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HomeMy WebLinkAboutOrd 675-2014 Authorizing Issuance and Sale of General Obligation Refunding Bond, Series 2014BORDINANCE NO. 675-2014 AUTHORIZING THE ISSUANCE AND SALE OF CITY OF ANNA, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2014B, LEVYING AN ANNUAL AD VALOREM TAX FOR THE PAYMENT OF SAID BOND, AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT STATE OF TEXAS § COUNTY OF COLLIN § CITY OF ANNA § WHEREAS, there are presently outstanding the following obligations (the "Refunded Obligations") of the City of Anna, Texas (the "Issuer"), which are secured by a pledge by the Issuer to levy ad valorem taxes sufficient to pay principal of and interest on such obligations as they become due, within the limit prescribed by law, and certain of which are additionally secured by a pledge of limited surplus revenues of the Issuer's waterworks and sewer system: Combination Tax and Limited Surplus Revenue Certificates of Obligation, Series 2006 Maturity February 15, 2022 February 15, 2024 February 15, 2026 Principal Amount Outstanding $300,000 330,000 360,000 Principal Amount Refunded $300,000 330,000 360,000 Public Property Finance Act Contractual Obligations, Series 2011 Maturity Date February 15, 2015 February 15, 2016 February 15, 2017 February 15, 2018 February 15, 2019 February 15, 2020 February 15, 2021 February 15, 2022 February 15, 2023 February 15, 2024 February 15, 2025 February 15, 2026 Principal Amount Outstanding $ 8,000 9,000 9,000 10,000 33,000 34,000 36,000 38,000 39,000 41,000 43,000 44,000 1 Principal Amount Refunded $ 8,000 9,000 9,000 10,000 33,000 34,000 36,000 38,000 39,000 41,000 43,000 44,000 WHEREAS, the Issuer now desires to refund all of the Refunded Obligations; WHEREAS, Chapter 1207, Texas Government Code, authorizes the Issuer to issue refunding bonds and to deposit the proceeds from the sale thereof, together with any other available finds or resources, directly with a paying agent for the Refunded Obligations or a trust company or commercial bank that does not act as a depository for the Issuer and is named in these proceedings, and such deposit, if made before the payment dates of the Refunded Obligations, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; WHEREAS, Chapter 1207, Texas Government Code, further authorizes the Issuer to enter into an escrow or similar agreement with such paying agent for the Refunded Obligations or trust company or commercial bank with respect to the safekeeping, investment, reinvestment, administration and disposition of any such deposit, upon such terms and conditions as the Issuer and such paying agent or trust company or commercial bank may agree; WHEREAS, the Escrow Agent (as hereinafter defined) is a commercial bank that does not act as a depository for the Issuer; WHEREAS, the City Council of the Issuer hereby finds and declares a public purpose and deems it in the best interests of the Issuer to refund the Refunded Obligations in order to achieve a debt sei vice savings and to restructure the Issuer's outstanding debt service, and that such refunding will result in a present value debt service savings of approximately $172,106.85 and an actual debt service savings of $203,572.70 to the Issuer; and WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to maturity within 20 years of the date of the bond hereinafter authorized; WHEREAS, the bond hereafter authorized is being issued and delivered pursuant to the Constitution and laws of the State of Texas, including Chapter 1207. THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS: Section 1. AMOUNT AND PURPOSE OF THE BOND. The City Council of the Issuer hereby incorporates the recitals set forth in the preamble hereto as if set forth in full at this place and further finds and determines that said recitals are true and correct. The bond of the City of Anna, Texas (the "Issuer") is hereby authorized to be issued and delivered in the aggregate principal amount of $1,462,000 FOR THE PURPOSE OF PROVIDING FUNDS TO REFUND THE REFUNDED OBLIGATIONS AND TO PAY THE COSTS OF ISSUANCE RELATED THERETO. Section 2. DESIGNATION, DATE, DENOMINATION, PAYMENT DATES AND INTEREST RATE OF BOND. The Bond issued pursuant to this Ordinance shall be designated: 2 CITY OF ANNA, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2014B," and there shall be issued, sold, and delivered hereunder one fully registered Bond, without interest coupons, dated November 1, 2014, in the principal amount stated above, numbered R-1, with any Bond issued in replacement thereof being in the denomination and principal amount of $1,462,000or the remaining principal amount of the outstanding Bonds of this series if an exchange of a Bond is made after a reduction in the principal amount of the series (the "Authorized Denomination"), and numbered consecutively from R-2 upward, payable to the registered owner thereof, or to the registered assignee of said Bond (in each case, the "Holder"). Principal on the Bond shall be payable in installments in the amounts and on the dates specified in the FORM OF BOND set forth in this Ordinance. The Bond shall bear interest from the date of delivery to the date of payment or prepayment prior to maturity, calculated on the basis of a 360 -day year of twelve 30 -day months. Said interest shall be payable at such rates and in the manner provided and on the dates stated in the FORM OF BOND set forth in this Ordinance. Section 3. CHARACTERISTICS OF THE BOND. (a) Registration, Transfer and Exchange; Authentication. The Issuer shall keep or cause to be kept at the a corporate trust office of Texas Star Bank in Van Alstyne, Texas (the "Paying Agent/Registrar"), books or records for the registration of the transfer of the Bond (the "Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such registrations of transfers under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations and transfers as herein provided within three days of presentation in due and proper form. The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the Holder of the Bond to which payments with respect to the Bond shall be mailed, as herein provided; but it shall be the duty of the Holder to notify the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and such interest payments shall not be mailed unless such notice has been given. The Issuer shall have the right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for malting such registration and transfer of a substitute Bond. Registration of assignments and transfers of the Bond shall be made in the manner provided and with the effect stated in the FORM OF BOND set forth in this Ordinance. Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond. Except as provided in Section 3(c) hereof, an authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date and manually sign said Bond, and no such Bond shall be deemed to be issued or outstanding unless such Bond is so executed. The Paying Agent/Registrar promptly shall cancel a Bond surrendered for transfer or the Bond when paid in full. No additional ordinances, orders or resolutions need be passed or adopted by the governing body of the Issuer or any other body or person so as to accomplish the foregoing transfer of any Bond or portion thereof, and the Paying Agent/Registrar shall provide forthe printing, execution and delivery of the substitute Bond in the manner prescribed herein. Pursuant to Subchapter D, Chapter 1201, Texas Government Code, the duty of transfer of the Bond as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Bond, said Bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Bond which initially was issued and delivered pursuant to this Ordinance, approved by the Attorney General of the State of Texas (the "Attorney General"), and registered by the Comptroller of Public Accounts of the State of Texas (the "Comptroller"). (b) Payment of Bond and Interest. The Issuer hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bond, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the Issuer and the Paying Agent/Registrar with respect to the Bond and shall properly and accurately record all payments on the Bond on the Registration Books, and shall keep proper records of all transfers of the Bond, and all replacements of the Bond, as provided in this Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States mail, first- class postage prepaid, to the address of the Holder appearing on the Registration Books at the close of business on the last business day next preceding the date of mailing of such notice. (c) In General. The Bond (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Bond to be payable only to the Holder thereof, (ii) may be redeemed prior to maturity, (iii) may be transferred and assigned, (iv) shall have the characteristics, (v) shall be signed, sealed, executed and authenticated, (vi) the principal of and interest on the Bond shall be payable, and (vii) shall be administered and the Paying Agent/Registrar and the Issuer shall have certain duties and responsibilities with respect to the Bond, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF BOND set forth in this Ordinance. The Bond initially issued and delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in exchange for any Bond the Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF BOND. (d) Substitute Pang A end ig stray. The Issuer covenants with the Holder of the Bond that at all times while the Bond is outstanding the Issuer will provide a competent and legally qualified bank, trust company, financial institution or other agency to act as and perform the services of Paying Agent/Registrar for the Bond under this Ordinance, and that the Paying Agent/Registrar will be one entity. The Issuer reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not less than 40 days written notice to the Paying Agent/Registrar, to be effective not later than 30 days prior to the next principal or interest payment date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, W. acquisition, or other method) should resign or otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to the Bond, to the new Paying Agent/Registrar designated and appointed by the Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new Paying Agent/Registrar to the Holder of the Bond, by United States mail, first-class postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar. (e) On the closing date, the initial BondNo. R -I representingthe entire principal amount of the Bond, payable to the Purchaser, executed by manual or facsimile signature of the Mayor or Mayor Pro -Tem and City Secretary of the Issuer, approved by the Attorney General, and registered and manually signed by the Comptroller, will be delivered to the Purchaser or its designee. Section 4. FORM OF BOND. The form of the Bond, including the form of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of the Comptroller's Registration Certificate to be attached to the Bond initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as provided in Exhibit A hereto, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance. Section 5. TAX LEVY. (a) A special "Interest and Sinking Fund" is hereby created and shall be established and maintained by the Issuer at an official depository bank of said Issuer. Said Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of said Issuer, and shall be used only for paying the interest on and principal of said Bond. All ad valorem taxes levied and collected for and on account of said Bond shall be deposited, as collected, to the credit of said Interest and Sinking Fund. During each year while any of said Bond is outstanding and unpaid, the governing body of said Issuer shall compute and ascertain a rate and amount of ad valorem tax that will be sufficient to raise and produce the money required to pay the