HomeMy WebLinkAboutOrd 1026-2022 Authorizing Issuance of Special Assessment Revenue Bonds, Series 2022 (Hurricane Creek PID #2)1
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
December 13, 2022, 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
Randy Atchley, Deputy Mayor Pro-Tem Pete Cain
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
2022 (HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #2 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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CITY OF ANNA
ORDINANCE NO. 1026-2022
AN ORDINANCE AUTHORIZING THE ISSUANCE OF THE "CITY OF ANNA,
TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2022 (HURRICANE
CREEK PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #2
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
"Hurricane Creek Public Improvement District" (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 December 13, 2022,
regarding the levy of special assessments within the District, and the City Council convened the
hearing on December 13, 2022; and
WHEREAS, after all comments and evidence, both written and oral, were received by the
City Council, the public hearing was closed on December 13, 2022 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
Improvement Area #2 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 2022 (Hurricane Creek Public Improvement District Improvement Area #2
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 Improvement Area #2 Improvements (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 Improvement Area #2 Projects, (ii) the form, terms and provisions of the
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Indenture securing the Bonds authorized hereby, (iii) the form, terms and provisions of a 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 Funding and Reimbursement 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. Approval of Issuance of Bonds and Indenture of Trust.
(a) The issuance of the Bonds in the principal amount of $10,550,000 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 Improvement Area #2
Improvements, (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 December 15, 2022, 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 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 and 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 Improvement Area #2 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 2022 (Hurricane Creek Public Improvement District
Improvement Area #2 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 Hurricane Creek Public
Improvement District Improvement Area #2 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 and
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
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approved by the Mayor or Mayor Pro-Tem, such approval to be evidenced by the execution
thereof.
Section 7. Funding and Reimbursement Agreement. That certain agreement titled
Improvement Area #2 Funding and Reimbursement Agreement (the "Funding and
Reimbursement 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 Funding and Reimbursement 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 Funding and Reimbursement Agreement may be attested by the City
Secretary.
Section 8. Additional Actions. The Mayor, Mayor Pro Tem, Deputy 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, Mayor Pro Tem, Deputy 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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A-1
EXHIBIT A
INDENTURE OF TRUST
INDENTURE OF TRUST
By and Between
CITY OF ANNA, TEXAS
and
REGIONS BANK,
as Trustee
DATED AS OF DECEMBER 15, 2022
SECURING
$10,550,000
CITY OF ANNA, TEXAS
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2022
(HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #2 PROJECT)
TABLE OF CONTENTS
Page
ARTICLE I – DEFINITIONS, FINDINGS AND INTERPRETATION ....................................... 4
Section 1.1. Definitions........................................................................................................... 4
Section 1.2. Findings............................................................................................................. 12
Section 1.3. Table of Contents, Titles and Headings. ........................................................... 13
Section 1.4. Interpretation. .................................................................................................... 13
ARTICLE II – THE BONDS ........................................................................................................ 13
Section 2.1. Security for the Bonds. ..................................................................................... 13
Section 2.2. Limited Obligations. ......................................................................................... 14
Section 2.3. Authorization for Indenture. ............................................................................. 14
Section 2.4. Contract with Owners and Trustee. .................................................................. 14
ARTICLE III – AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING
THE BONDS ................................................................................................................................ 14
Section 3.1. Authorization. ................................................................................................... 14
Section 3.2. Date, Denomination, Maturities, Numbers and Interest. .................................. 15
Section 3.3. Conditions Precedent to Delivery of Bonds. ..................................................... 15
Section 3.4. Medium, Method and Place of Payment. .......................................................... 16
Section 3.5. Execution and Registration of Bonds. .............................................................. 17
Section 3.7. Ownership. ........................................................................................................ 18
Section 3.8. Registration, Transfer and Exchange. ............................................................... 18
Section 3.9. Cancellation. ..................................................................................................... 19
Section 3.10. Temporary Bonds. ............................................................................................. 19
Section 3.11. Replacement Bonds. ......................................................................................... 20
Section 3.12. Book-Entry-Only System.................................................................................. 21
Section 3.13. Successor Securities Depository: Transfer Outside Book-Entry-Only System. 22
Section 3.14. Payments to Cede & Co. ................................................................................... 22
ARTICLE IV – REDEMPTION OF BONDS BEFORE MATURITY ....................................... 22
Section 4.1. Limitation on Redemption. ............................................................................... 22
Section 4.2. Mandatory Sinking Fund Redemption. ............................................................. 22
Section 4.3. Optional Redemption. ....................................................................................... 24
Section 4.5. Partial Redemption............................................................................................ 24
Section 4.6. Notice of Redemption to Owners. .................................................................... 25
Section 4.7. Payment upon Redemption. .............................................................................. 25
Section 4.8. Effect of Redemption. ....................................................................................... 26
ARTICLE V – FORM OF THE BONDS ..................................................................................... 26
Section 5.1. Form Generally. ................................................................................................ 26
Section 5.2. Form of the Bonds. ........................................................................................... 27
Section 5.3. Cusip Registration. ............................................................................................ 35
Section 5.4. Legal Opinion. .................................................................................................. 35
ARTICLE VI – FUNDS AND ACCOUNTS ............................................................................... 35
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Section 6.1. Establishment of Funds and Accounts. ............................................................. 35
Section 6.2. Initial Deposits to Funds and Accounts. ........................................................... 37
Section 6.3. Pledged Revenue Fund. .................................................................................... 37
Section 6.4. Bond Fund. ........................................................................................................ 39
Section 6.5. Project Fund. ..................................................................................................... 39
Section 6.6. Redemption Fund. ............................................................................................. 41
Section 6.7. Reserve Fund. ................................................................................................... 42
Section 6.8. Rebate Fund: Rebatable Arbitrage. ................................................................... 44
Section 6.9. Administrative Fund. ........................................................................................ 44
Section 6.10. Investment of Funds. ......................................................................................... 44
ARTICLE VII – COVENANTS ................................................................................................... 46
Section 7.1. Confirmation of Assessments. .......................................................................... 46
Section 7.2. Collection and Enforcement of Assessments. ................................................... 46
Section 7.3. Against Encumbrances. ..................................................................................... 47
Section 7.4. Records, Accounts, Accounting Reports. ......................................................... 47
Section 7.5. Covenants Regarding Tax Exemption of Interest on Bonds. ............................ 47
ARTICLE VIII – LIABILITY OF CITY ...................................................................................... 50
Section 8.1. Liability of City................................................................................................. 50
ARTICLE IX – THE TRUSTEE .................................................................................................. 51
Section 9.1. Acceptance of Trust; Trustee as Registrar and Paying Agent. ......................... 51
Section 9.2. Trustee Entitled to Indemnity. .......................................................................... 52
Section 9.3. Responsibilities of the Trustee. ......................................................................... 52
Section 9.4. Property Held in Trust. ..................................................................................... 54
Section 9.5. Trustee Protected in Relying on Certain Documents. ....................................... 54
Section 9.6. Compensation. .................................................................................................. 54
Section 9.7. Permitted Acts. .................................................................................................. 55
Section 9.8. Resignation of Trustee. ..................................................................................... 55
Section 9.9. Removal of Trustee. .......................................................................................... 55
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
Section 9.16. Offering Documentation. .................................................................................. 58
ARTICLE X – MODIFICATION OR AMENDMENT OF THIS INDENTURE ....................... 58
Section 10.1. Amendments Permitted. .................................................................................... 58
Section 10.2. 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
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Section 10.8. Waiver of Default. ............................................................................................ 61
Section 10.9. Execution of Supplemental Indenture. .............................................................. 61
ARTICLE XI – DEFAULT AND REMEDIES ............................................................................ 62
Section 11.1. Events of Default. ............................................................................................. 62
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. ............................................................................................... 65
Section 11.6. Evidence of Ownership of Bonds. .................................................................... 65
Section 11.7. No Acceleration. ............................................................................................... 66
Section 11.8. Mailing of Notice. ............................................................................................. 66
Section 11.9. Exclusion of Bonds. .......................................................................................... 66
ARTICLE XII – GENERAL COVENANTS AND REPRESENTATIONS ............................... 66
Section 12.1. Representations as to Trust Estate. ................................................................... 66
Section 12.2. General. ............................................................................................................. 66
ARTICLE XIII – SPECIAL COVENANTS ................................................................................ 67
Section 13.1. Further Assurances; Due Performance. ............................................................ 67
Section 13.2. Other Obligations or Other Liens; Refunding Bonds. ...................................... 67
Section 13.3. Books of Record. .............................................................................................. 67
ARTICLE XIV – PAYMENT AND CANCELLATION OF THE BONDS AND
SATISFACTION OF THE INDENTURE ................................................................................... 68
Section 14.1. Trust Irrevocable. .............................................................................................. 68
Section 14.2. Satisfaction of Indenture. .................................................................................. 68
Section 14.3. Bonds Deemed Paid. ......................................................................................... 68
ARTICLE XV - MISCELLANEOUS .......................................................................................... 69
Section 15.1. Benefits of Indenture Limited to Parties. .......................................................... 69
Section 15.2. Successor is Deemed Included in all References to Predecessor. .................... 69
Section 15.3. Execution of Documents and Proof of Ownership by Owners. ........................ 69
Section 15.4. No Waiver of Personal Liability. ...................................................................... 70
Section 15.5. Notices to and Demands on City and Trustee. .................................................. 70
Section 15.6. Partial Invalidity................................................................................................ 71
Section 15.7. Applicable Laws. .............................................................................................. 71
Section 15.8. Payment on Business Day. ................................................................................ 71
Section 15.9. Reimbursement Agreement Amendments and Supplements. ........................... 71
Section 15.10. Counterparts. ..................................................................................................... 71
Section 15.11. Texas Government Code Verifications. ............................................................ 71
INDENTURE OF TRUST
THIS INDENTURE, dated as of December 15, 2022, is by and between the CITY OF
ANNA, TEXAS (the "City"), and REGIONS BANK, an Alabama state banking corporation with
offices in 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 19, 2018, 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 corporate limits
of the City to be known as "Hurricane Creek Public Improvement District" (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
Collin 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 October 23, 2018, the City Council of the City (the "City
Council") adopted Resolution No. 2018-10-497 accepting the Petition and calling a public
hearing on the creation of the District on November 13, 2018; and
WHEREAS, on November 13, 2018, after due notice, the City Council held 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, on
November 13, 2018, the City Council made the findings required by Section 372.009(b) of the
PID Act and, by Resolution No. 2018-11-506 adopted by the City Council, authorized the
District in accordance with its finding as to the advisability of the improvement projects and
services; and
WHEREAS, following the adoption of Resolution No. 2018-11-506, 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 372.0l6(b) of the PID Act, published notice of
a public hearing in a newspaper of general circulation in the City where the proposed
improvements are to be undertaken 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, on November 8, 2022, the City Council called for a public hearing to be
held to consider the proposed Assessment Roll, the Service and Assessment Plan and the levy of
the Assessments on the Assessed Property, and the City (i) published notice of such public
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hearing in a newspaper of general circulation in the City and in the extraterritorial jurisdiction of
the City where the proposed improvements are to be undertaken pursuant to Section 372.0l6(b)
of the Act and (ii) mailed notice of such public hearing to the last known address of the owners
of the property liable for the Assessments pursuant to Section 372.0l6(c) of the Act; and
WHEREAS, the City Council convened the public hearing on December 13, 2022, 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 Improvement Area #2 Improvements, 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 December 13, 2022 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 Improvement Area #2 Improvements, 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 the meeting held on December 13, 2022, 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 Improvement Area
#2 Improvements, (ii) paying a portion of the interest on the Bonds during and after the period of
acquisition and construction of the Improvement Area #2 Improvements, (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 2022 (Hurricane Creek Public Improvement District Improvement Area #2
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
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interest in all of the moneys, rights and properties described in the Granting Clauses hereof, as
follows (collectively, the "Trust Estate"):
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, limited obligations of the City payable solely from
the Trust Estate, 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 Trust Estate. The City shall have no legal or moral obligation to pay for the Bonds out
of any funds of the City other than the Trust Estate.
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
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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:
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.
“Actual Costs” mean with respect to Authorized Improvements, the Developer’s
demonstrated, reasonable, allocable, and allowable costs of constructing such Authorized
Improvements, as specified in a payment request in a form that has been reviewed and approved
by the City. Actual Costs may include: (1) the costs incurred by or on behalf of the Developer
(either directly or through affiliates) for the design, planning, financing,
administration/management, acquisition, installation, construction and/or implementation of such
Authorized Improvements; (2) the fees paid for obtaining permits, licenses, or other
governmental approvals for such Authorized Improvements; (3) construction management fees
equal to 4% of costs; (4) the costs incurred by or on behalf of the Developer for external
professional costs, such as engineering, geotechnical, surveying, land planning, architectural
landscapers, appraisals, legal, accounting, and similar professional services; (5) all labor, bonds,
and materials, including equipment and fixtures, by contractors, builders, and materialmen in
connection with the acquisition, construction, or implementation of the Authorized
Improvements; (6) all related permitting and public approval expenses, architectural,
engineering, and consulting fees, taxes, and governmental fees and charges.
“Additional Interest” means the amount collected by the application of the Additional
Interest Rate.
"Additional Interest Rate" 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 of this Indenture and
administered pursuant to Section 6.9 of this Indenture.
"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.
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“Annual Collection Costs” mean the actual or budgeted costs and expenses related to the
creation and operation of the District, the issuance and sale of PID Bonds, and the construction,
operation, and maintenance of the Authorized Improvements, including, but not limited to, costs
and expenses for: (1) the Administrator and City staff; (2) legal counsel, engineers, accountants,
financial advisors, and other consultants engaged by the City; (3) calculating, collecting, and
maintaining records with respect to Assessments and Annual Installments, including the costs of
foreclosure; (4) preparing and maintaining records with respect to Assessment Roll and Annual
Service Plan Updates; (5) issuing, paying, and redeeming PID Bonds; (6) investing or depositing
Assessments and Annual Installments; (7) complying with the Service and Assessment Plan and
the PID Act with respect to the issuance and sale of PID Bonds, including continuing disclosure
requirements; and (8) the paying agent/registrar and Trustee in connection with PID Bonds,
including their respective legal counsel. Annual Collection Costs collected but not expended in
any year shall be carried forward and applied to reduce Annual Collection Costs for 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).
"Annual Installment" means, with respect to each Parcel of 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 I-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.
"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 Improvement Area #2 that benefit
from the Improvement Area #2 Improvements, and is defined as the " Improvement Area #2
Assessed Property" in the Service and Assessment Plan.
"Assessment Ordinance" means the ordinance adopted by the City Council on December
13, 2022, 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.
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"Assessment Roll" means the "Improvement Area #2 Assessment Roll", which document
is attached to the Service and Assessment Plan as Exhibit I-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 Improvement Area #2 Improvements.
"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 and to be constructed within Improvement Area #2 for which Assessments are
levied, including those described in the Service and Assessment Plan.
"Bond" means any of the Bonds.
"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 December 13,
2022 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 2022 (Hurricane
Creek Public Improvement District Improvement Area #2 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.
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"Certificate for Payment" means, with respect to payment or reimbursement of
Improvement Area #2 Improvements, a certificate substantially in the form of Exhibit A attached
to the Reimbursement Agreement and executed by a Person approved by the City Representative
that is delivered to the City Representative and the Trustee specifying the amount of work
performed and the Improvement Area #2 Improvements thereof, and requesting payment for
such Improvement Area #2 Improvements from money on deposit in the Improvement Area #2
Bond Improvement Account of the Project Fund as further described in the Reimbursement
Agreement and Section 6.5 of this Indenture.
"Certificate for Payment – Developer Improvement Account" means, with respect to
payment or reimbursement of Improvement Area #2 Improvements, a certificate substantially in
the form of Exhibit B attached to the Reimbursement Agreement and executed by a Person
approved by the City Representative that is delivered to the City Representative and the Trustee
specifying the amount of work performed and the Improvement Area #2 Improvements thereof,
and requesting payment for such Improvement Area #2 Improvements from money on deposit in
the Improvement Area #2 Developer Improvement Account of the Project Fund as further
described in the Reimbursement Agreement and Section 6.5 of this Indenture.
"City Certificate" 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.
"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 5.5% of
the principal amount of the Outstanding Bonds to be funded from the Additional Interest
deposited to the Pledged Revenue Fund and transferred to the Delinquency and Prepayment
Reserve Account.
"Delinquent Collection Costs" mean costs related to the foreclosure on Assessed Property
and the costs of collection of delinquent Assessments, delinquent Annual Installments, or any
other delinquent amounts due under the Service and Assessment Plan, including penalties and
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reasonable attorney’s fees actually paid, but excluding amounts representing interest and penalty
interest.
"Delivery Date" means December 30, 2022, 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 CADG Hurricane Creek, LLC, a Texas limited liability 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,
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.
"Improvement Area #2" means that portion of the District generally described in
Section II of the Service and Assessment Plan and generally shown in Exhibit A-4 to the Service
and Assessment Plan and as specifically described in Exhibit M-4 to the Service and Assessment
Plan.
“Improvement Area #2 Developer Improvement Account” means that Account established
pursuant to Section 6.1 and administered pursuant to Section 6.5 of this Indenture.
"Improvement Area #2 Improvements" means the Authorized Improvements which only
benefit the property located in the Improvement Area #2, and are described in Section III(C) and
Exhibit J-3 to the Service and Assessment Plan.
"Improvement Area #2 Improvements" means the Actual Costs, as defined in the Service
and Assessment Plan (excluding Annual Collection Costs), solely for the Improvement Area #2
Improvements.
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"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 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 1 and September 1 of each year, commencing September 1, 2023.
"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
services; provided that such money market funds are authorized investments described in the
Public Funds Investment Act, Chapter 2256, Government Code, as amended.
"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.
“Other Obligations” means any bonds, temporary notes, time warrants, or an obligation
under an installment sale contract or reimbursement agreement secured in whole or in part by an
assessment, other than the Assessments securing the Bonds, levied against property within
Improvement Area #2 in accordance with the PID Act.
"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 of this Indenture and (iv) any 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 of this
Indenture.
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"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.
"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.
"Pledged Funds" means, collectively, the Pledged Revenue Fund, the Bond Fund, the
Project Fund (but excluding the Improvement Area #2 Developer Improvement Account), the
Reserve Fund and the Redemption Fund.
"Pledged Revenue Fund" means that fund established pursuant to Section 6.1 of this
Indenture 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 of this Indenture and
administered pursuant to Section 6.8 of this Indenture.
"Record Date" means the close of business on the last Business Day of the month next
preceding an Interest Payment Date.
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"Redemption Fund" means that fund established pursuant to Section 6.1 of this Indenture
and administered pursuant to Section 6.6 of this Indenture.
"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 Improvement Area #2 Funding and
Reimbursement Agreement, Hurricane Creek Public Improvement District, by and between the
City and the Developer, dated as of December 15, 2022, as may be amended and/or
supplemented from time to time, which provides, in part, for the construction and maintenance of
the Improvement Area #2 Improvements, the issuance of the Bonds, the payment or
reimbursement of costs of Improvement Area #2 Improvements 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 of this Indenture and
administered pursuant to Section 6.7 of this Indenture.
"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 $784,400, 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 A of the Assessment Ordinance, as may be updated, amended and
supplemented from time to time.
"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 of this Indenture.
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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 Improvement Area #2, 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, Houston, Texas, an Alabama state banking corporation
with offices in Houston, Texas and authorized to do business in the State, 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.
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.
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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
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.
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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 Owners, 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 $10,550,000 for the purpose of (i) paying a portion of the
Improvement Area #2 Improvements, (ii) paying a portion of the interest on the Bonds during
and after the period of acquisition and construction of the Improvement Area #2 Improvements,
(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.
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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 1 and September 1 of each year, commencing September 1,
2023, computed on the basis of a 360-day year of twelve 30-day months.
(c) The Bonds shall mature on September 1 in the years and in the principal amounts
and shall bear interest at the rates set forth below:
Year
Principal
Amount
Interest
Rate
2028 $ 833,000 5.000%
2042 4,004,000 5.750
2052 5,713,000 6.000
(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 Reimbursement Agreement with all executed amendments
thereto;
(d) a copy of this Indenture executed by the Trustee and the City;
(e) an executed City Certificate 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;
(f) an executed Signature and No-Litigation Certificate;
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(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.
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(b) The principal of all Refunding Bonds must be scheduled to be paid, be subject to
mandatory sinking fund redemption or mature on September 1 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 1 and September 1. 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
principal amount equal to the unpaid principal amount of the Bond presented for exchange. The
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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 City shall issue and 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
City shall issue and 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 1 in each of the years 2028, 2042 and 2052
(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 1, 2028
Redemption Date Sinking Fund Installment Amount
September 1, 2024 $151,000
September 1, 2025 158,000
September 1, 2026 166,000
September 1, 2027 175,000
September 1, 2028* 183,000
Term Bonds maturing September 1, 2042
Redemption Date Sinking Fund Installment Amount
September 1, 2029 $193,000
September 1, 2030 204,000
September 1, 2031 216,000
September 1, 2032 228,000
September 1, 2033 241,000
September 1, 2034 256,000
September 1, 2035 270,000
September 1, 2036 286,000
September 1, 2037 303,000
September 1, 2038 321,000
September 1, 2039 340,000
September 1, 2040 360,000
September 1, 2041 382,000
September 1, 2042* 404,000
Term Bonds maturing September 1, 2052
Redemption Date Sinking Fund Installment Amount
September 1, 2043 $428,000
September 1, 2044 455,000
September 1, 2045 483,000
September 1, 2046 514,000
September 1, 2047 546,000
September 1, 2048 580,000
September 1, 2049 616,000
September 1, 2050 655,000
September 1, 2051 696,000
September 1, 2052* 740,000
__________
* Stated 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.
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(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
days prior to the mandatory 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 1, 2032, 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 any date, 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 4.2, 4.3
or 4.4, Bonds may be redeemed in minimum principal amounts of $1,000 or any integral thereof.
