ORD 2002-09CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS §
COUNTY OF DENTON §
TOWN OF TROPHY CLUB §
We, the undersigned officers of said Town, hereby certify as follows:
1. The Town Council of said Town convened in SPECIAL MEETING ON THE 25th
DAY OF FEBRUARY, 2002, at the Town Hall, and the roll was called of the duly constituted officers
and members of said Town Council, to -wit:
Scott Smith, Mayor
Susan Edstom
Barry Huizenga
Bill Mattlral
Scott Spence
Roger Williams
Diane Cockrell, Town Secretary
and all of said persons were present, except the following absentees: Scott Spence, thus constituting a
quorum. Whereupon, among other business, the following was transacted at said Meeting: a written
RE -ADOPTION OF
ORDINANCE NO. 2002-09 AN ORDINANCE OF THE TOWN OF TROPHY CLUB, TEXAS,
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF TOWN OF TROPHY CLUB
TEXAS GENERAL OBLIGATION REFUNDING BONDS SERIES, 2002; ESTABLISHING
BOND AMOUNT AND PURPOSE; PROVIDING FOR DESIGNATION OF THE BONDS;
PROVIDING FOR INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL BOND; PROVIDING
FOR INTEREST; PROVIDING FOR THE FORM OF THE INITIAL BOND; DEFINING
ADDITIONAL CHARACTERISTICS OF THE BONDS; PROVIDING FOR THE FORM OF
SUBSTITUTE BONDS; PROVIDING FOR TAX LEVY; PROVIDING FORDEFEASANCE OF
BONDS; PROVIDING FOR DAMAGED, MUTILATED, LOST, STOLEN OR DESTROYED
BONDS; ESTABLISHING GUIDELINES FOR CUSTODY, APPROVAL, AND
REGISTRATION OF BONDS, BOND COUNSEL'S OPINION, CUSIP NUMBERS, AND
CONTINGENT INSURANCE PROVISION, IF OBTAINED; PROVIDING COVENANTS
REGARDING TAX EXEMPTION; PROVIDING FOR THE DISPOSITION OF PROJECT;
PROVIDING FOR CONTINUING DISCLOSURE; PROVIDING FOR SALE OF BONDS;
PROVIDING FOR APPROVAL OF THE OFFICIAL STATEMENT; PROVIDING FOR
APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS; PROVIDING FOR
NOTICE OF REDEMPTION; PROVIDING FOR NOTICE TO PAYING AGENT, REGISTRAR
AND PUBLICATION; PROVIDING FOR INTEREST EARNINGS ON BOND PROCEEDS;
PROVIDING REASONS FORREFUNDING; PROVIDING FORAN INTEREST AND SINKING
FUND; PROVIDING FOR INSURANCE; PROVIDING FOR PUBLIC NOTICE; GENERALLY
AUTHORIZING THE MAYOR TO EXECUTE ALL NECESSARY DOCUMENTS;
PROVIDING A CUMULATIVE CLAUSE; PROVIDING FOR SAVINGS; PROVIDING
SEVERABILITY; PROVIDING FOR PUBLICATION; PROVIDING FOR ENGROSSMENT
AND ENROLLMENT; AND PROVIDING AN EFFECTIVE DATE.
was duly introduced for the consideration of said Town Council and read in full. It was then duly moved and
seconded that said Ordinance be passed; and, after due discussion, said motion carrying with it the passage
of said Ordinance, prevailed and carred by the following vote:
AYES: All members of said Town Council shown present above voted "Aye".
NOES: None.
2. That a true, full and correct copy of the aforesaid Ordinance passed at the Meeting described
in the above and foregoing paragraph is attached to and follows this Certificate; that said Ordinance has been
duly recorded in said Town Council's minutes of said Meeting; that the above and foregoing paragraph is a
true, full and correct excerpt from said Town Council's minutes of said Meeting pertaining to the passage of
said Ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified
and acting officers and members of said Town Council as indicated therein; that each of the officers and
members of said Town Council was duly and sufficiently notified officially and personally, in advance, of the
tune, place and purpose of the aforesaid Meeting, and that said Ordinance would be introduced and
considered for passage at said Meeting, and each of said officers and members consented, in advance, to the
holding of said Meeting for such purpose, and that said Meeting was open to tine public and public notice of
the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government
Code,
3. That the Mayor of said Town has approved and hereby approves the aforesaid Ordinance;
that the Mayor and the Town Secretary of said Town have duly signed said Ordinance; and that the Mayor
and the Town Secretary of said Town hereby declare that their signing of this Certificate shall constitute the
signing of the attached and following copy of said Ordinance for all purposes.
[Remainder of'Page Left Intentionally Blank]
SIGNED AND SEALED the 25TH clay of FEBRUARY, 2002.
Town Secretary
(TOWN SEAL) r'��
ORDINANCE NO. 2002-09
AN ORDINANCE OF THE TOWN OF TROPHY CLUB, TEXAS, AUTHORIZING THE
ISSUANCE, SALE, AND DELIVERY OF TOWN OF TROPHY CLUB TEXAS GENERAL
OBLIGATION REFUNDING BONDS SERIES, 2002; ESTABLISHING BOND AMOUNT AND
PURPOSE; PROVIDING FOR DESIGNATION OF THE BONDS; PROVIDING FOR INITIAL
DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL REGISTERED OWNER, AND
CHARACTERISTICS OF THE INITIAL BOND; PROVIDING FOR INTEREST; PROVIDING
FOR THE FORM OF THE INITIAL BOND; DEFINING ADDITIONAL CHARACTERISTICS
OFTHE BONDS; .PROVIDING FOR THE FORM OF SUBSTITUTE BONDS; PROVIDING FOR
TAX LEVY; PROVIDING FOR DEFEASANCE OF BONDS; PROVIDING FOR DAMAGED,
MUTILATED, LOST, STOLEN OR DESTROYED BONDS; ESTABLISHING GUIDELINES
FOR CUSTODY, APPROVAL, AND REGISTRATION OF BONDS, BOND COUNSEL'S
OPINION, CUSIP NUMBERS, AND CONTINGENT INSURANCE PROVISION, IF OBTAINED;
PROVIDING COVENANTS REGARDING TAX EXEMPTION; PROVIDING FOR THE
DISPOSITION OF PROJECT; PROVIDING FOR CONTINUING DISCLOSURE; PROVIDING
FOR SALE OF BONDS; PROVIDING FOR APPROVAL OF THE OFFICIAL STATEMENT;
PROVIDING FOR APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS;
PROVIDING FOR NOTICE OF REDEMPTION; PROVIDING FOR NOTICE TO PAYING
AGENT, REGISTRAR AND PUBLICATION; PROVIDING FOR INTEREST EARNINGS ON
BOND PROCEEDS; PROVIDING REASONS FOR REFUNDING; PROVIDING FOR AN
INTEREST AND SINKING FUND; PROVIDING FOR INSURANCE; PROVIDING FOR
PUBLIC NOTICE; GENERALLY AUTHORIZING THE MAYOR TO EXECUTE ALL
NECESSARY DOCUMENTS; PROVIDING A CUMULATIVE CLAUSE; PROVIDING FOR
SAVINGS; PROVIDING SEVERABILITY; PROVIDING FOR PUBLICATION; PROVIDING
FOR ENGROSSMENT AND ENROLLMENT; AND PROVIDING AN EFFECTIVE DATE.
