HomeMy WebLinkAboutOrd 1108-2024-07 Authorizing Issuance of Special Assessment Revenue Bonds, Series 2024 (Meadow Vista PID)2
WHEREAS, the Council has found and determined to approve (i) the issuance of the
Bonds to finance the Improvement Area #1 Projects, (ii) the form, terms and provisions of the
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), and (v) a Continuing Disclosure
Agreement (defined below); and
WHEREAS, the City previously entered into that certain Meadow Vista Development
Agreement with Bloomfield Homes, L.P., a Texas limited partnership (the “Development
Agreement”); and
WHEREAS, the Development Agreement allows for the City to issue the Bonds and
establishes a minimum value to lien ratio of 2:1 unless the Council approves a lower ratio; 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 $12,806,000 for the
purpose of (i) paying a portion of the Improvement Area #1 Projects, (ii) paying a portion
of the interest on the Bonds during and after the period of acquisition and construction of
the Improvement Area #1 Projects, (iii) funding a reserve fund for payment of principal
and interest on the Bonds, (iv) paying a portion of the costs incidental to the organization
of the District and (v) paying the costs of issuance of the Bonds, is hereby authorized and
approved.
(b) The Bonds shall be issued and secured under that certain Indenture of
Trust (the "Indenture"), dated as of July 1, 2024, 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
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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
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 #1 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 2024 (Meadow Vista Public Improvement District
Improvement Area #1 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
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approved by the Mayor or Mayor Pro-Tem, such approval to be evidenced by the execution
thereof.
Section 6. Approval of Value-to-Lien Ratio. The City Council of the City of Anna,
Texas, pursuant to Section 6.1 of the Development Agreement, as amended, hereby approves a
ratio of estimated finished value per lot type to assessment of 1.94:1 as confirmed by an
appraisal from a licensed MAI appraiser as referenced in Preliminary Limited Offering
Memorandum for the Bonds.
Section 7. 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 8. 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 9. 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 JULY 1, 2024
SECURING
$12,806,000
CITY OF ANNA, TEXAS
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
TABLE OF CONTENTS
Page
ARTICLE I – DEFINITIONS, FINDINGS AND INTERPRETATION ....................................... 4
Section 1.1. Definitions........................................................................................................... 4
Section 1.2. Findings............................................................................................................. 13
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. ........................................................... 36
Section 6.3. Pledged Revenue Fund. .................................................................................... 37
Section 6.4. Bond Fund. ........................................................................................................ 38
Section 6.5. Project Fund. ..................................................................................................... 39
Section 6.6. Redemption Fund. ............................................................................................. 40
Section 6.7. Reserve Fund. ................................................................................................... 41
Section 6.8. Rebate Fund: Rebatable Arbitrage. ................................................................... 43
Section 6.9. Administrative Fund. ........................................................................................ 43
Section 6.10. Investment of Funds. ......................................................................................... 43
ARTICLE VII – COVENANTS ................................................................................................... 45
Section 7.1. Confirmation of Improvement Area #1 Assessments. ...................................... 45
Section 7.2. Collection and Enforcement of Improvement Area #1 Assessments. .............. 45
Section 7.3. Against Encumbrances. ..................................................................................... 46
Section 7.4. Records, Accounts, Accounting Reports. ......................................................... 46
Section 7.5. Covenants Regarding Tax Exemption of Interest on Bonds. ............................ 46
ARTICLE VIII – LIABILITY OF CITY ...................................................................................... 49
Section 8.1. Liability of City................................................................................................. 49
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. .......................................................................... 51
Section 9.3. Responsibilities of the Trustee. ......................................................................... 51
Section 9.4. Property Held in Trust. ..................................................................................... 53
Section 9.5. Trustee Protected in Relying on Certain Documents. ....................................... 53
Section 9.6. Compensation. .................................................................................................. 54
Section 9.7. Permitted Acts. .................................................................................................. 54
Section 9.8. Resignation of Trustee. ..................................................................................... 55
Section 9.9. Removal of Trustee. .......................................................................................... 55
Section 9.10. Successor Trustee.............................................................................................. 55
Section 9.11. Transfer of Rights and Property to Successor Trustee. ..................................... 56
Section 9.12. Merger, Conversion or Consolidation of Trustee. ............................................ 56
Section 9.13. Trustee to File Continuation Statements. .......................................................... 57
Section 9.14. Accounts, Periodic Reports and Certificates. ................................................... 57
Section 9.15. Construction of Indenture. ................................................................................ 57
Section 9.16. Offering Documentation. .................................................................................. 57
ARTICLE X – MODIFICATION OR AMENDMENT OF THIS INDENTURE ....................... 57
Section 10.1. Amendments Permitted. .................................................................................... 57
Section 10.2. Owners’ Meetings. ............................................................................................ 58
Section 10.3. Procedure for Amendment with Written Consent of Owners. .......................... 59
Section 10.4. Procedure for Amendment not Requiring Owner Consent. .............................. 59
Section 10.5. Effect of Supplemental Indenture. .................................................................... 60
Section 10.6. Endorsement or Replacement of Bonds Issued after Amendments. ................. 60
Section 10.7. Amendatory Endorsement of Bonds. ............................................................... 60
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Section 10.8. Waiver of Default. ............................................................................................ 60
Section 10.9. Execution of Supplemental Indenture. .............................................................. 60
ARTICLE XI – DEFAULT AND REMEDIES ............................................................................ 61
Section 11.1. Events of Default. ............................................................................................. 61
Section 11.2. Immediate Remedies for Default. ..................................................................... 62
Section 11.3. Restriction on Owner’s Action. ........................................................................ 62
Section 11.4. Application of Revenues and Other Moneys after Default. .............................. 63
Section 11.5. Effect of Waiver. ............................................................................................... 64
Section 11.6. Evidence of Ownership of Bonds. .................................................................... 64
Section 11.7. No Acceleration. ............................................................................................... 65
Section 11.8. Mailing of Notice. ............................................................................................. 65
Section 11.9. Exclusion of Bonds. .......................................................................................... 65
ARTICLE XII – GENERAL COVENANTS AND REPRESENTATIONS ............................... 65
Section 12.1. Representations as to Trust Estate. ................................................................... 65
Section 12.2. General. ............................................................................................................. 66
ARTICLE XIII – SPECIAL COVENANTS ................................................................................ 66
Section 13.1. Further Assurances; Due Performance. ............................................................ 66
Section 13.2. Other Obligations or Other Liens; Refunding Bonds. ...................................... 66
Section 13.3. Books of Record. .............................................................................................. 67
ARTICLE XIV – PAYMENT AND CANCELLATION OF THE BONDS AND
SATISFACTION OF THE INDENTURE ................................................................................... 67
Section 14.1. Trust Irrevocable. .............................................................................................. 67
Section 14.2. Satisfaction of Indenture. .................................................................................. 67
Section 14.3. Bonds Deemed Paid. ......................................................................................... 67
ARTICLE XV - MISCELLANEOUS .......................................................................................... 68
Section 15.1. Benefits of Indenture Limited to Parties. .......................................................... 68
Section 15.2. Successor is Deemed Included in all References to Predecessor. .................... 68
Section 15.3. Execution of Documents and Proof of Ownership by Owners. ........................ 69
Section 15.4. No Waiver of Personal Liability. ...................................................................... 69
Section 15.5. Notices to and Demands on City and Trustee. .................................................. 69
Section 15.6. Partial Invalidity................................................................................................ 70
Section 15.7. Applicable Laws. .............................................................................................. 70
Section 15.8. Payment on Business Day. ................................................................................ 70
Section 15.9. CFA Agreement Amendments and Supplements. ............................................ 70
Section 15.10. Counterparts. ..................................................................................................... 71
Section 15.11. Texas Government Code Verifications. ............................................................ 71
INDENTURE OF TRUST
THIS INDENTURE, dated as of July 1, 2024, 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 August 2, 2023, 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 "Meadow Vista 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 August 22, 2023, the City Council of the City (the "City Council")
adopted Resolution No. 2023-08-1525 accepting the Petition and calling a public hearing on the
creation of the District on September 26, 2023; and
WHEREAS, on September 26, 2023, 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
September 26, 2023, the City Council made the findings required by Section 372.009(b) of the
PID Act and, by Resolution No. 2023-09-1558 adopted by the City Council (the “Creation
Resolution”), authorized the District in accordance with its finding as to the advisability of the
improvement projects and services; and
WHEREAS, following the adoption of the Creation Resolution, the City recorded said
Creation Resolution in the real property records of Collin County, Texas as Document No.
2023000113773; 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 adoption of
said Creation Resolution; and
WHEREAS, the City, pursuant to Section 372.016(b) of the PID Act, published notice of
a public hearing in a newspaper of general circulation in the City where the proposed
improvements are to be undertaken to consider the proposed "Improvement Area #1 Assessment
Roll" and the "Service and Assessment Plan" and the levy of the "Improvement Area #1
Assessments" on property in the District; and
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WHEREAS, on June 11, 2024, the City Council called for a public hearing to be held to
consider the proposed Improvement Area #1 Assessment Roll, the Service and Assessment Plan
and the levy of the Improvement Area #1 Assessments on the Improvement Area #1 Assessed
Property, and the City (i) published notice of such public hearing in a newspaper of general
circulation in the City and (ii) mailed notice of such public hearing to the last known address of
the owners of the property liable for the Improvement Area #1 Assessments pursuant to Section
372.0l6(c) of the Act; and
WHEREAS, the City Council convened the public hearing on July 9, 2024, 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 Improvement Area #1
Assessment Roll and the Improvement Area #1 Assessments, and to offer testimony pertinent to
any issue presented on the amount of the Improvement Area #1 Assessments, the allocation of
Improvement Area #1 Projects, the purposes of the Improvement Area #1 Assessments, the
special benefits of the Improvement Area #1 Assessments and the penalties and interest on
Improvement Area #1 Annual Installments and on delinquent Improvement Area #1 Annual
Installments of the Improvement Area #1 Assessments; and
WHEREAS, at the July 9, 2024 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 the Improvement Area #1 Projects, the Improvement Area #1
Assessment Roll or the levy of the Improvement Area #1 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 July 9, 2024, 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 Improvement Area #1
Assessment Roll and levied the Improvement Area #1 Assessments; and
WHEREAS, the City Council is authorized by the PID Act to issue revenue bonds
payable from the Improvement Area #1 Assessments for the purpose of (i) paying a portion of
the Improvement Area #1 Projects, (ii) paying a portion of the interest on the Bonds during and
after the period of acquisition and construction of the Improvement Area #1 Projects, (iii)
funding a reserve fund for payment of principal and interest on the Bonds, (iv) paying a portion
of the costs incidental to the organization of the District and (v) paying the costs of issuance of
the Bonds; and
WHEREAS, the City Council now desires to issue its revenue bonds, in accordance with
the PID Act, such bonds to be entitled "City of Anna, Texas, Special Assessment Revenue
Bonds, Series 2024 (Meadow Vista Public Improvement District Improvement Area #1 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;
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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 first lien
on, a security interest in, and pledge of 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.
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THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all
Bonds issued and secured hereunder are to be issued, authenticated, and delivered and the Trust
Estate hereby created, assigned, and pledged is to be dealt with and disposed of under, upon and
subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses, and purposes as
hereinafter expressed, and the City has agreed and covenanted, and does hereby agree and
covenant, with the Trustee and with the respective Owners from time to time of the Bonds as
follows:
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
Improvement Area #1 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.
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"Administrator" means an employee or designee of the City who shall have the
responsibilities provided in the Service and Assessment Plan, this Indenture, or any other
agreement or document approved by the City related to the duties and responsibilities of the
administration of the District.
“Annual Collection Costs” mean the actual or budgeted costs and expenses related to the
creation and operation of the District, the issuance and sale of the 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 Improvement Area #1 Assessments and Improvement Area
#1 Annual Installments, including the costs of foreclosure; (4) preparing and maintaining records
with respect to Improvement Area #1 Assessment Roll and Annual Service Plan Updates; (5)
issuing, paying, and redeeming the Bonds; (6) investing or depositing Improvement Area #1
Assessments and Improvement Area #1 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 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.
"Assessment Ordinance" means the ordinance adopted by the City Council on July 9,
2024, as may be amended or supplemented, that levied the Improvement Area #1 Assessments
on the Improvement Area #1 Assessed Property.
"Assessment Revenues" means the revenues received by the City from the collection of
Improvement Area #1 Assessments, including Prepayments, Improvement Area #1 Annual
Installments and Foreclosure Proceeds.
"Attorney General" means the Attorney General of the State.
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"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 #1 for which Improvement Area #1
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 July 9, 2024
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 2024 (Meadow Vista
Public Improvement District Improvement Area #1 Project)" and, in the event the City issues
Refunding Bonds pursuant to Section 13.2 hereof, the term "Bonds" shall include such
Refunding Bonds.
"Business Day" means any day other than a Saturday, Sunday or legal holiday in the State
observed as such by the City or the Trustee or any national holiday observed by the Trustee.
"Capitalized Interest Account" means the Account in the Bond Fund established pursuant
to Section 6.1 of this Indenture.
"Certification for Payment" means, with respect to payment or reimbursement of
Improvement Area #1 Projects, a certificate substantially in the form of Exhibit B attached to the
CFA 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 #1 Projects thereof, and requesting payment for such Improvement Area #1
Projects from money on deposit in the Improvement Area #1 Bond Improvement Account of the
Project Fund as further described in the CFA Agreement and Section 6.5 of this Indenture.
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"CFA Agreement" means the Improvement Area #1 Construction, Funding and
Acquisition Agreement, Meadow Vista Public Improvement District, by and between the City
and the Developer, dated as of July 9, 2024, as may be amended and/or supplemented from time
to time, which provides, in part, for the construction and maintenance of the Improvement Area
#1 Projects, the issuance of the Bonds, the payment or reimbursement of costs of Improvement
Area #1 Projects.
"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 Improvement
Area #1 Assessed Property and the costs of collection of delinquent Improvement Area #1
Assessments, delinquent Improvement Area #1 Annual Installments, or any other delinquent
amounts due under the Service and Assessment Plan, including penalties and reasonable
attorney’s fees actually paid, but excluding amounts representing interest and penalty interest.
"Delivery Date" means July 31, 2024, 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.
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"Developer" means Bloomfield Homes, L.P., a Texas limited partnership, 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 Improvement Area #1 Assessments against any
Improvement Area #1 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 #1" means that portion of the District generally described in Section
II of the Service and Assessment Plan and generally shown in Exhibit A-2 to the Service and
Assessment Plan and as specifically described in Exhibit J-2 to the Service and Assessment Plan.
"Improvement Area #1 Annual Installments" means, with respect to each Parcel of
Improvement Area #1 Assessed Property, each annual payment of: (i) the principal of and
interest on the Improvement Area #1 Assessments as shown on the Improvement Area #1
Assessment Roll or in an Annual Service Plan Update, and as shown in Exhibit F-2 to the
Service and Assessment Plan, and calculated as provided in Section VI of the Service and
Assessment Plan, (ii) Annual Collection Costs and (iii) the Additional Interest.
"Improvement Area #1 Assessed Property" means the property located in Improvement
Area #1 that benefits from the Improvement Area #1 Projects, and is defined as the
"Improvement Area #1 Assessed Property" in the Service and Assessment Plan.
"Improvement Area #1 Assessment Roll" means the "Improvement Area #1 Assessment
Roll", which document is attached to the Service and Assessment Plan as Exhibit F-1, as
updated, modified or amended from time to time.
"Improvement Area #1 Assessments" means an assessment levied against Improvement
Area #1 Assessed Property based on the special benefit conferred on such Improvement Area #1
Assessed Property by the Improvement Area #1 Projects.
"Improvement Area #1 Projects" means the Authorized Improvements which only benefit
the property located in the Improvement Area #1, and are described in Section III(A) and Exhibit
G-2 to the Service and Assessment Plan.
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"Improvement Area #1 Project Costs" means the Actual Costs, as defined in the Service
and Assessment Plan (excluding Annual Collection Costs), solely for the Improvement Area #1
Projects.
"Improvement Area #1 Projects" means the Improvement Area #1 Projects and the pro-
rata portion of the Major Improvements allocable to Improvement Area #1.
"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 15 and September 15 of each year, commencing March 15, 2025.
"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.
"Major Improvements" means the Authorized Improvements which benefit the entire
District, and are described in Section III(A) and Exhibit G-1 to the Service and Assessment Plan.
"Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond
Year after the calculation is made through the final maturity date of any Outstanding Bonds.
“Other Obligations” means any bonds, temporary notes, time warrants, or an obligation
under an installment sale contract or CFA Agreement secured in whole or in part by an
assessment, other than the Improvement Area #1 Assessments securing the Bonds, levied against
property within Improvement Area #1 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
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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.
"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.
"PID Act" means the Public Improvement District Assessment Act, Subchapter A of
Chapter 372, Texas Local Government Code, as amended.
"Pledged Funds" means, collectively, the Pledged Revenue Fund, the Bond Fund, the
Project Fund, 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 Improvement Area #1 Assessments and Improvement Area #1 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.
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"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.
"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.
"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 $931,657.50, which is
an amount equal to the Reserve Account Requirement defined above.
"Service and Assessment Plan" means the document, including the Improvement Area #1
Assessment Roll, which is attached as Exhibit A of the Assessment Ordinance, as may be
updated, amended and supplemented from time to time.
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"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.
"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 Improvement Area #1
Assessments levied on the Improvement Area #1 Assessed Property within Improvement Area
#1, 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.
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Section 1.2. Findings.
The declarations, determinations and findings declared, made and found in the preamble
to this Indenture are hereby adopted, restated and made a part of the operative provisions hereof.
Section 1.3. Table of Contents, Titles and Headings.
The table of contents, titles, and headings of the Articles and Sections of this Indenture
have been inserted for convenience of reference only and are not to be considered a part hereof
and shall not in any way modify or restrict any of the terms or provisions hereof and shall never
be considered or given any effect in construing this Indenture or any provision hereof or in
ascertaining intent, if any question of intent should arise.
Section 1.4. Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall be
construed to include correlative words of the feminine and neuter genders and vice versa, and
words of the singular number shall be construed to include correlative words of the plural
number and vice versa.
(b) Words importing persons include any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust, unincorporated
organization or government or agency or political subdivision thereof.
(c) Any reference to a particular Article or Section shall be to such Article or Section
of this Indenture unless the context shall require otherwise.
(d) This Indenture and all the terms and provisions hereof shall be liberally construed
to effectuate the purposes set forth herein to sustain the validity of this Indenture.
ARTICLE II
THE BONDS
Section 2.1. Security for the Bonds.
(a) The Bonds, as to principal, interest and redemption premium, if any, are and shall
be equally and ratably secured by and payable from a first lien on, security interest in, and pledge
of the Trust Estate.
(b) The lien on and pledge of the Trust Estate shall be valid and binding and fully
perfected from and after the Delivery Date, without physical delivery or transfer of control of the
Trust Estate, the filing of this Indenture or any other act; all as provided in Chapter 1208 of the
Texas Government Code, as amended, which applies to the issuance of the Bonds and the pledge
of the Trust Estate granted by the City under this Indenture, and such pledge is therefore valid,
effective and perfected. If State law is amended at any time while the Bonds are Outstanding
such that the pledge of the Trust Estate granted by the City under this Indenture is to be subject
to the filing requirements of Chapter 9, Business and Commerce Code, then in order to preserve
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to the registered owners of the Bonds the perfection of the security interest in said pledge, the
City agrees to take such measures as it determines are reasonable and necessary under State law
to comply with the applicable provisions of Chapter 9, Business and Commerce Code and enable
a filing to perfect the security interest in said pledge to occur.
Section 2.2. Limited Obligations.
The Bonds are special and limited obligations of the City, payable solely from and
secured solely by the Trust Estate, including the Pledged Revenues; and the Bonds shall never be
payable out of funds raised or to be raised by taxation or from any other revenues, properties or
income of the City.
Section 2.3. Authorization for Indenture.
The terms and provisions of this Indenture and the execution and delivery hereof by the
City to the Trustee have been duly authorized by official action of the City Council. The City
has ascertained and it is hereby determined and declared that the execution and delivery of this
Indenture is necessary to carry out and effectuate the purposes set forth in the preambles of this
Indenture and that each and every covenant or agreement herein contained and made is
necessary, useful and/or convenient in order to better secure the Bonds and is a contract or
agreement necessary, useful and/or convenient to carry out and effectuate the purposes herein
described.
Section 2.4. Contract with Owners and Trustee.
