HomeMy WebLinkAbout12-02 2002-06-25 RESOLUTION NO. /6.2-O.2
A RESOLUTION authorizing the issuance of "EULESS DEVELOPMENT
CORPORATION SALES TAX REVENUE REFUNDING BONDS, SERIES
2002"; 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 of a Paying Agent/Registrar Agreement, Purchase Contract
and a Special Escrow Agreement and the approval and distribution of an
Official Statement; and resolving other matters incident and related to the
issuance and sale of the Bonds.
WHEREAS, the Euless Development Corporation (the "Corporation"), a non-profit
corporation duly organized and existing under the laws of the State of Texas, including Vernon's
Ann.Civ.St., Section 4B of Article 5190.6, as amended, has heretofore issued, sold, and
delivered, and there is currently outstanding, obligations totaling in principal amount $6,020,000
(the "Refunded Obligations") more particularly described as follows: Euless Development
Corporation Sales Tax Revenue Bonds, Series 1994, dated August 1, 1994, maturing on
September 15 in each of the years 2005 through 2015; and
WHEREAS, the Board of Directors of the Corporation hereby finds and determines that
refunding bonds should be issued in accordance with the provisions of Vernon's Ann.Civ St.,
Article 5190.6 at this time to refund the Refunded Obligations to provide debt service savings of
approximately $382,614.37 and present value savings of approximately $291,311.73; and
WHEREAS, the Board of Directors hereby finds and determines such bonds can and
should be issued on a parity with the outstanding and unpaid "Previously Issued Bonds"
(hereinafter identified and defined), in that (i) the Treasurer of the Corporation will execute a
certificate stating that, to the best of her knowledge and belief, the Corporation is not now in
default as to any covenant, obligation or agreement contained in the resolution authorizing the
issuance of the Previously Issued Bonds, (ii) a certificate or opinion of a certified public
accountant can be obtained to the effect that, according to the books and records of the
Corporation, the Gross Sales Tax Revenues received by the Corporation during the last
completed fiscal year next preceding the adoption of this Resolution were equal to not less than
(a) 1.50 times the Average Annual Debt Service during such twelve consecutive month period
with respect to the Parity Obligations now Outstanding after giving effect to the issuance of the
Bonds herein authorized to be issued, and (b) 1.35 times the maximum annual Debt Service for
all Parity Obligations now Outstanding after giving effect to the issuance of the Bonds herein
authorized and (iii) the amount to be accumulated and maintained in the Reserve Fund will be
adjusted to take into account the issuance of the bonds herein authorized in accordance with
the resolutions authorizing the issuance of the Previously Issued Bonds; and
WHEREAS, the Board of Directors has further determined and hereby finds that the
principal amount of the Bonds, and other obligations of the Corporation, and the principal
amount of the Previously Issued Bonds, payable in whole or in part from the "Pledged
Revenues" (hereinafter defined), together with the amount of the costs of projects (other than
costs of projects financed with the proceeds of such bonds and other obligations) undertaken by
the Corporation and paid in cash directly from such "Pledged Revenues" do not, in the
aggregate, exceed $135,000,000; now, therefore,
45029332.2 1
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE EULESS
DEVELOPMENT CORPORATION:
SECTION 1: Authorization - Designation - Principal Amount- Purpose. Bonds of the
Corporation shall be and are hereby authorized to be issued in the aggregate principal amount
of $6,480,000 to be designated and bear the title "EULESS DEVELOPMENT CORPORATION
SALES TAX REVENUE REFUNDING BONDS, SERIES 2002", hereinafter referred to as the
"Bonds" to provide funds for the discharge and final payment of certain outstanding obligations
of the Corporation (identified in the preamble hereof and referred to as the "Refunded
Obligations") and to pay costs of issuance, in conformity with the Constitution and laws of the
State of Texas, including Vernon's Ann. Civ. Stat., Article 5190.6., as amended and V.T.C.A.,
Government Code, Chapter 1207.
SECTION 2: Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Date. The Bonds shall be issued as fully registered obligations, without coupons,
shall be dated June 15, 2002 (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 September 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:
Principal Interest
Stated Maturity Amount Rates
2003 $10,000 3.00%
2004 75,000 3.00%
2005 485,000 3.00%
2006 495,000 3.25%
2007 510,000 3.50%
2008 530,000 3.75%
2009 550,000 4.00%
2010 570,000 4.00%
2011 600,000 4.00%
2012 620,000 4.00%
2013 645,000 4.20%
2014 680,000 4.30%
2015 710,000 4.40%
The Bonds shall bear interest on the unpaid principal amounts from the Issue Date at the
per annum rates shown above (calculated on the basis of a 360-day year of twelve 30-day
months). Interest on the Bonds shall be payable on March 15 and September 15 in each year,
commencing March 15, 2003.
SECTION 3: Terms of Payment- Paying Agent/Registrar. The principal of, and the
interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be
payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders")
appearing on the registration and transfer books maintained by the Paying Agent/Registrar and
the payment thereof shall be in any coin or currency of the United States of America, which at
the time of payment is legal tender for the payment of public and private debts, and shall be
without exchange or collection charges to the Holders.
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The selection and appointment of Wachovia Bank, National Association, Houston,
Texas, to serve 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 Corporation 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 designated offices in Charlotte, North Carolina (the "Designated
Payment/Transfer Office"). Interest on the Bonds shall be paid to the Holders whose name
appear in the Security Register at the close of business on the Record Date (the last business
day of the month next preceding each interest payment date) and shall be paid by the Paying
Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address
of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for
the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal
holiday, or a day when banking institutions in the city where the Designated Payment/Transfer
Office of the Paying Agent/Registrar is located is authorized by law or executive order to close,
then the date for such payment shall be the next succeeding day which is not such a Saturday,
Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on
such date shall have the same force and effect as if made on the original date payment was
due.
In the event of a non-payment of interest on one or more maturities on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment
for such maturity or maturities (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from
the Corporation. Notice of the Special Record Date and of the scheduled payment date of the
past due interest (which shall be 15 days after the Special Record Date) shall be sent at least
five (5) business days prior to the Special Record Date by United States Mail, first class postage
prepaid, to the address of each Holder of such maturity or maturities appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
SECTION 4: Redemption. (a) Optional Redemption. The Bonds maturing on and
after September 15, 2012 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 September 15, 2011 or
on any date thereafter at the redemption price of par plus accrued interest to the date of
redemption.
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(b) Exercise of Redemption Option. 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.
(c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the
same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar
shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by
dividing the principal amount of such Bond by $5,000 and shall select the Bonds, or principal
amount thereof, to be redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date
for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage
prepaid, in the name of the Corporation and at the Corporation's expense, to each Holder of a
Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security
Register at the close of business on the business day next preceding the date of mailing such
notice, and any notice of redemption so mailed shall be conclusively presumed to have been
duly given irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii)
identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall
become due and payable on the redemption date specified, and the interest thereon, or on the
portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the
redemption date, and (v) specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer
Office of the Paying Agent/ Registrar only upon presentation and surrender thereof by the
Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption
and notice of redemption thereof has been duly given or waived as herein provided, such Bond
(or the principal amount thereof to be redeemed) shall become due and payable, and interest
thereon shall cease to accrue from and after the redemption date therefor, provided moneys
sufficient for the payment of such Bonds (or of the principal amount thereof to be redeemed) at
the then applicable redemption price are held for the purpose of such payment by the Paying
Agent/Registrar.
SECTION 5: Registration -Transfer- Exchange of Bonds - Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each registered owner of the Bonds issued under and pursuant to the provisions of
this Resolution. Any Bond may, in accordance with its terms and the terms hereof, be
transferred or exchanged for Bonds of other authorized denominations upon the Security
Register by the Holder, in person or by his duly authorized agent, upon surrender of such Bond
to the Designated Payment/Transfer Office of the Paying Agent/Registrar for cancellation,
accompanied by a written instrument of transfer or request for exchange duly executed by the
Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar.
Upon surrender for transfer of a Bond (other than the Initial Bond(s) referenced in
Section 8 hereof) at the Designated Payment/Transfer Office of the Paying Agent/Registrar, one
45029332.2 4
or more new certificates evidencing the Bonds, in authorized denominations, of like Stated
Maturity and of a like aggregate principal amount as the Bond or Bonds surrender for transfer
shall be registered and issued to the assignee or transferee of the previous Holders.
At the option of the Holder, Bonds (other than the Initial Bond(s) referenced in Section 8
hereof) may be exchanged for other Bonds of authorized denominations and having the same
Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the
Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the
Designated Payment/Transfer Office of the Paying Agent/Registrar. Whenever any Bonds are
surrendered for exchange, the Paying Agent/Registrar shall register and deliver new 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 Security Register for all purposes, including payment and notices, shall be Cede & Co., as
nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each
Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants.
45029332.255
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 - Registration. The Bonds shall be executed on behalf of the
Corporation by its President under its seal reproduced or impressed thereon and attested by the
Secretary of the Corporation. The signature of said officers on the Bonds may be manual or
facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the
proper officers of the Corporation on the Issue Date shall be deemed to be duly executed on
behalf of the Corporation, notwithstanding that such individuals or either of them shall cease to
hold such offices at the time of delivery of the Bonds to the initial purchasers and with respect to
Bonds delivered in subsequent exchanges and transfers.
No Bond shall be entitled to any right or benefit under this Resolution, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 9C, manually executed by the Comptroller of Public
Accounts of the State of Texas or his duly authorized agent, or a certificate of registration
substantially in the form provided in Section 9D, manually executed by an authorized officer,
employee or representative of the Paying Agent/Registrar, and either such certificate upon any
Bond duly signed shall be conclusive evidence, and the only evidence, that such Bond has been
duly certified, registered and delivered.
SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued
either (i) as a single fully registered bond in the total principal amount noted in Section 1 with
principal installments to become due and payable as provided in Section 2 hereof and
numbered T-1, or (ii) as multiple fully registered bonds, being one bond for each year of maturity
in the applicable principal amount and denomination and to be numbered consecutively from
T-1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s)
shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial
Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas
for approval, certified and registered by the Office of the Comptroller of Public Accounts of the
State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial
Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial
purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and
exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal
amounts and bearing applicable interest rates for transfer and delivery to the Holders named at
the addresses identified therefor; all pursuant to and in accordance with such written
instructions from the initial purchaser(s), or the designee thereof, and such other information
and documentation as the Paying Agent/Registrar may reasonably require.
SECTION 9: Forms. A. Forms Generally. The Bonds, the Registration Certificate
of the Comptroller of Public Accounts of the State of Texas (to be printed on the Initial Bond(s)
only), the Certificate of Registration, and the form of Assignment to be printed on each of the
Bonds, shall be substantially in the forms set forth in this Section with such appropriate
insertions, omissions, substitutions, and other variations as are permitted or required by this
45029332.2 6
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
EULESS DEVELOPMENT CORPORATION
SALES TAX REVENUE REFUNDING BOND, SERIES 2002
Certificate Date: Interest Rate: Stated Maturity: CUSIP NO:
June 15, 2002
Registered Owner:
Principal Amount: DOLLARS
The Euless Development Corporation (hereinafter referred to as the "Corporation"), a
non-profit industrial development corporation organized and existing under the laws of the State
of Texas, including Section 4B of Article 5190.6, Tex. Rev. Civ. St. Ann., as amended, (the
"Act"), with its principal office located in Tarrant County, Texas, for value received, hereby
promises to pay to the order of the Registered Owner named above, or the registered assigns
thereof, solely from the revenues and sources pledged under the Resolution identified below,
the Principal Amount stated above (or so much thereof as shall not have been paid upon prior
redemption) on the Stated Maturity date specified above and to pay interest (computed on the
basis of a 360-day year of twelve 30-day months) on the unpaid Principal Amount hereof from
the Issue Date at the per annum rate of interest specified above; such interest being payable on
March 15 and September 15 of each year, commencing March 15, 2003. 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
45029332.2 7
States Mail, first class postage prepaid, to the address of the registered owner recorded in the
Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested
by, and at the risk and expense of, the registered owner. All payments of principal of, premium,
if any, and interest on this Bond shall be without exchange or collection charges to the owner
hereof and in any coin or currency of the United States of America which at the time of payment
is legal tender for the payment of public and private debts.
This Bond is one of the series specified in its title issued in the aggregate principal
amount of$6,480,000 (herein referred to as the "Bonds") to provide funds for the discharge and
final payment of certain outstanding obligations of the Corporation (identified in the preamble
hereof and referred to as the "Refunded Obligations") and to pay costs of issuance, in
conformity with the Constitution and laws of the State of Texas, including the Act and V.T.C.A.,
Government Code, Chapter 1207, as amended, and pursuant to a Resolution adopted by the
governing body of the Corporation (herein referred to as the "Resolution").
The Bonds maturing on and after September 15, 2012 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 September 15, 2011 or on any date thereafter at the redemption price of
par plus accrued interest thereon to the redemption date.
At least thirty days prior to the date fixed for any redemption of Bonds, 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 each Bond to be redeemed at the address shown
on the Security Register and subject to the terms and provisions relating thereto contained in
the Resolution. If this Bond (or any portion of the principal sum hereof) shall have been duly
called for redemption and notice of such redemption duly given, then upon such redemption
date this Bond (or the portion of the principal sum hereof to be redeemed) shall become due
and payable, and, if moneys 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 hereof redeemed.
In the event of a partial redemption of the principal amount of this Bond and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
this Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and there
shall be issued to the registered owner hereof, without charge, a new Bond or Bonds of like
maturity and interest rate in any authorized denominations provided in the Resolution for the
then unredeemed balance of the principal sum hereof. If this Bond is called for redemption, in
whole or in part, the Corporation and the Paying Agent/Registrar shall not be required to
transfer this Bond to an assignee of the Holder within 45 days of the redemption date therefor;
provided, however, such limitation on transferability shall not be applicable to an exchange by
the Holder of the unredeemed balance hereof in the event of its redemption in part.
The Bonds are payable solely from and, together with the Previously Issued Bonds
(identified and defined in the Resolution), equally and ratably secured by a pledge of the
"Pledged Revenues" (as defined in the Resolution) received by the Corporation, including the
receipts from a Sales Tax levied for the benefit of the Corporation pursuant to the Act and an
election held in the City. The Bonds do not constitute a legal or equitable, pledge, charge, lien
or encumbrance upon any property of the Corporation or the City of Euless, Texas (the "City")
45029332.2 8
except with respect to the "Pledged Revenues". This Bond may not be paid in whole or in part
from any property taxes raised or to be raised by the City and is not a debt of and does not give
rise to a claim for payment against the City, except as to the sales and use tax revenues held by
the City and required under the Act to be paid over to the Corporation. Neither the State of
Texas, the City or any political corporation, subdivision or agency of the State of Texas shall be
obligated to pay this Bond or the interest hereon and neither the faith and credit nor the taxing
power of the State, the City or any other political corporation, subdivision or agency thereof is
pledged to the payment of the principal of and interest on this Bond except as noted above.
Subject to satisfying the terms and conditions prescribed therefor, the Corporation has
reserved the right to issue additional revenue obligations payable, in whole or in part, from the
"Pledged Revenues" and equally and ratably secured in like manner and effect as the Bonds.
Reference is hereby made to the Resolution, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the
Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and
the nature and extent of the security for the payment of the Bonds; the rights of Holders of the
Bonds the terms and conditions for the issuance of additional obligations; the terms and
conditions relating to the payment, transfer or exchange of this Bond; the conditions upon which
the Resolution may be amended or supplemented with or without the consent of the Holders;
the rights, duties, and obligations of the Corporation and the Paying Agent/Registrar; the terms
and provisions upon which the encumbrances, pledges, charges and covenants made therein
may be discharged; and for the other terms and provisions contained therein. Capitalized terms
used herein have the same meanings assigned in the Resolution.