THE STATE OF TEXAS
COUNTY OF DENTON
TOWN OF TROPHY CLUB
WHEREAS, the TOWN OF TROPHY CLUB, TEXAS (the "Issuer") has duly issued and there
is now outstanding, the following series or issues of bonds which are secured by the full faith and credit of
the Issuer and a pledge by the Issuer to levy ad valorem taxes sufficient to pay principal of and interest on
the general obligation bonds as same become due:
TOWN OF TROPHY CLUB, General Obligation Bonds, Series 1994, dated October 1,
1994, maturities September 1, 2002 through September 1, 2014, in the aggregate principal
amount of $ 1,790,000 (the "Series 1994 General Obligation Bonds")
WHEREAS, the Issuer now desires to refund the Series 1994 General Obligation Bonds, maturing
September 1, 2006 through September 1, 2014 in the amount of $1,420,000 (the "Refunded Bonds"); and
WHEREAS, the Town Council of the Issuer deems it advisable and in the best interests of the Issuer
to refund the Refunded Bonds in order to restructure the Issuer's debt service payments, resulting in a debt
service savings of approximately $79,150.99 and a present value savings, after taking into account transfers
from the Interest and Sinking Favid for the Refunded Bonds, of $68,973.09; and
WHEREAS, Article 717k, V.A.T.C.S., now codified as Chapter 1207 of the Government Code,
authorizes the Issuer to issue refunding bonds and to deposit the proceeds from the sale thereof together with
any other available funds or resources, directly with a place of payment (paying agent) for the Refunded
Bonds, and such deposit, if made before such payment dates, shall constitute the malting of firm banking and
financial arrangements for the discharge and final payment of the Refunded Bonds; and
WHEREAS, Article 717k, now codified as Chapter 1207 of the Government Code, further
authorizes the Issuer to enter into an escrow agreement with the paying agent for the Refunded Bonds with
respect to the safekeeping, investment, reinvestment, administration and disposition of any such deposit, upon
such terns and conditions as the Issuer and such paying agent may agree, provided that such deposits may
be invested and reinvested including obligations the principal of and interest on which are unconditionally
guaranteed by the United States of America, and which shall mature and bear interest payable at such times
and in such amounts as will be sufficient to provide for the scheduled payment or prepayment of the Refunded
Bonds; and
WHEREAS, ]PMorgan Chase Bank, Houston, Texas (successor to Texas Commerce Bank,
Houston, Texas), is the paying agent for the Series 1994 General Obligation Bonds and will be the Escrow
Agent For the Escrow Agreement hereinafter authorized, which constitutes an agreement of the kind
authorized and permitted by said Chapter 1207 of the Texas Government Code; and
WHEREAS, all the Refunded Bonds mature or are subject to redemption prior to maturity within
20 years of the date of the bonds hereinafter authorized; and
WHEREAS, the meeting was open to the public and public notice of the time, place and purpose of
said meeting was given pursuant to Chapter 551, Texas Goverrunent Code.
THEREFORE BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF
TROPHY CLUB, TEXAS:
Section 1. AMOUNT AND PURPOSE OF THE BONDS. The bond or bonds of the TOWN
OF TROPHY CLUB (the "Issuer") are hereby authorized to be issued and delivered in the aggregate
principal amount of $1,580,000 for refunding the Refunded Bonds.
Section 2. DESIGNATION OF THE BONDS. Each bond issued pursuant to this Ordinance
shall be designated: "TOYEN OF TROPHYCLUB, TEXAS GENERAL OBLIGATION REFUNDING
BOND, SERIES 2002", and initially there shall be issued, sold, and delivered hereunder a single fully
registered bond, without interest coupons, payable in annual instalhnents of principal (the "Initial Bond"), but
the Initial Bond may be assigned and transferred and/or converted into and exchanged for a like aggregate
principal amount of fully registered bonds, without interest coupons, having serial and annual maturities, and
in the denomination or denominations of $5,000 or any integral multiple of $5,000, all in the manner hereinafter
provided. The term "Bonds" as used in this Ordinance shall mean and include collectively the Initial Bond and
all substitute bonds exchanged therefor, as well as all other substitute bonds and replacement bonds issued
pursuant hereta, and the term 'Bond" shall mean any of the Bonds.
Section 3. INITIAL DATE DENOMINATION NUMBER MATURITIES INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL BOND. (a) The Initial Bond
is hereby authorized to be issued, sold, and delivered hereunder as a single fully registered Bond, without
interest coupons, dated February 1, 2002, in the denomination and aggregate principal amount of $1,580,000,
numbered R-1, payable in annual installments of principal to the initial registered owner thereof, to -wit: FIRST
SOUTHWEST COMPANY, or to the registered assignee or assignees of said Bond or any portion or
portions thereof (in each case, the "registered owner"), with the annual installments of principal of the Initial
Bond to be payable on the dates, respectively, and in the principal amounts, respectively, stated in the FORM
OF INITIAL BOND set forth in this Ordinance.
(b) The Initial Bond (i) may be prepaid or redeemed prior to the respective scheduled due dates of
installments of principal thereof, (ii) may be assigned and transferred, (iii) may be converted and exchanged
for other Bonds, (iv) shall have the characteristics, and (v) shall be signed and sealed, and the principal of and
interest on the Initial Bond shall be payable, all as provided, and in the manner required or indicated, in the
FORM OF INITIAL BOND set forth in this Ordinance.
Section 4. INTEREST. The unpaid principal balance of the Initial Bond shall bear interest from
the date of the Initial Bond and will be calculated on the basis of a 360 -day year of twelve 30 -day months to
the respective scheduled due dates, of the installments of principal of the Initial Bond, and said interest shall
be payable, all in the manner provided and at the rates and on the dates stated in the FORM OF INITIAL
BOND set forth in this Ordinance.
Section 5. FORM. OF INITIAL BOND. The form of the Initial Bond, including the form of
Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed on the
Initial Bond, shall be substantially as follows:
NO. R-1
FORM OF INITIAL BOND
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
TOWN OF TROPHY CLUB, TEXAS
GENERAL OBLIGATION REFUNDING BOND, SERIES 2002
$1,580,000
The TOWN OF TROPHY CLUB, in DENTON COUNTY (the "Issuer"), being a political
subdivision of the State of Texas, hereby promises to pay to
FIRST SOUTHWEST COMPANY
or to the registered assignee or assignees of this Bond or any portion or portions hereof (in each case, the
"registered owner") the aggregate principal amount of
ONE MILLION FIVE HUNDRED NINETY THOUSAND DOLLARS
in annual installments of principal due and payable on September I in each of the years, and in the respective
principal amounts, as set forth in the following schedule:
YEAR
AMOUNT
YEAR
AMOUNT
2003
30,000
2009
155,000
2004
30,000
2010
165,000
2005
35,000
2011
170,000
2006
140,000
2012
180,000
2007
145,000
2013
185,000
2008
150,000
2014
195,000
and to pay interest, from the date of this Bond hereinafter stated, on the balance of each such installment of
principal, respectively, from time to time remaining unpaid, at the rates as follows:
maturities 2003,
3.50 %
maturities 2009,
4.00
%
maturities 2004,
3,50 %,
maturities 2010,
4.10
%
maturities 2005,
3.50 %
maturities 2011,
4.20
%
maturities 2006,
3.50 %
maturities 2012,
4.30
%
maturities 2007,
3.75 %
maturities 2013,
4.40
%
maturities 2008,
4.00 %
maturities 2014,
4,50
°/,
with said interest being payable on September 1, 2002, and semiannually on each March 1 and September 1
thereafter while this Bond or any portion hereof is outstanding and unpaid.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Bond are payable
in lawful money of the United States of America, without exchange or collection charges. The installments
of principal and the interest on this Bond are payable to the registered owner hereof through the services of
JPhIORGAN CHASE BANK, HOUSTON, TEXAS, which is the "Paying Agent/Registrar" for this Bond.
Payment of all principal of and interest on this Bond shall he made by the Paying Agent/Registrar to the
registered owner hereof on each principal and/or interest payment date by check or draft, dated as of such
date, drawn by the Paying Agent/Registrar on, and payable solely fi-om, funds of the Issuer required by the
ordinance authorizing the issuance of this Bond (the 'Bond Ordinance") to be on deposit with the Paying
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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 principal and/or interest
payment date, to the registered owner hereof, at the address of the registered owner, as it appeared on the
fifteenth 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, or by such other method acceptable to the Paying
Agent/Registrar requested by, and at the risk and expense of, the registered owner. The Issuer covenants
with the registered owner of this Bond that on or before each principal and/or interest payment date for this
Bond it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by
the Bond Ordinance, the amounts required to provide for the payment, in inunediately available funds, of all
principal of and interest on this Bond, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday, or a day an which banking institutions in the City where 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 which 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.
THIS BOND has been authorized in accordance with the Constitution and laws of tile State of Texas,
in the principal amount of $1,580,000 for refunding the Issuer's Refunded Bonds.
ON SEPTEMBER 1, 2010, or on any date thereafter, the unpaid instalhnents of principal of this Bond
may be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer, with funds derived
from any available source, as a whole, or in part, and, if in part, the Issuer shall select and designate the
maturity, or maturities, and the amount that is to be redeemed, and if less than a whole maturity is to be called,
the Issuer shall direct the Paying Agent/Registrar to call by lot (provided that a portion of this Bond may be
redeemed only in an integral multiple of $5,000), at the redemption price of the principal amount, plus accrued
interest to the date fixed for prepayment or redemption.
