ORD 2016-15CERTIFICATION PERTAINING TO
PASSAGE OF AN ORDINANCE
STATE OF TEXAS §
TOWN OF TROPHY CLUB §
On the 12th day of April, 2016 the Town Council of the Town of Trophy Club, Texas,
convened in a regular meeting at the regular meeting place thereof, the meeting being open to the
public and notice of said meeting, giving the date, place and subject thereof, having been posted
as prescribed by Chapter 551, Texas Government Code, as amended; and the roll was called of
the duly constituted officers and members of the Town Council, which officers and members are
as follows:
Nick Sanders, Mayor Jim Parrow )
Greg Lamont, Mayor Pro Tem Garrett Reed )
Tim Kurtz ) Members of
Rhylan Rowe ) the Council
Philip Shoffner )
and all of said persons were present except , thus
constituting a quorum. Whereupon, among other business, a written ordinance bearing the
following caption was introduced:
AN ORDINANCE AUTHORIZING THE ISSUANCE OF $4,210,000 TOWN
OF TROPHY CLUB, TEXAS, COMBINATION TAX AND REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2016; LEVYING A TAX, AND
PROVIDING FOR THE SECURITY FOR AND PAYMENT OF SAID
CERTIFICATES; AWARDING THE SALE OF THE CERTIFICATES;
AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT
AGREEMENT; APPROVING THE OFFICIAL STATEMENT; ENACTING
OTHER PROVISIONS RELATING TO THE SUBJECT; AND DECLARING
AN EFFECTIVE DATE.
The Ordinance, a full, true and correct copy of which is attached hereto, was read and
reviewed by the Town Council.
Thereupon, it was duly moved and seconded that the Ordinance be finally passed and
adopted.
The Presiding Officer put the motion to a vote of the members of the Town Council, and
the Ordinance was finally passed and adopted by the following vote:
AYES: Z NAYS: 0
#5173446.1
ABSTENTIONS: 0
THIS CERTIFICATE IS CERTIFIED TO BE TRUE AND CORRECT, and to correctly
reflect the duly constituted officers and members of the Town Council of said Town, and the
attached and following copy of said Ordinance is hereby certified to be a true and correct copy of
an official copy thereof on file among the official records of the Town, all on this the I,&ay
Of n , 2016.
[SEAL]
Town Secretar , Town of Trophy Club, Texas
Certification for Ordinance
Series 2016 Certificates of'Obligation
ORDINANCE
2016-15
relating to
$4,210,000
TOWN OF TROPHY CLUB, TEXAS
COMBINATION TAX AND REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2016
Adopted: April 12, 2016
Dated: May 1, 2016
P51;90283
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section1.01. Definitions...............................................................................................................2
Section1.02. Findings..................................................................................................................4
Section 1.03. Table of Contents, Titles, and Headings...........................................................5
Section1.04. Interpretation..........................................................................................................5
ARTICLE II
SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND
Section 2.01. Payment of the Certificates.................................................................................5
Section 2.02. Interest and Sinking Fund....................................................................................6
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE CERTIFICATES
Section3.01. Authorization..........................................................................................................7
Section 3.02. Date, Denomination, Maturities, and Interest...................................................7
Section 3.03. Medium, Method, and Place of Payment..........................................................8
Section 3.04. Execution and Registration of Certificates........................................................9
Section3.05. Ownership ............................................................................................................10
Section 3.06. Registration, Transfer, and Exchange.............................................................11
Section3.07. Cancellation.........................................................................................................11
Section 3.08. Temporary Certificates.......................................................................................12
Section 3.09. Replacement Certificates...................................................................................12
Section 3.10. Book -Entry -Only System....................................................................................13
Section 3.11. Successor Securities Depository; Transfer Outside Book -Entry -Only
System.....................................................................................................................................
14
Section 3.12. Payments to Cede & Co.....................................................................................15
ARTICLE IV
REDEMPTION OF CERTIFICATES BEFORE MATURITY
Section 4.01. Limitation on Redemption..................................................................................15
Section 4.02. Optional Redemption..........................................................................................15
Section 4.03. Mandatory Sinking Fund Redemption.............................................................15
Section 4.04. Partial Redemption.............................................................................................17
Section 4.05. Notice of Redemption to Owners......................................................................17
Section 4.06. Payment Upon Redemption..............................................................................17
Section 4.07. Effect of Redemption..........................................................................................18
Section 4.08. Conditional Notice of Redemption....................................................................18
Section4.09. Lapse of Payment...............................................................................................18
(i)
#5159028.3
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01. Appointment of Initial Paying Agent/Registrar................................................19
Section5.02. Qualifications.......................................................................................................19
Section 5.03. Maintaining Paying Agent/Registrar.................................................................19
Section5.04. Termination..........................................................................................................19
Section 5.05. Notice of Change to Owners.............................................................................19
Section 5.06. Agreement to Perform Duties and Functions.................................................19
Section 5.07. Delivery of Records to Successor....................................................................20
ARTICLE VI
FORM OF THE CERTIFICATES
Section6.01. Form Generally....................................................................................................20
Section 6.02. Form of the Certificates......................................................................................20
Section 6.03. CUSIP Registration.............................................................................................27
Section6.04. Legal Opinion.......................................................................................................28
Section 6.05. Statement Insurance..........................................................................................28
ARTICLE VII
SALE AND DELIVERY OF CERTIFICATES;
DEPOSIT OF PROCEEDS; FLOW OF FUNDS
Section 7.01. Sale of Certificates; Official Statement............................................................28
Section 7.02. Control and Delivery of Certificates..................................................................29
Section 7.03. Deposit of Proceeds...........................................................................................30
ARTICLE VIII
INVESTMENTS
Section8.01. Investments..........................................................................................................30
Section 8.02. Investment Income..............................................................................................30
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01. Payment of the Certificates...............................................................................31
Section 9.02. Other Representations and Covenants...........................................................31
Section 9.03. Provisions Concerning Federal Income Tax Exclusion................................31
Section 9.04. No Private Use or Payment and No Private Loan Financing .......................32
Section 9.05. No Federal Guaranty..........................................................................................32
Section 9.06. Certificates are not Hedge Certificates............................................................32
Section 9.07. No -Arbitrage Covenant......................................................................................32
Section9.08. Arbitrage Rebate.................................................................................................33
Section 9.09. Information Reporting.........................................................................................33
Section 9.10. Continuing Obligation.........................................................................................33
(ii)
#5159028.3
Section 9.11. Qualified Tax -Exempt Obligations....................................................................33
ARTICLE X
DEFAULT AND REMEDIES
Section10.01............................................................................................................Events of Default. 34
Section 10.02.................................................................................................... Remedies for Default. 34
Section 10.03..............................................................................................Remedies Not Exclusive. 35
ARTICLE XI
DISCHARGE
Section11.01......................................................................................................................... Discharge. 35
ARTICLE XII
CONTINUING DISCLOSURE UNDERTAKING
Section12.01...............................................................................................................Annual Reports. 35
Section 12.02................................................................................................. Material Event Notices. 36
Section 12.03............................................................Limitations, Disclaimers and Amendments. 37
ARTICLE XIII
AMENDMENTS
Section13.01...................................................................................................................Amendments. 38
ARTICLE XIV
MISCELLANEOUS
Section 14.01................................................................................................Changes to Ordinance.. 39
Section 14.02............................................................................................................. Partial Invalidity.. 39
Section 14.03.................................................................................................... No Personal Liability.. 39
ARTICLE XV
EFFECTIVENESS
Section15.01................................................................................................................... Effectiveness. 39
#5159028.3
TOWN OF TROPHY CLUB, TEXAS
ORDINANCE NO. 2016-15
AN ORDINANCE AUTHORIZING THE ISSUANCE OF $4,210,000
TOWN OF TROPHY CLUB, TEXAS, COMBINATION TAX AND
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2016; LEVYING
A TAX, AND PROVIDING FOR THE SECURITY FOR AND PAYMENT
OF SAID CERTIFICATES; AWARDING THE SALE OF THE
CERTIFICATES; AUTHORIZING THE EXECUTION AND DELIVERY OF
A PAYING AGENT AGREEMENT; APPROVING THE OFFICIAL
STATEMENT; ENACTING OTHER PROVISIONS RELATING TO THE
SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, under the provisions of the Texas Local Government Code, Chapter
271, Subchapter C, as amended, the Town of Trophy Club, Texas (the "Town"), is
authorized to issue certificates of obligation for the purposes specified in this Ordinance
and for the payment of all or a portion of the contractual obligations for professional
services, including that of engineers, attorneys, and financial advisors in connection
therewith, and to sell the same for cash as herein provided; and
WHEREAS, the Town is authorized to provide that such obligations will be
payable from and secured by the levy of a direct and continuing ad valorem tax against
all taxable property within the Town, in combination with all or a part of certain revenues
of the Town's municipal drainage utility system (the "System") remaining after payment
of any obligations of the Town payable in whole or in part from a lien on or pledge of
such revenues that would be superior to the obligations to be authorized herein as
authorized by Chapter 1502, Texas Government Code; and
WHEREAS, the Town Council has found and determined that it is necessary and
in the best interests of the Town and its citizens that it issue such certificates of
obligation authorized by this Ordinance; and
WHEREAS, pursuant to a resolution heretofore passed by this governing body,
notice of intention (the "Notice of Intention") to issue certificates of obligation of the
Town payable as provided in this Ordinance was published in a newspaper of general
circulation in the Town in accordance with the requirements of law, such certificates of
obligation to be issued for the purpose of paying contractual obligations to be incurred
for the purposes set forth in Section 3.01 hereof; and
WHEREAS, the Notice of Intention stated that the Town Council intended to pass
an ordinance authorizing the issuance of the Certificates at its Town Council meeting
held on the date of adoption of this Ordinance; and
WHEREAS, no petition of any kind has been filed with the Town Secretary, any
member of the Town Council or any other official of the Town, protesting the issuance of
such certificates of obligation; and
Page 1 of 44
#5159028.3
WHEREAS, this Town Council is now authorized and empowered to proceed
with the issuance of said certificates of obligation and to sell the same for cash; and
WHEREAS, the meeting at which this Ordinance is considered is open to the
public as required by law, and public notice of the time, place, and purpose of said
meeting was given as required by Chapter 551, Texas Government Code, as amended;
therefore,
BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF TROPHY
CLUB, TEXAS, THAT:
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section 1.01. Definitions.
Unless otherwise expressly provided or unless the context clearly requires
otherwise in this Ordinance, the following terms shall have the meanings specified
below:
"Business Day" means a day that is not a Saturday, Sunday, legal holiday or
other day on which banking institutions in the city where the Designated
Payment/Transfer Office is located are required or authorized by law or executive order
to close.
