HomeMy WebLinkAboutOrd 923-2021 Authorizing Issuance of Special Assessment Revenue Bonds, Series 2021 (Sherley Tract PID #2)CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS
COLLIN COUNTY
CITY OF ANNA
We, the undersigned officers of the City of Anna, Texas (the "City"), hereby certify as follows:
1. The City Council (the "Council") of the City convened in a regular meeting on
July 27, 2021, at the regular designated meeting place, and the roll was called of the duly
constituted officers and members of the Council, to wit:
Nate Pike, Mayor Kevin Toten
Lee Miller, Mayor Pro-Tem Danny Ussery
Josh Vollmer, Deputy Mayor Pro-Tem Randy Atchley
Stan Carver
Jim Proce, City Manager
Carrie L. Land, City Secretary
and all of said persons were present, thus constituting a quorum. Whereupon, among other
business the following was transacted at said meeting: a written Ordinance entitled
AN ORDINANCE AUTHORIZING THE ISSUANCE OF THE "CITY OF
ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES
2021 (SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO. 2
MAJOR IMPROVEMENT AREA PROJECT)"; APPROVING AND
AUTHORIZING AN INDENTURE OF TRUST, A BOND PURCHASE
AGREEMENT, A LIMITED OFFERING MEMORANDUM, A
CONTINUING DISCLOSURE AGREEMENT AND OTHER
AGREEMENTS AND DOCUMENTS IN CONNECTION THEREWITH;
MAKING FINDINGS WITH RESPECT TO THE ISSUANCE OF SUCH
BONDS; AND PROVIDING AN EFFECTIVE DATE
was duly introduced for the consideration of the Council. It was then duly moved and seconded
that said Ordinance be passed; and, after due discussion, said motion, carrying with it the passage
of said Ordinance, prevailed and carried, with all members of the Council shown present above
voting "Aye," except as noted below:
NAYS: 0 ABSTENTIONS: 0
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2. A true, full, and correct copy of the aforesaid Ordinance passed at the meeting
described in the above and foregoing paragraph is attached to and follows this Certificate; said
Ordinance has been duly recorded in the Council's minutes of said meeting; the above and
foregoing paragraph is a true, full, and correct excerpt from the Council's minutes of said
meeting pertaining to the passage of said Ordinance; the persons named in the above and
foregoing paragraph are the duly chosen, qualified, and acting officers and members of the
Council as indicated therein; that each of the officers and members of the Council was duly and
sufficiently notified officially and personally, in advance, of the time, place, and purpose of the
aforesaid meeting, and that said Ordinance would be introduced and considered for passage at
said meeting, and each of said officers and members consented, in advance, to the holding of
said meeting for such purpose; and that said meeting was open to the public, and public notice of
the time, place, and purpose of said meeting was given all as required by the Texas Government
Code, Chapter 551.
3. The Council has approved and hereby approves the Ordinance; and the Mayor and
City Secretary hereby declare that their signing of this Certificate shall constitute the signing of
the attached and following copy of said Ordinance for all purposes.
SIGNED AND SEALED ON JULY 27, 2021
`-,OI \151IItIIsI
of A
Carrie L. Land, City Secretary *NTite&ke, Mayor
(City Seal) I///lflfllllSlSS11111
2
CITY OF ANNA
ORDINANCE NO. 923-2021
AN ORDINANCE AUTHORIZING THE ISSUANCE OF THE "CITY OF ANNA,
TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2021 (SHERLEY
TRACT PUBLIC IMPROVEMENT DISTRICT NO. 2 MAJOR IMPROVEMENT AREA
PROJECT)"; APPROVING AND AUTHORIZING AN INDENTURE OF TRUST, A
BOND PURCHASE AGREEMENT, A LIMITED OFFERING MEMORANDUM, A
CONTINUING DISCLOSURE AGREEMENT AND OTHER AGREEMENTS AND
DOCUMENTS IN CONNECTION THEREWITH; MAKING FINDINGS WITH
RESPECT TO THE ISSUANCE OF SUCH BONDS; AND PROVIDING AN EFFECTIVE
DATE
WHEREAS, the City of Anna, Texas (the "City"), pursuant to and in accordance with the
terms, provisions and requirements of the Public Improvement District Assessment Act,
Subchapter A of Chapter 372, Texas Local Government Code, has previously established the
"Sherley Tract Public Improvement District No. 2" (the "District"); and
WHEREAS, pursuant to the PID Act, the City Council of the City (the "Council")
published notice of the assessment hearing in a newspaper of general circulation in the City and
the extraterritorial jurisdiction of the City, and opened a public hearing on June 22, 2021,
regarding the levy of special assessments within the District, and the City Council continued the
hearing until July 27, 2021; and
WHEREAS, after all comments and evidence, both written and oral, were received by the
City Council, the public hearing was closed on July 27, 2021, and, on such date, the Council
adopted an ordinance levying such special assessments (the "Assessment Ordinance"); and
WHEREAS, in the Assessment Ordinance, the Council approved and accepted the
Service and Assessment Plan (as defined in the Assessment Ordinance) relating to the District
and levied the Assessments (as defined in the Indenture (defined below)) against the Major
Improvement Area Assessed Property (as defined in the Service and Assessment Plan); and
WHEREAS, the Council has found and determined that it is in the best interests of the
City to issue its bonds to be designated "City of Anna, Texas, Special Assessment Revenue
Bonds, Series 2021 (Sherley Tract Public Improvement District No. 2 Major Improvement Area
Project)" (the 'Bonds"), such Bonds to be payable from and secured by the Pledged Revenues (as
defined in the Indenture); and
WHEREAS, the City is authorized by the PID Act to issue the Bonds for the purpose of
(i) paying the Costs (as defined in the Indenture), (ii) paying interest on the Bonds during and
after the period of acquisition and construction of the Major Improvement Area Projects (as
defined in the Indenture), (iii) funding a reserve fund for payment of principal and interest on the
Bonds, (iv) paying a portion of the costs incidental to the organization of the District and (v)
paying the costs of issuance of the Bonds; and
WHEREAS, the Council has found and determined to approve (i) the issuance of the
Bonds to finance the Major Improvement Area Projects, (ii) the form, terms and provisions of
the Indenture securing the Bonds authorized hereby, (iii) the form, terms and provisions of a
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Bond Purchase Agreement (defined below) between the City and the Underwriter (defined
below), (iv) a Limited Offering Memorandum (defined below), (v) a Continuing Disclosure
Agreement (defined below), (vi) the form, terms and provisions of a Landowner Agreement
(defined below), and (vii) the form, terms and provisions of a Construction, Funding and
Acquisition Agreement (defined below); and
WHEREAS, the meeting at which this Ordinance is considered is open to the public as
required by law, and the public notice of the time, place and purpose of said meeting was given
as required by Chapter 551, Texas Government Code, as amended;
NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
ANNA, TEXAS, THAT:
Section 1. Findings. The findings and determinations set forth in the preamble
hereof are hereby incorporated by reference for all purposes as if set forth in full herein.
Section 2. Aooroval of Issuance of Bonds and Indenture of Trust.
(a) The issuance of the Bonds in the principal amount of $2,896,000 for the
purpose of (i) paying the Costs, (ii) paying a portion of the interest on the Bonds during
and after the period of acquisition and construction of the Major Improvement Area
Projects, (iii) funding a reserve fund for payment of principal and interest on the Bonds,
(iv) paying a portion of the costs incidental to the organization of the District, and (v)
paying the costs of issuance of the Bonds, is hereby authorized and approved.
(b) The Bonds shall be issued and secured under that certain Indenture of
Trust (the "Indenture"), dated as of August 1, 2021, between the City and Regions Bank,
an Alabama state banking corporation with offices in Houston, Texas, as trustee (the
"Trustee"), with such changes as may be necessary or desirable to carry out the intent of
this Ordinance and as approved by the Mayor or Mayor Pro Tem of the City, such
approval to be evidenced by the execution and delivery of the Indenture, which Indenture
is hereby approved in substantially final form attached hereto as Exhibit A and
incorporated herein as a part hereof for all purposes. The Mayor or Mayor Pro Tem of
the City is hereby authorized and directed to execute the Indenture and the City Secretary
is hereby authorized and directed to attest such signature of the Mayor or Mayor Pro
Tem.
(c) The Bonds shall be dated, shall mature on the date or dates and in the
principal amount or amounts, shall bear interest, shall be registered as to both principal
and interest, shall be subject to redemption and shall have such other terms and
provisions as set forth in the Indenture. The Bonds shall be in substantially the form set
forth in the Indenture, with such insertions, omissions and modifications as may be
required to conform the form of Bond to the actual terms of the Bonds. The Bonds shall
be payable from and secured by the Pledged Revenues (as defined in the Indenture) and
other assets of the Trust Estate (as defined in the Indenture) pledged to the Bonds, and
shall never be payable from ad valorem taxes or any other funds or revenues of the City.
Section 3. Sale of Bonds; Approval of Bond Purchase Agreement. The Bonds shall
be sold to FMSbonds, Inc. (the "Underwriter") at the price and on the terms and provisions set
forth in that certain Bond Purchase Agreement (the "Purchase Agreement"), dated the date
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hereof, between the City and the Underwriter, attached hereto as Exhibit B and incorporated
herein as a part hereof for all purposes, which terms of sale are declared to be in the best interest
of the City. The form, terms and provisions of the Purchase Agreement are hereby authorized
and approved and the Mayor or Mayor Pro Tem of the City is hereby authorized and directed to
execute and deliver the Purchase Agreement. The Mayor's or Mayor Pro Tem's signature on the
Purchase Agreement may be attested by the City Secretary. The Initial Bond shall be registered
in the name of the Underwriter.
Section 4. Limited Offering Memorandum. The form and substance of the
Preliminary Limited Offering Memorandum and any addenda, supplement or amendment thereto
and the final Limited Offering Memorandum for the Bonds and any addenda, supplement or
amendment thereto (the "Limited Offering Memorandum") are hereby approved and adopted in
all respects. The Limited Offering Memorandum, with such appropriate variations as shall be
approved by the Mayor or Mayor Pro Tem of the City and the Underwriter, may be used by the
Underwriter in the offering and sale of the Bonds. The City Secretary is hereby authorized and
directed to include and maintain a copy of the Preliminary Limited Offering Memorandum (as
defined in the Purchase Agreement) and the Limited Offering Memorandum and any addenda,
supplement or amendment thereto thus approved among the permanent records of this meeting.
The use and distribution of the Preliminary Limited Offering Memorandum in the offering of the
Bonds is hereby ratified, approved and confirmed. The City deems the Preliminary Limited
Offering Memorandum final, within the meaning of Rule 15c2-12 issued by the United States
Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), as
of its date, except for the omission of information specified in Section (b)(1) of the Rule, as
permitted by Section (b)(1) of the Rule. Notwithstanding the approval and delivery of such
Preliminary Limited Offering Memorandum and Limited Offering Memorandum by the Council,
the Council is not responsible for and proclaims no specific knowledge of the information
contained in the Preliminary Limited Offering Memorandum and the Limited Offering
Memorandum pertaining to the Major Improvement Area Projects, the Developer or its financial
ability, any builders, any landowners or the appraisal of the property in the District.
Section 5. Continuing Disclosure Agreement. The City of Anna, Texas, Special
Assessment Revenue Bonds, Series 2021 (Sherley Tract Public Improvement District No. 2
Major Improvement Area Project) Continuing Disclosure Agreement of the Issuer (the
"Continuing Disclosure Agreement") between the City, P3Works, LLC and Regions Bank is
hereby authorized and approved in substantially final form attached hereto as Exhibit C and
incorporated herein as a part hereof for all purposes, and the Mayor or Mayor Pro Tem of the
City is hereby authorized and directed to execute and deliver such Continuing Disclosure
Agreement with such changes as may be required to carry out the purpose of this Ordinance and
approved by the Mayor or Mayor Pro Tem, such approval to be evidenced by the execution
thereof.
Section 6. Landowner Agreement. That certain Major Improvement Area
Landowner Agreement (the "Landowner Agreement"), between the City and the entity defined in
the Landowner Agreement as the "Landowner" is hereby authorized and approved in
substantially the form attached hereto as Exhibit D which is incorporated herein as a part hereof
for all purposes and the Mayor or Mayor Pro Tem is each hereby authorized and directed to
execute and deliver such Landowner Agreement with such changes as may be required to carry
out the purposes of this Ordinance and approved by the Mayor or Mayor Pro Tem, such approval
to be evidenced by the execution thereof.
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Section 7. Construction, Funding and Acquisition Agreement. That certain
agreement titled Sherley Tract Public Improvement District No. 2 Major Improvement Area
Construction, Funding and Acquisition Agreement (the "Construction, Funding and Acquisition
Agreement") between the City and the Developer is hereby authorized and approved in
substantially the form attached hereto as Exhibit E which is incorporated herein as a part hereof
for all purposes and the Mayor or Mayor Pro Tem is hereby authorized and directed to execute
and deliver such Construction, Funding and Acquisition Agreement with such changes as may be
required to carry out the purpose of this Ordinance and then as approved by the Mayor or Mayor
Pro Tem, such approval to be evidenced by the execution thereof. The Mayor's or Mayor Pro
Tem's signature on the Construction, Funding and Acquisition Agreement may be attested by the
City Secretary.
Section 8. Additional Actions. The Mayor, the Mayor Pro Tem, the City Manager,
the Finance Director and the City Secretary are hereby authorized and directed to take any and
all actions on behalf of the City necessary or desirable to carry out the intent and purposes of this
Ordinance and to issue the Bonds in accordance with the terms of this Ordinance. The Mayor,
the Mayor Pro Tem, the City Manager, the Finance Director and the City Secretary are hereby
authorized and directed to execute and deliver any and all certificates, agreements, notices,
instruction letters, requisitions and other documents which may be necessary or advisable in
connection with the sale, issuance and delivery of the Bonds and the carrying out of the purposes
and intent of this Ordinance.
Section 9. Severability. If any Section, paragraph, clause or provision of this
Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or
unenforceability of such Section, paragraph, clause or provision shall not affect any of the
remaining provisions of this Ordinance.
Section 10. Effective Date. This Ordinance is passed on one reading as authorized by
Texas Government Code, Section 1201.028, and shall be effective immediately upon its passage
and adoption.
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EXHIBIT A
INDENTURE OF TRUST
Em
INDENTURE OF TRUST
By and Between
CITY OF ANNA, TEXAS
and
REGIONS BANK,
as Trustee
DATED AS OF AUGUST 1, 2021
SECURING
$2,896,000
CITY OF ANNA, TEXAS
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2021
(SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO.2
MAJOR IMPROVEMENT AREA PROJECT)
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS, FINDINGS AND INTERPRETATION ......................................... 4
SectionI.I.
Definitions........................................................................................................... 4
Section1.2.
Findings.............................................................................................................
14
Section 1.3.
Table of Contents, Titles and Headings............................................................
14
Section 1.4.
Interpretation.....................................................................................................
14
ARTICLE II THE BONDS..........................................................................................................
14
Section 2.1.
Security for the Bonds......................................................................................
14
Section 2.2.
Limited Obligations..........................................................................................
15
Section 2.3.
Authorization for Indenture..............................................................................
15
Section 2.4.
Contract with Owners and Trustee...................................................................
15
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING
THEBONDS................................................................................................................................
15
Section 3.1.
Authorization....................................................................................................
15
Section 3.2.
Date, Denomination, Maturities, Numbers and Interest ...................................
16
Section 3.3.
Conditions Precedent to Delivery of Bonds ......................................................
16
Section 3.4.
Medium, Method and Place of Payment...........................................................
17
Section 3.5.
Execution and Registration of Bonds...............................................................
18
Section3.6.
Refunding Bonds..............................................................................................
18
Section3.7.
Ownership.........................................................................................................
19
Section 3.8.
Registration, Transfer and Exchange................................................................
19
Section3.9.
Cancellation......................................................................................................
20
Section3.10.
Temporary Bonds..............................................................................................
20
Section 3.11.
Replacement Bonds..........................................................................................
21
Section 3.12.
book -Entry -Only System..................................................................................
22
Section 3.13.
Successor Securities Depository: Transfer Outside Book -Entry -Only System.23
Section 3.14.
Payments to Cede & Co....................................................................................
23
ARTICLE IV REDEMPTION OF BONDS BEFORE MATURITY ..........................................
23
Section 4.1.
Limitation on Redemption................................................................................
23
Section 4.2.
Mandatory Sinking Fund Redemption..............................................................
23
Section 4.3.
Optional Redemption........................................................................................
25
Section 4.5.
Partial Redemption............................................................................................
25
Section 4.6.
Notice of Redemption to Owners.....................................................................
26
Section 4.7.
Payment upon Redemption...............................................................................
26
Section 4.8.
Effect of Redemption........................................................................................
27
ARTICLE V FORM OF THE BONDS.......................................................................................
27
Section 5.1.
Form Generally.................................................................................................
27
Section5.2.
Form of the Bonds............................................................................................
28
Section 5.3.
CUSIP Registration...........................................................................................
36
Section5.4.
Legal Opinion...................................................................................................
36
ARTICLE VI FUNDS AND ACCOUNTS.................................................................................
36
Section 6.1.
Establishment of Funds and Accounts..............................................................
36
Section 6.2.
Initial Deposits to Funds and Accounts............................................................
37
Section 6.3.
Pledged Revenue Fund.....................................................................................
38
Section6.4.
Bond Fund.........................................................................................................
39
Section6.5.
Project Fund......................................................................................................
40
Section 6.6.
Redemption Fund..............................................................................................
42
Section6.7.
Reserve Fund....................................................................................................
43
Section 6.8.
Rebate Fund: Rebatable Arbitrage....................................................................
45
Section 6.9.
Administrative Fund.........................................................................................
45
Section 6.10.
Investment of Funds.........................................................................................
45
ARTICLEVII
COVENANTS.....................................................................................................
47
Section 7.1.
Confirmation of Assessments...........................................................................
47
Section 7.2.
Collection and Enforcement of Assessments....................................................
47
Section 7.3.
Against Encumbrances......................................................................................
48
Section 7.4.
Records, Accounts, Accounting Reports..........................................................
48
Section 7.5.
Covenants Regarding Tax Exemption of Interest on Bonds .............................
48
ARTICLE VIII
LIABILITY OF THE CITY...............................................................................
51
Section8.1.
Liability of City.................................................................................................
52
ARTICLE IX THE TRUSTEE....................................................................................................
52
Section 9.1.
Acceptance of Trust; Trustee as Registrar and Paying Agent ..........................
52
Section 9.2.
Trustee Entitled to Indemnity...........................................................................
52
Section 9.3.
Responsibilities of the Trustee..........................................................................
53
Section 9.4.
Property Held in Trust......................................................................................
54
Section 9.5.
Trustee Protected in Relying on Certain Documents ........................................
54
Section9.6.
Compensation...................................................................................................
55
Section 9.7.
Permitted Acts...................................................................................................
55
Section 9.8.
Resignation of Trustee......................................................................................
55
Section 9.9.
Removal of Trustee...........................................................................................
56
Section 9.10.
Successor Trustee..............................................................................................
56
Section 9.11.
Transfer of Rights and Property to Successor Trustee ......................................
57
Section 9.12.
Merger, Conversion or Consolidation of Trustee .............................................
57
Section 9.13.
Trustee to File Continuation Statements...........................................................
57
Section 9.14.
Accounts, Periodic Reports and Certificates....................................................
58
Section 9.15.
Construction of Indenture.................................................................................
58
ARTICLE X MODIFICATION OR AMENDMENT OF THIS INDENTURE .........................
58
Section 10.1.
Amendments Permitted.....................................................................................
58
Section10.2.
Owners' Meetings.............................................................................................
59
Section 10.3.
Procedure for Amendment with Written Consent of Owners ...........................
59
Section 10.4.
Procedure for Amendment not Requiring Owner Consent ...............................
60
Section 10.5.
Effect of Supplemental Indenture.....................................................................
60
Section 10.6.
Endorsement or Replacement of Bonds Issued after Amendments ..................
61
Section 10.7.
Amendatory Endorsement of Bonds.................................................................
61
Section 10.8.
Waiver of Default.............................................................................................
61
ii
Section 10.9.
Execution of Supplemental Indenture............................................................... 61
ARTICLE XI DEFAULT AND REMEDIES..............................................................................
61
Section 11.1.
Events of Default..............................................................................................
61
Section 11.2.
Immediate Remedies for Default......................................................................
62
Section 11.3.
Restriction on Owner's Action.........................................................................
63
Section 11.4.
Application of Revenues and Other Moneys after Default ...............................
64
Section 11.5.
Effect of Waiver................................................................................................
64
Section 11.6.
Evidence of Ownership of Bonds.....................................................................
65
Section 11.7.
No Acceleration................................................................................................
65
Section 11.8.
Mailing of Notice..............................................................................................
65
section 11.9.
Exclusion of Bonds...........................................................................................
65
ARTICLE XII
GENERAL COVENANTS AND REPRESENTATIONS .................................
66
Section 12.1.
Representations as to Trust Estate.............................................................................66
Section12.2.
General..............................................................................................................
66
ARTICLE XIII
SPECIAL COVENANTS..................................................................................
66
Section 13.1.
Further Assurances; Due Performance.............................................................
66
Section 13.2.
Other Obligations or Other Liens; Refunding Bonds; Future Improvement Area
Bonds.
67
Section 13.3.
Books of Record...............................................................................................
69
ARTICLE XIV
PAYMENT AND CANCELLATION OF THE BONDS
AND
SATISFACTION
OF THE INDENTURE...................................................................................
69
Section 14.1.
Trust Irrevocable...............................................................................................
69
Section 14.2.
Satisfaction of Indenture...................................................................................
69
Section 14.3.
Bonds Deemed Paid..........................................................................................
69
ARTICLE XV
MISCELLANEOUS............................................................................................
70
Section 15.1.
Benefits of Indenture Limited to Parties...........................................................
70
Section 15.2.
Successor is Deemed Included in all References to Predecessor .....................
71
Section 15.3.
Execution of Documents and Proof of Ownership by Owners .........................
71
Section 15.4.
No Waiver of Personal Liability.......................................................................
71
Section 15.5.
Notices to and Demands on City and Trustee ...................................................
71
Section 15.6.
Partial Invalidity................................................................................................
72
Section 15.7.
Applicable Laws...............................................................................................
72
Section 15.8.
Payment on Business Day.................................................................................
72
Section 15.9.
Construction, Funding and Acquisition Agreement Amendments
and
Supplements.
.................................................................................................................
73
Section 15.10. Counterparts......................................................................................................
73
Section 15.11.
No Boycott of Israel..........................................................................................
73
Section 15.12. No Terrorist Organization.................................................................................
73
EXHIBIT A: DESCRIPTION OF THE PROPERTY WITHIN THE MAJOR IMPROVEMENT
AREA OF SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO. 2
iii
INDENTURE OF TRUST
THIS INDENTURE, dated as of August 1, 2021, is by and between the CITY OF
ANNA, TEXAS (the "City"), and REGIONS BANK, Houston, Texas, as trustee (together with
its successors, the "Trustee"). Capitalized terms used in the preambles, recitals and granting
clauses and not otherwise defined shall have the meanings assigned thereto in Article I.
WHEREAS, on October 20, 2020, a petition (the "Petition") was submitted and filed with
the City Secretary of the City (the "City Secretary") pursuant to the Public Improvement District
Assessment Act, Chapter 372, Texas Local Government Code, as amended (the "Act" or "PID
Act"), requesting the creation of a public improvement district located within the extraterritorial
jurisdiction of the City to be known as "Sherley Tract Public Improvement District No. 2" (the
"District"); and
WHEREAS, the Petition contained the signatures of the owners of taxable real property
representing more than fifty percent of the appraised value of taxable real property liable for
assessment within the District, as determined by the then current ad valorem tax rolls of the
Rockwall Central Appraisal District, and the signatures of record property owners who own
taxable real property that constitutes more than fifty percent of the area of all taxable property
that is liable for assessment by the District; and
WHEREAS, on November 10, 2020, the City Council of the City (the "City Council")
adopted Resolution No. 2020-11-825 accepting the Petition and calling a public hearing on the
creation of the District December 8, 2020; and
WHEREAS, after due notice, on December 8, 2020 the City Council opened, conducted
and closed the public hearing in the manner required by law on the advisability of the
improvement projects and services described in the Petition as required by Section 372.009 of
the PID Act and made the findings required by Section 372.009(b) of the PID Act and, by
Resolution No. 2020-12-839 adopted by the City Council (the "Creation Resolution"),
authorized the District in accordance with its finding as to the advisability of the improvement
projects and services; and
WHEREAS, following the adoption of the Creation Resolution, the City published notice
of its authorization of the District in a newspaper of general circulation in the City; and
WHEREAS, no written protests of the District from any owners of record of property
within the District were filed with the City Secretary within 20 days after the date of publication
of such notice; and
WHEREAS, the City, pursuant to Section 372.016(b) of the PID Act, published notice of
a public hearing in a newspaper of general circulation in the City to consider the proposed
"Assessment Roll" and the "Service and Assessment Plan" and the levy of the "Assessments" on
property in the District; and
WHEREAS, the City, pursuant to Section 372.016(c) of the PID Act, mailed notice of the
public hearing to consider the proposed Assessment Roll and the Service and Assessment Plan
and the levy of Assessments on property in the District to the last known address of the owners
of the property liable for the Assessments; and
WHEREAS, the City Council convened the public hearing on July 27, 2021, at which all
persons who appeared, or requested to appear, in person or by their attorney, were given the
opportunity to contend for or contest the Service and Assessment Plan, the Assessment Roll, and
the Assessments, and to offer testimony pertinent to any issue presented on the amount of the
Assessments, the allocation of Major Improvement Area Project Costs, the purposes of the
Assessments, the special benefits of the Assessments, and the penalties and interest on annual
installments and on delinquent annual installments of the Assessments; and
WHEREAS, at the July 27, 2021 public hearing referenced above, there were no written
objections or evidence submitted to the City Secretary in opposition to the Service and
Assessment Plan, the allocation of Major Improvement Area Project Costs, the Assessment Roll,
or the levy of the Assessments; and
WHEREAS, the City Council closed the public hearing and, after considering all written
and documentary evidence presented at the public hearing, including all written comments and
statements filed with the City, at a meeting held on July 27, 2021, approved and accepted the
Service and Assessment Plan in conformity with the requirements of the PID Act and adopted
the Assessment Ordinance, which Assessment Ordinance approved the Assessment Roll and
levied the Assessments; and
WHEREAS, the City Council is authorized by the PID Act to issue revenue bonds
payable from the Assessments for the purpose of (i) paying a portion of the Major Improvement
Area Project Costs, (ii) paying interest on the Bonds during and after the period of acquisition
and construction of the Major Improvement Area Projects, (iii) funding a reserve fund for
payment of principal and interest on the Bonds, (iv) paying a portion of the costs incidental to the
organization of the District and (v) paying the costs of issuance of the Bonds; and
WHEREAS, the City Council now desires to issue its revenue bonds, in accordance with
the PID Act, such bonds to be entitled "City of Anna, Texas, Special Assessment Revenue
Bonds, Series 2021 (Sherley Tract Public Improvement District No. 2 Major Improvement Area
Project)" (the "Bonds"), such Bonds being payable solely from the Trust Estate and for the
purposes set forth in this preamble; and
WHEREAS, the Trustee has agreed to accept the trusts herein created upon the terms set
forth in this Indenture;
NOW, THEREFORE, the City, in consideration of the foregoing premises and
acceptance by the Trustee of the trusts herein created, of the purchase and acceptance of the
Bonds by the Owners thereof, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, does hereby GRANT, CONVEY, PLEDGE,
TRANSFER, ASSIGN, and DELIVER to the Trustee for the benefit of the Owners, a security
interest in all of the moneys, rights and properties described in the Granting Clauses hereof, as
follows (collectively, the "Trust Estate"):
2
FIRST GRANTING CLAUSE
The Pledged Revenues, as herein defined, including all moneys and investments held in
the Pledged Funds, including any contract or any evidence of indebtedness related thereto or
other rights of the City to receive any of such moneys or investments, whether now existing or
hereafter coming into existence, and whether now or hereafter acquired; and
SECOND GRANTING CLAUSE
Any and all other property or money of every name and nature which is, from time to
time hereafter by delivery or by writing of any kind, conveyed, pledged, assigned or transferred,
to the Trustee as additional security hereunder by the City or by anyone on its behalf or with its
written consent, and the Trustee is hereby authorized to receive any and all such property or
money at any and all times and to hold and apply the same subject to the terms thereof; and
THIRD GRANTING CLAUSE
Any and all proceeds of the foregoing property and proceeds from the investment of the
foregoing property;
TO HAVE AND TO HOLD the Trust Estate, whether now owned or hereafter acquired,
unto the Trustee and its successors or assigns;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the benefit
of all present and future Owners of the Bonds from time to time issued under and secured by this
Indenture, and for enforcement of the payment of the Bonds in accordance with their terms, and
for the performance of and compliance with the obligations, covenants, and conditions of this
Indenture;
PROVIDED, HOWEVER, if the City or its assigns shall well and truly pay, or cause to
be paid, the principal or Redemption Price of and the interest on the Bonds at the times and in the
manner stated in the Bonds, according to the true intent and meaning thereof, then this Indenture
and the rights hereby granted shall cease, terminate and be void; otherwise this Indenture is to be
and remain in full force and effect;
IN ADDITION, the Bonds are special obligations of the City payable solely from the
Pledged Revenues, as and to the extent provided in this Indenture. The Bonds do not give rise to
a charge against the general credit or taxing powers of the City and are not payable except as
provided in this Indenture. Notwithstanding anything to the contrary herein, the Owners of the
Bonds shall never have the right to demand payment thereof out of any funds of the City other
than the Pledged Revenues. The City shall have no legal or moral obligation to pay for the
Bonds out of any funds of the City other than the Pledged Revenues.
THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all
Bonds issued and secured hereunder are to be issued, authenticated, and delivered and the Trust
Estate hereby created, assigned, and pledged is to be dealt with and disposed of under, upon and
subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses, and purposes as
hereinafter expressed, and the City has agreed and covenanted, and does hereby agree and
covenant, with the Trustee and with the respective Owners from time to time of the Bonds as
follows:
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ARTICLE I
DEFINITIONS, FINDINGS AND INTERPRETATION
Section 1.1. Definitions.
Unless otherwise expressly provided or unless the context clearly requires otherwise in
this Indenture, the following terms shall have the meanings specified below:
"Account", in the singular, means any of the accounts established pursuant to Section 6.1
of this Indenture, and "Accounts", in the plural, means, collectively, all of the accounts
established pursuant to Section 6.1 of this Indenture.
"Additional Interest" means the 0.50% additional interest charged on the Assessments
pursuant to Section 372.018 of the PID Act.
"Administrative Fund" means that Fund established by Section 6.1 and administered
pursuant to Section 6.9.
"Administrator" means an employee or designee of the City who shall have the
responsibilities provided in the Service and Assessment Plan, this Indenture, or any other
agreement or document approved by the City related to the duties and responsibilities of the
administration of the District.
"Annual Collection Costs" means the actual or budgeted costs and expenses related
specifically to the Major Improvement Area, including costs and expenses related to the creation
and operation of the District, and the construction of the Major Improvement Area Projects,
including, but not limited to, costs and expenses for: (i) the Administrator; (ii) City staff; (iii)
legal counsel, engineers, accountants, financial advisors, and other consultants engaged by the
City; (iv) calculating, collecting, and maintaining records with respect to Assessments and
Annual Installments; (v) preparing and maintaining records with respect to Assessment Rolls and
Annual Service Plan Updates; (vi) paying and redeeming Bonds; (vii) investing or depositing
Assessments and Annual Installments; (viii) complying with the Service and Assessment Plan,
this Indenture and the PID Act with respect to the Bonds, including continuing disclosure
requirements; and (ix) the paying agent/registrar and Trustee in connection with Bonds,
including their respective legal counsel. Annual Collection Costs do not include payment of the
actual principal of, redemption premium, if any, and interest on the Bonds. Annual Collection
Costs collected and not expended in any year shall be carried forward and applied to reduce
Annual Collection Costs in subsequent years.
"Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due on the
Outstanding Bonds in such Bond Year (excluding interest paid from funds on deposit in the
Capitalized Interest Account of the Bond Fund), assuming that the Outstanding Bonds are retired
as scheduled (including by reason of Sinking Fund Installments), and (ii) the principal amount of
the Outstanding Bonds due in such Bond Year (including any Sinking Fund Installments due in
such Bond Year).
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"Annual Installment" means, with respect to each Assessed Property, each annual
payment of. (i) the principal of and interest on the Assessments as shown on the Assessment Roll
or in an Annual Service Plan Update, and as shown in Exhibit F-2 to the Service and Assessment
Plan, and calculated as provided in Section VI of the Service and Assessment Plan, (ii) Annual
Collection Costs and (iii) the Additional Interest.
"Annual Service Plan Update" means an update to the Service and Assessment Plan
prepared no less frequently than annually by the Administrator and approved by the City
Council, including, without limitation, updates in connection with the incurrence or issuance of
Future Improvement Area Bonds.
"Applicable Laws" means the PID Act, and all other laws or statutes, rules, or regulations,
and any amendments thereto, of the State or of the United States of America, by which the City
and its powers, securities, operations, and procedures are, or may be, governed or from which its
powers may be derived.
"Assessed Property" means the property located in the Major Improvement Area that
benefit from the Major Improvement Area Projects, and is defined as the "Major Improvement
Area Assessed Property" in the Service and Assessment Plan.
"Assessment Ordinance" means the ordinance adopted by the City Council on July 27,
2021, as may be amended or supplemented, that levied the Assessments on the Assessed
Property.
"Assessment Revenues" means the revenues received by the City from the collection of
Assessments, including Prepayments, Annual Installments and Foreclosure Proceeds.
"Assessment Roll" means the "Major Improvement Area Assessment Roll", which
document is attached to the Service and Assessment Plan as Exhibit F-1, as updated, modified or
amended from time to time.
"Assessments" means an assessment levied against Assessed Property based on the
special benefit conferred on such Parcels by the Major Improvement Area Projects.
"Assessments" do not include any Future Improvement Area Assessments.
"Attorney General" means the Attorney General of the State.
"Authorized Denomination" means $100,000 and any integral multiple of $1,000 in
excess thereof. The City prohibits any Bond to be issued in a denomination of less than $100,000
and further prohibits the assignment of a CUSIP number to any Bond with a denomination of
less than $100,000, and any attempt to accomplish either of the foregoing shall be void and of no
effect.
"Authorized Improvements" mean those improvements authorized by Section 372.003 of
the PID Act for which assessments are levied, including those described in the Service and
Assessment Plan.
"Bond" means any of the Bonds.
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"Bond Counsel" means McCall, Parkhurst & Horton L.L.P. or any other attorney or firm
of attorneys designated by the City that are nationally recognized for expertise in rendering
opinions as to the legality and tax-exempt status of securities issued by public entities.
"Bond Fund" means the Fund established pursuant to Section 6.1 and administered
pursuant to Section 6.4 of this Indenture.
"Bond Ordinance" means the ordinance adopted by the City Council on July 27, 2021
authorizing the issuance of the Bonds pursuant to this Indenture.
"Bond Pledged Revenue Account" means the Account in the Pledged Revenue Fund
established pursuant to Section 6.1 of this Indenture.
"Bond Year" means the one-year period beginning on October 1 in each year and ending
on September 30 in the following year.
"Bonds" means the City's bonds authorized to be issued by Section 3.1 of this Indenture
entitled "City of Anna, Texas, Special Assessment Revenue Bonds, Series 2021 (Sherley Tract
Public Improvement District No. 2 Major Improvement Area Project)" and, in the event the City
issues Refunding Bonds pursuant to Section 13.2 hereof, the term "Bonds" shall include such
Refunding Bonds.
"Business Day" means any day other than a Saturday, Sunday or legal holiday in the State
observed as such by the City or the Trustee or any national holiday observed by the Trustee.
"Capitalized Interest Account" means the Account in the Bond Fund established pursuant
to Section 6.1 of this Indenture.
"Certification for Payment" means a certificate substantially in the form of Exhibit B to
the Construction, Funding and Acquisition Agreement or otherwise approved by the Developer
and a City Representative executed by a Person approved by a City Representative, delivered to
a City Representative and the Trustee specifying the amount of work performed related to the
Major Improvement Area Projects and the Actual Costs thereof, and requesting payment for such
Actual Costs from money on deposit in an account of the Project Fund as further described in the
Construction, Funding and Acquisition Agreement and Section 6.5 herein.
"City Order" means written instructions by the City, executed by a City Representative.
"City Representative" means that official or agent of the City authorized by the City
Council to undertake the action referenced herein.
"Code" means the Internal Revenue Code of 1986, as amended, including applicable
regulations, published rulings and court decisions.
"Comptroller" means the Comptroller of Public Accounts of the State.
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"Construction, Funding and Acquisition Agreement" means the "Sherley Tract Public
Improvement District No. 2 Major Improvement Area Construction, Funding and Acquisition
Agreement" by and between the City and the Developer dated as of July 27, 2021, which
provides, in part, for the deposit of proceeds from the issuance and sale of the Bonds and the
payment of costs of Major Improvement Area Projects within the District, the issuance of bonds,
and other matters related thereto.
"Costs of Issuance Account" means the Account in the Project Fund established pursuant
to Section 6.1 of this Indenture.
"Defeasance Securities" means Investment Securities then authorized by applicable law
for the investment of funds to defease public securities.
"Delinquency and Prepayment Reserve Account" means the reserve account administered
by the City and segregated from other funds of the City and established by Section 6.1 of this
Indenture.
"Delinquency and Prepayment Reserve Requirement" means an amount equal to 3.15%
of the principal amount of the Outstanding Bonds to be funded from Assessment Revenues
deposited to the Pledged Revenue Fund.
"Delinquent Collection Costs" means, for a Parcel, interest, penalties and other costs and
expenses that are authorized by the PID Act and by the Assessment Ordinance and that directly
or indirectly relate to the collection of delinquent Assessments, delinquent Annual Installments,
or any other delinquent amounts due under the Service and Assessment Plan, including costs and
expenses related to the foreclosure of liens.
"Delivery Date" means August 16, 2021, which is the date of delivery of the Bonds to the
initial purchaser or purchasers thereof against payment therefor.
"Designated Payment/Transfer Office" means (i) with respect to the initial Paying
Agent/Registrar named in this Indenture, the transfer/payment office designated by the Paying
Agent/Registrar, which shall initially be located in Houston, Texas, and (ii) with respect to any
successor Paying Agent/Registrar, the office of such successor designated and located as may be
agreed upon by the City and such successor.
"Developer" means MM Anna 325, LLC, a Texas limited company, and any successor
thereto.
"DTC" means The Depository Trust Company of New York, New York, or any successor
securities depository.
"DTC Participant" means brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities transactions among DTC Participants.
"Foreclosure Proceeds" means the proceeds, including interest and penalty interest,
received by the City from the enforcement of the Assessments against any Assessed Property,
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whether by foreclosure of lien or otherwise, but excluding and net of all Delinquent Collection
Costs.
"Fund", in the singular, means any of the funds established pursuant to Section 6.1 of this
Indenture, and "Funds", in the plural, means, collectively, all of the funds established pursuant to
Section 6.1 of this Indenture.
"Future Improvement Area" means a distinct portion of the Major Improvement Area that
may be developed in a phase, as a separate and distinct Improvement Areas, after Improvement
Area #1.
"Future Improvement Area Assessed Property" means any and all Parcels within a Future
Improvement Area other than Non -Benefited Property and as shown on an assessment roll
against which a Future Improvement Area Assessment relating to the Future Improvement Area
Improvements is levied.
"Future Improvement Area Assessment" means the assessments levied on Future
Improvement Area Assessed Property within a Future Improvement Area to fund Future
Improvement Area Improvements. The Future Improvement Area Assessments are not a part of
the Trust Estate, are not security for the Bonds and will not be used to finance construction of the
Major Improvement Area Projects.
"Future Improvement Area Bonds" means bonds, notes or other obligations issued or
incurred to fund Future Improvement Area Improvements (or a portion thereof) in a Future
Improvement Area secured by Future Improvement Area Assessments levied against the Future
Improvement Area Assessed Property located within the Future Improvement Area benefitting
from the Future Improvement Area Improvements being financed.
"Future Improvement Area Improvements" means the Authorized Improvements which
only benefit the Future Improvement Areas and will be described in the Service and Assessment
Plan.
"Future Improvement Area Value to Lien Ratio" means the ratio of the appraised value of
a specific assessed parcel or assessed parcels, as applicable, in a Future Improvement Area,
based on an Independent Appraisal, to the Future Improvement Area Assessments levied or to be
levied on a specific parcel or parcels, as applicable, within such Future Improvement Area.
"Improvement Area" means specifically defined and designated portions of the District
that are developed in phases.
"Improvement Area #1" means that portion of the District generally described in
Section II of the Service and Assessment Plan and generally shown in Exhibit A-1 to the Service
and Assessment Plan and as specifically described in Exhibit A-2 to the Service and Assessment
Plan.
N.
"Improvement Area #1 Bonds" means those certain "City of Anna, Texas Special
Assessment Revenue Bonds, Series 2021 (Sherley Tract Public Improvement District No. 2
Improvement Area #1 Project)".
"Indenture" means this Indenture of Trust as originally executed or as it may be from
time to time supplemented or amended by one or more indentures supplemental hereto and
entered into pursuant to the applicable provisions hereof.
"Independent Appraisal" means, in establishing the appraised value, (i) the appraised
value of a specific assessed parcel or assessed parcels, as applicable, in a specific Future
Improvement Area for which the Future Improvement Area Bonds are to be issued as established
by publicly available data from the Collin Central Appraisal District, (ii) the Collin Central
Appraisal District Chief Appraiser's estimated assessed valuation for completed homes (home
and lot assessed valuation) and estimated lot valuation for lots on which homes are under
construction, (iii) an "as -complete" appraisal delivered by an independent appraiser licensed in
the State of Texas, which appraisal shall assume completion of the Future Improvement Area
Improvements to be funded with the Future Improvement Area Bonds, (iv) a certificate delivered
to the City by a qualified independent third party (which party may be the Administrator or a
licensed appraiser) certifying on an individual lot type basis, the value of each lot in the Future
Improvement Area, as applicable, for which such Future Improvement Area Bonds are to be
issued based on either (x) the average gross sales price (which is the gross amount including
escalations and reimbursements due to the seller of the lots) for each lot type based on closings
of lots in the Future Improvement Area for which such Future Improvement Area Bonds are to
be issued or any preceding Improvement Areas of the District for which bonds have been issued
to fund Authorized Improvements or (y) the sales price in the actual lot purchase contracts in the
Future Improvement Area for which the Future Improvement Area Bonds are to be issued.
"Independent Financial Consultant" means any consultant or firm of such consultants
appointed by the City who, or each of whom: (i) is judged by the City, as the case may be, to
have experience in matters relating to the issuance and/or administration of the Bonds; (ii) is in
fact independent and not under the domination of the City; (iii) does not have any substantial
interest, direct or indirect, with or in the City, or any owner of real property in the District, or any
real property in the District; and (iv) is not connected with the City as an officer or employee of
the City, but who may be regularly retained to make reports to the City.
"Initial Bonds" means the Initial Bonds authorized by Section 5.2 of this Indenture.
"Interest Payment Date" means the date or dates upon which interest on the Bonds is
scheduled to be paid until their respective dates of maturity or prior redemption, such dates being
on March 15 and September 15 of each year, commencing March 15, 2022.
"Investment Securities" means those authorized investments described in the Public
Funds Investment Act, Chapter 2256, Government Code, as amended, which investments are, at
the time made, included in and authorized by the City's official investment policy as approved
by the City Council from time to time. Such Investment Securities may include money market
funds that are rated in either of the two highest categories by a rating agency, including funds for
which the Trustee and/or its affiliates provide investment advisory or other management
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services; provided that such money market funds are authorized investments described in the
Public Funds Investment Act, Chapter 2256, Government Code, as amended.
"Major Improvement Area Bond Improvement Account" means the Account in the Project
Fund established pursuant to Section 6.1 of this Indenture.
"Major Improvement Area" means that portion of the District generally described in
Section II of the Service and Assessment Plan and generally shown in Exhibit A-3 to the Service
and Assessment Plan and as specifically described in Exhibit A-3 to the Service and Assessment
Plan and in Exhibit A to this Indenture.
"Major Improvement Area Project Costs" means the Actual Costs, as defined in the
Service and Assessment Plan (excluding Annual Collection Costs), solely for the Major
Improvement Area Projects, as such amounts are set forth in the Service and Assessment Plan.
"Major Improvement Area Projects" means the pro rata portion of the Major
Improvements allocable to the Major Improvement Area.
"Major Improvements" means the Authorized Improvements that confer special benefit to
the entire District, and as further described in Section III.A and depicted on Exhibit G-2 to the
Service and Assessment Plan.
"Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond
Year after the calculation is made through the final maturity date of any Outstanding Bonds.
"Outstanding" means, as of any particular date when used with reference to Bonds, all
Bonds authenticated and delivered under this Indenture except (i) any Bond that has been
canceled by the Trustee (or has been delivered to the Trustee for cancellation) at or before such
date, (ii) any Bond for which the payment of the principal or Redemption Price of and interest on
such Bond shall have been made as provided in Article IV, (iii) any Bond in lieu of or in
substitution for which a new Bond shall have been authenticated and delivered pursuant to
Section 3.10 and (iv) Bond alleged to have been mutilated, destroyed, lost or stolen which have
been paid as provided in this Indenture.
"Owner" means the Person who is the registered owner of a Bond or Bonds, as shown in
the Register, which shall be Cede & Co., as nominee for DTC, so long as the Bonds are in book -
entry only form and held by DTC as securities depository in accordance with Section 3.11.
"Parcel" or "Parcels" means a parcel or parcels within the District identified by either a
tax map identification number assigned by the Collin Central Appraisal District for real property
tax purposes or by lot and block number in a final subdivision plat recorded in the real property
records of Collin County.
"Paying Agent/Registrar" means initially the Trustee, or any successor thereto as
provided in this Indenture.
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"Person" or "Persons" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PID Bonds" means any bonds issued by the City in one or more series and secured in
whole or in part by an assessment levied against a parcel within the District and imposed
pursuant to an assessment ordinance and the provisions in the Service and Assessment Plan,
including the Bonds, any Refunding Bonds, the Improvement Area #1 Bonds and any Future
Improvement Area Bonds, if any.
"Pledged Funds" means, collectively, the Pledged Revenue Fund, the Bond Fund, the
Project Fund (excluding the Developer Improvement Account), the Reserve Fund and the
Redemption Fund.
"Pledged Revenue Fund" means that fund established pursuant to Section 6.1 and
administered pursuant to Section 6.3 of this Indenture.
"Pledged Revenues" means, collectively, the (i) Assessment Revenues (excluding the
portion of the Assessments and Annual Installments collected for the payment of Annual
Collection Costs and Delinquent Collection Costs, as set forth in the Service and Assessment
Plan), (ii) the moneys held in any of the Pledged Funds and (iii) any additional revenues that the
City may pledge to the payment of the Bonds.
"Prepayment" means the payment of all or a portion of an Assessment before the due date
thereof. Amounts received at the time of a Prepayment which represent a payment of principal,
interest or penalties on a delinquent installment of an Assessment are not to be considered a
Prepayment, but rather are to be treated as the payment of the regularly scheduled Assessment.
"Principal and Interest Account" means the Account in the Bond Fund established
pursuant to Section 6.1 of this Indenture.
"Project Fund" means that fund established pursuant to Section 6.1 and administered
pursuant to Section 6.5.
"Purchaser" means the initial purchaser of the Bonds.
"Rebatable Arbitrage" means rebatable arbitrage as defined in Section 1.148-3 of the
Treasury Regulations.
"Rebate Fund" means that fund established pursuant to Section 6.1 and administered
pursuant to Section 6.8.
"Record Date" means the close of business on the last Business Day of the month next
preceding an Interest Payment Date.
"Redemption Fund" means that fund established pursuant to Section 6.1 and administered
pursuant to Section 6.6.
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"Redemption Price" means, when used with respect to any Bond or portion thereof, the
principal amount of such Bond or such portion thereof plus the applicable premium, if any, plus
accrued and unpaid interest on such Bond to the date fixed for redemption payable upon
redemption thereof pursuant to this Indenture.
"Refunding Bonds" means bonds issued to refund all or any portion of the Outstanding
Bonds and secured by a parity lien with the Outstanding Bonds on the Pledged Revenues, as
more specifically described in the Supplemental Indenture authorizing such Refunding Bonds.
"Register" means the register specified in Article III of this Indenture.
"Reimbursement Agreement" means the PID Reimbursement Agreement Sherley Tract
Public Improvement District No. 2 by and between the City and the Developer, dated July 27,
2021, as may be amended and/or supplemented from time to time, which provides, in part, for
the construction and maintenance of the Major Improvement Area Projects, the issuance of the
Bonds, the payment or reimbursement of costs of Major Improvement Area Projects not paid
from the Project Fund, and other matters related thereto.
"Reserve Account" means the Account in the Reserve Fund established pursuant to
Section 6.1 of this Indenture.
"Reserve Fund" means that fund established pursuant to Section 6.1 and administered
pursuant to Section 6.7.
"Reserve Fund Obligations" means cash or Investment Securities.
"Reserve Account Requirement" means the least of. (i) Maximum Annual Debt Service
on the Bonds as of the date of issuance, (ii) 125% of average Annual Debt Service on the Bonds
as of the date of issuance, and (iii) 10% of the proceeds of the Bonds; provided, however, that
such amount shall be reduced by the amount of any transfers made pursuant to Section 6.7(c);
and provided further that as a result of (1) an optional redemption pursuant to Section 4.3 or (2)
an extraordinary optional redemption pursuant to Section 4.4, the Reserve Account Requirement
shall be reduced by a percentage equal to the pro rata principal amount of Bonds redeemed by
such redemption divided by the total principal amount of the Outstanding Bonds prior to such
redemption. As of the Delivery Date, the Reserve Account Requirement is $198,230.00 which is
an amount equal to the Reserve Account Requirement defined above.
"Service and Assessment Plan" means the document, including the Assessment Roll,
which is attached as Exhibit F-1 to the Service and Assessment Plan attached as EXHIBIT A to
the Assessment Ordinance, as may be updated, amended and supplemented from time to time,
including, without limitation, in connection with the incurrence or issuance of Future
Improvement Area Bonds.
"Sinking Fund Installment" means the amount of money to redeem or pay at maturity the
principal of a Stated Maturity of Bonds payable from such installments at the times and in the
amounts provided in Section 4.2.
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"Special Record Date" has the meaning set forth in in the form of Bond included in
Section 5.2 hereof.
"State" means the State of Texas.
"Stated Maturity" means the date the Bonds, or any portion of the Bonds, as applicable,
are scheduled to mature without regard to any redemption or Prepayment.
"Supplemental Indenture" means an indenture which has been duly executed by the
Trustee and a City Representative pursuant to an ordinance adopted by the City Council and
which indenture amends or supplements this Indenture, but only if and to the extent that such
indenture is specifically authorized hereunder.
"Treasury Regulations" shall have the meaning assigned to such term in Section 7.5(c).
"Trust Estate" means the Trust Estate described in the granting clauses of this Indenture,
and the Trust Estate shall only include Pledged Revenues related to the Assessments levied on
the Assessed Property within the Major Improvement Area for the Major Improvement Area
Projects, unless the City pledges additional revenues to the payment of the Bonds, which
additional pledge may only be created in a Supplemental Indenture.
"Trustee" means Regions Bank, an Alabama state banking corporation with offices in
Houston, Texas, in its capacity as trustee hereunder, and its successors, and any other corporation
or association that may at any time be substituted in its place, as provided in Article IX, such
entity to serve as Trustee and Paying Agent/Registrar for the Bonds.
"Value of Investment Securities" means the amortized value of any Investment Securities,
provided, however, that all United States of America, United States Treasury Obligations — State
and Local Government Series shall be valued at par and those obligations which are redeemable
at the option of the holder shall be valued at the price at which such obligations are then
redeemable. The computations shall include accrued interest on the investment securities paid as
a part of the purchase price thereof and not collected. For the purposes of this definition
"amortized value," when used with respect to a security purchased at par means the purchase
price of such security and when used with respect to a security purchased at a premium above or
discount below par, means as of any subsequent date of valuation, the value obtained by dividing
the total premium or discount by the number of interest payment dates remaining to maturity on
any such security after such purchase and by multiplying the amount as calculated by the number
of interest payment dates having passed since the date of purchase and (i) in the case of a
security purchased at a premium, by deducting the product thus obtained from the purchase
price, and (ii) in the case of a security purchased at a discount, by adding the product thus
obtained to the purchase price.
"Value to Lien Ratio" means the ratio of the appraised value of a specific assessed parcel
or assessed parcels, as applicable, in a Future Improvement Area, based on an Independent
Appraisal, to the sum of (i) the Future Improvement Area Assessments levied or to be levied on a
specific parcel or parcels, as applicable, within such Future Improvement Area and (ii) the
outstanding Assessments levied on such parcel or parcels, as applicable, within such Future
Improvement Area.
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Section 1.2. Findings.
The declarations, determinations and findings declared, made and found in the preamble
to this Indenture are hereby adopted, restated and made a part of the operative provisions hereof.
Section 1.3. Table of Contents, Titles and Headings.
The table of contents, titles, and headings of the Articles and Sections of this Indenture
have been inserted for convenience of reference only and are not to be considered a part hereof
and shall not in any way modify or restrict any of the terms or provisions hereof and shall never
be considered or given any effect in construing this Indenture or any provision hereof or in
ascertaining intent, if any question of intent should arise.
Section 1.4. Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall be
construed to include correlative words of the feminine and neuter genders and vice versa, and
words of the singular number shall be construed to include correlative words of the plural
number and vice versa.
(b) Words importing persons include any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust, unincorporated
organization or government or agency or political subdivision thereof.
(c) Any reference to a particular Article or Section shall be to such Article or Section
of this Indenture unless the context shall require otherwise.
(d) This Indenture and all the terms and provisions hereof shall be liberally construed
to effectuate the purposes set forth herein to sustain the validity of this Indenture.
ARTICLE II
THE BONDS
Section 2.1. Security for the Bonds.
(a) The Bonds, as to principal, interest and redemption premium, if any, are and shall
be equally and ratably secured by and payable from a first lien on and pledge of the Trust Estate.
(b) The lien on and pledge of the Trust Estate shall be valid and binding and fully
perfected from and after the Delivery Date without physical delivery or transfer of control of the
Trust Estate, the filing of this Indenture or any other act; all as provided in Chapter 1208 of the
Texas Government Code, as amended, which applies to the issuance of the Bonds and the pledge
of the Trust Estate granted by the City under this Indenture, and such pledge is therefore valid,
effective and perfected. If State law is amended at any time while the Bonds are Outstanding
such that the pledge of the Trust Estate granted by the City under this Indenture is to be subject
to the filing requirements of Chapter 9, Business and Commerce Code, then in order to preserve
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to the registered owners of the Bonds the perfection of the security interest in said pledge, the
City agrees to take such measures as it determines are reasonable and necessary under State law
to comply with the applicable provisions of Chapter 9, Business and Commerce Code and enable
a filing to perfect the security interest in said pledge to occur.
Section 2.2. Limited Obligations.
The Bonds are special and limited obligations of the City, payable solely from and
secured solely by the Trust Estate, including the Pledged Revenues; and the Bonds shall never be
payable out of funds raised or to be raised by taxation or from any other revenues, properties or
income of the City.
Section 2.3. Authorization for Indenture.
The terms and provisions of this Indenture and the execution and delivery hereof by the
City to the Trustee have been duly authorized by official action of the City Council. The City has
ascertained and it is hereby determined and declared that the execution and delivery of this
Indenture is necessary to carry out and effectuate the purposes set forth in the preambles of this
Indenture and that each and every covenant or agreement herein contained and made is
necessary, useful and/or convenient in order to better secure the Bonds and is a contract or
agreement necessary, useful and/or convenient to carry out and effectuate the purposes herein
described.
Section 2.4. Contract with Owners and Trustee.
(a) The purposes of this Indenture are to establish a lien and the security for, and to
prescribe the minimum standards for the authorization, issuance, execution and delivery of, the
Bonds and to prescribe the rights of the Owners, and the rights and duties of the City and the
Trustee.
(b) In consideration of the purchase and acceptance of any or all of the Bonds by
those who shall purchase and hold the same from time to time, the provisions of this Indenture
shall be a part of the contract of the City with the Owner, and shall be deemed to be and shall
constitute a contract among the City, the Owners, and the Trustee.
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE
BONDS
Section 3.1. Authorization.
The Bonds are hereby authorized to be issued and delivered in accordance with the
Constitution and laws of the State, including particularly the PID Act. The Bonds shall be issued
in the aggregate principal amount of $2,896,000 for the purpose of (i) paying a portion of the
Major Improvement Area Project Costs, (ii) paying a portion of the interest on the Bonds during
and after the period of acquisition and construction of the Major Improvement Area Projects, (iii)
funding a reserve fund for payment of principal and interest on the Bonds, (iv) paying a portion
15
of the costs incidental to the organization of the District, and (v) paying the costs of issuance of
the Bonds.
Section 3.2. Date, Denomination, Maturities, Numbers and Interest.
(a) The Bonds shall be dated the Delivery Date and shall be issued in Authorized
Denominations. The Bonds shall be in fully registered form, without coupons, and shall be
numbered separately from R-1 upward, except the Initial Bond, which shall be numbered T-1.
(b) Interest shall accrue and be paid on each Bond from the later of the Delivery Date
or the most recent Interest Payment Date to which interest has been paid or provided for, at the
rate per annum set forth below until the principal thereof has been paid on the maturity date
specified below, or on a date of earlier redemption, or otherwise provided for. Such interest shall
be payable semiannually on March 15 and September 15 of each year, commencing March 15,
2022, computed on the basis of a 360-day year of twelve 30-day months.
(c) The Bonds shall mature on September 15 in the years and in the principal
amounts and shall bear interest at the rates set forth below:
Principal
Interest
Year Amount
Rate
2031 $ 514,000
4.500%
2051 2,382,000
5.000
(d) The Bonds shall be subject to mandatory sinking fund redemption, optional
redemption, and extraordinary optional redemption prior to maturity as provided in Article IV,
and shall otherwise have the terms, tenor, denominations, details, and specifications as set forth
in the form of Bond set forth in Section 5.2.
Section 3.3. Conditions Precedent to Delivery of Bonds.
The Bonds shall be executed by the City and delivered to the Trustee, whereupon the
Trustee shall authenticate the Bonds and, upon payment of the purchase price of the Bonds, shall
deliver the Bonds upon the order of the City, but only upon delivery to the Trustee of:
(a) a certified copy of the Assessment Ordinance;
(b) a certified copy of the Bond Ordinance;
(c) a copy of the executed Construction, Funding and Acquisition Agreement with all
executed amendments thereto;
(d) a copy of this Indenture executed by the Trustee and the City;
(e) an executed City Order directing the authentication and delivery of the Bonds,
describing the Bonds to be authenticated and delivered, designating the purchasers to whom the
Bonds are to be delivered, stating the purchase price of the Bonds and stating that all items
required by this Section are therewith delivered to the Trustee;
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(f) an executed Signature and No -Litigation Certificate;
(g) an executed opinion of Bond Counsel; and
(h) the approving opinion of the Attorney General of the State and the State
Comptroller's registration certificate.
Section 3.4. Medium, Method and Place of Payment.
(a) Principal of and interest on the Bonds shall be paid in lawful money of the United
States of America, as provided in this Section.
(b) Interest on the Bonds shall be payable to the Owners thereof as shown in the
Register at the close of business on the relevant Record Date or Special Record Date, as
applicable.
