G-97-02-27-9F - 2/27/1997ORNAAac6 no. 6-q7-0.2-a7-qr
AN ORDINANCE AUTHORIZING 11IE ISSUANCE OF $2,690,000, ENCINO PLAZA
PUBLIC IMPROVEMENT DISTRICT SPECIAL ASSESSMENT BONDS, TAXABLE
SERIES 1997; PROVIDING FOR THE PAYMENT OF SAID BONDS BY A PLEDGE OF
REVENUES DERIVED FROM SPECIAL ASSESSMENTS LEVIED AGAINST ALL
PROPERTIES IN ENCINO PLAZA PUBLIC IMPROVEMENT DISTRICT, IN
AMOUNTS SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON SUCH
BONDS, TO FUND A RESERVE FUND, AND TO PAY VARIOUS ADMINISTRATIVE
COSTS ASSOCIATED WITH THE OPERATION OF THE PUBLIC IMPROVEMENT
DISTRICT; PROVIDING 1'HI: TERMS AND CONDITIONS OF SUCH BONDS;
ORDAINING OTHER MATTERS INCIDENT AND RELATING TO THE ISSUANCE,
PAYMENT, SECURITY, SALE, AND DELIVERY OF SAID BONDS, INCLUDING
AUTHORIZING THE EXECUTION OF A PAYING AGENT/REGISTRAR
AGREEMENT
RECITALS
The City Council of the City of Round Rock, Texas (the "City"), has previously found and
determined that it was in the best interests of the City and the petitioning property owners of the City
to create a public improvement district, pursuant to the provisions of the Public Improvement District
Assessment Act, as amended, Texas Local Government Code, Chapter 372 (the "Act"); and
On August 14, 1996, a petition signed by the requisite number of property owners located
within the proposed public improvement district was submitted to and filed with the City Secretary
requesting that the City Council create a public improvement district in the City.
The aforementioned petition was submitted in compliance with the provisions of Section
372.005 of the Act.
Notice of a public hearing to consider the advisability of the improvements was published in
a newspaper of general circulation on November 25, 1996, disclosing the City Council's intention to
consider the creation of a public improvement district.
Written notice of the scheduled public hearing was delivered on November 18, 1996, to each
property owner located within the proposed public improvement district.
On December 12, 1996, the City Council held a public hearing conforming to the requirements
of Section 372.009 of the Act on the advisability of the improvements.
Pursuant to Section 372.009(b) of the Act, the City Council, on December 12, 1996, passed
and approved a Resolution making certain findings as to the advisability of the improvements, the
nature of the improvements, the boundaries of the proposed public improvement district, the method
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of assessment, and the apportionment of the costs between the proposed public improvement district
and the City as a whole and authorizing creation of the Encino Plaza Public Improvement District (the
"District") thereby establishing the exact boundaries of the District.
No portion of the District is located within the extraterritorial jurisdiction of the City.
Such authorization took effect on January 27, 1997, the date on which notice of the creation
of the District was published in the Round Rock Leader, a newspaper of general circulation in the
City.
No protest, satisfying the requirements of Section 372.010(c) of the Act, has been filed with
any official of the City.
Pursuant to the provisions of Sections 372.013 and 372.014 of the Act, an
Assessment/Service Plan was prepared and submitted to the City Council for review which was set
for a public hearing before the City Council to be held on February 27, 1997.
The Assessment/Service Plan provides that one hundred percent (100%) of the cost of the
improvements authorized by Section 372.003 of the Act (the "Authorized Improvements") will be
paid by Special Assessments levied against property located within the District.
The Assessment/Service Plan recommended that the City Council apportion the cost of the
Authorized Improvements on the basis of two classes (Class A and Class B) and within each class the
Authorized Improvements be apportioned based on a ratio of the appraised value of each tract within
each class in comparison to the appraised value of the total property within such class as set out in
the Assessment/Service Plan, with such apportionment resulting in a fair and reasonable
apportionment of costs based on property similarly benefitted within the District.
Based upon the aforementioned method of apportionment, the City Council has prepared and
filed an Assessment Roll establishing the proposed Special Assessment against each parcel of property
within the District, all as provided in Section 372.016 of the Act.
A notice was published on February 17, 1997 and February 20, 1997, evidencing the City
Council's intention to consider the proposed Special Assessments at a public hearing.
Written notice of this scheduled public hearing was delivered on February 13, 1997, to each
property owner residing within the District.
On February 27, 1997, the City Council held a public hearing to hear and pass on any
objections to the proposed Special Assessments.
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On February 27, 1997, the City Council adopted an Ordinance (the "Assessment Ordinance")
approving the Assessment/Service Plan for the District and levied assessments as Special Assessments
on each parcel of property within the District, all as provided in Section 372.017 of the Act.
Pursuant to the Assessment Ordinance, the City permitted the Special Assessments to be paid
in installments, fixed the rate of interest on installment payments, established the penalties and interest
on delinquent installments, and established the procedure for collection of the Special Assessments.
The Assessment Ordinance provides the mechanism and procedure that will be utilized to
collect and enforce the Special Assessments in periodic installments being the same procedures that
the City currently employs to collect and enforce its annual ad valorem tax.
Sections 372.019 and 372.020 of the Act establish a mechanism for the City to make
supplemental assessments to correct errors in the original Special Assessments, and a mechanism for
reassessment in the event any Special Assessment is invalid or excessive.
The Act provides that an assessment or any reassessment, the expense of collection, and
reasonable attorney's fees, if incurred, are a first and prior lien against the property assessed, superior
to all other liens and claims except liens or claims for state, county, city, school district, or other
political subdivision, ad valorem taxes, and are a personal liability of and charge against the owners
of the property regardless of whether the owners are named. The lien is effective from the date of the
Assessment Ordinance levying the Special Assessment until the Special Assessment is paid, and may
be enforced by the City in the same manner as an ad valorem tax levied against real property may be
enforced by the City. The owner of any property assessed may pay the entire Special Assessment
against any lot or parcel with accrued interest to the date of payment which must be an Interest
Payment Date, as hereinafter defined.
Section 372.023 of the Act authorizes the City, through the District, to issue revenue bonds
payable solely from Special Assessments.
The City Council has determined to pay the costs of the Authorized Improvements by the
issuance of special assessment revenue bonds designated as the "Encino Plaza Public Improvement
District Special Assessment Bonds, Taxable Series 1997" (the "Bonds"), dated March 1, 1997, in the
original principal amount of $2,690,000.
The terms and conditions of the Bonds and the pledge of the revenues derived from Special
Assessments which must be collected on an annual basis while any of the Bonds remain Outstanding
will be controlled by the provisions of this Ordinance and Sections 372.025 and 372.026 of the Act
or any other applicable law.
The City Council further finds and determines that the aforementioned Bonds should be issued
and sold at this time; NOW, THEREFORE,
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BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions. For all purposes of this Ordinance and in particular for clarity with
respect to the issuance of the Bonds herein authorized and the lien on and pledge of the Special
Assessment Revenues (hereinafter defined) to the payment of the Bonds, the following words and
terms, whenever the same appear herein without qualifying language, are defined to mean as follows:
Act - means the Public Improvement District Assessment Act, as amended, Texas Local
Government Code, Chapter 372.
Administrative Expense Assessment - means the minimum annual special assessment of levied
by the Assessment Ordinance or such larger amount as may be levied by the City in the future to pay
the annual costs of the administration and operation of the District.
Administrative Expense Fund - means the fund established in Section 6.05 of this Ordinance.
Administrative Expense Fund Requirement - means three thousand dollars ($3,000).
Administrative Expenses - means the administrative and operation costs associated with the
establishment, administration, and operation of the District, including, without limitation, the costs
of: (a) collecting Special Assessments or the installments thereof, (b) maintaining the record of
installments of the Special Assessments and the system of registration and transfer of the Bonds, (c)
paying and redeeming the Bonds, (d) investing or depositing of monies, (e) complying with the Code
with respect to the Bonds (other than any such costs which constitute City Administrative Expenses
payable as an expense of issuing the Bonds), (f) the Paying Agent/Registrar Trustee fees and
expenses, and (g) paying the costs of administering the acquisition of the Authorized Improvements.
Assessment Ordinance - means the Ordinance adopted by the City Council on February 27,
1997, and any amendment or supplement thereto that may be hereafter adopted by the City Council,
levying annual Administrative Expense Assessments, and levying Special Assessments to pay the Debt
Service Requirements on the Bonds against each eligible parcel of land in the District and providing
that such Special Assessments be paid in periodic installments in amounts necessary to pay
Administrative Expenses and the Debt Service Requirements on the Bonds, respectively.
Assessment Fund - means the fund established in Section 6.01 of this Ordinance. Assessment
Prepayment Fund - means the fund established in Section 6.04 of this Ordinance.
Assessment Roll - means the Assessment Roll, attached hereto as Exhibit "A", [Exhibit "C"
to the Assessment/Service Plan which is attached as Exhibit "B" to the assessment ordinance (the
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"Assessment Ordinance")], as amended from time to time in accordance with the Act, which shows,
among other things, the properties within the District subject to Special Assessments, the owner of
the property assessed, the amount assessed, and the installment payments on the Special Assessments.
Assessment/Service Plan - means the Assessment/Service Plan prepared in accordance with
the Act and approved by the City Council as part of the Assessment Ordinance on February 27, 1997
(and attached as Exhibit "B" to the Assessment Ordinance) setting forth the plan for services and
activities to be provided in the District and setting forth the plan for apportioning the cost of the
improvements to be assessed against properties in the District.
Authorized Denomination - means the denomination of the Bonds which shall be $100,000
or a greater amount divisible by $5,000 except as otherwise provided in Section 2.03 of this
Ordinance.
Authorized Improvements - means the improvements described in the Assessment/Service
Plan.
Authorized Investments - means obligations that are eligible for investment by the City
pursuant to the Public Funds Investment Act.
Bonds - means any Bonds or all Bonds of the "Encino Plaza Public Improvement District
Special Assessment Bonds, Taxable Series 1997", dated March 1, 1997, authorized by this Ordinance.
Business Day - means any day which is not a Saturday, Sunday, or a day on which the
Registrar is authorized by law or executive order to close, or a legal holiday.
City Council - means the governing body of the City.
Closing Date - means the date of physical delivery of the Initial Bonds for payment in full by
the initial purchasers thereof.
Code - means the Internal Revenue Code of 1986, as amended.
Comptroller - means the Comptroller of Public Accounts of the State of Texas.
Debt Service Fund- means the debt service fund created in Section 6.02 of this Ordinance.
Debt Service Requirements - means, as of any particular date of computation, with respect
to any Bonds and with respect to any period, the aggregate of the amounts to be paid or set aside by
the Trustee on behalf of the City as of such date or in such period for the payment of the Principal
Installment, premium, if any, and interest (to the extent not capitalized) on such Bonds.
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District - means the Encino Plaza Public Improvement District established by the City
pursuant to the provisions of the Act by Resolution adopted on December 12, 1996.
Exchange Bonds - means Bonds registered, authenticated, and delivered by the Trustee, as
provided in Section 2.11 of this Ordinance.
Fiscal Year - means the twelve (12) month accounting period used by the City which may be
any twelve (12) consecutive month period established by the City which currently ends on September
30.
Foreclosure Proceeds - means the amounts received from the judicial sale of assessed property
within the District as a result of the nonpayment of Special Assessments.
Bond.
Holder or Holders - means the registered owner, whose name appears in the Register, for any
Improvement Fund - means the fund established in Section 6.07.
Initial Bonds - means the Bonds authorized, issued, and initially delivered as provided in
Section 2.03 of this Ordinance.
Interest Payment Date - when used in connection with any Bond, means April 1, 1998, and
each October 1 and April 1 thereafter until maturity.
Issue Date - means the date of the Bonds which is March 1, 1997.
Maturity Date - means the date or dates on which principal of the Bonds is scheduled to be
paid, as provided in Section 2.03 of this Ordinance.
Ordinance - as used herein and in the Bonds, means this Bond Ordinance and all amendments
and supplements hereto.
Outstanding - when used with reference to the Bonds, Outstanding means, as of a particular
date, all such Bonds theretofore and thereupon delivered except: (a) any such Bond cancelled by or
on behalf of the City at or before said date, (b) any such Bond defeased or no longer considered
Outstanding pursuant to the provisions of the ordinance authorizing its issuance, or otherwise
defeased as permitted by applicable law, and (c) any such Bond in lieu of or in substitution for which
another Bond shall have been delivered pursuant to the ordinance authorizing the issuance of such
Bond.
Owner or Registered Owner - means the Person or entity who is the registered owner of any
Outstanding Bond.
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Paying Agent - means the Trustee.
Person or Persons - means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, or government or any agency or political
subdivision thereof.
Placement Agent means First Southwest Company.
Prepayments - means amounts received as a result of the early payment, in whole or in part,
of a Special Assessment to pay the Debt Service Requirements on the Bonds or any installment
thereof. Amounts received at the time of a Prepayment which represent a payment of principal,
interest or penalties on a delinquent installment of a Special Assessment to pay the Debt Service
Requirement on the Bonds are not to be considered a Prepayment, but rather are to be treated as the
payment of regularly scheduled Special Assessment Revenues.
Principal Installment - means as of any particular date of computation and with respect to the
Bonds, an amount of money equal to the aggregate of the principal amount of Outstanding Bonds
of said series which mature on a single future date.
Record Date - means, for any Interest Payment Date, the fifteenth (15th) calendar day of the
month next preceding such Interest Payment Date.
Redemption Fund - means the redemption fund established in Section 6.08 of this Ordinance.
Register - means the books of registration kept by the Registrar in which are maintained the
names and addresses of, and the principal amounts registered to, the Registered Owners.
Registrar - means the Trustee.
Replacement Bond - means the Bond authorized by the City to be issued in substitution for
lost, apparently destroyed, or wrongfully taken Bonds as provided in Section 2.13 of this Ordinance.
Required Reserve Amount - means 150% of the average annual principal and interest of all
Bonds Outstanding.
Reserve Fund - means the reserve fund established in Section 6.03 of this Ordinance.
Special Assessments - means: (a) the assessments levied against properties in the District to
pay Debt Service Requirements on the Bonds as set forth in the Assessment/Service Plan which are
payable in periodic installments as provided in the Assessment Ordinance; and (b) the annual
Administrative Expense Assessments levied and to be levied against properties in the District, all as
provided in the Assessment/Service Plan, the Assessment Ordinance and this Ordinance. Special
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Assessments also include any supplemental assessments levied in accordance with Sections 372.019
and 372.020 of the Act.
Special Assessment Revenues - means the monies collected from Special Assessments levied
against properties in the District, including interest on Special Assessments during the period a
Special Assessment or any installment thereof is current or delinquent, Prepayments, Foreclosure
Proceeds, and penalties for non -timely payment of Special Assessments. Earnings and income derived
from the investment or deposit of monies in the special funds or accounts created and established for
the payment and security of the Bonds shall also constitute Special Assessment Revenues.
Trustee - means Texas Commerce Bank National Association.
Section 1.02. Interpretations. All terms defined herein and all pronouns used in this Ordinance
shall be deemed to apply equally to singular and plural and to all genders. The 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 and
provisions hereof. This Ordinance and all the terms and provisions hereof shall be liberally construed
to effectuate the purposes set forth herein.
ARTICLE II
TERMS OF THE BONDS
Section 2.01. Authorization. The Bonds shall be issued in fully registered form in the total
authorized aggregate amount of $2,690,000 for the purpose of paying the costs of acquiring and
constructing the Authorized Improvements, establishing a Reserve Fund, and paying costs of issuance
of the Bonds in accordance with the Act.
Section 2.02. Designation, Date, and Interest Payment Dates. Each Bond shall be designated
as "Encino Plaza Public Improvement District Special Assessment Bond, Taxable Series 1997" and
shall be dated March 1, 1997. The Bonds shall bear interest from March 1, 1997, or the most recent
Interest Payment Date to which interest has been paid or duly provided for, at the rates set out in
Section 2.03 of this Ordinance, calculated on the basis of a 360 -day year of twelve 30 -day months,
payable on April 1, 1998, and semiannually thereafter on October 1 and April 1 of each year until
maturity or prior redemption.
Section 203. Initial Bonds; Numbers and Denomination. The Bonds shall be initially issued
bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the
following schedule, and may be transferred and exchanged as set out in this Ordinance. The Bonds
shall mature on October 1 in each of the years and in the amounts set out in such schedule and be
subject to prior redemption as provided herein. Bonds delivered on transfer of or in exchange for
other Bonds shall be numbered (with appropriate prefix) in order of their authentication by the
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Registrar, and shall be in the denomination of one hundred thousand dollars ($100,000) or a greater
amount divisible by five thousand dollars ($5,000); provided, however, that in the event of a
redemption of a portion of the Bonds then Outstanding, the Trustee may authenticate and deliver an
exchange Bond in a denomination of five thousand dollars ($5,000) or any integral multiple thereof
if the amount of any Holder's Bond remaining after such redemption is less than one hundred
thousand dollars ($100,000). The Bonds shall mature on the same date and bear interest at the same
rate as the Bond or Bonds in lieu of which they are delivered.
Bond Number Principal Amount Year of Maturity Interest Rate
T-1 $ 90,000 2000 10.00%
T-2 100,000 2001 10.00
T-3 115,000 2002 10.00
T-4 125,000 2003 10.00
T-5 140,000 2004 10.00
T-6 155,000 2005 10.00
T-7 170,000 2006 10.00
T-8 185,000 2007 10.00
T-9 205,000 2008 10.00
T-10 23 0, 000 2009 10.00
T-11 250,000 2010 10.00
T-12 280,000 2011 10.00
T-13 305,000 2012 10.00
T-14 340,000 2013 10.00
Section 2.04. Execution of Bonds; Seal. The Bonds shall be signed on behalf of the District
by the Mayor and countersigned by the City Secretary, by their manual, lithographed, 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.
If any officer of the City whose manual or facsimile signature shall appear on the Bonds shall cease
to be such officer before the authentication of such Bonds or before the delivery of such Bonds, such
manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such
officer had remained in such office.
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Section 2.05. Approval, Registration and Delivery. After the Bonds to be initially issued shall
have been executed, it shall be the duty of the Mayor of the City to deliver the Bonds to be initially
issued and all pertinent records and proceedings to the Attorney General of Texas, for examination
and approval by the Attorney General. After the Bonds to be initially issued shall have been approved
by the Attorney General, they shall be delivered to the Comptroller of Public Accounts of the State
of Texas for registration. Upon registration of the Bonds to be initially issued, the Comptroller of
Public Accounts (or a deputy lawfully designated in writing to act for the Comptroller) shall manually
sign the Comptroller's Registration Certificate prescribed herein to be attached or affixed to the
Bonds to be initially issued, and the seal of said Comptroller shall be impressed, or placed in facsimile,
thereon.
Section 2.06. Authentication. Except for the Bonds to be initially issued, which need not be
authenticated, only such Bonds as shall bear thereon a certificate of authentication, substantially in
the form provided in Section 4.01 of this Ordinance, manually executed by an authorized
representative of the Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or
obligatory for any purpose. Such duly executed certificate of authentication shall be conclusive
evidence that the Bond so authenticated was delivered by the Registrar hereunder. The signed
Certificate of Registration of the Comptroller of Public Accounts shall constitute the certificate of
authentication for the Initial Bonds.
Section 2.07. Payment of Principal Installment and Interest. The Registrar is hereby
appointed as the Registrar and Paying Agent for the Bonds. The Principal Installment of the Bonds
shall be payable, without exchange or collection charges, in any coin or currency of the United States
of America which, on the date of payment, is legal tender for the payment of debts due the United
States of America, upon their presentation and surrender as they respectively become due and payable
at maturity or at their earlier redemption date, at the office for payment of the Registrar. The interest
on each Bond shall be payable by check payable on the Interest Payment Date, mailed by the
Registrar, first-class, postage prepaid, on or before each Interest Payment Date to the Owner of
record as of the Record Date, to the address of such Owner as shown on the Register. Upon the
properly documented written request of each Registered Owner of not less than one million dollars
($1,000,000) aggregate principal amount of Bonds received by the Paying Agent/Registrar not less
than fifteen (15) days prior to the applicable Record Date, interest owed to such Owner will be paid
by federal funds wire transfer to any account located within the United States of America designated
in the request at the City's expense. Each Principal Installment payment, premium or interest will be
accompanied by a statement of the CUSIP numbers of the Bonds on which such payment is made and
the amounts paid in respect of each CUSIP number. Any accrued interest payable at maturity shall
be paid upon presentation and surrender of the Bond to which such interest appertains.
If the date for the Principal Installment payment or interest shall be a Saturday, Sunday, a legal
holiday, or a day on which banking institutions in the city where the Registrar is located are
authorized by law or executive order to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking
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institutions are authorized by law to close, and payment on such date shall have the same force and
effect as if made on the original date such payment was due.
Section 2.08. Successor Registrars. The City covenants that at all times while any Bonds are
Outstanding it will provide a legally qualified bank, trust company, financial institution or other
agency to act as Trustee and as Registrar for the Bonds. Each successor Registrar hereunder, by
acting in that capacity, shall be deemed to have agreed to the provisions of this Ordinance. Promptly
upon the appointment of any successor Registrar, the previous Registrar shall deliver the Register or
a copy thereof to the new Registrar, and the new Registrar shall notify each Owner, by United States
mail, first-class postage prepaid, of such change and of the address of the new Registrar.
Section 2.09. Special Record Date. If interest on any Bond is not paid on any Interest
Payment Date and continues unpaid for thirty (30) days thereafter, the Registrar shall establish a new
Record Date for the payment of such interest, to be known as a Special Record Date. The Registrar
shall establish a Special Record Date when funds to make such interest payment are received from
or on behalf of the City. Such Special Record Date shall be fifteen (15) days prior to the date fixed
for payment of such past due interest, and notice of the date of payment and the Special Record Date
shall be sent by United States mail, first-class postage prepaid, not later than five (5) days prior to the
Special Record Date, to each affected Owner of record as of the close of business on the day prior
to the mailing of such notice.
Section 2.10. Ownership; Unclaimed Principal and Interest. The City, the Registrar, and any
other Person shall 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 of the principal thereof and for the
further purpose of making and receiving payment of the interest thereon, and for all other purposes,
whether or not such Bond is overdue, and neither the City nor the Registrar shall be bound by any
notice or knowledge to the contrary. All payments made to the Person deemed to be the Owner of
any Bond in accordance with this Section 2.10 shall be valid and effectual and shall discharge the
liability of the City and the Registrar upon such Bond to the extent of the sums paid.
Amounts held by the Registrar which represent principal of and interest on the Bonds
remaining unclaimed by the Owner after the expiration of three years from the date such amounts
have become due and payable shall be reported and disposed of by the Registrar in accordance with
the provisions of Title 6 of the Texas Property Code, as amended, to the extent that such provisions
are applicable to such amounts.
Section 2.11. Registration, Transfer, and Exchange. The Bonds shall initially be registered
in the name of First Southwest Company as Placement Agent. At any time after the date of initial
delivery of the Bonds, the Registered Owner may, in accordance with the procedures prescribed in
Section 2.14 hereof, surrender such Bonds to the Registrar for registration of transfer or exchange,
and the Registrar shall register, authenticate, and deliver Exchange Bonds in accordance with the
provisions of this Ordinance.
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So long as any Bonds remain Outstanding, the Registrar shall keep at its office for payment,
in which, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for
the registration and transfer of Bonds in accordance with the terms of this Ordinance.
Each Bond shall be transferable only (i) upon the presentation and surrender thereof at the
office for payment of the Registrar, duly endorsed for transfer, or accompanied by an assignment duly
executed by the Registered Owner or his authorized representative in form satisfactory to the
Registrar and (ii) upon receipt of the Investment Letter set forth as Exhibit "B " attached hereto.
Upon due presentation of any Bond for transfer, the Registrar shall authenticate and deliver in
exchange therefor, within seventy-two (72) hours after such presentation, a new Bond or Bonds,
registered in the name of the transferee or transferees, in authorized denominations and of the same
maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds
so presented.
All Bonds shall be exchangeable upon presentation and surrender thereof at the office for
payment of the Registrar for a Bond or Bonds of the same maturity and interest rate and in any
Authorized Denomination, in an aggregate principal amount equal to the unpaid principal amount of
the Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to
authenticate and deliver Exchange Bonds in accordance with the provisions of this Section 2.11. Each
Bond delivered in accordance with this Section 2.11 shall be entitled to the benefits and security of
this Ordinance to the same extent as the Bond or Bonds in lieu of which such Bond is delivered. The
City or the Registrar may require the Owner of any Bond to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with the transfer or exchange of such
Bond. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the City.
The Registrar shall not be required to register the transfer of any Bond during the period
beginning on the Record Date next preceding a scheduled Interest Payment Date (other than final
payment) and ending after such interest payment has been made. The Registrar shall not be required
to transfer or exchange any Bond called for redemption during the period beginning 45 days prior to
the date fixed for redemption and ending on the date fixed for redemption; provided, however, that
this limitation shall not apply to the exchange by the Owner of the unredeemed portion of a Bond
called for redemption in part.
Section 2.12. Cancellation of Bonds. All Bonds paid in accordance with this Ordinance, and
all Bonds in lieu of which Exchange Bonds or Replacement Bonds are authenticated and delivered
in accordance herewith, shall be cancelled and destroyed upon the making of proper records regarding
such payment. The Registrar shall furnish the City with appropriate certificates of destruction of such
Bonds.
Section 2.13. Replacement Bonds. Upon the presentation and surrender to the Registrar of
a mutilated Bond, the Registrar shall authenticate and deliver in exchange therefor a Replacement
Bond of like maturity, interest rate and principal amount, bearing a number not contemporaneously
outstanding. The City or the Registrar may require the Owner of such Bond to pay a sum sufficient
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to cover any tax or other governmental charge that may be imposed in connection therewith and any
other expenses connected therewith, including the fees and expenses of the Registrar.
If any Bond is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the
applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has
been acquired by a bona fide purchaser, shall execute and the Registrar shall authenticate and deliver
a Replacement Bond of like maturity, interest rate and principal amount, bearing a number not
contemporaneously outstanding, provided that the Owner thereof shall have:
(a) furnished to the City and the Registrar satisfactory evidence of the ownership of and the
circumstances of the loss, destruction, or theft of such Bond;
(b) furnished such security or indemnity as may be required by the Registrar and the City to
save them harmless;
(c) paid all expenses and charges in connection therewith, including, but not limited to,
printing costs, legal fees, fees of the Registrar, and any tax or other governmental charge that
may be imposed; and
(d) met any other reasonable requirements of the City and the Registrar.
If, after the delivery of such Replacement Bond, 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 Registrar shall be entitled to recover such Replacement Bond from the Person to whom it was
delivered or any Person taking therefrom, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the City or the Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is
about to become due and payable, the City, in its discretion may, instead of issuing a Replacement
Bond, authorize the Registrar to pay such Bond.
Each Replacement Bond delivered in accordance with this Section 2.13 shall be entitled to
the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which
such Replacement Bond is delivered.
ARTICLE III
REDEMPTION
Section 3.01. Optional Redemption. The Bonds may be redeemed by the District acting
through the City, in whole or in part prior to maturity, on any interest payment date at the option of
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the District acting through the City, after notice as provided herein, at the redemption prices
(expressed as percentages of principal amount) set forth in the table below plus accrued interest to
the redemption date.
Redemption Date Redemption Price
October 1, 2007 or April 1, 2008 103%
October 1, 2008 or April 1, 2009 102 1/2
October 1, 2009 or April 1, 2010 102
October 1, 2010 or April 1, 2011 101 1/2
October 1, 2011 or April 1, 2012 101
October 1, 2012 or April 1, 2013 100 1/2
October 1, 2013 100
Section 3.02. Mandatory Nonscheduled Redemptions. The Bonds shall be redeemed, in whole
or in part, prior to maturity on any Interest Payment Date at the redemption prices stated in Section
3.01 or purchased, in whole or in part, at the purchase prices stated in Section 3.07 from amounts
transferred to the Redemption Fund from the Assessment Fund, Assessment Prepayment Fund,
Administrative Expense Fund, and Improvement Fund pursuant to Sections 6.01, 6.04, 6.05, and
6.07, respectively.
Notwithstanding the foregoing, the City will not be required to make a mandatory
nonscheduled redemption unless it has at least twenty-five thousand dollars ($25,000) available in the
Redemption Fund with which to redeem Bonds.
In lieu of redeeming Bonds with the funds described in this Section, the City may purchase
Bonds in the open market of the maturity to be redeemed at the price not in excess of that provided
in Section 3.07.
Section 3.03. Reserved for Future Use.
Section 3.04. Notice of Redemption. Notice of redemption shall be given at least thirty (30)
days and no more than sixty (60) days prior to the redemption date by giving written notice to the
Paying Agent/Registrar and by sending such notice to the Registered Owner of each Bond to be
redeemed in whole or in part at the address shown on the Register by first-class mail, postage prepaid.
Such notice shall also be sent by certified mail, return receipt requested to Registered Owners of one
million dollars ($1,000,000) or more of Bonds. Such notice shall state the complete official name of
the Bonds to be redeemed, CUSIP numbers, the Issue Date and the Maturity Date of such Bonds,
any other information appropriate to identify sufficiently the Bonds being redeemed, the redemption
RROCK/PUB[]C: ORDDI DR2 2/26/97
14
date, the principal amount of the Bonds to be redeemed and, if less than all of the then Outstanding
Bonds are to be redeemed, the identification numbers (and, in the case of partial redemption, the
respective principal amounts) of the Bonds to be redeemed, the amount of accrued interest payable
on the redemption date, the redemption agent's name and address, and the place at which the Bonds
are to be surrendered for payment. Any notice mailed as provided in this Section 3.04 shall be
conclusively presumed to have been duly given, whether or not the Registered Owner receives such
notice. By the redemption date, due provision shall be made with the Paying Agent/Registrar for the
payment of the redemption price of the Bonds to be redeemed, plus accrued interest thereon to the
redemption date. When such Bonds have been called for redemption, in whole or in part, as provided
above and due provision has been made to redeem same, such Bonds, or portions thereof, shall no
longer be regarded as Outstanding except for the purpose of receiving payment from the funds
provided for redemption, and the right of the Registered Owners to collect interest on such Bonds
or portions thereof which would otherwise accrue after the redemption date shall be terminated.
Section 3.05. Additional Provisions with Respect to Redemption. Bonds may be redeemed
in part only in integral multiples of five thousand dollars ($5,000) and if a Bond subject to redemption
is in a denomination larger than five thousand dollars ($5,000), a portion of such Bond may be
redeemed, but only in an integral multiple of five thousand dollars ($5,000).
If less than all of the Bonds are to be redeemed pursuant to a Section 3.01 optional
redemption, the City may select the maturity to be redeemed. Bonds to be mandatorily redeemed with
funds described in Section 3.02 shall be redeemed by the Trustee in integrals of five thousand dollars
($5,000), on a pro rata basis from all maturities in such manner as the Trustee in its sole discretion
determines.
If less than all of the Bonds within a maturity are to be redeemed pursuant to an optional or
mandatory call, they shall be selected by lot within such maturity, in such manner as the Paying
Agent/Registrar may determine and treating each five thousand dollar ($5,000) amount of Bonds as
a single Bond for such purposes.
Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar, in
accordance with the provisions of the Ordinance, shall authenticate and deliver in exchange therefor
a Bond or Bonds of like tenor, maturity and interest rate in an aggregate principal amount equal to
the unredeemed portion of the Bond so surrendered.
Section 3.06. Reserved for Future Use.
Section 3.07. Purchase Price for Bonds. Upon receipt of written notice by the City specifying
Bonds to be purchased, the Trustee shall apply monies available for redemption to the purchase of
Bonds which were otherwise to be redeemed in such order or priority and subject to such restrictions
as may be prescribed in this Ordinance in the manner provided in this Section. The purchase price
paid by the Trustee (excluding accrued interest but including any brokerage and other charges) for
any Bond purchased shall not exceed the principal amount of such Bond unless such Bond may be
RROCK/PUBUC: ORDW DR2 2/26/97
15
redeemed in accordance with this Ordinance on any date or dates within thirteen (13) months after
such purchase in which event such purchase price shall not exceed the highest of the redemption price
of such Bond applicable on any such date.
Section 3.08. Trustee to Redeem Bonds. Subject to the limitations set forth or referred to in
Sections 3.02 and 3.07, the Trustee shall call for redemption on each mandatory redemption date,
whether scheduled or nonscheduled, when said Bonds are to be redeemed in accordance with this
Ordinance, such principal amount of said Bonds as are to be redeemed on said date with the amount
of such monies then available therefor.
ARTICLE IV
FORM OF BONDS AND CERTIFICATES
Section 4.01. Forms. The form of the Bonds, including the form of the Registrar's
authentication certificate, the form of assignment, and the form of the Comptroller's Registration
Certificate for the Bonds to be initially issued, shall be substantially as follows, with such additions,
deletions, and variations as may be necessary or desirable and not prohibited by this Ordinance:
Form of Bond
(Face of Bond)
United States of America
State of Texas
NUMBER DENOMINATION
R- $
REGISTERED REGISTERED
ENCINO PLAZA PUBLIC IMPROVEMENT DISTRICT
Special Assessment Bonds
Taxable Series 1997
INTEREST RATE: MATURITY DATE: ISSUE DATE:
March 1, 1997
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
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CUSIP:
THE ENCINO PUBLIC IMPROVEMENT DISTRICT, acting by and through the City of
Round Rock, Texas (the "City") for value received, promises to pay, but solely from Special
Assessment Revenues as hereafter defined, to the registered owner identified above or registered
assigns, on the date specified above, upon presentation and surrender of this bond at the office for
payment of Texas Commerce Bank National Association, Dallas, Texas (the "Paying
Agent/Registrar"), the principal amount identified above, in any coin or currency of the United States
of America which on the date of payment of such principal is legal tender for the payment of debts
due the United States of America, and to pay interest thereon at the rate shown above, calculated on
the basis of a 360 -day year of twelve 30 -day months, from the later of March 1, 1997, or the most
recent interest payment date to which interest has been paid or duly provided for. Interest on this
bond is payable by check payable on April 1, 1998 and each October 1 and April 1 thereafter until
maturity, mailed to the registered owner of record as shown on the books of registration kept by the
Registrar as of the 15th calendar day of the month next preceding each interest payment date.
THIS BOND IS NOT A GENERAL OBLIGATION OF THE CITY, DOES NOT GIVE
RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF THE
CITY, AND IS NOT PAYABLE EXCEPT AS PROVIDED HEREUNDER AND IN
ACCORDANCE WITH CHAPTER 372, V.T.C.A., LOCAL GOVERNMENT CODE, AS
AMENDED, (THE "ACT"). THE OWNER OF THIS BOND SHALL NEVER HAVE THE RIGHT
TO DEMAND PAYMENT OF THIS OBLIGATION OUT OF ANY FUNDS OF THE CITY
OTHER THAN THE SPECIAL ASSESSMENT REVENUES (THE "SPECIAL ASSESSMENT
REVENUES") WITHIN THE DISTRICT, AND THE CITY SHALL HAVE NO LEGAL OR
MORAL OBLIGATION TO PAY THIS OBLIGATION FROM ANY FUNDS OTHER THAN
SPECIAL ASSESSMENT REVENUES. NEITHER THE STATE OF TEXAS NOR ANY
POLITICAL SUBDIVISION THEREOF IS OBLIGATED TO MAKE PAYMENT ON THIS
BOND.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE THE SAME
FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE.
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17
IN WITNESS HEREOF, this bond has been signed with the manual or facsimile signature of
the Mayor of the City and countersigned with the manual or facsimile signature of the City Secretary
of the City, and the official seal of the City has been duly impressed, or placed in facsimile, on this
bond.
(AUTHENTICATION (SEAL) ENCINO PLAZA PUBLIC IMPROVEMENT
CERTIFICATE) DISTRICT
Mayor
COUNTERSIGNED:
City Secretary
(Back Panel of Bond)
THIS BOND IS ONE OF A DULY AUTHORIZED ISSUE OF BONDS aggregating
$2,690,000, issued pursuant to an ordinance adopted by the City Council of the City (the
"Ordinance") for Encino Plaza Public Improvement District Special Assessment Bonds, Taxable
Series 1997, to pay the costs of authorized improvements within the District, to fund a reserve fund,
and to pay costs of issuance of the bonds as authorized by and pursuant to the Act.
THIS BOND AND THE SERIES OF WHICH IT IS A PART are special obligations and are
payable as to both principal and interest solely from and equally secured by a lien on and pledge of
the Special Assessment Revenues (as defined and more fully described in the Ordinance authorizing
this bond and the series of which it is a part), levied against benefited property within the Encino
Plaza Public Improvement District, pursuant to the provisions of Chapter 372, Texas Local
Government Code. Reference is hereby made to the Ordinance for a more complete statement of the
covenants and provisions securing the payment of this bond and the series of which it is a part.
THIS BOND is transferable only upon (i) presentation and surrender at the office for payment
of the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the
registered owner or his authorized representative and (ii) upon presentation of the Investment Letter,
which is attached to and subject to the terms and conditions of the Ordinance.
THE BONDS are subject to redemption prior to maturity at the option of the City on any
interest payment date at a redemption price equal to the percentage of their principal amount set forth
below plus accrued interest to the date fixed for redemption:
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Redemption Date Redemption Price
October 1, 2007 or April 1, 2008 103%
October 1, 2008 or April 1, 2009 102 1/2
October 1, 2009 or April 1, 2010 102
October 1, 2010 or April 1, 2011 101 1/2
October 1, 2011 or April 1, 2012 101
October 2, 2012 or April 1, 2013 100 1/2
October 1, 2013 100
THE BONDS are to be redeemed on any Interest Payment Date from prepayments of Special
Assessments, excess Special Assessment Revenues and proceeds of bonds as provided in the
Ordinance at the redemption prices set forth above plus accrued interest to the date of redemption.
BONDS MAY BE REDEEMED IN PART only in integral multiples of $5,000. If a bond
subject to redemption is in a denomination larger than $5,000, a portion of such bond may be
redeemed, but only in integral multiples of $5,000. In selecting portions of bonds for redemption,
each bond shall be treated as representing that number of bonds of $5,000 denomination which is
obtained by dividing the principal amount of such bond by $5,000. Upon surrender of any bond for
redemption in part, the Paying Agent/Registrar, in accordance with the provisions of the Ordinance,
shall authenticate and deliver in exchange therefor a bond or bonds of like maturity and interest rate
in an aggregate principal amount equal to the unredeemed portion of the bond so surrendered.
NOTICE OF EACH EXERCISE OF A RESERVED RIGHT OF REDEMPTION shall be
given at least 30 days and no more than sixty (60) days prior to the redemption date by written notice
to the Paying Agent/Registrar and by sending such notice to the registered owner of each bond to be
redeemed in whole or in part at the address shown on the Register by first-class mail, postage prepaid.