"Certificate" means any of the Certificates.
"Certificate Date" means the date designated as the initial date of the Certificates
by Section 3.02(a) of this Ordinance.
"Certificates" means the certificates of obligation authorized to be issued by
Section 3.01 of this Ordinance and designated as "Town of Trophy Club, Texas,
Combination Tax and Revenue Certificates of Obligation, Series 2016.
"Closing Date" means the date of the initial delivery of and payment for the
Certificates.
"Code" means the Internal Revenue Code of 1986, as amended, including
applicable regulations, published rulings, and court decisions.
"Designated Payment/Transfer Office" means (i) with respect to the initial Paying
Agent/Registrar named herein, its office in Dallas, Texas, or at such other location
designated by the Paying Agent/Registrar and (ii) with respect to any successor Paying
Agent/Registrar, the office of such successor designated and located as may be agreed
upon by the Town and such successor.
Page 2 of 44
#5159028.3
"DTC" means The Depository Trust Company of New York, New York, or any
successor securities depository.
"DTC Participant" means brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations on whose behalf DTC was created to hold
securities to facilitate the clearance and settlement of securities transactions among
DTC Participants.
"EMMA" means the Electronic Municipal Market Access System.
"Event of Default" means any event of default as defined in Section 10.01 of this
Ordinance.
"Fiscal Year" means such fiscal year as shall from time to time be set by the
Town Council.
"Initial Certificate" means the initial certificate authorized by Section 3.04(d) of
this Ordinance.
"Interest and Sinking Fund" means the interest and sinking fund established by
Section 2.02 of this Ordinance.
"Interest Payment Date" means the date or dates upon which interest on the
Certificates is scheduled to be paid until their respective dates of maturity or prior
redemption, such dates being March 1 and September 1 of each year commencing
March 1, 2017.
"MSRB" means the Municipal Securities Rulemaking Board.
"Net Revenues" means the gross revenues of the System less the expenses of
operation and maintenance as said expenses are defined by Chapter 1502, Texas
Government Code, as amended.
"Ordinance" means this Ordinance.
"Owner" means the person who is the registered owner of a Certificate or
Certificates, as shown in the Register.
"Paying Agent/Registrar" means initially BOKF, N.A., Dallas, Texas, or any
successor thereto as provided in this Ordinance.
"Prior Lien Bonds" means any and all bonds or other obligations of the Town
presently outstanding or that may be hereafter issued, payable from and secured by a
first lien on and pledge of the Net Revenues or by a lien on and pledge of the Net
Revenues subordinate to a first lien and pledge of such Net Revenues but superior to
the lien and pledge of the Surplus Revenues made for the Certificates.
Page 3 of 44
#5159028.3
"Record Date" means the last Business Day of the month next preceding an
Interest Payment Date.
"Register" means the Register specified in Section 3.06(a) of this Ordinance.
"Representations Letter" means the Blanket Letter of Representations between
the Town and DTC.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized
department, officer or agency thereof, as and determined by the SEC or its staff to be a
state information depository within the meaning of the Rule from time to time.
"Special Payment Date" means the Special Payment Date prescribed by
Section 3.03(b).
"Special Record Date" means the Special Record Date prescribed by
Section 3.03(b).
"Surplus Revenues" means the revenues of the System remaining after payment
of all operation and maintenance expenses thereof, and all debt service, reserve, and
other requirements in connection with the Town's Prior Lien Bonds; provided, however,
that the amount of such Surplus Revenues pledged to the payment of the Certificates
shall be limited to $1,000.
"System" as used in this Ordinance means the Town's municipal drainage utility
system, including all present and future additions, extensions, replacements, and
improvements thereto.
"Town" means the Town of Trophy Club, Texas.
"Unclaimed Payments" means money deposited with the Paying Agent/Registrar
for the payment of principal of, redemption premium, if any, or interest on the
Certificates as the same come due and payable or money set aside for the payment of
Certificates duly called for redemption prior to maturity.
Section 1.02. Findings.
The declarations, determinations, and findings declared, made, and found in the
preamble to this Ordinance are hereby adopted, restated, and made a part of the
operative provisions hereof.
Page 4 of 44
#5159028.3
Section 1.03. Table of Contents Titles and Headings.
The table of contents, titles, and headings of the Articles and Sections of this
Ordinance have been inserted for convenience of reference only and are not to be
considered a part hereof and shall not in any way modify or restrict any of the terms or
provisions hereof and shall never be considered or given any effect in construing this
Ordinance or any provision hereof or in ascertaining intent, if any question of intent
should arise.
Section 1.04. Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender
shall be construed to include correlative words of the feminine and neuter genders and
vice versa, and words of the singular number shall be construed to include correlative
words of the plural number and vice versa.
(b) This Ordinance and all the terms and provisions hereof shall be liberally
construed to effectuate the purposes set forth herein.
ARTICLE II
SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND
Section 2.01. Payment of the Certificates.
(a) Pursuant to the authority granted by the Texas Constitution and laws of
the State of Texas, there shall be levied and there is hereby levied for the current year
and for each succeeding year thereafter while any of the Certificates or any interest
thereon is outstanding and unpaid, an ad valorem tax on each one hundred dollars
valuation of taxable property within the Town, at a rate sufficient, within the limit
prescribed by law, to pay the debt service requirements of the Certificates, being (i) the
interest on the Certificates, and (ii) a sinking fund for their redemption at maturity or a
sinking fund of two percent per annum (whichever amount is the greater), when due and
payable, full allowance being made for delinquencies and costs of collection.
(b) The ad valorem tax thus levied shall be assessed and collected each year
against all property appearing on the tax rolls of the Town most recently approved in
accordance with law, and the money thus collected shall be deposited as collected to
the Interest and Sinking Fund.
(c) Said ad valorem tax, the collections therefrom, and all amounts on deposit
in or required hereby to be deposited to the Interest and Sinking Fund are hereby
pledged and committed irrevocably to the payment of the principal of and interest on the
Certificates when and as due and payable in accordance with their terms and this
Ordinance.
Page 5 of 44
#5159028.3
(d) The amount of taxes to be provided annually for the payment of principal
of and interest on the Certificates shall be determined and accomplished in the following
manner:
(1) The Town's annual budget shall reflect (i) the amount of debt
service requirements to become due on the Certificates in the next succeeding
Fiscal Year of the Town and (ii) the amount on deposit in the Interest and Sinking
Fund, as of the date such budget is prepared (after giving effect to any payments
required to be made during the remainder of the then current Fiscal Year), and
(iii) the amount of Surplus Revenues estimated and budgeted to be available for
the payment of such debt service requirements on the Certificates during the
next succeeding Fiscal Year.
(ii) The amount required to be provided in the succeeding Fiscal Year
of the Town from ad valorem taxes shall be the amount, if any, the debt service
requirements to be paid on the Certificates in the next succeeding Fiscal Year of
the Town exceeds the sum of (i) the amount shown to be on deposit in the
Interest and Sinking Fund (after giving effect to any payments required to be
made during the remainder of the then current Fiscal Year) at the time the annual
budget is prepared, and (ii) the Surplus Revenues shown to be budgeted and
available for payment of said debt service requirements.
(iii) Following the final approval of the annual budget of the Town, the
governing body of the Town shall, by ordinance, levy an ad valorem tax at a rate
sufficient to produce taxes in the amount determined in paragraph (ii) above, to
be utilized for purposes of paying the principal of and interest on the Certificates
in the next succeeding Fiscal Year of the Town.
(e) The Town hereby covenants and agrees that the Surplus Revenues are
hereby irrevocably pledged equally and ratably to the payment of the principal of,
redemption premium, if any, and interest on the Certificates, as the same become due.
(f) If the liens and provisions of this Ordinance shall be released in a manner
permitted by Article XI hereof, then the collection of such ad valorem tax may be
suspended or appropriately reduced, as the facts may permit, and further deposits to
the Interest and Sinking Fund may be suspended or appropriately reduced, as the facts
may permit. In determining the aggregate principal amount of outstanding Certificates,
there shall be subtracted the amount of any Certificates that have been duly called for
redemption and for which money has been deposited with the Paying Agent/Registrar
for such redemption.
Section 2.02. Interest and Sinking Fund.
(a) The Town hereby establishes a special fund or account to be designated
the "Town of Trophy Club, Texas, Combination Tax and Revenue Certificates of
Obligation, Series 2016, Interest and Sinking Fund" (the "Interest and Sinking Fund")
Page 6 of 44
#5159028.3
said fund to be maintained at an official depository bank of the Town separate and apart
from all other funds and accounts of the Town.
(b) Money on deposit in or required by this Ordinance to be deposited to the
Interest and Sinking Fund shall be used solely for the purpose of paying the interest on
and principal of the Certificates when and as due and payable in accordance with their
terms and this Ordinance.
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE CERTIFICATES
Section 3.01. Authorization.
The Town's certificates of obligation to be designated "Town of Trophy Club,
Texas, Combination Tax and Revenue Certificates of Obligation, Series 2016" (the
"Certificates"), are hereby authorized to be issued and delivered in accordance with the
Constitution and laws of the State of Texas, specifically Subchapter C, Chapter 271,
Texas Local Government Code. The Certificates shall be issued in the aggregate
principal amount of $4,210,000 for the following purposes, to wit. (i) designing,
developing, constructing, improving, extending, and expanding streets, thoroughfares,
sidewalks, bridges, and other public ways of the Town, including streetscaping,
streetlighting, right-of-way protection, utility relocation, and related storm drainage
improvements; and acquiring rights-of-way in connection therewith, (the "Project") and
(ii) to pay professional services of attorneys, financial advisors and other professionals
in connection with the Project and the issuance of the Certificates.
Section 3.02. Date, Denomination, Maturities, and Interest.
(a) The Certificates shall be dated May 1, 2016. The Certificates shall be in
fully registered form, without coupons, in the denomination of $5,000 or any integral
multiple thereof and shall be numbered separately from one upward, except the Initial
Certificate, which shall be numbered T-1.
(b) The Certificates shall mature on September 1 in the years and in the
principal amounts set forth in the following schedule:
Page 7 of 44
#5159028.3
Serial Certificates
Term Certificates
Year Principal Amount Interest Rate
2028
Principal
Interest
2034
Principal
2.750%
Years
Amount
Rate
Years
Amount
Interest Rate
2017
$125,000
2.000%
2025
$205,000
3.000%
2018
160,000
3.000%
2026
210,000
2.500%
2019
165,000
4.000%
*****
*****
*****
2020
175,000
4.000%
2029
225,000
2.250%
2021
180,000
4.000%
2030
230,000
2.375%
2022
190,000
3.000%
2031
235,000
2.500%
2023
195,000
3.000%
2032
245,000
2.500%
2024
200,000
3.000%
Term Certificates
Year Principal Amount Interest Rate
2028
$435,000
2.125%
2034
$505,000
2.750%
2036
$530,000
3.000%
(c) Interest shall accrue and be paid on each Certificate respectively until its
maturity or prior redemption from the later of the Certificate Date or the most recent
interest payment date to which interest has been paid or provided for at the rates per
annum for each maturity specified in the schedule contained in subsection (b) above.