Each Bond shall be treated as representing the number of Bonds that is obtained by dividing the
principal amount of such Bond by $1,000. 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.
(b) If less than all of the Bonds are called for optional redemption pursuant to Section
4.3 hereof, the Trustee shall rely on directions provided in a City Certificate in selecting the
Bonds to be redeemed.
(c) If less than all of the Bonds are called for extraordinary optional redemption
pursuant to Section 4.4 hereof, the Bonds or portion of a Bond to be redeemed shall be allocated
on a pro rata basis (as nearly as practicable) among all Outstanding Bonds.
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(d) 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
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.
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(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.
REGISTERED
NO. ______
United States of America
State of Texas
CITY OF ANNA, TEXAS
SPECIAL ASSESSMENT REVENUE BOND, SERIES 2022
(HURRICANE CREEK PUBLIC IMPROVEMENT
DISTRICT IMPROVEMENT AREA #2 PROJECT)
REGISTERED
$__________
INTEREST RATE MATURITY DATE DELIVERY DATE CUSIP NUMBER
______% September 1, 20__ December 30, 2022 __________
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 1 and September 1 of each year, commencing September 1,
2023.
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
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.
______________________________________
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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 close of business on the fifteenth calendar 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 $10,550,000 and issued, with the
limitations described herein, pursuant to an Indenture of Trust, dated as of December 15, 2022
(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
Improvement Area #2 Improvements, (ii) paying a portion of the interest on the Bonds during
and after the period of acquisition and construction of the Improvement Area #2 Improvements,
(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 1 in the years 2028, 2042 and 2052 (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 1, 2028
Redemption Date Sinking Fund Installment Amount
September 1, 2024 $151,000
September 1, 2025 158,000
September 1, 2026 166,000
September 1, 2027 175,000
September 1, 2028* 183,000
__________
* Stated Maturity.
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Term Bonds maturing September 1, 2042
Redemption Date Sinking Fund Installment Amount
September 1, 2029 $193,000
September 1, 2030 204,000
September 1, 2031 216,000
September 1, 2032 228,000
September 1, 2033 241,000
September 1, 2034 256,000
September 1, 2035 270,000
September 1, 2036 286,000
September 1, 2037 303,000
September 1, 2038 321,000
September 1, 2039 340,000
September 1, 2040 360,000
September 1, 2041 382,000
September 1, 2042* 404,000
Term Bonds maturing September 1, 2052
Redemption Date Sinking Fund Installment Amount
September 1, 2043 $428,000
September 1, 2044 455,000
September 1, 2045 483,000
September 1, 2046 514,000
September 1, 2047 546,000
September 1, 2048 580,000
September 1, 2049 616,000
September 1, 2050 655,000
September 1, 2051 696,000
September 1, 2052* 740,000
__________
* Stated Maturity.
At least thirty (30) days prior to each mandatory 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 mandatory 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
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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.
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 1, 2032, 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 any date, 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.
If less than all of the Bonds are to be redeemed, Bonds may be redeemed in minimum
principal amounts of $1,000 or any integral thereof. Each Bond shall be treated as representing
the number of Bonds that is obtained by dividing the principal amount of such Bond by $1,000.
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.
If less than all of the Bonds are called for optional redemption, the Trustee shall rely on
directions provided in a City Certificate in selecting the Bonds to be redeemed.
If less than all of the Bonds are called for extraordinary optional redemption, the Bonds
to be redeemed shall be allocated on a pro rata basis (as nearly as practicable) among all
Outstanding Bonds.
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
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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
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.
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.
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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.
____________________________
City Secretary Mayor
[CITY SEAL]
(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]
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(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.
REGIONS BANK,
as Trustee
DATED: _________________
By: _____________________________
Authorized Signatory
(d) Form of Assignment.
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.
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(e) The Initial Bond shall be in the form set forth in paragraphs (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 1 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
(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;
36
(ii) Bond Fund;
(iii) Project Fund;
(iv) Reserve Fund;
(v) Redemption Fund;
(vi) Rebate Fund; and
(vii) Administrative Fund.
(b) Creation of Accounts.
(i) The following Account is hereby created and established under the Bond
Fund:
(A) Principal and Interest Account; and
(B) Capitalized 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) Improvement Area #2 Bond Improvement Account;
(B) Improvement Area #2 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 Improvement Area #2 Developer
Improvement Account shall constitute a trust fund which shall be held in trust by the Trustee
37
solely for the benefit of the City. The Improvement Area #2 Developer Improvement Account
shall not be part of the Trust Estate and shall not be security for the Bonds. Amounts in the
Improvement Area #2 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.
(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: $411,480.72;
(ii) to the Reserve Account of the Reserve Fund: $784,400.00, which is equal
to the initial Reserve Account Requirement;
(iii) to the Costs of Issuance Account of the Project Fund: $656,811.28;
(iv) to the Improvement Area #2 Bond Improvement Account of the Project
Fund: $8,340,808.00; and
(v) to the Administrative Fund: $40,000.00.
(b) Funds received from the Developer on the Delivery Date in the amount of $0.00
shall be deposited to the Improvement Area #2 Developer Improvement Account.
Section 6.3. Pledged Revenue Fund.
(a) Periodically upon receipt thereof, the City shall transfer or cause to be transferred,
pursuant to a City Certificate provided 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 pursuant to a City Certificate provided to the Trustee 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
38
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 a City Certificate 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 6.10(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 Improvement Area #2 Improvements, (ii) pay other costs
permitted by the PID Act, or (iii) deposit such excess into the Redemption Fund to redeem
Bonds as provided in 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 Certificate.
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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.
(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
(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.
(d) Moneys in the Capitalized Interest Account shall be used for the payment of all
interest due on the Bonds on September 1, 2023. Any amounts on deposit to the Capitalized
Interest Account after the foregoing payments shall be transferred to the Improvement Area #2
Bond Improvement Account of the Project Fund, or if the Improvement Area #2 Bond
Improvement Account of the Project Fund has been closed as provided in Section 6.5(d), such
amounts shall be transferred to the Redemption Fund to be used to redeem Bonds and the
Capitalized Interest Account shall be closed.
Section 6.5. Project Fund.
(a) Money on deposit in 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
Certificates.
(2) Disbursements from the Improvement Area #2 Bond Improvement Account and
Improvement Area #2 Developer Improvement Account of the Project Fund to pay Improvement
Area #2 Improvements shall be made by the Trustee upon receipt by the Trustee of a properly
executed and completed Certificate for Payment or Certificate for Payment – Developer
Improvement Account, respectively. The funds from the Improvement Area #2 Bond
Improvement Account and Improvement Area #2 Developer Improvement Account of the
Project Fund shall be disbursed in accordance with a Certificate for Payment or Certificate for
Payment – Developer Improvement Account, respectively, for Improvement Area #2
Improvements as described in the Reimbursement Agreement. Each such Certificate for
Payment or Certificate for Payment – Developer Improvement Account 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
40
be made by check or wire transfer in accordance with the payment instructions set forth in such
Certificate for Payment or Certificate for Payment – Developer Improvement Account 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), (f) and (i), money on deposit in the
Improvement Area #2 Bond Improvement Account and Improvement Area #2 Developer
Improvement Account of the Project Fund shall be used solely to pay Improvement Area #2
Improvements. The Trustee shall first pay Improvement Area #2 Improvements from funds on
deposit in the Improvement Area #2 Bond Improvement Account. After all amounts have been
disbursed from the Improvement Area #2 Bond Improvement Account, the Trustee shall pay
Improvement Area #2 Improvements from funds in the Improvement Area #2 Developer
Improvement Account upon receipt by the Trustee of a properly executed and completed
Certificate for Payment – Developer Improvement Account.
(d) If the City Representative determines in his or her sole discretion that certain
amounts then on deposit in the Improvement Area #2 Bond Improvement Account and the
Improvement Area #2 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 Improvement Area #2 Improvements such that, in the opinion of the City
Representative, it is unlikely that the amounts in the Improvement Area #2 Bond Improvement
Account and the Improvement Area #2 Developer Improvement Account will ever be expended
for the purposes of the Project Fund, the City Representative shall file a City Certificate with the
Trustee which identifies the amounts then on deposit in the Improvement Area #2 Bond
Improvement Account and the Improvement Area #2 Developer Improvement Account that are
not expected to be used for purposes of the Project Fund. If such City Certificate is so filed, the
identified amounts on deposit in the Improvement Area #2 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 Certificate filed with the Trustee, and
the identified amounts on deposit in the Improvement Area #2 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(g). Upon such transfer, the Improvement Area #2 Bond
Improvement Account and Improvement Area #2 Developer Improvement Account of the
Project Fund shall be closed.
(e) In making any determination pursuant to this Section, the City Representative
may conclusively rely upon a certificate of an Independent Financial Consultant.
(f) Upon the filing of a City Certificate stating that all Improvement Area #2
Improvements have been completed and that all Improvement Area #2 Improvements have been
paid, or that any Improvement Area #2 Improvements are not required to be paid from the
Project Fund pursuant to a Certificate for Payment or a Certificate for Payment – Developer
Improvement Account, the Trustee shall transfer the amount, if any, remaining within the
Improvement Area #2 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 Certificate filed with the Trustee, and the amounts on deposit in the
Improvement Area #2 Developer Improvement Account shall be transferred and released to the
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Developer, or to the Developer's successors and assigns or designees pursuant to Section 6.5(g).
Upon such transfer, the Improvement Area #2 Bond Improvement Account and Improvement
Area #2 Developer Improvement Account of the Project Fund shall be closed.
(g) Any amounts in the Improvement Area #2 Developer Improvement Account to be
transferred and released pursuant to Section 6.5(d), (f) or (i) 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 Improvement Area #2 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.
(h) 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 Improvement Area #2 Bond Improvement Account of the Project Fund and
used to pay Improvement Area #2 Improvements or to the Principal and Interest Account and
used to pay interest on the Bonds, as directed in a City Certificate filed with the Trustee, and the
Costs of Issuance Account shall be closed.
(i) In the event the Developer has not completed the Improvement Area #2
Improvements by December 30, 2027, then the City shall provide written direction to the Trustee
to (i) transfer all funds on deposit in the Improvement Area #2 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 Improvement Area #2 Developer Improvement Account to the
Developer, or to the Developer's successors and assigns or designees pursuant to Section 6.5(g).
Upon such transfers, the Improvement Area #2 Bond Improvement Account and Improvement
Area #2 Developer Improvement Account of the Project Fund shall be closed.
(j) In providing any disbursement under this Section, the Trustee may conclusively
rely as to the completeness and accuracy of all statements in such Certificate for Payment or
Certificate for Payment – Developer Improvement Account 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 Certificate for Payment or Certificate for Payment –
Developer Improvement Account 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, pursuant to a City Certificate, 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 1 of each year, commencing March 1, 2024, 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 transferring the
amounts pursuant to this Section, the Trustee may conclusively rely on a City Certificate (which
shall be based on the Annual Installments as shown on the Assessment Roll in the Service and
Assessment Plan) unless and until it receives a City Certificate 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 a City Certificate, 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, or any additional amounts necessary to permit the
Bonds to be redeemed in minimum principal amounts of $1,000, 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 written
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
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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 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 Certificate 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 Improvement Area #2 Bond Improvement Account of the Project Fund to pay
Improvement Area #2 Improvements 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 a 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 Certificate, 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 Certificate
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.
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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 Certificate, 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
Certificate 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 Certificate 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 Certificate 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 Certificate shall be a certification, upon which the Trustee may
conclusively rely without investigation or inquiry, that the investment directed therein constitutes
45
an 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 suitability or legality of any investments or whether investments
comply with Section 6.10(a) above. The parties acknowledge that the Trustee is not providing
investment supervision, recommendations, or advice.
(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
46
will be available upon request and at no additional cost and other trade confirmations may be
obtained from the applicable broker.
(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 Certificate, 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 Certificate 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 permissib1e 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
47
required under any circumstances to purchase or make payment for the purchase of the
delinquent Assessments or the corresponding particular Assessed Property.
(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 Trust Estate 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
Trust Estate 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
48
the payment of more than 10 percent of the debt service on the Bonds, in contravention of
section 141(b)(2) of the Code;
(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 refundings); and
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(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
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 City Manager and 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 Improvement Area #2 Improvements 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
Improvement Area #2 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.
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(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
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.
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(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
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 express 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.
No implied covenants or obligations shall be read into this Indenture against the Trustee.
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(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.
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, and to the extent money in the Administrative Fund is insufficient, from the Pledged
Revenue Fund, to pay all fees, 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 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. 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
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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
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 Improvement Area #2 Improvements. 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 shall not be liable for any error of judgment made in good faith by
any one of its officers, unless it shall be established that the Trustee was negligent in ascertaining
the pertinent facts.
(e) The Trustee’s immunities and protections from liability and its right to
indemnification in connection with the performance of its duties under this Indenture shall
extend to the Trustee’s officers, directors, agents, attorneys and employees. Such immunities
and protections and rights to indemnification, together with the Trustee’s right to compensation,
shall survive the Trustee’s resignation or removal, the discharge of this Indenture.
(f) The Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or through agents, attorneys, or receivers, and shall not be
responsible for any misconduct or negligence on the part of any agent, attorney, or receiver
appointed or chosen by it with due care, and the Trustee shall be entitled to rely and act upon the
opinion or advice of counsel, who may be counsel to the City, concerning all matters of trust
hereof and the duties hereunder, and may in all cases pay such reasonable compensation to all
such agents, attorneys, and receivers as may reasonably be employed in connection with the
trusts hereof. The Trustee shall not be responsible for any loss or damage resulting from any
action or nonaction by it taken or omitted to be taken in good faith in reliance upon such opinion
or advice of counsel.
(g) The Trustee shall not be responsible for any recital herein (except with respect to
the authentication certificate of the Trustee endorsed on the Bonds) or for the recording, filing, or
refiling of this Indenture in connection therewith, or for the validity of the execution by the City
of this Indenture or of any Supplemental Indentures or instruments of further assurance, or for
the sufficiency or security of the Bonds. The Trustee shall not be responsible or liable for any
loss suffered in connection with any investment of funds made by it in accordance with this
Indenture.
(h) The Trustee makes no representations as to the value or condition of the Trust
Estate or any part thereof, or as to the validity or sufficiency of this Indenture or of the Bonds.
The Trustee shall not be accountable for the use or application of any Bonds or the proceeds
thereof or of any money paid to or upon the order of the City under any provision of this
Indenture.
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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 Certificate, unless other evidence in
respect thereof be hereby specifically prescribed. Such City Certificate 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
hereof by the City to the Trustee shall be sufficiently executed if executed in the name of the
City by the City Representative. The Trustee shall be entitled to conclusively rely upon the
foregoing as sufficient evidence of the facts set forth herein. The execution of any City
Certificate shall constitute, unto the Trustee, an irrevocable determination that all conditions
precedent thereto have occurred.
(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
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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
Certificate 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 Certificate, 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 in the Administrative Fund, and to the extent moneys in the Administrative Fund
are insufficient then from any moneys in its possession under the provision of this Indenture and
shall be entitled to a preference therefor over any Bonds Outstanding hereunder. The right of the
Trustee to fees, expenses, and indemnification, to the extent permitted by law, shall survive the
release, discharge, and satisfaction of the Indenture.
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. The permissive right of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty, and the Trustee shall not be liable for any
permissive actions taken except as a consequence of its own negligence or misconduct.
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
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
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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.
(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.
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(f) Each successor Trustee shall mail, in accordance with the provisions of the
Bonds, notice of its appointment as 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
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. The City shall timely delivery a
copy of such filed financing statement, if any, to the Trustee.
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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.
Section 9.16. Offering Documentation.
The Trustee shall have no responsibility with respect to any information, statement, or
recital in any official statement, offering memorandum, or any other disclosure material prepared
or distributed with respect to the Bonds and, except as otherwise provided in the Continuing
Disclosure Agreement of the Issuer, shall have no responsibility for compliance with any State or
federal securities laws in connection with 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 the principal of or 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
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any Owners, only to the extent permitted by law, and only for any one 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
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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
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
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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 the 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.
(a) 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.
(b) No such amendment shall modify any of the rights or obligations of the Trustee
without its written consent. In executing or accepting any Supplemental Indenture, the Trustee
shall be fully protected in relying upon an opinion of qualified counsel addressed and delivered
to the Trustee stating that (i) the execution of such Supplemental Indenture is permitted by and in
compliance with this Indenture, (ii) the execution and delivery of will not adversely affect the
exclusion from federal gross income of the interest on the Bonds, and (iii) such Supplemental
Indenture will, upon the execution and delivery thereof, to be a valid and binding obligation of
the City.
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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;
(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; 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; and
(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.
The Trustee shall not be charged with knowledge of (a) any events or other information,
or (b) any default under this Indenture or any other agreement unless a responsible officer of the
Trustee shall have actual knowledge thereof.
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 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.
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(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 Certificate, 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 Certificate, 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. The Trustee shall have no liability for its selection of Trust Estate assets to liquidate or
sell.
(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
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
51% 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
written 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 in writing;
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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, at the option of the Trustee as advised by its counsel, 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.
Section 11.4. Application of Revenues and Other Moneys After Default.
(a) All moneys, securities, funds, Pledged Revenues and other assets of the Trust
Estate 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 fees,
costs, and expenses), 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 or
Redemption Price and to the Owners entitled thereto, without any discrimination or
preference.
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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
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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.
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.
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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 Pledged Revenues, 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.
Section 13.2. Other Obligations or Other Liens; Refunding Bonds.
(a) The City reserves the right, subject to the provisions contained in this
Section 13.2, to issue 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 the Trust Estate, or any portion thereof.
(b) Other than Refunding Bonds issued to refund all or a portion of the Bonds, or
subordinate lien obligations permitted hereunder, 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.
(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 and subordinate lien obligations
permitted hereunder. 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.
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
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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.
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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. This
Indenture and the exhibits hereto set forth the entire agreement and understanding of the parties
related to this transaction and supersedes all prior agreements and understandings, oral or
written.
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
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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:
If to the City City of Anna, Texas
120 W. 7th St.
Anna, Texas 75409
Attn: Director of Finance
Telephone: (972) 924-3325
If to the Trustee, initially also acting in
the capacity of Paying Agent/Registrar
Regions Bank
3773 Richmond Avenue, Suite 1100
Houston, Texas 77046
Attn: Corporate Trust Services
Telephone: (713) 244-8042
(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 party 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
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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. Venue and exclusive jurisdiction
for any action to enforce or construe this Indenture shall be a state court of competent
jurisdiction in Collin County, Texas or any federal court with diversity jurisdiction.
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.
Section 15.9. Reimbursement Agreement Amendments and Supplements.
The City and the Developer may amend and supplement the Reimbursement 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. Texas Government Code Verifications.
(a) The Trustee represents that, neither the Trustee, nor any parent company, wholly-
or majority-owned subsidiaries or affiliates of the same, if any, are companies 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 the following page of such
officer's internet website:
https://comptroller.texas.gov/purchasing/publications/divestment.php
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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 Federal law
and excludes the Trustee and each parent company, wholly- or majority-owned subsidiaries, and
other affiliates of the same, 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 Trustee understands "affiliate"
to mean any entity that controls, is controlled by, or is under common control with the Trustee
and exists to make a profit.
(b) The Trustee hereby verify that the Trustee and any parent company, wholly- or
majority-owned subsidiaries, and other affiliates, if any, do not boycott Israel and, to the extent
this Indenture is a contract for goods or services, will not boycott Israel during the term of this
Contract. 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.
(c) The Trustee hereby verifies that it and any parent company, wholly- or majority-
owned subsidiaries, and other affiliates, if any, do not boycott energy companies and, to the
extent this Indenture is a contract for goods or services, will not boycott energy companies
during the term of this Indenture. The foregoing verification is made solely to enable the City to
comply with Section 2274.002, Texas Government Code, as added by Senate Bill 13 in the
Regular Session of the 87th Legislature of Texas, and to the extent such Section does not
contravene applicable Federal law. As used in the foregoing verification, “boycott energy
company” means (without an ordinary business purpose) 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 with a company because the company either (i)
engages in the exploration, production, utilization, transportation, sale, or manufacturing of fossil
fuel-based energy and does not commit or pledge to meet environmental standards beyond
applicable federal and state law or (ii) does business with such a company.
(d) The Trustee hereby verifies that it and any parent company, wholly- or majority-
owned subsidiaries, and other affiliates, if any, do not discriminate against a firearm entity or
firearm trade association and, to the extent this Indenture is a contract for goods or services, will
not discriminate against a firearm entity or firearm trade association during the term of this
Indenture. The foregoing verification is made solely to enable the City to comply with Section
2274.002, Texas Government Code, and to the extent such Section does not contravene
applicable Federal law. As used in the foregoing verification, (a) ‘discriminate against a firearm
entity or firearm trade association’ means to refuse to engage in the trade of any goods or
services, or to refrain from continuing or terminate an existing business relationship, with the
firearm entity or firearm trade association based solely on its status as a firearm entity or firearm
trade association, but does not include any such action taken (i) to comply with federal, state, or
local law, policy, or regulations or a directive by a regulatory agency or (ii) for a traditional
business reason that is specific to the firearm entity or firearm trade association and not based
solely on its status as a firearm entity or firearm trade association, (b) ‘firearm entity’ means a
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manufacturer, distributor, wholesaler, supplier, or retailer of firearms, firearm accessories (i.e.,
devices specifically designed or adapted to enable an individual to wear, carry, store, or mount a
firearm on the individual or on a conveyance and items used in conjunction with or mounted on a
firearm that are not essential to the basic function of the firearm, including detachable firearm
magazines), or ammunition (i.e., a loaded cartridge case, primer, bullet, or propellant powder
with or without a projectile) or a sport shooting range (as defined by Section 250.001, Texas
Local Government Code), and (c) ‘firearm trade association’ means a person, corporation,
unincorporated association, federation, business league, or business organization that (i) is not
organized or operated for profit (and none of the net earnings of which inures to the benefit of
any private shareholder or individual), (ii) has two or more firearm entities as members, and (iii)
is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, as
an organization described by Section 501(c) of that code.