AT LEAST 30 days prior to the date fixed for any such prepayment or redemption, a written notice
of such prepayment or redemption shall be mailed by United States mail, first class postage pre -paid, by the
Paying Agent/Registrar to the registered owner hereof. By the date fixed for any such prepayment or
redemption due provision shall be made by the Issuer with the Paying Agent/Registrar for the payment of the
required prepayment or redemption price for this Bond or the portion hereof which is to be so prepaid or
redeemed, plus accrued interest thereon to the date fixed for prepayment or redemption. If such written notice
of prepayment or redemption is given, and if due provision for such payment is made, all as provided above,
this Bond, or the portion thereof which is to be so prepaid or redeemed, thereby automatically shall be treated
as prepaid or redeemed prior to its scheduled due date, and shall not bear interest after the date fixed for its
prepayment or redemption, and shall not be regarded as being outstanding except for the right of the
registered owner to receive the prepayment or redemption price plus accrued interest to the date fixed for
prepayment or redemption from the Paying Agent/Registrar out of the funds provided for such payment. The
Paying Agent/Registrar shall record in the Registration Books all such prepayments or redemptions of
principal of this Bond or any portion hereof.
THIS BOND, to the extent of the unpaid principal balance hereof, or any unpaid and unredeemed
portion hereof in any integral multiple of $5,000, may be assigned by the initial registered owner hereof and
shall be transferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting
in the capacity of registrar for the Bonds, upon the terms and conditions set forth in the Bond Ordinance.
Among other requirements for such transfer, this Bond must be presented and surrendered to the Paying
Agent/Registrar for cancellation, together with proper instruments of assignment, in forn and with guarantee
of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment by the initial registered owner
of this Bond, or any portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees
in whose name or names this Bond or any such portion or portions hereof is or are to be transferred and
registered. Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar may be
used to evidence the assignment of this Bond or any such portion or portions hereof by the initial registered
owner hereof. A new bond or bonds payable to such assignee or assignees (which then will be the new
registered owner or owners of such new Bond or Bonds) or to the initial registered owner as to any portion
of this Bond which is not being assigned and transferred by the initial registered owner, shall be delivered by
the Paying Agent/Registrar in conversion of and exchange for this Bond or any portion or portions hereof,
but solely in the form and manner as provided in the next paragraph hereof for the conversion and exchange
of this Bond or any portion hereof. The registered owner of this Bond shall be deemed and treated by the
Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and
discharge of liability upon this Bond to the extent of such payment, and the Issuer and the Paying
Agent/Registrar shall not be affected by any notice to the contrary.
AS PROVIDED above and in the Bond Ordinance, this Bond, to the extent of the unpaid principal
balance hereof, may be converted into and exchanged for a like aggregate principal amount of fully registered
bonds, without interest coupons, payable to the assignee or assignees duly designated in writing by the initial
registered owner hereof, or to the initial registered owner as to any portion of this Bond which is not being
assigned and transferred by the initialregistered owner, in any denomination or denominations in any integral
multiple of $5,000 (subject to the requirement hereinafter stated that each substitute bond issued in exchange
for any portion of this Bond shall have a single stated principal maturity date), upon surrender of this Bond
to the Paying Agent/Registrar for cancellation, all in accordance with the fonn and procedures set forth in
the Bond Ordinance. If this Bond or any portion hereof is assigned and transferred or converted each bond
issued in exchange for any portion hereof shall have a single stated principal maturity date corresponding to
the due date of the installment of principal of this Bond or portion hereof for which the substitute bond is being
exchanged, and shall bear- interest at the rate applicable to and home by such installment of principal or portion
thereof. No such bond shall be payable in installments, but shall have only one stated principal maturity date.
AS PROVIDED IN THE BOND ORDINANCE, THIS BOND IN ITS PRESENT FORM MAY BE
ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more assignees, but
the bonds issued and delivered in exchange for this Bond or any portion hereof may be assigned and
transferred, and converted, subsequently, as provided in the Bond Ordinance. The Issuer shall pay the Paying
Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging this
Bond or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any
taxes or governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall
not be required to make any such assignment, conversion, 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 this Bond is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will appoint
a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be
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mailed to the registered owner of this Bond.
IT IS HEREBY certified, recited, and covenanted that this Bond 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 ofthis Bond have been performed, existed,
and been done in accordance with law; that this Bond is a general obligation of the Issuer, issued on the full
faith and credit thereof; and that ad valorem taxes sufficient to provide for the payment of the interest on and
principal of this Bond, 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.
BY BECOMING the registered owner of this Bond, the registered owner thereby acknowledges all
of the teens and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions,
acknowledges that the Bond 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 Bond and
the Bond Ordinance constitute a contract between the registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual signature
of the Mayor of the Issuer and countersigned with the manual signature of the Town Secretary of the Issuer,
has caused the official seal of the Issuer to be duly impressed on this Bond, and has caused this Bond to be
dated February 1, 2002,
Town Secretary Mayor
(TOWN SEAL)
FORM OF REGISTRATION CERTIFICATE OF
THE COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE:
REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of Public
Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
Section G. ADDITIONAL CHARACTERISTICS OF THE BONDS, (a) Registration and
Transfer. The Issuer shall keep or cause to be kept at the principal corporate trust office of .TPNIORGAN
CHASE, BANK, HOUSTON, TEXAS, (the "Paying Agent/Registrar") books or records of the registration
and transfer of the Bonds (tile "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 transfers
and registrations under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe;
and the Paying Agent/Registrar shall make such transfers and registrations as herein provided. The Paying
Agent/Registrar shall obtain and record in the Registration Books the address of the registered owner of each
Bond to which payments with respect to the Bonds 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. Registration of each
Bond may be transferred in the Registration Books only upon presentation and surrender of such Bond to the
Paying Agent/Registrar for transfer of registrati on and cancellation, together with proper written instruments
of assigmnent, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, (i)
evidencing the assignment of the Bond, or any portion thereof in any integral multiple of $5,000, to the
assignee or assignees thereof, and (ii) the right of such assignee or assignees to have the Bond or any such
portion thereof registered in the name of such assignee or assignees. Upon the assignment and transfer of
any Bond or any portion thereof, a new substitute Bond or Bonds shall be issued in conversion and exchange
therefor in the manner herein provided. The Initial Bond, to the extent of the unpaid principal balance thereof,
inay be assigned and transferred by the initial registered owner thereof once only, and to one or more
assignees designated in writing by the initial registered owner thereof. All Bonds issued and delivered in
conversion of and exchange for the Initial Bond shall be in any denomination or denominations of any integral
multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Bond shall have a single
stated principal maturity date), shall he in the form prescribed in the FORM OF SUBSTITUTE BOND set
forth in this Ordinance, and shall have the characteristics, and may be assigned, transferred, and converted
as hereinafter provided. If the Initial Bond or any portion thereof is assigned and transferred or converted
the Initial Bond must be surrendered to the Paying Agent/Registrar for cancellation, and each Bond issued
in exchange for any portion of the Initial Bond shall have a single stated principal maturity date, and shall not
be payable in installments; and each such Bond shall have a principal maturity date corresponding to the due
date of the installment of principal or portion thereof for which the substitute Bond is being exchanged; and
each such Bond shall bear interest at the single rate applicable to and borne by such installment of principal
or portion thereof for which it is being exchanged. If only a portion of the Initial Bond is assigned and
transferred, there shall be delivered to and registered in the name of the initial registered owner substitute
Bonds in exchange for the unassigned balance of the Initial Bond in the same manner as if the initial
registered owner were the assignee thereof. If any Bond or portion thereof other than the Initial Bond is
assigned and transferred or converted each Bond issued in exchange shall have the same principal maturity
date and bear interest at the same rate as the Bond for which it is exchanged. A form of assignment shall
be printed or endorsed on each Bond, excepting the Initial Bond, which shall be executed by the registered
owner or its duly authorized attorney or representative to evidence an assignment thereof. Upon surrender
of any Bonds or any portion or portions thereof for transfer of registration, an authorized representative of
the Paying Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new fully
registered substitute Bond or Bonds, having the characteristics herein described, payable to such assignee or
assignees (which then will be the registered owner or owners of such new Bond or Bonds), or to the previous
registered owner in case only a portion of a Bond is being assigned and transferred, all in conversion of and
exchange for said assigned Bond or Bonds or any portion or portions thereof, in the same form and manner,
and with the same effect, as provided in Section 6(d), below, for the conversion and exchange of Bonds by
any registered owner of a Bond. The Issuer shall pay the Paying Agent/Registrar's standard or customary
fees and charges for making such transfer and delivery of a substitute Bond or Bonds, but the one requesting
s uch transfer shall pay any taxes or other govenunental charges required to be paid with respect thereto. The
Paying Agent/Registrar shall not be required to male transfers of registration of any Bond or any portion
thereof 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.