This Bond, subject to certain limitations contained in the Resolution, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered
Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of
interest, and of the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The Corporation and the Paying Agent/Registrar, and any agent of either, may treat the
registered owner hereof whose name appears on the Security Register (i) on the Record Date
as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as
the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in
whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the
Corporation nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to
the contrary. In the event of non-payment of interest on a scheduled payment date and for
thirty (30) days thereafter, a new record date for such interest payment (a "Special Record
Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of
such interest have been received from the Corporation. Notice of the Special Record Date and
of the scheduled payment date of the past due interest (which shall be 15 days after the Special
Record Date) shall be sent at least five (5) business days prior to the Special Record Date by
United States Mail, first class postage prepaid, to the address of each Holder appearing on the
Security Register at the close of business on the last business day next preceding the date of
mailing of such notice.
45029332.2 9
It is hereby certified, recited, represented and covenanted that the Corporation is a
non-profit industrial development corporation duly organized and legally existing under and by
virtue of the Constitution and laws of the State of Texas, including the Act; that all acts,
conditions and things required to exist and be done precedent to and in the issuance of the
Bonds to render the same lawful and valid special obligations of the Corporation have been
properly done, have happened and have been performed in regular and due time, form and
manner as required by law; and that due provision has been made for the payment of the
principal of and interest on the Bonds from the sources and in the manner provided in the
Resolution. In case any provision in this Bond or any application thereof shall be invalid, illegal,
or unenforceable, the validity, legality, and enforceability of the remaining provisions and
applications shall not in any way be affected or impaired thereby. The terms and provisions of
this Bond and the Resolution shall be construed in accordance with and shall be governed by
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.
EULESS DEVELOPMENT CORPORATION
President
ATTEST:
Secretary
(SEAL)
45029332.2 1 0
C. *Form of Registration Certificate of Comptroller of Public Accounts to Appear
on Initial Bonds only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER )
OF PUBLIC ACCOUNTS ) REGISTER NO.
THE STATE OF TEXAS )
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
*NOTE TO PRINTER: Do not print on definitive bonds
D. Form of Certificate of Paying Agent/Registrar to Appear on definitive Bonds.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered in the name of the Registered Owner
shown above under the provisions of the within-mentioned Resolution and duly approved, or a
Predecessor Bond hereof duly approved, by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts, as shown by the records of the Paying
Agent/Registrar.
The designated offices of the Paying Agent/Registrar located in Charlotte, North
Carolina is the "Designated Payment/Transfer Office" for this Bond.
WACHOVIA BANK, NATIONAL
ASSOCIATION, Houston, Texas,
as Paying Agent/Registrar
Registration date:
By
Authorized Signature
45029332.2 11
E. Form of Assignment
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number ) the within
Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
NOTICE: The signature on this
assignment must correspond with the
Signature guaranteed: name of the registered owner as it
appears on the face of the within Bond in
every particular.
F. The Initial Bond(s) shall be in the form set forth in paragraph B of this Section,
except that the form of a single fully registered Initial Bond shall be modified as
follows::
(i) immediately under the name of the bond the headings "Interest Rate " and
"Stated Maturity " shall both be omitted;"
(ii) Paragraph one shall read as follows:
The Euless 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 September 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 March 15 and September 15 of each year, commencing March 15,
2003. Principal installments of this Bond are payable at its Stated Maturity or on a prepayment
date to the registered owner hereof by Wachovia Bank, National Association, Houston, Texas
(the "Paying Agent/Registrar"), upon its presentation and surrender, at its designated offices in
Charlotte, North Carolina (the "Designated Payment/Transfer Office"). Interest is payable to the
registered owner of this Bond (or one or more Predecessor Bonds, as defined in the resolution
45029332.2 12
hereinafter referenced) whose name appears on the "Security Register" maintained by the
Paying Agent/Registrar at the close of business on the "Record Date", which is the last business
day of the month next preceding each interest payment date and interest shall be paid by the
Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the
address of the registered owner recorded in the Security Register or by such other method,
acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the
registered owner. All payments of principal of, premium, if any, and interest on this Bond shall
be without exchange or collection charges to the owner hereof and in any coin or currency of
the United States of America which at the time of payment is legal tender for the payment of
public and private debts.
SECTION 10: Definitions. For all purposes of this Resolution and in particular for clarity
with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of
revenues to the payment of the Bonds, the following definitions are provided:
"Act" - The Development Corporation Act of 1979, Vernon's Ann. Civ. St.,
Art. 5190.6, as amended at any time.
"Additional Obligations" - Bonds, notes or other evidences of
indebtedness which the Corporation reserves the right to issue or enter into, as
the case may be, in the future in accordance with the terms and conditions
provided in Section 18 hereof and which, together with the Bonds, are equally
and ratably secured by a parity pledge of and claim on the Pledged Revenues
under the terms of this Resolution and a Supplemental Resolution.
"Average Annual Debt Service"-That amount which, at the time of
computation, is derived by dividing the total amount of Debt Service to be paid
over a period of years as the same is scheduled to become due and payable by
the number of years taken into account in determining the total Debt Service.
Capitalized interest payments provided from proceeds of a borrowing of the
Corporation shall be excluded in making the aforementioned computation.
"Board" - The Board of Directors of the Corporation.
"Bonds" - The "Euless Development Corporation Sales Tax Revenue
Refunding Bonds, Series 2002", dated June 15, 2002, authorized by this
Resolution.
"City" -The City of Euless, Texas.
"Corporation" - The Euless 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 and on behalf of
the City of Euless, 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
45029332.2 13
the maximum legal per annum rate applicable to such obligations, and further
assuming in the case of obligations required to be redeemed or prepaid as to
principal prior to maturity, the principal amounts thereof will be redeemed prior to
maturity in accordance with the mandatory redemption provisions applicable
thereto.
"Depository" - A commercial bank or other qualified financial institution
eligible and qualified to serve as the custodian of the Corporation's monetary
accounts and funds.
"Fiscal Year" - The twelve month financial accounting period used by the
Corporation ending September 30 in each year, or such other twelve consecutive
month period established by the Corporation.
"Government Obligations" - (i) Direct noncallable obligations of the
United States of America, including obligations the principal of and interest on
which are unconditionally guaranteed by the United States of America, (ii)
noncallable obligations of an agency or instrumentality of the United States,
including obligations unconditionally guaranteed or insured by the agency or
instrumentality and on the date of their acquisition or purchase by the
Corporation are rated as to investment quality by a nationally recognized
investment rating firm not less than AAA or its equivalent and (iii) noncallable
obligations of a state or an agency or a county, municipality, or other political
subdivision of a state that have been refunded and on the date of their
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 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 January 16,
1993, less any amounts due and owed to the Comptroller of Public Accounts of
the State of Texas as charges for the collection of the Sales Tax or retention by
said Comptroller for refunds and to redeem dishonored checks and drafts, to the
extent such charges and retention are authorized or required by law.
"Outstanding" -When used in this Resolution with respect to Bonds or
Parity Obligations, as the case may be, means, as of the date of determination,
all Bonds and Parity Obligations theretofore sold, issued and delivered by the
Corporation, except:
(1) those Bonds or Parity Obligations canceled or delivered to the
transfer agent or registrar for cancellation in connection with the exchange or
transfer of such obligations;
(2) those Bonds or Parity Obligations paid or deemed to be paid in
accordance with the provisions of Section 25 hereof or similar provisions of any
Supplemental Resolution authorizing the issuance of Additional Obligations.
(3) those Bonds or Parity Obligations that have been mutilated,
destroyed, lost, or stolen and replacement obligations have been registered and
delivered in lieu thereof.
45029332.2 14
"Parity Obligations" - Collectively, the Previously Issued Bonds, the Bonds
and Additional Obligations.
"Pledged Revenues" - Collectively (i) Gross Sales Tax Revenues from
time to time deposited or owing to the Pledged Revenue Fund and (ii) such other
money, income, revenue, receipts or other property as may be specifically
dedicated, pledged or otherwise encumbered in a Supplemental Resolution for
the payment and security of Parity Obligations.
"Previously Issued Bonds" - the outstanding (i) "Euless Development
Corporation Sales Tax Revenue Bonds, Series 1994", dated August 1, 1994,
issued in the original aggregate principal amount of $8,855,000, (ii) ."Euless
Development Corporation Sales Tax Revenue Bonds, Series 1996", dated
August 15, 1996, issued in the original aggregate principal amount of
$1,485,000, and (iii) "Euless Development Corporation Sales Tax Revenue
Bonds, Series 1999", dated October 15, 1999, issued in the original aggregate
principal amount of$1,000,000.
"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 January 16, 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 July
1, 1993, together with any increases in the rate of such Sales Tax authorized and
provided by law.
"Supplemental Resolution" -Any resolution of the Board supplementing
this Resolution for the purpose of authorizing and providing the terms and
provisions of the Bonds or Additional Obligations, or supplementing or amending
this Resolution for any other authorized purpose permitted in Section 18 or 25
hereof, including resolutions authorizing the issuance of Additional Obligations or
pledging and encumbering income, revenues, receipts or property other than the
Gross Sales Tax Revenues to the payment and security of the Parity Obligations.
SECTION 11: Pledge. The Corporation hereby covenants and agrees that the Pledged
Revenues, with the exception of those in excess of the amounts required for the payment and
security of the Parity Obligations, are hereby irrevocably pledged to the payment and security of
the Previously Issued Bonds, the Bonds and Additional Obligations, if issued, including the
establishment and maintenance of the special funds created and established in this Resolution
and any Supplemental Resolution, all as hereinafter provided. The Corporation hereby resolves
the Parity Obligations shall constitute a lien on the Pledged Revenues in accordance with the
terms of this Resolution and any Supplemental Resolution, which lien shall be valid and binding
and fully perfected from and after the date of adoption of this Resolution without physical
delivery or transfer or transfer of control of the Pledged Revenues, the filing of this Resolution or
any other act; all as provided in Chapter 1208 of the Texas Government Code.
Section 1208, Government Code, applies to the issuance of the Bonds and the pledge of
the Pledged Revenues granted by the Corporation under this Section 11, and such pledge is
therefore valid, effective and perfected. If Texas law is amended at any time while the Bonds
45029332.2 15
are Outstanding such that the pledge of the Pledged Revenues granted by the Corporation
under this Section 11 is to be subject to the filing requirements of Chapter 9, Business &
Commerce Code, then in order to preserve to the registered owners of the Bonds the perfection
of the security interest in said pledge, the Corporation agrees to take such measures as it
determines are reasonable and necessary under Texas law to comply with the applicable
provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security
interest in said pledge to occur.
SECTION 12: Pledged Revenue Fund. The Corporation hereby agrees and covenants
to establish and 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
Bond Fund for the payment of Debt Service on the Parity Obligations as the
same becomes due and payable;
Second: 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;
Third: 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
Fourth: To any fund or account held at any place or places, or to any
payee, required by any other resolution of the Board which authorized the
issuance of obligations or the creation of debt of the Corporation having a lien on
the Pledged Revenues subordinate to the lien created herein on behalf of the
Parity Obligations.
Any Pledged Revenues remaining in the Pledged Revenue Fund after satisfying the
foregoing payments, or making adequate and sufficient provision for the payment thereof, may
be appropriated and used for any other lawful purpose now or hereafter permitted by law.
SECTION 13: Bond Fund. For the purpose of providing funds to pay the principal of and
interest on Parity Obligations, the Corporation agrees and covenants to maintain a separate and
special account or fund on the books and records of the Corporation known as the "Euless
Development Corporation Debt Service Account" (the "Bond Fund"), and all monies deposited
to the credit of such Fund shall be held in a special banking fund or account maintained at a
Depository of the Corporation. In addition to the amounts required to be deposited to the credit
of such Fund for the payment of the Previously Issued Bonds, the Corporation covenants 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
45029332.2 16
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 20th day of each month, beginning on or before the 20th 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. The Corporation agrees and covenants to maintain on the
books and records of the Corporation a separate and special fund or account to be known as
the "Reserve Account" (the "Reserve Fund"), which fund or account shall be a special banking
fund maintained at a Depository. All Pledged Revenues deposited to the credit of such fund or
account shall be used solely for the payment of 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, 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.
In accordance with the provisions of the resolution authorizing the issuance of the
Previously Issued Bonds, there is currently on deposit to the credit of the Reserve Fund the sum
of $982,439 (the "Current Reserve"). By reason of the issuance of the Bonds, the total amount
required to be accumulated and maintained in the Reserve Fund is hereby redetermined and
calculated to be $950,618.00 (the "Required Reserve) and the Corporation agrees that
immediately following the delivery of the Bonds, the difference, if any, between the Required
Reserve and Current Reserve shall be deposited to the credit of the Reserve Fund from the
proceeds of sale of the Bond or the amount of the Current Reserve in excess of the Required
Reserve by reason of the issuance of the Bonds shall be deposited to the credit of the Pledged
Revenue Fund.
As and when Additional Obligations are delivered or incurred, the Required Reserve
shall be increased, if required, to an amount equal to the lesser of either (i) the maximum annual
Debt Service (calculated on a Fiscal Year basis) for all Parity Obligations then Outstanding
(after giving effect to the issuance of the Additional Obligations), as determined on the date
each series of Additional Obligations are delivered or incurred, as the case may be, or (ii) the
maximum amount that can be invested without restriction as to yield in a reasonably required
reserve fund pursuant to Subsection (d) of Section 148 of the Internal Revenue Code of 1986,
as amended, and regulations promulgated thereunder. Any additional amount required to be
accumulated and maintained in the Reserve Fund shall be accumulated by the deposit to the
credit of the Reserve Fund of all or any part in cash immediately after the delivery of the then
proposed Additional Obligations, or, at the option of the Corporation, by the deposit of monthly
installments, made on or before the 20th 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).
While the cash and investments in the Reserve Fund total not less than the Required
Reserve, no deposits need be made to the credit of the Reserve Fund; but, if and when the
45029332.2 17
Reserve Fund at any time contains less than the Required Reserve, the Corporation covenants
and agrees to cure the deficiency in the Required Reserve by resuming monthly deposits to said
Fund from the Pledged Revenues; such monthly deposits to be in amounts equal to not less
than 1/36th of the then total Required Reserve to be maintained in said Fund and to be made on
or before the 20th day of each month until the total Required Reserve then required to be
maintained in said Fund has been fully restored. The Corporation further covenants and agrees
that the Pledged Revenues shall be applied and appropriated and used to establish and
maintain the Required Reserve and to cure any deficiency in such amounts as required by the
terms of this Resolution and any Supplemental Resolution.
During such time as the Reserve Fund contains the total Required Reserve, the
Corporation may, at its option, withdraw all surplus in the Reserve Fund in excess of the
Required Reserve and deposit such surplus in the Pledged Revenue Fund.
SECTION 15: Deficiencies. If on any occasion there shall not be sufficient Pledged
Revenues to make the required deposits into the Bond Fund or Reserve Fund, such deficiency
shall be cured as soon as possible from the next available Pledged Revenues, or from any other
sources available for such purpose.
SECTION 16: Payment of Bonds. While any of the Bonds are Outstanding, the
Treasurer of the Corporation (or other designated financial officer of the Corporation) shall
cause to be transferred to the Paying Agent/Registrar, from funds on deposit in the Bond Fund,
and, if necessary, in the Reserve Fund, amounts sufficient to fully pay and discharge promptly
as each installment of interest and principal of the Bonds accrues or matures; such transfer of
funds to be made in such manner as will cause immediately available funds to be deposited with
the Paying Agent/Registrar for the Bonds at the close of the business day next preceding the
date of payment for the Bonds.
SECTION 17: Investments- Security of Funds. 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 of 1987
(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.
That money deposited to the credit of the Pledged Revenue Fund, Bond Fund and
Reserve Fund, to the extent not invested and not otherwise insured by the Federal Deposit
Insurance Corporation or similar agency, shall be secured by a pledge of direct obligations of
45029332.2 1 8
the United States of America, or obligations unconditionally guaranteed by the United States of
America.
