2000-002 SPDCRESOLUTION NO ,~Db 00-~')'~'
A
RESOLUTION authorizing the issuance of "SOUTHLAKE PARKS
DEVELOPMENT CORPORATION SALES TAX SUBORDINATE LIEN
REVENUE BONDS, SERIES 2000"; 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 $4,180,000 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 s "Notice of Public Hearing Relating to Southlake Parks
Development Corporation Projects" duly p~,~2!%hed on February 9, 2000 and February 15, 2000, 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 h~:~ further determined and hereby finds that the Projects
to be financed by the issuance of the bond5 are for and on behalf of the City of Southlake, Texas,
and the principal amount of such bonds ant:{ other obligations of the Corporation payable in whole
or in part from the "Gross Sales Tax Rever, ues" (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 "Gro~ ,'>,k,~s Tax Revenues" do not, in the aggregate, exceed
$135,000,000; and
WHEREAS, the Board of Director.~ further finds and determines that the bonds herein
authorized should be payable from a lien ~>;' and pledge of the Pledged Revenues (as defined
herein) junior and subordinate to the lien o;~ 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:
820706,1
SECTION 1: Authorization - Desiqnation - Principal Amount - Purpose. Bonds of the
Corporation shall be and are hereby authorized to be issued in the aggregate principal amount of
$4,180,000 to be designated and bear the title "SOUTHLAKE PARKS DEVELOPMENT
CORPORATION SALES TAX SUBORDINATE LIEN REVENUE BONDS, SERIES 2000",
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
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 March 1,2000 (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:
Stated Matudty
Principal Interest
Amount Rates
2001 $ 60,000 4.30%
2002 60,000 4.75%
2003 65,000 4.90%
2004 65,000 5.00%
2005 70,000 5.10%
2006 75,000 5.20%
2007 75,000 5.30%
2008 80,000 5.40%
2009 85,000 5.45%
2010 90,000 5.40%
2011 95,000 5.45%
2012 100,000 5.55%
2013 105,000 5.65%
2014 110,000 5.70%
2015 120,000 5.80%
2016 125,000 5.875%
2017 135,000 5.90%
2018 140,000 6.00%
2025 1,260,000 6.00%
2030 1,265,000 6.00%
The Bonds shall bear interest on the unpaid principal amounts from the Issue Date at the
per annum rates shown above (ca[cjjlated. on the basis of a 360-day year of twelve 30-day months).
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Interest on the Bonds shall be payable on February 15 and August 15 in each year, commencing
August 15, 2000.
SECTION 3: Terms of Payment - Paying Aqent/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 Chase Bank of Texas, National Association, 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 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 Secudty
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
succeedin§ 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 themafter-,-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 pdor 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 matudng on and after
August 15, 2010 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 August 15, 2009 or on any date thereafter
at the redemption price of par plus accrued interest to the date of redemption.
At least forty-five (45) days 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 August 15, 2025 and
August 15, 2030 ("Term Bonds") shall be subject to mandatory redemption prior to maturity at the
redemption pdce 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, 2025
Redemption Date Principal Amount
Term Bonds due August 15, 2030
Redemption Date Principal Amount
August 15, 2019 $ 150,000
August 15, 2020 160,000
August 15, 2021 170,000
August 15, 2022 180,000
August 15, 2023 190,000
August 15, 2024 200,000
August15, 2026 $225,000
August15,2027 240,000
August15,2028 250,000
August15,2029 265,000
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 redem~tion-.date, (1) shall have been acquired by the Corporation at
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a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date
of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation or (2) shall have
been redeemed pursuant to the optional redemption provisions set forth in paragraph(a) of this
Section and not theretofore credited against a mandatory redemption requirement.
(c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same
Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat
such Bonds as representing the number of Bonds Outstanding which is obtained by dividing the
principal amount of such Bond by $5,000 and shall select the Bonds, or principal amount thereof,
to be redeemed within such Stated Matudty 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 Secudty 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 pdce, (iv) state that the Bonds,
or the portion of the principal amount thereof to be redeemed, shall become due and payable on
the redemption date specified, and the interest thereon, or on the portion of the principal amount
thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify
that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed,
shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon
presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior
redemption and has been called for redemption and notice of redemption thereof has been duly
given or waived as herein provided, such Bond (or the principal amount thereof to be redeemed)
shall become due and payable, and interest thereon shall cease to accrue from and after the
redemption date therefor, provided moneys sufficient for the payment of such Bonds (or of the
principal amount thereof to be redeemed) at the then applicable redemption price are held for the
purpose of such payment by the Paying Agent/Registrar.
SECTION 5: Registration - Transfer - Exchanqe 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.
820706.3 -5-
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 Matudty 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.
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 Secudty 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.
SECTION 7: Execution - Reqistration. 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-l, 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
AgentJRegistrar, 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
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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 pdnted 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.