interest on said Bond as such interest comes due, and to provide and maintain a sinking fund adequate to pay the principal of said Bond as such principal matures (but never less than 2% of the original amount of said Bond as a sinking fiend each year); and said tax shall be based on the latest approved tax rolls of said Issuer, with full allowances being made for tax delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied, against all taxable property in said Issuer, for each year while any of said Bond is outstanding and unpaid, and said tax shall be assessed and collected each such year and deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of said Bond, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. (b) Notwithstanding the requirements of subsection (a) of this Section, if Surplus Revenues or other lawfully available moneys of the Issuer are actually on deposit or budgeted and appropriated to be deposited in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes that otherwise would have been required to be levied pursuant to this Section may be reduced to the extent and by the amount of the Surplus Revenues or other lawfully available funds then on deposit or budgeted and appropriated to be deposited in the Interest and Sinking Fund. For purposes of this Section, "Surplus Revenues" means revenues derived by the Issuer from the ownership and operation of the Issuer's waterworks and sewer system (the "System") that remain after the payment of all maintenance and operation expenses thereof, and all debt service, reserve and other requirements in connection with all of the Issuer's revenue obligations (now or hereafter outstanding) or contractual obligations (now or hereafter existing) which are payable from all or any part of the net revenues of the System. If Surplus Revenues are budgeted and appropriated for deposit into the Interest and Sinking Fund, the Issuer: (i) shall transfer and deposit in the Interest and Sinking Fund each month an amount of not less than 1/12th of the annual debt service on the Bond to be paid from Surplus Revenues until the amount on deposit in the Interest and Sinking Fund equals the amount required for annual debt service on the Bond; (ii) shall establish, adopt and maintain an annual budget that provides for either the monthly deposit of sufficient Surplus Revenues and/or tax revenues, the monthly deposit of any other legally available funds on hand at the time of the adoption of the annual budget, or a combination thereof, into the Interest and Sinking Fund for the repayment of the Bond; and (iii) shall at all times maintain and collect sufficient System rates and charges in conjunction with any other legally available funds that, after payment of the costs of operating and maintaining the System, produce revenues in an amount not less than the debt service requirements of all outstanding revenue bonds of the Issuer and other obligations of the Issuer which are secured in whole or in part by a pledge of revenues of the System and for which the Issuer is budgeting the repayment of such obligations from the revenues of the System, or the Issuer shall provide documentation which evidences the levy of an ad valorem tax rate dedicated to the Interest and Sinking Fund, in conjunction with any other legally available funds except System rates and charges, sufficient for the repayment of System debt service requirements. (c) Chapter 1208, Texas Government Code, applies to the issuance of the Bond and the pledge of the taxes and revenues granted by the Issuer under this Section, and is therefore valid, effective, and perfected. Should Texas law be amended at any time while the Bond is outstanding and unpaid, the result of such amendment being that the pledge of the taxes and revenues granted by the Issuer under this Section, is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, in order to preserve to the registered owner of the Bond a security interest in said pledge, the Issuer agrees to take such measures as it determines are reasonable and no necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code and enable a filing of a security interest in said pledge to occur. Section 6. METHOD OF AMENDMENT. The Issuer hereby reserves the right to amend this Ordinance subject to the following terms and conditions: (a) The Issuer may from time to time, without the consent of the Holder, except as otherwise required by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any ambiguity, defect or omission in this Ordinance that does not materially adversely affect the interests of the Holder, (ii) grant additional rights or security for the benefit of the Holder, (iii) add events of default as shall not be inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the interests of the Holder, (iv) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time in effect, or (v) make such other provisions in regard to matters or questions arising under this Ordinance as shall not be inconsistent with the provisions of this Ordinance and that shall not in the opinion ofnationally-recognized bond counsel materially adversely affect the interests ofthe Holder. (b) Except as provided in paragraph (a) above, the Holder of the Bond shall have the right from time to time to approve any amendment hereto that may be deemed necessary or desirable by the Issuer; provided, however, that without the consent of the Holder of the Bond, nothing herein contained shall permit or be construed to permit amendment of the terms and conditions of this Ordinance or in the Bond so as to: (1) Make any change in the final maturity or any other date fixed hereby for the payment of an installment of principal of the Bond; (2) Reduce the rate of interest borne by the Bond; (3) Reduce the amount of the principal of, or redemption premium, if any, payable on the Bond; (4) Modify the terms of payment of principal or of interest or redemption premium the