ORD 2007-18TOWN OF TROPHY CLUB, TEXAS
ORDINANCE NO. 2007- lj
AUTHORIZING THE ISSUANCE AND SALE OF TOWN OF TROPHY
CLUB, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATE OF
OBLIGATION, SERIES 2007, IN THE PRINCIPAL AMOUNT OF
$474,000; LEVYING AN ANNUAL AD VALOREM TAX AND PROVIDING
FOR THE ADDITIONAL SECURITY AND PAYMENT OF SAID
CERTIFICATE OF OBLIGATION; AWARDING TO PURCHASER; AND
ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT
WHEREAS, the Town Council of the Town of Trophy Club, Texas (the "Issuer")
deems it advisable to issue a Certificate of Obligation in the amount and for the
purposes hereinafter set forth;
WHEREAS, the Certificate of Obligation hereinafter authorized and designated
(the "Certificate of Obligation") is to be issued and delivered for cash pursuant to
Subchapter C of Chapter 271, Local Government Code and Chapter 1502, Government
Code;
WHEREAS, the Town Council has heretofore passed a resolution authorizing
and directing the Town Secretary to give notice of intention to issue a Certificate of
Obligation for the purposes described above, and said notice has been duly published
in a newspaper of general circulation in said Issuer, said newspaper being a
"newspaper" as defined in §2051.044, Texas Government Code;
WHEREAS, the Issuer received no petition from the qualified electors of the
Issuer protesting the issuance of such Certificate of Obligation;
WHEREAS, it is considered to be to the best interest of the Issuer that said
interest-bearing Certificate of Obligation be issued; and
WHEREAS, It is officially found, determined, and declared that the meeting at
which this Ordinance has been adopted was open to the public and public notice of the
time, place and subject matter of the public business to be considered and acted upon
at said meeting, including this Ordinance, was given, all as required by the applicable
provisions of Tex. Gov't Code Ann. ch. 551;
WHEREAS, Economic Development Corporation 4A has agreed to fund the
CERTIFICATE OF OBLIGATION; and
NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE
TOWN OF TROPHY CLUB, TEXAS.
Section 1. RECITALS, AMOUNT AND PURPOSE OF THE CERTIFICATE OF
OBLIGATION. The recitals set forth in the preamble hereof are incorporated herein
and shall have the same force and effect as if set forth in this Section. The Certificate
of Obligation of the Town of Trophy Club, Texas (the "Issuer") is hereby authorized to
be issued and delivered in the aggregate principal amount of $474,000 for paying all or
a portion of the Town's contractual obligations for the purpose of constructing and
improving the Town's Harmony Park and its improvements, and for paying legal, fiscal,
and engineering fees in connection with such project.
Section 2. DESIGNATION, DATE, DENOMINATION, NUMBER, AND
MATURITY OF CERTIFICATE OF OBLIGATION. (a) Each Certificate of Obligation
issued pursuant to this Ordinance shall be designated: "TOWN OF TROPHY CLUB,
TEXAS, COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION,
SERIES 2007," and there shall be issued, sold, and delivered hereunder one fully
registered Certificate of Obligation, without interest coupons, dated May 1, 2007, in the
denomination and principal amount of $474,000, numbered R-1, with any Certificate of
Obligation issued in replacement thereof being in the denomination of the full principal
amount of the series of which the Certificate of Obligation is issued, and numbered
consecutively from R-2 upward, payable in installments to the registered owner thereof,
or to the registered assignee of said Certificate of Obligation (in each case, the
"Registered Owner").
(b) Principal of said Certificate of Obligation shall mature and be payable in
installments on the dates and in the principal installment amounts and shall bear
interest at the per annum rates set forth in the following schedule:
MATURITY
PRINCIPAL AMOUNT
INTEREST RATE
9/1/07
$45,000
4.200%
9/1/08
$35,000
4.200%
9/1/09
$37,000
4.200%
9/1/10
$39,000
4.200%
9/11/11
$40,000
4.200%
9/1/12
$42,000
4.200%
9/1/13
$44,000
4.200%
9/1/14
$45,000
4.200%
9/1/15
$47,000
4.200%
9/1/16
$49,000
4.200%
9/1/17
$51,000
4.200%
(c) Said interest shall be payable in the manner provided and on the dates
stated in the FORM OF CERTIFICATE OF OBLIGATION set forth in this Ordinance.
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(d) The term "Certificate of Obligation" as used in this Ordinance shall mean and
include collectively the Certificate of Obligation initially issued and delivered pursuant to
this Ordinance and any substitute Certificate of Obligation exchanged therefor, as well
as any other substitute or replacement Certificate of Obligation issued pursuant hereto,
and the term "Certificate of Obligation" shall mean any such Certificate of Obligation.
Section 3. CHARACTERISTICS OF THE CERTIFICATE OF OBLIGATION. (a)
Registration. The Issuer shall keep or cause to be kept at the principal corporate trust
office of ZIONS FIRST NATIONAL BANK, HOUSTON, TEXAS, the "Paying
Agent/Registrar"), books or records for the registration of the transfer and exchange of
the Certificate of Obligation (the "Registration Books"), and the Issuer hereby appoints
the Paying Agent/Registrar as its registrar and transfer agent to keep such books or
records and make such registrations of transfers and exchanges under such
reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe; and
the Paying Agent/Registrar shall make such registrations, transfers and exchanges as
herein provided within three days of presentation in due and proper form. The Paying
Agent/Registrar shall obtain and record in the Registration Books the address of the
Registered Owner of each Certificate of Obligation to which payments with respect to
the Certificate of Obligation shall be mailed, as herein provided; but it shall be the duty
of each Registered Owner to notify the Paying Agent/Registrar in writing of the address
to which payments shall be mailed, and such interest payments shall not be mailed
unless such notice has been given. The Issuer shall have the right to inspect the
Registration Books during regular business hours of the Paying Agent/Registrar, but
otherwise the Paying Agent/Registrar shall keep the Registration Books confidential
and, unless otherwise required by law, shall not permit their inspection by any other
entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees
and charges for making such registration, transfer, exchange and delivery of a
substitute Certificate of Obligation. Registration of assignments, transfers and
exchanges of Certificate of Obligation shall be made in the manner provided and with
the effect stated in the FORM OF CERTIFICATE OF OBLIGATION set forth in this
Ordinance. Each substitute Certificate of Obligation shall bear a letter and/or number to
distinguish it from each other Certificate of Obligation.
(b) Authentication; Transfer and Exchange. Except as provided in subsection (f)
of this Section, an authorized representative of the Paying Agent/Registrar shall, before
the delivery of any such Certificate of Obligation, date and manually sign said
Certificate of Obligation, and no such Certificate of Obligation shall be deemed to be
issued or outstanding unless such Certificate of Obligation is so executed. No
additional ordinances, orders, or resolutions need be passed or adopted by the
governing body of the Issuer or any other body or person so as to accomplish the
foregoing exchange of any Certificate of Obligation or portion thereof, and the Paying
Agent/Registrar shall provide for the printing, execution, and delivery of the substitute
Certificate of Obligation in the manner prescribed herein. Pursuant to Chapter 1201,
Government Code, as amended, the duty of transfer of Certificate of Obligation as
aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution
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of said Certificate of Obligation, the exchanged Certificate of Obligation shall be valid,
incontestable, and enforceable in the same manner and with the same effect as the
Certificate of Obligation that initially was issued and delivered pursuant to this
Ordinance, approved by the Attorney General and registered by the Comptroller of
Public Accounts.