Such notice shall also be sent by certified mail, return receipt requested to registered owners of
$1,000,000 or more of bonds. Such notice shall state the complete official name of the bonds to be
redeemed, CUSIP numbers, the issue date and the maturity date of such bonds, any other information
appropriate to identify sufficiently the bonds being redeemed, the redemption date, the principal
amount of the bonds to be redeemed and, if less than all of the then outstanding bonds are to be
redeemed, the identification numbers (and, in the case of partial redemption, the respective principal
amounts) of the bonds to be redeemed, the amount of accrued interest payable on the redemption
date, the redemption agent's name and address, and the place at which the bonds are to be
surrendered for payment. Any notice mailed as provided in Section 3.04 of the ordinance authorizing
the bonds shall be conclusively presumed to have been duly given, whether or not the registered
owner receives such notice. By the redemption date, due provision shall be made with the Paying
Agent/Registrar for the payment of the redemption price of the bonds to be redeemed, plus accrued
RROCK/PUB!]C: ORDIN DR7 2/26/97
19
interest thereon to the redemption date. When such bonds have been called for redemption, in whole
or in part, as provided above and due provision has been made to redeem same, such bonds, or
portions thereof, shall no longer be regarded as outstanding except for the purpose of receiving
payment from the funds provided for redemption, and the right of the registered owners to collect
interest on such bonds or portions thereof which would otherwise accrue after the redemption date
shall be terminated.
THE BONDS are exchangeable at the office for payment of the Registrar for bonds in the
principal amount of $100,000 or a greater amount divisible by $5,000; provided, however, that in the
event of a redemption of a portion of the bonds then outstanding, the Trustee may authenticate and
deliver an exchange bond in a denomination of $5,000 or any integral multiple thereof if the amount
of any holder's bond remaining after such redemption is less than $100,000, subject to the terms and
conditions of the Ordinance.
THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit
under the Ordinance unless this bond either (i) is registered by the Comptroller of Public Accounts
of the State of Texas by registration certificate attached or affixed hereto or (ii) is authenticated by
the Registrar by due execution of the authentication certificate endorsed hereon.
THE CITY HAS APPOINTED the Paying Agent/Registrar to act as Trustee for the
bondholders as provided in the Ordinance. Pursuant to the Ordinance, the Trustee is to bill and collect
Special Assessment Revenues for and on behalf of the City. Reference is made to the Ordinance for
a complete description of the powers and duties of the Trustee.
THE REGISTERED OWNER of this bond, by acceptance hereof, acknowledges and agrees
to be bound by all the terms and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all times provide a legally qualified
registrar for the bonds and will cause notice of any change of registrar to be mailed to each registered
owner.
IT IS HEREBY CERTIFIED, RECITED, AND REPRESENTED that this bond has been
duly and validly issued and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the issuance and delivery of this bond have been
performed, exist, and been done in accordance with law; that the bonds do not exceed any statutory
limitation; and that provision has been made for the principal installment payment of and interest on
this bond and all of the bonds by the creation of the aforesaid lien on and pledge of the Special
Assessment Revenues.
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FORM OF REGISTRATION CERTIFICATE
OF COMPTROLLER OF PUBLIC ACCOUNTS
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this bond has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this bond has been registered by the Comptroller of
Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL OF OFFICE THIS
[SEAL]
RROCK/PUBLIC: ORDIN DR2 V26/97
21
Comptroller of Public Accounts
of the State of Texas
FORM OF AUTHENTICATION CERTIFICATE
AUTHENTICATION CERTIFICATE
It is hereby certified that this bond has been delivered pursuant to the bond Ordinance described in
the text of this bond, in exchange for or in replacement of a bond, bonds, or a portion of a bond or
bonds of a series which was originally approved by the Attorney General of Texas and registered by
the Comptroller of Public Accounts of the State of Texas.
RROCK/PUBLIC: ORDIN DR2 2/26/97
22
Texas Commerce Bank National Association
Paying Agent/Registrar
By
Authorized Signature
Date of Authentication
FORM OF ASSIGNMENT
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer
Identification Number of Transferee
(Please print or typewrite name and address, including zip code, of Transferee)
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney, to register the transfer of the within
Certificate on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
NOTICE: The signature above must
correspond with the name of the Registered
Owner as it appears upon the front of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.
Section 4.02. Legal Opinion; CUSIP; Bond Insurance. The approving opinion of McCall,
Parkhurst & Horton L.L.P. and CUSIP Numbers may be printed on the Bonds, but errors or
omissions in the printing of such opinion or such numbers shall have no effect on the validity of the
Bonds. If bond insurance is obtained, the Bonds may bear an appropriate legend as provided by the
insurer.
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23
ARTICLE V
SECURITY FOR THE BONDS
Section 5.01. Pledge of Special Assessment Revenues. The City hereby covenants and agrees
that the Special Assessment Revenues are hereby irrevocably pledged, to the payment and security
of the Bonds and the payment of Administrative Expenses, including the establishment and
maintenance of the special funds created and established for the payment and security thereof, all as
hereinafter provided; and it is hereby ordained that the pledge of the Special Assessment Revenues
to the payment of the Bonds and the interest thereon be valid and binding without any physical
delivery thereof or further act by the City, and the lien upon such revenues created for the payment
and security of the Bonds shall be, except as otherwise provided in the Act or by law, prior in right
and claim as to any other indebtedness, liability, or obligation of the City.
Section 5.02. Special Obligations. The Bonds are special obligations payable from the Special
Assessment Revenues, as and to the extent provided in this Ordinance. 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 the Act and in this Ordinance. The Owners of the Bonds shall never have the right to
demand payment thereof out of any funds of the City other than the Special Assessment Revenues.
The City shall have no legal or moral obligation to pay for the Bonds out of any City funds other than
Special Assessment Revenues.
Section 5.03. Assessment Roll. The Special Assessments are shown on the Assessment Roll
attached hereto as Exhibit "A". The aggregate amount of Special Assessments assessed to pay the
Debt Service Requirements on the Bonds is $2,690,000 plus accrued interest. Reference is made to
the Assessment Roll for a particular description of the lots or parcels of land and the amount of
Special Assessment on each.
Section 5.04. Collection and Deposit of Special Assessments. The Special Assessments shown
on the Assessment Roll, together with the interest thereon, shall remain and constitute a trust fund
for the redemption and Principal Installment payment of the Bonds and for the interest due thereon
and to pay Administrative Expenses.
The Special Assessments assessed to pay Debt Service Requirements on the Bonds, together
with interest thereon, are payable in annual installments established by the Assessment Ordinance to
correspond, as nearly as practicable, to the Debt Service Requirements. A Special Assessment has
been made payable in the Assessment Ordinance in each Fiscal Year preceding the date of final
maturity of the Bonds which, if collected, will be sufficient to pay the Debt Service Requirements on
the Bonds and to pay Administrative Expenses. The annual installment of each Special Assessment
coming due in any year, together with the annual interest thereon, is payable in the manner as set forth
in the Assessment Ordinance.
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24
A record of the Special Assessments on each tract or lot in the District which are to be
collected in each year during the term of the Bonds has been prepared by the City and is shown on
the Assessment Roll. Sums received from the collection of the Special Assessments to pay the Debt
Service Requirements on the Bonds (including delinquent installments, Foreclosure Proceeds,
proceeds from a guarantor of Special Assessments to pay the Debt Service Requirements on the
Bonds, and penalties) and of the interest thereon shall be deposited into the Assessment Fund, except
that amounts received as Prepayments shall be deposited into the Assessment Prepayment Fund.
Any sums collected as an annual Administrative Expense Assessment to pay Administrative
Expenses shall be deposited in the Administrative Expense Fund.
Section 5.05. Prepayments in Full. The provisions of Section 372.018 of the Act are
applicable to the payment of the unpaid Special Assessments and the corresponding mandatory
redemption of the Bonds. Pursuant thereto, whenever an owner elects to pay off an unpaid Special
Assessment levied to pay the Debt Service Requirements on the Bonds in full and remove the lien of
such Special Assessment, the Trustee (in addition to any delinquent installments of such Special
Assessment, including the interest and penalties thereon) shall collect from such owner the total of
the following sums:
(a) The unpaid, nondelinquent principal of such Special Assessment, including principal for
the current Fiscal Year but not yet paid.
(b) Unpaid interest to accrue on such Special Assessment through the date of Prepayment and
a reasonable fee, fixed by the Trustee, for the cost of administering the Prepayments and the
corresponding mandatory redemption of the Bonds.
Section 5.06. Partial Prepayments. Whenever an owner of assessed land elects to prepay the
Special Assessment levied to pay the Debt Service Requirements on the Bonds in part and remove
the lien of such Special Assessment in part, the Trustee (in addition to any delinquent installments of
such Special Assessment, including the interest and penalties thereon) shall collect from each owner
the total of the following sums:
(a) A portion of the unpaid, nondelinquent principal of such Special Assessment to be prepaid
in increments of five thousand dollars ($5,000).
(b) Unpaid interest to accrue on such Special Assessment through the date of Prepayment and
a reasonable fee, fixed by the Trustee, for the cost of administering the Prepayment and the
corresponding mandatory redemption of the Bonds.
When a Special Assessment to pay the Debt Service Requirements on the Bonds has been
partially prepaid, the Trustee shall issue a revised record for that parcel, a copy of which shall be filed
with the City Secretary, showing the proportionate reduction in such Special Assessment installments
or the portion of the parcel which has had the lien for such Special Assessment removed. Thereafter,
RI/OCR/PUBLIC: ORDIN DR2 2/26/97
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the Trustee shall mail subsequent installments at the reduced rate.
ARTICLE VI
FUNDS AND ACCOUNTS. INITIAL DEPOSITS
AND APPLICATION OF MONEY
Section 6.01. Assessment Fund. The City hereby covenants and agrees that all Special
Assessment Revenues (other than interest and investment earnings, those received as a Prepayment
of a Special Assessment, and revenues resulting from the collection of the Administrative Expense
Assessments) shall be deposited, as collected and received, into a separate account (created,
established, and to be maintained with the Trustee known as the "Encino Plaza Public Improvement
District Special Assessment Bonds, Taxable Series 1997 Assessment Fund" and that the Special
Assessment Revenues shall be kept separate and apart from all other funds of the City. All Special
Assessment Revenues deposited into the Assessment Fund shall be promptly transferred to the
following Funds in the following order of priority:
FIRST: To the Debt Service Fund, an amount necessary, if any, to increase the balance in the
Debt Service Fund to an amount equal to the aggregate amount of all remaining scheduled Debt
Service Requirements during the next year, as provided herein.
SECOND: To the Reserve Fund, an amount required to establish, accumulate, and maintain
the Required Reserve Amount in accordance with the provisions of this Ordinance.
THIRD: To the Administrative Expense Fund, an amount required to cause the balance in
such Fund to equal the Administrative Expense Fund Requirement.
FOURTH: To the Redemption Fund, any remaining amounts.
Section 6.02. Debt Service Fund. For purposes of providing funds to pay the Debt Service
Requirements on the Bonds as the same become due and payable, the City agrees to maintain, at the
Trustee, a separate and special account or fund to be created and known as the "Encino Plaza Public
Improvement Special Assessment Bonds, Taxable Series 1997 Debt Service Fund." Accrued interest
on the Bonds shall be deposited into the Debt Service Fund upon issuance of the Bonds. There shall
also be deposited into the Debt Service Fund prior to each Maturity Date and Interest Payment Date
on the Bonds, from the available Special Assessment Revenues, an amount equal to one hundred
percent (100%) of the amount required to fully pay the interest on and the Principal Installment of
the Bonds then falling due and payable whether at maturity or as a mandatory scheduled redemption.
Section 6.03. Reserve Fund. For purposes of establishing, accumulating, and maintaining
funds as a reserve for the payment of the Bonds, the City agrees and covenants to maintain a separate
and special fund or account with the Trustee known as the "Encino Plaza Public Improvement District
RROCK/PUBIIC: ORDIN DR2 2/26/97
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Special Assessment Bonds, Taxable Series 1997 Reserve Fund." The Trustee shall deposit into the
Reserve Fund (a) from the proceeds of the Bonds, an amount equal to the Required Reserve Amount,
and (b) all amounts required to be transferred to such Fund from the Assessment Fund pursuant to
and at the times specified in Section 6.01. The Trustee shall transfer from the Reserve Fund to the
Debt Service Fund such amounts at such times as required to pay the Debt Service Requirements on
the Bonds as they become due (whether at maturity or on scheduled mandatory redemption dates),
when and to the extent other funds available for such purposes in the Debt Service Fund are
insufficient. The Reserve Fund may also be used for the payment of the applicable redemption
premium, if any, on Bonds called for early redemption with Prepayments pursuant to Section 3.02.
In addition, amounts in the Reserve Fund may be used to retire the last maturity or interest on the
Bonds that remain Outstanding.
The amount of the Required Reserve Amount shall be recalculated by the Trustee at the end
of each Fiscal Year in which there were Special Assessment Prepayments resulting in the early
payment of Bonds. Any excess amount in the Reserve Fund may be transferred to the Assessment
Fund at the end of each fiscal year as directed in writing by the City.
When and so long as the cash and investments in the Reserve Fund total not less than the
Required Reserve Amount, no deposits need be made to the credit of the Reserve Fund; but, if and
when the Reserve Fund at any time contains less than the Required Reserve Amount because monies
are withdrawn as permitted by this Section, the City agrees to cure the deficiency in the Required
Reserve Amount from Special Assessments at the earliest possible time but only from Special
Assessment Revenues.
Section 6.04. Assessment Prepayment Fund. There is hereby established with the Trustee a
special fund to be known as the "Encino Plaza Public Improvement District Special Assessment
Bonds, Taxable Series 1997 Assessment Prepayment Fund." Upon receiving a Prepayment of a
Special Assessment for the payment of the Debt Service Requirements on the Bonds, the Trustee
shall deposit the amount of such Prepayment (except for any portion thereof that represents a
payment of principal, interest or penalty on a delinquent installment of such prepaid Special
Assessment, which portion shall be treated and applied as Special Assessment Revenues) into the
Assessment Prepayment Fund. All Prepayments may be commingled in a single account. Promptly
following the deposit of any such Prepayment into the Assessment Prepayment Fund, the Trustee
shall transfer such amount representing unpaid principal of the Special Assessment as set forth in
Section 5.05 directly into the Redemption Fund to be used to redeem or purchase Bonds and such
amount representing unpaid interest as set forth in Section 5.05 to the Debt Service Fund.
Section 6.05. Administrative Expense Fund. There is hereby created with the Trustee a special
fund, herein called the "Encino Plaza Public Improvement District Taxable Special Assessment
Bonds, Series 1997 Administrative Expense Fund," to be designated and maintained by the City as
a separate account, distinct from all other accounts of the City with the Trustee. The Trustee shall
deposit into the Administrative Expense Fund from the proceeds of the Bonds an amount equal to
the Administrative Expense Fund Requirement. Thereafter, the Trustee shall deposit into the
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Administrative Expense Fund, all amounts required to be transferred to such Fund from the
Assessment Fund pursuant to, and at the times specified in, Section 6.01 hereof, and all revenues
resulting from the collection of the Administrative Expense Assessments. Such amounts shall be
applied by the Trustee to pay Administrative Expenses as they become due. The Trustee shall transfer
any amounts in the Administrative Expense Fund in excess of the Administrative Expense Fund
Requirement to the Redemption Fund.
Fees or charges incurred by the City payable to the Paying Agent/Registrar/Trustee in
satisfaction of the liability to the Paying Agent/Registrar/Trustee for the services described herein,
as well as other Administrative Costs hereunder, including those for the collection services described
herein, shall be paid from the Administrative Expense Fund.
Section 6.06. Lien Forgiveness upon Payment of Bonds. When there are monies in the
Administrative Expense Fund, Assessment Fund, Assessment Prepayment Fund, Improvement Fund,
Redemption Fund, and Reserve Fund sufficient to make all interest payments to maturity or earlier
required redemption date, to pay all Principal Installment payments, and to pay the Administrative
Expenses due and to become due to the final Maturity Date or scheduled mandatory redemption date
of all the Bonds, no further payments need to be made into the Administrative Expense Fund,
Assessment Fund, Assessment Prepayment Fund, Improvement Fund, Redemption Fund, and Reserve
Fund, and such funds shall be used to redeem the Bonds.
After all Bonds are paid or provision is made for their payment, the City forgives the owner
of assessed property of the payment of any further Special Assessment and the lien for the Special
Assessment shall be removed from all property in the District.
Any amount remaining in any of the Funds created hereunder upon the retirement of the
Bonds shall be paid to the City.
Section 6.07. Improvement Fund. There is hereby created a special fund with the Trustee to
be called the "Encino Plaza Public Improvement District Special Assessment Bonds, Taxable Series
1997 Improvement Fund." The Improvement Fund shall be maintained by the City as a separate
account distinct from all other accounts of the City with the Trustee. The Improvement Fund shall
consist of the proceeds received from the sale of the Bonds, including any premium received by the
City on the sale of the Bonds (but not including: any accrued interest which shall be deposited directly
into the Debt Service Fund pursuant to Section 6.02; any amounts placed in the Reserve Fund
pursuant to Section 6.03, and any amounts placed in the Administrative Expense Fund pursuant to
Section 6.05). Disbursement from the Improvement Fund shall be made to pay the costs of acquisition
and construction of the Authorized Improvements, together with all expenses incidental thereto, and
the City's costs of creation of the District and initial administration of the District and costs of
issuance of the Bonds. Prior to making each disbursement from the Improvement Fund, the Trustee
shall receive from the City a Request for Disbursement in the form attached hereto as Exhibit "C."
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After completion of the acquisition and construction of the Authorized Improvements and the
payment of all claims from the Improvement Fund, the Trustee shall determine the amount of the
surplus, if any, remaining in the Improvement Fund and shall transfer any such surplus to the
Redemption Fund to redeem Outstanding Bonds prior to their scheduled maturity as provided in
Section 3.02 of this Ordinance.
Section 6.08. Redemption Fund. There is hereby created a special fund with the Trustee to
be called the "Encino Plaza Public Improvement District Special Assessment Bonds, Taxable Series
1997 Redemption Fund." The Trustee shall deposit into the Redemption Fund all amounts required
to be transferred to such Fund from the Assessment Fund, Assessment Prepayment Fund,
Administrative Expense Fund and the Improvement Fund pursuant to, and at the times specified in,
Sections 6.01, 6.04, 6.05 and 6.07, respectively, hereof. The Trustee shall apply all such amounts in
the Redemption Fund, subject to the $25,000 limitation specified in Section 3.02 hereof, to redeem
or purchase Bonds in accordance with Section 3.02 hereof. Accrued interest on any Bonds redeemed
shall be paid from the Debt Service Fund. The redemption premium shall be paid from amounts
transferred to the Redemption Fund except in the event of a transfer in accordance to Section 6.04
in which event the redemption premium shall be paid from the Reserve Fund pursuant to Section
6.03.
Section 6.09. Deposit and Investment of Funds. Monies in the Assessment Fund, the Debt
Service Fund, the Administrative Expense Fund, the Assessment Prepayment Fund, the Redemption
Fund and the Improvement Fund shall be deposited or invested in any Authorized Investments
maturing on a date or dates on or prior to the need for such monies. Monies in the Reserve Fund shall
be deposited or invested in such Authorized Investments maturing on the earlier of a date or dates
not later than (a) the date of maturity of the last Bond then Outstanding or (b) five (5) years after the
date of the investment. Except as provided in this Section, any income or interest earned on any fund
or account held by the Trustee under this Ordinance shall accrue to and be deposited in the fund or
account from which said monies were deposited or invested, except to the extent otherwise provided
herein. The Trustee shall be entitled to receive instructions from the City as to each deposit or
investment prior thereto, and to have such instructions confirmed in writing within two Business
Days. In the absence of prior instructions, the Trustee shall invest monies as they become available
for deposit or investment in a qualified money market account.
Section 6.10. Payment of Bonds. While any of the Bonds are Outstanding, the City shall cause
to be paid solely from funds on deposit in the Funds created hereunder amounts sufficient to fully pay
and discharge promptly the Debt Service Requirements on the Bonds as such payments accrue or
mature, whether by reason of Stated Maturity, redemption, or otherwise; such transfer of funds must
be made in such manner as will cause immediately available funds to be available for payment of the
Bonds at the close of the Business Day next preceding the date the Debt Service Requirement
payment is due on the Bonds.
Section 6.1I. Advances from Available Funds. In the event of a delinquency in the payment
of any installment of the Special Assessment levied upon any property for the payment of the
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Principal Installment of and interest on the Bonds, the City may, but is not obligated to, be the
purchaser of the delinquent property upon which any of said Special Assessments are levied in like
manner in which it may become the purchaser of property sold for the nonpayment of general ad
valorem property taxes, and in the event the City does so become the purchaser of such property,
shall pay and transfer from available funds and deposit into the Debt Service Fund the amount of any
remaining amount of unpaid Special Assessment, delinquent Special Assessment installment and
interest thereon. The City may also pay and transfer from available funds and deposit into the Debt
Service Fund, but shall not be so obligated, the amount of any such property pending redemption or
sale. Any amounts so advanced shall be recoverable upon sale or redemption of the property. The
City shall not be obligated to advance available funds to cure any deficiency in the Debt Service Fund,
or any other fund created hereunder, and has determined that it would not obligate itself to advance
available funds from the City treasury to cure any such deficiency.
ARTICLE VII
PROVISIONS CONCERNING
FEDERAL INCOME TAX
Section 7.01. General Tax Covenant. The City does not intend that the interest on the Bonds
be excludable from gross income for purposes of federal income taxation pursuant to sections 103
and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable
regulations.
ARTICLE VIII
MISCELLANEOUS COVENANTS AND COLLECTION PROCEDURES
So long as any of the Bonds issued hereunder are Outstanding and unpaid, the City makes the
following covenants with the Owners of the Bonds under the provisions of the Act and this Ordinance
(to be performed by the City or its proper officers, agents or employees), which covenants are
necessary, convenient and desirable to secure the Bonds and to make them more marketable;
provided, however, that said covenants do not require the City to expend any funds or monies other
than the Special Assessment Revenues collected.
Section 8.01. Trustee to Pursue Collections. During the term of the Bonds, the City hereby
appoints the Trustee to act as a billing and collection agent for the City. The City may determine to
act as its own billing and collecting agent at a later date as designated in writing to the Trustee by an
authorized City representative. The Trustee will:
(a) prepare and mail in the name of the City, at the time and in the manner required by the
provisions of this Ordinance, the Assessment Ordinance, and the Act, statements for the collection
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of all Special Assessments levied by the Assessment Ordinance, this Ordinance and any ordinances
supplemental hereto levying supplemental assessments or reassessments (collectively, the
"Ordinances");
(b) prepare and mail statements of delinquent Special Assessments at the time and manner
required by the Ordinances, the Act or as may be deemed advisable by the Trustee;
(c) receive and collect Special Assessments and the penalties and interest thereon or any
proceeds from a judicial sale of assessed property and deposit the same as required by the Ordinances
and the Act;
(d) engage such attorneys and other consultants as the City deems appropriate to act on its
behalf upon such terms and conditions and at the rate the City deems appropriate and to pay for same
from monies in the Administrative Expense Fund;
(e) bring legal actions in the name of the City and District to collect delinquent Special
Assessments and to proceed to sell any assessed property in a judicial foreclosure proceeding;
(f) with the consent of the City, buy any assessed property at a judicial foreclosure proceeding
in the name of the City and thereafter to sell such property purchased on behalf of the City upon such
terms and conditions as the Trustee deems desirable; and
(g) do any and all further acts as the Trustee deems desirable to protect the interest of the
Owners of the Bonds and/or collect the Special Assessments.
In the event the Trustee is unsuccessful in collecting all of a delinquent installment of a Special
Assessment by selling the assessed property in a judicial foreclosure sale, the Trustee is authorized
to pursue any remedy available to the City to collect the delinquent installment (or balance of a
delinquent installment) against the Person who owned the property sold at such judicial foreclosure
sale at the time the Special Assessment was levied by the City pursuant to the Assessment Ordinance.
Section 8.02. Foreclosure Covenant. The City hereby covenants with and for the benefit of
the Owners that it will determine or cause to be determined, no later than December 1 of each year,
whether or not any installment or installments of Special Assessments are delinquent and, if such
delinquencies exist, the City will order and cause to be commenced, or cause the Trustee to do so on
behalf of the City, on or before January 1 or immediately thereafter, and thereafter diligently
prosecute an action in district court to foreclose the lien for the amount of any delinquent installment
or installments of Special Assessments, provided, however, that the City shall not be required to order
the commencement of foreclosure proceedings if (i) the total of such delinquencies for such Fiscal
Year is less than five percent (5%) of the total of the Special Assessment installments posted to the
Assessment Roll for such Fiscal Year, and (ii) the Reserve Fund is not less than five percent (5%) of
the principal amount of all Bonds originally issued, less any Bonds called for redemption.
Notwithstanding the foregoing, if the City determines that there is a delinquent Special Assessment
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installment on any single property in excess of one hundred thousand dollars ($100,000), then it will
diligently institute, prosecute and pursue foreclosure proceedings against such property or cause the
Trustee to do so on its behalf.
To the extent it may legally do so, and taking into account the prior liens on assessed land for
ad valorem taxes, the City covenants that property will not be sold in a judicial foreclosure for less
than the amount of a delinquent Special Assessment installment due on the property, including
delinquent penalties, interest, and attorney fees, without the consent of fifty-one percent (51%) of the
owners of the Outstanding Bonds. Any sale of property for nonpayment of an installment or
installments of a Special Assessment shall be subject to the lien established for the remaining unpaid
installments of the Special Assessment against such property and such property may again be sold at
a judicial foreclosure sale if the purchaser thereof fails to make timely payment of the nondelinquent
installments of Special Assessment against such property as they become due and payable pursuant
to the terms of the Assessment Ordinance and this Ordinance.
Section 8.03. City Covenant to Cooperate with Trustee. The City agrees to cooperate with
and assist the Trustee with the billing and collection of Special Assessments by taking such action as
the Trustee requests from time to time including:
(a) approving annual Special Assessment bills;
(b) approving collection procedures;
(c) approving engagement of attorneys and consultants; and
(d) authorizing and pursuing tax foreclosure proceedings on property liable for delinquent
Special Assessments.
Section 8.04. Good Faith Covenant. The City will proceed in good faith to complete the
acquisition and construction of the Authorized Improvements in a timely manner pursuant to the Act,
reserving the right to make changes and modifications as permitted by the Act.
Section 8.05. Further Assurances. The City will adopt, make, execute and deliver any and all
such further ordinances, resolutions, instruments and assurances as may be reasonably necessary or
proper to carry out the intention or to facilitate the performance of this Ordinance, to aid the Trustee
in its collection efforts, and for the better assuring and confirming to the Owners of the Bonds the
rights and benefits provided by this Ordinance.
Section 8.06 Punctual Payment. The City covenants that it will duly and punctually pay or
cause to be paid the Principal Installments of and interest on every Bond issued hereunder at maturity
or earlier scheduled mandatory redemption date, together with the premium thereon, if any be
payable, on the date, at the place and in the manner mentioned in the Bonds and in accordance with
this Ordinance to the extent Special Assessment Revenues are available therefor, and that the
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payments into the various Funds created hereunder will be made, all in strict conformity with the
terms of the Bonds and this Ordinance, and that it will faithfully observe and perform all of the
conditions, covenants and requirements of this Ordinance and all ordinances supplemental hereto and
of the Bonds issued hereunder, and that time of such payment and performance is of the essence of
the City's contract with the Owners of the Bonds.
Section 8.07. Reassessments. If any Special Assessment heretofore or hereafter issued is void
or unenforceable, for any cause, or if the City made a mistake in a Special Assessment relating to the
cost of the Authorized Improvements, then a supplemental assessment or reassessment shall be made
in the manner as provided by Sections 372.019 and 372.020 of the Act.
Section 8.08. Contract With Owners of Bonds. The provisions of this Ordinance and of any
other ordinance supplementing or amending this Ordinance, shall constitute a contract between the
City and the Owners of the Bonds and such provisions shall be enforceable by any Owner of Bonds
for the equal benefit and protection of all Owners of Bonds similarly situated by mandamus,
accounting, mandatory injunction or any other suit, action or proceeding at law or in equity that is
now or may hereafter be authorized under the laws of the State of Texas in any court of competent
jurisdiction. Said contract is made under and is to be construed in accordance with the laws of the
State of Texas.
No remedy conferred hereby upon any Owner of Bonds is intended to be exclusive of any
other remedy, but each such remedy is cumulative and in addition to every other remedy and may be
exercised without exhausting and without regard to any other remedy conferred by law. No waiver
of any default or breach of duty or contract by any Owner of Bonds shall affect any subsequent
default or breach of duty or contract or shall impair any right or remedies on said subsequent default
or breach. No delay or omission of any Owners of Bonds to exercise any right or power accruing
upon any default shall impair any such right or power or shall be construed as a waiver of any default
or acquiescence therein. Every substantive right and every remedy conferred upon the Owners of
Bonds may be enforced and exercised as often as may be deemed expedient. In case any suit, action
or proceeding to enforce any right or exercise any remedy shall be brought or taken and should said
suit, action or proceeding be abandoned, or be determined adversely to the Owners of Bonds, then,
and in every such case, the City and the Owners of Bonds shall be restored to their former positions,
rights and remedies as if such suit, action or proceeding had not been brought or taken.
Section 8.09. No Obligation to Cure Deficiency. The City has not, and the Council determines
and declares that it will not, obligate itself to advance available funds from the treasury of the City
to cure any deficiency which may occur in any fund created under this Ordinance or to pay any other
cost associated with the Bonds not covered by amounts on deposit in such funds.
Section 8.10. No Additional Bonds. The City covenants that it will not issue additional bonds
or other indebtedness payable from special assessments on land in the District without the consent
of 100% of the holders of the Outstanding Bonds.
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ARTICLE IX
REMEDIES
Section 9.01. Events of Default. Each of the following events is hereby declared an "event of
default":
(a) if default in the payment of the Principal Installment of any of the Bonds shall be made
when the same shall become due and payable, either at maturity or by proceedings for redemption;
or
(b) if default in the payment of any installment of interest shall be made; or
(c) if the City shall for any reason be rendered incapable of fulfilling its obligations hereunder;
or
(d) if the City shall default in the due and punctual performance of any of the covenants,
conditions, agreements and provisions contained in the Bonds or in this Ordinance, other than as
specified in Section 9.01(a) and (b), on the part of the City to be performed, and such default shall
continue for 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 shall give such notice at the written request of the Holders of not less than ten per cent (10%)
in principal amount of the Bonds then Outstanding.
Section 9.02. Actions by Trustee. Upon the happening and continuance of any event of default
specified in Section 9.01 of this Ordinance, then and in every such case the Trustee may proceed, and
upon the written request of the Holders of not less than fifty-one per cent (51%) in principal amount
of the Bonds then Outstanding hereunder shall proceed, subject to the provisions of Section 9.01 of
this Ordinance, to protect and enforce its rights and the rights of the Owners of the Bond under the
Act and under this Ordinance by such suits, actions or special proceedings in equity or at law, or by
proceedings in the office of any board or officer having jurisdiction, either for the specific
performance of any covenant or agreement contained herein or in aid or execution of any power
herein granted or for the enforcement of any proper legal or equitable remedy, as the Trustee, being
advised by counsel, shall deem most effectual to protect and enforce such rights.
In the enforcement of any remedy under this Ordinance the Trustee shall be entitled to sue for,
enforce payment of and receive any and all amounts then or during any default becoming, and at any
time remaining, due from the City for Principal Installments, interest or otherwise under any of the
provisions of this Ordinance or of the Bonds and unpaid, with interest on overdue payments at the
rate or rates of interest specified in such Bonds, together with any and all costs and expenses of
collection and of all proceedings hereunder and under such Bonds, without prejudice, to any other
right or remedy of the Trustee or of the Owners of the Bonds, and to recover and enforce judgment
or decree against the City, but solely as provided herein and in such Bonds, for any portion of such
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amounts remaining unpaid, with interest, costs and expenses, and to collect (but solely from monies
available for such purposes) in any manner provided by law, the monies adjudged or decreed to be
payable.
Section 9.03. Priority of Payment Upon Default. If at any time the monies in the Funds
created under this Ordinance shall not be sufficient to pay the Principal Installments or the interest
on the Bonds as the same become due and payable, such monies, together with any monies then
available or thereafter becoming available for such purpose, whether through the exercise of the
remedies provided for in this Article or otherwise, shall, after payment of the costs and expenses of
the proceedings resulting in the collection of such money and of the fees of, and the expenses,
liabilities, and advances incurred or made by, the Trustee (including all accrued and unpaid Trustee
fees and the fees of its attorneys), be applied (subject to the provisions of Sections 9.01 and 9.03 of
this Ordinance) as follows:
(a) Unless the principal of all the Bonds shall then be due and payable, all such monies shall
be applied:
FIRST: to the payment to the Persons entitled thereto of all installments of interest then due,
in the order of the maturity of the installments of such interest, and, if the amount available shall not
be sufficient to pay in full any particular installment, then to the payment ratably, according to the
amounts due on such installment, to the Persons entitled thereto, without any discrimination or
preference except as to any difference in the respective rates of interest specified in the Bonds; and
SECOND: to the payment of the Principal Installments of any Bonds which are due, and, if
the amount available shall not be sufficient to pay all of such amounts, then to the payment thereof
ratably, according to the amount due.
Section 9.04. Default Cured. In case any action taken by the Trustee on account of any
default shall have been discontinued or abandoned for any reason, then and in every such case the
City, the Trustee and the Holders of the Bonds shall be restored to their former positions and rights
hereunder, respectively, and all rights, remedies, powers and duties of the Trustee shall continue as
though no such action had been taken.
Section 9.05. Holders' of Bonds Direction of Proceedings. Anything in this Ordinance to the
contrary notwithstanding, the Holders of not less than a majority in principal amount of the Bonds
then Outstanding hereunder shall have the right, subject to the provisions of Sections 9.01 and 9.06
of this Ordinance, by an instrument or concurrent instruments in writing executed and delivered to
the Trustee, to direct the method and place of conducting all remedial actions to be taken by the
Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law
or the provisions of this Ordinance, and that the Trustee shall have the right to decline to follow any
such direction which in the opinion of the Trustee would be unjustly prejudicial to Holders of Bonds
not parties to such direction.
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Section 9.06. Remedies Exclusion. No Holder of any of the Outstanding Bonds shall have any
right to institute any suit, action, mandamus or other proceeding in equity or at law for the execution
of any trust hereunder or the protection or enforcement of any right under this Ordinance or any
resolution of the City authorizing the issuance of Bonds, or any right under the Act or the laws of
Texas, excepting only an action for the recovery of overdue and unpaid Principal Installments, interest
or redemption premium, unless such Holder previously shall have given to the Trustee written notice
of the event of default or breach of trust or duty on account of which such suit or action is to be
taken, and unless the Holders of not less than twenty per cent (20%) in principal amount of the Bonds
then outstanding shall have made written request of the Trustee after the right to exercise such
powers or right of action, as the case may be, shall have accrued, and shall have afforded the Trustee
a reasonable opportunity either to proceed to exercise the powers herein granted or granted by the
Act or by the laws of Texas, or to institute such action, suit or proceeding in its or their name, and
unless, also, there shall have been offered to the Trustee reasonable security and indemnity against
the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall have refused
or neglected to comply with such request within a reasonable time; and such notification, request and
offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be
conditions precedent to the execution of the powers and trusts of this Ordinance or for any other
remedy hereunder or under the Act or the laws of Texas. It is understood and intended that no one
or more Holders of the Bonds hereby secured shall have any right in any manner whatever by his or
their action to affect, disturb or prejudice the security of this Ordinance, or to enforce any right
hereunder or under the Act or the laws of Texas with respect to the Bonds or this Ordinance, except
in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and
maintained in the manner herein provided and for the benefit of all Holders of the Outstanding Bonds,
except as otherwise permitted herein with reference to overdue and unpaid Principal Installments,
interest or redemption premium.
Section 9.07. Non possession of Bonds. All rights of action under this Ordinance or under any
of the Bonds, enforceable by the Trustee, may be enforced by it without the possession of any of the
Bonds or the production thereof on the trial or other proceeding relative thereto, and any such suit,
action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the
Holders of such Bonds, subject to the provisions of this Ordinance.
Section 9.08. Other Remedies Available. No remedy herein conferred upon or reserved to the
Trustee or to the Holders of the Bonds is intended to be exclusive of any other remedy or remedies,
and each and every such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute.
Section 9.09. Delay in Exercise of Rights. No delay or omission of the Trustee or of any
Holder of the Bonds 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 any acquiescence therein;
and every power and remedy given by this Ordinance to the Trustee and the Holders of the Bonds,
respectively, may be exercised from time to time and as often as may be deemed expedient.
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The Trustee may, and upon written request of the Holders of not less than a majority in
principal amount of the Bonds then Outstanding shall, waive any default which in its opinion shall
have been remedied before the completion of the enforcement of any remedy under this Ordinance,
but no such waiver shall extend to or affect any other existing or any subsequent default or defaults
or impair any rights or remedies consequent thereon.
ARTICLE X
CONCERNING THE TRUSTEE
Section 10.01. Acceptance of Trust. The Trustee accepts and agrees to execute the trusts
imposed upon it by this Ordinance, but only upon the terms and conditions and subject to the
provisions of this Ordinance to all of which the parties hereto and the respective Owners of the Bonds
agree.
Section 10.02. Trustee Obligation to Bring Suit. Other than suits to collect delinquent Special
Assessments as provided herein and as provided in Article IX, the Trustee shall be under no
obligation to institute any suit, or to take any remedial proceeding under this Ordinance, 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 its satisfaction by the Owners against any and all costs and
expenses, outlays and counsel fees and other reasonable disbursements, and against all liability; the
Trustee may, nevertheless, begin suit, or appear in and defend suit, or do anything else in its judgment
proper to be done by it as such Trustee, without indemnity, and in any such case the Owners shall
reimburse the Trustee for all costs and expenses, outlays and counsel fees and other reasonable
disbursements properly incurred in connection therewith. If the City shall fail to make such
reimbursement, the Trustee may reimburse itself from any monies in its possession under the
provisions of this Ordinance and shall be entitled to a preference therefor over any of the Bonds
Outstanding hereunder.
Section 10.03. Trustee Not Responsible for Other Depositories. The Trustee shall not be
liable or responsible because of the failure of the City or of any of its employees or agents to make
any collections or deposits or to perform any act herein required of the City, or its employees or
agents or because of the loss of any monies arising through the insolvency or the act or default or
omission of any depository, or Paying Agent/Registrar other than itself, in which such monies have
been deposited under the provisions of this City. The Trustee shall not be responsible for the
application of any of the proceeds of the Bonds or any other monies deposited with it and paid out,
invested, withdrawn or transferred in accordance with the provisions of this Ordinance. The
immunities and exemptions from liability of the Trustee hereunder extend to its directors, officers,
employees agents.
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Section 10.04. Compensation of Trustee. Subject to the provisions of any contract between
the City and the Trustee, the City shall pay to the Trustee, but solely from amounts on deposit in the
Administrative Expense Fund, reasonable compensation for all services performed by it hereunder
and also all its reasonable expenses, charges and other disbursements and those of its attorneys,
agents and employees incurred in and about the administration and execution of the trusts hereby
created and the performance of their powers and duties hereunder. If the City shall fail to make any
payment required by this Section, the Trustee may make such payments from any monies in its
possession under the provisions of this Ordinance and shall be entitled to a preference therefor over
any of the Bonds Outstanding hereunder.