Bond or impose any condition with respect to such payment; or (5) Change the requirement with respect to approval by the Holder of the Bond necessary for consent to such amendment. (c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the Issuer shall send by U.S. mail to the Holder of the Bond a copy of the proposed amendment. (d) Whenever at any time within one year from the date of the mailing of such notice the Issuer shall receive an instrument or instruments executed by the Holder of the Bond, which instrument or instruments shall refer to the proposed amendment and shall specifically consent to and approve such amendment, the Issuer may adopt the amendment in substantially the same form. 7 (e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this Section, this Ordinance shall be deemed to be modified and amended in accordance with such amendatory Ordinance, and the rights, duties, and obligations of the Issuer and the Holder of the Bond shall thereafter be determined, exercised, and enforced, subject in all respects to such amendment. For the purposes of establishing ownership of the Bond, the Issuer shall rely solely upon the registration of the ownership of such bond on the Registration Books kept by the Paying Agent/Registrar. Section 7. DEFEASANCE OF BOND. (a) The Bond or a portion of the principal amount thereof and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased Bond") within the meaning of this Ordinance, except to the extent provided in subsection (d) of this Section, when payment of the principal of the Bond, plus interest thereon to the due date (whether such due date be by reason of payment, final maturity or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably depositing with or malting available to the Paying Agent/Registrar in accordance with an escrow agreement or other instrument (the "Future Escrow Agreement") for such payment (1) lawful money ofthe United States ofAmerica sufficient to make such payment or (2) Defeasance Securities that mature as to principal and interest in such amounts and at such times as will insure the availability of sufficient money to provide for such payment, and when proper arrangements have been made by the Issuer with the Paying Agent/Registrar for the payment of its services until the Defeased Bond shall have become due and payable. At such time as the Bond or a portion thereof shall be deemed to be aDefeased Bond hereunder, as aforesaid, such Bond or portion thereof and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes or revenues herein levied and pledged as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Defeasance Securities, and thereafter the Issuer will have no further responsibility with respect to amounts available to the Paying Agent/Registrar (or other financial institution permitted by applicable law) for the payment of such Defeased Bond, including any insufficiency therein caused by the failure of the Paying Agent/Registrar (or other financial institution permitted by applicable law) to receive payment when due on the Defeasance Securities. (b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer be invested in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance Securities received by the Paying Agent/Registrar that is not required for the payment of the Bond or portion thereof and interest thereon, with respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer. Any Future Escrow Agreement pursuant to which the money and/or Defeasance Securities are held for the payment of the Defeased Bond may contain provisions permitting the investment or reinvestment of such moneys in Defeasance Securities or the substitution of other Defeasance Securities upon the satisfaction of the requirements specified in (i) or (ii) of paragraph (a) above. All income from such Defeasance Securities received by the Paying Agent/Registrar that is not required for the payment of the Defeased Bond, with respect to which such money has been so deposited, shall be remitted to the Issuer or deposited as directed in writing by the Issuer. (c) The term 'Defeasance Securities" means any securities and obligations now or hereafter authorized by State law that are eligible to refund, retire or otherwise discharge obligations such as the Bond. (d) Until the Defeased Bond shall have become due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Bond the same as if it had not been defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required by this Ordinance. Section 8. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BOND. (a) Replacement Bond. In the event the Bond is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered a new bond of the same principal amount, final maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Bond in replacement for the Bond in the manner hereinafter provided. (b) Application for Replacement Bond. Application for replacement of a damaged, mutilated, lost, stolen, or destroyed Bond shall be made by the Holder thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of the Bond, the Holder applying for a replacement bond shall furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of the Bond, the Holder shall furnish to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Bond. In every case of damage or mutilation of the Bond, the Holder shall surrender to the Paying Agent/Registrar for cancellation the Bond. (c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the event any such Bond shall have finally matured, and no default has occurred that is then continuing in the payment of the principal of or interest on the Bond, the Issuer may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished as above provided in this Section. (d) Charge for Issuing Replacement Bond. Prior to the issuance of any replacement bond, the Paying Agent/Registrar shall charge the Holder of the Bond with all legal, printing, and other expenses in connection therewith. Every