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 REGISTERED
NO. $-
UNITED STATES OF AMERICA
STATE OF TEXAS
SOUTHLAKE PARKS DEVELOPMENT CORPORATION
SALES TAX SUBORDINATE LIEN REVENUE BOND, SERIES 2000
Issue Date:
March 1, 2000
Interest Rate:
Stated Maturity:
CUSIP NO:
Registered Owner:
Principal Amount:
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
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'revenu.es and sources pledged under the Resolution identified
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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, 2000. 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.
Ali 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
Amedca 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 $4,180,000 (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 on dates hereinafter identified (the "Term Bonds") are subject to
mandatory redemption prior to maturity with funds on deposit in the Bond Fund established and
maintained for the payment thereof in the Resolution, and shall be redeemed in part prior to matudty
at the price of par and accrued interest thereon to the date of redemption, and without premium.
The Term Bonds maturing on August 15, 2025 are subject to mandatory redemption on August 15,
2019 and annually thereafter on each August 15 through August 15, 2024 in the amounts set forth
in the Resolution. The Term Bonds maturing on August 15, 2030 are subject to mandatory
redemption on August 15, 2026 and annually thereafter on each August 15 through August 15, 2029
in the amounts set forth in the Resolution. 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 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 ~ike maturity 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 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
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redeemed pursuant to the optional redemption provisions appearing below and not theretofore
credited against a mandatory redemption requirement.
The Bonds maturing on and after August 15, 2010 may be 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, 2009 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 pdca 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 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 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 pdor 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_tl:~s Bond or the interest hereon and neither the faith and credit
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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 padty 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 AgentJRegistrar, 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~'ransfer
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 Matudty 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 precedingt_h_e da. re_ of mailing of such notice.
820706.Y - 11 -
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 propedy 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.
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
ATTEST:
President, Board of Directors
Secretary, Board of Directors
(SEAL)
C. *Form of Reqistration Certificate of Comptroller of Public Accounts to Appear on Initial
Bonds only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER )
)
OF PUBLIC ACCOUNTS )
)
THE STATE OF TEXAS )
REGISTER NO.
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
(SEAL)
Comptroller of Public Accounts
of the State of Texas
D. Form of Certificate of Payinq Aqent/Reqistrar 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 PaymenETransfer Office" for this Bond.
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
as Paying AgentJRegistrer
Registration date:
By
Authorized Signature
-13-
E. Form of Assignment.
ASSIGNMENT
FORVALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
irrevocably constitutes and appoints
(Social Secudty or other identifying number:
) the within Bond and all rights thereunder, and hereby
attorney to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature guaranteed:
NOTICE: The signature on this assignment must
correspond with the name of the registered owner
as it appears on the face of the within Bond in every
particular.
The Initial Bond(s) shall be in the form set forth in paraqraph B of this Section, except that
the form of a sinqle fully reqistered Initial Bond shall be modified as follows::
(i)
(ii)
immediately under the name of the bond the headings "Interest Rate
"Stated Maturity "shall both be omitted;"
Paragraph one shall read as follows:
"and
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, 2000. Principal
installments of this Bond are pay_a.able.~t its Stated Maturity or on a prepayment date to the
820706,1 --14-
registered owner hereof by Chase Bank of Texas, National Association (the "Paying
Agent/Registrar"), upon its presentation and surrender, at its principal offices in Dallas, Texas (the
"Designated PaymentJTransfer 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 Amedca 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 dght 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 2000", dated Mamh 1, 2000, 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 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 pedod 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 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 cequired by law.
"Outstanding" - When used in this Resolution with respect to Bonds or Padty
Obligations, as the case may be, means, as of the date of determination, all Bonds
8~0706.1 -16-
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 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.
"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
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
-17-
encumbering income, revenues, receipts or property other than the Gross Sales Tax
Revenues to the payment and security of the Padty 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 secudty of the Parity Obligations, are hereby irrevocably
pledged to the payment and security of 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:
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 Pdority Bonds;
Second: To the payment of the amounts required to be deposited in the
Bond Fund for the payment of Debt Service on the Padty 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
820706.1 - 18 -
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 Padty 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 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. 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
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 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 total amount to be accumulated and maintained in the Reserve Fund by reason of the
issuance of the Bonds shall be $302,900.00 (the "Required Reserve"). The Required Reserve
shall be established and maintained with Pledged Revenues, the proceeds of sale of Parity
Obligations or by depositing to the-~edit_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. The Corporation hereby covenants and
agrees the Required Reserve shall be initially funded in full on the date of the delivery of the Bonds
with surety bond coverage provided by a surety obligation issued by Ambac Assurance Corporation
as provided below.
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 ail Parity Obligations then Outstanding (after giving
effect to the issuance of the Additional Obligations), as determined on the date each sedes 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 ail
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 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,
820706.[ - 2 0 -
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 Obliqation 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 "Ambad')
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:
(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 paymen, t default under any related security agreement.
-21-
(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.
(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.
820706.1 - 22 -
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.
