Item 7Oulty or boutruaKe, i exas
MEMORANDUM
January 11, 2006
TO: Shana Yelverton, City Manager
FROM: Sharen .Jackson, Director of Finance
SUBJECT: Resolution No. 06 -007, a resolution relating to the "Southlake Parks
Development Corporation Sales Tax Subordinate Lien Revenue Bonds, Series
2006"; approving (i) the resolution of the Southlake Parrs Development
Corporation authorizing the issuance of such Bonds and (ii) the execution, on
behalf of the City, of the Financing /Use Agreement relating to such financing by
the Corporation; resolving other matters incident and related to the issuance of
such Bonds; and providing an effective date.
Action Requested: Approval of Resolution No, 06 -007.
Background
Information: If you recall on September 20, 2005, City Council approved the 2005 -06
Capital Improvement Plan This agenda item is related to the funding
requirements to fund the projects included in the plan. Approval of this
resolution authorizes SPDC to issue $4,690,000 sales tax revenue bonds The
SPDC Board held a public bearing on the project on January 17, 2005 prior to
the regular City Council meeting..
Financial
Considerations: The bonds will be repaid through the 1 /2 cent sales tax,
Citizen Input/
Board Review: SPDC held a public hearing on the project on January 17, 2005 at 4:30 pm,
Legal Review: Fulbright and Jaworski serve as the City's bond counsel, and as such have
prepared the Resolution„
Alternatives: N/A
Supporting
Documents: Resolution No, 06 -007
Staff
Recommendation: Approval of Resolution No. 06 -007 approving and authorizing the issuance of
"Southlake Parks Development Corporation Sales Tax Subordinate Lien
Revenue Bonds, Series 2006 ".
RESOLUTION NO OE"
GO
A RESOLUTION by the City Council of the City of Southlake, Texas, relating to
the "Southlake Parks Development Corporation Sales Tax Subordinate
Lien Revenue Bonds, Series 2006 "; approving (i) the resolution of the
Southlake Parks Development Corporation authorizing the issuance of
such Bonds and (ii) the execution, on behalf of the City, of the
Financing /Use Agreement relating to such financing by the Corporation;
resolving other matters incident and related to the issuance of such
Bonds; and providing an effective date.
WHEREAS, Southlake Parks Development Corporation (the "Issuer ") was created by
the City of Southlake, Texas (the "City "), pursuant to the provisions of Section 4B of the
Development Corporation Act of 1979, Article 5190 6, Vernon's Texas Civil Statutes, as
amended (the "Act "); and
WHEREAS, the Issuer is empowered to issue bonds for the purpose of defraying the
cost of any "project" defined as such by the Act; and
WHEREAS, the Act defines "project" to include land, buildings, equipment, facilities, and
improvements found by the Board of Directors of the Issuer to be required or suitable for use for
sports and entertainment and public park purposes or promote or develop new and expanded
business enterprises; and
WHEREAS, the Issuer has determined to finance on behalf of the City park projects
involving the improvements to neighborhood parks, acquisition of additional park land for multi-
use lighted sports fields, and the construction of a lighted lacrosse complex (collectively, the
"Projects "); and
WHEREAS, Section 25(f) of the Act requires the City Council of the City approve the
resolution of the Issuer providing for the issuance of the Bonds no more than sixty (60) days
prior to the delivery of the Bonds; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS:
SECTION 1: The Resolution authorizing the issuance of $4,690,000 "Southlake Parks
Development Corporation Sales Tax Subordinate Lien Revenue Bonds, Series 2006 ", adopted
by the Issuer (the "Issuer Resolution ") on January 17, 2006 and submitted to the City Council
this day, is hereby approved in all respects. The Bonds are being issued to finance the
acquisition and construction of the Projects, which will be located within the City of Southlake
and the City agrees that upon receipt of the proceeds of sale of the Bonds from the Issuer, the
City will acquire and construct the Projects and thereafter be fully responsible for the upkeep,
maintenance and use of the Projects.
SECTION 2: The approvals herein given are in accordance with Section 25(f) of the
Act and the Issuer's bylaws, and the Bonds shall never be construed an indebtedness or pledge
of the City, or the State of Texas (the "State "), within the meaning of any constitutional or
statutory provision, and the owner of the Bonds shall never be paid in whole or in part out of any
funds raised or to be raised by taxation (other than sales tax proceeds as authorized pursuant to
Section 4B of the Act) or any other revenues of the Issuer, the City, or the State, except those
revenues assigned and pledged by the Issuer Resolution.
457003471
SECTION 3: The City hereby agrees to promptly collect and remit to the Issuer the
Gross Sales Tax Revenues (as defined in the Issuer Resolution) in accordance with the terms
of the Issuer Resolution and the Act to provide for the prompt payment of the Bonds, and to
assist and cooperate with the Issuer in the enforcement and collection of sales and use taxes
imposed on behalf of the Issuer.