As used in subsections (a) through (d) above, the Trustee understands “affiliate” to mean
an entity that controls, is controlled by, or is under common control with the Trustee within the
meaning of SEC Rule 133(f), 17 C.F.R. § 230.133(f), and exists to make a profit.
(e) The Trustee represents that it has, or will have prior to the date of delivery of the
Bonds, on file with the Texas Attorney General a standing letter addressing the representations
and verifications in subsections (a) through (d) above in a form acceptable to the Texas Attorney
General. In addition, if the Trustee has received notice from the Texas Comptroller of Public
Accounts that the Trustee or its affiliate may appear on the State of Texas’ list of financial
companies that boycott energy companies, the Trustee agrees to provide to the City or Bond
Counsel, two business days prior to the delivery date for the Bonds, written verification to the
effect that the applicable standing letter remains in effect and may be relied upon by the City and
the Texas Attorney General. The written verification will also confirm that the Trustee (or its
affiliate which received the letter from the Comptroller) intends to timely respond to the
Comptroller’s request. Such written verification may be in the form of an e-mail.
[Remainder of page left blank intentionally]
IN WITNESS WHEREOF, the City and the Trustee have caused this Indenture of Trust
to be executed as of the date hereof.
CITY OF ANNA, TEXAS
By: ___________________________
Nate Pike, Mayor
City of Anna, Texas
Attest:
_________________________
Carrie L. Land, City Secretary
City of Anna, Texas
(CITY SEAL)
City Signature Page to Indenture of Trust
REGIONS BANK,
as Trustee
By: ___________________________
Authorized Officer
Trustee Signature Page to Indenture of Trust
B-1
EXHIBIT B
BOND PURCHASE AGREEMENT
$10,550,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2022
(HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #2 PROJECT)
BOND PURCHASE AGREEMENT
December 13, 2022
City of Anna, Texas
111 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 $10,550,000 aggregate principal amount of the “City of Anna, Texas
Special Assessment Revenue Bonds, Series 2022 (Hurricane Creek Public Improvement District
Improvement Area #2 Project”)” (the “Bonds”), at a purchase price of $10,233,500.00
representing the aggregate principal amount of the Bonds, less an Underwriter’s discount of
$316,500.00).
Inasmuch as this 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
2
and agrees that (i) the purchase and placement 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 Improvement Area #2
Improvements (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 December 30, 2022 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 December 30, 2022 (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 December 13, 2022 (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
December 15, 2022, 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 special assessments
(the “Assessments”) levied on the assessable parcels within Improvement Area #2 of the
Hurricane Creek Public Improvement District (the “District”). The District was established by
Resolution No. 2018-11-506 (the “Creation Resolution”), enacted by the City Council on
November 13, 2018, in accordance with the Act.
An amended and restated Service and Assessment Plan (as so updated, the “Service and
Assessment Plan”) which sets forth the costs of the Improvement Area #2 Improvements and the
method of payment of the Assessments levied against assessable property located within
Improvement Area #2 of the District, was approved pursuant to an assessment ordinance adopted
3
by the City Council on December 13, 2022 (the “Assessment Ordinance” and, together with the
Creation Resolution, the Indenture and the Bond Ordinance, 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 “Improvement Area #2 Improvements”, (ii) paying a portion of the interest on the Bonds
during and after the period of acquisition and construction of the Improvement Area #2
Improvements, (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. On or before the fifth (5th) business day prior to Closing, the
Underwriter shall executed 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 December 2, 2022 (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 been deemed final by the City as of its date, except for the omission of such
4
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 placement 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 respect to the information in the Preliminary Limited Offering Memorandum or the
5
Limited Offering Memorandum under the captions and subcaptions “PLAN OF
FINANCE — Status of Development and Plan of Finance,” “BOOK-ENTRY ONLY
SYSTEM,” “THE IMPROVEMENT AREA #2 IMPROVEMENTS,” “THE
DEVELOPMENT,” “THE DEVELOPER,” “BONDHOLDERS' RISKS” (only as it
pertains to the Developer, the Improvement Area #2 Improvements and the
Development), “THE ADMINISTRATOR,” “LEGAL MATTERS — Litigation — The
Developer,” “CONTINUING DISCLOSURE – The Developer,” “CONTINUING
DISCLOSURE – The Developer’s Compliance with Prior Undertakings,” 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 First Amended and Restated Villages of Hurricane
Creek Subdivision Improvement Agreement between the City and CADG
Hurricane Creek, LLC, a Texas limited liability company (the
6
“Developer”) effective as August 28, 2018, as amended by that Second
Amended Villages of Hurricane Creek Subdivision Improvement
Agreement effective as of November 13, 2018, as further amended by the
Third Amended Villages of Hurricane Creek Subdivision Improvement
Agreement effective as of February 12, 2019, and as further amended by
the Fourth Amended Villages of Hurricane Creek Subdivision
Improvement Agreement effective as of December 8, 2020 (collectively
the “Development Agreement”);
(4) Improvement Area #2 Funding and Reimbursement
Agreement Hurricane Creek Public Improvement District, effective
December 13, 2022, and executed and delivered by the City and the
Developer (the “Funding & Reimbursement Agreement”);
(5) the Continuing Disclosure Agreement of Issuer with
respect to the Bonds, dated as of December 15, 2022 (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 Improvement Area #2 Landowner Agreement dated as
of December 13, 2022 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 Funding & Reimbursement Agreement, (5) the Landowner
Agreement, (6) the City Continuing Disclosure Agreement, (7) the Limited
Offering Memorandum, and (8) any other documents and certificates described in
any of the foregoing (the documents described by subclauses (1) through (8) 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
7
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
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
8
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,
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 Improvement Area #2 Assessment Roll (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.
(j) 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
9
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
Memorandum or the Limited Offering Memorandum under the captions and subcaptions
“PLAN OF FINANCE — Status of Development and Plan of Finance,” “BOOK-ENTRY
ONLY SYSTEM,” “THE IMPROVEMENT AREA #2 IMPROVEMENTS,” “THE
DEVELOPMENT,” “THE DEVELOPER,” “BONDHOLDERS' RISKS” (only as it
pertains to the Developer, the Improvement Area #2 Improvements and the
Development), “THE ADMINISTRATOR,” “LEGAL MATTERS — Litigation — The
Developer,” “CONTINUING DISCLOSURE – The Developer,” “CONTINUING
DISCLOSURE – The Developer’s Compliance with Prior Undertakings,” 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 — Status of Development and Plan of Finance,” “BOOK-ENTRY ONLY
SYSTEM,” “THE IMPROVEMENT AREA #2 IMPROVEMENTS,” “THE
DEVELOPMENT,” “THE DEVELOPER,” “BONDHOLDERS' RISKS” (only as it
pertains to the Developer, the Improvement Area #2 Improvements and the
Development), “THE ADMINISTRATOR,” “LEGAL MATTERS — Litigation — The
Developer,” “CONTINUING DISCLOSURE – The Developer,” “CONTINUING
DISCLOSURE – The Developer’s Compliance with Prior Undertakings,” 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.
(l) 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
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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
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.
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(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.
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 for 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 Boghetich Law, PLLC
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(“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 Funding & Reimbursement
Agreement, the Landowner Agreement and the Continuing Disclosure Agreement of the
Developer with respect to the Bonds, dated as of December 15, 2022 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 Representations, the Development Agreement, the Funding &
Reimbursement 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 Improvement Area #2 Improvements 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) 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
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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
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
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Bonds have been offered and sold shall have withheld registration,
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
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Exchange Act of 1934 (the “Securities Exchange Act”) and the Trust Indenture
Act; or
(viii) the purchase of, payment for, and placement 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
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and subcaptions is an accurate and fair description of the laws and legal issues
addressed therein and, 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 Funding &
Reimbursement 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;
17
(ii) the Authorizing Documents and City Documents are in full force
and effect and have not been amended, modified, or supplemented;
(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
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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;
(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.
(j) 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.
(l) 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.
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(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, or in form otherwise
agreed upon by the Underwriter, and (ii) a copy of the real estate appraisal of the property
in the District attached as Appendix E to the Limited Offering Memorandum.
(p) Letter of Representation of Administrator. Letter of Representation of the
Administrator, substantially in the form of Appendix G hereto, or in form otherwise
agreed upon by the Underwriter.
(q) Evidence of Filing of Assessment Ordinance and Landowner Agreement.
Evidence that (i) the Assessment Ordinance, including the Assessment Roll for
Improvement Area #2 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 (ii) 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 Simmons Bank
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 create by the Assessments in a form acceptable to the Underwriter.
(s) Rule 15c2-12 Certification. A resolution or certificate of the City 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
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.
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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
forth in Section 1 hereof, the opinion of Bond Counsel described in Section 9(a) hereof, and any
documents to be provided by the Developer.
11. Establishment of Issue Price.
(a) The Underwriter agrees to assist the City in establishing the issue price
of the Bonds and shall execute and deliver to the City on or before Closing an “issue
price” or similar 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
sales price or prices of the Bonds. 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 identified herein and any notice or report to be provided to the
City may be provided to the City’s Financial Advisor.
(b) The Underwriter confirms that it has sold all the Bonds of each maturity
to the Purchaser on or before the date of the Agreement at the respective offering price
(the “initial offering price”), or at the corresponding yield or yields, set forth in Schedule
I attached hereto, except as otherwise set forth herein. If different interest coupons apply
within a maturity, each separate CUSIP number within that maturity will be treated as a
separate maturity for this purpose.
(c) The Underwriter confirms that no other entity has participated in the initial
placement of the Bonds with the Purchaser.
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 Assessment
21
Consultant, 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
actual knowledge prior to the purchase and placement 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.
22
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 Assignment. 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. 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
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.
24. Iran, Sudan and Foreign Terrorist Organizations. The Underwriter hereby
represents that neither the Underwriter nor any of its parent companies, 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://comptroller.texas.gov/purchasing/docs/sudan-list.pdf,
https://comptroller.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 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
23
regime relating to Sudan or Iran or any federal sanctions regime relating to a foreign terrorist
organization.
25. Verification Regarding Energy Company Boycotts. To the extent this Agreement
constitutes a contract for goods or services for which a written verification is required under
Section 2274.002 (as added by Senate Bill 13 in the 87th Texas Legislature, Regular Session),
Texas Government Code, as amended, the Underwriter hereby verifies that it and its parent
company, wholly- or majority- owned subsidiaries, and other affiliates, if any, do not boycott
energy companies and, will not boycott energy companies during the term of this Agreement. The
foregoing verification is made solely to enable the Issuer to comply with such Section and to the
extent such Section does not contravene applicable Federal or Texas law. As used in the
foregoing verification, “boycott energy companies,” a term defined in Section 2274.001(1),
Texas Government Code (as enacted by such Senate Bill) by reference to Section 809.001, Texas
Government Code (also as enacted by such Senate Bill), shall mean, without an ordinary
business purpose, 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
with a company because the company (A) engages in the exploration, production, utilization,
transportation, sale, or manufacturing of fossil fuel-based energy and does not commit or pledge
to meet environmental standards beyond applicable federal and state law; or (B) does business
with a company described by (A) above.
26. Verification Regarding Discrimination Against Firearm Entity or Trade
Association. To the extent this Agreement constitutes a contract for goods or services for which a
written verification is required under Section 2274.002 (as added by Senate Bill 19 in the 87th
Texas Legislature, Regular Session), Texas Government Code, as amended, the Underwriter
hereby verifies that it and its parent company, wholly- or majority- owned subsidiaries, and other
affiliates, if any does not contravene applicable Federal or Texas law.
As used in the foregoing verification, and the following definitions,
(a) “discriminate against a firearm entity or firearm trade association,” a term
defined in Section 2274.001(3), Texas Government Code (as enacted by such Senate
Bill), (A) means, with respect to the firearm entity or firearm trade association, to (i)
refuse to engage in the trade of any goods or services with the firearm entity or firearm
trade association based solely on its status as a firearm entity or firearm trade association,
(ii) refrain from continuing an existing business relationship with the firearm entity or
firearm trade association based solely on its status as a firearm entity or firearm trade
association, or (iii) terminate an existing business relationship with the firearm entity or
firearm trade association based solely on its status as a firearm entity or firearm trade
association and (B) does not include (i) the established policies of a merchant, retail
seller, or platform that restrict or prohibit the listing or selling of ammunition, firearms,
or firearm accessories and (ii) a company’s refusal to engage in the trade of any goods or
services, decision to refrain from continuing an existing business relationship, or decision
to terminate an existing business relationship (aa) to comply with federal, state, or local
law, policy, or regulations or a directive by a regulatory agency or (bb) for any traditional
business reason that is specific to the customer or potential customer and not based solely
on an entity’s or association’s status as a firearm entity or firearm trade association,
24
(b) “firearm entity,” a term defined in Section 2274.001(6), Texas
Government Code (as enacted by such Senate Bill), means a manufacturer, distributor,
wholesaler, supplier, or retailer of firearms (defined in Section 2274.001(4), Texas
Government Code, as enacted by such Senate Bill, as weapons that expel projectiles by
the action of explosive or expanding gases), firearm accessories (defined in Section
2274.001(5), Texas Government Code, as enacted by such Senate Bill, as devices
specifically designed or adapted to enable an individual to wear, carry, store, or mount a
firearm on the individual or on a conveyance and items used in conjunction with or
mounted on a firearm that are not essential to the basic function of the firearm, including
detachable firearm magazines), or ammunition (defined in Section 2274.001(1), Texas
Government Code, as enacted by such Senate Bill, as a loaded cartridge case, primer,
bullet, or propellant powder with or without a projectile) or a sport shooting range
(defined in Section 250.001, Texas Local Government Code, as a business establishment,
private club, or association that operates an area for the discharge or other use of firearms
for silhouette, skeet, trap, black powder, target, self-defense, or similar recreational
shooting), and
“firearm trade association,” a term defined in Section 2274.001(7), Texas Government Code (as
enacted by such Senate Bill), means any person, corporation, unincorporated association,
federation, business league, or business organization that (i) is not organized or operated for
profit (and none of the net earnings of which inures to the benefit of any private shareholder or
individual), (ii) has two or more firearm entities as members, and (iii) is exempt from federal
income taxation under Section 501(a), Internal Revenue Code of 1986, as an organization
described by Section 501(c) of that code.
27. Affiliate. As used in Section 23 through 26, the Underwriter understands
“affiliate” to mean an entity that controls, is controlled by, or is under common control with the
Underwriter within the meaning of SEC Rule 405, 17 C.F.R. § 230.405, and exists to make a
profit.
[Signatures to follow]
S-1
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first set forth above.
FMSbonds, Inc.,
as Underwriter
By:
Name: Theodore A. Swinarski
Title: Senior Vice President - Trading
S-2
Accepted at _____ a.m./p.m. central time on the
date first stated above.
CITY OF ANNA, TEXAS
By:
Nate Pike, Mayor
Schedule I-1
SCHEDULE I
$10,550,000
CITY OF ANNA, TEXAS
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2022
(HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #2 PROJECT)
Interest Accrues From: Date of Delivery
$833,000 5.000% Term Bonds, Due September 1, 2028, Priced to Yield 5.000% (a) (c)
$4,004,000 5.750% Term Bonds, Due September 1, 2042, Priced to Yield 5.750% (a) (b)(c)
$5,713,000 6.000% Term Bonds, Due September 1, 2052, Priced to Yield 6.000% (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 or after September 1, 2042 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 1, 2032, 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.”
(c) The Bonds are also subject to mandatory sinking fund and 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.
$833,000 Term Bonds Maturing September 1, 2028
Redemption Date Sinking Fund
Installment ($)
September 1, 2024 151,000
September 1, 2025 158,000
September 1, 2026 166,000
September 1, 2027 175,000
September 1, 2028* 183,000
$4,004,000 Term Bonds Maturing September 1, 2042
Redemption Date Sinking Fund
Installment ($)
September 1, 2029 193,000
September 1, 2030 204,000
September 1, 2031 216,000
September 1, 2032 228,000
September 1, 2033 241,000
September 1, 2034 256,000
September 1, 2035 270,000
September 1, 2036 286,000
September 1, 2037 303,000
September 1, 2038 321,000
Schedule I--2
September 1, 2039 340,000
September 1, 2040 360,000
September 1, 2041 382,000
September 1, 2042* 404,000
$5,713,000 Term Bonds Maturing September 1, 2052
Redemption Date Sinking Fund
Installment ($)
September 1, 2043 428,000
September 1, 2044 455,000
September 1, 2045 483,000
September 1, 2046 514,000
September 1, 2047 546,000
September 1, 2048 580,000
September 1, 2049 616,000
September 1, 2050 655,000
September 1, 2051 696,000
September 1, 2052* 740,000
* Final Maturity
A-1
APPENDIX A
FORM OF DEVELOPER LETTER OF REPRESENTATIONS
$10,550,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2022
(HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA
#2 PROJECT)
DEVELOPER LETTER OF REPRESENTATIONS
December 13, 2022
City of Anna, Texas
111 N. Powell Parkway
Anna, Texas 75409
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
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 placement of the $10,550,000
“City of Anna, Texas, Special Assessment Revenue Bonds, Series 2022 (Hurricane Creek Public
Improvement District Improvement Area #2 Project)” (the “Bonds”). Pursuant to the Bond
Purchase Agreement, the City has agreed to sell the Bonds to the Underwriter, and the
Underwriter has agreed to purchase the Bonds from the City and use its best efforts to place the
Bonds on behalf of the City. In order to induce the City to enter into the Bond Purchase
Agreement and as consideration for the execution sale, and delivery of the Bonds to the
Underwriter and the purchase and placement of the Bonds by the Underwriter, the undersigned,
CADG Hurricane Creek, 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 and not otherwise
defined in this Developer Letter of Representations will have the meaning set forth in the Bond
Purchase Agreement.
1. Sale and Placement of Bonds. Inasmuch as the purchase and sale of the Bonds
represents a negotiated transaction, the Developer understand, and hereby confirm, that the
A-2
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 Improvement Area #2
Improvements 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.”
1. Developer Documents. The Developer has executed 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 Developer in accordance with its terms:
(a) this Developer Letter of Representations;
(b) the Development Agreement;
(c) the Funding and Reimbursement Agreement;
(d) the Landowner Agreement; and
(e) the Continuing Disclosure Agreement of the Developer;
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.
A-3
2. 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
Memorandum under the captions “PLAN OF FINANCE — Status of Development and
Plan of Finance,” “THE IMPROVEMENT AREA #2 IMPROVEMENTS,” “THE
DEVELOPMENT,” “THE DEVELOPER,” “CONTINUING DISCLOSURE — The
Developer,” and “CONTINUING DISCLOSURE – The Developer’s Compliance with
Prior Undertakings,” 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
Improvement Area #2 Improvements and the Development, as defined in the Limited
Offering Memorandum) and “LEGAL MATTERS — Litigation — 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.
A-4
(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 Improvement Area
#2 Improvements 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.
3. Indemnification.
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 — Status of Development and Plan of Finance,” “THE
IMPROVEMENT AREA #2 IMPROVEMENTS,” “THE DEVELOPMENT,” “THE
DEVELOPER,” “CONTINUING DISCLOSURE — The Developer” and
“CONTINUING DISCLOSURE – The Developer’s Compliance with Prior
Undertakings,” 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
Improvement Area #2 Improvements and the Development, as defined in the Limited
Offering Memorandum) and “LEGAL MATTERS — Litigation — 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.
(a) Promptly after receipt by an indemnified party under the paragraph above
of notice of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof; but the omission so to
notify the indemnifying party 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 party to such indemnified party of its election so
A-5
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 party, in
connection with the defense thereof other than reasonable costs of investigation. The
indemnifying party 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.
4. 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.
5. 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.
[Signatures to Follow]
A-6
CADG HURRICANE CREEK, LLC, a Texas limited
liability company
By: CADG Holdings, LLC,
a Texas limited liability company
its Sole managing Member
By: MMM Ventures, LLC
a Texas limited liability company
its Manager
By: 2M Ventures, LLC
a Delaware limited liability company
its Manager
By:
Printed Name:
Title:
B-1
APPENDIX B
$10,550,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2022
(HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA
#2 PROJECT)
ISSUE PRICE CERTIFICATE
The undersigned, as the duly authorized representative of FMSbonds, Inc., hereby
certifies with respect to the as set forth below with respect to the $10,550,000 City of Anna,
Texas, Special Assessment Revenue Bonds, Series 2022 (Hurricane Creek Public Improvement
District Improvement Area #2 Project) (“the “Bonds”) issued by the City of Anna, Texas (the
“Issuer”), hereby certifies, based on its records and information, as follows:
1. 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.
2. A copy of the pricing wires or equivalent communication for the Bonds is attached to this
certificate as Schedule A.
3. 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 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.
4. 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.
B-2
EXECUTED and DELIVERED this December 30, 2022.
FMSbonds, Inc.
By:
Name:
Title:
SCHEDULE A
SALE PRICES OF THE BONDS
(Attached)
C-1
APPENDIX C
[LETTERHEAD OF WOLFE, TIDWELL & MCCOY, LLP]
December 30, 2022
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
Regions Bank
3773 Richmond Avenue, Suite 1100
Houston, Texas 77046
Winstead PC
500 Winstead Building
2728 N. Harwood Street
Dallas, Texas 75218
City of Anna, Texas
111 N. Powell Parkway
Anna, Texas 75409
$10,550,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2022
(HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #2
PROJECT)
Ladies and Gentlemen:
We are the Attorney for the City of Anna, Texas (the “City”) for limited purposes, and
are rendering this opinion in connection with the issuance and sale of $10,550,000 “City of
Anna, Texas, Special Assessment Revenue Bonds, Series 2022 (Hurricane Creek Public
Improvement District Improvement Area #2 Project)” (the “Bonds”), by the City, a political
subdivision of the State of Texas.