(a) The purposes of this Indenture are to establish a lien and the security for, and to
prescribe the minimum standards for the authorization, issuance, execution and delivery of, the
Bonds and to prescribe the rights of the Owners, and the rights and duties of the City and the
Trustee.
(b) In consideration of the purchase and acceptance of any or all of the Bonds by
those who shall purchase and hold the same from time to time, the provisions of this Indenture
shall be a part of the contract of the City with the 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 $12,806,000 for the purpose of (i) paying a portion of the
Improvement Area #1 Project Costs, (ii) paying a portion of the interest on the Bonds during and
after the period of acquisition and construction of the Improvement Area #1 Projects, (iii)
funding a reserve fund for payment of principal and interest on the Bonds, (iv) paying a portion
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of the costs incidental to the organization of the District and (v) paying the costs of issuance of
the Bonds.
Section 3.2. Date, Denomination, Maturities, Numbers and Interest.
(a) The Bonds shall be dated the Delivery Date and shall be issued in Authorized
Denominations. The Bonds shall be in fully registered form, without coupons, and shall be
numbered separately from R-1 upward, except the Initial Bond, which shall be numbered T-1.
(b) Interest shall accrue and be paid on each Bond from the later of the Delivery Date
or the most recent Interest Payment Date to which interest has been paid or provided for, at the
rate per annum set forth below until the principal thereof has been paid on the maturity date
specified below, or on a date of earlier redemption, or otherwise provided for. Such interest shall
be payable semiannually on March 15 and September 15 of each year, commencing March 15,
2025, computed on the basis of a 360-day year of twelve 30-day months.
(c) The Bonds shall mature on September 15 in the years and in the principal
amounts and shall bear interest at the rates set forth below:
Year
Principal
Amount
Interest
Rate
2031 $1,282,000 4.875%
2044 $4,669,000 5.500%
2054 $6,855,000 5.750%
(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 CFA 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;
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(f) an executed Signature and No-Litigation Certificate;
(g) an executed opinion of Bond Counsel; and
(h) the approving opinion of the Attorney General of the State and the State
Comptroller’s registration certificate.
Section 3.4. Medium, Method and Place of Payment.
(a) Principal of and interest on the Bonds shall be paid in lawful money of the United
States of America, as provided in this Section.
(b) Interest on the Bonds shall be payable to the Owners thereof as shown in the
Register at the close of business on the relevant Record Date or Special Record Date, as
applicable.
(c) Interest on the Bonds shall be paid by check, dated as of the Interest Payment
Date, and sent, first class United States mail, postage prepaid, by the Paying Agent/Registrar to
each Owner at the address of each as such appears in the Register or by such other customary
banking arrangement acceptable to the Paying Agent/Registrar and the Owner; provided,
however, the Owner shall bear all risk and expense of such other banking arrangement.
(d) The principal of each Bond shall be paid to the Owner of such Bond on the due
date thereof, whether at the maturity date or the date of prior redemption thereof, upon
presentation and surrender of such Bond at the Designated Payment/Transfer Office of the
Paying Agent/Registrar.
(e) If the date for the payment of the principal of or interest on the Bonds shall be a
Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the
Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or
authorized by law or executive order to close, the date for such payment shall be the next
succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking
institutions are required or authorized to close, and payment on such date shall for all purposes
be deemed to have been made on the due date thereof as specified in Section 3.2 of this
Indenture.
(f) Unclaimed payments of amounts due hereunder shall be segregated in a special
account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the
Owner of the Bonds to which such unclaimed payments pertain. Subject to any escheat,
abandoned property, or similar law of the State, any such payments remaining unclaimed by the
Owners entitled thereto for three (3) years after the applicable payment or redemption date shall
be applied to the next payment or payments on the Bonds thereafter coming due and, to the
extent any such money remains after the retirement of all Outstanding Bonds, shall be paid to the
City to be used for any lawful purpose. Thereafter, none of the City, the Paying Agent/Registrar,
or any other Person shall be liable or responsible to any holders of such Bonds for any further
payment of such unclaimed moneys or on account of any such Bonds, subject to any applicable
escheat law or similar law of the State.
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Section 3.5. Execution and Registration of Bonds.
(a) The Bonds shall be executed on behalf of the City by the Mayor (or in the
Mayor’s absence, the Mayor Pro-Tem) 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 (or in the Mayor’s Absence, the Mayor Pro-Tem)
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
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entities, including private corporations, municipalities and political subdivisions issued
particularly for the purchase, construction, improvement, extension, replacement, enlargement or
repair of the facilities needed in performing any such contract.
(b) The principal of all Refunding Bonds must be scheduled to be paid, be subject to
mandatory sinking fund redemption or mature on September 15 of the years in which such
principal is scheduled to be paid. All Refunding Bonds must bear interest at a fixed rate and any
interest payment dates for Refunding Bonds must be March 15 and September 15. The date, rate
or rates of interest on, interest payment dates, maturity dates, redemption and all other terms and
provisions of Refunding Bonds shall be set forth in a Supplemental Indenture.
(c) Upon their authorization by the City, the Refunding Bonds of a series issued
under this Section 3.6 and in accordance with Article IV hereof shall be issued and shall be
delivered to the purchasers or owners thereof, but before, or concurrently with, the delivery of
said Refunding Bonds to such purchasers or owners there shall have been filed with the Trustee
the items required by Section 3.3 above.
Section 3.7. Ownership.
(a) The City, the Trustee, the Paying Agent/Registrar and any other Person may treat
the Person in whose name any Bond is registered as the absolute owner of such Bond for the
purpose of making and receiving payment as provided herein (except interest shall be paid to the
Person in whose name such Bond is registered on the Record Date or Special Record Date, as
applicable) and for all other purposes, whether or not such Bond is overdue, and none of the
City, the Trustee or the Paying Agent/Registrar shall be bound by any notice or knowledge to the
contrary.
(b) All payments made to the Owner of any Bond shall be valid and effectual and
shall discharge the liability of the City, the Trustee and the Paying Agent/Registrar upon such
Bond to the extent of the sums paid.
Section 3.8. Registration, Transfer and Exchange.
(a) So long as any Bond remains Outstanding, the City shall cause the Paying
Agent/Registrar to keep at the Designated Payment/Transfer Office a Register in which, subject
to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for
the registration and transfer of Bonds in accordance with this Indenture. The Paying
Agent/Registrar represents and warrants that it will maintain a copy of the Register, and shall
cause the Register to be current with all registration and transfer information as from time to time
may be applicable.
(b) A Bond shall be transferable only upon the presentation and surrender thereof at
the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or
other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any
Bond shall be effective until entered in the Register.
(c) The Bonds shall be exchangeable upon the presentation and surrender thereof at
the Designated Payment/Transfer Office of the Paying Agent/Registrar for a Bond or Bonds of
19
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
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
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the officers of the City executing such temporary Bonds may determine, as evidenced by their
signing of such temporary Bonds.
(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,
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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.
(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
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Record Date, as applicable, the word "Cede & Co." in this Indenture shall refer to such new
nominee of DTC.
Section 3.13. Successor Securities Depository: Transfer Outside Book-Entry-Only
System.
In the event that the City determines that DTC is incapable of discharging its
responsibilities described herein and in the blanket issuer letter of representations from the City
to DTC, the City shall (i) appoint a successor securities depository, qualified to act as such under
Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC
Participants of the appointment of such successor securities depository and transfer one or more
separate Bonds to such successor securities depository; or (ii) notify DTC and DTC Participants
of the availability through DTC of certificated Bonds and cause the Paying Agent/Registrar to
transfer one or more separate registered Bonds to DTC Participants having Bonds credited to
their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in
the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name
of the successor securities depository, or its nominee, or in whatever name or names Owners
transferring or exchanging Bonds shall designate, in accordance with the provisions of this
Indenture.
Section 3.14. Payments to Cede & Co.
Notwithstanding any other provision of this Indenture to the contrary, so long as any
Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect
to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such
Bonds shall be made and given, respectively, in the manner provided in the blanket letter of
representations from the City to DTC.
ARTICLE IV
REDEMPTION OF BONDS BEFORE MATURITY
Section 4.1. Limitation on Redemption.
The Bonds shall be subject to redemption before their scheduled maturity only as
provided in this Article IV.
Section 4.2. Mandatory Sinking Fund Redemption.
(a) The Bonds maturing on September 15 in each of the years 2031, 2044 and 2054
(collectively, the “Term Bonds”), are subject to mandatory sinking fund redemption prior to their
respective maturities and will be redeemed by the City in part at the Redemption Price from
moneys available for such purpose in the Principal and Interest Account of the Bond Fund
pursuant to Article VI, on the dates and in the respective Sinking Fund Installments as set forth
in the following schedule:
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Term Bonds maturing September 15, 2031
Redemption Date Sinking Fund Installment Amount
September 15, 2026 $189,000
September 15, 2027 198,000
September 15, 2028 208,000
September 15, 2029 218,000
September 15, 2030 229,000
September 15, 2031* 240,000
Term Bonds maturing September 15, 2044
Redemption Date Sinking Fund Installment Amount
September 15, 2032 $252,000
September 15, 2033 267,000
September 15, 2034 282,000
September 15, 2035 298,000
September 15, 2036 314,000
September 15, 2037 332,000
September 15, 2038 351,000
September 15, 2039 371,000
September 15, 2040 393,000
September 15, 2041 415,000
September 15, 2042 439,000
September 15, 2043 464,000
September 15, 2044* 491,000
Term Bonds maturing September 15, 2054
Redemption Date Sinking Fund Installment Amount
September 15, 2045 $519,000
September 15, 2046 550,000
September 15, 2047 583,000
September 15, 2048 619,000
September 15, 2049 656,000
September 15, 2050 696,000
September 15, 2051 738,000
September 15, 2052 783,000
September 15, 2053 830,000
September 15, 2054* 881,000
__________
* 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
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4.6.
(c) The principal amount of Bonds required to be redeemed on any mandatory
sinking fund redemption date pursuant to subparagraph (a) of this Section 4.2 shall be reduced, at
the option of the City, by the principal amount of any Bonds of such maturity which, at least 30
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 15, 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 2024
(MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
REGISTERED
$__________
INTEREST RATE MATURITY DATE DELIVERY DATE CUSIP NUMBER
______% September 15, 20__ July 31, 2024 __________
The City of Anna, Texas (the "City"), for value received, hereby promises to pay, solely
from the Trust Estate, to
or registered assigns, on the Maturity Date, as specified above, the sum of
______________________________ DOLLARS
unless this Bond shall have been sooner called for redemption and the payment of the principal
hereof shall have been paid or provision for such payment shall have been made, and to pay
interest on the unpaid principal amount hereof from the later of the Delivery Date, as specified
above, or the most recent Interest Payment Date to which interest has been paid or provided for
until such principal amount shall have been paid or provided for, at the per annum rate of interest
specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest
to be paid semiannually on March 15 and September 15 of each year, commencing March 15,
2025.
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 last business day of the month next preceding such Interest Payment
Date; provided, however, that in the event of nonpayment of interest on a scheduled Interest
Payment Date, and for 30 days thereafter, a new record date for such interest payment (a
"Special Record Date") will be established by the Trustee, if and when funds for the payment of
such interest have been received from the City. Notice of the Special Record Date and of the
scheduled payment date of the past due interest (which shall be 15 days after the Special Record
Date) shall be sent at least five Business Days prior to the Special Record Date by United States
mail, first class postage prepaid, to the address of each Owner of a Bond appearing on the books
of the Trustee at the close of business on the last Business Day preceding the date of mailing
such notice.
If a date for the payment of the principal of or interest on the Bonds is a Saturday,
Sunday, legal holiday, or a day on which banking institutions in the city in which the Designated
Payment/Transfer Office is located are authorized by law or executive order to close, then the
date for such payment shall be the next succeeding Business Day, and payment on such date
shall have the same force and effect as if made on the original date payment was due.
This Bond is one of a duly authorized issue of assessment revenue bonds of the City
having the designation specified in its title (herein referred to as the "Bonds"), dated as of the
Delivery Date and issued in the aggregate principal amount of $12,806,000 and issued, with the
limitations described herein, pursuant to an Indenture of Trust, dated as of July 1, 2024 (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 #1 Project Costs, (ii) paying a portion of the interest on the Bonds during and after the
period of acquisition and construction of the Improvement Area #1 Projects, (iii) funding a
reserve fund for payment of principal and interest on the Bonds, (iv) paying a portion of the costs
incidental to the organization of the District and (v) paying the costs of issuance of the Bonds.
The Bonds are special, limited obligations of the City payable solely from the Trust
Estate. Reference is hereby made to the Indenture, copies of which are on file with and available
upon request from the Trustee, for the provisions, among others, with respect to the nature and
extent of the duties and obligations of the City, the Trustee and the Owners. The Owner of this
Bond, by the acceptance hereof, is deemed to have agreed and consented to the terms, conditions
and provisions of the Indenture.
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IN THE INDENTURE, THE CITY HAS RESERVED THE RIGHT to issue Refunding
Bonds payable from and secured by a first lien on, security interest in, and pledge of the sources
described above on a parity with this Bond.
Notwithstanding any provision hereof, the Indenture may be released and the obligation
of the City to make money available to pay this Bond may be defeased by the deposit of money
and/or certain direct or indirect Defeasance Securities sufficient for such purpose as described in
the Indenture.
The Bonds are issuable as fully registered bonds only in denominations of $100,000 and
any multiple of $1,000 in excess thereof ("Authorized Denominations"). Except to the extent
permitted by the Indenture, the City prohibits the breaking up or allocation of CUSIP numbers to
any Bond or Bonds in denominations of less than $100,000, and any attempt to do so will be
void and of no effect.
The Bonds maturing on September 15 in the years 2031, 2044 and 2054 (collectively,
"Term Bonds"), are subject to mandatory sinking fund redemption prior to their respective
maturities and will be redeemed by the City in part at the Redemption Price from moneys
available for such purpose in the Principal and Interest Account of the Bond Fund pursuant to
Article VI of the Indenture, on the dates and in the respective sinking fund installments as set
forth in the following schedule:
Term Bonds maturing September 15, 2031
Redemption Date Sinking Fund Installment Amount
September 15, 2026 $189,000
September 15, 2027 198,000
September 15, 2028 208,000
September 15, 2029 218,000
September 15, 2030 229,000
September 15, 2031* 240,000
Term Bonds maturing September 15, 2044
Redemption Date Sinking Fund Installment Amount
September 15, 2032 $252,000
September 15, 2033 267,000
September 15, 2034 282,000
September 15, 2035 298,000
September 15, 2036 314,000
September 15, 2037 332,000
September 15, 2038 351,000
September 15, 2039 371,000
September 15, 2040 393,000
September 15, 2041 415,000
September 15, 2042 439,000
September 15, 2043 464,000
September 15, 2044* 491,000
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Term Bonds maturing September 15, 2054
Redemption Date Sinking Fund Installment Amount
September 15, 2045 $519,000
September 15, 2046 550,000
September 15, 2047 583,000
September 15, 2048 619,000
September 15, 2049 656,000
September 15, 2050 696,000
September 15, 2051 738,000
September 15, 2052 783,000
September 15, 2053 830,000
September 15, 2054* 881,000
__________
* 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
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 15, 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.
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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
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
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(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 an opinion to the
effect that the Attorney General of the State of Texas has approved this Bond, and that this Bond
has been registered this day by me.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this __________________.
_______________________________
Comptroller of Public Accounts
of the State of Texas
[SEAL]
(c) Form of Certificate of Trustee.
CERTIFICATE OF TRUSTEE
It is hereby certified that this is one of the Bonds of the series of Bonds referred to in the
within mentioned Indenture.
REGIONS BANK,
as Trustee
DATED: _________________
By: _____________________________
Authorized Signatory
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(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.
(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 15 in each of the years, in the principal installments
and bearing interest at the per annum rates set forth in the following schedule:
Year Principal Amount Interest Rate"
(Information to be inserted from Section 3.2(c)); and
(iii) the Initial Bond shall be numbered T-1.
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Section 5.3. CUSIP Registration.
The City may secure identification numbers through CUSIP Global Services, managed by
S&P Global Markets Intelligence on behalf of the American Bankers Association, New York,
New York, and may authorize the printing of such numbers on the face of the Bonds. It is
expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds shall
be of no significance or effect as regards the legality thereof and none of the City, the attorneys
approving said Bonds as to legality or the Trustee are to be held responsible for CUSIP numbers
incorrectly printed on the Bonds. Except as authorized under Section 4.5 hereof, the City
prohibits any Bond to be issued in a denomination of less than $100,000 and further prohibits the
assignment of a CUSIP number to any Bond with a denomination of less than $100,000, and any
attempt to accomplish either of the foregoing shall be void and of no effect. The Trustee may
include in any redemption notice a statement to the effect that the CUSIP numbers on the Bonds
have been assigned by an independent service and are included in such notice solely for the
convenience of the Bondholders and that neither the City nor the Trustee shall be liable for any
inaccuracies in such numbers.
Section 5.4. Legal Opinion.
The approving legal opinion of Bond Counsel may be printed on or attached to each
Bond over the certification of the City Secretary of the City, which may be executed in facsimile.
ARTICLE VI
FUNDS AND ACCOUNTS
Section 6.1. Establishment of Funds and Accounts.
(a) Creation of Funds. The following Funds are hereby created and established
under this Indenture:
(i) Pledged Revenue Fund;
(ii) Bond Fund;
(iii) Project Fund;
(iv) Reserve Fund;
(v) Redemption Fund;
(vi) Rebate Fund; and
(vii) Administrative Fund.
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(b) Creation of Accounts.
(i) The following Accounts are 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 #1 Bond Improvement Account; and
(B) 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. 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: $ 802,636.88;
(ii) to the Reserve Account of the Reserve Fund: $931,657.50, which is equal
to the initial Reserve Account Requirement;
37
(iii) to the Costs of Issuance Account of the Project Fund: $692,525.62;
(iv) to the Improvement Area #1 Bond Improvement Account of the Project
Fund: $9,955,000.00; and
(v) to the Administrative Fund: $40,000.00.
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 Improvement Area #1 Assessments and Improvement Area #1 Annual Installments, other
than the portion of the Improvement Area #1 Assessments and Improvement Area #1 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
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 #1 Projects, (ii) pay other costs permitted
by the PID Act, or (iii) deposit such excess into the Redemption Fund to redeem Bonds as
provided in 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.
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(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
Improvement Area #1 Assessed Property to which the Foreclosure Proceeds relate (first, to
replenish the Reserve Account Requirement and second, to replenish the Delinquency and
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.
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 March 15, 2025 and September 15, 2025. Any amounts on deposit
to the Capitalized Interest Account after the foregoing payments shall be transferred to the
Improvement Area #1 Bond Improvement Account of the Project Fund, or if the Improvement
Area #1 Bond Improvement Account of the Project Fund has been closed as provided in Section
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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 #1 Bond Improvement Account of the
Project Fund to pay Improvement Area #1 Projects shall be made by the Trustee upon receipt by
the Trustee of a properly executed and completed Certification for Payment. The funds from the
Improvement Area #1 Bond Improvement Account of the Project Fund shall be disbursed in
accordance with a Certification for Payment for Improvement Area #1 Projects as described in
the CFA Agreement. Each such Certification for Payment shall include a list of the payees and
the payments to be made to such payees as well as a statement that all payments shall be made
by check or wire transfer in accordance with the payment instructions set forth in such
Certification for Payment or in the invoices submitted therewith and the Trustee may rely on
such payment instructions with no duty to investigate or inquire as to the authenticity of or
authorization for the invoice or the payment instructions contained therein.
(c) Except as provided in Section 6.5(d), (f) and (h), money on deposit in the
Improvement Area #1 Bond Improvement Account of the Project Fund shall be used solely to
pay Improvement Area #1 Projects.
(d) If the City Representative determines in his or her sole discretion that certain
amounts then on deposit in the Improvement Area #1 Bond 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 #1 Projects such that, in the
opinion of the City Representative, it is unlikely that the amounts in the Improvement Area #1
Bond 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 #1 Bond 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 #1 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. Upon such
transfer, the Improvement Area #1 Bond 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 #1 Projects
have been completed and that all Improvement Area #1 Projects have been paid, or that any
Improvement Area #1 Projects are not required to be paid from the Project Fund pursuant to a
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Certification for Payment, the Trustee shall transfer the amount, if any, remaining within the
Improvement Area #1 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. Upon such transfer, the Improvement
Area #1 Bond Improvement Account of the Project Fund shall be closed.
(g) Upon a determination by the City Representative that all costs of issuance of the
Bonds have been paid, any amounts remaining in the Costs of Issuance Account shall be
transferred to the Improvement Area #1 Bond Improvement Account of the Project Fund and
used to pay Improvement Area #1 Projects 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.