(c) Paving Agent/Registrar. The Issuer covenants with the Registered Owner of
the Certificate of Obligation that at all times while the Certificate of Obligation is
outstanding the Issuer will provide a competent and legally qualified bank, trust
company, financial institution or other agency to act as and perform the services of
Paying Agent/Registrar for the Certificate of Obligation under this Ordinance, and that
the Paying Agent/Registrar will be one entity. The Issuer reserves the right to, and
may, at its option, change the Paying Agent/Registrar upon not less than 20 days
written notice to the Paying Agent/Registrar, to be effective not later than 15 days prior
to the next principal or interest payment date after such notice. In the event that the
entity at any time acting as Paying Agent/Registrar (or its successor by merger,
acquisition, or other method) should resign or otherwise cease to act as such, the
Issuer covenants that promptly it will appoint a competent and legally qualified bank,
trust company, financial institution, or other agency to act as Paying Agent/Registrar
under this Ordinance. Upon any change in the Paying Agent/Registrar, the previous
Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a
copy thereof), along with all other pertinent books and records relating to the Certificate
of Obligation, to the new Paying Agent/Registrar designated and appointed by the
Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause
a written notice thereof to be sent by the new Paying Agent/Registrar to the Registered
Owner of the Certificate of Obligation, by United States mail, first-class postage
prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By
accepting the position and performing as such, each Paying Agent/Registrar shall be
deemed to have agreed to the provisions of this Ordinance, and a certified copy of this
Ordinance shall be delivered to each Paying Agent/Registrar.
(d) Payment of Certificate of Obligation and Interest. The Issuer hereby further
appoints the Paying Agent/Registrar to act as the paying agent for paying the principal
of and interest on the Certificate of Obligation, all as provided in this Ordinance. The
Paying Agent/Registrar shall keep proper records of all payments made by the Issuer
and the Paying Agent/Registrar with respect to the Certificate of Obligation and shall
properly and accurately record all payments on the Certificate of Obligation on the
Registration Books, and shall keep proper records of all exchanges of the Certificate of
Obligation, and all replacements of the Certificate of Obligation, as provided in this
Ordinance. However, in the event of a nonpayment of interest on a scheduled payment
date, and for thirty (30) days thereafter, a new record date for such interest payment (a
"Special Record Date") will be established by the Paying Agent/Registrar, if and when
funds for the payment of such interest have been received from the Issuer. Notice of
the past due interest shall be sent at least five (5) business days prior to the Special
Record Date by United States mail, first-class postage prepaid, to the address of the
C!
Registered Owner appearing on the Registration Books at the close of business on the
last business day next preceding the date of mailing of such notice.
(e) In General. The Certificate of Obligation (i) shall be issued in fully registered
form, without interest coupons, with the principal of and interest on such Certificate of
Obligation to be payable only to the Registered Owner thereof, (ii) may be exchanged
for another Certificate of Obligation, (iii) may be transferred and assigned, (iv) shall
have the characteristics, (v) shall be signed, sealed, executed and authenticated, (vi)
the principal of and interest on the Certificate of Obligation shall be payable, and (vii)
shall be administered and the Paying Agent/Registrar and the Issuer shall have certain
duties and responsibilities with respect to the Certificate of Obligation, all as provided,
and in the manner and to the effect as required or indicated, in the FORM OF
CERTIFICATE OF OBLIGATION set forth in this Ordinance. The Certificate of
Obligation initially issued and delivered pursuant to this Ordinance is not required to be,
and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute
Certificate of Obligation issued in exchange for any Certificate of Obligation issued
under this Ordinance the Paying Agent/Registrar shall execute the PAYING
AGENT/REGISTRAR'S AUTHENTICATION Certificate of Obligation, in the form set
forth in the FORM OF CERTIFICATE OF OBLIGATION.
(f) Delivery of Certificate of Obligation. On the closing date, the Initial
Certificate of Obligation representing the entire principal amount of the Certificate of
Obligation, payable to the Purchaser, executed by manual or facsimile signature of the
Mayor and Town Secretary, approved by the Attorney General of Texas, and registered
and manually signed by the Comptroller of Public Accounts of the State of Texas, and
with the date of delivery inserted thereon by the Paying Agent/Registrar, will be
delivered to the Purchaser.
Section 4. FORM OF CERTIFICATE OF OBLIGATION. The form of the
Certificate of Obligation, including the form of Paying Agent/Registrar's Authentication
Certificate of Obligation, the form of Assignment and the form of Registration Certificate
of Obligation of the Comptroller of Public Accounts of the State of Texas to be attached
to the Certificate of Obligation initially issued and delivered pursuant to this Ordinance,
shall be, respectively, substantially as follows, with such appropriate variations,
omissions or insertions as are permitted or required by this Ordinance.
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(a) FORM OF CERTIFICATE OF OBLIGATION.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
TOWN OF TROPHY CLUB, TEXAS
COMBINATION TAX AND REVENUE
CERTIFICATE OF OBLIGATION
SERIES 2007
Interest Rate
As Shown Below
PRINCIPAL
AMOUNT
$474,000
Delivery Date
June 7, 2007
REGISTERED OWNER: ZIONS FIRST NATIONAL BANK, HOUSTON, TEXAS
PRINCIPAL AMOUNT: FOUR HUNDRED SEVENTY FOUR THOUSAND
DOLLARS
The Town of Trophy Club, Texas (the "Issuer"), being a political subdivision of
the State of Texas located in Denton County, for value received, promises to pay, from
the sources described herein, to the registered owner specified above, or registered
assigns (the 'Registered Owner"), the principal amount specified above, and to pay
interest thereon, from the Delivery Date set forth above, on the balance of said principal
amount from time to time remaining unpaid, at the rates per annum set forth below,
calculated on the basis of a 360 -day year of twelve 30 -day months. The principal of
this Certificate of Obligation shall mature and be paid in installments on the dates and
in the amounts set forth in the table below:
Maturity
Principal Amount
Interest Rate
9/1/07
$45,000
4.200%
9/1/08
$35,000
4.200%
9/1/09
$37,000
4.200%
9/1/10
$39,000
4.200%
9/1/11
$40,000
4.200%
9/1/12
$42,000
4.200%
9/1/13
$44,000
4.200%
9/1/14
$45,000
4.200%
9/1/15
$47,000
4.200%
9/1/16
$49,000
4.200%
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9/1/17 $51,000 4.200%
THE PRINCIPAL OF AND INTEREST ON THIS Certificate of Obligation are
payable in lawful money of the United States of America, without exchange or collection
charges. The Issuer shall pay interest on the unpaid principal installments of this
Certificate of Obligation on September 1, 2007 and on each March 1 and September 1
thereafter to the date of maturity. The last principal installment of this Certificate of
Obligation shall be paid to the Registered Owner hereof upon presentation and
surrender of this Certificate of Obligation at maturity, at the principal office of ZIONS
FIRST NATIONAL BANK, HOUSTON, TEXAS, which is the "Paying Agent/Registrar"
for this Certificate of Obligation. The payment of all other principal installments of and
interest on this Certificate of Obligation shall be made by the Paying Agent/Registrar to
the Registered Owner hereof on each principal and interest payment date by check or
draft, dated as of such principal and interest payment date, drawn by the Paying
Agent/Registrar on, and payable solely from, funds of the Issuer required by the
Certificate of Obligation Ordinance to be on deposit with the Paying Agent/Registrar for
such purpose as hereinafter provided; and such check or draft shall be sent by the
Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such
interest payment date, to the Registered Owner hereof, at its address as it appeared on
the last day of the month next preceding each such date (the 'Record Date") on the
Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In
addition, principal and interest may be paid by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Registered
Owner.
