
2/15/2029
-
- 63,280.00
63,280.00
-
8/15/2029
695,000.00
5.600% 63,280.00
758,280.00
-
9/30/2029
-
- -
-
821,560.00
2/15/2030
-
- 43,820.00
43.820.00
-
8/15/2030
730,000.00
5.600% 43,820.00
773,820.00
-
9/30/2030
-
- -
-
817.640.00
2/15/2031
-
- 23,380.00
23,380.00
-
8/15/2031
835,000.00
5.600% 23,380.00
858,380.00
-
9/30/2031
-
- -
-
881,760.00
Total
4,690,000.00
- 7,223,020.00
11,913,020.00
-
First Southwest Company
Public Finance
Page 3
File = 2001.SF-Final Pricing
511412001 4:29 PM
Fin:
Southlake Parks Development Corporation
Sales Tax Subordinate Lien Revenue Bonds, Series 2001
Final Pricing
DEBT SERVICE SCHEDULE
YIELD STATISTICS
Accrued Interest from 05/15/2001 to 06/14/2001.................................................................
21,157.11
BondYear Dollars ................................................................................................................
$128,982.50
AverageLife.........................................................................................................................
27.502 Years
AverageCoupon..................................................................................................................
5.6000000%
NetInterest Cost(NIC)........................................................................................................
5.6254385%
TrueInterest Cost (TIC).......................................................................................................
5.6508938%
Bond Yield for Arbitrage Purposes.......................................................................................
5.7752611 %
AllInclusive Cost(AIC)........................................................................................................
5.9745281 %
IRS FORM 8038
NetInterest Cost..................................................................................................................
5.6000000%
Weighted Average Maturity..................................................................................................
27.421 Years
First Southwest Company
Public Finance
Page 4
File = 2001.SF-Final Pricing
5h4/2001 4:29 PM
H
Southlake Parks Development Corporation
Sales Tax Subordinate Lien Revenue Bonds, Series 2001
Final Pricing
PRICING SUMMARY
Maturity Type of Bond Coupon Yield Maturity Value Price Dollar Price
8/15/2031 Term 1 Coupon 5.600% 5.600% 4,690,000.00 100.000% 4,690,000.00
Total - - - - 4,690,000.00 - 4,690,000.00
BID INFORMATION
ParAmount of Bonds..............................................................................................................
$4,690,000.00
GrossProduction....................................................................................................................
$4,690,000.00
Total Underwriter's Discount(0.700%)...................................................................................
$(32,811.20)
Bid(99.300%).........................................................................................................................
4,657,188.80
Accrued Interest from 05/15/2001 to 06/14/2001....................................................................
21,157.11
Total Purchase Price ..............................................................................................................
$4,678,345.91
BondYear Dollars...................................................................................................................
$128,982.50
AverageLife............................................................................................................................
27.502 Years
AverageCoupon.....................................................................................................................
5.6000000%
NetInterest Cost(NIC)...........................................................................................................
5.6254385%
TrueInterest Cost (TIC)..........................................................................................................
5.6508938%
First Southwest Company
Public Finance
Page 5
Final
File = 200 1. SF -Final Pricing
5(14/2001 4:29 PM
I
calculations, respectively. Moody's anticipates this coverage level to improve as the sales tax base continues to
expand at its historically rapid growth rate. Interim results provided by the city indicate sales tax revenues for FY
2001 should exceed the budgeted total collections of $4.1 million.
Outlook
The outlook for this rating is stable based on Moody's belief that debt service coverage levels will continue to
improve as the city's retail base expands. Moody's anticipates that growth of the retail sector will be supported
by ongoing economic growth in the city and a continued favorable socioeconomic profile.
KEY STATISTICS:
2001 Taxable Valuation: $2.6
2001 Full Valuation per capita: $98,230
2000 Maximum Annual Debt Service Coverage: 1.22x
5-year average sales tax growth: 29.1 %
Principal retirement (SPDC only): 20% in 10 years
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