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. WhileanyoftheBondsareOutstanding, 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. 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 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) That money deposited to the credit of the Pledged Revenue Fund, Bond Fund and
Reserve Fund, to the extent nqt_ i_nves, t_ed and not otherwise insured by the Federal Deposit
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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, pdor 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.
(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 1.20 times the Average 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: Refundinq 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 shat give effect to the refunding.
SECTION 20: Right to Issue Additional Priority Bonds - Riqht to Create Subordinate Debt.
The Corporation expressly reserves the right to issue Priority Bonds, without limitation as to
principal amount or complying wi{h-any, terms and conditions contained in this Resolution, but
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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 debt 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 debt 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.
(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:
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(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 business
hours.
SECTION23: RepresentationsastoSecudtyfortheBonds. (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
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owners and holders of Parity Obligations without distinction as to priority and rights under this
Resolution,
(f) The Padty Obligations shall constitute special obligations of the Corporation, payable
solely from, and equally and ratably secured by a padty 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 dght to demand
payment out of any funds raised or to be raised by any system of ad valorem taxation.
SECTION 24: Satisfaction of Obliqation 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 sha l, 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.
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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 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, 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 Reqardinq Tax-Exempt Status.
(a)
meanings:
Definitions. When used in this Section 27, the following terms have the following
"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.
820706.1 - 2 8 -
"Computation Date" has the meaning set for[h in Section 1.148-1 (b) of the
Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of
the Regulations, and any replacement proceeds as defined in Section 1.148-1 (c) of
the Regulations, of the Bonds.
"Investment" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Nonpurpose Investment" means any investment property, as defined in
section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and
which is not acquired to carry out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Regulations" means any proposed, temporary, or final Income Tax
Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and
103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any
reference to any specific Regulation shall also mean, as appropriate, any proposed,
temporary or final Income Tax Regulation designed to supplement, amend or
replace the specific Regulation referenced.
"Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of
the Regulations and (2) the Bonds has the meaning set forth in Section 1.148-4 of
the Regulations.
(b) Not to Cause Interest to Become Taxable. The 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:
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(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 Pdvate 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 Hiqher 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 pdor 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
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 Arbitraqe Profits. Except to the extent otherwise provided in section 148(0
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
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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 Arbitraqe 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 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.
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(j) 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 AgentJRegistrar, 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. and Dain Rauscher Incorporated
(herein referred to as the "Purchasers") in accordance with a Bond Purchase Contract (the
"Contract"), dated March 7, 2000, 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 be_qe_fit th.e_Corporation, is hereby authorized to be executed by the
820706. L -32-
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 March 7, 2000, 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.
SECTION33: ProceedsofSale. TheproceedsofsaleoftheBonds, 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, 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: Leqal 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
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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 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 Attomey 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 Amedca.
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.
SECTION41: ConstructionofTerms. IfappropriateinthecontextofthisResolution, 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 Undertakinq. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"MS,qB" means the Municipal Securities Rulemaking Board.
"NRMSIF~' 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. '
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"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC' means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
(b) Annual Reports. The 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, 1999) 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 pedod
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.
(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:
and
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
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;
820706.i -35-
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 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.
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 ar~y_~ther_provision of this Resolution that authorizes such an
-36-
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 offedng 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 SlD 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 "Ambad') 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 pdce,
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 dghts 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
an,/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, includLqg, without limitation, notice of any redemption
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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) Concerninq 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
-38-
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 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 dghts 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 AmbaCs
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 AgentJRegistrar
to note AmbaCs 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 Meetinq. 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.
-39-
SECTION 45: Effective Date. This Resolution shall be in force and effect from and after
its passage on the date shown below.
PASSED AND ADOPTED, this March 7, 2000.
SOUTHLAKE PARKS DEVELOPMENT CORPORATION
President, Board of Directors
A'I-FEST:
SecretAry, Board of Directors I- ~
(Corporation Seal)
-40-
PAYING AGENT/REGISTRAR AGREEMENT
EXHIBIT
THIS AGREEMENT entered into as of March 7, 2000 (this "Agreement"), by and between
the Southlake Parks Development Corporation (the "Issuer"), and Chase Bank of Texas, National
Association, a banking association duly organized and existing under the laws of the United States
of America, (the "Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its "Southlake
Parks Development Corporation Sales Tax Subordinate Lien Revenue Bonds, Series 2000" (the
"Securities") in the aggregate principal amount of $4,180,000, which Securities are scheduled to
be delivered to the initial purchasers on or about April 11, 2000; 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; ail 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. Com_9._o._o._o._o.~ation. 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 tothe Issuer on or before 90 days prior to the close of the
Fiscal Year of the Issuer, and. shall be e~fective upon the first day of the following Fiscal Year.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any of
the provisions hereof (including the reasonable compensation and the expenses and disbursements
of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"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 "Secudfy 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 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).
-2-
EXHIBIT
"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 Payinq Aqent. 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 Secudty to the Bank at the following address:
P. O. Box 2320, Dallas, Texas 75221-2320 or 1201 Main Street, One Main Place, 18"~ 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.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Reqister- Transfers and Exchanqes. 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 wdtten 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 AgentJRegistrar.