Such interest shall be payable semiannually on March 1 and September 1 of each year
commencing March 1, 2017, and shall be computed on the basis of a 360 -day year of
twelve 30 -day months.
Section 3.03. Medium, Method, and Place of Payment.
(a) The principal of, redemption premium, if any, and interest on the
Certificates shall be paid in lawful money of the United States of America.
(b) Interest on the Certificates shall be payable to the Owners as shown in the
Register at the close of business on the Record Date; provided, however, in the event of
nonpayment of interest on a scheduled Interest Payment Date and for 30 days
thereafter, a new record date for such interest payment (a "Special Record Date") shall
be established by the Paying Agent/Registrar, if and when funds for the payment of
such interest have been received from the Town. Notice of the Special Record Date
and of the scheduled payment date of the past due interest (the "Special Payment
Date," which shall be 15 days after the Special Record Date) shall be sent at least five
Business Days prior to the Special Record Date by United States mail, first class,
postage prepaid, to the address of each Owner of a Certificate appearing on the
Register at the close of business on the last Business Day next preceding the date of
mailing of such notice.
Page 8 of 44
a;1 S9028.3
(c) Interest shall be paid by check, dated as of and mailed on the Interest
Payment Date, and sent by the Paying Agent/Registrar to each Owner, first class United
States mail, postage prepaid, to the address of each Owner as it appears in the
Register, or by such other customary banking arrangement acceptable to the Paying
Agent/Registrar and the Owner; provided, however, that the Owner shall bear all risk
and expense of such alternative banking arrangement. At the option of an Owner of at
least $1,000,000 principal amount of the Certificates, interest may be paid by wire
transfer to the bank account of such Owner on file with the Paying Agent/Registrar.
(d) The principal of each Certificate shall be paid to the Owner thereof on the
due date, whether at the maturity date or the date of prior redemption thereof upon
presentation and surrender of such Certificate at the Designated Payment/Transfer
Office of the Paying Agent/Registrar.
(e) If the date for the payment of the principal of or interest on the Certificates
shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the
city where the Designated Payment/Transfer Office of the paying Agent/Registrar is
located are required or authorized by law or executive order to close, then the date for
such payment shall be the next succeeding day which is not a Saturday, Sunday, legal
holiday, or day on which banking institutions are required or authorized to close, and
payment on such date shall have the same force and effect as if made on the original
date payment was due and no additional interest shall be due by reason of nonpayment
on the date on which such payment is otherwise stated to be due and payable.
(f) Unclaimed Payments shall be segregated in a special escrow account and
held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owners of
the Certificates to which the Unclaimed Payments pertain. Subject to Title 6 of the
Texas Property Code, Unclaimed Payments remaining unclaimed by the Owners
entitled thereto for three years after the applicable payment or redemption date shall be
applied to the next payment or payments on the Certificates thereafter coming due and,
to the extent any such money remains after the retirement of all outstanding
Certificates, shall be paid to the Town to be used for any lawful purpose. Thereafter,
neither the Town, the Paying Agent/Registrar, nor any other person shall be liable or
responsible to any Owners of such Certificates for any further payment of such
unclaimed moneys or on account of any such Certificates, subject to Title 6 of the Texas
Property Code.
Section 3.04. Execution and Registration of Certificates.
(a) The Certificates shall be executed on behalf of the Town by the Mayor and
the Town Secretary, by their manual or facsimile signatures, and the official seal of the
Town shall be impressed or placed in facsimile thereon. Such facsimile signatures on
the Certificates shall have the same effect as if each of the Certificates had been signed
manually and in person by each of said officers, and such facsimile seal on the
Certificates shall have the same effect as if the official seal of the Town had been
manually impressed upon each of the Certificates.
#5159028.3 Page 9 of 44
(b) In the event that any officer of the Town whose manual or facsimile
signature appears on the Certificates ceases to be such officer before the authentication
of such Certificates or before the delivery thereof, such manual or facsimile signature
nevertheless shall be valid and sufficient for all purposes as if such officer had remained
in such office.
(c) Except as provided below, no Certificate shall be valid or obligatory for
any purpose or be entitled to any security or benefit of this Ordinance unless and until
there appears thereon the Certificate of Paying Agent/Registrar substantially in the form
provided herein, duly authenticated by manual execution by an officer or duly authorized
signatory of the Paying Agent/Registrar. It shall not be required that the same officer or
authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying
Agent/Registrar on all of the Certificates. In lieu of the executed Certificate of Paying
Agent/Registrar described above, the Initial Certificate delivered at the Closing Date
shall have attached thereto the Comptroller's Registration Certificate substantially in the
form provided herein, manually executed by the Comptroller of Public Accounts of the
State of Texas, or by his duly authorized agent, which Certificate shall be evidence that
the Certificate has been duly approved by the Attorney General of the State of Texas,
that it is a valid and binding obligation of the Town, and that it has been registered by
the Comptroller of Public Accounts of the State of Texas.
(d) On the Closing Date, one initial Certificate (the "Initial Certificate")
representing the entire principal amount of all Certificates, payable in stated installments
to the initial purchaser, or its designee, executed by the Mayor and Town Secretary of
the Town, approved by the Attorney General, and registered and manually signed by
the Comptroller of Public Accounts, will be delivered to the initial purchaser or its
designee. Upon payment for the Initial Certificate, the Paying Agent/Registrar shall
cancel the Initial Certificate and deliver to DTC on behalf of the initial purchaser one
registered definitive Certificate for each year of maturity of the Certificates in the
aggregate principal amount of all Certificates for such maturity, registered in the name
of Cede & Co., as nominee of DTC.
Section 3.05. Ownership.
(a) The Town, the Paying Agent/Registrar, and any other person may treat
the person in whose name any Certificate is registered as the absolute owner of such
Certificate for the purpose of making and receiving payment as herein provided (except
interest shall be paid to the person in whose name such Certificate is registered on the
Record Date or Special Record Date, as applicable), and for all other purposes, whether
or not such Certificate is overdue, and neither the Town nor the Paying Agent/Registrar
shall be bound by any notice or knowledge to the contrary.
(b) All payments made to the Owner of a Certificate shall be valid and
effectual and shall discharge the liability of the Town and the Paying Agent/Registrar
upon such Certificate to the extent of the sums paid.
Page 10 of 44
9;1>9028.3
Section 3.06. Registration, Transfer, and Exchange
(a) So long as any Certificates remain outstanding, the Town shall cause the
Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register
(the "Register") in which, subject to such reasonable regulations as it may prescribe, the
Paying Agent/Registrar shall provide for the registration and transfer of Certificates in
accordance with this Ordinance.
(b) The ownership of a Certificate may be transferred only upon the
presentation and surrender of the Certificate at the Designated Payment/Transfer Office
of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is
acceptable to the Paying Agent/Registrar. No transfer of any Certificate shall be
effective until entered in the Register.
(c) The Certificates shall be exchangeable upon the presentation and
surrender thereof at the Designated Payment/Transfer Office of the Paying
Agent/Registrar for a Certificate or Certificates of the same maturity and interest rate
and in a denomination or denominations of any integral multiple of $5,000, and in an
aggregate principal amount equal to the unpaid principal amount of the Certificates
presented for exchange. The Paying Agent/Registrar is hereby authorized to
authenticate and deliver Certificates exchanged for other Certificates in accordance with
this Section.
(d) Each exchange Certificate delivered by the Paying Agent/Registrar in
accordance with this Section shall constitute an original contractual obligation of the
Town and shall be entitled to the benefits and security of this Ordinance to the same
extent as the Certificate or Certificates in lieu of which such exchange Certificate is
delivered.
(e) No service charge shall be made to the Owner for the initial registration,
subsequent transfer, or exchange for a different denomination of any of the Certificates.
The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to
cover any tax or other governmental charge that is authorized to be imposed in
connection with the registration, transfer, or exchange of a Certificate.
(f) Neither the Town nor the Paying Agent/Registrar shall be required to
issue, transfer or exchange any Certificate called for redemption, in whole or in part,
within 45 calendar days prior to the date fixed for redemption; provided, however, such
limitation shall not be applicable to an exchange by the Owner of the uncalled principal
balance of a Certificate.
Section 3.07. Cancellation.
All Certificates paid or redeemed before scheduled maturity in accordance with
this Ordinance, and all Certificates in lieu of which exchange Certificates or replacement
Page 11 of 44
#5159028.3
Certificates are authenticated and delivered in accordance with this Ordinance, shall be
canceled and proper records made regarding such payment, redemption, exchange, or
replacement. The Paying Agent/Registrar shall then return such canceled Certificates
to the Town or may in accordance with law dispose of such cancelled Certificates.
Section 3.08. Temporary Certificates.
(a) Following the delivery and registration of the Initial Certificate and pending
the preparation of definitive Certificates, the proper officers of the Town may execute
and, upon the Town's request, the Paying Agent/Registrar shall authenticate and
deliver, one or more temporary Certificates that are printed, lithographed, typewritten,
mimeographed, or otherwise produced, in any denomination, substantially of the tenor
of the definitive Certificates in lieu of which they are delivered, without coupons, and
with such appropriate insertions, omissions, substitutions, and other variations as the
officers of the Town executing such temporary Certificates may determine, as
evidenced by their signing of such temporary Certificates.
(b) Until exchanged for Certificates in definitive form, such Certificates in
temporary form shall be entitled to the benefit and security of this Ordinance.
(c) The Town, without unreasonable delay, shall prepare, execute and deliver
to the Paying Agent/Registrar the Certificates in definitive form; thereupon, upon the
presentation and surrender of the Certificate or Certificates in temporary form to the
Paying Agent/Registrar, the Paying Agent/Registrar shall cancel the Certificates in
temporary form and shall authenticate and deliver in exchange therefor a Certificate or
Certificates of the same maturity and series, in definitive form, in the authorized
denomination, and in the same aggregate principal amount, as the Certificate or
Certificates in temporary form surrendered. Such exchange shall be made without the
making of any charge therefor to any Owner.