ANY ACCRUED INTEREST due in connection with the final installment of
principal of this Certificate of Obligation or upon redemption of this Certificate of
Obligation in whole at the option of the Issuer prior to maturity as provided herein shall
be paid to the Registered Owner upon presentation and surrender of this Certificate of
Obligation for payment at the principal corporate trust office of the Paying
Agent/Registrar. The Issuer covenants with the Registered Owner of this Certificate of
Obligation that on or before each principal payment date and interest payment date for
this Certificate of Obligation it will make available to the Paying Agent/Registrar, from
the "Interest and Sinking Fund" created by the Certificate of Obligation Ordinance, the
amounts required to provide for the payment, in immediately available funds, of all
principal of and interest on the Certificate of Obligation, when due.
IF THE DATE for the payment of the principal of or interest on this Certificate of
Obligation shall be a Saturday, Sunday, a legal holiday or a day on which banking
institutions in the city where the principal corporate trust office of the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the
date for such payment shall be the next succeeding day that is not such a Saturday,
Sunday, legal holiday or day on which banking institutions are 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.
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THIS CERTIFICATE OF OBLIGATION is dated May 1, 2007, and authorized in
accordance with the Constitution and laws of the State of Texas, in the principal amount
of $474,000, for paying all or a portion of the Town's contractual obligations for the
purpose of constructing and improving the Town's Harmony Park and its improvements,
and for paying legal, fiscal, and engineering fees in connection with such project.
THE CERTIFICATE OF OBLIGATION OF THIS SERIES is issuable in the form
of one fully -registered Certificate of Obligation without coupons in the denomination of
$474,000. This Certificate of Obligation may be transferred or exchanged as provided
in the Certificate of Obligation Ordinance, only upon the registration books kept for that
purpose at the above-mentioned office of the Paying Agent/Registrar upon surrender of
this Certificate of Obligation together with a written instrument of transfer or
authorization for exchange satisfactory to the Paying Agent/Registrar and duly executed
by the registered owner or his duly authorized attorney, and thereupon a new Certificate
of Obligation of the same maturity and in the same aggregate principal amount shall be
issued by the Paying Agent/Registrar to the transferee in exchange therefor as provided
in the Certificate of Obligation Ordinance, and upon payment of the charges therein
prescribed. The Issuer and the Paying Agent/Registrar may deem and treat the person
in whose name this Certificate of Obligation is registered as the absolute owner hereof
for the purpose of receiving payment of, or on account of, the principal price hereof and
interest due hereon and for all other purposes. The Paying Agent/Registrar shall not be
required to make any such transfer or exchange during the period commencing with the
close of business on any Record Date and ending with the opening of business on the
next following principal or interest payment date.
IN THE EVENT any Paying Agent/Registrar for the Certificate of Obligation is
changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has
covenanted in the Certificate of Obligation Ordinance that it promptly will appoint a
competent and legally qualified substitute therefor, and cause written notice thereof to
be mailed to the Registered Owner of the Certificate of Obligation.
THIS CERTIFICATE OF OBLIGATION shall not be valid or become obligatory
for any purpose or be entitled to any security or benefit under the Certificate of
Obligation Ordinance until the Certificate of Obligation of Authentication shall have
been executed by the Paying Agent/Registrar or the Comptroller's Registration
Certificate of Obligation hereon shall have been executed by the Texas Comptroller of
Public Accounts.
IT IS HEREBY certified, recited, and covenanted that this Certificate of
Obligation has been duly and validly authorized, issued, sold, and delivered; that all
acts, conditions, and things required or proper to be performed, exist, and be done
precedent to or in the authorization, issuance, and delivery of this Certificate of
Obligation have been performed, existed, and been done in accordance with law; that
this Certificate of Obligation is a general obligation of the Issuer, issued on the full faith
0
and credit thereof; and that ad valorem taxes sufficient to provide for the payment of the
interest on and principal of this Certificate of Obligation, as such interest and principal
come due, have been levied and ordered to be levied against all taxable property in the
Issuer, and have been pledged for such payment, within the limit prescribed by law, and
that this Certificate of Obligation is additionally secured by and payable from the limited
surplus revenues of the Issuer's Harmony Park, Splash Park Water Pool, remaining
after payment of all operation and maintenance expenses thereof, and all debt service,
reserve, and other requirements in connection with all of the Issuer's revenue bonds or
other obligations (now or hereafter outstanding), which are payable from all or any part
of the Net Revenues of the Issuer's Harmony Park, Splash Park Water Pool.
BY BECOMING the Registered Owner of this Certificate of Obligation, the
Registered Owner thereby acknowledges all of the terms and provisions of the
Certificate of Obligation Ordinance, agrees to be bound by such terms and provisions,
acknowledges that the Certificate of Obligation Ordinance is duly recorded and
available for inspection in the official minutes and records of the governing body of the
Issuer, and agrees that the terms and provisions of this Certificate of Obligation and the
Certificate of Obligation Ordinance constitute a contract between the Registered Owner
hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate of Obligation to
be signed with the manual or facsimile signature of the Mayor of the Issuer and
countersigned with the manual or facsimile signature of the Town Secretary of said
Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in
facsimile, n this Certificate of Obligation.
i
Town Secretary
(SEAL)
(b)
Principal Payment
(amount and
Date of installment(s) to
Paymen which payment is
t applied)
Mayor
TYME T RECORD
rrr
Remaining Name and Title
Principal of Authorized
Balance Officer making
Entry
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Signature of
Authorized Officer
(c) FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION
CERTIFICATE OF OBLIGATION.
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE OF OBLIGATION
(To be executed if this Certificate of Obligation is not accompanied by an executed
Registration
Certificate of Obligation of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Certificate of Obligation has been issued under the
provisions of the Certificate of Obligation Ordinance described in the text of this
Certificate of Obligation; and that this Certificate of Obligation has been issued in
replacement of, or in exchange for, a Certificate of Obligation or a Certificate of
Obligation of a series that originally was approved by the Attorney General of the State
of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
Dated:
Zions First National Bank, Houston,
Texas
Paying Agent/Registrar
By:
Authorized Representative
(d) FORM OF ASSIGNMENT.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
(Please insert Social Security or Taxpayer Identification Number of Transferee)
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(Please print or typewrite name and address, including zip code, of Transferee.)
the within Certificate of Obligation and all rights thereunder, and hereby irrevocably
constitutes and appoints , attorney, to register the
transfer of the within Certificate of Obligation on the books kept for registration thereof,
with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be
guaranteed by an eligible guarantor
institution participating in a securities
transfer association recognized
signature guarantee program.