SECTION 4: The Financing /Use Agreement by and between the City and the Issuer in
relation to the Projects, attached hereto as Exhibit A and incorporated by reference as a part of
this resolution for all purposes, with respect to the obligations of the City and Issuer during the
time the Bonds are outstanding, is hereby approved as to form and substance and the Mayor
and the City Secretary are hereby authorized to execute and deliver such agreement for and on
behalf of the City and as the act and deed of this City Council. Furthermore, the Mayor and the
City Secretary and the other officers of the City are hereby authorized, individually or jointly, to
execute and deliver such endorsements, instruments, certificates, documents, or papers
necessary and advisable to carry out the intent and purposes of this Resolution.
SECTION 5: The City hereby acknowledges and recognizes that the Bonds are being
issued as tax exempt obligations under and pursuant to section 103(a) of the Code (as defined
below) and a portion of the proceeds of sale of such Bonds are to be deposited with the City
following their receipt by the Issuer and the City shall have full control and responsibility with
respect to the acquisition and construction of the Projects and the investment and disbursement
of the proceeds of sale of the Bonds issued to finance the Projects. Therefore, as a result of
the foregoing, the City hereby makes the following representations and warranties to the Issuer:
(a) Definitions When used in this Section, the following terms have the following
meanings:
"Closing Date" means the date on which the Bonds are first authenticated
and delivered to the initial purchasers against payment therefor,
"Code" means the Internal Revenue Code of 1986, as amended by all
legislation, if any, effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148 -1(b) of the
Regulations
"Gross Proceeds" means any proceeds as defined in Section 1,148 -1(b)
of the Regulations, and any replacement proceeds as defined in Section
1,148 -1(c) of the Regulations, of the Bonds.
"Investment" has the meaning set forth in Section 1 148 -1(b) of the
Regulations.
"Nonpurpose Investment" means any investment property, as defined in
section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested
and which is not acquired to carry out the governmental purposes of the Bonds,
"Rebate Amount" has the meaning set forth in Section 1.148 -1(b) of the
Regulations.
45700347 1 2
"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 E1 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
(c) No Private Use or Private Payments Except as permitted by section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds, 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
457003471
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
which is the economic equivalent of a loan,
(e) Not to Invest at Higher Yield Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment
(or Use Gross Proceeds to replace money so invested), if as a result of such investment the
Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money
replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds.
(f) Not f=ederally 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..
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Bonds until six years after the final Computation Date,
(3) As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the City shall remit to the Issuer for payment to the United States
the amount described in paragraph (3) above and the amount described in
paragraph (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 (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 Issuer for
payment to the United States of any additional Rebate Amount owed to it,
457003471 4
interest thereon, and any penalty imposed under Section 1.148 -3 (h) of the
Regulations.
SECTION 6: 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 7: This Resolution shall be in force and effect from and after its passage on
the date shown below,
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45700347 1
'DASS'E'D AND ADO!"'I"FE1.), ;y 1"",
C is ^ CE Soul H � f ' k
Al
C� Sergi ad
C "R S
EXHIBIT A
FINANCING /USE AGREEMENT
457003471
FINANCING /USE AGREEMENT
This Financing /Use Agreement (this "Agreement') is made to be effective as of the 17
day of January, 2006, 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 park projects involving the
improvements to neighborhood parks, acquisition of additional park land for multi -use lighted
sports fields, and the construction of a lighted lacrosse complex (collectively, the "Projects ");
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 Projects; and
WHEREAS, the City will have full responsibility for the design and construction of the
Projects and the Corporation shall have no duties or responsibilities with respect to the Projects
other than to provide for the financing of its costs;
AGREEMENT
1, Financing of Projects 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 2006 ", hereinafter called the
"Bands ", and deposit proceeds of sale of the Bonds (less amounts to pay costs of issuance,
municipal bond insurance premium and surety bond premium) 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 Projects.
2. Use of Proiects Until all the Bonds have been fully paid, discharged and retired,
the upkeep and maintenance of the Projects will be the responsibility of the City and the
Corporation shall have no responsibility with respect to the operation, upkeep and maintenance
of the Projects.
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(x) 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 Projects as follows:
(a) Definitions When used in this Section, the following terms have the following
meanings:
45700452 1/10512968
"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 lnvestment" 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 1148-
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
457004521/30512958
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
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 Arbitra e. 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
457004521/10512968
for each receipt and expenditure of Gross Proceeds and the obligations acquired
therewith,
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchasers and the 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" (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.
