ORD 2014-25CERTIFICATION PERTAINING TO
PASSAGE OF AN ORDINANCE
STATE OF TEXAS §
TOWN OF TROPHY CLUB §
On the 26th day of August, 2014, Town Council of the Town of Trophy Club, Texas,
convened in a regular meeting at the regular meeting place thereof, the meeting being open to the
public and notice of said meeting, giving the date, place and subject thereof, having been posted
as prescribed by Chapter 551, Texas Government Code, as amended; and the roll was called of
the duly constituted officers and members of the Town Council, which officers and members are
as follows:
Nick Sanders, Mayor Jim Parrow )
Greg Lamont, Mayor Pro Tem Garrett Reed )
(Vacant) ) Members of
Rhylan Rowe ) the Council
Philip Shoffner )
and all of said persons were present, thus constituting a quorum. Whereupon, among other
business, a written ordinance bearing the following caption was introduced:
AN ORDINANCE OF THE TOWN OF TROPHY CLUB,
TEXAS, AUTHORIZING THE ISSUANCE AND SALE OF
TOWN OF TROPHY CLUB, TEXAS, TAX NOTES, SERIES
2014, IN THE AGGREGATE PRINCIPAL AMOUNT OF
$600,000; LEVYING A TAX IN PAYMENT THEREOF;
APPROVING A NOTE PURCHASE AGREEMENT AND AN
ENGAGEMENT LETTER; PRESCRIBING THE FORM OF
SAID NOTES; AND ENACTING OTHER PROVISIONS
RELATING TO THE SUBJECT
The Ordinance, a full, true and correct copy of which is attached hereto, was read and
reviewed by the Town Council.
Thereupon, it was duly moved and seconded that the Ordinance be finally passed and
adopted.
The Presiding Officer put the motion to a vote of the members of the Town Council, and
the Ordinance was finally passed and adopted by the following vote:
AYES: 6 NAYS: 0
#4669436.1
ABSTENTIONS: 0
THIS CERTIFICATE IS CERTIFIED TO BE TRUE AND CORRECT, and to correctly
reflect the duly constituted officers and members of the Town Council of said Town, and the
attached and following copy of said Ordinance is hereby certified to be a true and correct copy of
an offs ial copy thereof on file among the official records of the Town, all on this the2-(orA day
of ST , 2014.
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Certification for Ordinance
ORDINANCE
ORD 2014-25
AUTHORIZING THE ISSUANCE OF
$600,000
TOWN OF TROPHY CLUB, TEXAS
TAX NOTES
SERIES 2014
Adopted: August 26, 2014
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TABLE OF CONTENTS
Page
Parties............................................................................................................................................... l
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section.1.01. Definitions................................................................................................................1
Section 1.02. Other Definitions....................................................................................................3
Section1.03. Findings....................................................................................................................3
Section 1.04. Table of Contents, Titles and Headings...................................................................3
Section 1.05. Interpretation............................................................................................................3
ARTICLE II
SECURITY FOR THE NOTES
Section 2.01. Tax Levy for Payment of the Notes.........................................................................3
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE NOTES
Section3.01.
Authorization...........................................................................................................4
Section 3.02.
Date, Denomination, Maturities, Numbers and Interest..........................................4
Section 3.03.
Medium, Method and Place of Payment..................................................................5
Section 3.04.
Execution and Initial Registration...........................................................................6
Section3.05.
Ownership................................................................................................................6
Section 3.06.
Registration, Transfer and Exchange.......................................................................7
Section 3.07.
Cancellation and Authentication......................................................:..................:....7
Section3.08.
Temporary Notes.....................................................................................................8
Section 3.09.
Replacement Notes......................................................................... .......................8
ARTICLE IV
REDEMPTION OF NOTES BEFORE MATURITY
Section 4.01. No Optional Redemption.........................................................................................9
Section 4.02. Mandatory Sinking Fund Redemption......................................................................9
Section 4.03. Payment Upon Redemption...................................................................................10
Section 4.04. Effect of Redemption.............................................................................................10
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ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01. Appointment of Initial Paying Agent/Registrar.....................................................1 l
Section5.02. Qualifications.........................................................................................................11
Section 5.03. Maintaining Paying Agent/Registrar.....................................................................11
Section5.04. Termination ........................................................................................................11
Section5.05. Notice of Change .................................. ............................... ..........................11
Section 5.06. Agreement to Perform Duties and Functions.........................................................11
Section 5.07. Delivery of Records to Successor..........................................................................12
ARTICLE VI
FORM OF THE NOTES
Section6.01. Form Generally......................................................................................................12
Section6.02. Form of Notes ......................................................................................................12
Section 6.03. CUSIP Registration................................................................................................17
Section6.04. Legal Opinion........................................................................................................18
ARTICLE VII
SALE OF THE NOTES;
CONTROL AND DELIVERY OF THE NOTES
Section7.01. Sale of Notes..........................................................................................:..:............18
Section 7.02. Control and Delivery of Notes................................................................................18
ARTICLE VIII
CREATION OF FUNDS AND ACCOUNTS;
DEPOSIT OF PROCEEDS; INVESTMENTS
Section 8.01.