replacement bond issued pursuant to the provisions of this Section by virtue of the fact that the Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the Issuer whether or not the lost, stolen, or destroyed Bond shall be found W at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Bonds duly issued under this Ordinance. (e) Authority for Issuing Replacement Bond. In accordance with Chapter 1201, Subchapter D, Texas Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such replacement bond without necessity of further action by the governing body of the Issuer or any other body or person, and the duty of the replacement of such bonds is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Bond in the form and manner and with the effect, as provided in Section 3(a) of this Ordinance for a Bond issued in exchange for another Bond. Section 9. CUSTODY, APPROVAL, AND REGISTRATION OF BOND; BOND COUNSEL'S OPINION AND ENGAGEMENT OF BOND COUNSEL; APPROVAL OF ATTORNEY GENERAL REVIEW FEE. (a) The Mayor is hereby authorized to have control of the Bond initially issued and delivered hereunder and all necessary records and proceedings pertaining to the Bond pending its delivery and its investigation, examination, and approval by the Attorney General and registration by the Comptroller. Upon registration of the Bond the Comptroller (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate attached to the Bond, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such Certificate. If bond insurance is obtained, the Bond may bear an appropriate legend as provided by the insurer. (b) The obligation of the Purchaser to accept delivery of the Bond is subject to the Purchaser being furnished with the final, approving opinion of McCall, Parkhurst & Horton L.L.P., "Bond Counsel" to the Issuer, which opinion shall be dated as of and delivered on the date of initial delivery of the Bond to the Purchaser. The engagement of such firm as Bond Counsel to the Issuer in connection with issuance, sale and delivery of the Bond is hereby approved and confirmed. The execution and delivery of an engagement letter between the Issuer and such firm, with respect to such services as Bond Counsel, is hereby authorized in such form as may be approved by the Mayor of the Issuer (or the Mayor Pro -tem in the absence of the Mayor), and the Mayor of the Issuer (or the Mayor Pro -tem in the absence of the Mayor) is hereby authorized to execute such engagement letter. (c) In accordance with the provisions of Section 1202.004, Tex. Gov't Code Ann., in connection with the submission of the Bond by the Attorney General for review and approval, a statutory fee (an amount equal to 0.1 % principal amount of the Bond, subject to a minimum of $750 and a maximum of $9,500) is required to be paid to the Attorney General upon the submission of the transcript of proceedings for the Bond. The Issuer hereby authorizes and directs that a check in the amount of the Attorney General filing fee for the Bond, made payable to the "Texas Attorney General," be promptly furnished to the Issuer's Bond Counsel, for payment to the Attorney General in connection with his review of the Bond. Section 10. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE BOND. The Issuer covenants to take any action necessary to assure, or refrain from any action that 10 would adversely affect, the treatment of the Bond as an obligation described in section 103 of the Internal Revenue Code of 1986, as amended (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 Issuer covenants as follows: (a) to take any action to assure that no more than 10 percent of the proceeds of the Bond or the projects refinanced therewith (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 received by the Issuer, with respect to such private business use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the Bond, in contravention of section 141(b)(2) of the Code; (b) to take any action to assure that in the event that the "private business use" described in subsection (a) hereof exceeds 5 percent of the proceeds of the Bond or the projects refinanced 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) ofthe Code, to the governmental use; (c) 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 Bond (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; (d) to refrain from taking any action that would otherwise result in the Bond being treated as a "private activity bond" within the meaning of section 141(b) of the Code; (e) to refrain from taking any action that would result in the Bond being "federally guaranteed" within the meaning of section 149(b) of the Code; (f) to refrain from using any portion of the proceeds of the Bond, 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 Bond, other than investment property acquired with — (1) proceeds of the Bond invested for a reasonable temporary period or, in the case of current refunding bonds, for a period of 90 days or less and in the case of advance refunding bonds, for a period of 30 days or less, until such proceeds are needed for the purpose for which the bonds are issued, 11 (2) amounts invested in a bona fide debt service fund, within the meaning of section 1.148-1(b) of the rules and regulations of the United States Department of the Treasury ("Treasury Regulations"), and (3) 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 Bond; (g) to otherwise restrict the use of the proceeds of the Bond or amounts treated as proceeds of the Bond, as may be necessary, so that the Bond does not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); and (h) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Bond) 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 Bond has 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. In order to facilitate compliance with the above covenant (h), a "Rebate Fund" is hereby established by the Issuer for the sole benefit of the United States of America, and such fund shall not be subject to the claim of any other person, including without limitation the Holder. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. For purposes of the foregoing (a) and (b), the Issuer 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 Bond. It is the understanding of the Issuer that the covenants contained herein are intended to assure compliance with the Code and any Treasury Regulations or rulings promulgated pursuant thereto. In the event that regulations or rulings are hereafter promulgated that modify or expand provisions of the Code, as applicable to the Bond, the Issuer 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 Bond under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated that impose additional requirements that are applicable to the Bond, the Issuer 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 Bond under section 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs the Mayor, City Manager, Finance Director and/or City Secretary of the Issuer to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the Issuer, that may be permitted by the Code, as are consistent with the purpose for the issuance of the Bond. 12 Section 11. SALE OF BOND. The Bond is hereby sold and shall be delivered to Texas Star Bank (the "Purchaser") for cash for the par value thereof, pursuant to the Purchase Letter dated the date of the adoption of this Ordinance. The Bond shall initially be registered in the name of the Purchaser. In satisfaction of Section 1201.022(a)(3)(B), Texas Government Code, and upon consultation with the Issuer's Financial Advisor, it is hereby officially found, determined, and declared that the terms of the Bond as set forth herein are in the Issuer's best interests. Section 12. REDEMPTION OF REFUNDED OBLIGATIONS; ESCROW AGREEMENT. (a) The Issuer hereby directs that the Refunded Obligations be called for redemption on December 1, 2014 (with respect to the Issuer's Public Property Finance Contractual Obligations, Series 2011) and February 15, 2016 (with respect to the Issuer's Combination Tax and Limited Surplus Revenue Certificates of Obligation, Series 2006). The redemption price shall be the par amount of the Refunded Obligations so redeemed plus interest accrued and unpaid to the date fixed for redemption. The paying agent for the Refunded Obligations is hereby directed to make appropriate arrangements so that the Refunded Obligations may be redeemed on such redemption date, including giving the appropriate notices of redemption as are required by the ordinances authorizing the Refunded Obligations. (b) The Mayor (or in the Mayor's absence, the Mayor Pro -Tem) of the Issuer is further authorized to enter into and execute on behalf of the Issuer with Regions Bank (the "Escrow Agent"), an escrow agreement in the form and substance as presented at this meeting, which escrow agreement agreement will provide for the payment in full of the Refunded Obligations (the "Escrow Agreement"). Section 13. FURTHER PROCEDURES. The Mayor of the Issuer (or the Mayor Pro -tem in the absence of the Mayor) and City Secretary of the Issuer and all other officers, employees and agents of the Issuer, and each of them, shall be and are hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal, if required, and on behalf of the Issuer the Paying Agent/Registrar Agreement with the Paying Agent/Registrar, the Escrow Agreement with the Escrow Agent, the Purchase Letter, a Private Placement Agent Agreement with Frost Bank, and all other instruments, whether herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance, the Bond and the sale of the Bond. In case any officer whose signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. Section 14. DISPOSITION OF PROJECT; ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE PROJECT. (a) The Issuer covenants that the property constituting the Project, being the property financed or refinanced with the proceeds of the Refunded Obligations (the "Project"), will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or other compensation, unless any action taken in connection with such disposition will not adversely affect the tax-exempt status of the Bond. For purpose of the foregoing, the Issuer may rely on an opinion of nationally -recognized bond counsel that the action taken in connection 13 with such sale or other disposition will not adversely affect the tax-exempt status of the Bond. 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 Issuer shall not be obligated to comply with this covenant if it obtains an opinion of nationally -recognized bond counsel that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest on the Bond. (b) The Issuer covenants to account for the expenditure of sale proceeds and investment earnings to be used for the Project on its books and records in accordance with the requirements of the Code. The Issuer 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 Project is completed; but in no event later than three years after the date on which the original expenditure is paid. The foregoing notwithstanding, the Issuer 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 of the Bonds, or (2) the date the Bonds are retired. The Issuer agrees to obtain the advise 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 Issuer shall not be obligated to comply with this covenant if it obtains an opinion of nationally -recognized bond counsel that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest on the Bond. Section 15. NO RULE 15c2-12 UNDERTAKING. The Issuer has not made an undertaking in accordance with Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). The Issuer is not, therefore, obligated pursuant to the Rule to provide any on-going disclosure relating to the Issuer or the Bond. Notwithstanding the foregoing, the Issuer agrees to provide to the Purchaser a copy of the Issuer's annual audited financial statement within 6 months after the end of each fiscal year of the Issuer, or within 30 days after completion if the Issuer's annual audited financial statement has not been completed within 12 months of the end of such fiscal year and is completed at a later date. Section 16. GOVERNING LAW. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas (the "State") and the United States of America. Section 17. SEVERABILITY. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be valid, and the City Council hereby declares that this Ordinance would have been enacted without such invalid provision. Section 18. DESIGNATION AS QUALIFIED TAX-EXEMPT OBLIGATION. The Issuer hereby designates the Bond as a "qualified tax-exempt obligation" as defined in section 265(b)(3) of the Code, conditioned upon the Purchaser identified in Section II hereof certifying that the 14 aggregate initial offering price of the Bond is no greater than $10 million (or such other amount permitted by such section 265 of the Code). Assuming such condition is met, in furtherance of such designation, the Issuer represents, covenants and warrants the following: (a) that during the calendar year in which the Bond is issued, the Issuer (including any subordinate entities) has not designated nor will designate obligations, which when aggregated with the Bond, will result in more than $10,000,000 (or such other amount permitted by such section 265 of the Code) of "qualified tax- exempt obligations" being issued; (b) that the Issuer reasonably anticipates that the amount of tax- exempt obligations issued, during the calendar year in which the Bond is issued, by the Issuer (or any subordinate entities) will not exceed $10,000,000 (or such other amount permitted by such section 265 of the Code); and, (c) that the Issuer will take such action or refrain from such action as necessary, and as more particularly set forth in this Section, in order that the Bond will not be considered a "private activity bond" within the meaning of section 141 of the Code. Section 19. APPROPRIATION. To pay the debt service coming due on the Bond prior to receipt of the taxes levied to pay such debt service, if any, there is hereby appropriated from current funds on hand, which are hereby certified to be on hand and available for such purpose, an amount, which together with capitalized interest received from the sale of the Bond, if any, will be sufficient to pay such debt service, and such amount shall be used for no other purpose. 15 Exhibit A FORM OF BOND NO. R-1 UNITED STATES OF AMERICA PRINCIPAL STATE OF TEXAS AMOUNT CITY OF ANNA, TEXAS $1,462,000 GENERAL OBLIGATION REFUNDING BOND, SERIES 2014B DATE OF DELIVERY: NOVEMBER 25, 2014 REGISTERED OWNER: TEXAS STAR BANK PRINCIPAL AMOUNT: ONE MILLION FOUR HUNDRED SIXTY TWO THOUSAND DOLLARS The City of Anna, in Collin County, Texas (the "Issuer"), being a political subdivision of the State of Texas, for value received, promises to pay, from the sources described herein, to the registered owner specified above, or registered assigns (in each case, the "Holder"), the principal amount specified above, and to pay interest thereon, from the date of delivery set forth above, on the balance of said principal amount from time to time remaining unpaid. This Bond shall finally mature on February 15, 2026, but shall be payable in installments on the dates and in the principal installment amounts, and shall bear interest at a rates per annum, calculated on the basis of basis of a 360 -day year of twelve 30 -day months, as set forth in the following schedule: The principal of and interest on this Bond are payable in lawful money of the United States of America, without exchange or collection charges. The Issuer shall pay interest on this Bond on February 15, 2015 and on each August 15 and February 15 thereafter to the date of the final maturity hereof. The last principal installment of this Bond shall be paid to the Holder hereof upon 01N Principal Interest Payment Date Installment Rate February 15, 2015 $ 52,000 0.300% February 15, 2016 27,000 0.550 February 15, 2017 27,000 0.800 February 15, 2018 28,000 1.110 February 15, 2019 50,000 1.300 February 15, 2020 50,000 1.500 February 15, 2021 194,000 1.700 February 15, 2022 201,000 1.900 February 15, 2023 202,000 2.100 February 15, 2024 208,000 2.255 February 15, 2025 209,000 2.355 February 15, 2026 214,000 2.395 The principal of and interest on this Bond are payable in lawful money of the United States of America, without exchange or collection charges. The Issuer shall pay interest on this Bond on February 15, 2015 and on each August 15 and February 15 thereafter to the date of the final maturity hereof. The last principal installment of this Bond shall be paid to the Holder hereof upon 01N presentation and surrender of this Bond at final maturity at the corporate trust office of Texas Star Bank in Van Alstyne, Texas, which is the " Paying Agent/Registrar" for this Bond. The payment of all other principal installments of and interest on this Bond shall be made by the Paying Agent/Registrar to the Holder hereof on each principal and interest payment date by check or draft, dated as of such principal and interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the Bond Ordinance (as defined below) to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment date, to the Holder hereof, at its address as it appeared at the close of business on the last business day of the month next preceding each such date (the 'Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In addition, principal and interest may be paid by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. Any accrued interest due in connection with the payment of the final installment of principal of this Bond shall be paid to the Holder upon presentation and surrender of this Bond for payment at the designated corporate trust office of the Paying Agent/Registrar. The Issuer covenants with