SECTION 18: Issuance of Additional Parity Obligations. Subject to the provisions
hereinafter appearing as to conditions precedent which must be satisfied, the Corporation
reserves the right to issue, from time to time as needed, Additional Obligations for any lawful
purpose. Such Additional Obligations may be issued in such form and manner as the
Corporation shall determine, provided, however, prior to issuing or incurring such Additional
Obligations, the following conditions precedent for the authorization and issuance of the same
are satisfied, to wit:
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.
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 (i) 1.50 times the Average Annual Debt
Service for all Parity Obligations then Outstanding after giving effect to the issuance of the
Additional Obligations then being issued and (ii) 1.35 times the maximum annual Debt Service
for all Parity Obligations then Outstanding 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.
The Required Reserve to be accumulated and maintained in the Reserve Fund is
increased to the extent required by Section 14.
SECTION 19: Refunding Bonds. The Corporation reserves the right to issue refunding
bonds to refund all or any part of the Parity Obligations (pursuant to any law then available)
upon such terms and conditions as the Board may deem to be in the best interest of the
Corporation, and if less than all such Parity Obligations then Outstanding are refunded, the
conditions precedent prescribed (for the issuance of Additional Obligations) set forth in
Section 18 hereof shall be satisfied, and shall give effect to the refunding.
SECTION 20: Right to Create Subordinate Debt. Except as may be limited by a
Supplemental Resolution, the Corporation shall have the right to issue or create any debt
payable from or 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 such debt is subordinate to the pledge and lien established, made and
created in Section 11 of this Resolution with respect to the Pledged Revenues to the payment
and security of the Parity Obligations.
45029332.2 19
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 January 16, 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:
(i) A statement in reasonable detail regarding the receipt and
disbursement of the Pledged Revenues for such Fiscal Year; and
(ii) 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
45029332.2 20
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.
SECTION 23: Representations as to Security for the Bonds. (a) The Corporation
represents and warrants that, except for the Parity Obligations, the Pledged Revenues are and
will be and remain free and clear of any pledge, lien, charge or encumbrance thereon or with
respect thereto prior to, or of equal rank with, the pledge and lien created in or authorized by
this Resolution except as expressly provided herein.
(b) The Bonds and the provisions of this Resolution are and will be the valid and
legally enforceable obligations of the Corporation in accordance with their terms and the terms
of this Resolution, subject only to any applicable bankruptcy or insolvency laws or to any laws
affecting creditors rights generally.
(c) The Corporation shall at all times, to the extent permitted by law, defend,
preserve and protect the pledge of the Pledged Revenues and all the rights of the Holders
against all claims and demands of all persons whomsoever.
(d) The Corporation will take, and use its best efforts to cause the City to take, all
steps reasonably necessary and appropriate to collect all delinquencies in the collection of the
Sales Tax to the fullest extent permitted by the Act.
(e) The provisions, covenants, pledge and lien on and against the Pledged
Revenues, as herein set forth, are established and shall be for the equal benefit, protection and
security of the owners and holders of Parity Obligations without distinction as to priority and
rights under this Resolution.
(f) The Parity Obligations shall constitute special obligations of the Corporation,
payable solely from, and equally and ratably secured by a parity pledge of and lien on, the
Pledged Revenues, and not from any other revenues, properties or income of the Corporation.
The Bonds may not be paid in whole or in part from any property taxes raised or to be raised by
the City and shall not constitute debts or obligations of the State or of the City, and the Holders,
shall never have the right to demand payment out of any funds raised or to be raised by any
system of ad valorem taxation.
SECTION 24: Satisfaction of Obligation of Corporation. If the Corporation shall pay or
cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if
any, and interest on the Bonds, at the times and in the manner stipulated in this Resolution,
then the pledge of the Pledged Revenues under this Resolution and all other obligations of the
Corporation to the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Bonds or any principal amount(s) shall be deemed to have been paid within the meaning
and with the effect expressed above in this Section when (i) money sufficient to pay in full such
45029332.2 21
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 District or deposited as directed by the District.
Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of
and interest on the Bonds and remaining unclaimed for a period of three (3) years after the
Stated Maturity, or applicable redemption date, of the Bonds such moneys were deposited and
are held in trust to pay shall, upon the request of the Corporation, be remitted to the Corporation
against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of
funds from the Paying Agent/Registrar to the Corporation shall be subject to any applicable
unclaimed property laws of the State of Texas.
SECTION 25: Resolution a Contract -Amendments. This Resolution shall constitute a
contract with the Holders from time to time, be binding on the Corporation, and shall not be
amended or repealed by the Corporation while any Bond remains Outstanding except as
permitted in this Section. The Corporation, may, without the consent of or notice to any
Holders, from time to time and at any time, amend this Resolution in any manner not detrimental
to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal
defect or omission herein. In addition, the Corporation may, with the written consent from the
owners holding a majority in aggregate principal amount of the Parity Obligations then
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
45029332.2 22
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 Regarding Tax-Exempt Status.
(a) Definitions. When used in this Section 27, the following terms have the following
meanings:
"Closing Date" means the date on which the Bonds are first authenticated
and delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all
legislation, if any, effective on or before the Closing Date.
"Computation Date"has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1(b)
of the Regulations, and any replacement proceeds as defined in Section
1.148-1(c) of the Regulations, of the Bonds.
"Investment" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"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.
45029332.2 23
(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 Project 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 Project 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 Project shall at all times prior to the last Stated Maturity
of Bonds:
(1) be exclusively owned, operated and maintained by the City, and
prohibits the City from using or permitting the use of such Gross Proceeds or any
property acquired, constructed or improved with such Gross Proceeds (including
property financed with Gross Proceeds of the Refunded Obligations) 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 (including property
financed with Gross Proceeds of the Refunded Obligations), other than taxes of
general application within the City or interest earned on investments acquired
with such Gross Proceeds pending application for their intended purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the Code and
the Regulations and rulings thereunder, the Corporation shall not use Gross Proceeds of the
Bonds to make or finance loans to any person or entity other than a state or local government.
For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to
a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the Corporation shall not at any time prior
to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or
45029332.2 24
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 Arbitrage Profits. Except to the extent otherwise provided in section
148(f) of the Code and the Regulations and rulings thereunder:
(i) The Corporation and the City shall account for all Gross Proceeds (including all
receipts, expenditures and investments thereof) on its books of account separately and apart
from all other funds (and receipts, expenditures and investments thereof) and shall retain all
records of accounting for at least six years after the day on which the last Outstanding Bond is
discharged. However, to the extent permitted by law, the Corporation may commingle Gross
Proceeds of the Bonds with other money of the Corporation, provided that the Corporation
separately accounts for each receipt and expenditure of Gross Proceeds and the obligations
acquired therewith.
(ii) 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.
(iii) As additional consideration for the purchase of the Bonds by the Purchasers and
the loan of the money represented thereby and in order to induce such purchase by measures
designed to insure the excludability of the interest thereon from the gross income of the owners
thereof for federal income tax purposes, the 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.
(iv) 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.
45029332.2 25
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the Corporation shall not, at any time
prior to the earlier of the Stated Maturity or final payment of the Bonds, enter into any
transaction that reduces the amount required to be paid to the United States pursuant to
Subsection (h) of this Section because such transaction results in a smaller profit or a larger
loss than would have resulted if the transaction had been at arm's length and had the Yield of
the Bonds not been relevant to either party.
(j) Elections. The Corporation hereby directs and authorizes the President and
Secretary of the Corporation 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.
(k) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the
Bonds were issued, the Corporation reasonably expected to spend at least 85% of the
spendable proceeds of such bonds within three years after such bonds were issued and (2) not
more than 50% of the proceeds of the original bonds refunded by the Bonds were invested in
Nonpurpose Investments having a substantially guaranteed Yield for a period of 4 years or
more.
(I) Qualified Advance Refunding. The Bonds are issued exclusively to refund the
Refunded Obligations, and the Bonds will be issued more than 90 days before the redemption
of the Refunded Obligations. The Corporation represents as follows:
(1) The Bonds are the first advance refunding of the Refunded
Obligations, within the meaning of section 149(d)(3) of the Code.
(2) The Refunded Obligations are being called for redemption, and
will be redeemed not later than the earliest date on which such bonds may be
redeemed.
(3) The initial temporary period under section 148(c) of the Code will
end: (i) with respect to the proceeds of the Bonds not later than 30 days after the
date of issue of such Bonds; and (ii) with respect to proceeds of the Refunded
Obligations on the Closing Date if not ended prior thereto.
(4) On and after the date of issue of the Bonds, no proceeds of the
Refunded Obligations will be invested in Nonpurpose Investments having a Yield
in excess of the Yield on such Refunded Obligations.
(5) The Bonds are being issued for the purposes stated in the
preamble of this Resolution. There is a present value savings associated with
the refunding. In the issuance of the Bonds the Corporation has neither:
(i) overburdened the tax-exempt bond market by issuing more bonds, issuing
bonds earlier or allowing bonds to remain outstanding longer than reasonably
necessary to accomplish the governmental purposes for which the Bonds were
issued; (ii) employed on "abusive arbitrage device" within the meaning of Section
1.148-10(a) of the Regulations; nor (iii) employed a "device" to obtain a material
financial advantage based on arbitrage, within the meaning of section 149(d)(4)
45029332.2 26
of the Code, apart from savings attributable to lower interest rates and reduced
debt service payments in early years.
SECTION 28: Notices to Holders-Waiver. Wherever this Resolution provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to
the address of each Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Bonds. Where this Resolution provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 29: Cancellation. All Bonds surrendered for payment, redemption, transfer or
exchange, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if
surrendered to the Corporation, shall be delivered to the Paying Agent/Registrar and, if not
already canceled, shall be promptly canceled by the Paying Agent/Registrar. The Corporation
may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously
certified or registered and delivered which the Corporation may have acquired in any manner
whatsoever, and all Bonds so delivered shall be promptly canceled by the Paying
Agent/Registrar. All canceled Bonds held by the Paying Agent/Registrar shall be destroyed as
directed by the Corporation.
SECTION 30: Sale of Bonds —Official Statement Approval. The Bonds authorized by
this Resolution are hereby sold by the Corporation to Morgan Keegan & Company, Inc. (herein
referred to as the "Purchasers") in accordance with the Purchase Contract, dated June 25,
2002, attached hereto as Exhibit B and incorporated herein by reference as a part of this
Resolution for all purposes. The President and Secretary of the Corporation are hereby
authorized and directed to execute said Purchase 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
Purchase Contract, the Board hereby finds, determines and declares that the representations,
warranties and agreements of the Corporation contained in the Purchase Contract are true and
correct in all material respects and shall be honored and performed by the Corporation.
Furthermore, the use of the Official Statement by the Purchasers in connection with the
public offering and sale of the Bonds is hereby ratified, confirmed and approved in all respects.
The final Official Statement, which reflects the terms of sale, attached as Exhibit A to the
Purchase Contract (together with such changes approved by the Chairman of the Board of
Directors or the President, Vice President, Secretary and Treasurer of the Corporation, one or
both of said officials), shall be and is hereby in all respects approved and the Purchasers are
hereby authorized to use and distribute said final Official Statement, dated June 25, 2002, in the
reoffering, sale and delivery of the Bonds to the public. The President and Secretary 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.
45029332.2 27
SECTION 31: Special Escrow Agreement Approval and Execution. The "Special
Escrow Agreement" (the "Agreement") by and between the Corporation and JPMorgan Chase
Bank, Dallas, Texas (the "Escrow Agent"), attached hereto as Exhibit C 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 refunding or benefit the
Corporation, is hereby authorized to be executed by the President and Secretary of the
Corporation for and on behalf of the Corporation and as the act and deed of this Board of
Directors; and such Agreement as executed by said officials shall be deemed approved by the
Board of Directors and constitute the Agreement herein approved.
Furthermore, appropriate officials of the Corporation in cooperation with the Escrow
Agent are hereby authorized and directed to make the necessary arrangements for the
purchase of the Federal Securities referenced in the Agreement and the delivery thereof to the
Escrow Agent on the day of delivery of the Bonds to the Purchasers for deposit to the credit of
the "SPECIAL 2002 EULESS DEVELOPMENT CORPORATION REFUNDING BOND
ESCROW FUND" (the "Escrow Fund"); all as contemplated and provided in Act, this Resolution
and the Agreement.
SECTION 32: Redemption of Refunded Obligations. The bonds of that series known as
"Euless Development Corporation Sales Tax Revenue Bonds, Series 1994", dated August 1,
1994, aggregating in principal amount $6,020,000 and more particularly described in the
preamble hereof shall be redeemed and the same are hereby called for redemption on
September 15, 2004, at the price of par and accrued interest to the date of redemption. The
Secretary of the Corporation is hereby authorized and directed to file a copy of this resolution,
together with a suggested form of notice of redemption to be sent to bondholders, with
JPMorgan Chase Bank, Dallas, Texas (successor paying agent/registrar to Texas Commerce
Bank, National Association), in accordance with the redemption provisions applicable to such
bonds; such suggested form of notice of redemption being attached hereto as Exhibit D and
incorporated herein by reference as a part of this resolution for all purposes.
The redemption of the bonds described above being associated with the advance
refunding of such bonds, the approval, authorization and arrangements herein given and
provided for the redemption of such bonds on the redemption dates designated therefor and in
the manner provided shall be irrevocable upon the issuance and delivery of the Bonds; and the
Secretary of the Corporation is hereby authorized and directed to make all arrangements
necessary to notify the holders of such bonds of the Corporation's decision to redeem such
bonds on the dates and in the manner herein provided and in accordance with the respective
resolutions authorizing the issuance of such bonds and this Resolution.
SECTION 33: Proceeds of Sale. Immediately following the delivery of the Bonds, the
proceeds of sale thereof (less certain costs of issuance and the accrued interest received from
the Purchasers of the Bonds) shall be deposited with the Escrow Agent for application and
disbursement in accordance with the provisions of the Agreement. The proceeds of sale of the
Bonds not so deposited with the Escrow Agent for the refunding of the Refunded Obligations
shall be disbursed and deposited for payment of costs of issuance or deposited in the Bond
Fund, all in accordance with written instructions from the Corporation.
Additionally, on or immediately prior to the date of the delivery of the Bonds to the
Purchasers, the Treasurer of the Corporation shall cause to be transferred in immediately
available funds to the Escrow Agent from moneys on deposit in the interest and sinking fund
45029332.2 28
maintained for the payment of the Refunded Obligations the sum of $206,165.42 to accomplish
the refunding.
SECTION 34: Legal Opinion. The obligation of the Purchasers to accept delivery of the
Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys,
Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered
as of the date of delivery and payment for such Bonds. A true and correct reproduction of said
opinion is hereby authorized to be printed on the definitive Bonds or an executed counterpart
thereof shall accompany the global Bonds deposited with the Depository Trust Company.
SECTION 35: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Bonds shall be of no significance or effect as regards the legality
thereof and neither the Corporation nor attorneys approving said Bonds as to legality are to be
held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds.
SECTION 36: Control and Custody of Bonds. The President of the Board shall be and
is hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, and shall take and have charge and
control of the Initial Bond(s) pending the approval thereof by the Attorney General, the
registration thereof by the Comptroller of Public Accounts and the delivery thereof to the
Purchasers.
Furthermore, the Chairman or Vice Chairman of the Board of Directors or President,
First Vice President, Second Vice President, Secretary, Assistant Secretary or Treasurer of the
Corporation, individually,jointly or collectively, are hereby authorized and directed to furnish and
execute such documents and certifications relating to the Corporation and the issuance of the
Bonds, as may be necessary for the approval of the Attorney General, registration by the
Comptroller of Public Accounts and delivery of the Bonds to the initial purchasers and, together
with the Corporation's financial advisor, general counsel, bond counsel and the Paying
Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond(s) to the
Purchasers and the initial exchange thereof for definitive Bonds.
SECTION 37: Benefits of Resolution. Nothing in this Resolution, expressed or implied,
is intended or shall be construed to confer upon any person other than the Corporation, the
Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or
by reason of this Resolution or any provision hereof, this Resolution and all its provisions being
intended to be and being for the sole and exclusive benefit of the Corporation, the Paying
Agent/Registrar and the Holders.