NOTICE: The signature above must
correspond with the name of the
registered owner as it appears upon the
front of this Certificate of Obligation in
every particular, without alteration or
enlargement or any change
whatsoever.
(e) FORM OF REGISTRATION CERTIFICATE OF OBLIGATION OF THE
COMPTROLLER OF PUBLIC ACCOUNTS.
COMPTROLLER'S REGISTRATION CERTIFICATE OF OBLIGATION:
REGISTER NO.
I hereby certify that this Certificate of Obligation has been examined, certified as
to validity and approved by the Attorney General of the State of Texas, and that this
Certificate of Obligation has been registered by the Comptroller of Public Accounts of
the State of Texas.
Witness my signature and seal this
(COMPTROLLER'S SEAL)
Comptroller of Public Accounts of the State of
Texas
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Section 5. TAX LEVY. A special Interest and Sinking Fund (the "Interest and
Sinking Fund") is hereby created solely for the benefit of the Certificate of Obligation,
and the Interest and Sinking Fund shall be established and maintained by the Issuer at
an official depository bank of the Issuer. The Interest and Sinking Fund shall be kept
separate and apart from all other funds and accounts of the Issuer, and shall be used
only for paying the interest on and principal of the Certificate of Obligation. All ad
valorem taxes levied and collected for and on account of the Certificate of Obligation,
together with any premium received from the sale of the Certificate of Obligation, shall
be deposited, as collected, to the credit of the Interest and Sinking Fund. During each
year while any of the Certificate of Obligation or interest thereon are outstanding and
unpaid, the governing body of the Issuer shall compute and ascertain a rate and
amount of ad valorem tax which will be sufficient to raise and produce the money
required to pay the interest on the Certificate of Obligation as such interest comes due,
and to provide and maintain a sinking fund adequate to pay the principal of its
Certificate of Obligation as such principal matures (but never less than 2% of the
original principal amount of the Certificate of Obligation as a sinking fund each year).
Said tax shall be based on the latest approved tax rolls of the Issuer, with full
allowance being made for tax delinquencies and the cost of tax collection. Said rate
and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied,
against all taxable property in the Issuer for each year while any of the Certificate of
Obligation or interest thereon are outstanding and unpaid; and said tax shall be
assessed and collected each such year and deposited to the credit of the aforesaid
Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment
of the interest on and principal of the Certificate of Obligation, as such interest comes
due and such principal matures, are hereby pledged for such payment, within the limit
prescribed by law.
Chapter 1208, Government Code, applies to the issuance of the Certificate of
Obligation and the pledge of the taxes granted by the Issuer under this Section, and is
therefore valid, effective, and perfected. Should Texas law be amended at any time
while the Certificate of Obligation are outstanding and unpaid, the result of such
amendment being that the pledge of the taxes granted by the Issuer under this Section
is to be subject to the filing requirements of Chapter 9, Business & Commerce Code, in
order to preserve to the registered owners of the Certificate of Obligation a security
interest in said pledge, the Issuer agrees to take such measures as it determines are
reasonable and necessary under Texas law to comply with the applicable provisions of
Chapter 9, Business & Commerce Code and enable a filing of a security interest in said
pledge to occur.
Section 6. REVENUES. That said Certificate of Obligation, together with
other obligations of the Issuer, are additionally secured by and shall be payable from
and secured by the collection of the limited surplus revenues of the Issuer's Harmony
Park, Splash Park Water Pool, after payment of all expenses of operation and
maintenance thereof, and all debt service, reserve, and other requirements in
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connection with all of the Issuer's revenue Certificate of Obligation or other obligations
(now or hereafter outstanding), which are payable from all or any part of the Net
Revenues of the Issuer's Harmony Park, Splash Park Water Pool with such amount of
the revenues from the Harmony Park, Splash Park Water Pool constituting "Surplus
Revenues". The Issuer shall deposit such Surplus Revenues to the credit of the
Interest and Sinking Fund created pursuant to Section 5, to the extent necessary to
pay the principal and interest on the Certificate of Obligation. Notwithstanding the
requirements of Section 5, if revenues are actually on deposit or budgeted for deposit in
the Interest and Sinking Fund in advance of the time when ad valorem taxes are
scheduled to be levied for any year, then the amount of taxes which otherwise would
have been required to be levied pursuant to Section 7 may be reduced to the extent
and by the amount of the revenues then on deposit in the Interest and Sinking Fund or
budgeted for deposit therein.
Section 7. TRANSFER. That the Mayor and the Town Secretary are hereby
ordered to do any and all things necessary to accomplish the transfer of monies to the
Interest and Sinking Fund of this issue in ample time to pay such items of principal and
interest.
Section 8. REMEDIES OF REGISTERED OWNER. In addition to all rights
and remedies of the Registered Owner of the Certificate of Obligation provided by the
laws of the State, the Issuer and the Town Council covenant and agree that in the event
the Issuer defaults in the payments of the principal of or interest on the Certificate of
Obligation when due, or fails to make the payments required by this Resolution, the
Registered Owner of the Certificate of Obligation shall be entitled to a writ of
mandamus issued by a court of proper jurisdiction compelling and requiring the Town
Council and other officers of the Issuer to observe and perform any covenant, obligation
or condition prescribed in this Ordinance. No delay or omission by any Registered
Owner to exercise any right or power accruing to him upon default shall impair any such
right or power, or shall be construed to be a waiver of any such default or acquiescence
therein, and every such right or power may be exercised from time to time and as often
as may be deemed expedient. The specific remedies mentioned in this Ordinance shall
be available to the Registered Owner of the Certificate of Obligation and shall be
cumulative of all other existing remedies.