Section 10.05. Trustee May Rely on Certificates. In case at any time it shall be necessary or
desirable for the Trustee to make any investigation respecting any fact preparatory to taking or not
taking any action or doing or not doing anything as such Trustee, and in any case in which this
Ordinance provides for permitting or taking any action, the Trustee may rely upon any certificate
required or permitted to be filed with it under the provisions of this Ordinance, and any such
certificate shall be evidence of such fact to protect it in any action that it may or may not take or in
respect of anything it may or may not do, in good faith, by reason of the supposed existence of such
fact. Any request, notice or other instrument from the City to the Trustee shall be deemed to have
been signed by the proper party or parties if signed by an authorized officer of the City, and the
Trustee may accept a certificate signed by the City Secretary of the City as to any resolution adopted
or any other action taken by the City.
Section 10.06. Trustee May Own Bonds. Any bank or trust company acting as Trustee under
this Ordinance, and its directors, officers, employees or agents, may in good faith buy, sell, own, hold
and deal in any of the Bonds issued under and secured by this Ordinance, and may join in any action
which any Owner of the Bonds may be entitled to take with like effect as if such bank or trust
company were not the Trustee under this Ordinance.
Section 10.07. Representations of City in Bonds. The recitals, statements and representations
contained herein and in the Bonds (excluding the Trustee's certificate on the Bonds as Registrar) shall
be taken and construed as made by and on the part of the City and not by the Trustee, and the Trustee
assumes and shall be under no responsibility for the correctness of the same.
Section 10.08. Trustee Solely Liable for Negligence. In performing its duties under the terms
of this Ordinance, the Trustee shall be liable only for its own negligence or willful misconduct, and
shall incur no liability in acting or proceeding, or in not acting or not proceeding, reasonably and in
good faith, upon any resolution, order, notice, request, consent, waiver, certificate, statement,
affidavit, requisition, bond or other paper or document which it 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 Ordinance, or upon the opinion of
any attorney, engineer, or accountant believed by the Trustee to be qualified in relation to the subject
matter.
RROCIC/PUBUC: ORDIN DR2 2/26/97
38
Section 10.09. Resignation of Trustee. The Trustee may resign and thereby become
discharged from the trusts hereby created, by notice in writing to be given to the City and mailed to
the Owners of the Bonds not less than sixty (60) days before such resignation is to take effect, but
such resignation shall take effect immediately upon the appointment of a new Trustee as the case may
be, if such new Trustee shall be appointed before the time limited by such notice and shall then accept
the trusts hereof.
Section 10.10. Removal of Trustee. The Trustee may be removed at any time by an instrument
or concurrent instruments in writing, signed by the Holders of not less than a majority in principal
amount of the Bonds hereby secured and then Outstanding and filed with the City. A photostatic copy
of each such instrument shall be delivered promptly by the City to the Trustee.
The Trustee may also be removed at any time for any breach of trust or violation of this
Ordinance or if the Trustee does not meet the minimum required capital and surplus of $50,000,000
set forth in Section 10.11 by an ordinance duly passed by the City.
Section 10.11. Insolvency of Trustee. If at any time the Trustee shall resign, or shall be
removed, be dissolved or otherwise become incapable of acting, or the banks or trust company acting
as Trustee shall be taken over by any governmental official, agency, department or board, the position
of Trustee shall thereupon become vacant. If the position of Trustee shall become vacant for any of
the foregoing reasons or for any other reason, the City shall appoint a Trustee to fill such vacancy.
The City shall mail a copy of the notice of any such appointment by it to the Owners of the Bonds.
At any time within one year after any such vacancy shall have occurred, the Owners of a
majority in principal amount of the Bonds then Outstanding, by an instrument or concurrent
instruments in writing, signed by such Owners of the Bonds or their attorneys in fact "hereunto duly
authorized and filed with the City, may appoint a successor Trustee, which shall supersede any
Trustee theretofore appointed by the City. Photostatic copies of each such instrument shall be
delivered promptly by the City to the predecessor Trustee and to the Trustee so appointed by the
Owners of the Bonds.
If no appointment of a successor Trustee shall be made pursuant to the foregoing provisions
of this Section, the Owner of any Bond Outstanding hereunder or any retiring Trustee may apply to
any court of competent jurisdiction to appoint a successor Trustee. Such court may thereupon, after
such notice, if any, as such court may deem proper, appoint a successor Trustee.
Any Trustee hereafter appointed shall be a bank or trust company duly organized and doing
business under the laws of the United States of America or any State, authorized under such laws to
exercise corporate trust powers and subject to examination by federal or state authority, of good
standing, and having, at the time of its appointment, a combined capital and surplus aggregating not
less than fifty million dollars ($50,000,000) be subject to supervision or examination by federal or
state authority and have an office in Austin, Texas.
RROCK/PUBUC: ORDINDR2 2)26/97
39
Section 10.12. Powers of Successor Trustee. Every successor Trustee appointed hereunder
shall execute, acknowledge and deliver to its predecessor, and also to the City, an instrument in
writing accepting such appointment hereunder, and thereupon such successor Trustee, without any
further act, shall become fully vested with all the rights, immunities, powers and trusts, and subject
to all the duties and obligations, of its predecessor; but such predecessor shall, nevertheless, on the
written request of its successor or of the City, and upon payment of the compensation, expenses,
charges and other disbursements of such predecessor which are due and payable pursuant to the
provisions of this Article, execute and deliver an instrument transferring to such successor Trustee
all the rights, immunities, powers and trusts of such predecessor hereunder; and every predecessor
Trustee shall deliver all property and monies held by it hereunder to its successor. Should any
instrument in writing from the City be required by any successor Trustee for more fully and certainly
vesting in such Trustee the rights, immunities, powers and trusts hereby vested or intended to be
vested in the predecessor Trustee, any such instrument in writing shall and will, on request, be
executed, acknowledged and delivered by the City.
Notwithstanding any of the foregoing provisions of this Article, any bank or trust company
having power to perform the duties and execute the trusts of this Ordinance and otherwise qualified
to act as Trustee hereunder with or into which the bank or trust company acting as Trustee may be
merged or consolidated, or to which the assets and business of such bank or trust company may be
sold, shall be deemed the successor of the Trustee.
ARTICLE XI
AMENDMENTS
Section 11.01. Amendment Without Consent of Holders of Bonds. This Ordinance may be
amended, without the consent of any of the Owners, by the City, by ordinance, for any of the
following purposes:
(a) to add to the covenants for the benefit of the Owners or to surrender any right or power
conferred upon the City; and
(b) to cure any ambiguity, to correct, or supplement any provision which may be inconsistent
with any other provision, or to make any other provision, with respect to matters or questions arising
with respect to the Bonds, which shall not be inconsistent with the provisions of this Ordinance and
applicable law, provided that such action shall not adversely affect the interests of the Owners of the
Bonds.
This Ordinance shall, by the adoption of any such ordinance, be amended in accordance
therewith. Bonds authenticated and delivered after the adoption of any such ordinance may bear a
notation as to any matter provided for in such ordinance. If the City shall so determine, new bonds
so modified as to conform to any such ordinance or resolution may be prepared and executed by the
RROCK/PUBUC: ORDIN DR2 2/26/97
40
City and authenticated and delivered in exchange for Bonds Outstanding.
Section 11.02. Supplemental Ordinance Amending the Ordinance or Bonds. (a) At any time
or from time to time but subject to the conditions or restrictions contained in this Ordinance, an
ordinance of the City amending or supplementing this Ordinance may be adopted modifying any of
the provisions of this Ordinance or of the Bonds or releasing the City from any of the obligations,
covenants, agreements, limitations, conditions, or restrictions therein contained, but no such
ordinance shall be effective until after the filing with the Trustee of a copy of such ordinance certified
by the City Secretary and unless (1) no Bonds remain Outstanding at the time the ordinance becomes
effective, or (2) such ordinance is consented to by or on behalf of Owners of the Bonds in accordance
with and subject to the provisions of Sections 11.04 through 11.06.
(b) The provisions of paragraph (a) of this Section 11.02 shall not be applicable to
supplemental ordinances adopted in accordance with the provisions of Section 11.01.
Section 11.03. Restriction on Amendments. Neither the Ordinance, nor the Bonds, shall be
modified or amended in any respect except as provided in, and in accordance with, and subject to the
provisions of this Article. The provisions of Section 11.02 are in all respects subject and subordinate
to the provisions, restrictions, exceptions, and limitations set forth in this Article. Nothing in this
Article shall affect or limit the rights or obligations of the City to pass, make, do, execute,
acknowledge, or deliver any ordinance, act, or other instrument which elsewhere in this Ordinance
it is provided shall be delivered to said Trustee.
Section 11.04. Amendment of Ordinance with Consent of Owners of Bonds. Except as
provided in Section 11.01, the Owners of not less than fifty-one percent (51%) in aggregate principal
amount of the Bonds then Outstanding shall have the right, at any time and from time to time, to
consent to and approve an amendment of this Ordinance as shall be deemed desirable by the City for
the purpose of modifying, altering, amending, adding to or rescinding any of the terms or provisions
contained in this Ordinance; provided, however, that nothing in this Article shall permit (a) an
extension of the maturity of the Principal Installment of or the interest on any Bond issued hereunder,
or any scheduled mandatory redemption, or (b) a reduction in the principal amount of any Bond or
the rate of interest on any Bond, or (c) a privilege or priority of any Bond or Bonds over any other
Bond or Bonds, or (d) a reduction in the aggregate principal amount of the Bonds required for
consent to such amendment.
Bonds owned or held by or for the account of or for the benefit of the City shall not be
deemed to be Outstanding for the purpose of amending this Ordinance.
Section 11.05. Notice and Adoption of Amendment. If the City desires to amend this
Ordinance, the Trustee shall cause notice be sent by first-class mail to the Registered Owners of the
Bonds. Such notice shall briefly set forth the nature of the proposed amendment and shall state that
copies thereof are on file at the office of the Trustee for inspection by all Owners of Bonds. If within
ninety (90) days or such longer period as shall be prescribed by the City following the mailing of such
RROCK/PUBI2C: ORDIN DR2 2/26/97
41
notice, the Owners of not less than fifty-one percent (51%) in aggregate principal amount of the
Bonds Outstanding shall have consented to the amendment as herein provided, no Owner of any
Bond shall have any right to object to any of the terms and provisions contained therein, or in any
manner to question the propriety of the execution thereof, or enjoin or restrain the City from taking
any action pursuant to the provisions thereof, and all of the rights of the Owners of Outstanding
Bonds shall thereafter be determined, exercised, and enforced hereunder, subject in all respects to
such amendments.
Section 11.06. Revocation of Consent. Any consent given by any Owner of a Bond pursuant
to the provisions of this Article shall be irrevocable for a period of six (6) months from the date notice
of the amendment was mailed as provided in Section 11.05, and shall be conclusive and binding upon
all future Owners of the same Bond during such period. Such consent may be revoked at any time
after six (6) months from the date the notice was mailed by the Owner who gave such consent or by
a successor in title, by filing notice thereof with the Trustee, but such revocation shall not be effective
if the Owners of fifty-one percent (51%) aggregate principal amount of the Bonds Outstanding as in
this Section defined have, prior to the attempted revocation, consented to and approved the
amendment.
ARTICLE XII
PROVISIONS CONCERNING SALE AND APPLICATION
OF PROCEEDS OF BONDS
Section 12.01. Sale of the Bonds. First Southwest Company has agreed to use its best efforts
to place the Bonds in accordance with a Placement Agreement which shall be substantially in the form
attached as Exhibit "D" which agreement is approved, and the appropriate officials of the City are
hereby authorized to execute such agreement on behalf of the City.
Section 12.02. Offering Documents. The City Council hereby ratifies, authorizes and
approves, in connection with the offering and sale of the Bonds, the preparation and distribution of
the Private Placement Memorandum which shall be substantially in the same form attached as Exhibit
"E" and containing such additional information as is contained in or authorized by this Ordinance, and
it is further officially found and determined that the statements and representations contained therein
are true and correct in all material respects, to the best knowledge and belief of the City Council.
Section 12.03. Related Matters. To satisfy in a timely manner all of the City's obligations
under this Ordinance, the Placement Agreement, the Paying Agent/Registrar Agreement, the Mayor
or Mayor Pro Tem, the City Manager, the City Secretary or an Assistant City Secretary, and all other
appropriate officers and agents of the City are hereby authorized and directed to take all other actions
that are reasonably necessary to provide for the issuance of the Bonds, including, without limitation,
executing and delivering on behalf of the City all certificates, consents, receipts, requests, and other
documents as may be reasonably necessary to satisfy the City's obligations under the Placement
RROCK/PUBIIC: ORDIN DR2 2/26/97
42
Agreement, the Paying Agent/Registrar Agreement, and this Ordinance and to direct the application
of funds of the City consistent with the provisions of such agreements and this Ordinance.
Section 12.04. Paying Agent/Registrar/Trustee. The form of agreement setting forth the
duties of the Paying Agent/Registrar/Trustee in substantially the form attached as Exhibit "F" is
hereby approved, and the appropriate officials of the City are hereby authorized to execute such
agreements for and on behalf of the City.
Section 12.05. No Personal Liability. No recourse shall be had for payment of the Principal
Installment of or interest on any Bonds or for any claim based thereon, or on this Ordinance, against
any official or employee of the City or any Person executing any Bonds.
ARTICLE XIII
MISCELLANEOUS
Secuon 13.01. Further Proceedings. The Mayor, the City Secretary, and other appropriate
officials of the City are hereby authorized and directed to do any and all things necessary and/or
convenient to carry out the terms of this Ordinance.
Section 13.02. 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 13.03. Open Meeting. It is hereby found, determined and declared that a sufficient
written notice of the date, hour, place and subject of the meeting of the City Council at which this
Ordinance was adopted was posted at a place convenient and readily accessible at all times to the
general public at the City Hall of the City for the time required by law preceding this meeting, as
required by the Open Meetings Law, Chapter 551, Texas Government code, as amended, and that
this meeting has been open to the public as required by law at all times during which this Ordinance
and the subject matter thereof has been discussed, considered and formally acted upon. The City
Council further ratifies, approves and confirms such written notice and the contents and posting
thereof.
Section 13.04. Provisions Concerning Registrar. (a) The Registrar, by undertaking the
performance of the duties of the Registrar and in consideration of the payment of fees and/or deposits
of money pursuant to this Ordinance and a Paying Agent/Registrar Agreement, accepts and agrees
to abide by the terms of this Ordinance and such agreement.
(b) The City reserves the right to replace the Registrar or its successor at any time. If the
Registrar is replaced by the City, the new registrar shall accept the previous Registrar's records and
RROCK/PUBI7C: ORDIN DR2 2/26/97
43
act in the same capacity as the previous Registrar. Any successor registrar shall be either a national
or state banking institution and a corporation organized and doing business under the laws of the
United States of America or any State authorized under such laws to exercise trust powers and
subject to supervision or examination by Federal or State authority.
Section 13.05. Effect of Ordinance. This Ordinance shall be in force and effect from and after
its passage, and it is so ordered.
Section 13.06. Repealer. All orders, resolutions and ordinances, or parts thereof, inconsistent
herewith are hereby repealed to the extent of such inconsistency.
RROCR/PUBUC: ORDIN DR2 2/2/97
44
PASSED AND APPROVED this day of , 1997.
ATTEST:
City Secretary
City of Round Rock, Texas
[SEAL]
RROCR/PUB[1C: ORDIN DR2 2126/97
45
Mayor
City of Round Rock, Texas
Texas Commerce Bank National Association, Trustee under the provisions of Ordinance No.
authorizing the $2,690,000 Encino Plaza Public Improvement District Special Assessment
Bonds, Taxable Series 1997, by the execution of the duly authorized officer named below does hereby
accept the obligations imposed on the Trustee pursuant to this Ordinance and agrees to perform the
duties of Trustee/Paying Agent/Registrar upon the terms and conditions set forth in this Ordinance.
ATTEST:
Title:
(SEAL)
RROCK/PUBuc: ORDIN DR2 2/26/97
46
TEXAS COMMERCE BANK
NATIONAL AS SOCIATION,
TRUSTEE
Title:
EXHIBIT "A"
ASSESSMENT ROLL
A-1
ENCINO PLAZA PUBLIC IMPROVEMENT DISTRICT
ASSESSMENT/SERVICE PLAN
Chapter 372 of the Local Government Code of the State of Texas, known as the "Public
Improvement District Assessment Act" (the "Act"), authorizes and defines formation of public
improvement districts within the State of Texas.
By action taken by the City Council, on December 12, 1996, the City of Round Rock (the
"City") passed a Resolution which authorized the establishment of Encino Plaza Public Improvement
District (the "District").
In compliance with requirements outlined in various sections of the Act, this
Assessment/Service Plan for the District is defined herein.
Section 1. Improvements and Services to be Provided to the District.
After analyzing the improvements authorized by the Act, the City determined that the
following improvements (the "Improvements") which are allowed by the Act should be provided by
the City within the District and will be of special benefit to the classes property described herein
within the District. As such, the City authorized the acquisition or construction of the Improvements
within the District which are described as follows and more specifically set forth in Exhibit "A"
attached hereto:
1. Acquisition or construction of a water distribution system throughout the District,
connecting to the City's master water distribution collection system.
2. Acquisition or construction of a wastewater collection system throught the District,
connecting to the City's master wastewater collection system.
3 Acquisition or construction of a stormwater drainage system throughout the District,
connecting to the City's master drainage system.
4. Acquisition or construction of streets or roadways to provide access to and through
all property within the District, connecting to and becoming part of the City's master
throroughfare plan.
The services to be provided in the District (the "Services") shall consist of those necessary
for the administration and operation of the District, including those of the City, the Paying Agent,
Registrar, and Trustee for the Bonds in annually collecting assessments and making payment on the
Bonds.
RROCK/PUBLIC: ASSES7.PLN 7/18/97
Section 2. Assessment Plan.
After analyzing the assessment methods allowed by the Act, the City has determined that
allocating the Improvement costs between two classes (Class A and Class B) due to the different use
within each class is fair and equitable. Furthermore, the City has determined allocating Improvement
costs within each class based upon the ratio of the appraised value of each lot compared to the total
appraised value within the class is fair and equitable and is the most reasonable means of allocating
the (i) costs of the Services to be provided annually to the District ("Service Costs"), (ii) costs of the
Improvements to be acquired and/or constructed within the District shown in Exhibit "A" attached
hereto, (iii) costs of the Bonds, and (iv) other costs directly or indirectly relating to the acquisition,
construction, and financing of the Improvements ("Improvement Costs"). (Service Costs and
Improvement Costs shall be referred to collectively as "Costs").
Section 3. Assessment Roll.
The District is described as being those properties more specifically described in Exhibit "B"
attached hereto.
Land parcels within the District may be replatted or subdivided for future transactions,
however, the total value of land to be assessed shall not be adjusted or reduced unless there is a
prepayment of total assessments due for a given parcel of land. Each parcel resulting from a replat
or subdivision of a parcel shall continue to bear its pro rata share of the assessment against the
original unplatted or subdivided parcel.
Section 4. Annual Indebtedness.
In accordance with Section 372.023 and 372.024 of the Act, the City will issue $2,690,000
Encino Plaza Public Improvement District Special Assessment Revenue Bonds, Taxable Series 1997
(the "Bonds"), secured by liens on all of the revenue generated through assessments within the
District. The total amount of Bonds to be issued to pay the Improvement Costs is $2,690,000. The
estimated annual debt service requirements on such Bonds is shown in Schedule I attached hereto.
Section 5. Improvement Costs.
In accordance with Sections 372.023 and 372.024 of the Act, the District will provide for the
completion/acquisition of the Improvements shown on Exhibit "A" attached hereto as soon as
possible upon funding (closing) the Bonds.
Section 6. Costs of Establishment and Administration of the District and Costs of Bonds to be
Paid From Assessments.
The estimated costs of establishment and administration of the District and costs of Bonds to
be paid from assessments are as follows:
RROCK/PU3LIC. ASSESS PLN 2/IB/97
A) Costs of Issuance of the Bonds $155,761
B) Establishment of Reserve Fund for the Bonds 534,239
TOTAL COSTS OF ESTABLISHMENT AND ADMINISTRATION $690,000
Section 7. Total Costs to be Assessed to Pay for the Bonds.
The total costs to be assessed as Improvement Costs are as follows:
A) Total Costs of Improvements $2,000,000
B) Costs of Issuance of the Bonds 155,761
C) Establishment of Reserve Fund for the Bonds 534,239
TOTAL COSTS TO BE ASSESSED $2.690,000
Section 8. Annual Service Costs to be Paid with an Annual Assessment During the Term of the
Bonds.
The annual Service Costs to be paid by the City with annual assessments for administration
and operation of the District is as follows:
Trustees Annual
Costs of Administration and
Operation of District and
Collection of Assessments
Section 9. Annual Costs of Improvements to be Paid by City.
$3,500
In accordance with the Act, all State and Federal laws regulating Home Rule Municipalities
within the State of Texas and all the laws and regulations of the City, the City will provide for the
ongoing annual maintenance, operation, and repair of the Improvements from the date of receipt and
acceptance of title to the Improvements from user fees from the Authorized Improvements and from
general funds. No fees or expenses related to the maintenance or repairs of the Improvements shall
be due from or collected from property within the District other than those currently provided for
under current City laws and regulations for any municipally -owned infrastructure improvements.
Section 10. Ownership of Improvements.
In accordance with the Act, the City intends to provide for the construction/acquisition and
completion of those Improvements described in Exhibit "A" attached hereto. Upon completion of
the Improvements, all such Improvements, including the land and the facilities and infrastructure
RROCK/PUBLIC: ASSES3.PLN 7/I K/97
thereon, shall be acquired by the City with proceeds of the Bonds and title to the land and
Improvements shall rest in the City.
Section 11. Levy of Assessments for Improvement Costs.
There is to be levied by the City an assessment as set forth in Exhibit "C" attached hereto
within the District to pay the Improvement Costs (the "Improvement Assessment") which shall be due
on the effective date of the ordinance levying assessments. Each Improvement Assessment may be
paid immediately or in periodic annual installments (the "Annual Installment") over a period of 14
years. The Annual Installment to be paid each year is shown in Exhibit "C". Each Improvement
Assessment shall bear interest per annum from March 1, 1997, the date of the Bonds, until paid at
the rate of ten percent (10%) per annum, calculated on the basis of a 360 day year of twelve 30 -day
months. Each Annual Installment, together with the interest in the unpaid amount of an Improvement
Assessment, shall be due on September 30 of each year (the "Installment Payment Date") with the
first Annual Installment being due on September 30, 1997 and each subsequent Annual Installment
shall be delinquent if not paid prior to November 1 of the year such Annual Installment is due (the
"Delinquency Date"). The principal amount of each Annual Installment of an Improvement
Assessment and the interest due on the unpaid principal amount of an Improvement Assessment on
each Installment Payment Date is shown in Exhibit "C".
Section 12. Prepayment of Assessments for Each Year.
Pursuant to the provision of Section 372.018 (b) of the Act, an Improvement Assessment may
be paid in whole or in part on any October 1 and April 1 of each year by paying the unpaid amount
of the Improvement Assessment plus the interest accrued or penalties that have been imposed prior
to the date of payment of the Improvement Assessment.
Section 13. Levy of Assessments to Pay Annual Service Costs of Administration and Operation
of District.
As authorized by Section 372.003(14) of the Act, there shall be levied each year while the
Bonds are outstanding and unpaid an assessment to pay the annual costs of the administration and
operation of the District (the "Administration Expense Assessment"). The Administration Expense
Assessment shall remain in effect from year to year until all Bonds are finally paid or until the City
adjusts the levy after a hearing and determination of benefits in any year pursuant to Section
372.015(d) of the Act. Administration Expense Assessments shall be due on September 30 of each
year following their levy and shall be delinquent if not paid prior to November 1 (the "Delinquency
Date").
Section 14. Interest on Delinquent Administration Expense Assessments and Annual Installments.
A delinquent Annual Installment and a delinquent Administration Expense Assessment will
accrue interest at the rate of one percent (1%) for each month or portion of a month the Annual
Installment or Administration Expense Assessment remains unpaid after it becomes delinquent.
RROCKIPUBLIC: ASSES7. PLN 2iI8/97
Section 15. Penalties.
A delinquent Annual Installment and delinquent Administration Expense Assessment incurs
a penalty of six percent (6%) of the amount of the Annual Installment or Administration Expense
Assessment for the first calendar month or fraction thereof it is delinquent plus one percent (1%) for
each additional month or fraction thereof the Annual Installment or Administration Expense
Assessment remains unpaid prior to January 1 of the year in which it becomes delinquent; however,
an Annual Installment or Administration Expense Assessment delinquent on January 1 incurs a total
penalty of twelve percent (12%) of the amount of the delinquent Annual Installment or
Administration Expense Assessment without regard to the number of months the Annual Installment
or the Administration Expense Assessments has been delinquent. Penalties shall not exceed the
amount permitted by Chapter 372 of the Code.
Section 16. Additional Penalty.
If an Annual Installment or an Administration Expense Assessment remain delinquent on
January 1 in the year in which the Annual Installment or the Administration Expense Assessment
became delinquent, there shall be imposed an additional penalty to defray costs of collection if it is
necessary for the City to contract with an attorney for the purposes of representing the City in the
collection of the delinquent Annual Installment or Administration Expense Assessment. The
additional penalty shall be fifteen percent (15%) of the Annual Installment or the Administration
Expense Assessment and the penalties and interest on the Annual Installment or the Administration
Expense Assessment. Penalties shall not exceed the amount permitted by Chapter 372 of the Code.
Section 17. No Discounts or Split Payments.
There will be no split payment of an Annual Installment or an Administration Expense
Assessment or discount for the early payment of an Annual Installment or an Administration Expense
Assessment.
Section 18. Lien for Collection of Assessments.
Improvement Assessments and Administrative Expense Assessments ("Assessments")
together with interest, penalties, and expense of collection and reasonable attorneys fees, as permitted
by the Code shall be a first and prior lien against the property assessed, superior to all other liens and
claims, except liens or claims for state, county, school district, or municipal ad valorem taxes, and
shall be a personal liability of and charge against the owner of the property regardless of whether the
owners are named. The lien for Assessments and each Installment thereof and penalties and interest
is effective from the date of the Ordinance levying the Assessments until the assessment is paid, and
shall be enforced by the City in the manner provided by Vernon's Texas Tax Code for collecting ad
valorem taxes on real property.
RROCK/PUBLIC: ASSESS. PLN 2/18197
Section 19. Applicability of Tax Code.
To the extent not inconsistent with the Ordinance levying Assessments, and not inconsistent
with Chapter 372 of the Code or the other laws governing public improvement districts, the
provisions of Vernon's Texas Tax Code shall be applicable to the imposition and collection of
Assessments by the City.
Section 20. No Acceleration of Installments.
Failure to pay an Annual Installment when due shall not accelerate the payment of the
remaining Annual Installments of the Improvement Assessment and such remaining Annual
Installments (together with interest thereon) shall continue to be due and payable at the same time
and in the same amount and manner as if such default had not occurred.
Section 21. Lien Survives Foreclosure.
Any sale of property for nonpayment of an Annual Installment or Annual Installments of an
Improvement Assessment per annum shall be subject to the lien established for the remaining unpaid
Annual Installments of the Improvement Assessment against such property and such property may
again be sold at a judicial foreclosure sale if the purchaser thereof fails to make timely payment of the
nondelinquent Annual Installments of an Improvement Assessment against such property as they
become due and payable pursuant to the terms of the Assessment Ordinance and the ordinance
authorizing the issuance of the Bonds.
RROCK/PUBLIC: ASSES3.PLN 7/18/97
SCHEDULE I
Encino Plaza P10
Assessment Banda, Taxable Sariee 1997
Man -Rated; Level Debt Servfcs
DEBT SERVICE SCHEDULE
DATE PRINCIPAL COUPON INTEREST TOTAL P+I FISCAL TOTAL
3/01/1997 - - - - -
4/01/1997 - - - - -
9/30/1997 - - - - -
10 01/1997 - - - - -
»: m /.,....... .............._.........,RE ....r ,.r.,r,.•r.»r«, . . ,»..., . .......:;;7' w« .r .. " -.. .. .
t�n�:w.rww�rn•..,.«».xr««w.w«.ww.r:».....»w•»».`�.SL�•y"� y. �nv), +.. ...r,r a.„ •o.
»:«+.". �l:".'wx' "�.."
7n+.ww.•..+w..wr..n»r«.w...:.......w.............•............. .. .. .l!•r:'.'� OIN»ewrw
9/30/1998 - - - - 291,416.67
10/01/1998 - - 134,500.00 134,500.00 -
4/01/1999 - - 134,500.00 134,500.00 -
9/30/1999 ... - - - - _269 4000.00
VM '".";Y, lei 'tantiOr4. L.•r: .1:4*i 'r.w.M.M:M:V'))'f /./.u...�wM:".* :r.{"r..�ar6 ..t :=1
YJ�iY:, I.'R�7<�M•
4/01/2000 — - 130,000.00 130,000.00 -
9/30/2000 - - - - 354,500.00
10/01/2000 100,000.00 10.000X 130,000.00 230,000.00 -
4/01/2001 ..y»// -w - 125,000.00 125/.000.00
•`� -
,,��i/� ::,.. .««.r•.:�.,M..:,�..r�:,..:r..;r.-�r�.rw�..»..�;«.r«.»:-»»,,........,,.,......_. ,n • ..
10/01/2001 115,000.00 10.000% 125,000.00 240,000.00 -
4/01/2002 - - 119,250.00 119,250.00 -
9/30/2002 - - - - 359,250.00
10/01/2002 125,000.00 10.000X 119,250.00 244,250 00 -
........ ...... _..........................._............._........,�. may.-'
y, ,g�^�»».»r•wr;.•:...:wrw"•w»:«,.w.,r•. .• i•w..,•.'p,"�•:el''Y� elifi '."'w..'.« «.'.r w �" M%a:.:a»nw
»'�'i�wwM'��irµAi�w�.iw:.'•'..•.�v..."'.r.�.•w«w.�«n.•»â€¢».. w..�ww..r.«.ww.. I .x+rw. ,. � ............... o.a:w�.:..r.A.en.«..
9/30/2003 - - - - - 357,250.00
10/01/2003 140,000.00 10-0001 113,000.00 253,000.00 -
4/01/2004 - - 106,000.00 106,000.00 -
9/30/2004 - - - - 359,000.00
;:f1•"A0.%DTROtiG':'.: �will ..,Nl'�'r.-•=540.45k..'10#04. EF.,«.."'.:.......•.;;.,.:45«.:.;;
4/01/2005 - - 98.250.00 98,250.00 -
9/30/2005 - - - - 359,250.00
10/01/2005 170,000.00 10.000X 98,250.00 268,250.00 -
4/01/2006 - - 89,750.00 89,750.000 -
- «.r
, ^ ... sr .. -.w ....•r.....««.rw.»r...-, r�r:rM:r...rt;4.. iz.::44-...�; ---„ .«..r«.r,.•» /1��
jy�� •.N•», .v.• »r.. w1w»rr.!.+.MMr•VhY•Mw '•'�Vr..
.�'�
10/01/2006 185,000.00 10.000X 89,750.00 274,750.00 -
4/01/2007 - - 80,500.00 80,500.00 -
9/30/2007 - - - - 355,250.00
10/01/2007 205,000.00 10.000X „80,500.00 285,500.00
.w»;.,«.,-
iMww��..4w00n«..:°:MV«M.•.M.l!Kr•�" "NM~ »r«M ..w.w�w»» •N � j�.� N •.•»MY•» ,»
.If•'RnMNr .t•:, .�A/M ♦ww. w. -.-Era .—=
9/30/2008 - - - - 355,750.00
10/01/2008 230,000.00 10.000X 70,250.00 300,250.00 -
4/01/2009 - - 58,750.00 58,750.00 -
9/30/2009 - „ - - _ - 359,000,00
�CC((� �h09 09.«â€¢ •w --;cs.,,75 'k ay0s w��►�w: r r.".•... •' rCr%.i.•.::i::
»ï¿½.• ulli�. râ–º..r•.».�:CNV'•i.�N':'...".4Y.��i%i.:.i::s.. w7�j.[.7FI:0fl.w....•....`..'.:�Hi,'�W�'JRMww �.«r.�!»w•�w�a•.»ï¿½r..iiww.u:
4/01/2010 - - 46,250.00 46,250.00 -
9/30/2010 - - - - 355,000.00
10/01/2010 280,000.00 10.000X 46,250.00 326,250.00 -
_ ,4/01/201111-_ - - 32 250.00 32,250.00 -
. 4wiw'wi syezt ":'w.«..» .,, vk .iwiviwwi+v++i« w»ii:.riww �:..,w•.�nrwwww»i.� ••.'w'ii ..-w:.42:47 r`.: ,�.+,.:
10/01/2011 305,000.00« 10.000X 32,250.00 337,250.00 -
4/01/2012 - - 17,000.00 17,000_00 -
9/30/2012 - - - - 354,250.00
10/01/2012 000.00 10.000X 17 000.00 357 000.00 ••..• -
Mf-.7,*ififfiX61E.7:7F4777.E.4S:74-:=4.F!!..;71;.;;7..;;;:th4TAt."6:=Fritiiii'i.'"z"4.-7-7:7.:7177.-44.1'!"-t!7". .....w.ww...,..._,.r ««.r•....«....»...+w.":1.::w««.:.:•...-....w,..../...r.»"•rr«...,.,.« ..•r.»w.,, _..,... w.!..»...
.IMW/:T/ w.r.•riw» n»:M1.:r+WMr.r«+w.w.ww.1.M•.�•..N!".MM..v+w...wo.N•�Ivnwwrr»»w....r.r.r....w...—.............v..........'357,000.00 !!�4"!1,".w.:...........w.
9/30/2013 - - - - 357 000.00
TOTAL 2,690,000.00 - 2,867,416.67 5,557,416.67 -
First southwest Company
Public Finance Department
FILE • RROCKREF-s97P10
2/10/1997 10:58 AK
"/_1 111_ 1 1
A
ENCINO PLAZA CONSTRUCTION COSTS
Water Improvements
No. Description Quantity Unit Unit Price Total Price
1 8" Water C-900 848 L.F. 525.00 S21,200.00
2 12" Water C-90() 1,980 L.F. 532.00 563,360.00
3 Single Water Service 9 EA 51,570.00 514,130.00
4 5-1/4" Fire I lydrvtt & 6" (iate Valve 7 EA 51,700.00 51 1,900.00
5 I2" Wet Connection 1 EA 57,500.00 57,500.00
6 )4" Wet Conneetu, 1 EA 53,700.00 53,700.00
7 8" Gate Valve 3 EA 5520.00 51,560.00
8 12" Gate Valve 4 EA 51,000.00 54,000.00
9 Raise Gate Valve 7 EA 5260.00 51,820.00
Total Water Improvements 5129,170.00
Wastewater Improvements
No. Description Quantity Unit Unit Price Total Price
8" PVC (All Depths) 755 L.F. 525.00 518,875.00
2 12" PVC (All Depths) 1,195 L.F. 539.00 546,605.00
3 Single Wastewater 8 EA 5620.00 54,960.00
4 Manholes 9 EA 53,000.00 527,000.00
5 Trench Safety 1.950 L.F. 52.50 54,875.00
Total Wastewater Improvements 5102.315.00
Street Improvements (Includes internal streets only)
No. Description Quantity Unit Unit Price Total Price
1 l.ixeavation/Suhgrade Preparation 9,700 S.Y. 53.00 529,100.00
I lâ–º" Flex Base 9,700 S.Y. 54.50 543,650.00
3 2" Asphalt 9,050 S.Y. 54.00 536,200.00
('urh and Gutter 5,600 56.00 533,600.00
5 6' Valley (utter 2 liA 51,500.00 53,000.00
6 Street Signage 4 I:A 5I50.00 5600.00
7 Revegetation 1 1..5. 57,000.00 57,000.00
8 Handicapped Sidewalk Ramps 2 I A 5500.00 51,000.00
9 5' Concrete Sidewalk 3,500 I..F. 510.50 536,750.00
S190.900.00
Total Street Improvements
Drainage Improvements
No. Description Quantity Unit Unit Price Total Price
I 18" RCP 210 L.F. 532.00 56,720.00
2 24" RCI' 666 1..1:. 535.00 523,310.00
3 30" RCI' 340 LI'. 545.00 515,300.00
4 36" RCI' 800 L.F. 558. 0() 546,400.00
5 18" CGMI' 150 L.I. 527.50 54,125.00
6 10' Curb Inlet 5 EA 51,800.00 59,000.00
7 15' Curb Inlet I EA 52,500.00 52,500.00
8 Standard Storm Manhole 5 EA 51,600.00 58,000.00
9 Junction Type Manholes 8 EA 52,900.00 523,200.00
10 Concrete Slopewalls 4 EA 5620.00 52,480.00
I I Trench Safety 1,576 L.F. S2.75 54,334.00
12 Temporary Erosion Control 1 L.S. 51 1,000.00 511,000.00
11 Concrete 1 Ieadwal1(18" RCI') 6 EA 51,000.00 56,000.00
14 Pond 1 I L.S. 5186,000.00 5186,00.00
15 Pond 2 1 L.S. 570,000.00 570,000.00
16 Pond 3 1 L.S. 5 1 10.000.00 5110,000.00
Total Drainage Improvements 5528,369.00
Encino Plaza Construction Costs - Page 2
Off -Site Improvements Total Price
No. Description Quantity Unit Unit Price
1 12" PVC (All Depths) 1,300 L.F. 540.00 552,000.00
12" l) I. (All I)cptlas) llncuatcd
130 L.I. 575.00 528,500.00
�()
L.P. 5200.00 510,000.00
3 30" 1),I. (All Depths) Uncoated 53,100.00 521,700.00
4 Manholes 7 EA
5 Concrete I{nwsunent of 12" 1),I 300 l..I;. 552.00 515,600.00
t, Repair I>rtvev.avN 10(1 I..F. 55& 0O 56,600.00
7 Temporary 1•:rusi,ni ('t iiti 'Is I L.S. 55.250.00 55,250.00
x 1'icnch Safety 1.1i(0 1..1 . 53.(X) 54,140.00
,a Prep PipeItoµ. 13.5 STA 5600.00 58,100.00
1(1 Permanent Erosion Control 1 l..S. S4,2(X).(X) 54,200,00
5156,090.00
Total Off -Site Improvements
Total Water. Wastewater. Street, Drainage. and Off -Site Improvements 51.106,844.00
Engineer Based on 10% of Total Improvement Cost 5110,684.40
5110484.40
Contingency Cost of 10% of Total Improvement Costs
Land
No.
Description
Land for Detention and Water Quality fonds
Quantity Unit Unit Price Total Price
72.(X)() S.I. 56.00 5432.000.00
GRAND TOTAL 51,760.212.80
ROUND ROCK NIJJAI'
CONSTRUCTION COSTS
Water Improvements
No. Description
Total Price
Upgrade Water Pressure Plane including
distant I'RV valve and engineering
Total Water Improvements
520,000.00
520,000.00
Wastewater Improvements
No. Description
2 12" Water and Wastewater Scr,•iee Lines
including connections and manholes
Total Wastewater Improvements
Total Price
573,425.00
S73,425.00
Drainage Improvements (Conveyance Lot 2)
No. Description Total Price .
3 Drainage Conveyance (Lot 2) 539,925.00
Drainage Improvements (Lot t)
4 Drainage. Filtration. Detention (I.ot I) 581,120.00
Total Drainage Improvements 5121,045.00
Total Water, Wastewater, and Drainage Improvements S214,470.00
Engineering and Contingency Costs S18,785.00
GRAND TOTAL S233,255.00
A1.