SECTION 38: Inconsistent Provisions. All orders or resolutions, or parts thereof, which
are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the
extent of such conflict and the provisions of this Resolution shall be and remain controlling as to
the matters contained herein.
SECTION 39: Governing Law. This Resolution shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 40: Severability. If any provision of this Resolution or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Resolution and the
45029332.2 29
application thereof to other circumstances shall nevertheless be valid, and the Board hereby
declares that this Resolution would have been enacted without such invalid provision.
SECTION 41: Construction of Terms. If appropriate in the context of this Resolution,
words of the singular number shall be considered to include the plural, words of the plural
number shall be considered to include the singular, and words of the masculine, feminine or
neuter gender shall be considered to include the other genders.
SECTION 42: Continuing Disclosure Undertaking. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
(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, 2002) financial information and operating data with respect to the
Corporation of the general type included in the final Official Statement approved by Section 30
of this Resolution, being the information described in Exhibit E hereto. Financial statements to
be provided shall be (1) prepared in accordance with the accounting principles described in
Exhibit E hereto and (2) audited, if the Corporation commissions an audit of such statements
and the audit is completed within the period during which they must be provided. If audited
financial statements are not available at the time the financial information and operating data
must be provided, then the Corporation shall provide unaudited financial statements for the
applicable fiscal year to each NRMSIR and any SID with the financial information and operating
data and will file the annual audit report when and if the same becomes available.
If the Corporation changes its fiscal year, it will notify each NRMSIR and any SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the
Corporation otherwise would be required to provide financial information and operating data
pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(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:
45029332.2 30
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
7. Modifications to rights of holders of the Bonds;
8. Bond calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds;
and
11. Rating changes.
The Corporation shall notify any SID and either each NRMSIR or the MSRB, 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.
45029332.2 31
The provisions of this Section may be amended by the Corporation from time to time to
adapt to changed circumstances resulting from a change in legal requirements, a change in law,
or a change in the identity, nature, status, or type of operations of the Corporation, but only if (1)
the provisions of this Section, as so amended, would have permitted an underwriter to purchase
or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into
account any amendments or interpretations of the Rule to the date of such amendment, as well
as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate
principal amount (or any greater amount required by any other provision of this Resolution that
authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a
Person that is unaffiliated with the Corporation (such as nationally recognized bond counsel)
determines that such amendment will not materially impair the interests of the Holders and
beneficial owners of the Bonds. The provisions of this Section may also be amended from time
to time or repealed by the Corporation if the SEC amends or repeals the applicable provisions of
the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and
to the extent that reservation of the Corporation's right to do so would not prevent underwriters
of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such
offering. If the Corporation so amends the provisions of this Section, it shall include with any
amended financial information or operating data filed with each NRMSIR and SID pursuant to
subsection (b) of this Section an explanation, in narrative form, of the reasons for the
amendment and of the impact of any change in the type of financial information or operating
data so provided.
SECTION 43: FSA Insurance. The Bonds have been sold with the principal of and
interest thereon being insured by Financial Security Assurance Inc. (hereinafter called "FSA")
pursuant to an Insurance Policy. In accordance with the terms and conditions applicable to
insurance provided by FSA, the Corporation covenants and agrees that, in the event the
principal and interest due on the Bonds shall be paid by FSA 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 FSA shall be
subrogated to the rights of such Holders; and furthermore, the Corporation covenants and
agrees that:
(a) FSA shall be included as a third party beneficiary to this Resolution.
(b) FSA shall be deemed to be a Holder for purposes of Section 26 of this
Resolution.
(c) No amendment or supplement to this Resolution may become effective without
prior notice to FSA.
Copies of any modification or amendment to this Resolution shall be sent to Standard &
Poor's Ratings Services and Moody's Investors Service, Inc..
(d) The rights granted to FSA under this Resolution to request, consent to or direct
any action are rights granted to FSA in consideration of its issuance of the Insurance Policy.
Any exercise by FSA of such rights is merely an exercise of the FSA's contractual rights and
shall not be construed or deemed to be taken for the benefit or on behalf of the Holders nor
does such action evidence any position of FSA, positive or negative, as to whether Holder
consent is required in addition to consent of FSA.
45029332.2 32
(e) Claims upon the Insurance Policy and Payments by and to FSA. If, on the
business day prior to the related scheduled interest payment date or principal payment date or
the date to which bond maturity has been accelerated ("Payment Date") there is not on deposit
with the Paying Agent/Registrar, after making all transfers and deposits required under this
Resolution, moneys sufficient to pay the principal of and interest on the Bonds due on such
Payment Date, the Paying Agent shall make a claim under the Insurance Policy and shall give
notice to FSA and to its designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or
telecopy of the amount of such deficiency and the allocation of such deficiency between the
amount required to pay interest on the Bonds and the amount required to pay principal of the
Bonds, confirmed in writing to FSA and the Insurer's Fiscal Agent by 12:00 noon, New York City
time, on such business day by filling in the form of Notice of Claim and Certificate delivered with
the Insurance Policy.
In the event the claim to be made is for a mandatory sinking fund redemption
installment, upon receipt of the moneys due, the Paying Agent/Registrar shall authenticate and
deliver to affected Holders who surrender their Bonds a new Bond or Bonds in an aggregate
principal amount equal to the unredeemed portion of the Bond surrendered. The Paying
Agent/Registrar shall designate any portion of payment of principal on Bonds paid by FSA,
whether by virtue of mandatory sinking fund redemption, maturity or other advancement of
maturity, on its books as a reduction in the principal amount of Bonds registered to the then
current Holder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond
to FSA, registered in the name of Financial Security Assurance Inc., in a principal amount equal
to the amount of principal paid (without regard to authorized denominations); provided that the
Paying Agent/Registrar's failure to so designate any payment or issue any replacement Bond
shall have no effect on the amount of principal or interest payable by the Corporation on any
Bond or the subrogation rights of FSA.
The Paying Agent/Registrar shall keep a complete and accurate record of all funds
deposited by FSA into the Policy Payments Account and the allocation of such funds to
payment of interest on and principal paid in respect of any Bond. FSA shall have the right to
inspect such records at reasonable times upon reasonable notice to the Paying Agent/Registrar.
Upon payment of a claim under the Insurance Policy the Paying Agent/Registrar shall
establish a separate special purpose trust account for the benefit of Holders referred to herein
as the "Policy Payments Account" and over which the Paying Agent/Registrar shall have
exclusive control and sole right of withdrawal. The Paying Agent/Registrar shall receive any
amount paid under the Insurance Policy in trust on behalf of Holders and shall deposit any such
amount in the Policy Payments Account and distribute such amount only for purposes of making
the payments for which a claim was made. Such amounts shall be disbursed by the Paying
Agent/Registrar to Holders in the same manner as principal and interest payments are to be
made with respect to the Bonds under the sections hereof regarding payment of Bonds. It shall
not be necessary for such payments to be made by checks or wire transfers separate from the
check or wire transfer used to pay debt service with other funds available to make such
payments.
Funds held in the Policy Payments Account shall not be invested by the Paying
Agent/Registrar and may not be applied to satisfy any costs, expenses or liabilities of the Paying
Agent/Registrar.
Any funds remaining in the Policy Payments Account following a payment date for a Bon
shall promptly be remitted to FSA.
45029332.2 33
(f) FSA shall, to the extent it makes any payment of principal or interest on the
Bonds, become surrogate to the rights of the recipients of such payments in accordance with
the terms of the Insurance Policy.
(g) FSA shall be entitled to pay principal or interest on the Bonds that shall become
Due for Payment but shall be unpaid by reason of Nonpayment by the Corporation (as such
terms are defined in the Insurance Policy) and any amounts due on the Bonds as a result of
acceleration of the maturity thereof in accordance with this Resolution, whether or not FSA has
received a Notice (as defined in the Insurance Policy) of Nonpayment or a claim upon the
Insurance Policy.
(h) The notice address of FSA is: Financial Security Assurance Inc., 350 Park
Avenue, New York, New York 10022-6022, Attention: Managing Director -- Surveillance.--Re:
Policy No. , Telephone: (212) 826-0100; Telecopier: (212) 339-3529. In each case in
which notice or other communication refers to an Event of Default then a copy of such notice or
other communication shall also be sent to the attention of General Counsel and shall be marked
to indicate 'URGENT MATERIAL ENCLOSED."
(i) FSA shall be provided with the following information:
(i) Annual audited financial statements within 120 days after the end
of the Corporation's fiscal year and the Corporation's annual budget within 30
days after the approval thereof;
(ii) Notice of any draw upon the Reserve Fund within two business
days after knowledge thereof other than (i) withdrawals of amounts in excess of
the Reserve Requirement and (ii) withdrawals in connection with a refunding of
Bonds;
(iii) Notice of any default within five business days after knowledge
thereof;
(iv) Prior notice of the advance refunding or redemption of any of the
Bonds, including the principal amount, maturities and CUSIP numbers thereof;
(v) Notice of the resignation or removal of the Paying Agent/Registrar
and the appointment of, and acceptance of duties by, any successor thereto;
(vi) the commencement of any proceeding by or against the
Corporation commenced under the United States Bankruptcy Code or any other
applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an
"Insolvency Proceeding");
(vii) the making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential transfer of any payment of
principal of, or interest on, the Bonds;
(viii) A full original transcript of all proceedings relating to the execution of
any amendment or supplement to this Resolution; and
45029332.2 34
(ix) All reports, notices and correspondence to be delivered under the
terms of this Resolution.
SECTION 44: Public Meeting. It is officially found, determined, and declared that the
meeting at which this Resolution is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Resolution, was given, all as required by V.T.C.A., Government Code, Chapter 551, as
amended.
SECTION 45: Effective Date. This Resolution shall be in force and effect from and
after its passage on the date shown below.
PASSED AND ADOPTED, this June 25, 2002.
EULESS DEVELOPMENT CORPORATION
i .. 0. : ::i,L
C airman, j•ard of Direc ors
ATTEST:
.....:A07...-----.." -d, ...AL
eary
(Corporation Seal)
45029332.2 35
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of June 25, 2002 (this "Agreement"), by and
between the Euless Development Corporation (the "Issuer"), and Wachovia Bank, National
Association, Houston, Texas a national 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 "Euless
Development Corporation Sales Tax Revenue Refunding Bonds, Series 2002" (the
"Securities"), in the aggregate principal amount of $6,480,000, which Securities are scheduled
to be delivered to the initial purchasers on or about July 25, 2002; and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in
connection with the payment of the principal of, premium, if any, and interest on said Securities
and with respect to the registration, transfer and exchange thereof by the registered owners
thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the
Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the
Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof; all in
accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Bond Resolution".
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02. Compensation. As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Annex A attached hereto for the first year of this Agreement and thereafter the fees and
amounts set forth in the Bank's current fee schedule then in effect for services as Paying
Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days
prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the
following Fiscal Year.
45189901.1 Exhibit A
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any
of the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which the
principal or any or all installments of interest, or both, are due and payable on any
Security which has become accelerated pursuant to the terms of the Security.
"Bank Office" means the offices of the Bank located in Charlotte, North Carolina
at the address appearing in Section 3.01 hereof. The Bank will notify the Issuer in
writing of any change in location of the Bank Office.
"Bond Resolution" means the resolution, order, or ordinance of the governing
body of the Issuer pursuant to which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30.
"Holder" and "Security Holder" each means the Person in whose name a Security
is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order signed in
the name of the Issuer by the Chairman or Vice Chairman of the Board of Directors or
President, Vice President, Secretary, Assistant Secretary or Treasurer of the
Corporation, any one or more of said officials, and delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be
closed.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or government or
any agency or political subdivision of a government.
"Predecessor Securities" of any particular Security means every previous
Security evidencing all or a portion of the same obligation as that evidenced by such
particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed,
or stolen Security for which a replacement Security has been registered and delivered in
lieu thereof pursuant to Section 4.06 hereof and the Resolution).
"Record Date" means the last business day of the month next preceding each
interest payment date.
"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.
45189901.1 2 Exhibit A
"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.
"Securities" means the securities defined in the recital paragraphs herein.
"Security Register" means a register maintained by the Bank on behalf of the
Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the principal of
a Security is scheduled to be due and payable.
Section 2.02. Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties
and functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent. As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the
Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity,
Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the
Bank at the following offices:
Wachovia Bank, National Association
Customer Information Center
1525 West W. T. Harris Blvd.
Charlotte, North Carolina 28288
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 (as defined in the Resolution). 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.
45189901.1 3 Exhibit A
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register-Transfers and Exchanges. The Bank agrees to keep
and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "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. The Bank represents and warrants its office
in Fort Worth, Texas will at all times have immediate access to the Security Register by
electronic or other means and will be capable at all times of producing a hard copy of the
Security Register at its Fort Worth office for use by the Issuer. All transfers, exchanges and
replacement of Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed
by an officer of a federal or state bank or a member of the National Association of Securities
Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly
authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re-registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in
not more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly
executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the
Paying Agent/Registrar.
Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use and reasonable care will be
exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less
than the care maintained by the Bank for debt securities of other governments or corporations
for which it serves as registrar, or that is maintained for its own securities.
Section 4.03. Form of Security Register. The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities
in accordance with the Bank's general practices and procedures in effect from time to time. The
Bank shall not be obligated to maintain such Security Register in any form other than those
which the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
45189901.1 4 Exhibit A
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank to provide an up-to-date listing or to convert the information into written form.
The Bank will not release or disclose the contents of the Security Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and
prior to the release or disclosure of the contents of the Security Register, the Bank will notify the
Issuer so that the Issuer may contest the court order or such release or disclosure of the
contents of the Security Register.
Section 4.05. Return of Cancelled Certificates. The Bank will, at such reasonable
intervals as it determines, cancel and destroy, pursuant to the Securities and Exchange Act of
1934, all Securities in lieu of which or in exchange for which other Securities have been issued,
or which have been paid.
Section 4.06. Mutilated, Destroyed, Lost or Stolen Securities. The Issuer hereby
instructs the Bank, subject to the provisions of Section 26 of the Bond Resolution, to deliver and
issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as
long as the same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may
execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or
stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof
with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such
Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of
indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All
expenses and charges associated with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or
destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable
time after receipt of written request from the Issuer, furnish the Issuer information as to the
Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or
exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in
exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to
Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof.
Section 5.02. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as
to the truth of the statements and correctness of the opinions expressed therein, on certificates
or opinions furnished to the Bank.
45189901.1 5 Exhibit A
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine the ownership of any
Securities, but is protected in acting upon receipt of Securities containing an endorsement or
instruction of transfer or power of transfer which appears on its face to be signed by the Holder
or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts
or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note, security, or other paper or document supplied by
Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or
any opinion of counsel shall be full and complete authorization and protection with respect to
any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the
Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank
assumes no responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05. Moneys Held by Bank- Fiduciary Account/Collateralization. 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.
45189901.1 6 Exhibit A
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 its directors, officers and employees, and hold it harmless against, any loss,
liability, or expense incurred without negligence or bad faith on its part, arising out of or in
connection with its acceptance or administration of its duties hereunder, including the cost and
expense against any claim or liability in connection with the exercise or performance of any of
its powers or duties under this Agreement.
Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the State and County where the
administrative offices of the Issuer is located, and agree that service of process by certified or
registered mail, return receipt requested, to the address referred to in Section 6.03 of this
Agreement shall constitute adequate service. The Issuer and the Bank further agree that the
Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction within the
State of Texas to determine the rights of any Person claiming any interest herein.
Section 5.08. DTC Services. It is hereby represented and warranted that, in the event
the Securities are otherwise qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the Bank has the capability and, to
the extent within its control, will comply with the "Operational Arrangements", which establishes
requirements for securities to be eligible for such type depository trust services, including, but
not limited to, requirements for the timeliness of payments and funds availability, transfer
turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6.02. Assignment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on page 9.