(b) Ownership of Bonds. The entity in whose name any Bond shall be registered in the Registration
Books at any time shall be deemed and treated as the absolute owner thereof for all purposes of this
Ordinance, whether or not such Bond shall be overdue, and the Issuer and the Paying Agent/Registrar shall
not be affected by any notice to the contrary; and payment of, or on account of, the principal of, premium,
if any, and interest on any such Bond shall be made only to such registered owner. All such payments shall
be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the surn or sums
so paid.
(c) Payment of Bonds 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 Bonds, and to act as its agent to
convert and exchange or replace Bonds, 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
Bonds, and of all conversions and exchanges of Bonds, and all replacements of Bonds, 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 fi-orn the Issuer. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (which shall be 15 days after the Special Record Date) 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 each
Bondholder appearing on the Registration Books at the close of business on the last business day next
preceding the date of mailing of such notice.
(d) Conversion and Exchange or Replacement, Authentication. Each Bond issued and delivered
pursuant to this Ordinance, to the extent of the unpaid principal balance or principal amount thereof, may,
upon surrender of such Bond at the principal corporate trust office of the Paying Agent/Registrar, together
with a written request therefor duly executed by the registered owner or the assignee or assignees thereof,
or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the
Paying Agent/Registrar, may, at the option of the registered owner or such assignee or assignees, as
appropriate, be converted into and exchanged for fully registered bonds, without interest coupons, in the form
prescribedin the FORM OF SUBSTITUTE BOND set forth in this Ordinance, in the denomination of $5,000,
or any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Bond shall
have a single stated maturity date), as requested in writing by such registered owner or such assignee or
assignees, in an aggregate principal amount equal to the unpaid or unredeemed principal balance or principal
amount of any Bond or Bonds so surrendered, and payable to the appropriate registered owner, assignee, or
assignees, as the case may be. If the Initial Bond is assigned and transferred or converted each substitute
Bond issued in exchange for any portion of the Initial Bond shall have a single stated principal maturity date,
and shall not be payable in installments; and each such Bond shall have a principal maturity date
corresponding to the due date of the installment of principal or portion thereof for which the substitute Bond
is being exchanged; and each such Bond shall bear interest at the single rate applicable to and home by such
0
instalh-nent of principal or portion thereof for which it is being exchanged. If any Bond or portion thereof
(other than the Initial Bond) is assigned and transferred or converted, each Bond issued in exchange therefor
shall have the same principal maturity date and bear interest at the same rate as the Bond for which it is being
exchanged. Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond.
The Paying Agent/Registrar shall convert and exchange or replace Bonds as provided herein, and each fully
registered bond delivered in conversion of and exchange for or replacement of any Bond or portion thereof
as pennitted or required by any provision of this Ordinance shall constitute one of the Bonds for all purposes
of this Ordinance, and may again be converted and exchanged or replaced. It is specifically provided that
any Bond authenticated in conversion of and exchange for or replacement of another Bond on or prior to the
first scheduled Record Date for the Initial Bond shall bear interest from the date of the Initial Bond, but each
substitute Bond so authenticated after such first scheduled Record Date shall bear interest from the interest
payment date next preceding the date on which such substitute Bond was so authenticated, unless such Bond
is authenticated after any Record Date but on or before the next following interest payment date, in which
case it shall bear interest from such next following interest payment date; provided, however, that if at the
time of delivery of any substitute Bond the interest on the Bond for which it is being exchanged is due but has
not been paid, then such Bond shall bear interest from the date to which such interest has been paid in full.
THE INITIAL BOND 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 Bond issued in conversion of and
exchange for or replacement of any Bond or Bonds issued under this Ordinance there shall be printed a
certificate, in the form substantially as follows:
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance
described on the face of this Bond; and that this Bond has been issued in conversion of and exchange for or
replacement of a bond, bonds, or a portion of a bond or bonds of an issue which 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.
Paying Agent/Registrar
Dated By
Authorized Representative"
An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date
and manually sign the above Certificate, and no such Bond shall be deemed to be issued or outstanding unless
such Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all Bonds surrendered for
conversion and exchange or replacement. 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
conversion and exchange or replacement of any Bond or portion thereof, and the Paying Agent/Registrar shall
provide for the printing, execution, and delivery of the substitute Bonds in the manner prescribed herein, and
said Bonds shall be of type composition printed on paper with lithographed or steel engraved borders of
customary weight and strength. Pursuant to Chapter 1201, Texas Government Code, the duty of conversion
and exchange or replacement of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and,
upon the execution of the above Paying Agent/Registrar's Authentication Certificate, the converted and
exchanged or replaced Bond shall be valid, incontestable, and enforceable in the same manner and with the
same effect as the Initial Bond which originally was issued pursuant to this Ordinance, approved by the
Attorney General, and registered by the Comptroller of Public Accounts. The Issuer shall pay the Paying
Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging any
Bond or any portion thereof, but the one requesting any such transfer, conversion, and exchange shall pay
any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the
exercise of such privilege of conversion and exchange. The Paying Agent/Registrar shall not be required to
make any such conversion and exchange or replacement of Bonds or any portion thereof 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.
(e) In General All Bonds issued in conversion and exchange or replacement of any other Bond or
portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of and
interest on such Bonds to be payable only to the registered owners thereof, (ii) may be transferred and
assigned, (iii) may be converted and exchanged for other Bonds, (iv) shall have the characteristics, (v) shall
be signed and sealed, and (vii) the principal of and interest on the Bonds shall be payable, all as provided, and
in the manner required or indicated, in the FORM OF SUBSTITUTE BOND set forth in this Ordinance.
(f) Payinent_of Fees and Charges. The Issuer hereby covenants with the registered owners of the
Bonds that it will (i) pay the standard or customary fees and charges of the Paying Agent/Registrar for its
services with respect to the payment of the principal of and interest on the Bonds, when due, and (ii) pay the
fees and charges of the Paying Agent/Registrar for services with respect to the transfer of registration of
Bonds, and with respect to the conversion and exchange of Bonds solely to the extent above provided in this
Ordinance.
(g) Substitute Paying Agent/Registrar, The issuer covenants with the registered owners of the
Bonds that at all times while the Bonds are 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 Bonds 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 120 days written notice to the Paying Agent/ Registrar, to be effective not later than 60 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 tinder
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 Bonds, 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 each registered owner of the Bonds, 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.
(h) Book -Entry On1,y,,,,,S, sy term The Bonds issued in exchange for the Bonds initially issued to the
purchaser specified herein shall be initially issued in the form of a separate single fully registered Bond for
each of the maturities thereof. Upon initial issuance, the ownership of each such Bond shall be registered
in the name of Cede & Co., as nominee of Depository Trust Company of New York ("DTC"), and except
as provided in subsection (h) hereof, all of the outstanding Bonds shall be registered in the name of Cede &
Co., as nominee of DTC.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the Issuer 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 on the Bonds. Without limiting the immediately
preceding sentence, the Issuer 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 Bonds, (ii) the delivery to any DTC Participant or any other person, other than a
Bondholder, as shown on the Registration Books, of any notice with respect to the Bonds, including any notice
of redemption, or (iii) the payment to any DTC Participant or any other person, other than a Bondholder, as
shown in the Registration Books of any amount with respect to principal of, premium, if any, or interest on,
as the case may be, the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the
Issuer and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each
Bond is registered in the Registration Books as the absolute owner of such .Bond for the purpose of payment
of principal, premium, if any, and interest, as the case may be, with respect to such Bond, for the purpose of
giving notices of redemption and other matters with respect to such Bond, for the purpose of registering
transfers with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall
pay all principal of, premiutrr, if any, and interest on the Bonds only to or upon the order of the respective
owners, as shown in the Registration Books 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
Issuer's obligations with respect to payment of principal of, premium, if any, and interest on, or as the case
may be, the Bonds to the extent of the sum or sums so paid. No person other than an owner, as shown in
the Registration Books, shall receive a Bond certificate evidencing the obligation of the Issuer to make
payments of principal, premium, if any, and interest, as the case may be, 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., and subject to the provisions in this Ordinance with respect
to interest checks being mailed to the registered owner at the close of business on the Record Date, the word
"Cede & Co." in this Ordinance shall refer to such new nominee of DTC.