(h) In the event the Developer has not completed the Improvement Area #1 Projects
by July 17, 2029, then the City shall provide written direction to the Trustee to transfer all funds
on deposit in the Improvement Area #1 Bond Improvement Account to the Redemption Fund to
redeem Bonds pursuant to Section 4.4 hereof. Upon such transfers, the Improvement Area #1
Bond Improvement Account of the Project Fund shall be closed.
(k) In providing any disbursement under this Section, the Trustee may conclusively
rely as to the completeness and accuracy of all statements in such Certification for Payment if
such certificate is signed by a City Representative, and the Trustee shall not be required to make
any independent investigation in connection therewith. The execution of any Certification for
Payment by a City Representative shall constitute, unto the Trustee, an irrevocable determination
that all conditions precedent to the payments requested have been completed.
Section 6.6. Redemption Fund.
The Trustee, 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 15 of each year, commencing March 15, 2025, 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 Improvement Area #1 Annual Installments as shown on the Improvement
Area #1 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
42
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 #1 Bond Improvement Account of the Project Fund to pay
Improvement Area #1 Projects 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 Improvement Area #1 Assessments and Improvement
Area #1 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
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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
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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 Improvement Area #1 Assessments.
The City hereby confirms, covenants, and agrees that, in the Assessment Ordinance, it
has levied the Improvement Area #1 Assessments against the Improvement Area #1 Assessed
Property from which the Assessment Revenues will be collected and received.
Section 7.2. Collection and Enforcement of Improvement Area #1 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 Improvement Area #1 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 Improvement Area #1 Assessments.
(b) To the extent permitted by law, notice of the Improvement Area #1 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 Improvement Area
#1 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 Improvement Area #1 Improvement Area #1 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
Improvement Area #1 Annual Installment, and any delinquent charges and interest thereon,
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including diligently prosecuting an action in district court to foreclose the currently delinquent
Improvement Area #1 Annual Installment. Notwithstanding the foregoing, the City shall not be
required under any circumstances to purchase or make payment for the purchase of the
delinquent Improvement Area #1 Assessments or the corresponding particular Improvement
Area #1 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
Improvement Area #1 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
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the proceeds or the projects financed therewith are so used, such amounts, whether or not
received by the City, with respect to such private business use, do not, under the terms of
this Article or any underlying arrangement, directly or indirectly, secure or provide for
the payment of more than 10 percent of the debt service on the Bonds, in contravention of
section 141(b)(2) of the Code;
(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);
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(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
(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 #1 Projects 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 #1 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
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assure that such expenditure will not adversely affect the tax-exempt status of the Bonds. For
purposes hereof, the City shall not be obligated to comply with this covenant if it obtains an
opinion that such failure to comply will not adversely affect the excludability for federal income
tax purposes from gross income of the interest.
(e) The City covenants that the projects funded with the proceeds of the Bonds will
not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or
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
50
Collection Costs) in the performance of any of its obligations hereunder, or in the exercise of any
of its rights or powers, if in the judgment of the City there are reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to it.
(e) Neither the Owners nor any other Person shall have any claim against the City or
any of its officers, officials, agents, or employees for damages suffered as a result of the City’s
failure to perform in any respect any covenant, undertaking, or obligation under any Bond
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.
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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.
(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
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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
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 #1 Projects. The Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in accordance with the
direction of the Owners of not less than a majority in principal amount of the Bonds then
Outstanding relating to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture.
(d) The Trustee 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
53
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.
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
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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
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.
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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
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.
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(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.
(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.
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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.
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
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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
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.
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Section 10.3. Procedure for Amendment with Written Consent of Owners.
(a) The City and the Trustee may at any time adopt a Supplemental Indenture
amending the provisions of the Bonds or of this Indenture, to the extent that such amendment is
permitted by Section 10.1, to take effect when and as provided in this Section. A copy of such
Supplemental Indenture, together with a request to Owners for their consent thereto, if such
consent is required pursuant to Section 10.1, shall be mailed by first class mail, by the Trustee to
each Owner of Bonds from whom consent is required under this Indenture, but failure to mail
copies of such Supplemental Indenture and request shall not affect the validity of the
Supplemental Indenture when assented to as in this Section provided.
(b) Such Supplemental Indenture shall not become effective unless there shall be
filed with the Trustee the written consents of the Owners as required by this Indenture and a
notice shall have been mailed as hereinafter in this Section provided and the City has delivered to
the Trustee an opinion of Bond Counsel to the effect that such amendment is permitted and will
not adversely affect the exclusion of interest on the Bonds from gross income for purposes of
federal income taxation. Each such consent shall be effective only if accompanied by proof of
ownership of the Bonds for which such consent is given, which proof shall be such as is
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
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mailing of such notice. A record, consisting of the papers required by this Section 10.4, shall be
proof of the matters therein stated until the contrary is proved.
(b) The Supplemental Indenture shall become effective upon the execution and
delivery of such Supplemental Indenture by the Trustee and the City, and the Supplemental
Indenture shall be deemed conclusively binding upon the City, the Trustee and the Owners of all
Bonds as of the date of such execution and delivery.
Section 10.5. Effect of Supplemental Indenture.
From and after the time any Supplemental Indenture becomes effective pursuant to this
Article X, this Indenture shall be deemed to be modified and amended in accordance therewith,
the respective rights, duties, and obligations under this Indenture of the City, the Trustee and all
Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms and conditions of
any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
Section 10.6. Endorsement or Replacement of Bonds Issued After Amendments.
The City may determine that Bonds issued and delivered after the effective date of any
action taken as provided in this Article X shall bear a notation, by endorsement or otherwise, in
form approved by the City, as to such action. In that case, upon demand of the Owner of any
Bond Outstanding at such effective date and presentation of his Bond for that purpose at the
designated office of the Trustee or at such other office as the City may select and designate for
that purpose, a suitable notation shall be made on such Bond. The City may determine that new
Bonds, so modified as in the opinion of the City is necessary to conform to such Owners’ action,
shall be prepared, executed, and delivered. In that case, upon demand of the Owner of any Bonds
then Outstanding, such new Bonds shall be exchanged at the designated office of the Trustee
without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds.
Section 10.7. Amendatory Endorsement of Bonds.
The provisions of this Article X shall not prevent any Owner from accepting any
amendment as to the particular Bonds held by such Owner, provided that due notation thereof is
made on such Bonds.
Section 10.8. Waiver of Default.
With the written consent of 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,
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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.
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 Improvement Area
#1 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.
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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.
(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
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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;
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
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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.
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
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such notary public or other officer. Where such execution is by an officer of a corporation
or association or a member of a partnership, on behalf of such corporation, association or
partnership, such signature guarantee, certificate, or affidavit shall also constitute
sufficient proof of his authority.
(ii) The ownership of Bonds and the amount, numbers and other identification
and date of holding the same shall be proved by the Register.
(b) Except as otherwise provided in this Indenture with respect to revocation of a
consent, any request or consent by an Owner of any Bond shall bind all future Owners of the
same Bond in respect of anything done or suffered to be done by the City or the Trustee in
accordance therewith.
Section 11.7. No Acceleration.
In the event of the occurrence of an Event of Default under Section 11.1, the right of
acceleration of any Stated Maturity is not granted as a remedy hereunder and the right of
acceleration under this Indenture is expressly denied.
Section 11.8. Mailing of Notice.
Any provision in this Article for the mailing of a notice or other document to Owners
shall be fully complied with if it is mailed, first class postage prepaid, only to each Owner at the
address appearing upon the Register.
Section 11.9. Exclusion of Bonds.
Bonds owned or held by or for the account of the City will not be deemed Outstanding
for the purpose of consent or other action or any calculation of Outstanding Bonds provided for
in this Indenture, and the City shall not be entitled with respect to such Bonds to give any
consent or take any other action provided for in this Indenture.
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.
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(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 Improvement Area
#1 Assessments and any other amounts pledged to the payment of the Bonds to the fullest extent
permitted by the PID Act and other Applicable Laws.
Section 12.2. General.
The City shall do and perform or cause to be done and performed all acts and things
required to be done or performed by or on behalf of the City under the provisions of this
Indenture.
ARTICLE XIII
SPECIAL COVENANTS
Section 13.1. Further Assurances; Due Performance.
(a) At any and all times the City will duly execute, acknowledge and deliver, or will
cause to be done, executed and delivered, all and every such further acts, conveyances, transfers,
and assurances in a manner as the Trustee shall reasonably require for better conveying,
transferring, pledging, and confirming unto the Trustee, all and singular, the revenues, Funds,
Accounts and properties constituting the 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
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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
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,
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compensation, and expenses of the Trustee pertaining to the Bonds with respect to which such
deposit is made shall have been paid or the payment thereof provided for to the satisfaction of
the Trustee. Neither Defeasance Securities nor moneys deposited with the Trustee pursuant to
this Section nor principal or interest payments on any such Defeasance Securities shall be
withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the
principal of and interest on the Bonds and shall not be part of the Trust Estate. Any cash received
from such principal of and interest on such Defeasance Securities deposited with the Trustee, if
not then needed for such purpose, shall be reinvested in Defeasance Securities as directed by the
City maturing at times and in amounts sufficient to pay when due the principal of and interest on
the Bonds on and prior to such redemption date or maturity date thereof, as the case may be.
Any payment for Defeasance Securities purchased for the purpose of reinvesting cash as
aforesaid shall be made only against delivery of such Defeasance Securities.
(b) Any determination not to redeem Defeased Debt that is made in conjunction with
the payment arrangements specified in Sections 14.3(a)(1) or 14.3(a)(2) shall not be irrevocable,
provided that: (1) in the proceedings providing for such defeasance, the City expressly reserves
the right to call the Defeased Debt for redemption; (2) the City gives notice of the reservation of
that right to the Owners of the Defeased Debt immediately following the defeasance; (3) the City
directs that notice of the reservation be included in any defeasance or redemption notices that it
authorizes; and (4) at or prior to the time of the redemption, the City satisfies the conditions of
clause (a) of this Section 14.3 with respect to such Defeased Debt as though it was being
defeased at the time of the exercise of the option to redeem the Defeased Debt, after taking the
redemption into account in determining the sufficiency of the provisions made for the payment
of the Defeased Debt.
(c) Until all Defeased Debt shall have become due and payable, the Trustee and the
Paying Agent/Registrar each shall perform the services of Trustee and Paying Agent/Registrar
for such Defeased Debt the same as if they had not been defeased, and the City shall make
proper arrangements to provide and pay for such services as required by this Indenture.
ARTICLE XV
MISCELLANEOUS
Section 15.1. Benefits of Indenture Limited to Parties.
Nothing in this Indenture, expressed or implied, is intended to give to any Person other
than the City, the Trustee and the Owners, any right, remedy, or claim under or by reason of this
Indenture. Any covenants, stipulations, promises or agreements in this Indenture by and on
behalf of the City shall be for the sole and exclusive benefit of the Owners and the Trustee. 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
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City or the Trustee shall bind and inure to the benefit of the respective successors and assigns
thereof whether so expressed or not.
Section 15.3. Execution of Documents and Proof of Ownership by Owners.
(a) Any request, declaration, or other instrument which this Indenture may require or
permit to be executed by Owners may be in one or more instruments of similar tenor, and shall
be executed by Owners in person or by their attorneys duly appointed in writing.
(b) Except as otherwise expressly provided herein, the fact and date of the execution
by any Owner or his attorney of such request, declaration, or other instrument, or of such writing
appointing such attorney, may be proved by the certificate of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded in the state in which he purports to
act, that the Person signing such request, declaration, or other instrument or writing
acknowledged to him the execution thereof, or by an affidavit of a witness of such execution,
duly sworn to before such notary public or other officer.
(c) Except as otherwise herein expressly provided, the ownership of registered Bonds
and the amount, maturity, number, and date of holding the same shall be proved by the Register.
(d) Any request, declaration or other instrument or writing of the Owner of any Bond
shall bind all future Owners of such Bond in respect of anything done or suffered to be done by
the City or the Trustee in good faith and in accordance therewith.
Section 15.4. No Waiver of Personal Liability.
No member, officer, agent, or employee of the City shall be individually or personally
liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing
herein contained shall relieve any such member, officer, agent, or employee from the
performance of any official duty provided by law.
Section 15.5. Notices to and Demands on City and Trustee.
(a) Except as otherwise expressly provided herein, all notices or other instruments
required or permitted under this Indenture shall be in writing and shall be faxed, delivered by
hand, or mailed by first class mail, postage prepaid, and addressed as follows:
If to the City City of Anna, Texas
120 W. 7th St.
Anna, Texas 75409
Attn: Director of Finance
Telephone: (972) 924-3325
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If to the Trustee, initially also acting in
the capacity of Paying Agent/Registrar
Regions Bank
1717 McKinney Avenue
Dallas, Texas 75202
Attn: Corporate Trust Services
Telephone: (214) 220-6158
(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
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. CFA Agreement Amendments and Supplements.
The City and the Developer may amend and supplement the CFA Agreement from time
to time without the consent or approval of the Owners or the Trustee.
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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 makes the following representations and covenants pursuant to
Chapters 2252, 2271, 2274, and 2276, Texas Government Code, as amended (the “Government
Code”), in entering into this Indenture. As used in such verifications, "affiliate" means an entity
that controls, is controlled by, or is under common control with the Trustee within the meaning
of SEC Rule 405, 17 C.F.R. § 230.405, and exists to make a profit. Liability for breach of any
such verification during the term of this Indenture shall survive until barred by the applicable
statute of limitations, and shall not be liquidated or otherwise limited by any provision of this
Indenture, notwithstanding anything in this Indenture to the contrary.
(1) Not a Sanctioned Company. The Trustee 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, Government Code. The
foregoing representation excludes the Trustee 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.
(2) No Boycott of Israel. The Trustee 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 Indenture. As used in the
foregoing verification, “boycott Israel” has the meaning provided in Section 2271.001,
Government Code.
(3) No Discrimination Against Firearm Entities. The Trustee 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 Indenture. As used in
the foregoing verification, "discriminate against a firearm entity or firearm trade
association" has the meaning provided in Section 2274.001(3), Government Code.
(4) No Boycott of Energy Companies. The Trustee 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 Indenture. As used in the foregoing verification, "boycott energy companies" has
the meaning provided in Section 2276.001(1), Government Code.
[Remainder of page left blank intentionally]
REGIONS BANK,
as Trustee
By: ___________________________
Authorized Officer
Trustee Signature Page to Indenture of Trust
B-1
EXHIBIT B
BOND PURCHASE AGREEMENT
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4125-9942-8176.5
$12,806,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
BOND PURCHASE AGREEMENT
July 9, 2024
City of Anna, Texas
120 W. 7th Street
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, as trustee (the
“Trustee”), authorizing the issuance of the Bonds (defined herein), and the Limited Offering
Memorandum (defined herein).
1. Purchase and Sale of 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 $12,806,000 aggregate principal amount of the “City of Anna, Texas, Special
Assessment Revenue Bonds, Series 2024 (Meadow Vista Public Improvement District
Improvement Area #1 Project)” (the “Bonds”), at a purchase price of $12,421,820.00 (representing
the aggregate principal amount of the Bonds, less an Underwriter’s discount of $384,180.00) and
no accrued interest.
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 and
agrees that (i) the purchase and sale of the Bonds pursuant to this Agreement is an arm’s length
commercial transaction between the City and the Underwriter, (ii) in connection with the
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4125-9942-8176.5
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 #1 Projects 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, and will not be assuming an advisory or fiduciary
responsibility in favor, of the City.
The Bonds shall be dated as of the Closing Date (defined below), 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 July 31, 2024 (or such other date as may be agreed to by the City and the
Underwriter) (the “Closing Date”).
2. Authorization Instruments and Law. The Bonds were authorized by an ordinance
enacted by the City Council of the City (the “City Council”) on July 9, 2024 (the “Bond
Ordinance”) and shall be issued pursuant to the provisions of the Public Improvement District
Assessment Act, Subchapter A of Chapter 372, Texas Local Government Code, as amended (the
“Act”), and the Indenture of Trust, dated as of July 1, 2024, 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 Trust Estate consisting primarily of
Improvement Area #1 Assessments levied pursuant to the Assessment Ordinance against the
Improvement Area #1 Assessed Property located within the District all to the extent and upon the
conditions described in the Indenture. The District was established by a resolution (the “Creation
Resolution”), enacted by the City Council on September 26, 2023, in accordance with the Act.
The Service and Assessment Plan was approved on July 9, 2024. The Creation Resolution, the
Assessment Ordinance, the Bond Ordinance, and the Indenture are collectively referred to herein
as the “Authorizing Documents.”
The Bonds shall be as described in Schedule I attached hereto, the Indenture, and the
Limited Offering Memorandum. The proceeds of the Bonds shall be used for the purposes
described in the Limited Offering Memorandum under “PLAN OF FINANCE – The Bonds” and
shall be generally applied as described in the Limited Offering Memorandum under “SOURCES
AND USES OF FUNDS.”
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The City has been advised that the Reserve Account, funded at the Reserve Account
Requirement, is reasonably required for the purposes for which the Reserve Account has been
established, is a vital factor in marketing the Bonds, and facilitates the marketing of the Bonds at
interest rates comparable to those of other bonds of a similar type.
3. Public Offering. The Underwriter agrees to make an initial public offering of all of
the Bonds in accordance with Section 4 hereof and to persons that qualify as “Accredited
Investors” (as defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended
and as then in effect (the “Securities Act”)) or “Qualified Institutional Buyers” (within the meaning
of Rule 144A under the Securities Act). On or before the third (3rd) business day prior to the
Closing Date, the Underwriter shall execute and deliver to Bond Counsel (as defined herein) the
Issue Price Certificate (as defined herein), in substantially the form attached hereto as Appendix
B.
4. Establishment of Issue Price. Notwithstanding any provision of this Agreement to
the contrary, the following provisions related to the establishment of the issue price of the Bonds
apply:
a. Definitions. For purposes of this Section 4, the following definitions
apply:
(i) “Participating Underwriter” means (A) any person that agrees
pursuant to a written contract with the City (or with the Underwriter to form an
underwriting syndicate) to participate in the initial sale of the Bonds to the Public
and (B) any person that agrees pursuant to a written contract directly or indirectly
with a person described in clause (A) to participate in the initial sale of the Bonds to
the Public (including a member of a selling group or a party to a third-party
distribution agreement participating in the initial sale of the Bonds to the public).
(ii) “Public” means any person (including an individual, trust, estate,
partnership, association, company, or corporation) other than a Participating
Underwriter or a Related Party to a Participating Underwriter.
(iii) “Related Party” means any two or more persons who are subject,
directly or indirectly, to (A) more than 50% common ownership of the voting power
or the total value of their stock, if both entities are corporations (including direct
ownership by one corporation of another), (B) more than 50% common ownership
of their capital interests or profits interests, if both entities are partnerships
(including direct ownership by one partnership of another) or (C) more than 50%
common ownership of the value of the outstanding stock of the corporation or the
capital interest or profits interest of the partnership, as applicable, if one entity is a
corporation and the other entity is a partnership (including direct ownership of the
applicable stock or interests by one entity of the other).
(iv) “Sale Date” means the date of execution of this Agreement by all
parties.
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b. Issue Price Certificate. The Underwriter agrees to assist the City in
establishing the issue price of the Bonds and to execute and deliver to the City at least five
(5) Business Days prior to Closing an Issue Price Certificate, together with the supporting
pricing wires or equivalent communications, substantially in the form attached hereto as
Appendix B, with such modifications as may be appropriate or necessary, in the
reasonable judgment of the Underwriter, the City, and Bond Counsel to accurately reflect,
as applicable, the initial offering price (the “Initial Offering Price”) or prices or the sales
price or prices to the Public of the Bonds. As applicable, all actions to be taken by the City
under this section to establish the issue price of the Bonds may be taken on behalf of the
City by the City's financial advisor and any notice or report to be provided to the City may
be provided to the City's financial advisor.
c. Substantial Amount Test. Other than those maturities of the Bonds which
are designated by the Underwriter in writing in attached Schedule I (the “Hold-the-Price
Maturities”), the City will treat the Initial Offering Price at which at least ten percent (a
“Substantial Amount”) in principal amount of each maturity of the Bonds is sold to the
Public as of the Sale Date (the “Substantial Amount Test”) as the issue price of that
maturity (or each separate CUSIP number within that maturity). At or promptly after the
execution of this Agreement, the Underwriter will report to the City the price or prices at
which the Underwriter has offered and sold to the Public each maturity of the Bonds. If at
that time the Substantial Amount Test has not been satisfied as to any maturity of the
Bonds, the Representative agrees to promptly report to the City the prices at which the
Bonds have been sold by the Participating Underwriters to the Public. That reporting
obligation will continue, whether or not the Closing Date has occurred, until the
Substantial Amount Test has been satisfied as to the Bonds of that maturity or until all
Bonds of that maturity have been sold to the Public.
d. Hold-The-Price Restriction. The Underwriter agrees that it will neither
offer nor sell any of the Hold-the-Price Maturities to any person at a price that is higher
than the applicable Initial Offering Price for such maturity during the period starting on
the Sale Date and ending on the earlier of (i) the close of the fifth (5th) Business Day after
the Sale Date, or (ii) the date on which the Underwriter has sold a Substantial Amount of
such Hold-the-Price Maturity to the Public at a price that is no higher than the Initial
Offering Price of such Hold-the-Price Maturity (the “Hold-the-Price Restriction”).