Section 9. DEFEASANCE OF CERTIFICATE OF OBLIGATION. (a) Any
Certificate of Obligation and the interest thereon shall be deemed to be paid, retired
and no longer outstanding (a "Defeased Certificate of Obligation") within the meaning of
this Ordinance, except to the extent provided in subsection (d) of this Section, when
payment of the principal of such Certificate of Obligation, plus interest thereon to the
due date (whether such due date be by reason of maturity or otherwise) either (i) shall
have been made or caused to be made in accordance with the terms thereof, or (ii)
shall have been provided for on or before such due date by irrevocably depositing with
or making available to the Paying Agent/Registrar in accordance with an escrow
agreement or other instrument (the "Future Escrow Agreement") for such payment
13
(1) lawful money of the United States of America sufficient to make such payment or
(2) Defeasance Securities that mature as to principal and interest in such amounts and
at such times as will insure the availability, without reinvestment, of sufficient money to
provide for such payment, and when proper arrangements have been made by the
Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased
Certificate of Obligation shall have become due and payable. At such time as a
Certificate of Obligation shall be deemed to be a Defeased Certificate of Obligation
hereunder, as aforesaid, such Certificate of Obligation and the interest thereon shall no
longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes
herein levied and pledged or the revenues pledged as provided in this Ordinance, and
such principal and interest shall be payable solely from such money or Defeasance
Securities. Notwithstanding any other provision of this Ordinance to the contrary, it is
hereby provided that any determination not to redeem Defeased Certificate of
Obligation that is made in conjunction with the payment arrangements specified in
subsection (a)(i) or (ii) of this Section shall not be irrevocable, provided that: (1) in the
proceedings providing for such payment arrangements, the Issuer expressly reserves
the right to call the Defeased Certificate of Obligation for redemption; (2) gives notice of
the reservation of that right to the owners of the Defeased Certificate of Obligation
immediately following the making of the payment arrangements; and (3) directs that
notice of the reservation be included in any redemption notices that it authorizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written
direction of the Issuer be invested in Defeasance Securities, maturing in the amounts
and times as hereinbefore set forth, and all income from such Defeasance Securities
received by the Paying Agent/Registrar that is not required for the payment of the
Certificate of Obligation and interest thereon, with respect to which such money has
been so deposited, shall be turned over to the Issuer, or deposited as directed in writing
by the Issuer. Any Future Escrow Agreement pursuant to which the money and/or
Defeasance Securities are held for the payment of Defeased Certificate of Obligation
may contain provisions permitting the investment or reinvestment of such moneys in
Defeasance Securities or the substitution of other Defeasance Securities upon the
satisfaction of the requirements specified in subsection (a)(i) or (ii) of this Section. All
income from such Defeasance Securities received by the Paying Agent/Registrar which
is not required for the payment of the Defeased Certificate of Obligation, with respect to
which such money has been so deposited, shall be remitted to the Issuer or deposited
as directed in writing by the Issuer.
(c) The term "Defeasance Securities" means (i) direct, noncallable obligations of
the United States of America, including obligations that are unconditionally guaranteed
by the United States of America., (ii) noncallable obligations of an agency or
instrumentality of the United States of America, including obligations that are
unconditionally guaranteed or insured by the agency or instrumentality and that, on the
date of the purchase thereof are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent, and (iii)
noncallable obligations of a state or an agency or a county, municipality, or other
14
political subdivision of a state that have been refunded and that, on the date the
governing body of the Issuer adopts or approves the proceedings authorizing the
financial arrangements are rated as to investment quality by a nationally recognized
investment rating firm not less than AAA or its equivalent.
(d) Until the Defeased Certificate of Obligation shall have become due and
payable, the Paying Agent/Registrar shall perform the services of Paying
Agent/Registrar for such Defeased Certificate of Obligation the same as if they had not
been defeased, and the Issuer shall make proper arrangements to provide and pay for
such services as required by this Ordinance.
Section 10. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATE OF OBLIGATION.(a) Replacement Certificate of Obligation. In the
event any outstanding Certificate of Obligation is damaged, mutilated, lost, stolen or
destroyed, the Paying Agent/Registrar shall cause to be printed, executed and
delivered, a new Certificate of Obligation of the same principal amount, maturity and
interest rate, as the damaged, mutilated, lost, stolen or destroyed Certificate of
Obligation, in replacement for such Certificate of Obligation in the manner hereinafter
provided.
(b) Application for Replacement Certificate of Obligation. Application for
replacement of damaged, mutilated, lost, stolen or destroyed Certificate of Obligation
shall be made by the Registered Owner thereof to the Paying Agent/Registrar. In every
case of loss, theft or destruction of a Certificate of Obligation, the Registered Owner
applying for a replacement Certificate of Obligation shall furnish to the Issuer and to the
Paying Agent/Registrar such security or indemnity as may be required by them to save
each of them harmless from any loss or damage with respect thereto. Also, in every
case of loss, theft or destruction of a Certificate of Obligation, the Registered Owner
shall furnish to the Issuer and to the Paying Agent/Registrar evidence to their
satisfaction of the loss, theft or destruction of such Certificate of Obligation, as the case
may be. In every case of damage or mutilation of a Certificate of Obligation, the
Registered Owner shall surrender to the Paying Agent/Registrar for cancellation the
Certificate of Obligation so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this
Section, in the event any such Certificate of Obligation shall have matured, and no
default has occurred that is then continuing in the payment of the principal of,
redemption premium, if any, or interest on the Certificate of Obligation, the Issuer may
authorize the payment of the same (without surrender thereof except in the case of a
damaged or mutilated Certificate of Obligation) instead of issuing a replacement
Certificate of Obligation, provided security or indemnity is furnished as above provided
in this Section.
(d) Charge for Issuing Replacement Certificate of Obligation. Prior to the
issuance of any replacement Certificate of Obligation, the Paying Agent/Registrar shall
charge the Registered Owner of such Certificate of Obligation with all legal, printing,
15
and other expenses in connection therewith. Every replacement Certificate of
Obligation issued pursuant to the provisions of this Section by virtue of the fact that any
Certificate of Obligation is lost, stolen or destroyed shall constitute a contractual
obligation of the Issuer whether or not the lost, stolen or destroyed Certificate of
Obligation shall be found at any time, or be enforceable by anyone, and shall be
entitled to all the benefits of this Ordinance equally and proportionately with any and all
other Certificate of Obligation duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificate of Obligation. In accordance
with Sec. 1206.022, Government Code, this Section of this Ordinance shall constitute
authority for the issuance of any such replacement Certificate of Obligation without
necessity of further action by the governing body of the Issuer or any other body or
person, and the duty of the replacement of such Certificate of Obligation is hereby
authorized and imposed upon the Paying Agent/Registrar, and the Paying
Agent/Registrar shall authenticate and deliver such Certificate of Obligation in the form
and manner and with the effect, as provided in Section 3(a) of this Ordinance for
Certificate of Obligation issued in exchange for other Certificate of Obligation.
Section 11. CUSTODY, APPROVAL, AND REGISTRATION OF THE
CERTIFICATE OF OBLIGATION; BOND COUNSEL'S OPINION; CUSIP NUMBERS;
ENGAGEMENT OF BOND COUNSEL. (a) The Mayor of the Issuer is hereby
authorized to have control of the Certificate of Obligation initially issued and delivered
hereunder and all necessary records and proceedings pertaining to the Certificate of
Obligation pending its delivery and its examination, and approval by the Attorney
General of the State of Texas, and its registration by the Comptroller of Public Accounts
of the State of Texas. Upon registration of the Certificate of Obligation said Comptroller
of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall
manually sign the Comptroller's Registration Certificate of Obligation attached to such
Certificate of Obligation, and the seal of said Comptroller shall be impressed, or placed
in facsimile, on such Certificate of Obligation. The approving legal opinion of the
Issuer's Bond Counsel and the assigned CUSIP numbers (if any) may, at the option of
the Issuer, be printed on the Certificate of Obligation issued and delivered under this
Ordinance, but neither shall have any legal effect, and shall be solely for the
convenience and information of the Registered Owner of the Certificate of Obligation.
In addition, if bond insurance is obtained, the Certificate of Obligation may bear an
appropriate legend as provided by the insurer.