(c) Interest on the Bonds shall be paid by check, dated as of the Interest Payment
Date, and sent, first class United States mail, postage prepaid, by the Paying Agent/Registrar to
each Owner at the address of each as such appears in the Register or by such other customary
banking arrangement acceptable to the Paying Agent/Registrar and the Owner; provided,
however, the Owner shall bear all risk and expense of such other banking arrangement.
(d) The principal of each Bond shall be paid to the Owner of such Bond on the due
date thereof, whether at the maturity date or the date of prior redemption thereof, upon
presentation and surrender of such Bond at the Designated Payment/Transfer Office of the
Paying Agent/Registrar.
(e) If the date for the payment of the principal of or interest on the Bonds shall be a
Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the
Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or
authorized by law or executive order to close, the date for such payment shall be the next
succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking
institutions are required or authorized to close, and payment on such date shall for all purposes
be deemed to have been made on the due date thereof as specified in Section 3.2 of this
Indenture.
(f) Unclaimed payments of amounts due hereunder shall be segregated in a special
account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the
Owner of the Bonds to which such unclaimed payments pertain. Subject to any escheat,
abandoned property, or similar law of the State, any such payments remaining unclaimed by the
Owners entitled thereto for three (3) years after the applicable payment or redemption date shall
be applied to the next payment or payments on the Bonds thereafter coming due and, to the
extent any such money remains after the retirement of all Outstanding Bonds, shall be paid to the
City to be used for any lawful purpose. Thereafter, none of the City, the Paying Agent/Registrar,
or any other Person shall be liable or responsible to any holders of such Bonds for any further
payment of such unclaimed moneys or on account of any such Bonds, subject to any applicable
escheat law or similar law of the State.
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Section 3.5. Execution and Registration of Bonds.
(a) The Bonds shall be executed on behalf of the City by the Mayor and City
Secretary, by their manual or facsimile signatures, and the official seal of the City shall be
impressed or placed in facsimile thereon such facsimile signatures on the Bonds shall have the
same effect as if each of the Bonds had been signed manually and in person by each of said
officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of
the City had been manually impressed upon each of the Bonds.
(b) In the event that any officer of the City whose manual or facsimile signature
appears on the Bonds ceases to be such officer before the authentication of such Bonds or before
the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient
for all purposes as if such officer had remained in such office.
(c) Except as provided below, no Bond shall be valid or obligatory for any purpose or
be entitled to any security or benefit of this Indenture unless and until there appears thereon the
Certificate of Trustee substantially in the form provided herein, duly authenticated by manual
execution by an officer or duly authorized signatory of the Trustee. It shall not be required that
the same officer or authorized signatory of the Trustee sign the Certificate of Trustee on all of
the Bonds. In lieu of the executed Certificate of Trustee described above, the Initial Bond
delivered on the Delivery Date shall have attached thereto the Comptroller's Registration
Certificate substantially in the form provided herein, manually executed by the Comptroller, or
by his duly authorized agent, which certificate shall be evidence that the Initial Bond has been
duly approved by the Attorney General, is a valid and binding obligation of the City, and has
been registered by the Comptroller.
(d) On the Delivery Date, one Initial Bond representing the entire principal amount of
all Bonds, payable in stated installments to the Purchaser, or its designee, executed with the
manual or facsimile signatures of the Mayor and the City Secretary, approved by the Attorney
General, and registered and manually signed by the Comptroller, will be delivered to the
Purchaser or its designee. Upon payment for the Initial Bond, the Trustee shall cancel the Initial
Bond and deliver to DTC on behalf of the Purchaser one registered definitive Bond for each year
of maturity of the Bonds, in the aggregate principal amount of all Bonds for such maturity,
registered in the name of Cede & Co., as nominee of DTC.
Section 3.6. Refunding Bonds.
(a) Except in accordance with the provisions of this Indenture, including Section
13.2, the City shall not issue additional bonds, notes or other obligations payable from any
portion of the Trust Estate, other than Refunding Bonds. The City reserves the right to issue
Refunding Bonds, the proceeds of which would be utilized to refund all or any portion of the
Outstanding Bonds or Outstanding Refunding Bonds and to pay all costs incident to the
Refunding Bonds, as authorized by the laws of the State of Texas. Except as limited by the
terms of this Indenture, including Section 13.2, the City reserves the right to incur debt payable
from sources other than the Trust Estate, including revenue derived from contracts with other
entities, including private corporations, municipalities and political subdivisions issued
particularly for the purchase, construction, improvement, extension, replacement, enlargement or
repair of the facilities needed in performing any such contract.
(b) The principal of all Refunding Bonds must be scheduled to be paid, be subject to
mandatory sinking fund redemption or mature on September 15 of the years in which such
principal is scheduled to be paid. All Refunding Bonds must bear interest at a fixed rate and any
interest payment dates for Refunding Bonds must be March 15 and September 15. The date, rate
or rates of interest on, interest payment dates, maturity dates, redemption and all other terms and
provisions of Refunding Bonds shall be set forth in a Supplemental Indenture.
(c) Upon their authorization by the City, the Refunding Bonds of a series issued
under this Section 3.6 and in accordance with Article IV hereof shall be issued and shall be
delivered to the purchasers or owners thereof, but before, or concurrently with, the delivery of
said Refunding Bonds to such purchasers or owners there shall have been filed with the Trustee
the items required by Section 3.3 above.
Section 3.7. Ownership.
(a) The City, the Trustee, the Paying Agent/Registrar and any other Person may treat
the Person in whose name any Bond is registered as the absolute owner of such Bond for the
purpose of making and receiving payment as provided herein (except interest shall be paid to the
Person in whose name such Bond is registered on the Record Date or Special Record Date, as
applicable) and for all other purposes, whether or not such Bond is overdue, and none of the
City, the Trustee or the Paying Agent/Registrar shall be bound by any notice or knowledge to the
contrary.
(b) All payments made to the Owner of any Bond shall be valid and effectual and
shall discharge the liability of the City, the Trustee and the Paying Agent/Registrar upon such
Bond to the extent of the sums paid.
Section 3.8. Registration, Transfer and Exchange.
(a) So long as any Bond remains outstanding, the City shall cause the Paying
Agent/Registrar to keep at the Designated Payment/Transfer Office a Register in which, subject
to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for
the registration and transfer of Bonds in accordance with this Indenture. The Paying
Agent/Registrar represents and warrants that it will maintain a copy of the Register, and shall
cause the Register to be current with all registration and transfer information as from time to time
may be applicable.
(b) A Bond shall be transferable only upon the presentation and surrender thereof at
the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or
other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any
Bond shall be effective until entered in the Register.
(c) The Bonds shall be exchangeable upon the presentation and surrender thereof at
the Designated Payment/Transfer Office of the Paying Agent/Registrar for a Bond or Bonds of
the same maturity and interest rate and in any Authorized Denomination and in an aggregate
19
principal amount equal to the unpaid principal amount of the Bond presented for exchange. The
Trustee is hereby authorized to authenticate and deliver Bonds exchanged for other Bonds in
accordance with this Section.
(d) The Trustee is hereby authorized to authenticate and deliver Bonds transferred or
exchanged in accordance with this Section. A new Bond or Bonds will be delivered by the
Paying Agent/Registrar, in lieu of the Bond being transferred or exchanged, at the Designated
Payment/Transfer Office, or sent by United States mail, first class, postage prepaid, to the Owner
or his designee. Each transferred Bond delivered by the Paying Agent/Registrar in accordance
with this Section shall constitute an original contractual obligation of the City and shall be
entitled to the benefits and security of this Indenture to the same extent as the Bond or Bonds in
lieu of which such transferred Bond is delivered.
(e) Each exchange Bond delivered in accordance with this Section shall constitute an
original contractual obligation of the City and shall be entitled to the benefits and security of this
Indenture to the same extent as the Bond or Bonds in lieu of which such exchange Bond is
delivered.
(f) No service charge shall be made to the Owner for the initial registration,
subsequent transfer, or exchange for a different denomination of any of the Bonds. The Paying
Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or
other governmental charge that is authorized to be imposed in connection with the registration,
transfer, or exchange of a Bond.
(g) Neither the City nor the Paying Agent/Registrar shall be required to issue,
transfer, or exchange any Bond or portion thereof called for redemption prior to maturity within
forty-five (45) days prior to the date fixed for redemption; provided, however, such limitation
shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Bond.
Section 3.9. Cancellation.
All Bonds paid or redeemed before scheduled maturity in accordance with this Indenture,
and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and
delivered in accordance with this Indenture, shall be cancelled, and proper records shall be made
regarding such payment, redemption, exchange, or replacement. Whenever in this Indenture
provision is made for the cancellation by the Trustee of any Bonds, the Trustee shall dispose of
cancelled Bonds in accordance with its record retention policies.
Section 3.10. Temporary Bonds.
(a) Following the delivery and registration of the Initial Bond and pending the
preparation of definitive Bonds, the proper officers of the City may execute and, upon the City's
request, the Trustee shall authenticate and deliver, one or more temporary Bonds that are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Bonds in lieu of which they are delivered, without
coupons, and with such appropriate insertions, omissions, substitutions and other variations as
the officers of the City executing such temporary Bonds may determine, as evidenced by their
signing of such temporary Bonds.
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(b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall
be entitled to the benefit and security of this Indenture.
(c) The City, without unreasonable delay, shall prepare, execute and deliver to the
Trustee the Bonds in definitive form; thereupon, upon the presentation and surrender of the Bond
or Bonds in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall
cancel the Bonds in temporary form and the Trustee shall authenticate and deliver in exchange
therefor a Bond or Bonds of the same maturity and series, in definitive form, in the Authorized
Denomination, and in the same aggregate principal amount, as the Bond or Bonds in temporary
form surrendered. Such exchange shall be made without the making of any charge therefor to
any Owner.
Section 3.11. Replacement Bonds.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated
Bond, the Trustee shall authenticate and deliver in exchange therefor a replacement Bond of like
tenor and principal amount, bearing a number not contemporaneously outstanding. The City or
the Paying Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover
any tax or other governmental charge that is authorized to be imposed in connection therewith
and any other expenses connected therewith.
(b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the
Trustee, pursuant to the applicable laws of the State and in the absence of notice or knowledge
that such Bond has been acquired by a bona fide purchaser, shall authenticate and deliver a
replacement Bond of like tenor and principal amount bearing a number not contemporaneously
outstanding, provided that the Owner first complies with the following requirements:
(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her
ownership of and the circumstances of the loss, destruction or theft of such Bond;
(ii) furnishes such security or indemnity as may be required by the Paying
Agent/Registrar and the Trustee to save them and the City harmless;
(iii) pays all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Trustee and the Paying Agent/Registrar
and any tax or other governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the City and the
Trustee.
(c) After the delivery of such replacement Bond, if a bona fide purchaser of the
original Bond in lieu of which such replacement Bond was issued presents for payment such
original Bond, the City and the Paying Agent/Registrar shall be entitled to recover such
replacement Bond from the Person to whom it was delivered or any Person taking therefrom,
except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost, or expense incurred by the City, the
Paying Agent/Registrar or the Trustee in connection therewith.
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(d) In the event that any such mutilated, lost, apparently destroyed or wrongfully
taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its
discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and
payable or may pay such Bond when it becomes due and payable.
(e) Each replacement Bond delivered in accordance with this Section shall constitute
an original additional contractual obligation of the City and shall be entitled to the benefits and
security of this Indenture to the same extent as the Bond or Bonds in lieu of which such
replacement Bond is delivered.
Section 3.12. Book -Entry -Only System.
(a) The Bonds shall initially be issued in book -entry -only form and shall be deposited
with DTC, which is hereby appointed to act as the securities depository therefor, in accordance
with the blanket issuer letter of representations from the City to DTC. On the Delivery Date, the
definitive Bonds shall be issued in the form of a single typewritten certificate for each maturity
thereof registered in the name of Cede & Co., as nominee for DTC.
(b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC,
the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC
Participant or to any Person on behalf of whom such a DTC Participant holds an interest in the
Bonds. Without limiting the immediately preceding sentence, the City and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the
records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in
the Bonds, (ii) the delivery to any DTC Participant or any other Person, other than an Owner, as
shown on the Register, of any notice with respect to the Bonds, including any notice of
redemption, or (iii) the payment to any DTC Participant or any other Person, other than an
Owner, as shown in the Register of any amount with respect to principal of, premium, if any, or
interest on the Bonds. Notwithstanding any other provision of this Indenture to the contrary, the
City and the Paying Agent/Registrar shall be entitled to treat and consider the Person in whose
name each Bond is registered in the Register as the absolute owner of such Bond for the purpose
of payment of principal of, premium, if any, and interest on Bonds, for the purpose of giving
notices of redemption and other matters with respect to such Bond, for the purpose of registering
transfer with respect to such Bond, and for all other purposes whatsoever. The Paying
Agent/Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or
upon the order of the respective Owners as shown in the Register, as provided in this Indenture,
and all such payments shall be valid and effective to fully satisfy and discharge the City's
obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to
the extent of the sum or sums so paid. No Person other than an Owner, as shown in the Register,
shall receive a Bond certificate evidencing the obligation of the City to make payments of
amounts due pursuant to this Indenture. Upon delivery by DTC to the Paying Agent/Registrar of
written notice to the effect that DTC has determined to substitute a new nominee in place of
Cede & Co., and subject to the provisions in this Indenture with respect to interest checks or
drafts being mailed to the registered owner at the close of business on the Record Date or Special
Record Date, as applicable, the word "Cede & Co." in this Indenture shall refer to such new
nominee of DTC.
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Section 3.13. Successor Securities Depository: Transfer Outside Book -Entry -Only
System.
In the event that the City determines that DTC is incapable of discharging its
responsibilities described herein and in the blanket issuer letter of representations from the City
to DTC, the City shall (i) appoint a successor securities depository, qualified to act as such under
Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC
Participants of the appointment of such successor securities depository and transfer one or more
separate Bonds to such successor securities depository; or (ii) notify DTC and DTC Participants
of the availability through DTC of certificated Bonds and cause the Paying Agent/Registrar to
transfer one or more separate registered Bonds to DTC Participants having Bonds credited to
their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in
the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name
of the successor securities depository, or its nominee, or in whatever name or names Owners
transferring or exchanging Bonds shall designate, in accordance with the provisions of this
Indenture.
Section 3.14. Payments to Cede & Co.
Notwithstanding any other provision of this Indenture to the contrary, so long as any
Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect
to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such
Bonds shall be made and given, respectively, in the manner provided in the blanket letter of
representations from the City to DTC.
ARTICLE IV
REDEMPTION OF BONDS BEFORE MATURITY
Section 4.1. Limitation on Redemption.
The Bonds shall be subject to redemption before their scheduled maturity only as
provided in this Article IV.
Section 4.2. Mandatory Sinking Fund Redemption.
(a) The Bonds maturing on September 15 in each of the years 2031 and 2051
(collectively, the "Term Bonds"), are subject to mandatory sinking fund redemption prior to their
respective maturities and will be redeemed by the City in part at the Redemption Price from
moneys available for such purpose in the Principal and Interest Account of the Bond Fund
pursuant to Article VI, on the dates and in the respective sinking fund installments as set forth in
the following schedule:
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Term Bonds maturing September 15, 2031
Redemption Date
Sinking Fund Installment Amount
2024
$56,000
2025
58,000
2026
61,000
2027
63,000
2028
65,000
2029
68,000
2030
70,000
2031*
73,000
Term Bonds maturing September 15, 2051
Redemption Date
Sinking Fund Installment Amount
2032
$ 76,000
2033
79,000
2034
83,000
2035
86,000
2036
90,000
2037
94,000
2038
98,000
2039
103,000
2040
107,000
2041
112,000
2042
117,000
2043
123,000
2044
129,000
2045
135,000
2046
141,000
2047
147,000
2048
154,000
2049
162,000
2050
169,000
2051 *
177,000
atatea maturity.
(b) At least thirty (30) days prior to each mandatory sinking fund redemption date,
and subject to any prior reduction authorized by this Indenture, the Trustee shall select by lot, or
by any other customary method that results in a random selection, a principal amount of Bonds
of such maturity equal to the Sinking Fund Installment amount of such Bonds to be redeemed,
shall call such Bonds for redemption on such scheduled mandatory sinking fund redemption
date, and shall give notice of such mandatory sinking fund redemption, as provided in Section
4.6.
(c) The principal amount of Bonds required to be redeemed on any mandatory
sinking fund redemption date pursuant to subparagraph (a) of this Section 4.2 shall be reduced, at
the option of the City, by the principal amount of any Bonds of such maturity which, at least 30
24
days prior to the sinking fund redemption date shall have been acquired by the City at a price not
exceeding the principal amount of such Bonds plus accrued unpaid interest to the date of
purchase thereof, and delivered to the Trustee for cancellation.
(d) The Sinking Fund Installments of Term Bonds required to be redeemed on any
mandatory sinking fund redemption date pursuant to subparagraph (a) of this Section 4.2 shall be
reduced in integral multiples of $1,000 by any portion of such Bonds, which, at least 30 days
prior to the mandatory sinking fund redemption date, shall have been redeemed pursuant to the
optional redemption or extraordinary optional redemption provisions in Sections 4.3 and 4.4,
respectively, hereof, and not previously credited to a mandatory sinking fund redemption.
Section 4.3. Optional Redemption.
The City reserves the right and option to redeem Bonds before their scheduled maturity
date, in whole or in part, on any date on or after September 15, 2031, such redemption date or
dates to be fixed by the City, at the Redemption Price.
Section 4.4. Extraordinary Optional Redemption.
The City reserves the right and option to redeem Bonds before their respective scheduled
maturity dates, in whole or in part, on the fifteenth day of any month, at the Redemption Price,
from amounts on deposit in the Redemption Fund as a result of Prepayments (including related
transfers to the Redemption Fund as provided in Section 6.7(c)) or any other transfers to the
Redemption Fund under the terms of this Indenture.
Section 4.5. Partial Redemption.
(a) If less than all of the Bonds are to be redeemed pursuant to either Sections 4.3 or
4.4, Bonds shall be redeemed in increments of $1,000 by any method selected by the Trustee that
results in a random selection, provided that no redemption shall cause the principal amount of
any Bond to be less than the minimum Authorized Denomination for such Bond.
Notwithstanding the foregoing, if any Bonds are to be partially redeemed and such redemption
results in the redemption of a portion of a single Bond in an amount less than the Authorized
Denomination in effect at that time, a Bond in the principal amount equal to the unredeemed
portion, but not less than $1,000, may be issued, and notwithstanding any other provision of this
Indenture, such Bond may be assigned a CUSIP number. Each Bond shall be treated as
representing the number of Bonds that is obtained by dividing the principal amount of such Bond
by the minimum Authorized Denomination for such Bond.
(b) A portion of an Outstanding Bond of any one maturity may be redeemed, but only
in a principal amount equal to $1,000 or any integral thereof. If a portion of an Outstanding
Bond of a maturity is selected for redemption pursuant to subsection 4.5(a) hereof, the Trustee
shall select the Outstanding Bonds of such maturity to be redeemed by lot or in any manner
deemed fair by the Trustee. The Trustee shall treat each $1,000 portion of such Bond as though
it were a single Bond for purposes of selection for redemption. No redemption shall result in a
Bond in a denomination of less than an Authorized Denomination; provided, however, if the
amount of Outstanding Bonds is less than an Authorized Denomination after giving effect to
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such partial redemption, a Bond in the principal amount equal to the unredeemed portion, but not
less than $1,000, may be issued.
(c) Upon surrender of any Bond for redemption in part, the Trustee in accordance
with Section 3.7 of this Indenture, shall authenticate and deliver an exchange Bond or Bonds in
an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered, such
exchange being without charge.
Section 4.6. Notice of Redemption to Owners.
(a) Upon written direction from the City to the Trustee of the exercise of any
redemption provision provided hereunder, the Trustee shall give notice of any redemption of
Bonds by sending notice by first class United States mail, postage prepaid, not less than 30 days
before the date fixed for redemption, to the Owner of each Bond or portion thereof to be
redeemed, at the address shown in the Register.
(b) The notice shall state the redemption date, the Redemption Price, the place at
which the Bonds are to be surrendered for payment, and, if less than all the Bonds Outstanding
are to be redeemed, and subject to Section 4.5, an identification of the Bonds or portions thereof
to be redeemed, any conditions to such redemption and that on the redemption date, if all
conditions, if any, to such redemption have been satisfied, such Bond shall become due and
payable.
(c) Any notice given as provided in this Section shall be conclusively presumed to
have been duly given, whether or not the Owner receives such notice.
(d) With respect to any optional redemption of the Bonds, unless the Trustee has
received funds sufficient to pay the Redemption Price of the Bonds to be redeemed before giving
of a notice of redemption, the notice may state the City may condition redemption on the receipt
of such funds by the Trustee on or before the date fixed for the redemption, or on the satisfaction
of any other prerequisites set forth in the notice of redemption. If a conditional notice of
redemption is given and such prerequisites to the redemption and sufficient funds are not
received, the notice shall be of no force and effect, the City shall not redeem the Bonds and the
Trustee shall give notice, in the manner in which the notice of redemption was given, that the
Bonds have not been redeemed.
(e) The City has the right to rescind any optional redemption or extraordinary
optional redemption described in Section 4.3 or 4.4 by written notice to the Trustee on or prior to
the date fixed for redemption. Any notice of redemption shall be cancelled and annulled if for
any reason funds are not available on the date fixed for redemption for the payment in full of the
Bonds then called for redemption, and such cancellation shall not constitute an Event of Default
under this Indenture. Upon written direction from the City, the Trustee shall mail notice of
rescission of redemption in the same manner notice of redemption was originally provided.
Section 4.7. Payment Upon Redemption.
(a) The Trustee shall make provision for the payment of the Bonds to be redeemed on
such date by setting aside and holding in trust an amount from the Redemption Fund or
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otherwise received by the Trustee from the City and shall use such funds solely for the purpose
of paying the Redemption Price on the Bonds being redeemed.
(b) Upon presentation and surrender of any Bond called for redemption at the
designated corporate trust office of the Trustee on or after the date fixed for redemption, the
Trustee shall pay the Redemption Price on such Bond to the date of redemption from the moneys
set aside for such purpose.
Section 4.8. Effect of Redemption.
Notice of redemption having been given as provided in Section 4.6 of this Indenture, the
Bonds or portions thereof called for redemption shall become due and payable on the date fixed
for redemption provided that funds for the payment of the Redemption Price of such Bonds to
the date fixed for redemption are on deposit with the Trustee; thereafter, such Bonds or portions
thereof shall cease to bear interest from and after the date fixed for redemption, whether or not
such Bonds are presented and surrendered for payment on such date.
ARTICLE V
FORM OF THE BONDS
Section 5.1. Form Generally.
(a) The Bonds, including the Registration Certificate of the Comptroller, the
Certificate of the Trustee, and the Assignment to appear on each of the Bonds, (i) shall be
substantially in the form set forth in this Article with such appropriate insertions, omissions,
substitutions, and other variations as are permitted or required by this Indenture, and (ii) 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 any reproduction of an
opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the
officers executing such Bonds, as evidenced by their execution thereof.
(b) Any portion of the text of any Bonds may be set forth on the reverse side thereof,
with an appropriate reference thereto on the face of the Bonds.
(c) The definitive Bonds shall be typewritten, printed, lithographed, or engraved, and
may be produced by any combination of these methods or produced in any other similar manner,
all as determined by the officers executing such Bonds, as evidenced by their execution thereof.
(d) The Initial Bond submitted to the Attorney General may be typewritten and
photocopied or otherwise reproduced.
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Section 5.2. Form of the Bonds.
(a) Form of Bond.
NEITHER THE FAITH AND CREDIT NOR THE TAXING
POWER OF THE STATE OF TEXAS, THE CITY, OR ANY
OTHER POLITICAL CORPORATION, SUBDIVISION OR
AGENCY THEREOF, IS PLEDGED TO THE PAYMENT
OF THE PRINCIPAL OF OR INTEREST ON THIS BOND.
REGISTERED United States of America
NO. State of Texas
CITY OF ANNA, TEXAS
SPECIAL ASSESSMENT REVENUE BOND, SERIES 2021
(SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT
NO. 2 MAJOR IMPROVEMENT AREA PROJECT)
INTEREST RATE MATURITY DATE DELIVERY DATE
% September 15, 20_ , 2021
REGISTERED
CUSIP NUMBER
The City of Anna, Texas (the "City"), for value received, hereby promises to pay, solely
from the Trust Estate, to
or registered assigns, on the Maturity Date, as specified above, the sum of
DOLLARS
unless this Bond shall have been sooner called for redemption and the payment of the principal
hereof shall have been paid or provision for such payment shall have been made, and to pay
interest on the unpaid principal amount hereof from the later of the Delivery Date, as specified
above, or the most recent Interest Payment Date to which interest has been paid or provided for
until such principal amount shall have been paid or provided for, at the per annum rate of interest
specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest
to be paid semiannually on March 15 and September 15 of each year, commencing March 15,
2022.
Capitalized terms appearing herein that are defined terms in the Indenture (defined
below) have the meanings assigned to them in the Indenture. Reference is made to the Indenture
for such definitions and for all other purposes.
The principal of this Bond shall be payable without exchange or collection charges in
lawful money of the United States of America upon presentation and surrender of this Bond at
the corporate trust office in Houston, Texas (the "Designated Payment/Transfer Office"), of
Regions Bank, as trustee and paying agent/registrar (the "Trustee"), or, with respect to a
successor trustee and paying agent/registrar, at the Designated Payment/Transfer Office of such
successor. Interest on this Bond is payable by check dated as of the Interest Payment Date,
mailed by the Trustee to the registered owner at the address shown on the registration books kept
by the Trustee or by such other customary banking arrangements acceptable to the Trustee,
requested by, and at the risk and expense of, the Person to whom interest is to be paid. For the
purpose of the payment of interest on this Bond, the registered owner shall be the Person in
whose name this Bond is registered at the close of business on the "Record Date," which shall be
the last Business Day of the month next preceding such Interest Payment Date; provided,
however, that in the event of nonpayment of interest on a scheduled Interest Payment Date, and
for 30 days thereafter, a new record date for such interest payment (a "Special Record Date")
will be established by the Trustee, if and when funds for the payment of such interest have been
received from the City. Notice of the Special Record Date and of the scheduled payment date of
the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least
five Business Days prior to the Special Record Date by United States mail, first class postage
prepaid, to the address of each Owner of a Bond appearing on the books of the Trustee at the
close of business on the last Business Day preceding the date of mailing such notice.
If a date for the payment of the principal of or interest on the Bonds is a Saturday,
Sunday, legal holiday, or a day on which banking institutions in the city in which the Designated
Payment/Transfer Office is located are authorized by law or executive order to close, then the
date for such payment shall be the next succeeding Business Day, and payment on such date
shall have the same force and effect as if made on the original date payment was due.
This Bond is one of a duly authorized issue of assessment revenue bonds of the City
having the designation specified in its title (herein referred to as the 'Bonds"), dated as of the
Delivery Date and issued in the aggregate principal amount of $2,896,000 and issued, with the
limitations described herein, pursuant to an Indenture of Trust, dated as of August 1, 2021 (the
"Indenture"), by and between the City and the Trustee, to which Indenture reference is hereby
made for a description of the amounts thereby pledged and assigned, the nature and extent of the
lien and security, the respective rights thereunder to the holders of the Bonds, the Trustee, and
the City, and the terms upon which the Bonds are, and are to be, authenticated and delivered and
by this reference to the terms of which each holder of this Bond hereby consents. All Bonds
issued under the Indenture are equally and ratably secured by the amounts thereby pledged and
assigned. The Bonds are being issued for the purpose of (i) paying a portion of the Major
Improvement Area Project Costs, (ii) paying a portion of the interest on the Bonds during and
after the period of acquisition and construction of the Major Improvement Area Projects, (iii)
funding a reserve fund for payment of principal and interest on the Bonds, (iv) paying a portion
of the costs incidental to the organization of the District, and (v) paying the costs of issuance of
the Bonds.
The Bonds are special, limited obligations of the City payable solely from the Trust
Estate. Reference is hereby made to the Indenture, copies of which are on file with and available
upon request from the Trustee, for the provisions, among others, with respect to the nature and
extent of the duties and obligations of the City, the Trustee and the Owners. The Owner of this
Bond, by the acceptance hereof, is deemed to have agreed and consented to the terms, conditions
and provisions of the Indenture.
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IN THE INDENTURE, THE CITY HAS RESERVED THE RIGHT to issue Refunding
Bonds payable from and secured by a lien on and pledge of the sources described above on a
parity with this Bond.
Notwithstanding any provision hereof, the Indenture may be released and the obligation
of the City to make money available to pay this Bond may be defeased by the deposit of money
and/or certain direct or indirect Defeasance Securities sufficient for such purpose as described in
the Indenture.
The Bonds are issuable as fully registered bonds only in denominations of $100,000 and
any multiple of $1,000 in excess thereof ("Authorized Denominations"). Except to the extent
permitted by the Indenture, the City prohibits the breaking up or allocation of CUSIP numbers to
any Bond or Bonds in denominations of less than $100,000, and any attempt to do so will be
void and of no effect.
The Bonds maturing on September 15 in the years 2031 and 2051 (collectively, "Term
Bonds"), are subject to mandatory sinking fund redemption prior to their respective maturities
and will be redeemed by the City in part at the Redemption Price from moneys available for such
purpose in the Principal and Interest Account of the Bond Fund pursuant to Article VI of the
Indenture, on the dates and in the respective sinking fund installments as set forth in the
following schedule:
Term Bonds maturing September 15, 2031
Redemption Date Sinking Fund Installment Amount
2024 $56,000
2025 58,000
2026
61,000
2027
63,000
2028
65,000
2029
68,000
2030
70,000
2031*
73,000
30
Term Bonds maturing September 15, 2051
Redemption Date
Sinking Fund Installment Amount
2032
$ 76,000
2033
79,000
2034
83,000
2035
86,000
2036
90,000
2037
94,000
2038
98,000
2039
103,000
2040
107,000
2041
112,000
2042
117,000
2043
123,000
2044
129,000
2045
135,000
2046
141,000
2047
147,000
2048
154,000
2049
162,000
2050
169,000
2051 *
177,000
* Stated Maturity.
At least thirty (30) days prior to each sinking fund redemption date, and subject to any
prior reduction authorized by the Indenture, the Trustee shall select for redemption by lot, or by
any other customary method that results in a random selection, a principal amount of Bonds of
such maturity equal to the sinking fund installments of such Bonds to be redeemed, shall call
such Bonds for redemption on such scheduled mandatory sinking fund redemption date, and
shall give notice of such redemption, as provided in Section 4.6 of the Indenture.
The principal amount of Bonds required to be redeemed on any sinking fund redemption
date shall be reduced, at the option of the City, by the principal amount of any Bonds of such
maturity which, at least 30 days prior to the sinking fund redemption date shall have been
acquired by the City at a price not exceeding the principal amount of such Bonds plus accrued
and unpaid interest to the date of purchase thereof, and delivered to the Trustee for cancellation.
The Sinking Fund Installments of Term Bonds required to be redeemed on any
mandatory sinking fund redemption shall be reduced in integral multiples of $1,000 by any
portion of such Bonds, which, at least 30 days prior to the mandatory sinking fund redemption
date, shall have been redeemed pursuant to the optional redemption or extraordinary optional
redemption provisions in the Indenture and not previously credited to a mandatory sinking fund
redemption.
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The City reserves the right and option to redeem Bonds before their scheduled maturity
date, in whole or in part, on any date on or after September 15, 2031, such redemption date or
dates to be fixed by the City, at the Redemption Price.
The Bonds are subject to extraordinary optional redemption prior to maturity in whole or
in part, on the fifteenth day of any month, at the Redemption Price from amounts on deposit in
the Redemption Fund as a result of Prepayments or any other transfers to the Redemption Fund
under the terms of the Indenture.
A portion of an Outstanding Bond of any one maturity may be redeemed, but only in a
principal amount equal to $1,000 or any integral thereof. If a portion of an Outstanding Bond of
a maturity is selected for redemption pursuant to the Indenture, the Trustee shall select the
Outstanding Bonds of such maturity to be redeemed by lot or in any manner deemed fair by the
Trustee. The Trustee shall treat each $1,000 portion of such Bond as though it were a single
Bond for purposes of selection for redemption. No redemption shall result in a Bond in a
denomination of less than an Authorized Denomination; provided, however, if the amount of
Outstanding Bonds is less than an Authorized Denomination after giving effect to such partial
redemption, a Bond in the principal amount equal to the unredeemed portion, but not less than
$1,000, may be issued.
Upon written direction from the City to the Trustee of the exercise of any redemption
provision provided under the Indenture, the Trustee shall give notice of any redemption of Bonds
by sending notice by first class United States mail, postage prepaid, not less than 30 days before
the date fixed for redemption, to the Owner of each Bond (or portion thereof) to be redeemed, at
the address shown on the Register. The notice shall state the redemption date, the Redemption
Price, the place at which the Bonds are to be surrendered for payment, and, if less than all the
Bonds Outstanding are to be redeemed, an identification of the Bonds or portions thereof to be
redeemed, any conditions to such redemption and that on the redemption date, if all conditions, if
any, to such redemption have been satisfied, such Bond shall become due and payable. Any
notice so given shall be conclusively presumed to have been duly given, whether or not the
Owner receives such notice.
With respect to any optional redemption of the Bonds, unless the Trustee has received
funds sufficient to pay the Redemption Price of the Bonds to be redeemed before giving of a
notice of redemption, the notice may state the City may condition redemption on the receipt of
such funds by the Trustee on or before the date fixed for the redemption, or on the satisfaction of
any other prerequisites set forth in the notice of redemption. If a conditional notice of
redemption is given and such prerequisites to the redemption and sufficient funds are not
received, the notice shall be of no force and effect, the City shall not redeem the Bonds and the
Trustee shall give notice, in the manner in which the notice of redemption was given, that the
Bonds have not been redeemed.
The City has the right to rescind any optional redemption or extraordinary optional
redemption described in the Indenture by written notice to the Trustee on or prior to the date
fixed for redemption. Any notice of redemption shall be cancelled and annulled if for any reason
funds are not available on the date fixed for redemption for the payment in full of the Bonds then
called for redemption, and such cancellation shall not constitute an Event of Default under the
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Indenture. The Trustee shall mail notice of rescission of redemption in the same manner notice of
redemption was originally provided.
The Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the City and the rights of the holders
of the Bonds under the Indenture at any time Outstanding affected by such modification. The
Indenture also contains provisions permitting the holders of specified percentages in aggregate
principal amount of the Bonds at the time Outstanding, on behalf of the holders of all the Bonds,
to waive compliance by the City with certain past defaults under the Bond Ordinance or the
Indenture and their consequences. Any such consent or waiver by the holder of this Bond or any
predecessor Bond evidencing the same debt shall be conclusive and binding upon such holder
and upon all future holders thereof and of any Bond issued upon the transfer thereof or in
exchange therefor or in lieu thereof, whether or not notation of such consent or waiver is made
upon this Bond.
As provided in the Indenture, this Bond is transferable upon surrender of this Bond for
transfer at the Designated Payment/Transfer Office, with such endorsement or other evidence of
transfer as is acceptable to the Trustee, and upon delivery to the Trustee of such certifications
and/or opinion of counsel as may be required under the Indenture for the transfer of this Bond.
Upon satisfaction of such requirements, one or more new fully registered Bonds of the same
Stated Maturity, of Authorized Denominations, bearing the same rate of interest, and for the
same aggregate principal amount will be issued to the designated transferee or transferees.
Neither the City nor the Trustee shall be required to issue, transfer or exchange any Bond
called for redemption where such redemption is scheduled to occur within 45 calendar days of
the transfer or exchange date; provided, however, such limitation shall not be applicable to an
exchange by the registered owner of the uncalled principal balance of a Bond.
The City, the Trustee, and any other Person may treat the Person in whose name this
Bond is registered as the owner hereof for the purpose of receiving payment as herein provided
(except interest shall be paid to the Person in whose name this Bond is registered on the Record
Date or Special Record Date, as applicable) and for all other purposes, whether or not this Bond
be overdue, and neither the City nor the Trustee shall be affected by notice to the contrary.
NEITHER THE FULL FAITH AND CREDIT NOR THE GENERAL TAXING POWER
OF THE CITY, COLLIN COUNTY, TEXAS, OR THE STATE OF TEXAS, OR ANY
POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE
BONDS.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the
series of which it is a part is duly authorized by law; that all acts, conditions and things required
to be done precedent to and in the issuance of the Bonds have been properly done and performed
and have happened in regular and due time, form and manner, as required by law; and that the
total indebtedness of the City, including the Bonds, does not exceed any Constitutional or
statutory limitation.
IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be
executed under the official seal of the City.
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City Secretary
[CITY SEAL]
Mayor
(b) Form of Comptroller's Registration Certificate.
The following Registration Certificate of Comptroller of Public Accounts shall appear on
the Initial Bond:
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § REGISTER NO.
THE STATE OF TEXAS §
I HEREBY CERTIFY THAT there is on file and of record in my office a certificate to
the effect that the Attorney General of the State of Texas has approved this Bond, and that this
Bond has been registered this day by me.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
Comptroller of Public Accounts
of the State of Texas
[SEAL]
(c) Form of Certificate of Trustee.
CERTIFICATE OF TRUSTEE
It is hereby certified that this is one of the Bonds of the series of Bonds referred to in the
within mentioned Indenture.
DATED:
REGIONS BANK,
as Trustee
34
(d) Form of Assignment.
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (print
or typewrite name and address, including zip code, of Transferee.)
(Social Security or other identifying number: ) the within
Bond and all rights hereunder, and hereby irrevocably constitutes and appoints
, attorney, to register the transfer of the
within Bond on the books kept for registration thereof, with full power of substitution in the
premises.
Dated:
Signature Guaranteed by:
Authorized Signatory
NOTICE: The signature on this Assignment
must correspond with the name of the
registered owner as it appears on the face of
the within Bond in every particular and must
be guaranteed in a manner acceptable to the
Trustee.
(e) The Initial Bond shall be in the form set forth in para�_raphs (a) through (d) of this
section, except for the following alterations:
(i) immediately under the name of the Bond the heading "INTEREST RATE" and
"MATURITY DATE" shall both be completed with the expression "As Shown Below," and the
reference to the "CUSIP NUMBER" shall be deleted;
(ii) in the first paragraph of the Bond, the words "on the Maturity Date, as specified
above, the sum of DOLLARS" shall be deleted and the
following will be inserted: "on September 15 in each of the years, in the principal installments
and bearing interest at the per annum rates set forth in the following schedule:
Year Principal Amount
Interest Rate
(Information to be inserted from Section 3.2(c)); and
35
(iii) the Initial Bond shall be numbered T-1.
Section 5.3. CUSIP Registration.
The City may secure identification numbers through CUSIP Global Services, managed by
S&P Global Markets Intelligence on behalf of the American Bankers Association, New York,
New York, and may authorize the printing of such numbers on the face of the Bonds. It is
expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds shall
be of no significance or effect as regards the legality thereof and none of the City, the attorneys
approving said Bonds as to legality or the Trustee are to be held responsible for CUSIP numbers
incorrectly printed on the Bonds. Except as authorized under Section 4.5 hereof, the City
prohibits any Bond to be issued in a denomination of less than $100,000 and further prohibits the
assignment of a CUSIP number to any Bond with a denomination of less than $100,000, and any
attempt to accomplish either of the foregoing shall be void and of no effect. The Trustee may
include in any redemption notice a statement to the effect that the CUSIP numbers on the Bonds
have been assigned by an independent service and are included in such notice solely for the
convenience of the Bondholders and that neither the City nor the Trustee shall be liable for any
inaccuracies in such numbers.
Section 5.4. Legal Opinion.
The approving legal opinion of Bond Counsel may be printed on or attached to each
Bond over the certification of the City Secretary of the City, which may be executed in facsimile.
ARTICLE VI
FUNDS AND ACCOUNTS
Section 6.1. Establishment of Funds and Accounts.
(a) Creation of Funds. The following Funds are hereby created and established
under this Indenture:
(i) Pledged Revenue Fund;
(ii) Bond Fund;
(iii) Project Fund;
(iv) Reserve Fund;
(v) Redemption Fund;
(vi) Rebate Fund; and
(vii) Administrative Fund.
36
(b) Creation of Accounts.
Bond Fund:
(i) The following Accounts are hereby created and established under the
(A) Capitalized Interest Account; and
(B) Principal and Interest Account.
(ii) The following Accounts are hereby created and established under the
Reserve Fund:
(A) Reserve Account; and
(B) Delinquency and Prepayment Reserve Account.
(iii) The following Accounts are hereby created and established under the
Project Fund:
(A) Major Improvement Area Bond Improvement Account;
(B) Major Improvement Area Developer Improvement Account; and
(C) Costs of Issuance Account.
(iv) The following Account is hereby created and established under the
Pledged Revenue Fund:
(A) Bond Pledged Revenue Account.
(c) Each Fund and each Account created within such Fund shall be maintained by the
Trustee separate and apart from all other funds and accounts of the City. The Pledged Funds
shall constitute trust funds which shall be held in trust by the Trustee as part of the Trust Estate
solely for the benefit of the Owners of the Bonds. The Major Improvement Area Developer
Improvement Account shall constitute a trust fund which shall be held in trust by the Trustee
solely for the benefit of the Developer. The Major Improvement Area Developer Improvement
Account shall not be part of the Trust Estate and shall not be security for the Bonds. Amounts in
the Major Improvement Area Developer Improvement Account shall not be used to pay the
principal of or interest on the Bonds. Amounts on deposit in the Funds and Accounts shall be
used solely for the purposes set forth herein.
(d) Interest earnings and profit on each respective Fund and Account established by
this Indenture shall be applied or withdrawn for the purposes of such Fund or Account as
specified below.
Section 6.2. Initial Deposits to Funds and Accounts.
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(a) The proceeds from the sale of the Bonds shall be paid to the Trustee and
deposited or transferred by the Trustee as follows:
(i) to the Capitalized Interest Account of the Bond Fund: $295,917.42;
(ii) to the Principal and Interest Account of the Bond Fund: $0.00;
(iii) to the Reserve Account of the Reserve Fund: $198,230.00, which is equal
to the initial Reserve Account Requirement;
(iv) to the Costs of Issuance Account of the Project Fund: $193,403.50;
(v) to the Major Improvement Area Bond Improvement Account of the
Project Fund: $2,086,569.08; and
(vi) to the Administrative Fund: $35,000.00.
(b) Funds received from the Developer on the Delivery Date in the amount of
$173,080.92 shall be deposited to the Major Improvement Area Developer Improvement
Account.
Section 6.3. Pledged Revenue Fund.
(a) Periodically upon receipt thereof, the City shall transfer to the Trustee for deposit
to the Pledged Revenue Fund the Assessments and Annual Installments, other than the portion of
the Assessments and Annual Installments allocated to the payment of Annual Collection Costs
and Delinquent Collection Costs, which shall be deposited to the Administrative Fund in
accordance with Section 6.9 hereof. Following such deposit to the Pledged Revenue Fund, the
City shall transfer or cause to be transferred the following amounts from the Pledged Revenue
Fund to the following Accounts: (i) first, to the Bond Pledged Revenue Account of the Pledged
Revenue Fund, an amount sufficient to pay debt service on the Bonds next coming due, and (ii)
second, if necessary, to the Reserve Account of the Reserve Fund, an amount to cause the
amount in the Reserve Account to equal the Reserve Account Requirement. Notwithstanding the
foregoing, the Additional Interest shall only be utilized for the purposes set forth in Section 6.7
hereof and, immediately following the initial deposit to the Pledged Revenue Fund, prior to any
other transfers or deposits being made under this Section 6.3(a), if the Delinquency and
Prepayment Reserve Account of the Reserve Fund does not contain the Delinquency and
Prepayment Reserve Requirement and Additional Interest is collected, then all such Additional
Interest will be transferred into the Delinquency and Prepayment Reserve Account until the
Delinquency and Prepayment Reserve Requirement is met. In addition, in the event the City
owes Rebatable Arbitrage to the United States Government pursuant to Section 6.8 hereof, the
City shall provide written direction to the Trustee to transfer to the Rebate Fund, prior to any
other transfer under this Section 6.3(a), the full amount of Rebatable Arbitrage owed by the City,
as further described in Section 6.11(f) hereof. If any funds remain on deposit in the Pledged
Revenue Fund after the foregoing deposits are made, the City shall have the option, in its sole
and absolute discretion, to use such excess funds for any one or more of the following purposes:
(i) pay other costs of the Major Improvement Area Projects, (ii) pay other costs permitted by the
PID Act, or (iii) deposit such excess into the Redemption Fund to redeem Bonds as provided in
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Article IV. Along with each transfer to the Trustee, the City shall provide a certificate as to the
funds, accounts and payments into which the amounts are to be deposited or paid.
(b) From time to time as needed to pay the obligations relating to the Bonds, but no
later than five (5) Business Days before each Interest Payment Date, the Trustee shall withdraw
from the Pledged Revenue Fund and transfer to the Principal and Interest Account of the Bond
Fund, an amount, taking into account any amounts then on deposit in such Principal and Interest
Account and any expected transfers from the Capitalized Interest Account to the Principal and
Interest Account, such that the amount on deposit in the Principal and Interest Account equals
the principal (including any Sinking Fund Installments) and interest due on the Bonds on the
next Interest Payment Date.
(c) If, after the foregoing transfers and any transfer from the Reserve Fund as
provided in Section 6.7, there are insufficient funds to make the payments provided in paragraph
(b) above, the Trustee shall apply the available funds in the Principal and Interest Account first
to the payment of interest, then to the payment of principal (including any Sinking Fund
Installments) on the Bonds.
(d) The Trustee shall transfer Prepayments to the Redemption Fund to be used to
redeem Bonds pursuant to Section 4.4 promptly after deposit of such amounts into the Pledged
Revenue Fund.
(e) Promptly after the deposit of Foreclosure Proceeds into the Pledged Revenue
Fund, the Trustee shall transfer such Foreclosure Proceeds first to the Reserve Fund to restore
any transfers from the Accounts within the Reserve Fund made with respect to the particular
Assessed Property to which the Foreclosure Proceeds relate (first, to replenish the Reserve
Account Requirement and second, to replenish the Delinquency & Prepayment Reserve
Requirement), and second, to the Redemption Fund to be used to redeem Bonds pursuant to
Section 4.4.
(f) After satisfaction of the requirement to provide for the payment of the principal
and interest on the Bonds and to fund any deficiency that may exist in the Reserve Fund, the
Trustee shall transfer any Pledged Revenues remaining in the Pledged Revenue Fund for the
purposes set forth in Section 6.3(a) hereof, as directed by the City in a City Order.
Section 6.4. Bond Fund.
(a) On each Interest Payment Date, the Trustee shall withdraw from the Principal and
Interest Account and transfer to the Paying Agent/Registrar the principal (including any Sinking
Fund Installments) and interest then due and payable on the Bonds, less any amount to be used to
pay interest on the Bonds on such Interest Payment Date from the Capitalized Interest Account
as provided below.
(b) If amounts in the Principal and Interest Account are insufficient for the purposes
set forth in paragraph (a) above, the Trustee shall withdraw from the Reserve Fund amounts to
cover the amount of such insufficiency pursuant to Section 6.7(f). Amounts so withdrawn from
the Reserve Fund shall be deposited in the Principal and Interest Account and transferred to the
Paying Agent/Registrar.
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(c) Moneys in the Capitalized Interest Account shall be used for the payment of all
interest due on the Bonds on March 15, 2022, September 15, 2022, March 15, 2023 and
September 15, 2023. Not later than five Business Days prior to the Interest Payment Date
specified above, the Trustee shall withdraw from the Capitalized Interest Account and transfer to
the Principal and Interest Account of the Bond Fund all interest due on the Bonds on such
Interest Payment Dates. Any amounts on deposit to the Capitalized Interest Account after the
foregoing payments shall be transferred to the Major Improvement Area Bond Improvement
Account of the Project Fund, or if the Major Improvement Area Bond Improvement Account of
the Project Fund has been closed as provided in Section 6.5(d) or (f), such amounts shall be
transferred to the Redemption Fund to be used to redeem Bonds pursuant to Section 4.4 and the
Capitalized Interest Account shall be closed.
(d) If, after the foregoing transfers and any transfer from the Reserve Fund as
provided in Section 6.7, there are insufficient funds to make the payments provided in paragraph
(a) above, the Trustee shall apply the available funds in the Principal and Interest Account first to
the payment of interest, then to the payment of principal (including any Sinking Fund
Installments) on the Bonds.
Section 6.5. Project Fund.
(a) Money on deposit in the Major Improvement Area Bond Improvement Account
of the Project Fund shall be used for the purposes specified in Section 3.1.
(b) (1) Disbursements from the Costs of Issuance Account of the Project Fund shall
be made by the Trustee to pay costs of issuance of the Bonds pursuant to one or more City
Orders.
(2) Disbursements from the Major Improvement Area Bond Improvement Account and
the Major Improvement Area Developer Improvement Account of the Project Fund to pay Major
Improvement Area Project Costs shall be made by the Trustee upon receipt by the Trustee of a
properly executed and completed Certification for Payment. The funds from the Major
Improvement Area Bond Improvement Account and the Major Improvement Area Developer
Improvement Account of the Project Fund shall be disbursed in accordance with a Certification
for Payment as described in the Construction, Funding and Acquisition Agreement. Each such
Certification for Payment shall include a list of the payees and the payments to be made to such
payees as well as a statement that all payments shall be made by check or wire transfer in
accordance with the payment instructions set forth in such Certification for Payment or in the
invoices submitted therewith and the Trustee may rely on such payment instructions with no duty
to investigate or inquire as to the authenticity of or authorization for the invoice or the payment
instructions contained therein.
(c) Except as provided in Section 6.5(d), (e) and (h), money on deposit in the Major
Improvement Area Bond Improvement Account and the Major Improvement Area Developer
Improvement Account of the Project Fund shall be used solely to pay Major Improvement Area
Project Costs.
(d) If the City Representative determines in his or her sole discretion that certain
amounts then on deposit in the Major Improvement Area Bond Improvement Account and the
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Major Improvement Area Developer Improvement Account are not expected to be expended for
purposes of the Project Fund due to the abandonment, or constructive abandonment, of one or
more of the Major Improvement Area Projects such that, in the opinion of the City
Representative, it is unlikely that the amounts in the Major Improvement Area Bond
Improvement Account and the Major Improvement Area Developer Improvement Account will
ever be expended for the purposes of the Major Improvement Area Bond Improvement Account
and the Major Improvement Area Developer Improvement Account, respectively, the City
Representative shall file a City Order with the Trustee which identifies the amounts then on
deposit in the Major Improvement Area Bond Improvement Account and the Major
Improvement Area Developer Improvement Account that are not expected to be used for
purposes of the respective Account. If such City Order is so filed, the identified amounts on
deposit in the Major Improvement Area Bond Improvement Account shall be transferred to the
Bond Fund or to the Redemption Fund to be used to redeem Bonds pursuant to Section 4.4 as
directed by the City Representative in a City Order filed with the Trustee, and the identified
amounts on deposit in the Major Improvement Area Developer Improvement Account shall be
transferred and released to the Developer, or to the Developer's successors and assigns or
designees pursuant to Section 6.5(f). Upon such transfer, the Major Improvement Area Bond
Improvement Account and the Major Improvement Area Developer Improvement Account of the
Project Fund shall be closed.
(e) Upon the filing of a City Order stating that (i) all Major Improvement Area
Projects have been completed and that all Major Improvement Area Project Costs have been
paid, or that any Major Improvement Area Project Costs are not required to be paid from the
Major Improvement Area Bond Improvement Account of the Project Fund pursuant to a
Certification for Payment, the Trustee shall transfer the amount, if any, remaining within the
Major Improvement Area Bond Improvement Account of the Project Fund to the Bond Fund or
to the Redemption Fund to be used to redeem Bonds pursuant to Section 4.4 as directed by the
City Representative in a City Order filed with the Trustee, and the amounts on deposit in the
Major Improvement Area Developer Improvement Account shall be transferred and released to
the Developer, or to the Developer's successors and assigns or designees pursuant to Section
6.5(f). Upon such transfer, the Major Improvement Area Bond Improvement Account and Major
Improvement Area Developer Improvement Account of the Project Fund shall be closed.
(f) Any amounts in the Major Improvement Area Developer Improvement Account
to be transferred and released pursuant to Section 6.5(d), (e) or (h) shall be irrevocably and
unconditionally transferred and released to the Developer, or to the Developer's successors and
assigns or designees as identified in a written notice from the Developer to the Trustee and the
City. The City and the Trustee shall solely and conclusively rely as to payment of amounts
released from the Major Improvement Area Developer Improvement Account on any such
written notice from the Developer as to their successors and assigns or designees. The City shall
provide written notice of the release to the Trustee and Developer, or to the Developer's
successors and assigns or designees, and the amount payable to the Developer, or its successors
and assigns or designees.
(g) Upon a determination by the City Representative that all costs of issuance of the
Bonds have been paid, any amounts remaining in the Costs of Issuance Account shall be
transferred to the Major Improvement Area Bond Improvement Account of the Project Fund and
used to pay Major Improvement Area Project Costs or to the Principal and Interest Account and
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used to pay interest on the Bonds, as directed in a City Order filed with the Trustee, and the
Costs of Issuance Account shall be closed.
(h) In the event the Developer has not completed the Major Improvement Area
Projects by July 15, 2026, then the City may provide written direction to the Trustee to (i)
transfer all funds on deposit in the Major Improvement Area Bond Improvement Account to the
Redemption Fund to redeem Bonds pursuant to Section 4.4 hereof, and (ii) transfer and release
amounts on deposit in the Major Improvement Area Developer Improvement Account to the
Developer, or to the Developer's successors and assigns or designees pursuant to Section 6.5(f).
Upon such transfers, the Major Improvement Area Bond Improvement Account and Major
Improvement Area Developer Improvement Account of the Project Fund shall be closed.
(i) In providing any disbursement under this Section, the Trustee may conclusively
rely as to the completeness and accuracy of all statements in such Certification for Payment if
such certificate is signed by a City Representative, and the Trustee shall not be required to make
any independent investigation in connection therewith. The execution of any Certification for
Payment by a City Representative shall constitute, unto the Trustee, an irrevocable determination
that all conditions precedent to the payments requested have been completed.
Section 6.6. Redemption Fund.
The Trustee shall cause to be deposited to the Redemption Fund from the Pledged
Revenue Fund an amount sufficient to redeem Bonds as provided in Sections 4.3 and 4.4 on the
dates specified for redemption as provided in Sections 4.3 and 4.4. Amounts on deposit in the
Redemption Fund shall be used and withdrawn by the Trustee to redeem Bonds as provided in
Article IV.
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Section 6.7. Reserve Fund.
(a) The City agrees with the Owners of the Bonds to accumulate and, when
accumulated, maintain in the Reserve Account, an amount equal to not less than the Reserve
Account Requirement. All amounts deposited in the Reserve Account shall be used and
withdrawn by the Trustee for the purpose of making transfers to the Principal and Interest
Account of the Bond Fund as provided in this Indenture. The Trustee will transfer from the
Bond Pledged Revenue Account of the Pledged Revenue Fund to the Delinquency and
Prepayment Reserve Account on March 15 of each year, commencing March 15, 2022, an
amount the City confirms to the Trustee is equal to the Additional Interest until the Delinquency
and Prepayment Reserve Requirement has been accumulated in the Delinquency and Prepayment
Reserve Account; provided, however, that at any time the amount on deposit in the Delinquency
and Prepayment Reserve Account is less than Delinquency and Prepayment Reserve
Requirement, the Trustee shall resume depositing the Additional Interest into the Delinquency
and Prepayment Reserve Account until the Delinquency and Prepayment Reserve Requirement
has accumulated in the Delinquency and Prepayment Reserve Account. In calculating the
amounts to be transferred pursuant to this Section, the Trustee may conclusively rely on the
Annual Installments as shown on the Assessment Roll in the Service and Assessment Plan unless
and until it receives a City Order directing that a different amount be used. Whenever a transfer
is made from the Reserve Account to the Bond Fund due to a deficiency in the Bond Fund, the
Trustee shall provide written notice thereof to the City, specifying the amount withdrawn and the
source of said funds. The Additional Interest shall continue to be collected and deposited
pursuant to this Section 6.7 until the Bonds are no longer Outstanding.
(b) Whenever a transfer is made from the Reserve Fund to the Bond Fund due to a
deficiency in the Bond Fund, the Trustee shall provide written notice thereof to the City,
specifying the amount withdrawn and the source of said funds.
(c) In the event of an extraordinary optional redemption of Bonds from the proceeds
of a Prepayment pursuant to Section 4.4, the Trustee, pursuant to prior written directions from
the City, shall transfer from the Reserve Account of the Reserve Fund to the Redemption Fund
the amount specified in such directions, which shall be an amount equal to the principal amount
of Bonds to be redeemed multiplied by the lesser of. (i) the amount required to be in the Reserve
Account of the Reserve Fund divided by the principal amount of Outstanding Bonds prior to the
redemption, and (ii) the amount actually in the Reserve Account of the Reserve Fund divided by
the principal amount of Outstanding Bonds prior to the redemption. If after such transfer, and
after applying investment earnings on the Prepayment toward payment of accrued interest, there
are insufficient funds to pay the principal amount plus accrued and unpaid interest on such
Bonds to the date fixed for redemption of the Bonds to be redeemed as a result of such
Prepayment, the Trustee shall transfer an amount equal to the shortfall from the Delinquency and
Prepayment Reserve Account to the Redemption Fund to be applied to the redemption of the
Bonds.
(d) Whenever, on any Interest Payment Date, or on any other date at the request of a
City Representative, the value of cash and Value of Investment Securities on deposit in the
Reserve Account exceeds the Reserve Account Requirement, the Trustee shall provide written
notice to the City Representative of the amount of the excess. Such excess shall be transferred to
the Principal and Interest Account to be used for the payment of interest on the Bonds on the
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next Interest Payment Date in accordance with Section 6.4, unless within thirty days of such
notice to the City Representative, the Trustee receives a City Order instructing the Trustee to
apply such excess: (i) to pay amounts due under Section 6.8 hereof, (ii) to the Administrative
Fund in an amount not more than the Annual Collection Costs for the Bonds, (iii) to the Major
Improvement Area Bond Improvement Account of the Project Fund to pay Major Improvement
Area Project Costs if such application and the expenditure of funds is expected to occur within
three years of the date hereof, or (iv) to the Redemption Fund to be applied to the redemption of
Bonds.
(e) Whenever, on any Interest Payment Date, or on any other date at the written
request of the City Representative, the amounts on deposit in the Delinquency and Prepayment
Reserve Account exceed the Delinquency and Prepayment Reserve Requirement, the Trustee
shall provide written notice to the City of the amount of the excess, and such excess shall be
transferred, at the direction of the City pursuant to a City Order, to the Administrative Fund for
the payment of Annual Collection Costs or to the Redemption Fund to be used to redeem Bonds
pursuant to Section 4.4. In the event that the Trustee does not receive a City Order directing the
transfer of such excess to the Administrative Fund within 45 days of providing notice to the City
of such excess, the Trustee shall transfer such excess to the Redemption Fund to redeem Bonds
pursuant to Section 4.4 hereof and provide the City with written notification of the transfer. The
Trustee shall incur no liability for the accuracy or validity of the transfer so long as the Trustee
made such transfer in full compliance with this Section.
(f) Whenever, on any Interest Payment Date, the amount on deposit in the Bond
Fund is insufficient to pay the debt service on the Bonds due on such date, the Trustee shall
transfer first from the Delinquency and Prepayment Reserve Account of the Reserve Fund and
second from the Reserve Account of the Reserve Fund to the Bond Fund the amounts necessary
to cure such deficiency.