The Bonds are authorized pursuant to Ordinance No. [_________] and enacted by the
City Council of the City (the “City Council”) on December 13, 2022 (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 December 15, 2022 (the “Indenture”) by and between the City and
Regions Bank, an Alabama state banking corporation, as trustee (the “Trustee”). 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 the:
(a) The Resolution No. 2018-11-506 (the “Creation Resolution”), enacted by the City
Council on November 13, 2018.
(b) The Ordinance No. ______, adopted by the City Council on December 13, 2022
(the “Assessment Ordinance”).
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(c) The Bond Ordinance.
(d) The Indenture.
(e) That First Amended and Restated Villages of Hurricane Creek Subdivision
Improvement Agreement between the City and CADG Hurricane Creek, LLC, a Texas limited
liability company (the “Developer”) effective as August 28, 2018, as amended by that Second
Amended Villages of Hurricane Creek Subdivision Improvement Agreement effective as of
November 13, 2018, as further amended by the Third Amended Villages of Hurricane Creek
Subdivision Improvement Agreement effective as of February 12, 2019, and as further amended
by the Fourth Amended Villages of Hurricane Creek Subdivision Improvement Agreement
effective as of December 8, 2020 (collectively the “Development Agreement”).
(f) That certain Continuing Disclosure Agreement of Issuer, dated as of December
15, 200, executed and delivered by the City, P3Works, LLC (the “Administrator”), and Regions
Bank, an Alabama state banking corporation (the “Dissemination Agent”).
(g) That certain Improvement Area #2 Funding and Reimbursement Agreement
Hurricane Creek Public Improvement Area effective December 13, 2022, and executed and
delivered by the City and the Developer (the “Funding and Reimbursement Agreement”).
The Creation Resolution, the Assessment Ordinance, and the Bond Ordinance shall
herein after be referred to as the “Authorizing Documents” and the remaining documents shall
herein after 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.
2. To the best of our 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 Improvement Area #2 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
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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 remain legal, valid and binding obligations of the City enforceable against the City in
accordance with their 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, and (c) the application of Texas
law relating to action by future councils and relating to governmental immunity applicable to
governmental entities.
5. The performance by the City of the obligations under the Authorizing Documents
and the City Documents will not violate any provision of any Federal or Texas constitutional or
statutory provision.
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.
7. The City has duly authorized and delivered the Preliminary Limited Offering
Memorandum and the Limited Offering Memorandum.
8. The adoption of the Authorizing Documents and 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 our knowledge: (a)
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, court order or consent
decree to which the City is subject.
9. Based upon our 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 Limited Offering
Memorandum with respect to the City under the captions and subcaptions “ASSESSMENT
PROCEDURES – Assessment Methodology” and “– Assessment Amounts,” “THE CITY,”
“THE DISTRICT,” “LEGAL MATTERS – Litigation – The City” and “CONTINUING
DISCLOSURE – The City” is a fair and accurate summary of the law relating to collection and
enforcement of Assessments and the documents and facts summarized therein.
This opinion may not be relied upon by any other person except those specifically
addressed in this letter.
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Very truly yours,
______________________
WOLFE, TIDWELL & MCCOY, LLP
ATTORNEY FOR THE CITY
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APPENDIX D
[LETTERHEAD OF BOGETICH LAW PLLC]
December 30, 2022
City of Anna, Texas
111 N. Powell Parkway
Anna, Texas 75409
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 72034
Regions Bank
3773 Richmond Avenue, Suite 1100
Houston, Texas 77046
Wolfe, Tidwell & McCoy, LLP
2591 Dallas Parkway, Suite 300
Frisco, Texas 75034
McCall, Parkhurst & Horton L.L.P
717 North Harwood, Suite 900
Dallas, Texas 75201
Winstead PC
2728 N. Harwood Street, Suite 500
Dallas, Texas 75201
$10,550,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2022
(HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT
AREA #2 PROJECT)
Ladies & Gentlemen:
We have acted as special counsel to CADG Hurricane Creek, LLC, a Texas limited
liability company (the “Developer”) in connection with the issuance and sale by the City of
Anna, Texas (the “City”), of $10,550,000 City of Anna, Texas, Special Assessment Revenue
Bonds, Series 2022 (Hurricane Creek Public Improvement District Improvement Area #2
Project) (the “Bonds”), pursuant to the Indenture of Trust dated as of December 15, 2022 (the
“Indenture”), by and between the City and Regions Bank, an Alabama state banking
corporation, 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 known as “Villages
of Hurricane Creek” (the “Development”) located in the City of Anna, Texas (the “City”).
The Bonds are being sold by FMSbonds, Inc. (the “Underwriter”), pursuant to that
certain Bond Purchase Agreement dated December 13, 2022 (the “Bond Purchase
Agreement”), 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.
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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 Development Agreement;
2) the Funding and Reimbursement Agreement;
3) the Landowner Agreement;
4) the Continuing Disclosure Agreement of Developer;
5) the Developer Letter of Representations dated as of December 30, 2022;
(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 December 2, 2022, relating to the
issuance of the Bonds (the “Preliminary Limited Offering Memorandum”);
(d) The final Limited Offering Memorandum, dated December 13, 2022, 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
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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 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
Based solely upon the foregoing, and subject to the assumptions and limitations set forth
herein, we are of the opinion that:
1. The Developer is a Texas limited liability company duly formed, validly
existing under the laws of the State of Texas and qualified to transact business as a Texas
limited liability company in good standing under the laws of the State of Texas.
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2. The Developer has the limited liability company power and authority under the
Texas Business Organizations Code and the Developer Basic Documents to execute, deliver and
perform its obligations under the Material Documents to which it is a party. The execution and
delivery by the Developer of each Material Document to which it is a party, and the performance
by the Developer of its agreements set forth therein, have been duly authorized by all necessary
limited liability company action under the laws of the State of Texas, the Texas Business
Organizations Code and the Developer Basic Documents.
3. 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.
4. 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).
5. 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, and (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.
6. 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.
7. 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 party or is otherwise subject and which
D-5
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 or (b) under any such loan agreement, indenture,
bond note, resolution, agreement, or other instrument.
8. The information set forth in the Limited Offering Memorandum under the
captions “PLAN OF FINANCE — Status of Development and Plan of Finance,” “THE
IMPROVEMENT AREA #2 IMPROVEMENTS,” “THE DEVELOPMENT,” “THE
DEVELOPER,” “BONDHOLDERS’ RISKS” (only as it pertains to the Developer, the
Improvement Area #2 Improvements, and the Development, each as defined in the
Limited Offering Memorandum),” “LEGAL MATTERS — Litigation — The Developer,”
and “CONTINUING DISCLOSURE — The Developer,” and “CONTINUING
DISCLOSURE – The Developer’s Compliance with Prior Undertakings,” 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 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 Certificates, 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.
D-6
(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) 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.
(j) 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.
D-7
(k) We express no opinion as to the validity, binding effect, or enforceability of: (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.
(l) 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,
______________________
Travis Boghetich
E-1
APPENDIX E
CLOSING CERTIFICATE OF DEVELOPER
CADG Hurricane Creek, LLC, a Texas limited liability company (“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. Developer is a limited liability company organized, validly existing and in good
standing under the laws of the State of Texas.
2. Representatives of 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 $10,550,000 aggregate principal amount of Special Assessment
Revenue Bonds, Series 2022 (Hurricane Creek Public Improvement District Improvement Area
#2 Project) (the “Bonds”), pursuant to the City’s Preliminary Limited Offering Memorandum,
dated December 2, 2022 and Limited Offering Memorandum dated December 13, 2022
(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. Developer has executed 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 Developer in
accordance with its terms:
(a) the Developer Letter of Representation;
(b) the Development Agreement;
(c) the Funding and Reimbursement Agreement;
(d) the Landowner Agreement; and
(e) the Continuing Disclosure Agreement of the Developer.
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.
E-2
7. 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. To the Developer’s knowledge,
after due inquiry, 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 Limited Offering Memorandum.
8. Developer has reviewed and approved the information contained in the Limited
Offering Memorandum under the captions “PLAN OF FINANCE – Status of Development and
Plan of Finance,” “THE IMPROVEMENT AREA #2 IMPROVEMENTS,” “THE
DEVELOPMENT,” “THE DEVELOPER,” “BONDHOLDERS’ RISKS” (only as it pertains to
the Developer, the Improvement Area #2 Improvements, and the Development), “LEGAL
MATTERS — Litigation — The Developer,” “CONTINUING DISCLOSURE — The
Developer,” and “CONTINUING DISCLOSURE — The Developer’s Compliance with Prior
Undertakings” 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.
9. Developer is in compliance in all material respects with all provisions of
applicable law in all material respects relating to 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 Developer or any
portion of the Development that would materially and adversely affect 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.
10. 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.
11. The levy of the Assessments (as defined in the Limited Offering Memorandum)
on property in Improvement Area #2 of the District owned by the Developer will not conflict
with or constitute a breach of or default under any agreement, indenture or other instrument to
which Developer is a party or to which Developer or any of its property or assets is subject.
12. 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.
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13. Developer has no knowledge of any physical condition of the Development
owned or to be developed by 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.
14. For the purposes of the provisions of Section 13.2(d) of that certain Indenture of
Trust dated March 15, 2019 relating the City of Anna, Texas Special Assessment Revenue
Bonds, Series 2019 (Hurricane Creek Public Improvement District Major Improvement Project),
the Developer hereby certifies that builder contracts have been executed for 100% of the lots in
Improvement Area #2 of the District.
[Signatures to Follow]
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Dated: December 30, 2022
DEVELOPER:
CADG HURRICANE CREEK, LLC, a Texas limited
liability company
By: CADG Holdings, LLC,
a Texas limited liability company
its Sole managing Member
By: MMM Ventures, LLC
a Texas limited liability company
its Manager
By: 2M Ventures, LLC
a Delaware limited liability company
its Manager
By:
Printed Name: Mehrdad Moayedi
Title: Manager
F-1
HOU:3829549.1
APPENDIX F
[LETTERHEAD OF INTEGRA REALTY RESOURCES]
December 30, 2022
City of Anna, Texas
111 N. Powell Parkway
Anna, Texas 75409
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
Regions Bank
3773 Richmond Avenue
Suite 1100
Houston, Texas 77046
Winstead PC
2728 N. Harwood Street, Suite 500
Dallas, Texas 75201
Re: City of Anna, Texas, Special Assessment Revenue Bonds, Series 2022 (Hurricane
Creek Public Improvement District Improvement Area #2 Project) (the “Bonds”)
Ladies and Gentlemen:
The undersigned, Integra Realty Resources - Dallas, appraiser of (i) the undeveloped
property contained in Hurricane Creek Public Improvement District (“District”), does hereby
represent the following:
1. On behalf of Integra Realty Resources - Dallas, I have supplied certain
information contained in the Preliminary Limited Offering Memorandum for the Bonds, dated
December 2, 2022, and the Limited Offering Memorandum for the Bonds, dated on or about
December 13, 2022 (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 District, located in APPENDIX E to the Limited
Offering Memorandum, and the description thereof, set forth under the caption “APPRAISAL
OF PROPERTY WITHIN IMPROVEMENT AREA #2 OF THE DISTRICT”.
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.
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 December
30, 2022) which would render any such information in the Limited Offering Memorandum
F-2
HOU:3829549.1
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 - DALLAS
By:
Its:
G-1
APPENDIX G
[LETTERHEAD OF P3 WORKS, LLC]
DECEMBER 30, 2022
City of Anna, Texas
111 N. Powell Parkway
Anna, Texas 75409
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
Regions Bank
3773 Richmond Avenue, Suite 1100
Houston, Texas 77046
Winstead PC
2728 N. Harwood Street, Suite 500
Dallas, Texas 75201
Re: City of Anna, Texas, Special Assessment Revenue Bonds, Series 2022 (Hurricane
Creek Public Improvement District Improvement Area #2 Project) (the “Bonds”)
Ladies and Gentlemen:
The undersigned, an authorized representative, of P3 Works, LLC, consultant in
connection with the creation and administration by the City of Anna, Texas (the “City”), of
Hurricane Creek Public Improvement District (the “District”), does hereby represent the
following:
1. On behalf of P3 Works, LLC, I have supplied certain information contained in the
Preliminary Limited Offering Memorandum, dated December 2, 2022 (the “Preliminary Limited
Offering Memorandum”), and the final Limited Offering Memorandum, dated on or about
December 13, 2022 (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 I 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,” and “ASSESSMENT AND COLLECTION DATA FOR THE
DISTRICT” (b) under the caption “THE ADMINISTRATOR” and (c) 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 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. We agree to the inclusion of the SAP in the Limited Offering Memorandum and
to the use of the name of my firm in the Limited Offering Memorandum for the Bonds.
4. We agree that, to the best of our 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
December 30, 2022) which would render any such information in the Limited Offering
G-2
Memorandum untrue, incomplete, or incorrect, in any material fact or render any such
information materially misleading.
5. The undersigned hereby represents that he has been duly authorized to execute
this letter of representation.
Sincerely yours,
P3 WORKS, LLC
By:
Its:
C-1
EXHIBIT C
CONTINUING DISCLOSURE AGREEMENT
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2022
(HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #2
PROJECT)
CONTINUING DISCLOSURE AGREEMENT OF THE ISSUER
This Continuing Disclosure Agreement of the Issuer dated as of December 15, 2022 (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 2022 (Hurricane Creek Public Improvement District Improvement Area #2 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 December 15, 2022, 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.
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“Developer” shall mean CADG Hurricane Creek, 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 December 15, 2022 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 Hurricane Creek Public Improvement District 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.
“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.
“Trust Estate” shall have the meaning assigned to such term in the Indenture.
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“Trustee” shall mean Regions Bank, or any successor trustee pursuant to the Indenture.
“Underwriter” shall mean FMSbonds, Inc., and its successors and assigns.
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, 2023, 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);
4
(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) 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 Improvement Area #2 of the District.
(iv) The aggregate taxable assessed valuation for parcels or lots within Improvement
Area #2 of the District based on the most recent certified tax roll available to the Issuer.
(v) 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
within Improvement Area #2 of the District, such SAP Update shall include the following:
(A) the number of new homes completed in Improvement Area #2 of the
District during such Fiscal Year; and
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(B) the aggregate number of new homes completed within Improvement
Area #2 of the District since filing the initial Annual Issuer Report for Fiscal Year
ended September 30, 2023.
(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
within Improvement Area #2 of the District, a listing of any property or property owners in
Improvement Area #2 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 Improvement
Area #2 of the District, all as of the October 1 billing date for the Fiscal Year.
(vii) Collection and delinquency history of the Assessments within Improvement
Area #2 of the District for the past five Fiscal Years, in the format specified in Exhibit B:
(viii) 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.
(ix) Total amount of Prepayments collected, as of the March 1 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).
(x) 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
(E) the result of any foreclosure sales of assessed property within
Improvement Area #2 of the District if the assessed property represents more than one
percent (1%) of the total amount of Assessments.
(xi) 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.
6
(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, 2023, 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:
1. 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.
9. Defeasances.
10. Release, substitution, or sale of property securing repayment of the Bonds, if
material.
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
7
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
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).
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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
9
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,
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
10
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 Improvement Area #2 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. 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.
11
(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
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.
12
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
Improvement Area #2 of the District, for its fees and expenses for the Dissemination Agent’s services
rendered in accordance with this Disclosure Agreement.
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 2270.002, 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
13
“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. The Dissemination Agent
represents that neither it 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://comptroller.texas.gov/purchasing/docs/sudan-list.pdf,
https://comptroller.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 Federal law and
excludes the Dissemination Agent and 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 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. No Discrimination Against Fossil-Fuel Companies. To the extent this
Disclosure Agreement constitutes a contract for goods or services for which a written verification is
required under Section 2274.002 (as added by Senate Bill 13 in the 87th Texas Legislature, Regular
Session), Texas Government Code, as amended, the Dissemination Agent and the Administrator, each
respectively, hereby verifies that it and its parent company, wholly- or majority-owned subsidiaries,
and other affiliates, if any, do not boycott energy companies and will not boycott energy companies
during the term of this Disclosure Agreement. The foregoing verification is made solely to enable the
Issuer to comply with such Section and to the extent such Section does not contravene applicable
Federal or Texas law. As used in the foregoing verification, “boycott energy companies” shall mean,
without an ordinary business purpose, 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 with a company because the company (A) engages in the exploration, production, utilization,
transportation, sale, or manufacturing of fossil fuel-based energy and does not commit or pledge to
meet environmental standards beyond applicable Federal or Texas law; or (B) does business with a
company described by (A) above.
SECTION 21. No Discrimination Against Firearm Entities and Firearm Trade Associations.
To the extent this Disclosure Agreement constitutes a contract for goods or services for which a written
verification is required under Section 2274.002 (as added by Senate Bill 19 in the 87th Texas
Legislature, Regular Session), Texas Government Code, as amended, the Dissemination Agent and the
Administrator, each respectively, hereby verifies that it and its parent company, wholly- or majority-
owned subsidiaries, and other affiliates, if any, do not have a practice, policy, guidance, or directive
that discriminates against a firearm entity or firearm trade association and will not discriminate against
a firearm entity or firearm trade association during the term of this Disclosure Agreement. The
foregoing verification is made solely to enable the Issuer to comply with such Section and to the extent
such Section does not contravene applicable Federal or Texas law. As used in the foregoing
14
verification, (a) ‘discriminate against a firearm entity or firearm trade association’ (A) means, with
respect to the firearm entity or firearm trade association, to (i) refuse to engage in the trade of any
goods or services with the firearm entity or firearm trade association based solely on its status as a
firearm entity or firearm trade association, (ii) refrain from continuing an existing business relationship
with the firearm entity or firearm trade association based solely on its status as a firearm entity or
firearm trade association, or (iii) terminate an existing business relationship with the firearm entity or
firearm trade association based solely on its status as a firearm entity or firearm trade association and
(B) does not include (i) the established policies of a merchant, retail seller, or platform that restrict or
prohibit the listing or selling of ammunition, firearms, or firearm accessories and (ii) a company’s
refusal to engage in the trade of any goods or services, decision to refrain from continuing an existing
business relationship, or decision to terminate an existing business relationship (aa) to comply with
federal, state, or local law, policy, or regulations or a directive by a regulatory agency or (bb) for any
traditional business reason that is specific to the customer or potential customer and not based solely
on an entity’s or association’s status as a firearm entity or firearm trade association. As used in the
foregoing verification, (b) ‘firearm entity’ means a manufacturer, distributor, wholesaler, supplier, or
retailer of firearms (i.e., weapons that expel projectiles by the action of explosive or expanding gases),
firearm accessories (i.e., devices specifically designed or adapted to enable an individual to wear,
carry, store, or mount a firearm on the individual or on a conveyance and items used in conjunction
with or mounted on a firearm that are not essential to the basic function of the firearm, including
detachable firearm magazines), or ammunition (i.e., a loaded cartridge case, primer, bullet, or
propellant powder with or without a projectile) or a sport shooting range (as defined by
Section 250.001, Texas Local Government Code), and (c) ‘firearm trade association’ means a person,
corporation, unincorporated association, federation, business league, or business organization that (i) is
not organized or operated for profit (and none of the net earnings of which insures to the benefit of any
private shareholder or individual), (ii) has two or more firearm entities as members, and (iii) is exempt
from federal income taxation under Section 501(a), Internal Revenue Code of 1986, as an organization
described by Section 501(c) of that code.
SECTION 22. Affiliate. As used in Sections 19 through 22, the Dissemination Agent and
Administrator, each respectively, understands ‘affiliate’ to mean an entity that controls, is controlled
by, or is under common control with the Dissemination Agent or the Administrator within the meaning
of SEC Rule 405, 17.C.F.R. § 230.405, and exists to make a profit.
SECTION 23. Disclosure of Interested Parties. Pursuant to Section 2252.908(c)(4), Texas
Government Code, as amended, the Dissemination Agent hereby certifies it is a publicly traded
business entity and is not required to file a Certificate of Interested Parties Form 1295 related to this
Disclosure Agreement.
SECTION 24. Governing Law. This Disclosure Agreement shall be governed by the laws
of the State of Texas.
SECTION 25. 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. The Issuer, the Administrator and the Dissemination Agent agree that electronic signatures
to this Disclosure Agreement may be regarded as original signatures.
SIGNATURE PAGE TO ISSUER CONTINUING DISCLOSURE AGREEMENT
S-1
CITY OF ANNA, TEXAS
By:
Mayor
SIGNATURE PAGE TO ISSUER CONTINUING DISCLOSURE AGREEMENT
S-2
REGIONS BANK
(as Dissemination Agent)
By:
Authorized Officer
SIGNATURE PAGE TO ISSUER CONTINUING DISCLOSURE AGREEMENT
S-3
P3WORKS, LLC
(as Administrator)
By:
Name:
Title:
A-1
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 2022
(Hurricane Creek Public Improvement District Improvement Area #2
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 December 15, 2022, 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: _________________
Regions Bank
(as Dissemination Agent)
By:
Title:
cc: City of Anna Texas
B-1
EXHIBIT B
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2022
(HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA
#2 PROJECT)
ANNUAL ISSUER REPORT *
Delivery Date: __________, 20__
CUSIP NOSs: [insert CUSIP NOs.]