(b) The obligation of the initial purchaser to accept delivery of the Certificate of
Obligation is subject to the initial purchaser being furnished with the final, approving
opinion of McCall, Parkhurst & Horton L.L.P., bond counsel to the Issuer, which opinion
shall be dated as of and delivered on the date of initial delivery of the Certificate of
Obligation to the initial purchaser. The engagement of such firm as bond counsel to the
Issuer in connection with issuance, sale and delivery of the Certificate of Obligation is
hereby approved and confirmed. The execution and delivery of an engagement letter
between the Issuer and such firm, with respect to such services as bond counsel, is
16
hereby authorized in such form as may be approved by the Mayor, and the Mayor is
hereby authorized to execute such engagement letter.
Section 12. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON
THE CERTIFICATE OF OBLIGATION. (a) Covenants. The Issuer covenants to take
any action necessary to assure, or refrain from any action that would adversely affect,
the treatment of the Certificate of Obligation as an obligation described in section 103
of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which
is not includable in the "gross income" of the holder for purposes of federal income
taxation. In furtherance thereof, the Issuer covenants as follows:
(1) to take any action to assure that no more than 10 percent of the
proceeds of the Certificate of Obligation (less amounts deposited to a reserve
fund, if any) are used for any "private business use," as defined in section
141(b)(6) of the Code or, if more than 10 percent of the proceeds or the projects
financed therewith are so used, such amounts, whether or not received by the
Issuer, with respect to such private business use, do not, under the terms of this
Ordinance or any underlying arrangement, directly or indirectly, secure or provide
for the payment of more than 10 percent of the debt service on the Certificate of
Obligation, in contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the 'private
business use" described in subsection (1) hereof exceeds 5 percent of the
proceeds of the Certificate of Obligation or the projects financed therewith (less
amounts deposited into a reserve fund, if any) then the amount in excess of 5
percent is used for a 'private business use" that is "related" and not
"disproportionate," within the meaning of section 141(b)(3) of the Code, to the
governmental use;
(3) to take any action to assure that no amount that is greater than the
lesser of $5,000,000, or 5 percent of the proceeds of the Certificate of Obligation
(less amounts deposited into a reserve fund, if any) is directly or indirectly used
to finance loans to persons, other than state or local governmental units, in
contravention of section 141(c) of the Code;
(4) to refrain from taking any action that would otherwise result in the
Certificate of Obligation being treated as 'private activity bonds" within the
meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Certificate of
Obligation being "federally guaranteed" within the meaning of section 149(b) of
the Code;
(6) to refrain from using any portion of the proceeds of the Certificate of
Obligation, directly or indirectly, to acquire or to replace funds that were used,
directly or indirectly, to acquire investment property (as defined in section
17
148(b)(2) of the Code) that produces a materially higher yield over the term of
the Certificate of Obligation, other than investment property acquired with —
(A) proceeds of the Certificate of Obligation invested for a
reasonable temporary period of 3 years or less or, in the case of a
refunding bond, for a period of 30 days or less until such proceeds are
needed for the purpose for which the bonds are issued,
(B) amounts invested in a bona fide debt service fund, within the
meaning of section 1.148-1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or
replacement fund to the extent such amounts do not exceed 10 percent of
the proceeds of the Certificate of Obligation;
(7) to otherwise restrict the use of the proceeds of the Certificate of
Obligation or amounts treated as proceeds of the Certificate of Obligation, as
may be necessary, so that the Certificate of Obligation do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage)
and, to the extent applicable, section 149(d) of the Code (relating to advance
refundings); and
(8) to pay to the United States of America at least once during each five-
year period (beginning on the date of delivery of the Certificate of Obligation) an
amount that is at least equal to 90 percent of the "Excess Earnings," within the
meaning of section 148(f) of the Code and to pay to the United States of
America, not later than 60 days after the Certificate of Obligation have been paid
in full, 100 percent of the amount then required to be paid as a result of Excess
Earnings under section 148(f) of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant
(a)(8), a 'Rebate Fund" is hereby established by the Issuer for the sole benefit of the
United States of America, and such Fund shall not be subject to the claim of any other
person, including without limitation the Registered Owners. The Rebate Fund is
established for the additional purpose of compliance with section 148 of the Code.
(c) Use of Proceeds. The Issuer understands that the term "proceeds" includes
"disposition proceeds" as defined in the Treasury Regulations (hereinafter defined) and,
in the case of refunding bonds, transferred proceeds (if any) and proceeds of the
refunded bonds expended prior to the date of issuance of the Certificate of Obligation.
It is the understanding of the Issuer that the covenants contained herein are intended to
assure compliance with the Code and any regulations or rulings promulgated by the
U.S. Department of the Treasury pursuant thereto (the "Treasury Regulations"). In the
event that regulations or rulings are hereafter promulgated that modify or expand
provisions of the Code, as applicable to the Certificate of Obligation, the Issuer will not
IN
be required to comply with any covenant contained herein to the extent that such failure
to comply, in the opinion of nationally recognized bond counsel, will not adversely affect
the exemption from federal income taxation of interest on the Certificate of Obligation
under section 103 of the Code. In the event that regulations or rulings are hereafter
promulgated that impose additional requirements applicable to the Certificate of
Obligation, the Issuer agrees to comply with the additional requirements to the extent
necessary, in the opinion of nationally recognized bond counsel, to preserve the
exemption from federal income taxation of interest on the Certificate of Obligation under
section 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes
and directs the Mayor to execute any documents, Certificate of Obligation or reports
required by the Code and to make such elections, on behalf of the Issuer, that may be
permitted by the Code as are consistent with the purpose for the issuance of the
Certificate of Obligation.
(d) Allocation of, and Limitation on, Expenditures for the Project. The Issuer
covenants to account for the expenditure of sale proceeds and investment earnings to
be used for the construction and acquisition of the Project on its books and records by
allocating proceeds to expenditures within 18 months of the later of the date that (1) the
expenditure is made, or (2) the Project is completed. The foregoing notwithstanding,
the Issuer shall not expend proceeds of the sale of the Certificate of Obligation or
investment earnings thereon more than 60 days after the earlier of (1) the fifth
anniversary of the delivery of the Certificate of Obligation, or (2) the date the Certificate
of Obligation is retired, unless the Issuer obtains an opinion of nationally -recognized
bond counsel that such expenditure will not adversely affect the status, for federal
income tax purposes, of the Certificate of Obligation or the interest thereon. For
purposes hereof, the Issuer shall not be obligated to comply with this covenant if it
obtains an opinion that such failure to comply will not adversely affect the excludability
for federal income tax purposes from gross income of the interest.
(e) Disposition of Project. The Issuer covenants that the Project will not be sold
or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or
other compensation, unless the Issuer obtains an opinion of nationally -recognized bond
counsel that such sale or other disposition will not adversely affect the tax-exempt
status of the Certificate of Obligation. For purposes of the foregoing, the portion of the
property comprising personal property and disposed in the ordinary course shall not be
treated as a transaction resulting in the receipt of cash or other compensation. For
purposes hereof, the Issuer shall not be obligated to comply with this covenant if it
obtains a legal opinion that such failure to comply will not adversely affect the
excludability for federal income tax proposes from gross income of the interest.