The Underwriter shall promptly advise the City when the Underwriter has sold a
Substantial Amount of each such Hold-The-Price Maturity to the Public at a price that is
no higher than the applicable Initial Offering Price of such Hold-The-Price Maturity, if
that occurs prior to the close of the fifth (5th) Business Day after the Sale Date.
The City acknowledges that, in making the representation set forth in this subparagraph
(4), the Underwriter will rely on (A) the agreement of each Participating Underwriter to
comply with the Hold-the-Price Restriction, as set forth in an agreement among
underwriters and the related pricing wires, (B) in the event a selling group has been created
in connection with the sale of the Bonds to the Public, the agreement of each dealer who
is a member of the selling group to comply with the Hold-the-Price Restriction, as set
forth in a selling group agreement and the related pricing wires, and (C) in the event that
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a Participating Underwriter is a party to a third-party distribution agreement that was
employed in connection with the sale of the Bonds, the agreement of each such
underwriter, dealer or broker-dealer that is a party to such agreement to comply with the
Hold-the-Price Restriction, as set forth in the third-party distribution agreement and the
related pricing wires. The City further acknowledges that each Participating Underwriter
will be solely liable for its failure to comply with its agreement regarding the Hold-the-
Price Restriction and that no Participating Underwriter will be liable for the failure of any
other Participating Underwriter to comply with its corresponding agreement regarding the
Hold-the-Price Restrictions as applicable to the Bonds.
e. Agreements Among Participating Underwriters. The Underwriter
confirms that (i) any agreement among underwriters, any selling group agreement, and
each third-party distribution agreement to which the Underwriter is a party relating to the
initial sale of the Bonds to the Public, together with related pricing wires, contains or will
contain language obligating each Participating Underwriter, each dealer who is a member
of any selling group, and each broker-dealer that is a party to any such third-party
distribution agreement, as applicable, to (A) report the prices at which it sells to the Public
the unsold Bonds of each maturity allocated to it until it is notified by the Underwriter that
either the Substantial Amount Test has been satisfied as to the Bonds of that maturity or
all Bonds of that maturity have been sold to the Public, (B) comply with the Hold-the-
Price Restriction, if applicable, in each case if and for so long as directed by the
Underwriter and as set forth in the relating pricing wires, and (C) acknowledge that, unless
otherwise advised by the Participating Underwriter, the Underwriter will assume that
based on such agreement each order submitted by the underwriter, dealer or broker-dealer
is a sale to the Public; and (ii) any agreement among underwriters relating to the initial
sale of the Bonds to the Public, together with related pricing wires, contains or will contain
language obligating each Participating Underwriter that is a party to a third-party
distribution agreement to be employed in connection with the initial sale of the Bonds to
the Public to require each underwriter or broker-dealer that is a party to such third-party
distribution agreement to (A) report the prices at which it sells to the Public the unsold
Bonds of each maturity allotted to it until it is notified by the Underwriter or the applicable
Participating Underwriter that either the Substantial Amount Test has been satisfied as to
the Bonds of that maturity or all Bonds of that maturity have been sold to the Public, and
(B) comply with the Hold-the-Price Restriction, if applicable, in each case if and for so
long as directed by the Underwriter or the applicable Participating Underwriter and as set
forth in the relating pricing wires.
f. Sale to Related Party not a Sale to the Public. The Underwriter
acknowledges that sales of any Bonds to any person that is a Related Party to the
Underwriter do not constitute sales to the Public for purposes of this Section. If a Related
Party to the Underwriter purchases during the initial offering period all of a Hold-The-Price
Maturity, the related Participating Underwriter will notify the Underwriter and will take
steps to confirm in writing that such Related Party will either (i) hold such Bonds for its
own account, without present intention to sell, reoffer, or otherwise dispose of such Bonds
for at least five (5) Business Days from the Sale Date, or (ii) comply with the Hold-The-
Price Restriction.
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5. 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 June 26, 2024 (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 (as more particularly defined below, 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, except for the
inclusion of the information permitted to be excluded from the Preliminary Limited
Offering Memorandum by Section (b)(1) of Rule 15c2-12. 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, upon request, sufficient
quantities (which may be in electronic format) of the Preliminary Limited Offering
Memorandum as the Underwriter reasonably deems necessary to satisfy the obligation of
the Underwriter under Rule 15c2-12 with respect to distribution to each potential customer.
b. Preliminary Limited Offering Memorandum Deemed Final. The
Preliminary Limited Offering Memorandum has been prepared for use by the Underwriter
in connection with the public 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 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 public offering and the sale
of the Bonds. The City consents to the use by the Underwriter prior to the date hereof of
the Preliminary Limited Offering Memorandum in connection with the public 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 reasonably
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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 twenty-fifth (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 promptly 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, the City makes no representations with respect to the following information
(collectively, the “Non-City Disclosures”): (i) 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
information in the Preliminary Limited Offering Memorandum or the Limited Offering
Memorandum in any maps included therein or under the captions and subcaptions “PLAN
OF FINANCE” (except for the information under the subcaption “– The Bonds”),
“LIMITATIONS APPLICABLE TO INITIAL PURCHASERS,” “BOOK-ENTRY ONLY
SYSTEM,” “THE IMPROVEMENT AREA #1 PROJECTS,” “THE DEVELOPMENT,”
“THE DEVELOPER,” “THE PID ADMINISTRATOR,” “APPRAISAL,”
“BONDHOLDERS’ RISKS” (only as it pertains to the Developer, the Improvement Area
#1 Projects, and the Development (as defined in the Limited Offering Memorandum)),
“LEGAL MATTERS – Litigation – The Developer,” “CONTINUING DISCLOSURE –
The Developer” and “– The Developer’s Compliance with Prior Undertakings,”
“INFORMATION RELATING TO THE TRUSTEE,” “APPENDIX E-2,” “APPENDIX
F,” and “APPENDIX G.” If such notification shall be subsequent to the Closing (as defined
herein), 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
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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 reasonably 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 (1) 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.
6. 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 and perform its duties and obligations under:
(1) this Agreement;
(2) the Indenture;
(3) the Development Agreement;
(4) the CFA Agreement; and
(5) the Continuing Disclosure Agreement of Issuer with respect
to the Bonds, dated as of July 1, 2024 (the “Continuing Disclosure
Agreement of Issuer”), executed and delivered by the City, the
Administrator, and Regions Bank, as Dissemination Agent (the
“Dissemination Agent”).
(ii) to issue, sell, and deliver the Bonds to the Underwriter as provided
herein; and
(iii) to carry out and consummate the transactions on its part described in
(1) the Authorizing Documents, (2) this Agreement, (3) the Development
Agreement, (4) the CFA Agreement, (5) the Continuing Disclosure Agreement of
Issuer, (6) the Limited Offering Memorandum and (7) any other documents and
certificates described in any of the foregoing (the documents described by
subclauses (1) through (7) 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
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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 be in compliance, in all material respects, with the
obligations on its part to be performed on or prior to the Closing Date under the City
Documents.
c. Due Authorization for Issuance of the Bonds. The City has duly authorized
the issuance and sale of the Bonds pursuant to the Bond Ordinance, the Indenture, and the
Act. The City has, and at the Closing 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 Bond
Ordinance and the City Documents.
d. No Breach or Default. As of the time of acceptance hereof, and to its
knowledge, the City is not, and as of the Closing Date the City will not be, in breach of or
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 to which the City 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 the
obligations on its part to be performed in each of such agreements or instruments does not
and will not conflict with or constitute a 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 portion of the Trust Estate 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
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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 of and interest on the Bonds, or in any way contests or affects the
validity of the City Documents or the consummation of the transactions on the part of the
City described therein, or contests the exclusion of the interest on the Bonds from federal
income taxation, or (iv) which may result in any material adverse change in the financial
condition of the City; and, as of the time of acceptance hereof, to the City’s knowledge,
there is no basis for any action, suit, 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 Improvement Area #1 Assessments
received by the City, all to the extent provided for in the Indenture. The Indenture creates
a valid lien on and pledge of the Trust Estate to the extent provided for in the Indenture,
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. Improvement Area #1 Assessments. The Improvement Area #1
Assessments constituting the security for the Bonds have been levied by the City in
accordance with the Act on those parcels of land identified in the Improvement Area #1
Assessment Roll. According to the Act, such Improvement Area #1 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
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contingent, payable from or secured by a lien on and pledge of the Trust Estate which
secures 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 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 the Non-City
Disclosures.
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 5 of this Agreement) at all times subsequent thereto
during the period up to and including the twenty-fifth (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 a
material fact required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided,
however, that the City makes no representations with respect to the Non-City Disclosures;
and further provided, however, that if the City notifies the Underwriter of any fact or event
as required by Section 5(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 5 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 twenty-fifth (25th) day
subsequent to the “end of the underwriting period,” the Limited Offering Memorandum as
so supplemented or amended will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading;
provided, however, that if the City notifies the Underwriter of any fact or event as required
by Section 5(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 (5) 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.
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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/or warranty, as applicable in the legal context, by the City
to the Underwriter as to the statements made therein and can be relied upon by the
Underwriter as to the statements made therein.
q. Intentional Actions Regarding Representations and Warranties. The City
covenants that between the date hereof and the Closing it will not intentionally take actions
which will cause the representations and warranties made in this Section to be untrue as of
the Closing.
r. Financial Advisor. The City has engaged Hilltop Securities Inc. as its
financial advisor (the “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.
7. Developer’s Letter of Representations. At the signing of this Agreement, the City
and Underwriter shall receive from the Developer an executed Developer’s Letter of
Representations (the “Developer’s Letter of Representations”) in the form of Appendix A hereto,
and at the Closing, a certificate signed by the Developer set forth in Section 10(e) hereof and in
Appendix E hereto (the “Developer Closing Certificate”).
8. 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
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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 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 or Underwriter’s Counsel (defined herein) for
inspection not less than twenty-four (24) hours prior to the Closing.
9. Underwriter’s Closing Conditions. The Underwriter has entered into this
Agreement in reliance upon the representations and covenants herein and in the Developer’s Letter
of Representations and the performance by the City of its obligations under this Agreement, both
as of the date hereof and as of the Closing Date. Accordingly, the Underwriter’s obligations under
this Agreement to purchase, accept delivery of, and pay for the Bonds 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 ordinances,
resolutions, or actions of the City as, in the opinion of Bond Counsel and
Underwriter’s Counsel, 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 Locke Lord LLP (“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’s Letter of Representations,
the Development Agreement, the CFA Agreement, the Consent and Agreement of
Landowner executed by the Developer as of July 9, 2024 (the “Landowner
Consent”), and the Continuing Disclosure Agreement of Developer with respect to
the Bonds, dated as of July 1, 2024, executed and delivered by the Developer, the
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Administrator, and the Dissemination Agent (the “Continuing Disclosure
Agreement of Developer” and, together with the Developer’s Letter of
Representations, the Development Agreement, the CFA Agreement, and the
Landowner Consent, 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 #1 Projects and the Development (as defined in the
Limited Offering Memorandum), 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 the Developer to pay the Improvement Area #1 Assessments when
due or complete the Improvement Area #1 Projects.
d. Closing Documents. At or prior to the Closing, the Underwriter shall have
received each of the documents required under Section 10 below.
e. Termination Events. The Underwriter shall have the right to cancel its
obligation to purchase 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
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 chamber 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 chamber of the Congress of the United States
by a Committee of such chamber to which such legislation has been
referred for consideration, or a decision by a court of the United States or
the Tax Court of the United States shall be rendered or a ruling, regulation,
or announcement (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
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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, and which in either case, makes it, in the reasonable judgment of
the Underwriter, impracticable or inadvisable to proceed with the offer,
sale, or delivery of the Bonds on the terms and in the manner described in
the Limited Offering Memorandum; 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 statement 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 of 1933, as amended and as then in
effect, 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; provided, however that such suspension in trading or
any disruption in securities settlement, payment or clearance services is not
in force on the date hereof; or
(4) there shall have occurred (whether or not foreseeable) (i)
any outbreak of hostilities (including, without limitation, an act of
terrorism) including, but not limited to, an escalation of hostilities that
existed prior to the date hereof, (ii) national or international calamity or
crisis, including, but not limited to, an escalation in the scope or magnitude
of any natural disaster, or (iii) material financial crisis or adverse change
in the financial or economic conditions affecting the United States
government or the securities markets in 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
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City or the Developer, except as disclosed or described in 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 ten percent
(10%) of the 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 Improvement Area #1 Assessments and the liens
created thereby, such Improvement Area #1 Assessments being the
primary asset of the Trust Estate pledged to pay principal of and 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
a 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
the Limited Offering Memorandum; or
(v) a general banking moratorium shall have been declared by federal or
State authorities having jurisdiction and shall be in force; or
(vi) a material disruption in securities settlement, payment or clearance
services shall have occurred; or
(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 Securities and
Exchange Commission or any other governmental agency having jurisdiction of the
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4125-9942-8176.5
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 described in this
Agreement or in 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 Closing Date, including the Securities
Act, the Securities Exchange Act of 1934 and the Trust Indenture Act; or
(viii) the purchase of and payment for the Bonds by the Underwriter, or the
resale of the Bonds by the Underwriter, on the terms and conditions herein provided
shall be prohibited by any applicable law, governmental authority, board, agency, or
commission, which prohibition shall occur subsequent to the date hereof and shall
not be due to the malfeasance, misfeasance, or nonfeasance of the Underwriter.
With respect to the conditions described in subparagraphs (ii), (vii), 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.
10. Closing Documents. At or prior to the Closing, the Underwriter (or Underwriter’s
Counsel on behalf of 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 D to the Limited Offering
Memorandum, dated the Closing Date and addressed to the Underwriter, which may be
included in the supplemental opinion required by Section 10(b) hereof, 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, in form and substance
acceptable to Underwriter’s Counsel, 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
Preliminary Limited Offering Memorandum and in the Limited Offering
Memorandum, but that such firm has reviewed the statements and information
appearing in the Preliminary Limited Offering Memorandum and in the Limited
Offering Memorandum under the captions and subcaptions “PLAN OF FINANCE
– The Bonds,” “DESCRIPTION OF THE BONDS,” “SECURITY FOR THE
BONDS,” “ASSESSMENT PROCEDURES” (except for the subcaptions
“Improvement Area #1 Assessment Methodology” and “Improvement Area #1
Assessment Amounts”), “THE DISTRICT,” “TAX MATTERS,” “LEGAL
MATTERS – Legal Proceedings” (except for the final paragraph thereof) and “–
Legal Opinions” (except for the final paragraph thereof), “CONTINUING
DISCLOSURE – The City,” “REGISTRATION AND QUALIFICATION OF
BONDS FOR SALE,” “LEGAL INVESTMENT AND ELIGIBILITY TO SECURE
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PUBLIC FUNDS IN TEXAS,” “APPENDIX B,” and “APPENDIX D,” and Bond
Counsel is of the opinion that the information relating to the Bonds, the Bond
Ordinance, the Assessment Ordinance, and the Indenture and legal issues contained
under such captions 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, the Assessment Ordinance, and the 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 or at the time of the adoption thereof had full power and
authority to adopt the Authorizing Documents (including approving the Service and
Assessment Plan) and perform its obligations thereunder, and the Authorizing
Documents have been duly adopted, are in full force and effect, and have not been
modified, amended, or rescinded; and
(iv) The Indenture, the Continuing Disclosure Agreement of Issuer, 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 governmental entities.
c. City Legal Opinion. An opinion of Wolfe, Tidwell & McCoy, LLP (the
“City Attorney”), dated the Closing Date and addressed to the Underwriter, the City, Bond
Counsel, 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. The opinion(s) of Developer’s Special
Counsel, substantially in the form of Appendix D hereto, dated the Closing Date, addressed
to the City, Bond Counsel, the City Attorney, the Underwriter, and the Trustee; or a form
otherwise agreed upon by the City and the Underwriter.
e. Developer Closing Certificate. The Developer Closing Certificate dated as
of the Closing Date, signed by authorized officers of the Developer in substantially the
form of Appendix E hereto.
f. City Closing Certificate. A certificate of the City, dated the Closing Date,
signed by an appropriate City Representative, to the effect that:
(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;
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4125-9942-8176.5
(ii) the 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
person, 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 Improvement Area #1 Assessments pledged to pay the principal of
and interest on the Bonds, or the pledge thereof; and
(iv) to the best of such person’s knowledge, the City has 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 Counsel Opinion. An opinion of counsel to the Trustee, dated the
Closing Date and addressed to the Underwriter, the City, and Bond Counsel, in form and
substance acceptable to Underwriter’s Counsel, the City, and Bond Counsel, to the
following effect:
(i) The Trustee was formed as an Alabama state banking corporation
and has not been dissolved, canceled, or terminated, and is authorized to carry out
corporate trust powers in accordance with the qualifications set forth for the Trustee
in the Indenture;
(ii) No consent, approval, authorization or order of, or filing, registration
or declaration with, any court or governmental agency or body is required on behalf
of the Trustee for the execution and delivery by the Trustee of the Indenture or the
performance by the Trustee of its obligations thereunder; and
(iii) The Indenture has been duly authorized, executed, and delivered by
the Trustee and is valid and enforceable against the Trustee in accordance with its
terms, except (a) as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or other similar laws affecting
the enforcement of creditors’ rights generally, and (b) as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered a proceeding at law or in equity) and the discretion of the court before
which any proceeding therefor may be brought, (iii) as the exculpation provisions
and rights to indemnification thereunder may be limited by U.S., federal, and state
securities laws and public policy considerations, and (iv) as the waiver of rights and
defenses contained in the Trustee Documents may be limited by applicable law.