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EXHIBIT C
Endno Plata PID
Assessments Allocation Summary
1115197
Tone/ Ass.s:m.rrt: $2.690,000.00 (plus accrued interest): Maximum Annual Assessment 5359.23000 (1)
Class A (8$.30% of Total Assessment):
Panel Description:
Total
Initial Annual
Retail Assessment Assessment Assessment
Value Macedon don % .. ' 1 Liability (2)
Lat 1, Block $ 972.607.00 0.15925976 t cc . $ 378,284.93 $ 50,520.02
Lot 2. Block A 457,206.00 0.07486630 $ 177,825.31 $ 23,748.60
Lat 1, Block 8 1.488,946.00 0.24380781 ^ ^ 'h`;' $ 579,109.38 $ 77,340.17
Lot 2. Block B 1,628,889.00 026872281�~ �.,: ,. $ 633,538.69 $ 84,609.21
Lot 3, Block C 0 ;•':: - : $ - $ -
Lot 1, Block C 315,043.00 0.05158679: ;- .. r : $ 122,532.55 $ 16,364.25
Lot 2, Block C 1,244,357.00 0. ro/33i $ 483.979.14 $ 54.635.50
$ 6,107,048.00 1.00000000 8 2.375,270.00 8 317,217.75
Glass 8 (11.70% of Total Assessment):
Parcel Description:
Lot 1 $ 815,000.00 0.48367953 $ 152.22846 $ 20,330.14
Lat 2 $ 870.000.00 031632047 $ 162,501.54 $ 21.70211
$1,685.000.00 1.00000000 $ 314,730.00 $ 42,032.25
$ 2,690,000.00 $ 359,25099
(1) Tom/ Initial Assessment as shown does not include accrued interest
See Schedule 1 for breakdown of Assessment Payoff by Band Interest Payment dates.
(2) Annual Assessment Payment Due W30. Beginning 9130197 and continuing through 9132013.
EXHIBIT "B"
INVESTMENT LETTER
Encino Plaza Public Improvement District
City of Round Rock
221 East Main Street
Round Rock, Texas 78664
First Southwest Company
98 San Jacinto, Suite 370
Austin, Texas 78701
Texas Commerce Bank National Association
700 Lavaca, 5th Floor
Austin, Texas 78701
In connection with our proposed purchase of $2,690,000 aggregate principal amount of
Encino Plaza Public Improvement District Assessment Bonds Taxable, Series 1997 (the "Bonds"),
we confirm that:
1. We are agreeing to buy the Bonds from the District.
2. We have received a copy of the Private Placement Memorandum, dated February 18,
1997, relating to the Bonds and understand that the Bonds have not been, and will not be,
registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not
be sold except as permitted in the following sentence. We agree, on our own behalf and on
behalf of any accounts for which we are acting as hereinafter stated, that if we should sell any
Bonds prior to three years after the later of March 17, 1997 and the last date on which the
District or any affiliate of the District was the beneficial owner of such Bonds (or any
predecessor of such Bonds), we will do so only (A) to the District or an affiliate of the
District, (B) to a person who we reasonably believe is a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) that purchases in compliance with Rule 144A
under the Securities Act for its own account or for the account of a "qualified institutional
buyer," and we further agree, in the capacities stated above, to provide to any person
purchasing any of the Bonds from us a notice advising such purchaser that resales of the
Bonds are restricted as stated herein.
We understand that, on any proposed resale of any Bonds prior to three years after
the later of march 17, 1997 and the last date on which the District or any affiliate of the
B-1
District was the beneficial owner of such Bonds (or any predecessor of such Bonds), we will
be required to furnish to the Trustee, such certifications, opinions and other information as
the District may reasonably require to confirm that the proposed sale complied with the
foregoing restrictions. We further understand that certificates evidencing Bonds purchased
by us will, unless otherwise agreed by the District, bear a legend to the foregoing effect.
3. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Securities Act) (an "Institutional Accredited Investor")
and have such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Bonds, and we and any accounts
for which we are acting are each able to bear the economic risk of our or its investment.
4. We are acquiring the Bonds purchased by us for our own account or for one
or more accounts (each of which is an Institutional Accredited Investor) as to each of which
we exercise sole investment discretion and for each of which we are acquiring not less than
$ aggregate principal amount of Bonds.
You are entitled to rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Purchaser]
By:
Name:
Title:
B-2
SCHEDULE I
TO
REQUEST FOR DISBURSEMENT
Schedule of Invoices and Other Evidence of Payment
C-2
EXHIBIT "C"
REQUEST FOR DISBURSEMENT
Ladies/Gentlemen:
On behalf of the City of Round Rock, Texas (the "City"), I hereby request a disbursement
pursuant to Section 6.07 of the Ordinance adopted by the City Council of the City on February 27,
1997, in the sum of $ to be paid by check at the following address:
for
I hereby certify that (a) such obligation has been incurred by the City in or about the
acquisition, renovation, reconstruction, and equipping of the Authorized Improvements, as defined
in the Ordinance, (b) each item is a proper charge against the Improvement Fund, as defined in the
Ordinance, (c) such obligation has not been the basis for a prior requisition which has been paid, and
(d) the City has heretofore delivered or caused to be delivered to the Trustee each of items listed on
Schedule I hereto as evidence to the obligations having been incurred.
CITY OF ROUND ROCK, TEXAS
By:
Title:
Authorized Representative
C-1
EXHIBIT "D"
PLACEMENT AGREEMENT
D-1
BOND PLACEMENT
AGREEMENT
THIS BOND PLACEMENT AGREEMENT (the "Placement Agreement"), dated February
27, 1997, is made between the Encino Plaza Public Improvement District acting by and through the
City of Round Rock, Texas, together with any successor to its rights, duties and obligations (the
"Issuer"), and First Southwest Company, together with any successors to its rights, duties and
obligations (the "Placement Agent").
RECITALS
The Issuer has authorized the issuance and sale of bonds pursuant to an ordinance adopted
by the Issuer on February 27, 1997 (as from time to time amended, supplemented or modified, the
"Ordinance") which bonds are to be entitled Encino Plaza Public Improvement District Special
Assessment Bonds, Taxable Series 1997 (the "Bonds"). All capitalized terms not otherwise defined
herein shall have the meanings set forth in the Ordinance.
The Issuer desires to appoint a Placement Agent as its agent to perform certain services as
provided herein.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. For purposes of this Placement Agreement, and except as
otherwise expressly provided herein or unless the context otherwise requires, the following terms
shall have the meanings given said terms in this Section. All capitalized terms not otherwise defined
herein shall have the meanings given said terms in the Ordinance.
"Bonds" shall mean the Encino Plaza Public Improvement District Special Assessment Bonds,
Taxable Series 1997 authorized pursuant to the Ordinance.
"Closing" shall mean the issuance and delivery of the Bonds by the Issuer and the acceptance
and payment therefor by the purchasers as further set forth in Section 6 of this Agreement.
"Offering Document" shall mean a private placement memorandum or such other appropriate
disclosure document satisfactory in form and substance to the Placement Agent to be used in
connection with its efforts to place the Bonds.
Section 2. Placement of the Bonds. On the basis of the representations, warranties
and covenants contained herein and subject to the terms and conditions herein set forth, the
Placement Agent agrees to use its best efforts to place the Bonds at a price of 100% of the principal
amount thereof. The Bonds shall be delivered on the Closing at such time, place, manner and date
as agreed to in writing by the Issuer and the Placement Agent prior to the Closing.
RROCK/PUBLIC: PLCMNT.AGR 2/21/97
Section 3. Limitation on Placement. Nothing in this Placement Agreement shall
obligate the Placement Agent to purchase any Bond in the event a purchaser fails to pay the purchase
price for such Bond at any Closing. If any purchaser does not deposit the purchase price of its Bond,
the Placement Agent will use its best efforts to arrange for a substitute purchaser.
Section 4. Fees and Expenses.
(a) The Placement Agent shall be entitled to a fee of $20 a Bond ($53,800) in connection
with the placement of the Bonds in an amount agreed to between the Placement Agent and the Issuer,
together with any reasonable out-of-pocket expenses paid or incurred by the Placement Agent in
connection with such placement, which fee and expenses are payable in immediately available funds
at the Closing of the Bonds.
(b) The Issuer shall pay (and the Placement Agent shall be under no obligation to pay) at
the Closing, any expense incident to the performance of the Issuer's obligations under this Placement
Agreement, including but not limited to: (i) the cost of the preparation, printing and distribution of
the Offering Document; (ii) the cost of the preparation and printing of the Bonds, (iii) the fees and
expenses of Bond Counsel to the Issuer; (iv) the fees and disbursements of the Attorney General of
Texas and the Issuer's accountants, advisors, and any other experts or consultants retained by the
Issuer.
Section 5. Right to Suspend Efforts to Place Bonds. In the event of:
(a) a suspension of, or material limitation in, trading in securities generally on the New
York Stock Exchange;
(b) a general moratorium on commercial banking activities in New York City declared by
either federal or New York State authorities;
(c) the initiation or escalation of hostilities involving the United States, if the effect of
such, in the Placement Agent's judgment, makes it impracticable or inadvisable to proceed with the
solicitation of offers to purchase the Bonds;
(d) the occurrence of any market disruption or event affecting the Issuer which, in the
good faith judgment of the Placement Agent, makes it impracticable for the Placement Agent to carry
out its responsibilities to use its best efforts to place the Bonds, whether the Placement Agent learns
thereof from the Issuer or otherwise; or
(e) the occurrence of any event or condition whereby the accuracy of any statement of
a material fact, or the omission of any material fact, with respect to any Offering Document, or any
document incorporated in such Offering Document or any other document received by the Placement
Agent pursuant to this Placement Agreement is made uncertain or misleading, whether the Placement
Agent learns thereof from the Issuer or otherwise;
RROCR/PUBLIC: PLCMNT.AGR 2/21/97
2
and so long as any such situation listed in clauses (a) through (e) of this Section 5 continues to exist,
the Placement Agent shall have the right to suspend its efforts to place the Bonds.
Section 6. Conditions to Placement Agent's Obligation. At 10:00 a.m., Texas
time, on March 17, 1997 or at such other time and date as shall have been agreed upon by the Issuer
and the Placement Agent (the "Closing") the Issuer will, subject to the terms and conditions hereof,
deliver the Bonds to the purchasers. The obligation of the Placement Agent hereunder to use its best
efforts to place the Bonds is subject to the following conditions:
(a) The representations and warranties of the Issuer contained herein shall be true,
complete and correct on the date hereof and on and as of the date of the Closing, as if made on the
date of the Closing;
(b) At the time of the Closing, the Ordinance shall be in full force and effect and shall not
have been amended, modified or supplemented;
(c) At the time of the Closing, all official action of the Issuer relating to this Agreement,
the Bonds, the Assessment Ordinance and the Ordinance shall be in full force and effect and shall not
have been amended, modified or supplemented; and the Placement Agent shall have received, in
appropriate form, evidence thereof;
(d) At or prior to the Closing, the Placement Agent shall have received copies of each of
the following documents:
(1) The Ordinance and the Assessment Ordinance certified by the City Secretary
under its seal as having been duly adopted by the Issuer and as being in effect, with such
changes or amendments as may have been agreed to by the Placement Agent;
(2) The opinion of McCall, Parkhurst & Horton L.L.P. in substantially the form
and substance attached hereto as Exhibit "A";
(3) The opinions or certificates, dated on or prior to the date of Closing, of the
Attorney General of the State of Texas, approving the Certificates, as required by law, and
the registration certificates of the Comptroller of Public Accounts of the State of Texas for
the Bonds;
(4) The supplemental opinion, dated the date of the Closing, of McCall, Parkhurst
& Horton L.L.P., addressed to the Issuer and the Placement Agent to the effect that except
to the extent noted therein, said firm has not verified and is not passing upon, and does not
assume any responsibility for, the accuracy, completeness or fairness of the statements
contained in the Private Placement Memorandum but that said firm has reviewed the
information contained in the Private Placement Memorandum under the captions "THE
BONDS," "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" and APPENDIX
RROCK/PUBLIC: PLCMNT.AGR 2/21/97
3
B and such firm is of the opinion that the information relating to the Bonds and the Ordinance
contained therein accurately and fairly reflects in all material aspects the provisions thereof
and is correct as to matters of law;
(5) A certificate, dated the date of the Closing, signed by the Mayor, the City
Manager and the City Secretary, to the effect that (i) the representations and warranties of
the Issuer contained herein are true and correct in all material respects on and as of the date
of Closing as if made on the date of Closing; (ii) except to the extent disclosed in the Offering
Memorandum, no litigation is pending or, to the knowledge of such persons, threatened in
any court to restrain or enjoin the issuance or delivery of the Bonds or the levy, collection or
application of the assessments of and interest on the Bonds payment of the principal and
interest on the Bonds, or in any way contesting o affecting the validity of the Bonds, the
Ordinance, or this Agreement, or contesting the powers of the Issuer or contesting the
authorization of the Bonds or the Ordinance; and (iii) no litigation is pending or, to the
knowledge of such persons, threatened in any court contesting or affecting the Bonds;
(6) Such additional legal opinions, certificates, instruments and other documents
as the Placement Agent may request to evidence the truth and accuracy, as of the date hereof
and as of the date of the Closing, of the Issuer's representations and warranties contained
herein and of the statements and information contained in the Offering Document and the due
performance or satisfaction by the Issuer on or prior to the date of the Closing of all the
respective agreements then to be performed and conditions then to be satisfied by the Issuer.
Section 7. Representations and Warranties Indemnification. The Issuer hereby
represents, warrants, covenants and agrees (and, so long as this Agreement has not been terminated,
shall be deemed to continuously represent, warrant, covenant, and agree) that:
(a) the Issuer is a duly authorized and validly existing public improvement district
operating pursuant to Chapter 372 of the Local Government Code;
(b) the Issuer has the power and has taken all the necessary action to execute this
Agreement;
(c) this Agreement has been duly executed and delivered and constitutes the legal, valid
and binding agreement of the Issuer, enforceable in accordance with its terms; except as the
enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and the application of general principles of equity;
(d) the distribution, approval, execution and delivery by the Issuer of the Offering
Document and the execution and delivery of this Agreement and any other related documents will not
violate, contravene or constitute a default under any requirement of law or any contractual obligation
applicable to the Issuer and no approval or other action by, or filing or registration with, any
governmental authority or agency is required in connection therewith which has not been obtained
RROCK/PUBLIC: PLCMNT.AGR 2/21/97
4
prior to the closing of the Bonds;
(e) the Ordinance, the Assessment Ordinance and any other related documents have been
duly authorized and executed by the Issuer and constitute the legal, valid and binding obligations of
the Issuer and are enforceable in accordance with their respective terms and will be in full force and
effect at the time of closing, as hereinafter defined, hereunder except as the enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights
generally and the application of general principles of equity;
(f) the Bonds have been duly authorized and, when delivered will have been duly
executed, authenticated, issued and delivered and will constitute valid and binding obligations of the
Issuer in accordance with their terms and will be entitled to the benefits of the Ordinance;
(g) except as provided in the Ordinance, the Issuer has not entered into any contract or
arrangement of any kind which might give rise to any lien or encumbrance on the rights, assets, funds
and interest pledged pursuant to, or subject to the lien of, the Ordinance;
(h) there is no action, suit, proceeding at law or in equity pending or, to the best of the
Issuer's knowledge, threatened against the Issuer which in any way would adversely affect the validity
or enforceability of the bonds, this Agreement, the Assessment Ordinance, the Ordinance or any other
related documents.
Section 8. Governing Law. THIS PLACEMENT AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND SHALL BE GOVERNED BY, THE LAWS
OF THE SATE OF TEXAS.
Section 9. Limitation of Issuer's Liability. No covenant, agreement or obligation
contained herein shall be deemed to be a covenant, agreement or obligation of any present or future
member, officer or employee of the Issuer in the individual capacity thereof, and none of the members
of the Issuer or any officer thereof executing this Placement Agreement shall be liable personally
hereunder or be subject to any personal liability or accountability by reason hereof. No member,
officer or employee of the Issuer shall incur any personal liability with respect to any other action
taken by him pursuant hereto or with respect to the transactions contemplated hereby, provided such
individual does not act in bad faith.
The obligations of the Issuer hereunder shall not be deemed to constitute a debt or pledge of
the faith and credit of the State or any agency of the State. None of the State, municipal corporation
thereof, or the Issuer shall be obligated to pay any obligations hereunder or other costs incident
hereto except from the revenues and receipts pledged therefor under the Ordinance and neither the
faith and credit nor the taxing power of the Sate is pledged to the payment of such obligations.
Section 10. Binding Effect. This Placement Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns, except that
RROCK/PUBLIC: PLCMNT.AGR 2/21/97
5
neither party hereto may assign any of its respective rights or obligations hereunder without the prior
written consent of the other.
Section 11. Amendments. This Placement Agreement may not be amended except
by a writing signed by bother of the parties hereto.
Section 12. Notices. Unless otherwise provided herein, all notices, certificates,
requests or other communications hereunder shall be given by telephone and promptly confirmed in
writing, delivered by hand or sent by facsimile transmission, or registered mail, postage prepaid, and
shall be deemed given when given by telephone and addressed as follows:
Issuer:
Placement Agent:
Encino Plaza Public Improvement District
c/o City of Round Rock
221 East Main
Round Rock, Texas 78664
Attn: David Kautz
Telephone: (512) 218-5401
Telecopier: (512) 218-5442
First Southwest Company
98 San Jacinto, Suite 370
Austin, Texas 78701
Attn: Garry Kimball
Telephone: (512) 481-2000
Telecopier: (512) 481-2010
or to such other address or telephone number as either of the above shall specify to the others in
writing.
Section 13. Counterparts. This Placement Agreement may be signed in any number
of counterparts, each of which shall be an original, and by the parties hereto on separate counterparts,
with the same effect as if the signatures thereto and hereto were upon the same instrument.
Section 14. Termination. This Placement Agreement shall terminate (except as to rights
of the Placement Agent to any fees and expenses payable and indemnity, which shall survive any
termination) on such date as the Ordinance is no longer in full force and effect.
Section 15. Severability. If any one or more of the provisions contained in this Placement
Agreement shall be invalid, illegal or unenforceable in any respect under any law, the validity, legality
and enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
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6
IN WITNESS WHEREOF, the parties hereto have caused this Placement Agreement to be
duly executed as of the day and year first above written.
RROCK/PUBLIC: PLCMNf.AGR 2/21/97
ENCINO PLAZA PUBLIC IMPROVEMENT
DISTRICT
By:
Title:
FIRST SOUTHWEST COMPANY
By:
Title:
7
EXHIBIT "E"
PRIVATE PLACEMENT MEMORANDUM
E-1
PRELIMINARY PRIVATE PLACEMENT MEMORANDUM DATED FEBRUARY 19, 1997
IN THE OPINION OF BOND COUNSEL. THE BONDS ARE NOT OBLIGATIONS DESCRIBED IN SECTION I03(A) OF THE INTERNAL
REVENUE CODE OF 1986. SEE "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" HEREIN.
New Issue
S2,690,000
ENCINO PLAZA PUBLIC IMPROVEMENT DISTRICT
SPECIAL ASSESSMENT BONDS
TAXABLE SERIES 1997
Not Rated
The bonds described above (the "Bonds") are limited and special obligations payable solely from the assessment revenues collected within the
Encino Plaza Public Improvement District (the "District") and are not obligations of the State of Texas, Williamson County or the City of Round
Rock. THE BONDS ARE SUBJECT TO SPECIAL RISK FACTORS DESCRIBED HEREIN. SEE "RISKS TO BONDHOLDERS."
Dated Date: March 1, 1997 Due: October 1, as shown below
The Bonds will be issued in fully registered form only, in any integral multiple of 5100,000 or integral multiples of 55,000 in excess of 5100,000.
Principal will be payable at maturity or earlier redemption on presentation of the Bonds at the principal payment office of Texas Commerce Bank
National Association (the Trustee/Paying Agent, collectively referred to herein as Trustee) in Dallas, Texas, or the principal payment office of any
successor Trustee. Interest accrues from the dated date of the Bonds, March 1, 1997, and is payable April 1, 1998, and each October 1 and April 1
thereafter, to registered owners shown on the Bond register kept by the Trustee on the fifteenth day of the calendar month prior to each interest
payment date, by check mailed to the address on the Bond register, or by such other method acceptable to the Trustee, at the risk and expense of
the registered owner .
Proceeds of the Bonds will be used to acquire certain authorized improvements, which are described herein, pursuant to the Public Improvement
District Act, as amended, Texas Local Government Code, Chapter 372 (the "Act"). The Bonds will be issued pursuant to Section 372.023 of the
Act and are secured by unpaid special assessments levied pursuant to the Assessment Ordinance (the "Assessment Ordinance") to be adopted by
the City of Round Rock, Texas (the "City") on February 27, 1997 on property within the District.
MATURITY SCHEDULE
Price Price
Principal Interest or Principal Interest or
Due Amount Rate Yield Due Amount Rate Yield
$ 90,000 2000 10.00% 100% 5 185,000 2007 10.00% 100%
100,000 2001 10.00% 100% 205,000 2008 10.00% 100%
115,000 2005 10.00% 100% 230,000 2009 10.00% 100%
125,000 2003 10.00% 100% 250,000 2010 10.00% 100%
140,000 2004 10.00% 100% 280,000 2011 10.00% 100%
155,000 2005 10.00% 100% 305,000 2012 10.00% 100%
170,000 2006 10.00% 100% 340,000 2013 10.00% 100%
Bonds maturing on or after October 1, 2008, arc subject to redemption prior to maturity at the option of the District acting through the City, in
whole or from time to time in part, on October 1, 2007, or on any interest payment date thereafter, at a premium. In addition, the Bonds are
subject to mandatory nonscheduled redemption as described herein. See "THE BONDS - Redemption Provisions."
The Bonds, when issued, will constitute special obligations, payable solely from the trust estate pledged therefor, including the annual installments
of special assessments and the reserve fund established in connection with the issuance of the Bonds. Sec "Security for the Bonds". The holders of
the Bonds shall never have the right to demand payment of the principal of or interest on the Bonds from any funds other than the special
assessment revenues and certain other funds established in connection with the issuance of the Bonds. The assessment is a first and prior lien
against the property assessed, superior to all other liens and claims except liens or claims for state, county, school district, or municipality ad
valorem taxes, and is a personal liability of and charge against the owners of the property. The City has not covenanted nor obligated itself to
pay the Bonds from any funds raised from taxation or any other revenues available to the City. The City has no current or contemplated
obligations to support the District direcdy or indirectly and makes no representation regarding the timely payment of principal or interest
on the Bonds. The Bonds are not a debt of the State or any of its political subdivisions, and neither the State nor any of its political subdivisions
are liable therefor. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limit or restriction. The
Bonds are not general obligations of the City and shall not constitute a debt within the meaning of the Constitution of the State of Texas, or a
pledge of the faith and credit of the City. THE BONDS ARE SUBJECT TO SPECIAL RISK FACTORS DESCRIBED HEREIN. See "RISKS TO
BONDHOLDERS."
First Southwest Company has agreed to act as Placement Agent for the Bonds and to use it best efforts in placing the Bonds. This Placement
Memorandum is being distributed solely to sophisticated investors who (i) have previously invested in special assessment bonds or similar types of
obligations, (ii) have such knowledge and experience in financial or business matters to make them capable of evaluating the merits and risks of
investment in the Bonds and (iii) are able and prepared to bear the economic risk of investing in the Bonds.
The Bonds are offered for delivery when, as and if issued and accepted by the Purchasers, subject, among other things, to the approval of the
Bonds by the Attorney General of Texas and McCall. Parkhurst & Horton, L.L.P., Austin, Texas, Bond Counsel. Delivery of the Bonds is
expected on or about March 17, 1997.
TABLE OF CONTENTS
USE OF INFORMATION IN PRIVATE PLACEMENT MEMORANDUM 3
SALE AND DISTRIBUTION OF THE BONDS 3
PRIVATE PLACEMENT MEMORANDUM SUMMARY 4
THE BONDS 4
THE DISTRICT 5
PRIVATE PLACEMENT MEMORANDUM 6
THE BONDS 6
Description 6
Authority for Issuance 6
Trustee/Paying Agent 6
Registration and Transfer 7
Lost, Stolen or Destroyed Bonds 7
Redemption Provisions 7
Source of Payment 8
Establishment of Special Funds 9
THE DISTRICT 10
General 10
Description and Location 10
Status of Development as of January 29, 1997 11
Authorized Public Improvements by the Act 11
Assessment/Service Plan 11
Preparing Assessment Roll and Notices 12
Assessments, Hearing, Lew and Payment 12
Supplemental Assessments 12
Ownership of Authorized Improvements 12
Maintenance of Authorized Improvements 12
MANAGEMENT OF THE DISTRICT 12
THE PROJECT 13
Description of the Project 13
Description of the Developer 13
UTILITY SERVICE TO THE PROJECT 13
Water Supply 13
Water Supply Contracts 13
Water Storage 14
Monthly Water Rates (Effective 10-1-91) 14
Wastewater Services 14
Monthly Sewer Rates (Effective 10-1-91) 14
DISTRICT FINANCIAL INFORMATION 16
Estimated Overlapping Debt 16
RISKS TO BONDHOLDERS 17
General 17
Bankruptcy and Foreclosure 17
Availability of Funds to Pay Delinquent Special Assessment Installments 18
Limited City Obligation Upon Delinquency 18
Factors Which May Affect Land Development and Property Values 18
Land Values and the Appraisal 19
Absence of Market for the Bonds 19
Competing Developments 19
No Acceleration Provision 19
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS 19
DEBT SERVICE REQUIREMENTS 20
USE AND DISTRIBUTION OF BOND PROCEEDS 21
Summary of Estimated Uses of Bond Proceeds 21
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS 22
General 22
Periodic Interest Payments 22
Disposition of Bonds 22
State and Local Taxes and Foreign Persons 23
Required Reporting to Internal Revenue Service 23
TRANSFER RESTRICTIONS 23
LEGAL MATTERS 24
Legal Proceedings 24
No -Litigation Certificate 24
PREPARATION OF PRIVATE PLACEMENT MEMORANDUM 24
Sources and Compilation of Information 24
USE OF INFORMATION IN PRIVATE PLACEMENT MEMORANDUM
No dealer, broker, salesman or other person has been authorized to give any information or to make any representations other than
those contained in this PRIVATE PLACEMENT MEMORANDUM, and, if given or made, such other information or representation
must not be relied upon as having been authorized by the District or the City.
This PRIVATE PLACEMENT MEMORANDUM is not to be used in an offer to sell or the solicitation of an offer to buy in any state in
which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to
any person to whom it is unlawful to make such offer or solicitation.
All of the summaries of the statutes, resolutions, contracts, audited fmancial statements, other related reports set forth in this
PRIVATE PLACEMENT MEMORANDUM are made subject to all of the provisions of such documents. These summaries do not
purport to be complete statements of such provisions, and reference is made to such documents, copies of which are available from
First Southwest Company, Placement Agent for the Bonds, 98 San Jacinto Blvd., Suite 370, Austin, Texas, 78701, for further
information.
This PRIVATE PLACEMENT MEMORANDUM contains, in part, estimates, assumptions and matters of opinion which are not
intended as statements of fact, and no representation is made as to the correctness of such estimates, assumptions or matters of opinion,
or as to the likelihood that they will be realized. Any information and expressions of opinion herein contained are subject to change
without notice, and neither the delivery of this PRIVATE PLACEMENT MEMORANDUM nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the condition of the District or other matters described
herein since the date hereof. All changes in the affairs of the District and other matters described in this PRIVATE PLACEMENT
MEMORANDUM subsequent to the delivery of the Bonds and all information with respect to the resale of the Bonds is the
responsibility of the Purchasers.
SALE AND DISTRIBUTION OF THE BONDS
Securities Laws
No registration statement relating to the Bonds has been filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, in reliance upon the exemptions provided thereunder. The Bonds have not been registered or qualified under the
Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been registered or qualified under
the securities laws of any other jurisdiction. The District and the City assume no responsibility for registration or qualification of the
Bonds under the securities laws of any other jurisdiction in which the Bonds may be offered, sold or otherwise transferred. This
disclaimer of responsibility for registration or qualification for sale or other disposition of the Bonds shall not be construed as an
interpretation of any kind with regard to the availability of any exemption from securities registration or qualification provisions in
such other jurisdiction.
3
PRIVATE PLACEMENT MEMORANDUM SUMMARY
The following is a brief sununary of certain information contained herein which is qualified in its entirety by the detailed
information appearing elsewhere in this PRIVATE PLACEMENT MEMORANDUM. The summary should not be
detached and should be used in conjunction with more complete information contained herein.
THE BONDS
Description The Bonds are issued as S2,690,000 Encino Plaza Public Improvement District Special
Assessment Bonds, Taxable Series 1997. The Bonds are issued in minimum
denominations of S100,000 or integral multiples of $5,000 in excess of S100,000
("Authorized Denominations") as serial Bonds maturing October 1, 2000 through
October 1, 2013.
Redemption The Bonds may be redeemed in whole or from time -to -time in part on October 1, 2007
or any interest payment date thereafter, at a premium. See "THE BONDS -
Redemption Premium."
The Bonds are subject to mandatory non-scheduled redemption, in whole or in part,
prior to maturity, on any Interest Payment Date to the extent the Trustee has received
prepayments of special assessments. See "THE BONDS - Redemption Provisions."
Use of Proceeds Proceeds from the sale of the Bonds will be used to (i) acquire certain water,
wastewater, street and drainage improvements and detention and water quality ponds
within the District, (ii) fully fund a Debt Service Reserve Fund and (iii) pay the costs
associated with the issuance of the Bonds. See "USE AND DISTRIBUTION OF
BOND PROCEEDS."
Authority for Issuance The Bonds are issued pursuant to the general laws of the State, including particularly
Chapter 372 of the Texas Local Government Code and an Ordinance passed by the
City Council. See "RISK FACTORS."
Security The Bonds constitute special and limited obligations, payable solely from special
assessment revenues within the District and certain other funds established in
connection with the issuance of the Bonds. The holders shall never have the right to
demand payment of the principal of or interest on the Bonds from any funds other than
the special assessment revenues and the Debt Service Reserve Fund. The assessment
is a first and prior lien against the property assessed, superior to all other liens and
claims except liens or claims for state, county, school district, or municipality ad
valorem taxes, and is a personal liability of and charge against the owners of the
property. The City has not covenanted nor obligated itself to pay the Bonds from
any funds raised from taxation or any other revenues available to the City. The
City has no current or contemplated obligations to support the District directly or
indirectly and makes no representation regarding the timely payment of principal
or interest on the Bonds. The Bonds are not a debt of the State or any of its political
subdivisions, and neither the State nor any of its political subdivisions are liable
therefor. The Bonds do not constitute an indebtedness within the meaning of any
constitutional or statutory debt limit or restriction. The Bonds are not general
obligations of the City and shall not constitute a debt within the meaning of the
Constitution of the State of Texas, or a pledge of the faith and credit of the City. See
"Security for the Bonds".
Payment Record The District is newly created and has no previously issued debt outstanding.
4
Municipal Bond Rating No application for a rating on the Bonds has been made nor is it expected that an
investment grade rating would be assigned had such application been made.
Legal Opinion McCall, Parkhurst & Horton L.L.P., Bond Counsel, Austin, Texas.
Risk Factors The purchase and ownership of the bonds are subject to special risk factors and all
prospective purchasers are urged to examine carefully this entire PRIVATE
PLACEMENT MEMORANDUM with respect to the investment security of the Bonds,
particularly the section captioned "RISKS TO BONDHOLDERS."
Transfer Restrictions
Description
Location
The Project
The Developer
Bond Placement Agent.
The Bonds have not and will not be registered under the Securities Act and are subject
to certain restrictions on transfer. See "TRANSFER RESTRICTIONS".
THE DISTRICT
The District is a public improvement district, created by the City of Round Rock,
Texas (the "City"), on December 12, 1996, and operates pursuant to Chapter 372 of
the Texas Local Government Code, as amended. The City is a political subdivision of
the State of Texas located in Williamson and Travis Counties, operating as a home -
rule City under the laws of the State and a charter approved by the voters in August,
1977. The District consists of approximately 25.058 acres of land.
The District is located in Williamson County, Texas 2,000 feet north of the northwest
corner of Interstate Highway 35 (IH -35) and Farm -to -Market Road 3406 (FM 3406) in
the City of Round Rock. The District contains approximately 25 acres of land with
819 linear feet of frontage along IH -35. Access from the south bound lanes of IH -35 is
via FM 1431 exit to the north of the District. Access from the north bound lanes of
IH -35 is via either the FM 3406 exit or the FM 1431 exit. See "THE DISTRICT."
See "THE PROJECT."
See "THE DEVELOPER"
First Southwest Company, Austin, Texas.
5
PRIVATE PLACEMENT MEMORANDUM
S2,690,000
ENCINO PLAZA PUBLIC IMPROVEMENT DISTRICT
SPECIAL ASSESSMENT BONDS
TAXABLE SERIES 1997
This Private Placement Memorandum provides certain information in connection with the issuance of the Encino Plaza
Public Improvement District (the "District"), $2,690,000 Special Assessment Bonds, Taxable Series 1997 (the "Bonds").
The Bonds are issued pursuant to the Texas Constitution, the general laws of the State of Texas including the Public
Improvement District Act, Chapter 372, Texas Local Government Code, and an ordinance authorizing the issuance of the
Bonds (the "Bond Ordinance") adopted by the City Council of the City of Round Rock.
This Private Placement Memorandum includes descriptions, among others, of the Bonds and the Bond Ordinance and
certain other information about the District, the Project and the Developer. All descriptions of documents contained
herein are only summaries and are qualified in their entirety by reference to each document. Copies of documents may be
obtained from First Southwest Company, Placement Agent for the Bonds, 98 San Jacinto Blvd., Suite 370, Austin, Texas,
78701.
THE BONDS
Description
The Bonds will pay interest from their dated date of March 1, 1997 with interest payable April 1, 1998 and each October
1 and April 1 thereafter until the earlier of maturity or redemption. The Bonds are serial bonds maturing on October 1 of
the years and in the amounts, and paying interest on the basis of a 360 -day year of twelve 30 -day months at the per annum
rates, shown on the cover page hereof. The Bonds are issued in fully registered form only in any integral multiple of
$100,000 or $5,000 multiples in excess of $100,000 (an "Authorized Denomination"). Principal will be payable at
maturity or earlier redemption upon presentation of the Bonds at the principal payment office of Texas Commerce Bank
National Association, Dallas, Texas, (the Trustee/Paying Agent/Registrar collectively referred to herein as the "Trustee")
or the principal payment office of any successor Trustee. Interest on the Bonds will be payable on the interest payment
date by check mailed by the Trustee to Registered Owners shown on the Bond register on the fifteenth day of the month
prior to each interest payment date or by such other method acceptable to the Trustee, requested by and at the risk and
expense of the Registered Owner.
If the date for payment of principal or interest shall be a Saturday, Sunday or legal holiday or equivalent for banking
institutions generally in the City of Dallas, Texas, such payment may be made on the next succeeding day which is not
one of the foregoing days without additional interest and with the same force and effect as if made on the date such
payment was originally due.
Authority for Issuance
The Bonds are issued pursuant to the general laws of the State, including particularly Chapter 372 of the Texas Local
Government Code and the Bond Ordinance passed by the Round Rock City Council.
Trustee/Paving Agent
Texas Commerce Bank is serving as the initial Trustee/Paying Agent/Registrar for the Bonds. Provision is made in the
Bond Ordinance for successor paying agents/trustees, and any successor paying agent/trustee selected shall be a bank or
trust company organized and doing business under the laws of the United States of America or of any state, be authorized
under such laws to exercise trust powers, have a combined capital and surplus of at least 550,000,000, be subject to
supervision or examination by federal or state authority, and have an office in Austin, Texas.
6
Registration and Transfer
The Bonds will be transferable only on the Bond register kept by the Trustee upon surrender and reissuance and
presentation of an Investment Letter. See TRANSFER RESTRICTIONS. The Bonds are exchangeable for an equal
principal amount of Bonds of the same maturity and of any Authorized Denomination upon surrender of the Bonds to be
exchanged at the principal payment office of the Trustee. Every Bond presented or surrendered for transfer is required to
be duly endorsed, or be accompanied by a written instrument of transfer, in form satisfactory to the Trustee. The Trustee
is not required (1) to transfer or exchange any Bond during the period beginning at the opening of business fifteen (15)
days before each interest payment date and ending at the close of business such payment date or (2) to transfer or
exchange any Bonds selected for redemption during the thirty day period prior to the redemption date. No service charge
will be made for any transfer or exchange, but the Trustee may require payment of a sum sufficient to cover any tax or
governmental charge payable in connection therewith.
Lost, Stolen or Destroyed Bonds
Mutilated, destroyed, lost or stolen Bonds will be replaced upon surrender of the mutilated Bonds, or receipt of satisfactory
evidence of such destruction, loss or theft, and receipt by the Trustee of security or indemnity to keep them and the
District and City harmless. Payment of taxes, governmental charges and other expenses in connection with any such
replacement may be required.
Redemption Provisions
Optional Redemption. The Bonds may be redeemed in whole or from time -to -time in part on October 1, 2007 or any
interest payment date thereafter at the prices as set forth below plus accrued interest to the date of redemption.
Redemption Date Price of Par
October 1, 2007 or April 1, 2008 103%
October 1, 2008 or April 1, 2009 102V2%
October 1, 2009 or April 1, 2010 102%
October 1, 2010 or April 1, 2011 101%2%
October 1, 2011 or April 1, 2012 101%
October 1, 2012 or April 1, 2013 100Y2%
October 1, 2013 100%
Mandatory Non -Scheduled Redemption. The Bonds are subject to mandatory nonscheduled redemption, in whole or in
part prior to maturity, on any interest payment date at a price equivalent to the optional redemption schedule set forth in
the immediately preceding paragraph plus accrued interest to the date of redemption to the extent the District has received
prepayments of special assessments. Mandatory nonscheduled prepayments will not be required to be made until at least
$25,000 is available in the Redemption Fund. In the event Bonds are called for early redemption with prepayments of
special assessments, the redemption premium is payable from monies in the Reserve Fund. The Reserve Fund is initially
funded and will be maintained at 150% of average annual debt service on the Bonds; however, should substantial
delinquencies exist, insufficient monies may remain in the Reserve fund to pay such premiums. See APPENDIX A for a
schedule of the prepayment amounts per tract on each interest payment date.
In the event Bonds are called for early redemption with prepayments of special assessments, the redemption premium is
payable from monies in the Reserve Fund. The Reserve Fund is initially funded and maintained at 150% of average
annual principal and interest requirements on the Bonds; however, should substantial delinquencies exist, insufficient
monies may remain in the Reserve Fund to pay such premiums. See Appendix A for a schedule of the prepayment
amounts per tract on each interest payment date.
See APPENDIX B - Provisions of the Bond Ordinance regarding the notice and other redemption provisions.