(g) At the final maturity of the Bonds, the amount on deposit in the Reserve Account
and the Delinquency and Prepayment Reserve Account shall be transferred to the Principal and
Interest Account and applied to the payment of the principal of the Bonds.
(h) If, after a Reserve Account withdrawal, the amount on deposit in the Reserve
Account is less than the Reserve Account Requirement, the Trustee shall transfer from the
Pledged Revenue Fund to the Reserve Account the amount of such deficiency, but only to the
extent that such amount is not required for the timely payment of principal, interest, or Sinking
Fund Installments.
(i) If the amount held in the Reserve Fund together with the amount held in the
Pledged Revenue Fund, the Bond Fund and Redemption Fund is sufficient to pay the principal
amount and of all Outstanding Bonds on the next date the Bonds may be optionally redeemed by
the City at a redemption price of par, together with the unpaid interest accrued on such Bonds as
of such date, the moneys shall be transferred to the Redemption Fund and thereafter used to
redeem all Bonds on such date.
Section 6.8. Rebate Fund: Rebatable Arbitrage.
(a) The Rebate Fund is to be held by the Trustee in accordance with the terms and
provisions of this Indenture. Amounts on deposit in the Rebate Fund shall be used solely for the
purpose of paying amounts due the United States Government in accordance with the Code. The
Rebate Fund shall not be part of the Trust Estate and shall not be security for the Bonds.
(b) In order to assure that Rebatable Arbitrage is paid to the United States rather than
to a third party, investments of funds on deposit in the Rebate Fund shall be made in accordance
with the Code and the City's federal tax certificate for the Bonds, as further set forth in written
directions from the City to the Trustee. The Trustee may conclusively rely on such written
instructions as set forth in this Section and shall not be responsible for any loss or liability
resulting from the investment of funds under this Section, but only so long as the Trustee follows
such written instructions in all respects.
(c) The Trustee conclusively shall be deemed to have complied with the provisions of
this Section and shall not be liable or responsible if it follows the written instructions of the City
and shall not be required to take any action under this Section in the absence of instructions from
the City.
(d) If, on the date of each annual calculation, the amount on deposit in the Rebate
Fund exceeds the amount of the Rebatable Arbitrage, the City may direct the Trustee, pursuant to
a City Order, to transfer the amount in excess of the Rebatable Arbitrage to the Bond Fund.
Section 6.9. Administrative Fund.
(a) Periodically upon receipt thereof, the City shall deposit or cause to be deposited to
the Administrative Fund the portion of the Assessments and Annual Installments allocated to the
payment of Annual Collection Costs and Delinquent Collection Costs, as set forth in the Service
and Assessment Plan.
(b) Moneys in the Administrative Fund shall be held by the Trustee separate and
apart from the other Funds created and administered hereunder and used as directed by a City
Order solely for the purposes set forth in the Service and Assessment Plan, including payment of
Annual Collection Costs and Delinquent Collection Costs. The Administrative Fund shall not be
part of the Trust Estate and shall not be security for the Bonds.
Section 6.10. Investment of Funds.
(a) Money in any Fund or Account, other than the Reserve Fund, shall be invested by
the Trustee in Investment Securities as directed by the City pursuant to a City Order filed with
the Trustee; provided that all such deposits and investments shall be made in such manner that
the money required to be expended from any Fund or Account will be available at the proper
time or times. Money in the Reserve Fund shall be invested in such Investment Securities as
directed by the City pursuant to a City Order filed with the Trustee, provided that the final
maturity of any individual Investment Security shall not exceed 270 days and the average
weighted maturity of any investment pool or no-load money market mutual fund shall not exceed
90 days. Each such City Order shall be a certification, upon which the Trustee may conclusively
rely without investigation or inquiry, that the investment directed therein constitutes an
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Investment Security and that such investments meet the maturity and average weighted maturity
requirements set forth in the preceding sentence. Such investments shall be valued each year in
terms of the Value of Investment Securities as of September 30. For purposes of maximizing
investment returns, to the extent permitted by law, money in the Funds and Accounts may be
invested in common investments of the kind described above, or in a common pool of such
investment which shall be kept and held at an official depository bank, which shall not be
deemed to be or constitute a commingling of such money or funds provided that safekeeping
receipts or certificates of participation clearly evidencing the investment or investment pool in
which such money is invested and the share thereof purchased with such money or owned by
such Fund or Account are held by or on behalf of each such Fund or Account. If necessary, such
investments shall be promptly sold to prevent any default under this Indenture. To ensure that
cash on hand is invested, if the City does not give the Trustee written or timely instructions with
respect to investments of funds, the Trustee is hereby directed to invest and re -invest cash
balances in Morgan Stanley, Fidelity or Federated family of funds, but only so long as such
funds are authorized investments and permitted under the Public Funds Investment Act, Texas
Government Code, Chapter 2256, as amended, or any successor law, and only so long as such
investments constitute Investment Securities and the money required to be expended from any
Fund will be available at the proper time or times.
(b) Obligations purchased as an investment of moneys in any Fund or Account shall
be deemed to be part of such Fund or Account, subject, however, to the requirements of this
Indenture for transfer of interest earnings and profits resulting from investment of amounts in
Funds and Accounts. Whenever in this Indenture any moneys are required to be transferred by
the City to the Trustee, such transfer may be accomplished by transferring a like amount of
Investment Securities as directed by the City in writing.
(c) The Trustee and its affiliates may act as sponsor, advisor, depository, principal or
agent in the acquisition or disposition of any investment. The Trustee shall not incur any liability
for losses arising from any investments made pursuant to this Section. The Trustee shall not be
required to determine the legality of any investments.
(d) Investments in any and all Funds and Accounts may be commingled in a separate
fund or funds for purposes of making, holding and disposing of investments, notwithstanding
provisions herein for transfer to or holding in or to the credit of particular Funds or Accounts of
amounts received or held by the Trustee hereunder, provided that the Trustee shall at all times
account for such investments strictly in accordance with the Funds and Accounts to which they
are credited and otherwise as provided in this Indenture.
(e) The Trustee will furnish to the City, upon the City's written request, periodic cash
transaction statements which include detail for all investment transactions effected by the Trustee
or brokers selected by the City. Upon the City's election, such statements will be delivered via
the Trustee's online service and upon electing such service, paper statements will be provided
only upon request. The City waives the right to receive brokerage confirmations of security
transactions effected by the Trustee as they occur, to the extent permitted by law. The City
further understands that trade confirmations for securities transactions effected by the Trustee
will be available upon request and at no additional cost and other trade confirmations may be
obtained from the applicable broker.
.e
(f) In the event it is found, after an annual calculation has been done pursuant to
Section 6.8 hereof, that the City owes Rebatable Arbitrage to the United States Government, the
City shall direct the Trustee, pursuant to a City Order, to transfer to the Rebate Fund the
investment earnings on funds on deposit in the Pledged Funds in an amount equal to the
Rebatable Arbitrage owed by the City. The City Order shall specify the amount to the transferred
and the Pledged Fund or Pledged Funds from which the investment earnings shall be transferred.
Section 6.11. Security of Funds.
All Funds heretofore created or reaffirmed, to the extent not invested as herein permitted,
shall be secured in the manner and to the fullest extent required by law for the security of public
funds, and such Funds shall be used only for the purposes and in the manner permitted or
required by this Indenture.
ARTICLE VII
COVENANTS
Section 7.1. Confirmation of Assessments.
The City hereby confirms, covenants, and agrees that, in the Assessment Ordinance, it
has levied the Assessments against the Assessed Property from which the Assessment Revenues
will be collected and received.
Section 7.2. Collection and Enforcement of Assessments.
(a) For so long as any Bonds are Outstanding, the City covenants, agrees and
warrants that it will take and pursue all reasonable actions permissible under Applicable Laws to
cause the Assessments to be collected and the liens thereof enforced continuously, in the manner
and to the maximum extent permitted by Applicable Laws, and to cause no reduction, abatement
or exemption in the Assessments.
(b) To the extent permitted by law, notice of the Annual Installments shall be sent by,
or on behalf of, the City to the affected property owners on the same statement or such other
mechanism that is used by the City, so that such Annual Installments are collected
simultaneously with ad valorem taxes and shall be subject to the same penalties, procedures, and
foreclosure sale in case of delinquencies as are provided for ad valorem taxes of the City.
(c) The City will determine or cause to be determined, no later than February 15 of
each year, whether or not any Annual Installment is delinquent and, if such delinquencies exist,
the City will order and cause to be commenced as soon as practicable any and all appropriate and
legally permissible actions to obtain such Annual Installment, and any delinquent charges and
interest thereon, including diligently prosecuting an action in district court to foreclose the
currently delinquent Annual Installment. Notwithstanding the foregoing, the City shall not be
required under any circumstances to purchase or make payment for the purchase of the
delinquent Assessments or the corresponding particular Assessed Property.
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(d) The City shall not be required under any circumstances to expend any funds for
Delinquent Collection Costs or Annual Collection Costs in connection with its covenants and
agreements under this Section or otherwise other than funds on deposit in the Administrative
Fund.
Section 7.3. Against Encumbrances.
(a) Other than Refunding Bonds issued to refund all or a portion of the Bonds, the
City shall not create and, to the extent Pledged Revenues are received, shall not suffer to remain,
any lien, encumbrance or charge upon the Pledged Revenues or upon any other property pledged
under this Indenture, except the pledge created for the security of the Bonds, and other than a
lien or pledge subordinate to the lien and pledge of such property related to the Bonds.
(b) So long as Bonds are Outstanding hereunder, the City shall not issue any bonds,
notes or other evidences of indebtedness, other than the Bonds and any Refunding Bonds issued
to refund all or a portion of the Bonds, secured by any pledge of or other lien or charge on the
Pledged Revenues or other property pledged under this Indenture, other than a lien or pledge
subordinate to the lien and pledge of such property related to the Bonds.
Section 7.4. Records, Accounts, Accounting Reports.
The City hereby covenants and agrees that so long as any Bonds are Outstanding, it will
keep and maintain a proper and complete system of records and accounts pertaining to the
Assessments. The Trustee and holder or holders of any Bonds or any duly authorized agent or
agents of such holders shall have the right at all reasonable times to inspect all such records,
accounts, and data relating thereto, upon written request to the City by the Trustee or duly
authorized representative, as applicable. The City shall provide the Trustee or duly authorized
representative, as applicable, an opportunity to inspect such books and records relating to the
Bonds during the City's regular business hours and on a mutually agreeable date not later than
twenty days after the City receives such request.
Section 7.5. Covenants Regarding Tax Exemption of Interest on Bonds.
(a) The City covenants to take any action necessary to assure, or refrain from any
action that would adversely affect, the treatment of the Bonds as an obligation described in
section 103 of the Code, the interest on which is not includable in the "gross income" of the
holder for purposes of federal income taxation. In furtherance thereof, the City covenants as
follows:
(1) to take any action to assure that no more than 10 percent of the proceeds
of the Bonds (less amounts deposited to a reserve fund, if any) are used for any "private
business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of
the proceeds or the projects financed therewith are so used, such amounts, whether or not
received by the City, with respect to such private business use, do not, under the terms of
this Article or any underlying arrangement, directly or indirectly, secure or provide for
the payment of more than 10 percent of the debt service on the Bonds, in contravention of
section 141(b)(2) of the Code;
M.
(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a "private business use" that is "related" and not
"disproportionate," within the meaning of section 141(b)(3) of the Code, to the
governmental use;
(3) to take any action to assure that no amount that is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action that would otherwise result in the Bonds
being treated as a "private activity bond" within the meaning of section 141(b) of the
Code;
(5) to refrain from taking any action that would result in the Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) that produces a
materially higher yield over the term of the Bonds, other than investment property
acquired with —
(A) proceeds of the Bonds invested for a reasonable temporary period
of 3 years or less or, in the case of refunding bonds, for a period of 30 days or less
until such proceeds are needed for the purpose for which the Bonds or refunding
bonds are issued,
(B) amounts invested in a bona fide debt service fund, within the
meaning of section 1.148-1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or
replacement fund to the extent such amounts do not exceed 10 percent of the
proceeds of the Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts
treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage);
(8) to refrain from using the proceeds of the Bonds or proceeds of any prior
bonds to pay debt service on another issue more than 90 days after the date of issue of the
Bonds in contravention of the requirements of section 149(d) of the Code (relating to
advance ref endings); and
(9) to pay to the United States of America at least once during each five-year
period (beginning on the Delivery Date) an amount that is at least equal to 90 percent of
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the 'Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the
United States of America, not later than 60 days after the Bonds have been paid in full,
100 percent of the amount then required to be paid as a result of Excess Earnings under
section 148(f) of the Code.
(b) In order to facilitate compliance with the above covenant (a)(9), the Rebate Fund
is established by the City pursuant to Section 6.1 for the sole benefit of the United States of
America, and such Rebate Fund shall not be subject to the claim of any other person, including
without limitation the registered Owner. The Rebate Fund is established for the additional
purpose of compliance with section 148 of the Code.
(c) The City understands that the term "proceeds" includes "disposition proceeds" as
defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if
any) and proceeds of the refunded bonds expended prior to the date of issuance of the Bonds. It
is the understanding of the City that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the U.S. Department of
the Treasury pursuant thereto (the "Treasury Regulations"). In the event that regulations or
rulings are hereafter promulgated that modify or expand provisions of the Code, as applicable to
the Bonds, the City will not be required to comply with any covenant contained herein to the
extent that such failure to comply, in the opinion of nationally recognized bond counsel, will not
adversely affect the exemption from federal income taxation of interest on the Bonds under
section 103 of the Code. In the event that regulations or rulings are hereafter promulgated that
impose additional requirements applicable to the Bonds, the City agrees to comply with the
additional requirements to the extent necessary, in the opinion of nationally recognized bond
counsel, to preserve the exemption from federal income taxation of interest on the Bonds under
section 103 of the Code. In furtherance of such intention, the City hereby authorizes and directs
the Director of Finance to execute any documents, certificates or reports required by the Code
and to make such elections, on behalf of the City, that may be permitted by the Code as are
consistent with the purpose for the issuance of the Bonds.
(d) The City covenants to account for the expenditure of sale proceeds and
investment earnings to be used for Major Improvement Area Project Costs on its books and
records in accordance with the requirements of the Code. The City recognizes that in order for
the proceeds to be considered used for the reimbursement of costs, the proceeds must be
allocated to expenditures within 18 months of the later of the date that (1) the expenditure is
made, or (2) the Major Improvement Area Projects are completed; but in no event later than
three years after the date on which the original expenditure is paid. The foregoing
notwithstanding, the City recognizes that in order for proceeds to be expended under the Code,
the sale proceeds or investment earnings must be expended no more than 60 days after the earlier
of (1) the fifth anniversary of the Delivery Date, or (2) the date the Bonds are retired. The City
agrees to obtain the advice of nationally -recognized bond counsel if such expenditure fails to
comply with the foregoing to assure that such expenditure will not adversely affect the tax-
exempt status of the Bonds. For purposes hereof, the City shall not be obligated to comply with
this covenant if it obtains an opinion that such failure to comply will not adversely affect the
excludability for federal income tax purposes from gross income of the interest.
(e) The City covenants that the projects funded with the proceeds of the Bonds will
not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or
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other compensation, unless the City obtains an opinion of nationally -recognized bond counsel
that such sale or other disposition will not adversely affect the tax-exempt status of the Bonds.
For purposes of the foregoing, the portion of the property comprising personal property and
disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of
cash or other compensation. For purposes hereof, the City shall not be obligated to comply with
this covenant if it obtains a legal opinion that such failure to comply will not adversely affect the
excludability for federal income tax proposes from gross income of the interest.
ARTICLE VIII
LIABILITY OF CITY
Section 8.1. Liability of City.
(a) Neither the full faith and credit nor the general taxing power of the City is
pledged to the payment of the Bonds, and, except for the Trust Estate, no City taxes, fee or
revenues from any source are pledged to the payment of, or available to pay any portion of, the
Bonds or any other obligations relating to the District. The City shall never be liable for any
obligations relating to the Bonds or other obligations relating to the District, other than as
specifically provided for in this Indenture.
(b) The City shall not incur any responsibility in respect of the Bonds or this
Indenture other than in connection with the duties or obligations explicitly herein or in the Bonds
assigned to or imposed upon it. The City shall not be liable in connection with the performance
of its duties hereunder, except for its own willful default or act of bad faith. The City shall not be
bound to ascertain or inquire as to the performance or observance of any of the terms, conditions
covenants or agreements of the Trustee herein or of any of the documents executed by the
Trustee in connection with the Bonds, or as to the existence of a default or event of default
thereunder.
(c) In the absence of bad faith, the City may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the City and conforming to the requirements of this Indenture. The City shall not be
liable for any error of judgment made in good faith unless it shall be proved that it was negligent
in ascertaining the pertinent facts.
(d) No provision of this Indenture, the Bonds, the Assessment Ordinance, or any
agreement, document, instrument, or certificate executed, delivered or approved in connection
with the issuance, sale, delivery, or administration of the Bonds (collectively, the "Bond
Documents"), shall require the City to expend or risk its own general funds or other funds or
otherwise incur any financial liability (other than with respect to the Trust Estate and the Annual
Collection Costs) in the performance of any of its obligations hereunder, or in the exercise of any
of its rights or powers, if in the judgment of the City there are reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to it.
(e) Neither the Owners nor any other Person shall have any claim against the City or
any of its officers, officials, agents, or employees for damages suffered as a result of the City's
failure to perform in any respect any covenant, undertaking, or obligation under any Bond
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Documents or as a result of the incorrectness of any representation in, or omission from, any of
the Bond Documents, except to the extent that any such claim relates to an obligation,
undertaking, representation, or covenant of the City, in accordance with the Bond Documents
and the PID Act. Any such claim shall be payable only from the Trust Estate or the amounts
collected to pay Annual Collection Costs on deposit in the Administrative Fund. Nothing
contained in any of the Bond Documents shall be construed to preclude any action or proceeding
in any court or before any governmental body, agency, or instrumentality against the City or any
of its officers, officials, agents, or employees to enforce the provisions of any of the Bond
Documents or to enforce all rights of the Owners of the Bonds by mandamus or other proceeding
at law or in equity.
(f) The City may rely on and shall be protected in acting or refraining from acting
upon any notice, resolution, request, consent, order, certificate, report, warrant, bond, or other
paper or document believed by it to be genuine and to have been signed or presented by the
proper party or proper parties. The City may consult with counsel with regard to legal questions,
and the opinion of such counsel shall be full and complete authorization and protection in respect
of any action taken or suffered by it hereunder in good faith and in accordance therewith.
Whenever in the administration of its duties under this Indenture the City shall deem it necessary
or desirable that a matter be proved or established prior to taking or suffering any action
hereunder, such matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of willful misconduct on the part of the City, be deemed to be
conclusively proved and established by a certificate of the Trustee, an Independent Financial
Consultant, an independent inspector or City Manager or other person designated by the City
Council to so act on behalf of the City, and such certificate shall be full warrant to the City for
any action taken or suffered under the provisions of this Indenture upon the faith thereof, but in
its discretion the City may, in lieu thereof, accept other evidence of such matter or may require
such additional evidence as to it may deem reasonable.
(g) In order to perform its duties and obligations hereunder, the City may employ
such persons or entities as it deems necessary or advisable. The City shall not be liable for any of
the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall
be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations,
determinations, and directions of such persons or entities.
ARTICLE IX
THE TRUSTEE
Section 9.1. Acceptance of Trust; Trustee as Registrar and Paying Agent.
(a) The Trustee accepts and agrees to execute the respective trusts imposed upon it by
this Indenture, but only upon the terms and conditions and subject to the provisions of this
Indenture to all of which the parties hereto and the respective Owners of the Bonds agree.
(b) The Trustee is hereby designated and agrees to act as Paying Agent/Registrar for
and with respect to the Bonds.
Section 9.2. Trustee Entitled to Indemnity.
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The Trustee shall be under no obligation to institute any suit, or to undertake any
proceeding under this Indenture, or to enter any appearance or in any way defend in any suit in
which it may be made defendant, or to take any steps in the execution of the trusts hereby created
or in the enforcement of any rights and powers hereunder, until it shall be indemnified, to the
extent permitted by law, to its satisfaction against any and all costs and expenses, outlays, and
counsel fees and other reasonable disbursements, and against all liability except as a
consequence of its own negligence or willful misconduct; provided, however, that in no event
shall the Trustee request or require indemnification as a condition to making any deposits,
payments or transfers (provided such payment or transfer is prior to an Event of Default) when
required hereunder, or to deliver any notice when required hereunder. To the extent permitted by
law and during the occurrence of an Event of Default, the Trustee shall be entitled to
indemnification as a condition to making any deposits, payments or transfers when required
hereunder, or to delivering any notice when required hereunder. Nevertheless, the Trustee may
begin suit, or appear in and defend suit, or exercise any such rights and powers as Trustee, and in
such case the Trustee may make transfers from the Pledged Revenue Fund and Administrative
Fund to pay all costs and expenses, outlays, and counsel fees and other reasonable disbursements
properly incurred in connection therewith and shall, to the extent permitted by law, be entitled to
a preference therefor over any Bonds Outstanding hereunder.
Section 9.3. Responsibilities of the Trustee.
(a) The recitals contained in this Indenture and in the Bonds shall be taken as the
statements of the City and the Trustee assumes no responsibility for and undertakes no duty to
verify the correctness of the same. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or the Bonds or with respect to the security afforded by this
Indenture, and the Trustee shall incur no liability with respect thereto. Except as otherwise
expressly provided in this Indenture, the Trustee shall have no responsibility or duty with respect
to: (i) the issuance of Bonds for value; (ii) the application of the proceeds thereof, except to the
extent that such proceeds are received by it in its capacity as Trustee; (iii) the application of any
moneys paid to the City or others in accordance with this Indenture, except as to the application
of any moneys paid to it in its capacity as Trustee; (iv) any calculation of arbitrage or rebate
under the Code; (v) any loss suffered in connection with any investment of funds in accordance
with this Indenture; or (vi) to undertake any other action unless specifically authorized or
required pursuant to a written direction by the City or pursuant to this Indenture.
(b) The duties and obligations of the Trustee shall be determined by the express
provisions of this Indenture, and the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Indenture, except for the Trustee's
own negligence or willful misconduct. The Trustee will, prior to any Event of Default and after
curing of any Event of Default, perform such duties and only such duties as are specifically set
forth herein. The Trustee will, during the existence of an Event of Default, exercise such rights
and powers vested in it by this Indenture and use the same degree of care and skill in its exercise
as a prudent person would exercise or use under the circumstances in the conduct of his/her own
affairs.
(c) The Trustee shall not be liable for any action taken or omitted by it in the
performance of its duties under this Indenture, except for its own negligence or willful
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misconduct. In no event shall the Trustee be liable for incidental, indirect, special or
consequential damages in connection with or arising from this Indenture for the existence,
furnishing or use of the Major Improvement Area Projects. The Trustee 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 Owners of not less than a majority in principal amount of the Bonds then
Outstanding relating to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture.
(d) The Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agent's attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or, attorney appointed with
due care and in good faith by it hereunder.
Section 9.4. Property Held in Trust.
All moneys and securities held by the Trustee at any time pursuant to the terms of this
Indenture shall be held by the Trustee in trust for the purposes and under the terms and
conditions of this Indenture.
Section 9.5. Trustee Protected in Relying on Certain Documents.
(a) The Trustee may conclusively rely upon any order, notice, request, consent,
waiver, certificate, statement, affidavit, requisition, bond, or other document provided to the
Trustee in accordance with the terms of this Indenture that it shall in good faith reasonably
believe to be genuine and to have been adopted or signed by the proper board or Person or to
have been prepared and furnished pursuant to any of the provisions of this Indenture, or upon the
written opinion of any counsel, architect, engineer, insurance consultant, management
consultant, or accountant that the Trustee shall in good faith reasonably believe to be qualified in
relation to the subject matter or is selected by the City in accordance with this Indenture, and the
Trustee shall be under no duty to make any investigation or inquiry into, and shall not be deemed
to have knowledge of, any statements contained or matters referred to in any such instrument.
The Trustee may consult with counsel selected by the Trustee with due care that is nationally
recognized in the field of municipal bond law, who may or may not be Bond Counsel, and any
advice from such counsel with respect to compliance with the provisions of this Indenture shall
be full and complete authorization and protection in respect of any action taken, suffered or
omitted to be taken by it hereunder, reasonably and in good faith, in accordance with such
advice.
(b) Whenever the Trustee shall deem it necessary or desirable that a matter be proved
or established prior to taking or suffering any action under this Indenture, such matter may be
deemed to be conclusively proved and established by a City Order, unless other evidence in
respect thereof be hereby specifically prescribed. Such City Order shall be full warrant for any
action taken or suffered in good faith under the provisions hereof, but the Trustee may in lieu
thereof accept other evidence of such fact or matter or may require such further or additional
evidence as it may deem reasonable. Except as otherwise expressly provided herein, any request,
order, notice, or other direction required or permitted to be furnished pursuant to any provision
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hereof by the City to the Trustee shall be sufficiently executed if executed in the name of the
City by the City Representative.
(c) The Trustee shall not be under any obligation to see to the recording or filing of
this Indenture, or otherwise to the giving to any Person of notice of the provisions hereof except
as expressly required in Section 9.13.
Section 9.6. Compensation.
Unless otherwise provided by contract with the Trustee, the Trustee, at the written
direction of the City, shall transfer from the Administrative Fund, the previously determined and
agreed upon, reasonable compensation for all services rendered by it hereunder, including its
services as Paying Agent/Registrar and extraordinary services rendered, together with all its
reasonable expenses, charges, and other disbursements and those of its counsel, agents and
employees, incurred in and about the administration and execution of the trusts hereby created
and the exercise of its powers and the performance of its duties hereunder, all pursuant to a City
Order and subject to any limit on the amount of such compensation or recovery of expenses or
other charges as shall be prescribed by such City Order, and the Trustee shall have a lien therefor
on any and all funds at any time held by it hereunder prior to any Bonds Outstanding. None of
the provisions contained in this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Trustee has reasonable grounds for believing that
the repayment of such funds or liability is not reasonably assured to it. If the City shall fail to
make any payment required by this Section, the Trustee shall make such payment from lawfully
available funds (other than funds designated by the City for arbitrage rebate purposes) in its
possession under the provisions of this Indenture and shall be entitled to a preference therefor
over any Bonds Outstanding hereunder.
Section 9.7. Permitted Acts.
The Trustee and its directors, officers, employees, or agents may become the owner of or
may in good faith buy, sell, own, hold and deal in Bonds and may join in any action that any
Owner of Bonds may be entitled to take as fully and with the same rights as if it were not the
Trustee. The Trustee may act as depository, and permit any of its officers or directors to act as a
member of, or in any other capacity with respect to, the City or any committee formed to protect
the rights of holders of Bonds or to effect or aid in any reorganization growing out of the
enforcement of the Bonds or this Indenture, whether or not such committee shall represent the
holders of a majority of the Bonds.
Section 9.8. Resignation of Trustee.
The Trustee may at any time resign and be discharged of its duties and obligations
hereunder by giving not fewer than 60 days' written notice, specifying the date when such
resignation shall take effect, to the City and each Owner of any Outstanding Bond. Such
resignation shall take effect upon the appointment of a successor as provided in Section 9.10 and
the acceptance of such appointment by such successor. Notwithstanding the foregoing, if, after
60 days following receipt of the notice, the City has not appointed a successor Trustee, the
Trustee may apply to a court of competent jurisdiction to appoint a successor Trustee, at no
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expense to the City, and such resignation shall take effect upon the court's appointment of a
successor Trustee.
Section 9.9. Removal of Trustee.
The Trustee may be removed at any time by (i) the Owners of at least a majority in
aggregate Outstanding principal amount of the Bonds by an instrument or concurrent instruments
in writing signed and acknowledged by such Owners or by their attorneys -in -fact, duly
authorized and delivered to the City, or (ii) so long as the City is not in default under this
Indenture, the City. Copies of each such instrument shall be delivered by the City to the Trustee
and any successor thereof. The Trustee may also be removed at any time for any breach of trust
or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any
provision of this Indenture with respect to the duties and obligations of the Trustee by any court
of competent jurisdiction upon the application of the City or the Owners of not less than 10% in
aggregate Outstanding principal amount of the Bonds.
Section 9.10. Successor Trustee.
(a) If the Trustee shall resign, be removed, be dissolved, or become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator, or conservator of
the Trustee or of its property shall be appointed, or if any public officer shall take charge or
control of the Trustee or of its property or affairs, the position of the Trustee hereunder shall
thereupon become vacant.
(b) If the position of Trustee shall become vacant for any of the foregoing reasons or
for any other reason, a successor Trustee may be appointed within one year after any such
vacancy shall have occurred by the Owners of at least 50% of the aggregate Outstanding
principal amount of the Bonds by an instrument or concurrent instruments in writing signed and
acknowledged by such Owners or their attorneys -in -fact, duly authorized and delivered to such
successor Trustee, with notification thereof being given to the predecessor Trustee and the City.
(c) Until such successor Trustee shall have been appointed by the Owners of the
Bonds, the City shall forthwith (and in no event in excess of 30 days after such vacancy occurs)
appoint a Trustee to act hereunder. Copies of any instrument of the City providing for any such
appointment shall be delivered by the City to the Trustee so appointed. The City shall mail notice
of any such appointment to each Owner of any Outstanding Bonds within 30 days after such
appointment. Any appointment of a successor Trustee made by the City immediately and without
further act shall be superseded and revoked by an appointment subsequently made by the
Owners.
(c) If in a proper case no appointment of a successor Trustee shall be made within 45
days after the giving by any Trustee of any notice of resignation in accordance with Section 9.8
or after the occurrence of any other event requiring or authorizing such appointment, the Trustee
or any Owner of Bonds may apply to any court of competent jurisdiction for the appointment of
such a successor, and the court may thereupon, after such notice, if any, as the court may deem
proper, appoint such successor and the City shall be responsible for the costs of such
appointment process.
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(e) Any successor Trustee appointed under the provisions of this Section shall be a
commercial bank or trust company or national banking association (i) having a capital and
surplus and undivided profits aggregating at least $50,000,000, if there be such a commercial
bank or trust company or national banking association willing and able to accept the appointment
on reasonable and customary terms, and (ii) authorized by law to perform all the duties of the
Trustee required by this Indenture.
(f) Each successor Trustee shall mail, in accordance with the provisions of the
Bonds, notice of its appointment to the Trustee, any rating agency which, at the time of such
appointment, is providing a rating on the Bonds and each of the Owners of the Bonds.
Section 9.11. Transfer of Rights and Property to Successor Trustee.
Any successor Trustee appointed under the provisions of Section 9.10 shall execute,
acknowledge, and deliver to its predecessor and the City an instrument in writing accepting such
appointment, and thereupon such successor, without any further act, deed, or conveyance, shall
become fully vested with all moneys, estates, properties, rights, immunities, powers, duties,
obligations, and trusts of its predecessor hereunder, with like effect as if originally appointed as
Trustee. However, the Trustee then ceasing to act shall nevertheless, on request of the City or of
such successor, execute, acknowledge, and deliver such instruments of conveyance and further
assurance and do such other things as may reasonably be required for more fully and certainly
vesting and confirming in such successor all the rights, immunities, powers, and trusts of such
Trustee and all the right, title, and interest of such Trustee in and to the Trust Estate, and, upon
the receipt of payment of its outstanding charges, shall pay over, assign, and deliver to such
successor any moneys or other properties subject to the trusts and conditions herein set forth.
Should any deed, conveyance, or instrument in writing from the City be required by such
successor for more fully and certainly vesting in and confirming to it any such moneys, estates,
properties, rights, powers, duties, or obligations, any and all such deeds, conveyances, and
instruments in writing, on request and so far, as may be authorized by law, shall be executed,
acknowledged, and delivered by the City.
Section 9.12. Merger, Conversion or Consolidation of Trustee.
Any corporation or association into which the Trustee may be merged or with which it
may be consolidated or any corporation or association resulting from any merger, conversion or
consolidation to which it shall be a party or any corporation or association to which the Trustee
may sell or transfer all or substantially all of its corporate trust business shall be the successor to
such Trustee hereunder, without any further act, deed or conveyance, provided that such
corporation or association shall be a commercial bank or trust company or national banking
association qualified to be a successor to such Trustee under the provisions of Section 9.10, or a
trust company that is a wholly -owned subsidiary of any of the foregoing.
Section 9.13. Trustee To File Continuation Statements.
Chapter 1208, Texas Government Code, applies to the issuance of the Bonds and the
pledge of the Trust Estate provided herein, and such pledge is, under current law, valid, effective
and perfected. If necessary, the Trustee shall file or cause to be filed, at the City's expense, such
continuation statements as may be delivered to the Trustee and which may be required by the
Texas Uniform Commercial Code, as from time to time in effect (the "UCC"), in order to
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continue perfection of the security interest of the Trustee in such items of tangible or intangible
personal property and any fixtures as may have been granted to the Trustee pursuant to this
Indenture in the time, place and manner required by the UCC; provided unless the Trustee is
otherwise notified by the City, the Trustee may conclusively rely upon the initial filing
statements delivered to it in filing any continuation statements hereunder. The Trustee is not
responsible for the initial filing of any financing statements.
Section 9.14. Accounts, Periodic Reports and Certificates.
The Trustee shall keep or cause to be kept proper books of record and account (separate
from all other records and accounts) in which complete and correct entries shall be made of its
transactions relating to the Funds and Accounts established by this Indenture and which shall at
all times be subject to inspection by the City, and the Owner or Owners of not less than 10% in
principal amount of the Bonds then Outstanding or their representatives duly authorized in
writing.
Section 9.15. Construction of Indenture.
The Trustee may construe any of the provisions of this Indenture insofar as the same may
appear to be ambiguous or inconsistent with any other provision hereof, and any construction of
any such provisions hereof by the Trustee in good faith shall be binding upon the Owners of the
Bonds.
ARTICLE X
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Section 10.1. Amendments Permitted.
(a) This Indenture and the rights and obligations of the City and of the Owners of the
Bonds may be modified or amended at any time by a Supplemental Indenture, except as provided
below, pursuant to the affirmative vote at a meeting of Owners of the Bonds, or with the written
consent without a meeting, of the Owners of the Bonds of at least a majority of the aggregate
principal amount of the Bonds then Outstanding and City approval of such modification or
amendment. No such modification or amendment shall (i) extend the maturity of any Bond or
reduce principal of or the interest rate thereon, or otherwise alter or impair the obligation of the
City to pay the principal of, and the interest and any premium on, any Bond, without the express
consent of the Owner of such Bond, (ii) permit the creation by the City of any pledge or lien
upon the Trust Estate, or any portion thereof, superior to or on a parity with the pledge and lien
created for the benefit of the Bonds (except for the issuance of Refunding Bonds or as otherwise
permitted by Applicable Laws or this Indenture), or (iii) reduce the percentage of Owners of the
Bonds required for the amendment hereof. Any such amendment shall not modify any of the
rights or obligations of the Trustee without its written consent.
(b) This Indenture and the rights and obligations of the City and of the Owners may
also be modified or amended at any time by a Supplemental Indenture, without the consent of
any Owners, only to the extent permitted by law, and only for anyone or more of the following
purposes:
(i) to add to the covenants and agreements of the City in this Indenture
contained, other covenants and agreements thereafter to be observed, or to limit or
surrender any right or power herein reserved to or conferred upon the City;
(ii) to make modifications not adversely affecting any Outstanding Bonds in
any material respect;
(iii) to make such provisions for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective provision contained in this
Indenture, or in regard to questions arising under this Indenture, as the City and the
Trustee may deem necessary or desirable and not inconsistent with this Indenture, and
that shall not adversely affect the rights of the Owners of the Bonds;
(iv) to set forth additional provisions, if deemed necessary or advisable, in
connection with the issuance of Refunding Bonds permitted under the terms of this
Indenture; and
(v) to make such additions, deletions or modifications as may be necessary or
desirable to assure exemption from federal income taxation of interest on the Bonds.
Section 10.2. Owners' Meetings.
The City may at any time call a meeting of the Owners of the Bonds. In such event the
City is authorized to fix the time and place of said meeting and to provide for the giving of notice
thereof, and to fix and adopt reasonable rules and regulations for the conduct of said meeting;
provided, however, that the same may not conflict with the terms of this Indenture. Without
limiting the generality of the immediately preceding sentence, such rules and regulations may not
reduce the percentage of Owners of Bonds required for the amendment of this Indenture as
provided herein.
Section 10.3. Procedure for Amendment with Written Consent of Owners.
(a) The City and the Trustee may at any time adopt a Supplemental Indenture
amending the provisions of the Bonds or of this Indenture, to the extent that such amendment is
permitted by Section 10.1, to take effect when and as provided in this Section. A copy of such
Supplemental Indenture, together with a request to Owners for their consent thereto, if such
consent is required pursuant to Section 10.1, shall be mailed by first class mail, by the Trustee to
each Owner of Bonds from whom consent is required under this Indenture, but failure to mail
copies of such Supplemental Indenture and request shall not affect the validity of the
Supplemental Indenture when assented to as in this Section provided.
(b) Such Supplemental Indenture shall not become effective unless there shall be
filed with the Trustee the written consents of the Owners as required by this Indenture and a
notice shall have been mailed as hereinafter in this Section provided and the City has delivered to
the Trustee an opinion of Bond Counsel to the effect that such amendment is permitted and will
not adversely affect the exclusion of interest on the Bonds from gross income for purposes of
federal income taxation. Each such consent shall be effective only if accompanied by proof of
ownership of the Bonds for which such consent is given, which proof shall be such as is
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permitted by Section 11.6. Any such consent shall be binding upon the Owner of the Bonds
giving such consent and on any subsequent Owner (whether or not such subsequent Owner has
notice thereof), unless such consent is revoked in writing by the Owner giving such consent or a
subsequent Owner by filing such revocation with the Trustee prior to the date when the notice
hereinafter in this Section provided for has been mailed.
(c) After the Owners of the required percentage of Bonds shall have filed their
consents to the Supplemental Indenture, the City shall mail a notice to the Owners in the manner
hereinbefore provided in this Section for the mailing of the Supplemental Indenture, stating in
substance that the Supplemental Indenture has been consented to by the Owners of the required
percentage of Bonds and will be effective as provided in this Section (but failure to mail copies
of said notice shall not affect the validity of the Supplemental Indenture or consents thereto).
Proof of the mailing of such notice shall be filed with the Trustee. A record, consisting of the
papers required by this Section 10.3 to be filed with the Trustee, shall be proof of the matters
therein stated until the contrary is proved. The Supplemental Indenture shall become effective
upon the filing with the Trustee of the proof of mailing of such notice, and the Supplemental
Indenture shall be deemed conclusively binding (except as otherwise hereinabove specifically
provided in this Article) upon the City and the Owners of all Bonds at the expiration of sixty (60)
days after such filing, except in the event of a final decree of a court of competent jurisdiction
setting aside such consent in a legal action or equitable proceeding for such purpose commenced
within such sixty-day period.
Section 10.4. Procedure for Amendment Not Requiring Owner Consent.
(a) The City and the Trustee may at any time adopt a Supplemental Indenture
amending the provisions of the Bonds or of this Indenture, to the extent that such amendment is
permitted by Section 10.1, to take effect when and as provided in this Section. The City shall
direct the Trustee to provide a copy of such Supplemental Indenture, together with a notice
stating that the Supplemental Indenture does not require Owner consent, mailed by first class
mail to each Owner of Bonds, but failure to mail copies of such Supplemental Indenture shall not
affect the validity of the Supplemental Indenture. The Trustee shall retain the proof of its
mailing of such notice. A record, consisting of the papers required by this Section 10.4, shall be
proof of the matters therein stated until the contrary is proved.
(b) The Supplemental Indenture shall become effective upon the execution and
delivery of such Supplemental Indenture by the Trustee and the City, and the Supplemental
Indenture shall be deemed conclusively binding upon the City, the Trustee and the Owners of all
Bonds as of the date of such execution and delivery.
Section 10.5. Effect of Supplemental Indenture.
From and after the time any Supplemental Indenture becomes effective pursuant to this
Article X, this Indenture shall be deemed to be modified and amended in accordance therewith,
the respective rights, duties, and obligations under this Indenture of the City, the Trustee and all
Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms and conditions of
any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
Section 10.6. Endorsement or Replacement of Bonds Issued After Amendments.
The City may determine that Bonds issued and delivered after the effective date of any
action taken as provided in this Article X shall bear a notation, by endorsement or otherwise, in
form approved by the City, as to such action. In that case, upon demand of the Owner of any
Bond Outstanding at such effective date and presentation of his Bond for that purpose at the
designated office of the Trustee or at such other office as the City may select and designate for
that purpose, a suitable notation shall be made on such Bond. The City may determine that new
Bonds, so modified as in the opinion of the City is necessary to conform to such Owners' action,
shall be prepared, executed, and delivered. In that case, upon demand of the Owner of any Bonds
then Outstanding, such new Bonds shall be exchanged at the designated office of the Trustee
without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds.
Section 10.7. Amendatory Endorsement of Bonds.
The provisions of this Article X shall not prevent any Owner from accepting any
amendment as to the particular Bonds held by such Owner, provided that due notation thereof is
made on such Bonds.
Section 10.8. Waiver of Default.
With the written consent of Owners of at least a majority in aggregate principal amount
of the Bonds then Outstanding, the Owners may waive compliance by the City with certain past
defaults under this Indenture and their consequences. Any such consent shall be conclusive and
binding upon the Owners and upon all future Owners.
Section 10.9. Execution of Supplemental Indenture.
In executing, or accepting the additional trusts created by, any Supplemental Indenture
permitted by this Article or the modification thereby of the trusts created by this Indenture, the
Trustee shall receive, and shall be fully protected in relying upon, an opinion of counsel
addressed and delivered to the Trustee and the City stating that the execution of such
Supplemental Indenture is permitted by and in compliance with this Indenture. The Trustee may,
but shall not be obligated to, enter into any such Supplemental Indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
ARTICLE XI
DEFAULT AND REMEDIES
Section 11.1. Events of Default.
Each of the following occurrences or events shall be and is hereby declared to be an
"Event of Default," to wit:
(i) The failure of the City to deposit the Pledged Revenues to the Pledged
Revenue Fund;
(ii) The failure of the City to enforce the collection of the Assessments
including the prosecution of foreclosure proceedings, in accordance with Section 7.2; and
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(iii) Default in the performance or observance of any covenant, agreement or
obligation of the City under this Indenture, other than a default under (iv) below, and the
continuation thereof for a period of ninety (90) days after written notice specifying such default
and requiring same to be remedied shall have been given to the City by the Trustee, which may
give such notice in its discretion and which shall give such notice at the written request of the
Owners of not less than 51% in aggregate Outstanding principal amount of the Bonds then
Outstanding; provided, however, if the default stated in the notice is capable of cure but cannot
reasonably be cured within the applicable period, the City shall be entitled to a further extension
of time reasonably necessary to remedy such default so long as corrective action is instituted by
the City within the applicable period and is diligently pursued until such failure is corrected, but
in no event for a period of time of more than one hundred eighty (180) days after such notice.
(iv) The failure to make payment of the principal of or interest on any of the
Bonds when the same becomes due and payable and such failure is not remedied within thirty
(30) days thereafter.
Section 11.2. Immediate Remedies for Default.
(a) Subject to Article VIII, upon the happening and continuance of any of the Events
of Default described in Section 11.1, then and in every such case the Trustee may proceed, and
upon the written request of the Owners of not less than 51 % in aggregate Outstanding principal
amount of the Bonds then Outstanding hereunder shall proceed, to protect and enforce the rights
of the Owners under this Indenture, by action seeking mandamus or by other suit, action, or
special proceeding in equity or at law, in any court of competent jurisdiction, for any relief to the
extent permitted by Applicable Laws, including, but not limited to, the specific performance of
any covenant or agreement contained herein, or injunction; provided, however, that no action for
money damages against the City may be sought or shall be permitted.
(b) PURSUANT TO SECTION 11.7, THE PRINCIPAL OF THE BONDS SHALL
NOT BE SUBJECT TO ACCELERATION UNDER ANY CIRCUMSTANCES.
(c) If the assets of the Trust Estate are sufficient to pay all amounts due with respect
to Outstanding Bonds, in the selection of Trust Estate assets to be used in the payment of Bonds
due under this Article, the City shall determine, in its absolute discretion, and shall instruct the
Trustee by City Order, which Trust Estate assets shall be applied to such payment and shall not
be liable to any Owner or other Person by reason of such selection and application. In the event
that the City shall fail to deliver to the Trustee such City Order, the Trustee shall select and
liquidate or sell Trust Estate assets as provided in the following paragraph, and shall not be liable
to any Owner, or other Person, or the City by reason of such selection, liquidation or sale.
(d) Whenever moneys are to be applied pursuant to this Article XI, irrespective of
and whether other remedies authorized under this Indenture shall have been pursued in whole or
in part, the Trustee may cause any or all of the assets of the Trust Estate, including Investment
Securities, to be sold. The Trustee may so sell the assets of the Trust Estate and all right, title,
interest, claim and demand thereto and the right of redemption thereof, in one or more parts, at
any such place or places, and at such time or times and upon such notice and terms as the Trustee
may deem appropriate, and as may be required by law and apply the proceeds thereof in
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accordance with the provisions of this Section. Upon such sale, the Trustee may make and
deliver to the purchaser or purchasers a good and sufficient assignment or conveyance for the
same, which sale shall be a perpetual bar both at law and in equity against the City, and all other
Persons claiming such properties. No purchaser at any sale shall be bound to see to the
application of the purchase money proceeds thereof or to inquire as to the authorization,
necessity, expediency, or regularity of any such sale. Nevertheless, if so requested by the
Trustee, the City shall ratify and confirm any sale or sales by executing and delivering to the
Trustee or to such purchaser or purchasers all such instruments as may be necessary or, in the
reasonable judgment of the Trustee, proper for the purpose which may be designated in such
request.
Section 11.3. Restriction on Owner's Action.
(a) No Owner shall have any right to institute any action, suit or proceeding at law or
in equity for the enforcement of this Indenture or for the execution of any trust thereof or any
other remedy hereunder, unless (i) a default has occurred and is continuing of which the Trustee
has been notified in writing as provided in Section 11.1, or of which by such Section it is deemed
to have notice, (ii) such default has become an Event of Default and the Owners of not less than
5 1 % of the aggregate principal amount of the Bonds then Outstanding have made written request
to the Trustee and offered it reasonable opportunity either to proceed to exercise the powers
hereinbefore granted or to institute such action, suit or proceeding in its own name, (iii) the
Owners have furnished to the Trustee written evidence of indemnity as provided in Section 9.2,
(iv) the Trustee has for 60 days after such notice failed or refused to exercise the powers
hereinbefore granted, or to institute such action, suit, or proceeding in its own name, (v) no
direction inconsistent with such written request has been given to the Trustee during such 60-day
period by the Owners of a majority of the aggregate principal amount of the Bonds then
Outstanding, and (vi) notice of such action, suit, or proceeding is given to the Trustee; however,
no one or more Owners of the Bonds shall have any right in any manner whatsoever to affect,
disturb, or prejudice this Indenture by its, his or their action or to enforce any right hereunder
except in the manner provided herein, and that all proceedings at law or in equity shall be
instituted and maintained in the manner provided herein and for the equal benefit of the Owners
of all Bonds then Outstanding. The notification, request and furnishing of indemnity set forth
above shall be conditions precedent to the execution of the powers and trusts of this Indenture
and to any action or cause of action for the enforcement of this Indenture or for any other remedy
hereunder.
(b) Subject to Article VIII, nothing in this Indenture shall affect or impair the right of
any Owner to enforce, by action at law, payment of any Bond at and after the maturity thereof, or
on the date fixed for redemption or the obligation of the City to pay each Bond issued hereunder
to the respective Owners thereof at the time and place, from the source and in the manner
expressed herein and in the Bonds.
(c) In case the Trustee or any Owners shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Trustee or any Owners, then and in every such case
the City, the Trustee and the Owners shall be restored to their former positions and rights
hereunder, and all rights, remedies and powers of the Trustee shall continue as if no such
proceedings had been taken.
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Section 11.4. Application of Revenues and Other Moneys After Default.
(a) All moneys, securities, funds and Pledged Revenues and the income therefrom
received by the Trustee pursuant to any right given or action taken under the provisions of this
Article shall, after payment of the cost and expenses of the proceedings resulting in the collection
of such amounts, the expenses (including its counsel), liabilities, and advances incurred or made
by the Trustee and the fees of the Trustee in carrying out this Indenture, during the continuance
of an Event of Default, notwithstanding Section 11.2, be applied by the Trustee, on behalf of the
City, to the payment of interest and principal or Redemption Price then due on Bonds, as
follows:
FIRST: To the payment to the Owners entitled thereto all installments of interest then due
in the direct order of maturity of such installments, and, if the amount available shall not
be sufficient to pay in full any installment, then to the payment thereof ratably, according
to the amounts due on such installment, to the Owners entitled thereto, without any
discrimination or preference; and
SECOND: To the payment to the Owners entitled thereto of the unpaid principal of
Outstanding Bonds, or Redemption Price of any Bonds which shall have become due,
whether at maturity or by call for redemption, in the direct order of their due dates and, if
the amounts available shall not be sufficient to pay in full all the Bonds due on any date,
then to the payment thereof ratably, according to the amounts of principal due and to the
Owners entitled thereto, without any discrimination or preference.
The Trustee shall make payments to the Owners pursuant to this Section 11.4 within
thirty (30) days of receipt of such good and available funds, and the record date shall be the date
the Trustee receives such good and available funds.
(b) In the event funds are not adequate to cure any of the Events of Default described
in Section 11.1, the available funds shall be allocated to the Bonds that are Outstanding in
proportion to the quantity of Bonds that are currently due and in default under the terms of this
Indenture.
(c) The restoration of the City to its prior position after any and all defaults have been
cured, as provided in Section 11.3, shall not extend to or affect any subsequent default under this
Indenture or impair any right consequent thereon.
Section 11.5. Effect of Waiver.
No delay or omission of the Trustee, or any Owner, to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a
waiver of any such default or an acquiescence therein; and every power and remedy given by this
Indenture to the Trustee or the Owners, respectively, may be exercised from time to time and as
often as may be deemed expedient.
Section 11.6. Evidence of Ownership of Bonds.
(a) Any request, consent, revocation of consent or other instrument which this
Indenture may require or permit to be signed and executed by the Owners may be in one or more
instruments of similar tenor, and shall be signed or executed by such Owners in person or by
their attorneys duly appointed in writing. Proof of the execution of any such instrument, or of
any instrument appointing any such attorney, or the holding by any Person of the Bonds shall be
sufficient for any purpose of this Indenture (except as otherwise herein expressly provided) if
made in the following manner:
(i) The fact and date of the execution of such instruments by any Owner of
Bonds or the duly appointed attorney authorized to act on behalf of such Owner may be
provided by a guarantee of the signature thereon by a bank or trust company or by the
certificate of any notary public or other officer authorized to take acknowledgments of
deeds, that the Person signing such request or other instrument acknowledged to him the
execution thereof, or by an affidavit of a witness of such execution, duly sworn to before
such notary public or other officer. Where such execution is by an officer of a corporation
or association or a member of a partnership, on behalf of such corporation, association or
partnership, such signature guarantee, certificate, or affidavit shall also constitute
sufficient proof of his authority.
(ii) The ownership of Bonds and the amount, numbers and other identification
and date of holding the same shall be proved by the Register.
(b) Except as otherwise provided in this Indenture with respect to revocation of a
consent, any request or consent by an Owner of any Bond shall bind all future Owners of the
same Bond in respect of anything done or suffered to be done by the City or the Trustee in
accordance therewith.
Section 11.7. No Acceleration.
In the event of the occurrence of an Event of Default under Section 11.1, the right of
acceleration of any Stated Maturity is not granted as a remedy hereunder and the right of
acceleration under this Indenture is expressly denied.
Section 11.8. Mailing of Notice.
Any provision in this Article for the mailing of a notice or other document to Owners
shall be fully complied with if it is mailed, first class postage prepaid, only to each Owner at the
address appearing upon the Register.
Section 11.9. Exclusion of Bonds.
Bonds owned or held by or for the account of the City will not be deemed Outstanding
for the purpose of consent or other action or any calculation of Outstanding Bonds provided for
in this Indenture, and the City shall not be entitled with respect to such Bonds to give any
consent or take any other action provided for in this Indenture.
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ARTICLE XII
GENERAL COVENANTS AND REPRESENTATIONS
Section 12.1. Representations as to Trust Estate.
(a) The City represents and warrants that it is authorized by Applicable Laws to
authorize and issue the Bonds, to execute and deliver this Indenture and to pledge the Trust
Estate in the manner and to the extent provided in this Indenture, and that the Trust Estate is 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
Indenture except as expressly provided herein.
(b) The City shall at all times, to the extent permitted by Applicable Laws, defend,
preserve and protect the pledge of the Trust Estate and all the rights of the Owners and the
Trustee, under this Indenture against all claims and demands of all Persons whomsoever.
(c) Subject to Section 7.2(d), the City will take all steps reasonably necessary and
appropriate, and will provide written direction to the Trustee to take all steps reasonably
necessary and appropriate, to collect all delinquencies in the collection of the Assessments and
any other amounts pledged to the payment of the Bonds to the fullest extent permitted by the PID
Act and other Applicable Laws.
Section 12.2. General.
The City shall do and perform or cause to be done and performed all acts and things
required to be done or performed by or on behalf of the City under the provisions of this
Indenture.
ARTICLE XIII
SPECIAL COVENANTS
Section 13.1. Further Assurances; Due Performance.
(a) At any and all times the City will duly execute, acknowledge and deliver, or will
cause to be done, executed and delivered, all and every such further acts, conveyances, transfers,
and assurances in a manner as the Trustee shall reasonably require for better conveying,
transferring, pledging, and confirming unto the Trustee, all and singular, the revenues, Funds,
Accounts and properties constituting the Trust Estate, and the Trust Estate hereby transferred and
pledged, or intended so to be transferred and pledged.
(b) The City will duly and punctually keep, observe and perform each and every
term, covenant and condition on its part to be kept, observed and performed, contained in this
Indenture.
Me
Section 13.2. Other Obligations or Other Liens; Refunding Bonds; Future
Improvement Area Bonds.
(a) The City reserves the right, subject to the provisions contained in this
Section 13.2, to issue or incur bonds, notes or other obligations under other indentures,
assessment ordinances, or similar agreements or other obligations which do not constitute or
create a lien on the Trust Estate and are not payable from Trust Estate, or any portion thereof,.
(b) Other than Refunding Bonds issued to refund all or a portion of the Bonds, the
City will not create or voluntarily permit to be created any debt, lien or charge on the Trust
Estate, or any portion thereof, and will not do or omit to do or suffer to be done or omit to be
done any matter or things whatsoever whereby the lien of this Indenture or the priority hereof
might or could be lost or impaired. Nothing herein shall prevent the City from levying Future
Improvement Area Assessments on Parcels within the Major Improvement Area, subject to the
provisions contained in Sections 13.2(d) and 13.2(e).
(c) Notwithstanding any contrary provision of this Indenture but subject to
Section 7.3, the City shall not issue additional bonds, notes or other obligations under this
Indenture, secured by any pledge of or other lien or charge on the Trust Estate or other property
pledged under this Indenture, other than Refunding Bonds. The City reserves the right to issue
Refunding Bonds, the proceeds of which would be utilized to refund all or any portion of the
Outstanding Bonds or Outstanding Refunding Bonds and to pay all costs incident to the
Refunding Bonds, as authorized by the laws of the State. In addition, the City reserves the right
to issue or incur Future Improvement Area Bonds as described below, which Future
Improvement Area Bonds will not be secured by the Trust Estate.
(d) The City reserves the right to issue or incur Future Improvement Area Bonds, to
finance the cost of Future Improvement Area Improvements within each of the Future
Improvement Areas as the development proceeds. Such Future Improvement Area Bonds are
secured by separate assessments levied on the Future Improvement Area Assessed Property. The
City may, but is under no obligation to, issue or incur Future Improvement Area Bonds, for any
purpose permitted by the PID Act; provided, however, that no Future Improvement Area Bonds
shall be issued unless such Future Improvement Area Bonds are made to mature on September
15 in each of the years in which they are scheduled to mature, and the applicable requirements in
this Section are met.
(e) The City reserves the right to issue or incur Future Improvement Area Bonds, but
shall be under no obligation to issue or incur Future Improvement Area Bonds, subject to the
following conditions:
(1) The Trustee shall receive a certificate from the City Representative
certifying that the City is not in default in the performance and observance of any of the
terms, provisions and conditions applicable to the City contained in any indenture of trust
authorizing the issuance of PID Bonds for the District;
(2) The Trustee and the City shall receive a certificate from the Developer,
through an authorized representative, certifying that the Developer is not in default
beyond any applicable notice and cure period in the performance and observance of any
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of the terms, provisions and conditions applicable to the Developer contained in the
Development Agreement, or any continuing disclosure agreement entered into by the
Developer relating to any PID Bonds, unless any defaults under the foregoing agreements
(except for defaults under any continuing disclosure agreements entered into by the
Developer which defaults shall be cured) are disclosed in a certificate from the Developer
to the City and the City elects to proceed with the issuance of the Future Improvement
Area Bonds regardless of the existence of such default or defaults;
(3) The Trustee and the City shall receive a certificate from the Administrator
certifying that there is no default by the Developer or any owner of more than five
percent (5%) of the assessed parcels in the applicable Future Improvement Area for
failure to pay special assessments on assessed parcels in such Future Improvement Area
owed by the Developer or such owner prior to the delinquency date thereof;
(4) (a) The Trustee and City shall receive an Independent Appraisal
evidencing that the sum of (i) the portion of the Future Improvement Area Assessment to
be pledged to the applicable Future Improvement Area Bonds, and (ii) the assessment
relating to the Bonds, for each individual assessed parcel in the applicable Future
Improvement Area, is not less than 3.0:1; provided, however (a) that if said ratio is
between 2.5:1 and 3.0:1, the Indenture for the applicable Future Improvement Area
Bonds must include a Holdback, as defined below, and (b) that if said ratio is 3.0:1 or
higher, then no such Holdback will be required.
(b) For purposes of this subsection 13(e)(4), a "Holdback" means a provision or
set of provisions reasonably satisfactory to the City to be included in any Indenture for
Future Improvement Bonds for which subsection (a) above is applicable which restricts a
"Holdback Amount." A "Holdback Amount" shall be equal to the amount of Future
Improvement Area Bonds which, if subtracted from the sum of (a) the total amount of
Future Improvement Area Bonds and (b) any outstanding assessments on such Future
Improvement Area, would cause the ratio described in subsection (a) above to equal
3.0:1.
(f) The City further covenants that, the City shall not levy an additional assessment
on land within any Future Improvement Area for the purpose of funding improvements within a
Future Improvement Area, whether such assessment is levied in connection with a
reimbursement agreement between the City and the Developer pursuant to the PID Act or in
connection with the issuance of any Future Improvement Area Bonds pursuant 13.2(e), unless
the following conditions are met:
(1) seventy-five percent (75%) of the parcels to be assessed in the Future
Improvement Area, for which the assessments will be levied, are under contract with
merchant builder(s) or real estate developer(s) for sale to end users; and either:
(A) building permits for homes have been issued and vertical construction
has commenced, which means framing on the main structure has begun, for at
least fifty percent (50%) of the total lots or residential units, as applicable, in the
preceding phase(s) or Improvement Area of the District for which bonds have
been issued, in part or whole, to fund local improvements within such phase or
Improvement Area; or
(B) certificates of occupancy for completed homes have been issued for at
least twenty-five percent (25%) of the total lots or residential units, as applicable,
in the preceding phase(s) or Improvement Area of the District for which bonds
have been issued, in part or whole, to fund local improvements within such phase
or Improvement Area.
Section 13.3. Books of Record.