Section 13. SALE OF CERTIFICATE OF OBLIGATION. (a) The Certificate of
Obligation is hereby initially sold and shall be delivered to ZIONS FIRST NATIONAL
BANK, HOUSTON, TEXAS for cash for the par value thereof in accordance with an
investment letter, a copy of which is attached hereto as Exhibit A, which includes a
19
schedule of the Certificate of Obligation installments, maturities and interest rate
assigned to the aforesaid Certificate of Obligation.
(b) The Mayor and all other officers, employees and agents of the Issuer, and
each of them, shall be and they are hereby expressly authorized, empowered and
directed from time to time and at any time to do and perform all such acts and things
and to execute, acknowledge and deliver in the name and on behalf of the Issuer a
Paying Agent/Registrar Agreement with the Paying Agent/Registrar and all other
instruments, whether or not herein mentioned, as may be necessary or desirable in
order to carry out the terms and provisions of this Ordinance, the Certificate of
Obligation and the sale of the Certificate of Obligation. In case any officer whose
signature shall appear on any Certificate of Obligation shall cease to be such officer
before the delivery of such Certificate of Obligation, such signature shall nevertheless
be valid and sufficient for all purposes the same as if such officer had remained in office
until such delivery.
Section 14. INTEREST EARNINGS ON CERTIFICATE OF OBLIGATION
PROCEEDS. Interest earnings derived from the investment of proceeds from the sale
of the Certificate of Obligation shall be used along with other Certificate of Obligation
proceeds for the Project; provided that after completion of such purpose, if any of such
interest earnings remain on hand, such interest earnings shall be deposited in the
Interest and Sinking Fund. It is further provided, however, that any interest earnings on
Certificate of Obligation proceeds that are required to be rebated to the United States of
America pursuant to Section 10 hereof in order to prevent the Certificate of Obligation
from being arbitrage bonds shall be so rebated and not considered as interest earnings
for the purposes of this Section.
Section 15. CONSTRUCTION FUND. (a) The Issuer hereby creates and
establishes and shall maintain on the books of the Issuer a separate fund to be entitled
the "Series 2007 Combination Tax and Revenue Certificate of Obligation Construction
Fund" for use by the Issuer for payment of all lawful costs associated with the
acquisition and construction of the Project as hereinbefore provided. Upon payment of
all such costs, any moneys remaining on deposit in said Fund shall be transferred to
the Interest and Sinking Fund. Amounts so deposited to the Interest and Sinking Fund
shall be used in the manner described in Section 5 of this Ordinance.
(b) The Issuer may place proceeds of the Certificate of Obligation (including
investment earnings thereon) and amounts deposited into the Interest and Sinking
Fund in investments authorized by the Public Funds Investment Act, Chapter 2256,
Texas Government Code, as amended; provided, however, that the Issuer hereby
covenants that the proceeds of the sale of the Certificate of Obligation will be used as
soon as practicable for the purposes for which the Certificate of Obligation is issued.
(c) All deposits authorized or required by this Ordinance shall be secured to the
fullest extent required by law for the security of public funds.
20
Section 16. METHOD OF AMENDMENT. The Issuer hereby reserves the right
to amend this Ordinance subject to the following terms and conditions, to -wit:
(a) The Issuer may from time to time, without the consent of the Registered
Owner, except as otherwise required by paragraph (b) below, amend or supplement this
Ordinance in order to (i) cure any ambiguity, defect or omission in this Ordinance that
does not materially adversely affect the interests of the holders, (ii) grant additional
rights or security for the benefit of the holders, (iii) add events of default as shall not be
inconsistent with the provisions of this Ordinance and that shall not materially adversely
affect the interests of the holders, (v) qualify this Ordinance under the Trust Indenture
Act of 1939, as amended, or corresponding provisions of federal laws from time to time
in effect, or (iv) make such other provisions in regard to matters or questions arising
under this Ordinance as shall not be inconsistent with the provisions of this Ordinance
and that shall not in the opinion of the Issuer's Bond Counsel materially adversely affect
the interests of the holders.
(b) Except as provided in paragraph (a) above, the Registered Owner shall have
the right from time to time to approve any amendment hereto that may be deemed
necessary or desirable by the Issuer; provided, however, that without the consent of the
Registered Owner, nothing herein contained shall permit or be construed to permit
amendment of the terms and conditions of this Ordinance or in the Certificate of
Obligation so as to:
(1) Reduce the rate of interest borne by the Certificate of Obligation;
(2) Reduce the amount of the principal of, or redemption premium, if any,
payable on the Certificate of Obligation;
(3) Modify the terms of payment of principal or of interest on the
Certificate of Obligation or impose any condition with respect to such
payment; or
(4) Change the requirement with respect to Registered Owner consent to
such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under this
Section, the Issuer shall send by U.S. mail to the Registered Owner a copy of the
proposed amendment.
(d) Whenever at any time within one year from the date of publication of such
notice the Issuer shall receive an instrument or instruments executed by the Registered
Owner, which instrument or instruments shall refer to the proposed amendment and
that shall specifically consent to and approve such amendment, the Issuer may adopt
the amendment in substantially the same form.
21
(e) Upon the adoption of any amendatory ordinance pursuant to the provisions
of this Section, this Ordinance shall be deemed to be modified and amended in
accordance with such amendatory Ordinance, and the respective rights, duties, and
obligations of the Issuer and the Registered Owner shall thereafter be determined,
exercised, and enforced, subject in all respects to such amendment.
(f) Any consent given by the Registered Owner of a Certificate of Obligation
pursuant to the provisions of this Section shall be irrevocable for a period of six months
from the date of such consent, and shall be conclusive and binding upon all future
holders of the same Certificate of Obligation during such period. Such consent may be
revoked at any time after six months from the date of consent by the Registered Owner
who gave such consent, or by a successor in title, by filing notice with the Issuer.
(g) For the purposes of establishing ownership of the Certificate of Obligation,
the Issuer shall rely solely upon the registration of the ownership of such Certificate of
Obligation on the registration books kept by the Paying Agent/Registrar.
Section 17. NO RULE 15c2-12 UNDERTAKING. The Issuer has not made an
undertaking in accordance with Rule 15c2-12 of the Securities and Exchange
Commission (the 'Rule"). The Issuer is not, therefore, obligated pursuant to the Rule to
provide any on-going disclosure relating to the Issuer or the Certificate of Obligation.
Section 18. OTHER REPRESENTATIONS AND COVENANTS. The Issuer
further covenants or warrants as follows:
(a) The Issuer is a duly organized and existing Town of the State of Texas under
the Constitution and laws of the State of Texas.
(b) The Issuer is duly authorized under the laws of the State of Texas to issue
the Certificates of Obligation; all action on its part for the creation and issuance,
including the authorization and execution of the Ordinance, of the Certificates of
Obligation has been duly and effectively taken; the Issuer has complied with notice
requirements and/or open meetings laws; and the Ordinance, and the Certificates in the
hands of the Registered Owners thereof, are and will be valid and enforceable
obligations of the Issuer, enforceable against the Issuer in accordance with their terms.