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 Reqister. 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 obli§ated to maintain such Security Register in any form other than those which the Bank has
currently available and currently utilizes at the time.
-4-
EXHIBIT
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 Secudty
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.
Section4.05. Return of Cancelled Certificates. TheBankwill, atsuchreasonableintervals
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 ovedssuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may execute
and deliver a replacement Security of like form and tenor, and in the same denomination and
bearing a number not contemporaneously outstanding, in exchange and substitution for such
mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only
upon the approval of the Issuer and after (i) the filing by the Holder thereof with the Bank of
evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the
authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an
amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges
associated with such indemnity and with the preparation, execution and delivery of a replacement
Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time
after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it
has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of any
Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu of
mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
-5-
EXHIBIT
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 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 attomeys of the Bank.
Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer
and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or
any other Person for any amount due on any Security from its own funds.
-6-
EXHIBIT
Section 5.04. ~curities. 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 - Fiduciary AccountJCoilateralization. A fiduciary
account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and
disbursement of moneys received from the Issuer hereunder for the payment of the Securities, and
money deposited to the credit of such account until paid to the Holders of the Securities shall be
continuously collateralized by securities or obligations which qualify and are eligible under both the
laws of the State of Texas and the laws of the United States of America to secure and be pledged
as collateral for fiduciary accounts to the extent such money is not insured by the Federal Deposit
Insurance Corporation. Payments made from such fiduciary account shall be made by check drawn
on such fiduciary account unless the owner of such Securities shall, at its own expense and risk,
request such other medium of payment.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal, premium (if any), or interest on any
Security and remaining unclaimed for 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 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
-7-
Limited to, requirements for the timeliness of payments and funds availability, transfer turnaround
time, and notification of redemptions and calls.
ARTICLE SlX
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. Assiqnment. 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 Headinqs. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 6.05. Successors and Assig.~. All covenants and agreements herein bY the Issuer
shall bind its successors and assigns, whether so expressed or not.
Section 6.06. Severability. In case any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
Section 6.07. ~ement. 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
-8-
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. Governinq Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
[SEAL]
Attest:
BY
Title:
Address:
600 Travis, Suite 1150
Houston, Texas 77002
Title:
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
(CORPORATION SEAL)
Attest:
BY
President, Board of Directors
Address: 667 N. Carroll Avenue
Southlake, Texas 76092
Secretary, Board of Directors
-9-
EXHIBIT
EXHIBIT B
GUARANTY AGREEMENT
EXHIBIT
GUARANTY AGREEMENT dated as of , 200_ by and between
· a public body corporate organized and existing under the laws of the State of _(the
"Obligor'); and AMBAC ASS~CE CORPORATION ("Amhac'). a Wisconsin domiciled stock
insurance company.
WITNESSETH:
WHEREAS, the Obligor has or will issue_(the "Obligations"); and
WHEREAS, Ambac will issue its Surety Bond (the "Surety Bond"), substantially in the form set
forth m 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 Amhac 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
DEFINITIONS; 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.
Secuon 102. Surety Bond.
t a) Ambac will issue the Surety Bond in accordance with and subject to the terms and conditions of the
Commltment.
{ 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.
tc) 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 pnncipal 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 catlge~o b$'~aid from Legally Available Funds the premium set forth in
the Commitment.
Section 1.04. Certain~- The Obligor will pay all reasonable fees and disbursements of
Ambac's counsel related to any modification of this Agreement or the Surety Bond. 15
ARTICLE II
REIMBURSEMENT OBLIGATIONS OF OBLIGOR AND SECURITY THEREFORE
Section 2.01. Reimbursement for Payments Under the Surety Bond and Exoenses.
(a) The Obligor will reimburse Ambac, from Legally Available Funds within the Reimbursement Period.
w~thout demand or notice by Ambac to the Obligor or any other person, to the extent of each Surety Bond
Payment w~th interest on each Surety Bond Payment fi'om 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 dunng the Reimbursement Period.
Interest on each Surety Bond Payment shall be paid monthly dunng 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
SurePj Bond and the enforcement by Axnbac 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 Sectiun 2.01.
Section 2.02. Allocation of Payments. Ambac and the Obligor hereby agree that each repayment of
pnnc~pal 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 port/on of the Surety Bond Coverage.
Section 2.03. SecunW 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 m 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 m 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,
hen 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
~ ~ll. from t~me to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and
dehvered, 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
th~s 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 nonperf, e_c_tion~gf_ any security interest in progerty 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
HIBIT B
(d) whether or not such obligations are contingent or matured, disputed or undisputed, liquidated or
unliquidated.