7
Source of Payment
General. The Bonds constitute special obligations payable solely from Special Assessment Revenues (hereinafter defined),
and the holders thereof shall never have the right to demand payment of the principal of or interest on the Bonds from any
funds of the City other than the Special Assessment Revenues. Special Assessment Revenues means the monies collected
from Special Assessments levied against properties in the District, including interest on Special Assessments during the
period of Special Assessment or any installment thereof is current or delinquent, Prepayments, Foreclosure Proceeds and
penalties for non -timely payment of Special Assessments. Earnings and income derived from the investment or deposit of
monies in any special funds or account created and established for the payment and security of the bonds also constitute
Special Assessment Revenues.
The Bonds are not a debt of the State, the City or any of its political subdivisions, and neither the State, the City nor any
of its political subdivisions are liable therefor. The Bonds do not constitute an indebtedness within the meaning of any
constitutional or statutory debt limit or restriction. The Bonds are not general obligations of the City and shall not
constitute a debt within the meaning of the Constitution of the State of Texas, or a pledge of the faith and credit of the
City.
Levy of Special Assessments. By ordinance to be adopted (the "Assessment Ordinance"), by the City on February 27,
1997, the City will levy Special Assessments against all property located within the boundaries of the District (the
"Special Assessments") by allocating the costs of the improvements between two classes (Class A and Class B) due to the
different uses within each class. Allocating costs within each class is based upon the ratio of the appraised value of each
lot within such class compared to the total appraised value within the class. See APPENDIX C for appraised values on
each tract of land within each class within the District. The aggregate amount of Special Assessments assessed to pay the
Debt Service Requirements on the Bonds, together with interest thereon, are payable in annual installments which have
been established to correspond as nearly as practicable to the Debt Service Requirements of the Bonds.
Additionally, the proposed Assessment Ordinance will levy, in each year while the Bonds are outstanding and unpaid, a
special assessment to pay the annual costs of the administration and operation of the District (the "Administrative
Expense Assessment"). The Administrative Expense Assessment will be levied on the same basis as the Special
Assessments. The Administrative Expense Assessment will remain in effect until all the Bonds are paid and are no
longer outstanding, or until the City adjusts the levy, after a hearing and determination of benefits in any year, pursuant to
the Act. Administrative Expense Assessments are due on September 30 of the year preceding the due date and are
delinquent if not paid prior to November 1.
Under the Bond Ordinance, the City has contracted with the Trustee to bill and collect annual installments of Special
Assessments. Installments are due September 30 of the preceding year and become delinquent on November 1.
Priority Lien. The assessment or any reassessment, the expense of collection, and reasonable attorney's fees, if incurred,
constitute a first and prior lien against the property assessed, superior to all other liens and claims except liens or claims
for state, county, city, school district, or other political subdivision, ad valorem taxes, and are a personal liability of and
charge against the owners of the property regardless of whether the owners are named. The lien is effective from the date
of the Assessment Ordinance until the Special Assessment is paid, and may be enforced by the City in the same manner as
an ad valorem tax levied against real property may be enforced by the City. The owner of any property assessed may pay
the entire Special Assessment levied against any lot or parcel, together with accrued interest to the date of payment which
must be an interest payment date.
Convenant to Commence Foreclosure Proceedings. Pursuant to the provisions of the Bond Ordinance, the City has
covenanted to determine or cause to be determined, no later than December 1 of each year, whether or not any installment
or installments of Special Assessments are delinquent and, if such delinquencies exist, the City has covenanted to order
and cause to be commenced, or cause the Trustee to do so on behalf of the City, on or before January 1, or immediately
thereafter, and thereafter diligently prosecute an action in district court to foreclose the currently delinquent lien for the
amount of any delinquent installment or installments of Special Assessments, provided, however, that the City shall not be
required to order the commencement of foreclosure proceedings if (i) the total of such Special Assessment installments
posted to the Assessment Roll for such Fiscal Year is less than five percent (5%) of the total of the Special Assessment
8
installments posted to the Assessment Roll for such Fiscal Year, and (ii) the Reserve Fund is not Tess than five percent
(5%) of the principal amount of all Bonds originally issued, Tess any Bonds called for redemption. Notwithstanding the
foregoing, if the City determines that there is a delinquent Special Assessment installment on any single property in
excess of one hundred thousand dollars (S 100,000), then it will diligently institute, prosecute and pursue foreclosure
proceedings against such property or cause the Trustee to do so on its behalf. The City has, pursuant to the Bond
Ordinance, appointed the Trustee to act as a billing and collection agent for the City and to pursue legal actions in the
City's name to collect delinquent Special Assessments and to proceed to sell any assessed property in a judicial foreclosure
proceeding. See "APPENDIX B - Provisions of the Bond Ordinance - Trustee to Pursue Collections."
To the extent it may legally do so, and taking into account the prior liens on assessed land for ad valorem taxes, the City
covenants that property will not be sold in a judicial foreclosure for less than the amount of a currently delinquent Special
Assessment installment due on the property, including delinquent penalties, interest, and attorney fees, without the
consent of fifty-one percent (51%) of the owners of the Outstanding Bonds. Any sale of property for nonpayment of an
installment or installments of a Special Assessment shall be subject to the lien established for the remaining unpaid
installments of the Special Assessment against such property and such property may again be sold at a judicial foreclosure
sale if the purchaser thereof fails to make timely payment of the nondelinquent installments of Special Assessment against
such property as they become due and payable pursuant to the terms of the Assessment Ordinance and the Bond
Ordinance.
Judicial foreclosure proceedings are not mandatory; however, the City has covenanted to order and cause such actions to
be commenced. In the event a foreclosure is necessary, there could be a delay in payments to owners of the Bonds
pending prosecution of the foreclosure proceedings and receipt by the City of the proceeds of the foreclosure sale. It is
possible that no bid would be received at the foreclosure sale, and in such event there could be an additional delay in
payment of the principal of and interest on Bonds or such payment may not be made in full.
The Reserve Fund, however, may be drawn upon, to the extent monies remain, to make payments of Principal
Installments and interest, whether at maturity or on scheduled mandatory redemption dates.
The City is not obligated to advance available funds from the City treasury to cure any deficiency which may occur in any
Fund created pursuant to the Bond Ordinance or to pay any other costs associated with the Bonds not covered by amounts
on deposit in such Funds.
Reserve Fund. Monies on deposit in the Reserve Fund will constitute a trust fund for the benefit of the owners of the
Bonds and shall be administered by the Trustee as described in "APPENDIX B - Provisions of the Bonds Ordinance -
Reserve Fund."
Establishment of Special Funds
The Bond Ordinance establishes with the Trustee certain Funds. All Special Assessment Revenues (other than that
received as a Prepayment of a Special Assessment or as interest and earnings from the investment or deposit on monies in
the special funds or accounts created and established in the Bond Ordinance or revenues resulting from the collection of
Administrative Expense Assessments) will be deposited to the credit of the Assessment Fund. The Trustee will disburse
from the Assessment Fund on the required dates, amounts which are required to be on deposit in the Debt Service Fund,
the Reserve Fund, and the Administrative Expense Fund, as described below. See "APPENDIX B - Provisions of the
Bond Ordinance - Funds."
Debt Service Fund. There is required to be kept on deposit in the Debt Service Fund prior to each principal, sinking fund,
and interest payment date on the Bonds, an amount equal to 100% of the amount required to fully pay the interest on and
the Principal Installment of the Bonds then due and payable, whether at maturity or as a mandatory nonscheduled
redemption. Accrued interest on the bonds shall be deposited into the Debt Service Fund upon issuance of the Bonds.
Reserve Fund. There is required to be kept on deposit in the Reserve Fund, and initially funded with Bond proceeds, an
amount equal to the Required Reserve Amount, as defined in the Bond Ordinance. The Trustee shall deposit into the
Reserve Fund, (i) from the proceeds of the Bonds, an amount equal to the Required Reserve Amount, which is 150% of
average annual principal and interest of the Bonds Outstanding, and (ii) all amounts required to be transferred to such
9
Fund from the Assessment Fund pursuant to, and at the times specified in the Bond Ordinance. The Trustee shall transfer
from the Reserve Fund to the Debt Service Fund such amounts at such times as required to pay the Debt Service
Requirements on the Bonds as they become due, (whether at maturity or on nonscheduled mandatory redemption dates),
to the extent that other funds available in the Debt Service Fund for such purposes are insufficient and for the payment of
the applicable redemption premium, if any, on Bonds called for early redemption with Prepayments, as provided in the
Bond Ordinance. In addition, amounts in the Reserve Fund may be used to retire the last maturity or interest on the
Bonds that remain Outstanding.
Administrative Expense Fund. The Trustee will deposit into the Administrative Expense Fund, from the proceeds of the
Bonds, an amount equal to the Administrative Expense Fund Requirement, if necessary, and shall thereafter deposit into
the Administrative Expense Fund all amounts required to be transferred to such Fund from the Assessment Fund pursuant
to, and at the times specified in, the Bond Ordinance, and shall also deposit to the Administrative Expense Fund all
revenues resulting from the collection of the Administrative Expense Assessments. Such amounts shall be applied by the
Trustee to pay Administrative Expenses as they become due, as provided in the Bond Ordinance.
Improvement Fund. The proceeds received from the sale of the Bonds, other than any accrued interest (which shall be
deposited directly into the Debt Service Fund), and any amounts deposited in the Reserve Fund and the Administrative
Expense Fund, shall be deposited in the Improvement Fund and used to pay the costs of acquisition and construction of
the Authorized Improvements, together with all expenses incidental thereto, and the City's costs of creation of the District
and initial administration of the District and costs of issuance of the Bonds. After the completion of the acquisition and
construction of the Authorized Improvements and the payment of all claims from the Improvement Fund, the Trustee
shall transfer any surplus monies from the Improvement Fund to the Redemption Fund to redeem Outstanding Bonds
prior to their scheduled maturity.
Assessment Prepayment Fund. The Trustee shall deposit all amounts received from the early payment, in whole or in
part, of a Special Assessment for the payment of the Debt Service Requirements on the Bonds (a "Prepayment") (except
for any portion thereof that represents a payment of principal, interest or penalty on a delinquent installment of such
prepaid Special Assessment, which portion shall be treated and applied as Special Assessment Revenues) into the
Assessment Prepayment Fund. All Prepayments may be commingled in a single account. Promptly following the deposit
of any such Prepayment into the Assessment Prepayment Fund, the Trustee shall transfer such amount of Prepayment
representing unpaid principal of the Special Assessment into the Redemption Fund to be used to redeem or purchase
Bonds and such amount representing unpaid interest to the Debt Service Fund. See "APPENDIX B - Provisions of the
Bond Ordinance - Funds."
Redemption Fund. The Trustee shall deposit into the Redemption Fund all amounts required to be transferred to such
Fund from the Assessment Fund, Assessment Prepayment Fund, Administrative Expense Fund, and the Improvement
Fund pursuant to, and at the times specified in the Bond Ordinance. The Trustee shall apply all such amounts in the
Redemption Fund, subject to the 525,000 limitation imposed by the Bond Ordinance, to redeem or purchase Bonds in
accordance with the provisions of the Bond Ordinance.
THE DISTRICT
General
The Encino Plaza Public Improvement District (the "District") was created by the City of Round Rock, Texas (the "City")
on December 12, 1996 upon petition of the landowners within the District. The City is a political subdivision of the State
of Texas (the "State") located in Williamson and Travis Counties, Texas, operating as a home -rule city under the laws of
the State and a charter approved by the voters in August, 1977 (the "Home Rule Charter"). The City will manage the
District following its creation.
Description and Location
The District is Located in Williamson County 2,000 feet north of the northwest corner of Interstate Highway 35 (IH -35)
and Farm -to -Market Road 3406 (FM 3406) in the City of Round Rock. The District contains approximately 25 acres of
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land with 819 linear feet of frontage along 1H-35. Access from the south bound lanes of IH -35 is via FM 1431 exit to the
north of the District. Access from the north bound lanes of 1H-35 is via either the FM 3406 exit or the FM 1431 exit.
Status of Development as of January 29. 1997
On the Round Rock Nissan (also known as Class B in the Assessment Ordinance) tract, infrastructure consisting of
internal streets, water, wastewater, detention and off-site water and wastewater was completed in September, 1996.
Construction of the dealership building and surrounding improvements was completed in October, 1996.
On the Encino Plaza (also known as Class A in the Assessment Ordinance) tract owned by Encino Plaza Properties,
Oaktree Development Corporation, Hammond, Inc., and Hoppe Estate, the infrastructure consisting of internal streets,
water, wastewater, detention and off-site water and wastewater is 95% complete as of January 29, 1997. Improvements of
the construction of a Denny's Restaurant has begun on the Hammoud, Inc. tract.
Authorized Public Improvements by the Act
The City Council may undertake improvement projects and/or services that confer a special benefit on property located
within the District. The City Council may levy and collect Special Assessments on property in the District, payable in
periodic installments based on the benefit conferred by the improvement project and/or services, to pay all or part of its
cost.
A public improvement project may include:
(1) landscaping; the erection of fountains, distinctive lighting and signs; the improvement, widening, narrowing,
closing or rerouting of sidewalks or of streets; drainage improvements; the construction or improvement of pedestrian
malls, the establishment or improvement of parks; the acquisition and installation of articles of art; and the acquisition,
construction or improvement of off-street parking facilities;
(2) other improvements similar to those described in (1) above;
(3) the acquisition of real property in connection with an authorized improvement;
(4) special supplemental services for improvement and promotion of the District, including advertising,
promotion, health and sanitation, public safety, security, business recruitment, development, recreation and cultural
enhancements; and
(5) expenses incurred in the establishment, administration and operation of the District.
Assessment/Service Plan
Pursuant to the Act, an ongoing assessment and service plan (the "Assessment/Service Plan") is scheduled for approval by
the City Council on February 27, 1997, setting forth a 15 -year plan for services and activities to be provided in the
District, and setting forth the plan for apportioning the costs of the improvements to be assessed against properties in the
District and for payment of the assessments. The improvements contemplated by the Assessment/Service Plan include:
(1) Acquisition or construction of a water distribution system throughout the District, connecting to the
City's master water distribution collection system.
(2) Acquisition or construction of a wastewater collection system throughout the District, connecting to the
City's master wastewater collection system.
(3) Acquisition or construction of a stormwater drainage system throughout the District, connecting to the
City's master drainage system.
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(4) Acquisition or construction of streets or roadways to provide access to and through all property within
the District, connecting to and becoming part of the City's master thoroughfare plan.
Under the Act, the cost of the improvements may be assessed equally per square foot against all property within the
District, or it may be assessed against property according to the value of the property as determined by the City Council,
with or without regard to structures or other improvements on the property, or it may be assessed on the basis of any other
reasonable assessment plan that results in imposing equal shares of the cost on property similarly benefited. The City
Council has elected to levy an assessment based on two classes of property and apportioning costs with each class based
on a ratio composed of the value of a particular tract compared to the total value within such class. See APPENDIX C for
the values used in determining the assessments.
Preparing Assessment Roll and Notices
On February 27, 1997, the City Council will cause the Special Assessments against each parcel of land within the District
to be determined in accordance with the provisions of the Assessment/Service Plan. The City Council has also caused an
Assessment Roll to be prepared. The Assessment Roll has been filed with the City Secretary and is available for public
inspection.
Assessments, Hearing, Levy and Payment
On February 27, 1997, the City will conduct a hearing on the proposed Special Assessments. The City Council will adopt
the Bond Ordinance, the final Assessment/Service Plan and the final Assessment Roll. The Assessment Ordinance, as
adopted by the City Council will levy the assessments as Special Assessments on the property and specifies the method of
payment of the Special Assessments and provides that they be payable in periodic installments which shall meet annual
costs for special supplemental services and improvements as set forth in Section 372.023 of the Act, and shall continue for
the number of years required to retire indebtedness.
Supplemental Assessments
After notice and hearing in the manner required for original assessments, the City Council may make supplemental
assessments to correct omissions or mistakes in the assessment relating to the total cost of the Authorized Improvements
and/or services.
Ownership of Authorized Improvements
In accordance with the Act, the City will acquire the Authorized Improvements. The Authorized Improvements will
become facilities owned by the City and will constitute a portion of the City's infrastructure improvements.
Maintenance of Authorized Improvements
In accordance with the Act, all State and Federal laws regulating Home Rule Municipalities within the State of Texas and
all laws of the City and regulations, the City will provide for the ongoing maintenance and repair of the Authorized
Improvements constructed and conveyed, as outlined in the Assessment/Service Plan, from the date of receipt and
acceptance of title to the Authorized Improvements. No fees or expenses related to the maintenance or repairs of the
Authorized Improvements shall be due from or collected from the District other than those currently provided for under
current City laws and regulations for any municipally -owned infrastructure improvements.
MANAGEMENT OF THE DISTRICT
Pursuant to the Act, the District operates through action of the Round Rock City Council. The City has further appointed
the Trustee to perform certain functions as set forth in the Bond Ordinance.
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THE PROJECT
Description of the Proiect
The project currently consists of two development sites. The Nissan tract (also known as Class B in the Assessment
Ordinance) which is the site of the Round Rock Nissan dealership and the Encino Plaza site (also known as Class A in the
Assessment Ordinance) which is owned by Oak Tree Development Corporation, Encino Plaza Property, L.L.C., Hoppe
Estate, and Hammoud, Inc. The tracts are being developed as a homogeneous project centered around the hotel project.
Oak Tree Development Corporation has sold to Hanunoud, Inc. the site on which the Denny's Restaurant is under
construction. Another restaurant site is under contract between Oak Tree Development Corporation and HKS Ventures,
L.L.C., a limited liability company. The remaining tracts are on the market. The Hoppe Estate owns two lots which are
under option contract to Scenic Land Development Corporation.
Description of the Developer
The developer of the Nissan Tract is SLKR, L.C. who also acted as principals in the Round Rock Nissan dealership.
The developer of the Encino Plaza tract is Encino Plaza Property, L.L.C., a limited liability company. The president is
David Shelton, shareholders are Ken Gerrard, Bill Lashlee, and David Shelton. The same shareholders are principals in
Oak Tree Development Corporation, a Texas corporation, which is developing a hotel site located within the District.
UTILITY SERVICE TO THE PROJECT
Water Supply
Water is currently provided to the District by the City of Round Rock. The City's water system is divided into five (5)
service levels. Level 1-A serves customers in the central portion of the City. Intermediate Level 1-B was created to meet
increasing residential and industrial demands in the northern portion of the City. Level 2 was established to provide for
service extension to the west and southwest. Level 3 was developed to serve industrial facilities to the far north, primarily
the Westinghouse plant. Level 4 is located to the southeast to serve current and future expansion in that direction. As of
February, 1996, the system was billing 14,078 customers.
Five City -owned water wells pumping from the Edwards Aquifer and a 15 MGD surface water treatment plant from North
Fork Lake (Lake Georgetown) provide the total water supply for the City. Gas chlorination prior to storage is the only
required treatment. Current capability of the City's wells is listed below.
Existing
Well Location
Lake Creek
Lake Creek
Lake Creek
Westinghouse
Westinghouse
Water Wells
Pump Capacity
GPM MGD
1,300 1.870
1,200 1.728
3,000 0.432
300 0.432
100 0.144
The six water wells have a combined safe water pumping capability of 5,900 GPM, or 8.5 MGD. The safe drought yield
of these wells is 4.0 MGD.
Water Supply Contracts
The City has a 100 year contract, dated May 2, 1978, with the Brazos River Authority for a surface water supply of 6.0
MGD (18.42 acre-feet) average annual use. The surface water source is North Fork Lake (Lake Georgetown), located
seven miles northwest of the City. Raw water transmission facilities and the 6.0 MGD treatment plant were completed in
1982. Additions which increased capacity to 15.0 MGD were completed in April of 1987.
13
In September 1991, the City entered into an additional 50 year surface water supply agreement with the Brazos River
Authority of raw water from Lake Stillhouse Hollow, approximately 30 miles north of the City. The City has reserved
8,134 acre-feet of water per year under the agreement.
Water Storage
The City's Waterworks System presently has 19 storage tanks. The ground storage tanks have combined storage capacity
of 7.85 million gallons; standpipe tanks have a storage capacity of 3.75 million gallons; and the elevated tanks have a
storage capacity of 3.31 million gallons.
Monthly Water Rates (Effective 10-1-91)
Water rates for retail customers inside the city limits are as follows*:
Rate
$1.76 per 1,000 gallons of water used by all customers
Monthly Charge
Meter Size Base
Serving Customer
5/8 inch
3/4 inch
1 inch
1 1/2 inch
2 inch
3 inch
4 inch
6 inch
8 inch
10 inch
12 inch
Monthly Water
Service Charge
$ 10.45
$ 14.18
$ 21.63
$ 40.25
$ 62.60
$ 114.75
$ 189.25
$ 599.00
$1,046.00
$1,642.00
$2,014.50
*Rates outside the City limits are calculated under contract terms (see above) or on a case by case basis with customers
representing an insignificant amount of system revenues.
Wastewater Services
Presently the City has a total wastewater treatment capability of 6.6 million gallons per day. Current average daily flow is
about 6.0 MGD.
Collection mains in the City range from 6 to 42 inches in diameter. Most of the City's lift stations will be eliminated
when the wastewater interceptors are constructed. As of February, 1996, the system was billing 13,906 sewer customers.
During July, 1996, the City entered into a contract to convey certain wastewater system assets (the east and west
wastewater treatment plants) to an "Alliance" of the Brazos River Authority and the Lower Colorado River Authority.
The City also contracted to have the operation of the City's wastewater system managed by the "Alliance". Copies of
these contracts are available upon request and have been previously provided to the Purchaser.
Monthly Sewer Rates (Effective 10-1-91)
Sewer rates for retail customers inside the city limits are as follows*:
Rate
$1.73 per 1,000 gallons of water used for all users
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Monthly Charge
Meter Size Base
Rate -No Consumption
5/8 inch
3/4 inch
1 inch
1 1/2 inch
2 inch
3 inch
4 inch
6 inch
8 inch
10 inch
12 inch
Monthly Sewer
Service Charge
$ 7.85
$ 10.28
S 15.13
S 27.25
$ 41.80
$ 75.75
$ 124.25
$ 391.00
$ 682.00
$1,070.00
$1,312.50
'Rates outside the City limits are calculated under contract terms (see above) or on a case by case basis with customers
representing an insignificant amount of system revenues.
15
DISTRICT
FINANCIAL INFORMATION
Estimated Overlavnini Debt
The following table indicates the general obligation indebtedness, defined as outstanding debt payable from ad valorem
taxes, of governmental entities within which the District is located and the estimated percentages and amounts of such
indebtedness attributable to property within the District. Debt figures equated herein to outstanding bonds payable from
ad valorem taxes are based upon data obtained from individual jurisdictions or Texas Municipal Reports compiled and
published by the Municipal Advisory Council of Texas. Furthermore, certain entities listed below may have issued
additional bonds since the date listed. Political subdivisions overlapping the District are authorized by Texas law to levy
and collect ad valorem taxes for the purposes of operation, maintenance and/or general revenue purposes in addition to
taxes for the payment of debt service.
Taxing
Jurisdiction
City of Round Rock(1)
Williamson County(')
Round Rock Independent
School District
Outstanding Overlapping
Bonds As of Percent
$ 37,508,448 08/01/96 0.160%
$ 26,210,000 08/01/96 0.004%
$200,486,167 08/01/96 0.040%
Total Estimated Overlapping Debt
The District's Total Direct Debt(b)
Total Direct and Estimated Overlapping Debt
Amount
$ 60,014
1,048
71.195
$ 132,257
2.690.000
$ 2,822,257
Direct and Estimated Overlapping Debt as a Percentage of:
1996 Austin Valuation Consultants Appraisee Value of $7,792,048 36.22%
1997 Estimate of Assessed Value of $21,000,000 13.44%
Net of self-supporting debt. Includes $13,125,000 issued by the City 9/24/96. County debt includes $11,100,000
issued 11/12/96.
Including the Bonds. The Bonds are payable solely from unpaid Special Assessments which have a lien on the
property subordinate to the lien or claims for state, county, city, school district or other political subdivision, ad
valorem taxes.
Value as published by the City as of 11/18/96.
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RISKS TO BONDHOLDERS
Development in the District can be influenced by such factors as general economic conditions, availability and cost of
construction financing, competition from other developing areas in the region and other factors beyond the control of the
property owners.
General
Under the provisions of the Act and the Assessment Ordinance, the Special Assessments, or any installments thereof,
from which funds for the payment of installments of principal of and interest on the Bonds are derived, will be billed to
properties against which there are unpaid assessments on the regular property tax bills sent to owners of such properties.
Such assessment installments are due and payable, and bear the same penalties and interest for non-payment, as set forth
in the Assessment Ordinance. Additionally, Special Assessments are payable in annual installments established by the
Assessment Ordinance to correspond in number and proportionate amount to the number of installments and principal
amounts of Bonds maturing in each year. See "SECURITY FOR THE BONDS - Priority of Lien" herein. It should be
noted that the unwillingness or inability of a property owner to pay regular property tax bills as evidenced by property tax
delinquencies may also indicate an unwillingness or inability to make regular property tax payments and assessment
installment payments in the future.
In order to pay debt service on the Bonds, it is necessary that installments of Special Assessments on land within the
District are paid in a timely manner. Should the installments not be paid on time, the City has established a Reserve Fund
from the proceeds of the Bonds to cover delinquencies. The Special Assessments are secured by a lien on the parcels
within the District and the City has covenanted to institute foreclosure proceedings to sell parcels with delinquent
assessment installments for amounts sufficient to cover such delinquent installments in order to obtain funds to pay debt
service on the Bonds. However, there can be no assurance that foreclosure proceedings will occur in a timely manner so
as to avoid depletion of the Reserve Fund and delay in payments of debt service on the Bonds. See "Bankruptcy and
Foreclosure" herein.
Failure by owners of the parcels to pay Special Assessments when due, depletion of the Reserve Fund, delay in foreclosure
proceedings, or the inability of the City to sell parcels which have been subject to foreclosure proceedings for amounts
sufficient to cover the delinquent installments of Special Assessments levied against such parcels may result in the
inability of the City to make full or punctual payments of debt service on the Bonds.
A SPECIAL ASSESSMENT CONSTITUTES A FIRST AND PRIOR LIEN AGAINST THE PROPERTY ASSESSED,
SUPERIOR TO ALL OTHER LIENS AND CLAIMS EXCEPT LIENS AND CLAIMS FOR STATE, COUNTY,
SCHOOL DISTRICT OR MUNICIPAL AD VALOREM TAXES, AND IS A PERSONAL LIABILITY OF AND
CHARGE AGAINST THE OWNERS OF PROPERTY LOCATED WITHIN THE DISTRICT.
Bankruptcy and Foreclosure
The payment of Special Assessments and the ability of the City to foreclose the lien of a delinquent unpaid assessment, as
discussed in the section entitled "SECURITY FOR THE BONDS - Covenant to Commence Foreclosure Proceedings,"
may be limited by bankruptcy, insolvency, or other laws generally affecting creditors' rights or by state law relating to
judicial foreclosure. In addition, the prosecution of a foreclosure could be delayed due to congested local court calendars
or procedural delays.
The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's
approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy,
reorganization, insolvency or other similar laws affecting the rights of creditors generally.
Although bankruptcy proceedings would not cause the Special Assessments to become extinguished, bankruptcy of a
property owner could result in a delay in prosecuting foreclosure proceedings and could result in delinquent Special
Assessments not being paid in full. Such a delay would increase the likelihood of a delay or default in payment of the
principal of and interest on the Bonds.
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Availability of Funds to Pay Delinquent Special Assessment Installments
The City will establish a Reserve Fund initially funded from Bond proceeds. An amount equal to 150% of the principal
and interest requirements of Bonds Outstanding will be maintained in the Reserve Fund. As discussed in "THE BONDS -
Establishment of Special Funds" herein, if a delinquency occurs in the payment of any Special Assessment, the City will
transfer into the Debt Service Fund the amount of the delinquency from the Reserve Fund. There is no assurance that the
balance in the Reserve Fund will always be adequate to pay all delinquent installments, and if, during the period of
delinquency, there are insufficient funds in the Reserve Fund to pay all delinquent installments, a delay may occur in
payments to the owners of the Bonds.
Limited City Obligation Upon Delinquency
The City is not obligated to advance funds from the City treasury for delinquent assessment installments; the only
obligation is for the Trustee to transfer amounts available in the Reserve Fund.
The City may, but is not obligated to, be the purchaser of delinquent property. In the event the City does become the
purchaser of such property, it will pay and transfer from available funds and deposit into the Debt Service Fund the
amount of any remaining amount of unpaid Special Assessment, any delinquent Special Assessment installment, and any
interest thereon. The City may also pay and transfer from available funds and deposit into the Debt Service Fund the
amount of any such property pending redemption or sale. Amounts so advanced are recoverable upon sale or redemption
of the property.
Factors Which May Affect Land Development and Property Values
Development in the District and the City as well as property values may be affected by changes in general economic
conditions, fluctuations in the real estate market, availability and cost of construction financing, competition from other
developing areas and other factors beyond the control of the property owners. In addition, development may be subject to
future federal, state and local regulations. Approval may be required from various agencies from time to time in
connection with the layout and design of development in the District, the nature and extent of public improvements, land
use, zoning and other matters. Failure to meet any such regulations or obtain any such approvals in a timely manner
could delay or adversely affect development in the District and property values.
The land within the District is subject to a number of contingencies which could slow or prevent future development of the
undeveloped land. Consequently, no assurance can be given that such development will be partially or fully completed,
and in assessing the investment quality of the Bonds, prospective purchasers should evaluate the risks of noncompletion.
First, undeveloped land is less valuable than such land in a developed condition and provides less valuable security to the
Bondowners should it be necessary for the City to foreclose due to the nonpayment of Special Assessments.
Second, if much of the land in the District remains undeveloped, the number of likely purchasers at the foreclosure sale, in
the event the City forecloses the lien of delinquent unpaid assessment installments, is likely to be reduced. See
"Bankruptcy and Foreclosure" herein.
Third, in addition to potentially reducing the ability and willingness of the landowners to pay assessment installments, a
slowdown of the economic development process in the region could adversely affect land values and reduce the proceeds
received at a foreclosure sale in the event Special Assessments are not paid when due.
Direct and Overlapping Indebtedness
The ability of an owner of land within the District to pay the Special Assessment could be affected by the existence of
other taxes and assessments imposed upon the land. In addition, other public agencies whose boundaries overlap those of
the District could, without the consent of the City, and in certain cases without the consent of the owners of the land
within the District, impose additional taxes or assessment liens on the property within the District to finance public
improvements to be located inside of or outside of the District. A statement of direct and overlapping indebtedness on
18
land within the city is included herein under the hearing "DISTRICT FINANCES - Estimated Direct and Overlapping
Funded Debt Payable from Ad Valorem Taxes." See also "THE SECURITY FOR THE BONDS - Priority of Lien."
Land Values and the Appraisal
The value of land within the District is a critical factor in determining the investment quality of the Bonds. If a property
owner defaults in the payment of Special Assessments, the City's only remedy is to commence foreclosure proceedings in
an attempt to obtain funds to pay the delinquent installments. See the section entitled "Bankruptcy and Foreclosure"
herein.
The appraisal prepared in connection with the assessment plan is set forth in APPENDIX C. There is no assurance that
the land values in the District will appreciate or remain at their current level.
Absence of Market for the Bonds
No application has been made for a credit rating for the Bonds, and it is not known whether a credit rating could be
secured either now or in the future for the Bonds. There can be no assurance that there will ever be a secondary market
for purchase or sale of the Bonds, and from time to time there may be no market for them, depending upon prevailing
market conditions, the financial condition on market position of firms who may make the secondary market and the
financial condition of the owners of land within the District and the development of the parcels within the District.
Competing Developments
At the present time there is an existing inventory of commercial and industrial space in the general vicinity of the District.
A slowdown of the development process and the absorption rate of constructed commercial building could adversely affect
land values and reduce the ability or desire of the property owners to pay the annual Special Assessments. In that event,
there could be a default in the payments of principal and interest on the Bonds.
No Acceleration Provision
The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other
default under the terms of the Bonds or the Bond Ordinance. Pursuant to the Bond Ordinance, any holder of any of the
Bonds is given the right for the equal benefit and protection of all holders similarly situated to pursue certain remedies
described under "APPENDIX B - Provisions of the Bond Ordinance - Trustee to Pursue Collections."
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS
Article 717k-6, Vernon's Texas Civil Statutes, as amended, provides that the Bonds are legal and authorized investments
for banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance
companies, fiduciaries and trustees, and for the sinking funds of cities, towns, villages, school districts, and other political
subdivisions or public agencies of the State of Texas. Provided that the Bonds have and maintain a current rating as to
investment quality of not less than "A" or its equivalent by a nationally recognized rating agency, they are eligible to
secure deposits of any public fund of the State or any political subdivision or public agency of the State, and are lawful and
sufficient security for the deposits to the extent of their market value. The Bonds also are eligible to secure deposits of any
public funds of the State or any political subdivision or public agency of the State, and are lawful and sufficient security
for the deposits to the extent of their market value.
No investigation has been made of any other laws, rules, regulations, or investment criteria that might affect the suitability
of the Bonds for any of the above purposes or limit the authority of any of the above entities or persons to purchase or
invest in the Bonds.
19
DEBT SERVICE REQUIREMENTS
The following sets forth the debt service requirements on the Bonds.
Outstanding Total
Ye_m Debt Service Principal Interest Debt Service
1997 $ 0.00 S 0.00 $ 0.00 S 0.00
1998 0.00 0.00 313,833.33 313,833.33
1999 0.00 0.00 269,000.00 269,000.00
2000 0.00 90,000.00 264,500.00 354,500.00
2001 0.00 100,000.00 255,000.00 355,000.00
2002 0.00 115,000.00 244,250.00 359,250.00
2003 0.00 125,000.00 232,250.00 357,250.00
2004 0.00 140,000.00 219,000.00 359,000.00
2005 0.00 155,000.00 204,250.00 359,250.00
2006 0.00 170,000.00 180,000.00 358,000.00
2007 0.00 185,000.00 170,250.00 355,250.00
2008 0.00 205,000.00 150,750.00 355,750.00
2009 0.00 230,000.00 129,000.00 359,000.00
2010 0.00 250,000.00 105,000.00 355,000.00
2011 0.00 280,000.00 78,500.00 358,500.00
2012 0.00 305,000.00 49,250.00 354,250.00
2013 0.00 340,000.00 17,000.00 357,000.00
Total $ 0.00 $ 2,690,000.00 $ 2,889,833.33 $ 5,579,833.33
Maximum Annual Debt Service Requirement (2002) 8359,250
Average Annual Debt Service Requirements (1997-2013) $348,740
USE AND DISTRIBUTION OF BOND PROCEEDS
Proceeds from the sale of the Bonds will be used to acquire certain water, wastewater, drainage and street improvements
within the District. Additionally, a portion of the proceeds from the sale of the Bonds will be used to fund a reserve fund
and pay the costs of issuance in connection with the Bonds.
Summary of Estimated Uses of Bond Proceeds
Amount
Total Acquisition Costs S 2,000,000
Nonconstruction Uses of Funds
Debt Service Reserve Fund S 534,239
Legal Fees, Trustee Fees and Other Issuance Costs 100,000
Bond Placement Agent Fee 53,800
Rounding 1.961
Total Nonconstruction Uses of Funds S 690,000
TOTAL BOND ISSUE REQUIREMENT $2,690,000
21
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
General
The following discussion is a summary of certain expected material federal income tax consequences of the purchase,
ownership and disposition of the Bonds. It is based in part on an opinion of McCall, Parkhurst & Horton L.L.P., Bond
Counsel, and on the Internal Revenue Code of 1986 (the "Code"), the regulations promulgated thereunder, published
revenue rulings and court decisions currently in effect, all of which are subject to change. The Internal Revenue Service
(the "Service") has not yet issued regulations or rulings relating to the treatment of obligations such as the Bonds, and as
such said opinion and this summary of federal income tax consequences are subject to modification by the eventual
issuance of regulations or rulings or by subsequent administrative or judicial interpretation, which could apply
retroactively.
The following discussion is applicable to investors other than those investors who are subject to special provisions of the
Code, such as life insurance companies, tax-exempt organizations, foreign taxpayers and taxpayers who may be subject to
the alternative minimum tax or personal holding company provisions of the Code. This summary is further limited to
investors who will hold the Bonds as "capital assets" (generally, property held for investment) within the meaning of
Section 1221 of the Code. INVESTORS WHO ARE SUBJECT TO SPECIAL PROVISIONS OF THE CODE SHOULD
CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO
RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE BONDS IN THEIR PARTICULAR
CIRCUMSTANCES BEFORE DETERMINING WHETHER TO PURCHASE THE BONDS.
Periodic Interest Payments
On the date of issue, McCall, Parkhurst & Horton L.L.P., Bond Counsel, will render an opinion that the Bonds are not
obligations described in section 103(a) of the Code. Accordingly, the stated interest paid on the Bonds for original issue
discount, if any, accruing on the Bonds will be included in "gross income" within the meaning of Section 61 of the Code
of the owners and be subject to federal income taxation when received or accrued, depending upon the tax accounting
method applicable to the owner thereof.
Disposition of Bonds
An owner will recognize gain or loss on the redemption, sale or exchange of a Bond equal to the difference between the
redemption or sale price (exclusive of any amount paid for accrued interest) and the owner's tax basis on the Bond.
Generally, the owner's tax basis in the Bond will be the owner's initial cost. Any gain or loss generally will be a capital
gain or loss and either will be long-term or short-term depending on whether the Bond has been held for more than one
year.
Under current law, purchasers of the Bonds who do not purchase the Bonds in the initial public offering at the initial
public offering price (a "subsequent purchaser") will generally be required, on the disposition of a Bond, to recognize as
ordinary income a portion of the gain, if any, to the extent of the accrued "market discount." Market discount is the
amount by which the price paid for a Bond by a subsequent purchaser is less than the Bond's "stated redemption price at
maturity" (or, in the case of a Bond issued at an original issue discount, if any, the Bond's "revised issue price"). In such
instances, section 1277 of the Code also may apply so as to defer the deductibility of all or a portion of the interest
incurred by a subsequent purchaser with respect to amounts borrowed to acquire a Bond with market discount.
Other Federal Income Tax Consequences
The Code requires debt obligations, such as the Bonds, to be issued in registered form and denies certain tax benefits to
the issuer and the holders of obligations failing this requirement. The Bonds will be issued in registered form.
Interest paid to an owner of a Bond ordinarily will not be subject to withholding of federal income tax is such owner is a
United States person. A United States person, however, will be subject to withholding of such tax at a rate of 20% under
certain circumstances. This withholding generally applies if the owner of a Bond (i) fails to furnish to the issuer such
owner's social security number or other taxpayer identification number ("TIN"), (ii) furnishes the issuer an incorrect TIN,
(iii) fails to report properly interest, dividends or other "reportable payments" as defined in the Code, or (iv) under certain
22
circumstances, fails to provide the issuer or such owner's broker with a certified statement, signed under penalty or
perjury, that the TIN provided to the issuer is correct and that such owner is not subject to backup withholding.
State and Local Taxes and Foreien Persons
Investors should consult their own tax advisors concerning the tax implications of holding and disposing of the Bonds
under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax
consequences unique to investors who are not United States persons.
Required Reuortine to Internal Revenue Service
Subject to certain exceptions, interest payments made to the owners with respect to the Bonds will be reported to the
Internal Revenue Service. Such information will be filed each year with the Internal Revenue Service on Form 1099
which will reflect the name, address and taxpayer identification number of the registered owner. A copy of Form 1099
will be sent to each registered owner of a Bond for federal income tax reporting purposes.