(i) Successor Securities De osito : Transfers Outside .Boole -Entry Only System. In the event that
the Issuer or the Paying Agent/Registrar determines that DTC is incapable of discharging its responsibilities
described herein and in the representation letter of the Issuer to DTC and that it is in the best interest of the
beneficial owners of the Bonds that they be aide to obtain certificated Bonds, the Issuer or the Paying
Agent/Registrar 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 Bonds to such
successor securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of
Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC
accounts. In such event, the Bonds shall no longer be restricted to being registered in the Registration Books
in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor
securities depository, or its norninee, or in whatever name or narnes Bondholders transferring or exchanging
Bonds shall designate, in accordance with the provisions of this Ordinance.
12
6) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary,
so long as any Bond is registered in the name of Cede & Co., as nornince of DTC, all payments with respect
to principal of, premium, if any, and interest on, or as the case may be, such Bond and all notices with respect
to such Bond shall be made and given, respectively, in the manner provided in the representation letter of the
Issuer to DTC.
Section 7. FORM OF SUBSTITUTE BONDS. The fonn of all Bonds issued in conversion
and exchange or replacement of any other Bond or portion thereof, including the fonn of Paying
Agent/Registrar's Certificate to be printed on each of such Bonds, and the Form of Assignment to be printed
on each of the Bonds, shall be, respectively, substantially as follows, with such appropriate variations,
omissions, or insertions as are pennitted or required by this Ordinance.
Wei
FORM OF SUBSTITUTE BOND
PRINCIPAL AMOUNT
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
TOWN OF TROPHY CLUB, TEXAS
GENERAL OBLIGATION REFUNDING BOND, SERIES 2002
INTEREST MATURITY DATE OF
RATE DATE ORIGINAL ISSUE CUSIP NO.
February 1, 2002
ON THE MATURITY DATE specified above, the TOWN OF TROPHY CLUB, in DENTON
County, Texas (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to
or to the registered assignee hereof (either being hereinafter called the "registered owner") the principal
amount of
and to pay interest thereon from FEBRUARY 1, 2002 to the maturity date specified above, at the interest
rate per annum specified above; with interest being payable on September 1, 2002 and semiannually thereafter
on each March I and September 1, except that if the date of authentication of this Bond is later than August
15, 2002, such principal amount shall bear interest from the interest payment date next preceding the date of
authentication, unless such date of authentication is after any Record Date (hereinafter defined) but on or
before the next following interest payment date, in which case such principal amount shall bear interest from
such next following interest payment date.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the United
13
States of America, without exchange or collection charges. The principal of this Bond shall be paid to the
registered owner hereof upon presentation and surrender of this Bond at maturity, at the principal corporate
trust office of JPMORGAN CHASE BANK, HOUSTON, TEXAS, wluch is the "Paying Agent/Registrar"
for this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
registered owner hereof on each interest payment date by check or draft, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the
ordinance authorizing the issuance of the Bonds (the 'Bond 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 the address of the registered owner, as it appeared on the fifteenth of the month
next preceding each such date (the "Record Date") on the Registration Books kept by the Paying
Agent/Registrar, as hereinafter described, or by such other method acceptable to the Paying Agent/Registrar
requested by, and the risk and expense of, the registered owner. The Issuer covenants with the registered
owner of this Bond that on or before each principal payment date and interest payment date for this Bond it
will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond
Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal
of and interest on the Bonds, when due.
1F THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday, or a day on which banking institutions in the City where 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 which is not such a Saturday, Sunday, Iegal 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.
THIS BOND is one of an issue of Bonds initially dated February 1, 2002, authorized in accordance
with the Constitution and laws of the State of Texas in the principal amount of $1,5$0,000 for refunding the
Refunded Bonds.
ON SEPTEMBER 1, 2010, or any date thereafter, the Bonds of this Series may be redeemed prior
to their scheduled maturities, at the option of the Issuer, with funds derived from any available and lawful
source, as a whole, or in part, and, if in part, the Issuer shall select and designate and designate the maturity
or maturities and the amount that is to be redeemed, and if less than a whole maturity is to be called, the
Issuer shall direct the Paying Agent/Registrar to call by lot (provided that a portion of a Bond may be
redeemed only in an integral multiple of $5,000), at the redemption price of the principal amount thereof, plus
accrued interest to the date fixed for redemption,
AT LEAST 30 days prior to the date fixed for any such prepayment or redemption, a written notice
of such prepayment or redemption shall he mailed by United States mail, first class postage pre -paid, by the
Paying Agent/Registrar to the registered owner hereof. By the date fixed for any such prepayment or
redemption due provision shall be made by the Issuer with the Paying Agent/Registrar for the payment of the
required prepayment or redemption price for this Bond or the portion hereof which is to be so prepaid or
redeemed, plus accrued interest thercon to the date fixed for prepayment or redemption. If such written notice
of prepayment or redemption is given, and if due provision for such payment is made, all as provided above,
this .Bond, or the portion thereof which is to be so prepaid or redeemed, thereby automatically shall be treated
14
as prepaid or redeemed prior to its scheduled due date, and shall not bear interest after the date fixed for its
prepayment or redemption, and shall not be regarded as being outstanding except for the tight of the
registered owner to receive the prepayment or redemption price plus accrued interest to the date fixed for
prepayment or redemption from the Paying Agent/Registrar out of the funds provided for such payment. The
Paying Agent/Registrar shall record in the Registration Books all such prepayments or redemptions of
principal of this Bond or any portion hereof.
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE
OF $5,000 may be assigned and shall be transferred only in the Registration Books of the Issuer kept by the
Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terns and conditions set
forth in the Bond Ordinance. Among other requirements for such assignment and transfer, this Bond must
be presented and surrendered to the Paying Agent/Registrar, together with proper instruments of assignment,
in fora and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment
of this Bond or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees
in whose name or naives this Bond or any such portion or portions hereof is or are to be transferred and
registered. The form of Assignment printed or endorsed on this Bond shall be executed by the registered
owner or its duly authorized attorney or representative, to evidence the assignment hereof. A new Bond or
Bonds payable to such assignee or assignees (which then will be the new registered owner or owners of such
new Bond or Bonds), or to the previous registered owner in the case of the assignment and transfer of only
a portion of this Bond, may be delivered by the Paying Agent/Registrar in conversion of and exchange for
tWs Bond, all in the form and manner as provided in the next paragraph hereof for the conversion and
exchange of other Bonds. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and
charges for malting such transfer, but the one requesting such transfer shall pay any taxes or other
governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be
required to make transfers of registration of this Bond or any portion hereof (i) 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, or, (ii) with respect to any Bond or any portion thereof called for
redemption prior to maturity, within 45 days prior to its redemption date. The registered owner of this Bond
shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for
all purposes, including payment and discharge of liability upon this Bond to the extent of such payment, and
the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond Ordinance, this
Bond, or any unredeemed portion hereof, may, at the request of the registered owner or the assignee or
assignees hereof, be converted into and exchanged for a like aggregate principal amount of fully registered
bonds, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the
case may be, having the same maturity date, and bearing interest at the same rate, in any denomination or
denominations in any integral multiple of $5,000 as requested in writing by the appropriate registered owner,
assignee, or assignees, as the case may be, upon surrender of this Bond to the Paying Agent/Registrar for
cancellation, all in accordance with the form and procedures set forth in the Bond Ordinance. The Issuer
shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting,
and exchanging any Bond or any portion thereof, but the one requesting such transfer, conversion, and
exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition
precedent to the exercise of such privilege of conversion and exchange. The Paying Agent/Registrar shall
not be required to malce any such conversion and exchange during the period commencing with the close of
15
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 Bonds is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will appoint
a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be
mailed to the registered owners of the Bonds.
IT IS HEREBY certified, recited, and covenanted that this Bond 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 Bond have been performed, existed,
and been done in accordance with law; that this Bond is a general obligation of the Issuer, issued on the full
faith and credit thereof, and that ad valorem taxes sufficient to provide for the payment of the interest on and
principal of this Bond, 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.