Section 6.04. Effect of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
45189901.1 7 Exhibit A
Section 6.05. Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
Section 6.06. Severability. In case any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 6.07. Benefits of Agreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement. This Agreement and the Bond Resolution constitute
the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the
Bond Resolution shall govern.
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one
and the same Agreement.
Section 6.10. Termination. This Agreement will terminate (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (60) days written notice; provided, however, an
early termination of this Agreement by either party shall not be effective until (a) a successor
Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and
(b) notice given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an
early termination of this Agreement shall not occur at any time which would disrupt, delay or
otherwise adversely affect the payment of the Securities.
The resigning Paying Agent/Registrar may petition any court of competent jurisdiction for
the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a
successor Paying Agent/Registrar has not been delivered to the resigning Paying
Agent/Registrar within sixty (60) days after the giving of such notice of resignation.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force
and effect following the termination of this Agreement.
Section 6.11. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
45189901.1 8 Exhibit A
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
WACHOVIA BANK, NATIONAL
ASSOCIATION, Houston, Texas
[SEAL]
Attest: BY
Title:
Address: 5847 San Felipe, Suite 1050
Title: Houston, Texas 77057
EULESS DEVELOPMENT CORPORATION
(CORPORATION SEAL)
Attest: BY
President
Address: 201 North Ector Drive
Secretary Euless, Texas 76039
45189901.1 9 Exhibit A
y
lA�T
Ato
$6,480,000
EULESS DEVELOPMENT CORPORATION
Sales Tax Revenue Refunding Bonds,
Series 2002
PURCHASE CONTRACT
June 25,2002
The Honorable President and Members of the Board of Directors
Euless Development Corporation
201 North Ector Drive
Euless,Texas 76039
Dear President and Members of the Board of Directors:
Morgan Keegan&Co.,Inc.(the"Underwriter"),offers to enter into this Purchase Contract with the
Euless Development Corporation(the"Issuer"). This offer is made subject to the Issuer's acceptance of
this Purchase Contract on or before 9:00 p.m. Central Time on June 25,2002.
1. Purchase and Sale of the Securities. Upon the terms and conditions and upon the basis of the
representations set forth herein,the Underwriter hereby agrees to purchase from the Issuer,and the Issuer
hereby agrees to sell and deliver to the Underwriter an aggregate of$6,480,000 principal amount of the
Euless Development Corporation Sales Tax Revenue Refunding Bonds, Series 2002 (the "Securities").
The Securities shall have the maturities,interest rates and be subject to redemption in accordance with the
provisions of Exhibit A hereto and shall be issued and secured under the provisions of the Resolution(as
defined below). The purchase price for the Securities shall be$6,438,700.69(representing the principal
amount of the Securities, less an Underwriter's discount on the Securities of$47,269.11 and plus an
aggregate original issue premium on the Securities of$5,969.80)and plus accrued interest
2. Resolution. The Securities shall be as described in and shall be issued and secured under the
provisions of the bond resolution authorizing the issuance and sale of the Securities adopted by the Issuer
on June 25, 2002 (the "Resolution"). The Securities shall be secured and payable as provided in the
Resolution.
3. Public Offering. It shall be a condition of the obligations of the Issuer to sell and deliver the
Securities to the Underwriter, and of the obligations of the Underwriter to purchase and accept delivery
ofthe Securities,that the entire principal amount of the Securities authorized by the Resolution shall be sold
and delivered by the Issuer and accepted and paid for by the Underwriter at the Closing. The Underwriter
agrees to make a bona fide public offering of all of the Securities, at not in excess of the initial public
offering prices,as set forth in the Official Statement,plus interest accrued on the Securities from the date
of the Securities,provided that at least 10% of each maturity of the Securities shall be sold at the initial
public offering prices set forth in the Official Statement
4. Official Statement. The Official Statement,including the cover pages and Appendices thereto,
of the Issuer,dated June 25,2002,with respect to the Securities,as further amended only in the manner
herein provided, is hereinafter called the "Official Statement." The Issuer hereby authorizes the Escrow
Agreement (hereinafter defined), the Resolution and the Official Statement and the information therein
contained to be used by the Underwriter in connection with the public offering and sale of the Securities.
The Issuer confirms its consent to the use by the Underwriter prior to the date hereof of the Preliminary
Official Statement,relative to the Securities, dated June 19,2002 (the "Preliminary Official Statement"),
in connection with the preliminary public offering and sale of the Securities, and it is "deemed final" as of
its date,within the meaning,and for the purposes,of Rule 15c2-12 promulgated under authority granted
by the federal Securities and Exchange Act of 1934(the"Rule"). The Issuer agrees to cooperate with the
Underwriter to provide a supply of final Official Statements within seven business days of the date hereof
in sufficient quantities to comply with the Underwriter's obligations under the Rule and the applicable rules
of the Municipal Securities Rulemaking Board. The Underwriter will use its best efforts to assist the Issuer
in the preparation of the final Official Statement in order to ensure compliance with the aforementioned
rules.
If at any time after the date of this Purchase Contract but before the first to occur of(i)the date upon
which the Underwriter notifies the Issuer that the period of the initial public offering of the Securities has
expired or(ii)the date that is 90 days after the date hereof, any event shall occur which might or would
cause the Official Statement to contain any untrue statement of a material fact or to omit to state a material
fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made,not misleading,the Issuer shall notify the Underwriter,and if,
in the opinion of the Underwriter such event requires the preparation and publication of a supplement or
amendment to the Official Statement, the Issuer will at its expense supplement or amend the Official
Statement in the form and in a manner approved by the Underwriter and furnish to the Underwriter a
reasonable number of copies requested by the Underwriter in order to enable the Underwriter to comply
with the Rule.
To the best knowledge and belief of the Issuer,the Official Statement contains information,including
financial information or operating data,concerning every entity,enterprise,fund,account or person that is
material to an evaluation of the offering of the Securities. The Issuer has not failed to comply with any
undertaking specified in paragraph(b)(5)(i)of the Rule within the last five years.
5. Representations,Warranties and Agreements of the Issuer. On the date hereof,the Issuer
represents,warrants and agrees as follows:
(a) The Issuer is an industrial development corporation,duly created by,and acting on behalf of,
the City of Euless,Texas(the"City"),under the provisions of Section 4B of Article 5190.6,Tex.Rev.
Civ. Stats.Ann.,as amended(the"Act"),and has full legal right,power and authority to enter into this
Purchase Contract and the Escrow Agreement pertaining to the Securities between the Issuer and the
Escrow Agent named therein(the"Escrow Agreement"),to adopt the Resolution,to sell the Securities,
2
EXHIBIT B
and to issue and deliver the Securities to the Underwriter as provided herein and to carry out and
consummate all other transactions contemplated by the Resolution, the Escrow Agreement and this
Purchase Contract;
(b) By official action of the Issuer prior to or concurrently with the acceptance hereof,the Issuer
has duly adopted the Resolution, and the Resolution has been duly approved by the City, in
accordance with the Act,and the Issuer has duly authorized and approved the execution and delivery
of, and the performance by the Issuer of the obligations contained in the Securities, this Purchase
Contract and the Escrow Agreement,and has duly authorized and approved the performance by the
Issuer of its obligations contained in the Resolution, this Purchase Contract and the Escrow
Agreement;
(c) The Issuer is not in breach of or default under any applicable law or administrative regulation
of the State of Texas or the United States (including regulations of its agencies) or any applicable
judgment or decree or any loan agreement,note,order,agreement or other instrument,except as may
be disclosed in the Official Statement,to which the Issuer is a party or is otherwise subject, which
would have a material and adverse effect upon the business or financial condition of the Issuer, and
the execution and delivery of the Escrow Agreement and this Purchase Contract by the Issuer and the
execution and delivery of the Securities and the adoption of the Resolution by the Issuer and
compliance with the provisions of each thereof will not violate or constitute a breach of or default
under any existing law, administrative regulation, judgment, decree or any agreement or other
instrument to which the Issuer is a party or,to the knowledge of the Issuer,is otherwise subject;
(d) All approvals, consents and orders of any governmental authority or agency having
jurisdiction of any matter which would constitute a condition precedent to the performance by the
Issuer of its obligations to sell and deliver the Securities hereunder will have been obtained prior to the
Closing;
(e) At the time of the Issuer's acceptance hereof and at the time of the Closing, the Official
Statement does not and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein,in the light of
the circumstances under which they were made,not misleading;
(f) Between the date of this Purchase Contract and the Closing,the Issuer will not,without the
prior written consent of the Underwriter, issue any additional bonds,notes or other obligations for
borrowed money payable in whole or in part from its sales and use tax that is pledged to secure the
Securities(the"Sales Tax"),and the Issuer will not incur any material liabilities, direct or contingent,
nor will there be any adverse change of a material nature in the financial position of the Issuer;
(g) Except as described in the Official Statement,no litigation is pending or,to the knowledge
of the Issuer, threatened in any court affecting the corporate existence of the Issuer, the title of its
3
EXHIBIT B
officers to their respective offices, or seeking to restrain or enjoin the issuance or delivery of the
Securities,the levy, collection or application of the Sales Tax pledged or to be pledged to pay the
principal of and interest on the Securities,or in any way contesting or affecting the issuance,execution,
delivery,payment,security or validity of the Securities,or in any way contesting or affecting the validity
or enforceability of the Resolution, the Escrow Agreement or this Purchase Contract, or contesting
the powers of the Issuer,or any authority for the Securities,the Resolution, the Escrow Agreement
or this Purchase Contract or contesting in any way the completeness, accuracy or fairness of the
Preliminary Official Statement or the Official Statement;
(h) The Issuer will cooperate with the Underwriter in arranging for the qualification of the
Securities for sale and the determination of their eligibility for investment under the laws of such
jurisdictions as the Underwriter designates,and will use its best efforts to continue such qualifications
in effect so long as required for distribution of the Securities;provided,however,that the Issuer will
not be required to execute a general consent to service of process or to qualify to do business in
connection with any such qualification in any jurisdiction;
(i) The descriptions of the Securities,the Escrow Agreement and the Resolution contained in the
Official Statement accurately summarize certain provisions of each such instrument,and the Securities,
when validly executed,authenticated and delivered in accordance with the Resolution and sold to the
Underwriter as provided herein,will be validly issued and outstanding obligations of the Issuer entitled
to the benefits of,and subject to the limitations contained in,the Resolution;
(j) If prior to the Closing an event occurs affecting the Issuer which is materially adverse for the
purpose for which the Official Statement is to be used and is not disclosed in the Official Statement,
the Issuer shall notify the Underwriter, and if in the opinion of the Issuer and the Underwriter such
event requires a supplement or amendment to the Official Statement, the Issuer will supplement or
amend the Official Statement in a form and in a manner approved by the Underwriter,
(k) Any certificate,signed by any official of the Issuer authorized to do so in connection with the
transactions contemplated by this Purchase Contract,shall be deemed a representation and warranty
by the Issuer to the Underwriter as to the statements made therein;
(1) The financial statements contained in the Official Statement present fairly the financial position
of the Issuer as of the date and for the period covered thereby and are stated on a basis substantially
consistent with that of the prior year's audited financial statements.
6. Closing. At 10:00 A.M.,Central Time,on July 25,2002 (the "Closing"),the Issuer will deliver
the initial securities certificates (as provided for in the Resolution) to the Underwriter and, provided the
Underwriter shall have made arrangements with The Depository Trust Company("DTC")for the Securities
to be qualified for trading as book-entry only securities through the facilities of DTC,the Issuer shall take
appropriate steps to provide DTC with one definite securities certificate for each year of maturity of the
4
EXHIBIT B
Securities, and to provide the Underwriter with the other documents hereinafter mentioned, and the
Underwriter will accept such delivery and pay the purchase price of the Securities as set forth in Paragraph
1 hereof in immediately available funds. Concurrently with such payment by the Underwriter, the Issuer
shall return to the Underwriter the check referred to in paragraph 15 hereof. Delivery and payment as
aforesaid shall be made at the office of the paying agent/registrar,as noted in the Official Statement,or such
other place,as shall have been mutually agreed upon by the Issuer and the Underwriter.
7. Conditions. The Underwriter have entered into this Purchase Contract in reliance upon the
representations and warranties of the Issuer contained herein and to be contained in the documents and
instruments to be delivered at the Closing, and upon the performance by the Issuer of its obligations
hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the Underwriter's
obligations under this Purchase Contract to purchase and pay for the Securities shall be subject to the
performance by the Issuer of its obligations to be performed hereunder and under such documents and
instruments at or prior to the Closing,and shall also be subject to the following conditions:
(a) The representations and warranties of the Issuer contained herein shall be true,complete and
correct in all material respects on the date hereof and on and as of the date of Closing,as if made on
the date of Closing;
(b) At the time of the Closing,(i)the Resolution and the Escrow Agreement shall be in full force
and effect,and the Resolution and the Escrow Agreement shall not have been amended,modified or
supplemented and the Official Statement shall not have been amended, modified or supplemented,
except as may have been agreed to by the Underwriter, and(ii) the net proceeds of the sale of the
Securities shall be deposited and applied as described in the Official Statement and in the Resolution
and;
(c) At the time of the Closing,all official action of the Issuer and the City related to the Resolution
shall be in full force and effect and shall not have been amended,modified or supplemented;
(d) The Issuer shall not have failed to pay principal or interest when due on any of its outstanding
obligations for borrowed money;
(e) The Issuer will purchase or cause to be purchased the Federal Securities(as defined in the
Official Statement) as may be necessary to effect the refunding of the Issuer's outstanding bonds as
contemplated by the Escrow Agreement;
(f) At or prior to the Closing, the Underwriter shall have received each of the following
documents:
(1) The Official Statement of the Issuer executed on behalf of the Issuer by the President
and Secretary of the Issuer's Board of Directors(the"Board");
5
EXHIBIT B
(2) The Resolution certified by the Secretary of the Board under the seal of the Issuer as
having been duly adopted by the Issuer and as being in effect,with such changes or amendments
as may have been agreed to by the Underwriter,the Resolution shall contain the agreement of
the Issuer, in form satisfactory to the Underwriter, which is described under the subcaptions
"Continuing Disclosure of Information"in the Preliminary Official Statement; and a resolution or
ordinance of the City approving the Resolution and the issuance of the Securities,certified by the
City Secretary under the seal of the City as having been duly adopted by the City and as being
in effect;
(3) The opinion, dated the date of Closing, of Fulbright & Jaworski L.L.P. ("Bond
Counsel")in substantially the form and substance of Appendix C to the Official Statement;
(4) An opinion or certificate, dated on or prior to the date of Closing, of the Attorney
General of Texas,approving the Securities as required by law and the registration certificate of
the Comptroller of Public Accounts of the State of Texas;
(5) The supplemental opinion or opinions, dated the date of Closing, of Bond Counsel,
addressed to the Underwriter,which provides that the Underwriter may rely upon the opinion of
Bond Counsel delivered in accordance with the provisions of paragraph 7(f)(3) hereof, and
opining to the effect that (a) in its capacity as Bond Counsel, such firm has reviewed the
information in the Official Statement under the captions or subcaptions subcaptions "Plan of
Financing"(exclusive of the information under the subcaption"Sources and Uses of Funds"),"The
Bonds" (exclusive of the information under the subcaptions "Book-Entry Only System" and
"Bondholders'Remedies"), "Tax Matters," "Continuing Disclosure of Information" (exclusive of
the information under the subcaption"Compliance with Prior Undertakings"),"Other Information
—Legal Opinions" (exclusive of the last two sentences of the first paragraph thereof)and"Legal
Investments and Eligibility to Secure Public Funds in Texas" and such firm is of the opinion that
such descriptions present a fair and accurate summary of the provisions of the laws and
instruments therein described and,with respect to the Securities, such information conforms to
the Ordinance;(b)the Securities are exempt from registration pursuant to the Securities Act of
1933,as amended,and the Resolution is exempt from qualification as an indenture pursuant to
the Trust Indenture Act of 1939, as amended; and (c) unless included in the opinion of Bond
Counsel delivered in accordance with the provisions of paragraph 7(f)(3) hereof, an opinion to
the effect that the refunded bonds have been defeased in accordance with State law;
(6) An opinion,dated the date of the Closing and addressed to the Underwriter,of counsel
for the Underwriter,in substantially the form attached hereto as Exhibit B;
(7) A certificate,dated the date of Closing, signed by the President and Secretary of the
Board,to the effect that(i)the representations and warranties of the Issuer contained herein are
true and correct in all material respects on and as of the date of Closing as if made on the date
6
EXHIBIT B
of Closing; (ii)except to the extent disclosed in the Official Statement,no litigation is pending or,
to the knowledge of such persons, threatened in any court to restrain or enjoin the issuance or
delivery of the Securities, or the levy, collection or application of the Sales Tax, or the pledge
thereof, or in any way contesting or affecting the validity of the Securities, the Resolution, the
Escrow Agreement or this Purchase Contract, or contesting the powers of the Issuer or the
authorization of the Securities or the Resolution, or contesting in any way the accuracy,
completeness or fairness of the Official Statement (but in lieu of or in conjunction with such
certificate,the Underwriter may, in its sole discretion, accept opinions of counsel for the Issuer
that, in the opinion thereof, the issues raised in any such pending or threatened litigation are
without substance or that the contentions of all plaintiffs therein are without merit);(iii)to the best
of their knowledge, no event affecting the Issuer has occurred since the date of the Official
Statement which should be disclosed in the Official Statement for the purpose for which it is to
be used or which it is necessary to disclose therein in order to make the statements and
information therein not misleading in any respect;and(iv)that there has not been any material and
adverse change in the affairs or financial condition of the Issuer since September 30,2001,the
latest date as to which audited financial information is available;
(8) A certificate,dated the date of the Closing, of an appropriate officer of the Issuer to
the effect that, on the basis of the facts, estimates and circumstances in effect on the date of
delivery of the Securities,it is not expected that the proceeds of the Securities will be used in a
manner that would cause the Securities to be arbitrage Securities within the meaning of
Section 148 of the Internal Revenue Code of 1986,as amended;
(9) A copy of a special report prepared by Grant Thornton LLP with respect to the
Securities addressed to the City, Bond Counsel and the Underwriter verifying the arithmetical
computations of the adequacy of the maturing principal and interest on the escrowed securities
and uninvested cash on hand under the Escrow Agreement to pay,when due,the principal of and
interest on the bonds being refunded and the computation of the yield with respect to such
refunded bonds and the Securities;
(10) Evidence of the rating on the Securities,which shall be "Aaa"by Moody's Investors
Service,Inc. ("Moody's"),shall be delivered in a form acceptable to the Underwriter;
(11) Evidence of delivery of the policy of municipal bond insurance issued by Financial
Security Assurance,Inc.,with respect to the Securities;and
(12) Such additional legal opinions,certificates,instruments and other documents as Bond
Counsel or the Underwriter may reasonably request to evidence the truth, accuracy and
completeness,as of the date hereof and as of the date of Closing,of the Issuer's representations
and warranties contained herein and of the statements and information contained in the Official
Statement and the due performance and satisfaction by the Issuer at or prior to the date of
7
EXHIBIT B
Closing of all agreements then to be performed and all conditions then to be satisfied by the
Issuer.