(a) The City shall cause to be kept full and proper books of record and accounts, in
which full, true and proper entries will be made of all dealings, business and affairs of the City,
which relate to the Trust Estate, and the Bonds.
(b) The Trustee shall have no responsibility with respect to the financial and other
information received by it pursuant to this Section 13.3 except to receive and retain same, subject
to the Trustee's document retention policies, and to distribute the same in accordance with the
provisions of this Indenture.
ARTICLE XIV
PAYMENT AND CANCELLATION OF THE BONDS AND SATISFACTION OF THE
INDENTURE
Section 14.1. Trust Irrevocable.
The trust created by the terms and provisions of this Indenture is irrevocable until the
Bonds secured hereby are fully paid or provision is made for their payment as provided in this
Article.
Section 14.2. Satisfaction of Indenture.
If the City shall pay or cause to be paid, or there shall otherwise be paid to the Owners,
principal of and interest on all of the Bonds, at the times and in the manner stipulated in this
Indenture, and all amounts due and owing with respect to the Bonds have been paid or provided
for, then the pledge of the Trust Estate and all covenants, agreements, and other obligations of
the City to the Owners of such Bonds, shall thereupon cease, terminate, and become void and be
discharged and satisfied. In such event, the Trustee shall execute and deliver to the City copies of
all such documents as it may have evidencing that principal of and interest on all of the Bonds
has been paid so that the City may determine if this Indenture is satisfied; if so, the Trustee shall
pay over or deliver all moneys held by it in the Funds and Accounts held hereunder to the Person
entitled to receive such amounts, or, if no Person is entitled to receive such amounts, then to the
City.
Section 14.3. Bonds Deemed Paid.
(a) Any Outstanding Bonds shall, prior to the Stated Maturity or redemption date
thereof, be deemed to have been paid and no longer Outstanding within the meaning of this
Indenture (a "Defeased Debt"), and particularly this Article XIV, when payment of the principal
of, premium, if any, on such Defeased Debt, plus interest thereon to the due date thereof
.'
(whether such due date be by reason of maturity, redemption, or otherwise), either (1) shall have
been made in accordance with the terms thereof, or (2) shall have been provided by irrevocably
depositing with the Trustee, in trust, and irrevocably set aside exclusively for such payment,
(A) money sufficient to make such payment or (B) Defeasance Securities that mature as to
principal and interest in such amount and at such times as will insure the availability, without
reinvestment, of sufficient money to make such payment, and all necessary and proper fees,
compensation, and expenses of the Trustee pertaining to the Bonds with respect to which such
deposit is made shall have been paid or the payment thereof provided for to the satisfaction of
the Trustee. Neither Defeasance Securities nor moneys deposited with the Trustee pursuant to
this Section nor principal or interest payments on any such Defeasance Securities shall be
withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the
principal of and interest on the Bonds and shall not be part of the Trust Estate. Any cash received
from such principal of and interest on such Defeasance Securities deposited with the Trustee, if
not then needed for such purpose, shall be reinvested in Defeasance Securities as directed by the
City maturing at times and in amounts sufficient to pay when due the principal of and interest on
the Bonds on and prior to such redemption date or maturity date thereof, as the case may be.
Any payment for Defeasance Securities purchased for the purpose of reinvesting cash as
aforesaid shall be made only against delivery of such Defeasance Securities.
(b) Any determination not to redeem Defeased Debt that is made in conjunction with
the payment arrangements specified in Sections 14.3(a)(1) or 14.3(a)(2) shall not be irrevocable,
provided that: (1) in the proceedings providing for such defeasance, the City expressly reserves
the right to call the Defeased Debt for redemption; (2) the City gives notice of the reservation of
that right to the Owners of the Defeased Debt immediately following the defeasance; (3) the City
directs that notice of the reservation be included in any defeasance or redemption notices that it
authorizes; and (4) at or prior to the time of the redemption, the City satisfies the conditions of
clause (a) of this Section 14.3 with respect to such Defeased Debt as though it was being
defeased at the time of the exercise of the option to redeem the Defeased Debt, after taking the
redemption into account in determining the sufficiency of the provisions made for the payment
of the Defeased Debt.
(c) Until all Defeased Debt shall have become due and payable, the Trustee and the
Paying Agent/Registrar each shall perform the services of Trustee and Paying Agent/Registrar
for such Defeased Debt the same as if they had not been defeased, and the City shall make
proper arrangements to provide and pay for such services as required by this Indenture.
ARTICLE XV
MISCELLANEOUS
Section 15.1. Benefits of Indenture Limited to Parties.
Nothing in this Indenture, expressed or implied, is intended to give to any Person other
than the City, the Trustee and the Owners, any right, remedy, or claim under or by reason of this
Indenture. Any covenants, stipulations, promises or agreements in this Indenture by and on
behalf of the City shall be for the sole and exclusive benefit of the Owners and the Trustee.
Iff
Section 15.2. Successor is Deemed Included in All References to Predecessor.
Whenever in this Indenture or any Supplemental Indenture either the City or the Trustee
is named or referred to, such reference shall be deemed to include the successors or assigns
thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the
City or the Trustee shall bind and inure to the benefit of the respective successors and assigns
thereof whether so expressed or not.
Section 15.3. Execution of Documents and Proof of Ownership by Owners.
(a) Any request, declaration, or other instrument which this Indenture may require or
permit to be executed by Owners may be in one or more instruments of similar tenor, and shall
be executed by Owners in person or by their attorneys duly appointed in writing.
(b) Except as otherwise expressly provided herein, the fact and date of the execution
by any Owner or his attorney of such request, declaration, or other instrument, or of such writing
appointing such attorney, may be proved by the certificate of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded in the state in which he purports to
act, that the Person signing such request, declaration, or other instrument or writing
acknowledged to him the execution thereof, or by an affidavit of a witness of such execution,
duly sworn to before such notary public or other officer.
(c) Except as otherwise herein expressly provided, the ownership of registered Bonds
and the amount, maturity, number, and date of holding the same shall be proved by the Register.
(d) Any request, declaration or other instrument or writing of the Owner of any Bond
shall bind all future Owners of such Bond in respect of anything done or suffered to be done by
the City or the Trustee in good faith and in accordance therewith.
Section 15.4. No Waiver of Personal Liability.
No member, officer, agent, or employee of the City shall be individually or personally
liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing
herein contained shall relieve any such member, officer, agent, or employee from the
performance of any official duty provided by law.
Section 15.5. Notices to and Demands on City and Trustee.
(a) Except as otherwise expressly provided herein, all notices or other instruments
required or permitted under this Indenture shall be in writing and shall be faxed, delivered by
hand, or mailed by first class mail, postage prepaid, and addressed as follows:
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If to the City
If to the Trustee, initially also acting in
the capacity of Paying Agent/Registrar
City of Anna, Texas
I I I N. Powell Parkway
Anna, Texas 75409
Attn: Director of Finance
Telephone: (972) 924-3325
Regions Bank
3773 Richmond Avenue, Suite 1100
Houston, Texas 77046
Attn: Corporate Trust Administration
Telephone: (713) 244-8041
(b) Any such notice, demand, or request may also be transmitted to the appropriate
party by telegram or telephone and shall be deemed to be properly given or made at the time of
such transmission if, and only if, such transmission of notice shall be confirmed in writing and
sent as specified above.
(c) Any of such addresses may be changed at any time upon written notice of such
change given to the other party by the parry effecting the change. Notices and consents given by
mail in accordance with this Section shall be deemed to have been given five Business Days after
the date of dispatch; notices and consents given by any other means shall be deemed to have
been given when received.
(d) The Trustee shall mail to each Owner of a Bond notice of the redemption or
defeasance of all Bonds Outstanding.
Section 15.6. Partial Invalidity.
If any Section, paragraph, sentence, clause, or phrase of this Indenture shall for any
reason be held illegal or unenforceable, such holding shall not affect the validity of the remaining
portions of this Indenture. The City hereby declares that it would have adopted this Indenture and
each and every other Section, paragraph, sentence, clause, or phrase hereof and authorized the
issue of the Bonds pursuant thereto irrespective of the fact that anyone or more Sections,
paragraphs, sentences, clauses, or phrases of this Indenture may be held illegal, invalid, or
unenforceable.
Section 15.7. Applicable Laws.
This Indenture shall be governed by and enforced in accordance with the laws of the
State applicable to contracts made and performed in the State.
Section 15.8. Payment on Business Day.
In any case where the date of the maturity of interest or of principal (and premium, if
any) of the Bonds or the date fixed for redemption of any Bonds or the date any action is to be
taken pursuant to this Indenture is other than a Business Day, the payment of interest or principal
(and premium, if any) or the action need not be made on such date but may be made on the next
succeeding day that is a Business Day with the same force and effect as if made on the date
required and no interest shall accrue for the period from and after such date.
72
Section 15.9. Construction, Funding and Acquisition Agreement Amendments and
Supplements.
The City and the Developer may amend and supplement the Construction, Funding and
Acquisition Agreement from time to time without the consent or approval of the Owners or the
Trustee.
Section 15.10. Counterparts.
This Indenture may be executed in counterparts, each of which shall be deemed an
original.
Section 15.11. No Boycott of Israel.
The Trustee hereby represents that it does not Boycott Israel (as such term is defined in
Section 2271.001, Texas Government Code, as amended) and, subject to or as otherwise required
by applicable Federal law, including, without limitation, 50 U.S.C. Section 4607, the Trustee
hereby agrees not to Boycott Israel during the term of this Indenture, which for the purposes of
this section shall mean the end of the underwriting period unless this Indenture is terminated in
accordance with the provisions hereof.
Section 15.12. No Terrorist Organization.
The Trustee represents that, to the extent this Indenture constitutes a governmental
contract within the meaning of Section 2252.151 of the Texas Government Code, as amended,
solely for purposes of compliance with Chapter 2252 of the Texas Government Code, and except
to the extent otherwise required by applicable Federal law, the Trustee, nor any wholly owned
subsidiary, majority -owned subsidiary, parent company or affiliate of the Trustee is a company
listed by the Texas Comptroller of Public Accounts under Sections 806.051, 807.051, or
2252.153 of the Texas Government Code on the following website:
https:Hcomptroller.texas.gov/purchasing/publications/divestment.php.
[Remainder of page left blank intentionally]
73
IN WITNESS WHEREOF, the City and the Trustee have caused this Indenture of Trust
to be executed as of the date hereof.
Attest:
Carrie L. Land, City Secretary
City of Arena, Texas
(CITY SEAL)
CITY OF ANNA, TEXAS
Nake Pike, Mayor
City of Anna, Texas
City Signature Page to Indenture of Trust
REGIONS BANK,
as Trustee
LOW
Authorized Officer
Trustee Signature Page to Indenture of Trust
EXHIBIT A
DESCRIPTION OF THE PROPERTY WITHIN
THE MAJOR IMPROVEMENT AREA OF THE SHERLEY TRACT PUBLIC
IMPROVEMENT DISTRICT NO. 2
DESCRIPTION
180.349 ACRES
BEING THAT CERTAIN TRACT OF LAND SITUATED IN THE J.M. KINCADE SURVEY, ABSTRACT NUMBER 509,
THE J. BOYLE SURVEY, ABSTRACT NUMBER 105, THE J. ROBERTS SURVEY, ABSTRACT NUMBER 760, THE J.
ELLET SURVEY, ABSTRACT NUMBER 296, AND THE W. RATTAN SURVEY, ABSTRACT NUMBER 752, COLLIN
COUNTY, TEXAS, BEING ALL OF THAT LAND DESCRIBED IN DEED TO MM ANNA 325, LLC TRACT 1
RECORDED IN INSTRUMENT NUMBER 20190411000386110 OF THE OFFICIAL PUBLIC RECORDS OF
COLLIN COUNTY, TEXAS (O.P.R.C.C.T.) AND BEING MORE PARTICULARLY DESCRIBED BY METES AND
BOUNDS AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY LINE OF SAID MM ANNA 325, LLC TRACT 1 AND BEING IN THE
NORTH LINE OF THAT TRACT OF LAND DESCRIBED IN DEED TO CADG HURRICANE CREEK, LLC TRACT 2
RECORDED IN INSTRUMENT NUMBER 201505290000631020 OF SAID O.P.R.C.C.T.;
THENCE N 00' 42' 12" W, 232.26 FEET;
THENCE S 88' 18' 50" W, 793.96 FEET TO THE SOUTH LINE OF SAID MM ANNA 325, LLC TRACT 1 AND
BEING IN THE NORTHEAST CORNER SAID CADG HURRICANE CREEK LLC (TRACT 1);
THENCE ALONG THE COMMON LINE BETWEEN SAID MM ANNA 325, LLC TRACT 1 AND SAID CADG
HURRICANE CREEK LLC (TRACT 1) THE FOLLOWING BEARINGS AND DISTANCES:
S 89° 05' 29" W, 1757.67 FEET;
S 88° 18' 31" W, 742.84 FEET;
S 88° 59' 33" W, 427.28 FEET;
THENCE DEPARTING SAID CADG HURRICANE CREEK, LLC TRACT 1 ALONG THE COMMON LINE BETWEEN
SAID MM ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO BLUE SPRUCE L.P.
RECORDED IN INSTRUMENT NUMBER 19940826000793830 OF THE O.P.R.C.C.T. THE FOLLOWING
BEARINGS AND DISTANCES:
N 61° 49' 20" E, 205.61 FEET;
N 19° 24' 17" E, 181.73 FEET;
N 38° 49' 43" E, 172.63 FEET;
N 20° 25' 25" E, 121.13 FEET;
A-1
N 49' 53' 58" E, 215.37 FEET;
N 04' 32' 42" E, 69.40 FEET;
THENCE N 30° 41' 24" W, 236.43 FEET DEPARTING SAID BLUE SPRUCE L.P. TRACT ALONG THE COMMON
LINE OF SAID MM ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO KIMBERLY
POWELL RECORDED IN VOLUME 5820 PAGE 2130 OF THE O.P.R.C.C.T.;
THENCE CONTINUING ALONG SAID MM ANNA 325, LLC TRACT 1 AND SAID KIMBERLY POWELL TRACT
THE FOLLOWING BEARINGS AND DISTANCES:
N 21° 14' 27" W, 129.45 FEET;
N 11° 58' 09" W, 106.75 FEET;
N 09° 26' 49" W, 132.42 FEET;
N 17° 32' 12" W, 108.70 FEET;
THENCE N 03' 35' 21" E, 118.10 FEET DEPARTING SAID KIMBERLY POWELL TRACT ALONG THE COMMON
LINE OF SAID MM ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO HARRISON
AND JANET SMITH RECORDED IN INSTRUMENT NUMBER 19920612000392310 OF THE O.P.R.C.C.T.;
THENCE CONTINUING ALONG SAID MM ANNA 325, LLC TRACT 1 AND SAID KIMBERLY POWELL TRACT
THE FOLLOWING BEARINGS AND DISTANCES:
N 16° 24' 37" E, 135.67 FEET;
N 06° 20' 57" E, 127.72 FEET;
N 18° 30' 44" E, 70.24 FEET;
N 10° 53' 53" E, 77.78 FEET;
N 19° 15' 05" E, 240.38 FEET;
THENCE DEPARTING SAID HARRISON AND JANET SMITH TRACT ALONG THE COMMON LINE OF SAID MM
ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO DASARA, LLC RECORDED IN
INSTRUMENT NUMBER 20150123000077570 OF THE O.P.R.C.C.T. THE FOLLOWING BEARINGS AND
DISTANCES:
N 59° 17' 04" E, 231.36 FEET;
N 39° 06' 49" E, 113.71 FEET;
N 18° 28' 30" E, 79.37 FEET;
N 45° 20' 55" E, 130.09 FEET;
N 24° 01' 10" E, 163.50 FEET;
N 29° 16' 45" E, 139.03 FEET;
N 07° 19' 23" W, 145.67 FEET;
A-2
N 22° 22' 47" E, 72.91 FEET;
N 66° 09' 44" E, 68.86 FEET;
N 49° 46' S2" E, 125.19 FEET;
N 25° 25' 25" E, 105.50 FEET;
N 41° 12' 53" E, 204.93 FEET;
N 44° 25' 31" E, 122.72 FEET;
N 40° 33' 22" E, 129.29 FEET;
N 01° 34' S4" E, 105.14 FEET;
THENCE N 30° 43' 16" E, 12.80 FEET DEPARTING SAID DASARA, LLC TRACT ACROSS THE COMMON LINE
OF SAID MM ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO DONNA PEELER
RECORDED IN VOLUME 4972 PAGE 5535 OF THE O.P.R.C.C.T.;
THENCE DEPARTING SAID DONNA PEELER TRACT ALONG THE COMMON LINE OF SAID MM ANNA 325,
LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO RISLAND MANTUA LLC RECORDED IN
INSTRUMENT NUMBER 2018062S000783630 OF THE O.P.R.C.C.T. THE FOLLOWING BEARINGS AND
DISTANCES:
N 88° 46' 52" E, 274.56 FEET;
N 89° 03' 01" E, 938.03 FEET;
THENCE DEPARTING SAID RISLAND MANTUA LLC TRACT ALONG THE COMMON LINE OF SAID MM ANNA
325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO HURRICANE CREEK ESTATES
(UNRECORDED) THE FOLLOWING BEARINGS AND DISTANCES:
S 02° 31' 07" E, 46.18 FEET;
S 00° 43' 55" E, 239.62 FEET;
S 00° 54' 34" E, 240.98 FEET;
S 00° 35' 30" E, 240.11 FEET;
S 00° 46' 25" E, 193.73 FEET;
S 00° 41' 51" E, 159.37 FEET;
S 02° 15' 50" W, 136.17 FEET;
S 00° 41' 12" E, 117.45 FEET;
N 43° 06' 55" E, 28.85 FEET;
N 36° 57' 57" E, 59.11 FEET;
S 81° 37' 00" E, 76.35 FEET;
A-3
N 64° 47' 48" E, 51.43 FEET;
S 23° 02' 34" E, 61.07 FEET;
N 53° 19' 07" E, 45.87 FEET;
S 82° 24' 22" E, 25.36 FEET;
S 39° 57' 49" E, 56.11 FEET;
S 48° 02' 59" E, 22.02 FEET;
THENCE DEPARTING SAID HURRICANE CREEK ESTATES TRACT ALONG THE COMMON LINE OF SAID MM
ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN PLAT TO URBAN CROSSING BLOCK B
TRACT RECORDED IN INSTRUMENT NUMBER 2013-568 OF THE PLAT RECORDS, COLLIN COUNTY, TEXAS
(P.R.C.C.T.) THE FOLLOWING BEARINGS AND DISTANCES:
S 02° 04' 20" E, 28.82 FEET;
S 00° 05' 05" E, 119.18 FEET;
S 89° 47' 13" E, 602.59 FEET;
N 88- 59' 00" E, 933.16 FEET;
N 88° 55' 42" E, 491.23 FEET;
THENCE S 04' 03' 22" E, 703.80 FEET DEPARTING SAID URBAN CROSSING BLOCK B TRACT ALONG THE
COMMON LINE OF SAID MM ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO
SHEIKH ALAM TRACT RECORDED IN VOLUME 4335 PAGE 955 OF THE O.P.R.C.C.T. TO A 5/8 INCH IRON
ROD STAMPED "PELOTON" FOUND;
THENCE DEPARTING SAID SHEIKH ALAM TRACT ALONG THE COMMON LINE OF SAID MM ANNA 325, LLC
TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO MANTUA 30 PARTNERS, LTD TRACT
RECORDED IN INSTRUMENT NUMBER 20201022001847220 OF THE O.P.R.C.C.T. THE FOLLOWING
BEARINGS AND DISTANCES:
S 88° 44' 00" W, 60.25 FEET FOR THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE OF 99.55 FEET, THROUGH A CENTRAL
ANGLE OF 03° 42' 13", HAVING A RADIUS OF 1,540.00 FEET, AND A LONG CHORD WHICH BEARS S 13°
52' 00" W, 99.53 FEET;
S 15° 43' 07" W, 512.37 FEET FOR THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE OF 504.39 FEET, THROUGH A CENTRAL
ANGLE OF 30° 06' 13", HAVING A RADIUS OF 960.00 FEET, AND A LONG CHORD WHICH BEARS S 00° 40'
00" W, 498.61 FEET;
S 14° 23' 07" E, 120.30 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
mll
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE OF 101.47 FEET, THROUGH A CENTRAL
ANGLE OF 12' 30' 04", HAVING A RADIUS OF 465.07 FEET, AND A LONG CHORD WHICH BEARS S 08° 14'
28" E, 101.27 FEET;
S 01° 59' 25" E, 283.25 FEET;
THENCE S 89' 04' 42" W, 1,264.39 FEET TO THE POINT OF BEGINNING AND CONTAINING 12,621,555
SQUARE FEET OR 289.751 ACRES MORE OR LESS.
SAVE AND EXCEPT
TRACT 1 (65.070 ACRES)
BEING THAT CERTAIN TRACT OF LAND SITUATED IN THE J.M. KINCADE SURVEY, ABSTRACT NUMBER 509,
THE J. BOYLE SURVEY, ABSTRACT NUMBER 105, AND THE W. RATTAN SURVEY, ABSTRACT NUMBER 752,
COLLIN COUNTY, TEXAS, BEING A PORTION OF THAT TRACT OF LAND DESCRIBED IN DEED TO MM ANNA
325, LLC TRACT 1 RECORDED IN INSTRUMENT NUMBER 20190411000386110 OF THE OFFICIAL PUBLIC
RECORDS OF COLLIN COUNTY, TEXAS (O.P.R.C.C.T.) AND BEING MORE PARTICULARLY DESCRIBED BY
METES AND BOUNDS AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY SOUTHWEST CORNER OF SAID TRACT OF LAND TO MM ANNA
325, LLC BEING IN THE NORTH LINE OF THAT TRACT OF LAND DESCRIBED BY DEED TO CADG HURRICANE
CREEK, LLC RECORDED IN INSTRUMENT NUMBER 201505290000631020 OF SAID O.P.R.C.C.T.;
THENCE N 00° 42' 12" W, 287.34 FEET WITH THE COMMON LINE OF SAID CADG TRACT AND SAID MM
ANNA 325 TRACT;
N 89° 17' 48" E, 110.00 FEET;
N 00° 42' 12" W, 31.43 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 302.23 FEET, THROUGH A
CENTRAL ANGLE OF 32° 59' 01", HAVING A RADIUS OF 525.00 FEET, AND A LONG CHORD WHICH
BEARS N 15' 47' 19" E, 298.07 FEET;
N 32° 16' 49" E, 45.65 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 7.44 FEET, THROUGH A CENTRAL
ANGLE OF 00' 30' 48", HAVING A RADIUS OF 830.00 FEET, AND A LONG CHORD WHICH BEARS N
57° 58' 35" W, 7.44 FEET;
N 57' 43' 11" W, 162.85 FEET;
S 32° 16' S0" W, 605.17 FEET;
THENCE S 88' 18' S0" W, 111.81 FEET TO THE NORTH LINE OF SAID CADG TRACT;
THENCE DEPARTING SAID NORTH LINE OVER AND ACROSS SAID MM ANNA 325 TRACT THE FOLLOWING
BEARINGS AND DISTANCES:
N 45° 08' S8" W, 366.07 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
A-5
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 520.46 FEET, THROUGH A CENTRAL
ANGLE OF 22° 45' S0", HAVING A RADIUS OF 1,309.97 FEET, AND A LONG CHORD WHICH BEARS
N 40° 23' 55" E, 517.04 FEET;
N 60' 58' S9" W, 120.00 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 923.67 FEET, THROUGH A
CENTRAL ANGLE OF 44° 28' 21", HAVING A RADIUS OF 1,190.00 FEET, AND A LONG CHORD
WHICH BEARS S 51' 15' 12" W, 900.66 FEET;
S 16° 30' 37" E, 120.00 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 27.21 FEET, THROUGH A CENTRAL
ANGLE OF 01' 11' 24", HAVING A RADIUS OF 1,310.00 FEET, AND A LONG CHORD WHICH BEARS
S 74° 05' 05" W, 27.21 FEET;
S 31° 32' 06" W, 43.31 FEET;
S 12° 15' 52" E, 4.77 FEET TO THE NORTH LINE OF SAID CADG TRACT;
THENCE S 89' 05' 29" W, 95.27 FEET;
THENCE DEPARTING SAID NORTH LINE OVER AND ACROSS SAID TRACT OF LAND TO MM ANNA 325, LLC
THE FOLLOWING BEARINGS AND DISTANCES:
N 56° 03' 28" W, 23.94 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 27.22 FEET, THROUGH A CENTRAL
ANGLE OF 01' 11' 26", HAVING A RADIUS OF 1,310.00 FEET, AND A LONG CHORD WHICH BEARS
S 81° 23' S5" W, 27.22 FEET TO A POINT OF INTERSECTION WITH A NON -TANGENTIAL LINE.
N 08° 00' 22" W, 120.00 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 147.41 FEET, THROUGH A
CENTRAL ANGLE OF 07° 05' S1", HAVING A RADIUS OF 1,190.00 FEET, AND A LONG CHORD
WHICH BEARS S 85' 32' 34" W, 147.31 FEET;
S 89° 05' 29" W, 1,229.11 FEET;
N 45° 54' 31" W, 42.43 FEET;
N 00° 54' 31" W, 48.75 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 139.73 FEET, THROUGH A
CENTRAL ANGLE OF 12° 07' 49", HAVING A RADIUS OF 660.00 FEET, AND A LONG CHORD WHICH
BEARS N 05' 09' 24" E, 139.47 FEET;
N 11° 13' 18" E, 45.96 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 101.09 FEET, THROUGH A
CENTRAL ANGLE OF 07° 14' 23", HAVING A RADIUS OF 800.00 FEET, AND A LONG CHORD WHICH
BEARS N 14' 50' 30" E, 101.02 FEET;
A-6
N 20° 08' 12" E, 50.00 FEET;
N 21° 08' 00" E, 138.53 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 304.73 FEET, THROUGH A CENTRAL
ANGLE OF 27° 42' S1", HAVING A RADIUS OF 630.00 FEET, AND A LONG CHORD WHICH BEARS N
07° 16' 34" E, 301.77 FEET;
N 83° 25' 09" E, 130.00 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 32.75 FEET, THROUGH A CENTRAL
ANGLE OF 02' 28' 08", HAVING A RADIUS OF 760.00 FEET, AND A LONG CHORD WHICH BEARS N
07° 48' S5" W, 32.75 FEET;
N 80° 57' 01" E, 50.00 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 20.00 FEET, THROUGH A CENTRAL
ANGLE OF 01' 24' S3", HAVING A RADIUS OF 810.00 FEET, AND A LONG CHORD WHICH BEARS S
08° 20' 32" E, 20.00 FEET;
N 83- 35' 40" E, 67.70 FEET;
S 87° 45' S7" E, 468.26 FEET;
S 87° 55' 48" E, 10.60 FEET;
N 01° 44' 03" E, 20.00 FEET;
S 88° 15' 57" E, 50.00 FEET;
S 01° 44' 03" W, 23.48 FEET;
N 89° 15' 16" E, 160.00 FEET;
N 84° 17' S9" E, 91.31 FEET;
N 81° 10' 42" E, 54.72 FEET;
N 75° 20' 06" E, 60.71 FEET;
N 70° 47' 30" E, 41.34 FEET;
N 66° 36' 18" E, 49.56 FEET;
N 61° 16' S0" E, 59.24 FEET;
N 56° 58' 45" E, 50.71 FEET;
N 55° 47' 22" E, 49.81 FEET;
N 58° 06' 52" E, 47.94 FEET;
N 57° 16' 20" E, 66.93 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
MA
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 32.90 FEET, THROUGH A CENTRAL
ANGLE OF 01' 34' 15", HAVING A RADIUS OF 1,200.00 FEET, AND A LONG CHORD WHICH BEARS
N 28° 47' 28" W, 32.90 FEETTO A POINT OF INTERSECTION WITH A NON -TANGENTIAL LINE.
N 61° 59' 39" E, 50.00 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 45.85 FEET, THROUGH A CENTRAL
ANGLE OF 02' 17' 04", HAVING A RADIUS OF 1,150.00 FEET, AND A LONG CHORD WHICH BEARS
S 29° 08' 53" E, 45.85 FEET;
N 59° 42' 35" E, 120.15 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 434.10 FEET, THROUGH A CENTRAL
ANGLE OF 24° 08' S2", HAVING A RADIUS OF 1,030.00 FEET, AND A LONG CHORD WHICH BEARS
S 42° 21' 09" E, 430.90 FEET;
S 54° 25' 35" E, 89.54 FEET;
N 24- 51' 49" E, 70.52 FEET;
S 64° 05' 47" E, 100.01 FEET;
S 65° 13' 30" E, 75.00 FEET;
N 69° 45' S4" E, 42.43 FEET;
N 24° 45' S4" E, 22.77 FEET;
S 65° 14' 06" E, 120.00 FEET;
S 24° 45' S4" W, 23.65 FEET;
S 19° 10' S3" E, 43.20 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 96.46 FEET, THROUGH A CENTRAL
ANGLE OF 05' 31' 37", HAVING A RADIUS OF 1,000.00 FEET, AND A LONG CHORD WHICH BEARS
S 59° 58' 35" E, 96.43 FEET;
N 24° 45' 54" E, 31.64 FEET;
S 58° 13' 31" E, 50.38 FEET;
S 24° 45' S4" W, 33.83 FEET;
S 55° 20' 20" E, 104.47 FEET;
S 57° 43' 11" E, 272.85 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, THROUGH 33° 03' S7", 444.37 FEET HAVING A RADIUS OF
770.00 FEET, AND A LONG CHORD WHICH BEARS S 74° 15' 09" E, 438.23 FEET TO THE
BEGINNING OF A CURVE TO THE RIGHT;
•
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 49.91 FEET, THROUGH A CENTRAL
ANGLE OF 07' 37' 35", HAVING A RADIUS OF 375.00 FEET, AND A LONG CHORD WHICH BEARS N
07° 38' 20" E, 49.88 FEET;
S 78° 32' S2" E, 50.00 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, THROUGH 06° 37' 24", 37.57 FEET HAVING A RADIUS OF 325.00
FEET, AND A LONG CHORD WHICH BEARS S 08° 08' 26" W, 37.55 FEET TO THE BEGINNING OF A
CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 71.20 FEET, THROUGH A CENTRAL
ANGLE OF 05' 17' S3", HAVING A RADIUS OF 770.00 FEET, AND A LONG CHORD WHICH BEARS N
82° 48' 59" E, 71.18 FEET;
N 80° 10' 03" E, 330.53 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 56.36 FEET, THROUGH A CENTRAL
ANGLE OF 03° 06' 19", HAVING A RADIUS OF 1,040.00 FEET, AND A LONG CHORD WHICH BEARS
N 04° 30' 13" W, 56.36 FEET TO A POINT OF INTERSECTION WITH A NON -TANGENTIAL LINE.
N 87° 02' S6" E, 80.00 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 191.58 FEET, THROUGH A CENTRAL
ANGLE OF 11' 26' 03", HAVING A RADIUS OF 960.00 FEET, AND A LONG CHORD WHICH BEARS S
08° 40' 05" E, 191.26 FEET;
S 14° 23' 07" E, 121.17 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 100.60 FEET, THROUGH A
CENTRAL ANGLE OF 12° 23' 42", HAVING A RADIUS OF 465.00 FEET, AND A LONG CHORD WHICH
BEARS S 08' 11' 16" E, 100.40 FEET;
S 01° 59' 25" E, 283.25 FEET;
THENCE S 89' 04' 42" W, 1,264.39 FEET TO THE POINT OF BEGINNING AND CONTAINING 2,834,457
SQUARE FEET OR 65.070 ACRES MORE OR LESS.
SAVE AND EXCEPT
TRACT 2 (44.332 ACRES)
BEING THAT CERTAIN TRACT OF LAND SITUATED IN THE J. BOYLE SURVEY, ABSTRACT NUMBER 105, AND
THE J. ELLET SURVEY, ABSTRACT NUMBER 296, COLLIN COUNTY, TEXAS, BEING A PORTION OF THAT
TRACT OF LAND DESCRIBED IN DEED TO MM ANNA 325, LLC TRACT 1 RECORDED IN INSTRUMENT
NUMBER 20190411000386110 OF THE OFFICIAL PUBLIC RECORDS OF COLLIN COUNTY, TEXAS
(O.P.R.C.C.T.) AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY SOUTHWEST CORNER IN PLAT TO URBAN CROSSING RECORDED
IN INSTURMENT NUMBER 20131227010003710 OF THE PLAT RECORDS OF COLLIN COUNTY, TEXAS
(P.R.C.C.T.) AND BEING IN THE NORTH LINE OF SAID MM ANNA 325 TRACT;
•
THENCE FOLLOWING THE SOUTH LINE OF SAID URBAN CROSSING TRACT AND THE NORTH LINE OF SAID
MM ANNA 325 TRACT THE FOLLOWING BEARINGS AND DISTANCES:
S 89° 47' 13" E, 602.59 FEET;
N 88° 59' 00" E, 461.54 FEET;
THENCE DEPARTING SAID COMMON LINE OVER AND ACROSS SAID MM ANNA 325 TRACT THE
FOLLOWING BEARINGS AND DISTANCES:
S 01° 10' 22" E, 231.65 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 1,023.35 FEET, THROUGH A
CENTRAL ANGLE OF 31° 31' 24", HAVING A RADIUS OF 1860.00 FEET, AND A LONG CHORD
WHICH BEARS S 40' 31' 36" W, 1,010.49 FEET;
S 24° 45' 54" W, 220.34 FEET;
S 24° 45' 54" W, 22.77 FEET;
S 69° 45' 54" W, 42.43 FEET;
N 65' 13' 30" W, 75.00 FEET;
N 64' 05' 47" W, 100.01 FEET;
S 24° 51' 49" W, 70.52 FEET;
N 54° 25' 35" W, 89.54 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 434.10 FEET, THROUGH A
CENTRAL ANGLE OF 24° 08' 52", HAVING A RADIUS OF 1,030.00 FEET, AND A LONG CHORD
WHICH BEARS N 42' 21' 09" W, 430.90 FEET;
S 59° 42' 35" W, 120.15 FEET TO THE BEGINNING OF A CURVFE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 45.85 FEET, THROUGH A CENTRAL
ANGLE OF 02' 17' 04", HAVING A RADIUS OF 1150.00 FEET, AND A LONG CHORD WHICH BEARS
N 29' 08' 53" W, 45.85 FEET;
S 61° 59' 39" W, 50.00 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 32.90 FEET, THROUGH A CENTRAL
ANGLE OF 01' 34' 15", HAVING A RADIUS OF 1,200.00 FEET, AND A LONG CHORD WHICH BEARS
S 28° 47' 28" E, 32.90 FEET;
S 57° 16' 20" W, 66.93 FEET;
S 58° 06' 52" W, 47.94 FEET;
S 55° 47' 22" W, 49.81 FEET;
S 56° 58' 45" W, 50.71 FEET;
S 61° 16' 50" W, 59.24 FEET;
A-10
S 66° 36' 18" W, 49.56 FEET;
S 70° 47' 30" W, 41.34 FEET;
S 75° 20' 06" W, 60.71 FEET;
S 81° 10' 42" W, 54.72 FEET;
S 84° 17' S9" W, 91.31 FEET;
S 89° 15' 16" W, 160.00 FEET;
N 01° 44' 03" E, 23.48 FEET;
N 01° 44' 03" E, 104.07 FEET;
S 88° 15' S7" E, 10.50 FEET;
N 01° 44' 03" E, 50.00 FEET;
N 88° 15' 57" W, 109.33 FEET;
N 01° 44' 03" E, 130.00 FEET;
N 00° 53' 08" E, 401.03 FEET;
N 68° 31' 37" E, 311.47 FEET;
N 27° 44' 36" E, 271.58 FEET;
N 78° 55' 21" E, 359.52 FEET;
N 89° 19' 48" E, 60.00 FEET;
N 89° 19' 48" E, 369.75 FEET TO THE WEST LINE OF SAID URBAN CROSSING TRACT;
THENCE S 00° 05' 05" E, 5.70 FEET TO THE POINT OF BEGINNING AND CONTAINING 1,931,085 SQUARE
FEET OR 44.332 ACRES MORE OR LESS.
A-11
EXHIBIT B
BOND PURCHASE AGREEMENT
$2,896,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2021
(SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO.2 MAJOR
IMPROVEMENT AREA PROJECT)
BOND PURCHASE AGREEMENT
July 27, 2021
City of Anna, Texas
I I I N. Powell Parkway
Anna, Texas 75409
Ladies and Gentlemen:
The undersigned, FMSbonds, Inc. (the "Underwriter"), offers to enter into this Bond
Purchase Agreement (this "Agreement") with the City of Anna, Texas (the "City"), which will be
binding upon the City and the Underwriter upon the acceptance of this Agreement by the City.
This offer is made subject to its acceptance by the City by execution of this Agreement and its
delivery to the Underwriter on or before 10:00 p.m., Central Time, on the date hereof and, if not
so accepted, will be subject to withdrawal by the Underwriter upon written notice delivered to
the City at any time prior to the acceptance hereof by the City. All capitalized terms not
otherwise defined herein shall have the meanings given to such terms in the Indenture (defined
herein) between the City and Regions Bank, an Alabama state banking corporation with offices
in Houston, Texas, as trustee (the "Trustee"), authorizing the issuance of the Bonds (defined
herein), and in the Limited Offering Memorandum (defined herein).
1. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the
basis of representations, warranties, and agreements hereinafter set forth, the Underwriter hereby
agrees to purchase from the City, and the City hereby agrees to sell to the Underwriter, all (but
not less than all) of the $2,896,000 aggregate principal amount of the "City of Anna, Texas,
Special Assessment Revenue Bonds, Series 2021 (Sherley Tract Public Improvement District No.
2 Major Improvement Area Project)" (the "Bonds"), at a purchase price of $2,809,120
(representing the aggregate principal amount of the Bonds less an Underwriter's discount of
$86,880).
Inasmuch as the purchase and sale represents a negotiated transaction, the City
understands, and hereby confirms, that the Underwriter is not acting as a municipal advisor or
fiduciary of the City (including, without limitation, a Municipal Advisor (as such term is defined
in Section 975(e) of the Dodd Frank Wall Street Reform and Consumer Protection Act)), but
rather is acting solely in its capacity as Underwriter for its own account. The City acknowledges
and agrees that (i) the purchase and sale of the Bonds pursuant to this Agreement is an arm's
length commercial transaction between the City and the Underwriter and the Underwriter has
financial and other interests that differ from any other party to this Agreement, (ii) in connection
therewith and with the discussions, undertakings, and procedures leading up to the
consummation of this transaction, the Underwriter is and has been acting solely as a principal
and is not acting as the agent, municipal advisor, financial advisor, or fiduciary of the City, (iii)
the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with
respect to the offering described herein or the discussions, undertakings, and procedures leading
thereto (regardless of whether the Underwriter has provided other services or is currently
providing other services to the City on other matters) and the Underwriter has no obligation to
the City with respect to the offering described herein except the obligations expressly set forth in
this Agreement, (iv) the City has consulted its own legal, financial and other advisors to the
extent it has deemed appropriate, (v) the Underwriter has financial and other interests that differ
from those of the City, and (vi) the Underwriter has provided to the City prior disclosures under
Rule G-17 of the Municipal Securities Rulemaking Board ("MSRB"), which have been received
by the City. The City further acknowledges and agrees that following the issuance and delivery
of the Bonds, the Underwriter has indicated that it may have periodic discussions with the City
regarding the expenditure of Bond proceeds and the construction of the Major Improvement Area
Projects (as defined in the Service and Assessment Plan) financed with the Bonds and, in
connection with such discussions, the Underwriter shall be acting solely as a principal and will
not be acting as the agent or fiduciary of, and will not be assuming an advisory or fiduciary
responsibility in favor of, the City.
The Bonds shall be dated August 1, 2021 and shall have the maturities and redemption
features, if any, and bear interest at the rates per annum shown on Schedule I hereto. Payment
for and delivery of the Bonds, and the other actions described herein, shall take place on August
16, 2021 (or such other date as may be agreed to by the City and the Underwriter) (the "Closing
Date").
2. Authorization Instruments and Law. The Bonds were authorized by an Ordinance
enacted by the City Council of the City (the "City Council") on July 27, 2021 (the "Bond
Ordinance") and shall be issued pursuant to the provisions of Subchapter A of Chapter 372,
Texas Local Government Code, as amended (the "Act"), and the Indenture of Trust, dated as of
August 1, 2021, between the City and the Trustee, authorizing the issuance of the Bonds (the
"Indenture"). The Bonds shall be substantially in the form described in, and shall be secured
under the provisions of, the Indenture.
The Bonds and interest thereon shall be secured by the proceeds of Assessments (as such
term is defined in the Limited Offering Memorandum) levied on the assessable parcels within the
Major Improvement Area of the Sherley Tract Public Improvement District No. 2 (the
"District"). The District was established by a resolution enacted by the City Council on
December 8, 2020 (the "Creation Resolution"), in accordance with the Act. A Service and
Assessment Plan (the "Service and Assessment Plan") which sets forth the costs of the Major
Improvement Area Projects (as defined below) and the method of payment of the Assessments
was adopted pursuant to an ordinance of the City Council on July 27, 2021 (the "Assessment
Ordinance" and, together with the Creation Resolution, the Indenture and the Bond Ordinance,
OA
the "Authorizing Documents"). The Bonds shall be further secured by certain applicable funds
and accounts created under the Indenture.
The Bonds shall be as described in Schedule I, the Indenture, and the Limited Offering
Memorandum. The proceeds of the Bonds shall be used for (i) paying a portion of the costs of
the "Major Improvement Area Projects", which consist of (a) Major Improvement Area's
proportionate share of the costs of certain public improvements that will benefit the entire
District and (b) the costs of the local infrastructure benefitting only Major Improvement Area (as
defined herein) of the District, (ii) paying a portion of the interest on the Bonds during and after
the period of acquisition and construction of the Major Improvement Area Projects, (iii) funding
a reserve fund for the payment of principal of and interest on the Bonds, (iv) paying a portion of
the costs incidental to the organization of the District, and (v) paying the costs of issuance of the
Bonds.
3. Limited Public Offering. The Underwriter agrees to make a bona fide limited
public offering of all of the Bonds in accordance with Section 11 hereof. On or before the third
(3rd) business day prior to the Closing Date, the Underwriter shall execute and deliver to Bond
Counsel the Issue Price Certificate, in substantially the form attached hereto as Appendix B.
4. Limited Offering Memorandum.
(a) Delivery of Limited Offering Memorandum. The City previously has
delivered, or caused to be delivered, to the Underwriter the Preliminary Limited Offering
Memorandum for the Bonds dated July 19, 2021, as supplemented July 27, 2021, (the
"Preliminary Limited Offering Memorandum"), in a "designated electronic format," as
defined in the MSRB Rule G-32 ("Rule G-32"). The City will prepare, or cause to be
prepared, a final Limited Offering Memorandum relating to the Bonds (the "Limited
Offering Memorandum") which will be (i) dated the date of this Agreement, (ii) complete
within the meaning of the United States Securities and Exchange Commission's Rule
15c2-12, as amended ("Rule 15c2-12"), (iii) in a "designated electronic format," and
(iv) substantially in the form of the most recent version of the Preliminary Limited
Offering Memorandum provided to the Underwriter before the execution hereof. The
Limited Offering Memorandum, including the cover page thereto, all exhibits, schedules,
appendices, maps, charts, pictures, diagrams, reports, and statements included or
incorporated therein or attached thereto, and all amendments and supplements thereto that
may be authorized for use with respect to the Bonds are collectively referred to herein as
the "Limited Offering Memorandum." Until the Limited Offering Memorandum has
been prepared and is available for distribution, the City shall provide to the Underwriter
sufficient quantities (which may be in electronic format) of the Preliminary Limited
Offering Memorandum as the Underwriter deems necessary to satisfy the obligation of
the Underwriter under Rule 15c2-12 with respect to distribution to each potential
customer, upon request, of a copy of the Preliminary Limited Offering Memorandum.
(b) Preliminary Limited Offering Memorandum Deemed Final. The
Preliminary Limited Offering Memorandum has been prepared for use by the
Underwriter in connection with the offering, sale, and distribution of the Bonds. The City
hereby represents and warrants that the Preliminary Limited Offering Memorandum has
3
been deemed final by the City as of its date, except for the omission of such information
which is dependent upon the final pricing of the Bonds for completion, all as permitted to
be excluded by Section (b)(1) of Rule 15c2-12.
(c) Use of Limited Offering Memorandum in Offering and Sale. The City
hereby authorizes the Limited Offering Memorandum and the information therein
contained to be used by the Underwriter in connection with the offering and the sale of
the Bonds. The City consents to the use by the Underwriter prior to the date hereof of the
Preliminary Limited Offering Memorandum in connection with the offering of the Bonds.
The City shall provide, or cause to be provided, to the Underwriter as soon as practicable
after the date of the City's acceptance of this Agreement (but, in any event, not later than
the earlier of the Closing Date or seven (7) business days after the City's acceptance of
this Agreement) copies of the Limited Offering Memorandum which is complete as of the
date of its delivery to the Underwriter. The City shall provide the Limited Offering
Memorandum, or cause the Limited Offering Memorandum to be provided, (i) in a
"designated electronic format" consistent with the requirements of Rule G-32 and (ii) in a
printed format in such quantity as the Underwriter shall request in order for the
Underwriter to comply with Section (b)(4) of Rule 15c2-12 and the rules of the MSRB.
(d) Updating of Limited Offering Memorandum. If, after the date of this
Agreement, up to and including the date the Underwriter is no longer required to provide
a Limited Offering Memorandum to potential customers who request the same pursuant
to Rule 15c2-12 (the earlier of (i) ninety (90) days from the "end of the underwriting
period" (as defined in Rule 15c2-12) and (ii) the time when the Limited Offering
Memorandum is available to any person from the MSRB, but in no case less than the
25th day after the "end of the underwriting period" for the Bonds), the City becomes
aware of any fact or event which might or would cause the Limited Offering
Memorandum, as then supplemented or amended, 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 light of the circumstances under which they were made,
not misleading, or if it is necessary to amend or supplement the Limited Offering
Memorandum to comply with law, the City will notify the Underwriter (and for the
purposes of this clause provide the Underwriter with such information as it may from
time to time reasonably request), and if, in the reasonable judgment of the Underwriter,
such fact or event requires preparation and publication of a supplement or amendment to
the Limited Offering Memorandum, the City will forthwith prepare and furnish, at no
expense to the Underwriter (in a form and manner approved by the Underwriter), either
an amendment or a supplement to the Limited Offering Memorandum so that the
statements therein as so amended and supplemented 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 light of the circumstances under which they were
made, not misleading or so that the Limited Offering Memorandum will comply with
law; provided, however, that for all purposes of this Agreement and any certificate
delivered by the City in accordance herewith, (i) the City makes no representations with
respect to the descriptions in the Preliminary Limited Offering Memorandum or the
Limited Offering Memorandum of The Depository Trust Company, New York, New York
("DTC"), or its book -entry -only system, and (ii) the City makes no representation with
2
respect to the information in the Preliminary Limited Offering Memorandum or the
Limited Offering Memorandum under the captions and subcaptions "PLAN OF
FINANCE — Development Plan and Plan of Finance," "BOOK -ENTRY ONLY
SYSTEM," "THE MAJOR IMPROVEMENT AREA PROJECTS," "THE
DEVELOPMENT," "THE DEVELOPER," `BONDHOLDERS' RISKS" (only as it
pertains to the Developer, the Major Improvement Area Projects and the Development),
"THE ADMINISTRATOR," "LEGAL MATTERS — Litigation — The Developer," and
"CONTINUING DISCLOSURE — The Developer," and "INFORMATION RELATING
TO THE TRUSTEE." If such notification shall be subsequent to the Closing, the City, at
no expense to the Underwriter, shall furnish such legal opinions, certificates, instruments,
and other documents as the Underwriter may reasonably deem necessary to evidence the
truth and accuracy of such supplement or amendment to the Limited Offering
Memorandum. The City shall provide any such amendment or supplement, or cause any
such amendment or supplement to be provided, (i) in a "designated electronic format"
consistent with the requirements of Rule G-32 and (ii) in a printed format in such
quantity as the Underwriter shall request in order for the Underwriter to comply with
Section (b)(4) of Rule 15c2-12 and the rules of the MSRB.
(e) Filing with MSRB. The Underwriter hereby agrees to timely file the
Limited Offering Memorandum with the MSRB through its Electronic Municipal Market
Access ("EMMA") system within one business day after receipt but no later than the
Closing Date. Unless otherwise notified in writing by the Underwriter, the City can
assume that the "end of the underwriting period" for purposes of Rule 15c2-12 is the
Closing Date.
(f) Limited Offering. The Underwriter hereby represents, warrants and
covenants that the Bonds were initially sold pursuant to a limited offering. The Bonds
were sold to not more than thirty-five persons that qualify as "Accredited Investors" (as
defined in Rule 501 of Regulation D under the Securities Act (as defined herein)) or
"Qualified Institutional Buyers" (within the meaning of Rule 144A under the Securities
Act).
5. City Representations, Warranties and Covenants. The City represents, warrants
and covenants that:
(a) Due Organization, Existence and Authority. The City is a political
subdivision of the State of Texas (the "State"), and has, and at the Closing Date will have,
full legal right, power and authority:
(i) to enter into:
(1) this Agreement;
(2) the Indenture;
(3) the Sherley Tract Subdivision Improvement Agreement
between the City, BFB Ana 40 Acres, LLC ("BFB Ana") and MM Anna
325, LLC, a Texas limited liability company (the "Developer") effective as
5
June 9, 2020, as amended by that First Amended Sherley Tract
Subdivision Improvement Agreement effective as of July 14, 2020, as
further amended (together the "Development Agreement");
(4) Sherley Tract Public Improvement District No. 2 Major
Improvement Area Construction, Funding and Acquisition Agreement,
effective July 27, 2021, and executed and delivered by the City and the
Developer (the "CIA Agreement");
(5) the Continuing Disclosure Agreement of Issuer with respect
to the Bonds, dated as of August 1, 2021 (the "City Continuing Disclosure
Agreement"), executed and delivered by the City, P3Works, LLC (the
"Administrator"), and Regions Bank, an Alabama state banking
corporation, as Dissemination Agent; and
(6) the Major Improvement Area Landowner Agreement dated
as of July 27, 2021 executed by the City and the Developer (the
"Landowner Agreement");
(ii) to issue, sell, and deliver the Bonds to the Underwriter as provided
herein; and
(iii) to carry out and consummate the transactions on its part described
in (1) the Authorizing Documents, (2) this Agreement, (3) the Development
Agreement, (4) the CFA Agreement, (5) the City Continuing Disclosure
Agreement, (6) the Limited Offering Memorandum, and (7) any other documents
and certificates described in any of the foregoing (the documents described by
subclauses (1) through (6) being referred to collectively herein as the "City
Documents").
(b) Due Authorization and Approval of City. By all necessary official action
of the City, the City has duly authorized and approved the adoption or execution and
delivery by the City of, and the performance by the City of the obligations on its part
contained in, the City Documents and, as of the date hereof, such authorizations and
approvals are in full force and effect and have not been amended, modified or rescinded,
except as may have been approved by the Underwriter. When validly executed and
delivered by the other parties thereto, the City Documents will constitute the legally valid
and binding obligations of the City enforceable upon the City in accordance with their
respective terms, except insofar as enforcement may be limited by principles of sovereign
immunity, bankruptcy, insolvency, reorganization, moratorium, or similar laws or
equitable principles relating to or affecting creditors' rights generally. The City has
complied, and will at the Closing (as defined herein) be in compliance, in all material
respects, with the obligations on its part to be performed on or prior to the Closing Date
under the City Documents.
(c) Due Authorization for Issuance of the Bonds. The City has duly
authorized the issuance and sale of the Bonds pursuant to the Bond Ordinance, the
Con
Indenture, and the Act. The City has, and at the Closing Date will have, full legal right,
power and authority (i) to enter into, execute, deliver, and perform its obligations under
this Agreement and the other City Documents, (ii) to issue, sell and, deliver the Bonds to
the Underwriter pursuant to the Indenture, the Bond Ordinance, the Act, and as provided
herein, and (iii) to carry out, give effect to and consummate the transactions on the part of
the City described by the City Documents and the Bond Ordinance.
(d) No Breach or Default. As of the time of acceptance hereof, and to the best
of its knowledge, the City is not, and as of the Closing Date the City will not be, in
material breach of or in default in any material respect under any applicable
constitutional provision, law or administrative rule or regulation of the State or the United
States, or any applicable judgment or decree or any trust agreement, loan agreement,
bond, note, resolution, ordinance, agreement or other instrument related to the Bonds and
to which the City is a party or is otherwise subject, and no event has occurred and is
continuing which, with the passage of time or the giving of notice, or both, would
constitute a default or event of default under any such instrument which breach, default
or event could have a material adverse effect on the City's ability to perform its
obligations under the Bonds or the City Documents; and, as of such times, the
authorization, execution and delivery of the Bonds and the City Documents and
compliance by the City with obligations on its part to be performed in each of such
agreements or instruments does not and will not conflict with or constitute a material
breach of or default under any applicable constitutional provision, law or administrative
rule or regulation of the State or the United States, or any applicable judgment, decree,
license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance,
agreement or other instrument to which the City (or any of its officers in their respective
capacities as such) is subject, or by which it or any of its properties are bound, nor will
any such authorization, execution, delivery or compliance result in the creation or
imposition of any lien, charge or other security interest or encumbrance of any nature
whatsoever upon any of its assets or properties securing the Bonds or under the terms of
any such law, regulation or instrument, except as may be permitted by the City
Documents.
(e) No Litigation. _ At the time of acceptance hereof there is no action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any court,
government agency, public board or body (collectively and individually, an "Action")
pending against the City with respect to which the City has been served with process, nor
to the knowledge of the City is any Action threatened against the City, in which any such
Action (i) in any way questions the existence of the City or the rights of the members of
the City Council to hold their respective positions, (ii) in any way questions the formation
or existence of the District, (iii) affects, contests or seeks to prohibit, restrain or enjoin the
issuance or delivery of any of the Bonds, or the payment or collection of any amounts
pledged or to be pledged to pay the principal and interest on the Bonds, or in any way
contests or affects the validity of the City Documents or the consummation of the
transactions on the part of the City described therein, or contests the exclusion of the
interest on the Bonds from federal income taxation, or (iv) which may result in any
material adverse change in the financial condition of the City; and, as of the time of
acceptance hereof, to the City's knowledge, there is no basis for any action, suit,
7
proceeding, inquiry, or investigation of the nature described in clauses (i) through (iv) of
this sentence.
(f) Bonds Issued Pursuant to Indenture. The City represents that the Bonds,
when issued, executed, and delivered in accordance with the Indenture and sold to the
Underwriter as provided herein, will be validly issued and outstanding obligations of the
City subject to the terms of the Indenture, entitled to the benefits of the Indenture and the
security of the pledge of the proceeds of the levy of the Assessments received by the City,
all to the extent provided for in the Indenture. The Indenture creates a valid pledge of the
monies in certain funds and accounts established pursuant to the Indenture to the extent
provided for in the Indenture, including the investments thereof, subject in all cases to the
provisions of the Indenture permitting the application thereof for the purposes and on the
terms and conditions set forth therein.
(g) Assessments. The Assessments constituting the security for the Bonds
have been or will be levied by the City on the date hereof in accordance with the Act on
those parcels of land identified in the Assessment Roll for Major Improvement Area (as
defined in the Service and Assessment Plan). According to the Act, such Assessments
constitute a valid and legally binding first and prior lien against the properties assessed,
superior to all other liens and claims, except liens or claims for state, county, school
district, or municipality ad valorem taxes.
(h) Consents and Approvals. All authorizations, approvals, licenses, permits,
consents, elections, and orders of or filings with any governmental authority, legislative
body, board, agency, or commission having jurisdiction in the matters which are required
by the Closing Date for the due authorization of, which would constitute a condition
precedent to or the absence of which would adversely affect the due performance by the
City of, its obligations in connection with the City Documents have been duly obtained or
made and are in full force and effect, except the approval of the Bonds by the Attorney
General of the State, registration of the Bonds by the Comptroller of Public Accounts of
the State, and the approvals, consents and orders as may be required under Blue Sky or
securities laws of any jurisdiction.
(i) Public Debt. Prior to the Closing, the City will not offer or issue any
bonds, notes or other obligations for borrowed money or incur any material liabilities,
direct or contingent, payable from or secured by a pledge of the Assessments which
secure the Bonds without the prior approval of the Underwriter.
0) Preliminary Limited Offering Memorandum. The information contained
in the Preliminary Limited Offering Memorandum is true and correct in all material
respects, and such information does 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; provided, however, that the City makes no representations with respect to (i)
the descriptions in the Preliminary Limited Offering Memorandum or the Limited
Offering Memorandum of DTC, or its book -entry -only system, and (ii) the City makes no
representation with respect to the information in the Preliminary Limited Offering
N.
Memorandum or the Limited Offering Memorandum under the captions and subcaptions
"PLAN OF FINANCE Development Plan and Plan of Finance," "BOOK -ENTRY
ONLY SYSTEM," "THE MAJOR IMPROVEMENT AREA PROJECTS," "THE
DEVELOPMENT," "THE DEVELOPER," `BONDHOLDERS' RISKS" (only as it
pertains to the Developer, the Major Improvement Area Projects and the Development),
"THE ADMINISTRATOR," "LEGAL MATTERS Litigation The Developer," and
"CONTINUING DISCLOSURE — The Developer," and "INFORMATION RELATING
TO THE TRUSTEE."
(k) Limited Offering Memorandum. At the time of the City's acceptance
hereof and (unless the Limited Offering Memorandum is amended or supplemented
pursuant to paragraph (d) of Section 4 of this Agreement) at all times subsequent thereto
during the period up to and including the 25th day subsequent to the "end of the
underwriting period," the information contained in the Limited Offering Memorandum
does not and will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the City makes no representations with respect to (i) the descriptions in the
Preliminary Limited Offering Memorandum or the Limited Offering Memorandum of
DTC, or its book -entry -only system, and (ii) the City makes no representation with
respect to the information in the Preliminary Limited Offering Memorandum or the
Limited Offering Memorandum under the captions and subcaptions "PLAN OF
FINANCE Development Plan of Finance," "BOOK -ENTRY ONLY SYSTEM," "THE
MAJOR IMPROVEMENT AREA PROJECTS," "THE DEVELOPMENT," "THE
DEVELOPER," "BONDHOLDERS' RISKS" (only as it pertains to the Developer, the
Major Improvement Area Projects and the Development), "THE ADMINISTRATOR,"
"LEGAL MATTERS — Litigation — The Developer," and "CONTINUING
DISCLOSURE — The Developer," and "INFORMATION RELATING TO THE
TRUSTEE;" and further provided, however, that if the City notifies the Underwriter of
any fact or event as required by Section 4(d) hereof, and the Underwriter determines that
such fact or event does not require preparation and publication of a supplement or
amendment to the Limited Offering Memorandum, then the Limited Offering
Memorandum in its then -current form shall be conclusively deemed to be complete and
correct in all material respects.
(1) Supplements or Amendments to Limited Offering Memorandum. If the
Limited Offering Memorandum is supplemented or amended pursuant to paragraph (d) of
Section 4 of this Agreement, at the time of each supplement or amendment thereto and
(unless subsequently again supplemented or amended pursuant to such paragraph) at all
times subsequent thereto during the period up to and including the 25th day subsequent to
the "end of the underwriting period," the Limited Offering Memorandum as so
supplemented or amended will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading;
provided, however, that if the City notifies the Underwriter of any fact or event as
required by Section 4(d) hereof, and the Underwriter determines that such fact or event
does not require preparation and publication of a supplement or amendment to the
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Limited Offering Memorandum, then the Limited Offering Memorandum in its then -
current form shall be conclusively deemed to be complete and correct in all material
respects.