BY BECOMING the registered owner of this Bond, the registered owner thereby acknowledges all
of the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions,
acknowledges that the Bond 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 teens and provisions of this Bond and
the Bond Ordinance constitute a contract between each registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuerhas caused this Bond 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 the Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in
facsimile, on this Bond.
Town Secretary
(TOWN SEAL)
Mayor
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed
Registration Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance
described in the text of this Bond; and that this Bond has been issued in conversion or replacement of, or in
exchange for, a bond, bonds, or a portion of a bond or bonds of a Series which 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
7PMorgan Chase Bank
Paying Agent/Registrar
By
Authorized Representative
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly authorized
representative or attorney thereof, hereby assigns this Bond to
(Assignee's Social Security or Tax (Print or type Assignee's Name and
Payer Identification Number) Address Including Zip Code)
and hereby irrevocably constitutes and appoints
attorney, to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books with full
power of substitution in the premises.
Dated
NOTICE: This signature must be guaranteed
by a member of the New York Stock Exchange
or a commercial bank or trust company.
17
NOTICE: This signature must correspond with the
name of the Registered Owner appearing on the
face of this Bond in evety particular without
alteration or enlargement or any change
whatsoever.
Section 8. TAXLEVY. A special Interest and Sinking Fund (the "Interest and Sinking Fund")
is hereby created solely for the benefit of the Bonds, 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 Bonds. All ad valorem taxes levied and collected for and on account of
the Bonds, together with any premium received from the sale of the Bonds, shall be deposited, as collected,
to the credit of the Interest and Sinking Fund. During each year while any of the Bonds 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 principal of its
Bonds as such principal matures (but never less than 2% of the original principal amount of the Bonds as a
sinking fund each year).
Section 9. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon shall be
deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") within the meaning of this
Ordinance, except to the extent provided in subsection (d) of this Section, when payment of the principal of
such Bond, 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 (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 tunes 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 Bonds shall have become due and payable. At such time as
a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond 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 as provided in this Ordinance, and such principal and interest shall be payable solely from such
money or .Defeasance Securities.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the
Issuer also 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 Bonds 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
Bonds may contain provisions pennitting 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 9(a)(i) or (ii). All income from such Defeasance Securities received by the Paying
Agent/Registrar which is not required for the payment of the Defeased Bonds, 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 teen "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, an the date of the
purchase thereof are rated as to investment quality by a nationally recognized investment rating Finn not less
18
than AAA. or its equivalent, and (iii) noncallable obligations of a state or an agency or a county, municipality,
or other 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
inveshnent quality by a nationally recognized investment rating firn1 not less than AAA or its equivalent.
(d) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall
perform the services of Paying Agent/Registrar for such Defeased Bonds 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.
(e) In the event that the Issuer elects to defease less than all of the principal amount of Bonds
of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Bonds by such
random method as it deems fair and appropriate.
Section 10. DAMAGED, MUTILATED., LOST, STOLEN. OR DESTROYED BONDS. (a)
Replacement Bonds. I.n the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the
Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond of the same principal
amount, maturity, and interest rate; as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement
for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged, mutilated, lost,
stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying Agent/Registrar. In
every case of loss, theft, or destruction of a Bond, the registered owner applying for a replacement bond shall
furnishto 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 Bond, 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 Bond, as the case may
be. In every case of damage or mutilation of a Bond, the registered owner shall surrender to the Paying
Agent/Registrar for cancellation the Bond so damaged or mutilated.
(c) No Default Occurred Notwithstanding the foregoing provisions of this Section, in the event any
such Bond shall have matured, and no default has occurred which is then continuing in the payment of the
principal of, redemption premium, if any, or interest on the Bond, the Issuer may authorize the payment of the
same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing a
replacement Bond, provided security or indemnity is furnished as above provided in this Section,
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond, the
Paying Agent/Registrar shall charge the registered owner of such Bond with all legal, printing, and other
expenses in connection therewith. Every replacement bond issued pursuant to the provisions of this Section
by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the
Issuer whether or not the lost, stolen, or destroyed Bond 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 Bonds duly issued under this Ordinance.
(e) Authori1y for Issuing Replacement Bonds. In accordance with Chapter 1201, Texas Government
Code, this Section 10 shall constitute authority for the issuance of any such replacement bond without
19
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 bands is hereby authorized and imposed upon the Paying Agent/Registrar, and the
Paying Agent/Registrar shall authenticate and deliver such Bonds in the form and manner and with the effect,
as provided in Section 6(d) of this Ordinance for Bonds issued in conversion and exchange for other Bonds.
Section 11. CUSTODY APPROVAL. AND REGISTRATION OF BONDS,• BOND
COUNSEL'S OPINION• CUSIP NUMBERS: AND CONTINGENT INSURANCE PROVISION IF
OBTAINED. The Mayor of the Issuer is hereby authorized to have control of the Initial Bond issued
hereunder and all necessary records and proceedings pertaining to the Initial Bond pending its delivery and
its investigation, 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 Initial Bond said
Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually
sign the Comptroller's Registration Certificate on the Initial Bond, and the seal of said Comptroller shall be
impressed, or placed in facsimile, on the Initial Bond. The approving legal opinion of the Issuer's bond counsel
and the assigned CUSIP nurnbers may, at the option of the Issuer, be printed on the Bond or any Bonds
issued and delivered in conversion of and exchange or replacement of any Bond, but neither shall have any
legal effect, and shall be solely for the convenience and information of the registered owners of the Bonds.
In addition, if bond insurance is obtained, the Bonds may bear an appropriate legend as provided by the
Insurer.
Section 12. COVENANTS REGARDING TAX EXEMPTION, The issuer covenants to refrain
from taking any action which would adversely affect, and to take any required action to ensure, the treatment
of the Bonds as obligations described in Section 103 of the Internal Revenue Code of 1986, as amended (the
"Code"), the interest on which is not includable in the "grass income" of the holder for purposes of federal
income taxation. In furtherance thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of the Bonds or the
projects financed therewith (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 an the
Bonds, in contravention of Section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use" described in
Subsection (a) hereof exceeds 5 percent of the proceeds of the Bonds 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" which is "related" and not "disproportionate," within the meaning of Section 141(b)(3) of the
Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or 5
percent of the proceeds of the Bonds (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;
20
(d) to refrain from taking any action which would otherwise result in the Bonds being treated as
"private activity bonds" within the meaning of Section I41(b) of the Code;
(e) to refrain from taking any action that would result in the Bonds being "federally guaranteed"
within the meaning of Section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of die Bonds, directly or indirectly, to acquire
or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in
Section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bonds, other
than investment property acquired with --
(1) proceeds of the Bonds invested for a reasonable temporary period of years or less or,
in die 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,
(2) amounts invested in a bona fide debt service fund, within the meaning of Section 1.148-
1(b) of the Treasury Regulations, and
(3) 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 Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the
Bonds, as may be necessary, so that the Bonds 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
(h) to pay to the United States of America at least once during each five-year period (beginning on
the date of delivery of the Bonds) 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 die Bonds have been paid in fidl, 100 percent of the amount then required to be paid as a result
of Excess Earnings under Section 148(f) of the Code.
The Issuer understands that the temi "proceeds" includes "disposition proceeds" as defined in die
Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of die
Refunded Bonds expended prior to the date of issuance of the Bonds. 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. In the event that regulations
or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the
Bonds, the Issuer will not be required to comply with any covenant contained herein to the extent that such
failure to comply, in die opinion of nationally -recognized bond counsel, will not adversely affect the exemption
from federal income taxation of interest on the Bonds under Section 103 of the Code. In the event that
regulations or rulings are hereafter promulgated which impose additional requirements which are applicable
to the Bonds, the Issuer agrees to comply with the additional requirements to die extent necessary, in the
opinion of nationally -recognized bond counsel, to preserve the exemption from federal income taxation of
interest on the Bonds under Section 103 of the Code. In furtherance of such intention, die Issuer hereby
authorizes and directs die Mayor of the Issuer to execute any documents, certificates or reports required by
21
the Code and to make such elections, on behalf of the Issuer, which may be permitted by the Code as are
consistent with the purpose for the issuance of the Bonds.
In order to facilitate compliance with the above covenant (h), 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 lirnitation the bondholders. The Rebate Fund is established for
the additional purpose of compliance with Section 148 of the Code.