All of the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if,but
only if,they are satisfactory to the Underwriter.
If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase,
to accept delivery of and to pay for the Securities as set forth in this Purchase Contract,or if the obligations
of the Underwriter to purchase,to accept delivery of and to pay for the Securities shall be terminated for
any reason permitted by this Purchase Contract,this Purchase Contract shall terminate,the security deposit
referred to in Paragraph 15 of this Purchase Contract shall be returned to the Underwriter and neither the
Underwriter nor the Issuer shall be under further obligation hereunder,except that the respective obligations
of the Issuer and the Underwriter set forth in Paragraphs 9 and 11 hereof shall continue in full force and
effect.
8. Termination. The Underwriter may terminate its obligation to purchase at any time before the
Closing if any of the following should occur:
(a) (i)Legislation shall have been enacted by the Congress of the United States,or recommended
to the Congress for passage by the President of the United States or favorably reported for passage
to either House of the Congress by any Committee of such House,or(ii)a decision shall have been
rendered by a court established under Article III of the Constitution of the United States or by the
United States Tax Court,or(iii)an order,ruling or regulation shall have been issued or proposed by
or on behalf of the Treasury Department of the United States or the Internal Revenue Service or any
other agency of the United States,or(iv)a release or official statement shall have been issued by the
President of the United States or by the Treasury Department of the United States or by the Internal
Revenue Service,the effect of which,in any such case described in clause(i),(ii),(iii),or(iv),would
be to impose,directly or indirectly, federal income taxation upon interest received on obligations of
the general character of the Securities or upon income of the general character to be derived by the
Issuer,other than any imposition of federal income taxes upon interest received on obligations of the
general character as the Securities on the date hereof and other than as disclosed in the Official
Statement, in such a manner as in the judgment of the Underwriter would materially impair the
marketability or materially reduce the market price of obligations of the general character of the
Securities.
(b) Any action shall have been taken by the Securities and Exchange Commission or by a court
which would require registration of any security under the Securities Act of 1933, as amended, or
qualification of any indenture under the Trust Indenture Act of 1939,as amended,in connection with
the public offering of the Securities, or any action shall have been taken by any court or by any
governmental authority suspending the use of the Preliminary Official Statement or the Official
8
EXHIBIT B
Statement or any amendment or supplement thereto, or any proceeding for that purpose shall have
been initiated or threatened in any such court or by any such authority.
(c) (i) The Constitution of the State of Texas shall be amended or an amendment shall be
proposed,or(ii)legislation shall be enacted,or(iii)a decision shall have been rendered as to matters
of Texas law,or(iv)any order,ruling or regulation shall have been issued or proposed by or on behalf
of the State of Texas by an official,agency or department thereof,affecting the tax status of the Issuer,
its property or income, its Securities (including the Securities) or the interest thereon, which in the
judgment of the Underwriter would materially affect the market price of the Securities.
(d) (i)A general suspension of trading in Securities shall have occurred on the New York Stock
Exchange,or(ii)the United States shall have become engaged in hostilities (including the escalation
of any hostilities existing on the date hereof,whether or not foreseeable),the effect of which,in either
case described in clause(i)and(ii),is,in the judgment of the Underwriter,so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in this Purchase Contract and the Official
Statement.
(e) there shall have occurred any (i) new material outbreak of hostilities (including, without
limitation,an act of terrorism)or(ii)new material other national or international calamity or crisis,or
any material adverse change in the financial, political or economic conditions affecting the United
States,including,but not limited to,an escalation of hostilities that existed prior to the date hereof or
(iii)material adverse change in the financial markets in the United States, and the effect of any such
event on the financial markets of the United States shall be such as would make it impracticable,in the
reasonable judgment of the Underwriter, for the Underwriter to sell the Securities on the terms and
in the manner contemplated by the Official Statement.
(I) An event described in Paragraph 5(j)hereof occurs which,in the opinion of the Underwriter,
requires a supplement or amendment to the Official Statement that is deemed by them, in their
discretion,to adversely affect the market for the Securities.
(g) A general banking moratorium shall have been declared by authorities of the United States,
the State of New York or the State of Texas.
(h) A lowering of the rating of"Aaa" initially assigned to the Securities by Moody's shall occur
prior to the Closing.
9. Expenses. (a)The Issuer shall pay out of the bond proceeds all expenses incident to the issuance
of the Securities,including but not limited to: (i)the cost of the preparation,printing and distribution of the
Preliminary Official Statement and the Official Statement;(ii)the cost of the preparation and printing of the
Securities;(iii)the fees and expenses of Bond Counsel to the Issuer,(iv)the fees and disbursements of the
9
EXHIBIT B
Issuer's accountants,advisors,and of any other experts or consultants retained by the Issuer,including the
fee of Grant Thornton LLP for the preparation of the verification report relating to the refunding; (v) the
premium for municipal bond insurance; and (vi) the fees for the bond ratings and any travel or other
expenses incurred incident thereto;
(b) The Underwriter shall pay (i) all advertising expenses in connection with the offering of the
Securities; (ii)the cost of the preparation and printing of all the underwriting documents;and(iii)the fee of
McCall,Parkhurst&Horton L.L.P.for such firm's opinion rendered to the Underwriter in accordance with
Paragraph(7)(f)(6)hereof.
10. Notices. Any notice or other communication to be given to the Issuer under this Purchase
Contract may be given by delivering the same in writing at the address for the Issuer set forth above,and
any notice or other communication to be given to the Underwriter under this Purchase Contract may be
given by delivering the same in writing to Morgan Keegan& Co., Inc., 5956 Sherry Lane, Suite 1900,
Dallas,Texas 75225,Attention: Tom Oppenheim.
11. Parties in Interest This Purchase Contract is made solely for the benefit ofthe Issuer and the
Underwriter(including the successors or assigns of the Underwriter)and no other person shall acquire or
have any right hereunder or by virtue hereof. The Issuer's representations, warranties and agreements
contained in this Purchase Contract shall remain operative and in full force and effect,regardless of(i)any
investigations made by or on behalf of the Underwriter,and(ii)delivery of any payment for the Securities
hereunder; and the Issuer's representations and warranties contained in Paragraph 5 of this Purchase
Contract shall remain operative and in full force and effect,regardless of any termination of this Purchase
Contract.
12. Severability. If any provision of this Purchase Contract shall be held or deemed to be or shall,
in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or
jurisdictions,or in all jurisdictions because it conflicts with any provisions of any constitution,statute,rule
ofpublic policy,or any other reason,such circumstances shall not have the effect of rendering the provision
in question invalid,inoperative or unenforceable in any other case or circumstances, or of rendering any
other provision inoperative or unenforceable to any extent whatever.
13. Choice of Law. This Purchase Contract shall be governed by and construed in accordance with
the laws of the State of Texas.
14. Execution in Counterparts. This Purchase Contract may be executed in any number of
counterparts,all of which taken together shall constitute one and the same instrument,and any of the parties
hereto may execute this Purchase Contract by signing any such counterpart.
15. Security Deposit. Delivered to the Issuer herewith is a corporate check of the Underwriter
payable to the order of the Issuer in the amount of$64,300. Such check is a"Good Faith" check for the
10
EXHIBIT 13
Securities and such check may be applied toward any obligation of the Underwriter owing as a result of
the failure of the Underwriter to accept delivery of the Securities, as provided herein. The Issuer agrees
to hold such check uncashed until the Closing to ensure the performance by the Underwriter of its
obligation to purchase,accept delivery of and pay for the Securities at the Closing. Concurrently with the
payment by the Underwriter of the purchase price of the Securities,the Issuer shall return such check to
the Underwriter as provided in Paragraphs 6 and 7 hereof. Should the Issuer fail to deliver the Securities
at the Closing, or should the Issuer be unable to satisfy the conditions of the obligations of the Underwriter
to purchase,accept delivery of and pay for the Securities, as set forth in this Purchase Contract (unless
waived by the Underwriter),or should such obligations of the Underwriter be terminated for any reason
permitted by this Purchase Contract,such check shall immediately be returned to the Underwriter. In the
event the Underwriter fails (other than for a reason permitted hereunder)to purchase,accept delivery of
and pay for the Securities at the Closing as herein provided,such check shall be retained by the Issuer as
and for full liquidated damages for such failure of the Underwriter and for any defaults hereunder on the part
of the Underwriter. The Underwriter hereby agrees not to stop or cause payment on said check to be
stopped unless the Issuer has breached any of the terms of this Purchase Contract.
[Signature page follows]
11
b(HIBIT B
16. Effective Date. This Purchase Contract shall become effective upon the execution of the
acceptance hereof by the President of the Issuer and shall be valid and enforceable as of the time of such
acceptance.
Very truly yours,
Morgan Keegan & Co.,Inc.
By:
Title:
Accepted
This_day of June, 2002.
By:
President
Euless Development Corporation
Attest:
By:
Secretary
Euless Development Corporation
12
EXHIBIT B
EXHIBIT A
Schedule of Maturities,Interest Rates,Yields and Redemption Provisions
Euless Development Corporation
Sales Tax Revenue Refunding Bonds, Series 2002
Maturity Principal Interest
(9/15) Amount Rate(%) Yield(%)
2003 10,000 3.00 2.00
2004 75,000 3.00 2.15
2005 485,000 3.00 2.62
2006 495,000 3.25 2.92
2007 510,000 3.50 3.21
2008 530,000 3.75 3.50
2009 550,000 4.00 3.71
2010 570,000 4.00 3.91
2011 600,000 4.00 4.03
2012 620,000 4.00 4.18
2013 645,000 4.20 4.31
2014 680,000 4.30 4.43
2015 710,000 4.40 4.54
The Securities maturing on and after September 15, 2012 are subject to redemption prior to maturity at
the option of the Issuer on September 15, 2011 or any date thereafter at a price of par plus accrued
interest to the date of redemption.
EXHIBIT B
EXHIBIT B
PROPOSED FORM OF OPINION OF UNDERWRITER'S COUNSEL
July 25,2002
Morgan Keegan&Company,Inc.
5956 Sherry Lane
Suite 1900
Dallas,Texas 75225
Re: $6,480,000 Euless Development Corporation Sales Tax Revenue Refunding Bonds, Series 2002
T aches and Gentlemen:
We have acted as counsel for you as the underwriter of the bonds described above (the "Bonds"),
issued under and pursuant to a resolution of Euless Development Corporation(the "Issuer"), authorizing
the issuance of the Bonds,which Bonds you are purchasing pursuant to a Purchase Contract,dated June
25, 2002. All capitalized undefined terms used herein shall have the meaning set forth in the Purchase
Contract.
In connection with this opinion letter,we have considered such matters of law and of fact,and have
relied upon such Bonds and other information furnished to us,as we have deemed appropriate as a basis
for our opinion set forth below. We are not expressing any opinion or views herein on the authorization,
issuance, delivery, validity of the Bonds and we have assumed, but not independently verified, that the
signatures on all documents and Bonds that we have examined are genuine.
Based on and subject to the foregoing,we are of the opinion that,under existing laws,the Bonds are
not subject to the registration requirements of the Securities Act of 1933,as amended,and the Resolution
is not required to be qualified under the Trust Indenture Act of 1939,as amended.
Because the primary purpose of our professional engagement as your counsel was not to establish
factual matters, and because of the wholly or partially nonlegal character of many of the determinations
involved in the preparation of the Official Statement dated June 25, 2002 (the "Official Statement") and
because the information in the Official Statement under the headings "The Bonds —Book-Entry-Only
System,""Tax Matters,""Continuing Disclosure of Information—Compliance with Prior Undertakings"and
the appendices thereto were prepared by others who have been engaged to review or provide such
information,we are not passing on and do not assume any responsibility for,except as set forth in the last
sentence of this paragraph, the accuracy, completeness or fairness of the statements contained in the
Official Statement (including any appendices, schedules and exhibits thereto) and we make no
EXHIBIT B
representation that we have independently verified the accuracy, completeness or fairness of such
statements. In the course of our participation in the preparation of the Official Statement as your counsel,
we had discussions with representatives of the Issuer, including its Financial Advisor and Bond Counsel,
regarding the contents of the Official Statement. In the course of such activities, no facts came to our
attention which would lead us to believe that the Official Statement(except for the financial statements and
other financial and statistical data contained therein,the information set forth under the headings"The Bonds
— Book-Entry-Only System," "Tax Matters," "Continuing Disclosure of Information—Compliance with
Prior Undertakings," "Bond Insurance" and the appendices thereto,as to which we express no opinion),
as of its date contained any untrue statement of a material fact or omitted to state any material fact
necessary to make the statements therein, in the light of the circumstances under which they were made,
not misleading.
This opinion letter may be relied upon by only you and only in connection with the transaction to which
reference is made above and may not be used or relied upon by any other person for any purposes
whatsoever without our prior written consent.