ARTICLE HI
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 ConUmtment, the Surety Bond or herewith shall have been
materially false at the tune when made;
(c) Except as otherVase 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 Banlo'uptcy 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, sequesWator 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 effectmg any of the foregoing; or
(e) An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of
competent jUnsdiction seeking (i) relief in respect of the Obligor, or of a substantial part of its properly,
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, sequesWator 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 tmstayed 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 inslrumcnt and any obligation, agreement or
covenant of the Obligor under this Agreement; provided, however, that Amhae may not take any action to
direct or require acceleration or other early redemption of the Obligations or adversely affect the fights 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.
17
ARTICLE IV
SETTLEMENT
Ambac shall have the exclusive right to decide and determine whether any claim, liability, suit or
judgment made or brought agamst 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 tn good faith, 'shall be final and binding upon the Obligor. An itemized statement of payments made
bv Ambac, cernfied by an officer of Ambac, or the voucher or vouchers for such payments, shall be prima
f~cm 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
subsecnon (a) of Section 2.01 hereof.
ARTICLE V
MISCELLANEOUS
Section 5,01. Computations. All computations of prermum, interest and fees hereunder shall be made on
thc basis of thc actual number of days ctapsed 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 pamal
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
further notme 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.
Sectmn 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 Obhgor hereby agrees that upon the vent'ten request of the Paying Agent, Ambac may make or
consent to ~ssue 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
dehver to the Obligor and to the company or companies, if any, rating the Obligations, a copy of such
subsmuted Surety Bond.
Sectmn 5.04. Successors and Assigns; Descriptive Headings.
la) Th~s Agreement shall bind, and the benefits thereof shall inure to, the Obligor and Ambac and their
respecnve 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.
lb) 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 Surenes. If An~ba~ sh~fi 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 th~s Agreement, and "Ambac," wherever used herein,
shall be deemed to include such reinsunng surety, as its respective ~nterests may appear.
18
Section 5.06. Si~ature on Bond. The Obligor's liabilRy shall not be affected by its failure to sign the
Surety Bond nor by any clatm that other indemnity or security was to have been obtained nor by the
release of any mdemmry, 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 parnes 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 teleeopier 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: >
IftoAmbac:
Ambac Assurance Corporation
One State Street Plaza
17th Floor
New York, New York 10004
Attention: General Counsel
Section 5.09. sUrWval of Representations and Warranties. All representations, warranties and
obligations contained herein shall survive the execution and delivery of this Agreement and the Surety
Bond.
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 pames 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. Severabilit~. 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 W~4 ~:REOF, each of the pames hereto has caused a counterpart of this Agreement to be
duly executed and delivered as of the date first above written.
[ISSUERI
(Seal)
Attest: By
Title: Title:
AMBAC ASSURANCE CORPORATION
Attest: By
Title: Title:
19
ANNEX A - SURETY BOND
2O
ANNEX B
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided herein or unless the context
otherwise requires, all capitalized terms shall have the meaning as set out below.
"Agreement" means this Guaranty Agreement.
-A. mbac" has the same meaning as set forth in the first paragraph of this Agreement.
"Collateral and Revenues" has the same meaning as set forth in Section 2.03 hereof.
"Commitment" means the Ambac Commitment for Surety Bond in the form attached hereto as Annex C.
"Debt Service Payments" means those payments required to be made by the Obligor which will be
applied to payment of prinmpal of and interest on the Obligations.
"Effective Interest Rate" means the lesser of the Reimbursement Rate or the maximum rate of interest
permitted by then applicable law; provided, however, that the Effective Interest Rate shall in no event be
less than the interest rate on the Obligations.
"Event of Default" shall mean those events of default set forth in Section 3.01 of this Agreement.
"Legally Available Funds" means any moneys legally available to the Obligor for the payment of i~s
obligations.
"Obligations" has the same meaning as set forth in the second paragraph of this Agreement.
"Obligor" has the same meamng as set forth in the first paragraph of this Agreement.
"Owners" means the registered owner of any Obligation as indicated in the books maintained by the
applicable paying agent, the Obligor or any designee of the Obligor for such purpose. The term "Owner"
shall not include the Obligor or any person or entity whose obligation or obligations by agreement
constitute the underlying security or source of payment for the Obligations.
~Paymg Agent" means
-Reimbursement Period" means, with respect to a particular Surety Bond Payment, the period
commencing on the date of such Surety Bond Payment and ending 12 months following such Surety
Bond Payment.
"Reimbursement Rate" means Citibank's prime rate plus two (2) percent per annum, as of the date of
such Surety Bond Payment, said "prime rate" being the rate of interest announced from time to time by
Citibank, New York, New York, as ~ts prime rate. The rate of interest shall be calculated on the basis of a
360 day year.
F HIBIT 8,
21
"Resolution" means
"State" means the Sta~e of :
"Surety Bond" means the surety bond issued by Amhac substantially in the form attached to this
Agreement as Annex A.
"Surety Bond Coverage" means the amount available at any partacular time to be paid to the Paying
Agent under the terms of the Surety Bond, which amount shall never exceed $
"Surety Bond Payment" means an amount equal to the Debt servaee Payment less (i) that portion oftha
Debt serVace Payment paid by the Obligor, and (ii) other funds legally available to the Paying Agent for
payment to the Owners, all as certified by the Paying Agent in a demand for payment rendered pursuant
to the terms of the Surety Bond.