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h. Trustee’s Certificate. A customary authorization and incumbency
certificate dated prior to the Closing Date, signed by authorized officers of the Trustee in
form and substance acceptable to the Underwriter, Underwriter’s Counsel, and Bond
Counsel.
i. Underwriter Counsel’s Opinion. An opinion, dated the Closing Date and
addressed to the Underwriter, of Orrick, Herrington & Sutcliffe LLP (“Underwriter’s
Counsel”), to the effect that:
(i) The Bonds are not subject to the registration requirements of the
Securities Act of 1933, as amended, and the Indenture is exempt from qualification
pursuant to the Trust Indenture Act of 1939, as amended;
(ii) The Continuing Disclosure Agreement of Issuer, together with
Section 10(o) hereof and Section __ of the Bond Ordinance, satisfies the
requirements contained in Securities and Exchange Commission Rule 15c2-12(b)(5)
of the United States Securities and Exchange Commission for an undertaking by the
City for the benefit of the holders of the Bonds to provide the information at the
times and in the manner required by said Rule; provided that, for purposes of this
opinion, such counsel is not expressing any view regarding the content of the
Preliminary Limited Offering Memorandum or the Limited Offering Memorandum
that is not expressly stated in the next paragraph below; and
(iii) Such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness, or fairness of any of the statements
contained in the Preliminary Limited Offering Memorandum or in the Limited
Offering Memorandum and makes no representation that it has independently
verified the accuracy, completeness, or fairness of any such statements. In its
capacity as counsel to the Underwriter, to assist the Underwriter in part of its
responsibility with respect to the Preliminary Limited Offering Memorandum and
the Limited Offering Memorandum, such counsel has participated in conferences
with representatives of the Underwriter, representatives of the City, and its counsel,
McCall, Parkhurst & Horton L.L.P., as bond counsel, Hilltop Securities Inc., as
Financial Advisor, the Administrator, the Developer, Developer’s Counsel, and its
engineers and consultants and others, during which the contents of the Preliminary
Limited Offering Memorandum or the Limited Offering Memorandum and related
matters were discussed. Based on such counsel’s participation in the above-
mentioned conferences (which, with respect to the Preliminary Limited Offering
Memorandum, did not extend beyond the date of this Agreement), and in reliance
thereon, on oral and written statements and representations of the City, the
Developer and others, and on the records, documents, certificates, opinions, and
matters herein mentioned, such counsel advises the Underwriter as a matter of fact
and not opinion that, during the course of such counsel’s representation of the
Underwriter on this matter, (a) no facts had come to the attention of the attorneys in
such counsel’s firm rendering legal services to the Underwriter in connection with
the Preliminary Limited Offering Memorandum which caused such counsel to
believe, as of the date of the Preliminary Limited Offering Memorandum and as of
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the date of this Agreement, based on the documents, drafts, and facts in existence
and reviewed as of those dates, that the Preliminary Limited Offering Memorandum
contained any untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading (except any information marked as
preliminary or subject to change, any information permitted to be omitted by
Securities and Exchange Commission Rule 15c2-12 or otherwise left blank and any
other differences with the information in the Limited Offering Memorandum), and
(b) no facts had come to the attention of the attorneys in such counsel’s firm
rendering legal service to the Underwriter in connection with the Limited Offering
Memorandum which caused such counsel to believe that the Limited Offering
Memorandum as of its date and as of the date hereof contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided that such counsel expressly excludes from the scope
of this paragraph and expresses no view with respect to both the Preliminary Limited
Offering Memorandum and the Limited Offering Memorandum about any CUSIP
numbers, financial, accounting, statistical, economic, engineering or demographic
data or forecasts, numbers, charts, tables, graphs, estimates, projections,
assumptions or expressions of opinion, any information about verification,
feasibility, valuation, appraisals, absorption, real estate or environmental matters,
relationship among the parties, Appendices, or any information about book-entry,
DTC, Cede & Co., Tax Matters, or Underwriting included or referred to therein or
omitted therefrom. No responsibility is undertaken or conclusion expressed with
respect to any other disclosure document, materials, or activity, or as to any
information from another document or source referred to by or incorporated by
reference in the Preliminary Limited Offering Memorandum or the Limited Offering
Memorandum.
j. Limited Offering Memorandum. The Limited Offering Memorandum and
each supplement or amendment, if any, thereto.
k. Delivery of City Documents and Developer Documents. The City
Documents and the Developer Documents shall have been executed and delivered in form
and content satisfactory to the Underwriter.
l. Form 8038-G. Evidence that the federal tax information form 8038-G has
been prepared by Bond Counsel for filing.
m. Federal Tax Certificate. A certificate of the City in form and substance
satisfactory to Bond Counsel and Underwriter’s Counsel setting forth the facts, estimates,
and circumstances in existence on the Closing Date, 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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n. 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.
o. Continuing Disclosure Agreements. The Continuing Disclosure Agreement
of Issuer and the Continuing Disclosure Agreement of Developer shall have been executed
by the parties thereto in substantially the forms attached to the Preliminary Limited
Offering Memorandum as Appendix E-1 and Appendix E-2.
p. Letter of Representation of the Appraiser. (i) Letter of Representation of the
Appraiser, substantially in the form of Appendix F hereto, addressed to the City, Bond
Counsel, the Underwriter, and the Trustee, or in form otherwise agreed upon by the
Underwriter, and (ii) a copy of the real estate appraisal of the property within Improvement
Area #1 of the District dated March 21, 2024.
q. Letter of Representation of Administrator. Letter of Representation of
Administrator, substantially in the form of Appendix G hereto, addressed to the City, Bond
Counsel, the Underwriter, and the Trustee, or in form otherwise agreed upon by the
Underwriter.
r. Evidence of Filing of the Service and Assessment Plan. Evidence that the
Service and Assessment Plan has been filed of record in the real property records of Collin
County, Texas.
s. Lender Consent Certificate. A Lender Consent Certificate of each holder of
a lien, if any, on land in Improvement Area #1 of the District on the Closing Date,
consenting to and acknowledging the creation of the District, the adoption of the
Assessment Ordinance, the levy of the Improvement Area #1 Assessments, and the
subordination of their respective liens to the lien created by the Improvement Area #1
Assessments in a form acceptable to the Underwriter. In the event that there are no such
lienholders, the Developer shall provide such certifications as may be reasonably requested
by the Underwriter to confirm that no such liens exist as of the Closing Date.
t. General Certificate of the Developer. The Developer shall have delivered to
the Underwriter, Bond Counsel, and the City an executed General Certificate containing
(i) fully executed copies of the Developer’s organizational documents, (ii) a Certificate of
Status from the Texas Secretary of State dated within 10 days of the Closing Date, (iii)
verification of franchise tax account status from the Texas Comptroller of Public Accounts
dated within 10 days of the Closing Date, and (iv) a copy of its Standing Letter to the
Attorney General of Texas in compliance with the All Bond Counsel letter dated November
1, 2023, as last supplemented on December 29, 2023, or evidence of an exception to such
requirement.
u. Rule 15c2-12 Certification. A resolution, an ordinance (including the Bond
Ordinance), or a 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 Section (b)(1) of Rule 15c2-12 in connection with the offering of the
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Bonds, which action may be based on the approval of the release of the Preliminary Limited
Offering Memorandum by an authorized City official (if such official has been duly
authorized to take such action by the City Council), or certification, if made in the form of
a certificate, may be included in the City Certificate required by Section 10(f) hereof.
v. Dissemination Agent. Evidence acceptable to the Underwriter in its sole
discretion that the City and the Developer have engaged a dissemination agent acceptable
to the Underwriter for the Bonds, with the execution of the Continuing Disclosure
Agreement of Issuer and the Continuing Disclosure Agreement of Developer by other
parties thereto being conclusive evidence of such acceptance by the Underwriter.
w. Reserved.
x. Additional Documents. Such additional legal opinions, certificates,
instruments, and other documents as the Underwriter or Underwriter’s Counsel may
reasonably deem necessary.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to
purchase, to accept delivery of, and to pay for the Bonds contained in this Agreement (unless
waived by the Underwriter in its sole discretion), 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 set forth in Sections
13 and 15 hereof.
11. City’s Closing Conditions. The obligation of the City hereunder to deliver the
Bonds shall be subject to receipt on or before the Closing Date of the purchase price set forth in
Section 1 hereof, the Attorney General Opinion, the opinion of Bond Counsel described in Section
10(a) hereof, and all documents required to be delivered by the Developer.
12. Term of Agreement. Except for surviving representations, warranties, and
indemnities of the parties to this Agreement, the term of this Agreement terminates upon the “end
of the underwriting period” (as defined in Rule 15c2-12) or, if earlier, exercise of a termination
right (which may not be based on an existing or incipient breach of a verification).
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, the Trustee’s counsel, Bond 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 for the benefit of the City, including but not limited to the fees and expenses of
the Appraiser and the Administrator; and (vi) the expenses incurred by or on behalf of City
24
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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 public 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 expense allocation of the underwriting discount the 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, 120 W. 7th
Street, 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.
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15. Parties in Interest; Survival of City Representations. 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 covenants contained in this Agreement shall remain
operative and in full force and effect and survive delivery of and payment for the Bonds and any
termination, regardless of any investigations made by or on behalf of the Underwriter.
16. Survival of Representations and Warranties of Third Parties. All representations
and warranties of the parties (other than the City and the Underwriter) 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 or 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. 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.
18. State Law Governs. The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the State.
19. 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
party hereto.
20. 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.
21. Statutory Verifications. The Underwriter makes the following representation and
covenants pursuant to Chapters 2252, 2271, 2274, and 2276, Texas Government Code, as
heretofore amended (the “Government Code”), in entering into this Agreement. As used in such
verifications, “affiliate” means 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. Liability for breach of any such verification during the term of this Agreement shall
survive until barred by the applicable statute of limitations, and shall not be liquidated or otherwise
limited by any provision of this Agreement, notwithstanding anything in this Agreement to the
contrary.
a. Not a Sanctioned Company. The Underwriter 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, Government Code. The foregoing
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4125-9942-8176.5
representation excludes the Underwriter and each of its parent company, wholly- or
majority-owned subsidiaries, and other affiliates, if any, that the United States government
has affirmatively declared to be excluded from its federal sanctions regime relating to
Sudan or Iran or any federal sanctions regime relating to a foreign terrorist organization.
b. No Boycott of Israel. The Underwriter 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. As used in
the foregoing verification, “boycott Israel” has the meaning provided in Section 2271.001,
Government Code.
c. No Discrimination Against Firearm Entities. The Underwriter 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. As used in the foregoing
verification, “discriminate against a firearm entity or firearm trade association” has the
meaning provided in Section 2274.001(3), Government Code.
d. No Boycott of Energy Companies. 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. As used in the foregoing verification, “boycott energy companies” has the
meaning provided in Section 2276.001(1), Government Code
22. Form 1295. Submitted herewith (or prior to the date hereof) is a completed Form
1295 in connection with the Underwriter’s participation in the execution of this Agreement
generated by the Texas Ethics Commission’s (the “TEC”) electronic filing application in
accordance with the provisions of Section 2252.908 of the Texas Government Code and the rules
promulgated by the TEC (the “Form 1295”). The City hereby confirms receipt of the Form 1295
from the Underwriter, and the City agrees to acknowledge such form with the TEC through its
electronic filing application not later than the thirtieth (30th) day after the receipt of such form.
The Underwriter and the City understand and agree that, with the exception of information
identifying the City and the contract identification number, neither the City nor its consultants are
responsible for the information contained in the Form 1295; that the information contained in the
Form 1295 has been provided solely by the Underwriter; and, neither the City nor its consultants
have verified such information.
23. Attorney General Standing Letter. The Underwriter represents that it has, or will
have prior to the date of Closing, on file with the Texas Attorney General a standing letter
addressing the representation and verifications contained in Section 21 of this Agreement in a form
accepted by the Texas Attorney General. In addition, if the Underwriter or the parent company, a
wholly- or majority-owned subsidiary or another affiliate of such Underwriter receives or has
received a letter from the Texas Comptroller of Public Accounts pursuant to Chapter 809, Texas
Government Code seeking written verification that it does not boycott energy companies (a
“Comptroller Request Letter”), the Underwriter shall promptly notify the City and Bond Counsel
(if it has not already done so) and provide to the City or Bond Counsel, two business days prior to
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4125-9942-8176.5
Closing and additionally upon request by the City or Bond Counsel, written verification to the
effect that its standing letter described in the preceding sentence remains in effect and may be
relied upon by the City and the Texas Attorney General (the “Bringdown Verification”). The
Bringdown Verification shall also confirm that such Underwriter (or the parent company, a
wholly- or majority-owned subsidiary or other affiliate of the Underwriter that received the
Comptroller Request Letter) intends to timely respond or has timely responded to the Comptroller
Request Letter. The Bringdown Verification may be in the form of an e-mail.
24. 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. The City and the
Underwriter agree that electronic signatures to this Agreement may be regarded as original
signatures.
Signature pages follow.
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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
Schedule I-1
4125-9942-8176.5
SCHEDULE I
$12,806,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
Interest Accrues From: Closing Date
$1,282,000 4.875% Term Bonds, Due September 15, 2031, Priced to Yield 4.875% (a)(c)(d)
$4,669,000 5.500% Term Bonds, Due September 15, 2044, Priced to Yield 5.500% (a)(b)(c)(d)
$6,855,000 5.750% Term Bonds, Due September 15, 2054, Priced to Yield 5.750% (a)(b)(c)(d)
(a) The initial reoffering prices or yields of the Bonds have been determined in accordance with the 10% test.
(b) The Bonds maturing on and after September 15, 2044, may be redeemed before their scheduled maturity date, in whole
or in part, on any date on or after September 15, 2032, such redemption date or dates to be fixed by the City, at the
redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued and unpaid interest to the date
fixed of redemption.
(c) The Bonds are also subject to extraordinary optional redemption as described in the Limited Offering Memorandum
under “DESCRIPTION OF THE BONDS – Redemption Provisions.”
(d) The Bonds are also subject to mandatory sinking fund redemption on the dates and in the respective Sinking Fund
Installments as set forth in the following schedules.
Term Bonds maturing September 15, 2031
Redemption Date Sinking Fund Installment Amount
September 15, 2026 $189,000
September 15, 2027 198,000
September 15, 2028 208,000
September 15, 2029 218,000
September 15, 2030 229,000
September 15, 2031 240,000
Term Bonds maturing September 15, 2044
Redemption Date Sinking Fund Installment Amount
September 15, 2032 $252,000
September 15, 2033 267,000
September 15, 2034 282,000
September 15, 2035 298,000
September 15, 2036 314,000
September 15, 2037 332,000
September 15, 2038 351,000
September 15, 2039 371,000
September 15, 2040 393,000
September 15, 2041 415,000
September 15, 2042 439,000
September 15, 2043 464,000
September 15, 2044 491,000
Schedule I-2
4125-9942-8176.5
Term Bonds maturing September 15, 2054
Redemption Date Sinking Fund Installment Amount
September 15, 2045 $519,000
September 15, 2046 550,000
September 15, 2047 583,000
September 15, 2048 619,000
September 15, 2049 656,000
September 15, 2050 696,000
September 15, 2051 738,000
September 15, 2052 783,000
September 15, 2053 830,000
September 15, 2054 881,000
† Stated maturity.
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APPENDIX A
FORM OF DEVELOPER’S LETTER OF REPRESENTATIONS
$12,806,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
DEVELOPER’S LETTER OF REPRESENTATIONS
July 9, 2024
City of Anna, Texas
120 W. 7th Street
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 purchase the $12,806,000 “City
of Anna, Texas, Special Assessment Revenue Bonds, Series 2024 (Meadow Vista Public
Improvement District Improvement Area #1 Project)” (the “Bonds”). Pursuant to the Bond
Purchase Agreement, the Underwriter has agreed to purchase from the City, and the City has
agreed to sell to the Underwriter, the Bonds. In order to induce the City to enter into the Bond
Purchase Agreement and as consideration for the execution, delivery, and sale of the Bonds by the
City and the purchase of them by the Underwriter, Bloomfield Homes, L.P., a Texas limited
partnership (the “Developer”), makes the representations, warranties, and covenants contained in
this Developer’s Letter of Representations. Unless the context clearly indicates otherwise, each
capitalized term used in this Developer’s Letter of Representations will have the meaning set forth
in the Bond Purchase Agreement.
25. Purchase and Sale of Bonds. Inasmuch as the purchase and sale of the Bonds
represents a negotiated transaction, the Developer understands, and hereby confirms, that the
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.
26. Updating of the Limited Offering Memorandum. If, after the date of this
Developer’s Letter of Representations, up to and including the date the Underwriter is no longer
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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 the 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’s 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 the information
appearing in the Preliminary Limited Offering Memorandum or the Limited Offering
Memorandum except for the information set forth in the maps included therein and under the
captions and subcaptions “PLAN OF FINANCE” (except for the information under the subcaption
“– The Bonds”), “THE IMPROVEMENT AREA #1 PROJECTS,” “THE DEVELOPMENT,”
“THE DEVELOPER” and, to the Developer’s knowledge after due inquiry, under the captions
“BONDHOLDERS’ RISKS” (only as it pertains to the Developer, the Improvement Area #1
Projects, and the Development (as defined in the Limited Offering Memorandum)), “LEGAL
MATTERS – Litigation – The Developer,” “CONTINUING DISCLOSURE – The Developer”
and “– The Developer’s Compliance with Prior Undertakings,” “SOURCES OF INFORMATION
– Source of Certain Information,” “APPENDIX E-2,” “APPENDIX F,” and “APPENDIX G”
(collectively, the “Developer Disclosures”) in accordance with subsection 4(f) herein.
27. 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 the Developer, enforceable
against the Developer in accordance with its terms:
a. this Developer’s Letter of Representations;
b. the Meadow Vista Development Agreement, effective as of June 27, 2023,
between the City and the Developer;
c. the Meadow Vista Public Improvement District Improvement Area #1
Construction, Funding, and Acquisition Agreement, effective July 9, 2024, between
the City and the Developer;
d. the Continuing Disclosure Agreement of Developer with respect to the
Bonds, dated as of July 1, 2024, executed and delivered by the Developer,
P3Works, LLC, as Administrator, and Regions Bank, as Dissemination Agent; and
e. the Consent and Agreement of Landowner executed by the Developer as of
July 9, 2024.
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The Developer has complied in all material respects with all of the Developer’s agreements and
covenants and satisfied all conditions required to be complied with or satisfied by the Developer
under the Developer Documents on or prior to the date hereof.
The representations and warranties of the Developer contained in the Developer
Documents are true and correct in all material respects on and as of the date hereof.
28. 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 partnership under the laws of the State of Texas and is
authorized to do business in 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 since delivery to the City and the Underwriter and
are in full force and effect as of the date hereof.
c. No Breach. The execution and delivery of the Developer
Documents by the Developer does not violate any judgment, order, writ, injunction
or decree binding on the Developer or any indenture, agreement, or other
instrument to which the Developer is a party.
d. No Litigation. Other than as described in the Preliminary Limited
Offering Memorandum and the Limited Offering Memorandum, there are no
proceedings pending or threatened in writing before any court or administrative
agency against the Developer that are either not covered by insurance or which
singularly or collectively would have a material, adverse effect on the ability of the
Developer to perform its obligations under the Developer Documents in all material
respects or that would reasonably be expected to prevent or prohibit the
development of the District in accordance with the description thereof in the
Preliminary Limited Offering Memorandum and the 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 and Limited Offering
Memorandum. The Developer represents and warrants that the information set
forth in the Developer’s Disclosures in the Preliminary Limited Offering
Memorandum and the Limited Offering Memorandum 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
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certificate dated the Closing Date affirming, as of such date, the representations
contained in this subsection (f) with respect to the Preliminary Limited Offering
Memorandum and the Limited Offering Memorandum.
g. Events of Default. No “Event of Default” or “event of default” by
the Developer under any of the Developer Documents, any documents to which the
Developer is a party described in the Limited Offering Memorandum, or under any
material documents relating to the financing and construction of the Improvement
Area #1 Projects to which the Developer is a party, or event that, with the passage
of time or the giving of notice or both, would constitute such “Event of Default” or
“event of default” by the Developer has occurred and is continuing.
29. Indemnification.
a. The Developer will indemnify and hold harmless the City and the Underwriter and
each of their officers, directors, employees and agents against any losses, claims, damages or
liabilities to which any of them may become subject, under the Securities Act of 1933 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 Developer’s Disclosures in the Preliminary Limited Offering
Memorandum and the Limited Offering Memorandum, 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, untrue
statement or alleged untrue statement or omission to state therein a material fact necessary to make
the statements under the aforementioned captions (as qualified above) not misleading under the
circumstances under which they were made and will reimburse any indemnified party for any
reasonable legal or other expenses reasonably incurred by them in connection with investigating
or defending any such action or claim as such expenses are incurred.
b. Promptly after receipt by an indemnified party under subsection (a) above of notice
of the commencement of any action, such indemnified 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 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
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4125-9942-8176.5
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.
30. Survival of Representations, Warranties and Covenants. All representations,
warranties, and agreements in this Developer’s 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.
31. Binding on Successors and Assigns. This Developer’s 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’s Letter of Representations.
Signature page follows.
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4125-9942-8176.5
Dated: July 9, 2024
Bloomfield Homes, L.P., a Texas limited partnership
By: Bloomfield Properties, Inc., a Texas limited
corporation,
its General Partner
By: ___________________________
Donald J. Dykstra, President
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APPENDIX B
$12,806,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
ISSUE PRICE CERTIFICATE
The undersigned, as the duly authorized representative of FMSbonds, Inc. (“Purchaser”),
with respect to the “City of Anna, Texas, Special Assessment Revenue Bonds, Series 2024
(Meadow Vista Public Improvement District Improvement Area #1 Project),” issued by the City
of Anna, Texas (“Issuer”), in the principal amount of $12,806,000 (“Bonds”) hereby certifies,
based on its records and information, as follows:
(a) 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.
(b) On or before the first day on which the Bond Purchase Agreement is entered into
(the “Sale Date”), the Purchaser offered to the Public each Maturity of the Hold-the-Price
Maturities at their respective initial offering prices (the “Initial Offering Prices”), as listed in the
final Limited Offering Memorandum relating to the Bonds.
(c) As set forth in the Bond Purchase Agreement, the Purchaser agreed in writing to
neither offer nor sell any of the Hold-the-Price Maturities to any person at any higher price than
the respective Initial Offering Price for such Maturity until a date that is the earlier of the close of
the fifth Business Day after the Sale Date or the date on which the Purchaser sells a Substantial
Amount of a Maturity of the Bonds to the Public at no higher price than the Initial Offering Price
for such Maturity.