(c) The Certificates of Obligation upon issuance and approval by the Attorney
General of the State of Texas will be legal, valid and binding obligations of the Issuer,
enforceable against the Issuer in accordance with their terms, subject to bankruptcy,
insolvency, or other laws affecting creditors; rights generally and as may be affected by
matters involving the exercise of equitable or judicial discretion.
(d) The adoption, execution and/or delivery of the Certificates of Obligation and
the Ordinance, and the compliance by the Issuer with their provisions, will not conflict
22
with or constitute a breach of or default under any court decree or order or any
agreement, indenture, lease or other instruments or any existing law or administrative
regulation, decree or order to which the Issuer is subject or by which the Issuer is or
maybe bound.
(e) No litigation is pending that would adversely affect the financial condition of
the Issuer, and no legal or governmental proceedings or litigation of any nature has
been filed or is now pending or, to restrain or enjoin the issuance or delivery of the
Certificates of Obligation or the transactions contemplated under, or the validity of, this
Ordinance or the Certificates of Obligation, that would affect the provisions made for the
payment or security of the Certificates of Obligation, or that in any manner questions
the proceedings or authority concerning the issuance of the Certificates of Obligation.
(f) There has been no default or non -appropriation of any obligations of the
Issuer.
Section 19. APPROPRIATION. There is hereby appropriated for transfer into
the Interest and Sinking Fund, from available funds of the Issuer, moneys sufficient to
pay the interest coming due on September 1, 2007.
Section 20. EFFECTIVE DATE. In accordance with the provisions of V.T.C.A.,
Government Code, Section 1201.028, this Ordinance shall be effective immediately
upon its adoption by the Town Council.
Section 21. SEVERABILITY. If any section, article, paragraph, sentence,
clause, phrase or word in this Ordinance, or application thereof to any persons or
circumstances is held invalid or unconstitutional by a court of competent jurisdiction,
such holding shall not affect the validity of the remaining portion of this Ordinance,
despite such invalidity, which remaining portions shall remain in full force and effect.
PASSED AND APPROVED by the Town Council of the Town of Trophy Club,
Texas, this 7th day of May, 2007.
Mayor Nick Sanders
Town of Trophy Club, Texas
Effective
Date: CJ_ —,
ATTEST:2311, �tiyi:/
`Towh Secretary, Lisa Ramsey
Town of Trophy Club, Texas
APPROVED TO AS FORM:
��tll GP o
Town Attorney, Patncia—A-dams
Town of Trophy Club, Texas
24
EXHIBIT A
Investment Letter
ZIONS FIRST NATIONAL BANK
May 7, 2007
Town of Trophy Club, Texas
100 Municipal Drive
Trophy Club, Texas 76262
Southwest Securities, Inc.
1201 Elm Street, Suite 3500
Dallas, Texas 75270
McCall, Parkhurst & Horton, LLP
717 North Harwood, 9TH Floor
Dallas, Texas 75201
Re: Town of Trophy Club, Texas Combination Tax and Revenue
Certificate of Obligation, Series 2007, in the principal amount of $474,000
Ladies and Gentlemen:
This letter constitutes the undersigned's (the "Purchaser") agreement to
purchase all of the above -captioned Certificate of Obligation (the "Certificate of
Obligation") issued in the aggregate principal amount of $474,000 by the Town of
Trophy Club (the "Issuer") for $474,000 having the terms set forth in that certain
ordinance adopted by the Issuer on May 7, 2007 (the "Ordinance"). In connection with
such agreement to purchase, the undersigned represents as follows:
1. We are a financial institution, to -wit: a "bank" as defined in Section 3(a)(2) of the
Securities Act of 1933.
2. We have sufficient knowledge and experience in financial and business matters,
including purchase and ownership of municipal and other tax-exempt obligations of a
nature similar to the Certificate of Obligation to be able to evaluate the risks and merits
of the investment represented by the purchase of the Certificate of Obligation.
3. We are acquiring the Certificate of Obligation for our own account, and not with a
view to, or for sale in connection with, any distribution of the Certificate of Obligation or
any part thereof. We have not offered to sell, solicited offers to buy, or agreed to sell
the Certificate of Obligation or any part thereof, and we have no present intention of
reselling or otherwise disposing of the Certificate of Obligation.
4. We acknowledge that the Issuer has not undertaken to make any on-going
disclosures for the benefit of the registered owners of the Certificate of Obligation in
accordance with Rule 15c2-12 of the Securities and Exchange. Commission. As a
sophisticated investor, we have made our own credit inquiry and analysis with respect
to the Issuer and the Certificate of Obligation, and have made an independent credit
decision based upon such inquiry and analysis. The Issuer has furnished to us all the
information which we as a reasonable investor have requested of the Issuer as a result
of our having attached significance thereto in making our investment decision with
respect to the Certificate of Obligation, and we have had the opportunity to ask
questions of and receive answers from knowledgeable individuals concerning the Issuer
and the Certificate of Obligation. We are able and willing to bear the economic risk of
the purchase and ownership of the Certificate of Obligation. We are not relying on
McCall, Parkhurst & Horton L.L.P., the Issuer's Bond Counsel, or Southwest Securities,
the Issuer's Financial Advisor, as to the completeness or accuracy of any financial
information provided to us by the Issuer in connection with our determination to
purchase the Certificate of Obligation.
5. We acknowledge that the Certificate of Obligation will be delivered in physical form.
We understand that the Certificate of Obligation has not been registered with any
federal or state securities agency or commission.
6. We acknowledge that the Certificate of Obligation are transferrable only by notation
on the registration books maintained by the Paying Agent/Registrar for the Certificate of
Obligation and are freely transferrable provided that:
(i) the transferring holder thereof shall first have complied with all applicable state
and federal securities laws and regulations;
(ii) the transferring holder thereof can transfer the Certificate of Obligation only
to:
(a) a transferee who executes and delivers to the Issuer a letter of the
transferee substantially to the effect of this letter; or
(b) a transferee who qualifies as a qualified institutional investor; or
(c) a transferee who qualifies as an "accredited investor" within the
meaning of Section 2(15) of the 1933 Act; or
(d) a securitization Special Purpose Vehicle ("SPV") the interests in which
SPV are sold to institutional investors only; and
(iii) the transferring holder thereof will not prepare or furnish, or cause to be
prepared or furnished, any disclosure regarding the Issuer's finances without the
prior review and written consent of the Issuer, in the Issuer's sole discretion.
7. Notwithstanding anything herein to the contrary, our obligation to purchase the
Certificate of Obligation shall be subject to the condition precedent that from the date
hereof to the date of delivery of the Certificate of Obligation, there shall not have
occurred any:
(i) material adverse change in the financial condition or general affairs of the
Issuer;
(ii) event, court decision, proposed law or rule which may have the effect of
changing the federal income tax incidents of the Issuer or of the ownership of the
Certificate of Obligation or the interest thereon or the transactions contemplated
herein: or
(iii) international or national crisis, suspension of stock exchange trading or
banking moratorium materially affecting, in our opinion, the market value of the
Certificate of Obligation.
ZIONS FIRST NATIONAL BANK
:-
Title:
ACCEPTED this May 7, 2007.
Mayor Nick Sanders
Town of Trophy Club, Texas