Creation of Funds...................................................................................................19
Section 8.02.
Interest and Sinking Fund......................................................................................19
Section8.03.
Project Fund...........................................................................................................19
Section8.04.
Security of Funds...................................................................................................20
Section 8.05.
Deposit of Proceeds...............................................................................................20
Section8.06.
Investments............................................................................................................20
Section 8.07.
Investment Income.................................................................................................20
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01. Payment of the Notes................................................................... ......................20
Section 9.02. Other Representations and Covenants...................................................................20
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Section 9.03.
Provisions Concerning Federal Income Tax Exclusion.........................................21
Section 9.04.
No Private Use or Payment and No Private Loan Financing.................................21
Section 9.05.
No Federal Guaranty...............................................................................................21
Section 9.06.
Notes are not Hedge Bonds....................................................................................21
Section 9.07.
No -Arbitrage Covenant..........................................................................................21
Section9.08.
Arbitrage Rebate....................................................................................................22
Section 9.09.
............................................................
Information Reporting ........:..........I....... ....22
Section 9.10.
Continuing Obligation...........................................................................................22
Section 9.11.
Qualified Tax -Exempt Obligations........................................................................22
ARTICLE X
DEFAULT AND REMEDIES
Section 10.01. Events of Default...................................................................................................23
Section 10.02. Remedies for Default.........................................................................................23
Section 10.03. Remedies Not Exclusive........................................................................................23
ARTICLE XI
DISCHARGE
Section11.01. Discharge...............................................................................................................24
ARTICLE XII
EFFECTIVE IMMEDIATELY
Section 12.01. Effectiveness ............. ...........24
..................................................................................
Signatures ...................
#4659128.2
...............................................................27
AN ORDINANCE OF THE TOWN OF TROPHY CLUB, TEXAS,
AUTHORIZING THE ISSUANCE AND SALE OF TOWN OF TROPHY
CLUB, TEXAS, TAX NOTES, SERIES 2014, IN THE AGGREGATE
PRINCIPAL AMOUNT OF $600,000; LEVYING A TAX IN PAYMENT
THEREOF; APPROVING A . NOTE PURCHASE AGREEMENT AND AN
ENGAGEMENT LETTER; PRESCRIBING THE FORM OF SAID NOTES;
AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT
WHEREAS, pursuant to Chapter 1431, Texas Government Code (the "Act"), the
governing body of a municipality is authorized to issue the notes hereinafter authorized (the
"Notes") to pay contractual obligations incurred or to be incurred for the purposes set forth in
Section 3.01 hereof, and
WHEREAS, this governing body (the "Town Council") of the Town of Trophy Club,
Texas (the "Town"), hereby finds and determines that it is necessary and in the best interest of
the Town and its citizens to issue such Notes for the purposes herein described and that such
Notes shall be payable from and secured by ad valorem taxes levied, within the limits prescribed
by law, on all taxable property within the Town; and
WHEREAS, the Notes hereinafter authorized shall mature before the seventh anniversary
of the date that the Attorney General of the State of Texas approves the Notes, as required by the
Act; and
WHEREAS, it is affirmatively found that this Town Council is authorized to proceed
with the issuance and sale of such Notes as authorized by the Constitution and laws of the State
of Texas, particularly the Act; and
WHEREAS, the Town Council has found and determined that it is necessary and in the
best interest of the Town and its citizens that it authorize by this Ordinance the issuance and
delivery of its Notes in a single series at this time; and
WHEREAS; it is officially found, determined, and declared that the meeting at which this
Ordinance has been adopted was open to the public and public notice of the time, place and
subject matter of the public business to be considered and acted upon at said meeting, including
this Ordinance, was given, all as required by the applicable provisions of Chapter 551, Texas
Government Code, as amended; Now Therefore,
BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF TROPHY CLUB:
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section 1.01. Definitions. Unless otherwise expressly provided or unless the context
clearly requires otherwise, in this Ordinance the following terms shall have the meanings
specified below:
"Closing Date" means the date of the initial delivery of and payment for the Notes.