(m) Compliance with Rule 15c2-12. During the past five years, the City has
complied in all material respects with its previous continuing disclosure undertakings
made by it in accordance with Rule 15c2-12, except as described in the Limited Offering
Memorandum.
(n) Use of Bond Proceeds. The City will apply, or cause to be applied, the
proceeds from the sale of the Bonds as provided in and subject to all of the terms and
provisions of the Indenture and will not take or omit to take any action which action or
omission will adversely affect the exclusion from gross income for federal income tax
purposes of the interest on the Bonds.
(o) Blue Sky and Securities Laws and Regulations. The City will furnish such
information and execute such instruments and take such action in cooperation with the
Underwriter as the Underwriter may reasonably request, at no expense to the City, (i) to
(y) qualify the Bonds for offer and sale under the Blue Sky or other securities laws and
regulations of such states and other jurisdictions in the United States as the Underwriter
may designate and (z) determine the eligibility of the Bonds for investment under the
laws of such states and other jurisdictions and (ii) to continue such qualifications in effect
so long as required for the initial distribution of the Bonds by the Underwriter (provided,
however, that the City will not be required to qualify as a foreign corporation or to file
any general or special consents to service of process under the laws of any jurisdiction)
and will advise the Underwriter immediately of receipt by the City of any notification
with respect to the suspension of the qualification of the Bonds for sale in any jurisdiction
or the initiation or threat of any proceeding for that purpose.
(p) Certificates of the City. Any certificate signed by any official of the City
authorized to do so in connection with the transactions described in this Agreement shall
be deemed a representation and warranty by the City to the Underwriter as to the
statements made therein and can be relied upon by the Underwriter as to the statements
made therein.
(q) Intentional Actions Regarding Representations and Warranties. The City
covenants that between the date hereof and the Closing it will not intentionally take
actions which will cause the representations and warranties made in this Section to be
untrue as of the Closing.
(r) Financial Advisor. The City has engaged Hilltop Securities Inc., as its
financial advisor in connection with its offering and issuance of the Bonds.
By delivering the Limited Offering Memorandum to the Underwriter, the City shall be
deemed to have reaffirmed, with respect to the Limited Offering Memorandum, the
representations, warranties and covenants set forth above.
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6. Developer Letter of Representations. At the signing of this Agreement, the City
and Underwriter shall receive from the Developer, an executed Developer Letter of
Representations (the "Developer Letter of Representations") in the form of Appendix A hereto,
and at the Closing, a certificate signed by the Developer as set forth in Section 9(e) hereof.
7. The Closing. At 10:00 a.m., Central time, on the Closing Date, or at such other
time or on such earlier or later business day as shall have been mutually agreed upon by the City
and the Underwriter, (i) the City will deliver or cause to be delivered to DTC through its "FAST"
System, the Bonds in the form of one fully registered Bond for each maturity, registered in the
name of Cede & Co., as nominee for DTC, duly executed by the City and authenticated by the
Trustee as provided in the Indenture, and (ii) the City will deliver the closing documents
hereinafter mentioned to McCall, Parkhurst & Horton, L.L.P. ("Bond Counsel"), or a place to be
mutually agreed upon by the City and the Underwriter. Settlement will be through the facilities
of DTC. The Underwriter will accept delivery and pay the purchase price of the Bonds as set
forth in Section 1 hereof by wire transfer in federal funds payable to the order of the City or its
designee. These payments and deliveries, together with the delivery of the aforementioned
documents, are herein called the "Closing." The Bonds will be made available to the
Underwriter for inspection not less than twenty-four (24) hours prior to the Closing.
8. Underwriter's Closing Conditions. The Underwriter has entered into this
Agreement in reliance upon the representations and covenants herein and the performance by the
City of its obligations under this Agreement, both as of the date hereof and as of the date of the
Closing. Accordingly, the Underwriter's obligations under this Agreement shall be conditioned
upon the performance by the City of its obligations to be performed hereunder at or prior to
Closing and shall also be subject to the following additional conditions:
(a) Bring -Down Representations of the City. The representations and
covenants of the City contained in this Agreement shall be true and correct in all material
respects as of the date hereof and at the time of the Closing, as if made on the Closing
Date.
(b) Executed Agreements and Performance Thereunder. At the time of the
Closing (i) the City Documents shall be in full force and effect, and shall not have been
amended, modified, or supplemented except with the written consent of the Underwriter;
(ii) the Authorizing Documents shall be in full force and effect; (iii) there shall be in full
force and effect such other resolutions or actions of the City as, in the opinion of Bond
Counsel and Counsel to the Underwriter, shall be necessary on or prior to the Closing
Date in connection with the transactions on the part of the City described in this
Agreement and the City Documents; (iv) there shall be in full force and effect such other
resolutions or actions of the Developer as, in the opinion of Miklos Cinclair, PLLC
("Developer's Counsel"), shall be necessary on or prior to the Closing Date in connection
with the transactions on the part of the Developer described in the Developer Letter of
Representations, the Development Agreement, the CFA Agreement, the Landowner
Agreement and the Continuing Disclosure Agreement of the Developer with respect to
the Bonds, dated as of August 1, 2021 executed and delivered by the Developer, Regions
Bank, as dissemination agent, and P3Works, LLC (the "Continuing Disclosure
Agreement of the Developer,") and together with the Developer Letter of
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Representations, the Development Agreement, the CIA Agreement and the Landowner
Agreement, (the "Developer Documents"); and (v) the City shall perform or have
performed its obligations required or specified in the City Documents to be performed at
or prior to Closing.
(c) No Default. At the time of the Closing, no default shall have occurred or
be existing and no circumstances or occurrences that, with the passage of time or giving
of notice, shall constitute an event of default under this Agreement, the Indenture, the
City Documents, the Developer Documents or other documents relating to the financing
and construction of the Major Improvement Area Projects and the Development, and the
Developer shall not be in default in the payment of principal or interest on any of its
indebtedness which default shall materially adversely impact the ability of such
Developer to pay the Assessments when due.
(d) Closing Documents. At or prior to the Closing, the Underwriter shall have
received each of the documents required under Section 9 below.
(e) Concurrent Closing of the Improvement Area #1 Bonds. The City shall
issue concurrently with the issuance of the Bonds its "City of Anna, Texas Special
Assessment Revenue Bonds, Series 2021 (Sherley Tract Public Improvement District No.
2 Improvement Area # 1 Project)".
(f) Termination Events. The Underwriter shall have the right to cancel its
obligation to purchase and place the Bonds and to terminate this Agreement without
liability therefor by written notification to the City if, between the date of this Agreement
and the Closing, in the Underwriter's reasonable judgment, any of the following shall
have occurred:
(i) the market price or marketability of the Bonds, or the ability of the
Underwriter to enforce contracts for the sale of the Bonds, shall be materially
adversely affected by the occurrence of any of the following:
(1) legislation shall have been introduced in or enacted by the
Congress of the United States or adopted by either House thereof, or
legislation pending in the Congress of the United States shall have been
amended, or legislation shall have been recommended to the Congress of
the United States or otherwise endorsed for passage (by press release,
other form of notice, or otherwise) by the President of the United States,
the Treasury Department of the United States, or the Internal Revenue
Service or legislation shall have been proposed for consideration by either
the U.S. Senate Committee on Finance or the U.S. House of
Representatives Committee on Ways and Means or legislation shall have
been favorably reported for passage to either House of the Congress of the
United States by a Committee of such House to which such legislation has
been referred for consideration, or a decision by a court of the United
States or the Tax Court of the United States shall be rendered or a ruling,
regulation, or order (final, temporary, or proposed) by or on behalf of the
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Treasury Department of the United States, the Internal Revenue Service,
or other federal agency shall be made, which would result in federal
taxation of revenues or other income of the general character expected to
be derived by the City or upon interest on securities of the general
character of the Bonds or which would have the effect of changing,
directly or indirectly, the federal income tax consequences of receipt of
interest on securities of the general character of the Bonds in the hands of
the holders thereof; or
(2) legislation shall be enacted by the Congress of the United
States, or a decision by a court of the United States shall be rendered, or a
stop order, ruling, regulation or no -action letter by, or on behalf of, the
Securities and Exchange Commission or any other governmental agency
having jurisdiction of the subject matter shall be issued or made to the
effect that the issuance, offering or sale of obligations of the general
character of the Bonds, or the issuance, offering or sale of the Bonds,
including all underlying obligations, as described herein or by the Limited
Offering Memorandum, is in violation or would be in violation of, or that
obligations of the general character of the Bonds, or the Bonds, are not
exempt from registration under, any provision of the federal securities
laws, including the Securities Act, or that the Indenture needs to be
qualified under the Trust Indenture Act of 1939, as amended and as then in
effect (the "Trust Indenture Act"); or
(3) a general suspension of trading in securities on the New
York Stock Exchange, the establishment of minimum prices on such
exchange, the establishment of material restrictions (not in force as of the
date hereof) upon trading securities generally by any governmental
authority or any national securities exchange, a general banking
moratorium declared by federal, State of New York, or State officials
authorized to do so; or
(4) there shall have occurred any outbreak of hostilities
(including, without limitation, an act of terrorism) or other national or
international calamity or crisis, including, but not limited to, an escalation
of hostilities that existed prior to the date hereof, and the effect of any such
event on the financial markets of the United States; or
(5) there shall have occurred since the date of this Agreement
any materially adverse change in the affairs or financial condition of the
City, except as disclosed in or contemplated by the Limited Offering
Memorandum; or
(6) any state blue sky or securities commission or other
governmental agency or body in any state in which more than 10% of the
Bonds have been offered and sold shall have withheld registration,
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exemption or clearance of the offering of the Bonds as described herein, or
issued a stop order or similar ruling relating thereto; or
(7) any amendment to the federal or state Constitution or
action by any federal or state court, legislative body, regulatory body, or
other authority materially adversely affecting the tax status of the City, its
property, income, securities (or interest thereon), or the validity or
enforceability of the Assessments to pay principal or interest on the
Bonds; or
(ii) the New York Stock Exchange or other national securities exchange
or any governmental authority shall impose, as to the Bonds or as to obligations of
the general character of the Bonds, any material restrictions not now in force, or
increase materially those now in force, with respect to the extension of credit by, or
the charge to the net capital requirements of, the Underwriter; or
(iii) any event occurring, or information becoming known which, in the
reasonable judgment of the Underwriter, makes untrue in any material respect any
statement or information contained in the Limited Offering Memorandum, or has
the effect that the Limited Offering Memorandum contains any untrue statement of
material fact or omits 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, which change shall occur subsequent to the
date of this Agreement and shall not be due to the malfeasance, misfeasance or
nonfeasance of the Underwriter; or
(iv) any fact or event shall exist or have existed that, in the
Underwriter's reasonable judgment, requires or has required an amendment of or
supplement to Limited Offering Memorandum; or
(v) a general banking moratorium shall have been declared by federal
or State authorities having jurisdiction and be in force; or
(vi) a material disruption in securities settlement, payment or clearance
services shall have occurred;
(vii) a decision by a court of the United States shall be rendered, or a
stop order, release, regulation or no -action letter by or on behalf of the United
States Securities and Exchange Commission (the "SEC") or any other
governmental agency having jurisdiction of the subject matter shall have been
issued or made, to the effect that the issuance, offering or sale of the Bonds,
including the underlying obligations as contemplated by this Agreement or by the
Limited Offering Memorandum, or any document relating to the issuance, offering
or sale of the Bonds, is or would be in violation of any provision of the federal
securities laws on the date of Closing, including the Securities Act, the Securities
Exchange Act of 1934 (the "Securities Exchange Act") and the Trust Indenture
Act; or
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(viii) the purchase of and payment for the Bonds by the Underwriter, or
the resale of the Bonds by the Underwriter on the terms and conditions herein
provided shall be prohibited by any applicable law, governmental authority, board,
agency or commission, which prohibition shall occur subsequent to the date hereof
and shall not be due to the malfeasance, misfeasance, or nonfeasance of the
Underwriter.
With respect to the conditions described in subparagraphs (ii) and (viii) above, the
Underwriter is not aware of any current, pending or proposed law or government inquiry
or investigation as of the date of execution of this Agreement which would permit the
Underwriter to invoke its termination rights hereunder.
9. Closing Documents. At or prior to the Closing, the Underwriter shall receive the
following documents:
(a) Bond Opinion. The approving opinion of Bond Counsel, dated the
Closing Date and substantially in the form included as Appendix C to the Limited
Offering Memorandum, dated the date of the Closing and addressed to the Underwriter,
which may be included in the supplemental opinion required by Section 9(b), to the effect
that the foregoing opinion may be relied upon by the Underwriter to the same extent as if
such opinion were addressed to it.
(b) Supplemental Opinion. A supplemental opinion of Bond Counsel dated
the Closing Date and addressed to the City and the Underwriter, which provides that the
Underwriter may rely upon the opinion of Bond Counsel delivered in accordance with the
provisions of Section 9(a) hereof, in form and substance acceptable to counsel for the
Underwriter, to the following effect:
(i) Except to the extent noted therein, Bond Counsel has not verified
and is not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements and information contained in the
Limited Offering Memorandum but that such firm has reviewed the information
describing the Bonds in the Limited Offering Memorandum under the captions or
subcaptions "PLAN OF FINANCE The Bonds", "DESCRIPTION OF THE
BONDS," "SECURITY FOR THE BONDS" (except for the last paragraph under
the subcaption "General"), "ASSESSMENT PROCEDURES" (except for the
subcaptions "Assessment Methodology" and "Assessment Amounts"), "THE
DISTRICT," "TAX MATTERS," "LEGAL MATTERS Legal Proceedings,"
"LEGAL MATTERS — Legal Opinions," "SUITABILITY FOR INVESTMENT,"
"CONTINUING DISCLOSURE" (except for the subcaptions "The City's
Compliance with Prior Undertakings" and "The Developer"), "REGISTRATION
AND QUALIFICATION OF BONDS FOR SALE," "LEGAL INVESTMENTS
AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS," and
APPENDIX A and Bond Counsel is of the opinion that the information relating to
the Bonds and legal issues contained under such captions and subcaptions is an
accurate and fair description of the laws and legal issues addressed therein and,
15
with respect to the Bonds, such information conforms to the Bond Ordinance and
Indenture;
(ii) The Bonds are not subject to the registration requirements of the
Securities Act, and the Indenture is exempt from qualification pursuant to the Trust
Indenture Act;
(iii) The City has full power and authority to adopt the Creation
Resolution, the Assessment Ordinance, and the Bond Ordinance (collectively, the
foregoing documents are referred to herein as the "City Actions") and perform its
obligations thereunder and the City Actions have been duly adopted, are in full
force and effect and have not been modified, amended or rescinded; and
(iv) The Indenture, the Development Agreement, the CIA Agreement,
the Landowner Agreement, the City Continuing Disclosure Agreement and this
Agreement have been duly authorized, executed and delivered by the City and,
assuming the due authorization, execution and delivery of such instruments,
documents, and agreements by the other parties thereto, constitute the legal, valid,
and binding agreements of the City, enforceable in accordance with their respective
terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or
other laws affecting enforcement of creditors' rights, or by the application of
equitable principles if equitable remedies are sought and to the application of
Texas law relating to governmental immunity applicable to local governmental
entities.
(c) City Legal . Opinion. An opinion of an attorney for the City, dated the
Closing Date and addressed to the Underwriter, the Underwriter's Counsel, the City and
the Trustee, with respect to matters relating to the City, substantially in the form of
Appendix C hereto or in form otherwise agreed upon by the Underwriter.
(d) Opinion of Developer's Counsel. An opinion of Developer's Counsel,
substantially in the form of Appendix D hereto, dated the Closing Date and addressed to
the City, Bond Counsel, the Attorney for the City, the Underwriter, Underwriter's
Counsel and the Trustee.
(e) Developer Certificate. The certificate of the Developer dated as of the
Closing Date, signed by an authorized officer of Developer in substantially the form of
Appendix E hereto.
(f) City Certificate. A certificate of the City, dated the Closing Date, to the
effect that, to the best of an authorized City official's knowledge:
(i) the representations and warranties of the City contained herein and
in the City Documents are true and correct in all material respects on and as of the
Closing Date as if made on the date thereof,
(ii) the Authorizing Documents and City Documents are in full force
and effect and have not been amended, modified, or supplemented;
16
(iii) except as disclosed in the Limited Offering Memorandum, no
litigation or proceeding against the City is pending or, to the knowledge of such
persons, threatened in any court or administrative body nor is there a basis for
litigation which would (a) contest the right of the members or officials of the City
to hold and exercise their respective positions, (b) contest the due organization and
valid existence of the City or the establishment of the District, (c) contest the
validity, due authorization and execution of the Bonds or the City Documents, or
(d) attempt to limit, enjoin or otherwise restrict or prevent the City from levying
and collecting the Assessments pledged to pay the principal and interest on the
Bonds, or the pledge thereof; and
(iv) the City has, to the best of such person's knowledge, complied with
all agreements and covenants and satisfied all conditions set forth in the City
Documents, on its part to be complied with or satisfied hereunder at or prior to the
Closing.
(g) Trustee's Certificate. A certificate of the Trustee, dated the date of
Closing, in form and substance acceptable to counsel for the Underwriter to the following
effect:
(i) The Trustee was founded as an Alabama state banking corporation
organized under the laws of the State of Alabama, and has not been dissolved,
cancelled, or terminated, and has the full power and authority, including trust
powers, to accept and perform its duties under the Indenture; and
(ii) No consent, approval, authorization or other action by any
governmental authority having jurisdiction over the Trustee that has not been
obtained is or will be required for the authentication of the Bonds or the
consummation by the Trustee of the other transactions contemplated to be
performed by the Trustee in connection with the authentication of the Bonds and
the acceptance and performance of the obligations created by the Indenture.
(h) Underwriter Counsel's Opinion. An opinion, dated the Closing Date and
addressed to the Underwriter, of Winstead PC, counsel to the Underwriter, to the effect
that:
(i) based on (A) such counsel's review of the Bond Ordinance, the
Indenture, and the Limited Offering Memorandum; (B) its discussions with Bond
Counsel and with the Underwriter; (C) its review of the documents, certificates,
opinions and other instruments delivered at the closing of the sale of the Bonds on
the date hereof; and (D) such other matters as it deems relevant, such counsel is of
the opinion that the Bonds are exempt securities under the Securities Act, and the
Trust Indenture Act, and it is not necessary, in connection with the offering and
sale of the Bonds, to register the Bonds under the Securities Act and the Indenture
is not required to be qualified under the Trust Indenture Act;
17
(ii) based upon (A) such counsel's review of Rule 15c2-12 and
interpretive guidance published by the SEC relating thereto; (B) its review of the
continuing disclosure undertaking of the City contained in the City Continuing
Disclosure Agreement; and (C) the inclusion in the Limited Offering Memorandum
of a description of the specifics of such undertaking, and assuming that the Bond
Ordinance, the Indenture, and the City Continuing Disclosure Agreement have
been duly adopted by the City and are in full force and effect, such undertaking
provides a suitable basis for the Underwriter, to make a reasonable determination
that the City has met the qualifications of paragraph (b)(5)(i) of Rule 15c2-12; and
(iii) although such counsel has not verified and is not passing upon, and
does not assume any responsibility for, the accuracy, completeness or fairness of
the information contained in the Limited Offering Memorandum, it has
participated in the preparation of the Limited Offering Memorandum and without
independent verification, no facts came to its attention that caused it to believe that
the Limited Offering Memorandum (except for the Appendices as well as any other
financial, engineering and statistical data contained therein or included therein by
reference or any litigation disclosed therein, as to which it expresses no view) as of
its date contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(i) Limited Offering Memorandum. The Limited Offering Memorandum and
each supplement or amendment, if any, thereto.
0) Delivery of City Documents and Developer Documents. The City
Documents and Developer Documents shall have been executed and delivered in form
and content satisfactory to the Underwriter.
(k) Form 8038-G. Evidence that the federal tax information form 8038-G has
been prepared by Bond Counsel for filing.
(1) Federal Tax Certificate. A certificate of the City in form and substance
satisfactory to Bond Counsel and counsel to the Underwriter setting forth the facts,
estimates and circumstances in existence on the date of the Closing, which establish that
it is not expected that the proceeds of the Bonds will be used in a manner that would
cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the
Internal Revenue Code of 1986, as amended (the "Code"), and any applicable regulations
(whether final, temporary or proposed), issued pursuant to the Code.
(m) Attorney General Opinion and Comptroller Registration. The approving
opinion of the Attorney General of the State regarding the Bonds and the Comptroller of
the State's Certificate of Registration for the Initial Bond.
(n) Continuing Disclosure Agreements. The City Continuing Disclosure
Agreement and the Continuing Disclosure Agreement of the Developer, shall have been
executed by the parties thereto in substantially the forms attached to the Preliminary
Limited Offering Memorandum as Appendix D-1 and Appendix D-2.
(o) Letter of Representation of the Appraiser. (i) Letter of Representation of
the Appraiser, substantially in the form of Appendix F hereto addressed to the City, Bond
Counsel, the Underwriter, counsel to the Underwriter and the Trustee, or in form
otherwise agreed upon by the Underwriter, and (ii) a copy of the real estate appraisal of
the property within the Major Improvement Area of in the District dated June 8, 2021.
(p) Letter of Representation of Administrator. Letter of Representation of the
Administrator, substantially in the form of Appendix G hereto, addressed to the City,
Bond Counsel, the Underwriter, counsel to the Underwriter, and the Trustee or in form
otherwise agreed upon by the Underwriter.
(q) Evidence of Filing of Creation Resolution, Assessment Ordinance, and
Landowner Agreement. Evidence that (i) the Creation Resolution, including legal
description of the District by metes and bounds, (ii) the Assessment Ordinance, including
the Assessment Roll for Major Improvement Area of the District and a statement
indicating the contact for and address of where a copy of the Service and Assessment
Plan, and any updates thereto may be obtained or viewed, and (iii) the Landowner
Agreement have been filed of record in the real property records of Collin County, Texas.
(r) Lender Consent Certificate. Lender Consent Certificate of International
Bank of Commerce consenting to and acknowledging the creation of the District, the
adoption of the Assessment Ordinance, the levy of the Assessments, and the
subordination of its lien to the lien created by the Assessments in a form acceptable to the
Underwriter.
(s) Rule 15c2-12 Certification. A resolution or certificate of the City (which
may be included in the Bond Ordinance) whereby the City has deemed the Preliminary
Limited Offering Memorandum final as of its date, except for permitted omissions, as
contemplated by Rule 15c2-12 in connection with the offering of the Bonds.
(t) Dissemination Agent. Evidence acceptable to the Underwriter in its sole
discretion that the City has engaged a dissemination agent acceptable to the Underwriter
for the Bonds, with the execution of the City Continuing Disclosure Agreement and the
Continuing Disclosure Agreement of the Developer by other parties thereto being
conclusive evidence of such acceptance by the Underwriter.
(u) BLOR. A copy of the Blanket Issuer Letter of Representation to DTC
relating to the Bonds and signed by the City.
(v) Additional Documents. Such additional legal opinions, certificates,
instruments, and other documents as the Underwriter or their counsel may reasonably
deem necessary.
10. City's Closing Conditions. The obligation of the City hereunder to deliver the
Bonds shall be subject to receipt on or before the date of the Closing of the purchase price set
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forth in Section 1 hereof, the opinion of Bond Counsel described in Section 9(a) hereof, the
opinion of the Attorney General described in Section 9(m) hereof, and any documents required to
be delivered by the Developer.
11. Establishment of Issue Price.
(a) Notwithstanding any provision of this Agreement to the contrary, the
following provisions related to the establishment of the issue price of the Bonds apply:
apply:
(i) Definitions. For purposes of this Section, the following definitions
(1) "Public" means any person (including an individual, trust,
estate, partnership, association, company or corporation) other than a
Participating Underwriter or a Related Party to a Participating
Underwriter.
(2) "Participating Underwriter" means (A) any person that
agrees pursuant to a written contract with the City (or with the
Underwriter to form an underwriting syndicate) to participate in the initial
sale of the Bonds to the Public and (B) any person that agrees pursuant to
a written contract directly or indirectly with a person described in clause
(A) to participate in the initial sale of the Bonds to the Public (including a
member of a selling group or a party to a third -parry distribution
agreement participating in the initial sale of the Bonds to the public).
(3) "Related Party" means any two or more persons who are
subject, directly or indirectly, to (A) more than 50% common ownership
of the voting power or the total value of their stock, if both entities are
corporations (including direct ownership by one corporation of another),
(B) more than 50% common ownership of their capital interests or profits
interests, if both entities are partnerships (including direct ownership by
one partnership of another) or (C) more than 50% common ownership of
the value of the outstanding stock of the corporation or the capital interest
or profits interest of the partnership, as applicable, if one entity is a
corporation and the other entity is a partnership (including direct
ownership of the applicable stock or interests by one entity of the other).
(4) "Sale Date" means the date of execution of this Agreement
by all parties.
(ii) Issue Price Certificate. The Underwriter agrees to assist the City in
establishing the issue price of the Bonds and to execute and deliver to the City at
Closing an Issue Price Certificate, together with the supporting pricing wires or
equivalent communications, substantially in the form attached hereto as Appendix
B, with such modifications as may be appropriate or necessary, in the reasonable
judgment of the Underwriter, the City and Bond Counsel, to accurately reflect, as
applicable, the initial offering price (the "Initial Offering Price") or prices or the
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sales price or prices to the Public of the Bonds. As applicable, all actions to be
taken by the City under this section to establish the issue price of the Bonds may
be taken on behalf of the City by the City's financial advisor and any notice or
report to be provided to the City may be provided to the City's financial advisor.
(iii) Substantial Amount Test. Other than those maturities of the Bonds
which are designated by the Underwriter in writing in the attached Schedule I (the
"Hold -the -Price Maturities"), the City will treat the Initial Offering Price at which
at least ten percent (a "Substantial Amount") in principal amount of each maturity
of the Bonds is sold to the Public as of the Sale Date (the "Substantial Amount
Test") as the issue price of that maturity (or each separate CUSIP number within
that maturity). At or promptly after the execution of this Agreement, the
Underwriter will report to the City the price or prices at which the Participating
Underwriters have offered and sold to the Public each maturity of the Bonds.
(iv) Hold -The -Price Restriction. The Underwriter agrees that it will
neither offer nor sell any of the Hold -the -Price Maturities to any person at a price
that is higher than the applicable Initial Offering Price for such maturity during the
period starting on the Sale Date and ending on the earlier of (i) the close of the
fifth business day after the Sale Date or (ii) the date on which the Underwriter has
sold a Substantial Amount of such Hold -the -Price Maturity to the Public at a price
that is no higher than the Initial Offering Price of such Hold -the -Price Maturity
(the "Hold -the -Price Restriction"). The Initial Offering Price of the Hold -the -Price
Maturities shall be the issue price for such maturities.
The Underwriter shall promptly advise the City when the Participating
Underwriters have sold a Substantial Amount of each such Hold -the -Price Maturity to the
Public at a price that is no higher than the applicable Initial Offering Price of such Hold -
the -Price Maturity, if that occurs prior to the close of the fifth business day after the Sale
Date.
The City acknowledges that, in making the representation set forth in this
subparagraph (4), the Underwriter will rely on (A) the agreement of each Participating
Underwriter to comply with the Hold -the -Price Restriction, as set forth in an agreement
among underwriters and the related pricing wires, (B) in the event a selling group has
been created in connection with the sale of the Bonds to the Public, the agreement of each
dealer who is a member of the selling group to comply with the Hold -the -Price
Restriction, as set forth in a selling group agreement and the related pricing wires, and
(C) in the event that a Participating Underwriter is a party to a third -party distribution
agreement that was employed in connection with the sale of the Bonds, the agreement of
each such underwriter, dealer or broker -dealer that is a party to such agreement to comply
with the Hold -the -Price Restriction, as set forth in the third -party distribution agreement
and the related pricing wires. The City further acknowledges that each Participating
Underwriter will be solely liable for its failure to comply with its agreement regarding the
Hold -the -Price Restriction and that no Participating Underwriter will be liable for the
failure of any other Participating Underwriter to comply with its corresponding
agreement regarding the Hold -the -Price Restriction as applicable to the Bonds.
21
(v) Agreements Among Participating Underwriters. The Underwriter
confirms that:
(1) any agreement among underwriters, any selling group
agreement and each third- party distribution agreement to which the
Underwriter is a party relating to the initial sale of the Bonds to the Public,
together with related pricing wires, contains or will contain language
obligating each Participating Underwriter, each dealer who is a member of
any selling group, and each broker -dealer that is a party to any such third -
party distribution agreement, as applicable, to (A) report the prices at
which it sells to the Public the unsold Bonds of each maturity allocated to
it until it is notified by the Underwriter that either the Substantial Amount
Test has been satisfied as to the Bonds of that maturity or all Bonds of that
maturity have been sold to the Public, (B) comply with the Hold -the -Price
Restriction, if applicable, in each case if and for so long as directed by the
Underwriter and as set forth in the relating pricing wires and (C)
acknowledge that, unless otherwise advised by the Participating
Underwriter, the Underwriter will assume that based on such agreement
each order submitted by the underwriter, dealer or broker -dealer is a sale
to the Public, and
(2) any agreement among underwriters relating to the initial
sale of the Bonds to the Public, together with related pricing wires,
contains or will contain language obligating each Participating
Underwriter that is a party to a third -party distribution agreement to be
employed in connection with the initial sale of the Bonds to the Public to
require each underwriter, dealer or broker -dealer that is a party to such
third -party distribution agreement to (A) report the prices at which it sells
to the Public the unsold Bonds of each maturity allotted to it until it is
notified by the Underwriter or the applicable Participating Underwriter
that either the Substantial Amount Test has been satisfied as to the Bonds
of that maturity or all Bonds if that maturity have been sold to the Public
and (B) comply with the Hold -the -Price Restriction, if applicable, in each
case if and for so long as directed by the Underwriter or the applicable
Participating Underwriter and as set forth in the related pricing wires.
(b) Sale to Related Party not a Sale to the Public. The Participating
Underwriters acknowledge that sales of any Bonds to any person that is a Related Party
to a Participating Underwriter do not constitute sales to the Public for purposes of this
Section. If a Related Party to a Participating Underwriter purchases during the initial
offering period all of a Hold -the -Price Maturity, the related Participating Underwriter will
notify the Underwriter and will take steps to confirm in writing that such Related Party
will either (i) hold such Bonds for its own account, without present intention to sell,
reoffer or otherwise dispose of such Bonds for at least five business days from the Sale
Date, or (ii) comply with the Hold -the -Price Restriction.
22
12. Consequences of Termination. If the City shall be unable to satisfy the conditions
contained in this Agreement or if the obligations of the Underwriter shall be terminated for any
reason permitted by this Agreement, this Agreement shall terminate and the Underwriter and the
City shall have no further obligation hereunder, except as further set forth in Sections 13, 15 and
16 hereof.
13. Costs and Expenses.
(a) The Underwriter shall be under no obligation to pay, and the City shall
cause to be paid from proceeds of the Bonds the following expenses incident to the
issuance of the Bonds and performance of the City's obligations hereunder: (i) the costs
of the preparation and printing of the Bonds; (ii) the cost of preparation, printing, and
mailing of the Preliminary Limited Offering Memorandum, the final Limited Offering
Memorandum and any supplements and amendments thereto; (iii) the fees and
disbursements of the City's financial advisor and legal counsel, the Trustee's counsel,
Bond Counsel, Developer's Counsel, and the Trustee relating to the issuance of the
Bonds, (iv) the Attorney General's review fees, (v) the fees and disbursements of
accountants, advisers and any other experts or consultants retained by the City or the
Developer, including but not limited to the fees and expenses of the Administrator, and
(vi) the expenses incurred by or on behalf of City employees and representatives that are
incidental to the issuance of the Bonds and the performance by the City of its obligations
under this Agreement.
(b) The Underwriter shall pay the following expenses: (i) all advertising
expenses in connection with the offering of the Bonds; (ii) fees of Underwriter's Counsel;
and (iii) all other expenses, including CUSIP fees (including out-of-pocket expenses and
related regulatory expenses), incurred by it in connection with its offering and
distribution of the Bonds, except as noted in Subsection 13(a) above.
(c) The City acknowledges that the Underwriter will pay from the
Underwriter's fee applicable per bond assessment charged by the Municipal Advisory
Council of Texas, a nonprofit corporation whose purpose is to collect, maintain and
distribute information relating to issuing entities of municipal securities.
14. Notice. Any notice or other communication to be given to the City under this
Agreement may be given by delivering the same in writing to: City of Anna, Texas, 111 N.
Powell Parkway, Anna, Texas 75409, Attention: City Manager. Any notice or other
communication to be given to the Underwriter under this Agreement may be given by delivering
the same in writing to: FMSbonds, Inc., 5 Cowboys Way, Suite 300-25, Frisco, Texas 75034,
Attention: Tripp Davenport, Director.
15. Entire Agreement. This Agreement is made solely for the benefit of the City and
the Underwriter (including their respective successors and assigns), and no other person shall
acquire or have any right hereunder or by virtue hereof. All of the City's representations,
warranties, and agreements contained in this Agreement shall remain operative and in full force
and effect regardless of. (i) any investigations made by or on behalf of the Underwriter,
provided the City shall have no liability with respect to any matter of which the Underwriter has
23
actual knowledge prior to the purchase of the Bonds; or (ii) delivery of any payment for the
Bonds pursuant to this Agreement. The agreements contained in this Section and in Sections 16
and 18 shall survive any termination of this Agreement.
16. Survival of Representations and Warranties. All representations and warranties of
the parties made in, pursuant to or in connection with this Agreement shall survive the execution
and delivery of this Agreement, notwithstanding any investigation by the parties. All statements
contained in any certificate, instrument, or other writing delivered by a party to this Agreement
or in connection with the transactions described in by this Agreement constitute representations
and warranties by such party under this Agreement to the extent such statement is set forth as a
representation and warranty in the instrument in question.
17. Counterparts. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
18. Severability. In case any one or more of the provisions contained herein shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision hereof.
19. State Law Governs. The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the State of Texas.
20. No Assi ng ment. The rights and obligations created by this Agreement shall not be
subject to assignment by the Underwriter or the City without the prior written consent of the
other parties hereto.
21. No Personal Liability. None of the members of the City Council, nor any officer,
representative, agent, or employee of the City, shall be charged personally by the Underwriter
with any liability, or be held liable to the Underwriter under any term or provision of this
Agreement, or because of execution or attempted execution, or because of any breach or
attempted or alleged breach of this Agreement.
22. Form 1295. Submitted herewith or on a date prior hereto is a completed Form
1295 in connection with the Underwriter's participation in the execution of this Agreement
generated by the Texas Ethics Commission's (the "TEC") electronic filing application in
accordance with the provisions of Section 2252.908 of the Texas Government Code and the rules
promulgated by the TEC (the "Form 1295"). The City hereby confirms receipt of the Form 1295
from the Underwriter, and the City agrees to acknowledge such form with the TEC through its
electronic filing application not later than the 30th day after the receipt of such form. The
Underwriter and the City understand and agree that, with the exception of information
identifying the City and the contract identification number, neither the City nor its consultants
are responsible for the information contained in the Form 1295; that the information contained in
the Form 1295 has been provided solely by the Underwriter; and, neither the City nor its
consultants have verified such information.
23. Anti -Boycott Verification. The Underwriter hereby verifies that the Underwriter
and its parent company, wholly- or majority -owned subsidiaries, and other affiliates, if any, do
24
not boycott Israel and, to the extent this Agreement is a contract for goods or services, will not
boycott Israel during the term of this Agreement. The foregoing verification is made solely to
comply with Section 2271.002, Texas Government Code, and to the extent such Section does not
contravene applicable State or Federal Law. As used in the foregoing verification, `boycott Israel'
means refusing to deal with, terminating business activities with, or otherwise taking any action
that is intended to penalize, inflict economic harm on, or limit commercial relations specifically
with Israel, or with a person or entity doing business in Israel or in an Israeli -controlled territory,
but does not include an action made for ordinary business purposes. The Underwriter
understands "affiliate" to mean an entity that controls, is controlled by, or is under common
control with the Underwriter and exists to make a profit.
24. Iran, Sudan and Foreign Terrorist Organizations. The Underwriter hereby
represents that neither the Underwriter nor any of its parent company, wholly- or majority -owned
subsidiaries, and other affiliates is a company identified on a list prepared and maintained by the
Texas Comptroller of Public Accounts under Section 2252.153 or Section 2270.0201, Texas
Government Code, and posted on any of the following pages of such officer's internet website:
https:Hcomptroller.texas.gov/purchasing/docs/sudan-list.pdf,
https:Hcomptroller.texas.gov/purchasing/docs/iran-list.pdf, or
https:Hcomptroller.texas.gov/purchasing/docs/fto-list.pdf. The foregoing representation is made
solely to comply with Section 2252.152, Texas Government Code, and to the extent such Section
does not contravene applicable State or Federal law and excludes the Underwriter and each of its
parent company, wholly- or majority -owned subsidiaries, and other affiliates, if any, that the
United States government has affirmatively declared to be excluded from its federal sanctions
regime relating to Sudan or Iran or any federal sanctions regime relating to a foreign terrorist
organization. The Underwriter understands "affiliate" to mean an entity that controls, is
controlled by, or is under common control with the Underwriter and exists to make a profit.
[Signatures to follow]
25
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first set forth above.
FMSbonds, Inc.,
as Underwriter
Lb-M
Name: Theodore A. Swinarski
Title: Senior Vice President — Trading
S-1
Accepted at a.m./p.m. central time on the
date first stated above.
CITY OF ANNA, TEXAS
UO-A
Nate Pike, Mayor
S-2
SCHEDULE I
$2,896,000
CITY OF ANNA, TEXAS
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2021
(SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO. 2 MAJOR IMPROVEMENT AREA
PROJECT)
Interest Accrues From: Date of Delivery
$514,000 4.500% Term Bonds, Due September 15, 2031, Priced to Yield 4.500% (a) (°)
$2,382,000 5.000% Term Bonds, Due September 15, 2051, Priced to Yield 5.000% (a) (b) (c)
(a) The initial prices or yields of the Bonds are furnished by the Underwriter, have been determined in
accordance with the "10% test", and represent the initial offering prices or yields to the public, which may
be changed by the Underwriter at any time.
(b) The Bonds maturing on September 15, 2051 are subject to redemption, in whole or in part, prior to stated
maturity, at the option of the City, on any date on or after September 15, 2031, at the redemption price of
100% of the principal amount plus accrued interest to the date of redemption as described in the Limited
Offering Memorandum under "DESCRIPTION OF THE BONDS — Redemption Provisions."
(°) The Bonds are also subject to extraordinary optional redemption as described in the Limited Offering
Memorandum under "DESCRIPTION OF THE BONDS — Redemption Provisions."
The Term Bonds are subject to mandatory sinking fund redemption on the dates and in the respective
Sinking Fund Installments as set forth in the following schedule.
$514,000 Term Bonds Maturing September 15, 2031
Redemption Date
Sinking Fund
Installment
September 15, 2024
$56,000
September 15, 2025
58,000
September 15, 2026
61,000
September 15, 2027
63,000
September 15, 2028
65,000
September 15, 2029
68,000
September 15, 2030
70,000
September 15, 2031 *
73,000
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Schedule I-1
* Final Maturity
2.382.000 Term Bonds Maturing September 15.2051
Redemption Date
Sinking Fund
Installment
September 15, 2032
$76,000
September 15, 2033
79,000
September 15, 2034
83,000
September 15, 2035
86,000
September 15, 2036
90,000
September 15, 2037
94,000
September 15, 2038
98,000
September 15, 2039
103,000
September 15, 2040
107,000
September 15, 2041
112,000
September 15, 2042
117,000
September 15, 2043
123,000
September 15, 2044
129,000
September 15, 2045
135,000
September 15, 2046
141,000
September 15, 2047
147,000
September 15, 2048
154,000
September 15, 2049
162,000
September 15, 2050
169,000
September 15, 2051 *
177,000
Schedule I--2
APPENDIX A
FORM OF DEVELOPER LETTER OF REPRESENTATIONS
$2,896,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2021
(SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO.2 MAJOR
IMPROVEMENT AREA PROJECT)
DEVELOPER LETTER OF REPRESENTATIONS
July 27, 2021
City of Anna, Texas
I I I N. Powell Parkway
Anna, Texas 75409
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
Ladies and Gentlemen:
Ladies and Gentlemen:
This letter is being delivered to the City of Anna, Texas (the "City") and FMSbonds, Inc.
(the "Underwriter"), in consideration for your entering into the Bond Purchase Agreement dated
the date hereof (the "Bond Purchase Agreement") for the sale and purchase of the $2,896,000
"City of Anna, Texas, Special Assessment Revenue Bonds, Series 2021 (Sherley Tract No. 2
Public Improvement District Major Improvement Area Project)" (the "Bonds"). Pursuant to the
Bond Purchase Agreement, the Underwriter has agreed to purchase from the City, and the City
has agreed to sell to the Underwriter, the Bonds. In order to induce the City to enter into the
Bond Purchase Agreement and as consideration for the execution, delivery, and sale of the Bonds
by the City and the purchase of them by the Underwriter, the undersigned, MM Anna 325, LLC,
a Texas limited liability company (the "Developer"), makes the representations, warranties, and
covenants contained in this Developer Letter of Representations. Unless the context clearly
indicates otherwise, each capitalized term used in this Developer Letter of Representations will
have the meaning set forth in the Bond Purchase Agreement.
1. Purchase and Sale of Bonds. Inasmuch as the purchase and sale of the Bonds
represents a negotiated transaction, the Developer understands, and hereby confirms, that the
A-1
Underwriter is not acting as a fiduciary of the Developer, but rather is acting solely in its
capacity as Underwriter of the Bonds for its own account.
2. Updating of the Limited Offering Memorandum. If, after the date of this
Developer Letter of Representations, up to and including the date the Underwriter is no longer
required to provide a Limited Offering Memorandum to potential customers who request the
same pursuant to Rule 15c2-12 (the earlier of (i) ninety (90) days from the "end of the
underwriting period" (as defined in Rule 15c2-12) and (ii) the time when the Limited Offering
Memorandum is available to any person from the MSRB, but in no case less than twenty-five
(25) days after the "end of the underwriting period" for the Bonds), the Developer becomes
aware of any fact or event which might or would cause the Limited Offering Memorandum, as
then supplemented or amended, 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
light of the circumstances under which they were made, not misleading, or if it is necessary to
amend or supplement the Limited Offering Memorandum to comply with law, the Developer will
notify the Underwriter (and for the purposes of this clause provide the Underwriter with such
information as it may from time to time request); however, that for the purposes of this
Developer Letter of Representations and any certificate delivered by the Developer in
accordance with the Bond Purchase Agreement, the Developer makes no representations with
respect to (i) the descriptions in the Preliminary Limited Offering Memorandum or the Limited
Offering Memorandum of The Depository Trust Company, New York, New York, or its book -
entry -only system and (ii) the information in the Preliminary Limited Offering Memorandum and
the Limited Offering Memorandum under the captions "THE CITY," "THE DISTRICT,"
"BONDHOLDERS' RISKS" (except as it pertains to the Developer, the Major Improvement
Area Projects and the Development, as defined in the Limited Offering Memorandum), "TAX
MATTERS," "LEGAL MATTERS — Litigation — The City," "CONTINUING DISCLOSURE
— The City" and "— The City's Compliance with Prior Undertakings" and "INFORMATION
RELATING TO THE TRUSTEE."
3. Developer Documents. The Developer has executed or caused the execution of
and delivered each of the below listed documents (individually, a "Developer Document" and
collectively, the "Developer Documents") in the capacity provided for in each such Developer
Document, and each such Developer Document constitutes a valid and binding obligation of
Developer, enforceable against the Developer in accordance with its terms:
(a) this Developer Letter of Representations;
(b) that certain Sherley Tract Subdivision Improvement Agreement between
the City, BFB Ana 40 Acres, LLC (`BFB Ana") and the Developer, effective as of June 9,
2020, as amended by the First Amended Sherley Tract Subdivision Improvement
Agreement effective as of July 14, 2020 (together, the "Development Agreement");
(c) that certain Sherley Tract Public Improvement District No. 2 Major
Improvement Area Construction, Funding, and Acquisition Agreement between the
Developer and the City dated July 27, 2021 (the "CFA Agreement");
WJ
(d) the certain the Major Improvement Area Landowner Agreement dated as
of July 27, 2021 executed by the City and the Developer (the "Landowner Agreement");
and
(e) that certain Continuing Disclosure Agreement of the Developer, dated as
of June 1, 2021 made by and among the Developer, P3Works, LLC as Administrator and
Regions Bank, an Alabama state banking corporation, as dissemination agent.
The Developer has complied in all material respects with all of the Developer's
agreements and covenants and satisfied all conditions required to be complied with or satisfied
by the Developer under the Developer Documents on or prior to the date hereof.
The representations and warranties of the Developer set forth in the Developer
Documents are true and correct in all material respects on and as of the date hereof.
4. Developer Representations, Warranties and Covenants. The Developer
represents, warrants, and covenants to the City and the Underwriter that:
(a) Due Organization and Existence. The Developer is duly formed and
validly existing as a limited liability company under the laws of the State of Texas.
(b) Organizational Documents. The copies of the organizational documents of
the Developer provided by the Developer (the "Developer Organizational Documents")
to the City and the Underwriter are fully executed, true, correct, and complete copies of
such documents and such documents have not been amended or supplemented and are in
full force and effect as of the date hereof.
(c) No Breach. The execution and delivery of the Developer Documents by
Developer does not violate any judgment, order, writ, injunction or decree binding on
Developer or any indenture, agreement, or other instrument to which Developer is a
party.
(d) No Litigation. Other than as described in the Preliminary Limited
Offering Memorandum, there are no proceedings pending or threatened in writing before
any court or administrative agency against Developer that is either not covered by
insurance or which singularly or collectively would have a material, adverse effect on the
ability of Developer to perform its obligations under the Developer Documents in all
material respects or that would reasonably be expected to prevent or prohibit the
development of the Development in accordance with the description thereof in the
Preliminary Limited Offering Memorandum.
(e) Information. The information prepared and submitted by the Developer to
the City or the Underwriter in connection with the preparation of the Preliminary Limited
Offering Memorandum and the Limited Offering Memorandum was, and is, as of this
date, true and correct in all material respects.
(f) Preliminary Limited Offering Memorandum. The Developer represents
and warrants that the information set forth in the Preliminary Limited Offering
A-3
Memorandum under the captions "PLAN OF FINANCE — Development Plan and Plan
of Finance," "THE MAJOR IMPROVEMENT AREA PROJECTS" "THE
DEVELOPMENT," "THE DEVELOPER" "CONTINUING DISCLOSURE — The
Developer", and, to the best of the Developer's knowledge after due inquiry, under the
captions "BONDHOLDERS' RISKS" (only as it pertains to the Developer, the Major
Improvement Area Projects and the Development, as defined in the Limited Offering
Memorandum), "LEGAL MATTERS — Litigation — The Developer," and "SOURCES
OF INFORMATION" (only as it pertains to the Developer) is true and correct and does
not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The Developer agrees to provide a certificate dated the
Closing Date affirming, as of such date, the representations contained in this subsection
(f) with respect to the Preliminary Limited Offering Memorandum and the Limited
Offering Memorandum.
(g) Events of Default. No "Event of Default" or "event of default" by the
Developer under any of the Developer Documents, any documents to which Developer is
a party described in the Preliminary Limited Offering Memorandum, or under any
material documents relating to the financing and construction of the Major Improvement
Area Projects to which the Developer is a party, or event that, with the passage of time or
the giving of notice or both, would constitute such "Event of Default" or "event of
default," by the Developer has occurred and is continuing.
5. Indemnification.
(a) The Developer will indemnify and hold harmless the City and the
Underwriter and each of their officers, directors, employees and agents against any
losses, claims, damages or liabilities to which any of them may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained or incorporated by reference in the
Preliminary Limited Offering Memorandum and the Limited Offering Memorandum
under the captions "PLAN OF FINANCE — Development Plan and Plan of Finance,"
"THE MAJOR IMPROVEMENT AREA PROJECTS," "THE DEVELOPMENT," "THE
DEVELOPER," "BONDHOLDERS' RISKS" (only as it pertains to the Developer, the
Major Improvement Area Projects, and the Development), "LEGAL MATTERS
Litigation — The Developer," "SOURCES OF INFORMATION" (only as it pertains to
the Developer) and "CONTINUING DISCLOSURE — The Developer" or any
amendment or supplement to the Limited Offering Memorandum amending or
supplementing the information contained under the aforementioned captions (as qualified
above), or arise out of or are based upon the omission or alleged untrue statement or
omission to state therein a material fact necessary to make the statements under the
aforementioned captions (as qualified above) not misleading under the circumstances
under which they were made and will reimburse any indemnified party for any
reasonable legal or other expenses reasonably incurred by them in connection with
investigating or defending any such action or claim as such expenses are incurred.
(b) Promptly after receipt by an indemnified party under subsection (a) above
of notice of the commencement of any action, such indemnified parry shall, if a claim in
respect thereof is to be made against the indemnifying parry under such subsection, notify
the indemnifying party in writing of the commencement thereof, but the omission so to
notify the indemnifying parry shall not relieve the indemnifying party from any liability
which it may have to the indemnified party otherwise than under such subsection, unless
such indemnifying party was prejudiced by such delay or lack of notice. In case any such
action shall be brought against an indemnified party, it shall promptly notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying party),
and, after notice from the indemnifying parry to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified parry, in
connection with the defense thereof other than reasonable costs of investigation. The
indemnifying parry shall not be liable for any settlement of any such action effected
without its consent, but if settled with the consent of the indemnifying party or if there is
a final judgment for the plaintiff in any such action, the indemnifying party will
indemnify and hold harmless any indemnified party from and against any loss or liability
by reason of such settlement or judgment. The indemnity herein shall survive delivery of
the Bonds and shall survive any investigation made by or on behalf of the City, the
Developer or the Underwriter.
6. Survival of Representations, Warranties and Covenants. All representations,
warranties, and agreements in this Developer Letter of Representations will survive regardless of
(a) any investigation or any statement in respect thereof made by or on behalf of the Underwriter,
(b) delivery of any payment by the Underwriter for the Bonds hereunder, and (c) any termination
of the Bond Purchase Agreement.
7. Binding on Successors and Assigns. This Developer Letter of Representations
will be binding upon the Developer and its successors and assigns and inure solely to the benefit
of the Underwriter and the City, and no other person or firm or entity will acquire or have any
right under or by virtue of this Developer Letter of Representations.
[Signature page to follow]
A-5
DEVELOPER:
MM ANNA 325, LLC,
a Texas limited liability company
By: MMM Ventures, LLC,
a Texas limited liability company
Its Manager
By: 2M Ventures, LLC,
a Delaware limited liability company
Its Manager
By:
Name: Mehrdad Moayedi
Its Manager
E
APPENDIX B
$2,896,000
CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2021
(SHERLEY TRACT NO. 2 PUBLIC IMPROVEMENT DISTRICT MAJOR IMPROVEMENT
AREA PROJECT)
ISSUE PRICE CERTIFICATE
The undersigned, as the duly authorized representative of FMSbonds, Inc. (the
"Purchaser"), hereby certifies with respect to the $2,896,000 City of Anna, Texas, Special
Assessment Revenue Bonds, Series 2021 (Sherley Tract No. 2 Public Improvement District
Neighborhood Major Improvement Area Project) ("the "Bonds") issued by the City of Anna,
Texas (the "Issuer"), hereby certifies, based on its records and information, as follows:
(a) [Other than the Bonds maturing in (the "Hold -the -Price
Maturities"), the] [The first price at which at least ten percent ("Substantial Amount") of the
principal amount of each maturity of the Bonds having the same credit and payment terms (a
"Maturity") was sold to a person (including an individual, trust, estate, partnership, association,
company, or corporation) other than an Underwriter (the "Public") is set forth in the final
Limited Offering Memorandum relating to the Bonds.
(Add (b) and (c) only if there are Hold -the -Price Maturities)
(b) On or before the first day on which there is a binding contract ("Purchase
Contract") in writing for the sale of the Bonds (the "Sale Date"), the Purchaser offered to the
Public each Maturity of the Hold -the -Price Maturities at their respective initial offering prices
(the "Initial Offering Prices"), as listed in the final Limited Offering Memorandum relating to the
Bonds.
(c) As set forth in the Purchase Contract, the Purchaser agreed in writing to neither
offer nor sell any of the Hold -the -Price Maturities to any person at any higher price than the
respective Initial Offering Price for such Hold -the -Price Maturities until a date that is the earlier
of the close of the fifth business day after the Sale Date or the date on which the Purchaser sells a
Substantial Amount of a Hold -the -Price Maturities of the Bonds to the Public at no higher price
than the Initial Offering Price for such Hold -the -Price Maturity.
A copy of the pricing wire or equivalent communication for the Bonds is attached to this
Certificate as Schedule A.
For purposes of this Issue Price Certificate, the term "Underwriter" means (1) (i) a person
that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an
underwriting syndicate) to participate in the initial sale of the Bonds to the Public, or (ii) any
person that agrees pursuant to a written contract directly or indirectly with a person described in
clause (1)(i) of this paragraph (including a member of a selling group or a party to a retail
distribution agreement participating in the initial sale of the Bonds to the Public) to participate in
HIM
the initial sale of the Bonds to the Public, and (2) any person who has more than 50% common
ownership, directly or indirectly, with a person described in clause (1) of this paragraph.
[Signature page to follow]
The undersigned understands that the foregoing information will be relied upon by the
Issuer with respect to certain of the representations set forth in the Federal Tax Certificate and
with respect to compliance with the federal income tax rules affecting the Bonds, and by McCall,
Parkhurst & Horton L.L.P. in connection with rendering its opinion that the interest on the Bonds
is excluded from gross income for federal income tax purposes, the preparation of the Internal
Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer
from time to time relating to the Bonds. Notwithstanding anything set forth herein, the
Purchaser is not engaged in the practice of law and makes no representation as to the legal
sufficiency of the factual matters set forth herein.
EXECUTED and DELIVERED this 12021.
FMSbonds, Inc.
By:
Name:
Title:
SCHEDULE A
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
APPENDIX C
[LETTERHEAD OF THE CITY ATTORNEY]
July 27, 2021
FMSbonds, Inc. Regions Bank
5 Cowboys Way, Suite 300-25 3773 Richmond Avenue, Suite 1100
Frisco, Texas 75034 Houston, Texas 77046
Winstead PC
500 Winstead Building
2728 N. Harwood Street
Dallas, Texas 75201
City of Anna
I I I N. Powell Parkway
Anna, Texas 75409
$2,896,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2021
(SHERLEY TRACT NO.2 PUBLIC IMPROVEMENT DISTRICT MAJOR IMPROVEMENT
AREA PROJECT)
Ladies and Gentlemen:
We are the City Attorney of the City of Anna, Texas (the "City") and render this opinion
in connection with the issuance and sale of $2,896,000 "City of Anna, Texas, Special Assessment
Revenue Bonds, Series 2021 (Sherley Tract No. 2 Public Improvement District Major
Improvement Area Project)" (the "Bonds"), by the City, a political subdivision of the State of
Texas (the "State").
The Bonds are authorized pursuant to Ordinance No. [ ] and enacted by the
City Council of the City (the "City Council") on July 27, 2021 (the "Bond Ordinance") and shall
be issued pursuant to the provisions of Subchapter A of the Public Improvement District
Assessment Act, Chapter 372, Texas Local Government Code, as amended (the "Act") and the
Indenture of Trust dated as of August 1, 2021 (the "Indenture") by and between the City and
Regions Bank as trustee (the "Trustee"). The Bonds are being sold to FMSbonds, Inc. pursuant to
the Bond Purchase Agreement dated July 27, 2021 between the City and FMSbonds, Inc. (the
"Bond Purchase Agreement"). This opinion is being delivered pursuant to Section 9(c) of the
Bond Purchase Agreement. Capitalized terms not defined herein shall have the same meanings as
in the Indenture, unless otherwise stated herein.
In connection with rendering this opinion, we have reviewed:
(a) The Resolution No. [ ] enacted by the City Council on December 8, 2020,
(the "Creation Resolution.");
C-1
(b) Ordinance No. [ ] approved by the City Council on July 27, 2021, and the
Service and Assessment Plan (the "Service and Assessment Plan") attached as an exhibit thereto
(the "Assessment Ordinance");
(c) The Bond Ordinance;
(d) The Indenture;
(e) The Bond Purchase Agreement;
(f) That certain Sherley Tract Subdivision Improvement Agreement between the City,
BFB Ana 40 Acres, LLC (`BFB Ana") and MM Anna 325, LLC a Texas limited liability
company ("the Developer"), effective as of June 9, 2020, as amended by that certain First
Amended Sherley Tract Subdivision Improvement Agreement, effective as of July 14, 2020 (the
"Development Agreement");
(g) That certain Continuing Disclosure Agreement of Issuer with respect to the
Bonds, dated as of August 1, 2021 (the "City Continuing Disclosure Agreement"), executed and
delivered by the City, P3Works, LLC as "Administrator", and Regions Bank, as Dissemination
Agent;
(h) That certain the Major Improvement Area Landowner Agreement dated as of July
27, 2021, executed and delivered by the Developer and the City (the "Landowner Agreement");
(i) That certain Sherley Tract No. 2 Public Improvement District Major Improvement
Area Construction, Funding, and Acquisition Agreement between the Developer and the City
dated July 27, 2021 (the "CIA Agreement");
0) Such other documents, records, agreements or certificates as we have deemed
necessary or appropriate to enable us to render the opinions expressed below.
The Creation Resolution, the Assessment Ordinance, the Indenture and the Bond
Ordinance shall hereinafter be collectively referred to as the "Authorizing Documents" and the
remaining documents shall hereinafter be collectively referred to as the "City Documents."
In all such examinations, we have assumed that all signatures on documents and
instruments executed by the City are genuine and that all documents submitted to me as copies
conform to the originals. In addition, for purposes of this opinion, we have assumed the due
authorization, execution and delivery of the City Documents by all parties other than the City.
Based upon and subject to the foregoing and the additional qualifications and
assumptions set forth herein, we are of the opinion that:
1. The City is a Texas political subdivision and has all necessary power and
authority to enter into and perform its obligations under the Authorizing Documents and the City
Documents. The City has taken or obtained all actions, approvals, consents and authorizations
required of it by applicable laws in connection with the execution of the Authorizing Documents
and the City Documents and the performance of its obligations thereunder.
C-2
2. To the best of my knowledge, there is no action, suit, proceeding, inquiry or
investigation at law or in equity, before or by any court, public board or body, pending, or
threatened against the City: (a) affecting the existence of the City or the titles of its officers to
their respective offices, (b) in any way questioning the formation or existence of the District, (c)
affecting, contesting or seeking to prohibit, restrain or enjoin the delivery of any of the Bonds, or
the payment, collection or application of any amounts pledged or to be pledged to pay the
principal of and interest on the Bonds, including the Assessments in the Major Improvement
Area of the District pursuant to the provisions of the Assessment Ordinance and the Service and
Assessment Plan referenced therein, (d) contesting or affecting the validity or enforceability or
the City's performance of the City Documents, (e) contesting the exclusion of the interest on the
Bonds from federal income taxation, or (f) which may result in any material adverse change
relating to the financial condition of the City.
3. The Authorizing Documents were duly enacted by the City and remain in full
force and effect on the date hereof.
4. The City Documents have been duly authorized, executed and delivered by the
City and are legal, valid and binding obligations of the City enforceable against the City in
accordance with their respective terms. However, the enforceability of the obligations of the
City under such City Documents may be limited or otherwise affected by (a) bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the rights of creditors generally,
(b) principles of equity, whether considered at law or in equity, or (c) the application of State law
relating to action by future councils and relating to governmental immunity applicable to
governmental entities.