the Holder of this Bond that on or before each principal payment date, interest payment date, and accrued interest payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Bond, when due. If the date for the payment of this Bond shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the designated corporate trust office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. This Bond is authorized and issued pursuant to and in compliance with Chapter 1207, Texas Government Code, as amended, and pursuant to the ordinance adopted by the Issuer authorizing the issuance hereof (the 'Bond Ordinance"), in the original aggregate principal amount of $1,462,000, dated as of November 1, 2014 FOR THE PURPOSE OF PROVIDING FUNDS TO REFUND THE REFUNDED OBLIGATIONS (AS DEFINED IN THE BOND ORDINANCE) AND TO PAY THE COSTS OF ISSUANCE RELATED THERETO. The principal installments of this Bond are not subj ect to redemption prior to their scheduled payment dates. This Bond is issuable solely as a single fully -registered Bond, without interest coupons in the denomination of $1,462,000 or the remaining principal amount of the outstanding Bonds of this series if an exchange of a Bond is made after a reduction in the principal amount of the series (the "Authorized Denomination"). As provided in the Bond Ordinance, this Bond may, at the request A-2 of the Holder or the assignee or assignees hereof, be assigned and transferred in whole but not in part for a like aggregate principal amount Bond, without interest coupons, payable to the appropriate Holder, assignee or assignees, as the case may be, in the Authorized Denomination, upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the Bond Ordinance. Among other requirements for such assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar, together with the proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond to the assignee this Bond is to be registered. The form of Assignment printed or endorsed on this Bond may be executed by the Holder to evidence the assignment hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Bond from time to time by the Holder. In the case of the assignment and transfer of this Bond, the reasonable standard or customary fees and charges of the Paying Agent/Registrar will be paid by the Issuer. In any circumstance, any taxes or governmental charges required to be paid with respect thereto shall be paid by the one requesting such assignment and transfer, as a condition precedent to the exercise of such privilege. The Issuer and the Paying Agent/Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal hereof and interest due hereon and for all other purposes. The Paying Agent/Registrar shall not be required to make any such transfer during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date. In the event any Paying Agent/Registrar for this Bond is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed to the Holder of the Bond. IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly authorized, issued and delivered; that all acts, conditions and things required or proper to be performed, exist and be done precedent to or in the authorization, issuance and delivery of this Bond have been performed, existed and been done in accordance with law; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in said Issuer, and have been pledged for such payment, within the limit prescribed by law, all as provided in the Bond Ordinance. The Issuer has reserved the right to amend the Bond Ordinance as provided therein, and under some (but not all) circumstances amendments thereto must be approved by the Holder of this Bond. By becoming the Holder of this Bond, the Holder thereby acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for inspection in the official minutes and A-3 records of the governing body of the Issuer, and agrees that the terms and provisions of this Bond and the Bond Ordinance constitute a contract between each Holder hereof and the Issuer. FEW IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or facsimile signature of the Mayor of the Issuer (or the Mayor Pro-tem in the absence of the Mayor), countersigned with the manual or facsimile signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed or placed in facsimile—on, on, this ond. Ln qturX,�/x Zzsi2nat Nat Wilcison, City'Secretary �<<���"°�'�"���ike Crist, Mayor OF (SE ) ti C� , •, _ 4 [Form of Paying AenffRe ' h 's Authntication Certificate] 4 PAYING AGENPREGIS� TICATION CERTIFICATE a (To be executed if thirs��thh�N��s not accompanied by an executed Comptroller's Registration Certificate) It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance described in the text of this Bond; and that this Bond has been issued in exchange for a bond of a series which or was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated: Texas Star Bank Van Alstyne, Texas Paying Agent/Registrar By Authorized Representative A-5 [Form of Assignment] ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto Please insert Social Security or Taxpayer Identification Number of Transferee (Please print or typewrite name and address, including zip code of Transferee) the within Bond and all rights thereunder, 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: NUI1UE: Nrgnature(s) must be guaranteed by an eligible guarantor institution participating in a securities transfer association recognized signature guarantee program. W NOTICE: The signature above must correspond with the name of the Registered Owner as it appears upon the front of this Bond in every particular, without alteration or enlargement or any change whatsoever. [Form of Comptroller's Registration Certificate] COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Bond has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of Public Accounts of the State of Texas. Witness my signature and seal this (COMPTROLLER'S SEAL) Comptroller of Public Accounts of the State of Texas A-7