A copy of the pricing wire or equivalent communication for the Bonds is attached to this
Certificate as Schedule A.
For purposes of this Issue Price Certificate, the term “Underwriter” means (1) (i) a person
that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an
underwriting syndicate) to participate in the initial sale of the Bonds to the Public, or (ii) any person
that agrees pursuant to a written contract directly or indirectly with a person described in clause
(1)(i) of this paragraph (including a member of a selling group or a party to a third-party
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.
[Signature page follows.]
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The representations set forth in this certificate are limited to factual matters only. Nothing
in this certificate represents the Representative’s interpretation of any laws, including specifically
Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder. 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 Tax Certificate with
respect to the Bonds and with respect to compliance with the federal income tax rules affecting the
Bonds, and by McCall, Parkhurst & Horton L.L.P., Bond Counsel, 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.
EXECUTED and DELIVERED as of this , 2024.
FMSbonds, Inc.
By:_________________________________
Name: Theodore A. Swinarski
Title: Senior Vice President – Trading
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SCHEDULE A
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
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APPENDIX C
[LETTERHEAD OF WOLFE, TIDWELL & MCCOY LLP]
July 31, 2024
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
Regions Bank
3773 Richmond Ave., Suite 1100
Houston, Texas 77046
City of Anna, Texas
120 W. 7th Street
Anna, Texas 75409
McCall, Parkhurst & Horton L.L.P.
717 North Harwood, Suite 900
Dallas, Texas 75201
$12,806,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
Ladies and Gentlemen:
The undersigned serves as the City Attorney for the City of Anna, Texas (the “City”), and
has, in that capacity, provided legal review in connection with the issuance and sale of $12,806,000
“City of Anna, Texas, Special Assessment Revenue Bonds, Series 2024 (Meadow Vista Public
Improvement District Improvement Area #1 Project)” (the “Bonds”), by the City, a political
subdivision of the State of Texas.
The Bonds are authorized pursuant to an ordinance enacted by the City Council of the City
(the “City Council”) on July 9, 2024 (the “Bond Ordinance”) and shall be issued pursuant to the
provisions of the Public Improvement District Assessment Act, Subchapter A of Chapter 372,
Texas Local Government Code, as amended (the “Act”), and the Indenture of Trust, dated as of
July 1, 2024 (the “Indenture”), by and between the City and Regions Bank, 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:
(a) The Resolution No. 2023-09-1558 (the “Creation Resolution”) enacted by the City
Council on September 26, 2023;
(b) The Ordinance No. 2024-__ accepted and approved by City Council on July 9, 2024
(the “Assessment Ordinance”), and the service and assessment plan (the “Service and Assessment
Plan”) attached as an exhibit thereto, as such Service and Assessment Plan was updated by the
Bond Ordinance;
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(c) The Bond Ordinance;
(d) The Indenture;
(e) the Meadow Vista Public Improvement District Improvement Area #1 Construction
Acquisition, and Financing Agreement, effective as of July 9, 2024 (the “CFA Agreement”),
executed and delivered by the City and Bloomfield Homes, L.P., a Texas limited partnership (the
“Developer”);
(f) the Meadow Vista Development Agreement, effective as of June 27, 2023, between
the City and the Developer (the “Development Agreement”); and
(g) the Continuing Disclosure Agreement of Issuer with respect to the Bonds, dated as
of July 1, 2024 (the “Continuing Disclosure Agreement of Issuer”), executed and delivered by the
City, P3Works, LLC, as PID Administrator, and Regions Bank, as Dissemination Agent.
The Creation Resolution, the Assessment Ordinance, and Bond Ordinance shall hereinafter
be referred to as the “Authorizing Documents” and the remaining documents shall hereinafter be
collectively referred to as the “City Documents.”
In all such examinations, we have assumed that all signatures on documents and
instruments executed by the City are genuine and that all documents submitted to me as copies
conform to the originals. In addition, for purposes of this opinion, we have assumed the due
authorization, execution, and delivery of the City Documents by all parties other than the City.
Based upon and subject to the foregoing and the additional qualifications and assumptions
set forth herein, we are of the opinion that:
1. The City is a home rule municipal corporation of the State of Texas 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 Meadow Vista Public
Improvement District (the “District”); (c) affecting, contesting or seeking to prohibit, restrain or
enjoin the delivery of any of the Bonds, or the payment, collection or application of any amounts
pledged or to be pledged to pay the principal of and interest on the Bonds, including the
Assessments in the District pursuant to the provisions of the Assessment Ordinance and the Service
and Assessment Plan referenced therein; (d) contesting or affecting the validity or enforceability
or the City’s performance of the City Documents; (e) contesting the exclusion of the interest on
the Bonds from federal income taxation; or (f) which may result in any material adverse change
relating to the financial condition of the City.
3. The Authorizing Documents were duly enacted by the City and remain in full force
and effect on the date hereof.
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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.
8. 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,” and “LEGAL MATTERS – Litigation – The City” are fair and accurate summaries
of the law and the documents and facts summarized therein.
9. The adoption of the Authorizing Documents, the execution and delivery of the City
Documents and the compliance with the provisions of the Authorizing Documents and the City
Documents under the circumstances contemplated thereby, to the best of 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.
This opinion may not be relied upon by any other person except those specifically
addressed in this letter.
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APPENDIX D
LETTERHEAD OF LOCKE LORD LLP
July 31, 2024
City of Anna
120 W. 7th Street
Anna, Texas 75409
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
McCall, Parkhurst & Horton L.L.P.
717 North Harwood, Suite 900
Dallas, Texas 75201
Regions Bank, an Alabama state banking
corporation, as Trustee
3773 Richmond Ave., Suite 1100
Houston, Texas 77046
Wolfe, Tidwell & McCoy LLP
2591 Dallas Parkway, #205
Frisco, Texas 75034
$12,806,000
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
Ladies and Gentlemen:
I. Introduction
We have acted as special counsel to Bloomfield Homes, L.P., a Texas limited partnership
(the “Developer”), in connection with the issuance and sale by the City of Anna, Texas (the
“City”), of $12,806,000 City of Anna, Texas, Special Assessment Revenue Bonds, Series 2024
(Meadow Vista Public Improvement District Improvement Area #1 Project) (the “Bonds”),
pursuant to the Indenture of Trust, dated as of July 1, 2024 (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 “Meadow Vista” (the “Development”) located in the
corporate boundaries of the City.
The Bonds are being sold by FMSbonds, Inc. (the “Underwriter”), pursuant to that certain
Bond Purchase Agreement, dated July 9, 2024 (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 Meadow Vista Development Agreement, effective as of June 27, 2023,
between the City and the Developer;
2. the Meadow Vista Public Improvement District Improvement Area #1
Construction, Funding, and Acquisition Agreement, effective July 9, 2024,
between the City and the Developer;
3. the Continuing Disclosure Agreement of Developer with respect to the Bonds,
dated as of July 1, 2024, executed and delivered by the Developer, P3Works,
LLC, as PID Administrator, and Regions Bank, as dissemination agent;
4. the Developer’s Letter of Representations, effective as of July 9, 2024, relating
to the Bonds;
5. the Developer Closing Certificate with respect to the Bonds, dated July 31,
2024;
6. the Consent and Agreement of Landowner, executed by the Developer as of
July 9, 2024; and
7. the General Certificate of the Developer with respect to the Bonds, dated as of
July 31, 2024 (the “Developer Certificate”).
(b) The Preliminary Limited Offering Memorandum, dated June 26, 2024, relating to
the issuance of the Bonds (the “Preliminary Limited Offering Memorandum”);
(c) The final Limited Offering Memorandum, dated July 9, 2024, relating to the
issuance of the Bonds (the “Limited Offering Memorandum”); and
(d) 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 (other than the
authorization, execution, and delivery by the Developer) and that each such document constitutes
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a valid, binding, and enforceable obligation of each party (other than the Developer) thereto, (ii)
all of the parties to the documents referred to in this opinion letter are duly organized, validly
existing, in good standing and have the requisite power, authority (corporate, limited liability
company, partnership or other) and legal right to execute, deliver, and perform its obligations under
such documents (except to the extent set forth in our opinions set forth herein regarding valid
existence and power and authority of the Developer to execute, deliver, and perform its obligations
under the Material Documents), (iii) each certificate from governmental officials reviewed by us
is accurate, complete, and authentic, and all official public records are accurate and complete, (iv)
the legal capacity of all natural persons, (v) the genuineness of all signatures (other than those of
the Developer in respect of the Material Documents), (vi) the authenticity and accuracy of all
documents submitted to us as originals, (vii) the conformity to original documents of all documents
submitted to us as photostatic or certified copies, (viii) that no laws or judicial, administrative, or
other action of any governmental entity of any jurisdiction not expressly opined to herein would
adversely affect the opinions set forth herein, and (ix) that the execution and delivery by each party
of, and performance of its agreements in, the Material Documents do not breach or result in a
default under any existing obligation of such party under any agreements, contracts or instruments
to which such party is a party to or otherwise subject to or any order, writ, injunction, or decree of
any court applicable to such party.
In addition, we have assumed that the Material Documents accurately reflect the complete
understanding of the parties with respect to the transactions contemplated thereby and the rights
and obligations of the parties thereunder. We have also assumed that the terms and conditions of
the transaction as reflected in the Material Documents have not been amended, modified, or
supplemented, directly or indirectly, by any other agreement or understanding of the parties or
waiver of any of the material provisions of the Material Documents.
We assume that none of the parties to the Material Documents (other than the Developer)
is a party to any court or regulatory proceeding relating to or otherwise affecting the Material
Documents or is subject to any order, writ, injunction, or decree of any court or federal, state, or
local governmental agency or commission that would prohibit the execution and delivery of the
Material Documents, or the consummation of the transactions therein contemplated in the manner
therein provided, or impair the validity or enforceability thereof. We assume that each of the
parties to the Material Documents (other than the 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.
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II. Opinions and Assurances
Based solely upon the foregoing, and subject to the assumptions and limitations set forth
herein, we are of the opinion that:
(a) The Developer is a limited partnership formed under the laws of the State of Texas
and qualified to transact business as a limited partnership, and in good standing under the laws of
the State of Texas.
(b) The Developer has the power and authority to execute and deliver the Material
Documents to which it is a party, and to perform its obligations thereunder.
(c) The execution and delivery by the Developer of the Material Documents to which
it is a party, 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.
(d) To our knowledge, no governmental approval which has not been obtained is
required to be obtained 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).
(e) Based solely on the Developer Certificate, the Developer has duly executed and
delivered each of the Material Documents to which it is a party, and each of the Material
Documents constitute the legal, valid, and binding obligations of the Developer, enforceable
against the Developer in accordance with their respective terms, subject to the following
qualifications: (i) the effect of applicable bankruptcy, insolvency, reorganization, moratorium, and
other similar laws affecting the rights of creditors generally, (ii) the effect of the exercise of judicial
discretion in accordance with general principles of equity (whether applied by a court of law or of
equity), and (iii) the effect that enforceability of the indemnification provisions therein may be
limited, in whole or in part. The execution, delivery, and performance by the Developer of its
obligations under the Material Documents do not violate any existing laws of the State of Texas
applicable to the Developer.
(f) To our knowledge, 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: (i) its
organization or existence or qualification to do business in the State of Texas; (ii) its authority to
execute or deliver the Material Documents to which it is a party; (iii) the titles of the parties
executing the Material Documents; (iv) the execution, delivery, validity, or enforceability of the
Material Documents on behalf of the Developer; (v) the operations or financial condition of the
Developer that would materially adversely affect those operations or the financial condition of the
Developer; or (vi) the acquisition and construction of the property and improvements identified in
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the Limited Offering Memorandum the cost of which is to be funded or reimbursed, in whole or
in part, by proceeds of the Bonds.
(g) Based solely on the Developer Certificate, 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
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.
(h) The information set forth in the Preliminary Limited Offering Memorandum and
the Limited Offering Memorandum under the captions “PLAN OF FINANCE – Development
Plan,” and “Lot Purchase Contract; Developer as Homebuilder,” “THE IMPROVEMENT AREA
#1 PROJECTS,” “THE DEVELOPMENT,” “THE DEVELOPER,” “BONDHOLDERS’ RISKS”
(only as it pertains to the Developer, the Improvement Area #1 Projects, and the Development (as
defined in the Limited Offering Memorandum)),” “LEGAL MATTERS – Litigation – The
Developer,” and “CONTINUING DISCLOSURE – The Developer,” and “– 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.
(i) Subject to the below qualifications and based upon our participation in the
preparation of the Preliminary Limited Offering Memorandum and 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
Preliminary Limited Offering Memorandum and the Limited Offering Memorandum and related
matters were discussed, and although we have not independently verified the information in the
Preliminary Limited Offering Memorandum and 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 Preliminary Limited Offering Memorandum and 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 with respect to the Preliminary Limited Offering Memorandum, as of the date
of the Preliminary Limited Offering Memorandum and as of July 9, 2024, and with respect to the
Limited Offering Memorandum, 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.
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III. Qualifications
In addition to any assumptions, qualifications, and other matters set forth elsewhere herein,
the opinions set forth above are subject to the following assumptions and qualifications:
(a) We have not examined any court dockets, agency files or other public records
regarding the entry of any judgments, writs, decrees, or orders or the pendency of any actions,
proceedings, investigations, or litigation.
(b) We have relied upon the Developer Certificate, as well as the representations of the
Developer contained in the Material Documents, with respect to certain facts material to our
opinion. Except as otherwise specifically indicated herein, we have made no independent
investigation regarding any of the foregoing documents, or the representations contained therein.
With respect to our opinion in II(a) relating to the Developer’s good standing, we have relied solely
on a Certificate of Fact being issued by the Secretary of State of Texas with respect to the
Developer and an online search of the Franchise Tax Account Status page of the website of the
Texas Comptroller of Public Accounts which indicated the right of the Developer to do business
in the State of Texas is intact.
(c) Our opinion 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
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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.
(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,
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APPENDIX E
DEVELOPER CLOSING CERTIFICATE
Bloomfield Homes, L.P., a Texas limited partnership (the “Developer”), DOES HEREBY
CERTIFY the following as of the date hereof. All capitalized terms not otherwise defined herein
shall have the meaning given to such term in the Limited Offering Memorandum.
1. The Developer is a Texas limited partnership organized, validly existing and in
good standing under the laws of the State of Texas.
2. Representatives of the Developer have provided information to the City of Anna,
Texas (the “City”) and FMSbonds, Inc. (the “Underwriter”) to be used in connection with the
offering by the City of its $12,806,000 aggregate principal amount of Special Assessment Revenue
Bonds, Series 2024 (Meadow Vista Public Improvement District Improvement Area #1 Project)
(the “Bonds”), pursuant to the Preliminary Limited Offering Memorandum, dated June 26, 2024
(the “Preliminary Limited Offering Memorandum”), and Limited Offering Memorandum dated
July 9, 2024 (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 since delivery to the Underwriter and the City
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.
5. 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 the Developer, enforceable against the Developer in
accordance with its terms:
(a) the Developer’s Letter of Representations, dated July 9, 2024;
(b) the Meadow Vista Development Agreement, effective as of June 27, 2023,
between the City and the Developer;
(c) the Meadow Vista Public Improvement District Improvement Area #1
Construction, Funding, and Acquisition Agreement, effective July 9, 2024, between the
City and the Developer;
(d) the Continuing Disclosure Agreement of Developer with respect to the
Bonds, dated as of July 1, 2024, executed and delivered by the Developer, P3Works, LLC,
as Administrator, and Regions Bank, an Alabama state banking corporation, as
Dissemination Agent; and
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(e) the Consent and Agreement of Landowner, executed by the Developer as of
July 9, 2024.
6. The Developer owned all of the Improvement Area #1 Assessed Property (as
defined in the Service and Assessment Plan) located in Improvement Area #1 of the District on
the date that the Assessment Ordinance was adopted and is not an entity that may claim a
homestead right under Texas law.
7. The representations and warranties of the Developer contained in the Developer
Documents are true and correct in all material respects on and as of the date hereof.
8. 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.
9. The execution and delivery of the Developer Documents by the Developer does not
violate any judgment, order, writ, injunction or decree binding on the Developer or any indenture,
agreement, or other instrument to which the Developer is a party. There are no proceedings
pending or threatened in writing before any court or administrative agency against the Developer
that is either not covered by insurance or which singularly or collectively would have a material,
adverse effect on the ability of the Developer to perform its obligations under the Developer
Documents in all material respects or that would reasonably be expected to prevent or prohibit the
development of the District in accordance with the description thereof in the Limited Offering
Memorandum.
10. The Developer has reviewed and approved the information contained in the
Preliminary Limited Offering Memorandum in all maps included therein and under the captions
and subcaptions “PLAN OF FINANCE” (except for the information under the subcaption “– The
Bonds”), “THE IMPROVEMENT AREA #1 PROJECTS,” “THE DEVELOPMENT” and “THE
DEVELOPER” and “BONDHOLDERS’ RISKS” (only as it pertains to the Developer, the
Improvement Area #1 Projects, and the Development (as defined in the Limited Offering
Memorandum)), “LEGAL MATTERS – Litigation – The Developer,” “CONTINUING
DISCLOSURE – The Developer” and “– The Developer’s Compliance with Prior Undertakings,”
“SOURCES OF INFORMATION – Source of Certain Information,” “APPENDIX E-2,”
“APPENDIX F,” and “APPENDIX G” (collectively, the “Developer Disclosures”) and certifies
that the information contained in the Developer Disclosures is true and correct and 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, as of the date of the Preliminary Limited Offering Memorandum and as of the date of
the Limited Offering Memorandum; 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 Preliminary Limited Offering Memorandum.
11. The Developer has reviewed and approved the information contained in the
Developer Disclosures in the Limited Offering Memorandum and certifies that the same is true
and correct and does not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in the light of the circumstances under
which they are made, not misleading, as of the date of the Limited Offering Memorandum and as of
the date hereof; provided, however, that the foregoing certification is not a certification as to the
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accuracy, completeness or fairness of any of the other statements contained in the Limited Offering
Memorandum.
12. To the Developer’s knowledge, the Developer is in compliance in all material
respects with all provisions of applicable law relating to the Developer in connection with the
Development. Except as otherwise described in the Limited Offering Memorandum: (a) to the
Developer’s knowledge, there is no default of any zoning condition, land use permit or
development agreement binding upon the Developer or any portion of the Development that would
materially and adversely affect the Developer’s ability to complete or cause to be completed the
development of the property within the District as described in the Limited Offering
Memorandum; and (b) the Developer has no reason to believe that any additional permits, consents
and licenses required to complete the development of the property within the District as and in the
manner described in the Limited Offering Memorandum will not be reasonably obtainable in due
course.
13. The Developer is not insolvent and has not made an assignment for the benefit of
creditors, filed, or consented to a petition in bankruptcy, petitioned or applied (or consented to any
third-party petition or application) to any tribunal for the appointment of a custodian, receiver or
any trustee or commenced any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any jurisdiction.
14. The levy of the Improvement Area #1 Assessments on property in the District
owned by the Developer will not conflict with or constitute a breach of or default under any
agreement, mortgage, deed of trust, indenture, or other instrument to which the Developer is a
party or to which the Developer or any of its property or assets is subject.
15. The Developer is not in default under any mortgage, trust indenture, lease, or other
instrument to which it or any of its assets is subject, which default would have a material and
adverse effect on the Bonds or the Developer’s ability to perform its obligations under the
Developer Documents.
16. The Developer has no knowledge of any physical condition of the Development
owned or to be developed by the Developer that currently requires, or currently is reasonably
expected to require in the process of development investigation or remediation under any
applicable federal, state, or local governmental laws or regulations relating to the environment in
any material and adverse respect.
17. No liens exist on land in Improvement Area #1 of the District on the date hereof.
Signature page follows.
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Dated: July 31, 2024
DEVELOPER:
Bloomfield Homes, L.P., a Texas limited partnership
By: Bloomfield Properties, Inc., a Texas
corporation,
its General Partner
By: ___________________________
Donald Dykstra, President
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APPENDIX F
LETTERHEAD OF PEYCO SOUTHWEST REALTY, INC.
, 2024
City of Anna, Texas
120 W. 7th Street
Anna, Texas 75409
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
McCall, Parkhurst & Horton L.L.P.