Respectfully,
EXHIBIT B
SPECIAL ESCROW AGREEMENT
THE STATE OF TEXAS §
COUNTY OF DALLAS §
THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and entered into as
of June 25, 2002, by and between the Euless Development Corporation (the "Corporation"), a
non-profit industrial development corporation organized and existing under laws of the State of
Texas, including Vernon's Ann. Civ. St., Section 4B of Article 5190.6, acting by and through the
President and Secretary of the Corporation, and JPMorgan Chase Bank, Dallas, Texas, a
banking association organized and existing under the laws of the State of Texas, or its
successors or assigns hereunder (the "Bank"),
WITNESSETH :
WHEREAS, the Corporation has duly issued certain obligations now outstanding in the
aggregate amount $6,020,000 (hereinafter referred to as the "Refunded Obligations") and more
particularly described as follows: Euless Development Corporation Sales Tax Revenue Bonds,
Series 1994, dated August 1, 1994, and scheduled to mature on September 15 in each of the
years 2005 through 2015; and
WHEREAS, the Corporation has determined to issue and sell refunding bonds in an
amount sufficient to provide for the payment of Refunded Obligations, deposit the proceeds of
such refunding bonds with any place of payment for such Refunded Obligations, or other
authorized depository, and enter into an escrow or similar agreement with such authorized
depository for the safekeeping, investment, reinvestment, administration and disposition of such
deposit, upon such terms and conditions as the parties may agree, provided such deposits may
be invested only in direct obligations of the United States of America, including obligations the
principal of and interest on are unconditionally guaranteed by the United States of America,
(hereinafter called the "Federal Securities") that mature and/or bear interest payable at such
times and in such amounts as will be sufficient to provide for the scheduled payment of
Refunded Obligations; and
WHEREAS, the Refunded Obligations are scheduled to mature, or be redeemed, and
interest thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto
and incorporated herein by reference as a part of this Agreement for all purposes; and
WHEREAS, the Corporation on the 25th day of June, 2002, pursuant to a resolution (the
"Bond Resolution") finally passed and adopted by the Board of Directors, authorized the
issuance of bonds known as "Euless Development Corporation Sales Tax Revenue Refunding
Bonds, Series 2002" (the "Bonds") to refund, discharge and make final payment of the principal
of and interest on the Refunded Obligations; and
WHEREAS, upon the delivery of the Bonds, certain proceeds of sale, together with other
available funds of the Corporation, are to be deposited with the Bank and used in part to
purchase the Federal Securities listed and identified in Exhibit B attached hereto and
incorporated by reference as a part of this Agreement for all purposes; and
45189921.1 Exhibit C
WHEREAS, the Federal Securities shall be held and deposited to the credit of the
"Escrow Fund" to be established and maintained by the Bank in accordance with this
Agreement; and
WHEREAS, the Federal Securities, together with the beginning cash balance in the
Escrow Fund, shall mature and the interest thereon shall be payable at such times to insure the
existence of monies sufficient to pay the principal amount of the Refunded Obligations and the
accrued interest thereon, as the same shall become due in accordance with the terms of the
resolutions authorizing the issuance of the Refunded Obligations and as set forth in Exhibit A
attached hereto; and
WHEREAS, the Corporation has completed all arrangements for the purchase of the
Federal Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund
as provided herein; and
WHEREAS, the Bank is a banking association organized and existing under the laws of
the United States of America, possessing trust powers and is fully qualified and empowered to
enter into this Agreement; and
WHEREAS, in Section 31 of the Bond Resolution, the Board of Directors duly approved
and authorized the execution of this Agreement; and
WHEREAS, the Corporation and the Escrow Agent, as the case may be, shall take all
action necessary to call, pay, redeem and retire said Refunded Obligations in accordance with
the provisions thereof, including, without limitation, all actions required by the resolution
authorizing the Refunded Obligations, the Bond Resolution and this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and
to secure the payment of the principal of and the interest on the Refunded Obligations as the
same shall become due, the Corporation and the Bank hereby mutually undertake, promise and
agree as follows:
SECTION 1: Receipt of Refunded Bond Resolutions. Receipt of a copy of the
resolution authorizing the issuance of the Refunded Obligations and the Bond Resolution are
hereby acknowledged by the Bank. Reference herein to or citation herein of any provision of
said documents shall be deemed an incorporation of such provision as a part hereof in the
same manner and with the same effect as if it were fully set forth herein.
SECTION 2: Escrow Fund Creation/Funding. There is hereby created by the
Corporation with the Bank a special segregated and irrevocable trust fund designated
"SPECIAL 2002 EULESS DEVELOPMENT CORPORATION REFUNDING BOND ESCROW
FUND" (hereinafter called the "Escrow Fund") for the benefit of the holders of the Refunded
Obligations, and, immediately following the delivery of the Bonds, the Corporation agrees and
covenants to cause to be deposited with the Bank the following amounts:
$5,807,633.41 for the purchase of Federal Securities identified in Exhibit B to be
held for the account of the Escrow Fund
$ 712,781.25 for deposit in the Escrow Fund as a beginning cash balance
The Bank hereby accepts the Escrow Fund and further agrees to receive said moneys,
apply the same as set forth herein, and to hold the cash and Federal Securities deposited and
45189921.1 2 Exhibit C
•
credited to the Escrow Fund for application and disbursement for the purposes and in the
manner provided in this Agreement.
SECTION 3: Escrow Fund Sufficiency Warranty. The Corporation hereby represents
that the cash and Federal Securities, together with the interest to be earned thereon, deposited
to the credit of the Escrow Fund will be sufficient to pay the principal of and premium and
interest on the Refunded Obligations as the same shall become due and payable, and such
Refunded Obligations, and the interest thereon, are to mature or be redeemed and shall be paid
at the times and in the amounts set forth and identified in Exhibit A attached hereto.
FURTHERMORE, the Bank acknowledges receipt of the Bond Resolution which also
provides for the redemption of the Refunded Obligations on September 15, 2004 at the
redemption price of par plus accrued interest thereon; all in accordance with the provisions of
the respective notice requirements applicable to said Refunded Obligations and the notice
requirements contained in the resolutions authorizing such Refunded Obligations.
The Bank agrees to cause a notice of redemption pertaining to the Refunded Obligations
to be sent to the registered owners thereof appearing on the registration books at least thirty
(30) days prior to the respective redemption dates therefor.
SECTION 4: Pledge of Escrow. The Bank agrees that all cash and Federal Securities,
together with any income or interest earned thereon, held in the Escrow Fund shall be and is
hereby irrevocably pledged to the payment of the principal of and interest on the Refunded
Obligations which will mature and become due on and after the date of this Agreement, and
such funds initially deposited and to be received from maturing principal and interest on the
Federal Securities in the Escrow Fund shall be applied solely in accordance with the provisions
of this Agreement.
SECTION 5: Escrow Insufficiency - Corporation Warranty to Cure. If, for any reason,
the funds on hand in the Escrow Fund shall be insufficient to make the payments set forth in
Exhibit A attached hereto, as the same becomes due and payable, the Corporation shall make
timely deposits to the Escrow Fund, from lawfully available funds, of additional funds in the
amounts required to make such payments. Notice of any such insufficiency shall be
immediately given by the Bank to the Corporation by the fastest means possible, but the Bank
shall in no manner be responsible for the Corporation's failure to make such deposits.
SECTION 6: Escrow Fund Securities/Segregation. The Bank shall hold said Federal
Securities and moneys in the Escrow Fund at all times as a special and separate trust fund for
the benefit of the holders of the Refunded Obligations, wholly segregated from other moneys
and securities on deposit with the Bank; shall never commingle said Federal Securities and
moneys with other moneys or securities of the Bank; and shall hold and dispose of the assets
therein only as set forth herein. Nothing herein contained shall be construed as requiring the
Bank to keep the identical moneys, or any part thereof, in said Escrow Fund, if it is impractical,
but moneys of an equal amount, except to the extent such are represented by the Federal
Securities, shall always be maintained on deposit in the Escrow Fund by the Bank, as trustee;
and a special account evidencing such facts shall at all times be maintained on the books of the
Bank.
SECTION 7: Escrow Fund Collections/Payments. The Bank shall from time to time
collect and receive the principal of and interest on the Federal Securities as.they respectively
mature and become due and credit the same to the Escrow Fund. On or before each principal
45189921.1 3 Exhibit C
and/or interest payment date or redemption date, as the case may be, for the Refunded
Obligations shown in Exhibit A attached hereto, the Bank, without further direction from anyone,
including the Corporation, shall cause to be withdrawn from the Escrow Fund the amount
required to pay the accrued interest on the Refunded Obligations due and payable on said
payment date and the principal of the Refunded Obligations due and payable on said payment
date or redemption date, as the case may be, and the amount withdrawn from the Escrow Fund
shall be immediately transmitted and deposited with the paying agent for the Refunded
Obligations to be paid with such amount. The paying agent for the Refunded Obligations is the
Bank.
If any Refunded Obligation thereon shall not be presented for payment when the
principal thereof or interest thereon shall have become due, and if cash shall at such times be
held by the Bank in trust for that purpose sufficient and available to pay the principal of such
Refunded Obligation and interest thereon it shall be the duty of the Bank to hold said cash
without liability to the holder of such Refunded Obligation for interest thereon after such maturity
or redemption date, in trust for the benefit of the holder of such Refunded Obligation, who shall
thereafter be restricted exclusively to said cash for any claim of whatever nature on his part on
or with respect to said Refunded Obligation, including for any claim for the payment thereof and
interest thereon. All cash required by the provisions hereof to be set aside or held in trust for
the payment of the Refunded Obligations, including interest thereon, shall be applied to and
used solely for the payment of the Refunded Obligations and interest thereon with respect to
which such cash has been so set aside in trust.
Subject to the provisions of the last sentence of Section 25 hereof, cash held by the
Bank in trust for the payment and discharge of any of the Refunded Obligations and interest
thereon which remains unclaimed for a period of three (3) years after the stated maturity date or
redemption date of such Refunded Obligations shall be returned to the Corporation.
Notwithstanding the above and foregoing, any remittance of funds from the Bank to the
Corporation shall be subject to any applicable unclaimed property laws of the State of Texas.
SECTION 8: Disposal of Refunded Obligations. All Refunded Obligations cancelled on
account of payment by the Bank shall be disposed of or otherwise destroyed by the Bank, and
an appropriate certificate of destruction furnished the Corporation.
SECTION 9: Escrow Fund Encumbrance. The escrow created hereby shall be
irrevocable and the holders of the Refunded Obligations shall have an express lien on all
moneys and Federal Securities in the Escrow Fund until paid out, used and applied in
accordance with this Agreement.
Unless disbursed in payment of the Refunded Obligations, all funds and the Federal
Securities received by the Bank for the account of the Corporation hereunder shall be and
remain the property of the Escrow Fund and the Corporation and the owners of the Refunded
Obligations shall be entitled to a preferred claim and shall have a first lien upon such funds and
Federal Securities enjoyed by a trust beneficiary. The funds and Federal Securities received by
the Bank under this Agreement shall not be considered as a banking deposit by the Corporation
and the Bank and the Corporation shall have no right or title with respect thereto, except as
otherwise provided herein. Such funds and Federal Securities shall not be subject to checks or
drafts drawn by the Corporation.
SECTION 10: Absence of Bank Claim/Lien on Escrow Fund. The Bank shall have no
lien whatsoever upon any of the moneys or Federal Securities in the Escrow Fund for payment
45189921.1 4 Exhibit C
of services rendered hereunder, services rendered as paying agent/registrar for the Refunded
Obligations, or for any costs or expenses incurred hereunder and reimbursable from the
Corporation.
SECTION 11: Substitution of Investments/Reinvestments. The Bank shall be authorized
to accept initially and temporarily cash and/or substituted Federal Securities pending the
delivery of the Federal Securities identified in the Exhibit B attached hereto, or shall be
authorized to redeem the Federal Securities and reinvest the proceeds thereof, together with
other moneys held in the Escrow Fund in noncallable direct obligations of the United States of
America provided such early redemption and reinvestment of proceeds does not change the
repayment schedule of the Refunded Obligations appearing in Exhibit A and the Bank receives
the following:
(1) an opinion by an independent certified public accountant to the
effect that (i) the initial and/or temporary substitution of cash and/or securities for
one or more of the Federal Securities identified in Exhibit B pending the receipt
and delivery thereof to the Escrow Agent or (ii) the redemption of one or more of
the Federal Securities and the reinvestment of such funds in one or more
substituted securities (which shall be noncallable direct obligations of the United
States of America), together with the interest thereon and other available moneys
then held in the Escrow Fund, will, in either case, be sufficient, without
reinvestment, to pay, as the same become due in accordance with Exhibit A, the
principal of, and interest on, the Refunded Obligations which have not previously
been paid, and
(2) with respect to an early redemption of Federal Securities and the
reinvestment of the proceeds thereof, an unqualified opinion of nationally
recognized municipal bond counsel to the effect that (a) such investment will not
cause interest on the Bonds or Refunded Obligations to be included in the gross
income for federal income tax purposes, under the Code and related regulations
as in effect on the date of such investment, or otherwise make the interest on the
Bonds or the Refunded Obligations subject to Federal income taxation and (b)
such reinvestment complies with the Constitution and laws of the State of Texas
and with all relevant documents relating to the issuance of the Refunded
Obligations and the Bonds.
SECTION 12: Restriction on Escrow Fund Investments - Reinvestment. Except as
provided in Section 11 hereof, moneys in the Escrow Fund will be invested only in the Federal
Securities listed in Exhibit B and neither the Corporation nor the Bank shall reinvest any moneys
deposited in the Escrow Fund except as specifically provided by this Agreement.
SECTION 13: Excess Funds. If at any time through redemption or cancellation of the
Refunded Obligations there exists or will exist excesses of interest on or maturing principal of
the Federal Securities in excess of the amounts necessary hereunder for the Refunded
Obligations, the Bank may transfer such excess amounts to or on the order of the Corporation,
provided that the Corporation delivers to the Bank the following:
(1) an opinion by an independent certified public accountant that after the
transfer of such excess, the principal amount of securities in the Escrow Fund,
together with the interest thereon, and other available monies then held in the
Escrow Fund, will be sufficient to pay, as the same become due and without
45189921.1 5 Exhibit C
reinvestment, in accordance with Exhibit A, the principal of, and interest on, the
Refunded Obligations which have not previously been paid, and
(2) an unqualified opinion of nationally recognized municipal bond
counsel to the effect that (a) such transfer will not cause interest on the Bonds or
the Refunded Obligations to be included in gross income for federal income tax
purposes, under the Code and related regulations as in effect on the date of such
transfer, or otherwise make the interest on the Bonds or the Refunded
Obligations subject to Federal income taxation, and (b) such transfer complies
with the Constitution and laws of the State of Texas and with all relevant
documents relating to the issuance of the Refunded Obligations or the Bonds.
SECTION 14: Collateralization. The Bank shall continuously secure the monies in the
Escrow Fund not invested in Federal Securities by a pledge of direct obligations of the United
States of America, in the par or face amount at least equal to the principal amount of said
uninvested monies to the extent such money is not insured by the Federal Deposit Insurance
Corporation.
SECTION 15: Absence of Bank's Liability for Investments. The Bank shall not be liable
or responsible for any loss resulting from any investment made in the Federal Securities or
substitute securities as provided in Section 11 hereof.
SECTION 16: Bank's Compensation - Escrow Administration/Settlement of Paying
Agent's Charges. The Corporation agrees to pay the Bank for the performance of services
hereunder and as reimbursement for anticipated expenses to be incurred hereunder the amount
of $ and, except for reimbursement of costs and expenses incurred by the Bank
pursuant to Sections 3, 11 and 19 hereof, the Bank hereby agrees said amount is full and
complete payment for the administration of this Agreement.
The Corporation also agrees to deposit with the Bank on the effective date of this
Agreement, the sum of $ and the Bank acknowledges and agrees that the
above amount is and represents the total amount of compensation due the Bank for services
rendered as paying agent for the Refunded Obligations. The Bank hereby agrees to pay,
assume and be fully responsible for any additional charges that it may incur in the performance
of its duties and responsibilities as paying agent for the Refunded Obligations.