Section 4(a)(i)(A)
BONDS OUTSTANDING
CUSIP
Number
Maturity
Date
Interest
Rate
Original
Principal
Amount
Outstanding
Principal
Amount
Outstanding
Interest
Amount
Section 4(a)(i)(B)
INVESTMENTS
Fund/
Account Name
Investment
Description Par Value Book Value Market Value
Section 4(a)(i)(C)
ASSETS AND LIABILITIES OF PLEDGED TRUST ESTATE
ASSETS
Bond Proceed Balance, if any ____________________
Funds and Accounts [list] ____________________
TOTAL ASSETS ____________________
* Excluding Audited Financial Statements of the Issuer
B-2
LIABILITIES
Outstanding Bond Principal ____________________
Outstanding Expenses (if any) ____________________
TOTAL LIABILITIES ____________________
NET POSITION
Assets Less Liabilities ____________________
____________________
OUTSTANDING ____________________
ASSESSMENTS
Form of Accounting Cash Accrual Modified Accrual
Audited Unaudited
Section 4(a)(ii)
Debt Service Requirements on the Bonds
Year Ending
(September 30) Principal Interest Total
ITEMS REQUIRED BY SECTIONS 4(a)(iii) – (iv)
[Insert a line item]
Section 4(a)(v)
Aggregate Taxable Assessed Value of the Improvement Area #2 of the District
The [YEAR] certified total aggregate taxable assessed value for the land in the
Improvement Area #2 of the District is approximately $[AMOUNT] according to the applicable
appraisal district(s).
ITEMS REQUIRED BY SECTION 4(a)(vi)(A-B)
[Insert a line item]
B-3
Section 4(a)(vii)
Top Assessment Payers in Improvement Area #2 of the District (1)
Property Owner Outstanding Assessments Percentage of Total Assessments
(1) Does not include those owing less than five percent (5%) of total Assessments.
Section 4(a)(viii)
Collection and Delinquent History of Assessments in Improvement Area #2 of the District
Collected in
Fiscal Year
Ending 9/30
Assessment
Billed
Parcels
Levied
Delinquent
Amount
as of 3/1
Delinquent
Percentage
as of 3/1
Delinquent
Amount
as of 9/1
Delinquent
Percentage
as of 9/1
Total
Assessments
Collected(1)
20__ $ — — $
(1) Collected as of _________, 20__. Includes $___________ attributable to Prepayments.
Section 4(a)(ix)
Annual Installments Delinquent as of September 1 of Fiscal Year (1)
Parcel Number
(1) Does not include those delinquent Annual Installments representing less than ten percent (10%) of total Annual
Installments.
Section 4(a)(x)
FINANCIAL INFORMATION AND OPERATING DATA WITH RESPECT TO THE
ISSUER OF THE GENERAL TYPE AS OF THE END OF THE FISCAL YEAR AND AS
OF MARCH 1 OF THE NEXT SUCCEEDING YEAR
History of Prepayment of Assessments
Time Period
Number of
Prepayments
Amount of
Prepayments
Bond Call
Date
Amount of
Bonds
Redeemed
[FISCAL YEAR END] $ $
[MARCH 1 OF
CURRENT YEAR] (1) $ $
(1) As of __________, 20__.
B-4
Section 4(a)(xi)
Foreclosure History Related to the Assessments
Time Period
Parcels in
Foreclosure
Proceedings
Delinquent Assessment
Amount
in Foreclosure
Proceedings
Foreclosure
Sales
Foreclosure
Proceeds
Received
[FISCAL YEAR END] $ $
[MARCH 1 OF
CURRENT YEAR] (1)
$ $
(1) As of __________, 20__.
ITEMS REQUIRED BY SECTION 4(a)(xii)
[Insert a line item]
C-1
EXHIBIT C
BASIC EXPECTED TIMELINE FOR ASSESSMENT COLLECTIONS
AND PURSUIT OF DELINQUENCIES *
Date Delinquency
Clock (Days)
Activity
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
* 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-2
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.
April 15 74/75 Preliminary Foreclosure activity commences,
and Issuer to notify Dissemination Agent of the
commencement of preliminary foreclosure
activity.
C-3
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 1 150/151 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.
D-1
EXHIBIT D
LANDOWNER AGREEMENT
1
HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #2 LANDOWNER AGREEMENT
This HURRICANE CREEK PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #2 LANDOWNER AGREEMENT (the “Agreement”), is entered
into as of December 13, 2022 between the City of Anna, Texas (the “City”), a home rule
municipality of the State of Texas (the “State”), and CADG Hurricane Creek, LLC, a Texas limited
liability company (the “Landowner”).
RECITALS:
WHEREAS, Landowner owns all of the Improvement Area #2 Assessed Property located
within the property described by the 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”).
WHEREAS, the Landowner’s Parcel is located (i) within the Hurricane Creek Public
Improvement District (the “District”) and (ii) within the corporate limits of the City; and
WHEREAS, the City Council has adopted an assessment ordinance for the Improvement
Area #2 Projects (including all exhibits and attachments thereto, the “Assessment Ordinance”) and
the Hurricane Creek Public Improvement District 2022 Amended & Restated Service and
Assessment Plan included as an Exhibit A to the Assessment Ordinance (the “Service and
Assessment Plan”) and which is incorporated herein for all purposes, and has levied an assessment
on each parcel of Improvement Area #2 Assessed Property in the District (as identified in the
Service and Assessment Plan) that will be pledged as the security for the payment of bonds or
other obligations (the “Bonds”) to be issued for the purpose of paying the costs of certain
Improvement Area #2 Projects that will benefit the Improvement Area #2 Assessed Property; and
WHEREAS, the Covenants, Conditions and Restrictions attached to this Agreement as
Exhibit II and which are incorporated herein for all purposes, include 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:
DEFINITIONS; APPROVAL OF AGREEMENTS
Definitions. Capitalized terms used but not defined herein (including each exhibit hereto)
shall have the meanings ascribed to them in the Service and Assessment Plan.
Affirmation of Recitals. The findings set forth in the Recitals of this Agreement are hereby
incorporated as the official findings of the City Council.
2
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, and the boundaries of the
Landowner’s Parcel, as shown on Exhibit I, and the location and development of the
Improvement Area #2 Improvements 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;
(iii) the Assessment Ordinance and the Service and Assessment Plan.
B. Acceptance and Approval of Assessments and Lien on Property. Landowner
consents to, agrees to, acknowledges and accepts the following:
(i) each Improvement Area #2 Assessment levied by the City on the
Landowner’s Parcel within the District as shown on the assessment roll attached as
Appendix I-1 to the Service and Assessment Plan (the “Assessment Roll”);
(ii) the Improvement Area #2 Improvements specially benefit the District, and
the Landowner’s Parcel, in an amount in excess of the Improvement Area #2 Assessment
levied on the Improvement Area #2 Assessed Property within the District, as such
Improvement Area #2 Assessment is shown on the Assessment Roll;
(iii) each Improvement Area #2 Assessment is final, conclusive and binding
upon Landowner and any subsequent owner of the Landowner’s Parcel, regardless of
whether such landowner may be required to prepay a portion of, or the entirety of, such
Improvement Area #2 Assessment upon the occurrence of a mandatory prepayment event
as provided in the Service and Assessment Plan;
(iv) the obligation to pay the Improvement Area #2 Assessment levied on the
Landowner’s Parcel owned by it when due and in the amount required by and stated in the
Service and Assessment Plan and the Assessment Ordinance;
(v) each Improvement Area #2 Assessment or reassessment, with interest, the
expense of collection, and reasonable attorney’s fees, if incurred, is a first and prior lien
against the Landowner’s Parcel, 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 Landowner’s Parcel regardless
of whether such owner is named;
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(vi) the Improvement Area #2 Assessment lien on the Landowner’s Parcel is a
lien and covenant that runs with the land and is effective from the date of the Assessment
Ordinance and continues until the Improvement Area #2 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 Improvement Area #2 Assessment shall incur
and accrue interest, penalties, and attorney’s fees as provided in the PID Act;
(viii) the owner of the Landowner’s Parcel may pay at any time the entire
Improvement Area #2 Assessment, with interest that has accrued on the Improvement Area
#2 Assessment, including on any lot within the Landowner’s Parcel;
(ix) the Annual Installments of the Improvement Area #2 Assessments may be
adjusted, decreased and extended; and, the assessed parties shall be obligated to pay their
respective revised amounts of the annual installments, when due, and without the necessity
of further action, 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 Improvement Area #2 Assessments. Landowner agrees
and acknowledges that Landowner or subsequent landowners may have an obligation to prepay an
Improvement Area #2 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 Improvement Area #2 Assessments. Landowner further agrees as
follows:
(i) the Covenants, Conditions and Restrictions 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 Landowner’s
Parcel, and Landowner hereby authorizes the City to so record such documents against the
Landowner’s Parcel owned by Landowner;
(ii) reference to the Covenants, Conditions and Restrictions attached hereto as
Exhibit II shall be included on all recordable subdivision plats and such plats shall be
recorded in the real property records of Collin County, Texas;
4
(iii) 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 Covenants, Conditions and
Restrictions and any purchaser, transferee or other subsequent owner shall take such
Landowner’s Parcel subject to all of the terms, conditions and provisions of such
Covenants, Conditions and Restrictions; and
(iv) Landowner shall comply with, and shall contractually obligate (and
promptly provide written evidence of such contractual provisions to the City) any party
who purchases the Landowner’s Parcel 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 (as defined in the Service and Assessment Plan) 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 Covenants, Conditions and
Restrictions may be included with other written restrictions running with the land on property
within 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 THE
IMPROVEMENT AREA #2 IMPROVEMENTS
A. Ownership and Transfer of Improvement Area #2 Improvements. Landowner
acknowledges that all of the Improvement Area #2 Improvements 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 the Improvement Area #2
Improvements.
5
(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 Improvement Area #2 Improvements 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 Improvement Area #2
Improvements and for passage and use over and across parts of the property within the
District as shall be reasonably necessary during the construction of the Improvement Area
#2 Improvements. Any subsequent owner of the Landowner’s Parcel may require that each
contractor constructing the Improvement Area #2 Improvements cause such owner 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 Improvement Area #2 Improvements 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 First
Amended and Restated Villages of Hurricane Creek Subdivision Improvement Agreement
(as amended, the Development Agreement”), or other agreement, with respect to the
Improvement Area #2 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 Improvement Area #2 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 Improvement Area #2 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
6
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
party, or by which Landowner or the 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 levy of the Improvement Area #2 Assessments, or (ii) the construction of the
Improvement Area #2 Improvements on those portions of the property within 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 the Improvement Area #2 Improvements. 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 Improvement Area #2 Improvements.
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
120 W. 7th Street
Anna, Texas 75409
With a copy to: City Attorney
Attn: Clark McCoy
Wolfe, Tidwell & McCoy, LLP
7
2591 Dallas Pkwy Ste 300
Frisco, TX 75034
To the Landowner: CADG Hurricane Creek, LLC
Attn: Mehrdad Moayedi
1800 Valley View Lane, Suite 300
Farmers Branch, Texas 75234
With a copy to: Boghetich Law, PLLC
Attn: Travis Boghetich
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 as 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
Improvement Area #2 Assessment revenues of the City or any part thereof to finance the costs of
the Improvement Area #2 Improvements, 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.
8
This Agreement shall become and be effective (the “Effective Date”) upon the date of final
execution by the latter of the City and the Landowner and shall be valid and enforceable on said
date and thereafter.
G. Estoppels.
Within 10 days after written request from a party hereto, the other party shall provide a
written certification, indicating whether this Agreement remains in effect as to the Landowner’s
Parcel, 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 Landowner’s
Parcel upon payment in full of the Improvement Area #2 Assessment(s) against such Landowner’s
Parcel.
I. No Boycott of Israel.
To the extent this Agreement constitutes a contract for goods or services for which a written
verification is required under Section 2271.002, Texas Government Code, 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 will not boycott Israel during the term of this Agreement. The
foregoing verification is made solely to enable the City to comply with such Section and to the
extent such Section does not contravene applicable Federal law. As used in the foregoing
verification, ‘boycott Israel,’ a term defined in Section 2271.001, Texas Government Code, by
reference to Section 808.001(1), Texas Government Code, 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 within the meaning of
SEC Rule 405, 17 C.F.R. § 230.405, and exists to make a profit.
J. No Business With Sanctioned Countries.
The Landowner represents that neither it 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://comptroller.texas.gov/purchasing/docs/sudan-list.pdf, https://
comptroller.texas.gov/purchasing/docs/iran-list.pdf or https://comptroller.texas.gov/purchasing/
docs/fto-list.pdf. The foregoing representation is made solely to enable the City to comply with
Section 2252.152, Texas Government Code, and to the extent such Section does not contravene
applicable Federal law and excludes the Landowner 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. As used in this Section,
the Landowner understands ‘affiliate’ to mean an entity that controls, is controlled by, or is under
9
common control with the Landowner within the meaning of SEC Rule 133(f), 17 C.F.R. §
230.133(f), and exists to make a profit.
K. Verification Regarding Energy Company Boycotts.
To the extent this Agreement constitutes a contract for goods or services for which a written
verification is required under Section 2274.002 (as added by Senate Bill 13 in the 87th Texas
Legislature, Regular Session), Texas Government Code, as amended, the Landowner hereby
verifies that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates,
if any, do not boycott energy companies and will not boycott energy companies during the term of
this Agreement. The foregoing verification is made solely to enable the City to comply with such
Section and to the extent such Section does not contravene applicable Texas or federal law. As
used in the foregoing verification, “boycott energy companies,” a term defined in Section
2274.001(1), Texas Government Code (as enacted by such Senate Bill) by reference to Section
809.001, Texas Government Code (also as enacted by such Senate Bill), shall mean, without an
ordinary business purpose, 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 with a company because the company (A) engages in the exploration, production,
utilization, transportation, sale, or manufacturing of fossil fuel-based energy and does not commit
or pledge to meet environmental standards beyond applicable federal and state law; or (B) does
business with a company described by (A) above. As used in this Section, the Landowner
understands ‘affiliate’ to mean an entity that controls, is controlled by, or is under common control
with the Landowner within the meaning of SEC Rule 133(f), 17 C.F.R. § 230.133(f), and exists to
make a profit.
L. Verification Regarding Discrimination Against Firearm Entity or Trade
Association.
To the extent this Agreement constitutes a contract for goods or services for which a written
verification is required under Section 2274.002 (as added by Senate Bill 19 in the 87th Texas
Legislature, Regular Session), Texas Government Code, as amended, the Landowner hereby
verifies that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates,
if any, do not have a practice, policy, guidance, or directive that discriminates against a firearm
entity or firearm trade association and will not discriminate against a firearm entity or firearm trade
association during the term of this Agreement. The foregoing verification is made solely to enable
the City to comply with such Section and to the extent such Section does not contravene applicable
Texas or federal law. As used in the foregoing verification and the following definitions:
(i) ‘discriminate against a firearm entity or firearm trade association,’ a term
defined in Section 2274.001(3), Texas Government Code (as enacted by such Senate Bill),
(A) means, with respect to the firearm entity or firearm trade association, to (i) refuse to
engage in the trade of any goods or services with the firearm entity or firearm trade
association based solely on its status as a firearm entity or firearm trade association, (ii)
refrain from continuing an existing business relationship with the firearm entity or firearm
trade association based solely on its status as a firearm entity or firearm trade association,
or (iii) terminate an existing business relationship with the firearm entity or firearm trade
association based solely on its status as a firearm entity or firearm trade association and
(B) does not include (i) the established policies of a merchant, retail seller, or platform that
10
restrict or prohibit the listing or selling of ammunition, firearms, or firearm accessories and
(ii) a company’s refusal to engage in the trade of any goods or services, decision to refrain
from continuing an existing business relationship, or decision to terminate an existing
business relationship (aa) to comply with federal, state, or local law, policy, or regulations
or a directive by a regulatory agency or (bb) for any traditional business reason that is
specific to the customer or potential customer and not based solely on an entity’s or
association’s status as a firearm entity or firearm trade association;
(ii) ‘firearm entity,’ a term defined in Section 2274.001(6), Texas Government
Code (as enacted by such Senate Bill), means a manufacturer, distributor, wholesaler,
supplier, or retailer of firearms (defined in Section 2274.001(4), Texas Government Code,
as enacted by such Senate Bill, as weapons that expel projectiles by the action of explosive
or expanding gases), firearm accessories (defined in Section 2274.001(5), Texas
Government Code, as enacted by such Senate Bill, as devices specifically designed or
adapted to enable an individual to wear, carry, store, or mount a firearm on the individual
or on a conveyance and items used in conjunction with or mounted on a firearm that are
not essential to the basic function of the firearm, including detachable firearm magazines),
or ammunition (defined in Section 2274.001(1), Texas Government Code, as enacted by
such Senate Bill, as a loaded cartridge case, primer, bullet, or propellant powder with or
without a projectile) or a sport shooting range (defined in Section 250.001, Texas Local
Government Code, as a business establishment, private club, or association that operates
an area for the discharge or other use of firearms for silhouette, skeet, trap, black powder,
target, self-defense, or similar recreational shooting); and
(iii) ‘firearm trade association,’ a term defined in Section 2274.001(7), Texas
Government Code (as enacted by such Senate Bill), means any person, corporation,
unincorporated association, federation, business league, or business organization that (i) is
not organized or operated for profit (and none of the net earnings of which inures to the
benefit of any private shareholder or individual), (ii) has two or more firearm entities as
members, and (iii) is exempt from federal income taxation under Section 501(a), Internal
Revenue Code of 1986, as an organization described by Section 501(c) of that code.
As used in this Section, the Landowner understands ‘affiliate’ to mean an entity that
controls, is controlled by, or is under common control with the Landowner within the meaning of
SEC Rule 133(f), 17 C.F.R. § 230.133(f), and exists to make a profit.
M. Form 1295 Certificate. Landowner represents that it has complied with Texas
Government Code, Section 2252.908 and in connection therewith, the Landowner has completed
a Texas Ethics Commission Form 1295 Certificate generated by the Texas Ethics Commission’s
electronic filing system in accordance with the rules promulgated by the Texas Ethics
Commission. The Landowner further agrees to print the completed certificate and execute the
completed certificate in such form as is required by Texas Government Code, Section 2252.908
and the rules of the Texas Ethics Commission and provide to the City at the time of delivery of an
executed counterpart of this Agreement, a duly executed completed Form 1295 Certificate. The
Parties agree that, except for the information identifying the City and the contract identification
number, the City is not responsible for the information contained in the Form 1295 completed by
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the Landowner. The information contained in the Form 1295 completed by the Landowner has
been provided solely by the Landowner and the City has not verified such information.
[Signature pages to follow]
S-1
EXECUTED by the City and Landowner on the respective dates stated below.
Date: _____________________, 2022 CITY OF ANNA, TEXAS
By: ________________________________
Nate Pike, Mayor
STATE OF TEXAS §
§
COUNTY OF COLLIN §
This instrument was acknowledged before me on the __ day of _______, 2022 by Nate
Pike, Mayor of the City of Anna, Texas on behalf of said City.
Notary Public, State of Texas
(SEAL)
Name printed or typed
Commission Expires:
[Signature Page Landowner Agreement]
S-2
LANDOWNER:
CADG Hurricane Creek, LLC,
a Texas limited liability company
By: CADG Holdings, LLC,
a Texas limited liability company
Its Sole Member
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 ________________,
2022 by Mehrdad Moayedi, Manager of 2M Ventures, LLC, as Manager of MMM Ventures, LLC,
as Manager of CADG Holdings, LLC, as Sole Member of CADG Hurricane Creek, 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
PHASE 2 LEGAL DESCRIPTION:
BEING THAT CERTAIN TRACT OF LAND SITUATED IN THE J. BOYLE SURVEY, ABSTRACT
NUMBER 105 AND THE W.S. RATTAN SURVEY, ABSTRACT NUMBER 752, COLLIN COUNTY,
TEXAS, BEING A PORTION OF THAT TRACT OF LAND DESCRIBED IN DEED TO CADG
HURRICANE CREEK, LLC KNOWN AS TRACT 2 RECORDED IN INSTRUMENT NUMBER
201505290000631020 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 A 1/2 INCH IRON ROD FOUND IN THE SOUTH LINE OF A TRACT OF LAND TO
MM ANNA 325, LLC TRACT 1 RECORDED IN INSTRUMENT NUMBER 20190411000386110 AND
BEING THE NORTHWEST CORNER OF ONE ANNA TWO ADDITION RECORDED IN
INSTRUMENT NUMBER 20210607010002180 OF SAID O.P.R.C.C.T.