TRANSFER RESTRICTIONS
Each purchaser of the Bonds offered hereby will be deemed to have represented and agreed as follows:
(1) It is purchasing the Bonds for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is (i) a qualified institutional buyer ("QIB") and is aware that the
sale to it is being made in reliance on Rule 144A or (ii) an Institutional Accredited Investor.
(2) It understands that the Bonds are being offered only in a transaction not involving any public offering
within the meaning of the Securities Act, and that, if prior to three years after the later of March 17, 1997 and the last
date on which the District or any affiliate of the District was the beneficial owner of any such Bond (or any predecessor of
such Bond), it decides to resell, pledge or otherwise transfer such Bonds, such Bonds may be resold, pledged or
transferred only (i) to the District or an affiliate of the District, (ii) to a person who the seller reasonably believes is a
"qualified institutional buyer" that purchases for its own account or for the account of a "qualified institutional buyer" in
compliance with Rule 144A, or (iii) in compliance with Rule 144 under the Securities Act. Each Institutional Accredited
Investor that is not a QIB and that is an original purchaser of the Bonds will be required to sign an investment letter to the
foregoing effect and in the form attached as APPENDIX D hereto. In order to effectuate the foregoing restrictions on
resales, pledges and other transfers of the Bonds, if any resale, pledge or other transfer of Bonds is proposed to be made
(otherwise than in compliance with Rule 144A) prior to three years after the later of March 17, 1997, and the last date on
which the District or any affiliate of the District was the beneficial owner of any such Bond (or any predecessor of such
Bond) the transferor and proposed transferee shall provide the Trustee with such opinions of counsel, representation
letters or other documentation as the District may request to ensure compliance with the provisions of the Securities Act.
(3) It understands that the Bonds will bear a legend to the following effect unless otherwise agreed by the
District and the Holder thereof:
THIS BOND IS NOT BEING REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE TRANSFER OF THIS BOND IS SUBJECT TO CERTAIN CONDITIONS. THE HOLDER
HEREOF, BY PURCHASING THIS BOND, AGREES FOR THE BENEFIT OF THE DISTRICT AND THE TRUSTEE
THAT THIS BOND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) TO THE
DISTRICT OR AN AFFILIATE OF THE DISTRICT, (2) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER, THAT IS AWARE THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, OR (3) IN COMPLIANCE WITH RULE 144 UNDER THE SECURITIES
ACT.
(4) It acknowledges that the District, the Initial Purchaser and other will rely upon the truth and accuracy of
the foregoing acknowledgments, representations and agreements and agrees that if any of the acknowledgments,
23
representations or warranties deemed to have been made by it by its purchase of Bonds are no long accurate, it shall
promptly notify the District and the Initial Purchaser. If it is acquiring any Bonds as a fiduciary or agent for one or more
investor accounts, it represents that it has sole investment discretion with respect to each such account and it has full
power to make the foregoing acknowledgments, representations and agreements on behalf of each such account.
LEGAL MATTERS
Legal Proceedings
Delivery of the Bonds will be accompanied by the unqualified approving legal opinion of the Attorney General of Texas to
the effect that the Bonds are valid and legally binding obligations of the District under the Constitution and laws of the
State of Texas and, based upon their examination of a transcript of certified proceedings relating to the issuance and sale
of the Bonds and the approving legal opinion of Bond Counsel.
The legal fees paid to Bond Counsel for services rendered in connection with the issuance of the Bonds are based on a
percentage of the bonds actually issued, sold and delivered and, therefore, such fees are contingent upon the sale and
delivery of the Bonds.
No -Litigation Certificate
The District will furnish the Initial Purchaser a certificate, executed by both the Mayor and City Secretary, and dated as of
the date of delivery of the Bonds, to the effect that no litigation of any nature is pending or threatened, either in state or
federal courts, contesting or attacking the Bonds; restraining or enjoining the levy, assessment and collection of
assessments to pay the interest on or the principal of the Bonds; in any manner questioning the authority or proceedings
for the issuance, execution or delivery of the Bonds; or affecting the validity of the Bonds or the creation of the District.
PREPARATION OF PRIVATE PLACEMENT MEMORANDUM
Sources and Compilation of Information
The financial data and other information contained in this PRIVATE PLACEMENT MEMORANDUM has been obtained
primarily from the Developer, the City's Engineer, the Appraisal District and information from other sources. All of
these sources are believed to be reliable, but no guarantee is made as to the accuracy or completeness of the information
and its inclusion herein is not to be construed as a representation on the part of the District, the Placement Agent or the
City to such effect. Furthermore, there is no guarantee that any of the assumptions or estimates contained herein will be
realized. The summaries of the statutes, resolutions, engineering and other related reports set forth in this PRIVATE
PLACEMENT MEMORANDUM are included herein subject to all of the provisions of such documents. These
summaries do not purport to be complete statements of such provisions, and reference is made to such documents for
further information.
24
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APPENDIX "B"
AN ORDINANCE AUTHORIZING THE ISSUANCE OF $2,690,000, ENCINO PLAZA
PUBLIC IMPROVEMENT DISTRICT SPECIAL ASSESSMENT BONDS, TAXABLE
SERIES 1997; PROVIDING FOR THE PAYMENT OF SAID BONDS BY A PLEDGE OF
REVENUES DERIVED FROM SPECIAL ASSESSMENTS LEVIED AGAINST ALL
PROPERTIES IN ENCINO PLAZA PUBLIC IMPROVEMENT DISTRICT, IN AMOUNTS
SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON SUCH BONDS, TO
FUND A RESERVE FUND, AND TO PAY VARIOUS ADMINISTRATIVE COSTS
ASSOCIATED WITH THE OPERATION OF THE PUBLIC IMPROVEMENT DISTRICT;
PROVIDING THE TERMS AND CONDITIONS OF SUCH BONDS; RESOLVING OTHER
MATTERS INCIDENT AND RELATING TO THE ISSUANCE, PAYMENT, SECURITY,
SALE, AND DELIVERY OF SAID BONDS, INCLUDING AUTHORIZING THE
EXECUTION OF A PAYING AGENT/REGISTRAR AGREEMENT.
RECITALS
The City Council of the City of Round Rock, Texas (the "City"), has previously found and
determined that it was in the best interests of the City and the petitioning property owners of the City
to create a public improvement district, pursuant to the provisions of the Public Improvement District
Assessment Act, as amended, Texas Local Government Code, Chapter 372 (the "Act"); and
On August 14, 1996, a petition signed by the requisite number of property owners located
within the proposed public improvement district was submitted to and filed with the City Secretary
requesting that the City Council create a public improvement district in the City.
The aforementioned petition was submitted in compliance with the provisions of Section
372.005 of the Act.
Notice of a public hearing to consider the advisability of the improvements was published in
a newspaper of general circulation on November 25, 1996, disclosing the City Council's intention to
consider the creation of a public improvement district.
Written notice of the scheduled public hearing was delivered on November 18, 1996, to each
property owner located within the proposed public improvement district.
On December 12, 1996, the City Council held a public hearing conforming to the requirements
of Section 372.009 of the Act on the advisability of the improvements.
Pursuant to Section 372.009(b) of the Act, the City Council, on December 12, 1996, passed
and approved a Resolution making certain findings as to the advisability of the improvements, the
nature of the improvements, the boundaries of the proposed public improvement district, the method
of assessment, and the apportionment of the costs between the proposed public improvement district
MIO(S/â–ºUHUC: OIIDwDPI I/27f7
1
and the City as a whole and authorizing creation of the Encino Plaza Public Improvement District (the
"District") thereby establishing the exact boundaries of the District.
No portion of the District is located within the extraterritorial jurisdiction of the City.
Such authorization took effect on January 27, 1997, the date on which notice of the creation
of the District was published in the Round Rock Leader, a newspaper of general circulation in the
City.
No protest, satisfying the requirements of Section 372.010(c) of the Act, has been filed with
any official of the City.
Pursuant to the provisions of Sections 372.013 and 372.014 of the Act, an
Assessment/Service Plan was prepared and submitted to the City Council for review which was set
for a public hearing before the City Council to be held on February 27, 1997.
The Assessment/Service Plan provides that one hundred percent (100%) of the cost of the
improvements authorized by Section 372.003 of the Act (the "Authorized Improvements") will be
paid by Special Assessments levied against property located within the District.
The Assessment/Service Plan recommended that the City Council apportion the cost of the
Authorized Improvements on the basis of two classes (Class A and Class B) and within each class the
Authorized Improvements be apportioned based on a ratio of the appraised value of each tract within
each class in comparison to the appraised value of the total property within such class as set out in
the Assessment/Service Plan, with such apportionment resulting in a fair and reasonable
apportionment of costs based on property similarly benefitted within the District.
Based upon the aforementioned method of apportionment, the City Council has prepared and
filed an Assessment Roll establishing the proposed Special Assessment against each parcel of property
within the District, all as provided in Section 372.016 of the Act.
A notice was published on February 17, 1997 and February 20, 1997, evidencing the City
Council's intention to consider the proposed Special Assessments at a public hearing.
Written notice of this scheduled public hearing was delivered on February 13, 1997, to each
property owner residing within the District.
On February 27, 1997, the City Council held a public hearing to hear and pass on any
objections to the proposed Special Assessments.
On February 27, 1997, the City Council adopted an Ordinance (the "Assessment Ordinance")
approving the Assessment/Service Plan for the District and levied assessments as Special Assessments
on each parcel of property within the District, all as provided in Section 372.017 of the Act.
uOCK/rUW C: ORDCI.DRI IA7/97
2
Pursuant to the Assessment Ordinance, the City permitted the Special Assessments to be paid
in installments, fixed the rate of interest on installment payments, established the penalties and interest
on delinquent installments, and established the procedure for collection of the Special Assessments.
The Assessment Ordinance provides the mechanism and procedure that will be utilized to
collect and enforce the Special Assessments in periodic installments being the same procedures that
the City currently employs to collect and enforce its annual ad valorem tax.
Sections 372.019 and 372.020 of the Act establish a mechanism for the City to make
supplemental assessments to correct errors in the original Special Assessments, and a mechanism for
reassessment in the event any Special Assessment is invalid or excessive.
The Act provides that an assessment or any reassessment, the expense of collection, and
reasonable attorney's fees, if incurred, are a first and prior lien against the property assessed, superior
to all other liens and claims except liens or claims for state, county, city, school district, or other
political subdivision, ad valorem taxes, and are a personal liability of and charge against the owners
of the property regardless of whether the owners are named. The lien is effective from the date of the
Assessment Ordinance levying the Special Assessment until the Special Assessment is paid, and may
be enforced by the City in the same manner as an ad valorem tax levied against real property may be
enforced by the City. The owner of any property assessed may pay the entire Special Assessment
against any lot or parcel with accrued interest to the date of payment which must be an Interest
Payment Date, as hereinafter defined.
Section 372.023 of the Act authorizes the City, through the District, to issue revenue bonds
payable solely from Special Assessments.
The City Council has determined to pay the costs of the Authorized Improvements by the
issuance of special assessment revenue bonds designated as the "Encino Plaza Public Improvement
District Special Assessment Bonds, Taxable Series 1997" (the "Bonds"), dated March 1, 1997, in the
original principal amount of $2,690,000.
The terms and conditions of the Bonds and the pledge of the revenues derived from Special
Assessments which must be collected on an annual basis while any of the Bonds remain Outstanding
will be controlled by the provisions of this Ordinance and Sections 372.025 and 372.026 of the Act
or any other applicable law.
The City Council further finds and determines that the aforementioned Bonds should be issued
and sold at this time; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK:
P. O PUBIIC: owa.DPI I/27/97
3
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions. For all purposes of this Ordinance and in particular for clarity with
respect to the issuance of the Bonds herein authorized and the lien on and pledge of the Special
Assessment Revenues (hereinafter defined) to the payment of the Bonds, the following words and
terms, whenever the same appear herein without qualifying language, are defined to mean as follows:
Act - means the Public Improvement District Assessment Act, as amended, Texas Local
Government Code, Chapter 372.
Administrative Expense Assessment - means the minimum annual special assessment of levied
by the Assessment Ordinance or such larger amount as may be levied by the City in the future to pay
the annual costs of the administration and operation of the District.
Administrative Expense Fund - means the fund established in Section 6.05 of this Ordinance.
Administrative Expense Fund Requirement - means three thousand dollars ($3,000).
Administrative Expenses - means the administrative and operation costs associated with the
establishment, administration, and operation of the District, including, without limitation, the costs
of: (a) collecting Special Assessments or the installments thereof, (b) maintaining the record of
installments of the Special Assessments and the system of registration and transfer of the Bonds, (c)
paying and redeeming the Bonds, (d) investing or depositing of monies, (e) complying with the Code
with respect to the Bonds (other than any such costs which constitute City Administrative Expenses
payable as an expense of issuing the Bonds), (f) the Paying Agent/Registrar Trustee fees and
expenses, and (g) paying the costs of administering the acquisition of the Authorized Improvements.
Assessment Ordinance - means the Ordinance adopted by the City Council on February 27,
1997, and any amendment or supplement thereto that may be hereafter adopted by the City Council,
levying annual Administrative Expense Assessments, and levying Special Assessments to pay the Debt
Service Requirements on the Bonds against each eligible parcel of land in the District and providing
that such Special Assessments be paid in periodic installments in amounts necessary to pay
Administrative Expenses and the Debt Service Requirements on the Bonds, respectively.
Assessment Fund - means the fund established in Section 6.01 of this Ordinance. Assessment
Prepayment Fund - means the fund established in Section 6.04 of this Ordinance.
Assessment Roll - means the Assessment Roll [Exhibit "C" to the Assessment/Service Plan
which is attached as Exhibit "A" to the Ordinance (the "Assessment Ordinance")], as amended from
time to time in accordance with the Act, which shows, among other things, the properties within the
District subject to Special Assessments, the owner of the property assessed, the amount assessed, and
the installment payments on the Special Assessments.
.*O«dPUBUC: OBDD/.DBI 1/7W
4
Assessment/Service Plan - means the Assessment/Service Plan prepared in accordance with
the Act and approved by the City Council as part of the Assessment Ordinance on February 27, 1997
(and attached as Exhibit "A" to the Assessment Ordinance) setting forth the plan for services and
activities to be provided in the District and setting forth the plan for apportioning the cost of the
improvements to be assessed against properties in the District.
Authorized Denomination - means the denomination of the Bonds which shall be $100,000
or a greater amount divisible by $5,000 except as otherwise provided in Section 2.03 of this
Ordinance.
Authorized Improvements - means the improvements described in the Assessment/Service
Plan.
Authorized Investments - means obligations that are eligible for investment by the City
pursuant to the Public Funds Investment Act.
Bonds - means any Bonds or all Bonds of the "Encino Plaza Public Improvement District
Special Assessment Bonds, Taxable Series 1997", dated March 1, 1997, authorized by this Ordinance.
Business Day - means any day which is not a Saturday, Sunday, or a day on which the
Registrar is authorized by law or executive order to close, or a legal holiday.
City Council - means the governing body of the City.
Closing Date - means the date of physical delivery of the Initial Bonds for payment in full by
the initial purchasers thereof.
Code - means the Internal Revenue Code of 1986, as amended.
Comptroller - means the Comptroller of Public Accounts of the State of Texas.
Debt Service Fund- means the debt service fund created in Section 6.02 of this Ordinance.
Debt Service Requirements - means, as of any particular date of computation, with respect
to any Bonds and with respect to any period, the aggregate of the amounts to be paid or set aside by
the Trustee on behalf of the City as of such date or in such period for the payment of the Principal
Installment, premium, if any, and interest (to the extent not capitalized) on such Bonds.
District - means the Encino Plaza Public Improvement District established by the City
pursuant to the provisions of the Act by Resolution adopted on December 12, 1996.
Exchange Bonds - means Bonds registered, authenticated, and delivered by the Trustee, as
provided in Section 2.11 of this Ordinance.
RAOCrJPUBLICI owv+.nu 1/27nf
5
Fiscal Year - means the twelve (12) month accounting period used by the City which may be
any twelve (12) consecutive month period established by the City which currently ends on September
30.
Foreclosure Proceeds - means the amounts received from the judicial sale of assessed property
within the District as a result of the nonpayment of Special Assessments.
Holder or Holders - means the registered owner, whose name appears in the Register, for any
Bond.
Improvement Fund - means the fund established in Section 6.07.
Initial Bonds - means the Bonds authorized, issued, and initially delivered as provided in
Section 2.03 of this Ordinance.
Interest Payment Date - when used in connection with any Bond, means April 1, 1998, and
each October 1 and April 1 thereafter until maturity.
Issue Date - means the date of the Bonds which is March 1, 1997.
Maturity Date - means the date or dates on which principal of the Bonds is scheduled to be
paid, as provided in Section 2.03 of this Ordinance.
Ordinance - as used herein and in the Bonds, means this Bond Ordinance and all amendments
and supplements hereto.
Outstanding - when used with reference to the Bonds, Outstanding means, as of a particular
date, all such Bonds theretofore and thereupon delivered except: (a) any such Bond cancelled by or
on behalf of the City at or before said date, (b) any such Bond defeased or no longer considered
Outstanding pursuant to the provisions of the ordinance authorizing its issuance, or otherwise
defeased as permitted by applicable law, and (c) any such Bond in lieu of or in substitution for which
another Bond shall have been delivered pursuant to the ordinance authorizing the issuance of such
Bond.
Owner or Registered Owner - means the Person or entity who is the registered owner of any
Outstanding Bond.
Paying Agent - means the Trustee.
Person or Persons - means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, or government or any agency or political
subdivision thereof.
Prepayments - means amounts received as a result of the early payment, in whole or in part,
UORT/IIJC: ORDDi DLLI I/371117
6
of a Special Assessment to pay the Debt Service Requirements on the Bonds or any installment
thereof. Amounts received at the time of a Prepayment which represent a payment of principal,
interest or penalties on a delinquent installment of a Special Assessment to pay the Debt Service
Requirement on the Bonds are not to be considered a Prepayment, but rather are to be treated as the
payment of regularly scheduled Special Assessment Revenues.
Principal Installment - means as of any particular date of computation and with respect to the
Bonds, an amount of money equal to the aggregate of the principal amount of Outstanding Bonds
of said series which mature on a single future date.
Record Date - means, for any Interest Payment Date, the fifteenth (15th) calendar day of the
month next preceding such Interest Payment Date.
Redemption Fund - means the redemption fund established in Section 6.08 of this Ordinance.
Register - means the books of registration kept by the Registrar in which are maintained the
names and addresses of, and the principal amounts registered to, the Registered Owners.
Registrar - means the Trustee.
Replacement Bond - means the Bond authorized by the City to be issued in substitution for
lost, apparently destroyed, or wrongfully taken Bonds as provided in Section 2.13 of this Ordinance.
Required Reserve Amount - means 150% of the average annual principal and interest of all
Bonds Outstanding.
Reserve Fund - means the reserve fund established in Section 6.03 of this Ordinance.
Special Assessments - means: (a) the assessments levied against properties in the District to
pay Debt Service Requirements on the Bonds as set forth in the Assessment/Service Plan which are
payable in periodic installments as provided in the Assessment Ordinance; and (b) the annual
Administrative Expense Assessments levied and to be levied against properties in the District, all as
provided in the Assessment/Service Plan, the Assessment Ordinance and this Ordinance. Special
Assessments also include any supplemental assessments levied in accordance with Sections 372.019
and 372.020 of the Act.
Special Assessment Revenues - means the monies collected from Special Assessments levied
against properties in the District, including interest on Special Assessments during the period a
Special Assessment or any installment thereof is current or delinquent, Prepayments, Foreclosure
Proceeds, and penalties for non -timely payment of Special Assessments. Earnings and income derived
from the investment or deposit of monies in the special funds or accounts created and established for
the payment and security of the Bonds shall also constitute Special Assessment Revenues.
Trustee - means Texas Commerce Bank National Association.
RROCIVIOBIIC. ORDlN.DRI I/27017
7
Placement Agent means First Southwest Company.
Section 1.02. Interpretations. All terms defined herein and all pronouns used in this Ordinance
shall be deemed to apply equally to singular and plural and to all genders. The 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 and
provisions hereof. This Ordinance and all the terms and provisions hereof shall be liberally construed
to effectuate the purposes set forth herein.
ARTICLE II
TERMS OF THE BONDS
Section 2.01. Authorization. The Bonds shall be issued in fully registered form in the total
authorized aggregate amount of $2,690,000 for the purpose of paying the costs of acquiring and
constructing the Authorized Improvements, establishing a Reserve Fund, and paying costs of issuance
of the Bonds in accordance with the Act.
Section 2.02. Designation, Date, and Interest Payment Dates. Each Bond shall be designated
as "Encino Plaza Public Improvement District Special Assessment Bond, Taxable Series 1997" and
shall be dated March 1, 1997. The Bonds shall bear interest from March 1, 1997, or the most recent
Interest Payment Date to which interest has been paid or duly provided for, at the rates set out in
Section 2.03 of this Ordinance, calculated on the basis of a 360 -day year of twelve 30 -day months,
payable on April 1, 1998, and semiannually thereafter on October 1 and April 1 of each year until
maturity or prior redemption.
Section 203. Initial Bonds; Numbers and Denomination. The Bonds shall be initially issued
bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the
following schedule, and may be transferred and exchanged as set out in this Ordinance. The Bonds
shall mature on October 1 in each of the years and in the amounts set out in such schedule and be
subject to prior redemption as provided herein. Bonds delivered on transfer of or in exchange for
other Bonds shall be numbered (with appropriate prefix) in order of their authentication by the
Registrar, and shall be in the denomination of one hundred thousand dollars ($100,000) or a greater
amount divisible by five thousand dollars ($5,000); provided, however, that in the event of a
redemption of a portion of the Bonds then Outstanding, the Trustee may authenticate and deliver an
exchange Bond in a denomination of five thousand dollars ($5,000) or any integral multiple thereof
if the amount of any Holder's Bond remaining after such redemption is less than one hundred
thousand dollars ($100,000). The Bonds shall mature on the same date and bear interest at the same
rate as the Bond or Bonds in lieu of which they are delivered.
UO 7UHUC. ownn.w" 1/ 17/97
8
Bond Number Principal Amount Year of Maturity Interest Rate
T-1 $ 90,000 2000 10.00%
T-2 100,000 2001 10.00
T-3 115,000 2002 10.00
T-4 125,000 2003 10.00
T-5 140,000 2004 10.00
T-6 155,000 2005 10.00
T-7 170,000 2006 10.00
T-8 185,000 2007 10.00
T-9 205,000 2008 10.00
T-10 230,000 2009 10.00
T-11 250,000 2010 10.00
T-12 280,000 2011 10.00
T-13 305,000 2012 10.00
T-14 340,000 2013 10.00
Section 2.04. Execution of Bonds; Seal. The Bonds shall be signed on behalf of the District
by the Mayor and countersigned by the City Secretary, by their manual, lithographed, 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.
If any officer of the City whose manual or facsimile signature shall appear on the Bonds shall cease
to be such officer before the authentication of such Bonds or before the delivery of such Bonds, such
manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such
officer had remained in such office.
Section 2.05. Approval, Registration and Delivery. After the Bonds to be initially issued shall
have been executed, it shall be the duty of the Mayor of the City to deliver the Bonds to be initially
issued and all pertinent records and proceedings to the Attorney General of Texas, for examination
and approval by the Attorney General. After the Bonds to be initially issued shall have been approved
by the Attorney General, they shall be delivered to the Comptroller of Public Accounts of the State
of Texas for registration. Upon registration of the Bonds to be initially issued, the Comptroller of
Public Accounts (or a deputy lawfully designated in writing to act for the Comptroller) shall manually
11100/?UEL1C: ORDD t DRI 1177197
9
sign the Comptroller's Registration Certificate prescribed herein to be attached or affixed to the
Bonds to be initially issued, and the seal of said Comptroller shall be impressed, or placed in facsimile,
thereon.
Section 2.06. Authentication. Except for the Bonds to be initially issued, which need not be
authenticated, only such Bonds as shall bear thereon a certificate of authentication, substantially in
the form provided in Section 4.01 of this Ordinance, manually executed by an authorized
representative of the Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or
obligatory for any purpose. Such duly executed certificate of authentication shall be conclusive
evidence that the Bond so authenticated was delivered by the Registrar hereunder. The signed
Certificate of Registration of the Comptroller of Public Accounts shall constitute the certificate of
authentication for the Initial Bonds.
Section 2.07. Payment of Principal Installment and Interest. The Registrar is hereby
appointed as the Registrar and Paying Agent for the Bonds. The Principal Installment of the Bonds
shall be payable, without exchange or collection charges, in any coin or currency of the United States
of America which, on the date of payment, is legal tender for the payment of debts due the United
States of America, upon their presentation and surrender as they respectively become due and payable
at maturity or at their earlier redemption date, at the office for payment of the Registrar. The interest
on each Bond shall be payable by check payable on the Interest Payment Date, mailed by the
Registrar, first-class, postage prepaid, on or before each Interest Payment Date to the Owner of
record as of the Record Date, to the address of such Owner as shown on the Register. Upon the
properly documented written request of each Registered Owner of not less than one million dollars
($1,000,000) aggregate principal amount of Bonds received by the Paying Agent/Registrar not less
than fifteen (15) days prior to the applicable Record Date, interest owed to such Owner will be paid
by federal funds wire transfer to any account located within the United States of America designated
in the request at the City's expense. Each Principal Installment payment, premium or interest will be
accompanied by a statement of the CUSIP numbers of the Bonds on which such payment is made and
the amounts paid in respect of each CUSIP number. Any accrued interest payable at maturity shall
be paid upon presentation and surrender of the Bond to which such interest appertains.
If the date for the Principal Installment payment or interest shall be a Saturday, Sunday, a legal
holiday, or a day on which banking institutions in the city where the Registrar is located are
authorized by law or executive order to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking
institutions are authorized by law to close, and payment on such date shall have the same force and
effect as if made on the original date such payment was due.
Section 2.08. Successor Registrars. The City covenants that at all times while any Bonds are
Outstanding it will provide a legally qualified bank, trust company, financial institution or other
agency to act as Trustee and as Registrar for the Bonds. Each successor Registrar hereunder, by
acting in that capacity, shall be deemed to have agreed to the provisions of this Ordinance. Promptly
upon the appointment of any successor Registrar, the previous Registrar shall deliver the Register or
a copy thereof to the new Registrar, and the new Registrar shall notify each Owner, by United States
10
RROC[//VB 1C: OROCJDRI IR7/97
mail, first-class postage prepaid, of such change and of the address of the new Registrar.
Section 2.09. Special Record Date. If interest on any Bond is not paid on any Interest
Payment Date and continues unpaid for thirty (30) days thereafter, the Registrar shall establish a new
Record Date for the payment of such interest, to be known as a Special Record Date. The Registrar
shall establish a Special Record Date when funds to make such interest payment are received from
or on behalf of the City. Such Special Record Date shall be fifteen (15) days prior to the date fixed
for payment of such past due interest, and notice of the date of payment and the Special Record Date
shall be sent by United States mail, first-class postage prepaid, not later than five (5) days prior to the
Special Record Date, to each affected Owner of record as of the close of business on the day prior
to the mailing of such notice.
Section 2.10. Ownership; Unclaimed Principal and Interest. The City, the Registrar, and any
other Person shall 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 of the principal thereof and for the
further purpose of making and receiving payment of the interest thereon, and for all other purposes,
whether or not such Bond is overdue, and neither the City nor the Registrar shall be bound by any
notice or knowledge to the contrary. All payments made to the Person deemed to be the Owner of
any Bond in accordance with this Section 2.10 shall be valid and effectual and shall discharge the
liability of the City and the Registrar upon such Bond to the extent of the sums paid.
Amounts held by the Registrar which represent principal of and interest on the Bonds
remaining unclaimed by the Owner after the expiration of three years from the date such amounts
have become due and payable shall be reported and disposed of by the Registrar in accordance with
the provisions of Title 6 of the Texas Property Code, as amended, to the extent that such provisions
are applicable to such amounts.
Section 2.11. Registration, Transfer, and Exchange. The Bonds shall initially be registered
in the name of First Southwest Company as Placement Agent. At any time after the date of initial
delivery of the Bonds, the Registered Owner may, in accordance with the procedures prescribed in
Section 2.14 hereof, surrender such Bonds to the Registrar for registration of transfer or exchange,
and the Registrar shall register, authenticate, and deliver Exchange Bonds in accordance with the
provisions of this Ordinance.
So long as any Bonds remain Outstanding, the Registrar shall keep at its office for payment,
in which, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for
the registration and transfer of Bonds in accordance with the terms of this Ordinance.
Each Bond shall be transferable only (i) upon the presentation and surrender thereof at the
office for payment of the Registrar, duly endorsed for transfer, or accompanied by an assignment duly
executed by the Registered Owner or his authorized representative in form satisfactory to the
Registrar and (ii) upon receipt of the Investment Letter set forth as Exhibit "A" attached hereto.
Upon due presentation of any Bond for transfer, the Registrar shall authenticate and deliver in
exchange therefor, within seventy-two (72) hours after such presentation, a new Bond or Bonds,
1RO 7VBUC: oww.D 1 imm
11
registered in the name of the transferee or transferees, in authorized denominations and of the same
maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds
so presented.
All Bonds shall be exchangeable upon presentation and surrender thereof at the office for
payment of the Registrar for a Bond or Bonds of the same maturity and interest rate and in any
Authorized Denomination, in an aggregate principal amount equal to the unpaid principal amount of
the Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to
authenticate and deliver Exchange Bonds in accordance with the provisions of this Section 2.11. Each
Bond delivered in accordance with this Section 2.11 shall be entitled to the benefits and security of
this Ordinance to the same extent as the Bond or Bonds in lieu of which such Bond is delivered.
The City or the Registrar may require the Owner of any Bond to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with the transfer or exchange
of such Bond. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the
City.
The Registrar shall not be required to register the transfer of any Bond during the period
beginning on the Record Date next preceding a scheduled Interest Payment Date (other than final
payment) and ending after such interest payment has been made. The Registrar shall not be required
to transfer or exchange any Bond called for redemption during the period beginning 45 days prior to
the date fixed for redemption and ending on the date fixed for redemption; provided, however, that
this limitation shall not apply to the exchange by the Owner of the unredeemed portion of a Bond
called for redemption in part.
Section 2.12. Cancellation of Bonds. All Bonds paid in accordance with this Ordinance, and
all Bonds in lieu of which Exchange Bonds or Replacement Bonds are authenticated and delivered
in accordance herewith, shall be cancelled and destroyed upon the making of proper records regarding
such payment. The Registrar shall finnish the City with appropriate certificates of destruction of such
Bonds.
Section 2.13. Replacement Bonds. Upon the presentation and surrender to the Registrar of
a mutilated Bond, the Registrar shall authenticate and deliver in exchange therefor a Replacement
Bond of like maturity, interest rate and principal amount, bearing a number not contemporaneously
outstanding. The City or the Registrar may require the Owner of such Bond to pay a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection therewith and any
other expenses connected therewith, including the fees and expenses of the Registrar.
If any Bond is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the
applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has
been acquired by a bona fide purchaser, shall execute and the Registrar shall authenticate and deliver
a Replacement Bond of like maturity, interest rate and principal amount, bearing a number not
contemporaneously outstanding, provided that the Owner thereof shall have:
R&OW VIUC ORDM.DRI 1/271,7
12
(a) furnished to the City and the Registrar satisfactory evidence of the ownership of and the
circumstances of the loss, destruction, or theft of such Bond;
(b) furnished such security or indemnity as may be required by the Registrar and the City to
save them harmless;
(c) paid all expenses and charges in connection therewith, including, but not limited to,
printing costs, legal fees, fees of the Registrar, and any tax or other governmental charge that
may be imposed; and
(d) met any other reasonable requirements of the City and the Registrar.
If after the delivery of such Replacement Bond, 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 Registrar shall be entitled to recover such Replacement Bond from the Person to whom it was
delivered or any Person taking therefrom, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the City or the Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is
about to become due and payable, the City, in its discretion may, instead of issuing a Replacement
Bond, authorize the Registrar to pay such Bond.
Each Replacement Bond delivered in accordance with this Section 2.13 shall be entitled to
the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which
such Replacement Bond is delivered.
ARTICLE III
REDEMPTION
Section 3.01. Optional Redemption. The Bonds may be redeemed by the District acting
through the City, in whole or in part prior to maturity, on any interest payment date at the option of
the District acting through the City, after notice as provided herein, at the redemption prices
(expressed as percentages of principal amount) set forth in the table below plus accrued interest to
the redemption date.
!MOCK/PUBLIC. Oww.DRI I/27/f7
13
Redemption Date Redemption Price
October 1, 2007 or April 1, 2008 103%
October 1, 2008 or April 1, 2009 102 1/2
October 1, 2009 or April 1, 2010 102
October 1, 2010 or April 1, 2011 101 1/2
October 1, 2011 or April 1, 2012 101
October 1, 2012 or April 1, 2013 100 1/2
October 1, 2013 100
Section 3.02. Mandatory Nonscheduled Redemptions. The Bonds shall be redeemed, in whole
or in part, prior to maturity on any Interest Payment Date at the redemption prices stated in Section
3.01 or purchased, in whole or in part, at the purchase prices stated in Section 3.07 from amounts
transferred to the Redemption Fund from the Assessment Fund, Assessment Prepayment Fund,
Administrative Expense Fund, and Improvement Fund pursuant to Sections 6.01, 6.04, 6.05, and
6.07, respectively.
Notwithstanding the foregoing, the City will not be required to make a mandatory
nonscheduled redemption unless it has at least twenty-five thousand dollars ($25,000) available in the
Redemption Fund with which to redeem Bonds.
In lieu of redeeming Bonds with the funds described in this Section, the City may purchase
Bonds in the open market of the maturity to be redeemed at the price not in excess of that provided
in Section 3.07.
Section 3.03. Reserved for Future Use.
Section 3.04. Notice of Redemption. Notice of redemption shall be given at least thirty (30)
days and no more than sixty (60) days prior to the redemption date by giving written notice to the
Paying Agent/Registrar and by sending such notice to the Registered Owner of each Bond to be
redeemed in whole or in part at the address shown on the Register by first-class mail, postage prepaid.
Such notice shall also be sent by certified mail, return receipt requested to Registered Owners of one
million dollars ($1,000,000) or more of Bonds. Such notice shall state the complete official name of
the Bonds to be redeemed, CUSIP numbers, the Issue Date and the Maturity Date of such Bonds,
any other information appropriate to identify sufficiently the Bonds being redeemed, the redemption
date, the principal amount of the Bonds to be redeemed and, if less than all of the then Outstanding
Bonds are to be redeemed, the identification numbers (and, in the case of partial redemption, the
respective principal amounts) of the Bonds to be redeemed, the amount of accrued interest payable
on the redemption date, the redemption agent's name and address, and the place at which the Bonds
are to be surrendered for payment. Any notice mailed as provided in this Section 3.04 shall be
1OQeowc: owaD&I II273
14
conclusively presumed to have been duly given, whether or not the Registered Owner receives such
notice. By the redemption date, due provision shall be made with the Paying Agent/Registrar for the
payment of the redemption price of the Bonds to be redeemed, plus accrued interest thereon to the
redemption date. When such Bonds have been called for redemption, in whole or in part, as provided
above and due provision has been made to redeem same, such Bonds, or portions thereof, shall no
longer be regarded as Outstanding except for the purpose of receiving payment from the funds
provided for redemption, and the right of the Registered Owners to collect interest on such Bonds
or portions thereof which would otherwise accrue after the redemption date shall be terminated.
Section 3.05. Additional Provisions with Respect to Redemption. Bonds may be redeemed
in part only in integral multiples of five thousand dollars ($5,000) and if a Bond subject to redemption
is in a denomination larger than five thousand dollars ($5,000), a portion of such Bond may be
redeemed, but only in an integral multiple of five thousand dollars ($5,000).
If less than all of the Bonds are to be redeemed pursuant to a Section 3.01 optional
redemption, the City may select the maturity to be redeemed. Bonds to be mandatorily redeemed with
funds described in Section 3.02 shall be redeemed by the Trustee in integrals of five thousand dollars
($5,000), on a pro rata basis from all maturities in such manner as the Trustee in its sole discretion
determines.
If less than all of the Bonds within a maturity are to be redeemed pursuant to an optional or
mandatory call, they shall be selected by lot within such maturity, in such manner as the Paying
Agent/Registrar may determine and treating each five thousand dollar ($5,000) amount of Bonds as
a single Bond for such purposes.
Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar, in
accordance with the provisions of the Ordinance, shall authenticate and deliver in exchange therefor
a Bond or Bonds of like tenor, maturity and interest rate in an aggregate principal amount equal to
the unredeemed portion of the Bond so surrendered.
Section 3.06. Reserved for Future Use.
Section 3.07. Purchase Price for Bonds. Upon receipt of written notice by the City specifying
Bonds to be purchased, the Trustee shall apply monies available for redemption to the purchase of
Bonds which were otherwise to be redeemed in such order or priority and subject to such restrictions
as may be prescribed in this Ordinance in the manner provided in this Section. The purchase price
paid by the Trustee (excluding accrued interest but including any brokerage and other charges) for
any Bond purchased shall not exceed the principal amount of such Bond unless such Bond may be
redeemed in accordance with this Ordinance on any date or dates within thirteen (13) months after
such purchase in which event such purchase price shall not exceed the highest of the redemption price
of such Bond applicable on any such date.
Section 3.08. Trustee to Redeem Bonds. Subject to the limitations set forth or referred to in
Sections 3.02 and 3.07, the Trustee shall call for redemption on each mandatory redemption date,
Ruoacmiauc: OwwDAI 1127197
15
whether scheduled or nonscheduled, when said Bonds are to be redeemed in accordance with this
Ordinance, such principal amount of said Bonds as are to be redeemed on said date with the amount
of such monies then available therefor.
ARTICLE IV
FORM OF BONDS AND CERTIFICATES
Section 4.01. Forms. The form of the Bonds, including the form of the Registrar's
authentication certificate, the form of assignment, and the form of the Comptroller's Registration
Certificate for the Bonds to be initially issued, shall be substantially as follows, with such additions,
deletions, and variations as may be necessary or desirable and not prohibited by this Ordinance:
Form of Bond
(Face of Bond)
United States of America
State of Texas
NUMBER DENOMINATION
R-
REGISTERED REGISTERED
ENCINO PLAZA PUBLIC IMPROVEMENT DISTRICT
Special Assessment Bonds
Taxable Series 1997
INTEREST RATE: MATURITY DATE: ISSUE DATE: CUS1P:
March 1, 1997
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
THE ENCINO PUBLIC IMPROVEMENT DISTRICT, acting by and through the City of
Round Rock, Texas (the "City") for value received, promises to pay, but solely from Special
Assessment Revenues as hereafter defined, to the registered owner identified above or registered
assigns, on the date specified above, upon presentation and surrender of this bond at the office for
payment of Texas Commerce Bank National Association, Dallas, Texas (the "Paying
Agent/Registrar"), the principal amount identified above, in any coin or currency of the United States
of America which on the date of payment of such principal is legal tender for the payment of debts
111O ALIC:ORCRiDRI1mm
16
due the United States of America, and to pay interest thereon at the rate shown above, calculated on
the basis of a 360 -day year of twelve 30 -day months, from the later of March 1, 1997, or the most
recent interest payment date to which interest has been paid or duly provided for. Interest on this
bond is payable by check payable on April 1, 1998 and each October 1 and April 1 thereafter until
maturity, mailed to the registered owner of record as shown on the books of registration kept by the
Registrar as of the 15th calendar day of the month next preceding each interest payment date.