Section 13. DISPOSITION OF PROJECT. The Issuer covenants that the property constituting
the Project originally financed by Refunded Bonds 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 Bonds. 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 an opinion that such failure to comply will not adversely affect the excludability for federal income
tax purposes fi-om gross income of the interest.
Section 14. CONTINUING DISCLOSURE, (a) ArmualReports. (i) The Issuer shall provide
annually to any SID, within six months after the end of each fiscal year ending in or after 2002, financial
information and operating data with respect to the Issuer of the general type described in Exhibit A. Any
financial statements so to be provided shall be prepared in accordance with the accounting principles
described in Exhibit A thereto, or such other accounting principles as the Issuer may be required to employ
from time to time pursuant to state law or regulation, and audited, if the Issuer commissions an audit of such
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 such period, then the Issuer shall provide audited financial
statements for the applicable fiscal year to each any SID, when and if the audit report on such statements
become available,
(ii) If the Issuer changes its fiscal year, it will notify any SID of the change (and of the date of the
new fiscal year end) prior to the next date by which the Issuer otherwise would be required to provide
financial information and operating data pursuant to this Section. The financial infonnation 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 reference to any document (including an official statement or other offering document, if it is
available from the MSRB) that theretofore has been provided to any SID or filed with the SEC.
(b) Material Event Notices, The Issuer shall notify any SID or the MSRB, in a timely manner, of
any of the following events with respect to the Bonds, if such event is material within the meaning of the
federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payrnent related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
G. Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
7. Modifications to rights of holders of the Bonds;
S. Bond calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds and
IL Rating changes.
The Issuer shall notify any SID or the MSRB, in a timely manner, of any failure by the Issuer to provide
Financial information or operating data in accordance with subsection (a) of this Section by the time required
by such subsection.
(c) Limitations. Disclaimers. and Amendments. (i) The Issuer shall be obligated to observe and
perform the covenants specified in this Section for so long as, but only for so long as, the Issuer remains an
"obligated person" with respect to the Bonds within the meaning of the Rule, except that the Issuer in any
event will give notice of any deposit made in accordance with this Ordinance or applicable law that causes
Bonds no longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the holders and beneficial owners of the
Bonds, and nothing in this Section, express or implied, shall give any benefit or any Iegal or equitable right,
remedy, or claim hereunder to any other person. The Issuer undertakes to provide only the financial
information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant
to this Section and does not hereby undertake to provide any other information that may be relevant or
material to a complete presentation of the Issuer's financial results, condition, or prospects or hereby
undertake to update any information provided in accordance with this Section or otherwise, except as
expressly provided herein. The Issuer does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT.
FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED
IN THIS SECTION, 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.
(iv) No default by the Issuer in observing or performing its obligations under this Section shall
comprise a breach of or default under the Ordinance for purposes of any other provision of this Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the Issuer
under federal and state securities laws.
(v) The provisions of this Section may be amended by the Issuer 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 Issuer, but only if (1) the provisions of this Section, as so
amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds
in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such
offering as well as such changed circumstances and (2) either (a) the holders of a majority in aggregate
principalamount (or any greater amount required by any other provision of this Ordinance that authorizes such
23
an amendment) of the Outstanding Bonds consent to such amendment or (b) a person that is unaffiliated with
the Issuer (such as bond counsel) determined that such amendment will not materially impair the interest of
the holders and beneficial owners of the Bonds. If the Issuer so amends the provisions of this Section, it shall
include with any amended financial infonnation or operating data next provided in accordance with subsection
(a) of this Section an explanation, in narrative form, of the reason for the amendment and of the impact of
any change in the type of financial information or operating data so provided. The Issuer may also amend
or repeal the provisions of this continuing, disclosure agreement if the SEC amends or repeals the applicable
provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid,
but only if and to the extent that the provisions of this sentence would not prevent an underwriter from
lawfully purchasing or selling Bonds in the primary offering of the Bonds.
(d) Definitions. As used in this Section, the following terms have the meanings ascribed to such
terns below:
"AISRB" means the Municipal Securities Rulemaking Board.
"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 infonnation depository within
the meaning of the Rule from time to time.
Section 15. SALE OF BONDS. Tine Bonds are hereby sold and shall be delivered to FIRST
SOUTHfVEST COMPANY (the "Underwriters"), at a price of $1,560,549.90, being the principal amount of
the Bonds less an original issue discount of $704.10 and less an underwriters discount of $18,746, plus accrued
interest, pursuant to the terms and provisions of a Bond Purchase Agreement in substantially the form
attached hereto as Exhibit B which the Mayor of the Town of the Issuer is hereby authorized and directed
to execute and deliver and which the Town Secretary of the Issuer is hereby authorized and directed to attest
(with accrued interest to be deposited into the Interest and Sinking Fund). It is hereby officially found,
determined, and declared that the terms of this sale are the most advantageous reasonably obtainable. The
Bonds shall initially be registered in the name of FIRST SOUTHWEST COMPANY.
Section 16. APPROVAL OF OFFICIAL STATEMENT. The Issuer hereby approves the form
and content of the Official Statement relating to the Bonds and any addenda, supplement or amendment
thereto, and approves the distribution of such Oficial Statement in the reoffering of the Bonds by the
Underwriter in final form, with such changes therein or additions thereto as the officer executing the same
may deem advisable, such determination to be conclusively evidenced by his execution thereof,
Section 17. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS. The
Mayor of the Issuer is hereby authorized and directed to execute and deliver and the Town Secretary of the
Issuer is hereby authorized and directed to attest an Escrow Agreement in substantially the form attached
hereto as Exhibit C. in Addition, the Mayor is authorized to execute such subscription for the purchase of
U. S. Treasury Securities, State and Local Goverunent Series, or the purchase of direct obligations of the
24
United States of America as may be necessary for the Escrow Fund, and to authorize such contributions as
may be necessary for the Escrow Fund.
Section 18. NOTICE OF REDEMPTION. That there is attached to this Ordinance, as Exhibit
D, and made a part hereof for all purposes, a notice of prior redemption for the Refunded Bonds to be
redeemed prior to stated maturity, and such Refunded Bonds described in said notice of prior redemption are
hereby called for redemption and shall be redeemed prior to maturity on the date, place, and at the price as
set forth therein.
Section 19, NOTICE TO PAYING AGENT/REGISTRAR AND PUBLICATION. The
Refunded Bonds described in Exhibit D attached hereto are so called for redemption, and JPMorgan Chase
Bank, Houston, Texas, with respect to the Refunded Series 1994 General Obligation Bonds are hereby
directed to make appropriate arrangements so that such Refunded Bonds may be redeemed at said Bank on
the redemption dates. Copies of such Notice of Redemption shall be delivered to the Paying Agent/Registrar
so mentioned, and published in the Texas Bond Reporter.
Section 20, INTEREST EARNINGS ON BOND PROCEEDS. The earnings derived from the
investment of proceeds from the sale of the Bonds shall be used along with other Bonds proceeds as
described in Section 1 hereof; provided that after completion of such project, 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 interest earnings an the Bonds proceeds which are required to be rebated to the
United States of America pursuant to Section 12 hereof in order to prevent the Bonds from being arbitrage
bonds shall be so rebated and not considered as interest earnings for the purpose of this Section.
Section 21. REASONS FOR REFUNDING The Issuer deems it advisable and in the best
interests of the Issuer to refund the Refunded Bonds in order to restructure the Issuer's debt service
payments, resulting in a debt service savings of approximately $79,150.99 and a present value savings, after
taking into account transfers from the .Interest and Sinldng Fund for the Refunded Bonds, of $68,973.09.
Section 22. INTEREST AND SINKING FUND. There is hereby appropriated for transfer to
the Interest and Sinlcing Fund, from available funds, moneys sufficient to pay the principal and interest coming
due on the Bonds on September 1, 2002,
Section 23. INSURANCE. The Issuer does hereby approve the execution of a conuuitment
letter for municipal bond insurance from FINANCIAL GUARANTY INSURANCE COMPANY, and
agrees that the provision of Exhibit E thereof, being the Insurance Connnitment, which are attached hereto,
are hereby adopted and incorporated into this Ordinance.
Section 24. PUBLIC NOTICE. It is hereby officially found and determined that public notice
of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government
Code.