THENCE DEPARTING THE SOUTH LINE OF SAID MM ANNA TRACT FOLLOWING THE WEST
LINE OF SAID ONE ANNA TWO ADDITION TRACT AND BEING THE WEST LINE OF
STANDRIDGE BOULEVARD (A CALLED 80’ RIGHT-OF-WAY) THE FOLLOWING BEARINGS
AND DISTANCES:
S 02° 05' 48" E, 55.77 TO A 1/2 INCH IRON ROD WITH CAP STAMPED “GEER 3258”
FOUND AND THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, AN ARC DISTANCE OF 205.60 FEET, THROUGH A
CENTRAL ANGLE OF 16° 49' 44", HAVING A RADIUS OF 700.00 FEET, AND A LONG
CHORD WHICH BEARS S 06° 27' 08" W, 204.87 FEET TO A 1/2 INCH IRON ROD WITH
CAP STAMPED “GEER 3258” FOUND;
S 14° 47' 37" W, 121.39 FEET TO A 1/2 INCH IRON ROD FOUND AND THE BEGINNING
OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, AN ARC DISTANCE OF 205.59 FEET, THROUGH A
CENTRAL ANGLE OF 16° 49' 39", HAVING A RADIUS OF 700.00 FEET, AND A LONG
CHORD WHICH BEARS S 06° 28' 09" W, 204.85 FEET TO A 1/2 IRON ROD WITH CAP
STAMPED “GEER 3258” FOUND;
S 02° 00' 44" E, 201.29 FEET TO A 1/2 INCH IRON ROD WITH CAP STAMPED “GEER 3258”
FOUND AND THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, AN ARC DISTANCE OF 116.43 FEET, THROUGH A
CENTRAL ANGLE OF 09° 31' 48", HAVING A RADIUS OF 699.99 FEET, AND A LONG
CHORD WHICH BEARS S 02° 49' 59" W, 116.30 FEET TO A 1/2 INCH IRON ROD WITH
CAP STAMPED “GEER 3258” FOUND;
S 07° 36' 10" W, 394.08 FEET TO A 1/2 INCH IRON ROD WITH CAP STAMPED “GEER 3258”
FOUND AND THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, AN ARC DISTANCE OF 101.69 FEET, THROUGH A
CENTRAL ANGLE OF 08° 19' 23", HAVING A RADIUS OF 700.03 FEET, AND A LONG
CHORD WHICH BEARS S 03° 23' 47" W, 101.60 FEET TO A 1/2 INCH IRON ROD WITH
CAP STAMPED “GEER 3258” FOUND;
S 00° 46' 53" E, 187.26 FEET TO THE NORTHEAST CORNER OF THE VILLAGES OF
HURRICANE CREEK, PHASE 1 RECORDED IN INSTRUMENT NUMBER
2021012000126700 OF SAID O.P.R.C.C.T;
THENCE FOLLOWING THE NORTH LINE OF SAID HURRICANE CREEK, PHASE 1 THE
FOLLOWING BEARINGS AND DISTANCES:
S 89° 13' 07" W, 1,391.48 FEET;
S 59° 26' 33" W, 165.35 FEET;
THENCE DEPARTING SAID NORTH LINE OF SAID HURRICANE CREEK, PHASE 1 OVER AND
ACROSS SAID TRACT 2 THE FOLLOWING BEARINGS AND DISTANCES:
N 00° 46' 53" W, 38.33 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, AN ARC DISTANCE OF 111.87 FEET, THROUGH A
CENTRAL ANGLE OF 12° 49' 11", HAVING A RADIUS OF 500.00 FEET, AND A LONG
CHORD WHICH BEARS N 05° 37' 43" E, 111.64 FEET;
N 12° 02' 18" E, 192.23 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, AN ARC DISTANCE OF 748.78 FEET, THROUGH A
CENTRAL ANGLE OF 58° 46' 11", HAVING A RADIUS OF 730.00 FEET, AND A LONG
CHORD WHICH BEARS N 17° 20' 48" W, 716.38 FEET;
N 46° 43' 54" W, 32.41 FEET;
N 46° 18' 49" E, 276.60 FEET;
N 32° 16' 49" E, 500.47 FEET;
THENCE N 89° 04' 42" E, 1382.63 FEET TO THE POINT OF BEGINNING AND CONTAINING
2,449,716 SQUARE FEET OR 56.238 ACRES MORE OR LESS.
PHASE 1B LEGAL DESCRIPTION
Tract 1
BEING that certain tract of land situated in W. Rattan Survey, Abstract Number 752, Collin County, Texas,
and being a portion of that tract of land referred to as Tract 2 in deed to CADG Hurricane Creek LLC
recorded in Instrument Number 20150529000631020 of the Official Public Records, Collin County, Texas
(O.P.R.C.C.T.) and being more particularly described by metes and bounds as follows:
BEGINNING at a 1/2” iron rod with cap stamped GEER 3258 found in the east line of said Tract 2 to
CADG Hurricane Creek LLC AND being the most easterly southeast corner of The Villages of Hurricane
Creek Phase 1 recorded in Instrument Number 20201015010003920 of said (O.P.R.C.C.T.);
THENCE following the east property line of said Villages of Hurricane Creek the following bearings and
distances:
N 36° 16' 46" W, 163.61 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 53° 43' 13" E, 1.72 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 36° 16' 47" W, 50.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 33° 07' 12" W, 131.90 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 55° 11' 09" E, 70.72 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 56° 29' 24" E, 66.49 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 34° 31' 32" E, 64.92 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 20° 40' 36" E, 64.06 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 03° 56' 49" E, 63.28 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 01° 32' 35" E, 138.83 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 89° 13' 07" E, 170.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 00° 46' 53" W, 410.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 89° 14' 17" E, 135.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found in the
east line of said Tract 2;
THENCE S 00° 46' 53" E, 513.44 feet to the beginning of a curve to the right to a 1/2” iron rod found;
THENCE with said curve to the right, an arc distance of 671.13 feet, through a central angle of 54° 55' 58",
having a radius of 700.00 feet, and a long chord which bears S 26° 43' 03" W, 645.72 feet to the POINT
OF BEGINNING and containing 251,915 square feet or 5.783 acres of land more or less.
Tract 2
BEING that certain tract of land situated in W. Rattan Survey, Abstract Number 752, Collin County, Texas,
and being a portion of that tract of land referred to as Tract 2 in deed to CADG Hurricane Creek LLC
recorded in Instrument Number 20150529000631020 of the Official Public Records, Collin County, Texas
(O.P.R.C.C.T.) and being more particularly described by metes and bounds as follows:
BEGINNING at a 5/8” iron rod with plastic cap stamped “PELOTON” found in the east line of said Tract
2 and the most easterly northeast corner of The Villages of Hurricane Creek Phase I recorded in Instrument
Number 20201015010003920 of said (O.P.R.C.C.T.);
THENCE S 89° 13' 07" W, 660.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE N 00° 46' 53" W, 284.46 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE N 89° 13' 08" E, 660.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set in the
east line of said Tract 2;
THENCE S 00° 46' 53" E, 284.46 feet to the POINT OF BEGINNING and containing 187,742 square feet
or 4.310 acres of land more or less.
Tract 3
BEING that certain tract of land situated in W. Rattan Survey, Abstract Number 752, Collin County, Texas,
and being a portion of that tract of land referred to as Tract 1 in deed to CADG Hurricane Creek LLC
recorded in Instrument Number 20150529000631020 of the Official Public Records, Collin County, Texas
(O.P.R.C.C.T.) and being more particularly described by metes and bounds as follows:
COMMENCING at a 5/8” iron rod found for the northeast corner of a remainder tract WBK Partners, LTD
recorded in Volume 4292, Page 27 of said Official Public Records and the easternmost southeast corner of
said CADG Hurricane Creek, LLC tract;
THENCE S 88°58'27” W, 842.56 feet;
THENCE departing said south line of the CADG Hurricane Creek, LLC tract, N 01°01'33” W, 218.10 feet
to a 5/8” iron rod with plastic cap stamped “PELOTON” set to THE POINT OF BEGINNING;
THENCE N 03° 24' 07" W, 121.40 feet to the beginning of a curve to the left to a 5/8” iron rod with plastic
cap stamped “PELOTON” found;
THENCE with said curve to the left, an arc distance of 248.93 feet, through a central angle of 15° 25' 09",
having a radius of 925.00 feet, and a long chord which bears N 76° 44' 47" E, 248.18 feet;
THENCE following the south right of way line of Hidden Valley Drive of said Villages of Hurricane Creek
the following bearings and distances:
N 69° 02' 12" E, 64.84 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 69° 02' 12" E, 90.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE following the west right of way line of Shadybrook Trail of said Villages of Hurricane Creek the
following bearing and distance:
S 20° 57' 48" E, 120.08 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 68° 55' 33" W, 161.45 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE S 71° 32' 50" W, 95.74 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE S 77° 06' 00" W, 90.37 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE S 82° 06' 18" W, 93.25 feet to the POINT OF BEGINNING and containing 50,814 square feet
or 1.167 acres of land more or less.
Tract 4
BEING that certain tract of land situated in W. Rattan Survey, Abstract Number 752, Collin County, Texas,
and being a portion of that tract of land referred to as Tract 1 in deed to CADG Hurricane Creek LLC
recorded in Instrument Number 20150529000631020 of the Official Public Records, Collin County, Texas
(O.P.R.C.C.T.) and being more particularly described by metes and bounds as follows:
BEGINNING at a 5/8” iron rod with plastic cap stamped “PELOTON” found for southwest corner of Block
M, Lot 4 in a tract of land referred to as Tract 1 recorded in said Official Public Records for said CADG
Hurricane Creek, LLC tract and having a Northing of 7180087.9589' and Easting of 2549759.9701';
BEGINNING at a 5/8” iron rod with plastic cap stamped “PELOTON” found for the most easterly southeast
corner of a tract of land referred to as Tract 1 recorded in said Official Public Records and the easternmost
northeast corner of said CADG Hurricane Creek, LLC tract;
THENCE S 46° 18' 49" W, 250.44 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE N 43° 41' 11" W, 55.84 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE N 86° 55' 45" W, 15.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE N 63° 16' 55" W, 153.10 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE N 43° 41' 11" W, 480.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE N 46° 18' 49" E, 115.13 feet to the beginning of a curve to the right;
With said curve to the right, an arc distance of 105.54 feet, through a central angle of 122° 40' 26", having
a radius of 50.00 feet, and a long chord which bears N 01° 33' 11" W, 87.75 feet to a 5/8” iron rod with
plastic cap stamped “PELOTON” set;
THENCE N 43° 40' 57" W, 113.93 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE N 46° 18' 49" E, 540.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE S 43° 40' 57" E, 120.00 feet; to a 5/8” iron rod with plastic cap stamped “PELOTON” set
THENCE N 46° 18' 49" E, 171.01 feet to the beginning of a curve to the right;
With said curve to the right, an arc distance of 117.81 feet, through a central angle of 89° 59' 58", having a
radius of 75.00 feet, and a long chord which bears S 88° 41' 11" E, 106.07 feet to a 5/8” iron rod with plastic
cap stamped “PELOTON” set;
THENCE S 43° 41' 11" E, 217.47 feet to the beginning of a curve to the left;
With said curve to the left, an arc distance of 47.91 feet, through a central angle of 05° 54' 13", having a
radius of 465.00 feet, and a long chord which bears S 49° 15' 49" W, 47.89 feet to a 5/8” iron rod with
plastic cap stamped “PELOTON” found;
THENCE S 46° 18' 49" W, 2.17 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 43° 40' 57" E, 50.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 43° 41' 17" E, 120.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
(THENCE S 43° 41' 11" E, 170.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;)
THENCE S 46° 18' 49" W, 570.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 43° 41' 11" E, 120.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 46° 18' 49" W, 145.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 43° 41' 11" E, 50.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE N 46° 18' 49" E, 117.05 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
(THENCE N 46° 18' 49" E, 117.06 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;)
THENCE S 43° 41' 11" E, 120.00 feet to the POINT OF BEGINNING and containing 570,152 square feet
or 13.089 acres of land 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 ________________ by
CADG Hurricane Creek, 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”).
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 Hurricane Creek Public Improvement District (the “District”) by the then
owners of more than 50% of the appraised value of the taxable real property and owners of
more than 50% of the area of all taxable real property 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
Improvement Area #2 Projects (including all exhibits and attachments thereto, the
“Assessment Ordinance”) and the 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 (as amended from time to time, the “Assessments”)
on property in 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 these Covenants, Conditions and Restrictions.
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:
1. 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 Improvement Area
#2 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 District will not extinguish the Assessment or any unpaid but not yet due
annual installments 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 these Declarations of Covenants, Conditions
and Restrictions, 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 as required by Section
5.014 of the Texas Property Code, as amended, and as included in the most recent Annual
Service Plan Update of the Service and Assessment Plan filed in the real property records
of Collin County, Texas.
[SIGNATURE APPEARS ON FOLLOWING PAGE]
EXECUTED by the undersigned on the date set forth below to be effective as of the date first
above written.
LANDOWNER
CADG Hurricane Creek, LLC,
a Texas limited liability company
By: CADG Holdings, LLC,
a Texas limited liability company
Its Sole Member
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 ________________,
2022 by Mehrdad Moayedi, Manager of 2M Ventures, LLC, as Manager of MMM Ventures, LLC,
as Manager of CADG Holdings, LLC, as Sole Member of CADG Hurricane Creek, 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 Assessment Ordinance and the 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
Assessment Roll for such Improvement Area #2 Assessed Property (or if the Assessment Roll is
not available for such Improvement Area #2 Assessed Property, then a schedule showing the
maximum 30-year payment for such Improvement Area #2 Assessed Property) as an addendum to
any residential homebuyer’s contract.
2. Any Landowner who is a Builder shall provide evidence of compliance with 1 above,
signed by such residential homebuyer, to the City.
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.
E-1
EXHIBIT E
FUNDING AND REIMBURSEMENT AGREEMENT
1
IMPROVEMENT AREA #2
FUNDING AND REIMBURSEMENT AGREEMENT
Hurricane Creek Public Improvement District
This IMPROVEMENT AREA #2 FUNDING AND REIMBURSEMENT AGREEMENT (this
“Agreement”) is entered into effective this 13th day of December, 2022, between the CITY OF ANNA,
TEXAS, a home rule municipality located in Collin County, Texas (the “City”), and CADG HURRICANE
CREEK, LLC, a Texas limited liability company (the “Developer”).
SECTION 1
RECITALS
WHEREAS, capitalized terms used in this Agreement shall have the meanings given to them in
Section 2 of this Agreement; and
WHEREAS, Developer is the developer of tracts of land located within the corporate limits of the
City, containing, collectively, approximately 368.2 acres, and being more particularly described in Exhibit
A attached hereto and incorporated herein for all purposes; and
WHEREAS, on November 13, 2018, the City Council passed and approved the PID Creation
Resolution creating the PID pursuant to the authority of the Act, encompassing all of the District, but no
other land; and
WHEREAS, the PID Creation Resolution identified, defined and authorized the public
improvement projects that will promote the interests of the City and will confer a special benefit on the
District; and
WHEREAS, the District is being developed in phases; and
WHEREAS, the Parties estimate that the total cost of the Improvement Area #2 Improvements
needed to develop the Improvement Area #2 Assessed Property, are listed with approximate dollar amounts
as shown in Exhibit D attached hereto and incorporated herein for all purposes; and
WHEREAS, in consideration of the Developer’s agreements contained herein, the City shall
exercise its powers under Chapter 372, Texas Local Government Code, to provide financing arrangements
that will enable the Developer, in accordance with the procedures and requirements of the Act and this
Agreement, to fully develop the Improvement Area #2 Assessed Property and be reimbursed for a specified
portion of the public improvement projects using the Bond Proceeds; and
WHEREAS, the City, subject to the consent and approval of the City Council, the satisfaction of
all conditions for issuing the Improvement Area #2 Bonds, the Developer’s compliance with this
Agreement, and in accordance with the terms of this Agreement and all legal requirements, including but
not limited to the Improvement Area #2 Indenture, shall use best efforts to (i) adopt a SAP; (ii) adopt one
or more assessment ordinances; and (iii) issue an aggregate principal amount of Improvement Area #2
Bonds estimated to be $10,550,000.00 for the purpose of financing the Improvement Area #2 Improvements
in accordance with the SAP and reimbursing the Developer for that portion of the Improvement Area #2
Improvements, including, without limitation, the Developer’s costs to create the PID, heretofore funded or
to be funded by Developer; and
2
WHEREAS, prior to the issuance of the Improvement Area #2 Bonds owners of the Improvement
Area #2 Assessed Property shall have executed and delivered a Landowner Agreement to the City; and
WHEREAS, the Developer will construct the Improvement Area #2 Improvements set forth in the
SAP on or otherwise serving the Improvement Area #2 Assessed Property; and
WHEREAS, the City has passed and approved an Assessment Ordinance and has approved a SAP
as a part of the Assessment Ordinance; and
WHEREAS, the City and the Developer have agreed upon a budget (the “Budgeted Costs”) of the
Actual Costs of the Improvement Area #2 Improvements as set forth on Exhibit D; and
WHEREAS, the SAP will apportion the Actual Costs of the Improvement Area #2 Improvements
to the Improvement Area #2 Assessed Property as set forth on an assessment roll in the Assessment
Ordinance; and
WHEREAS, the Assessment Ordinance will levy the Actual Costs of the Improvement Area #2
Improvements as Special Assessments against the Improvement Area #2 Assessed Property in the amounts
set forth on an assessment roll in the Assessment Ordinance; and
WHEREAS, Special Assessments will be due and payable as described in the SAP; and
WHEREAS, the Actual Costs of the Improvement Area #2 Improvements payable from the Special
Assessments as set forth in this Agreement may be paid by the issuance and sale of bonds under Section
372.024 of the Act; and
WHEREAS, the City Council intends to pass and approve one or more Bond Ordinances pursuant
to the authority of Section 372.024 of the Act and in accordance with Subtitles A and C, Title 9, of the Texas
Government Code; and
WHEREAS, Bond Proceeds will be deposited into the Project Fund and disbursed for (i) the
payment of the Bond Issuance Costs, (ii) reimbursement of the Developer for that portion of the Actual
Costs of the Improvement Area #2 Improvements, including, without limitation, the Developer’s costs to
create the PID, that Developer has funded out of pocket from its own funds, and (iii) funding of a portion
of all of the Actual Costs of the Improvement Area #2 Improvements; and
WHEREAS, following the sale of the Improvement Area #2 Bonds and the construction of the
Improvement Area #2 Improvements, the Parties agree that they may enter into further agreements
providing for the financing of additional phases of the development and the assessment of the portion of
development benefitting from such development; and
WHEREAS, these recitals are incorporated into and made a part of this Agreement for all purposes;
and
WHEREAS, all resolutions and ordinances referenced in this Agreement, together with all other
documents referenced in this Agreement, are incorporated into this Agreement for all purposes as if such
resolutions, ordinances and other documents were set forth in their entirety in or as exhibits to this
Agreement; and
WHEREAS, unless otherwise defined: (1) all references to “sections” shall mean sections of this
Agreement; (2) all references to “exhibits” shall mean exhibits to this Agreement which are incorporated
3
as part of this Agreement for all purposes; and (3) all references to “ordinances” or “resolutions” shall mean
ordinances or resolutions adopted by the City Council.
NOW THEREFORE, for and in consideration of the mutual obligations of the City and the
Developer set forth in this Agreement, the City and the Developer agree as follows:
SECTION 2.
DEFINITIONS
“Act” means Chapter 372, Texas Local Government Code, as amended.
“Actual Costs” has the meaning given such term in the SAP.
“Assessment Ordinance” means the ordinance passed and approved by the City Council on the date
hereof for the purposes of levying the Actual Costs of the Improvement Area #2 Projects as Special
Assessments against the Improvement Area #2 Assessed Property in the amounts set forth therein.
“Assessment Revenue” means the revenues actually received by or on behalf of the City from the
collection of Special Assessments.
“Authorized Improvements” shall have the meaning assigned such term in the SAP.
“Bond Closing” means the issuance and delivery, by the City, of the Improvement Area #2 Bonds.
“Bond Issuance Costs” shall have the meaning assigned such term in the SAP.
“Bond Ordinance” means the ordinance adopted by the City Council on the date hereof authorizing
the issuance of the Improvement Area #2 Bonds.
“Bond Par Amount” means the cumulative face amount of issued and delivered Improvement Area
#2 Bonds, equal to $10,550,000.00.
“Bond Proceeds” means the proceeds derived from the issuance and sale of the Improvement Area
#2 Bonds that are deposited and made available to pay Actual Costs, District Formation Expenses, and
Bond Issuance Costs in accordance with the Improvement Area #2 Indenture.
“Budgeted Costs” has the meaning given such term in the Recitals.
“Certificate for Payment” means a certificate (substantially in the form of Exhibit C-1 or as
otherwise approved by the Developer and the City Representative) executed by a person approved by the
City Representative, delivered to the City Representative (and/or, if applicable, to the Trustee), specifying
the work performed and the amount charged (including materials and labor costs) for Actual Costs, and
requesting payment of such amount from the Project Fund.
“City Council” means the governing body of the City.
“City Representative” means the person authorized by the City Council to undertake the actions
referenced herein. As of the Effective Date, the City Representative is the City Manager.
“Closing Disbursement Request” means a certificate (substantially in the form of Exhibit C-2 or as
otherwise approved by the Developer and the City Representative) executed by a person approved by the
4
City Representative, delivered to the City Representative (and/or, if applicable, to the Trustee), specifying
the Developer Advances which are to be reimbursed from Bond Proceeds.
“Default” has the meaning given such term in Section 4.6.1 of this Agreement.
“Developer Advances” mean advances made by the Developer to pay Actual Costs in accordance
with Section 3 of this Agreement.
“Developer Continuing Disclosure Agreement” means any Continuing Disclosure Agreement of
the Developer executed contemporaneously with the issuance and sale of Improvement Area #2 Bonds.
“Developer Deposit” means the amount of $0.00 being deposited into the Improvement Area #2
Developer Improvement Account of the Project Fund at the time of Bond Closing and governed by the
Improvement Area #2 Indenture.
“Development Agreement” means that certain First Amended and Restated Villages of Hurricane
Creek Subdivision Improvement Agreement between the City and the Developer effective as of August 28,
2018, as amended by that Second Amended Villages of Hurricane Creek Subdivision Improvement
Agreement effective as of November 13, 2018, as further amended by the Third Amended Villages of
Hurricane Creek Subdivision Improvement Agreement effective as of February 12, 2019, and as further
amended by the Fourth Amended Villages of Hurricane Creek Subdivision Improvement Agreement
effective as of December 8, 2020 as then amended and in effect.
“District” means the tract of land located in the corporate limits of the City, containing, collectively,
approximately 368.2 acres, and being more particularly described in Exhibit A attached hereto and
incorporated herein for all purposes.
“District Formation Expenses” shall have the meaning assigned such term in the SAP.
“Effective Date” has the meaning given such term in the Preamble to this Agreement.
“Failure” has the meaning given such term in Section 4.6.1 of this Agreement.
“Improvement Area #2 Assessed Property” means the means the second area to be developed within
the District containing, approximately 69.1 acres, and being more particularly described in Exhibit B
attached hereto and incorporated herein for all purposes.
“Improvement Area #2 Bonds” shall have the meaning assigned such term in the SAP.
“Improvement Area #2 Improvements” shall have the meaning assigned such term in the SAP.
“Improvement Area #2 Indenture” means the Indenture of Trust, between the City and the Trustee,
pursuant to which the Improvement Area #2 Bonds are issued.
“Improvement Area #2 Projects” shall have the meaning assigned such term in the SAP.
“Maturity Date” means the final maturity date of the Improvement Area #2 Bonds.
“Party” means individually either City or Developer and “Parties” means collectively both the City
and Developer.