6. No further consent, approval, authorization, or order of any court or governmental
agency or body or official is required to be obtained by the City as a condition precedent to the
performance by the City of its obligations under the Authorizing Documents and the City
Documents (other than those that have been or will be obtained prior to the delivery of the
Bonds, including the opinion of the Texas Attorney General).
7. The City has duly authorized and delivered the Preliminary Limited Offering
Memorandum and the Limited Offering Memorandum.
8. Based upon my limited participation in the preparation of the Preliminary Limited
Offering Memorandum and the Limited Offering Memorandum (collectively, the "Limited
Offering Memorandum"), the statements and information contained in the Preliminary Limited
Offering Memorandum and the Limited Offering Memorandum with respect to the City under
the captions and subcaptions "ASSESSMENT PROCEDURES —Assessment Methodology" and
" — Assessment Amounts," "THE CITY," "THE DISTRICT," "THE DEVELOPMENT
AGREEMENT," "LEGAL MATTERS — Litigation — The City," "CONTINUING DISCLOSURE
— The City" and "— The City's Compliance with Prior Undertakings" and "APPENDIX A" are a
fair and accurate summary of the laws and the documents and facts summarized therein.
9. The adoption of the Authorizing Documents, the execution and delivery of the
City Documents and the compliance with the provisions of the Authorizing Documents and the
City Documents under the circumstances contemplated thereby, to the best of my knowledge: (a)
C-3
do not and will not in any material respect conflict with or constitute on the part of the City a
breach of or default under any agreement to which the City is a party or by which it is bound,
and (b) do not and will not in any material respect conflict with or constitute on the part of the
City a violation, breach of or default under any existing law, regulation, constitutional provision,
court order or consent decree to which the City is subject.
This opinion may not be relied upon by any other person except those specifically
addressed in this letter.
Very truly yours,
CITY ATTORNEY
C-4
APPENDIX D
[LETTERHEAD OF MIKLOS CINCLAIR]
City of Anna, Texas
I I I N. Powell Parkway
Anna, Texas 75409
Regions Bank
3773 Richmond Avenue, Suite 1100
Dallas, Texas 75248
McCall, Parkhurst & Horton L.L.P
717 North Harwood, Suite 900
Dallas, Texas 75201
July 27, 2021
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
Wolfe Tidwell & McCoy, LLP
2591 Dallas Parkway, Suite 300
Frisco, Texas 75034
Winstead PC
2728 N. Harwood Street
Dallas, Texas 75201
$2,896,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2021
(SHERLEY TRACT NO. 2 PUBLIC IMPROVEMENT DISTRICT MAJOR
IMPROVEMENT AREA PROJECT)
Ladies & Gentlemen:
We have acted as special counsel to MM Anna 325, LLC, a Texas limited liability
company (the "Developer') in connection with the issuance and sale by the City of Anna, Texas
(the "City'), of $2,896,000 City of Anna, Texas, Special Assessment Revenue Bonds, Series
2021 (Sherley Tract No. 2 Public Improvement District Major Improvement Area Project) (the
`Bonds'), pursuant to the Indenture of Trust dated as of August 1, 2021 (the `Indenture'), by
and between the City and Regions Bank, as trustee (the "Trustee'). Proceeds from the sale of the
Bonds will be used, in part, to fund certain public infrastructure improvements in the
Development (as defined in the Limited Offering Memorandum) located in the City.
The Bonds are being sold by FMSbonds, Inc. (the "Underwriter'), pursuant to that
certain Bond Purchase Agreement dated July 27, 2021 (the "Bond Purchase Agreement'), by
and between the City and the Underwriter.
All capitalized terms used herein and not otherwise defined shall have the meanings
ascribed thereto in the Bond Purchase Agreement.
D-1
In our capacity as special counsel to the Developer, and for purposes of rendering the
opinions set forth herein, we have examined originals or copies, certified or otherwise identified
to our satisfaction, of:
(a) The following documents (collectively, the "Material Documents'):
(1) the Sherley Tract Subdivision Improvement Agreement between the City, BFB
Ana 40 Acres, LLC (`BFB Ana") and the Developer, effective as of June 9, 2020, as
amended by that certain First Amended Sherley Tract Subdivision Improvement
Agreement, effective as of July 14, 2020;
(2) the Sherley Tract Public Improvement District No. 2 Major Improvement
Area Construction, Funding, and Acquisition Agreement between the Developer and the City
dated July 27, 2021;
(3) the Major Improvement Area Landowner Agreement dated as of July 27, 2021
executed by the City and the Developer;
(4) the Continuing Disclosure Agreement of Developer dated as of August 1,
2021 among the Developer, P3Works, LLC, as Administrator and Regions Bank, as
Dissemination Agent; and
(S) the Developer Letter of Representations dated as of July 27, 2021;
(b) General Certificate of the Developer and the Closing Certificate of the Developer,
each dated as of the date hereof (together, the "Developer Certificate');
(c) The Preliminary Limited Offering Memorandum, dated July 19, 2021, as
supplemented July 27, 2021, relating to the issuance of the Bonds (the "Preliminary Limited
Offering Memorandum');
(d) The final Limited Offering Memorandum, dated July 27, 2021, relating to the
issuance of the Bonds (collectively with the Preliminary Limited Offering Memorandum, the
"Limited Offering Memorandum'); and
(e) Such other documents, records, agreements, and certificates of the Developer as we
have deemed necessary or appropriate to render the opinions expressed below.
In basing the opinions and other matters set forth herein on "our knowledge," the words
"our knowledge" signify that, in the course of our representation of the Developer, the principal
attorneys in this firm involved in the current actual transaction do not have actual knowledge or
actual notice that any such opinions or other matters are not accurate or that any of the
documents, certificates, reports and information on which we have relied are not accurate and
complete. Except as otherwise stated herein, we have undertaken no independent investigation
or certification of such matters. The words "our knowledge" and similar language used herein
are intended to be limited to the knowledge of the attorneys within our firm who have worked on
the matters contemplated by our representation as special counsel.
In rendering the opinions set forth herein, we have assumed, without independent
investigation (other than the Developer), that: (i) the due authorization, execution, and delivery
of each of the documents referred to in this opinion letter by all parties thereto and that each such
document constitutes a valid, binding, and enforceable obligation of each party thereto, (ii) all of
the parties to the documents referred to in this opinion letter are duly organized, validly existing,
in good standing and have the requisite power, authority (corporate, limited liability company,
partnership or other) and legal right to execute, deliver, and perform its obligations under such
documents (except to the extent set forth in our opinions set forth herein regarding valid
existence and power and authority of the Developer to execute, deliver, and perform its
obligations under the Material Documents), (iii) each certificate from governmental officials
reviewed by us is accurate, complete, and authentic, and all official public records are accurate
and complete, (iv) the legal capacity of all natural persons, (v) the genuineness of all signatures
(other than those of the Developer in respect of the Material Documents), (vi) the authenticity
and accuracy of all documents submitted to us as originals, (vii) the conformity to original
documents of all documents submitted to us as photostatic or certified copies, (viii) that no laws
or judicial, administrative, or other action of any governmental authority of any jurisdiction not
expressly opined to herein would adversely affect the opinions set forth herein, and (ix) that the
execution and delivery by each party of, and performance of its agreements in, the Material
Documents do not breach or result in a default under any existing obligation of such party under
any agreements, contracts or instruments to which such party is a party to or otherwise subject to
or any order, writ, injunction or decree of any court applicable to such party.
In addition, we have assumed that the Material Documents accurately reflect the
complete understanding of the parties with respect to the transactions contemplated thereby and
the rights and obligations of the parties thereunder. We have also assumed that the terms and
conditions of the transaction as reflected in the Material Documents have not been amended,
modified or supplemented, directly or indirectly, by any other agreement or understanding of the
parties or waiver of any of the material provisions of the Material Documents.
We assume that none of the parties to the Material Documents (other than the Developer)
is a party to any court or regulatory proceeding relating to or otherwise affecting the Material
Documents or is subject to any order, writ, injunction or decree of any court or federal, state or
local governmental agency or commission that would prohibit the execution and delivery of the
Material Documents, or the consummation of the transactions therein contemplated in the
manner therein provided, or impair the validity or enforceability thereof. We assume that each
of the parties to the Material Documents (other than Developer) has full authority to close this
transaction in accordance with the terms and provisions of the Material Documents.
We assume that neither the Underwriter nor the City nor their respective counsel has any
current actual knowledge of any facts not known to us or any law or judicial decision which
would make the opinions set forth herein incorrect, and that no party upon whom we have relied
for purposes of this opinion letter has perpetrated a fraud.
We have only been engaged by our clients in connection with the Material Documents
(and the transactions contemplated in the Material Documents) and do not represent these clients
generally.
Opinions and Assurances
D-3
Based solely upon the foregoing, and subject to the assumptions and limitations set forth
herein, we are of the opinion that:
1. The execution and delivery by the Developer of the Material Documents and the
performance by the Developer of its obligations under the Material Documents will not (i)
violate any applicable law; or (ii) conflict with or result in the breach of any court decree or order
of any governmental body identified in the Developer Certificate or otherwise actually known to
the lawyers who have provided substantive attention to the representation reflected in this
opinion binding upon or affecting the Developer, the conflict with which or breach of which
would have a material, adverse effect on the ability of the Developer to perform its obligations
under the Material Documents to which it is a party.
2. To our knowledge, no governmental approval which has not been obtained or
taken is required to be obtained or taken by the Developer on or before the date hereof as a
condition to the performance by the Developer of its obligations under the Material Documents
to which it is a party, except for governmental approvals that may be required to comply with
certain covenants contained in the Material Documents (including, without limitation, covenants
to comply with applicable laws).
3. The Developer has duly executed and delivered each of the Material Documents
to which it is a party, and each of the Material Documents constitute the legal, valid, and binding
obligations of the Developer, enforceable against the Developer in accordance with their
respective terms, subject to the following qualifications: (i) the effect of applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors
generally, (ii) the effect of the exercise of judicial discretion in accordance with general
principles of equity (whether applied by a court of law or of equity), and (iii) the effect that
enforceability of the indemnification provisions therein may be limited, in whole or in part. The
execution, delivery, and performance by the Developer of its obligations under the Material
Documents do not violate any existing laws of the State of Texas applicable to the Developer.
4. To our knowledge after reasonable inquiry, there are no actions, suits or
proceedings pending or threatened against the Developer identified in the Developer Certificate
or otherwise actually known to the lawyers who have provided substantive attention to the
representation reflected in this opinion in any court of law or equity, or before or by any
governmental instrumentality with respect to the validity or enforceability against it of such
Material Documents or the transactions described therein.
5. The execution and delivery of the Material Documents do not, and the
transactions described therein may be consummated and the terms and conditions thereof may be
observed and performed in a manner that does not, conflict with or constitute a breach of or
default under any loan agreement, Indenture, bond note, resolution, agreement or other
instrument to which the Developer is a parry or is otherwise subject and which have been
identified in the Developer Certificate which violation, breach or default would materially
adversely affect the Developer or its performance of its obligations under the transactions
described in the Material Documents; nor will any such execution, delivery, adoption,
fulfillment, or compliance result in the creation or imposition of any lien, charge, or other
security interest or encumbrance of any nature whatsoever upon any of the property or assets of
the Developer, except as expressly described in the Material Documents (a) under applicable law
Will
or (b) under any such loan agreement, indenture, bond note, resolution, agreement, or other
instrument.
6. The information set forth in the Limited Offering Memorandum under the
captions "PLAN OF FINANCE — Development Plan and Plan of Finance, " "THE MAJOR
IMPROVEMENT AREA PROJECTS, " "THE DEVELOPMENT, " "THE DEVELOPER, "
"BONDHOLDERS' RISKS" (only as it pertains to the Developer, the Major Improvement Area
Projects, and the Development, as defined in the Limited Offering Memorandum), " "LEGAL
MATTERS — Litigation — The Developer, " "SOURCES OF INFORMATION" (only as it
pertains to the Developer) and "CONTINUING DISCLOSURE — The Developer, " adequately
and fairly describe the information summarized under such captions and are correct as to matters
of law.
7. Subject to the below qualifications and based upon our participation in the
preparation of the Limited Offering Memorandum and our participation at conferences with
representatives of the Underwriter and its counsel, of the City and its counsel, and with
representatives of the Developer and its lawyers, at which the Limited Offering Memorandum
and related matters were discussed, and although we have not independently verified the
information in the Limited Offering Memorandum and are not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements contained in the
Limited Offering Memorandum and any amendment or supplement thereto, no facts have come
to our attention that lead us to believe that the information set forth under the captions referenced
in the preceding paragraph as of the date of the Limited Offering Memorandum and the date
hereof, contained or contains any untrue statement of a material fact, or omitted or omits to state
any material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
Qualifications
In addition to any assumptions, qualifications and other matters set forth elsewhere
herein, the opinions set forth above are subject to the following assumptions and qualifications:
(a) We have not examined any court dockets, agency files or other public records
regarding the entry of any judgments, writs, decrees or orders or the pendency of any actions,
proceedings, investigations or litigation.
(b) We have relied upon the Developer Certificate, as well as the representations of
the Developer contained in the Material Documents, with respect to certain facts material to our
opinion. Except as otherwise specifically indicated herein, we have made no independent
investigation regarding any of the foregoing documents or the representations contained therein.
(c) Our opinion delivered pursuant to Section 3 above is subject to the effect of any
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other
laws affecting creditors' rights generally and to the effect of general principles of equity,
including (without limitation) remedies of specific performance and injunctive relief and
concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether
considered in a proceeding in equity or at law).
D-5
(d) Except for the Material Documents, we have not reviewed, and express no
opinion as to, any other contracts or agreements to which the Developer is a party or by which
the Developer is or may be bound.
(e) The opinions expressed herein are based upon and limited to the applicable laws
of the State of Texas and the laws of the United States of America, excluding the principles of
conflicts of laws thereof, as in effect as of the date hereof, and our knowledge of the facts
relevant to such opinions on such date. In this regard, we note that we are members of the Bar of
the State of Texas, we do not express any opinion herein as to matters governed by the laws of
any other jurisdiction, except the United States of America, we do not purport to be experts in
any other laws and we can accept no responsibility for the applicability or effect of any such
laws. In addition, we assume no obligation to supplement the opinions expressed herein if any
applicable laws change after the date hereof, or if we become aware of any facts or
circumstances that affect the opinions expressed herein.
(f) This letter is strictly limited to the matters expressly set forth herein and no
statements or opinions should be inferred beyond such matters.
(g) Notwithstanding anything contained herein to the contrary, we express no opinion
whatsoever concerning the status of title to any real or personal property.
(h) The opinions expressed herein regarding the enforceability of the Material
Documents are subject to the qualification that certain of the remedial, waiver or other provisions
thereof may not be enforceable; but such unenforceability will not, in our judgment, render the
Material Documents invalid as a whole or substantially interfere with the practical realization of
the principal legal benefits provided in the Material Documents, except to the extent of any
economic consequences of any procedural delays which may result therefrom.
(i) The opinion expressed herein as to the enforceability of the Material Documents
is specifically subject to the qualification that enforceability of the Material Documents is limited
by the following: (i) the rights of the United States under the Federal Tax Lien Act of 1966, as
amended; (ii) principles of equity, public policy and unconscionability which may limit the
availability of certain remedies; (iii) bankruptcy, insolvency, reorganization, fraudulent
conveyance, liquidation, probate, conservatorship and other laws applicable to creditors' rights or
the collection of debtors' obligations generally; and (iv) requirements of due process under the
United States Constitution, the Constitution of the State of Texas and other laws or court
decisions limiting the rights of creditors to repossess, foreclose or otherwise realize upon the
property of a debtor without appropriate notice or hearing or both.
0) We express no opinion as to whether a court would grant specific performance or
any other equitable remedy with respect to the enforcement of the Material Documents.
(k) We express no opinion as to the validity, binding effect, or enforceability o£ (i)
provisions which purport to waive rights or notices, including rights to trial by jury,
counterclaims or defenses, jurisdiction or venue; (ii) provisions relating to consent judgments,
waivers of defenses or the benefits of statutes of limitations, marshaling of assets, the
transferability of any assets which by their nature are nontransferable, sales in inverse order of
alienation, or severance; (iii) provisions purporting to waive the benefits of present or of future
laws relating to exemptions, appraisement, valuation, stay of execution, redemption, extension of
time for payment, setoff and similar debtor protection laws; or (iv) provisions requiring a party to
pay fees and expenses regardless of the circumstances giving rise to such fees or expenses or the
reasonableness thereof.
(1) The opinions expressed herein are subject to the effect of generally applicable
rules of law that provide that forum selection clauses in contracts are not necessarily binding on
the court(s) in the forum selected.
(m) We express no opinion as to the enforceability of any provisions in the Material
Documents purporting to entitle a party to indemnification in respect of any matters arising in
whole or in part by reason of any negligent, illegal or wrongful act or omission of such party.
This opinion is furnished to those parties addressed in this letter solely in connection with
the transactions, for the purposes and on the terms described above and may not be relied upon
for any other purpose or by any other person in any manner or for any purpose.
Very truly yours,
Miklos Cinclair, PLLC
By:
Name: Robert Miklos
Its: Member and Director
D-7
APPENDIX E
CLOSING CERTIFICATE OF DEVELOPER
MM Anna 325, LLC, a Texas limited liability company (the "Developer") DOES
HEREBY CERTIFY the following as of the date hereof. All capitalized terms not otherwise
defined herein shall have the meaning given to such term in the Limited Offering Memorandum.
1. The Developer is a limited liability company organized, validly existing and in
good standing under the laws of the State of Texas.
2. Representatives of the Developer have provided information to the City of Anna,
Texas (the "City") and FMSbonds, Inc. (the "Underwriter") to be used in connection with the
offering by the City of its $2,896,000 aggregate principal amount of Special Assessment
Revenue Bonds, Series 2021 (Sherley Tract No. 2 Public Improvement District Major
Improvement Area Project) (the "Bonds"), pursuant to the City's Preliminary Limited Offering
Memorandum, dated July 19, 2021, as supplemented July 27, 2021, and Limited Offering
Memorandum dated July 27, 2021 (together, the "Limited Offering Memorandum").
3. The Developer has delivered to the Underwriter and the City true, correct,
complete and fully executed copies of the Developer's organizational documents, and such
documents have not been amended or supplemented and are in full force and effect as of the date
hereof.
4. The Developer has delivered to the Underwriter and the City a (i) Certificate of
Status from the Texas Secretary of State and (ii) verification of franchise tax account status from
the Texas Comptroller of Public Accounts for the Developer.
5. The Developer has executed or caused the execution of, and delivered each of the
below listed documents (individually, a "Developer Document" and collectively, the "Developer
Documents") in the capacity provided for in each such Developer Document, and each such
Developer Document constitutes a valid and binding obligation of the Developer, enforceable
against the Developer in accordance with its terms:
(a) that certain Developer Letter of Representations dated July 27, 2021;
(b) that certain "Sherley Tract Subdivision Improvement Agreement" between
the City, BFB Ana 40 Acres, LLC (`BFB Ana") and the Developer, effective as of June 9,
2020, as amended by that certain First Amended Sherley Tract Subdivision Improvement
Agreement effective as of July 14, 2020;
(c) that certain "Sherley Tract Public Improvement District No. 2 Major
Improvement Area Construction, Funding, and Acquisition Agreement" between the
Developer and the City dated July 27, 2021;
(d) the "Major Improvement Area Landowner Agreement" dated as of July
27, 2021 executed by the City and the Developer; and
E-1
(e) that certain Continuing Disclosure Agreement of the Developer, dated as
of August 1, 2021 made by and among the Developer, Regions Bank as dissemination
agent and P3Works, LLC, as Administrator.
6. The Developer has complied in all material respects with all of the Developer's
agreements and covenants and satisfied all conditions required to be complied with or satisfied
by the Developer under the Developer Documents on or prior to the date hereof.
7. The representations and warranties of the Developer contained in the Developer
Documents are true and correct in all material respects as if made on the date thereof.
8. The execution and delivery of the Developer Documents by Developer does not
violate any judgment, order, writ, injunction or decree binding on the Developer or any
indenture, agreement, or other instrument to which Developer is a party. To the Developer's
knowledge, after due inquiry, there are no proceedings pending or threatened in writing before
any court or administrative agency against the Developer that is either not covered by insurance
or which singularly or collectively would have a material, adverse effect on the ability of the
Developer to perform its obligations under the Developer Documents in all material respects or
that would reasonably be expected to prevent or prohibit the development of the Development in
accordance with the description thereof in the Limited Offering Memorandum.
9. The Developer has reviewed and approved the information contained in the
Limited Offering Memorandum under the captions "PLAN OF FINANCE — Development Plan
and Plan of Finance," "THE MAJOR IMPROVEMENT AREA PROJECTS," "THE
DEVELOPMENT," "THE DEVELOPER," "BONDHOLDERS' RISKS" (only as it pertains to
the Developer, the Major Improvement Area Projects, and the Development), "LEGAL
MATTERS — Litigation — The Developer," "SOURCES OF INFORMATION" (only as it
pertains to the Developer) and "CONTINUING DISCLOSURE — The Developer", and certifies
that the same does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they are made, not misleading respecting such Developer and the
portion of the Development owned by such Developer, provided, however, that the foregoing
certification is not a certification as to the accuracy, completeness or fairness of any of the other
statements contained in the Limited Offering Memorandum.
10. The Developer is in compliance in all material respects with all provisions of
applicable law in all material respects relating to the Developer in connection with the
Development. Except as otherwise described in the Limited Offering Memorandum: (a) there is
no default of any zoning condition, land use permit or development agreement binding upon the
Developer or any portion of the Development that would materially and adversely affect the
Developer's ability to complete or cause to be completed the development of such portion of the
Development as described in the Limited Offering Memorandum; and (b) we have no reason to
believe that any additional permits, consents and licenses required to complete the Development
as and in the manner described in the Limited Offering Memorandum will not be reasonably
obtainable in due course.
E-2
11. The Developer is not insolvent and has not made an assignment for the benefit of
creditors, filed or consented to a petition in bankruptcy, petitioned or applied (or consented to
any third party petition or application) to any tribunal for the appointment of a custodian,
receiver or any trustee or commenced any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction.
12. The levy of the Assessments (as defined in the Limited Offering Memorandum)
on property in the Major Improvement Area of the District owned by Developer will not conflict
with or constitute a breach of or default under any agreement, indenture or other instrument to
which the Developer is a party or to which the Developer or any of its property or assets is
subject.
13. The Developer is not in default under any mortgage, trust indenture, lease or other
instrument to which it or any of its assets is subject, which default would have a material and
adverse effect on the Bonds or the development of the Development.
14. The Developer has no knowledge of any physical condition of the Development
owned or to be developed by the Developer that currently requires, or currently is reasonably
expected to require in the process of development investigation or remediation under any
applicable federal, state or local governmental laws or regulations relating to the environment in
any material and adverse respect.
Dated: , 2021
[Signature page to follow]
E-3
DEVELOPER:
MM ANNA 325, LLC,
a Texas limited liability company
By: MMM Ventures, LLC,
a Texas limited liability company
Its Manager
By: 2M Ventures, LLC,
a Delaware limited liability company
Its Manager
LO
Name: Mehrdad Moayedi
Its Manager
[Signature page of Closing Certificate of Developer]
E-1
APPENDIX F
[LETTERHEAD OF INTEGRA REALTY RESOURCES]
City of Anna, Texas
I I I N. Powell Parkway
Anna, Texas 75409
McCall, Parkhurst & Horton L.L.P
717 North Harwood, Suite 900
Dallas, Texas 75201
Winstead PC
2728 N. Harwood St., Ste 500
Dallas, Texas 75201
August 16, 2021
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
Regions Bank
3773 Richmond Avenue, Suite 1100
Dallas, Texas 75248
Re: City of Anna, Texas, Special Assessment Revenue Bonds, Series 2021 (Sherley
Tract No. 2 Public Improvement District Major Improvement Area Project) (the
"Bonds")
Ladies and Gentlemen:
The undersigned, , appraiser of the property contained in the Major
Improvement Area of the Sherley Tract Public Improvement District No. 2 (the "District"), does
hereby represent the following:
1. On behalf of Integra Realty Resources DFW, I have supplied certain information
contained in the Preliminary Limited Offering Memorandum for the Bonds, dated July 19, 2021,
as supplemented July 27, 2021, and the Limited Offering Memorandum for the Bonds, dated on
or about July 27, 2021 (together, the "Limited Offering Memorandum"), relating to the issuance
of the Bonds by the City of Anna, Texas, as described above. The information I have provided is
the real estate appraisal of the property in the Major Improvement Area of the District, located in
APPENDIX E to the Limited Offering Memorandum, and the description thereof, set forth under
the caption "APPRAISAL OF PROPERTY WITHIN THE MAJOR IMPROVEMENT AREA OF
THE DISTRICT — The Appraisal".
2. To the best of my professional knowledge and belief, as of the date of my
appraisal report, the portion of the Limited Offering Memorandum described above does not
contain an untrue statement of a material fact as to the information and data set forth therein, and
does not omit to state a material fact necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading.
3. I agree to the inclusion of the Appraisal in the Limited Offering Memorandum
and the use of the name of my firm in the Limited Offering Memorandum for the Bonds.
F-1
4. I agree that, to the best of my ability, I will inform you immediately should I learn
of any event(s) or information of which you are not aware subsequent to the date of this letter
and prior to the actual time of delivery of the Bonds (anticipated to occur on or about August 16,
2021) which would render any such information in the Limited Offering Memorandum untrue,
incomplete, or incorrect, in any material fact or render any statement in the appraisal materially
misleading.
5. The undersigned hereby represents that he has been duly authorized to execute
this letter of representations.
Sincerely yours,
INTEGRA REALTY RESOURCES - DFW
By:
Its:
F-2
APPENDIX G
[LETTERHEAD OF ADMINISTRATOR]
City of Anna, Texas
I I I N. Powell Parkway
Anna, Texas 75409
McCall, Parkhurst & Horton L.L.P
717 North Harwood, Suite 900
Dallas, Texas 75201
Winstead PC
2728 N. Harwood St., Ste 500
Dallas, Texas 75201
August 16, 2021
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
Regions Bank
3773 Richmond Avenue, Suite 1100
Dallas, Texas 75248
Re: City of Anna, Texas, Special Assessment Revenue Bonds, Series 2021 (Sherley
Tract No. 2 Public Improvement District Major Improvement Area Project) (the
"Bonds")
Ladies and Gentlemen:
The undersigned, an authorized representative of P3Works, LLC ("P3Works"), consultant
in connection with the creation by the City of Anna, Texas (the "City"), of the Sherley Tract
Public Improvement District No. 2 (the "District"), does hereby represent the following:
1. P3Works has supplied certain information contained in the Preliminary Limited
Offering Memorandum, dated July 19, 2021, as supplemented July 27, 2021 (the "Preliminary
Limited Offering Memorandum"), and the final Limited Offering Memorandum, dated on or
about July 27, 2021 (together with the Preliminary Limited Offering Memorandum, the "Limited
Offering Memorandum"), both in connection with the Bonds, relating to the issuance of the
Bonds by the City, as described above. The information P3Works provided for the Preliminary
Limited Offering Memorandum and the Limited Offering Memorandum is located (a) under the
captions "ASSESSMENT PROCEDURES — Assessment Methodology" and "— Assessment
Amounts", "OVERLAPPING TAXES AND DEBT," and "THE ADMINISTRATOR," and (b) in
the Service and Assessment Plan (the "SAP") for the City located in APPENDIX B to the
Limited Offering Memorandum.
2. To our professional knowledge and belief, the portions of the Limited Offering
Memorandum described above do not contain an untrue statement of a material fact as to the
information and data set forth therein, and do not omit to state a material fact necessary to make
the statements made therein, in the light of the circumstances under which they were made, not
misleading.
G-1
3. We agree to the inclusion of the SAP in the Preliminary Limited Offering
Memorandum and the Limited Offering Memorandum and to the use of the name of our firm in
the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum for the
Bonds.
4. We agree that, to the best of our ability, we will inform you immediately should
we learn of any event(s) or information of which you are not aware subsequent to the date of this
letter and prior to the actual time of delivery of the Bonds (anticipated to occur on or about
August 16, 2021) which would render any such information in the Limited Offering
Memorandum untrue, incomplete, or incorrect, in any material fact or render any such
information materially misleading.
5. The undersigned hereby represents that he or she has been duly authorized to
execute this letter of representation.
Sincerely yours,
P3WORKS, INC.
By:
Its:
G-2
EXHIBIT C
CONTINUING DISCLOSURE AGREEMENT
C-1
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2021
(SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO.2 MAJOR IMPROVEMENT
AREA PROJECT)
CONTINUING DISCLOSURE AGREEMENT OF THE ISSUER
This Continuing Disclosure Agreement of the Issuer dated as of August 1, 2021 (this
"Disclosure Agreement") is executed and delivered by and between the City of Anna, Texas (the
"Issuer"), P3Works, LLC (the "Administrator"), and Regions Bank, an Alabama state banking
corporation (the "Dissemination Agent") with respect to the Issuer's "Special Assessment Revenue
Bonds, Series 2021 (Sherley Tract Public Improvement District No. 2 Major Improvement Area
Project)" (the "Bonds"). The Issuer and the Dissemination Agent covenant and agree as follows:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the Issuer and the Dissemination Agent for the benefit of the Owners
(defined below) and beneficial owners of the Bonds. Unless and until a different filing location is
designated by the MSRB (defined below) or the SEC (defined below), all filings made by the
Dissemination Agent pursuant to this Agreement shall be filed with the MSRB through EMMA
(defined below).
SECTION 2. Definitions. In addition to the definitions set forth above and in the
Indenture of Trust dated as of August 1, 2021, relating to the Bonds (the "Indenture"), which apply to
any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the
following capitalized terms shall have the following meanings:
"Administrator" shall mean, initially, P3Works, LLC, or thereafter any the employee or
designee of the Issuer who shall have the responsibilities provided in the District's
Service and Assessment Plan, or any other agreement or document approved by the
Issuer related to the duties and responsibilities of the administration of the District.
"Affiliate" shall have the meaning assigned to such term in the Disclosure Agreement
of the Developer.
"Annual Collection Costs" shall have the meaning assigned to such term in the Service
and Assessment Plan.
"Annual Financial Information" shall mean annual financial information as such term is
specified in Section 4(a) of this Disclosure Agreement.
"Annual Installment(s)" shall have the meaning assigned to such term in the Indenture.
"Annual Issuer Report" shall mean any Annual Issuer Report provided by the Issuer
pursuant to, and as described in, Sections 3 and 4(a) of this Disclosure Agreement.
"Assessments" shall have the meaning assigned to such term in the Indenture.
"Business Day" shall mean any day other than a Saturday, Sunday or legal holiday in
the State of Texas observed as such by the Issuer or the Trustee.
"Developer" shall mean MM Anna 325, LLC, a Texas limited liability company,
including any Affiliate of the Developer and its successors and assigns.
"Disclosure Agreement of the Developer" shall mean the Continuing Disclosure
Agreement of the Developer dated as of August 1, 2021 executed and delivered by the
Developer, the Administrator and Regions Bank, as Dissemination Agent.
"Disclosure Representative" shall mean the Finance Director of the Issuer or his or her
designee, or such other officer or employee as the Issuer, may designate in writing to
the Dissemination Agent from time to time.
"Dissemination Agent" shall mean Regions Bank, or any successor Dissemination
Agent designated in writing by the Issuer and which has filed with the Trustee a written
acceptance of such designation.
"District" shall mean Sherley Tract Public Improvement District No. 2 within the City
of Anna, Texas.
"EMMA" shall mean the Electronic Municipal Market Access System available on the
internet at http://emma.msrb.org.
"Fiscal Year" shall mean the calendar year from October 1 through September 30.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure
Agreement.
"MSRB" shall mean the Municipal Securities Rulemaking Board or any other entity
designated or authorized by the SEC to receive reports pursuant to the Rule.
"Outstanding" shall have the meaning given to it in the Indenture.
"Owner" shall mean the registered owner of any Bonds.
"Underwriter" shall mean FMSbonds, Inc., and its successors and assigns.
"Prepayment" shall mean the payment of all or a portion of an Assessment before the
due date thereof. Amounts received at the time of a Prepayment which represent a
principal, interest or penalties on a delinquent installment of an Assessment are not to
be considered a Prepayment, but rather are to be treated as the payment of the regularly
scheduled Assessment.
"Rule" shall mean Rule 15c2-12 adopted by the SEC under the Securities Exchange Act
of 1934, as the same may be amended from time to time.
"SEC" shall mean the United States Securities and Exchange Commission.
"Service and Assessment Plan" shall have the meaning assigned to such term in the
Indenture.
2
"Trust Estate" shall have the meaning assigned to such term in the Indenture.
"Trustee" shall mean Regions Bank, or any successor trustee pursuant to the Indenture.
SECTION 3. Provision of Annual Issuer Reports.
(a) The Issuer shall cause and hereby directs the Dissemination Agent to provide or cause
to be provided to the MSRB, in the electronic or other form required by the MSRB, commencing with
the Fiscal Year ending September 30, 2021, an Annual Issuer Report provided to the Dissemination
Agent which is consistent with the requirements of and within the time periods specified in Section 4
of this Disclosure Agreement. In each case, the Annual Issuer Report may be submitted as a single
document or as separate documents comprising a package and may include by reference other
information as provided in Section 4 of this Disclosure Agreement. If the Issuer's Fiscal Year
changes, it shall file notice of such change (and of the date of the new Fiscal Year) with the MSRB
prior to the next date by which the Issuer otherwise would be required to provide the Annual Issuer
Report pursuant to this paragraph. All documents provided to the MSRB shall be accompanied by
identifying information as prescribed by the MSRB.
Not later than ten (10) days prior to the date specified in Section 4 of this Disclosure
Agreement for providing the Annual Issuer Report to the MSRB, the Issuer shall provide the Annual
Issuer Report to the Dissemination Agent and direct the Dissemination Agent in writing to provide
such Annual Issuer Report to the MSRB not later than ten (10) days from receipt of such Annual Issuer
Report from the Issuer.
If by the fifth (5th) day before the filing date required under Section 4 of this Disclosure
Agreement, the Dissemination Agent has not received a copy of the Annual Issuer Report, the
Dissemination Agent may contact the Disclosure Representative by telephone and in writing (which
may be by e-mail) to remind the Issuer of its undertaking to provide Annual Issuer Report pursuant to
this subsection (a). Upon such reminder, the Disclosure Representative shall either (i) provide the
Dissemination Agent with an electronic copy of the Annual Issuer Report no later than two (2)
Business Days prior to the filing date required under Section 4 of this Disclosure Agreement; or (ii)
instruct the Dissemination Agent in writing that the Issuer will not be able to provide the Annual Issuer
Report within the time required under this Disclosure Agreement, state the date by which the Annual
Issuer Report for such year will be provided and instruct the Dissemination Agent to immediately send
a notice to the MSRB in substantially the form attached as Exhibit A; provided, however, that in the
event the Disclosure Representative is required to act under either (i) or (ii) described above, the
Dissemination Agent is hereby authorized and directed to file the Annual Issuer Report or the notice of
failure to file, as applicable, to the MSRB, no later than six months after the end of each Fiscal Year;
provided further, however, that in the event the Disclosure Representative fails to act under either (i) or
(ii) described above, the Dissemination Agent is hereby authorized and directed to file a notice of
failure to file no later than on the last Business Day of the six month period after the end of the Fiscal
Year.
(b) The Issuer shall or shall cause the Dissemination Agent to:
(i) determine the filing address or other filing location of the MSRB each year prior
to filing the Annual Issuer Report on the date required in subsection (a);
3
(ii) file the Annual Issuer Report containing or incorporating by reference the
information set forth in Section 4(a) hereof, and
(iii) if the Issuer has provided the Dissemination Agent with the completed Annual
Issuer Report and the Dissemination Agent has filed such Annual Issuer Report with the
MSRB, then upon the Issuer's written request, the Dissemination Agent shall file a report with
the Issuer certifying that the Annual Issuer Report has been provided pursuant to this
Disclosure Agreement, stating the date it was provided and that it was filed with the MSRB.
SECTION 4. Content and Timing of Annual Issuer Reports; Audited Financial
Statements.
(a) The Annual Issuer Report for the Bonds shall contain or incorporate by reference, and
the Issuer agrees to provide or cause to be provided to the Dissemination Agent to file, at Issuer's
written direction, the following:
Within six months after the end of each Fiscal Year the following Annual Financial
Information (any or all of which may be unaudited):
(i) Tables setting forth the following information, as of the end of such Fiscal Year:
(A) For the Bonds, the maturity date or dates, the interest rate or rates, the
original aggregate principal amount and principal amount remaining
Outstanding;
(B) The amounts in the funds and accounts securing the Bonds; and
(C) The assets and liabilities of the Trust Estate.
(ii) The principal and interest paid on the Bonds during the most recent Fiscal Year
and the minimum scheduled principal and interest required to be paid on the Bonds in the next
Fiscal Year.
(iii) Any changes to the land use designation for the property in the Major
Improvement Area of the District from the purposes identified in the Service and Assessment
Plan.
(iv) Updates to the information in the Service and Assessment Plan as most recently
amended or supplemented (a "SAP Update"), including any changes to the methodology for
levying the Assessments in the Major Improvement Area of the District.
(v) The aggregate taxable assessed valuation for parcels or lots within the Major
Improvement Area of the District based on the most recent certified tax roll available to the
Issuer.
(vi) With respect to single-family residential lots, until building permits have been
issued for parcels or lots representing, in the aggregate, 95% of the total Assessments levied
A9
within the Major Improvement Area of the District, such SAP Update shall include the
following:
(A) the number of new homes completed in the Major Improvement Area of
the District during such Fiscal Year; and
(B) the aggregate number of new homes completed within the Major
Improvement Area of the District since filing the initial Annual Issuer Report for Fiscal
Year ended September 30, 2021.
(vii) Listing of any property or property owners in the Major Improvement Area of
the District representing more than five percent (5%) of the levy of Assessments, the amount of
the levy of Assessments against such landowners, and the percentage of such Assessments
relative to the entire levy of Assessments within the Major Improvement Area of the District,
all as of the October 1 billing date for the Fiscal Year.
(viii) Collection and delinquency history of the Assessments within the Major
Improvement Area of the District for the past five Fiscal Years, in the following format:
Collection and Delinquent History of Assessments
Collected in Delinquent Delinquent Delinquent Delinquent Total
Fiscal Year Assessment Parcels Amount Percentage Amount Percentage Assessments
Ending 9/30 Billed Levied as of 3/1 as of 3/1 as of 9/1 as of 9/1 Collected(')
20 $ $
Collected as of 20 . Includes $ attributable to Prepayments.
(ix) For each calendar year, if the total amount of Annual Installments that are
delinquent as of September 1 in such calendar year is equal to or greater than ten (10%) of the
total amount of Annual Installments due in such calendar year, a list of parcel numbers for
which the Annual Installments are delinquent.
(x) Total amount of Prepayments collected, as of the February 15 of the calendar
year immediately succeeding such Fiscal Year, in each case with respect to the most recent
billing period (generally, October 1 of the preceding calendar year through January 31 of the
current calendar year).
(xi) The amount of delinquent Assessments by Fiscal Year:
(A) which are subject to institution of foreclosure proceedings (but as to
which such proceedings have not been instituted);
(B) which are currently subject to foreclosure proceedings which have not
been concluded;
(C) which have been reduced to judgment but not collected;
(D) which have been reduced to judgment and collected; and
5
(E) the result of any foreclosure sales of assessed property within the Major
Improvement Area of the District if the assessed property represents more than one
percent (1%) of the total amount of Assessments.
(xii) A description of any amendment to this Disclosure Agreement and a copy of
any restatements to the Issuer's audited financial statements during such Fiscal Year.
See Exhibit B hereto for a form for submitting the information set forth in the preceding
paragraphs. The Issuer has designated P3Works, LLC as the initial Administrator. The Administrator,
and if no Administrator is designated, Issuer's staff, shall prepare the Annual Financial Information.
(b) The Issuer shall provide annually to the MSRB through its EMMA, within twelve (12)
months after the end of each Fiscal Year ending on or after September 30, 2021, audited financial
statements of the Issuer. If the audit of such financial statements are not complete within such period,
the Issuer shall provide unaudited financial statements for the applicable Fiscal Year within such
twelve-month period to the MSRB through EMMA, and audited financial statements to the MSRB
through EMMA when the audit report on such statements becomes available.
(c) Any or all of the items listed above may be included by specific reference to other
documents, including disclosure documents of debt issues of the Issuer, which have been submitted to
and are publicly accessible from the MSRB. If the document included by reference is a final offering
document, it must be available from the MSRB. The Issuer shall clearly identify each such other
document so included by reference.
SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, each of the following is a Listed Event with
respect to the Bonds:
I. Principal and interest payment delinquencies.
2. Non-payment related defaults, if material.
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, the issuance by the IRS of proposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices
or determinations with respect to the tax status of the Bonds, or other material events affecting the tax
status of the Bonds.
7. Modifications to rights of Owners, if material.
8. Bond calls, if material.
2
material.
9. Defeasances.
10. Release, substitution, or sale of property securing repayment of the Bonds, if
11. Rating changes.
12. Bankruptcy, insolvency, receivership or similar event of the Issuer.
13. The consummation of a merger, consolidation, or acquisition of the Issuer, or
the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of
business, the entry into a definitive agreement to undertake such an action or the termination of a
definitive agreement relating to any such actions, other than pursuant to its terms, if material.
14. Appointment of a successor or additional trustee under the Indenture or the
change of name of a trustee, if material.
15. Incurrence of a financial obligation of the obligated person, if material, or
agreements to covenants, events of default, remedies, priority rights, or other similar terms of a
financial obligation of the obligated person, any of which affect security holders if material.
16. Default, event of acceleration, termination event, modification of terms, or other
similar events under the terms of a financial obligation of the obligated person, any of which reflect
financial difficulties.
For these purposes, any event described in in the immediately preceding paragraph (12) above
is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or
similar officer for the Issuer in a proceeding under the United States Bankruptcy Code or in any other
proceeding under state or federal law in which a court or governmental authority has assumed
jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been
assumed by leaving the existing governing body and officials or officers in possession but subject to
the supervision and orders of a court or governmental authority, or the entry of an order confirming a
plan of reorganization, arrangement, or liquidation by a court or governmental authority having
supervision or jurisdiction over substantially all of the assets or business of the Issuer.
For these purposes, "financial obligation" means (i) a debt obligation; (ii) derivative instrument
entered into in connection with, or pledged as security or a source of payment for, an existing or
planned debt obligation; or (iii) guarantee of (i) or (ii). The term "financial obligation" shall not
include municipal securities as to which a final official statement has been provided to the Municipal
Securities Rulemaking Board consistent with the Rule.
Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, the Issuer shall
promptly notify the Dissemination Agent in writing and the Issuer shall direct the Dissemination Agent
to file a notice of such occurrence with the MSRB. Following receipt of such with written direction
the Dissemination Agent shall file such within ten (10) Business Days of the occurrence of such Listed
Event; provided that the Dissemination Agent shall not be liable for the filing of notice of any Listed
Event more than ten (10) Business Days after the occurrence of such Listed Event if notice of such
7
Listed Event is received from the Issuer more than ten (10) Business Days after the occurrence of such
Listed Event.
Additionally, the Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer
to provide annual audited financial statements or Annual Financial Information as required under this
Disclosure Agreement.
Any notice under the preceding paragraphs shall be accompanied with the text of the disclosure
that the Issuer desires to make, the written authorization of the Issuer for the Dissemination Agent to
disseminate such information as provided herein, and the date the Issuer desires for the Dissemination
Agent to disseminate the information (which date shall not be more than ten (10) Business Days after
the occurrence of the Listed Event or failure to file).
In all cases, the Issuer shall have the sole responsibility for the content, design and other
elements comprising substantive contents of all disclosures. In addition, the Issuer shall have the sole
responsibility to ensure that any notice required to be filed under this Section 5 is filed within ten (10)
Business Days of the occurrence of the Listed Event.
(b) The Dissemination Agent and the Administrator shall, within one (1) Business Day of
obtaining actual knowledge of the occurrence of any Listed Event with respect to the Bonds, notify the
Disclosure Representative in writing of such Listed Event. The Dissemination Agent shall not be
required to file a notice of the occurrence of such Listed Event with the MSRB unless and until it
receives written instructions from the Disclosure Representative to do so. It is agreed and understood
that the duty to make or cause to be made the disclosures herein is that of the Issuer and not that of the
the Administrator or the Dissemination Agent. It is agreed and understood that the Dissemination
Agent and the Administrator have agreed to give the foregoing notice to the Issuer as an
accommodation to assist it in monitoring the occurrence of such event, but are under no obligation to
investigate whether any such event has occurred. As used above, "actual knowledge" means the actual
fact or statement of knowing, without a duty to make any investigation with respect thereto. In no
event shall the Dissemination Agent or the Administrator be liable in damages or in tort to the Issuer or
any Owner or beneficial owner of any interests in the Bonds as a result of its failure to give the
foregoing notice or to give such notice in a timely fashion.
(c) If in response to a notice from the Dissemination Agent under subsection (b), the Issuer
determines that the Listed Event under number 2, 7, 8, 10, 13, 14 or 15 of subparagraph (a) above is
not material under applicable federal securities laws, the Issuer shall promptly notify the Dissemination
Agent and the Trustee (if the Dissemination Agent is not the Trustee) in writing and instruct the
Dissemination Agent not to report the occurrence pursuant to subsection (d).
(d) If the Dissemination Agent has been instructed in writing by the Issuer to report the
occurrence of a Listed Event, the Dissemination Agent shall immediately file a notice of such
occurrence with the MSRB (which date shall not be more than ten (10) Business Days after the
occurrence of the Listed Event or failure to file).
SECTION 6. Termination of Reporting Obligations. The obligations of the Issuer and the
Dissemination Agent under this Disclosure Agreement shall terminate upon the legal defeasance, prior
redemption or payment in full of all of the Bonds, when the Issuer is no longer an obligated person
with respect to the Bonds, or upon delivery by the Disclosure Representative to the Dissemination
Agent of an opinion of nationally recognized bond counsel to the effect that continuing disclosure is no
longer required. So long as any of the Bonds remain Outstanding, the Dissemination Agent may
assume that the Issuer is an obligated person with respect to the Bonds until it receives written notice
from the Disclosure Representative stating that the Issuer is no longer an obligated person with respect
to the Bonds, and the Dissemination Agent may conclusively rely upon such written notice with no
duty to make investigation or inquiry into any statements contained or matters referred to in such
written notice. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give
notice of such termination in the same manner as for a Listed Event with respect to the Bonds under
Section 5(a).
SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage
a Dissemination Agent or successor Dissemination Agent to assist it in carrying out its obligations
under this Disclosure Agreement, and may discharge such Dissemination Agent, with or without
appointing a successor Dissemination Agent. If at any time there is not any other designated
Dissemination Agent, the Issuer shall be the Dissemination Agent. The initial Dissemination Agent
appointed hereunder shall be Regions Bank
SECTION 8. Amendment; Waiver. Notwithstanding any other provisions of this
Disclosure Agreement, the Issuer and the Dissemination Agent may amend this Disclosure Agreement
(and the Dissemination Agent shall not unreasonably withhold its consent to any amendment so
requested by the Issuer), and any provision of this Disclosure Agreement may be waived, provided that
the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a), it may
only be made in connection with a change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature or status of an obligated person with
respect to the Bonds, or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion
of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of
the delivery of the Bonds, after taking into account any amendments or interpretations of the Rule, as
well as any change in circumstances; and
(c) The amendment or waiver either (i) is approved by the Owners of the Bonds in the same
manner as provided in the Indenture for amendments to the Indenture with the consent of Owners, or
(ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of
the Owners or beneficial owners of the Bonds.
In the event of any amendment or waiver of a provision of this Disclosure Agreement, the
Issuer shall describe such amendment in the next related Annual Issuer Report, and shall include, as
applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the
type (or in the case of a change of accounting principles, on the presentation) of financial information
or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting
principles to be followed in preparing financial statements, (i) notice of such change shall be given in
the same manner as for a Listed Event under Section 5(a), and (ii) the Annual Issuer Report for the
year in which the change is made should present a comparison (in narrative form and also, if feasible,
0
in quantitative form) between the financial statements as prepared on the basis of the new accounting
principles and those prepared on the basis of the former accounting principles. No amendment which
adversely affects the Dissemination Agent may be made without its prior written consent (which
consent will not be unreasonably withheld or delayed).
SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the Issuer from disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement or any other means of communication, or
including any other information in any Annual Issuer Report or notice of occurrence of a Listed Event,
in addition to that which is required by this Disclosure Agreement. If the Issuer chooses to include any
information in any Annual Issuer Report or notice of occurrence of a Listed Event in addition to that
which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation (and
the Dissemination Agent shall incur no liability or obligation) under this Disclosure Agreement to
update such information or include it in any future Annual Issuer Report or notice of occurrence of a
Listed Event.
SECTION 10. Default. In the event of a failure of the Issuer to comply with any provision
of this Disclosure Agreement, the Dissemination Agent may (and, at the request of the Owners of at
least 25% aggregate principal amount of Outstanding Bonds, shall, upon being indemnified to its
satisfaction as provided in the Indenture), or any Owner or beneficial owner of the Bonds may take
such actions as may be necessary and appropriate to cause the Issuer, as the case may be, to comply
with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall
not be deemed an Event of Default under the Indenture with respect to the Bonds, and the sole remedy
under this Disclosure Agreement in the event of any failure of the Issuer to comply with this
Disclosure Agreement shall be an action for mandamus or specific performance. A default under this
Disclosure Agreement by the Issuer shall not be deemed a default under the Disclosure Agreement of
Developer by the Developer, and a default under the Disclosure Agreement of the Developer by the
Developer shall not be deemed a default under this Disclosure Agreement by the Issuer.
SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent and the
Administrator. (a) The Dissemination Agent shall not have any duty with respect to the content of
any disclosures made pursuant to the terms hereof. The Dissemination Agent shall have only such
duties as are specifically set forth in this Disclosure Agreement, and no implied covenants shall be read
into this Disclosure Agreement with respect to the Dissemination Agent. To the extent permitted by
law, the Issuer agrees to hold harmless the Dissemination Agent, its officers, directors, employees and
agents, but only with funds to be provided by the Developer or from Assessments collected from the
property owners in the Major Improvement Area of the District, against any loss, expense and
liabilities which it may incur arising out of or in the exercise or performance of its powers and duties
hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim
of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful
misconduct; provided, however, that nothing herein shall be construed to require the Issuer to
indemnify the Dissemination Agent for losses, expenses or liabilities arising from information
provided to the Dissemination Agent by the Developer or the failure of the Developer to provide
information to the Dissemination Agent as and when required under the Disclosure Agreement of
Developer. The obligations of the Issuer under this Section shall survive resignation or removal of the
Dissemination Agent and payment in full of the Bonds. Nothing in this Disclosure Agreement shall be
construed to mean or to imply that the Dissemination Agent is an "obligated person" under the Rule.
10
The Dissemination Agent is not acting in a fiduciary capacity in connection with the performance of its
respective obligations hereunder. The fact that the Dissemination Agent may have a banking or other
business relationship with the Issuer or any person with whom the Issuer contracts in connection with
the transaction described in the Indenture, apart from the relationship created by the Indenture or this
Disclosure Agreement, shall not be construed to mean that the Dissemination Agent has actual
knowledge of any event described in Section 5 above, except as may be provided by written notice to
the Dissemination Agent pursuant to this Disclosure Agreement.
The Dissemination Agent may, from time to time, consult with legal counsel of its own
choosing in the event of any disagreement or controversy, or question or doubt as to the construction of
any of the provisions hereof or their respective duties hereunder, and the Dissemination Agent shall not
incur any liability and shall be fully protected in acting in good faith upon the advice of such legal
counsel.
(b) The Administrator shall not have any responsibility for the (1) accuracy of any
information provided by third parties or the Issuer for the disclosures made pursuant to the terms
hereof, or (2) the untimeliness of any information provided by third parties or the Issuer for the
disclosures made pursuant to the terms hereof, except where such untimeliness is attributable to the
actions or inactions of the Administrator. The Administrator shall have only such duties as are
specifically set forth in Sections 3 and 4 of this Disclosure Agreement, and no implied covenants shall
be read into this Disclosure Agreement with respect to the Administrator. To the extent permitted by
law, the Issuer agrees to hold harmless the Administrator, its officers, directors, employees and agents,
but only with funds to be provided by the Developer or from Assessments collected from the property
owners in the District, against any loss, expense and liabilities which it may incur arising out of or in
the exercise or performance of its powers and duties hereunder, including the costs and expenses
(including attorneys' fees) of defending against any claim of liability resulting from information
provided to the Administrator by the Issuer, but excluding liabilities due to the Administrator's
negligence or willful misconduct; provided, however, that nothing herein shall be construed to require
the Issuer to indemnify the Administrator for losses, expenses or liabilities arising from information
provided to the Administrator by third parties or the Developer, or the failure of any third party or the
Developer to provide information to the Administrator as and when required under this Agreement.
The obligations of the Issuer under this Section shall survive resignation or removal of the
Administrator and payment in full of the Bonds. Nothing in this Disclosure Agreement shall be
construed to mean or to imply that the Administrator is an "obligated person" under the Rule. The
Administrator is not acting in a fiduciary capacity in connection with the performance of its respective
obligations hereunder. The Administrator shall not in any event incur any liability with respect to any
action taken or omitted to be taken in reliance upon any document delivered to the Administrator and
believed to be genuine and to have been signed or presented by the proper party or parties.
The Administrator may, from time to time, consult with legal counsel of its own choosing in
the event of any disagreement or controversy, or question or doubt as to the construction of any of the
provisions hereof or their respective duties hereunder, and the Administrator shall not incur any
liability and shall be fully protected in acting in good faith upon the advice of such legal counsel.
(c) UNDER NO CIRCUMSTANCES SHALL THE DISSEMINATION AGENT, THE
ADMINISTRATOR OR THE ISSUER BE LIABLE TO THE OWNER OR BENEFICIAL OWNER
OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES
11
RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER, THE
ADMINISTRATOR OR THE DISSEMINATION AGENT, RESPECTIVELY, WHETHER
NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS
DISCLOSURE AGREEMENT, 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. NEITHER THE
DISSEMINATION AGENT NOR THE ADMINISTRATOR ARE UNDER ANY OBLIGATION
NOR ARE THEY REQUIRED TO BRING SUCH AN ACTION.
SECTION 12. No Personal Liability. No covenant, stipulation, obligation or agreement of
the Issuer or Dissemination Agent contained in this Disclosure Agreement shall be deemed to be a
covenant, stipulation, obligation or agreement of any present or future council members, officer, agent
or employee of the Issuer or Dissemination Agent in other than that person's official capacity.
SECTION 13. Severability. In case any section or provision of this Disclosure Agreement,
or any covenant, stipulation, obligation, agreement, act or action, or part thereof made, assumed,
entered into, or taken thereunder or any application thereof, is for any reasons held to be illegal or
invalid, such illegality or invalidity shall not affect the remainder thereof or any other section or
provision thereof or any other covenant, stipulation, obligation, agreement, act or action, or part
thereof made, assumed, entered into, or taken thereunder (except to the extent that such remainder or
section or provision or other covenant, stipulation, obligation, agreement, act or action, or part thereof
is wholly dependent for its operation on the provision determined to be invalid), which shall be
construed and enforced as if such illegal or invalid portion were not contained therein, nor shall such
illegality or invalidity of any application thereof affect any legal and valid application thereof, and
each such section, provision, covenant, stipulation, obligation, agreement, act or action, or part thereof
shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full
extent permitted by law.
SECTION 14. Sovereign Immunity. The Dissemination Agent agrees that nothing in this
Disclosure Agreement shall constitute or be construed as a waiver of the Issuer's sovereign or
governmental immunities regarding liability or suit.
SECTION 15. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of
the Issuer, the Underwriter, the Dissemination Agent and the Owners and the beneficial owners from
time to time of the Bonds, and shall create no rights in any other person or entity. Nothing in this
Disclosure Agreement is intended or shall act to disclaim, waive or otherwise limit the duties of the
Issuer under federal and state securities laws.
SECTION 16. Dissemination Agent Compensation. The fees and expenses incurred by the
Dissemination Agent for its services rendered in accordance with this Disclosure Agreement constitute
Annual Collection Costs and will be included in the Annual Installments as provided in the annual
updates to the Service and Assessment Plan. The Issuer shall pay or reimburse the Dissemination
Agent, but only with funds to be provided from Assessments collected from the property owners in the
Major Improvement Area of the District, for its fees and expenses for the Dissemination Agent's
services rendered in accordance with this Disclosure Agreement.
12
SECTION 17. Assessment Timeline. The basic expected timeline for the collection of
Assessments and the anticipated procedures for pursuing the collection of delinquent Assessments is
set forth in Exhibit C which is intended to illustrate the general procedures expected to be followed in
enforcing the payment of delinquent Assessments.
SECTION 18. Anti -Boycott Verification. The Dissemination Agent hereby verifies that it
and its parent company, wholly- or majority -owned subsidiaries, and other affiliates, if any, do not
boycott Israel and, to the extent this Disclosure Agreement is a contract for goods or services, will not
boycott Israel during the term of this Disclosure Agreement. The foregoing verification is made solely
to comply with Section 2271.002, Texas Government Code, and to the extent such Section does not
contravene applicable Federal law. As used in the foregoing verification, "boycott Israel" means
refusing to deal with, terminating business activities with, or otherwise taking any action that is
intended to penalize, inflict economic harm on, or limit commercial relations specifically with Israel,
or with a person or entity doing business in Israel or in an Israeli -controlled territory, but does not
include an action made for ordinary business purposes. The Dissemination Agent understands
"affiliate" to mean an entity that controls, is controlled by, or is under common control with the
Dissemination Agent and exists to make a profit.
SECTION 19. Iran, Sudan and Foreign Terrorist Organizations. Pursuant to Subchapter F,
Chapter 2252, Texas Government Code, the Dissemination Agent represents that neither the
Dissemination Agent, nor any parent company, wholly- or majority -owned subsidiaries, and other
affiliates of the Dissemination Agent is a company identified on a list prepared and maintained by the
Texas Comptroller of Public Accounts under Section 2252.153 or Section 2270.0201, Texas
Government Code, and posted on any of the following pages of such officer's internet website:
https:Hcomptroller.texas.gov/purchasing/docs/sudan-list.pdf, https:Hcomptroller.texas.gov/purchasing/
docs/iran-list.pdf, or https://comptroller.texas.gov/purchasing/docs/fto-list.pdf. The foregoing
representation is made solely to comply with Section 2252.152, Texas Government Code, and to the
extent such Section does not contravene applicable state or federal law and excludes the Dissemination
Agent and each parent company, wholly- or majority -owned subsidiaries, and other affiliates of the
Dissemination Agent, if any, that the United States government has affirmatively declared to be
excluded from its federal sanctions regime relating to Sudan or Iran or any state or federal sanctions
regime relating to a foreign terrorist organization. The Dissemination Agent understands "affiliate" to
mean any entity that controls, is controlled by, or is under common control with the Dissemination
Agent and exists to make a profit.
SECTION 20. Governing Law. This Disclosure Agreement shall be governed by the laws
of the State of Texas.