EXHIBIT
22
ANNEX C
COMMITMENT
EXHIBIT J
AMBAC ASSURANCE CORPORATION WIRING INSTRUCTIONS
Citibank N.A.
ABA NO. 021000089
For: Ambac Assurance Corporation
AJC No. 40609486
*** PLease indicate Policy Number on wire ***
EXHIBIT
SOUTHLAKE PARKS
DEVELOPMENT CORPORATION, SOUTHLAKE, TEXAS
(Tarrant and Denton Counties)
$4,180,000 SALES TAX SUBORDINATE LIEN
REVENUE BONDS, SERIES 2000
BOND PURCHASE CONTRACT
March 7, 2000
President and Members of
the Board of Directors of
Southlake Parks Development Corporation
667 N. Carroll Avenue
Southlake, Texas 76092
Ladies and Gentlemen:
The undersigned (the "Representative"), acting on behalf of itself and on behalf of
the underwriters listed on attached Schedule 1 (the Representative and such other
underwriters being herein collectively referred to as the "Underwriters") offers to enter into
this Bond Purchase Contract (this "Purchase Contract") with the Southlake Parks
Development Corporation (the "Issuer") 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
Underwriters. 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 Underwriters upon notice
delivered to the Issuer at any time prior to its acceptance by the execution hereofi
l. Purchase Price. Upon the terms and conditions and upon the basis of the
representations, warranties and covenants set forth herein, the Underwriters hereby agree to
purchase from the Issuer, and the Issuer hereby agrees to sell to the Underwriters, all (but not
less than all) of the Issuer's $4,180,000 Sales Tax Subordinate Lien Revenue Bonds, Series
2000 (the "Bonds"), which Bonds have the terms and features (including those with respect
to redemption) set forth in the Official Statement (as hereinafter defined in Paragraph 4
hereof'). 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) $4,093,749.80 (which represents
the par amount of the Bonds, less an underwriting discount of 535,372.75, and an original
issue discount of S50,877.45), plus (ii) accrued interest on the Bonds, calculated on the basis
of a 360-day year of twelve 30-day months, from March l, 2000 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 o fDirectors (the "Resolution") 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 other,vise defined shall have the meanings ascribed to them in the
Resolution.
2. ~. Delivered to the Issuer herewith is the good-faith
corporate check of the Representative, payable to the order of the Issuer in an amount equal
to one percent (!.%) 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
Representative. 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 Underwriters of their 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 Underwriters' compliance with such obligations to
purchase and accept delivery of the Bonds at the Closing, the Check shall be returned to the
Representative at the Closing. In the event of the failure by the Issuer to deliver the Bonds
at ~he Closing or if the Issuer shall be unable to satisfy the conditions to the obligations of
the Underwriters contained in this Purchase Contract, or if the obligations of the
Underwriters shall be terminated for any reason permitted by this Purchase Contract, the
Check shall be returned promptly to the Representative. In the event that the Underwriters
fail (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 Underwriters 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 Representative agrees not to stop payment on the Check
unless the Issuer has breached the terms of this Purchase Contract.
3. Public Offerlnll. The Underwriters hereby agree 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, reserving the right to change such prices or yields as the Underwriters shall deem
EXHIBIT
necessary in connection with the offering of the Bonds without any requirement of prior
notice. The Underwriters 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 ofthis
Purchase Contract, the Issuer will deliver (or cause to be delivered) to the Underwriters one
copy of the Resolution, duly executed, approved and adopted and in full force and effect.
The Issuer hereby authorizes the Underwriters to use the Resolution in connection with the
public offering and sale of the Bonds.