Section 3.09. Replacement Certificates.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a
mutilated Certificate, the Paying Agent/Registrar shall authenticate and deliver in
exchange therefor a replacement Certificate of like tenor and principal amount, bearing
a number not contemporaneously outstanding. The Town or the Paying
Agent/Registrar may require the Owner of such Certificate to pay a sum sufficient to
cover any tax or other governmental charge that is authorized to be imposed in
connection therewith and any other expenses connected therewith.
(b) In the event that any Certificate is lost, apparently destroyed or wrongfully
taken, the Paying Agent/ Registrar, pursuant to the applicable laws of the State of
Texas and in the absence of notice or knowledge that such Certificate has been
acquired by a bona fide purchaser, shall authenticate and deliver a replacement
Certificate of like tenor and principal amount, bearing a number not contemporaneously
outstanding, provided that the Owner first complies with the following requirements:
Page 12 of 44
#5159028.3
(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his
or her ownership of and the circumstances of the loss, destruction, or theft of
such Certificate;
(ii) furnishes such security or indemnity as may be required by the
Paying Agent/Registrar to save it and the Town harmless;
(iii) pays all expenses and charges in connection therewith, including,
but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar,
and any tax or other governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the Town
and the Paying Agent/Registrar.
(c) If, after the delivery of such replacement Certificate, a bona fide purchaser
of the original Certificate in lieu of which such replacement Certificate was issued
presents for payment such original Certificate, the Town and the Paying Agent/Registrar
shall be entitled to recover such replacement Certificate 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 Town or the Paying Agent/Registrar in
connection therewith.
(d) In the event that any such mutilated, lost, apparently destroyed, or
wrongfully taken Certificate has become or is about to become due and payable, the
Paying Agent/Registrar, in its discretion, instead of issuing a replacement Certificate,
may pay such Certificate when it becomes due and payable.
(e) Each replacement Certificate delivered in accordance with this
Section shall constitute an original additional contractual obligation of the Town and
shall be entitled to the benefits and security of this Ordinance to the same extent as the
Certificate or Certificates in lieu of which such replacement Certificate is delivered.
Section 3.10. Book -Entry -Only System.
(a) Notwithstanding any other provision hereof, upon initial issuance of the
Certificates, the Certificates shall be registered in the name of Cede & Co., as nominee
of DTC. The definitive Certificates shall be initially issued in the form of a single
separate certificate for each of the maturities thereof.
(b) With respect to Certificates registered in the name of Cede & Co., as
nominee of DTC, the Town and the Paying Agent/Registrar shall have no responsibility
or obligation to any DTC Participant or to any person on behalf of whom such a DTC
Participant holds an interest in the Certificates. Without limiting the immediately
preceding sentence, the Town and the Paying Agent/Registrar shall have no
responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede
& Co. or any DTC Participant with respect to any ownership interest in the Certificates,
#5159028.3 Page 13 of 44
(ii) the delivery to any DTC Participant or any other person, other than an Owner, as
shown on the Register, of any notice with respect to the Certificates, including any
notice of redemption, or (iii) the payment to any DTC Participant or any other person,
other than an Owner, as shown in the Register of any amount with respect to principal
of, premium, if any, or interest on the Certificates. Notwithstanding any other provision
of this Ordinance to the contrary, the Town and the Paying Agent/Registrar shall be
entitled to treat and consider the person in whose name each Certificate is registered in
the Register as the absolute owner of such Certificate for the purpose of payment of
principal of, premium, if any, and interest on Certificates, for the purpose of giving
notices of redemption and other matters with respect to such Certificate, for the purpose
of registering transfer with respect to such Certificate, and for all other purposes
whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and
interest on the Certificates only to or upon the order of the respective Owners as shown
in the Register, as provided in this Ordinance, or their respective attorneys duly
authorized in writing, and all such payments shall be valid and effective to fully satisfy
and discharge the Town's obligations with respect to payment of, premium, if any, and
interest on the Certificates to the extent of the sum or sums so paid. No person other
than an Owner, as shown in the Register, shall receive a certificate evidencing the
obligation of the Town to make payments of amounts due pursuant to this Ordinance.
Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that
DTC has determined to substitute a new nominee in place of Cede & Co., the word
"Cede & Co." in this Ordinance shall refer to such new nominee of DTC.
(c) The Representations Letter previously executed and delivered by the
Town, and applicable to the Town's obligations delivered in book -entry -only form to
DTC as securities depository, is hereby ratified and approved for the Certificates.
Section 3.11. Successor Securities Depository Transfer Outside Book -Entry -
Only System.
In the event that the Town or the Paying Agent/Registrar determines that DTC is
incapable of discharging its responsibilities described herein and in the Representations
Letter of the Town to DTC, and that it is in the best interest of the Town and the
beneficial owners of the Certificates that they be able to obtain certificated Certificates,
or in the event DTC discontinues the services described herein, the Town shall (i)
appoint a successor securities depository, qualified to act as such under Section 17(a)
of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC
Participants of the appointment of such successor securities depository and transfer
one or more separate Certificates to such successor securities depository; or (ii) notify
DTC and DTC Participants of the availability through DTC of certificated Certificates and
cause the Paying Agent/Registrar to transfer one or more separate registered
Certificates to DTC Participants having Certificates credited to their DTC accounts. In
such event, the Certificates shall no longer be restricted to being registered in the
Register in the name of Cede & Co., as nominee of DTC, but may be registered in the
name of the successor securities depository, or its nominee, or in whatever name or
Page 14 of 44
95159028.3
names Owners transferring or exchanging Certificates shall designate, in accordance
with the provisions of this Ordinance.
Section 3.12. Payments to Cede & Co.
Notwithstanding any other provision of this Ordinance to the contrary, so long as
the Certificates are registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of, premium, if any, and interest on such Certificates,
and all notices with respect to such Certificates shall be made and given, respectively,
in the manner provided in the Representations Letter of the Town to DTC.
ARTICLE IV
REDEMPTION OF CERTIFICATES BEFORE MATURITY
Section 4.01. Limitation on Redemption.
The Certificates shall be subject to redemption before scheduled maturity only as
provided in this Article IV.
Section 4.02. Optional Redemption.
(a) The Town reserves the option to redeem Certificates maturing on and
after September 1, 2026 in whole or any part, before their respective scheduled maturity
dates, on September 1, 2025 or on any date thereafter, such redemption date or dates
to be fixed by the Town, at a price equal to the principal amount of the Certificates
called for redemption plus accrued interest to the date fixed for redemption.
(b) If less than all of the Certificates are to be redeemed pursuant to an
optional redemption, the Town shall determine the maturity or maturities and the
amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by
lot the Certificates, or portions thereof, within such maturity or maturities and in such
principal amounts for redemption.
(c) The Town, at least 45 days before the redemption date, unless a shorter
period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying
Agent/Registrar of such redemption date and of the principal amount of Certificates to
be redeemed.
Section 4.03. Mandatory Sinking Fund Redemption.
(a) The Certificates maturing on September 1, 2028, September 1, 2034 and
September 1, 2036 (the "Term Certificates") are subject to scheduled mandatory
redemption and will be redeemed by the Town, in part at a price equal to the principal
amount thereof, without premium, plus accrued interest to the redemption date, out of
moneys available for such purpose in the Interest and Sinking Fund, on the dates and in
the respective principal amounts as set forth below.
Page 15 of 44
#5159028.3
Term Certificates Maturing September 1 2028
Redemption Date Redemption Amount
September 1, 2027 $215,000
September 1, 2028* $220,000
*maturity
Term Certificates Maturing September 1 2034
Redemption Date Redemption Amount
September 1, 2033 $250,000
September 1, 2034* $255,000
*maturity
Term Certificates Maturing September 1 2033
Redemption Date Redemption Amount
September 1, 2035 $260,000
September 1, 2036* $270,000
*maturity
(b) At least forty-five (45) days prior to each scheduled mandatory redemption
date, the Paying Agent/Registrar shall select for redemption by lot, or by any other
customary method that results in a random selection, a principal amount of Term
Certificates equal to the aggregate principal amount of such Term Certificates to be
redeemed, shall call such Term Certificates for redemption on such scheduled
mandatory redemption date, and shall give notice of such redemption, as provided in
Section 4.05.
(c) The principal amount of the Term Certificates required to be redeemed on
any redemption date pursuant to subparagraph (a) of this Section 4.03 shall be
reduced, at the option of the Town, by the principal amount of any Term Certificates
which, at least 45 days prior to the mandatory sinking fund redemption date (i) shall
have been acquired by the Town at a price not exceeding the principal amount of such
Term Certificates plus accrued interest to the date of purchase thereof, and delivered to
the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed pursuant
to the optional redemption provisions hereof and not previously credited to a mandatory
sinking fund redemption.
Page 16 of 44
#5159028.3
Section 4.04. Partial Redemption.
(a) A portion of a single Certificate of a denomination greater than $5,000
may be redeemed, but only in a principal amount equal to $5,000 or any integral
multiple thereof. If such a Certificate is to be partially redeemed, the Paying
Agent/Registrar shall treat each $5,000 portion of the Certificate as though it were a
single Certificate for purposes of selection for redemption.
(b) Upon surrender of any Certificate for redemption in part, the Paying
Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate
and deliver an exchange Certificate or Certificates in an aggregate principal amount
equal to the unredeemed portion of the Certificate so surrendered, such exchange
being without charge.
(c) The Paying Agent/Registrar shall promptly notify the Town in writing of the
principal amount to be redeemed of any Certificate as to which only a portion thereof is
to be redeemed.
Section 4.05. Notice of Redemption to Owners.
(a) The Paying Agent/Registrar shall give notice of any redemption of
Certificates by sending notice by first class United States mail, postage prepaid, not less
than 30 days before the date fixed for redemption, to the Owner of each Certificate (or
part thereof) to be redeemed, at the address shown on the Register at the close of
business on the Business Day next preceding the date of mailing such notice.
(b) The notice shall state the redemption date, the redemption price, the place
at which the Certificates are to be surrendered for payment, and, if less than all the
Certificates outstanding are to be redeemed, an identification of the Certificates or
portions thereof to be redeemed.
(c) Any notice given as provided in this Section shall be conclusively
presumed to have been duly given, whether or not the Owner receives such notice.
Section 4.06. Payment Upon Redemption.
(a) Before or on each redemption date, the Town shall deposit with the
Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date
and the Paying Agent/Registrar shall make provision for the payment of the Certificates
to be redeemed on such date by setting aside and holding in trust such amounts as are
received by the Paying Agent/Registrar from the Town and shall use such funds solely
for the purpose of paying the principal of, redemption premium, if any, and accrued
interest on the Certificates being redeemed.