The Corporation acknowledges and agrees that the above amount deposited with the
Escrow Agent to cover paying agents' charges and expenses does not include amounts which
shall become due and payable for services rendered as registrar and transfer agent for fully
registered Refunded Obligations, and the Corporation agrees to pay directly to each "registrar"
for the Refunded Obligations all reasonable costs, expenses and charges incurred in connection
with the maintenance of the registration books and records and the transfer of such fully
registered obligations as and when such costs, expenses and charges are incurred and against
written invoices, statements or bills submitted therefor.
SECTION 17: Escrow Agent's Duties / Responsibilities/Liability. The Bank shall not be
responsible for any recital herein, except with respect to its organization and its powers and
authority. As to the existence or nonexistence of any fact relating to the Corporation or as to the
sufficiency or validity of any instrument, paper or proceedings relating to the Corporation, the
Bank shall be entitled to rely upon a certificate signed on behalf of the Corporation by its
Executive Director or the President or Secretary of the Board of Directors of the Corporation as
45189921.1 6 Exhibit C
sufficient evidence of the facts therein contained. The Bank may accept a certificate of the
Secretary of the Board of Directors under the Corporation's seal, to the effect that a resolution
or other instrument in the form therein set forth has been adopted by the Board of Directors of
the Corporation, as conclusive evidence that such resolution or other instrument has been duly
adopted and is in full force and effect.
The duties and obligations of the Bank shall be determined solely by the express
provisions of this Agreement and the Bank shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Bank.
In the absence of bad faith on the part of the Bank, the Bank may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon any
certificate or opinion furnished to the Bank, conforming to the requirements of this Agreement;
but notwithstanding any provision of this Agreement to the contrary, in the case of any such
certificate or opinion or any evidence which by any provision hereof is specifically required to be
furnished to the Bank, the Bank shall be under a duty to examine the same to determine
whether it conforms to the requirements of this Agreement.
The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Bank unless it shall be proved that the Bank was negligent
in ascertaining or acting upon the pertinent facts.
The Bank shall not be liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the holders of not less than a majority in
aggregate principal amount of all said Refunded Obligations at the time outstanding relating to
the time, method and place of conducting any proceeding for any remedy available to the Bank
not in conflict with the intent and purpose of this Agreement. For the purposes of determining
whether the holders of the required principal amount of said Refunded Obligations have
concurred in any such direction, Refunded Obligations owned by any obligor upon the Refunded
Obligations, or by any person directly or indirectly controlling or controlled by or under direct or
indirect common control with such obligor, shall be disregarded, except that for the purposes of
determining whether the Bank shall be protected in relying on any such direction only Refunded
Obligations which the Bank knows are so owned shall be so disregarded.
The term "Responsible Officers" of the Bank, as used in this Agreement, shall mean and
include the Chairman of the Board of Directors, the President, any Vice President and any
Second Vice President, the Secretary and any Assistant Secretary, the Treasurer and any
Assistant Treasurer, and every other officer and assistant officer of the Bank customarily
performing functions similar to those performed by the persons who at the time shall be officers,
respectively, or to whom any corporate trust matter is referred, because of his knowledge of and
familiarity with a particular subject; and the term "Responsible Officer" of the Bank, as used in
this Agreement, shall mean and include any of said officers or persons.
SECTION 18: Limitation Re: Bank's Duties/Responsibilities/Liabilities to Third Parties.
The Bank shall not be responsible or liable to any person in any manner whatever for the
sufficiency, correctness, genuineness, effectiveness, or validity of this Agreement with respect
to the Corporation, or for the identity or authority of any person making or executing this
Agreement for and on behalf of the Corporation. The Bank is authorized by the Corporation to
rely upon the representations of the Corporation with respect to this Agreement and the
deposits made pursuant hereto and as to the Corporation's right and power to execute and
45189921.1 7 Exhibit C
deliver this Agreement, and the Bank shall not be liable in any manner as a result of such
reliance. The duty of the Bank hereunder shall only be to the Corporation and the holders of the
Refunded Obligations. Neither the Corporation nor the Bank shall assign or attempt to assign or
transfer any interest hereunder or any portion of any such interest. Any such assignment or
attempted assignment shall be in direct conflict with this Agreement and be without effect.
SECTION 19: Interpleader. In the event conflicting demands or notices are made upon
the Bank growing out of or relating to this Agreement or the Bank in good faith is in doubt as to
what action should be taken hereunder, the Bank shall have the right at its election to:
(a) Withhold and stop all further proceedings in, and performance of, this
Agreement with respect to the issue in question and of all instructions received
hereunder in regard to such issue; and
(b) File a suit in interpleader and obtain an order from a court of
appropriate jurisdiction requiring all persons involved to interplead and litigate in
such court their several claims and rights among themselves.
In the event the Bank becomes involved in litigation in connection with this Section, the
Corporation, to the extent permitted by law, agrees to indemnify and save the Bank harmless
from all loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank as a
result thereof. The obligations of the Bank under this Agreement shall be performable at the
corporate office of the Bank in the City of Dallas, Texas.
The Bank may advise with legal counsel in the event of any dispute or question
regarding the construction of any of the provisions hereof or its duties hereunder, and in the
absence of negligence or bad faith on the part of the Bank, no liability shall be incurred by the
Bank for any action taken pursuant to this Section and the Bank shall be fully protected in acting
in accordance with the opinion and instructions of legal counsel that is knowledgeable and has
expertise in the field of law addressed in any such legal opinion or with respect to the
instructions given.
SECTION 20: Accounting - Annual Report. Promptly after September 30th of each
year, commencing with the year 2002, while the Escrow Fund is maintained under this
Agreement, the Bank shall forward to the Corporation, to the attention of the Treasurer, or other
designated official of the Corporation, a statement in detail of the Federal Securities and monies
held, and the current income and maturities thereof, and the withdrawals of money from the
Escrow Fund for the preceding 12 month period ending September 30th of each year.
SECTION 21: Notices. Any notice, authorization, request or demand required or
permitted to be given hereunder shall be in writing and shall be deemed to have been duly given
when mailed by registered or certified mail, postage prepaid addressed as follows:
EULESS DEVELOPMENT CORPORATION
201 North Ector Drive
Euless, Texas 76039
Attention: Treasurer
45189921.1 8 Exhibit C
JPMORGAN CHASE BANK
2001 Bryan Street, 10th Floor
Dallas, Texas 75201
Corporate Trust Department
The United States Post Office registered or certified mail receipt showing delivery of the
aforesaid shall be conclusive evidence of the date and fact of delivery.
Any party hereto may change the address to which notices are to be delivered by giving
to the other parties not less than ten (10) days prior notice thereof.
SECTION 22: Performance Date. Whenever under the terms of this Agreement the
performance date of any provision hereof, including the date of maturity of interest on or
principal of the Refunded Obligations, shall be a Sunday or a legal holiday or a day on which the
Bank is authorized by law to close, then the performance thereof, including the payment of
principal of and interest on the Refunded Obligations, need not be made on such date but may
be performed or paid, as the case may be, on the next succeeding business day of the Bank
with the same force and effect as if made on the date of performance or payment and with
respect to a payment, no interest shall accrue for the period after such date.
SECTION 23: Warranty of Parties Re: Power to Execute and Deliver Escrow
Agreement. The Corporation covenants that it will faithfully perform at all times any and all
covenants, undertakings, stipulations and provisions contained in this Agreement, in any and
every said Refunded Obligation as executed, authenticated and delivered and in all proceedings
pertaining thereto as said Refunded Obligations shall have been modified as provided in this
Agreement. The Corporation covenants that it is duly authorized under the Constitution and
laws of the State of Texas to execute and deliver this Agreement, that all actions on its part for
the payment of said Refunded Obligations as provided herein and the execution and delivery of
this Agreement have been duly and effectively taken and that said Refunded Obligations and
coupons in the hands of the holders and owners thereof are and will be valid and enforceable
obligations of the Corporation according to the import thereof as provided in this Agreement.
SECTION 24: Severability. If any one or more of the covenants or agreements provided
in this Agreement on the part of the parties to be performed should be determined by a court of
competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and
construed to be severable from the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions of this Agreement. In the event
any covenant or agreement contained in this Agreement is declared to be severable from the
other provisions of this Agreement, written notice of such event shall immediately be given to
each national rating service (Moody's Investors Service, Standard & Poor's Corporation or Fitch
Investors Service)which has rated the Refunded Obligations on the basis of this Agreement.
SECTION 25: Termination. This Agreement shall terminate when the Refunded
Obligations, including interest due thereon, have been paid and discharged in accordance with
the provisions of this Agreement. If any Refunded Obligations are not presented for payment
when due and payable, the nonpayment thereof shall not prevent the termination of this
Agreement. Funds for the payment of any nonpresented Refunded Obligations and accrued
interest thereon shall upon termination of this Agreement be held by the Bank for such purpose
in accordance with Section 7 hereof. Any moneys or Federal Securities held in the Escrow
45189921.1 9 Exhibit C
Fund at termination and not needed for the payment of the principal of or interest on any of the
Refunded Obligations shall be paid or transferred to the Corporation.
SECTION 26: Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Bank by this Agreement.
SECTION 27: Successors/Assigns. (a) Should the Bank not be able to legally serve or
perform the duties and obligations under this Agreement, or should the Bank be declared to be
insolvent or closed for any reason by federal or state regulatory authorities or a court of
competent jurisdiction, the Corporation, upon being notified or discovering the Bank's inability or
disqualification to serve hereunder, shall forthwith appoint a successor to replace the Bank, and
upon being notified of such appointment, the Bank shall (i) transfer all funds and securities held
hereunder, together with all books, records and accounts relating to the Escrow Fund and the
Refunded Obligations, to such successor and (ii) assign all rights, duties and obligations under
this Agreement to such successor. If the Corporation should fail to appoint such a successor
within ninety (90) days from the date the Corporation discovers, or is notified of, the event or
circumstance causing the Bank's inability or disqualification to serve hereunder, the Bank, or a
bondholder of the Refunded Obligations, may apply to a court of competent jurisdiction to
appoint a successor or assigns of the Bank and such court, upon determining the Bank is
unable to continue to serve, shall appoint a successor to serve under this Agreement and the
amount of compensation, if any, to be paid to such successor for the remainder of the term of
this Agreement for services to be rendered both for administering the Escrow Fund and for
paying agent duties and responsibilities for the Refunded Obligations.
(b) Furthermore, the Bank may resign and be discharged from performing its duties and
responsibilities under this Agreement upon notifying the Corporation in writing of its intention to
resign and requesting the Corporation to appoint a successor. No such resignation shall take
effect until a successor has been appointed by the Corporation and such successor has
accepted such appointment and agreed to perform all duties and obligations hereunder for a
total compensation equal to the unearned proportional amount paid the Bank under Section 16
hereof for the administration of this Agreement and the unearned proportional amount of the
paying agents fees for the Refunded Obligations due the Bank.
Any successor to the Bank shall be a bank, trust company or other financial institution
that is duly qualified under applicable law to serve as escrow agent hereunder and authorized
and empowered to perform the duties and obligations contemplated by this Agreement and
organized and doing business under the laws of the United States or the State of Texas, having
its principal office and place of business in the State of Texas, having a combined capital and
surplus of at least $5,000,000 and be subject to the supervision or examination by Federal or
State authority.
45189921.1 10 Exhibit C
Any successor or assigns to the Bank shall execute, acknowledge and deliver to the
Corporation and the Bank, or its successor or assigns, an instrument accepting such
appointment hereunder, and the Bank shall execute and deliver an instrument transferring to
such successor, subject to the terms of this Agreement, all the rights, powers and trusts created
and established and to be performed under this Agreement. Upon the request of any such
successor Bank, the Corporation shall execute any and all instruments in writing for more fully
and certainly vesting in and confirming to such successor Bank all such rights, powers and
duties. The term "Bank" as used herein shall be the Bank and its legal assigns and successor
hereunder.
SECTION 28: Escrow Agreement - Amendment/Modification. This Agreement shall be
binding upon the Corporation and the Bank and their respective successors and legal
representatives and shall inure solely to the benefit of the holders of the Refunded Obligations,
the Corporation, the Bank and their respective successors and legal representatives.
Furthermore, no alteration, amendment or modification of any provision of this Agreement shall
(1) alter the firm financial arrangements made for the payment of the Refunded Obligations or
(2) be effective unless (i) prior written consent of such alteration, amendment or modification
shall have been obtained from the holders of all Refunded Obligations outstanding at the time of
such alteration, amendment or modification and (ii) such alteration, amendment or modification
is in writing and signed by the parties hereto; provided, however, the Corporation and the Bank
may, without the consent of the holders of the Refunded Obligations, amend or modify the terms
and provisions of this Agreement to cure in a manner not adverse to the holders of the
Refunded Obligations any ambiguity, formal defect or omission in this Agreement. If the parties
hereto agree to any amendment or modification to this Agreement, prior written notice of such
amendment or proposed modification, together with the legal documents amending or modifying
this Agreement, shall be furnished to each national rating service (Standard & Poor's
Corporation, Moody's Investors Service or Fitch Investors Service) which has rated the
Refunded Obligations on the basis of this Agreement, prior to such amendment or modification
being executed.
SECTION 29: Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 30: Executed Counterparts. This Agreement may be executed in several
counterparts, all or any of which shall be regarded for all purposes as one original and shall
constitute and be but one and the same instrument. This Agreement shall be governed by the
laws of the State of Texas and shall be effective as of the date of the delivery of the Bonds.
45189921.1 11 Exhibit C
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their duly authorized officers and their corporate seals to be hereunto affixed and
attested as of the date first above written.
EULESS DEVELOPMENT CORPORATION
President
ATTEST:
Secretary
(Corporation Seal)
JPMORGAN CHASE BANK,
as Escrow Agent
Title:
ATTEST:
Title:
(Bank Seal)
45189921.1 12 Exhibit C
EXHIBIT D
NOTICE OF REDEMPTION
EULESS DEVELOPMENT CORPORATION
SALES TAX REVENUE BONDS
SERIES 1994
DATED AUGUST 1, 1994
NOTICE IS HEREBY GIVEN that all bonds of the above series maturing on and after
September 15, 2005 and aggregating in principal amount $6,020,000 have been called for
redemption on September 15, 2004 at the redemption price of par and accrued interest to the
date of redemption, such bonds being identified as follows:
Year of Principal Amount
Maturity Outstanding CUSIP Number
2005 $405,000 298272 AK1
2006 425,000 298272 AL9
2007 450,000 298272 AM7
2008 475,000 298272 AN5
2009 505,000 298272 APO
2010 535,000 298272 AQ8
2011 570,000 298272 AR6
2012 605,000 298272 AS4
2013 640,000 298272 AT2
2014 685,000 298272 AU9
2015 725,000 298272 AV7
ALL SUCH BONDS shall become due and payable on September 15, 2004, and interest
thereon shall cease to accrue from and after said redemption date and payment of the
redemption price of said bonds shall be paid to the registered owners of the bonds only upon
presentation and surrender of such bonds to JPMorgan Chase Bank (successor paying
agent/registrar to Texas Commerce Bank, National Association) at its designated offices at the
following addresses:
First Class/
Registered/Certified Express Delivery/Courier By Hand Only
JPMorgan Chase Bank JPMorgan Chase Bank JPMorgan Chase Bank
Institutional Trust Services Institutional Trust Services Room 234-North Building
P. O. Box 2320 2001 Bryan Street, 9th Floor Institutional Trust Securities Window
Dallas, Texas 75221-2320 Dallas, Texas 75201 55 Water Street
New York, New York 10041
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said bonds and pursuant to a resolution by the Board of Directors of the
Euless Development Corporation.
JPMORGAN CHASE BANK
Address: 2001 Bryan Street, 10th Floor
Dallas, Texas 75201
45029332.2
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 7 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.
45029332.2