The Issuer has heretofore delivered to the Underwriters copies of the Preliminary
Official Statement related to the Bonds, dated February 16, 2000 (the "Preliminary Official
StaTement"), for the Underwriters' use in determining interest in the Bonds. The Issuer
ratifies, confirms and approves the use by the Underwriters, 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 Underwriters copies of the final Official
Statement related to the Bonds approved by duly authorized officials of the Issuer in
sufficient number to permit the Underwriters to comply with the requirements of Rule l 5c2-
12 (the "Rule") of the Securities and Exchange Commission. Such final Official Statement
shail 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 Underwriters (and it shallbe a condition of the obligation of the Underwriters
to purchase and accept delivery of the Bonds that the Issuer shall so represent and warrant
as of the date of the Closing) that:
(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 fight, power and authority (i) to issue the Bonds,
(ii) to authorize the preparation of the Preliminary Official Statement and the Official
Statement and to authorize their use and distribution by the Underwriters, (iii) to
enter into this Purchase Contract and to sell and deliver the Bonds to the
Underwriters 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 hereof)
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 ofthis
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 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 instrumentality 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 o fthe United States
or any agency or instrumentality thereof or any applicable judgrnent 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 o fits
4
EXHIBIT
obligations hereunder and under the Resolution, the Bonds and this Purchase
Contract will have been obtained;
(t') 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 Underwriters, 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, 1998, 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 (j) 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 In formation in Official Statement After Amendment
or Supplement. If the Official Statement is amended or supplemented pursuant to
subparagraph (j) 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 material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in the light
o f the circumstances under which they were made, not misleading;
(j) Amending or Suoolementing 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 Representative. If
between the date of this Purchase Contract and the 91 st 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 ora 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 o fthe circumstances under which they were made, not
misleading, the Issuer shall notify the Representative, and if, in the opinion of the
issuer or the Representative, 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
Representative;
(k) Prohibition Against 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 Underwriters,
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 o fwhich 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 Underwriters, any debt described in the Official Statement);
(I) 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 Issuer
will 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 furnish such information, execute such
instruments and take such action in cooperation with the Representative as the
Representative may reasonably request (i) to qualify the Bonds for offer and sale
under the Blue Sky or other securities laws and regulations of such state and other
jurisdictions in the United States as the Representative 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 April 11, 2000, or on such other date as may be mutually agreed upon by the Issuer
and the Representative, the Issuer will deliver the Bonds to The Depository Trust Company
("DTC') in New York, New Ybrk 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 Underwriters the
other documents required by this Agreement. Subject to the terms and conditions hereof, the
6
Underwriters 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 Representative. The actions relating to the payment for,
and delivery of the Bonds, is herein above and hereafter called the "Closing." The
Representative 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 Underwriters
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 thi.s Purchase Contract shall remain operative
and in full force and effect regardless of any investigation made by or on behalf of the
Underwriters and shall survive the delivery of the Bonds hereunder for a period of n~nety
(90) days following the Closing.
8. Certain Conditions to Underwriters' Obligations. The Underwriters'
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 Underwriters:
(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 Underwriters;
(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 Underwriters. That, at the
Closing, the Unde~a'iters shall receive a copy of each of the following documents:
(I) 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 Underwriters;
(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
Representative in writing, and are in full force and effect;
(4) Bond Counsel's Opinion. Opinion of bond counsel,
Fulbright & Jaworski L.L.P., Dallas, Texas ("Bond Counsel"), dated
· as of the date of Closing, in form and substance of Appendix C to the
Official 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 Underwriters, to the
effect that (i) this Purchase Contract has been duly author/zed,
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; (iii) 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," "PLAN
OF FINANCING," "THE 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 of Information" (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 Underwriters 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
EXHIBIT
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 Underwriters' Opinion. An opinion,
dated as of the date of Closing and addressed to the Underwriters, of
Delgado, Acosta, Braden & .[ones, P.C., E1 Paso, Texas ("Counsel to
the Underwriters"), 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 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 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 correct in ail
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 ofreveunes
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 ora 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 of the
State of Texas in respect of the Bonds;
(11) Rating Letters. Evidence of minimum ratings of
Moody's Investors Service, Inc. of"Aaa," Standard & Poor's Rating
Services of"AAA," and Fitch IBCA of "AAA" on the Bonds, in a
form acceptable to the Underwriters;
(12) Bond Insurance Policy. 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 Representative) 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 Underwriters 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.
All certificates, instruments, opinions and documents referred to above shall be in form and
substance satisfactory to Bond Counsel and Counsel to the Underwriters. If the Issuer should
be unable to satisfy the conditions to the obligations of the Underwriters to pay for the Bonds
contained in this Purchase Contract or if the obligations of the Underwriters shall be
terminated for any reason permitted hereby, this Purchase Contract shall terminate, the
Check shall be returned to the Representative and neither the Underwriters nor the Issuer
shall be under further obligation hereunder, except that the respective obligations of the
10
£XttlBi1- 0
Issuer and the Underwriters set forth in Paragraphs 7 and 12 hereof shall continue in full
force and effect.
9. Termination of Purchase Contract by the Underwriters. The
Underwriters 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 government, or a release or official
statement shall be issued by the President, the Department of thc Treasury or the Internal
Revenue Service of the 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
Underwriters, materially adversely affects the market for the Bonds or the sale, at the
contemplated offerihg price, by the Underwriters of the Bonds; or (ii) a stop order, ruling,
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 of either 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 Underwriters' 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 o£New York authorities; or (vii) an event shall have occurred which, in thc
opinion o fthe Underwriters, requires an amendment or supplement to the Official Statement
and which, in the reasonable judgment of the Underwriters, materially adversely affects the
marketability of the Bonds or the market price thereof; or (viii) 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.
I 0. Receipt for the Bonds. At the Closing, contemporaneously with the receipt
11
-XI"IIBiT OJ
of the Bonds by the Underwriters, the Representative will, if requested, deliver to the Issuer
a receipt therefor, in form satisfactory to Bond Counsel, signed by the Representative.