(b) Upon presentation and surrender of any Certificate called for redemption
at the Designated Payment/Transfer Office of the Paying Agent/Registrar on or after the
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#5159028.3
date fixed for redemption, the Paying Agent/Registrar shall pay the principal of,
redemption premium, if any, and accrued interest on such Certificate to the date of
redemption from the money set aside for such purpose.
Section 4.07. Effect of Redemption.
(a) Notice of redemption having been given as provided in Section 4.05 of this
Ordinance, the Certificates or portions thereof called for redemption shall become due
and payable on the date fixed for redemption and, unless the Town defaults in its
obligation to make provision for the payment of the principal thereof, redemption
premium, if any, or accrued interest thereon, such Certificates or portions thereof shall
cease to bear interest from and after the date fixed for redemption, whether or not such
Certificates are presented and surrendered for payment on such date.
(b) If the Town shall fail to make provision for payment of all sums due on a
redemption date, then any Certificate or portion thereof called for redemption shall
continue to bear interest at the rate stated on the Certificate until due provision is made
for the payment of same by the Town.
Section 4.08. Conditional Notice of Redemption.
The Town reserves the right to give notice of its election or direction to redeem
Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i)
that the redemption is conditioned upon the deposit of moneys and/or authorized
securities, in an amount equal to the amount necessary to effect the redemption, with
the Paying Agent/Registrar, or such other entity as may be authorized by law, no later
than the redemption date, or (ii) that the Town retains the right to rescind such notice at
any time on or prior to the scheduled redemption date if the Town delivers a certificate
of the Town to the Paying Agent/Registrar instructing the Paying Agent/Registrar to
rescind the redemption notice and such notice and redemption shall be of no effect if
such moneys and/or authorized securities are not so deposited or if the notice is
rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission
of a conditional notice of redemption to the affected Owners. Any Bonds subject to
conditional redemption and such redemption has been rescinded shall remain
Outstanding and the rescission of such redemption shall not constitute an event of
default. Further, in the case of a conditional notice of redemption, the failure of the Town
to make moneys and or authorized securities available in part or in whole on or before
the redemption date shall not constitute an event of default.
Section 4.09. Lapse of Payment.
Money set aside for the redemption of Certificates and remaining unclaimed by
the Owners of such Certificates shall be subject to the provisions of Section 3.03(f)
hereof.
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#5159028.3
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01. Appointment of Initial Paying Agent/Registrar.
BOKF, N.A., Dallas, Texas, is hereby appointed as the initial Paying
Agent/Registrar for the Certificates.
Section 5.02. Qualifications.
Each Paying Agent/Registrar shall be a commercial bank, a trust company
organized under the laws of the State of Texas, or other entity duly qualified and legally
authorized to serve as and perform the duties and services of paying agent and
registrar for the Certificates.
Section 5.03. Maintaining Paying Agent/Registrar.
(a) At all times while any of the Certificates are outstanding, the Town will
maintain a Paying Agent/Registrar that is qualified under Section 5.02 of this Ordinance.
The Mayor is hereby authorized and directed to execute an agreement with the Paying
Agent/Registrar specifying the duties and responsibilities of the Town and the Paying
Agent/Registrar in substantially the form presented at this meeting, such form of
agreement being hereby approved. The signature of the Mayor shall be attested by the
Town Secretary of the Town.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as
such, the Town will promptly appoint a replacement.
Section 5.04. Termination.
The Town, upon not less than sixty (60) days' notice, reserves the right to
terminate the appointment of any Paying Agent/Registrar by delivering to the entity
whose appointment is to be terminated written notice of such termination.
Section 5.05. Notice of Change to Owners.
Promptly upon each change in the entity serving as Paying Agent/Registrar, the
Town will cause notice of the change to be sent to each Owner by first class United
States mail, postage prepaid, at the address thereof in the Register, stating the effective
date of the change and the name and mailing address of the replacement Paying
Agent/Registrar.
Section 5.06. Agreement to Perform Duties and Functions.
By accepting the appointment as Paying Agent/Registrar and executing the
Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have
#5159028.3 Page 19 of 44
agreed to the provisions of this Ordinance and that it will perform the duties and
functions of Paying Agent/Registrar prescribed thereby.
Section 5.07. Delivery of Records to Successor.
If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly
upon the appointment of the successor, will deliver the Register (or a copy thereof) and
all other pertinent books and records relating to the Certificates to the successor Paying
Agent/Registrar.
ARTICLE VI
FORM OF THE CERTIFICATES
Section 6.01. Form Generally.
(a) The Certificates, including the Registration Certificate of the Comptroller of
Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and
the Assignment form to appear on each of the Certificates, (i) shall be substantially in
the form set forth in this Article, with such appropriate insertions, omissions,
substitutions, and other variations as are permitted or required by this Ordinance, and
(ii) may have such letters, numbers, or other marks of identification (including identifying
numbers and letters of the Committee on Uniform Securities Identification Procedures of
the American Bankers Association) and such legends and endorsements (including any
reproduction of an opinion of counsel) thereon as, consistently herewith, may be
determined by the Town or by the officers executing such Certificates, as evidenced by
their execution thereof.
(b) Any portion of the text of any Certificates may be set forth on the reverse
side thereof, with an appropriate reference thereto on the face of the Certificates.
(c) The definitive Certificates, if any, shall be typewritten, photocopied,
printed, lithographed, or engraved, and may be produced by any combination of these
methods or produced in any other similar manner, all as determined by the officers
executing such Certificates, as evidenced by their execution thereof.
(d) The Initial Certificate submitted to the Attorney General of the State of
Texas may be typewritten and photocopied or otherwise reproduced.
Section 6.02. Form of the Certificates.
The form of the Certificates, including the form of the Registration Certificate of
the Comptroller of Public Accounts of the State of Texas, the form of Certificate of the
Paying Agent/Registrar and the form of Assignment appearing on the Certificates, shall
be substantially as follows:
Page 20 of 44
#5159028.3
(a) Form of Certificate.
REGISTERED No.
REGISTERED $
United States of America
State of Texas
Counties of Tarrant and Denton
TOWN OF TROPHY CLUB, TEXAS
COMBINATION TAX AND REVENUE
CERTIFICATE OF OBLIGATION
SERIES 2016
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP NUMBER:
% September 1, May 1, 2016
The Town of Trophy Club (the "Town"), in the Counties of Tarrant and Denton,
State of Texas, for value received, hereby promises to pay to
or registered assigns, on the Maturity Date specified above, the sum of
DOLLARS
unless this Certificate shall have been sooner called for redemption and the payment of
the principal hereof shall have been provided for, and to pay interest on such principal
amount from the later of Dated Date specified above or the most recent interest
payment date to which interest has been paid or provided for until payment of such
principal amount has been provided for, at the per annum rate of interest specified
above, computed on the basis of a 360 -day year of twelve 30 -day months, such interest
to be paid semiannually on March 1 and September 1 of each year, commencing
March 1, 2017.
The principal of this Certificate shall be payable without exchange or collection
charges in lawful money of the United States of America upon presentation and
surrender of this Certificate at the designated office in Dallas, Texas, of BOKF, N.A., as
Paying Agent/Registrar (the "Designated Payment/Transfer Office"), or, with respect to
a successor paying agent/registrar, at the Designated Payment/Transfer Office of such
successor Paying Agent/Registrar. Interest on this Certificate is payable by check
dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar
to the registered owner at the address shown on the registration books kept by the
Paying Agent/Registrar or by such other customary banking arrangement acceptable to
the Paying Agent/Registrar and the registered owner; provided, however, such
registered owner shall bear all risk and expenses of such customary banking
arrangement. At the option of an Owner of at least $1,000,000 principal amount of the
Certificates, interest may be paid by wire transfer to the bank account of such Owner on
file with the Paying Agent/Registrar. For the purpose of the payment of interest on this
Certificate, the registered owner shall be the person in whose name this Certificate is
Page 21 of 44
#5159028.3
registered at the close of business on the "Record Date," which shall be the fifteenth
business day of the month next preceding such interest payment date; provided,
however, that in the event of nonpayment of interest on a scheduled payment date and
for 30 days thereafter, a new record date for such interest payment (a "Special Record
Date") shall be established by the Paying Agent/Registrar, if and when funds for the
payment of such interest have been received from the Town. Notice of the Special
Record Date and of the scheduled payment date of the past due interest (the "Special
Payment Date," which date shall be 15 days after the Special Record Date) shall be
sent at least five business days prior to the Special Record Date by United States mail,
first class, postage prepaid, to the address of each Owner of a Certificate appearing on
the books of the Paying Agent/Registrar at the close of business on the last business
day next preceding the date of mailing of such notice.
If the date for the payment of the principal of or interest on this Certificate shall
be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city
where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located
are required or authorized by law or executive order to close, the date for such payment
shall be the next succeeding day that is not a Saturday, Sunday, legal holiday, or day
on which banking institutions are required or authorized to close, and payment on such
date shall have the same force and effect as if made on the original date payment was
due and no additional interest shall be due by reason of nonpayment on the date on
which such payment is otherwise stated to be due and payable.
This Certificate is one of a series of fully registered certificates specified in the
title hereof issued in the aggregate principal amount of $4,210,000 (herein referred to as
the "Certificates"), issued pursuant to a certain ordinance of the Town (the "Ordinance")
for the purpose of paying contractual obligations to be incurred for authorized public
improvements (the "Project") as described in the Ordinance, and to pay the contractual
obligations for professional services of attorneys, financial advisors and other
professionals in connection with the Project and the issuance of the Certificates.
The Certificates and the interest thereon are payable from the levy of a direct and
continuing ad valorem tax within the limits prescribed by law, against all taxable
property in the Town and from a pledge of certain Surplus Revenues (not to exceed
$1,000) of the Town's municipal drainage utility system, all as described and provided
for in the Ordinance.
The Town has reserved the option to redeem the Certificates maturing on or after
September 1, 2026, in whole or in part, before their respective scheduled maturity
dates, on September 1, 2025, or on any date thereafter, at a price equal to the principal
amount of the Certificates so called for redemption plus accrued interest to the date
fixed for redemption. If less than all of the Certificates are to be redeemed, the Town
shall determine the maturity or maturities and the amounts thereof to be redeemed and
shall direct the Paying Agent/Registrar to call by lot or other customary method that
results in a random selection the Certificates, or portions thereof, within such maturity
and in such principal amounts, for redemption.
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The Certificates maturing September 1, 2028, September 2034 and September
1, 2036 (the "Term Certificates") are subject to scheduled mandatory redemption and
will be redeemed by the Town, in part at a price equal to the principal amount thereof,
without premium, plus accrued interest to the redemption date, out of moneys available
for such purpose in the Interest and Sinking Fund, on the dates and in the respective
principal amounts as set forth below.