T. 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,
457004521!10512968 4
8. SeverabilitV 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.
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,
1 Q. 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.
['remainder of page left blank intentionally]
457004521/10512968
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
(Corporate Seal)
ATTEST:
City Secretary
(City Seal)
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
President, Board of Directors
CITY OF SOUTHLAKE, TEXAS
Mayor
45700452 1/10512968 6
PAYING AGENT /REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of January 17, 2006 (this "Agreement "), by and
between Southlake Parks Development Corporation (the "Issuer'), and Regions Bank, Houston,
Texas, a banking corporation organized and existing under the laws of the State of Alabama
and authorized to do business in the State of Texas, or its successors (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 2006" (the "Securities ") in the aggregate principal amount of $4,690,000, such Securities
to be issued in fully registered form only as to the payment of principal thereof and interest
thereon; and
WHEREAS, the Securities are scheduled to be delivered to the initial purchasers thereof
on or about February 15, 2006; 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 such Paying Agent, the Bank shall be responsible for paying on behalf of the
Issuer the principal of, premium (if any), and interest on the Securities as the same become due
and payable to the registered owners thereof; all in accordance with this Agreement and the
Bond Resolution (hereinafter defined). The Issuer hereby appoints the Bank as Registrar with
respect to the Securities and, as Registrar for the Securities, the Bank shall keep and maintain
for and on behalf of the Issuer books and records as to the ownership of said Securities and
with respect to the transfer and exchange thereof as provided herein and in the "Bond
Resolution."
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities..
Section 1.02, Compensation
457004611/10512968
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.
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 2.0 t . 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 office of the Bank at the address appearing in Section
3.01 hereof. The Bank will notify the Issuer in writing of any change in location of the
Bank Office.
"Bond Resolution" means the resolution, order, or ordinance of the governing
body of the Issuer pursuant to which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30.
"Holder" and "Security Holder" each means the Person in whose name a Security
is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order signed in
the name of the Issuer by the President, Vice President or Secretary of the Board of
Directors, or 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).
45700461111051296a 2
"Redemption Date" when used with respect to any Bond 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 transfer 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 the 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:
Regions Bank
298 West Valley Avenue, 2 "� Floor
Homewood, Alabama 35209
Attention: Operations
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
each Security when due, by computing the amount of interest to be paid each Holder and
making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the
Record Date. All payments of principal and /or interest on the Securities to the registered
owners shall be accomplished (1) by the issuance of checks, payable to the registered owners,
drawn on the 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..
45700451.1/10512968 3
Section 102, Payment Dates
The Issuer hereby instructs the Bank to pay the principal of and interest on the
Securities on the dates specified in the Bond Resolution.,
ARTICLE FOUR
REGISTRAR
Section 4.01.. Security Register - Transfers and Exchanges.
The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office
books and records (herein sometimes referred to as the "Security Register") for recording the
names and addresses of the Holders of the Securities, the transfer, exchange, and replacement
of the Securities and the payment of the principal of and interest on the Securities to the Holders
and containing such other information as may be reasonably required by the Issuer and subject
to such reasonable regulations as the Issuer and the Bank may prescribe. All transfers,
exchanges, and replacements of Securities shall be noted in the Security Register, The Bank
represents and warrants its office in Houston, Texas will at all times have immediate access to
the Security Register by electronic or other means and will be capable at all times of producing
a hard copy of the Security Register at its Houston office for use by the Issuer.
The Bank represents and warrants that it will file and maintain a copy of the Security
Register for the Issuer and shall cause the Security Register to be current with all registration
and transfer information as from time to time may be applicable,
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, such written instrument to be in a form satisfactory to the Bank and duly executed by
the Holder thereof or his agent duly authorized in writing,
The Bank may request any supporting documentation it feels necessary to effect a
re- registration, transfer, or exchange of the Securities..
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in
not more than three (3) business days after the receipt of the Securities to be canceled in an
exchange or transfer and the written instrument of transfer or request for exchange duly
executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the
Paying Agent/Registrar,
Section 4.02. Securities
The issuer shall provide an adequate inventory of printed Securities to facilitate transfers
or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept
in safekeeping pending their use and reasonable care will be exercised by the Bank in
maintaining such Securities in safekeeping, which shall be not less than the care maintained by
the Bank for debt securities of other governments or corporations for which it serves as
registrar, or that is maintained for its own securities_
457{30461.1/10512968 4
Section 4.03. Form of the Security Register.
The Bank, as Registrar, will maintain the Security Register relating to the registration,
payment, transfer, and exchange of the Securities in accordance with the Bank's general
practices and procedures in effect from time to time. The Bank shall not be obligated to
maintain such Security Register in any form other than those which the Bank has currently
available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time,
Section 4.04• List of Security Holders,
The Bank will provide the Issuer at any time requested by the Issuer, upon payment of
the required fee, a copy of the information contained in the Security Register, The Issuer may
also inspect the information contained in the Security Register at any time the Bank is
customarily open for business, provided that reasonable time is allowed the Bank to provide an
up -to -date listing or to convert the information into written form.