Section 25, CUMULATIVE. This ordinance shall be cumulative of all provisions of the
Ordinances of the Town, except when the provisions of this Ordinance are in direct conflict with the
provisions of such Ordinances, in which event the conflicting provisions of such Ordinances are hereby
25
repealed. Any complaint, action, claim or lawsuit which has been initiated or has arisen under or pursuant
to any conflicting Ordinance on the date of adoption of this Ordinance shall continue to be governed by the
provisions of such Ordinance and for that purpose the Ordinance shall remain in full force and effect.
Section 26. SAVINGS. All rights and remedies of the Town of Trophy Club, Texas, are
expressly saved as to any and all violations of the provisions of any other Ordinance affecting the issuance
or refunding of bonds which have secured at the time of the effective date of this Ordinance; and, as to such
accrued violations and all pending litigation, both civil and criminal, whether pending in court or not, under such
Ordinances same shall not be affected by this Ordinance but maybe prosecuted until final disposition by the
courts.
Section 27. SEVERABILITY. If any section, article, paragraph, sentence, clause, phrase or
word in this Ordinance or application thereof to any person or circumstance is held invalid or unconstitutional
by a Court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this
Ordinance, and the Town Council hereby declares it would have passed such remaining portions of this
Ordinance despite such invalidity, which remaining portions shall remain in full force and effect.
Section 28. PUBLICATION. The Town Secretary of the Town of Trophy Club is hereby
directed to publish, the Caption and Effective Date of this Ordinance as required by Section 52.011 of the
Texas Local Government Code.
Section 29. ENGROSSMENT AND ENROLLMENT The Town Secretary of the Town o1'
Trophy Club is hereby directed to engross and enroll this Ordinance by copying the exact Caption and
Effective Date in the minutes of the Town Council and by filing this Ordinance in the ordinance records of
the Town.
Section 30, EFFECTIVE DATE. This Ordinance shall become effective from and after its date
of adoption and publication as provided by law, and it is so ordained.
[Remainder of Page Left Infenfionally Blank]
26
PASSED AND APPROVED by the Town Council of the
day of February, 2002.
, Town of
ATTEST:
Town Secretary, Town f Trophy Club, Texas
Roles
[SEAL]a,
r
In
NIY
APPROVED AS TO FORM:
` 1v
Bond Counsel Attorney, Town of Trophy Club, Texas
of Trophy,qub, Texas, this 2511
Club, Texas
EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 14 of this Ordinance.
I. Annual Financial Statements and Operating Data
The financial information and operating data with respect to the Issuer to be provided annually in
accordance with such Section are as specified (and included in the Appendix or under the headings of the
Oficial Statement and Tables referred to) below:
Tables 1, 11 through 13 of Appendix A and Audit
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described in
the notes to the financial statements referred to in paragraph 1 above.
EXHIBIT B
Bond Purchase Agreement
The Bond Purchase Agreement has been omitted at this point as it appears in executed for n
elsewhere in this transcript.
EXHIBIT C
Escrow Agreement
The Escrow Agreement has been omitted at this point as it appears in executed fonn elsewhere
in this transcript.
EXHIBIT D
NOTICE OF REDEMPTION
TOWN OF TROPHY CLUB, TEXAS
NOTICE IS HEREBY GIVEN that the TOWN OF TROPHY CLUB, TEXAS (the "Town") has
called for redemption the outstanding General Obligation Bonds of the Town described as follows:
TOWN OF TROPHY CLUB, General Obligation Bonds, Series 1994, dated October I,
1994, maturities September 1, 2006 through September 1, 2014, in the aggregate principal
amount of $1,420,000, to call date of the General Obligation Bonds so called for
redemption at JPMorgan Chase Bank, Houston, Texas. Call date: September 1, 2005,
On September 1, 2005, interest on the General Obligation Bonds shall cease to accrue and be
payable.
TI -11S NOTICE is issued and given pursuant to the redemption provisions in the proceedings
authorizing the issuance of the aforementioned General Obligation Bonds and in accordance with the
recitals and provisions of said General Obligation Bonds.
NOTICE IS GIVEN that due and proper arrangements have been made for providing the place
ol'paynnent of said General Obligation Bonds called for redemption with funds sufficient to pay the
principal amount of said General Obligation Bonds and the interest thereon to the redemption date. In the
event said General Obligation Bonds, or any of them are not presented for redemption by the date fixed
for their redemption, they shall not thereafter bear interest.
NOTICE IS FURTHER GIVEN that the General Obligation Bonds should be submitted to either
of the following addresses:
Mail Delivety Hand DehveU or Courier
JPMorgan Chase Bank
Attn: Institutional Trust Services
P. O. Box 2320
Dallas, Teas 75221-2320
JPMorgan Chase Bank
Attn: Institutional Trust Services
2001 Bryan Street, 9th Floor
Dallas, Texas 75220
Scott Smith, Mayor
TOWN OF TROPHY CLUB, TEXAS
EXHIBIT E
INSURANCE COMMITMENT
The Insurance Commitment has been omitted at this paint as it appears in executed forni elsewhere
in this transcript.
AFFIDAVIT OF NOTICE OF SPECIAL MEETING FOR ABSENTEES
THE STATE OF TEXAS §
COUNTY OF DENTON
TOWN OF TROPHY CLUB
I, the undersigned, being the Town Secretary of the Town of Trophy Club, Texas, do hereby certify that on
Wednesday, February 20, 2002, 1 personally called or attempted to call all members of the Town Council and on
Thursday, February 21, 2002, 1 forwarded a written Notice of Special Meeting of the Town Council to be field on
February 25, 2002 at 5:30 PM, together with a copy of the agenda item, as staffed below:
RE - ADOPTION OF
ORDINANCE NO. 2002-09 AN ORDINANCE OF THE TOWN OF TROPHY CLUB, TEXAS,
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF TOWN OF TROPHY CLUB TEXAS
GENERAL OBLIGATION REFUNDING BONDS SERIES, 2002; ESTABLISHING BOND AMOUNT
AND PURPOSE; PROVIDING FOR DESIGNATION OF THE BONDS; PROVIDING FOR INITIAL
DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL REGISTERED OWNER, AND
CHARACTERISTICS OF THE INITIAL BOND; PROVIDING FOR INTEREST; PROVIDING FOR
THE FORM OF THE INITIAL BOND; DEFINING ADDITIONAL CHARACTERISTICS OF THE
BONDS; PROVIDING FOR THE FORM OF SUBSTITUTE BONDS; PROVIDING FOR TAX LEVY;
PROVIDING FOR DEFEASANCE OF BONDS; PROVIDING FOR DAMAGED, MUTILATED, LOST,
STOLEN OR DESTROYED BONDS; ESTABLISHING GUIDELINES FOR CUSTODY, APPROVAL,
AND REGISTRATION OF BONDS, BOND COUNSEL'S OPINION, CUSIP NUMBERS, AND
CONTINGENT INSURANCE PROVISION, IF OBTAINED; PROVIDING COVENANTS REGARDING
TAX EXEMPTION; PROVIDING FOR THE DISPOSITION OF PROJECT; PROVIDING FOR
CONTINUING DISCLOSURE; PROVIDING FOR SALE OF BONDS; PROVIDING FOR APPROVAL
OF THE OFFICIAL STATEMENT; PROVIDING FORAPPROVAL OF ESCROW AGREEMENT AND
TRANSFER OF FUNDS; PROVIDING FOR NOTICE OF REDEMPTION; PROVIDING FOR NOTICE
TO PAYING AGENT, REGISTRAR AND PUBLICATION; PROVIDING FOR INTEREST EARNINGS
ON BOND PROCEEDS; PROVIDING REASONS FOR REFUNDING; PROVIDING FOR AN
INTEREST AND SINKING FUND; PROVIDING FOR INSURANCE; PROVIDING FOR PUBLIC
NOTICE; GENERALLY AUTHORIZING THE MAYOR TO EXECUTE ALL NECESSARY
DOCUMENTS; PROVIDING A CUMULATIVE CLAUSE; PROVIDING FOR SAVINGS; PROVIDING
SEVERABILITY; PROVIDING FOR PUBLICATION; PROVIDING FOR ENGROSSMENT AND
ENROLLMENT; AND PROVIDING AN EFFECTIVE DATE.
SIGNED AND SEALED the 25TH day of FEBRUARY, 2002.
�� C1LUe
SEAL ..LA.
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TOWJOF OPHY CLUB, TEXAS
By:
Town Secretary