|
Limitation on Transfer or Exchange of Bonds
<br />
<br />The Paying AgentJRegistrar is not required to transfer or exchange any Bond during the period commencing with the close of
<br />business on any Record Date immediately preceding a principal or interest payment date for such Bonds and ending with the
<br />opening of business on the next following principal or interest payment date; or with respect to any Bond or portion calted for
<br />redemption prior to maturity, within 30 days pdor to its redemption date.
<br />
<br />Payment Record
<br />
<br />The City has never defaulted on the payment of its general obligation or revenue indebtedness.
<br />
<br />Legality
<br />
<br />The Bonds are offered when, as and if issued,'subject to the approval by the Attorney General of the State of Texas and the
<br />rendering of an opinion as to legality by McCall, Parkhurst & Horton L,L.P., Dallas, Texas. The legal opinion of Bond Counsel
<br />will accompany the global Bonds to be deposited with DTC or will be printed on the Bonds should the Book-Entry-Only System
<br />be discontinued. A form of the legal opinion of Bond Counsel appears in Appendix C attached hereto.
<br />
<br />The Ordinance provides for the defeasance of the Bonds when the payment of the principal of and premium, if any, on the
<br />Bonds, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, redemption, or
<br />otherwise), is provided by irrevocably depositing with a paying agent, in trust (1) money sufficient to make such payment or (2)
<br />Defeasance Securities, to mature as to principal and interest in such amounts and at such times to insure the availability,
<br />without reinvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation and
<br />expenses of the paying agent for the Bonds. The Ordinance provides that "Defeasance Securities" means (a) direct,
<br />noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United
<br />Sates of America, (b) noncallable obligations of an agency or instrumentality of the United States of America, including
<br />obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that are rated as to investment
<br />quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (c) noncallable obligations of a
<br />state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that ara rated
<br />as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. The City has
<br />additionally reserved the right, subject to satisfying the requirements of (1) and (2) above, to substitute other Defeasance
<br />Securities for the Defeasance Securities originally deposited, to reinvest the uninvested moneys on deposit for such
<br />defeasance and to withdraw for the benefit of the City moneys in excess of the amount required for such defeasance.
<br />
<br />Upon such deposit as described above, such Bonds shall no longer be regarded to be outstanding or unpaid. Provided,
<br />however, the City has reserved the option, to be exercised at the time of the defeasance of the Bonds, to call for redemption, at
<br />an earlier date, those Bonds which have been defeased to their maturity date, if the City: (i) in the proceeding providing for the
<br />firm banking and financial arrangements, expressly reserves the right to call the Bonds for redemption; (ii) gives notice of the
<br />reservation of that right to the owners of the Bonds immediately fotlowing the making of the firm banking and financial
<br />arrangements; and (iii) directs that notice of the reservation be included in any redemption notices that it authorizes.
<br />
<br />Default and Remedies
<br />
<br />If the Issuer defaults in the payment of the principal of or interest on any of the Bonds when due or defaults in the observance
<br />or performance of any of the covenants, conditions, or obligations set forth in the Ordinance, any registered owner is entitled to
<br />seek a writ of mandamus from a court of proper jurisdiction requiring the Issuer to make such payment or observance and
<br />perform such covenant, obligations, or condition. Such right is in addition to any other rights the registered owners of the
<br />Bonds may be provided by the laws of the State of Texas.
<br />
<br />The Ordinance does not specifically provide for the appointment of a trustee to protect and enforce the interests of the
<br />registered owners or for acceleration of the stated maturities of the Bonds in the event of default. Consequently, the remedy of
<br />mandamus may have to be relied upon from year to year.
<br />
<br />Under Texas law, no judgment obtained against the Issuer may be enforced by direct levy and execution against the Issuer's
<br />property. Further, the registered owners of the Bonds may not themselves foreclose on taxable property within the issuer to
<br />collect any unpaid taxes to pay the principal of and interest on the Bonds. The enforceability of the rights and remedies of the
<br />registered owners may be further limited by laws relating to bankruptcy, reorganization, or other similar laws of general
<br />application affecting the dghts of creditors of political subdivisions such as the Issuer. Specifically, during the pendency of a
<br />bankruptcy proceeding the remedy for mandamus may not be available unless authorized by the bankruptcy judge.
<br />
<br />
<br />
|