1 l. Reproduction of 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 and printing of the Bonds, if any; (b) the costs o fobtaining credit ratings and the
cost o fbond insurance premiums, if any; (c) the f~es and disbursements o fBond 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; (I3 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 Underwriters shall pay the fees and disbursements of Counsel to the
Underwriters and the out-of-pocket expenses incurred by the Underwriters. The Issuer shall
be under no obligation to pay any fees or expenses other than those specified in the preceding
paragraph.
13. ~isclosure. 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
Underwriters may be given by delivering such notice to J. P. Morgan Securities, Inc., 300
Crescent Court, Suite 400, Dallas, Texas 75201, Attention: Roberto G. Ruiz.
t5. 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
Underwriters 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 Underwriters pursuant to the
terms and provisions hereof shall be deemed to be a representation and warranty made by the
Issuer to the Underwriters as to the statements made therein.
16. Entire A reement. 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.
12 EXHIBIT
17. Counterparts. This Purchase Contract and any amendments hereto may be
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.
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. Representative Capacity. Any authority, right, discretion or other power
conferred upon the Underwriters or the Representative under any provision of this Purchase
Contract may be exercised by the Representative, 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
Representative.
[Execution page follows]
13
Very truly yours,
J.P. MORGAN SECURITIES INC.,
~-'-'~xREP RE S ENT~,,OF THE
Roberto G. Ruiz, Vice P~'e}iden0
APPROVED AND ACCEPTED AS
OF THE DATE FIRST ABOVE WRITTEN:
SOUTHLAKE PARKS
DEVELOPMENT CORPORATION
By:
Name:
Title:
ATTEST:
Secretary
Schedule 1
to
Bond Purchase Contract
J.P. Morgan Secm-ities Inc.
Dain Rauscher, Inc.
, .~pMO~O^~,~,~a,.'OOO,CO~BP^2~D Page 1 of Schedule
EXHIBIT "A"
Southlake Parks Development Corporation
$4,180,000 SALES TAX SUBORDINATE LIEN
REVENUE BONDS, SERIES 2000
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:
August 15
Amount Maturity Rate Price or Yield
560,000 200 l 4.300% 4.300%
$60,000 2002 4.750% 4.750%
$65,000 2003 4.900% 4.900%
$65,000 2004 5.000% 5.000%
$70,000 2005 5.100% 5.100%
$75,000 2006 5.200% 5.200%
$75,000 2007 5.300% 5.300%
$80,000 2008 5.400% 5.400%
$85,000 2009 5.450% 5.450%
S90,000 2010 5.400% 5.500%
595,000 2011 5.450% 5.550%
5100,000 2012 5.550% 5.650%
5105,000 2013 5.650% 5.750%
5110,000 2014 5.700% 5.800%
5120,000 2015 5.800% 5.870%
$125,000 2016 5.875% 5.950%
$135,000 }017 5.900% 6.000%
5140,000 2018 6.000% 6.050%
51,260,000 6.000% Term Bond due August 15, 2025, Priced to Yield 6.100%
$1,265,000 6.000% Term Bond due August I5, 2030, Priced to Yield 6.150%
(Accrued interest from March l, 2000 to be added.)
DATED DATE: March 1, 2000
REDEMPTION OPTION
The Issuer reserves the right, at its option, to redeem Bonds having stated maturities on and
after August 15, 2010, in whole or in part in principal amounts of $5,000 or any integral
multiple thereof, on August 15, 2009, or any date thereafter, at the par value thereof plus
accrued interest to the date of redemption.
A-2
FINANCING/USE AGREEMENT
This Financing/Use Agreement (this "Agreement') is made to be effective as of the 7~h day
of March, 2000, 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 $4,180,000, 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 Proiect: 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 2000", 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 Proiect. 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 Financinq. 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:
"Closing Date" means the date on which the Bonds are first authenticated
and delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all
legislation, if any, effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148-1 (b) of the
Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of
the Regulations, and any replacement proceeds as defined in Section 1.148-1 (c) of
the Regulations, of the Bonds.
"Investment" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Nonpurpose Investment" means any investment property, as defined in
section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and
which is not acquired to carry out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Regulations" means any proposed, temporary, or final Income Tax
Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and
103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any
reference to any specific Regulation shall also mean, as appropriate, any proposed,
temporary or final Income Tax Regulation designed to supplement, amend or
replace the specific Regulation referenced.
-2-
FIIBIT D
"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
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 sewice 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.
EXHIBII'
(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.
(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(0 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
-4-
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 Aqreement. This Agreement, including the Exhibits, contains the entire
agreement between the parties pertaining to the subject matter hereof and fully supersedes all pdor
agreements and understandings between the parties pertaining to such subject matter.
7. Counterparts. This Agreement may be executed in several counterparts, and a~l
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.
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.
....... -5- F..)(HI IT
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)
SOUTHLAKE PARKS DEVELOPMENT
CORPORATION
President, Board of Directors
CITY OF SOUTHLAKE, TEXAS
ATTEST: Mayor
City Secretary
(City Seal)
-6-
i-_'XHIBIT D
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.
820706.1