The Bank will not release or disclose the contents of the Security Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and
prior to the release or disclosure of the contents of the Security Register, the Bank will notify the
Issuer so that the Issuer may contest the court order or such release or disclosure of the
contents of the Security Register,
Section 4 05. Return of canceled Securities.
The Bank will retain and destroy, upon expiration of the appropriate retention period
under Texas law, Securities in lieu of which or in exchange for which other Securities have been
issued, or which have been paid, and will provide a certificate of destruction of such Securities
to Issuer upon the Issuer's request..
Section 4..06.. Mutilated, Destroyed, Lost, or Stolen Securities
The Issuer hereby instructs the Bank, subject to the applicable provisions of the Bond
Resolution, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost,
or stolen Securities as long as the same does not result in an overissuance.
In case any Security shall be mutilated, destroyed, lost, or stolen, the Bank, in its
discretion, may execute and deliver a replacement Security of like form and tenor, and in the
same denomination and bearing a number not contemporaneously outstanding, in exchange
and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed,
lost, or stolen Security, only upon (i) the filing by the Holder thereof with the Bank of evidence
satisfactory to the Bank of the destruction, loss, or theft of such Security, and of the authenticity
of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount
satisfactory to hold the Issuer and the Bank harmless. All expenses and charges associated
with such indemnity and with the preparation, execution, and delivery of a replacement Security
shall be borne by the Holder of the Security mutilated, destroyed, lost, or stolen.
Section 4.07. Transaction Information to the Issuer.
45700461.1!'10512968
The Bank will, within a reasonable time after receipt of written request from the Issuer,
furnish the Issuer information as to the Securities it has paid pursuant to Section 3,01 hereof,
Securities it has delivered upon the transfer or exchange of any Securities pursuant to Section
4.01 hereof, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed,
lost, or stolen Securities pursuant to Section 4.06 hereof,
ARTICLE FIVE
THE BANK
Section 5..01. Duties of the Bank
The Bank undertakes to perform the duties set forth herein and agrees to use
reasonable care in the performance thereof.
Section 5.02: Reliance on the Documents, Etc
(a) The Bank may conclusively rely, as to the truth of the statements and
correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts..
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper 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 the Issuer
457004611/10512968
The recitals contained herein with respect to the Issuer and in the Securities shall be
taken as the statements of the Issuer, and the Bank assumes no responsibility for their
correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5 04. May Hold Securities, .
The Bank, in its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Issuer with the same rights it would have if it were
not the Paying Agent/Registrar, or any other agent.
Section 5.05. Moneys Held by the Bank - Special Depository AccountlCollateralization.
A special depository 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 special depository accounts
to the extent such money is not insured by the Federal Deposit Insurance Corporation.
Payments made from such special depository account shall be made by check drawn on such
special depository 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
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 the administrative office 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
457004611/10512968 7
of Interpleader in any court of competent jurisdiction within the State of Texas to determine the
rights of any Person claiming any interest herein.
In the event the Bank becomes involved in litigation in connection with this Agreement,
the Issuer to the extent permitted by law agrees to indemnify and save the Bank harmless from
all loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result
thereof, The obligations of the Bank under this Agreement shall be performable at the principal
corporate office of the Bank in the City of Dallas, Texas,
Section 5.08. DT Services
It is hereby represented and warranted that, in the event the Securities are otherwise
qualified and accepted for Depository Trust Company services or equivalent depository trust
services by other organizations, the Bank has the capability and, to the extent within its control,
will comply with the "Operational Arrangements ", effective as of the date of this agreement,
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 the
execution page of this Agreement.
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,
45700461.1/10512968 8
In case any provision herein shall be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be affected or
impaired thereby„
Section 6.07, Benefits of A reement.
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 AgentlRegistrar 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. However, if the Issuer
fails to appoint a successor Paying Agent/Registrar within a reasonable time, the Bank may
petition a court of competent jurisdiction within the State of Texas to appoint a successor Paying
AgentlRegistrar. Furthermore, the Bank and the Issuer mutually agree that the effective date of
an early termination of this Agreement shall not occur at any time which would disrupt, delay, or
otherwise adversely affect the payment of the Securities.
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 611. Governing Law
This Agreement shall be construed in accordance with and governed by the laws of the
State of Texas.
4570045€ 1//0512988 9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
REGIONS BANK, Houston, Texas
BY
Title:
ATTEST: Address: 4400 Post Oak Parkway
Suite 2670
Houston, Texas 77027
Title
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
BY
(CORPORATE SEAL) President, Board of Directors
ATTEST:
Secretary, Board of Directors
Address: 1400 Main Street
Southlake, Texas 76092
45700461.1 S -1