Term Certificates Maturing September 1 2028
Redemption Date Redemption Amount
September 1, 2027 $215,000
September 1, 2028* $220,000
*maturity
Term Certificates Maturing September 1 2034
Redemption Date Redemption Amount
September 1, 2033 $250,000
September 1, 2034* $255,000
*maturity
Term Certificates Maturing September 1, 2033
Redemption Date Redemption Amount
September 1, 2035 $260,000
September 1, 2036* $270,000
*maturity
At least forty-five (45) days prior to each scheduled mandatory redemption date,
the Paying Agent/Registrar shall select for redemption by lot, or by any other customary
method that results in a random selection, a principal amount of Term Certificates equal
to the aggregate principal amount of such Term Certificates to be redeemed, shall call
such Term Certificates for redemption on such scheduled mandatory redemption date,
and shall give notice of such redemption, as provided in the Ordinance.
In lieu of calling the Term Certificates described above, for mandatory
redemption, the Town reserves the right to purchase such Term Certificates at a price
not exceeding the principal amount thereof, plus accrued interest, with (a) moneys on
deposit in the Interest and Sinking Fund which are available for the mandatory
redemption of such Term Certificates or (b) other lawfully available funds.
Upon any such purchase in lieu of redemption, not less than five (5) days prior to
a mandatory redemption date, the Town shall deliver such Term Certificates to the
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Paying Agent/Registrar prior to the selection of the Term Certificates for redemption and
the principal amount so delivered shall be credited against the amount required to be
called for redemption in that year.
Notice of such redemption or redemptions shall be given by first class mail,
postage prepaid, not less than 30 days before the date fixed for redemption, to the
registered owner of each of the Certificates to be redeemed in whole or in part. Notice
having been so given, the Certificates or portions thereof designated for redemption
shall become due and payable on the redemption date specified in such notice; from
and after such date, notwithstanding that any of the Certificates or portions thereof so
called for redemption shall not have been surrendered for payment, interest on such
Certificates or portions thereof shall cease to accrue.
The Town reserves the right to give notice of its election or direction to redeem
Certificates conditioned upon the occurrence of subsequent events. Such notice may
state (i) that the redemption is conditioned upon the deposit of moneys and/or
authorized securities, in an amount equal to the amount necessary to effect the
redemption, with the Paying Agent/Registrar, or such other entity as may be authorized
by law, no later than the redemption date, or (ii) that the Town retains the right to
rescind such notice at any time on or prior to the scheduled redemption date if the Town
delivers a certificate of the Town to the Paying Agent/Registrar instructing the Paying
Agent/Registrar to rescind the redemption notice and such notice and redemption shall
be of no effect if such moneys and/or authorized securities are not so deposited or if the
notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such
rescission of a conditional notice of redemption to the affected Owners. Any Certificates
subject to conditional notice of redemption and such redemption has been rescinded
shall remain Outstanding and the rescission of such redemption shall not constitute an
event of default. Further, in the case of a conditional redemption, the failure of the Town
to make moneys and or authorized securities available in part or in whole on or before
the redemption date shall not constitute an event of default.
As provided in the Ordinance, and subject to certain limitations therein set forth,
this Certificate is transferable upon surrender of this Town for transfer at the Designated
Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other
evidence of transfer as is acceptable to the Paying Agent/Registrar-, thereupon, one or
more new fully registered Certificates of the same stated maturity, of authorized
denominations, bearing the same rate of interest, and for the same aggregate principal
amount will be issued to the designated transferee or transferees.
Neither the Town nor the Paying Agent/Registrar shall be required to issue,
transfer or exchange any Certificate called for redemption where such redemption is
scheduled to occur within 45 calendar days of the date fixed for redemption; provided,
however, such limitation shall not be applicable to an exchange by the registered owner
of the uncalled principal balance of a Certificate.
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The Town, the Paying Agent/Registrar, and any other person may treat the
person in whose name this Certificate is registered as the owner hereof for the purpose
of receiving payment as herein provided (except interest shall be paid to the person in
whose name this Certificate is registered on the Record Date, or the Special Record
Date, as applicable) and for all other purposes, whether or not this Certificate be
overdue, and neither the Town nor the Paying Agent/Registrar shall be affected by
notice to the contrary.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Certificate
and the series of which it is a part is duly authorized by law; that all acts, conditions, and
things to be done precedent to and in the issuance of the Certificates have been
properly done and performed and have happened in regular and due time, form, and
manner as required by law; that ad valorem taxes upon all taxable property in the Town
have been levied for and pledged to the payment of the debt service requirements of
the Certificates within the limit prescribed by law; that, in addition to said taxes, further
provisions have been made for the payment of the debt service requirements of the
Certificates from a pledge of a limited amount of the Surplus Revenues, as described in
the Ordinance, derived by the Town from the operation of the municipal drainage utility
system in an amount limited to $1,000, that when so collected, such taxes and Surplus
Revenues shall be appropriated to such purposes; and that the total indebtedness of
the Town, including the Certificates, does not exceed any constitutional or statutory
limitation.
IN WITNESS WHEREOF, the Town has caused this Certificate to be executed
by the manual or facsimile signature of the Mayor of the Town and countersigned by the
manual or facsimile signature of the Town Secretary, and the official seal of the Town
has been duly impressed or placed in facsimile on this Certificate.
Mayor, Town of Trophy Club, Texas
Town Secretary,
Town of Trophy Club, Texas
[SEAL]
(b) Form of Comptroller's Registration Certificate. The following Comptroller's
Registration Certificate may be deleted from the definitive Certificates if such certificate
on the Initial Certificate is fully executed.
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § REGISTER NO.
OF THE STATE OF TEXAS §
I hereby certify that there is on file and of record in my office a certificate of the
Attorney General of the State of Texas to the effect that this Certificate has been
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examined by him as required by law, that he finds that it has been issued in conformity
with the Constitution and laws of the State of Texas, and that it is a valid and binding
obligation of the Town of Trophy Club, Texas; and that this Certificate has this day been
registered by me.
Witness my hand and seal of office at Austin, Texas,
Comptroller of Public Accounts
of the State of Texas
(c) Form of Certificate of Paying Agent/Registrar. The following Certificate of
Paying Agent/Registrar may be deleted from each Initial Certificate if the Comptroller's
Registration Certificate appears thereon.
CERTIFICATE OF PAYING AGENT/REGISTRAR
The records of the Paying Agent/Registrar show that the Initial Certificates of this
series of Certificates was approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts of the State of Texas, and that this is
one of the Certificates referred to in the within -mentioned Ordinance.
Dated:
BOKF, N.A.,
as Paying Agent/Registrar
Authorized Signatory
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N51 59028.3
(d) Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
(print or typewrite name, address and Zip Code of transferee):
(Social Security or other identifying number: ) the within
Certificate and all rights hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Certificate on the books kept for
registration hereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed By:
Authorized Signatory
NOTICE: The Signature on this
Assignment must correspond with the
name of the registered owner as it
appears on the face of the within
Certificate in every particular and must
be guaranteed in a manner acceptable
to the Paying Agent/Registrar.
(e) The initial Certificate shall be in the form set forth in subsections (a)
through (d) of this Section, except for the following alterations:
(i) immediately under the name of the Certificate, the headings
"INTEREST RATE," and "MATURITY DATE" shall both be completed with the
words "As Shown Below" and the words "CUSIP NO." shall be deleted;
(ii) in the first paragraph of the Certificate, the words "on the Maturity
Date specified above, the sum of DOLLARS" shall be
deleted and the following will be inserted: "on the first day of September in the
years, in the principal installments and bearing interest at the per annum rates
set forth in the following schedule:
Year Principal Amount Interest Rate
(Information to be inserted from Section 3.02(c) hereof).
(iii) the Initial Certificate shall be numbered T-1.
Section 6.03. CUSIP Registration.
The Town may secure identification numbers through the CUSIP Global
Services, managed by S&P Capital IQ on behalf of the American Bankers Association,
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and may authorize the printing of such numbers on the face of the Certificates. It is
expressly provided, however, that the presence or absence of CUSIP numbers on the
Certificates shall be of no significance or effect in regard to the legality thereof and
neither the Town nor the attorneys approving said Certificates as to legality are to be
held responsible for CUSIP numbers incorrectly printed on the Certificates.
Section 6.04. Legal Opinion.
The approving legal opinion of Bracewell LLP, Bond Counsel, may be attached to
or printed on the reverse side of each Certificate over the certification of the Town
Secretary of the Town, which may be executed in facsimile.
Section 6.05. Statement Insurance.
A statement relating to a municipal bond insurance policy, if any, to be issued for
the Certificates, may be printed on each Certificate.
ARTICLE VII
SALE AND DELIVERY OF CERTIFICATES;
DEPOSIT OF PROCEEDS; FLOW OF FUNDS
Section 7.01. Sale of Certificates; Official Statement.
(a) The Certificates, having been duly advertised and offered for sale at
competitive bid, are hereby officially sold and awarded to Raymond James &
Associates, Inc. (the "Purchaser") for a purchase price equal to the principal amount
thereof plus a cash premium of $232,853.04, being the bid which produced the lowest
true interest cost to the Town. The Initial Certificate shall be registered in the name of
the Purchaser or its designee.
(b) The form and substance of the Preliminary Official Statement and any
addenda, supplement or amendment thereto, are hereby in all respects approved and
adopted and is hereby deemed final as of its date within the meaning and for the
purposes of paragraph (b)(1) of Rule 15c2-12 under the Securities Exchange Act of
1934, as amended. The Mayor and Town Secretary are hereby authorized and directed
to cause to be prepared a final Official Statement (the "Official Statement') incorporating
applicable pricing information pertaining to the Certificates, and to execute the same by
manual or facsimile signature and deliver appropriate numbers of executed copies
thereof to the Purchaser. The Official Statement as thus approved, executed and
delivered, with such appropriate variations as shall be approved by the Mayor and the
Purchaser, may be used by the Purchaser in the public offering and sale thereof. The
Town Secretary is hereby authorized and directed to include and maintain a copy of the
Official Statement and any addenda, supplement or amendment thereto thus approved
among the permanent records of this meeting. The use and distribution of the
Preliminary Official Statement, and the preliminary public offering of the Certificates by
the Purchaser, is hereby ratified, approved and confirmed.
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(c) All officers of the Town are authorized to execute such documents,
certificates and receipts as they may deem appropriate in order to consummate the
delivery of the Certificates in accordance with the terms of sale therefor including,
without limitation, the Purchase Contract. Further, in connection with the submission of
the record of proceedings for the Certificates to the Attorney General of the State of
Texas for examination and approval of such Certificates, the appropriate officer of the
Town is hereby authorized and directed to issue a check of the Town payable to the
Attorney General of the State of Texas as a nonrefundable examination fee in the
amount required by Chapter 1202, Texas Government Code (such amount per series to
be the lesser of (i) 1/10th of 1% of the principal amount of such series of the Certificates
or (ii) $9,500.)