5
“Pledged Revenue Fund” means the “Pledged Revenue Fund”, including all accounts created
within such fund, created pursuant to Section 6.1 of the Improvement Area #2 Indenture (and segregated
from all other funds of the City) into which the City deposits Assessment Revenue from the collection of
the Special Assessments securing Improvement Area #2 Bonds issued and still outstanding.
“PID” means the Hurricane Creek Public Improvement District created by the PID Creation
Resolution.
“PID Bond Net Amount” means an amount equal to (x) the Bond Par Amount, less (y) the District
Formation Expenses and (z) Bond Issuance Costs.
“PID Creation Resolution” means City of Anna, Texas, Resolution No. 2018-11-506 passed and
approved by the City Council on November 13, 2018.
“PID Payment Balance” means the unpaid principal balance owed the Developer for all Certificates
of Payment.
“Project Fund” means the “Project Fund”, including all accounts created within such fund,
established by the City under the Improvement Area #2 Indenture (and segregated from all other funds of
the City) into which the City deposits Bond Proceeds and any other funds authorized or required by the
Improvement Area #2 Indenture.
“Reserve Fund” means the “Reserve Fund” created pursuant to Section 6.1 of the Improvement
Area #2 Indenture.
“SAP” means the Hurricane Creek Public Improvement District Amended and Restated Service
and Assessment Plan in form reasonably acceptable to Developer and approved as part of the Assessment
Ordinance, as same may be amended by the City Council from time to time.
“Special Assessment(s)” means the special assessments levied against the Improvement Area #2
Assessed Property pursuant to the Assessment Ordinance and in accordance with the SAP for the payment
of the Improvement Area #2 Bonds.
“Transfer” and “Transferee” have the meanings given such terms in Section 4.8 of this Agreement.
“Trustee” shall have the meaning assigned such term in the SAP, and as identified in the
Improvement Area #2 Indenture.
SECTION 3.
FUNDING IMPROVEMENTS
3.1 Project Fund. The City, pursuant to the Bond Ordinance and in connection with this
Agreement, is proceeding with the issuance and delivery of the Improvement Area #2 Bonds. The City
shall deposit all Bond Proceeds and any other funds authorized or required by the Improvement Area #2
Indenture, including the Developer Deposit, into the Project Fund. Funds in the Project Fund shall only be
used to pay District Formation Expenses, Bond Issuance Costs, and the Actual Costs of the Improvement
Area #2 Improvements in accordance with the Improvement Area #2 Indenture. The Improvement Area #2
Indenture shall control in the event of any conflicts with this Agreement.
3.2 Improvement Area #2 Bonds. Provided that the Improvement Area #2 Bonds are issued
and delivered and the Bond Proceeds from the Improvement Area #2 Bonds are deposited by the City in
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the Project Fund, the Developer will install and construct the Improvement Area #2 Improvements. Except
as otherwise set forth in the preceding sentence, the Developer shall not be relieved of its obligation to
construct or cause to be constructed the Improvement Area #2 Improvements, even if there are insufficient
funds in the Project Fund to pay the Actual Costs of the Improvement Area #2 Improvements.
3.3 Payment of Actual Costs. The Bond Proceeds shall be used to pay (i) Actual Costs, up to
the sum of the PID Bond Net Amount, (ii) the District Formation Expenses and (iii) Bond Issuance Costs,
and except for the Developer Deposit, the Developer shall have no obligation to make Developer Advances
unless the Bond Proceeds are insufficient to pay the Actual Costs of the Improvement Area #2
Improvements, in which case the Developer shall make Developer Advances to pay the deficit. The
Developer shall also make Developer Advances to pay for cost overruns for Improvement Area #2
Improvements (after applying cost savings). The lack of Bond Proceeds shall not diminish the obligation
of the Developer to pay Actual Costs; provided, however, the obligations of the Developer under this
Section 3.3 are subject to the terms of Section 3.2 of this Agreement. The Developer may, in its discretion
from time to time, elect to make Developer Advances to pay Actual Costs, for which Developer will be
entitled to reimbursement pursuant to this Agreement. Bond Proceeds from Project Fund will be used first
to pay for Actual Costs, and thereafter the Developer Deposit and Developer Advances shall be used to pay
Actual Costs.
3.4 Cost Overrun. If the Actual Cost of an Improvement Area #2 Improvement (or segment or
section thereof) exceeds the total amount of the Budgeted Cost for that Improvement Area #2 Improvements
(or segment or section thereof) (a “Cost Overrun”), the Developer shall be solely responsible for payment
of the remainder of the costs of that Improvement Area #2 Improvement (or segment or section thereof),
except as provided in Section 3.5 below.
3.5 Cost Underrun. If, upon the completion of construction of an Improvement Area #2
Improvement (or segment or section thereof) and payment or reimbursement for such Improvement Area
#2 Improvement (or segment or section thereof), the Actual Cost of such Improvement Area #2
Improvement is less than the total amount of the Budgeted Cost for that Improvement Area #2 Improvement
(or segment or section thereof) (a “Cost Underrun”), any remaining Budgeted Cost(s) may be available to
pay Cost Overruns on any other Improvement Area #2 Improvement with the approval of the City Manager
or his designee. The elimination of a category of Improvement Area #2 Improvement in the Service and
Assessment Plan will require an amendment to the SAP. If, upon completion of the Improvement Area #2
Improvement (or segment or section thereof) in any improvement category, any funds remain in such
category, those funds may be used to reimburse the Developer for any qualifying costs of the Improvement
Area #2 Improvement (or segment or section thereof) that have not been paid.
3.6 Remainder of Funds in the Improvement Area #2 Developer Improvement Account of the
Project Fund. If funds remain in the Improvement Area #2 Developer Improvement Account of the Project
Fund after the completion of all Improvement Area #2 Improvements and the payment of all costs of the
Improvement Area #2 Improvements as provided for in the Indenture, City shall be the recipient of the
remainder of funds for any lawful expenditure of public funds in accordance with applicable Indenture. In
the event of any conflict between the terms of this Agreement and the terms of the Indenture relative to
deposit and/or disbursement, the terms of the Indenture shall control.
3.7 Disbursements at and after Bond Closing. The City and the Developer agree that from the
Bond Proceeds, the City will direct the Trustee in writing under the Improvement Area #2 Indenture to pay
at closing of the Improvement Area #2 Bonds the District Formation Expenses and Bond Issuance Costs in
the amounts set forth on Exhibit D attached hereto. In order to receive an initial disbursement at the Bond
Closing from Bond Proceeds for Actual Costs of the Improvement Area #2 Improvements, the Developer
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shall execute a Closing Disbursement Request to be delivered to the City (along with all accompanying
documentation required by the City) no less than ten (10) business days prior to the scheduled date for the
Bond Closing, and the City will direct the Trustee in writing under the Improvement Area #2 Indenture to
pay at the Bond Closing the Actual Costs of the Improvement Area #2 Improvements set forth in the Closing
Disbursement Request. In order to receive additional disbursements of Bond Proceeds or funds on deposit
from Developer from the Project Fund, the Developer shall execute a Certificate for Payment, no more
frequently than monthly, to be delivered to the City for payment in accordance with the provisions of this
Agreement. Upon receipt of a Certificate for Payment (along with all accompanying documentation
required by the City) from the Developer, the City shall conduct a review and inspection in order to confirm
that such request is complete, to confirm that the work for which payment is requested was performed in
accordance with all applicable City ordinances, codes and regulations and applicable plans therefore and
with the terms of this Agreement and to verify and approve the Actual Costs of such work specified in such
Certificate for Payment. A cost overrun may be approved in the same manner as any cost underrun as set
forth in Section 7.3 of the Development Agreement. The City shall also conduct such review as is required
in its discretion to confirm the matters certified in the Certificate for Payment. The Developer agrees to
cooperate with the City in conducting each such review and inspection and to provide the City with such
additional information and documentation as is reasonably necessary for the City to conclude each such
review. Within fifteen (15) business days following receipt of any Certificate for Payment, the City shall
either: (1) approve the Certificate for Payment and forward it to the Trustee with written instructions for
payment, or (2) provide the Developer with written notification of disapproval of all or part of a Certificate
for Payment, specifying the basis for any such disapproval. If there is a dispute over the amount of any
payment, the City shall nevertheless pay the undisputed amount, and the Parties shall use all reasonable
efforts to resolve the disputed amount before the next payment is made; however, if the Parties are unable
to resolve the disputed amount, then the City’s determination of the disputed amount (as approved by the
City Council) shall control. The City shall deliver the approved or partially approved Certificate for
Payment to the Trustee with written instructions for payment, and after receipt of said written instructions
or directive, the Trustee shall make the disbursements as quickly as practicable thereafter in accordance
with the terms of the Improvement Area #2 Indenture.
3.8 Obligations Limited. The obligations of the City under this Agreement shall not, under any
circumstances, give rise to or create a charge against the general credit or taxing power of the City or a debt
or other obligation of the City payable from any source other than the Project Fund. Unless approved by
the City, no other City funds, revenues, taxes, or income of any kind shall be used to pay: (1) the Actual
Costs of the Improvement Area #2 Improvements; (2) the PID Payment Balance even if the PID Payment
Balance is not paid in full on or before the Maturity Date; or (3) debt service on any Improvement Area #2
Bonds. None of the City or any of its elected or appointed officials or any of its officers, employees,
consultants or representatives shall incur any liability hereunder to the Developer or any other party in their
individual capacities by reason of this Agreement or their acts or omissions under this Agreement.
3.9 Obligation to Pay. Subject to the provisions of Section 3.6 above and as determined solely
by the City, if the Developer is current on the payment of all taxes, assessments and fees owed to the City,
and (ii) the Developer is in then-current compliance with its obligations under this Agreement and the
Developer Continuing Disclosure Agreement (if Improvement Area #2 Bonds are issued and remain
outstanding), then following, as applicable, the City’s approval of a Closing Disbursement Request or the
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inspection and approval of any portion of Improvement Area #2 Improvements for which Developer seeks
reimbursement of the Actual Costs by submission of a Certificate for Payment, the obligations of the City
under this Agreement to pay disbursements (whether to the Developer or to any person designated by the
Developer) identified in any Closing Disbursement Request or in any Certificate for Payment and are
unconditional and not subject to any defenses or rights of offset except as may be provided in the
Improvement Area #2 Indenture. The City shall timely pay debt service on the Improvement Area #2 Bonds
from the Pledged Revenue Fund created under Section 6.1 of the Improvement Area #2 Indenture, and,
after depletion of such Pledged Revenue Fund, from the Reserve Fund.
3.10 Commencement and Completion of Construction. All Improvement Area #2
Improvements shall be constructed by or at the direction of the Developer in accordance with the City’s
applicable ordinances, codes and regulations, applicable plans therefor and this 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 installation and construction of Improvement Area #2 Improvements 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 or hire/contract 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 Improvement Area #2 Improvements to be conveyed to, and
accepted by, the City from the Developer. If any Improvement Area #2 Improvements are or will be on
land owned by the City, the City hereby grants to the Developer a license to enter upon such land for
purposes related to construction (and maintenance pending acquisition and acceptance) of the Improvement
Area #2 Improvements. Inspection and acceptance of Improvement Area #2 Improvements will be in
accordance with applicable City ordinances, codes and regulations.
3.11 Conveyance to the City; Security for Improvement Area #2 Improvements. Upon
completion of the Improvement Area #2 Improvements, the Developer shall convey the Improvement Area
#2 Improvements to the City, and, subject to the terms of Sections 3.7 and 3.9 of this Agreement, the City
shall approve and accept such conveyance. Prior to completion and conveyance to the City of any
Improvement Area #2 Improvements, the Developer shall cause to be provided to the City a maintenance
bond in the amount required by the City’s applicable subdivision regulations for the subject Improvement
Area #2 Improvements, which maintenance bond shall be for a term of one (1) year from the date of final
acceptance of the subject Improvement Area #2 Improvements. 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 legal
counsel for the City has the right to reject reasonably any surety company regardless of such company’s
authorization to do business in Texas. 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 mechanics or materialman’s lien
and/or judgment nor limit the remedies available to the Developer or the City with respect thereto so long
as such delay in performance shall not subject the Improvement Area #2 Improvements to foreclosure,
forfeiture or sale. In the event that any such lien and/or judgment with respect to the Improvement Area #2
Improvements is contested, the Developer shall be required to post or cause the delivery of a surety bond
or letter of credit, whichever is preferred by the City, in an amount reasonably determined by the City, not
to exceed one hundred twenty percent (120%) percent of the disputed amount.
3.12 Ownership and Transfer of Improvement Area #2 Improvements. The Developer shall
furnish to the City a preliminary title report for land related to the Improvement Area #2 Improvements to
be conveyed to, and accepted by, the City from the Developer and not previously dedicated or otherwise
conveyed to the City. The report shall be made available for City review and approval prior to the scheduled
conveyance. The City shall approve the preliminary title report unless it reveals a matter which, in the
reasonable judgment of the City, would materially affect the City’s use and enjoyment of the Improvement
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Area #2 Improvements. If the City objects to any preliminary title report, the City shall not be obligated to
accept the subject Improvement Area #2 Improvements until the Developer has cured the objections to the
reasonable satisfaction of the City. The Developer shall provide all documents necessary to convey to the
City all right, title and interest in and to the Improvement Area #2 Improvements, free and clear of all liens.
The City shall issue a letter of acceptance for all Improvement Area #2 Improvements accepted by the City.
Upon completion of all Improvement Area #2 Projects, any amounts remaining in the Project Fund shall be
transferred pursuant to Section 6.3 of the Improvement Area #2 Indenture.
3.13 Pledged Revenue Fund. The City shall deposit Assessment Revenue from the collection
of the Special Assessments securing the Improvement Area #2 Bonds issued and still outstanding in the
Pledged Revenue Fund, except as otherwise provided in the Improvement Area #2 Indenture.
3.14 PID Bond Issuance. The issuance of Improvement Area #2 Bonds is subject to the
following conditions:
(1) the adoption or amendment of an SAP and an assessment ordinance levying assessments
on all or any portion of the Improvement Area #2 Assessed Property benefitted by such
Improvement Area #2 Improvements in amounts sufficient to pay all costs related to such
Improvement Area #2 Bonds;
(2) the Developer, at the request of the City, providing an appraisal report;
(3) approval by the Texas Attorney General of the Improvement Area #2 Bonds and
registration of the Improvement Area #2 Bonds by the Comptroller of Public Accounts of
the State of Texas;
(4) the Developer is not in default under this Agreement or any other agreement with the City;
(5) the Improvement Area #2 Improvements to be financed by the Improvement Area #2 Bonds
have been or will be constructed according to the approved design specifications and
construction standards imposed by this Agreement, if any, including any applicable City
regulations;
(6) the maximum maturity for any Improvement Area #2 Bonds shall not exceed thirty (30)
years from the date of delivery thereof; and
(7) the Developer agrees to provide periodic information and notices of material events
regarding the Developer as it relates to the development of the Improvement Area #2
Assessed Property within the PID in accordance with Securities and Exchange Commission
Rule 15c2-12 and any continuing disclosure agreements executed by the Developer in
connection with the issuance of Improvement Area #2 Bonds.
(8) the Improvement Area #2 Bonds are offered for sale by the Underwriter thereof in
minimum denominations of $100,000 in a placement with a “qualified institutional buyer”
as defined in Securities and Exchange Commission Rule 144A.
SECTION 4.
ADDITIONAL PROVISIONS
4.1 Term. The term of this Agreement shall begin on the Effective Date and shall continue
until the earlier of the (i) Maturity Date, or (ii) the date on which the PID Payment Balance is paid in full,
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such that the total of all such disbursements is not less than the full PID Bond Net Amount plus Developer
Advances.
4.2 No Competitive Bidding. Construction of the Improvement Area #2 Improvements shall
not require competitive bidding pursuant to Section 252.022(a) (9) of the Texas Local Government Code,
as amended. All plans and specifications for the Improvement Area #2 Improvements, but not construction
contracts, shall be reviewed and approved, in writing, by the City prior to Developer’s commencing
construction of such Improvement Area #2 Improvements.
4.3 Independent Contractor. In performing this Agreement, the Developer is an independent
contractor and not the agent or employee of the City.
4.4 Audit. The City Representative shall have the right, during normal business hours and
upon three (3) business days’ prior written notice to the 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
Improvement Area #2 Improvements. For a period of two (2) years after completion of the Improvement
Area #2 Improvements, the Developer shall maintain proper books of record and account for the
construction of the Improvement Area #2 Improvements and all costs related thereto. Such accounting
books shall be maintained in accordance with customary real estate accounting principles.
4.5 Mutual Representations and Warranties.
4.5.1 The Developer represents and warrants to the City that: (1) the Developer has the authority
to enter into and perform its obligations under this Agreement; (2) the Developer has the financial resources,
or the ability to obtain sufficient financial resources, to meet its obligations under this Agreement; (3) the
person executing this Agreement on behalf of the Developer has been duly authorized to do so; (4) this
Agreement is binding upon the Developer in accordance with its terms; and (5) 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.
4.5.2 If in connection with the issuance of Improvement Area #2 Bonds the City is required to
deliver a certificate as to tax exemption (a “Tax Certificate”) to satisfy requirements of the Internal Revenue
Code, the Developer agrees 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
represents that such facts and estimates will be based on its reasonable expectations on the date of issuance
of the Improvement Area #2 Bonds and will be, to the knowledge of the officers of the Developer providing
such facts and estimates, true, correct and complete as of such date. To the extent that it exercises control
or direction over the use or investment of the Bond Proceeds (including, but not limited to, the use of the
Improvement Area #2 Improvements), the Developer further agrees that it will not knowingly make, or
permit to be made, any use or investment of such funds that would cause any of the covenants or agreements
of the City contained in a Tax Certificate to be violated or that would otherwise have an adverse effect on
the tax-exempt status of the interest payable on the Improvement Area #2 Bonds for federal income tax
purposes.
4.5.3 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.
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4.6 Default/Remedies.
4.6.1 If either Party fails to perform an obligation imposed on such Party by this Agreement (a
“Failure”) and such Failure is not cured after notice and the expiration of the cure periods provided in this
Section 4.6, then such Failure shall constitute a “Default”. If a Failure is monetary, the non-performing
Party shall have ten (10) days within which to cure. If the Failure is non-monetary, the non-performing
Party shall have thirty (30) days within which to cure.
4.6.2 If the Developer is in Default, the City shall be limited to mandamus relief to compel
actions required to be taken by the Developer under this Agreement, but in no event shall the City have any
other recourse of any kind against the Developer or its officers, officials, employees or representatives,
including but not limited to damages or other forms of monetary relief; provided no default by the
Developer shall entitle the City to terminate this Agreement or to withhold payments to the Developer from
the Project Fund in accordance with this Agreement and the Improvement Area #2 Indenture.
4.6.3 If the City is in Default, the Developer shall have available all remedies at law or in equity;
provided, however, no Default by the City shall entitle the Developer to terminate this Agreement.
4.6.4 The City shall give notice of any alleged Failure by the Developer to each Transferee
identified in any notice from the Developer, and such Transferees shall have the right, but not the obligation,
to cure the alleged Failure within the same cure periods that are provided to the Developer. The election
by a Transferee to cure a Failure by the Developer shall constitute a cure by the Developer but shall not
obligate the Transferee to be bound by this Agreement unless the Transferee agrees in writing to be bound.
4.7 Remedies Outside the Agreement. Except as otherwise provided in Section 4.6, nothing in
this Agreement constitutes a waiver by the City of any remedy the City may have outside this Agreement
against the Developer, any Transferee or any other person or entity involved in the design, installation or
construction of the Improvement Area #2 Improvements. The obligations of the Developer hereunder shall
be those of a party hereto and not as an owner of property in the PID. Nothing herein shall be construed as
affecting the rights or duties of the City or the Developer to perform their respective obligations under other
agreements, use regulations or subdivision requirements relating to the development of property in the PID.
4.8 Transfers. The Developer has the right to convey, transfer, assign, mortgage, pledge or
otherwise encumber, in whole or in part without the consent of (but with notice to) the City, the Developer’s
right, title or interest to payments under this Agreement (but not performance obligations) including, but
not limited to, any right, title or interest of the Developer in and to payments of the PID Payment Balance
(any of the foregoing, a “Transfer,” and the person or entity to whom the transfer is made, a “Transferee”).
The rights of the Developer to Transfer are conditioned upon the Transferee agreeing, in writing, to assume
the duties, obligations and rights being assigned and to be bound by the terms and conditions of this
Agreement to the extent they apply to the duties, obligations or rights being assigned. A Transfer by the
Developer pursuant to this Section shall be effective upon delivery to the City of a copy of the fully executed
Transfer or assignment agreement which shall include the information required by Section 4.11 and
unambiguous provisions regarding any apportionment between the Developer and the Transferee of the
right to receive any payments under this Agreement, and from and after the effective date of any Transfer,
the Developer shall be released from performing or benefiting from the duties, obligations and rights
assigned. The City may rely on notice of a Transfer received from the Developer without obligation to
investigate or confirm the validity of the Transfer. The Developer waives all rights or claims against the
City for any funds paid to a third party as a result of a Transfer for which the City received notice from the
Developer. No Transfer shall increase the liability of, or impose additional liabilities upon, the City beyond
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what is specifically provided for herein or increase the duties or expenses of, or impose additional duties or
expenses upon, the City beyond what is specifically provided for herein.
4.9 Eminent Domain. Developer agrees to use reasonable efforts to obtain all third party
rights-of-way, consents, or easements, if any, required for the Improvement Area #2 Improvements. If,
however, Developer is unable to obtain such third-party rights-of-way, consents, or easements within ninety
(90) days of commencing efforts to obtain the needed easements and right of way, the City agrees to take
reasonable steps to secure same (subject to City Council authorization after a finding of public necessity)
through the use of the City's power of eminent domain, pursuant to the provisions of Section 13.8 of the
Development Agreement.