THIS BOND IS NOT A GENERAL OBLIGATION OF THE CITY, DOES NOT GIVE
RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF THE
CITY, AND IS NOT PAYABLE EXCEPT AS PROVIDED HEREUNDER AND IN
ACCORDANCE WITH CHAPTER 372, V.T.C.A., LOCAL GOVERNMENT CODE, AS
AMENDED, (THE "ACT"). THE OWNER OF THIS BOND SHALL NEVER HAVE THE RIGHT
TO DEMAND PAYMENT OF THIS OBLIGATION OUT OF ANY FUNDS OF THE CITY
OTHER THAN THE SPECIAL ASSESSMENT REVENUES (THE "SPECIAL ASSESSMENT
REVENUES") WITHIN THE DISTRICT, AND THE CITY SHALL HAVE NO LEGAL OR
MORAL OBLIGATION TO PAY THIS OBLIGATION FROM ANY FUNDS OTHER THAN
SPECIAL ASSESSMENT REVENUES. NEITHER THE STATE OF TEXAS NOR ANY
POLITICAL SUBDIVISION THEREOF IS OBLIGATED TO MAKE PAYMENT ON THIS
BOND.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE THE SAME
FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE.
IN WITNESS HEREOF, this bond has been signed with the manual or facsimile signature of
the Mayor of the City and countersigned with the manual or facsimile signature of the City Secretary
of the City, and the official seal of the City has been duly impressed, or placed in facsimile, on this
bond.
(AUTHENTICATION
(SEAL) ENCINO PLAZA PUBLIC IMPROVEMENT
CERTIFICATE) DISTRICT
Mayor
COUNTERSIGNED:
City Secretary
(Back Panel of Bond)
THIS BOND IS ONE OF A DULY AUTHORIZED ISSUE OF BONDS aggregating
$2,690,000, issued pursuant to an ordinance adopted by the City Council of the City (the
1.120C1.11UBLIC. ORDIN.DRI I/27N7
17
"Ordinance") for Encino Plaza Public Improvement District Special Assessment Bonds, Taxable
Series 1997, to pay the costs of authorized improvements within the District, to fund a reserve fund,
and to pay costs of issuance of the bonds as authorized by and pursuant to the Act.
THIS BOND AND THE SERIES OF WHICH IT IS A PART are special obligations and are
payable as to both principal and interest solely from and equally secured by a lien on and pledge of
the Special Assessment Revenues (as defined and more fully described in the Ordinance authorizing
this bond and the series of which it is a part), levied against benefited property within the Encino
Plaza Public Improvement District, pursuant to the provisions of Chapter 372, Texas Local
Government Code. Reference is hereby made to the Ordinance for a more complete statement of the
covenants and provisions securing the payment of this bond and the series of which it is a part.
THIS BOND is transferable only upon (i) presentation and surrender at the office for payment
of the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the
registered owner or his authorized representative and (ii) upon presentation of the Investment Letter,
subject to the terms and conditions of the Ordinance.
THE BONDS are subject to redemption prior to maturity at the option of the City on any
interest payment date at a redemption price equal to the percentage of their principal amount set forth
below plus accrued interest to the date fixed for redemption:
Redemption Date Redemption Price
October 1, 2007 or April 1, 2008 103%
October 1, 2008 or April 1, 2009 102 1/2
October 1, 2009 or April 1, 2010 102
October 1, 2010 or April 1, 2011 101 1/2
October 1, 2011 or April 1, 2012 101
October 2, 2012 or April 1, 2013 100 1/2
October 1, 2013 100
THE BONDS are to be redeemed on any Interest Payment Date from prepayments of Special
Assessments, excess Special Assessment Revenues and proceeds of bonds as provided in the
Ordinance at the redemption prices set forth above plus accrued interest to the date of redemption.
BONDS MAY BE REDEEMED IN PART only in integral multiples of $5,000. If a bond
subject to redemption is in a denomination larger than $5,000, a portion of such bond may be
redeemed, but only in integral multiples of $5,000. In selecting portions of bonds for redemption,
each bond shall be treated as representing that number of bonds of $5,000 denomination which is
obtained by dividing the principal amount of such bond by $5,000. Upon surrender of any bond for
UO ?U UC: O*DDWI iRn,.,
18
redemption in part, the Paying Agent/Registrar, in accordance with the provisions of the Ordinance,
shall authenticate and deliver in exchange therefor a bond or bonds of like maturity and interest rate
in an aggregate principal amount equal to the unredeemed portion of the bond so surrendered.
NOTICE OF EACH EXERCISE OF A RESERVED RIGHT OF REDEMPTION shall be
given at least 30 days and no more than sixty (60) days prior to the redemption date by written notice
to the Paying Agent/Registrar and by sending such notice to the registered owner of each bond to be
redeemed in whole or in part at the address shown on the Register by first-class mail, postage prepaid.
Such notice shall also be sent by certified mail, return receipt requested to registered owners of
$1,000,000 or more of bonds. Such notice shall state the complete official name of the bonds to be
redeemed, CUSIP numbers, the issue date and the maturity date of such bonds, any other information
appropriate to identify sufficiently the bonds being redeemed, the redemption date, the principal
amount of the bonds to be redeemed and, if less than all of the then outstanding bonds are to be
redeemed, the identification numbers (and, in the case of partial redemption, the respective principal
amounts) of the bonds to be redeemed, the amount of accrued interest payable on the redemption
date, the redemption agent's name and address, and the place at which the bonds are to be
surrendered for payment. Any notice mailed as provided in Section 3.04 of the ordinance authorizing
the bonds shall be conclusively presumed to have been duly given, whether or not the registered
owner receives such notice. By the redemption date, due provision shall be made with the Paying
Agent/Registrar for the payment of the redemption price of the bonds to be redeemed, plus accrued
interest thereon to the redemption date. When such bonds have been called for redemption, in whole
or in part, as provided above and due provision has been made to redeem same, such bonds, or
portions thereof, shall no longer be regarded as outstanding except for the purpose of receiving
payment from the funds provided for redemption, and the right of the registered owners to collect
interest on such bonds or portions thereof which would otherwise accrue after the redemption date
shall be terminated.
THE BONDS are exchangeable at the office for payment of the Registrar for bonds in the
principal amount of $100,000 or a greater amount divisible by $5,000; provided, however, that in the
event of a redemption of a portion of the bonds then outstanding, the Trustee may authenticate and
deliver an exchange bond in a denomination of $5,000 or any integral multiple thereof if the amount
of any holder's bond remaining after such redemption is less than $100,000, subject to the terms and
conditions of the Ordinance.
THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit
under the Ordinance unless this bond either (i) is registered by the Comptroller of Public Accounts
of the State of Texas by registration certificate attached or affixed hereto or (ii) is authenticated by
the Registrar by due execution of the authentication certificate endorsed hereon.
THE CITY HAS APPOINTED the Paying Agent/Registrar to act as Trustee for the
bondholders as provided in the Ordinance. Pursuant to the Ordinance, the Trustee is to bill and collect
Special Assessment Revenues for and on behalf of the City. Reference is made to the Ordinance for
a complete description of the powers and duties of the Trustee.
IRO/PUBLIC: ORcw.DRI1mroi
19
THE REGISTERED OWNER of this bond, by acceptance hereof, acknowledges and agrees
to be bound by all the terms and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all times provide a legally qualified
registrar for the bonds and will cause notice of any change of registrar to be mailed to each registered
owner.
IT IS HEREBY CERTIFIED, RECITED, AND REPRESENTED that this bond has been
duly and validly issued and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the issuance and delivery of this bond have been
performed, exist, and been done in accordance with law; that the bonds do not exceed any statutory
limitation; and that provision has been made for the principal installment payment of and interest on
this bond and all of the bonds by the creation of the aforesaid lien on and pledge of the Special
Assessment Revenues.
U.00IPUIL pIDMDRI I/17M
20
FORM OF REGISTRATION CERTIFICATE
OF COMPTROLLER OF PUBLIC ACCOUNTS
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this bond has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this bond has been registered by the Comptroller of
Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL OF OFFICE THIS
[SEAL]
µin: a.D,.DRI IR,m
21
Comptroller of Public Accounts
of the State of Texas
FORM OF AUTHENTICATION CERTIFICATE
AUTHENTICATION CERTIFICATE
It is hereby certified that this bond has been delivered pursuant to the bond Ordinance described in
the text of this bond, in exchange for or in replacement of a bond, bonds, or a portion of a bond or
bonds of a series which was originally approved by the Attorney General of Texas and registered by
the Comptroller of Public Accounts of the State of Texas.
pJ.O I AIuc:OIDQ4.I.IInvm
22
Texas Commerce Bank National Association
Paying Agent/Registrar
By
Authorized Signature
Date of Authentication
FORM OF ASSIGNMENT
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer
Identification Number of Transferee
(Please print or typewrite name and address, including zip code, of Transferee)
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney, to register the transfer of the within
Certificate on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
NOTICE: The signature above must
correspond with the name of the Registered
Owner as it appears upon the front of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.
Section 4.02. Legal Opinion; CUSIP; Bond Insurance. The approving opinion of McCall,
Parkhurst & Horton L.L.P. and CUSIP Numbers may be printed on the Bonds, but errors or
omissions in the printing of such opinion or such numbers shall have no effect on the validity of the
Bonds. If bond insurance is obtained, the Bonds may bear an appropriate legend as provided by the
insurer.
R11001/191111.1C. 01112194.D111 1/27/97
23
ARTICLE V
SECURITY FOR THE BONDS
Section 5.01. Pledge of Special Assessment Revenues. The City hereby covenants and agrees
that the Special Assessment Revenues are hereby irrevocably pledged, to the payment and security
of the Bonds and the payment of Administrative Expenses, including the establishment and
maintenance of the special funds created and established for the payment and security thereof, all as
hereinafter provided; and it is hereby ordained that the pledge of the Special Assessment Revenues
to the payment of the Bonds and the interest thereon be valid and binding without any physical
delivery thereof or further act by the City, and the lien upon such revenues created for the payment
and security of the Bonds shall be, except as otherwise provided in the Act or by law, prior in right
and claim as to any other indebtedness, liability, or obligation of the City.
Section 5.02. Special Obligations. The Bonds are special obligations payable from the Special
Assessment Revenues, as and to the extent provided in this Ordinance. 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 the Act and in this Ordinance. The Owners of the Bonds shall never have the right to
demand payment thereof out of any funds of the City other than the Special Assessment Revenues.
The City shall have no legal or moral obligation to pay for the Bonds out of any City funds other than
Special Assessment Revenues.
Section 5.03. Assessment Roll. The Special Assessments are shown on the Assessment Roll.
The aggregate amount of Special Assessments assessed to pay the Debt Service Requirements on the
Bonds is $2,690,000 plus accrued interest. Reference is made to the Assessment Roll for a particular
description of the lots or parcels of land and the amount of Special Assessment on each.
Section 5.04. Collection and Deposit of Special Assessments. The Special Assessments shown
on the Assessment Roll, together with the interest thereon, shall remain and constitute a trust fund
for the redemption and Principal Installment payment of the Bonds and for the interest due thereon
and to pay Administrative Expenses.
The Special Assessments assessed to pay Debt Service Requirements on the Bonds, together
with interest thereon, are payable in annual installments established by the Assessment Ordinance to
correspond, as nearly as practicable, to the Debt Service Requirements. A Special Assessment has
been made payable in the Assessment Ordinance in each Fiscal Year preceding the date of final
maturity of the Bonds which, if collected, will be sufficient to pay the Debt Service Requirements on
the Bonds and to pay Administrative Expenses. The annual installment of each Special Assessment
coming due in any year, together with the annual interest thereon, is payable in the manner as set forth
in the Assessment Ordinance.
A record of the Special Assessments on each tract or lot in the District which are to be
collected in each year during the term of the Bonds has been prepared by the City and is shown on
the Assessment Roll. Sums received from the collection of the Special Assessments to pay the Debt
RROCi/PU W C: ORDIN. DR 1 1/77f7
24
Service Requirements on the Bonds (including delinquent installments, Foreclosure Proceeds,
proceeds from a guarantor of Special Assessments to pay the Debt Service Requirements on the
Bonds, and penalties) and of the interest thereon shall be deposited into the Assessment Fund, except
that amounts received as Prepayments shall be deposited into the Assessment Prepayment Fund.
Any sums collected as an annual Administrative Expense Assessment to pay Administrative
Expenses shall be deposited in the Administrative Expense Fund.
Section 5.05. Prepayments in Full. The provisions of Section 372.018 of the Act are
applicable to the payment of the unpaid Special Assessments and the corresponding mandatory
redemption of the Bonds. Pursuant thereto, whenever an owner elects to pay off an unpaid Special
Assessment levied to pay the Debt Service Requirements on the Bonds in full and remove the lien of
such Special Assessment, the Trustee (in addition to any delinquent installments of such Special
Assessment, including the interest and penalties thereon) shall collect from such owner the total of
the following sums:
(a) The unpaid, nondelinquent principal of such Special Assessment, including principal for
the current Fiscal Year but not yet paid.
(b) Unpaid interest to accrue on such Special Assessment through the date of Prepayment and
a reasonable fee, fixed by the Trustee, for the cost of administering the Prepayments and the
corresponding mandatory redemption of the Bonds.
Section 5.06. Partial Prepayments. Whenever an owner of assessed land elects to prepay the
Special Assessment levied to pay the Debt Service Requirements on the Bonds in part and remove
the lien of such Special Assessment in part, the Trustee (in addition to any delinquent installments of
such Special Assessment, including the interest and penalties thereon) shall collect from each owner
the total of the following sums:
(a) A portion of the unpaid, nondelinquent principal of such Special Assessment to be prepaid
in increments of five thousand dollars ($5,000).
(b) Unpaid interest to accrue on such Special Assessment through the date of Prepayment and
a reasonable fee, fixed by the Trustee, for the cost of administering the Prepayment and the
corresponding mandatory redemption of the Bonds.
When a Special Assessment to pay the Debt Service Requirements on the Bonds has been
partially prepaid, the Trustee shall issue a revised record for that parcel, a copy of which shall be filed
with the City Secretary, showing the proportionate reduction in such Special Assessment installments
or the portion of the parcel which has had the lien for such Special Assessment removed. Thereafter,
the Trustee shall mail subsequent installments at the reduced rate.
RAO /PUBLIC: OADDI.DAI 1/27177
ARTICLE VI
25
FUNDS AND ACCOUNTS. INITIAL DEPOSITS
AND APPLICATION OF MONEY
Section 6.01. Assessment Fund. The City hereby covenants and agrees that all Special
Assessment Revenues (other than interest and investment earnings, those received as a Prepayment
of a Special Assessment, and revenues resulting from the collection of the Administrative Expense
Assessments) shall be deposited, as collected and received, into a separate account (created,
established, and to be maintained with the Trustee known as the "Encino Plaza Public Improvement
District Special Assessment Bonds, Taxable Series 1997 Assessment Fund" and that the Special
Assessment Revenues shall be kept separate and apart from all other funds of the City. All Special
Assessment Revenues deposited into the Assessment Fund shall be promptly transferred to the
following Funds in the following order of priority:
FIRST: To the Debt Service Fund, an amount necessary, if any, to increase the balance in the
Debt Service Fund to an amount equal to the aggregate amount of all remaining scheduled Debt
Service Requirements during the next year, as provided herein.
SECOND: To the Reserve Fund, an amount required to establish, accumulate, and maintain
the Required Reserve Amount in accordance with the provisions of this Ordinance.
THIRD: To the Administrative Expense Fund, an amount required to cause the balance in
such Fund to equal the Administrative Expense Fund Requirement.
FOURTH: To the Redemption Fund, any remaining amounts.
Section 6.02. Debt Service Fund. For purposes of providing funds to pay the Debt Service
Requirements on the Bonds as the same become due and payable, the City agrees to maintain, at the
Trustee, a separate and special account or fund to be created and known as the "Encino Plaza Public
Improvement Special Assessment Bonds, Taxable Series 1997 Debt Service Fund." Accrued interest
on the Bonds shall be deposited into the Debt Service Fund upon issuance of the Bonds. There shall
also be deposited into the Debt Service Fund prior to each Maturity Date and Interest Payment Date
on the Bonds, from the available Special Assessment Revenues, an amount equal to one hundred
percent (100%) of the amount required to fully pay the interest on and the Principal Installment of
the Bonds then falling due and payable whether at maturity or as a mandatory scheduled redemption.
Section 6.03. Reserve Fund. For purposes of establishing, accumulating, and maintaining
funds as a reserve for the payment of the Bonds, the City agrees and covenants to maintain a separate
and special fund or account with the Trustee known as the "Encino Plaza Public Improvement District
Special Assessment Bonds, Taxable Series 1997 Reserve Fund." The Trustee shall deposit into the
Reserve Fund (a) from the proceeds of the Bonds, an amount equal to the Required Reserve Amount,
and (b) all amounts required to be transferred to such Fund from the Assessment Fund pursuant to
and at the times specified in Section 6.01. The Trustee shall transfer from the Reserve Fund to the
Debt Service Fund such amounts at such times as required to pay the Debt Service Requirements on
the Bonds as they become due (whether at maturity or on scheduled mandatory redemption dates),
RROOC/7'ORLC: ORDDI.DR1 1n1l
26
when and to the extent other funds available for such purposes in the Debt Service Fund are
insufficient. The Reserve Fund may also be used for the payment of the applicable redemption
premium, if any, on Bonds called for early redemption with Prepayments pursuant to Section 3.02.
In addition, amounts in the Reserve Fund may be used to retire the last maturity or interest on the
Bonds that remain Outstanding.
The amount of the Required Reserve Amount shall be recalculated by the Trustee at the end
of each Fiscal Year in which there were Special Assessment Prepayments resulting in the early
payment of Bonds. Any excess amount in the Reserve Fund may be transferred to the Assessment
Fund at the end of each fiscal year as directed in writing by the City.
When and so long as the cash and investments in the Reserve Fund total not less than the
Required Reserve Amount, no deposits need be made to the credit of the Reserve Fund; but, if and
when the Reserve Fund at any time contains less than the Required Reserve Amount because monies
are withdrawn as permitted by this Section, the City agrees to cure the deficiency in the Required
Reserve Amount from Special Assessments at the earliest possible time but only from Special
Assessment Revenues.
Section 6.04. Assessment Prepayment Fund. There is hereby established with the Trustee a
special fund to be known as the "Encino Plaza Public Improvement District Special Assessment
Bonds, Taxable Series 1997 Assessment Prepayment Fund." Upon receiving a Prepayment of a
Special Assessment for the payment of the Debt Service Requirements on the Bonds, the Trustee
shall deposit the amount of such Prepayment (except for any portion thereof that represents a
payment of principal, interest or penalty on a delinquent installment of such prepaid Special
Assessment, which portion shall be treated and applied as Special Assessment Revenues) into the
Assessment Prepayment Fund. All Prepayments may be commingled in a single account. Promptly
following the deposit of any such Prepayment into the Assessment Prepayment Fund, the Trustee
shall transfer such amount representing unpaid principal of the Special Assessment as set forth in
Section 5.05 directly into the Redemption Fund to be used to redeem or purchase Bonds and such
amount representing unpaid interest as set forth in Section 5.05 to the Debt Service Fund.
Section 6.05. Administrative Expense Fund. There is hereby created with the Trustee a special
fund, herein called the "Encino Plaza Public Improvement District Taxable Special Assessment
Bonds, Series 1997 Administrative Expense Fund," to be designated and maintained by the City as
a separate account, distinct from all other accounts of the City with the Trustee. The Trustee shall
deposit into the Administrative Expense Fund from the proceeds of the Bonds an amount equal to
the Administrative Expense Fund Requirement. Thereafter, the Trustee shall deposit into the
Administrative Expense Fund, all amounts required to be transferred to such Fund from the
Assessment Fund pursuant to, and at the times specified in, Section 6.01 hereof, and all revenues
resulting from the collection of the Administrative Expense Assessments. Such amounts shall be
applied by the Trustee to pay Administrative Expenses as they become due. The Trustee shall transfer
any amounts in the Administrative Expense Fund in excess of the Administrative Expense Fund
Requirement to the Redemption Fund.
uioavPUBUC. o1Dw.DRI vnm
27
Fees or charges incurred by the City payable to the Paying Agent/Registrar/Trustee in
satisfaction of the liability to the Paying Agent/Registrar/Trustee for the services described herein,
as well as other Administrative Costs hereunder, including those for the collection services described
herein, shall be paid from the Administrative Expense Fund.
Section 6.06. Lien Forgiveness upon Payment of Bonds. When there are monies in the
Administrative Expense Fund, Assessment Fund, Assessment Prepayment Fund, Improvement Fund,
Redemption Fund, and Reserve Fund sufficient to make all interest payments to maturity or earlier
required redemption date, to pay all Principal Installment payments, and to pay the Administrative
Expenses due and to become due to the final Maturity Date or scheduled mandatory redemption date
of all the Bonds, no further payments need to be made into the Administrative Expense Fund,
Assessment Fund, Assessment Prepayment Fund, Improvement Fund, Redemption Fund, and Reserve
Fund, and such funds shall be used to redeem the Bonds.
After all Bonds are paid or provision is made for their payment, the City forgives the owner
of assessed property of the payment of any further Special Assessment and the lien for the Special
Assessment shall be removed from all property in the District.
Any amount remaining in any of the Funds created hereunder upon the retirement of the
Bonds shall be paid to the City.
Section 6.07. Improvement Fund. There is hereby created a special fund with the Trustee to
be called the "Encino Plaza Public Improvement District Special Assessment Bonds, Taxable Series
1997 Improvement Fund." The Improvement Fund shall be maintained by the City as a separate
account distinct from all other accounts of the City with the Trustee. The Improvement Fund shall
consist of the proceeds received from the sale of the Bonds, including any premium received by the
City on the sale of the Bonds (but not including: any accrued interest which shall be deposited directly
into the Debt Service Fund pursuant to Section 6.02; any amounts placed in the Reserve Fund
pursuant to Section 6.03, and any amounts placed in the Administrative Expense Fund pursuant to
Section 6.05). Disbursement from the Improvement Fund shall be made to pay the costs of acquisition
and construction of the Authorized Improvements, together with all expenses incidental thereto, and
the City's costs of creation of the District and initial administration of the District and costs of
issuance of the Bonds. Prior to making each disbursement from the Improvement Fund, the Trustee
shall receive from the City a Request for Disbursement in the form attached hereto as Exhibit "B."
After completion of the acquisition and construction of the Authorized Improvements and the
payment of all claims from the Improvement Fund, the Trustee shall determine the amount of the
surplus, if any, remaining in the Improvement Fund and shall transfer any such surplus to the
Redemption Fund to redeem Outstanding Bonds prior to their scheduled maturity as provided in
Section 3.02 of this Ordinance.
Section 6.08. Redemption Fund. There is hereby created a special fund with the Trustee to
be called the "Encino Plaza Public Improvement District Special Assessment Bonds, Taxable Series
1997 Redemption Fund." The Trustee shall deposit into the Redemption Fund all amounts required
iuoocmnuc: owa.mu imm
28
to be transferred to such Fund from the Assessment Fund, Assessment Prepayment Fund,
Administrative Expense Fund and the Improvement Fund pursuant to, and at the times specified in,
Sections 6.01, 6.04, 6.05 and 6.07, respectively, hereof. The Trustee shall apply all such amounts in
the Redemption Fund, subject to the $25,000 limitation specified in Section 3.02 hereof, to redeem
or purchase Bonds in accordance with Section 3.02 hereof. Accrued interest on any Bonds redeemed
shall be paid from the Debt Service Fund. The redemption premium shall be paid from amounts
transferred to the Redemption Fund except in the event of a transfer in accordance to Section 6.04
in which event the redemption premium shall be paid from the Reserve Fund pursuant to Section
6.03.
Section 6.09. Deposit and Investment of Funds. Monies in the Assessment Fund, the Debt
Service Fund, the Administrative Expense Fund, the Assessment Prepayment Fund, the Redemption
Fund and the Improvement Fund shall be deposited or invested in any Authorized Investments
maturing on a date or dates on or prior to the need for such monies. Monies in the Reserve Fund shall
be deposited or invested in such Authorized Investments maturing on the earlier of a date or dates
not later than (a) the date of maturity of the last Bond then Outstanding or (b) five (5) years after the
date of the investment. Except as provided in this Section, any income or interest earned on any fund
or account held by the Trustee under this Ordinance shall accrue to and be deposited in the fund or
account from which said monies were deposited or invested, except to the extent otherwise provided
herein. The Trustee shall be entitled to receive instructions from the City as to each deposit or
investment prior thereto, and to have such instructions confirmed in writing within two Business
Days. In the absence of prior instructions, the Trustee shall invest monies as they become available
for deposit or investment in a qualified money market account.
Section 6.10. Payment of Bonds. While any of the Bonds are Outstanding, the City shall cause
to be paid solely from funds on deposit in the Funds created hereunder amounts sufficient to fully pay
and discharge promptly the Debt Service Requirements on the Bonds as such payments accrue or
mature, whether by reason of Stated Maturity, redemption, or otherwise; such transfer of funds must
be made in such manner as will cause immediately available funds to be available for payment of the
Bonds at the close of the Business Day next preceding the date the Debt Service Requirement
payment is due on the Bonds.
Section 6.11. Advances from Available Funds. In the event of a delinquency in the payment
of any installment of the Special Assessment levied upon any property for the payment of the
Principal Installment of and interest on the Bonds, the City may, but is not obligated to, be the
purchaser of the delinquent property upon which any of said Special Assessments are levied in like
manner in which it may become the purchaser of property sold for the nonpayment of general ad
valorem property taxes, and in the event the City does so become the purchaser of such property,
shall pay and transfer from available funds and deposit into the Debt Service Fund the amount of any
remaining amount of unpaid Special Assessment, delinquent Special Assessment installment and
interest thereon. The City may also pay and transfer from available funds and deposit into the Debt
Service Fund, but shall not be so obligated, the amount of any such property pending redemption or
sale. Any amounts so advanced shall be recoverable upon sale or redemption of the property. The
City shall not be obligated to advance available funds to cure any deficiency in the Debt Service Fund,
ItROCUPUBLIC. OP.DD D l Ia7rn
29
or any other fund created hereunder, and has determined that it would not obligate itself to advance
available funds from the City treasury to cure any such deficiency.
ARTICLE VII
PROVISIONS CONCERNING
FEDERAL INCOME TAX
Section 7.01. General Tax Covenant. The City does not intend that the interest on the Bonds
be excludable from gross income for purposes of federal income taxation pursuant to sections 103
and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable
regulations.
ARTICLE VIII
MISCELLANEOUS COVENANTS AND COLLECTION PROCEDURES
So long as any of the Bonds issued hereunder are Outstanding and unpaid, the City makes the
following covenants with the Owners of the Bonds under the provisions of the Act and this Ordinance
(to be performed by the City or its proper officers, agents or employees), which covenants are
necessary, convenient and desirable to secure the Bonds and to make them more marketable;
provided, however, that said covenants do not require the City to expend any funds or monies other
than the Special Assessment Revenues collected.
Section 8.01. Trustee to Pursue Collections. During the term of the Bonds, the City hereby
appoints the Trustee to act as a billing and collection agent for the City. The City may determine to
act as its own billing and collecting agent at a later date as designated in writing to the Trustee by an
authorized City representative. The Trustee will:
(a) prepare and mail in the name of the City, at the time and in the manner required by the
provisions of this Ordinance, the Assessment Ordinance, and the Act, statements for the collection
of all Special Assessments levied by the Assessment Ordinance, this Ordinance and any ordinances
supplemental hereto levying supplemental assessments or reassessments (collectively, the
"Ordinances");
(b) prepare and mail statements of delinquent Special Assessments at the time and manner
required by the Ordinances, the Act or as may be deemed advisable by the Trustee;
(c) receive and collect Special Assessments and the penalties and interest thereon or any
proceeds from a judicial sale of assessed property and deposit the same as required by the Ordinances
and the Act;
(d) engage such attorneys and other consultants as the City deems appropriate to act on its
MOCK/PUBLIC: OM W. DR 1 1/2797
30
behalf upon such terms and conditions and at the rate the City deems appropriate and to pay for same
from monies in the Administrative Expense Fund;
(e) bring legal actions in the name of the City and District to collect delinquent Special
Assessments and to proceed to sell any assessed property in a judicial foreclosure proceeding;
(f) with the consent of the City, buy any assessed property at a judicial foreclosure proceeding
in the name of the City and thereafter to sell such property purchased on behalf of the City upon such
terms and conditions as the Trustee deems desirable; and
(g) do any and all further acts as the Trustee deems desirable to protect the interest of the
Owners of the Bonds and/or collect the Special Assessments.
In the event the Trustee is unsuccessful in collecting all of a delinquent installment of a Special
Assessment by selling the assessed property in a judicial foreclosure sale, the Trustee is authorized
to pursue any remedy available to the City to collect the delinquent installment (or balance of a
delinquent installment) against the Person who owned the property sold at such judicial foreclosure
sale at the time the Special Assessment was levied by the City pursuant to the Assessment Ordinance.
Section 8.02. Foreclosure Covenant. The City hereby covenants with and for the benefit of
the Owners that it will determine or cause to be determined, no later than December 1 of each year,
whether or not any installment or installments of Special Assessments are delinquent and, if such
delinquencies exist, the City will order and cause to be commenced, or cause the Trustee to do so on
behalf of the City, on or before January 1 or immediately thereafter, and thereafter diligently
prosecute an action in district court to foreclose the lien for the amount of any delinquent installment
or installments of Special Assessments, provided, however, that the City shall not be required to order
the commencement of foreclosure proceedings if (i) the total of such delinquencies for such Fiscal
Year is less than five percent (5%) of the total of the Special Assessment installments posted to the
Assessment Roll for such Fiscal Year, and (ii) the Reserve Fund is not less than five percent (5%) of
the principal amount of all Bonds originally issued, less any Bonds called for redemption.
Notwithstanding the foregoing, if the City determines that there is a delinquent Special Assessment
installment on any single property in excess of one hundred thousand dollars ($100,000), then it will
diligently institute, prosecute and pursue foreclosure proceedings against such property or cause the
Trustee to do so on its behalf.
To the extent it may legally do so, and taking into account the prior liens on assessed land for
ad valorem taxes, the City covenants that property will not be sold in a judicial foreclosure for less
than the amount of a delinquent Special Assessment installment due on the property, including
delinquent penalties, interest, and attorney fees, without the consent of fifty-one percent (51%) of the
owners of the Outstanding Bonds. Any sale of property for nonpayment of an installment or
installments of a Special Assessment shall be subject to the lien established for the remaining unpaid
installments of the Special Assessment against such property and such property may again be sold at
a judicial foreclosure sale if the purchaser thereof fails to make timely payment of the nondelinquent
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31
installments of Special Assessment against such property as they become due and payable pursuant
to the terms of the Assessment Ordinance and this Ordinance.
Section 8.03. City Covenant to Cooperate with Trustee. The City agrees to cooperate with
and assist the Trustee with the billing and collection of Special Assessments by taking such action as
the Trustee requests from time to time including:
(a) approving annual Special Assessment bills;
(b) approving collection procedures;
(c) approving engagement of attorneys and consultants; and
(d) authorizing and pursuing tax foreclosure proceedings on property liable for delinquent
Special Assessments.
Section 8.04. Good Faith Covenant. The City will proceed in good faith to complete the
acquisition and construction of the Authorized Improvements in a timely manner pursuant to the Act,
reserving the right to make changes and modifications as permitted by the Act.
Section 8.05. Further Assurances. The City will adopt, make, execute and deliver any and all
such further ordinances, resolutions, instruments and assurances as may be reasonably necessary or
proper to carry out the intention or to facilitate the performance of this Ordinance, to aid the Trustee
in its collection efforts, and for the better assuring and confirming to the Owners of the Bonds the
rights and benefits provided by this Ordinance.
Section 8.06 Punctual Payment. The City covenants that it will duly and punctually pay or
cause to be paid the Principal Installments of and interest on every Bond issued hereunder at maturity
or earlier scheduled mandatory redemption date, together with the premium thereon, if any be
payable, on the date, at the place and in the manner mentioned in the Bonds and in accordance with
this Ordinance to the extent Special Assessment Revenues are available therefor, and that the
payments into the various Funds created hereunder will be made, all in strict conformity with the
terms of the Bonds and this Ordinance, and that it will faithfully observe and perform all of the
conditions, covenants and requirements of this Ordinance and all ordinances supplemental hereto and
of the Bonds issued hereunder, and that time of such payment and performance is of the essence of
the City's contract with the Owners of the Bonds.
Section 8.07. Reassessments. If any Special Assessment heretofore or hereafter issued is void
or unenforceable, for any cause, or if the City made a mistake in a Special Assessment relating to the
cost of the Authorized Improvements, then a supplemental assessment or reassessment shall be made
in the manner as provided by Sections 372.019 and 372.020 of the Act.
Section 8.08. Contract With Owners of Bonds. The provisions of this Ordinance and of any
other ordinance supplementing or amending this Ordinance, shall constitute a contract between the
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32
City and the Owners of the Bonds and such provisions shall be enforceable by any Owner of Bonds
for the equal benefit and protection of all Owners of Bonds similarly situated by mandamus,
accounting, mandatory injunction or any other suit, action or proceeding at law or in equity that is
now or may hereafter be authorized under the laws of the State of Texas in any court of competent
jurisdiction. Said contract is made under and is to be construed in accordance with the laws of the
State of Texas.
No remedy conferred hereby upon any Owner of Bonds is intended to be exclusive of any
other remedy, but each such remedy is cumulative and in addition to every other remedy and may be
exercised without exhausting and without regard to any other remedy conferred by law. No waiver
of any default or breach of duty or contract by any Owner of Bonds shall affect any subsequent
default or breach of duty or contract or shall impair any right or remedies on said subsequent default
or breach. No delay or omission of any Owners of Bonds to exercise any right or power accruing
upon any default shall impair any such right or power or shall be construed as a waiver of any default
or acquiescence therein. Every substantive right and every remedy conferred upon the Owners of
Bonds may be enforced and exercised as often as may be deemed expedient. In case any suit, action
or proceeding to enforce any right or exercise any remedy shall be brought or taken and should said
suit, action or proceeding be abandoned, or be determined adversely to the Owners of Bonds, then,
and in every such case, the City and the Owners of Bonds shall be restored to their former positions,
rights and remedies as if such suit, action or proceeding had not been brought or taken.
Section 8.09. No Obligation to Cure Deficiency. The City has not, and the Council determines
and declares that it will not, obligate itself to advance available funds from the treasury of the City
to cure any deficiency which may occur in any fund created under this Ordinance or to pay any other
cost associated with the Bonds not covered by amounts on deposit in such funds.
Section 8.10. No Additional Bonds. The City covenants that it will not issue additional bonds
or other indebtedness payable from special assessments on land in the District without the consent
of 100% of the holders of the Outstanding Bonds.
ARTICLE IX
REMEDIES
Section 9.01. Events of Default. Each of the following events is hereby declared an "event of
default":
(a) if default in the payment of the Principal Installment of any of the Bonds shall be made
when the same shall become due and payable, either at maturity or by proceedings for redemption;
or
(b) if default in the payment of any installment of interest shall be made; or
(c) if the City shall for any reason be rendered incapable of fulfilling its obligations hereunder;
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33
or
(d) if the City shall default in the due and punctual performance of any of the covenants,
conditions, agreements and provisions contained in the Bonds or in this Ordinance, other than as
specified in Section 9.01(a) and (b), on the part of the City to be performed, and such default shall
continue for 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 shall give such notice at the written request of the Holders of not less than ten per cent (10%)
in principal amount of the Bonds then Outstanding.
Section 9.02. Actions by Trustee. Upon the happening and continuance of any event of default
specified in Section 9.01 of this Ordinance, then and in every such case the Trustee may proceed, and
upon the written request of the Holders of not less than fifty-one per cent (51%) in principal amount
of the Bonds then Outstanding hereunder shall proceed, subject to the provisions of Section 9.01 of
this Ordinance, to protect and enforce its rights and the rights of the Owners of the Bond under the
Act and under this Ordinance by such suits, actions or special proceedings in equity or at law, or by
proceedings in the office of any board or officer having jurisdiction, either for the specific
performance of any covenant or agreement contained herein or in aid or execution of any power
herein granted or for the enforcement of any proper legal or equitable remedy, as the Trustee, being
advised by counsel, shall deem most effectual to protect and enforce such rights.
In the enforcement of any remedy under this Ordinance the Trustee shall be entitled to sue for,
enforce payment of and receive any and all amounts then or during any default becoming, and at any
time remaining, due from the City for Principal Installments, interest or otherwise under any of the
provisions of this Ordinance or of the Bonds and unpaid, with interest on overdue payments at the
rate or rates of interest specified in such Bonds, together with any and all costs and expenses of
collection and of all proceedings hereunder and under such Bonds, without prejudice, to any other
right or remedy of the Trustee or of the Owners of the Bonds, and to recover and enforce judgment
or decree against the City, but solely as provided herein and in such Bonds, for any portion of such
amounts remaining unpaid, with interest, costs and expenses, and to collect (but solely from monies
available for such purposes) in any manner provided by law, the monies adjudged or decreed to be
payable.
Section 9.03. Priority of Payment Upon Default. If at any time the monies in the Funds
created under this Ordinance shall not be sufficient to pay the Principal Installments or the interest
on the Bonds as the same become due and payable, such monies, together with any monies then
available or thereafter becoming available for such purpose, whether through the exercise of the
remedies provided for in this Article or otherwise, shall, after payment of the costs and expenses of
the proceedings resulting in the collection of such money and of the fees of, and the expenses,
liabilities, and advances incurred or made by, the Trustee (including all accrued and unpaid Trustee
fees and the fees of its attorneys), be applied (subject to the provisions of Sections 9.01 and 9.03 of
this Ordinance) as follows:
(a) Unless the principal of all the Bonds shall then be due and payable, all such monies shall
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34
be applied:
FIRST: to the payment to the Persons entitled thereto of all installments of interest then due,
in the order of the maturity of the installments of such interest, and, if the amount available shall not
be sufficient to pay in full any particular installment, then to the payment ratably, according to the
amounts due on such installment, to the Persons entitled thereto, without any discrimination or
preference except as to any difference in the respective rates of interest specified in the Bonds; and
SECOND: to the payment of the Principal Installments of any Bonds which are due, and, if
the amount available shall not be sufficient to pay all of such amounts, then to the payment thereof
ratably, according to the amount due.
Section 9.04. Default Cured. In case any action taken by the Trustee on account of any
default shall have been discontinued or abandoned for any reason, then and in every such case the
City, the Trustee and the Holders of the Bonds shall be restored to their former positions and rights
hereunder, respectively, and all rights, remedies, powers and duties of the Trustee shall continue as
though no such action had been taken.
Section 9.05. Holders' of Bonds Direction of Proceedings. Anything in this Ordinance to the
contrary notwithstanding, the Holders of not less than a majority in principal amount of the Bonds
then Outstanding hereunder shall have the right, subject to the provisions of Sections 9.01 and 9.06
of this Ordinance, by an instrument or concurrent instruments in writing executed and delivered to
the Trustee, to direct the method and place of conducting all remedial actions to be taken by the
Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law
or the provisions of this Ordinance, and that the Trustee shall have the right to decline to follow any
such direction which in the opinion of the Trustee would be unjustly prejudicial to Holders of Bonds
not parties to such direction.
Section 9.06. Remedies Exclusion. No Holder of any of the Outstanding Bonds shall have any
right to institute any suit, action, mandamus or other proceeding in equity or at law for the execution
of any trust hereunder or the protection or enforcement of any right under this Ordinance or any
resolution of the City authorizing the issuance of Bonds, or any right under the Act or the laws of
Texas, excepting only an action for the recovery of overdue and unpaid Principal Installments, interest
or redemption premium, unless such Holder previously shall have given to the Trustee written notice
of the event of default or breach of trust or duty on account of which such suit or action is to be
taken, and unless the Holders of not less than twenty per cent (20%) in principal amount of the Bonds
then outstanding shall have made written request of the Trustee after the right to exercise such
powers or right of action, as the case may be, shall have accrued, and shall have afforded the Trustee
a reasonable opportunity either to proceed to exercise the powers herein granted or granted by the
Act or by the laws of Texas, or to institute such action, suit or proceeding in its or their name, and
unless, also, there shall have been offered to the Trustee reasonable security and indemnity against
the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall have refused
or neglected to comply with such request within a reasonable time; and such notification, request and
offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be
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35
conditions precedent to the execution of the powers and trusts of this Ordinance or for any other
remedy hereunder or under the Act or the laws of Texas. It is understood and intended that no one
or more Holders of the Bonds hereby secured shall have any right in any manner whatever by his or
their action to affect, disturb or prejudice the security of this Ordinance, or to enforce any right
hereunder or under the Act or the laws of Texas with respect to the Bonds or this Ordinance, except
in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and
maintained in the manner herein provided and for the benefit of all Holders of the Outstanding Bonds,
except as otherwise permitted herein with reference to overdue and unpaid Principal Installments,
interest or redemption premium.
Section 9.07. Non possession of Bonds. All rights of action under this Ordinance or under any
of the Bonds, enforceable by the Trustee, may be enforced by it without the possession of any of the
Bonds or the production thereof on the trial or other proceeding relative thereto, and any such suit,
action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the
Holders of such Bonds, subject to the provisions of this Ordinance.
Section 9.08. Other Remedies Available. No remedy herein conferred upon or reserved to the
Trustee or to the Holders of the Bonds is intended to be exclusive of any other remedy or remedies,
and each and every such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute.
Section 9.09. Delay in Exercise of Rights. No delay or omission of the Trustee or of any
Holder of the Bonds 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 any acquiescence therein;
and every power and remedy given by this Ordinance to the Trustee and the Holders of the Bonds,
respectively, may be exercised from time to time and as often as may be deemed expedient.
The Trustee may, and upon written request of the Holders of not less than a majority in
principal amount of the Bonds then Outstanding shall, waive any default which in its opinion shall
have been remedied before the completion of the enforcement of any remedy under this Ordinance,
but no such waiver shall extend to or affect any other existing or any subsequent default or defaults
or impair any rights or remedies consequent thereon.
ARTICLE X
CONCERNING THE TRUSTEE
Section 10.01. Acceptance of Trust. The Trustee accepts and agrees to execute the trusts
imposed upon it by this Ordinance, but only upon the terms and conditions and subject to the
provisions of this Ordinance to all of which the parties hereto and the respective Owners of the Bonds
agree.
Section 10.02. Trustee Obligation to Bring Suit. Other than suits to collect delinquent Special
Assessments as provided herein and as provided in Article IX, the Trustee shall be under no
I1Oo I aeix: 011DINDRI Iaim
36
obligation to institute any suit, or to take any remedial proceeding under this Ordinance, 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 its satisfaction by the Owners against any and all costs and
expenses, outlays and counsel fees and other reasonable disbursements, and against all liability; the
Trustee may, nevertheless, begin suit, or appear in and defend suit, or do anything else in its judgment
proper to be done by it as such Trustee, without indemnity, and in any such case the Owners shall
reimburse the Trustee for all costs and expenses, outlays and counsel fees and other reasonable
disbursements properly incurred in connection therewith. If the City shall fail to make such
reimbursement, the Trustee may reimburse itself from any monies in its possession under the
provisions of this Ordinance and shall be entitled to a preference therefor over any of the Bonds
Outstanding hereunder.
Section 10.03. Trustee Not Responsible for Other Depositories. The Trustee shall not be
liable or responsible because of the failure of the City or of any of its employees or agents to make
any collections or deposits or to perform any act herein required of the City, or its employees or
agents or because of the loss of any monies arising through the insolvency or the act or default or
omission of any depository, or Paying Agent/Registrar other than itself, in which such monies have
been deposited under the provisions of this City. The Trustee shall not be responsible for the
application of any of the proceeds of the Bonds or any other monies deposited with it and paid out,
invested, withdrawn or transferred in accordance with the provisions of this Ordinance. The
immunities and exemptions from liability of the Trustee hereunder extend to its directors, officers,
employees agents.
Section 10.04. Compensation of Trustee. Subject to the provisions of any contract between
the City and the Trustee, the City shall pay to the Trustee, but solely from amounts on deposit in the
Administrative Expense Fund, reasonable compensation for all services performed by it hereunder
and also all its reasonable expenses, charges and other disbursements and those of its attorneys,
agents and employees incurred in and about the administration and execution of the trusts hereby
created and the performance of their powers and duties hereunder. If the City shall fail to make any
payment required by this Section, the Trustee may make such payments from any monies in its
possession under the provisions of this Ordinance and shall be entitled to a preference therefor over
any of the Bonds Outstanding hereunder.
Section 10.05. Trustee May Rely on Certificates. In case at any time it shall be necessary or
desirable for the Trustee to make any investigation respecting any fact preparatory to taking or not
taking any action or doing or not doing anything as such Trustee, and in any case in which this
Ordinance provides for permitting or taking any action, the Trustee may rely upon any certificate
required or permitted to be filed with it under the provisions of this Ordinance, and any such
certificate shall be evidence of such fact to protect it in any action that it may or may not take or in
respect of anything it may or may not do, in good faith, by reason of the supposed existence of such
fact. Any request, notice or other instrument from the City to the Trustee shall be deemed to have
been signed by the proper party or parties if signed by an authorized officer of the City, and the
Trustee may accept a certificate signed by the City Secretary of the City as to any resolution adopted
RIIOCK/NBIJ c: ORDIN.DR I I/27/97
37
or any other action taken by the City.
Section 10.06. Trustee May Own Bonds. Any bank or trust company acting as Trustee under
this Ordinance, and its directors, officers, employees or agents, may in good faith buy, sell, own, hold
and deal in any of the Bonds issued under and secured by this Ordinance, and may join in any action
which any Owner of the Bonds may be entitled to take with like effect as if such bank or trust
company were not the Trustee under this Ordinance.
Section 10.07. Representations of City in Bonds. The recitals, statements and representations
contained herein and in the Bonds (excluding the Trustee's certificate on the Bonds as Registrar) shall
be taken and construed as made by and on the part of the City and not by the Trustee, and the Trustee
assumes and shall be under no responsibility for the correctness of the same.
Section 10.08. Trustee Solely Liable for Negligence. In performing its duties under the terms
of this Ordinance, the Trustee shall be liable only for its own negligence or willful misconduct, and
shall incur no liability in acting or proceeding, or in not acting or not proceeding, reasonably and in
good faith, upon any resolution, order, notice, request, consent, waiver, certificate, statement,
affidavit, requisition, bond or other paper or document which it 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 Ordinance, or upon the opinion of
any attorney, engineer, or accountant believed by the Trustee to be qualified in relation to the subject
matter.
Section 10.09. Resignation of Trustee. The Trustee may resign and thereby become
discharged from the trusts hereby created, by notice in writing to be given to the City and mailed to
the Owners of the Bonds not less than sixty (60) days before such resignation is to take effect, but
such resignation shall take effect immediately upon the appointment of a new Trustee as the case may
be, if such new Trustee shall be appointed before the time limited by such notice and shall then accept
the trusts hereof.
Section 10.10. Removal of Trustee. The Trustee may be removed at any time by an instrument
or concurrent instruments in writing, signed by the Holders of not less than a majority in principal
amount of the Bonds hereby secured and then Outstanding and filed with the City. A photostatic copy
of each such instrument shall be delivered promptly by the City to the Trustee.
The Trustee may also be removed at any time for any breach of trust or violation of this
Ordinance or if the Trustee does not meet the minimum required capital and surplus of $50,000,000
set forth in Section 10.11 by an ordinance duly passed by the City.
Section 10.11. Insolvency of Trustee. If at any time the Trustee shall resign, or shall be
removed, be dissolved or otherwise become incapable of acting, or the banks or trust company acting
as Trustee shall be taken over by any governmental official, agency, department or board, the position
of Trustee shall thereupon become vacant. If the position of Trustee shall become vacant for any of
RROCT?ORIIC: ORDI DRI U2737
38
the foregoing reasons or for any other reason, the City shall appoint a Trustee to fill such vacancy.
The City shall mail a copy of the notice of any such appointment by it to the Owners of the Bonds.
At any time within one year after any such vacancy shall have occurred, the Owners of a
majority in principal amount of the Bonds then Outstanding, by an instrument or concurrent
instruments in writing, signed by such Owners of the Bonds or their attorneys in fact "hereunto duly
authorized and filed with the City, may appoint a successor Trustee, which shall supersede any
Trustee theretofore appointed by the City. Photostatic copies of each such instrument shall be
delivered promptly by the City to the predecessor Trustee and to the Trustee so appointed by the
Owners of the Bonds.
If no appointment of a successor Trustee shall be made pursuant to the foregoing provisions
of this Section, the Owner of any Bond Outstanding hereunder or any retiring Trustee may apply to
any court of competent jurisdiction to appoint a successor Trustee. Such court may thereupon, after
such notice, if any, as such court may deem proper, appoint a successor Trustee.
Any Trustee hereafter appointed shall be a bank or trust company duly organized and doing
business under the laws of the United States of America or any State, authorized under such laws to
exercise corporate trust powers and subject to examination by federal or state authority, of good
standing, and having, at the time of its appointment, a combined capital and surplus aggregating not
less than fifty million dollars ($50,000,000) be subject to supervision or examination by federal or
state authority and have an office in Austin, Texas.
Section 10.12. Powers of Successor Trustee. Every successor Trustee appointed hereunder
shall execute, acknowledge and deliver to its predecessor, and also to the City, an instrument in
writing accepting such appointment hereunder, and thereupon such successor Trustee, without any
further act, shall become fully vested with all the rights, immunities, powers and trusts, and subject
to all the duties and obligations, of its predecessor; but such predecessor shall, nevertheless, on the
written request of its successor or of the City, and upon payment of the compensation, expenses,
charges and other disbursements of such predecessor which are due and payable pursuant to the
provisions of this Article, execute and deliver an instrument transferring to such successor Trustee
all the rights, immunities, powers and trusts of such predecessor hereunder; and every predecessor
Trustee shall deliver all property and monies held by it hereunder to its successor. Should any
instrument in writing from the City be required by any successor Trustee for more fully and certainly
vesting in such Trustee the rights, immunities, powers and trusts hereby vested or intended to be
vested in the predecessor Trustee, any such instrument in writing shall and will, on request, be
executed, acknowledged and delivered by the City.
Notwithstanding any of the foregoing provisions of this Article, any bank or trust company
having power to perform the duties and execute the trusts of this Ordinance and otherwise qualified
to act as Trustee hereunder with or into which the bank or trust company acting as Trustee may be
merged or consolidated, or to which the assets and business of such bank or trust company may be
sold, shall be deemed the successor of the Trustee.
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39
ARTICLE XI
AMENDMENTS
Section 11.01. Amendment Without Consent of Holders of Bonds. This Ordinance may be
amended, without the consent of any of the Owners, by the City, by ordinance, for any of the
following purposes:
(a) to add to the covenants for the benefit of the Owners or to surrender any right or power
conferred upon the City; and
(b) to cure any ambiguity, to correct, or supplement any provision which may be inconsistent
with any other provision, or to make any other provision, with respect to matters or questions arising
with respect to the Bonds, which shall not be inconsistent with the provisions of this Ordinance and
applicable law, provided that such action shall not adversely affect the interests of the Owners of the
Bonds.
This Ordinance shall, by the adoption of any such ordinance, be amended in accordance
therewith. Bonds authenticated and delivered after the adoption of any such ordinance may bear a
notation as to any matter provided for in such ordinance. If the City shall so determine, new bonds
so modified as to conform to any such ordinance or resolution may be prepared and executed by the
City and authenticated and delivered in exchange for Bonds Outstanding.
Section 11.02. Supplemental Ordinance Amending the Ordinance or Bonds. (a) At any time
or from time to time but subject to the conditions or restrictions contained in this Ordinance, an
ordinance of the City amending or supplementing this Ordinance may be adopted modifying any of
the provisions of this Ordinance or of the Bonds or releasing the City from any of the obligations,
covenants, agreements, limitations, conditions, or restrictions therein contained, but no such
ordinance shall be effective until after the filing with the Trustee of a copy of such ordinance certified
by the City Secretary and unless (1) no Bonds remain Outstanding at the time the ordinance becomes
effective, or (2) such ordinance is consented to by or on behalf of Owners of the Bonds in accordance
with and subject to the provisions of Sections 11.04 through 11.06.
(b) The provisions of paragraph (a) of this Section 11.02 shall not be applicable to
supplemental ordinances adopted in accordance with the provisions of Section 11.01.
Section 11.03. Restriction on Amendments. Neither the Ordinance, nor the Bonds, shall be
modified or amended in any respect except as provided in, and in accordance with, and subject to the
provisions of this Article. The provisions of Section 11.02 are in all respects subject and subordinate
to the provisions, restrictions, exceptions, and limitations set forth in this Article. Nothing in this
Article shall affect or limit the rights or obligations of the City to pass, make, do, execute,
acknowledge, or deliver any ordinance, act, or other instrument which elsewhere in this Ordinance
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40
it is provided shall be delivered to said Trustee.
Section 11.04. Amendment of Ordinance with Consent of Owners of Bonds. Except as
provided in Section 11.01, the Owners of not less than fifty-one percent (51%) in aggregate principal
amount of the Bonds then Outstanding shall have the right, at any time and from time to time, to
consent to and approve an amendment of this Ordinance as shall be deemed desirable by the City for
the purpose of modifying, altering, amending, adding to or rescinding any of the terms or provisions
contained in this Ordinance; provided, however, that nothing in this Article shall permit (a) an
extension of the maturity of the Principal Installment of or the interest on any Bond issued hereunder,
or any scheduled mandatory redemption, or (b) a reduction in the principal amount of any Bond or
the rate of interest on any Bond, or (c) a privilege or priority of any Bond or Bonds over any other
Bond or Bonds, or (d) a reduction in the aggregate principal amount of the Bonds required for
consent to such amendment.
Bonds owned or held by or for the account of or for the benefit of the City shall not be
deemed to be Outstanding for the purpose of amending this Ordinance.
Section 11.05. Notice and Adoption of Amendment. If the City desires to amend this
Ordinance, the Trustee shall cause notice be sent by first-class mail to the Registered Owners of the
Bonds. Such notice shall briefly set forth the nature of the proposed amendment and shall state that
copies thereof are on file at the office of the Trustee for inspection by all Owners of Bonds. If within
ninety (90) days or such longer period as shall be prescribed by the City following the mailing of such
notice, the Owners of not less than fifty-one percent (51 %) in aggregate principal amount of the
Bonds Outstanding shall have consented to the amendment as herein provided, no Owner of any
Bond shall have any right to object to any of the terms and provisions contained therein, or in any
manner to question the propriety of the execution thereof, or enjoin or restrain the City from taking
any action pursuant to the provisions thereof, and all of the rights of the Owners of Outstanding
Bonds shall thereafter be determined, exercised, and enforced hereunder, subject in all respects to
such amendments.
Section 11.06. Revocation of Consent. Any consent given by any Owner of a Bond pursuant
to the provisions of this Article shall be irrevocable for a period of six (6) months from the date notice
of the amendment was mailed as provided in Section 11.05, and shall be conclusive and binding upon
all future Owners of the same Bond during such period. Such consent may be revoked at any time
after six (6) months from the date the notice was mailed by the Owner who gave such consent or by
a successor in title, by filing notice thereof with the Trustee, but such revocation shall not be effective
if the Owners of fifty-one percent (51%) aggregate principal amount of the Bonds Outstanding as in
this Section defined have, prior to the attempted revocation, consented to and approved the
amendment.
!MOM/PUBLIC ORDIN.DRI 1/2797
41
ARTICLE XII
PROVISIONS CONCERNING SALE AND APPLICATION
OF PROCEEDS OF BONDS
Section 12.01. Sale of the Bonds. First Southwest Company has agreed to use its best efforts
to place the Bonds in accordance with a Placement Agreement which shall be substantially in the form
attached as Exhibit "C" which agreement is approved, and the appropriate officials of the City are
hereby authorized to execute such agreement on behalf of the City.
Section 12.02. Offering Documents. The City Council hereby ratifies, authorizes and
approves, in connection with the offering and sale of the Bonds, the preparation and distribution of
the Private Placement Memorandum substantially in the same form and containing such additional
information as is contained in or authorized by this Ordinance, and it is further officially found and
determined that the statements and representations contained therein are true and correct in all
material respects, to the best knowledge and belief of the City Council.
Section 12.03. Related Matters. To satisfy in a timely manner all of the City's obligations
under this Ordinance, the Placement Agreement, the Paying Agent/Registrar Agreement, the Mayor
or Mayor Pro Tem, the City Manager, the City Secretary or an Assistant City Secretary, and all other
appropriate officers and agents of the City are hereby authorized and directed to take all other actions
that are reasonably necessary to provide for the issuance of the Bonds, including, without limitation,
executing and delivering on behalf of the City all certificates, consents, receipts, requests, and other
documents as may be reasonably necessary to satisfy the City's obligations under the Placement
Agreement, the Paying Agent/Registrar Agreement, and this Ordinance and to direct the application
of funds of the City consistent with the provisions of such agreements and this Ordinance.
Section 12.04. Paying Agent/Registrar/Trustee. The form of agreement setting forth the
duties of the Paying Agent/Registrar/Trustee in substantially the form attached as Exhibit "D" is
hereby approved, and the appropriate officials of the City are hereby authorized to execute such
agreements for and on behalf of the City.
Section 12.05. No Personal Liability. No recourse shall be had for payment of the Principal
Installment of or interest on any Bonds or for any claim based thereon, or on this Ordinance, against
any official or employee of the City or any Person executing any Bonds.
ARTICLE XIII
MISCELLANEOUS
Secuon 13.01. Further Proceedings. The Mayor, the City Secretary, and other appropriate
officials of the City are hereby authorized and directed to do any and all things necessary and/or
convenient to carry out the terms of this Ordinance.
42
RROCiI VIUC: ORD/N.011 112/97
Section 13.02. 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 13.03. Open Meeting. It is hereby found, determined and declared that a sufficient
written notice of the date, hour, place and subject of the meeting of the City Council at which this
Ordinance was adopted was posted at a place convenient and readily accessible at all times to the
general public at the City Hall of the City for the time required by law preceding this meeting, as
required by the Open Meetings Law, Chapter 551, Texas Government code, as amended, and that
this meeting has been open to the public as required by law at all times during which this Ordinance
and the subject matter thereof has been discussed, considered and formally acted upon. The City
Council further ratifies, approves and confirms such written notice and the contents and posting
thereof.
Section 13.04. Provisions Concerning Registrar. (a) The Registrar, by undertaking the
performance of the duties of the Registrar and in consideration of the payment of fees and/or deposits
of money pursuant to this Ordinance and a Paying Agent/Registrar Agreement, accepts and agrees
to abide by the terms of this Ordinance and such agreement.
(b) The City reserves the right to replace the Registrar or its successor at any time. If the
Registrar is replaced by the City, the new registrar shall accept the previous Registrar's records and
act in the same capacity as the previous Registrar. Any successor registrar shall be either a national
or state banking institution and a corporation organized and doing business under the laws of the
United States of America or any State authorized under such laws to exercise trust powers and
subject to supervision or examination by Federal or State authority.
Section 13.05. Effect of Ordinance. This Ordinance shall be in force and effect from and after
its passage, and it is so ordered.
Section 13.06. Repealer. All orders, resolutions and ordinances, or parts thereof, inconsistent
herewith are hereby repealed to the extent of such inconsistency.
ILKOCTJPUBUC OIDD .wu Imm
43
PASSED AND APPROVED this day of , 1997.
Mayor
City of Round Rock, Texas
ATTEST:
City Secretary
City of Round Rock, Texas
[SEAL]
Texas Commerce Bank National Association, Trustee under the provisions of Ordinance No.
authorizing the $2,690,000 Encino Plaza Public Improvement District Special Assessment
Bonds, Taxable Series 1997, by the execution of the duly authorized officer named below does hereby
accept the obligations imposed on the Trustee pursuant to this Ordinance and agrees to perform the
duties of Trustee/Paying Agent/Registrar upon the terms and conditions set forth in this Ordinance.
ATTEST:
Title:
(SEAL)
P&O !7awc: ORDINDRI imm
45
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION,
TRUSTEE
Title:
EXHIBIT "B"
REQUEST FOR DISBURSEMENT
Ladies/Gentlemen:
On behalf of the City of Round Rock, Texas (the "City"), I hereby request a disbursement
pursuant to Section 6.07 of the Ordinance adopted by the City Council of the City on February 27,
1997, in the sum of $ to be paid by check at the following address:
for
I hereby certify that (a) such obligation has been incurred by the City in or about the
acquisition, renovation, reconstruction, and equipping of the Authorized Improvements, as defined
in the Ordinance, (b) each item is a proper charge against the Improvement Fund, as defined in the
Ordinance, (c) such obligation has not been the basis for a prior requisition which has been paid, and
(d) the City has heretofore delivered or caused to be delivered to the Trustee each of items listed on
Schedule I hereto as evidence to the obligations having been incurred.
CITY OF ROUND ROCK, TEXAS
By:
Title:
Authorized Representative
46
RAOCXJl06IIC: ORDOIDRI (/27/11
SCHEDULE I
TO
REQUEST FOR DISBURSEMENT
Schedule of Invoices and Other Evidence of Payment
47
APPENDIX C
27
APPENDIX D
[FORM OF PURCHASER LETTER
FOR ACCREDITED INVESTORS]
Encino Plaza Public Improvement District
City of Round Rock
221 East Main Street
Round Rock, Texas 78664
First Southwest Company
98 San Jacinto, Suite 370
Austin, Texas 78701
Texas Commerce Bank National Association
700 Lavaca, 5th Floor
Austin, Texas 78701
In connection with our proposed purchase of S2,690,000 aggregate principal amount of Encino Plaza Public
Improvement District Assessment Bonds Taxable, Series 1997 (the "Bonds"), we confirm that:
1. We are agreeing to buy the Bonds from the District.
2. We have received a copy of the Private Placement Memorandum, dated February 18, 1997, relating to
the Bonds and understand that the Bonds have not been, and will not be, registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell any Bonds prior
to three years after the later of March 17, 1997 and the last date on which the District or any affiliate of the District was
the beneficial owner of such Bonds (or any predecessor of such Bonds), we will do so only (A) to the District or an
affiliate of the District, (B) to a person who we reasonably believe is a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) that purchases in compliance with Rule 144A under the Securities Act for its own account
or for the account of a "qualified institutional buyer," and we further agree, in the capacities stated above, to provide to
any person purchasing any of the Bonds from us a notice advising such purchaser that resales of the Bonds are restricted
as stated herein.
We understand that, on any proposed resale of any Bonds prior to three years after the later of march 17,
1997 and the last date on which the District or any affiliate of the District was the beneficial owner of such Bonds (or any
predecessor of such Bonds), we will be required to furnish to the Trustee, such certifications, opinions and other
information as the District may reasonably require to confirm that the proposed sale complied with the foregoing
restrictions. We further understand that certificates evidencing Bonds purchased by us will, unless otherwise agreed by
the District, bear a legend to the foregoing effect.
3. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act) (an "Institutional Accredited Investor") and have such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Bonds, and
we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.
4. We are acquiring the Bonds purchased by us for our own account or for one or more accounts
(each of which is an Institutional Accredited Investor) as to each of which we exercise sole investment discretion and for
each of which we are acquiring not less than $ aggregate principal amount of Bonds.
28
You are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered
hereby.
Very truly yours,
[Purchaser]
By:
Name:
Title:
29
EXHIBIT "F"
PAYING AGENT/REGISTRAR AGREEMENT
F-1
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT dated as of February 27, 1997 ("Agreement"), by and between the
Encino Plaza Public Improvement District acting by and through the City of Round Rock (the
"Issuer"), and Texas Commerce Bank National Association, a banking association duly organized and
existing under the laws of the State of Texas ("Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of certificates of
obligation to be issued only in registered form, as to payment of principal and interest thereon in an
aggregate principal amount of $2,690,000 and titled Special Assessment Bonds, Taxable Series 1997
(the "Securities"); and
WHEREAS, the Securities are scheduled to be delivered to the initial purchasers thereof on
or about March 17, 1997; and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in
connection with the payment of the principal of, premium, if any, and interest on the Securities and
with respect to the registration, transfer and exchange thereof by the registered owners thereof, and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the City and
has full power and authority to perform and serve as Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment.
The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the
Securities. As Paying Agent for the Securities, the Bank shall be responsible for paying on behalf
of the City the principal, premium (if any), and interest on the Securities as the same become due
and payable to the registered owners thereof, all in accordance with this Agreement and the
"Ordinance" (hereinafter defined).
The Issuer hereby appoints the Bank as Registrar with respect to the Securities. As
Registrar for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer
books and records as to the ownership of the Securities and with respect to the transfer and
exchange thereof as provided herein and in the "Ordinance. "
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
R ocKmuauc: PAYAawox 2/19H7
Section 1.02. Compensation.
As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby
agrees to pay the Bank the fees and amounts set forth in Schedule A attached hereto.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any of
the provisions hereof (including the reasonable compensation and the expenses and disbursements
of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
"Acceleration Date" on any Security means the date on and after which the
principal or any or all installments of interest, or both, are due and payable on any
Security which has become accelerated pursuant to the terms of the Security.
"Bank Office" means the corporate trust office of the Bank as indicated herein.
The Bank will notify the City in writing of any change in location of the Bank Office.
"Fiscal Year" means the fiscal year of the Issuer.
"Holder" and "Security Holder" each means the Person in whose name a Security
is registered in the Security Register.
"Issuer Request" and "Issuer Ordinance" means a written request or ordinance
signed in the name of the Issuer by the Mayor of the Issuer, any one or more of said
officials, delivered to the Bank.
closed.
"Legal Holiday" means a day on which the Bank is required or authorized to be
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or government or any
agency or political subdivision of a government.
"Predecessor Securities" of any particular Security means every previous Security
evidencing all or a portion of the same obligation as that evidenced by such particular
Security (and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen
Security for which a replacement Security has been registered and delivered in lieu thereof
pursuant to Section 4.06 hereof and the Ordinance).
MCCK/POBLC: PAYAQAQ 2/19/97
2
"Redemption Date" when used with respect to any Security to be redeemed means
the date fixed for such redemption pursuant to the terms of the Ordinance.
"Ordinance" means the ordinance of the governing body of the City pursuant to
which the Securities are issued, certified by the Secretary of the Board of Emergency
Services Commissioners or any other officer of the City and delivered to the Bank.
"Responsible Officer" when used with respect to the Bank means the Chairman or
Vice -Chairman of the Board of Directors, the Chairman or Vice -Chairman of the
Executive Committee of the Board of Directors, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier,
any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer
of the Bank customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of the City
providing for the registration and transfer of the Securities.
"Stated Maturity" means the date specified in the Ordinance on which the principal
of a Security is scheduled to be due and payable.
Section 2.02. Other Definitions.
The terms "Bank," "Issuer," and "Security" and "Bond" have the meanings assigned to
them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and
functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of
each Security at its Stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon
surrender of the Security to the Bank at the Bank Office.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each
Security when due, by computing the amount of interest to be paid each Holder and preparing and
sending checks by United States Mail, first class postage prepaid, on each payment date, to the
Holders of the Securities (or their Predecessor Securities) on the respective Record Date, to the
MOQC/PUBI]C: PAYAO.AQ 7/19/97
3
address appearing on the Security Register or by such other method, acceptable to the Bank,
requested in writing by the Holder at the Holder's risk and expense.
Section 3.02. Payment Dates.
The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities
on the dates specified in the Ordinance.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register - Transfers and Exchanges.
The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office
books and records (herein sometimes referred to as the "Security Register") for recording the
names and addresses of the Holders of the Securities, the transfer, exchange and replacement of
the Securities and the payment of the principal of and interest on the Securities to the Holders and
containing such other information as may be reasonably required by the Issuer and subject to such
reasonable regulations as the Issuer and the Bank may prescribe. All transfers, exchanges and
replacement of Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed by
an officer of a federal or state bank or a member of the National Association of Bond Dealers,
Inc., in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly
authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re -registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in not
more than three (3) business days after the receipt of the Securities to be cancelled in an exchange
or transfer and the written instrument of transfer or request for exchange duly executed by the
Holder, or his duly authorized agent, in form and manner satisfactory to the Paying
Agent/Registrar.
Section 4.02. Securities.
The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers
or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept
in safekeeping pending their use, and reasonable care will be exercised by the Bank in maintaining
such Securities in safekeeping, which shall be not less than the care maintained by the Bank for
debt Securities of other political subdivisions or corporations for which it serves as registrar, or
that is maintained for its own securities.
RROCK/PUBLIC: PAYAO.AOR 2/19/97
4
Section 4.03. Form of Bond Register.
The Bank, as Registrar, will maintain the Bond Register relating to the registration,
payment, transfer and exchange of the Securities in accordance with the Bank's general practices
and procedures in effect from time to time. The Bank shall not be obligated to maintain such
Bond Register in any form other than those which the Bank has currently available and currently
utilizes at the time.
The Bond Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Bond Holders.
The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the
required fee, a copy of the information contained in the Bond Register. The Issuer may also
inspect the information contained in the Bond Register at any time the Bank is customarily open
for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing
or to convert the information into written form.
The Bank will not release or disclose the contents of the Bond Register to any person other
than to, or at the written request of, an authorized officer or employee of the Issuer, except upon
receipt of a court ordinance or as otherwise required by law. Upon receipt of a court ordinance
and prior to the release or disclosure of the contents of the Bond Register, the Bank will notify
the Issuer so that the Issuer may contest the court ordinance or such release or disclosure of the
contents of the Bond Register.
Section 4.05. Return of Cancelled Securities.
The Bank will, at such reasonable intervals as it determines, surrender to the Issuer,
Securities in lieu of which or in exchange for which other Securities have been issued, or which
have been paid.
Section 4.06. Mutilated, Destroyed, Lost or Stolen Securities.
The Issuer hereby instructs the Bank, subject to the applicable provisions of the Ordinance,
to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen
Securities as long as the same does not result in an overissuance.
In case any Bond shall be mutilated, or destroyed, lost or stolen, the Bank, in its
discretion, may execute and deliver a replacement Bond of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed lost or
stolen Bond, only after (1) the filing by the Holder thereof with the Bank of evidence satisfactory
to the Bank of the destruction, loss or theft of such Bond, and of the authenticity of the ownership
thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the
Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with
AROCIVPUBIIC: PAYAGAC212/19/97
5
the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of the
Bond mutilated, or destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer.
The Bank will, within a reasonable time after receipt of written request from the Issuer,
furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities
it has delivered upon the transfer or exchange of any Securities pursuant to Section 4.01, and
Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen
Securities pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank
The Bank undertakes to perform the duties set forth herein and agrees to use reasonable
care in the performance thereof.
Section 5.02. Reliance on Documents, Etc.
(a) The Bank may conclusively rely, as to the truth of the statements and correctness
of the opinions expressed therein, on Certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is
not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, ordinance, bond, note, bond, or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine the ownership of any Securities,
but is protected in acting upon receipt of Securities containing an endorsement or instruction of
transfer or power of transfer which appears on its face to be signed by the Holder or an agent of
the Holder. The Bank shall not be bound to make any investigation into the facts or matters stated
in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, ordinance, bond, note, bond, or other paper or document supplied by Issuer.
RPOcK/PUBuc: PAYAQACBRV19/97
6
(e) The Bank may consult with counsel, and the written advice of such counsel or any
opinion of counsel shall be full and complete authorization and protection with respect to any
action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer.
The recitals contained herein with respect to the Issuer and in the Securities shall be taken
as the statements of the Issuer, and the Bank assumes no responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Bond, or
any other Person for any amount due on any Bond from its own funds.
Section 5.04. May Hold Securities.
The Bank, in its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Issuer with the same rights it would have if it were not
the Paying Agent/Registrar, or any other agent.
Section 5.05. Moneys Held by Bank.
The Bank shall deposit any moneys received from the Issuer into a trust account to be held
in a fiduciary capacity for the payment of the Securities, with such moneys in the account that
exceed the deposit insurance available to the Issuer by the Federal Deposit Insurance Corporation
to be fully collateralized with Securities or obligations that are eligible under the laws of the State
of Texas to secure and be pledged as collateral for trust accounts, until the principal and interest
on such Securities have been presented for payment and paid to the owner thereof. Payments
made from such trust account shall be made by check drawn on such trust account unless the
owner of such Securities shall, at its own expense and risk, request such other medium of
payment.
Subject to the Unclaimed Property Laws of the State of Texas, any money deposited with
the Bank for the payment of the principal, premium (if any), or interest on any Bond and
remaining unclaimed for three years after the final maturity of the Bond has become due and
payable will be paid by the Bank to the Issuer if the Issuer so elects, and the Holder of such Bond
shall hereafter look only to the Issuer for payment thereof, and all liability of the Bank with
respect to such monies shall thereupon cease. If the Issuer does not elect, the Bank is directed to
report and dispose of the funds in compliance with Title Six of the Texas Property Code, as
amended.
Section 5.06. Indemnification
To the extent permitted by law, the Issuer agrees to indemnify the Bank for, and hold it
harmless against, any loss, liability, or expense incurred without negligence or bad faith on the
AAOCX/POBIlc: PAYAC.ACBl 2/19197
7
Bank's part, arising out of or in connection with the Bank's acceptance or administration of its
duties hereunder, including the cost and expense incurred by the Bank in defending against any
claim or from liability imposed on the Bank in connection with the Bank's exercise or
performance of any of its powers or duties under this Agreement.
Section 5.07. Interpleader.
The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim,
demand, or controversy over its person as well as funds on deposit, in either a Federal or State
Issuer Court located in the State and County where either the Bank Office or the administrative
offices of the Issuer is located, and agree that service of process by certified or registered mail,
return receipt requested, to the address referred to in Section 6.03 of this Agreement shall
constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to
file a Bill of Interpleader in any court of competent jurisdiction to determine the rights of any
Person claiming any interest herein.
Section 5.08. Depository Trust Company Services.
It is hereby represented and warranted that, in the event the Securities are otherwise
qualified and accepted for "Depository Trust Company" services or equivalent depository trust
services by other organizations, the Bank has the capability and, to the extent within its control,
will comply with the "Operational Arrangements," effective August 1, 1987, which establishes
requirements for Securities to be eligible for such type depository trust services, including, but
not limited to, requirements for the timeliness of payments and funds availability, transfer
turnaround time, and notification of redemptions and calls.
Attached hereto is a copy of the Letter of Representations with The Depository Trust
Company.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the
parties hereto.
RROCK/POBLC: PAYAGAOR 2/19/97
8
Section 6.02. Assignment.
This Agreement may not be assigned by either party without the prior written consent of
the other.
Section 6.03. Notices.
Any request, demand, authorization, direction, notice, consent, waiver, or other document
provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed
or delivered to the Issuer or the Bank, respectively, at the addresses shown on the signature page
of this Agreement.
Section 6.04. Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the
construction hereof.
Section 6.05. Successors and Assigns.
All covenants and agreements herein by the Issuer shall bind its successors and assigns,
whether so expressed or not.
Section 6.06. Severability.
In case any provision herein shall be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 6.07. Benefits of Agreement.
Nothing herein, express or implied, shall give to any Person, other than the parties hereto
and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim
hereunder.
Section 6.08. Entire Agreement.
This Agreement and the Ordinance constitute the entire agreement between the parties
hereto relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this
Agreement and the Ordinance, the Ordinance shall govern.
Section 6.09. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same Agreement.
RROcxmueuc: PAYAQAGR 2119/97
9
Section 6.10. Termination.
This Agreement will terminate (i) on the date of final payment of the principal of and
interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party
upon sixty (60) days written notice; provided, however, an early termination of this Agreement
by either party shall not be effective until (a) a successor Paying Agent/Registrar has been
appointed by the Issuer and such appointment accepted and (b) notice has been given to the
Holders of the Securities of the appointment of a successor Paying Agent/Registrar. Furthermore,
the Bank and Issuer mutually agree that the effective date of an early termination of this
Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect
the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Bond Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force
and effect following the termination of this Agreement.
Section 6.11. Governing Law.
This Agreement shall be construed in accordance with and governed by the laws of the
State of Texas.
RROCx/PURUc: PAYAQA(812/19/97
10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
Attest:
Title
[BANK SEAL]
[ISSUER SEAL]
Attest:
City Secretary
RROCY/PUffiUC: PAYAGAOR 2/19/97
11
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By:
Title:
700 Lavaca, 5th Floor
Austin, Texas 78701
CITY OF ROUND ROCK, TEXAS
By:
Mayor
221 E. Main
Round Rock, Texas 78664
SCHEDULE A
Paying Agent/Registrar Fee Schedule
Acceptance Fee $
Annual Administration Fee $
RROCR/PUBUC: PAYAQ, GR 2/19/97
A-1
DATE:
SUBJECT:
ITEM:
February 25, 1997
City Council Meeting, February 27, 1997
9. F. Consider an "Ordinance Authorizing the Issuance of $2,690,000 Encino Plaza
Public Improvement District Special Assessment Bonds, Taxable Series 1997;
Providing for the Payment of Said Bonds by a Pledge of Revenues Derived from
Special Assessments Levied Against all Properties in Encino Plaza Public
Improvement District, in Amounts Sufficient to Pay the Principal of and Interest on Such
Bonds, to Fund a Reserve Fund, and to Pay Various Administrative Costs Associated
with the Operation of the Public Improvement District; Providing the Terms and
Conditions of Such Bonds; Ordaining Other Matters Incident and Relating to the
Issuance, Payment, Security, Sale and Delivery of said Bonds, Including authorizing
the Execution of a Paying/Agent Registrar Agreement." (First Reading)
STAFF RESOURCE PERSON: David Kautz
This ordinance authorizes the issuance $2,690,000 Encino Plaza Public Improvement District
Special Assessment Bonds. These bonds, the interest on which is taxable, are issued to finance
improvements to the Encino Plaza Public Improvement District (PID) and will be repaid by
assessments levied on properties within the PID. The City of Round Rock is not obligated in the
repayment of these bonds.