SECTION 21. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
[remainder of page left blank intentionally]
13
CITY OF ANNA, TEXAS
L-02
Mayor
SIGNATURE PAGE TO ISSUER CONTINUING DISCLOSURE AGREEMENT
S-1
REGIONS BANK
(as Dissemination Agent)
LO-A
Authorized Officer
SIGNATURE PAGE TO ISSUER CONTINUING DISCLOSURE AGREEMENT
S-2
P3WORKS, LLC
(as Administrator)
By:
Name:
Title:
SIGNATURE PAGE TO ISSUER CONTINUING DISCLOSURE AGREEMENT
S-3
EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE
ANNUAL ISSUER REPORT
Name of Issuer: City of Anna, Texas
Name of Bond Issue: Special Assessment Revenue Bonds, Series 2021
(Sherley Tract Public Improvement District No. 2 Major
Improvement Area Project)
CUSIP Nos. [insert CUSIP NOs.]
Date of Delivery: , 20
NOTICE IS HEREBY GIVEN that the City of Anna, Texas, has not provided [an Annual
Issuer Report][annual audited financial statements] with respect to the above -named bonds as
required by the Continuing Disclosure Agreement of Issuer dated [INDENTURE DATE], 2021,
between the Issuer and Regions Bank, as "Dissemination Agent." The Issuer anticipates that [the
Annual Issuer Report] [annual audited financial statements] will be filed by
Dated:
cc: City of Anna Texas
Regions Bank
(as Dissemination Agent)
Lo
Title:
A-1
EXHIBIT B
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2021
(SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO.2 IMPROVEMENT
AREA #1 PROJECT)
ANNUAL ISSUER REPORT*
Delivery Date: , 20_
CUSIP NOSs: [insert CUSIP NOs j
BONDS OUTSTANDING
CUSIP
Number
Maturity
Date
Interest
Rate
Original
Principal
Amount
Outstanding
Principal
Amount
Outstanding
Interest
Amount
INVESTMENTS
Fund/
Account Name
Investment
Description
Par Value
Book Value
Market Value
*Excluding Audited Financial Statements of the Issuer
ASSETS AND LIABILITIES OF PLEDGED TRUST ESTATE
Bonds (Principal Balance)
Funds and Accounts [list]
TOTAL ASSETS
LIABILITIES
Outstanding Bond Principal
Outstanding Program Expenses (if any)
TOTAL LIABILITIES
IWl
EQUITY
Assets Less Liabilities
Value to Debt Ratio
Form of Accounting Cash Accrual Modified Accrual
ITEMS REQUIRED BY SECTIONS 4(a)(ii) — (vii)
[Insert a line item]
SECTION 4(a)(viii) COLLECTION AND DELINQUENCY HISTORY OF THE
ASSESSMENTS WITHIN THE DISTRICT FOR THE PAST FIVE FISCAL YEARS, IN
THE FOLLOWING FORMAT:
Collection and Delinquent History of Assessments
Collected in
Delinquent
Delinquent Delinquent Delinquent
Total
Fiscal Year Assessment
Parcels Amount
Percentage Amount Percentage
Assessments
Ending 9/30 Billed
Levied as of 3/1
as of 3/1 as of 9/1 as of 9/1
Collected(')
0) Collected as of
20_. Includes $
attributable to Prepayments.
ITEMS REQUIRED BY SECTIONS 4(a)(ix) — (xii) OF THE CONTINUING
DISCLOSURE AGREEMENT OF ISSUER RELATING TO THE CITY OF ANNA,
TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2021, (SHERLEY
TRACT PUBLIC IMPROVEMENT DISTRICT NO. 2 IMPROVEMENT AREA #1
PROJECT)
[Insert a line item for each applicable listing]
WE
EXHIBIT C
BASIC EXPECTED TIMELINE FOR ASSESSMENT COLLECTIONS
AND PURSUIT OF DELINQUENCIES'
Date Delinquency Activi
Clock (Days)
January 31 Annual Installments of Assessments are due.
February 1 1 Annual Installments of Assessments Delinquent if
not received.
February 15 15 Issuer forwards payment to Trustee for all
collections received as of February 15, along with
detailed breakdown. Subsequent payments and
relevant details will follow monthly thereafter.
Issuer and/or Administrator should be aware of
actual and specific delinquencies.
Issuer and/or Administrator should be aware if
Reserve Fund needs to be utilized for debt service
payments on March 1. If there is to be a
shortfall, the Trustee and Dissemination Agent
should be immediately notified.
Issuer and/or Administrator should also be aware
if, based on collections, there will be a shortfall for
September payment.
Issuer and/or Administrator should determine if
previously collected surplus funds, if any, plus
actual collections will be fully adequate for debt
service in March and September.
At this point, if total delinquencies are under 5%
and if there is adequate funding for March and
September payments, no further action is
anticipated for collection of Annual Installments of
Assessments except that the Issuer or
Administrator, working with the City Attorney or
an appropriate designee, will begin process to cure
deficiency. For properties delinquent by more
than one year or if the delinquency exceeds
$10,000 the matter will be referred for
commencement of foreclosure.
If there are over 5% delinquencies or if there is
1 Illustrates anticipated dates and procedures for pursuing the collection of delinquent Annual Installments of
Assessments, which dates and procedures are subject to adjustment by the Issuer.
C-1
inadequate funding in the Pledged Revenue
Fund for transfer to the Principal and Interest
Account of such amounts as shall be required
for the full March and September payments,
the collection -foreclosure procedure will
proceed against all delinquent properties.
March 15 43/44 Trustee pays bond interest payments to
bondholders.
Reserve Fund payment to Bond Fund may be
required if Assessments are below approximately
50% collection rate.
Issuer, or the Trustee, on behalf of the Issuer, to
notify Dissemination Agent of the occurrence of
draw on the Reserve Fund and, following receipt
of such notice, Dissemination Agent to notify
MSRB of such draw on the Fund for debt service.
Use of Reserve Fund for debt service payment
should trigger commencement of foreclosure on
delinquent properties.
Issuer determines whether or not any Annual
Installments of Assessments are delinquent and, if
such delinquencies exist, the Issuer commences as
soon as practicable appropriate and legally
permissible actions to obtain such delinquent
Annual Installments of Assessments.
March 20 47/48 Issuer and/or Administrator to notify
Dissemination Agent for disclosure to MSRB of
all delinquencies.
If any property owner with ownership of
property responsible for more than $10,000 of
the Annual Installments of Assessments is
delinquent or if a total of delinquencies is over
5%, or if it is expected that Reserve Fund
moneys will need to be utilized for either the
March or September bond payments, the
Disclosure Representative shall work with City
Attorney's office, or the appropriate designee,
to satisfy payment of all delinquent Annual
Installments of Assessments.
April15 74/75 Preliminary Foreclosure activity commences,
and Issuer to notify Dissemination Agent of the
commencement of preliminary foreclosure
activity.
C-2
If Dissemination Agent has not received
Foreclosure Schedule and Plan of Collections,
Dissemination Agent to request same from the
Issuer.
May 1 89/90 If the Issuer has not provided the Dissemination
Agent with Foreclosure Schedule and Plan of
Collections, and if instructed by the bondholders
under Section 11.2 of the Indenture, Dissemination
Agent requests that the Issuer commence
foreclosure or provide plan for collection.
May 15
103/104 The designated lawyers or law firm will be
preparing the formal foreclosure documents and
will provide periodic updates to the Dissemination
Agent for dissemination to those bondholders who
have requested to be notified of collections
progress. The goal for the foreclosure actions is a
filing by no later than June 1 (day 120/121).
June 1
120/121 Foreclosure action to be filed with the court.
June 15
134/135 Issuer notifies Trustee and Dissemination Agent
of Foreclosure filing status. Dissemination
Agent notifies bondholders.
July 1
1501151 If bondholders and Dissemination Agent have not
been notified of a foreclosure action,
Dissemination Agent will notify the Issuer that it is
appropriate to file action.
A committee of not less than 25% of the Owners may request a meeting with the City
Manager, Assistant City Manager or the Finance Director to discuss the Issuer's actions in
pursuing the repayment of any delinquencies. This would also occur after day 30 if it is
apparent that a Reserve Fund draw is required. Further, if delinquencies exceed 5%,
Owners may also request a meeting with the Issuer at any time to discuss the Issuer's
plan and progress on collection and foreclosure activity. If the Issuer is not diligently
proceeding with the foreclosure process, the Owners may seek an action for mandamus or
specific performance to direct the Issuer to pursue the collections of delinquent Annual
Installments of Assessments.
C-3
EXHIBIT D
LANDOWNER AGREEMENT
D-1
MAJOR IMPROVEMENT AREA LANDOWNER AGREEMENT
This MAJOR IMPROVEMENT AREA LANDOWNER AGREEMENT (the
"Agreement"), is entered into as of July 27, 2021, between the City of Anna, Texas (the
a home -rule municipality of the State of Texas (the "State"), and MM Anna 325, LLC, a Texas
limited liability company (the "Landowner").
RECITALS:
WHEREAS, capitalized terms used but not defined herein shall have the meanings given
to them in the Service and Assessment Plan (as defined herein); and
WHEREAS, Landowner owns the Major Improvement Area Assessed Property described
by a metes and bounds description attached as Exhibit I to this Agreement and which is
incorporated herein for all purposes, comprising all of the non-exempt, privately -owned land
described in Exhibit I (the "Landowner's Parcel") which is located within the Major Improvement
Area of the Sherley Tract Public Improvement District No. 2 (the "District") in the extraterritorial
jurisdiction of the City; and
WHEREAS, the City Council has adopted an assessment ordinance (including all exhibits
and attachments thereto, the "Assessment Ordinance") for the Major Improvement Area Projects
and the Sherley Tract Public Improvement District No. 2 Service and Assessment Plan (as updated
and amended, the "Service and Assessment Plan") and which is incorporated herein for all
purposes, and has levied an assessment on the Major Improvement Area Assessed Property in the
Major Improvement Area of the District that will be pledged as the security for payment of bonds
or other obligations to be issued for the purpose of paying certain infrastructure improvements and
to pay the costs of constructing the Major Improvement Area Projects; and
WHEREAS, the Declaration of Covenants, Conditions and Restrictions attached to this
Agreement as Exhibit II and which are incorporated herein for all purposes, includes the statutory
notification required by Texas Property Code, Section 5.014, as amended, to be provided by the
seller of residential property that is located in a public improvement district established under
Chapter 372 of the Texas Local Government Code, as amended (the "PID Act"), to the purchaser.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants,
obligations and benefits hereinafter set forth, the City and the Landowner hereby contract,
covenant and agree as follows:
APPROVAL OF AGREEMENTS
Affirmation of Recitals. The findings set forth in the Recitals of this Agreement are hereby
incorporated as the official findings of the City Council.
I.
AGREEMENTS OF LANDOWNER
A. Affirmation and Acceptance of Agreements and Findings of Benefit. Landowner
hereby ratifies, confirms, accepts, agrees to, and approves:
(i) the creation and boundaries of the District, the boundaries of the
Landowner's Parcel, which are located within the District, and the location and
development of the Major Improvement Area Projects on the Landowner's Parcel and on
the property within the District;
(ii) the determinations and findings as to the benefits by the City Council in the
Service and Assessment Plan and the Assessment Ordinance; and
(iii) the Assessment Ordinance and the Service and Assessment Plan.
B. Acceptance and Approval of Major Improvement Area Assessments and Lien on
Property. Landowner consents to, agrees to, acknowledges and accepts the following:
(i) the Assessments levied on the Major Improvement Area of the District (the
"Major Improvement Area Assessments") as shown on the Major Improvement Area
Assessment Roll;
(ii) the Major Improvement Area Projects specially benefit the Major
Improvement Area of the District, and the Landowner's Parcel, in an amount at least equal
to the Major Improvement Area Assessment levied on the Major Improvement Area
Assessed Property within the Major Improvement Area of the District, as such Major
Improvement Area Assessment is shown on the Major Improvement Area Assessment
Roll;
(iii) each Major Improvement Area Assessment is final, conclusive and binding
upon Landowner and any subsequent owner of any of the Major Improvement Area
Assessed Property, regardless of whether such landowner may be required to prepay a
portion of, or the entirety of, such Major Improvement Area Assessment upon the
occurrence of a mandatory prepayment event as provided in the Service and Assessment
Plan;
(iv) the obligation to pay the Major Improvement Area Assessment levied on
the Major Improvement Area Assessed Property owned by the Landowner and any
subsequent owner of any of the Improvement Area #1 Assessed Property when due and in
the amount required by and stated in the Service and Assessment Plan and the Assessment
Ordinance;
(v) each Major Improvement Area Assessment or reassessment, with interest,
the expense of collection, and reasonable attorney's fees, if incurred, is a first and prior lien
against the Parcels within the Major Improvement Area Assessed Property, superior to all
other liens and monetary claims except liens or monetary claims for state, county, school
district, or municipal ad valorem taxes, and is a personal liability of and charge against the
owner of the Parcel(s) within the Major Improvement Area Assessed Property regardless
of whether such owner is named;
(vi) the Major Improvement Area Assessment lien on the Major Improvement
Area Assessed Property is a lien and covenant that runs with the land and is effective from
the date of the Assessment Ordinance and continues until the Major Improvement Area
Assessment is paid and may be enforced by the governing body of the City in the same
manner that an ad valorem tax lien against real property may be enforced by the City;
(vii) delinquent installments of the Major Improvement Area Assessment shall
incur and accrue interest, penalties, and attorney's fees as provided in the PID Act;
(viii) the owner of any Major Improvement Area Assessed Property may pay at
any time the entire Major Improvement Area Assessment, with interest that has accrued on
the Major Improvement Area Assessment, on any parcel in the Major Improvement Area
Assessed Property;
(ix) the Annual Installments of the Major Improvement Area Assessments may
be adjusted, decreased and extended; and, the Landowner and any subsequent owner of
any Improvement Area # 1 Assessed Property shall be obligated to pay their respective
revised amounts of the Annual Installments, when due, and without the necessity of further
action, Major Improvement Area Assessments or reassessments by the City, the same as
though they were expressly set forth herein; and
(x) Landowner has received, or hereby waives, all notices required to be
provided to it under Texas law, including the PID Act, prior to the Effective Date (defined
herein).
C. Mandatory Prepayment of Major Improvement Area Assessments. Landowner
agrees and acknowledges that Landowner or subsequent landowners may have an obligation to
prepay a Major Improvement Area Assessment upon the occurrence of a mandatory prepayment
event, at the sole discretion of the City and as provided in the Service and Assessment Plan, as
amended or updated.
D. Notice of Assessments. Landowner further agrees as follows:
(i) the Declaration of Covenants, Conditions and Restrictions in the form
attached hereto as Exhibit II shall be terms, conditions and provisions running with the
Landowner's Parcel and shall be recorded (the contents of which shall be consistent with
the Assessment Ordinance and the Service and Assessment Plan as reasonably determined
by the City), in the records of the County Clerk of Collin County, as a lien and encumbrance
against such Major Improvement Area Assessed Property, and Landowner hereby
authorizes the City to so record such documents against the Major Improvement Area
Assessed Property owned by Landowner;
(ii) in the event of any subdivision, sale, transfer or other conveyance by the
Landowner of the right, title or interest of the Landowner in the Landowner's Parcel or any
part thereof, the Landowner's Parcel, or any such part thereof, shall continue to be bound
by all of the terms, conditions and provisions of such Declaration of Covenants, Conditions
and Restrictions and any purchaser, transferee or other subsequent owner shall take such
Major Improvement Area Assessed Property or portion thereof, subject to all of the terms,
conditions and provisions of such Declaration of Covenants, Conditions and Restrictions;
and
(iii) Landowner shall comply with, and shall contractually obligate (and, upon
the City's request, promptly provide written evidence of such contractual provisions to the
City) any party who purchases any Major Improvement Area Assessed Property owned by
Landowner, or any portion thereof, for the purpose of constructing residential properties
that are eligible for "homestead" designations under State law, to comply with, the
Homebuyer Education Program described on Exhibit III to this Agreement. Such
compliance obligation shall terminate as to each Lot if, and when, (i) a final certificate of
occupancy for a residential unit on such Lot is issued by the City, and (ii) there is a sale of
a Lot to an individual homebuyer, it being the intent of the undersigned that the Homebuyer
Education Program shall apply only to a commercial builder who is in the business of
constructing and/or selling residences to individual home buyers (a "Builder") but not to
subsequent sales of such residence and Lot by an individual home buyer after the initial
sale by a Builder.
Notwithstanding the provisions of this Section, upon the Landowner's request and the
City's consent, in the City's sole and absolute discretion, the Declaration of Covenants, Conditions
and Restrictions may be included with other written restrictions running with the land on property
within the Major Improvement Area of the District, provided they contain all the material
provisions and provide the same material notice to prospective property owners as does the
document attached as Exhibit II.
II.
OWNERSHIP AND CONSTRUCTION OF
MAJOR IMPROVEMENT AREA PROJECTS
A. Ownership and Transfer of Major Improvement Area Projects. Landowner
acknowledges that the Major Improvement Area Projects and the land (or easements, as
applicable) needed therefor shall be owned by the City as constructed and/or conveyed to the City
and Landowner will execute such conveyances and/or dedications of public rights of way and
easements as may be reasonably required to evidence such ownership, as generally described on
the current plats of the property within the District.
B. Grant of Easement and License, Construction of Major Improvement Area Projects.
(i) Any subsequent owner of the Landowner's Parcel shall, upon the request of
the City or Landowner, grant and convey to the City or Landowner and its contractors,
materialmen and workmen a temporary license and/or easement, as appropriate, to
construct the Major Improvement Area Projects on the property within the District, to stage
on the property within the District construction trailers, building materials and equipment
to be used in connection with such construction of the Major Improvement Area Projects
and to provide for passage and use over and across parts of the property within the District
as shall be reasonably necessary during the construction of the Major Improvement Area
Projects. Any subsequent owner of the Landowner's Parcel may require that each
contractor constructing the Major Improvement Area Projects cause such owner of any of
the Landowner's Parcel to be indemnified and/or named as an additional insured under
liability insurance reasonably acceptable to such owner of the Landowner's Parcel. The
right to use and enjoy any easement and license provided above shall continue until the
construction of the Major Improvement Area Projects is complete; provided, however, any
such license or easement shall automatically terminate upon the recording of the final plat
for the Landowner's Parcel in the real property records of Collin County, Texas.
(ii) Landowner hereby agrees that any right or condition imposed by the Sherley
Tract Subdivision Improvement Agreement between the City, MM Anna 325, LLC, and
BFB ANA 40 Acres, LLC effective as of June 9, 2020, as amended by that First Amended
Sherley Tract Subdivision Improvement Agreement effective as of July 14, 2020, and as
may be amended (the "Development Agreement"), or other agreement, with respect to the
Major Improvement Area Assessments has been satisfied, and that Landowner shall not
have any rights or remedies against the City under the Development Agreement or under
any law or principles of equity concerning the Major Improvement Area Assessments, with
respect to the formation of the District, approval of the Service and Assessment Plan and
the City's levy and collection of the Major Improvement Area Assessments.
III.
COVENANTS AND WARRANTIES; MISCELLANEOUS
A. Special Covenants and Warranties of Landowner.
Landowner represents and warrants to the City as follows:
(i) Landowner is duly organized, validly existing and, as applicable, in good
standing under the laws of the state of its organization and has the full right, power and
authority to enter into this Agreement, and to perform all the obligations required to be
performed by Landowner hereunder.
(ii) This Agreement has been duly and validly executed and delivered by, and
on behalf of, Landowner and, assuming the due authorization, execution and delivery
thereof by and on behalf of the City and the Landowner, constitutes a valid, binding and
enforceable obligation of such party enforceable in accordance with its terms. This
representation and warranty is qualified to the extent the enforceability of this Agreement
may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other
similar laws of general application affecting the rights of creditors in general.
(iii) Neither the execution and delivery hereof, nor the taking of any actions
contemplated hereby, will conflict with or result in a breach of any of the provisions of, or
constitute a default, event of default or event creating a right of acceleration, termination
or cancellation of any obligation under, any instrument, note, mortgage, contract,
judgment, order, award, decree or other agreement or restriction to which Landowner is a
parry, or by which Landowner or Landowner's Parcel is otherwise bound.
(iv) Landowner is, subject to all matters of record in the Collin County, Texas
Real Property Records, the sole owner of the Landowner's Parcel.
(v) The Landowner's Parcel owned by Landowner is not subject to, or
encumbered by, any covenant, lien, encumbrance or agreement which would prohibit (i)
the creation of the District, (ii) the levy of the Major Improvement Area Assessments and
the priority of the lien related to the Major Improvement Area Assessments as described in
this Agreement, or (iii) the construction of the Major Improvement Area Projects on
property within the Major Improvement Area of the District which are to be owned by the
City, as generally described on the current plats of the property within the District (or, if
subject to any such prohibition, the approval or consent of all necessary parties thereto has
been obtained).
(vi) Landowner covenants and agrees to execute any and all documents
necessary, appropriate or incidental to the purposes of this Agreement, as long as such
documents are consistent with this Agreement and do not create additional liability of any
type to, or reduce the rights of, such Landowner by virtue of execution thereof.
B. Waiver of Claims Concerning Major Improvement Area Projects. The Landowner,
with full knowledge of the provisions, and the rights thereof pursuant to such provisions, of
applicable law, waives any claims against the City and its successors, assigns and agents,
pertaining to the installation of the Major Improvement Area Projects.
C. Notices.
Any notice or other communication to be given to the City or Landowner under this
Agreement shall be given by delivering the same in writing to:
To the City: City of Anna, Texas
Attn: City Manager
I I I N. Powell Parkway
Anna, Texas 75409
With a copy to: Wolfe, Tidwell & McCoy, LLP
Attn: Clark McCoy
2591 Dallas Parkway, Suite 300
Frisco, Texas 75034
And to: McCall, Parkhurst & Horton L.L.P.
Attn: Rodolfo Segura Jr
717 North Harwood, Suite 900
Dallas, TX 75201
To the Landowner: MM Anna 325, LLC
Attn: Mehrdad Moayedi
1800 Valley View Lane, Suite 300
Farmers Branch, Texas 75234
With a copy to: Miklos Cinclair, PLLC
Attn: Robert Miklos
1800 Valley View Lane, Suite 360
Farmers Branch, Texas 75234
Any notice sent under this Agreement (except as otherwise expressly required) shall be
written and mailed, or sent by electronic or facsimile transmission confirmed by mailing written
confirmation at substantially the same time as such electronic or facsimile transmission, or
personally delivered to an officer of the recipient at the address set forth herein.
Each recipient may change its address by written notice in accordance with this Section.
Any communication addressed and mailed in accordance with this provision shall be deemed to
be given when so mailed, any notice so sent by electronic or facsimile transmission shall be
deemed to be given when receipt of such transmission is acknowledged, and any communication
so delivered in person shall be deemed to be given when receipted for, or actually received by, the
addressee.
D. Parties in Interest.
This Agreement is made solely for the benefit of the City and the Landowner and is not
assignable, except, in the case of Landowner, in connection with the sale or disposition of all or
substantially all of the parcels which constitute the Landowner's Parcel. However, the parties
expressly agree and acknowledge that the City, the Landowner, each current owner of any parcel
which constitutes the Landowner's Parcel, and the holders of or trustee for any bonds secured by
Major Improvement Area Assessment revenues of the City or any part thereof to finance the costs
of the Major Improvement Area Projects, are express beneficiaries of this Agreement and shall be
entitled to pursue any and all remedies at law or in equity to enforce the obligations of the parties
hereto. This Agreement shall be recorded in the real property records of Collin County, Texas.
E. Amendments.
This Agreement may be amended only by written instrument executed by the City and the
Landowner. No termination or amendment shall be effective until a written instrument setting
forth the terms thereof has been executed by the then -current owners of the property within the
District and recorded in the Real Property Records of Collin County, Texas.
F. Effective Date.
This Agreement shall become and be effective upon the date of final execution by the latter
of the City and the Landowner (the "Effective Date") and shall be valid and enforceable on said
date and thereafter.
G. Estoppels.
Within ten (10) days after written request from a party hereto, the other parry shall provide
a written certification, indicating whether this Agreement remains in effect as to the Major
Improvement Area Assessed Property, and whether any party is then in default hereunder.
H. Termination.
This Agreement shall terminate and be of no further force and effect as to the Major
Improvement Area Assessed Property upon payment in full of the Major Improvement Area
Assessment(s) against such Major Improvement Area Assessed Property.
I. Anti -Boycott Verification.
The Landowner hereby verifies that it and its parent company, wholly- or majority -owned
subsidiaries, and other affiliates, if any, do not boycott Israel and, to the extent this Agreement is
a contract for goods or services, will not boycott Israel during the term of this Agreement. The
foregoing verification is made solely to comply with Section 2271.002, Texas Government Code,
and to the extent such Section does not contravene applicable Federal law. As used in the
foregoing verification, "boycott Israel" means refusing to deal with, terminating business activities
with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit
commercial relations specifically with Israel, or with a person or entity doing business in Israel or
in an Israeli -controlled territory, but does not include an action made for ordinary business
purposes. The Landowner understands "affiliate" to mean an entity that controls, is controlled by,
or is under common control with the Landowner and exists to make a profit.
J. Iran, Sudan and Foreign Terrorist Organizations.
Pursuant to Subchapter F, Chapter 2252, Texas Government Code, the Landowner
represents that neither the Landowner, nor any parent company, wholly- or majority -owned
subsidiaries, and other affiliates of the Landowner is a company identified on a list prepared and
maintained by the Texas Comptroller of Public Accounts under Section 2252.153 or Section
2270.0201, Texas Government Code, and posted on any of the following pages of such officer's
internet website:
https:Hcomptroller.texas.gov/purchasing/docs/sudan-list.pdf,
https:Hcomptroller.texas.gov/purchasing/ docs/iran-list.pdf, or
https:Hcomptroller.texas.gov/purchasing/docs/fto-list.pdf.
The foregoing representation is made solely to comply with Section 2252.152, Texas
Government Code, and to the extent such Section does not contravene applicable state or federal
law and excludes the Landowner gent and each parent company, wholly- or majority -owned
subsidiaries, and other affiliates of the Landowner, if any, that the United States government has
affirmatively declared to be excluded from its federal sanctions regime relating to Sudan or Iran
or any state or federal sanctions regime relating to a foreign terrorist organization. The Landowner
understands "affiliate" to mean any entity that controls, is controlled by, or is under common
control with the Landowner and exists to make a profit.
[Signature pages to follow]
EXECUTED by the City and Landowner on the Effective Date.
Date:
STATE OF TEXAS
COUNTY OF COLLIN
CITY OF ANNA, TEXAS
Nate Pike, Mayor
This instrument was acknowledged before me on the day of July, 2021 by Nate Pike,
Mayor of the City of Anna, Texas on behalf of said City.
(SEAL)
Notary Public, State of Texas
Name printed or typed
Commission Expires:
[Signature Page Landowner Agreement]
LANDOWNER Date:
MM Anna 325, LLC,
a Texas limited liability company
By: MMM Ventures, LLC,
a Texas limited liability company
Its Manager
By: 2M Ventures, LLC,
a Delaware limited liability company
Its Manager
By:
Name: Mehrdad Moayedi
Its: Manager
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on the day of July, 2021 by Mehrdad
Moayedi, Manager of 2M Ventures, LLC, as Manager of MMM Ventures, LLC, as Manager of
MM Anna 325, LLC, a Texas limited liability company, on behalf of said company.
Notary Public, State of Texas
[Signature Page Landowner Agreement]
LANDOWNER AGREEMENT - EXHIBIT I
METES AND BOUNDS DESCRIPTION OF LANDOWNER'S PARCEL
DESCRIPTION:
BEING THAT CERTAIN TRACT OF LAND SITUATED IN THE J.M. KINCADE SURVEY, ABSTRACT NUMBER 509,
THE J. BOYLE SURVEY, ABSTRACT NUMBER 105, THE J. ROBERTS SURVEY, ABSTRACT NUMBER 760, THE J
ELLET SURVEY, ABSTRACT NUMBER 296, AND THE W. RATTAN SURVEY, ABSTRACT NUMBER 752, COLLIN
COUNTY, TEXAS, BEING ALL OF THAT LAND DESCRIBED IN DEED TO MM ANNA 325, LLC TRACT 1
RECORDED IN INSTRUMENT NUMBER 20190411000386110 OF THE OFFICIAL PUBLIC RECORDS OF
COLLIN COUNTY, TEXAS (O.P.R.C.C.T.) AND BEING MORE PARTICULARLY DESCRIBED BY METES AND
BOUNDS AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY LINE OF SAID MM ANNA 325, LLC TRACT 1 AND BEING IN THE
NORTH LINE OF THAT TRACT OF LAND DESCRIBED IN DEED TO CADG HURRICANE CREEK, LLC TRACT 2
RECORDED IN INSTRUMENT NUMBER 201505290000631020 OF SAID O.P.R.C.C.T.;
THENCE N 00' 42' 12" W, 232.26 FEET;
THENCE S 88' 18' 50" W, 793.96 FEET TO THE SOUTH LINE OF SAID MM ANNA 325, LLC TRACT 1 AND
BEING IN THE NORTHEAST CORNER SAID CADG HURRICANE CREEK LLC (TRACT 1);
THENCE ALONG THE COMMON LINE BETWEEN SAID MM ANNA 325, LLC TRACT 1 AND SAID CADG
HURRICANE CREEK LLC (TRACT 1) THE FOLLOWING BEARINGS AND DISTANCES:
S 89° 05' 29" W, 1757.67 FEET;
S 88° 18' 31" W, 742.84 FEET;
S 88° ST 33" W, 427.28 FEET;
THENCE DEPARTING SAID CADG HURRICANE CREEK, LLC TRACT 1 ALONG THE COMMON LINE BETWEEN
SAID MM ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO BLUE SPRUCE L.P.
RECORDED IN INSTRUMENT NUMBER 19940826000793830 OF THE O.P.R.C.C.T. THE FOLLOWING
BEARINGS AND DISTANCES:
N 61° 49' 20" E, 205.61 FEET;
N 19° 24' 17" E, 181.73 FEET;
N 38° 49' 43" E, 172.63 FEET;
N 20° 25' 25" E, 121.13 FEET;
N 49° 53' 58" E, 215.37 FEET;
N 04° 32' 42" E, 69.40 FEET;
THENCE N 30° 41' 24" W, 236.43 FEET DEPARTING SAID BLUE SPRUCE L.P. TRACT ALONG THE COMMON
LINE OF SAID MM ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO KIMBERLY
POWELL RECORDED IN VOLUME 5820 PAGE 2130 OF THE O.P.R.C.C.T.;
THENCE CONTINUING ALONG SAID MM ANNA 325, LLC TRACT 1 AND SAID KIMBERLY POWELL TRACT
THE FOLLOWING BEARINGS AND DISTANCES:
N 21° 14' 27" W, 129.45 FEET;
N 11° 58' 09" W, 106.75 FEET;
N 09° 26' 49" W, 132.42 FEET;
N 17° 32' 12" W, 108.70 FEET;
THENCE N 03' 35' 21" E, 118.10 FEET DEPARTING SAID KIMBERLY POWELL TRACT ALONG THE COMMON
LINE OF SAID MM ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO HARRISON
AND JANET SMITH RECORDED IN INSTRUMENT NUMBER 19920612000392310 OF THE O.P.R.C.C.T.;
THENCE CONTINUING ALONG SAID MM ANNA 325, LLC TRACT 1 AND SAID KIMBERLY POWELL TRACT
THE FOLLOWING BEARINGS AND DISTANCES:
N 16° 24' 37" E, 135.67 FEET;
N 06° 20' 57" E, 127.72 FEET;
N 18° 30' 44" E, 70.24 FEET;
N 10° 53' 53" E, 77.78 FEET;
N 19° 15' 05" E, 240.38 FEET;
THENCE DEPARTING SAID HARRISON AND JANET SMITH TRACT ALONG THE COMMON LINE OF SAID MM
ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO DASARA, LLC RECORDED IN
INSTRUMENT NUMBER 20150123000077570 OF THE O.P.R.C.C.T. THE FOLLOWING BEARINGS AND
DISTANCES:
N 59° 17' 04"
E, 231.36 FEET;
N 39° 06' 49"
E, 113.71 FEET;
N 18° 28' 30"
E, 79.37 FEET;
N 45° 20' 55"
E, 130.09 FEET;
N 24° 01' 10"
E, 163.50 FEET;
N 29° 16' 45"
E, 139.03 FEET;
N 07° 19' 23"
W, 145.67 FEET;
N 22° 22' 47"
E, 72.91 FEET;
N 66° 09' 44"
E, 68.86 FEET;
N 49° 46' 52"
E, 125.19 FEET;
N 25° 25' 25"
E, 105.50 FEET;
N 41° 12' 53" E, 204.93 FEET;
N 44° 25' 31" E, 122.72 FEET;
N 40° 33' 22" E, 129.29 FEET;
N 01° 34' 54" E, 105.14 FEET;
THENCE N 30° 43' 16" E, 12.80 FEET DEPARTING SAID DASARA, LLC TRACT ACROSS THE COMMON LINE
OF SAID MM ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO DONNA PEELER
RECORDED IN VOLUME 4972 PAGE 5535 OF THE O.P.R.C.C.T.;
THENCE DEPARTING SAID DONNA PEELER TRACT ALONG THE COMMON LINE OF SAID MM ANNA 325,
LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO RISLAND MANTUA LLC RECORDED IN
INSTRUMENT NUMBER 20180625000783630 OF THE O.P.R.C.C.T. THE FOLLOWING BEARINGS AND
DISTANCES:
N 88° 46' 52" E, 274.56 FEET;
N 89° 03' 01" E, 938.03 FEET;
THENCE DEPARTING SAID RISLAND MANTUA LLC TRACT ALONG THE COMMON LINE OF SAID MM ANNA
325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO HURRICANE CREEK ESTATES
(UNRECORDED) THE FOLLOWING BEARINGS AND DISTANCES:
S 02° 31' 07" E, 46.18 FEET;
S 00° 43' S5" E, 239.62 FEET;
S 00° 54' 34" E, 240.98 FEET;
S 00° 35' 30" E, 240.11 FEET;
S 00° 46' 25" E, 193.73 FEET;
S 00° 41' 51" E, 159.37 FEET;
S 02° 15' 50" W, 136.17 FEET;
S 00° 41' 12" E, 117.45 FEET;
N 43° 06' S5" E, 28.85 FEET;
N 36° 57' 57" E, 59.11 FEET;
S 81° 37' 00" E, 76.35 FEET;
N 64° 47' 48" E, 51.43 FEET;
S 23° 02' 34" E, 61.07 FEET;
N 53° 19' 07" E, 45.87 FEET;
S 82° 24' 22" E, 25.36 FEET;
S 39° 57' 49" E, 56.11 FEET;
S 48° 02' 59" E, 22.02 FEET;
THENCE DEPARTING SAID HURRICANE CREEK ESTATES TRACT ALONG THE COMMON LINE OF SAID MM
ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN PLAT TO URBAN CROSSING BLOCK B
TRACT RECORDED IN INSTRUMENT NUMBER 2013-568 OF THE PLAT RECORDS, COLLIN COUNTY, TEXAS
(P.R.C.C.T.) THE FOLLOWING BEARINGS AND DISTANCES:
S 02° 04' 20" E, 28.82 FEET;
S 00° 05' 05" E, 119.18 FEET;
S 89° 47' 13" E, 602.59 FEET;
N 88° 59' 00" E, 933.16 FEET;
N 88° 55' 42" E, 491.23 FEET;
THENCE S 04' 03' 22" E, 703.80 FEET DEPARTING SAID URBAN CROSSING BLOCK B TRACT ALONG THE
COMMON LINE OF SAID MM ANNA 325, LLC TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO
SHEIKH ALAM TRACT RECORDED IN VOLUME 4335 PAGE 955 OF THE O.P.R.C.C.T. TO A 5/8 INCH IRON
ROD STAMPED "PELOTON" FOUND;
THENCE DEPARTING SAID SHEIKH ALAM TRACT ALONG THE COMMON LINE OF SAID MM ANNA 325, LLC
TRACT 1 AND THAT TRACT OF LAND DESCRIBED IN DEED TO MANTUA 30 PARTNERS, LTD TRACT
RECORDED IN INSTRUMENT NUMBER 20201022001847220 OF THE O.P.R.C.C.T. THE FOLLOWING
BEARINGS AND DISTANCES:
S 88° 44' 00" W, 60.25 FEET FOR THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE OF 99.55 FEET, THROUGH A CENTRAL
ANGLE OF 03° 42' 13", HAVING A RADIUS OF 1,540.00 FEET, AND A LONG CHORD WHICH BEARS S 13°
52' 00" W, 99.53 FEET;
S 15° 43' 07" W, 512.37 FEET FOR THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE OF 504.39 FEET, THROUGH A CENTRAL
ANGLE OF 30° 06' 13", HAVING A RADIUS OF 960.00 FEET, AND A LONG CHORD WHICH BEARS S 00° 40'
00" W, 498.61 FEET;
S 14° 23' 07" E, 120.30 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE OF 101.47 FEET, THROUGH A CENTRAL
ANGLE OF 12' 30' 04", HAVING A RADIUS OF 465.07 FEET, AND A LONG CHORD WHICH BEARS S 08° 14'
28" E, 101.27 FEET;
S 01° 59' 25" E, 283.25 FEET;
THENCE S 89' 04' 42" W, 1,264.39 FEET TO THE POINT OF BEGINNING AND CONTAINING 12,621,555
SQUARE FEET OR 289.751 ACRES MORE OR LESS.
SAVE AND EXCEPT
TRACT 1 (65.070 ACRES)
BEING THAT CERTAIN TRACT OF LAND SITUATED IN THE J.M. KINCADE SURVEY, ABSTRACT NUMBER 509,
THE J. BOYLE SURVEY, ABSTRACT NUMBER 105, AND THE W. RATTAN SURVEY, ABSTRACT NUMBER 752,
COLLIN COUNTY, TEXAS, BEING A PORTION OF THAT TRACT OF LAND DESCRIBED IN DEED TO MM ANNA
325, LLC TRACT 1 RECORDED IN INSTRUMENT NUMBER 20190411000386110 OF THE OFFICIAL PUBLIC
RECORDS OF COLLIN COUNTY, TEXAS (O.P.R.C.C.T.) AND BEING MORE PARTICULARLY DESCRIBED BY
METES AND BOUNDS AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY SOUTHWEST CORNER OF SAID TRACT OF LAND TO MM ANNA
325, LLC BEING IN THE NORTH LINE OF THAT TRACT OF LAND DESCRIBED BY DEED TO CADG HURRICANE
CREEK, LLC RECORDED IN INSTRUMENT NUMBER 201SOS290000631020 OF SAID O.P.R.C.C.T.;
THENCE N 00° 42' 12" W, 287.34 FEET WITH THE COMMON LINE OF SAID CADG TRACT AND SAID MM
ANNA 325 TRACT;
N 89° 17' 48" E, 110.00 FEET;
N 00° 42' 12" W, 31.43 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 302.23 FEET, THROUGH A
CENTRAL ANGLE OF 32° 59' 01", HAVING A RADIUS OF 525.00 FEET, AND A LONG CHORD WHICH
BEARS N 15' 47' 19" E, 298.07 FEET;
N 32° 16' 49" E, 45.65 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 7.44 FEET, THROUGH A CENTRAL
ANGLE OF 00' 30' 48", HAVING A RADIUS OF 830.00 FEET, AND A LONG CHORD WHICH BEARS N
57° 58' 35" W, 7.44 FEET;
N 57' 43' 11" W, 162.85 FEET;
S 32° 16' 50" W, 605.17 FEET;
THENCE S 88' 18' S0" W, 111.81 FEET TO THE NORTH LINE OF SAID CADG TRACT;
THENCE DEPARTING SAID NORTH LINE OVER AND ACROSS SAID MM ANNA 325 TRACT THE FOLLOWING
BEARINGS AND DISTANCES:
N 45° 08' S8" W, 366.07 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 520.46 FEET, THROUGH A CENTRAL
ANGLE OF 22° 45' S0", HAVING A RADIUS OF 1,309.97 FEET, AND A LONG CHORD WHICH BEARS
N 40° 23' 55" E, 517.04 FEET;
N 60' 58' S9" W, 120.00 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 923.67 FEET, THROUGH A
CENTRAL ANGLE OF 44° 28' 21", HAVING A RADIUS OF 1,190.00 FEET, AND A LONG CHORD
WHICH BEARS S 51' 15' 12" W, 900.66 FEET;
S 16° 30' 37" E, 120.00 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 27.21 FEET, THROUGH A CENTRAL
ANGLE OF 01' 11' 24", HAVING A RADIUS OF 1,310.00 FEET, AND A LONG CHORD WHICH BEARS
S 74° 05' 05" W, 27.21 FEET;
S 31° 32' 06" W, 43.31 FEET;
S 12° 15' 52" E, 4.77 FEET TO THE NORTH LINE OF SAID CADG TRACT;
THENCE S 89' 05' 29" W, 95.27 FEET;
THENCE DEPARTING SAID NORTH LINE OVER AND ACROSS SAID TRACT OF LAND TO MM ANNA 325, LLC
THE FOLLOWING BEARINGS AND DISTANCES:
N 56° 03' 28" W, 23.94 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 27.22 FEET, THROUGH A CENTRAL
ANGLE OF 01' 11' 26", HAVING A RADIUS OF 1,310.00 FEET, AND A LONG CHORD WHICH BEARS
S 81° 23' S5" W, 27.22 FEET TO A POINT OF INTERSECTION WITH A NON -TANGENTIAL LINE.
N 08° 00' 22" W, 120.00 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 147.41 FEET, THROUGH A
CENTRAL ANGLE OF 07° 05' S1", HAVING A RADIUS OF 1,190.00 FEET, AND A LONG CHORD
WHICH BEARS S 85° 32' 34" W, 147.31 FEET;
S 89° 05' 29" W, 1,229.11 FEET;
N 45° 54' 31" W, 42.43 FEET;
N 00° 54' 31" W, 48.75 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 139.73 FEET, THROUGH A
CENTRAL ANGLE OF 12° 07' 49", HAVING A RADIUS OF 660.00 FEET, AND A LONG CHORD WHICH
BEARS N 05' 09' 24" E, 139.47 FEET;
N 11° 13' 18" E, 45.96 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 101.09 FEET, THROUGH A
CENTRAL ANGLE OF 07° 14' 23", HAVING A RADIUS OF 800.00 FEET, AND A LONG CHORD WHICH
BEARS N 14' 50' 30" E, 101.02 FEET;
N 20° 08' 12" E, 50.00 FEET;
N 21° 08' 00" E, 138.53 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 304.73 FEET, THROUGH A CENTRAL
ANGLE OF 27° 42' S1", HAVING A RADIUS OF 630.00 FEET, AND A LONG CHORD WHICH BEARS N
07° 16' 34" E, 301.77 FEET;
N 83° 25' 09" E, 130.00 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 32.75 FEET, THROUGH A CENTRAL
ANGLE OF 02' 28' 08", HAVING A RADIUS OF 760.00 FEET, AND A LONG CHORD WHICH BEARS N
07° 48' S5" W, 32.75 FEET;
N 80° 57' 01" E, 50.00 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 20.00 FEET, THROUGH A CENTRAL
ANGLE OF 01' 24' S3", HAVING A RADIUS OF 810.00 FEET, AND A LONG CHORD WHICH BEARS S
08° 20' 32" E, 20.00 FEET;
N 83° 35' 40" E, 67.70 FEET;
S 87° 45' 57" E, 468.26 FEET;
S 87° 55' 48" E, 10.60 FEET;
N 01° 44' 03" E, 20.00 FEET;
S 88° 15' S7" E, 50.00 FEET;
S 01° 44' 03" W, 23.48 FEET;
N 89° 15' 16" E, 160.00 FEET;
N 84° 17' S9" E, 91.31 FEET;
N 81° 10' 42" E, 54.72 FEET;
N 75° 20' 06" E, 60.71 FEET;
N 70° 47' 30" E, 41.34 FEET;
N 66° 36' 18" E, 49.56 FEET;
N 61° 16' S0" E, 59.24 FEET;
N 56° 58' 45" E, 50.71 FEET;
N 55° 47' 22" E, 49.81 FEET;
N 58° 06' 52" E, 47.94 FEET;
N 57° 16' 20" E, 66.93 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 32.90 FEET, THROUGH A CENTRAL
ANGLE OF 01' 34' 15", HAVING A RADIUS OF 1,200.00 FEET, AND A LONG CHORD WHICH BEARS
N 28° 47' 28" W, 32.90 FEET TO A POINT OF INTERSECTION WITH A NON -TANGENTIAL LINE.
N 61° 59' 39" E, 50.00 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 45.85 FEET, THROUGH A CENTRAL
ANGLE OF 02' 17' 04", HAVING A RADIUS OF 1,150.00 FEET, AND A LONG CHORD WHICH BEARS
S 29° 08' 53" E, 45.85 FEET;
N 59° 42' 35" E, 120.15 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 434.10 FEET, THROUGH A CENTRAL
ANGLE OF 24° 08' S2", HAVING A RADIUS OF 1,030.00 FEET, AND A LONG CHORD WHICH BEARS
S 42° 21' 09" E, 430.90 FEET;
S 54° 25' 35" E, 89.54 FEET;
N 24° 51' 49" E, 70.52 FEET;
S 64° 05' 47" E, 100.01 FEET;
S 65° 13' 30" E, 75.00 FEET;
N 69° 45'54" E, 42.43 FEET;
N 24° 45'54" E, 22.77 FEET;
S 65° 14' 06" E, 120.00 FEET;
S 24° 45' 54" W, 23.65 FEET;
S 19° 10' 53" E, 43.20 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 96.46 FEET, THROUGH A CENTRAL
ANGLE OF 05' 31' 37", HAVING A RADIUS OF 1,000.00 FEET, AND A LONG CHORD WHICH BEARS
S 59° 58' 35" E, 96.43 FEET;
N 24° 45' 54" E, 31.64 FEET;
S 58° 13' 31" E, 50.38 FEET;
S 24° 45' 54" W, 33.83 FEET;
S 55° 20' 20" E, 104.47 FEET;
S 57° 43' 11" E, 272.85 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, THROUGH 33° 03' S7", 444.37 FEET HAVING A RADIUS OF
770.00 FEET, AND A LONG CHORD WHICH BEARS S 74° 15' 09" E, 438.23 FEET TO THE
BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 49.91 FEET, THROUGH A CENTRAL
ANGLE OF 07' 37' 35", HAVING A RADIUS OF 375.00 FEET, AND A LONG CHORD WHICH BEARS N
07° 38' 20" E, 49.88 FEET;
S 78° 32' S2" E, 50.00 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, THROUGH 06° 37' 24", 37.57 FEET HAVING A RADIUS OF 325.00
FEET, AND A LONG CHORD WHICH BEARS S 08° 08' 26" W, 37.55 FEET TO THE BEGINNING OF A
CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 71.20 FEET, THROUGH A CENTRAL
ANGLE OF 05' 17' S3", HAVING A RADIUS OF 770.00 FEET, AND A LONG CHORD WHICH BEARS N
82° 48' 59" E, 71.18 FEET;
N 80° 10' 03" E, 330.53 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 56.36 FEET, THROUGH A CENTRAL
ANGLE OF 03° 06' 19", HAVING A RADIUS OF 1,040.00 FEET, AND A LONG CHORD WHICH BEARS
N 04° 30' 13" W, 56.36 FEET TO A POINT OF INTERSECTION WITH A NON -TANGENTIAL LINE.
N 87° 02' S6" E, 80.00 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 191.58 FEET, THROUGH A CENTRAL
ANGLE OF 11' 26' 03", HAVING A RADIUS OF 960.00 FEET, AND A LONG CHORD WHICH BEARS S
08° 40' 05" E, 191.26 FEET;
S 14° 23' 07" E, 121.17 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 100.60 FEET, THROUGH A
CENTRAL ANGLE OF 12° 23' 42", HAVING A RADIUS OF 465.00 FEET, AND A LONG CHORD WHICH
BEARS S 08' 11' 16" E, 100.40 FEET;
S 01° 59' 25" E, 283.25 FEET;
THENCE S 89' 04' 42" W, 1,264.39 FEET TO THE POINT OF BEGINNING AND CONTAINING 2,834,457
SQUARE FEET OR 65.070 ACRES MORE OR LESS.
SAVE AND EXCEPT
TRACT 2 (44.332 ACRES)
BEING THAT CERTAIN TRACT OF LAND SITUATED IN THE J. BOYLE SURVEY, ABSTRACT NUMBER 105, AND
THE J. ELLET SURVEY, ABSTRACT NUMBER 296, COLLIN COUNTY, TEXAS, BEING A PORTION OF THAT
TRACT OF LAND DESCRIBED IN DEED TO MM ANNA 325, LLC TRACT 1 RECORDED IN INSTRUMENT
NUMBER 20190411000386110 OF THE OFFICIAL PUBLIC RECORDS OF COLLIN COUNTY, TEXAS
(O.P.R.C.C.T.) AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY SOUTHWEST CORNER IN PLAT TO URBAN CROSSING RECORDED
IN INSTURMENT NUMBER 20131227010003710 OF THE PLAT RECORDS OF COLLIN COUNTY, TEXAS
(P.R.C.C.T.) AND BEING IN THE NORTH LINE OF SAID MM ANNA 325 TRACT;
THENCE FOLLOWING THE SOUTH LINE OF SAID URBAN CROSSING TRACT AND THE NORTH LINE OF SAID
MM ANNA 325 TRACT THE FOLLOWING BEARINGS AND DISTANCES:
S 89° 47' 13" E, 602.59 FEET;
N 88° 59' 00" E, 461.54 FEET;
THENCE DEPARTING SAID COMMON LINE OVER AND ACROSS SAID MM ANNA 325 TRACT THE
FOLLOWING BEARINGS AND DISTANCES:
S 01° 10' 22" E, 231.65 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 1,023.35 FEET, THROUGH A
CENTRAL ANGLE OF 31° 31' 24", HAVING A RADIUS OF 1860.00 FEET, AND A LONG CHORD
WHICH BEARS S 40' 31' 36" W, 1,010.49 FEET;
S 24° 45' 54" W, 220.34 FEET;
S 24° 45' 54" W, 22.77 FEET;
S 69° 45' 54" W, 42.43 FEET;
N 65' 13' 30" W, 75.00 FEET;
N 64' 05' 47" W, 100.01 FEET;
S 24° 51' 49" W, 70.52 FEET;
N 54° 25' 35" W, 89.54 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 434.10 FEET, THROUGH A
CENTRAL ANGLE OF 24° 08' S2", HAVING A RADIUS OF 1,030.00 FEET, AND A LONG CHORD
WHICH BEARS N 42' 21' 09" W, 430.90 FEET;
S 59° 42' 35" W, 120.15 FEET TO THE BEGINNING OF A CURVFE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, HAVING AN ARC DISTANCE 45.85 FEET, THROUGH A CENTRAL
ANGLE OF 02' 17' 04", HAVING A RADIUS OF 1150.00 FEET, AND A LONG CHORD WHICH BEARS
N 29' 08' S3" W, 45.85 FEET;
S 61° 59' 39" W, 50.00 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, HAVING AN ARC DISTANCE 32.90 FEET, THROUGH A CENTRAL
ANGLE OF 01' 34' 15", HAVING A RADIUS OF 1,200.00 FEET, AND A LONG CHORD WHICH BEARS
S 28° 47' 28" E, 32.90 FEET;
S 57° 16' 20" W, 66.93 FEET;
S 58° 06' 52" W, 47.94 FEET;
S 55° 47' 22" W, 49.81 FEET;
S 56° 58' 45" W, 50.71 FEET;
S 61° 16' S0" W, 59.24 FEET;
S 66° 36' 18" W, 49.56 FEET;
S 70° 47' 30" W, 41.34 FEET;
S 75° 20' 06" W, 60.71 FEET;
S 81° 10' 42" W, 54.72 FEET;
S 84° 17' 59" W, 91.31 FEET;
S 89° 15' 16" W, 160.00 FEET;
N 01° 44' 03" E, 23.48 FEET;
N 01° 44' 03" E, 104.07 FEET;
S 88° 15' 57" E, 10.50 FEET;
N 01° 44' 03"
E, 50.00 FEET;
N 88° 15' S7"
W, 109.33 FEET;
N 01° 44' 03"
E, 130.00 FEET;
N 00° 53' 08"
E, 401.03 FEET;
N 68° 31' 37"
E, 311.47 FEET;
N 27° 44' 36"
E, 271.58 FEET;
N 78° 55' 21"
E, 359.52 FEET;
N 89° 19' 48"
E, 60.00 FEET;
N 89° 19' 48"
E, 369.75 FEET TO THE WEST LINE OF SAID URBAN CROSSING TRACT;
THENCE S 00' 05' 05"
E, 5.70 FEET TO THE POINT OF BEGINNING AND CONTAINING 1,931,085 SQUARE
FEET OR 44.332 ACRES
MORE OR LESS.
LANDOWNER AGREEMENT - EXHIBIT II
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
This DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (as
it may be amended from time to time, this "Declaration") is made as of July 27, 2021 by MM Anna
325, LLC a Texas limited liability company (the "Landowner").
RECITALS:
A. The Landowner holds record title to that portion of the real property located in Collin
County, Texas, which is described in the attached Exhibit I (the "Landowner's Parcel")
located within the Sherley Tract Public Improvement District No. 2.
B. The City Council of the City of Anna (the "City Council") upon a petition requesting the
establishment of a public improvement district covering the property within the District to
be known as the Sherley Tract Public Improvement District No. 2 (the "District") by the
then record owners taxable real property representing more than fifty percent (50%) of the
appraised value of the real property liable for assessment (as determined by the most recent
certified appraisal roll for Collin County) in the area requested to be included in the District
and the record owners of taxable real property that constitute more than fifty percent (50
%) of all of the area of all taxable real property that are liable for assessment within the
area requested to be included in the District, created such District, in accordance with the
Public Improvement District Assessment Act, Chapter 372, Texas Local Government
Code, as amended (the "PID Act").
C. The City Council has adopted an assessment ordinance to levy assessments for certain
public improvements (including all exhibits and attachments thereto, the "Assessment
Ordinance") and the Sherley Tract Public Improvement District No. 2 Service and
Assessment Plan included as an exhibit to the Assessment Ordinance (as amended from
time to time, the "Service and Assessment Plan"), and has levied the assessments (the
"Assessments") on property in the Major Improvement Area (as defined in the Service and
Assessment Plan) of the District.
D. The statutory notification required by Texas Property Code, Section 5.014, as amended, to
be provided by the seller of residential property that is located in a public improvement
district established under Chapter 372 of the Texas Local Government Code, as amended,
to the purchaser, is incorporated into this Declaration.
DECLARATIONS:
NOW, THEREFORE, the Landowner hereby declares that the Landowner's Parcel is and
shall be subject to, and hereby imposes on the Landowner's Parcel, the following covenants,
conditions and restrictions:
Acceptance and Approval of Assessments and Lien on Property:
(a) Landowner accepts each Assessment levied on the Landowner's Parcel owned by
such Landowner.
(b) The Assessment (including any reassessment, the expense of collection, and
reasonable attorney's fees, if incurred) is (a) a first and prior lien (the "Assessment
Lien") against the property assessed, superior to all other liens or claims except for
liens or claims for state, county, school district or municipality ad valorem property
taxes whether now or hereafter payable, and (b) a personal liability of and charge
against the owners of the property to the extent of their ownership regardless of
whether the owners are named. The Assessment Lien is effective from the date of
the Assessment Ordinance until the Assessments are paid and may be enforced by
the City in the same manner as an ad valorem property tax levied against real
property that may be enforced by the City. The owner of any assessed property
may pay, at any time, the entire Assessment levied against any such property.
Foreclosure of an ad valorem property tax lien on property within the Major
Improvement Area of the District will not extinguish the Assessment or any unpaid
but not yet due Annual Installments (as defined in the Service and Assessment Plan)
of the Assessment, and will not accelerate the due date for any unpaid and not yet
due Annual Installments of the Assessment.
It is the clear intention of all parties to this Declaration, that the Assessments,
including any Annual Installments of the Assessments (as such Annual Installments
may be adjusted, decreased or extended), are covenants that run with the
Landowner's Parcel and specifically binds the Landowner, its successors and
assigns.
In the event of delinquency in the payment of any Annual Installment of the
Assessment, the City is empowered to order institution of an action in district court
to foreclose the related Assessment Lien, to enforce personal liability against the
owner of the real property for the Assessment, or both. In such action the real
property subject to the delinquent Assessment may be sold at judicial foreclosure
sale for the amount of such delinquent property taxes and Assessment, plus
penalties, interest and costs of collection.
2. Landowner or any subsequent owner of the Landowner's Parcel waives:
(a) any and all defects, irregularities, illegalities or deficiencies in the proceedings
establishing the District and levying and collecting the Assessments or the annual
installments of the Assessments;
(b) any and all notices and time periods provided by the PID Act including, but not
limited to, notice of the establishment of the District and notice of public hearings
regarding the levy of Assessments by the City Council concerning the Assessments;
(c) any and all defects, irregularities, illegalities or deficiencies in, or in the adoption
of, the Assessment Ordinance by the City Council;
(d) any and all actions and defenses against the adoption or amendment of the Service
and Assessment Plan, the City's finding of a `special benefit' pursuant to the PID
Act and the Service and Assessment Plan, and the levy of the Assessments; and
(e) any right to object to the legality of any of the Assessments or the Service and
Assessment Plan or to any of the previous proceedings connected therewith which
occurred prior to, or upon, the City Council's levy of the Assessments.
3. Amendments: This Declaration may be terminated or amended only by a document duly
executed and acknowledged by the then -current owner(s) of the Landowner's Parcel and
the City. No such termination or amendment shall be effective until a written instrument
setting forth the terms thereof has been executed by the parties by whom approval is
required as set forth above and recorded in the Real Property Records of Collin County,
Texas.
4. Third Party Beneficiary: The City is a third -party beneficiary to this Declaration and
may enforce the terms hereof.
5. Notice to Subsequent Purchasers: Upon the sale of a dwelling unit within the District,
the purchaser of such property shall be provided a written notice that reads substantially
similar to the following:
TEXAS PROPERTY CODE SECTION 5.014
NOTICE OF OBLIGATION TO PAY PUBLIC IMPROVEMENT DISTRICT
ASSESSMENT TO THE CITY OF ANNA, COLLIN COUNTY, TEXAS
CONCERNING THE PROPERTY AT [Street Address]
As the purchaser of this parcel of real property, you are obligated to pay an assessment to
the City of Anna, Texas, for improvement projects undertaken by a public improvement
district under Chapter 372 of the Texas Local Government Code, as amended. The
assessment may be due in periodic installments.
The amount of the assessment against your property may be paid in full at any time together
with interest to the date of payment. If you do not pay the assessment in full, it will be due
and payable in annual installments (including interest and collection costs). More
information concerning the amount of the assessment and the due dates of that assessment
may be obtained from the City of Anna, 101 S. Powell Parkway, Anna, Texas 75409.
Your failure to pay the assessment or the annual installments could result in a lien on and
in the foreclosure of your property.
Signature of Purchaser(s)
Date:
The seller shall deliver this notice to the purchaser before the effective date of an executory
contract binding the purchaser to purchase the property. The notice may be given
separately, as part of the contract during negotiations, or as part of any other notice the
seller delivers to the purchaser. If the notice is included as part of the executory contract
or another notice, the title of the notice prescribed by this section, the references to the
street address and date in the notice, and the purchaser's signature on the notice may be
omitted.
EXECUTED by the undersigned on the date set forth below to be effective as of the date first
above written.
MM Anna 325, LLC,
a Texas limited liability company
By: MMM Ventures, LLC,
a Texas limited liability company
Its Manager
By: 2M Ventures, LLC,
a Delaware limited liability company
Its Manager
By:
Name:
Its:
STATE OF TEXAS §
COUNTY OF DALLAS §
Mehrdad Moayedi
Manager
This instrument was acknowledged before me on the day of July, 2021 by Mehrdad
Moayedi, Manager of 2M Ventures, LLC, as Manager of MMM Ventures, LLC, as Manager of
MM Anna 325, LLC, a Texas limited liability company, on behalf of said company.
