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e The proceeds from the sale of the Bonds which were used to (I) current refund two series of outstanding Waterwork and Sewer System Combination Tax and Revenue Bonds assumed by the City through annexation and (2) advance refund four series of outstanding Gen~i'al Obligation Bonds and two series of Waterworks and Sewer System Revenue Bonds prior to their stated maturities. The bonds to be refunded (hereinafter collectively referred to as the "Refunded Bonds") constitute the following issues: PLAN OF DN~CING e Pu rDose Option Dates 09/01194 02/15/96 02/15/00 03/15/01 02/15/99 03/15/01 03/15/99 05/01194 Maturities To Be Refunded 1997-1998 1995 1998-2005 2003-2010 2004-2011 2001-2005 2004-2011 2002-2005 ArnOunl To Be Refunded $ 120,000 5,000 $2,175,000 $1,850,000 $ 600,000 $1,900,000 $ 900,000 $1.260.000 $8,820,000 $ Style College View MUD WW&SS Comb. Tax & Rev Bonds, Ser 1968 (Assumed Bonds) College View MUD WW&SS Comb. Tax & Rev Bonds, Ser 1970 (Assumed Bonds) G.O.Bonds,SerI986 G.O. Bonds, Ser 1989 G.O. Bonds, Ser 1990 G.O. Refunding Bonds, Ser 1991 WW &SS Rev Bonds, Ser 1990 WW &SS Rev Refunding Bonds, Ser 1991 Original Amount Issued $1,150,000 $ 600,000 $4,250,000 $4,500,000 $1,500,000 $6,430,000 $2,100,000 $3,425,000 Total r I . e e [This page is intentionally left blank.] Option Dates at a price of par plus accrued interest to the date for redemption on their respective called The Refunded Bonds will be fixed for redemption. in a debt service savings to the City. The interest payments on the Refunded Bonds scheduled to become due and payable prior to the Option Dates and the principal amount of the Refunded Bonds scheduled to mature subsequent to the Option Dates are to be paid on the dates each comes due, and on the Option Dates respectively, from funds to be deposited with Texas Commerce Bank, National Association, Houston, Texas (the "Escrow Agent"). result wil issuance of the Bonds With respect to the Refunded Bonds, the The Ordinances authorizing the issuance and sale of the Bonds (the "Bond Ordinances") provide that from the proceeds of the sale of the Bonds to the Underwriters the City will deposit with the Escrow Agent the amount necessary to accomplish the discharge and final payment of the Refunded Bonds. Such funds will be held by the Escrow Agent in an escrow account (the "Escrow Fund") and used to purchase direct obligations of the United States of America (the "Federal Securities"). At the time of delivery of the Bonds to the Underwriters, Deloitte & Touche, Certified Public Accountants, will verify the mathematical adequacy of the Escrowed Securities, maturing at such time and yielding interest in amounts such that together with uninvested funds in the Escrow Fund they will be sufficient to pay, when due, the principal of and interest on the Refunded Bonds including all costs related thereto. Such maturing principal and interest on the Federal Securities will not be available to pay debt service on the Bonds. Under a certain Escrow Deposit Agreement (the "Escrow Agreement") to be dated as of between the City and the Escrow Agent, the Escrow Fund is irrevocably pledged to the payment of principal of and interest on the Refunded Bonds. . , I ~ By the deposit of the Federal Securities and cash with the Escrow Agent pursuant to the Escrow Agreement, the City will have effected the defeasance of the Refunded Bonds pursuant to the terms of the ordinances authorizing their issuance. In the opinion of Bond Counsel, as a result of such defeasance, the General Obligation Refunded Bonds will no longer be payable from ad valorem taxes, and the Revenue Refunded Bonds will no longer be paid from the net revenues of the City's Water and Sewer System, but will be payable solely from the principal of and interest on the Federal Securities and cash held for such purpose by the Escrow Agent, and the pledge of ad valorem taxes and net revenues of the City's Water and Sewer System for the payment of the principal and interest on the Refunded Bonds will be discharged. J