(d) The obligation of the Purchaser to accept delivery of the Certificates is
subject to the Purchaser being furnished with the final, approving opinion of Bracewell
LLP, bond counsel for the Town, which opinion shall be dated and delivered the Closing
Date.
(e) The Mayor is hereby authorized and directed to execute the contractual
agreement with Southwest Securities, Inc. setting forth such firm's responsibilities as
financial advisor to the Town, and the terms thereof in the form presented at this
meeting is hereby approved and accepted.
Section 7.02. Control and Delivery of Certificates.
(a) The Mayor of the Town is hereby authorized to have control of the Initial
Certificate and all necessary records and proceedings pertaining thereto pending
investigation, examination, and approval of the Attorney General of the State of Texas,
registration by the Comptroller of Public Accounts of the State of Texas and registration
with, and initial exchange or transfer by, the Paying Agent/Registrar.
(b) After registration by the Comptroller of Public Accounts, delivery of the
Certificates shall be made to the Underwriter or a representative thereof under and
subject to the general supervision and direction of the Mayor, against receipt by the
Town of all amounts due to the Town under the terms of sale.
(c) In the event the Mayor or Town Secretary is absent or otherwise unable to
execute any document or take any action authorized herein, the Mayor Pro Tem and the
Assistant Town Secretary, respectively, shall be authorized to execute such documents
and take such actions, and the performance of such duties by the Mayor Pro Tem and
the Assistant Town Secretary shall for the purposes of this Ordinance have the same
force and effect as if such duties were performed by the Mayor and Town Secretary,
respectively.
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Section 7.03. Deposit of Proceeds.
(a) First: All amounts received on the Closing Date as accrued interest on the
Certificates from the Certificate Date to the Closing Date, shall be deposited to the
Interest and Sinking Fund.
(b) Second: Proceeds of the Certificates in the amount of $4,375,000
(including premium in the amount of $165,000) shall be deposited to a special account
of the Town, such moneys to be dedicated and used solely for the purposes for which
the Certificates are being issued as herein provided in Section 3.01(i).
(c) Third: Premium received on the Certificates in the amount of $67,853.04
shall be used to pay the cost of issuing the Certificates. To the extent any of such
amount is not used for such purposes, such excess shall be deposited to the Interest
and Sinking Fund.
ARTICLE VIII
INVESTMENTS
Section 8.01. Investments.
(a) Money in the Interest and Sinking Fund created by this Ordinance, at the
option of the Town, may be invested in such securities or obligations as permitted under
applicable law.
(b) Any securities or obligations in which such money is so invested shall be
kept and held in trust for the benefit of the Owners and shall be sold and the proceeds
of sale shall be timely applied to the making of all payments required to be made from
the fund from which the investment was made.
Section 8.02. Investment Income.
(a) Interest and income derived from investment of the Interest and Sinking
Fund be credited to such fund.
(b) Interest and income derived from investment of the funds to be deposited
pursuant to Section 7.03(b) hereof shall be credited to the account where deposited
until the acquisition or construction of said projects is completed and thereafter, to the
extent such interest and income are present, such interest and income shall be
deposited to the Interest and Sinking Fund.
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ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01. Payment of the Certificates.
On or before each Interest Payment Date for the Certificates and while any of the
Certificates are outstanding and unpaid, there shall be made available to the Paying
Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such
interest on and principal of, redemption premium, if any, and interest on the Certificates
as will accrue or mature on the applicable Interest Payment Date, maturity date and, if
applicable, on a date of prior redemption.
Section 9.02. Other Representations and Covenants.
(a) The Town will faithfully perform, at all times, any and all covenants,
undertakings, stipulations, and provisions contained in this Ordinance and in each
Certificate; the Town will promptly pay or cause to be paid the principal of, redemption
premium, if any, and interest on each Certificate on the dates and at the places and
manner prescribed in such Certificate; and the Town will, at the times and in the manner
prescribed by this Ordinance, deposit or cause to be deposited the amounts of money
specified by this Ordinance.
(b) The Town is duly authorized under the laws of the State of Texas to issue
the Certificates; all action on its part for the creation and issuance of the Certificates has
been duly and effectively taken; and the Certificates in the hands of the Owners thereof
are and will be valid and enforceable obligations of the Town in accordance with their
terms.
Section 9.03. Provisions Concerning Federal Income Tax Exclusion.
The Town intends that the interest on the Certificates shall be excludable from
gross income for federal income taxation pursuant to sections 103 and 141 through 150
of the Internal Revenue Code of 1986, as amended (the "Code") and the applicable
regulations promulgated thereunder (the "Regulations"). The Town covenants and
agrees not to take any action, or knowingly omit to take any action within its control, that
if taken or omitted, respectively, would cause the interest on the Certificates to be
includable in gross income, as defined in section 61 of the Code of the holders thereof
for purposes of federal income taxation. In particular, the Town covenants and agrees
to comply with each requirement of Sections 9.03 through 9.10, inclusive; provided,
however, that the Town shall not be required to comply with any particular requirement
of this Sections 9.03 through 9.10 of the holders thereof for purposes of federal income
taxation, if the Town has received an opinion of nationally recognized bond counsel
("Counsel's Opinion") that such noncompliance will not adversely affect the exclusion
from gross income for federal income tax purposes of interest on the Certificates or if
the Town has received a Counsel's Opinion to the effect that compliance with some
other requirement set forth in this Sections 9.03 through 9.10, inclusive, will satisfy the
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applicable requirements of the Code and the Regulations, in which case compliance
with such other requirement specified in such Counsel's Opinion shall constitute
compliance with the corresponding requirement specified in Sections 9.03 through 9.10,
inclusive.
Section 9.04. No Private Use or Payment and No Private Loan Financing
The Town shall certify, through an authorized officer, employee or agent, that,
based upon all facts and estimates known or reasonably expected to be in existence on
the date the Certificates are delivered, that the proceeds of the Certificates will not be
used in a manner that would cause the Certificates to be "private activity bonds" within
the meaning of section 141 of the Code and the Regulations. The Town covenants and
agrees that it will make such use of the proceeds of the Certificates, including interest or
other investment income derived from Certificate proceeds, regulate the use of property
financed, directly or indirectly, with such proceeds, and take such other and further
action as may be required so that the Certificates will not be "private activity bonds"
within the meaning of section 141 of the Code and the Regulations.
Section 9.05. No Federal Guaranty.
The Town covenants and agrees not to take any action, or knowingly omit to take
any action, and has not knowingly omitted and will not knowingly omit to take any action
within its control, that, if taken or omitted, respectively, would cause the Certificates to
be "federally guaranteed" within the meaning of section 149(b) of the Code and the
Regulations, except as permitted by section 149(b)(3) of the Code and the Regulations.
Section 9.06. Certificates are not Hedge Certificates.
The Town covenants and agrees that it has not taken and will not take any
action, and has not knowingly omitted and will not knowingly omit to take any action
within its control, that, if taken or omitted, respectively, would cause the Certificates to
be "hedge bonds" within the meaning of section 149(g) of the Code and the
Regulations.
Section 9.07. No -Arbitrage Covenant.
The Town shall certify, through an authorized officer, employee or agent, that,
based upon all facts and estimates known or reasonably expected to be in existence on
the date the Certificates are delivered, the Town will reasonably expect that the
proceeds of the Certificates will not be used in a manner that would cause the
Certificates to be "arbitrage bonds" within the meaning of section 148(a) of the Code
and the Regulations. Moreover, the Town covenants and agrees that it will make such
use of the proceeds of the Certificates, including interest or other investment income
derived from Certificate proceeds, regulate investments of proceeds of the Certificates,
and take such other and further action as may be required so that the Certificates will
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not be "arbitrage bonds" within the meaning of section 148(a) of the Code and the
Regulations.
Section 9.08. Arbitrage Rebate.
If the Town does not qualify for an exception to the requirements of
Section 148(f]i of the Code, the Town will take all necessary steps to comply with the
requirement that certain amounts earned by the Town on the investment of the "gross
proceeds" of the Certificates (within the meaning of section 148(f)(6)(B) of the Code), be
rebated to the federal government. Specifically, the Town will (i) maintain records
regarding the investment of the gross proceeds of the Certificates as may be required to
calculate the amount earned on the investment of the gross proceeds of the Certificates
separately from records of amounts on deposit in the funds and accounts of the Town
allocable to other issues of the Town or moneys which do not represent gross proceeds
of any issues of the Town, (ii) calculate at such times as are required by the Regulations
the amount earned from the investment of the gross proceeds of the Certificates which
is required to be rebated to the federal government, and (iii) pay, not less often than
every fifth anniversary date of the delivery of the Certificates or on such other dates as
may be permitted under the Regulations, all amounts required to be rebated to the
federal government. Further, the Town will not indirectly pay any amount otherwise
payable to the federal government pursuant to the foregoing requirements to any
person other than the federal government by entering into any investment arrangement
with respect to the gross proceeds of the Certificates that might result in a reduction in
the amount required to be paid to the federal government because such arrangement
results in a smaller profit or a larger loss than would have resulted if the arrangement
had been at arm's length and had the yield on the issue not been relevant to either
party.
Section 9.09. Information Reporting.
The Town covenants and agrees to file or cause to be filed with the Secretary of
the Treasury, not later than the 15th day of the second calendar month after the close of
the calendar quarter in which the Certificates are issued, an information statement
concerning the Certificates, all under and in accordance with section 149(e) of the Code
and the Regulations.
Section 9.10. Continuing Obligation.
Notwithstanding any other provision of this Ordinance, the Town's obligations
under the covenants and provisions of Sections 9.03 through 9.09, inclusive, shall
survive the defeasance and discharge of the Certificates.
Section 9.11. Qualified Tax -Exempt Obligations.
The Town hereby designates the Certificates as "qualified tax-exempt
obligations" for purposes of section 265(b) of the Code. In connection therewith, the
Town represents (a) that the aggregate amount of tax-exempt obligations issued by the
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Town during calendar year 2013, including the Certificates, which have been
designated as "qualified tax-exempt obligations" under section 265(b)(3) of the Code
does not exceed $10,000,000, and (b) that the reasonably anticipated amount of its tax-
exempt obligations which will be issued by the Town during calendar year 2013,
including the Certificates, will not exceed $10,000,000. For purposes of this
Section 9.11, the term "tax-exempt obligations" does not include "private activity bonds"
within the meaning of section 141 of the Code, other than "qualified 501(c)(3) bonds"
within the meaning of section 145 of the Code. In addition, for purposes of this
Section 9.11, the Town includes all governmental units which are aggregate with the
Town under section 265(b) of the Code.