Notary Public, State of Texas
LANDOWNER AGREEMENT - EXHIBIT III
HOMEBUYER EDUCATION PROGRAM
As used in this Exhibit III, the recorded Notice of the Authorization and Establishment of the
Sherley Tract Public Improvement District No. 2 and the Declaration of Covenants, Conditions
and Restrictions in Exhibit II of this Agreement are referred to as the "Recorded Notices."
1. Any Landowner who is a Builder shall attach the Recorded Notices and the final Major
Improvement Area Assessment Roll for such Major Improvement Area Assessed Property (or if
the Major Improvement Area Assessment Roll is not available for such Major Improvement Area
Assessed Property, then a schedule showing the maximum 30 year payment for such Major
Improvement Area Assessed Property) as an addendum to any residential homebuyer's contract.
2. Any Landowner who is a Builder shall provide evidence of compliance with Paragraph 1
above, signed by such residential homebuyer, to the City upon the City's request.
3. Any Landowner who is a Builder shall prominently display signage in its model homes, if
any, substantially in the form of the Recorded Notices.
4. If prepared and provided by the City, any Landowner who is a Builder shall distribute
informational brochures about the existence and effect of the District in prospective homebuyer
sales packets.
5. Any Landowner who is a Builder shall include Assessments in estimated property taxes, if
such Builder estimates monthly ownership costs for prospective homebuyers.
EXHIBIT E
CONSTRUCTION, FUNDING AND ACQUISITION AGREEMENT
E-1
SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO. 2 MAJOR
IMPROVEMENT AREA CONSTRUCTION, FUNDING AND ACQUISITION
AGREEMENT
This SHERLEY TRACT PUBLIC IMPROVEMENT DISTRICT NO. 2 MAJOR
IMPROVEMENT AREA CONSTRUCTION, FUNDING AND ACQUISITION
AGREEMENT (this "Agreement"), dated as of July 27, 2021 is by and between the CITY OF
ANNA, TEXAS, a home -rule municipality of the State of Texas (the "C"), and MM ANNA
325, LLC, a Texas limited liability company, (the "Developer"). The Developer and the City are
sometimes individually referred to as a "Parry" and collectively as the "Parties."
ARTICLE I
DEFINITIONS
The following terms shall have the meanings ascribed to them in this Article I for purposes
of this Agreement. Unless otherwise indicated, any other terms, capitalized or not, when used
herein shall have the meanings ascribed to them in the Indenture (as hereinafter defined).
"Act" means the Public Improvement District Assessment Act, Texas Local Government
Code, Chapter 372, as amended.
"Actual Costs" means, with respect to each Major Improvement Area Project, the costs of
the Major Improvement Area Project actually paid or incurred for construction and installation of
the Major Improvement Area Project.
"Administrator" means, initially, P3Works, LLC, or any other individual or entity
designated by the City to administer the District.
"Annual Service Plan Update" means the annual update to the Service and Assessment
Plan conducted by the Administrator pursuant to the Service and Assessment Plan.
"Authorized Improvements" means the improvements authorized by Section 372.003 of
the Act, including those listed in Section III of the Service and Assessment Plan. An individual
Authorized Improvement, including a completed segment or part, shall be referred to as an
Authorized Improvement.
"Bond Ordinance" means the ordinance adopted by the City Council on July 27, 2021
authorizing the issuance of the Bonds pursuant to the Indenture.
"Bonds" means the City's bonds designated "City of Anna, Texas, Special Assessment
Revenue Bonds, Series 2021 (Sherley Tract Public Improvement District No. 2 Major
Improvement Area Project)".
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 1
"Budgeted Costs" means the anticipated, agreed upon costs of the Major Improvement
Area Projects as shown in the Service and Assessment Plan.
"Certification for Payment" means a certificate, substantially in the form of Exhibit B
hereto or otherwise agreed to by the Developer, the Administrator and the City Representative,
executed by the Developer and approved by the City Representative, provided each month to the
City Representative and the Trustee, specifying the amount of work performed and the amount
charged for that work, including materials and labor costs, presented to the Trustee to request
payment from the Major Improvement Area Bond Improvement Account or the Major
Improvement Area Developer Improvement Account of the Project Fund, as applicable, for Actual
Costs of Major Improvement Area Projects under the Indenture.
"City Inspector" means an individual employed by or an agent of the City whose job is,
in part or in whole, to inspect infrastructure to be owned by the City for compliance with all rules
and regulations applicable to the development and the infrastructure inspected.
"City Manager" means the City Manager of the City, or its designee.
"City Representative" means that official or agent of the City authorized by the City
Council to undertake the action referenced herein. As of the date hereof, the City Manager, and/or
its designees are the authorized City Representatives.
"Closing Disbursement Request" means the certificate, substantially in the form of
Exhibit A hereto or otherwise mutually agreed to by the Developer, Administrator and City
Representative, executed by an engineer, construction manager or other person or entity acceptable
to the City, as evidenced by the signature of a City Representative (as defined in the Indenture),
specifying the amounts to be disbursed for the costs related to the creation of the District and the
costs of issuance of the Bonds.
"Construction Contracts" means the contracts for the construction of a Major
Improvement Area Project. "Construction Contract" means any one of the Construction
Contracts.
"Cost" means the Budgeted Costs or the cost of a Major Improvement Area Project as
reflected in a Construction Contract, if greater than the Budgeted Costs.
"Cost of Issuance Account of the Project Fund" means the account of such name in the
Project Fund created under Section 6.1 of the Indenture.
"Cost Overrun" means, with respect to each Major Improvement Area Project, the Actual
Cost of such Major Improvement Area Project in excess of the Budgeted Cost.
"Development Agreement" means that certain Sherley Tract Subdivision Improvement
Agreement executed by and between the City, BFB ANA 40 Acres, LLC, and the Developer,
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 2
effective as of June 9, 2020, as amended by that certain First Amended Sherley Tract Subdivision
Improvement Agreement executed by and between the City and the Developer, effective July 14,
2020, and as may be amended.
"District" shall mean the Sherley Tract Public Improvement District No. 2 established by
the City of Anna, Texas.
"Final Completion" means completion of a Major Improvement Area Project in
compliance with existing City standards for dedication under the City's ordinances and the
Development Agreement.
"Force Majeure" means events or circumstances that are not within the reasonable control
of the Party whose performance is suspended and that could not have been avoided by such Party
with the good faith exercise of good faith, due diligence and reasonable care.
"Indenture" means that certain Indenture of Trust between the City and Regions Bank,
Houston, Texas, as trustee, dated as of August 1, 2021 relating to the Bonds.
"Improvement Area" means specifically defined and designated portions of the District
that are developed in phases, including Major Improvement Area.
"Major Improvement Area" means that portion of the District generally described in
Section II of the Service and Assessment Plan and generally shown in Exhibit A-3 to the Service
and Assessment Plan and as specifically described in Exhibit L-3 to the Service and Assessment
Plan.
"Major Improvement Area Bond Improvement Account" means the account of such
name in the Project Fund created under Section 6.1 of the Indenture.
"Major Improvement Area Projects" means means the pro rata portion of the Major
Improvements allocable to the Major Improvement Area.
"Major Improvements" means the Authorized Improvements that confer special benefit
to the entire District, and as further described in Section III.A and depicted on Exhibit G-2 to the
Service and Assessment Plan.
"Plans" means the plans, specifications, schedules and related construction contracts for
the Major Improvement Area Projects, respectively, approved pursuant to the applicable standards,
ordinances, procedures, policies and directives of the City, the Development Agreement, and any
other applicable governmental entity.
"Project Fund" means the fund, including the accounts created and established under such
fund, where monies from the proceeds of the sale of the Bonds and funds received from the
Developer, excluding those deposited in other funds in accordance with the Indenture, shall be
deposited, and the fund by such name created under the Indenture.
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"Service and Assessment Plan" means Sherley Tract Public Improvement District No. 2
Service and Assessment Plan adopted on July 27, 2021 by the City Council, prepared pursuant to
the Act, as amended and updated from time to time.
ARTICLE II
RECITALS
Section 2.01. The District and the Major Improvement Area Projects.
(a) The City has created the District under the Act for the financing of, among other
things, the acquisition, construction and installation of the Major Improvement Area Projects.
(b) The City has authorized the issuance of the Bonds in accordance with the provisions
of the Act, the Bond Ordinance and the Indenture, a portion of the proceeds of which shall be used,
in part, to finance all or a portion of the Major Improvement Area Projects in accordance with the
terms and limitations of the Development Agreement and the Service and Assessment Plan.
(c) All Major Improvement Area Projects are eligible to be financed with proceeds of
the Bonds to the extent specified in the Indenture and the Service and Assessment Plan.
(d) The proceeds from the issuance and sale of the Bonds and funds received from the
Developer currently with the closing of the Bonds shall be deposited in accordance with the
Indenture.
(e) The Developer will perform or cause to be performed the engineering, construction
and development of the Major Improvement Area Projects for acquisition and acceptance by the
City.
Section 2.02. Agreements. In consideration of the mutual promises and covenants set forth
herein, and for other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the City and the Developer agree that the foregoing recitals, as applicable to each,
are true and correct and further make the agreements set forth herein.
ARTICLE III
FUNDING
Section 3.01. Bonds.
(a) The City, in connection with this Agreement, is proceeding with the issuance and
delivery of the Bonds.
(b) Subject to the Cost Overrun provisions set forth in the Development Agreement
and Section 4.04 of this Agreement, the Bonds will finance all or a portion of the Actual Costs of
the Major Improvement Area Projects as provided for in the Service and Assessment Plan, as may
be updated or amended. The payment of costs from the proceeds of the Bonds for such Major
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Improvement Area Projects shall be made from the Major Improvement Area Bond Improvement
Account and Major Improvement Area Developer Improvement Account of the Project Fund
established under the Indenture, as applicable.
(c) The City's obligation with respect to the payment of the Major Improvement Area
Projects shall be limited to the Budgeted Costs and shall be payable solely from amounts on deposit
for the payment of such costs as provided herein and in the Indenture. The Developer agrees and
acknowledges that it is responsible for all Cost Overruns, Actual Costs and all expenses related to
the Major Improvement Area Projects, qualified, however, by the distribution of Cost Underrun
(as defined in Section 4.04 hereof) monies, as detailed in Section 4.04.
(d) The City shall have no responsibility whatsoever to the Developer with respect to
the investment of any funds held in the Project Fund by the Trustee under the provisions of the
Indenture, including any loss of all or a portion of the principal invested or any penalty for
liquidation of an investment. Any such loss may diminish the amounts available in the Project
Fund to pay the Costs of the Major Improvement Area Projects in the District, including the
Developer to the extent it owns any real property in the District. The obligation of a property owner
in the District to pay Assessments is not in any way dependent on the availability of amounts in
the Project Fund to pay for all or any portion of the Costs of the Major Improvement Area Projects.
(e) The Developer acknowledges that any lack of availability of amounts in the funds
or accounts established in the Indenture to pay the Costs of the Major Improvement Area Projects
shall in no way diminish any obligation of the Developer with respect to the construction of or
contributions for the Major Improvement Area Projects required by this Agreement, the
Development Agreement, or any other agreement to which the Developer is a party or any
governmental approval to which the Developer or any land within the District is subject.
(f) The Developer acknowledges that some funds may not be immediately available
for reimbursement for Actual Costs of the Major Improvement Area Projects submitted and
approved with an approved Certification for Payment. Both parties acknowledge that these
remaining amounts will be disbursed, to the extent of available monies in the Project Fund under
the terms of the Indenture, as money is deposited into the Project Fund for the payment of such
costs. Both Parties acknowledge that the availability of funds in the Project Fund does not relieve
the Developer from its responsibility to construct or ensure the construction of the Major
Improvement Area Projects in accordance with the Development Agreement, the Service and
Assessment Plan, and this Agreement.
Section 3.02. Disbursements and Transfers at Bond Closing.
(a) The City and the Developer agree that from the proceeds of the Bonds and upon
the presentation of evidence satisfactory to the Administrator, the City will cause the Trustee to
pay at closing of the Bonds from the Costs of Issuance Account of the Project Fund and/or the
Major Improvement Area Bond Improvement Account of the Project Fund, an amount not to
exceed the amount set forth in the Indenture to the persons entitled to the payment for costs of
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 5
issuance and payment of costs incurred in the establishment, administration, and operation of the
District as of the delivery of the Bonds, as described in the Service and Assessment Plan, as may
be updated and amended.
Section 3.03 Accounts. In addition to the Costs of Issuance Account, there shall be two
subaccounts, the Major Improvement Area Bond Improvement Account and the Major
Improvement Area Developer Improvement Account, in the Project Fund administered by the
Trustee at the direction of the City Representative:
(a) The Major Improvement Area Bond Improvement Account of the Project Fund.
Certain proceeds from the issuance and sale of the Bonds attributable to the Major Improvement
Area Projects shall be deposited into the Major Improvement Area Bond Improvement Account
of the Project Fund in the amount shown in the Indenture.
(b) The Major Improvement Area Developer Improvement Account of the Project
Fund. On the Closing Date and pursuant to the terms of the Indenture the Developer shall make
an initial deposit to the Major Improvement Area Developer Improvement Account of the Project
Fund in the amount shown in the Indenture.
Section 3.04. Security for the Major Improvement Area Projects. Prior to completion and
conveyance to the City of a Major Improvement Area Project, including a segment, section, or
portion thereof, the Developer or the Developer's contractor shall provide to the City a
maintenance bond, which maintenance bond shall be for a term of two years from the date of final
acceptance of the Major Improvement Area Project. Any surety company through which a bond
is written shall be a surety company duly authorized to do business in the State of Texas, provided
that the City, through the City attorney, shall retain the right to reject any surety company as a
surety for any work hereunder regardless of such company's authorization to do business in Texas.
Approvals by the City shall not be unreasonably withheld or delayed. The Developer shall
construct or cause to be constructed the Major Improvement Area Projects in accordance with the
City's established ordinances, regulations, policies, procedures, specifications, and the
Development Agreement. Prior to City accepting any Major Improvement Area Project and/or
approving a final disbursement for a Major Improvement Area Project, the Developer shall provide
an "all bills paid/no liens" affidavit, in the form provided by the City and shall also provide such
supporting documentation as required by the City, that affirms that all invoices and bills, other
than statutory ten percent (10%) retainage, were paid for the Major Improvement Area Project.
Section 3.05 Disbursements, Generally. All disbursements from the Project Fund shall
be made in accordance with the provisions of the Development Agreement, the Service and
Assessment Plan, this Agreement, and the Indenture.
ARTICLE IV
DEDICATION OF LAND AND CONSTRUCTION OF MAJOR IMPROVEMENT
AREA PROJECTS
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Section 4.01. Duty of Developer to Construct.
(a) All Major Improvement Area Projects shall be constructed by or at the direction of
the Developer in accordance with the Plans and in accordance with this Agreement and the
Development Agreement. The Developer shall perform, or cause to be performed, all of its
obligations and shall conduct, or cause to be conducted, all operations with respect to the
construction of Major Improvement Area Projects in a good, workmanlike and commercially
reasonable manner, with the standard of diligence and care normally employed by duly qualified
persons utilizing their commercially reasonable efforts in the performance of comparable work
and in accordance with generally accepted practices appropriate to the activities undertaken. The
Developer shall employ at all times adequate staff or consultants with the requisite experience
necessary to administer and coordinate all work related to the design, engineering, acquisition,
construction and installation of all Major Improvement Area Projects, to be acquired and accepted
by the City from the Developer as provided in this Agreement and the Development Agreement.
(b) The Developer shall not be relieved of its obligation to construct or cause to be
constructed each Major Improvement Area Project and, upon completion, inspection, and
acceptance, convey each such Major Improvement Area Project to the City in accordance with the
terms hereof, even if there are insufficient funds in the Project Fund to pay the Actual Costs
thereof. In any event, this Agreement shall not affect any obligation of the Developer under any
other agreement to which the Developer is a party or any governmental approval to which the
Developer or any land within the District is subject, with respect to the Major Improvement Area
Projects required in connection with the development of the land within the District.
Section 4.02. No Competitive Bidding. The Major Improvement Area Projects shall not
require competitive bidding pursuant to Sections 252.022(a)(9) and 252.022(a)(11) of the Texas
Local Government Code, as amended, based upon current cost estimates.
Section 4.03. Independent Contractor. In performing this Agreement, the Developer is
an independent contractor and not the agent or employee of the City with respect to the Major
Improvement Area Projects.
Section 4.04. Remaining Funds After Completion of a Major Improvement Area Project.
Upon the Final Completion of a Major Improvement Area Project (or its completed segment or
phase thereof) and payment of all outstanding invoices for such Major Improvement Area Project
(or its completed segment or phase thereof), if the Actual Cost of such Major Improvement Area
Project is less than the Budgeted Cost (a "Cost Underrun"), any remaining Budgeted Cost may be
made available to pay Cost Overruns on any other Major Improvement Area Project (or its
completed segment or phase thereof) with the approval of the City Manager and provided that all
Major Improvement Area Projects as set forth in the Service and Assessment Plan are undertaken
at least in part. The elimination of a category of Major Improvement Area Projects in the Service
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and Assessment Plan will require an amendment to the Service and Assessment Plan. Prior to
completion of all of the Major Improvement Area Projects within an improvement category, as
listed in the Service and Assessment Plan and the applicable PID phase, ten percent (10%) of funds
available from an improvement category may be used as Cost Underruns and applied to another
improvement category. If, upon completion of the Major Improvement Area Projects in any
improvement category, there are funds remaining in any improvement categories, those funds can
then be used to reimburse the Developer for any qualifying costs of the Major Improvement Area
Projects that have not been previously paid.
Section 4.05. Contracts and Change Orders. The Developer shall be responsible for
entering into all contracts and any supplemental agreements (herein referred to as "Change
Orders") required for the construction of the Major Improvement Area Projects. Developer or its
contractors may approve and implement any Change Orders, even if such Change Order would
increase the Cost of a Major Improvement Area Project, but the Developer shall be solely
responsible for payment of any Cost Overruns resulting from such Change Orders except to the
extent amounts are available pursuant to Section 4.04. If any Change Order is for work that requires
changes to be made by an engineer to the construction and design documents and plans previously
approved under Section 4.01, then such revisions made by an engineer must be submitted to the
City for approval by the City's engineer prior to execution of the Change Order.
ARTICLE V
ACQUISITION, CONSTRUCTION, AND PAYMENT
Section 5.01. Closing Disbursement Request. In order to receive the disbursement from
the Project Fund at closing of the Bonds described in Section 3.02, the Developer shall cause to be
delivered to the Trustee at Closing a Closing Disbursement Request, substantially in the form of
Exhibit A hereto or otherwise acceptable and agreed to by the Developer, Administrator, and the
City Representative for the disbursements described in Section 3.02.
Section 5.02. Certification for Payment for a Major Improvement Area Project.
(a) No payment hereunder shall be made from the Project Fund to the Developer for
work on a Major Improvement Area Project until a monthly Certification for Payment is received
from the Developer for work with respect to a Major Improvement Area Project (or its completed
segment or phase thereof). Upon receipt of a Certification for Payment substantially in the form
of Exhibit B hereto (and all accompanying documentation executed by the City) from the
Developer, the City Inspector shall conduct a review in order to confirm that such request is
complete, that the work with respect to such Major Improvement Area Project identified therein
for which payment is requested was completed in accordance with all applicable governmental
laws, rules and regulations and applicable Plans therefor and with the terms of this Agreement, the
Development Agreement, and to verify and approve the Actual Cost of such work specified in
such Certification for Payment (collectively, the "Developer Compliance Requirements"), and
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shall promptly forward the request to the City Representative. The approval of the Certification
for Payment by the City Inspector shall constitute a representation by the City Inspector to the City
and the Trustee that the Developer Compliance Requirements have been satisfied with respect to
the Major Improvement Area Projects identified therein; provided, however, that the approval of
the Certification for Payment shall not have the effect of estopping or preventing the City from
asserting claims under this Agreement, the Indenture, the Service and Assessment Plan, or any
other agreement between the parties or that there is a defect in a Major Improvement Area Project
(as defined in the Indenture). The City Inspector shall also conduct such review as is required in
his discretion to confirm the matters certified in the Certification for Payment. The Developer
agrees to cooperate with the City Inspector in conducting each such review and to provide the City
Inspector with such additional information and documentation as is reasonably necessary for the
City Inspector to conclude each such review.
(b) Within ten (10) business days of receipt of any Certification for Payment, the City
Inspector shall either (i) approve and execute the Certification for Payment and forward the same
to the City Representative for approval and delivery to the Trustee for payment to the Developer
in accordance with Section 5.03(a) hereof or (ii) in the event the City Inspector disapproves the
Certification for Payment, give written notification to the Developer of the City Inspector's
disapproval, in whole or in part, of such Certification for Payment, specifying the reasons for such
disapproval and the additional requirements to be satisfied for approval of such Certification for
Payment. If a Certification for Payment seeking reimbursement is approved only in part, the City
Inspector shall specify the extent to which the Certification for Payment is approved and shall
deliver such partially approved Certification for Payment to the City Representative for approval
in accordance with Section 5.03 hereof and delivery to the Trustee for payment to the Developer
in accordance with Section 5.02(d) hereof, and any such partial work shall be processed for
payment under Section 5.03 notwithstanding such partial denial.
(c) If the City Inspector fails to act with respect to a Certification for Payment within
the time period therein provided, the Developer shall submit the Certification for Payment directly
to the City Representative for approval. Within five (5) business days of receipt of any
Certification for Payment, the City Representative shall approve or deny the Certification for
Payment and provide notice to the Administrator and the Developer. Upon approval of a
Certification for Payment, the approval shall be forwarded to the Trustee for payment, and delivery
to the Developer in accordance with Section 5.03 hereof. The approval of the Certification for
Payment by the City Representative shall constitute a representation by the City Representative to
the Trustee of the Developer's compliance therein. Pursuant to the terms of Section 5.03 and the
Indenture, the Trustee shall make a payment to the Developer, or pursuant to the Developer's
directions, of an approved Certification for Payment.
(d) If the City requires additional documentation, timely disapproves or questions the
correctness or authenticity of the Certification for Payment, the City shall deliver a detailed notice
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 9
to the Developer within ten (10) business days of receipt thereof, then payment with respect to
disputed portion(s) of the Certification for Payment shall not be made until the Developer and the
City have jointly settled such dispute or additional information has been provided to the City's
reasonable satisfaction. The denial may be appealed to the City Council by the Developer in
writing within thirty (30) days of being denied by the City Representative. Denial of the
Certification for Payment by the City Council shall be attempted to be resolved by half -day
mediation between the Parties in the event an agreement is not otherwise reached by the Parties,
with the mediator's fee being paid by Developer. The portion of the Certification for Payment in
dispute shall not be forwarded to the Trustee for payment until the dispute is resolved by the City
and the Developer.
(e) The Developer shall deliver the approved or partially approved Certification for
Payment to the Trustee for payment and the Trustee shall make such payment from the Project
Fund in accordance with Section 5.03 below.
Section 5.03. Payment for a Major Improvement Area Project.
(a) Upon receipt of a reviewed and approved Certification for Payment, the Trustee
shall make payment for the Actual Costs of Major Improvement Area Projects from the Major
Improvement Area Bond Improvement Account and the Major Improvement Area Developer
Improvement Account of the Project Fund in the manner described in Section 5.03(b) below. Such
payments shall be as further designated in the Certification for Payment pursuant to the terms of
the Certification for Payment and the Indenture in an amount not to exceed the Budgeted Cost for
the particular Major Improvement Area Project (or its completed segment), unless a Cost Overrun
amount has been approved for a particular Major Improvement Area Project. If a Cost Overrun
amount has been approved, then the amount reimbursed shall not exceed the Budgeted Amount
plus the approved Cost Overrun amount.
(b) The Trustee shall pay Actual Costs of the Major Improvement Area Projects, first,
from funds in the Major Improvement Area Bond Improvement Account until such Account is
depleted, and thereafter from funds on deposit in the Major Improvement Area Developer
Improvement Account. In the event of any conflict between this provision and Section 6.5 of the
Indenture, Section 6.5 of the Indenture shall control.
(c) Approved Certifications for Payment that await reimbursement shall not accrue
interest.
(d) Notwithstanding any other provisions of this Agreement, when payment is made,
the Trustee shall make payment directly to the person or entity specified by the Developer in an
approved Certification for Payment, including: (1) a general contractor or supplier of materials or
services or jointly to the Developer (or any permitted assignee of the Developer) and the general
contractor or supplier of materials or services, as indicated in an approved Certification for
Payment; (2) to the Developer or any assignee of the Developer if an unconditional lien release
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related to the items referenced in the Certification for Payment is attached to such Certification for
Payment; and (3) to the Developer, or to the third party contractor directly, at Developer's request
as specified in the Certification for Payment, in the event the Developer provides a general
contractor's or suppliers of materials unconditional lien release for a portion of the work covered
by a Developer or any assignee of the Developer to the extent of such lien release. Neither the
Trustee, nor the City, City Council, City Manager, or City Representative shall have any liability
for relying on the accuracy of the payee information in any Certification for Payment as presented
by the Developer or its assignees.
(e) Withholding Pa. ents.
Nothing in this Agreement shall be deemed to prohibit the Developer or the City from
contesting in good faith the validity or amount of any mechanic's or materialman's lien and/or
judgment nor limit the remedies available to the Developer or the City with respect thereto,
including the withholding of any payment that may be associated with the exercise of such remedy,
so long as such delay in performance shall not subject the Major Improvement Area Project to
foreclosure, forfeiture, or sale.
ARTICLE VI
OWNERSHIP AND TRANSFER OF MAJOR IMPROVEMENT AREA PROJECTS
Section 6.01. Major Improvement Area Projects to be Owned by the City— Title Evidence.
The Developer shall furnish to the City a preliminary title report for land with respect to a Major
Improvement Area Project to be acquired and accepted by the City from the Developer and not
previously dedicated or otherwise conveyed to the City, for review and approval at least thirty (30)
calendar days prior to the transfer of title of a Major Improvement Area Project to the City. The
City shall approve the preliminary title report unless it reveals a matter which, in the reasonable
judgment of the City, could materially affect the City's clean title or use and enjoyment of any part
of the property or easement covered by the preliminary title report. In the event the City does not
approve the preliminary title report, the City shall not be obligated to accept title to the Major
Improvement Area Project until the Developer has cured such objections to title to the satisfaction
of the City.
Section 6.02. Major Improvement Area Project Constructed on City Land or Developer
Land. If a Major Improvement Area Project is on land owned by the City, the City hereby grants
to the Developer, where applicable, a temporary easement to enter upon such land for purposes
related to construction (and maintenance pending acquisition and acceptance) of the Major
Improvement Area Project. The provisions for inspection and acceptance of such Major
Improvement Area Project otherwise provided herein shall apply. If the Major Improvement Area
Project is on land owned by the Developer, the Developer hereby grants to the City an easement
to enter upon such land for purposes related to inspection and maintenance (pending acquisition
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and acceptance) of the Major Improvement Area Project. The provisions for inspection and
acceptance of such Major Improvement Area Project otherwise provided herein and in the
Development Agreement shall apply.
ARTICLE VII
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Representations, Covenants and Warranties of the Developer. The
Developer represents and warrants for the benefit of the City as follows:
(a) Organization. The Developer is a limited liability company duly formed, organized
and validly existing under the laws of the State of Texas, is in compliance with the laws of the
State of Texas, and has the power and authority to own its properties and assets and to fulfill its
obligations in this Agreement and to carry on its business in the State of Texas as now being
conducted as hereby contemplated.
(b) Developer Authority; Representations. The Developer has the power and authority
to enter into this Agreement, and has taken all action necessary to cause this Agreement to be
executed and delivered, and this Agreement has been duly and validly executed and delivered by
the Developer. The Developer has the financial resources, or the ability to obtain sufficient
financial resources, to meet its obligations under this Agreement. The person executing this
Agreement on behalf of the Developer has been duly authorized to do so. This Agreement is
binding upon the Developer in accordance with its terms. The execution of this Agreement and
the performance by the Developer of its obligations under this Agreement do not constitute a
breach or event of default by the Developer under any other agreement, instrument, or order to
which the Developer is a party or by which the Developer is bound.
(c) Binding Obligation. This Agreement is a legal, valid and binding obligation of the
Developer, enforceable against the Developer in accordance with its terms, subject to bankruptcy
and other equitable principles.
(d) Compliance with Law. The Developer shall not commit, suffer or permit any act
to be done in, upon or to the lands of the Developer in the District or the Major Improvement Area
Projects in violation of any law, ordinance, rule, regulation or order of any governmental authority
or any covenant, condition or restriction now or hereafter affecting the lands in the District or the
Major Improvement Area Projects.
(e) Requests for Pam. The Developer represents and warrants that (i) it will not
request payment from the Project Fund for the acquisition, construction or installation of any
improvements that are not part of the Major Improvement Area Projects, and (ii) it will diligently
follow all procedures set forth in this Agreement with respect to the Certification for Payments.
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 12
(f) Financial Records. For a period of two years after completion of the Major
Improvement Area Projects, the Developer covenants to maintain proper books of record and
account for the construction of the Major Improvement Area Projects and all Costs related thereto.
Such accounting books shall be maintained in accordance with generally accepted accounting
principles and shall be available for inspection by the City or its agents at any reasonable time
during regular business hours on reasonable notice.
(g) Plans. The Developer represents that it has obtained or will obtain approval of the
Plans from all appropriate departments of the City and from any other public entity or public utility
from which such approval must be obtained. The Developer further agrees that, subject to the
terms hereof, the Major Improvement Area Projects have been or will be constructed in full
compliance with such Plans and any change orders thereto consistent with the Act, this Agreement
and the Development Agreement. Developer shall provide as -built plans for all Major
Improvement Area Projects to the City.
(h) Additional Information. The Developer agrees to cooperate with all reasonable
written requests for nonproprietary information by the initial purchaser of the Bonds, the City
Inspector and the City Representative related to the status of construction of Major Improvement
Area Projects within the District, the anticipated completion dates for future improvements and
any other matter that the initial purchaser of the Bonds or City Representative deems material to
the investment quality of the Bonds.
(i) Continuing Disclosure Agreement. The Developer agrees to provide the
information required pursuant to the Continuing Disclosure Agreement executed by the Developer,
the Administrator, and Regions Bank, as Dissemination Agent, dated as August 1, 2021 in
connection with the Bonds.
0) Tax Certificate. The City will deliver a certificate relating to the Bonds (such
certificate, as it may be amended and supplemented from time to time, being referred to herein as
the "Tax Certificate") containing covenants and agreements designed to satisfy the requirements
of 26 U.S. Code Sections 103 and 141 through 150, inclusive, and the federal income tax
regulations issued thereunder relating to the use of the proceeds of the Bonds or of any monies,
securities or other obligations on deposit to the credit of any of the funds and accounts created by
the Indenture or this Agreement or otherwise that may be deemed to be proceeds of the Bonds
within the meaning of 26 U.S. Code Section 148 (collectively, "Bond Proceeds").
The Developer covenants to provide, or cause to be provided, such facts and estimates as
the City reasonably considers necessary to enable it to execute and deliver its Tax Certificate. The
Developer further covenants that (i) such facts and estimates will be based on its reasonable
expectations on the date of issuance of the Bonds and will be, to the best of the knowledge of the
officers of the Developer providing such facts and estimates, true, correct and complete as of that
date, and (ii) the Developer will make reasonable inquires to ensure such truth, correctness and
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completeness. The Developer covenants that it will not make, or (to the extent that it exercises
control or direction) permit to be made, any use or investment of the Bond Proceeds (including,
but not limited to, the use of the Major Improvement Area Projects) that would cause any of the
covenants or agreements of the City contained in the Tax Certificate to be violated or that would
otherwise have an adverse effect on the tax-exempt status of the interest payable on the Bonds for
federal income tax purposes.
(k) City Authority; Representations; The City represents and warrants to the
Developer that (1) the City has the authority to enter into and perform its obligations under this
Agreement; (2) the person executing this Agreement on behalf of the City has been duly authorized
to do so; (3) this Agreement is binding upon the City in accordance with its terms; and (4) the
execution of this Agreement and the performance by the City of its obligations under this
Agreement do not constitute a breach or event of default by the City under any other agreement,
instrument, or order to which the City is a party or by which the City is bound.
Section 7.02. Indemnification and Hold Harmless.
(a) THE DEVELOPER SHALL ASSUME THE DEFENSE OF, AND INDEMNIFY AND
HOLD HARMLESS THE CITY INSPECTOR, THE CITY, EMPLOYEES, OFFICIALS,
OFFICERS, REPRESENTATIVES AND AGENTS OF THE CITY, AND EACH OF THEM
(EACH AN "INDEMNIFIED PARTY"), FROM AND AGAINST ALL ACTIONS, DAMAGES,
CLAIMS, LOSES OR EXPENSE OF EVERY TYPE AND DESCRIPTION TO WHICH THEY
MAY BE SUBJECTED OR PUT: (I) BY REASON OF, OR RESULTING FROM THE BREACH
OF ANY PROVISION OF THIS AGREEMENT BY THE DEVELOPER, (II) THE NEGLIGENT
DESIGN, ENGINEERING AND/OR CONSTRUCTION BY THE DEVELOPER OR ANY
ARCHITECT, ENGINEER OR CONTRACTOR HIRED BY THE DEVELOPER OF ANY OF
THE MAJOR IMPROVEMENT AREA PROJECTS OR OTHER AUTHORIZED
IMPROVEMENTS CONSTRUCTED BY THE DEVELOPER HEREUNDER, (III) THE
DEVELOPER'S NONPAYMENT UNDER CONTRACTS BETWEEN THE DEVELOPER
AND ITS CONSULTANTS, ENGINEERS, ADVISORS, CONTRACTORS,
SUBCONTRACTORS AND SUPPLIERS IN THE PROVISION OF THE MAJOR
IMPROVEMENT AREA PROJECTS OR OTHER AUTHORIZED IMPROVEMENTS
CONSTRUCTED BY DEVELOPER, OR (IV) ANY CLAIMS OF PERSONS EMPLOYED BY
THE DEVELOPER OR ITS AGENTS TO CONSTRUCT SUCH PROJECTS, OR (V) ANY
CLAIMS AND SUITS OF THIRD PARTIES, INCLUDING BUT NOT LIMITED TO
DEVELOPER'S RESPECTIVE PARTNERS, OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS, SUCCESSORS, ASSIGNEES, VENDORS, GRANTEES
AND/OR TRUSTEES, REGARDING OR RELATED TO THE MAJOR IMPROVEMENT
AREA PROJECTS OR ANY AGREEMENT OR RESPONSIBILITY REGARDING THE
MAJOR IMPROVEMENT AREA PROJECTS , INCLUDING CLAIMS AND CAUSES OF
ACTION WHICH MAY ARISE OUT OF THE SOLE OR PARTIAL NEGLIGENCE OF AN
INDEMNIFIED PARTY. NOTWITHSTANDING THE FOREGOING, NO
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 14
INDEMNIFICATION IS GIVEN HEREUNDER FOR ANY ACTION, DAMAGE, CLAIM,
LOSS OR EXPENSE DETERMINED BY A COURT OF COMPETENT JURISDICTION TO
BE DIRECTLY ATTRIBUTABLE TO THE WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE OF ANY INDEMNIFIED PARTY. THE CITY DOES NOT WAIVE ITS
DEFENSES AND IMMUNITIES, WHETHER GOVERNMENTAL, SOVEREIGN, OFFICIAL,
OR OTHERWISE, AND NOTHING IN THIS AGREEMENT IS INTENDED TO OR SHALL
CONFER ANY RIGHT OR INTEREST IN ANY PERSON NOT A PARTY HERETO.
(b) IN ITS REASONABLE DISCRETION, CITY SHALL HAVE THE RIGHT
TO APPROVE OR SELECT DEFENSE COUNSEL TO BE RETAINED BY DEVELOPER
IN FULFILLING ITS OBLIGATIONS HEREUNDER TO DEFEND AND INDEMNIFY THE
INDEMNIFIED PARTIES, UNLESS SUCH RIGHT IS EXPRESSLY WAIVED BY CITY IN
WRITING. THE INDEMNIFIED PARTIES RESERVE THE RIGHT TO PROVIDE A
PORTION OR ALL OF THEIR/ITS OWN DEFENSE, AT THEIR/ITS SOLE COST;
HOWEVER, INDEMNIFIED PARTIES ARE UNDER NO OBLIGATION TO DO SO. ANY
SUCH ACTION BY AN INDEMNIFIED PARTY IS NOT TO BE CONSTRUED AS A
WAIVER OF DEVELOPER'S OBLIGATION TO DEFEND INDEMNIFIED PARTIES OR AS
A WAIVER OF DEVELOPER'S OBLIGATION TO INDEMNIFY INDEMNIFIED PARTIES,
PURSUANT TO THIS AGREEMENT. DEVELOPER SHALL RETAIN CITY -APPROVED
DEFENSE COUNSEL WITHIN SEVEN (7) BUSINESS DAYS OF WRITTEN NOTICE FROM
AN INDEMNIFIED PARTY THAT IT IS INVOKING ITS RIGHT TO INDEMNIFICATION
UNDER THIS AGREEMENT. IF DEVELOPER FAILS TO RETAIN COUNSEL WITHIN
SUCH TIME PERIOD, INDEMNIFIED PARTIES SHALL HAVE THE RIGHT TO RETAIN
DEFENSE COUNSEL ON ITS OWN BEHALF, AND DEVELOPER SHALL BE JOINTLY
AND SEVERALLY LIABLE FOR ALL REASONABLE COSTS INCURRED BY
INDEMNIFIED PARTIES.
(c) THIS SECTION 7.02 SHALL SURVIVE THE TERMINATION OF
THIS AGREEMENT.
(d) THE PARTIES AGREE AND STIPULATE THAT THIS INDEMNIFICATION
COMPLIES WITH THE CONSPICUOUSNESS REQUIREMENT AND THE EXPRESS
NEGLIGENCE TEST, AND IS VALID AND ENFORCEABLE AGAINST THE DEVELOPER.
Section 7.03. Use of Monies by City; Changes to Indenture. The City agrees not to take
any action or direct the Trustee to take any action to expend, disburse or encumber the monies held
in the Project Fund and any monies to be transferred thereto for any purpose other than the
purposes permitted by the Indenture. Prior to the acceptance of all the Major Improvement Area
Projects, the City agrees not to modify or supplement the Indenture without the approval of the
Developer if as a result or as a consequence of such modification or supplement: (a) the amount
of monies that would otherwise have been available under the Indenture for disbursement for the
Costs of the Major Improvement Area Projects is reduced, delayed or deferred, (b) the obligations
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 15
or liabilities of the Developer are or may be substantially increased or otherwise adversely affected
in any manner, or (c) the rights of the Developer are or may be modified, limited, restricted or
otherwise substantially adversely affected in any manner.
Section 7.04. No Reduction of Assessments. The Developer agrees not to take any action
or actions to reduce the total amount of such Assessments to be levied within the Major
Improvement Area as of the effective date of this Agreement.
ARTICLE VIII
TERMINATION
Section 8.01. Mutual Consent. This Agreement may be terminated by the mutual, written
consent of the City and the Developer, in which event the City may either execute contracts for or
perform any remaining work related to the Major Improvement Area Projects not accepted by the
City or other appropriate entity and use all or any portion of funds on deposit in the Project Fund
or other amounts transferred to the Project Fund under the terms of the Indenture to pay for same,
and the Developer shall have no claim or right to any further payments for the Costs of a Major
Improvement Area Project hereunder for any remaining work, except as otherwise may be
provided in such written consent.
Section 8.02. City's Election for Cause.
(a) The City, upon notice to Developer and the passage of the cure period identified in
subsection (b) below, may terminate this Agreement, without the consent of the Developer if the
Developer shall breach any material covenant or default in the performance of any material
obligation hereunder.
(b) If any such event described in Section 8.02(a) occurs, the City shall give written
notice of its knowledge of such event to the Developer, and the Developer agrees to promptly meet
and confer with the City Inspector and other appropriate City staff and consultants as to options
available to assure timely completion, subject to the terms of this Agreement, of the Major
Improvement Area Projects. Such options may include, but not be limited to, the termination of
this Agreement by the City. If the City elects to terminate this Agreement, the City shall first
notify the Developer (and any mortgagee or trust deed beneficiary specified in writing by the
Developer to the City to receive such notice) of the grounds for such termination and allow the
Developer a minimum of forty-five (45) days to eliminate or to mitigate to the satisfaction of the
City the grounds for such termination. Such period may be extended, at the sole discretion of the
City, if the Developer, to the reasonable satisfaction of the City, is proceeding with diligence to
eliminate or mitigate such grounds for termination. If at the end of such period (and any extension
thereof), as determined reasonably by the City, the Developer has not eliminated or completely
mitigated such grounds to the satisfaction of the City, the City may then terminate this Agreement.
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 16
In the event of the termination of this Agreement, the Developer is entitled to payment for work
accepted by the City related to a Major Improvement Area Project only as provided for under the
terms of the Indenture and this Agreement prior to the termination date of this Agreement.
Notwithstanding the foregoing, so long as the Developer has breached any material covenant or
defaulted in the performance of any material obligation hereunder, notice of which has been given
by the City to the Developer, and such event has not been cured or otherwise eliminated by the
Developer, the City may in its discretion cause the Trustee to cease making payments for the
Actual Costs of Major Improvement Area Projects, provided that the Developer shall receive
payment of the Actual Costs of any Major Improvement Area Projects that were accepted by the
City at the time of the occurrence of such breach or default by the Developer upon submission of
the documents and compliance with the other applicable requirements of this Agreement, the
Indenture, and of the Development Agreement.
(c) If this Agreement is terminated by the City for cause, the City may either execute
contracts for or perform any remaining work related to the Major Improvement Area Projects not
accepted by the City and use all or any portion of the funds on deposit in the Project Fund or other
amounts transferred to the Project Fund and the Developer shall have no claim or right to any
further payments for the Major Improvement Area Projects hereunder, except as otherwise may
be provided upon the mutual written consent of the City and the Developer or as provided for in
the Indenture. The City shall have no obligation to perform any work related to a Major
Improvement Area Project or to incur any expense or cost in excess of the remaining balance of
the Project Fund.
Section 8.03. Termination Upon Redemption or Defeasance of Bonds. This Agreement
will terminate automatically and with no further action by the City or the Developer upon the
redemption or defeasance of all outstanding Bonds issued under the Indenture.
Section 8.04. Construction of the Major Improvement Area Projects Upon Termination
of this Agreement. Notwithstanding anything to the contrary contained herein, upon the
termination of this Agreement pursuant to this Article VIII, the Developer shall perform its
obligations with respect to the Major Improvement Area Projects in accordance with this
Agreement and the Development Agreement.
Section 8.05. Force Majeure. Each Party shall use good faith, due diligence and
reasonable care in the performance of its respective obligations under this Agreement, and time
shall be of the essence in such performance; however, in the event a Party is unable, due to Force
Majeure, to perform its obligations under this Agreement, then the obligations affected by the
Force Majeure shall be temporarily suspended. Within fifteen (15) business days after the
occurrence of a Force Majeure, the Party claiming the right to temporarily suspend its performance,
shall give notice to all the Parties, including a detailed explanation of the Force Majeure and a
description of the action that will be taken to remedy the Force Majeure and resume full
performance at the earliest possible time.
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 17
ARTICLE IX
MISCELLANEOUS
Section 9.01. Limited Liability of City. The Developer agrees that any and all obligations
of the City arising out of or related to this Agreement are special obligations of the City, and the
City's obligations to make any payments hereunder are restricted entirely to the moneys, if any, in
the Project Fund and from no other source. Neither the City, the City Inspector, City
Representative nor any other City employee, officer, official or agent shall incur any liability
hereunder to the Developer or any other party in their individual capacities by reason of their
actions hereunder or execution hereof.
Section 9.02. Audit. The City Inspector, City Representative or a finance officer of the
City shall have the right, during normal business hours and upon the giving of three business days'
prior written notice to a Developer, to review all books and records of the Developer pertaining to
costs and expenses incurred by the Developer with respect to any of the Major Improvement Area
Projects and any bids taken or received for the construction thereof or materials therefor.
Section 9.03. Notices. Any notice, payment or instrument required or permitted by this
Agreement to be given or delivered to any parry shall be deemed to have been received when
personally delivered or transmitted by telecopy or facsimile transmission (which shall be
immediately confirmed by telephone and shall be followed by mailing an original of the same
within 24 hours after such transmission) or 72 hours following deposit of the same in any United
States Post Office, registered or certified mail, postage prepaid, addressed as follows:
To the City: City of Anna, Texas
Attn: City Manager
I I I N. Powell Parkway
Anna, Texas 75409
With a copy to: Wolfe, Tidwell & McCoy, LLP
Attn: Clark McCoy
2591 Dallas Parkway, Suite 300
Frisco, Texas 75034
And to: McCall, Parkhurst & Horton L.L.P.
Attn: Rodolfo Segura Jr
717 North Harwood, Suite 900
Dallas, TX 75201
To the Landowner: MM Anna 325, LLC
Attn: Mehrdad Moayedi
1800 Valley View Lane, Suite 300
Farmers Branch, Texas 75234
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 18
With a copy to: Miklos Cinclair, PLLC
Attn: Robert Miklos
1800 Valley View Lane, Suite 360
Farmers Branch, Texas 75234
Any party may change its address or addresses for delivery of notice by delivering written
notice of such change of address to the other parry.
The City shall advise the Developer of the name and address of any City Inspector who is
to receive any notice or other communication pursuant to this Agreement.
Section 9.04. Severability. If any part of this Agreement is held to be illegal or
unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given
effect to the fullest extent possible.
Section 9.05. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the parties hereto. Any receivables due under this
Agreement may be assigned by the Developer without the consent of, but upon written notice to
the City pursuant to Section 9.03 of this Agreement. The obligations, requirements, or covenants
of this Agreement shall be able to be assigned to an affiliate or related entity of the Developer, or
any lien holder on the Property, without prior written consent of the City. The obligations,
requirements, or covenants of this Agreement shall not be assigned by the Developer to a non -
affiliate or non -related entity of the Developer without prior written consent of the City Manager,
except pursuant to a collateral assignment to any person or entity providing construction financing
to the Developer for the Developer for a Major Improvement Area Project, provided such person
or entity expressly agrees to assume all obligations of the Developer hereunder if there is a default
under such financing and such Person elects to complete the Major Improvement Area Project.
No such assignment shall be made by the Developer or any successor or assignee of the Developer
that results in the City being an "obligated person" within the meaning of Rule 15c2-12 of the
United States Securities and Exchange Commission without the express written consent of the
City. In connection with any consent of the City, the City may condition its consent upon the
acceptability of the financial condition of the proposed assignee, upon the assignee's express
assumption of all obligations of the Developer hereunder and/or upon any other reasonable factor
which the City deems relevant in the circumstances. In any event, any such assignment shall be
in writing, shall clearly identify the scope of the rights and/or obligations assigned. The City may
assign by a separate writing certain rights as described in this Agreement and in the Indenture, to
the Trustee and the Developer hereby consents to such assignment.
Section 9.06. Other Agreements. The obligations of the Developer hereunder shall be
those of a party hereto and not as an owner of property in the District. Nothing herein shall be
construed as affecting the City's or the Developer's rights or duties to perform their respective
obligations under other agreements, use regulations, ordinances or subdivision requirements
relating to the development of the lands in the District, including the applicable Construction
Contracts and the Development Agreement. To the extent there is a conflict between this
Agreement and the Indenture, the Indenture shall control. To the extent there is a conflict between
this Agreement and the Development Agreement, this Agreement shall control.
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 19
Section 9.07. Waiver. Failure by a party to insist upon the strict performance of any of
the provisions of this Agreement by any other party, or the failure by a party to exercise its rights
upon the default of any other party, shall not constitute a waiver of such party's right to insist and
demand strict compliance by such other party with the terms of this Agreement thereafter.
Section 9.08. Merger. No other agreement, statement or promise made by any party or
any employee, officer or agent of any party with respect to any matters covered hereby that is not
in writing and signed by all the parties to this Agreement shall be binding.
Section 9.09. Parties in Interest. Nothing in this Agreement, expressed or implied, is
intended to or shall be construed to confer upon or to give to any person or entity other than the
City and the Developer any rights, remedies or claims under or by reason of this Agreement or any
covenants, conditions or stipulations hereof, and all covenants, conditions, promises and
agreements in this Agreement contained by or on behalf of the City or the Developer shall be for
the sole and exclusive benefit of the City and the Developer.
Section 9.10. Amendment. Except as otherwise provided in Section 9.05, upon agreement
by the parties, this Agreement may be amended, from time to time in a manner consistent with the
Act, the Indenture, and the Bond Ordinance by written supplement hereto and executed in
counterparts, each of which shall be deemed an original.
Section 9.11. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
Section 9.12. Effective Date. This Agreement has been dated as of the date first above
written solely for the purpose of convenience of reference and shall become effective upon its
execution and delivery, on the Closing Date of the Bonds, by the parties hereto. All representations
and warranties set forth therein shall be deemed to have been made on the Closing Date of the
Bonds.
Section 9.13 No Waiver of Powers or Immunity. The City does not waive or surrender
any of its governmental powers, immunities, or rights except as necessary to allow Developer to
enforce its remedies under this Agreement.
Section 9.14 Anti -Boycott Verification. The Developer hereby verifies that it and its
parent company, wholly- or majority -owned subsidiaries, and other affiliates, if any, do not boycott
Israel and, to the extent this Agreement is a contract for goods or services, will not boycott Israel
during the term of this Agreement. The foregoing verification is made solely to comply with
Section 2271.002, Texas Government Code, and to the extent such Section does not contravene
applicable Federal law. As used in the foregoing verification, "boycott Israel" means refusing to
deal with, terminating business activities with, or otherwise taking any action that is intended to
penalize, inflict economic harm on, or limit commercial relations specifically with Israel, or with
a person or entity doing business in Israel or in an Israeli -controlled territory, but does not include
an action made for ordinary business purposes. The Developer understands "affiliate" to mean an
entity that controls, is controlled by, or is under common control with the Developer and exists to
make a profit.
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 20
Section 9.15 Iran, Sudan and Foreign Terrorist Organizations. Pursuant to Subchapter F,
Chapter 2252, Texas Government Code, the Developer represents that neither the Developer, nor
any parent company, wholly- or majority -owned subsidiaries, and other affiliates of the Developer
is a company identified on a list prepared and maintained by the Texas Comptroller of Public
Accounts under Section 2252.153 or Section 2270.0201, Texas Government Code, and posted on
any of the following pages of such officer's internet website:
https:Hcomptroller.texas.gov/purchasing/docs/sudan-list.pdf,
https:Hcomptroller.texas.gov/purchasing/ docs/iran-list.pdf, or
https:Hcomptroller.texas.gov/purchasing/docs/fto-list.pdf
The foregoing representation is made solely to comply with Section 2252.152, Texas Government
Code, and to the extent such Section does not contravene applicable state or federal law and
excludes the Developer gent and each parent company, wholly- or majority -owned subsidiaries,
and other affiliates of the Developer, if any, that the United States government has affirmatively
declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any state or
federal sanctions regime relating to a foreign terrorist organization. The Developer understands
"affiliate" to mean any entity that controls, is controlled by, or is under common control with the
Developer and exists to make a profit.
[Execution pages follow.]
SHERLEY TRACT PID NO. 2 IA #1 CFA Page 21
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
July 27, 2021.
ATTEST:
Name: Carrie L. Land
Title: City Secretary
(City Seal)
CITY OF ANNA, TEXAS
By:
Name: Nate Pike
Title: Mayor
Date:
S-1
DEVELOPER:
MM Anna 325, LLC,
a Texas limited liability company
By: MMM Ventures, LLC,
a Texas limited liability company
Its Manager
By: 2M Ventures, LLC,
a Delaware limited liability company
Its Manager
By:
Name:
Its:
S-2
Mehrdad Moayedi
Manager
Exhibit A
FORM OF CLOSING DISBURSEMENT REQUEST
The undersigned is an agent for MM Anna 325, LLC, (the "Developer") and requests
payment from:
[the Costs of Issuance Account of the Project Fund][the Major Improvement Area Bond
Improvement Account of the Project Fund] from Regions Bank, Houston, Texas, (the "Trustee")
in the amount of DOLLARS ($ ) for costs incurred in the
establishment, administration, and operation of the Sherley Tract Public Improvement District No.
2 (the "District"), as follows:
Closing Costs Description Cost PID Allocated Cost
TOTAL
Unless otherwise defined, any capitalized terms used herein shall have the meanings ascribed to
them in the Sherley Tract Public Improvement District No. 2 Major Improvement Area
Construction, Funding, and Acquisition Agreement between the Developer and the City, dated as
of July 27, 2021 (the "CFA Agreement").
In connection to the above referenced payments, the Developer represents and warrants to
the City as follows:
1. The undersigned is a duly authorized officer of the Developer, is qualified to
execute this Closing Disbursement Request on behalf of the Developer, and is
knowledgeable as to the matters set forth herein.
2. The payment requested for the above referenced establishment, administration, and
operation of the District at the time of the delivery of the Bonds has not been the subject
of any prior payment request submitted to the City.
3. The amount listed for the below itemized costs is a true and accurate representation
of the Actual Costs incurred by Developer with the establishment of the District at the time
of the delivery of the Bonds, and such costs are in compliance with and within the costs as
set forth in the Service and Assessment Plan.
4. The Developer is in compliance with the terms and provisions of the CFA
Agreement, the Indenture, and the Service and Assessment Plan.
5. All conditions set forth in the Indenture for the payment hereby requested have been
satisfied.
6. The Developer agrees to cooperate with the City in conducting its review of the
requested payment, and agrees to provide additional information and documentation as is
reasonably necessary for the City to complete said review.
Payments requested hereunder shall be made as directed below:
a. X amount to Person or Account Y for Z goods or services.
b. Payment Instructions
I hereby declare that the above representations and warranties are true and correct.
DEVELOPER:
MM Anna 325, LLC,
a Texas limited liability company
By: MMM Ventures, LLC,
a Texas limited liability company
Its Manager
By: 2M Ventures, LLC,
a Delaware limited liability company
Its Manager
By:
Name:
Its:
Mehrdad Moayedi
Manager
APPROVAL OF REQUEST
The City is in receipt of the attached Closing Disbursement Request, acknowledges the Closing
Disbursement Request, and finds the Closing Disbursement Request to be in order. After
reviewing the Closing Disbursement Request, the City approves the Closing Disbursement
Request and authorizes and directs payment of such amounts by Trustee from the accounts listed
below to the Developer or other person designated by the Developer. The City's approval of the
Closing Disbursement Request shall not have the effect of estopping or preventing the City from
asserting claims under the CFA Agreement, the Indenture, the Service and Assessment Plan, any
other agreement between the parties or that there is a defect in a Major Improvement Area Project
(as defined in the Indenture).
Closing Costs
Amount to be Paid by
Amount to be paid by
Trustee from Costs of
Trustee from Major
Issuance Account
Improvement Area
Bond Improvement
Account
CITY OF ANNA, TEXAS
an
Name:
Title:
Date:
Exhibit B
CERTIFICATION FOR PAYMENT FORM — MAJOR IMPROVEMENT AREA
PROJECT
Unless otherwise defined, any capitalized terms used herein shall have the meanings ascribed to
them in the Sherley Tract Public Improvement District No. 2 Major Improvement Area
Construction, Funding and Acquisition Agreement between the Developer and the City, dated as
of July 27, 2021 (the "CFA Agreement").
The undersigned is an agent for MM Anna 325, LLC, a Texas limited liability company (the
"Developer") and requests payment to the Developer (or to the person designated by the
Developer) from:
the Major Improvement Area Bond Improvement Account of the Project Fund
the Major Improvement Area Developer Improvement Account of the Project Fund
from Regions Bank, Houston, Texas, (the "Trustee"), in the amount
of i ($ ) for labor, materials, fees, and/or other general
costs related to the creation, acquisition, or construction of certain Major Improvement Area
Projects providing a special benefit to property within the Sherley Tract Public Improvement
District No. 2.
In connection with the above referenced payment, the Developer represents and warrants to the
City as follows:
1. The undersigned is a duly authorized officer of the Developer, is qualified to execute this
Certification for Payment Form on behalf of the Developer and is knowledgeable as to the matters
set forth herein.
2. The itemized payment requested for the below referenced Major Improvement Area
Projects has not been the subject of any prior payment request submitted for the same work to the
City or, if previously requested, no disbursement was made with respect thereto.
3. The itemized amounts listed for the Major Improvement Area Projects below is a true and
accurate representation of the Actual Costs of the Major Improvement Area Projects associated
with the creation, acquisition, or construction of said Major Improvement Area Projects and such
costs (i) are in compliance with the CFA Agreement, and (ii) are consistent with and within the
cost identified for such Major Improvement Area Projects as set forth in the Service and
Assessment Plan.
4. The Developer is in compliance with the terms and provisions of the CFA Agreement, the
Indenture, and the Service and Assessment Plan.
5. All conditions set forth in the Indenture and the CFA Agreement for the payment hereby
requested have been satisfied.
6. The work with respect to Major Improvement Area Projects referenced below (or its
completed segment) has been completed, and the City has inspected such Major Improvement
Area Projects (or its completed segment).
7. The Developer agrees to cooperate with the City in conducting its review of the requested
payment and agrees to provide additional information and documentation as is reasonably
necessary for the City to complete said review.
Payments requested are as follows:
Payee /
Total Cost
Budgeted Cost
Amount
Amount
Total amount
Total amount
Description of
of Major
of Major
requested to
requested to be
disbursed from
disbursed from the
Major
Improveme
Improvement
be paid from
paid from the
the Major
Major
Improvement
nt Area
Area Projects
the Major
Major
Improvement
Improvement
Area Projects
Projects
Improvement
Improvement
Area Bond
Area Developer
Area Bond
Area Developer
Improvement
Improvement
Improvement
Improvement
Account upon
Account upon
Account
Account
payment of
payment of sums
sums under this
under this
Payment
Payment
Certificate
Certificate
Attached hereto are receipts, purchase orders, change orders, and similar instruments which
support and validate the above requested payments. Also attached hereto are "bills paid"
affidavits and supporting documentation in the standard form for City construction projects.
Pursuant to the CFA Agreement, after receiving this payment request, the City has inspected the
Major Improvement Area Projects (or completed segment) and confirmed that said work has been
completed in accordance with approved plans and all applicable governmental laws, rules, and
regulations.
Payments requested hereunder shall be made as directed below:
a. X amount to Person or Account Y for Z goods or services.
b. Payment instructions
I hereby declare that the above representations and warranties are true and correct.
DEVELOPER:
MM Anna 325, LLC,
a Texas limited liability company
By: MMM Ventures, LLC,
a Texas limited liability company
Its Manager
By: 2M Ventures, LLC,
a Delaware limited liability company
Its Manager
By:
Name:
Its:
Mehrdad Moayedi
Manager
APPROVAL OF REOUEST
The City is in receipt of the attached Certification for Payment, acknowledges the Certification for
Payment, and finds the Certification for Payment to be in order. After reviewing the Certification
for Payment, the City approves the Certification for Payment and authorizes and directs payment
of the amounts set forth below by Trustee from the Project Fund to the Developer or other person
designated by the Developer as listed and directed on such Certification for Payment. The City's
approval of the Certification for Payment shall not have the effect of estopping or preventing the
City from asserting claims under the CFA Agreement, the Indenture, the Service and Assessment
Plan, or any other agreement between the parties or that there is a defect in the Major Improvement
Area Projects.
Amount of Payment
Amount to be Paid by Trustee
Amount to be paid by Trustee
Certificate Request
from Major Improvement
from Major Improvement
Area Bond Improvement
Area Developer Improvement
Account
Account
CITY OF ANNA, TEXAS
By:_
Name:
Title:
Date: