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HomeMy WebLinkAboutOrdinance No. 689 $290~000 CITY OF THE COLONY, TEXAS CONTRACTUAL OBLIGATION SERIES 1991 Adopted: February 25, 1991 TABLE OF CONTENTS Page Recitals 1 ARTICLE I Definitions and Other Preliminary Matters Section 1.01. Definitions 1 Section 1.02. Findings 3 Section 1.03. Table of Contents, Titles and Headings 3 Section 1.04. Interpretation 3 ARTICLE II Security for the Contractual Obligation; Debt Service Fund Section 2.01. Payment of the Contractual Obligation 3 Section 2.02. Debt Service Fund 4 ARTICLE III Authorization; General Terms and Provisions Regarding the Contractual Obligation Section 3.01. Authorization 5 Section 3.02. Date, Denomination, Maturities and Interest 5 Section 3.03. Medium, Method and Place of Payment 5 Section 3.04. Control, Execution and Initial Registration 7 Section 3.05. Ownership 8 Section 3.06. Registration, Transfer and Exchange 8 Section 3.07. Cancellation 9 Section 3.08. Replacement Contractual Obligation 9 Section 3.09. Additional Obligations 11 ARTICLE IV Redemption of Contractual Obligation Before Maturity Section 4.01. No Redemption 11 ARTICLE V Paying Agent/Registrar Section 5.01. Appointment of Initial Paying Agent/Registrar 11 Section 5.02. Qualifications 11 Section 5.03. Maintaining Paying Agent/Registrar 11 Section 5.04. Termination 12 Section 5.05. Notice of Change to Owners 12 Section 5.06. Agreement to Perform Duties and Functions 12 (i) Section 5.07. Delivery of Records to Successor 12 ARTICLE VI Form of the Contractual Obligations Section 6.01. Form Generally 13 Section 6.02. Form of the Contractual Obligation 13 Section 6.03. CUSIP Registration 17 Section 6.04. Legal Opinion 18 Section 6.05. Statement of Insurance 18 ARTICLE VII Sale and Delivery of the Contractual Obligation; Deposit of Proceeds Section 7.01. Sale of Contractual Obligation; Limited Offering Memorandum 18 Section 7.02. Control and Delivery of the Contractual Obligation 19 Section 7.03. Approval of Escrow Agreement and Appointment of Escrow Agent 19 Section 7.04. Deposit of Proceeds 19 ARTICLE VIII Investments Section 8.01. Investments 20 Section 8.02. Investment Income 20 ARTICLE IX Particular Representations and Covenants Section 9.01. Payment of the Contractual Obligation 20 Section 9.02. Other Representations and Covenants 20 ARTICLE X Default and Remedies Section 10.01. Events of Default 22 Section 10.02. Remedies for Default 22 Section 10.03. Remedies Not Exclusive 23 ARTICLE XI Discharge Section 11.01. Discharge by Payment 23 Section 11.02. Discharge by Deposit 24 EXECUTION 25 SCHEDULE I Description of Property SCHEDULE II Payment Schedule EXHIBIT A Form of Escrow Agreement AN ORDINANCE PROVIDING FOR THE ISSUANCE AND SALE OF CITY OF THE COLONY, TEXAS, CONTRACTUAL OBLIGATION, SERIES 1991, IN THE AGGREGATE PRINCIPAL AMOUNT OF $290,000; AND ENACTING OTHER PROVISIONS RELATING THERETO WHEREAS, the Public Property Finance Act, V.T.C.A., Local Government Code, Sections 271.001 through 271.009, inclusive, (the "Act") authorizes, among others, cities to execute, perform, and make payments under contracts with any person for the use, acquisition or purchase of personal property as described in the Act; WHEREAS, the Act permits the governing body of a city to execute contracts in any form deemed appropriate by said governing body in connection with the use, acquisition or purchase of personal property; WHEREAS, the City Council of the City of The Colony, Texas (the "City") has found and deems it necessary, useful and appropriate for its public purposes to acquire or purchase the personal property described in Schedule I to this Ordinance; WHEREAS, the City Council of the City deems it appropriate to adopt this Ordinance and issue the "Contractual Obligation" herein authorized as permitted by the Act; and WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and public notice of the time, place and purpose of said meeting was given as required by Article 6252-17, TEX. REV. CIV. STAT. ANN., as amended; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.01. Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise in this Ordinance, the following terms shall have the meanings specified below: "City" means the City of The Colony, Texas. "Closing Date" means the date of the initial delivery of and payment for the Contractual Obligation. "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings and court decisions thereunder. "Contractual Obligation" means the contractual obligation authorized to be issued by Section 3.01 of this Ordinance and designated as "City of The Colony, Texas, Contractual Obligation, Series 1991," in the aggregate principal amount of $290,000. "Contractual Obligation Date" means the date designated as the date of the Contractual Obligations by Section 3.02(a) of this Ordinance. "Debt Service Fund" means the debt service fund established by Section 2.02 of this Ordinance. "Escrow Agreement" means the Escrow Agreement between the City and Ameritrust Texas National Asociation, Dallas, Texas, as Escrow Agent in substantially the form attached hereto as Exhibit A. "Event of Default" means any event of default as defined in Section 10.01 of this Ordinance. "Fiscal Year" means such fiscal year as shall from time to time be set by the City Council. "Initial Contractual Obligation" means the initial contractual obligation authorized by Section 3.04(d) of this Ordinance. "Owner" means the person who is the registered owner of the Contractual Obligation, as shown in the Register. "Paying Agent/Registrar" means initially Ameritrust Texas National Association, Dallas, Texas, or any successor thereto as provided in this Ordinance. "Property" means the personal property listed in Schedule I to this Ordinance and such substitutions therefor made pursuant to Section 9.02(h) of this Ordinance. "Record Date" means the fifteenth calendar day preceding each Interest Payment Date. "Register" means the Register specified in Section 3.06(a) of this Ordinance. -2- 0694H "Special Record Date" means the Special Record Date as prescribed in Section 3.03(b) of this Ordinance. "State" means the State of Texas. "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the payment of principal of or interest on the Contractual Obligation as the same come due and payable and remaining unclaimed by the Owners of such Contractual Obligation for 90 days after the applicable payment or redemption date. Section 1.02. Findinqs. The declarations, determinations and findings declared, made and found in the preamble to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof. Section 1.03. Table of Contents, Titles and Headings. The table of contents, titles and headings of the Articles. and Sections of this Ordinance 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 Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. Section 1.04. 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) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE II SECURITY FOR THE CONTRACTUAL OBLIGATION; DEBT SERVICE FUND Section 2.01. Payment of the Contractual Qbligation. ( a ) Pursuant to the authority granted by the Constitution and laws of the State, there shall be levied and there is hereby levied for the current year and each succeeding --3-- 0694H year thereafter while the Contractual Obligation or any interest thereon is outstanding and unpaid, an ad valorem tax on each one hundred dollars' valuation of taxable property within the City, at a rate sufficient, within the limit prescribed by law, to pay the debt service requirements on the Contractual Obligation, being (i) the interest on the Contractual Obligation and (ii) a sinking fund for their payment at maturity or a sinking fund of two percent per annum (whichever amount is the greater), when due and payable, full allowance being made for delinquencies and costs of collection. (b) The ad valorem tax thus levied shall be assessed and collected each year against all property appearing on the tax rolls of the City most recently approved in accordance with law and the money thus collected shall be deposited as collected to the Debt Service Fund. (c) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or required hereby to be deposited to the Debt Service Fund are hereby pledged and committed irrevocably to the payment of the principal of and interest on the Contractual Obligation when and as due and payable in accordance with their terms and this Ordinance. (d) If the liens and provisions of this Ordinance shall be released in a manner permitted by Article XI hereof, then the collection of such ad valorem tax may be suspended or appropriately reduced, as the facts may permit, and further deposits to the Debt Service Fund may be suspended or appropriately reduced, as the facts may permit. Section 2.02. Debt Service Fund. (a) The City hereby establishes a special fund or account to be designated the "City of The Colony, Texas, Contractual Obligation, Series 1991, Debt Service Fund," said fund to be maintained at an official depository bank of the City separate and apart from all other funds and accounts of the City. (b) Money on deposit in or required by this Ordinance to be deposited to the Debt Service Fund shall be used solely for the purpose of paying the interest on and principal of the Contractual Obligation when and as due and payable in accordance with its terms and this Ordinance. -4- 069~.H ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE CONTRACTUAL OBLIGATION Section 3.01. Authorization. The City's contractual obligation to be designated "City of The Colony, Texas, Contractual Obligation, Series 1991" (the "Contractual Obligation"), is hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State, specifically the Public Property Finance Act, V.T.C.A., Local Government Code, Sections 271.001 through 271.009, inclusive, and the City's Home-Rule Charter. The Contractual Obligation shall be issued in the aggregate principal amount of $290,000 for the purpose of paying all or a portion of the City's contractual obligations to be incurred in connection with the acquisition or purchase of personal property for the City as described in Schedule I attached hereto, and for paying certain costs related to the issuance of the Contractual Obligation. Section 3.02. Date, Denomination, Maturities and Interest. (a) The Contractual Obligation shall be dated February 1, 1991, shall be in fully registered form without coupons, shall be issued in an authorized denomination equal to the aggregate principal amount thereof outstanding from time to time, and shall be numbered from 1 upward. (b) The Contractual Obligation shall have a final stated maturity of March 27, 1994, and shall bear interest from the date of initial delivery thereof at the per annum rate of 6.50%. (c) Principal and interest shall be payable in monthly installments commencing April 27, 1991 and on the 27th day of each month thereafter until paid in the amounts set forth in Schedule II - Payment Schedule, attached hereto and incorporated herein by reference for all purposes. Section 3.03. Medium. Method and Place of Payment. (a) The principal of and interest on the Contractual Obligation shall be paid in lawful money of the United States of America. (b) Principal and interest on the Contractual Obligation shall be payable to the Owners as shown in the Register at the close of business on the Record Date. However, in the event that principal and interest is not paid on a 0694H scheduled payment date and remains unpaid for thirty (30) days thereafter, a new record date for such payment (a "Special Record Date") shall be established by the Paying Agent/ Registrar, if and when funds for the payment of such payment have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due payments (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 the Owner of the Contractual Obligation appearing on the Register at the close of business on the last business day next preceding the date of mailing of such notice. (c) Principal and interest shall be paid by check, dated as of the payment date, and sent, first class United States mail, postage prepaid, by the Paying Agent/Registrar to the Owner at the address 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 alternate banking arrangement. (d) If the date for the payment of the principal and interest on the Contractual Obligation shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Paying Agent/Registrar is located are required or authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, a 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 3.02 of this Ordinance. (e) Unclaimed Payments 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 Contractual Obligation to which the Unclaimed Payments pertain. Subject to any escheat, abandoned property or similar law, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for two years after the applicable payment or redemption date shall be applied to the next payment or payments on the Contractual Obligation thereafter coming due and, to the extent any such money remains after the retirement of the outstanding Contractual Obligation, shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar nor any other person shall be liable or responsible to any holder of such Contractual Obligation for any further payment of such unclaimed moneys or on account of any such Contractual Obligation, subject to any applicable escheat law or similar law. -6- 0694H Section 3.04. Control. Execution and Initial Registration. (a) The Contractual Obligation shall be executed on behalf of the City by the Mayor and the 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 Contractual Obligation shall have the same effect as if the Contractual Obligation had been signed manually and in person by each of said officers, and such facsimile seal on the Contractual Obligation shall have the same effect as if the official seal of the City had been manually impressed upon the Contractual Obligation. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Contractual Obligation ceases to be such officer before the authentication of such Contractual Obligation 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, the Contractual Obligation shall not be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Contractual Obligation referred to below and delivered on the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided herein, manually executed by the Comptroller of Public Accounts of the State, or by his duly authorized agent, which Certificate shall be evidence that the Contractual Obligation has been duly approved by the Attorney General of the State, is a valid and binding obligation of the City, and has been registered by the Comptroller of Public Accounts of the State. (d) On the Closing Date, one initial Contractual Obligation (the "Initial Contractual Obligation") representing the entire principal amount of the Contractual Obligation, payable in stated installments to the initial purchaser, or its designee, executed by the manual or facsimile signature of the Mayor and City Secretary of the City, approved by the Attorney General of the State, and registered and manually signed by the Comptroller of Public Accounts of the State, will be delivered to the initial purchaser or its designee upon payment for the Contractual Obligation. -7- 0694H Section 3.05. Ownership. (a) The City, the Paying Agent/Registrar and any other person may treat the person in whose name any Contractual Obligation is registered as the absolute owner of such~ Contractual Obligation for the purpose of making and receiving payment of the principal thereof and interest thereon and for all other purposes, whether or not such Contractual Obligation is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. (b) All payments made to the Owner of the Contractual Obligation shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Contractual Obligation to the extent of the sums paid. Section 3.06. Reqistration, Transfer and Exchange. (a) So long as any portion of the Contractual Obligation remains outstanding, the City shall cause the Paying Agent/Registrar to keep at its principal corporate 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 the Contractual Obligation in accordance with this Ordinance. (b) The ownership of the Contractual Obligation may be transferred only upon the presentation and surrender of the Contractual Obligation at the principal corporate 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 Contractual Obligation shall be effective until entered in the Register. (c) The Contractual Obligation shall be exchangeable upon the presentation and surrender thereof at the principal corporate office of the Paying Agent/Registrar for a Contractual Obligation of the same maturity and interest rate, and in an aggregate principal amount equal to the unpaid principal amount of the Contractual Obligation presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver a Contractual Obligation in exchange for such Contractual Obligation in accordance with this Section. (d) Each exchange Contractual Obligation 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 Ordinance to the same extent as the Contractual Obligation in lieu of which such exchange Contractual Obligation is delivered. -8- 0696H (e) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange of the Contractual Obligation. 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 Contractual Obligation. Section 3.07. ~ancellation. All Contractual Obligations in lieu of which an exchange Contractual Obligation or replacement Contractual Obligation is authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper records made regarding such payment, exchange or replacement. The Paying Agent/Registrar shall then return such cancelled Contractual Obligation to the City. Section 3.08. Replacement Contractual Obligation. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Contractual Obligation, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Contractual Obligation 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 Contractual Obligation 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 the Contractual Obligation is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State and in the absence of notice or knowledge that such Contractual Obligation has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Contractual Obligation 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 Contractual Obligation; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar to save the Paying Agent/Registrar and the City harmless; -9- 0694H (iii) pays all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of 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 Paying Agent/Registrar. (c) After the delivery of such replacement Contractual Obligation, if a bona fide purchaser of the original Contractual Obligation in lieu of which such replacement Contractual Obligation was issued presents for payment such original Contractual Obligation, the City and the Paying Agent/ Registrar shall be entitled to recover such replacement Contractual Obligation from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Paying Agent/Registrar in connection therewith. (d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken Contractual Obligation has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Contractual Obligation, may pay such Contractual Obligation. (e) Each replacement Contractual Obligation 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 Ordinance to the same extent as the Contractual Obligation in lieu of which such replacement Contractual Obligation is delivered. Section 3.09. Additional Obligations. The City reserves the right to issue any obligations authorized by law and such obligations may be payable from the same source and secured in the same manner as the Contractual Obligation. ARTICLE IV REDEMPTION OF CONTRACTUAL OBLIGATIONS BEFORE MATURITY Section 4.01. No Redemption. The Contractual Obligation shall not be subject to redemption before its scheduled maturity. -10-- 0694H ARTICLE V PAYING AGENT/REGISTRAR Section 5.01. APpointment of Initial Paying Agent/. Ameritrust Texas National Association, Dallas, Texas, is hereby appointed as the initial Paying Agent/Registrar for the Contractual Obligation. Section 5.02. ua~k~k~~. Each Paying Agent/Registrar shall be a commercial bank, trust company organized under the laws of the State or other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Contractual Obligation. Section 5.03. Maintaining Paying Agent/Registrar. (a) At all times while any portion of the Contractual Obligation is outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 5.02 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying Agent/Registrar specifying the duties and responsibilities of the City and the Paying Agent/Registrar. The signature of the Mayor shall be attested by the City Secretary. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement. Section 5.04. Termination. The City, upon not less than 60 days notice, reserves the right to terminate the appointment of any Paying Agent/ Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination. Section 5.05. Notice of Change to Qwners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by first class United States mail, postage prepaid, at the address in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. --11-- 0694H Section 5.06. Aqreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. Section 5.07. Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent, promptly upon the appointment of a successor, will deliver the Register (or a copy thereof) and all other pertinent books and records relating to the Contractual Obligation to the successor Paying Agent/Registrar. ARTICLE VI FORM OF THE CONTRACTUAL OBLIGATION Section 6.01. Form Generally. (a) The Contractual Obligation, including the Registration Certificate of the Comptroller of Public Accounts of the State, the Certificate of the Paying Agent/Registrar, and the Assignment form to appear on the Contractual Obligation, (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 Ordinance, 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 Contractual Obligation, as evidenced by their execution thereof. (b) Any portion of the text of the Contractual Obligation may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Contractual Obligation. (c) The Contractual Obligation shall be typewritten or photocopied, 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 Contractual Obligation, as evidenced by their execution thereof. --12-- 0694H Section 6.02. Form of the Contractual ObliGation. The form of the Contractual Obligation, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State, the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Contractual Obligation, shall be substantially as follows: (a) Form of Contractual Obligation. REGISTERED REGISTERED No. __ $ United States of America State of Texas COUNTY OF DENTON CITY OF THE COLONY, TEXAS CONTRACTUAL OBLIGATION SERIES 1991 INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP NUMBER: 6.50% March 27, 1994 February 1, 1991 The City of The Colony (the "City"), in the County of Denton, State of Texas, for value received, hereby promises to pay to or registered assigns, the principal amount of $290,000, with interest accrued thereon at the rate per annum set forth above, in the installments of principal and interest on the dates set forth in the Schedule of Payments attached hereto and incorporated herein by reference for all purposes. The principal of and interest on this Contractual Obligation shall be payable without exchange or collection charges in lawful money of the United States of America at the principal office of the Paying Agent/Registrar. The initial Paying Agent/Registrar is Ameritrust Texas National Association, Dallas, Texas. Principal and interest on this Contractual Obligation is payable by check dated as of the payment date, and mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expense of such alternate banking arrangement. For the purpose of the payment of principal and --13-- 0694H interest on this Contractual Obligation, the registered owner shall be the person in whose name this Contractual Obligation is registered at the close of business on the "Record Date," which shall be the fifteenth day of the month of such payment date. However, in the event that principal and interest is not paid on a scheduled payment date and remains unpaid for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") shall be established by the Paying Agent/Registrar, if and when funds for the payment of such principal and interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due principal and 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 the Owner of the Contractual Obligation appearing on the Register at the close of business on the last business day next preceding the date of mailing of such notice. If the date for the payment of the principal and interest on this Contractual Obligation shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where 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 which 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 original date payment was due. This Contractual Obligation is issued in fully registered form in the aggregate principal amount of $290,000 (herein referred to as the "Contractual Obligation"), pursuant to a certain ordinance of the City (the "Ordinance") for the purpose of paying all or a portion of the City's contractual obligations to be incurred in connection with the acquisition or purchase of personal property for the City. This Contractual Obligation is not subject to redemption prior to maturity. As provided in the Ordinance, and subject to certain limitations therein set forth, this Contractual Obligation is transferable upon surrender of this Contractual Obligation for transfer at the principal office of the Paying Agent/ Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar; thereupon, one fully registered Contractual Obligation of the same stated maturity, bearing the same rate of interest, and for the aggregate principal amount of the Contractual Obligation outstanding payable in the installments set forth in the Schedule attached --14-- 0694H hereto, will be issued to the designated transferee or transferees. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Contractual. Obligation is registered as the owner hereof for the purpose of receiving payment as herein provided, and for all other purposes, whether or not this Contractual Obligation be overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the contrary. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Contractual Obligation is duly authorized by law; that all acts, conditions, and things to be done precedent to and in the issuance of this Contractual Obligation have been properly done, have happened, and have been performed in regular and due time, form, and manner as required by law; that proper provisions have been made for the levy and collection annually of taxes upon all taxable property in said City sufficient within the limits prescribed by law to pay the principal and interest on this Contractual Obligation when due; that when so collected, such taxes shall be appropriated to such purpose; and that ~he total indebtedness of the City, including the Contractual Obligation, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City has caused this Contractual Obligation to be executed by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Contractual Obligation. City Secretary Mayor, City of The Colony, Texas City of The Colony, Texas [SEAL] (b) Form of Comptroller's Registration Certificate. The following Comptroller' s Registration Certificate may be deleted from the Contractual Obligation if such certificate on the Initial Contractual Obligation is fully executed. OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS S REGISTER NO. OF THE STATE OF TEXAS I hereby certify that there is on file and of record in my office a certificate of the Attorney General of the State of --15-- 0694H Texas to the effect that this Contractual Obligation has been examined by him as required by law, that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding obligation of the City of The Colony, Texas; and that this Contractual Obligation has this day been registered by me. Witness my hand and seal of office at Austin, Texas, Comptroller of Public Accounts of the State of Texas [SEAL] (c) Form of Certificate of Paying Agent/Registrar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Contractual Obligation if the Comptroller's Registration Certificate appears thereon. CERTIFICATE OF PAYING AGENT/REGISTRAR The records of the Paying Agent/Registrar show that the Initial Contractual Obligation representing this Contractual Obligation was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas, and that this is a Contractual Obligation issued in exchange or as a replacement for the Initial Contractual Obligation referred to in the within-mentioned Ordinance. Ameritrust Texas National Association, Dallas, Texas, as Paying Agent/Registrar Dated: By: Authorized Signatory (d) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto --16-- 0694H (Print or typewrite name, address and Zip Code of transferee) (Social Security or other identifying number: ) the within Contractual Obligation and all rights hereunder and hereby irrevocably constitutes and appoints attorney to transfer the within Contractual Obligation on the books kept for registration hereof, with full power of substitution in the premises. Dated .' NOTICE.. The signature on this Assignment must correspond with Signature Guaranteed By.' the name of the registered owner as it appears on the face of the within Contractual Obligation in every particular and must be guaranteed by an officer of a federal or state bank or a member of the Authorized Signatory National Association of Securities Dealers. Section 6.03. CUSIP Reaistration. The City may secure identification numbers through the CUSIP Service Bureau Division of Standard & Poor's Corporation, New York, New York, and may authorize the printing of such numbers on the face of the Contractual Obligation. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Contractual Obligation shall be of no significance or effect as regards the legality thereof and neither the City nor the attorneys approving said Contractual Obligation as to legality are to be held responsible for CUSIP numbers incorrectly printed on the Contractual Obligation. Section 6.04. Leaal Opinion. The approving legal opinion of Hutchison Boyle Brooks & Fisher, A Professional Corporation, Dallas, Texas, Bond Counsel, may be printed on the reverse side of or attached to the Contractual Obligation over the certification of the City Secretary of the City, which may be executed in facsimile. Section 6.05. Statement of Insurance. A statement relating to a municipal bond insurance policy, if any, to be issued for the Contractual Obligation may be printed on or attached to each Contractual Obligation. -17- 0694H ARTICLE VII SALE AND DELIVERY OF CONTRACTUAL OBLIGATION; DEPOSIT OF PROCEEDS Section 7.01. Sale of Contractual Obligations: Official Statement. (a) The Contractual Obligation is hereby sold and shall be delivered to Virginia C. Head (the "Purchasers"). It is hereby officially found, determined, and declared that the terms of this sale are the most advantageous reasonably obtainable. The Contractual Obligation initially shall be registered in the name of Virginia C. Head, or her designee. (b) The Offering Memorandum prepared and distributed in connection with the offering and sale of the Contractual Obligation, is hereby approved, confirmed, and adopted as official documents and statements of the City. (c) The use of the Offering Memorandum and all addenda, if any, thereto, in the offering and sale of the Contractual Obligation, is hereby approved, authorized, and ratified. (d) The signing of the Offering Memorandum by the Mayor and the City Secretary is hereby approved, authorized, and ratified. (e) All officers of the City are hereby authorized to execute such documents, certificates, and receipts, and to make suchy elections with respect to the tax-exempt status thereof, as they may deem appropriate in order to consummate the delivery of the Contractual Obligation in accordance with the terms of this Ordinance. (f) The obligation of the purchaser identified in subsection (a) of this Section to accept delivery of the Contractual Obligation is subject to such purchaser being furnished with the final, approving opinion of Hutchison Boyle Brooks & Fisher, A Professional Corporation, Dallas, Texas, Bond Counsel for the City, which opinion shall be dated and delivered the Closing Date. Section 7.02. Control and Delivery of Contractual Obliaation. (a) The Mayor of the City is hereby authorized to have control of the Initial Contractual Obligation and all necessary records and proceedings pertaining thereto pending investigation, examination and approval of the Attorney General --18-- 0694H of the State, registration by the Comptroller of Public Accounts of the State, and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. (b) After registration by the Comptroller of Public Accounts of the State, delivery of the Contractual Obligation shall be made to the initial purchaser thereof under and subject to the general supervision and direction of the Mayor, against receipt by the City of all amounts due to the City under the terms of sale. Section 7.03. ADDroval of Escrow Aareement and Appoint- ment of Escrow Agent. An Escrow Agreement substantially in the form attached hereto as Exhibit A, is hereby approved, and the Mayor and City Secretary of the City are hereby authorized and directed to execute such escrow agreement on behalf of the City. Ameritrust Texas National Asociation, Dallas, Texas, is hereby appointed to act as the initial Escrow Agent pursuant to the Escrow Agreement. Section 7.04. DePosit of Proceeds. The proceeds of the sale of the Contractual Obligation shall be deposited to the Contractual Obligation Escrow Fund established pursuant to the Escrow Agreement, such moneys to be dedicated and used solely for the purposes of paying the costs of acquiring or purchasing the Property and the costs of issuance with respect to the Contractual Obligation. Until disbursed for the acquisition of property, the Contractual Obligation is secured and payable from amounts held in the Escrow Fund pursuant to the Escrow Agreement. The City hereby acknowledges its expectation that the Property to be acquired with the proceeds of the Contractual Obligation no later than ARTICLE VIII INVESTMENTS Section 8.01. Investments. (a) Money in the Debt Service Fund, created by this Ordinance, at the option of the City, may be invested in such securities or obligations as are permitted under applicable law. (b) Any securities or obligations in which money is so invested in the Debt Service Fund shall be kept and held in trust for the benefit of the Owners and shall be sold and the --19-- 0694H proceeds of sale shall be timely applied to the making of all payments required to be made from the fund from which the investment was made. Section 8.02. Investment Income. Interest and income derived from investment of the Debt Service Fund shall be credited to such Fund. ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01. Payment of the Contractual Obliqations. On or before each payment date of the Contractual Obligation and while any portion of the Contractual Obligation is outstanding and unpaid, there shall be made available to the Paying Agent/Registrar, out of the Debt Service Fund, money sufficient to pay such interest on and principal of the Contractual Obligation as will accrue or mature on the applicable payment date. Section 9.02. Other Representations and Covenants. (a) The City will faithfully perform, at all times, any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance and in the Contractual Obligation; the City will promptly pay or cause to be paid the principal of and interest on the Contractual Obligation on the dates and at the places and manner prescribed in such Contractual Obligation; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. (b) The City is duly authorized under the laws of the State to issue the Contractual Obligation; all action on its part for the creation and issuance of the Contractual Obligation has been duly and effectively taken; and the Contractual Obligation in the hands of the Owner thereof is and will be a valid and enforceable obligation 'of the City in accordance with its terms. (c) The City hereby represents that the proceeds of the Contractual Obligation are needed at this time to provide funds for the City's purchase of the property for which the Contractual Obligation was issued, as specified in this Ordinance; that based on current facts, estimates, and circumstances, it is reasonably expected that final disbursement of the proceeds of the Contractual Obligation will occur within three years after the Closing Date, that -20- 0694H substantial binding obligations to purchase such property will be incurred within six months after such date, and that the acquisition of the property will proceed with due diligence to completion; that it is not reasonably expected that the proceeds of the Contractual Obligation or money deposited in. the Debt Service Fund will be used or invested in a manner that would cause the Contractual Obligation to be or become an "arbitrage bond," within the meaning of Section 148 of the Code; and that, except for the Debt Service Fund, no other funds or accounts have been established or pledged to the payment of the Contractual Obligation. (d) The City will not take any action or fail to take any action with respect to the investment of the proceeds of the Contractual Obligation or any other funds of the City, including amounts received from the investment of any of the foregoing, that, based upon the facts, estimates, and circumstances known on the Closing Date, would result in constituting the Contractual Obligation "arbitrage bonds," within the meaning of such Section 148(f) of the Code, and the City will not take any deliberate action motivated by arbitrage that would have such result. (e) Proper officers of the City charged with the responsibility of issuing the Contractual Obligation are hereby directed to make, execute, and deliver certifications as to facts, estimates, and circumstances in existence as of the Closing Date and stating whether there are any facts, estimates, or circumstances that would materially change the City's current expectations. (f) The City will comply with the provisions of Section 148(f) of the Code, and the regulations promulgated thereunder, relating to paying certain excess earnings of investments of proceeds of the Contractual Obligation to the United States of America. (g) The City may make any changes in the description of the Property listed on Schedule I to this Ordinance or of any component thereof whenever the City deems such changes to be necessary and appropriate and provided that the nature of the Property after such changes will constitute qualified property eligible for financing under the Act and such changes shall not adversely affect the tax-exempt status of the Contractual Obligation. ACtions described herein shall be evidenced by a certificate of the City filed with the Escrow Agent setting forth such change. (h) The covenants and representations made or required by this Section are for the benefit of the Owners and may be relied upon by the Owners and Bond Counsel for the City. --21-- 0694H ARTICLE X DEFAULT AND REMEDIES Section 10.01. Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of or interest on the Contractual Obligation when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement, or obligation of the City, which default materially, adversely affects the rights of the Owners, including but not limited to, their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by any Owner to the City. Section 10.02. Remedies for Default. (a) Upon the happening of any Event of Default, then and in every case any Owner or an authorized representative thereof, including but not limited to, a trustee therefor, may proceed against the City for the purpose of protecting and enforcing the rights of the Owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Owners hereunder or any combination of such remedies. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of the Contractual Obligation then outstanding. Section 10.03. Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Contractual Obligation or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt -22- 0694H evidenced by the Contractual Obligation shall not be available as a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. ARTICLE XI DISCHARGE Section 11.01. Discharge by Payment. When all or any portion of the Contractual Obligation has been paid in full as to principal and as to interest and redemption premium, if any, or when all or any portion of the Contractual Obligation has become due and payable, whether at maturity or otherwise, and the City shall have provided for the payment of the whole amount due or to become due on such Contractual Obligation then outstanding, including such interest that has accrued thereon or that may accrue to the date of maturity or that may become due at maturity by depositing with the Paying Agent/Registrar, for payment of the principal of such outstanding Contractual Obligation and the interest accrued thereon, the entire amount due or to become due thereon, and the City shall also have paid or caused to be paid all sums, other than debt service, due and payable under this Ordinance by the City, including the compensation due or to become due the Paying Agent/Registrar, then the Paying Agent/Registrar, upon receipt of a letter of instructions from the City requesting the same, shall discharge and release the lien of this Ordinance as it relates to such Contractual Obligation and execute and deliver to the City such releases or other instruments as shall be requisite to release the lien hereof. Section 11.02. Discharge by DePosit. (a) The City may discharge its obligation to pay the principal of and interest on all or any portion of the Contractual Obligation and its obligation to pay other sums payable or to become payable under this Ordinance by the City, including the compensation due or to become due the Paying Agent/Registrar, in accordance with the following provisions: (i) depositing or causing to be deposited with the Paying Agent/Registrar an amount of money that, together with the interest earned on or capital gains or profits to be realized from the investment of such money, will be sufficient to pay the principal of and accrued interest on such Contractual Obligation to maturity of -23- 0694H such Contractual Obligation, and to pay such other amounts as may be reasonably estimated by the Paying Agent/Registrar to become payable under this Ordinance with respect to the Contractual Obligation being provided for, including the compensation due or to become due the Paying Agent/Registrar; and (ii) providing the Paying Agent/Registrar with an opinion of nationally recognized bond counsel acceptable to the Paying Agent/Registrar to the effect that the deposit specified in subdivision (i) of this subsection (a) will not cause the interest on the Contractual Obligation to become subject to federal income taxation. (b) Subject to subsection (c) of this Section, upon compliance with subsection (a) of this Section, the Contractual Obligation for the payment of which provision is thus made shall no longer be regarded as outstanding and unpaid, and the Paying Agent/Registrar, upon receipt of a letter of instructions from the City requesting the same, shall discharge and release the lien of this Ordinance as to such Contractual Obligation and shall execute and deliver to the City such releases or other instruments as shall be requisite to release the lien hereof. (c) Before the discharge and release of any portion of the lien of this Ordinance pursuant to this Section, the City shall make the following provisions with the Paying Agent/ Registrar: (i) the establishment of a separate escrow account fund with the Paying Agent/Registrar for the deposit pursuant to subsection (a)(i) of this Section; (ii) the payment to the Owners at the date of maturity or at the date fixed for prior redemption, as applicable, of the full amount to which the Owners of the Contractual Obligation would be entitled by way of principal, redemption premium, if any, and interest to the date of such maturity or prior redemption; (iii) the investment of such moneys by the Paying Agent/Registrar in direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and which may be in book entry form, maturing and/or bearing interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payments of such Contractual Obligation; -24- 0694H (iv) the sending of written notice by registered or certified United States mail to the Owner of the Contractual Obligation then outstanding within 30 days following the date of such deposit that such moneys are. so available for such payment; and (v) the payment to the City, periodically or following final payment of the principal of, redemption premium, if any, and interest on the appropriate Contractual Obligation, of any moneys, interest earnings, profits or capital gains over and above the amounts necessary for such purposes. FINALLY PASSED, APPROVED AND EFFECTIVE this 25th day of February, 1991. Mayor, ~ City of The Colony, ATTEST: City Secretary, City of The Colony, Texas [SEAL] -25- 069~H Schedule I Initial Description of Personal Property to be Purchased 0694H/29 Schedule II PAYMENT SCHEDULE The Colony Contractual Obligation Total Payment Installment Date Principal Interest Pa~vment 4/27/91 $ 7,952.12 $ 1,570.84 $ 9,522.96 5/27/91 7,995.20 1,527.76 9,552.96 6/27/91 8,038.50 1,484.46 9,522.96 7/27/91 8,082.05 1,440.91 9,522.96 8/27/91 8,125.83 1,397.13 9,522.96 9/27/91 8,169.84 1,353.12 9,522.96 10/27/91 8,214.10 1,308.86 9,522.96 11/27/91 8,258.59 1,264.37 9,522.96 12/27/91 8,303.32 1,219.64 9,522.96 1/27/92 8,348.30 1,174.66 9,522.96 2/27/92 8,393.51 1,129.45 9,522.96 3/27/92 8,438.99 1,083.97 9,522.96 4/27/92 8,484.69 1,038.27 9,522.96 5/27/92 8,530.65 992.31 9,522.96 6/27/92 8,576.87 946.09 9,522.96 7/27/92 8,623.32 899.64 9,522.96 8/27/92 8,670.03 852.93 9,522.96 9/27/92 8,716.99 805.97 9,522.96 10/27/92 8,764.21 758.75 9,522.96 11/27/92 8,811.68 711.28 9,522.96 12/27/92 8,859.41 663.55 9,522.96 1/27/93 8,907.40 615.56 9,522.96 2/27/93 8,955.65 567.31 9,522.96 3/27/93 9,004.16 518.31 9,522.96 4/27/93 9,052.93 470.03 9,522.96 5/27/93 9,101.97 420.99 9,522.96 6/27/93 9,151.27 371.69 9,522.96 7/27/93 9,201.07 322.12 9,523.19 8/27/93 6,165.23 272.28 6,437.51 9/27/93 6,198.62 238.89 6,437.51 10/27/93 6,232.20 205.31 6,437 51 11/27/93 6,265.96 171.55 6,437 51 12/27/93 6,299.90 137.61 6,437 51 1/27/94 6,334.02 103.49 6,437 51 2/27/94 6,368.33 69.18 6,437 51 3/27/94 6,403.09 34.68 6,437 77 TOTALS: $290.000.00 S28.143.4~ S318.143.45 0694H/30 EXHIBIT A FORM OF ESCROW AGREEMENT See Attached EXHIBIT A ~EEMENT THIS ESCROW AGREEMENT, dated as of February 1, 1991 (herein, together with any amendments or supplements hereto, called the "Agreement"), is entered into by and between the City of The Colony, Texas (herein called the "Issuer"), and Ameritrust Texas National Association, Dallas, Texas, as escrow agent (herein, together with any successor in such capacity, called the "Escrow Agent"). W I TNE SSETH: WHEREAS, the Public Property Finance Act, V.T.C.A., Local Government Code, Sections 271.001 through 271.009, inclusive, (the "Act") authorizes the Issuer to execute, perform, and make payments under contracts with any person for the use, acquisition, or purchase of personal property as described in the Act; and WHEREAS, the Act permits the governing body of the Issuer to execute contracts in any form deemed appropriate by said governing body in connection with the use, acquisition, or purchase of personal property; and WHEREAS, the governing body of the Issuer desires to acquire or purchase personal property, deemed by the governing body of the Issuer to be necessary, useful and/or appropriate for the purpose of the Issuer, all as described in the Ordinance (the "Property"); and WHEREAS, the governing body of the Issuer has adopted an ordinance (the "Ordinance") authorizing the issuance, sale, and delivery of $290,000 of City of The Colony, Texas Contractual Obligation, Series 1991 (the "Contractual Obligation"); and WHEREAS, the Ordinance authorized the execution of an Escrow Agreement in substantially the form hereof and the deposit of the proceeds of the sale of the Contractual Obligation in the Escrow Fund (hereinafter defined); and WHEREAS, the Escrow Agent is a party to this Agreement and acknowledges its acceptance of the terms and provisions hereof. NOW, THEREFORE, in consideration of the mutual under- takings, promises and agreements herein contained and in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Issuer and the Escrow Agent mutually undertake, promise, and agree for themselves and their respective representatives and successors, as follows: A-1 0695H ARTICLE I DEFINITIONS AND INTERPRETATIONS SECTION 1.01. Definitions. Unless the context clearly indicates otherwise, the following terms shall have the meanings assigned to them below when they are used in this Agreement: "Authorized Representative" shall mean with respect to the Issuer, the Mayor, the City Manager, or such other party hereafter designated by the governing body of the Issuer. "Escrow Fund" means the fund created by this Agreement to be administered by the Escrow Agent pursuant to the provisions of this Agreement. "Permitted Investments" shall mean all forms of investment then authorized by law for the investment of the general funds of the Issuer. SECTION 1.02. Other Definitions. The terms "Agreement," "Issuer, .... Escrow Agent, .... Contractual Obligation, .... Ordinance" and "Property," when they are used in this Agreement, shall have the meanings assigned to them in the preamble to this Agreement. SECTION 1.03. Interpretations. The titles and headings of the articles and sections of this Agreement have been inserted for convenience and reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the acquisition or purchase of the Property and the payment of the costs of issuance with respect to the Contractual Obligation. ARTICLE II DEPOSIT OF FUNDS SECTION 2.01. DePosits in the Escrow Fund. Concurrently with the sale and delivery of the Contractual Obligation the Issuer shall deposit, or cause to be deposited, with the Escrow Agent, for deposit in the Escrow Fund, the proceeds of the sale of the Contractual Obligation other than proceeds representing accrued interest, if any, and premium, if any, which is to be deposited to the Debt Service Fund established by the Ordinance, and the Escrow Agent shall, upon the receipt thereof, acknowledge such receipt to the Issuer in writing. A-2 0695H ARTICLE III CREATION AND OPERATION OF ESCROW FUND SECTION 3.01. Escrow Fund. (a) The Escrow Agent has created on its books a special irrevocable escrow fund to be known as the City of The Colony, Texas, Contractual Obligation Escrow Fund (the "Escrow Fund"). The Escrow Agent hereby agrees that upon receipt thereof it will deposit to the credit of the Escrow Fund the funds described in Section 2.01 hereof. Such deposit, all proceeds therefrom, and all cash balances from time to time on deposit therein (i) shall be the property of the Escrow Fund, and (ii) shall be applied only in strict conformity with the terms and conditions of this Agreement. (b) The Escrow Agent shall hold at all times the Escrow Fund and all assets of the Escrow Fund, wholly segregated from all other funds and securities on deposit with the Escrow Agent; it shall never allow any other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. (c) The assets of the Escrow Fund shall always be held by the Escrow Agent in a fiduciary capacity for the benefit of the Issuer and a special account thereof shall at all times be maintained on the books of the Escrow Agent. The amounts received by the Escrow Agent under this Agreement shall not be considered as a banking deposit by the Issuer, and the Escrow Agent shall have no right to title with respect thereto except as a fiduciary and Escrow Agent under the terms of this Agreement. (d) The amounts received by the Escrow Agent under this Agreement shall not be subject to warrants, drafts, or checks drawn by the Issuer but shall be disbursed or withdrawn, in connection with the costs paid or incurred by the Issuer with respect to the use, acquisition, or purchase of Property, solely upon the receipt of written direction from an Authorized Representative in the form of the "Payment Request Form" attached hereto as Attachment B. The Escrow Agent shall retain on file copies of each Payment Request Form. SECTION 3.02. Moneys Secured. All moneys deposited with the Escrow Agent and not invested in securities by the Escrow Agent pursuant to the provisions hereof or to the extent not insured by the Federal Deposit Insurance Corporation or other federal agency, shall continuously be secured, for the benefit of the Issuer and the holders of the Contractual Obligation, to the extent and as required by law for security of Issuer's funds. Such securities shall be deposited with the Escrow Agent. A-3 0695H SECTION 3.03. No Unauthorized Transfers. No money shall be withdrawn or transferred from or paid out of the Escrow Fund except as herein expressly provided in Section 3.01. SECTION 3.04. Investment of MQ~y in Escrow Fund. All. money held by the Escrow Agent pursuant to this Escrow Agreement shall be deposited or invested only in Permitted Investments and only at the written direction of the Authorized Representative. All interest and other income received by the Escrow Agent from investment of the Escrow Fund shall be retained in the Escrow Fund. The Escrow Agent shall not be liable for any loss resulting from the making or disposition of any investment pursuant to this Section, and any such losses shall be charged to the Escrow Fund. ARTICLE IV RECORDS AND REPORTS SECT10N 4.01. Records. The Escrow Agent will keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocations, and application of the money and Permitted Investments deposited to the Escrow Fund and all proceeds thereof, including specifically the submission of any Payment Request Form and the disbursement of funds pursuant to any such submission, and such books shall be available for inspection at reasonable hours and under reasonable conditions by the Issuer and the owners of the Contractual Obligation. SECTION 4.02. Reports. While this Agreement remains in effect, the Escrow Agent annually shall prepare and send to the Issuer a written report summarizing all transactions relating to the Escrow Fund during the preceding year, together with a detailed statement of all Permitted Investments and the cash balance on deposit in the Escrow Fund as of the end of such period. ARTICLE V CONCERNING THE ESCROW AGENT SECTION 5.01. Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Agreement and undertake the obligations and A-4 0695H responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder. SECTION 5.02. Limitation on Liability. The Escrow Agent makes no representations as to the value, conditions, or sufficiency of the Escrow Fund, or any part thereof, or as to the title of the Issuer thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in respect to any of such matters. It is the intention of the parties hereto that the Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in good faith in any exercise of reasonable care and believed by it to be within the discretion or power conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the consequences of any error of judgment; and the Escrow Agent shall not be answerable except fox its own action, neglect, or default, nor for any loss unless the same shall have been through its negligence or want of good faith. Unless it is specifically otherwise provided herein, the Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency or the performance or failure of performance of the Issuer with respect to arrangements or contracts with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund, and to dispose of and deliver the same in accordance with this Agreement. If, however, the Escrow Agent is called upon by the terms of this Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise reasonable care and diligence, and in event of error in making such determination the Escrow Agent shall be liable only for its own misconduct or its negligence. In determining the occurrence of any such event or contingency, the Escrow Agent may request from the Issuer or any other person such reasonable additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency~ and in this connection may make inquiries of, and consult with, among others, the Issuer at any time. SECTION 5.03. Successor Escrow Agents. If at any time the Escrow Agent or its legal successor or successors should become unable, through operation of law or otherwise, to act as escrow agent hereunder, or if its property and affairs shall be A-5 0695H taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy or for any other reason, a vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event the Issuer, by appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy. If no successor Escrow Agent shall have been appointed by the Issuer within 60 days, a successor may be appointed by the owners of a majority in principal amounts of the Contractual Obligation then outstanding by an instrument or instruments in writing filed with the Issuer, signed by such owners or by their duly authorized attorneys-in-fact. If, in a proper case, no appointment of a successor Escrow Agent shall be made pursuant to the foregoing provisions of this section within three months after a vacancy shall have occurred, the owner of any Contractual Obligation may apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if any, as it may deem proper, prescribe and appoint a successor Escrow Agent. Any successor Escrow Agent shall be a corporation organized and doing business under the laws of the United States or the State of Texas, which may, but need not be, authorized under such laws to exercise corporate trust powers, having its principal office and place of business in the State of Texas, having a combined capital and surplus of at least $1,000,000 and subject to the supervision or examination by federal or state authority. Any successor Escrow Agent shall execute, acknowledge, and deliver to the Issuer and the Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall execute and deliver an instrument transferring to such successor Escrow Agent, subject to the terms of this Agreement, all the rights, powers, and trusts of the Escrow Agent hereunder. Upon the request of any such successor Escrow Agent, the Issuer shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such rights, powers, and duties. ARTICLE VI MISCELLANEOUS SECTION 6.01. Notice. Any notice, authorization, request, or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed to the Issuer or the Escrow Agent at the address shown on Attachment A attached hereto. The United States Post Office registered or certified mail receipt showing delivery of A-6 0695H the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other party not less than ten (10) days prior notice thereof. SECTION 6.02. Termination of Responsibilities. Upon the taking of all the actions as described herein by the Escrow Agent, the Escrow Agent shall have no further obligations or responsibilities hereunder to the Issuer, the owners of the Contractual Obligation or to any other person or persons in connection with this Agreement. SECTION 6.03. Binding Agreement. This Agreement shall be binding upon the Issuer and the Escrow Agent and their respective successors and legal representatives, and shall inure solely to the benefit of the owners of the Contractual Obligation, the Issuer, the Escrow Agent and their respective successors and legal representatives. SECTION 6.04. Severability. In case any one or more of the provisions contained in this Agreement 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 provisions of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. SECTION 6.05. Texas Law Governs. This Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Texas. SECTION 6.06. Time of the Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Agreement. SECTION 6.07. Amendments. This Agreement shall not be amended except to cure any ambiguity or formal defect or omission in this Agreement. No amendment shall be effective unless the same shall be in writing and signed by the parties thereto. No such amendment shall adversely affect the rights of the holders of the Contractual Obligation. EXECUTED as of the date first written above. CITY OF THE COLONY, TEXAS By: Mayor A-7 0695H ATTEST: City Secretary [SEAL] AMERITRUST TEXAS NATIONAL ASSOCIATION, as Escrow Agent By: Title: ATTEST: Title: [SEAL] A-8 0695H INDEX TO ATTACM~R~TS Attachment "A" Addresses of the Issuer and the Escrow Agent Attachment "B" Payment Request Form 0695H/10 ATTACHMENT "A" ADDRESSES OF THE ISSUER AND ESCROW AGENT ISSUER City of The Colony, Texas 5151 North Colony Blvd. The Colony, Texas 75056 Attention: City Manager Ameritrust Texas National Association 1201 Elm Street Dallas, Texas 75221 Attention: Corporate Trust Department 0695H/11 ATTAC~ENT "B" Payment Request Form No. TO: Ameritrust Texas National Association 1201 Elm Street Dallas, Texas 75221 Attention: Corporate Trust Department As Escrow Agent, you are hereby requested to pay from the Escrow Fund established by the Escrow Agreement, dated as of February 1, 1991, by and between the City of The Colony, Texas (the "Issuer") and Ameritrust Texas National Association (the "Escrow Agent"), to the person, corporations, or other entity designated below as Payee, being someone other than an employee or officer of the Issuer, the sum set forth below such designation. The Issuer, acting by and through its Authorized Representative, hereby certifies that [check one or more as appropriate]: [ ] Such amount represents [full] [partial] payment for an item of "Property" (as defined in the Escrow Agreement) being and such item or Property [has not been] [has been] the subject of prior Payment Request Forms [Nos. ]. Attached hereto, unless supplied with a previous Payment Request, is a copy of the invoice, winning bid form, or contract relating to the purchase or acquisition of such Property. [ ] Such amount represents a cost of issuance of the Contractual Obligation (as defined in the Escrow Agreement). [ ] Such amount represents the unexpended balance of the funds held in the Escrow Fund not needed for the payment of the costs of acquiring or purchasing Property and should be transferred to the Debt Service Fund established by the Ordinance. B-1 Payee: Address: Amount: $. Dated City of The Colony, Texas City Manager B-2 0695H/13