717 North Harwood, Suite 900
Dallas, Texas 75201
Regions Bank, an Alabama state banking
corporation, as Trustee
3773 Richmond Ave., Suite 1100
Houston, Texas 77046
Re: City of Anna, Texas, Special Assessment Revenue Bonds, Series 2024 (Meadow
Vista Public Improvement District Improvement Area #1 Project) (the “Bonds”)
Ladies and Gentlemen:
The undersigned, an authorized representative of Peyco Southwest Realty, Inc. (the
“Appraiser”), the appraiser of the undeveloped property contained in Improvement Area #1 of the
Meadow Vista Public Improvement District (the “District”), does hereby represent the following:
1. The Appraiser has supplied certain information contained in the Preliminary
Limited Offering Memorandum for the Bonds, dated June 26, 2024, and the Limited Offering
Memorandum for the Bonds, dated July 9, 2024 (together, the “Limited Offering Memorandum”),
relating to the issuance of the Bonds by the City of Anna, Texas, as described above. The
information the Appraiser provided for the Limited Offering Memorandum is the real estate
appraisal of the property in the District, located in APPENDIX H to the Limited Offering
Memorandum, and the description thereof, set forth under the caption “APPRAISAL.”
2. To the best of my professional knowledge and belief, as of the date of my appraisal
report, the portion of the Limited Offering Memorandum described above does not contain an
untrue statement of a material fact as to the information and data set forth therein and does not
omit to state a material fact necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
3. Appraiser agrees to the inclusion of the Appraisal in the Limited Offering
Memorandum and the use of its name in the Limited Offering Memorandum for the Bonds.
4. Appraiser agrees that, to the best of its ability, it will inform you immediately
should it 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
July 31, 2024) which would render any such information in the Limited Offering Memorandum
untrue, incomplete, or incorrect, in any material fact or render any statement in the Appraisal
materially misleading.
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4125-9942-8176.5
5. The undersigned hereby represents that he or she has been duly authorized to
execute this letter of representations.
Sincerely yours,
PEYCO SOUTHWEST REALTY, INC.
By:
Its:
G-1
4125-9942-8176.5
APPENDIX G
LETTERHEAD OF P3WORKS, LLC
, 2024
City of Anna, Texas
120 W. 7th Street
Anna, Texas 75409
FMSbonds, Inc.
5 Cowboys Way, Suite 300-25
Frisco, Texas 75034
McCall, Parkhurst & Horton L.L.P.
717 North Harwood, Suite 900
Dallas, Texas 75201
Regions Bank, an Alabama state banking
corporation, as Trustee
3773 Richmond Ave., Suite 1100
Houston, Texas 77046
Re: City of Anna, Texas, Special Assessment Revenue Bonds, Series 2024 (Meadow
Vista Public Improvement District Improvement Area #1 Project) (the “Bonds”)
Ladies and Gentlemen:
The undersigned, an authorized representative of P3Works, LLC (“P3Works”), consultant
in connection with the creation by the City of Anna, Texas (the “City”), of Meadow Vista Public
Improvement District (the “District”), does hereby represent the following:
1. P3Works has supplied certain information contained in the Preliminary Limited
Offering Memorandum for the Bonds, dated June 26, 2024, and the final Limited Offering
Memorandum for the Bonds, dated July 9, 2024 (together, the “Limited Offering Memorandum”),
relating to the issuance of the Bonds by the City, as described above. The information P3Works
provided for the Limited Offering Memorandum is located (a) under the captions “ASSESSMENT
PROCEDURES” and “THE ADMINISTRATOR” and (b) in the Service and Assessment Plan (the
“SAP”) for the City located in APPENDIX C to the Limited Offering Memorandum.
2. At the request of the City, P3Works has prepared the SAP and acknowledges and
agrees that the SAP will be included in the Limited Offering Memorandum for the Bonds.
3. To the best of my professional knowledge and belief, the portions of the Limited
Offering Memorandum described in paragraph 1 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.
4. P3Works agrees to the inclusion of the SAP in the Limited Offering Memorandum
and to the use of its name in the Limited Offering Memorandum for the Bonds.
4. P3Works agree that, to the best of our ability, we will inform you immediately
should we learn of any event(s) or information of which you are not aware subsequent to the date
of this letter and prior to the actual time of delivery of the Bonds (anticipated to occur on or about
July 31, 2024) which would render any such information in the Limited Offering Memorandum
untrue, incomplete, or incorrect, in any material fact or render any such information materially
misleading.
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4125-9942-8176.5
5. The undersigned hereby represents that he or she has been duly authorized to
execute this letter of representation.
Sincerely yours,
P3WORKS, LLC
By:
Its:
C-1
EXHIBIT C
CONTINUING DISCLOSURE AGREEMENT
Draft 05.24.2024
4135-3525-7936.1
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
CONTINUING DISCLOSURE AGREEMENT OF ISSUER
This Continuing Disclosure Agreement of Issuer, dated as of July 1, 2024 (this “Disclosure
Agreement”), is executed and delivered by and among the City of Anna, Texas (the “Issuer”), P3Works,
LLC (the “Administrator”), and Regions Bank, acting solely in its capacity as dissemination agent (the
“Dissemination Agent”), with respect to the Issuer’s “Special Assessment Revenue Bonds, Series 2024
(Meadow Vista Public Improvement District Improvement Area #1 Project)” (the “Bonds”). The Issuer,
the Administrator, 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, the Administrator, 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 Disclosure 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 July 1, 2024, relating to the Bonds (the “Indenture”), which apply to any capitalized
term used in this Disclosure Agreement, including the Exhibits hereto, the following capitalized terms
shall have the following meanings:
“Administrator” shall have the meaning assigned to such term in the Indenture. The initial
Administrator is P3Works, LLC.
“Annual Collection Costs” shall have the meaning assigned to such term in the Indenture.
“Annual Collections Report” shall mean any Annual Collections Report provided by the Issuer
pursuant to, and as described in, Section 5 of this Disclosure Agreement.
“Annual Collections Report Filing Date” shall mean, for each Fiscal Year succeeding the
reporting Fiscal Year, the date that is three (3) months after the Final Improvement Area #1 Assessment
Payment Date, which Annual Collections Report Filing Date is currently April 30.
“Annual Financial Information” shall mean annual financial information as such term is used in
paragraph (b)(5)(i) of the Rule and specified in subsection 4(a) of this Disclosure Agreement.
“Annual Issuer Report” shall mean any Annual Issuer Report provided by the Issuer pursuant to,
and as described in, Sections 3 and 4 of this Disclosure Agreement.
“Annual Issuer Report Filing Date” shall mean, for each Fiscal Year, the date that is six (6)
months after the end of the Issuer’s Fiscal Year, which Annual Issuer Report Filing Date is currently
March 31.
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“Annual Service Plan Update” shall have the meaning assigned to such term in the Indenture.
“Business Day” shall have the meaning assigned to such term in the Indenture.
“Collections Reporting Date” shall mean, for each Tax Year, the date that is one (1) month after
the Delinquency Date, which Collections Reporting Date is currently March 1.
“Delinquency Date” shall mean February 1 of the year following the year in which the
Improvement Area #1 Assessments were billed or as may be otherwise defined in Section 31.02 of the
Texas Tax Code, as amended.
“Developer” shall mean Bloomfield Homes, L.P., a Texas limited partnership, and its designated
successors and assigns.
“Disclosure Agreement of Developer” shall mean the Continuing Disclosure Agreement of
Developer relating to the Bonds, dated as of July 1, 2024, executed and delivered by the Developer, the
Administrator, and the Dissemination Agent.
“Disclosure Representative” shall mean the Finance Director or City Manager 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, acting solely in its capacity as dissemination
agent, 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 Meadow Vista Public Improvement District.
“EMMA” shall mean the Electronic Municipal Market Access System currently available on the
internet at http://emma.msrb.org.
“Final Improvement Area #1 Assessment Payment Date” shall mean the calendar day preceding
the Delinquency Date.
“Financial Obligation” shall mean a (a) debt obligation; (b) derivative instrument entered into in
connection with, or pledged as security or a source of payment for, an existing or planned debt
obligation; or (c) guarantee of a debt obligation or any such derivative instrument; provided that
“financial obligation” shall not include municipal securities (as defined in the Securities Exchange Act
of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to
the MSRB consistent with the Rule.
“Fiscal Year” shall mean the Issuer’s fiscal year, currently the twelve-month period from
October 1 through September 30.
“Improvement Area #1” shall have the meaning assigned to such term in the Indenture.
“Improvement Area #1 Annual Installment” shall have the meaning assigned to such term in the
Indenture.
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4135-3525-7936.1
“Improvement Area #1 Assessments” shall have the meaning assigned to such term in the
Indenture.
“Listed Events” shall mean any of the events listed in subsection 6(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 continuing disclosure reports pursuant to the Rule.
“Other Obligations” shall have the meaning assigned to such term in the Indenture.
“Outstanding” shall have the meaning assigned to such term in the Indenture.
“Owner” shall have the meaning assigned to such term in the Indenture.
“Prepayment” shall have the meaning assigned to such term in the Indenture.
“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.
“Tax Year” means the calendar year, or as may be otherwise defined in Section 1.04 of the Texas
Tax Code, as amended.
“Trust Estate” shall have the meaning assigned to such term in the Indenture.
“Trustee” shall have the meaning assigned to such term in the Indenture.
SECTION 3. Provision of Annual Issuer Reports.
(a) For each Fiscal Year, commencing with the Fiscal Year ending September 30, 2024, the
Issuer shall cause, pursuant to written direction, and hereby directs the Dissemination Agent to provide
or cause to be provided to the MSRB, in the electronic or other format required by the MSRB, not later
than the Annual Issuer Report Filing Date, 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. The Annual Issuer Report may, but is not required to, include the Audited
Financial Statements and the failure to include the audited financial statements as a part of the Annual
Issuer Report shall not violate the Issuer’s obligations under this Disclosure Agreement provided the
Issuer provides its audited financial statements within twelve (12) months of the most recently ended
Fiscal Year or, if the audited financial statements are not available within such twelve-month period, the
Issuer provides unaudited financial statements within such twelve-month period, and provides audited
financial statements when and if available. 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 (including the date of the new Fiscal Year) with the MSRB prior to the
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4135-3525-7936.1
next Annual Issuer Report Filing Date. 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 Annual Issuer Report Filing Date, the Issuer shall provide
the Annual Issuer Report to the Dissemination Agent together with written direction to file such Annual
Issuer Report with the MSRB. The Dissemination Agent shall provide such Annual Issuer Report to the
MSRB not later than ten (10) days from receipt of such Annual Issuer Report from the Issuer, but in no
event later than the Annual Issuer Report Filing Date for such Fiscal Year.
If by the fifth (5th) day before the Annual Issuer Report Filing Date the Dissemination Agent has
not received a copy of the Annual Issuer Report, the Dissemination Agent shall contact the Disclosure
Representative in writing (which may be by e-mail) to remind the Issuer of its undertaking to provide
the applicable 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 Annual Issuer Report Filing Date, or (ii)
instruct the Dissemination Agent in writing that the Issuer will not be able to provide the Annual Issuer
Report by the Annual Issuer Report Filing Date, 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 still must file the Annual Issuer Report or the notice of failure to file, as applicable, to the MSRB
no later than the Annual Issuer Report Filing Date; provided further, however, that in the event the
Disclosure Representative fails to act under either (i) or (ii) described above, the Dissemination Agent
shall file a notice of failure to file no later than the last Business Day prior to the Annual Issuer Report
Filing Date.
(b) The Issuer shall or shall cause the Dissemination Agent pursuant to written direction to:
(i) determine the filing address or other filing location of the MSRB each year prior
to filing the Annual Issuer Report; and
(ii) file the Annual Issuer Report containing or incorporating by reference the
information set forth in Section 4 hereof.
(c) 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 the
Dissemination Agent shall provide written confirmation to the Issuer verifying 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, which report shall include a filing receipt from the MSRB.
SECTION 4. Content and Timing of Annual Issuer Reports. 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 by the Annual Issuer Report Filing Date, the following:
(a) Annual Financial Information. 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:
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4135-3525-7936.1
(A) For the Bonds, the maturity date(s), the interest rate(s), the original
aggregate principal amount(s), the principal amount(s) remaining Outstanding, and the
total interest amount due on the aggregate principal amount Outstanding;
(B) The amounts in the funds and accounts securing the Bonds and a
description of the related investments; and
(C) The assets and liabilities of the Trust Estate;
(ii) Financial information and operating data with respect to the Issuer of the general
type and in substantially similar form to that shown in the tables provided under Sections 4(a)(ii)
of Exhibit B attached hereto. Such information shall be provided as of the end of the reporting
Fiscal Year;
(iii) Any updates to the Service and Assessment Plan, including the Annual Service
Plan Update; and
(iv) 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.
(b) Audited Financial Statements. The audited financial statements of the Issuer for the most
recently ended Fiscal Year, prepared in accordance with generally accepted accounting principles
applicable from time to time to the Issuer and that have been audited by an independent certified public
accountant, but only if available by the Annual Issuer Report Filing Date. If the audited financial
statements of the Issuer are not available within twelve months after the end of the Fiscal Year, the Issuer
shall provide notice that the audited financial statements are not available, file unaudited financial
statements within such twelve-month period, and file audited financial statements when prepared and
available.
(c) A form for submitting the information described in subsection 4(a) above is attached as
Exhibit B hereto. 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.
The Administrator, and if no Administrator is designated, Issuer’s staff, shall prepare the Annual
Financial Information. In all cases, the Issuer shall have the sole responsibility for the content, design,
and other elements comprising substantive contents of the Annual Issuer Reports under this Section 4.
SECTION 5. Annual Collections Report.
(a) For each Fiscal Year succeeding the reporting Fiscal Year, the Issuer shall cause, pursuant
to written direction, and hereby directs the Dissemination Agent to provide or cause to be provided to
the MSRB, in the electronic or other format required by the MSRB, not later than the Annual Collections
Report Filing Date, an Annual Collections Report provided to the Dissemination Agent which complies
with the requirements specified in this Section 5; provided that the Issuer may provide the Annual
Collections Report as part of the Annual Issuer Report, if such Annual Collections Report is available
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4135-3525-7936.1
when the Annual Issuer Report is provided to the MSRB. 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 Annual Collections Report Filing Date, the Issuer shall
provide the Annual Collections Report to the Dissemination Agent together with written direction to file
such Annual Collections Report with the MSRB. The Dissemination Agent shall provide such Annual
Collections Report to the MSRB not later than ten (10) days from receipt of such Annual Collections
Report from the Issuer, but in no event later than the Annual Collections Report Filing Date.
If by the fifth (5th) day before the Annual Collections Report Filing Date the Dissemination Agent
has not received a copy of the Annual Collections Report, the Dissemination Agent shall contact the
Disclosure Representative in writing (which may be by e-mail) to remind the Issuer of its undertaking
to provide the applicable Annual Collections 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 Collections Report no later than two (2) Business Days prior to the Annual Collections
Report Filing Date, or (ii) instruct the Dissemination Agent in writing that the Issuer will not be able to
provide the Annual Collections Report by the Annual Collections Report Filing Date, state the date by
which the Annual Collections 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 hereto;
provided, however, that in the event the Disclosure Representative is required to act under either (i) or
(ii) described above, the Dissemination Agent still must file the Annual Collections Report or the notice
of failure to file, as applicable, to the MSRB no later than the Annual Collections Report Filing Date;
provided further, however, that in the event the Disclosure Representative fails to act under either (i) or
(ii) described above, the Dissemination Agent shall file a notice of failure to file no later than the last
Business Day prior to the Annual Collections Report Filing Date.
(b) The Annual Collections Report for the Bonds shall contain, and the Issuer agrees to
provide or cause to be provided to the Dissemination Agent to file by the Annual Collections Report
Filing Date, certain financial information and operating data with respect to collection of the
Improvement Area #1 Assessments of the general type and in substantially similar form to that shown
in the tables provided in Exhibit C attached hereto. Such information shall cover the period beginning
the first (1st) day of the Fiscal Year succeeding the reporting Fiscal Year through the Collections
Reporting Date. If the State Legislature amends the definition of Delinquency Date or Tax Year, the
City shall file notice of such change or changes with the MSRB prior to the next Annual Collections
Report Filing Date. The Administrator, and if no Administrator is designated, Issuer’s staff, shall prepare
the Annual Collections Report. In all cases, the Issuer shall have the sole responsibility for the content,
design, and other elements comprising substantive contents of the Annual Collections Report under this
Section 5.
SECTION 6. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 6, 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.
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4135-3525-7936.1
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, and tender offers.
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 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 Issuer, if material, or agreement to
covenants, events of default, remedies, priority rights, or other similar terms of a Financial
Obligation of the Issuer, 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 Issuer, any of which reflect
financial difficulties.
Any sale by the Developer of real property within Improvement Area #1 in the ordinary course
of the Developer’s business will not constitute a Listed Event for the purposes of paragraph (10) above.
For these purposes, any event described in 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
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4135-3525-7936.1
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.
The Issuer intends the words used in paragraphs (15) and (16) above and the definition of
Financial Obligation to have the same meanings as when they are used in the Rule, as evidenced by SEC
Release No. 34-83885, dated August 20, 2018. For the avoidance of doubt, the incurrence of Other
Obligations without the filing of a corresponding official statement with the MSRB will constitute the
incurrence of a material Financial Obligation for which a notice of a Listed Event in accordance with
this Section 6 must be filed with the MSRB.
Upon 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. The Dissemination Agent shall file such notice no later than three (3) Business Days
immediately following the day on which it receives written notice of such occurrence from the Issuer.
Any such notice is required to be filed within ten (10) Business Days of the occurrence of such Listed
Event.
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.
In all cases, the Issuer shall have the sole responsibility for the content, design and other elements
comprising substantive contents of all disclosures made under this Section 6. In addition, the Issuer shall
have the sole responsibility to ensure that any notice required to be filed under this Section 6 is filed
within ten (10) Business Days of the occurrence of the Listed Event.
(b) The Dissemination Agent shall, promptly, and not more than five (5) Business Days after
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. If the Dissemination Agent has been
instructed in writing by the Disclosure Representative on behalf of the Issuer to report the occurrence of
a Listed Event under this subsection (b), the Dissemination Agent shall file a notice of such occurrence
with the MSRB no later than two (2) Business Days following the day on which it receives such written
instructions. 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 Dissemination Agent. It is agreed and understood that the
Dissemination Agent has agreed to give the foregoing notice to the Issuer as an accommodation to assist
it in monitoring the occurrence of such event, but is 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
be liable in damages or in tort to the Issuer, the Trustee, any Owner or beneficial owner of any interests
in the Bonds, or any other party as a result of its failure to give the foregoing notice or to give such notice
in a timely fashion.
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4135-3525-7936.1
(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 (as to bond calls only), 10, 13, 14, or 15 of
subparagraph (a) above is not material under applicable federal securities laws, the Issuer shall promptly,
but in no case more than five (5) Business Days after the occurrence of the event, 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 (b).
SECTION 7. Termination of Reporting Obligations. The obligations of the Issuer, the
Administrator, 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 and the Administrator 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 Administrator and the Dissemination Agent may assume that the Issuer is an obligated person with
respect to the Bonds until they receive 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 and the
Administrator 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 6(a).
SECTION 8. Dissemination Agent. The Issuer may, from time to time, appoint or engage
a Dissemination Agent or successor Dissemination Agent to assist it in carrying out its obligations under
this Disclosure Agreement, and may discharge such Dissemination Agent, with or without appointing a
successor Dissemination Agent. If the Issuer discharges the Dissemination Agent without appointing a
successor Dissemination Agent, the Issuer shall use best efforts to appoint a successor Dissemination
Agent within 30 days of such discharge. The Dissemination Agent may resign at any time with 30 days’
written notice to the Issuer. If at any time there is not any other designated Dissemination Agent, the
Issuer shall be the Dissemination Agent.
SECTION 9. Amendment; Waiver. Notwithstanding any other provisions of this
Disclosure Agreement, the Issuer, the Administrator, and the Dissemination Agent may amend this
Disclosure Agreement (and the Dissemination Agent shall not unreasonably withhold its consent to any
amendment so requested in writing by the Issuer or the Administrator), 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, 5, or 6(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
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(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 Financial Information, 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 6(a), and (ii) the Annual Financial Information 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 10. 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, Annual Collections 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, Annual Collections 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 under this Disclosure Agreement to update such
information or include it in any future Annual Issuer Report, Annual Collections Report, or notice of
occurrence of a Listed Event.
SECTION 11. Default. In the event of a failure of the Issuer to comply with any provision
of this Disclosure Agreement, the Dissemination Agent or any Owner or beneficial owner of the Bonds
may, and the Dissemination Agent (at the written request of the Owners of at least twenty-five percent
(25%) aggregate principal amount of Outstanding Bonds and upon being indemnified to its satisfaction)
shall, take such actions as may be necessary and appropriate to cause the Issuer 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 shall not be deemed a default under the Disclosure Agreement of Developer and a default
under the Disclosure Agreement of Developer shall not be deemed a default under this Disclosure
Agreement.
SECTION 12. Duties, Immunities and Liabilities of Dissemination Agent and 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
11
4135-3525-7936.1
Disclosure Agreement with respect to the Dissemination Agent. To the extent permitted by law, the
Issuer agrees to indemnify and hold harmless the Dissemination Agent, its officers, directors, employees
and agents, but only from Annual Collection Costs collected from the property owners in Improvement
Area #1, 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 termination of this Disclosure
Agreement, 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. If the Issuer does not provide the Dissemination Agent
with the Annual Issuer Report in accordance with subsection 3(a) or the Annual Collections Report in
accordance with subsection 5(a), the Dissemination Agent shall not be responsible for the failure to
submit an Annual Issuer Report or an Annual Collections Report, as applicable, to the MSRB. The
Dissemination Agent is not acting in a fiduciary capacity in connection with the performance of its
respective obligations hereunder.
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 its duties hereunder, and the Dissemination Agent shall not incur any liability and
shall be fully protected in acting in good faith upon the advice of such legal counsel.
(b) The Administrator shall not have any duty with respect to the content of any disclosures
made pursuant to the terms hereof. The Administrator 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 Administrator. To the extent permitted by law, the Issuer agrees to hold
harmless the Administrator, its officers, directors, employees and agents, but only from Annual
Collection Costs collected from the property owners in Improvement Area #1, 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 reasonable attorneys’ fees) of defending against
any claim of liability, 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 failure of any third party to provide information to the
Administrator as and when required under this Disclosure Agreement, or the failure of the Developer to
provide information to the Administrator 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
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 (i)
any action taken or omitted to be taken in good faith upon advice of legal counsel given with respect to
any question relating to duties and responsibilities of the Administrator hereunder, or (ii) any action
12
4135-3525-7936.1
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 its 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 ANY PARTY TO THIS
DISCLOSURE AGREEMENT, 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. THE DISSEMINATION AGENT AND THE ADMINISTRATOR ARE UNDER
NO OBLIGATION NOR ARE THEY REQUIRED TO BRING SUCH AN ACTION.
SECTION 13. Assessment Timeline. The basic expected timeline for the collection of
Improvement Area #1 Assessments and the anticipated procedures for pursuing the collection of
delinquent Improvement Area #1 Assessments is set forth in Exhibit D which is intended to illustrate the
general procedures expected to be followed in enforcing the payment of delinquent Improvement Area
#1 Assessments. Failure to adhere to such expected timeline shall not constitute a default by the Issuer
under this Disclosure Agreement, the Indenture, the Bonds, or any other document related to the Bonds.
SECTION 14. No Personal Liability. No covenant, stipulation, obligation or agreement of
the Issuer, the Administrator, or the 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, the Administrator, or the Dissemination Agent in
other than that person’s official capacity.
SECTION 15. 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.
13
4135-3525-7936.1
SECTION 16. Sovereign Immunity. The Dissemination Agent and the Administrator agree
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 17. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of
the Issuer, the Administrator, 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 18. Dissemination Agent and Administrator Compensation. The fees and
expenses incurred by the Dissemination Agent and the Administrator for their respective services
rendered in accordance with this Disclosure Agreement constitute Annual Collection Costs and will be
included in the Improvement Area #1 Annual Installments as provided in the annual updates to the
Service and Assessment Plan. The Issuer shall pay or reimburse the Dissemination Agent and the
Administrator, but only with funds to be provided from the Annual Collection Costs component of the
Improvement Area #1 Annual Installments collected from the property owners in Improvement Area #1,
for the fees and expenses for their respective services rendered in accordance with this Disclosure
Agreement.
SECTION 19. Statutory Verifications. The Dissemination Agent and the Administrator,
each individually, make the following representation and verifications to enable the Issuer to comply
with Chapters 2252, 2271, 2274, and 2276, Texas Government Code, as heretofore amended (the
“Government Code”), in entering into this Disclosure Agreement. As used in such verifications,
“affiliate” means an entity that controls, is controlled by, or is under common control with the
Dissemination Agent or the Administrator, as the case may be, within the meaning of SEC Rule 405, 17
C.F.R. § 230.405, and exists to make a profit. Liability for breach of any such verification prior to the
expiration or earlier termination of this Disclosure Agreement shall survive until barred by the applicable
statute of limitations, and shall not be liquidated or otherwise limited by any provision of this Disclosure
Agreement, notwithstanding anything in this Disclosure Agreement to the contrary.
(a) Not a Sanctioned Company. The Dissemination Agent and the Administrator, each
individually, 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, Government Code. The
foregoing representation excludes the Dissemination Agent and the Administrator 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.
(b) No Boycott of Israel. The Dissemination Agent and the Administrator, each individually,
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 Disclosure
Agreement. As used in the foregoing verification, “boycott Israel” has the meaning provided in Section
2271.001, Government Code.
14
4135-3525-7936.1
(c) No Discrimination Against Firearm Entities. The Dissemination Agent and the
Administrator, each individually, 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. As used in the
foregoing verification, “discriminate against a firearm entity or firearm trade association” has the
meaning provided in Section 2274.001(3), Government Code.
(d) No Boycott of Energy Companies. The Dissemination Agent and the Administrator, each
individually, 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. As used in the foregoing verification, “boycott energy
companies” has the meaning provided in Section 2276.001(1), Government Code.
SECTION 20. 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. Submitted herewith is a completed Form 1295 in connection with the Administrator’s
participation in the execution of this Disclosure 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 Issuer hereby
confirms receipt of the Form 1295 from the Administrator, and the Issuer agrees to acknowledge such
form with the TEC through its electronic filing application not later than the thirtieth (30th) day after the
receipt of such form. The Administrator and the Issuer understand and agree that, with the exception of
information identifying the Issuer and the contract identification number, neither the Issuer 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 Administrator; and, neither the Issuer nor
its consultants have verified such information.
SECTION 21. Governing Law. This Disclosure Agreement shall be governed by the laws of
the State of Texas.
SECTION 22. 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 pages follow.
SIGNATURE PAGE OF CONTINUING DISCLOSURE AGREEMENT OF ISSUER
4135-3525-7936.1
Regions Bank
(as Dissemination Agent)
By:
Authorized Officer
SIGNATURE PAGE OF CONTINUING DISCLOSURE AGREEMENT OF ISSUER
4135-3525-7936.1
P3Works, LLC
(as Administrator)
By:
Authorized Officer
A-1
4135-3525-7936.1
EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE
[ANNUAL ISSUER REPORT][ANNUAL COLLECTIONS REPORT]
[AUDITED/UNAUDITED FINANCIAL STATEMENTS]
Name of Issuer: City of Anna, Texas
Name of Bond Issue: Special Assessment Revenue Bonds, Series 2024
(Meadow Vista Public Improvement District Improvement Area #1
Project) (the “Bonds”)
CUSIP Nos. [insert CUSIP Nos.]
Date of Delivery: ____________, 20__
NOTICE IS HEREBY GIVEN that the City of Anna, Texas (the “Issuer”), has not provided
[an Annual Issuer Report][an Annual Collections Report][audited/unaudited financial statements]
with respect to the Bonds as required by the Continuing Disclosure Agreement of Issuer dated as
of July 1, 2024, by and among the Issuer, P3Works, LLC., as “Administrator,” and Regions Bank,
as “Dissemination Agent.” The Issuer anticipates that [the Annual Issuer Report][the Annual
Collections Report][audited/unaudited financial statements] will be filed by
__________________.
Dated:
Regions Bank, on behalf of the City of Anna,
Texas
(as Dissemination Agent)
By:
Title:
cc: City of Anna, Texas
B-1
4135-3525-7936.1
EXHIBIT B
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
ANNUAL FINANCIAL INFORMATION*
Delivery Date: __________, 20__
CUSIP Nos: [insert CUSIP Nos.]
DISSEMINATION AGENT
Name: Regions Bank
Address: [__________________]
City: [_]
Telephone: (___) ___-____
Contact Person: Attn: ___________
Section 4(a)(i)(A)
BONDS OUTSTANDING
Maturity
Date
Interest
Rate
Original
Principal
Amount
Outstanding
Principal
Amount
Outstanding
Interest
Amount
–
–
Total
Section 4(a)(i)(B)
INVESTMENTS
Fund/
Account Name
Investment
Description
Par
Value(1)
Book
Value(1)
Market
Value(1)
(1) According to account balance statement dated as of [insert date] as provided by the Trustee.
*Excluding audited financial statements of the Issuer
B-2
4135-3525-7936.1
Section 4(a)(i)(C)
ASSETS AND LIABILITIES OF TRUST ESTATE
Cash Position of Trust Estate for statements dated September 30, 20[__]
[List of Funds/Accounts Held Under Indenture] Amount In the Fund
Total A
Bond Principal Amount Outstanding B
Outstanding Improvement Area #1 Assessment Amount to be
collected
C
Net Position of Trust Estate and Outstanding Bonds and
Improvement Area #1 Assessments
A-B+C
September 30, 20[__] Trust Statements: Audited Unaudited
Accounting Type: Cash Accrual Modified Accrual
Section 4(a)(ii)
FINANCIAL INFORMATION AND OPERATING DATA WITH RESPECT TO THE ISSUER OF THE
GENERAL TYPE AND IN SUBSTANTIALLY SIMILAR FORM PROVIDED IN THE FOLLOWING
TABLES AS OF THE END OF THE FISCAL YEAR
Debt Service Requirements on the Bonds
Year Ending
(September 30) Principal Interest Total
Top [Five] Improvement Area #1 Assessment Payers (1)
Property Owner No. of Parcels/Lots
Percentage of
Parcels/Lots
Outstanding
Improvement Area
#1 Assessments
Percentage of Total
Improvement Area
#1 Assessments
(1) Does not include those owing less than one percent (1%) of total Improvement Area #1 Assessments; may be fewer than five.
Assessed Value of Improvement Area #1 of the District
The [YEAR] certified total assessed value for the Assessed Property in Improvement Area #1 of the District
is approximately $[AMOUNT] according to the Collin County Appraisal District.
B-3
4135-3525-7936.1
Foreclosure History Related to the Improvement Area #1 Assessments for the Past Five Fiscal Years
Fiscal
Year
Ended
(9/30)
Delinquent
Improvement Area #1
Assessment Amount
not in Foreclosure
Proceedings
Parcels in
Foreclosure
Proceedings
Delinquent
Improvement Area
#1 Assessment
Amount
in Foreclosure
Proceedings
Foreclosure
Sales
Foreclosure Proceeds
Received
20__ $ $ $
20__
20__
20__
20__
[insert any necessary footnotes]
Collection and Delinquency History of Improvement Area #1 Annual Installments for the Past Five Fiscal Years
Fiscal Year
Ended
(9/30)
Total
Improvement
Area #1
Annual
Installment
Billed
Parcels
Levied(1)
Delinquent
Amount as
of 3/1
Delinquent
% as of 3/1
Delinquent
Amount as
of [9/1]
Delinquent %
as of [9/1]
Total
Improvement
Area #1
Assessments
Collected(2)
20__ $ $ % $ % $
20__
20__
20__
20__
(1) Pursuant to Section 31.031, Texas Tax Code, certain veterans, persons aged 65 or older, and the disabled, who qualify for an exemption under
either Section 11.13(c), 11.32, or 11.22, Texas Tax Code, are eligible to pay property taxes in four equal installments (“Installment Payments”).
Effective January 1, 2018, pursuant to Section 31.031(a-1), Texas Tax Code, the Installment Payments are each due before February 1, April 1,
June 1, and August 1. Each unpaid Installment Payment is delinquent and incurs penalties and interest if not paid by the applicable date.
(2) [Does/does not] include interest and penalties.
Parcel Numbers for Delinquencies Equaling or Exceeding 10% of Improvement Area #1 Annual Installments
Due
For the past five Fiscal Years, if the total amount of delinquencies as of September 1 equals or exceeds ten
percent (10%) of the amount of Improvement Area #1 Annual Installments due, a list of parcel numbers for which the
Improvement Area #1 Annual Installments are delinquent.
Fiscal Year
Ended (9/30) Delinquent % as of 9/1 Parcel Numbers
20__ %
20__
20__
20__
20__
History of Prepayment of Improvement Area #1 Assessments for the Past Five Fiscal Years
Fiscal Year Ended (9/30)
Number of
Prepayments
Amount of
Prepayments Bond Call Date
Amount of
Bonds
Redeemed
20__ $ $
20__
20__
20__
[insert any necessary footnotes]
B-4
4135-3525-7936.1
ITEMS REQUIRED BY SECTION 4(a)(iii) - (iv)
[Insert a line item for each applicable listing]
C-1
4135-3525-7936.1
EXHIBIT C
CITY OF ANNA, TEXAS,
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
ANNUAL COLLECTIONS REPORT
Delivery Date: __________, 20__
CUSIP Nos: [insert CUSIP Nos.]
DISSEMINATION AGENT
Name: Regions Bank
Address: [______________________]
City: [_____, Texas _____]
Telephone: (___) ___-____
Contact Person: Attn: ___________
SELECT FINANCIAL INFORMATION AND OPERATING DATA WITH RESPECT TO
THE COLLECTION OF ASSESSMENTS COVERING THE PERIOD BEGINNING WITH
THE FIRST DAY OF THE FISCAL YEAR SUCCEEDING THE REPORTING FISCAL
YEAR THROUGH THE COLLECTIONS REPORTING DATE PROVIDED IN
COMPLIANCE WITH SUBSECTION 5(A) OF THE ISSUER’S DISCLOSURE
AGREEMENT
Foreclosure History Related to the Improvement Area #1 Annual Installments(1)
Succeeding
Fiscal Year
Delinquent
Improvement Area
#1 Annual
Installment Amount
not in Foreclosure
Proceedings
Parcels in
Foreclosure
Proceedings
Delinquent
Improvement Area
#1 Annual
Installment Amount
in Foreclosure
Proceedings
Foreclosure
Sales
Foreclosure Proceeds
Received
20__ $ $ $
(i) Period covered includes October 1, 20__ through March 1, 20__.
C-2
4135-3525-7936.1
Collection and Delinquency of Improvement Area #1 Annual Installments (1)
Succeeding
Fiscal Year
Total
Improvement
Area #1 Annual
Installments
Levied
Parcels
Levied(2)
Delinquent
Amount as
of 3/1
Delinquent %
as of 3/1
Total
Improvement
Area #1 Annual
Installments
Collected(3)
20__ $ $ % $
(1) Period covered includes October 1, 20__ through March 1, 20__.
(2) Pursuant to Section 31.031, Texas Tax Code, certain veterans, persons aged 65 or older, and the disabled, who qualify for an exemption under
either Section 11.13(c), 11.32, or 11.22, Texas Tax Code, are eligible to pay property taxes in four equal installments (“Installment Payments”).
Effective January 1, 2018, pursuant to Section 31.031(a-1), Texas Tax Code, the Installment Payments are each due before February 1, April 1,
June 1, and August 1. Each unpaid Installment Payment is delinquent and incurs penalties and interest if not paid by the applicable date.
(3) [Does/does not] include interest and penalties.
Prepayment of Improvement Area #1 Assessments(1)
Succeeding
Fiscal Year
Number of
Prepayments
Amount of
Prepayments Bond Call Date
Amount of
Bonds
Redeemed
$ $
(1) Period covered includes October 1, 20__ through March 1, 20__.
D-1
4135-3525-7936.1
EXHIBIT D
BASIC EXPECTED TIMELINE FOR ASSESSMENT COLLECTIONS
AND PURSUIT OF DELINQUENCIES1
Date
Delinquency
Clock (Days) Activity
January 31 Improvement Area #1 Assessments are due.
February 1 1 Improvement Area #1 Assessments delinquent if not
received.
15 Upon receipt, but no later than February 15, Issuer forwards
payment to Trustee for all collections received, 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.
Administrator should be aware if Reserve Fund needs to be
utilized for debt service payments during the corresponding
Fiscal Year.
Issuer and Administrator should determine if previously
collected surplus funds, if any, plus actual Improvement
Area #1 Annual Installment collections will be fully
adequate for debt service in the corresponding March and
September.
March 15 43/44 Trustee pays bond interest payments to Owners.
April 1 59/60 At this point, if total delinquencies are under 5% and if there
is adequate funding in the Pledged Revenue Fund for transfer
to the Principal and Interest Account for full September
payments, no further action is anticipated for collection of
Improvement Area #1 Assessments except that the Issuer or
Administrator, working with the City Attorney or an
appropriate designee, will begin process to cure deficiency.
Issuer, or the Trustee on behalf of the Issuer, to notify
Dissemination Agent in writing of the occurrence of draw on
the Reserve Fund and, following receipt of such notice,
Dissemination Agent to notify MSRB of such draw or the
Reserve Fund.
1 Illustrates anticipated dates and procedures for pursuing the collection of delinquent Improvement Area #1 Annual Installments of
Improvement Area #1 Assessments, which dates and procedures shall be in accordance with Chapters 31, 32, 33, and 34, Texas Tax
Code, as amended (the “Code”), and the Tax Assessor/Collector’s procedures, and are subject to adjustment by the Issuer. If the
collection and delinquency procedures under the Code are subsequently modified, whether due to an executive order of the Governor of
Texas, an amendment to the Code, or otherwise, such modifications shall control.
D-2
4135-3525-7936.1
July 1 152/153 If there are over 5% delinquencies or if there is
insufficient funding in the Pledged Revenue Fund for
transfer to the Principal and Interest Account of such
amounts as shall be required for the full September
payment, Issuer and/or Administrator to notify
Dissemination Agent in writing for inclusion in the next
Annual Report.
Preliminary foreclosure activity commences in
accordance with Tax Assessor/Collector’s procedures.
If Dissemination Agent has not received Foreclosure
Schedule and Plan of Collections, Dissemination Agent to
request same from the Issuer.
If the Issuer has not provided the Dissemination Agent with
Foreclosure Schedule and Plan of Collections,
Dissemination Agent requests that the Issuer commence
foreclosure or provide plan for collection.
August 15 197/198 The designated lawyers or law firm will be preparing the
formal foreclosure documents and will provide periodic
updates to the Dissemination Agent and the Trustee. The
goal for the foreclosure actions is a filing by no later than
August 15 (day 197/198).
Foreclosure action to be filed with the court as soon as
practicable, in accordance with the Tax
Assessor/Collector’s procedures.
Issuer notifies Trustee and Dissemination Agent of
Foreclosure filing status in writing for inclusion in next
Annual Report.
A committee of not less than twenty-five percent (25%) of the Owners may request a meeting with the
Issuer to discuss the Issuer’s actions in pursuing the repayment of any delinquencies. This would also occur
after day thirty (30) if it is apparent that a Reserve Fund draw is required. Further, if delinquencies exceed
five percent (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 Improvement Area #1 Annual Installments of Improvement
Area #1 Assessments.
Controlling
Name of Interested Party4 Nature of interest
City, State, Country (place of business)
Intermediary
(check applicable)
CERTIFICATE OF INTERESTED PARTIES 1295FORM
1 of 1
1
OFFICE USE ONLY
2 07/09/2024
Complete Nos. 1 - 4 and 6 if there are interested parties.
Complete Nos. 1, 2, 3, 5, and 6 if there are no interested parties.
Name of business entity filing form, and the city, state and country of the business entity's place
of business.
FMSbonds, Inc.
Frisco, TX United States
Name of governmental entity or state agency that is a party to the contract for which the form is
being filed.
Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a
description of the services, goods, or other property to be provided under the contract.
3
City of Anna, Texas
Underwriting Services
Meadow Vista IA#1 Bonds
2024-1185103
Date Filed:
Date Acknowledged:
Certificate Number:
CERTIFICATION OF FILING
Feinsilver, Paul XN. Miami, FL United States
Klotz, James XBoca Raton, FL United States
6
Signature of authorized agent of contracting business entity
My name is _______________________________________________________________,
UNSWORN DECLARATION
Check only if there is NO Interested Party.5
My address is _______________________________________________, _______________________,
and my date of birth is _______________________.
Executed in ________________________________________County,
I declare under penalty of perjury that the foregoing is true and correct.
(street)(state) (zip code) (country)
(year)(month)
_______, ______________, _________.
State of ________________, on the _____day of ___________, 20_____.
(city)
(Declarant)
Version V4.1.0.d378aba0www.ethics.state.tx.usForms provided by Texas Ethics Commission
Esther Moreno 12/29/1970
5412 Soledad Ln. TX 79932 USA
El Paso Texas 9th July 24