4.10 Applicable Law; Venue. This Agreement is being executed and delivered and is intended
to be performed in the State of Texas. The substantive laws of the State of Texas shall govern the
interpretation and enforcement of this Agreement. In the event of a dispute involving this Agreement, venue
shall lie in any court of competent jurisdiction in Collin County, Texas.
4.11 Notice. Any notice referenced in this Agreement must be in writing and shall be deemed
given at the addresses shown below: (1) when delivered by a nationally recognized delivery service such
as Federal Express or UPS with evidence of delivery signed by any person at the delivery address regardless
of whether such person is the named addressee; or (2) seventy-two (72) hours after deposited with the
United States Postal Service, Certified Mail, Return Receipt Requested.
To the City:
City of Anna
Attn: Jim Proce, City Manager
120 W. 7th Street
Anna, TX 75409
With a copy to:
Clark McCoy
Wolfe, Tidwell & McCoy, LLP
2591 Dallas Parkway, Suite 300
Frisco, Texas 75034
To the Developer:
CADG Hurricane Creek, LLC
Attn: Mehrdad Moayedi
1800 Valley View Lane, Suite 300
Farmers Branch, Texas 75234
With a copy to:
Boghetich Law, PLLC
Attn: Travis Boghetich
1800 Valley View Lane, Suite 360
Farmers Branch, Texas 75234
Any Party may change its address by delivering notice of the change in accordance with this section.
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4.12 Amendment; Binding Agreement. This Agreement may only be amended by written
agreement of the City and the Developer. This Agreement shall be binding upon, and inure to the benefit
of, the respective successors and assigns of the City and the Developer.
4.13 Severability. If any provision of this Agreement is held invalid by any court, such holding
shall not affect the validity of the remaining provisions.
4.14 Non-Waiver. The failure by a party to insist upon the strict performance of any provision
of this Agreement by the other party, or the failure by a party to exercise its rights upon a Default by the
other party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by such
other party with the provisions of this Agreement.
4.15 Third Party Beneficiaries. Nothing in this Agreement is intended to or shall be construed
to confer upon any person or entity other than the City, the Developer and Transferees any rights under or
by reason of this Agreement. All provisions of this Agreement shall be for the sole and exclusive benefit
of the City, the Developer and Transferees.
4.16 Counterparts. This Agreement may be executed in multiple counterparts, which, when
taken together, shall be deemed one original.
[SIGNATURES FOLLOW ON THE NEXT PAGES]
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CITY:
CITY OF ANNA, TEXAS,
a home rule municipality
______________________________________
ATTEST: Nate Pike, Mayor
______________________________________
Carrie Land, City Secretary
(SEAL)
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DEVELOPER:
CADG HURRICANE CREEK, LLC
a Texas limited liability company
By: CADG Holdings, LLC,
a Texas limited liability company
Its Sole Member
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
EXHIBIT A
Legal Description of District
EXHIBIT B
EXHIBIT B
Legal Description of the Improvement Area #2 Assessed Property
Phase 2 LEGAL DESCRIPTION:
BEING THAT CERTAIN TRACT OF LAND SITUATED IN THE J. BOYLE SURVEY, ABSTRACT
NUMBER 105 AND THE W.S. RATTAN SURVEY, ABSTRACT NUMBER 752, COLLIN COUNTY,
TEXAS, BEING A PORTION OF THAT TRACT OF LAND DESCRIBED IN DEED TO CADG
HURRICANE CREEK, LLC KNOWN AS TRACT 2 RECORDED IN INSTRUMENT NUMBER
201505290000631020 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 A 1/2 INCH IRON ROD FOUND IN THE SOUTH LINE OF A TRACT OF LAND TO MM
ANNA 325, LLC TRACT 1 RECORDED IN INSTRUMENT NUMBER 20190411000386110 AND BEING
THE NORTHWEST CORNER OF ONE ANNA TWO ADDITION RECORDED IN INSTRUMENT
NUMBER 20210607010002180 OF SAID O.P.R.C.C.T.
THENCE DEPARTING THE SOUTH LINE OF SAID MM ANNA TRACT FOLLOWING THE WEST LINE
OF SAID ONE ANNA TWO ADDITION TRACT AND BEING THE WEST LINE OF STANDRIDGE
BOULEVARD (A CALLED 80’ RIGHT-OF-WAY) THE FOLLOWING BEARINGS AND DISTANCES:
S 02° 05' 48" E, 55.77 TO A 1/2 INCH IRON ROD WITH CAP STAMPED “GEER 3258” FOUND
AND THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, AN ARC DISTANCE OF 205.60 FEET, THROUGH A
CENTRAL ANGLE OF 16° 49' 44", HAVING A RADIUS OF 700.00 FEET, AND A LONG CHORD
WHICH BEARS S 06° 27' 08" W, 204.87 FEET TO A 1/2 INCH IRON ROD WITH CAP STAMPED
“GEER 3258” FOUND;
S 14° 47' 37" W, 121.39 FEET TO A 1/2 INCH IRON ROD FOUND AND THE BEGINNING OF A
CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, AN ARC DISTANCE OF 205.59 FEET, THROUGH A
CENTRAL ANGLE OF 16° 49' 39", HAVING A RADIUS OF 700.00 FEET, AND A LONG CHORD
WHICH BEARS S 06° 28' 09" W, 204.85 FEET TO A 1/2 IRON ROD WITH CAP STAMPED “GEER
3258” FOUND;
S 02° 00' 44" E, 201.29 FEET TO A 1/2 INCH IRON ROD WITH CAP STAMPED “GEER 3258”
FOUND AND THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, AN ARC DISTANCE OF 116.43 FEET, THROUGH A
CENTRAL ANGLE OF 09° 31' 48", HAVING A RADIUS OF 699.99 FEET, AND A LONG CHORD
WHICH BEARS S 02° 49' 59" W, 116.30 FEET TO A 1/2 INCH IRON ROD WITH CAP STAMPED
“GEER 3258” FOUND;
S 07° 36' 10" W, 394.08 FEET TO A 1/2 INCH IRON ROD WITH CAP STAMPED “GEER 3258”
FOUND AND THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, AN ARC DISTANCE OF 101.69 FEET, THROUGH A
CENTRAL ANGLE OF 08° 19' 23", HAVING A RADIUS OF 700.03 FEET, AND A LONG CHORD
WHICH BEARS S 03° 23' 47" W, 101.60 FEET TO A 1/2 INCH IRON ROD WITH CAP STAMPED
“GEER 3258” FOUND;
EXHIBIT B
S 00° 46' 53" E, 187.26 FEET TO THE NORTHEAST CORNER OF THE VILLAGES OF
HURRICANE CREEK, PHASE 1 RECORDED IN INSTRUMENT NUMBER 2021012000126700
OF SAID O.P.R.C.C.T;
THENCE FOLLOWING THE NORTH LINE OF SAID HURRICANE CREEK, PHASE 1 THE FOLLOWING
BEARINGS AND DISTANCES:
S 89° 13' 07" W, 1,391.48 FEET;
S 59° 26' 33" W, 165.35 FEET;
THENCE DEPARTING SAID NORTH LINE OF SAID HURRICANE CREEK, PHASE 1 OVER AND
ACROSS SAID TRACT 2 THE FOLLOWING BEARINGS AND DISTANCES:
N 00° 46' 53" W, 38.33 FEET TO THE BEGINNING OF A CURVE TO THE RIGHT;
WITH SAID CURVE TO THE RIGHT, AN ARC DISTANCE OF 111.87 FEET, THROUGH A
CENTRAL ANGLE OF 12° 49' 11", HAVING A RADIUS OF 500.00 FEET, AND A LONG CHORD
WHICH BEARS N 05° 37' 43" E, 111.64 FEET;
N 12° 02' 18" E, 192.23 FEET TO THE BEGINNING OF A CURVE TO THE LEFT;
WITH SAID CURVE TO THE LEFT, AN ARC DISTANCE OF 748.78 FEET, THROUGH A
CENTRAL ANGLE OF 58° 46' 11", HAVING A RADIUS OF 730.00 FEET, AND A LONG CHORD
WHICH BEARS N 17° 20' 48" W, 716.38 FEET;
N 46° 43' 54" W, 32.41 FEET;
N 46° 18' 49" E, 276.60 FEET;
N 32° 16' 49" E, 500.47 FEET;
THENCE N 89° 04' 42" E, 1382.63 FEET TO THE POINT OF BEGINNING AND CONTAINING 2,449,716
SQUARE FEET OR 56.238 ACRES MORE OR LESS.
Phase 1B Legal Description
Tract 1
BEING that certain tract of land situated in W. Rattan Survey, Abstract Number 752, Collin County, Texas, and
being a portion of that tract of land referred to as Tract 2 in deed to CADG Hurricane Creek LLC recorded in
Instrument Number 20150529000631020 of the Official Public Records, Collin County, Texas (O.P.R.C.C.T.)
and being more particularly described by metes and bounds as follows:
BEGINNING at a 1/2” iron rod with cap stamped GEER 3258 found in the east line of said Tract 2 to CADG
Hurricane Creek LLC AND being the most easterly southeast corner of The Villages of Hurricane Creek Phase
1 recorded in Instrument Number 20201015010003920 of said (O.P.R.C.C.T.);
THENCE following the east property line of said Villages of Hurricane Creek the following bearings and
distances:
N 36° 16' 46" W, 163.61 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 53° 43' 13" E, 1.72 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 36° 16' 47" W, 50.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
EXHIBIT B
N 33° 07' 12" W, 131.90 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 55° 11' 09" E, 70.72 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 56° 29' 24" E, 66.49 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 34° 31' 32" E, 64.92 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 20° 40' 36" E, 64.06 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 03° 56' 49" E, 63.28 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 01° 32' 35" E, 138.83 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 89° 13' 07" E, 170.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 00° 46' 53" W, 410.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 89° 14' 17" E, 135.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found in the east
line of said Tract 2;
THENCE S 00° 46' 53" E, 513.44 feet to the beginning of a curve to the right to a 1/2” iron rod found;
THENCE with said curve to the right, an arc distance of 671.13 feet, through a central angle of 54° 55' 58",
having a radius of 700.00 feet, and a long chord which bears S 26° 43' 03" W, 645.72 feet to the POINT OF
BEGINNING and containing 251,915 square feet or 5.783 acres of land more or less.
Tract 2
BEING that certain tract of land situated in W. Rattan Survey, Abstract Number 752, Collin County, Texas, and
being a portion of that tract of land referred to as Tract 2 in deed to CADG Hurricane Creek LLC recorded in
Instrument Number 20150529000631020 of the Official Public Records, Collin County, Texas (O.P.R.C.C.T.)
and being more particularly described by metes and bounds as follows:
BEGINNING at a 5/8” iron rod with plastic cap stamped “PELOTON” found in the east line of said Tract 2 and
the most easterly northeast corner of The Villages of Hurricane Creek Phase I recorded in Instrument Number
20201015010003920 of said (O.P.R.C.C.T.);
THENCE S 89° 13' 07" W, 660.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE N 00° 46' 53" W, 284.46 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE N 89° 13' 08" E, 660.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set in the east
line of said Tract 2;
THENCE S 00° 46' 53" E, 284.46 feet to the POINT OF BEGINNING and containing 187,742 square feet or
4.310 acres of land more or less.
Tract 3
BEING that certain tract of land situated in W. Rattan Survey, Abstract Number 752, Collin County, Texas, and
being a portion of that tract of land referred to as Tract 1 in deed to CADG Hurricane Creek LLC recorded in
Instrument Number 20150529000631020 of the Official Public Records, Collin County, Texas (O.P.R.C.C.T.)
and being more particularly described by metes and bounds as follows:
EXHIBIT B
COMMENCING at a 5/8” iron rod found for the northeast corner of a remainder tract WBK Partners, LTD
recorded in Volume 4292, Page 27 of said Official Public Records and the easternmost southeast corner of said
CADG Hurricane Creek, LLC tract;
THENCE S 88°58'27” W, 842.56 feet;
THENCE departing said south line of the CADG Hurricane Creek, LLC tract, N 01°01'33” W, 218.10 feet to a
5/8” iron rod with plastic cap stamped “PELOTON” set to THE POINT OF BEGINNING;
THENCE N 03° 24' 07" W, 121.40 feet to the beginning of a curve to the left to a 5/8” iron rod with plastic cap
stamped “PELOTON” found;
THENCE with said curve to the left, an arc distance of 248.93 feet, through a central angle of 15° 25' 09", having
a radius of 925.00 feet, and a long chord which bears N 76° 44' 47" E, 248.18 feet;
THENCE following the south right of way line of Hidden Valley Drive of said Villages of Hurricane Creek the
following bearings and distances:
N 69° 02' 12" E, 64.84 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
N 69° 02' 12" E, 90.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE following the west right of way line of Shadybrook Trail of said Villages of Hurricane Creek the
following bearing and distance:
S 20° 57' 48" E, 120.08 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 68° 55' 33" W, 161.45 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE S 71° 32' 50" W, 95.74 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE S 77° 06' 00" W, 90.37 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE S 82° 06' 18" W, 93.25 feet to the POINT OF BEGINNING and containing 50,814 square feet or
1.167 acres of land more or less.
Tract 4
BEING that certain tract of land situated in W. Rattan Survey, Abstract Number 752, Collin County, Texas, and
being a portion of that tract of land referred to as Tract 1 in deed to CADG Hurricane Creek LLC recorded in
Instrument Number 20150529000631020 of the Official Public Records, Collin County, Texas (O.P.R.C.C.T.)
and being more particularly described by metes and bounds as follows:
BEGINNING at a 5/8” iron rod with plastic cap stamped “PELOTON” found for southwest corner of Block M,
Lot 4 in a tract of land referred to as Tract 1 recorded in said Official Public Records for said CADG Hurricane
Creek, LLC tract and having a Northing of 7180087.9589' and Easting of 2549759.9701';
BEGINNING at a 5/8” iron rod with plastic cap stamped “PELOTON” found for the most easterly southeast
corner of a tract of land referred to as Tract 1 recorded in said Official Public Records and the easternmost
northeast corner of said CADG Hurricane Creek, LLC tract;
THENCE S 46° 18' 49" W, 250.44 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE N 43° 41' 11" W, 55.84 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE N 86° 55' 45" W, 15.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
EXHIBIT B
THENCE N 63° 16' 55" W, 153.10 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE N 43° 41' 11" W, 480.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE N 46° 18' 49" E, 115.13 feet to the beginning of a curve to the right;
With said curve to the right, an arc distance of 105.54 feet, through a central angle of 122° 40' 26", having a
radius of 50.00 feet, and a long chord which bears N 01° 33' 11" W, 87.75 feet to a 5/8” iron rod with plastic cap
stamped “PELOTON” set;
THENCE N 43° 40' 57" W, 113.93 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE N 46° 18' 49" E, 540.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” set;
THENCE S 43° 40' 57" E, 120.00 feet; to a 5/8” iron rod with plastic cap stamped “PELOTON” set
THENCE N 46° 18' 49" E, 171.01 feet to the beginning of a curve to the right;
With said curve to the right, an arc distance of 117.81 feet, through a central angle of 89° 59' 58", having a radius
of 75.00 feet, and a long chord which bears S 88° 41' 11" E, 106.07 feet to a 5/8” iron rod with plastic cap
stamped “PELOTON” set;
THENCE S 43° 41' 11" E, 217.47 feet to the beginning of a curve to the left;
With said curve to the left, an arc distance of 47.91 feet, through a central angle of 05° 54' 13", having a radius
of 465.00 feet, and a long chord which bears S 49° 15' 49" W, 47.89 feet to a 5/8” iron rod with plastic cap
stamped “PELOTON” found;
THENCE S 46° 18' 49" W, 2.17 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 43° 40' 57" E, 50.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 43° 41' 17" E, 120.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
(THENCE S 43° 41' 11" E, 170.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;)
THENCE S 46° 18' 49" W, 570.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 43° 41' 11" E, 120.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 46° 18' 49" W, 145.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE S 43° 41' 11" E, 50.00 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
THENCE N 46° 18' 49" E, 117.05 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;
(THENCE N 46° 18' 49" E, 117.06 feet to a 5/8” iron rod with plastic cap stamped “PELOTON” found;)
THENCE S 43° 41' 11" E, 120.00 feet to the POINT OF BEGINNING and containing 570,152 square feet or
13.089 acres of land more or less.
EXHIBIT C-1
EXHIBIT C-1
Form of Certificate for Payment
The undersigned, on behalf of CADG Hurricane Creek, LLC, a Texas limited liability company
(the “Developer”), requests payment from the Project Fund from the City of Anna, Texas, a home rule
municipality (the “City”) in the amount of $____________ for labor, materials, fees and/or other general
costs related to the acquisition, installation or construction of certain Improvement Area #2 Improvements
pursuant to that certain Improvement Area #2 Funding and Reimbursement Agreement, dated
_____________, 2022, between the City and the Developer (“Funding Agreement”).
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
Certificate for Payment on behalf of the Developer and is knowledgeable as to the matters set forth herein.
Capitalized terms not otherwise defined in this Certificate for Payment have the meanings given such terms
in the Funding Agreement.
2. The payment requested for the below referenced Improvement Area #2 Improvements 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 amount listed for the Improvement Area #2 Improvements below is a true and accurate
representation of the Actual Costs associated with the acquisition, installation or construction of said
Improvement Area #2 Improvements, and such costs are in compliance with the Funding Agreement and
consistent with the SAP.
4. The Developer is in substantial compliance with the terms and provisions of the Funding
Agreement, the Developer Continuing Disclosure Agreement, the Service and Assessment Plan and the
Improvement Area #2 Indenture, if applicable.
5. All ad valorem taxes that the Developer owes and that are due and payable or that an entity
the Developer controls owes and that are due and payable with respect to the Improvement Area #2 Assessed
Property have been paid.
6. All conditions set forth in the Improvement Area #2 Indenture for the payment hereby
requested have been satisfied.
7. The work with respect to the Improvement Area #2 Improvements referenced below (or its
completed segment) has been completed, and the City has inspected such Improvement Area #2
Improvements (or its completed segment).
8. 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.
9. The Developer confirms that [based on the percentage of the Improvement Area #2
Improvements as of the date of this Certificate as verified by the City against the estimated costs from the
SAP,] payment of the amounts requested in this Certificate for Payment, taking into account [all prior
EXHIBIT C-1
payments for the Improvement Area #2 Improvements and] the amount of work related to the Improvement
Area #2 Improvements remaining to be completed as of the date of this Certificate for Payment will not
cause the amounts on deposit in the [Improvement Area #2 Revenue Fund/ Project Fund] to fall below the
amount necessary to complete the remaining Improvement Area #2 Improvements.
PAYMENTS REQUESTED ARE AS FOLLOWS:
Payee:
Work:
Amount:
Attached hereto are invoices, receipts, statements, purchase orders, change orders, notarized all bills paid
affidavits for soft costs, lien releases, cancelled checks and similar instruments which support and validate
the above requested payments.
DEVELOPER:
CADG Hurricane Creek, LLC,
a Texas limited liability company
By:
Name:
Its:
Date:
EXHIBIT C-1
APPROVAL OF REQUEST BY CITY
The City is in receipt of the attached Certificate for Payment, acknowledges the Certificate for Payment,
acknowledges that the Improvement Area #2 Improvements (or its completed segment) covered by the
certificate have been inspected by the City and otherwise finds the Certificate for Payment to be in order.
After reviewing the Certificate for Payment, the City approves the Certificate for Payment and shall include
said payments in the City Certificate submitted to the Trustee directing payments to be made from the
Project Fund to the Developer or to any person designated by the Developer.
CITY OF ANNA, TEXAS,
a home rule law municipality
By:
Printed Name:
Its:
EXHIBIT C-2
EXHIBIT C-2
Form of Closing Disbursement Request
The undersigned, on behalf of CADG Hurricane Creek, LLC, a Texas limited liability company
(the “Developer”), requests payment from the Project Fund from the City of Anna, Texas, a home rule
municipality (the “City”) in the amount of $____________ for costs and expenses incurred by Developer
in connection with the Improvement Area #2 Improvements and/or District Formation Expenses and/or
Bond Issuance Costs to be funded pursuant to that Improvement Area #2 Funding and Reimbursement
Agreement, dated ___________, 2022 (“Funding Agreement”).
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
Closing Disbursement Request on behalf of the Developer and is knowledgeable as to the matters set forth
herein. Capitalized terms not otherwise defined in this Closing Disbursement Request have the meanings
given such terms in the Funding Agreement.
2. The payment requested for the below referenced costs for the Improvement Area #2
Improvements at the time of the delivery of the Improvement Area #2 Bonds have not been the subject of
any prior payment request submitted to the City.
3. The amount listed for the below costs is a true and accurate representation of the Actual
Costs associated with the Improvement Area #2 Improvements at the time of the delivery of the
Improvement Area #2 Bonds, and such costs are in compliance with the Funding Agreement and the SAP.
4. All conditions set forth in the Funding Agreement and in the Improvement Area #2
Indenture for the payment hereby requested have been satisfied.
5. 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:
Description of Cost:
Amount:
Attached hereto are invoices, receipts, statements, purchase orders, notarized all bills paid affidavits for soft
costs, lien releases, cancelled checks and similar instruments which support and validate the above
requested payments.
EXHIBIT C-2
DEVELOPER:
CADG Hurricane Creek, LLC, a Texas limited liability company
By:
Name: ______________________________
Its: _________________________________
Date:
APPROVAL OF REQUEST BY CITY
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 shall include said
payments in the City Certificate submitted to the Trustee directing payments to be made upon delivery of
the Improvement Area #2 Bonds.
CITY OF ANNA, TEXAS,
a general law municipality
By:
Printed Name:
Its:
EXHIBIT D EXHIBIT D Budgeted Costs Improvement Area #2 Improvements Budgeted Costs Street $2,567,570 Water $1,101,249 Sanitary Sewer $1,223,558 Storm Drainage $776,994 Soft Costs (includes $450,000) in District Formation Expenses $2,671,437 Total: $8,340,808