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"Code" means the Internal Revenue Code of 1986, as amended, including applicable
regulations, published rulings and court decisions relating thereto.
"Designated Payment/Transfer Office" means (i) with respect to the initial Paying
Agent/Registrar named herein, its office in Dallas, Texas, or at such other location designated by
the Paying Agent/Registrar and (ii) with respect to any successor Paying Agent/Registrar, the
office of such successor designated and located as may be agreed upon by the Town and such
successor.
"Event of Default" means any Event of Default as defined in Section 10.01.
"Initial Note" means the Note described in Section 3.04(d) and 6.02(d).
"Interest and Sinking Fund" means the interest and sinking fund established by
Section 8.01(a).
"Interest Payment Date" means the date or dates upon which interest on the Notes is
scheduled to be paid until the maturity of the Notes, such dates being March 1 and September 1
of each year commencing March 1, 2015.
"Note" means any of the Notes.
"Notes" means the Town's notes entitled "Town of Trophy Club, Texas, Tax Notes,
Series 2014" authorized to be issued by Section 3.01.
"Ordinance" means this Ordinance.
"Original Issue Date" means the Closing Date.
"Owner" means the person who is the registered owner of a Note or Notes, as shown in
the Register.
"Paying Agent/Registrar" means initially Branch Banking & Trust Company, or any
successor thereto as provided in this Ordinance.
"Paying Agent/Registrar Agreement" means the Paying Agent/Registrar Agreement
between the Town and the Paying Agent/Registrar relating to the Notes.
"Purchaser" means Branch Banking & Trust Company.
"Record Date" means the last business day_ of the month next preceding an Interest
Payment Date.
"Register" means the Register specified in Section 3.06(a).
"Special Payment Date" means the Special Payment Date prescribed by Section 3.03(b).
"Special Record Date" means the Special Record Date prescribed by Section 3.03(b).
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"Unclaimed Payments means money deposited with the Paying Agent/Registrar for the
payment of the principal of or interest on Notes as the same become due and payable and
remaining unclaimed by the Owners of such Notes for 90 days after the applicable payment or
redemption date.
Section 1.02. Other Definitions. The terms "Town Council" and "Town" shall have the
meaning assigned in the preamble to this Ordinance.
Section 1.03. Findings. The declarations, determinations and findings declared, made
and found in the preamble to this Ordinance are hereby adopted, restated and made a part of the
operative provisions hereof.
Section 1.04. Table of Contents, Titles and Headings. The table of contents, titles and
headings of the Articles and Sections of this Ordinance have been inserted for convenience of
reference only and are not to be considered a part hereof and shall not in any way modify or
restrict any of the terms or provisions hereof and shall never be considered or given any effect in
construing this Ordinance or any provision hereof or in ascertaining intent, if any question of
intent should arise.
Section 1.05. Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall be
construed to include correlative words of.the feminine and neuter genders and vice versa, and
words of the singular number shall be construed to include correlative words of the plural
number and vice versa.
(b) Article and section references shall mean references to articles and sections of this
Ordinance unless designated otherwise.
(c) This Ordinance and all the terms and provisions hereof shall be liberally
construed to effectuate the purposes set forth herein to sustain the validity of this Ordinance.
ARTICLE II
SECURITY FOR THE NOTES
Section 2.01. Tax Lev, for or Payment of the Notes.
(a) The Town Council hereby declares and covenants that it will provide and levy a
tax legally and fully sufficient for payment of the Notes, it having been determined that the
existing and available taxing authority of the Town for such purpose is adequate to permit a
legally sufficient tax in consideration of all other outstanding obligations of the Town.
(b) In order to provide for the payment of the debt service requirements on the Notes,
being (i) the interest on the Notes, and (ii) a sinking fund for their payment at maturity or a
sinking fund of two percent per annum (whichever amount is the greater), there is hereby levied
for the current year and each succeeding year thereafter, while the Notes or interest thereon
remain outstanding and unpaid, an ad valorem tax on each one hundred dollars valuation of
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#4659128.2
taxable property within the Town at a rate sufficient, within the limit prescribed by law, to pay
such debt service requirements, full allowance being made for delinquencies and costs of
collection.
(c) The tax levied by this Section shall be assessed and collected each year and
deposited into the Interest and Sinking Fund for the payment of the debt service requirements on
the Notes, and the tax shall not be diverted to any other purpose.
(d) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or
required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and
committed irrevocably to the payment of the principal of and interest on the Notes when and as
due and payable in accordance with their terms and this Ordinance.
(e) If the liens and provisions of this Ordinance shall be discharged in a manner
permitted by Article XI, then the collection of such ad valorem tax may be suspended or
appropriately reduced, as the facts may permit, and further deposits to the Interest and Sinking
Fund may be suspended or appropriately reduced, as the facts may permit.