ARTICLE X
DEFAULT AND REMEDIES
Section 10.01. Events of Default.
Each of the following occurrences or events for the purpose of this Ordinance is
hereby declared to be an Event of Default:
(i) the failure to make payment of the principal of, redemption
premium, if any, or interest on any of the Certificates when the same becomes
due and payable; or
(ii) default in the performance or observance of any other covenant,
agreement, or obligation of the Town, which default materially and adversely
affects the rights of the Owners, including but not limited to their prospect or
ability to be repaid in accordance with this Ordinance, and the continuation
thereof for a period of sixty (60) days after notice of such default is given by any
Owner to the Town.
Section 10.02. Remedies for Default.
(a) Upon the happening of any Event of Default, then any Owner or an
authorized representative thereof, including but not limited to a trustee or trustees
therefor, may proceed against the Town for the purpose of protecting and enforcing the
rights of the Owners under this Ordinance by mandamus or other suit, action or special
proceeding in equity or at law in any court of competent jurisdiction for any relief
permitted by law, including the specific performance of any covenant or agreement
contained herein, or thereby to enjoin any act or thing that may be unlawful or in
violation of any right of the Owners hereunder or any combination of such remedies.
(b) It is provided that all such proceedings shall be instituted and maintained
for the equal benefit of all Owners of Certificates then outstanding.
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Section 10.03. Remedies Not Exclusive.
(a) No remedy herein conferred or reserved is intended to be exclusive of any
other available remedy, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given hereunder or under the Certificates or now or
hereafter existing at law or in equity; provided, however, that notwithstanding any other
provision of this Ordinance, the right to accelerate the debt evidenced by the
Certificates shall not be available as a remedy under this Ordinance.
(b) The exercise of any remedy herein conferred or reserved shall not be
deemed a waiver of any other available remedy.
ARTICLE XI
DISCHARGE
Section 11.01. Discharge.
The Certificates may be defeased, discharged or refunded in any manner
permitted by applicable law.
ARTICLE XII
CONTINUING DISCLOSURE UNDERTAKING
Section 12.01. Annual Reports.
(i) The Town shall provide annually to the MSRB, (1) within six months
after the end of each fiscal year of the Town, financial information and operating
data with respect to the Town of the general type included in the final Official
Statement, being information of the type described in the Pricing Certificate,
including financial statements of the Town if audited financial statements of the
Town are then available, and (2) if not provided as part such financial information
and operating data, audited financial statements of the Town, when and if
available. Any financial statements to be provided shall be (i) prepared in
accordance with the accounting principles appended to the Official Statement, or
such other accounting principles as the Town may be required to employ from
time to time pursuant to state law or regulation, and (ii) audited, if the Town
commissions an audit of such financial statements and the audit is completed
within the period during which they must be provided. If the audit of such
financial statements is not complete within 12 months after any such fiscal year
end, then the Town shall file unaudited financial statements within such 12 -month
period and audited financial statements for the applicable fiscal year, when and if
the audit report on such statements becomes available.
(ii) If the Town changes its fiscal year, it will notify the MSRB of the
change (and of the date of the new fiscal year end) prior to the next date by
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fit; 159029.3
which the Town otherwise would be required to provide financial information and
operating data pursuant to this Section.
(iii) The financial information and operating data to be provided
pursuant to this Section may be set forth in full in one or more documents or may
be included by specific referenced to any document (including an official
statement or other offering document, if it is available from the MSRB) that
theretofore has been provided to the MSRB or filed with the SEC.
Section 12.02. Material Event Notices.
(a) The Town shall notify the MSRB, in a timely manner not in excess of ten
(10) Business Days after the occurrence of the event, of any of the following events with
respect to the Certificates:
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults, if material;
(iii) Unscheduled draws on debt service reserves reflecting financial
difficulties;
(iv) Unscheduled draws on credit enhancements reflecting financial
difficulties;
(v) Substitution of credit or liquidity providers, or their failure to
perform;
(vi) Adverse tax opinions, the issuance by the Internal Revenue Service
of proposed or final determinations of taxability, Notices of Proposed Issue (IRS
Form 5701-TEB) or other material notices or determinations with respect to the
tax status of the Certificates, or other material events affecting the tax status of
the Certificates;
(vii) Modifications to rights of holders of the Certificates, if material;
(viii) Certificate calls, if material, and tender offers;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment of the
Certificates, if material;
(xi) Rating changes;
#51590283 Page 36 of 44
(xii) Bankruptcy, insolvency, receivership or similar event of the Town;
(xiii) The consummation of a merger, consolidation, or acquisition
involving the Town or the sale of all or substantially all of the assets of the Town,
other than in the ordinary course of business, the entry into a definitive
agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if
material; and
(xiv) Appointment of a successor Paying Agent/Registrar or change in
the name of the Paying Agent/Registrar, if material.
(b) The Town shall provide to the MSRB, in an electronic format as prescribed
by the MSRB, in a timely manner, notice of a failure by the Town to provide required
annual financial information and notices of material events in accordance with Sections
12.01 and 12.02. All documents provided to the MSRB pursuant to this section shall be
accompanied by identifying information as prescribed by the MSRB.
Section 12.03. Limitations, Disclaimers and Amendments.
(a) The Town shall be obligated to observe and perform the covenants
specified in this Article for so long as, but only for so long as, the Town remains an
"obligated person" with respect to the Certificates within the meaning of the Rule, except
that the Town in any event will give notice of any redemption calls and any defeasances
that cause the Town to be no longer an "obligated person."
(b) The provisions of this Article are for the sole benefit of the Owners and
beneficial owners of the Certificates, and nothing in this Article, express or implied, shall
give any benefit or any legal or equitable right, remedy, or claim hereunder to any other
person. The Town undertakes to provide only the financial information, operating data,
financial statements, and notices which it has expressly agreed to provide pursuant to
this Article and does not hereby undertake to provide any other information that may be
relevant or material to a complete presentation of the Town's financial results, condition,
or prospects or hereby undertake to update any information provided in accordance with
this Article or otherwise, except as expressly provided herein. The Town does not make
any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Certificates at any future date.
' For the purposes of the event identified in (xii), the event is considered to occur when any of the
following occur: the appointment of a receiver, fiscal agent, or similar officer for an obligated person in a
proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in
which a court or governmental authority has assumed jurisdiction over substantially all of the assets or
business of the obligated person, or if such jurisdiction has been assumed by leaving the existing
governing body and officials or officers in possession but subject to the supervision and orders of a court
or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or
liquidation by a court or governmental authority having supervision or jurisdiction over substantially all
of the assets or business of the obligated person.
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UNDER NO CIRCUMSTANCES SHALL THE TOWN BE LIABLE TO THE
OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN
PART FROM ANY BREACH BY THE TOWN, WHETHER NEGLIGENT OR WITHOUT
FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT
EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT,
FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN
ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
(c) No default by the Town in observing or performing its obligations under
this Article shall constitute a breach of or default under the Ordinance for purposes of
any other provisions of this Ordinance.
(d) Nothing in this Article is intended or shall act to disclaim, waive, or
otherwise limit the duties of the Town under federal and state securities laws.
(e) The provisions of this Article may be amended by the Town from time to
time to adapt to changed circumstances that arise from a change in legal requirements,
a change in law, or a change in the identity, nature, status, or type of operations of the
Town, but only if (i) the provisions of this Article, as so amended, would have permitted
an underwriter to purchase or sell Certificates in the primary offering of the Certificates
in compliance with the Rule, taking into account any amendments or interpretations of
the Rule to the date of such amendment, as well as such changed circumstances, and
(ii) either (A) the Owners of a majority in aggregate principal amount (or any greater
amount required by any other provisions of this Ordinance that authorizes such an
amendment) of the Outstanding Certificates consent to such amendment or (B) an
entity or individual person that is unaffiliated with the Town (such as nationally
recognized bond counsel) determines that such amendment will not materially impair
the interests of the Owners and beneficial owners of the Certificates. If the Town so
amends the provisions of this Article, it shall include with any amended financial
information or operating data next provided in accordance with Section 12.01 an
explanation, in narrative form, of the reasons for the amendment and of the impact of
any change in type of financial information or operating data so provide.
ARTICLE XIII
AMENDMENTS
Section 13.01. Amendments.
This Ordinance shall constitute a contract with the Owners, be binding on the
Town, and shall not be amended or repealed by the Town so long as any Certificate
remains outstanding except as permitted in this Section. The Town may, without
consent of or notice to any Owners, from time to time and at any time, amend this
Ordinance in any manner not detrimental to the interests of the Owners, including the
curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition,
Page 38 of 44
451 19028.3
the Town may, with the written consent of the Owners of the Certificates holding a
majority in aggregate principal amount of the Certificates then outstanding, amend, add
to, or rescind any of the provisions of this Ordinance, provided that, without the consent
of all Owners of outstanding Certificates, no such amendment, addition, or rescission
shall (i) extend the time or times of payment of the principal of and interest on the
Certificates, reduce the principal amount thereof, the redemption price, or the rate of
interest thereon, or in any other way modify the terms of payment of the principal of or
interest on the Certificates, (ii) give any preference to any Certificate over any other
Certificate, or (iii) reduce the aggregate principal amount of Certificates required to be
held by Owners for consent to any such amendment, addition, or rescission.
ARTICLE XIV
MISCELLANEOUS
Section 14.01. Changes to Ordinance.
The Mayor and the Chief Financial Officer, in consultation with Bond Counsel,
are hereby authorized to make changes to the terms of this Ordinance if necessary or
desirable to carry out the purposes hereof or in connection with the approval of the
issuance of the Certificates by the Attorney General of Texas.
Section 14.02. Partial Invalidity.
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 the Ordinance.
Section 14.03. No Personal Liability.
No recourse shall be had for payment of the principal of or interest on any
Certificates or for any claim based thereon, or on this Ordinance, against any official or
employee of the Town or any person executing any Certificates.
ARTICLE XV
EFFECTIVENESS
Effectiveness.
This Ordinance shall take effect immediately from and after its passage.
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APPROVED AND ADOPTED this April 12, 2016.
� r4-? ���
C. Nick Sanders, Mayor
Town of Trophy Club, Texas
ATTEST:
Holly Fimbre , Town Secretary
Town of Trophy Club, Texas Q
APPROVED TO AS FORM:
Patricia A. Adams , Town Attorney
Town of Trophy Club, Texas
Julie K. Partain, Bond Counsel
Town of Trophy Club, Texas
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Signature Page for Ordinance
Series 2016 Combination Tax and Revenue Certificates of Obligation