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE NOTES
Section 3.01. Authorization. The Town's notes to be designated "Town of Trophy
Club, Texas, Tax Notes, Series 2014," are hereby authorized to be issued and delivered in
accordance with the Constitution, and laws of the State 'of Texas, particularly Chapter 1431,
Texas Government Code, as amended, in the aggregate principal amount of $600,000 for the
public purpose of providing funds to: (i) purchase materials, supplies, equipment and machinery
for various Town departments including police and emergency services; (ii) construct street
improvements; (iii) construct improvements to solid waste, drainage,. water and sewer facilities
and infrastructure; (iv) construct park and recreation facilities and improvements; and (v) pay
the costs associated with the issuance of the Notes.
Section 3.02. Date Denomination, Maturities, Numbers and Interest.
(a) The Notes shall be dated the date of their delivery to the Purchaser, shall be in
fully registered form, without coupons, in the denomination of $5,000 or any integral multiple
thereof, and shall be numbered separately from one upward or such other designation acceptable
to the Town and the Paying Agent/Registrar and the Initial Note shall be numbered No. T-1.
(b) The Notes shall mature. on March 1 in the years and in the principal installments
set forth in the following schedule;
ie
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Term Notes
Maturity Principal Amount Interest Rate
2016 $600,000 .890%
(c) Interest shall accrue and be paid on each Note, respectively, until the payment of
the principal amount thereof shall have been paid or provided for, from the later of the Closing
Date or the most recent Interest Payment Date to which interest has been paid or provided for.
Such interest shall be payable semiannually on each March 1 and September 1 of each year,
commencing on March 1, 2015, until maturity or prior redemption. Interest on the Notes shall be
calculated on the basis of a 360 -day year composed of twelve 30 -day months.
Section 3.03. Medium, Method and Place of Payment.
(a) The principal of and interest on the Notes shall be paid in lawful money of the
United States of America as provided in this Section.
(b) Interest on the Notes shall be payable to the Owners whose names appear in the
Register at the close of business on the Record Date; provided, however, that in the event of
nonpayment of interest on a, scheduled Interest Payment Date, and for 30 days thereafter, a new
record date for such interest payment (a "Special Record Date") will be established by the
Paying Agent/Registrar if and when funds for the payment of such interest have been received
from the Town. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (the "Special Payment Date," which shall be at least 15 days after the Special Record
Date) shall be sent at least five business days prior to the Special Record Date by United. States
mail, first class postage prepaid, to the address of each Owner of a Note appearing on the books
of the Paying Agent/Registrar at the close of business on the last business day next preceding the
date of mailing of such notice.
(c) Interest on the Notes shall be paid by check (dated as of the Interest Payment
Date) and sent by the Paying Agent/Registrar to the person entitled to such payment, United
States mail, first class postage prepaid, to the address of such person as it appears in the Register
or by such other customary banking arrangements acceptable to the Paying Agent/Registrar and
the person to whom interest is to be paid; provided, however, that such person shall bear all risk
and expenses of such other customary banking arrangements.
(d) The principal of each Note shall be paid to the person in whose name such Note is
registered on the due date thereof (whether at the maturity date or the date of prior redemption
thereof) upon presentation and surrender of such Note at the Designated Payment/Transfer
Office.
(e) If a date for the payment of the principal of or interest on the Notes is a Saturday,
Sunday, legal holiday, or a day on which banking institutions . in the Town in which the
Designated Payment/Transfer Office 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 a Saturday, Sunday,
legal holiday, or day on which such banking institutions are authorized to close; and payment on
such date shall have the same force and effect as if made on the original date payment was due.
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(f) Subject to any applicable escheat, unclaimed property, or similar law, including
Title 6 of the Texas Property Code, Unclaimed Payments remaining unclaimed by the Owners
entitled thereto for three years after the applicable payment or redemption date shall be paid to
the Town and thereafter neither the Town, the Paying Agent/Registrar, nor any other person shall
be liable or responsible to any Owners of such Notes for any further payment of such unclaimed
moneys or on account of any such Notes.
Section 3.04. Execution and Initial Registration.
(a) The Notes shall be executed on behalf of the Town by the Mayor and Town
Secretary of the Town, by their manual or facsimile signatures, and the official seal of the Town
shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Notes shall
have the same effect as if each of the Notes had been signed manually and in person by each of
said officers, and such facsimile seal on the Notes shall have the same effect as if the official seal
of the Town had been manually impressed upon each of the Notes.
(b) In the event that any officer of the Town whose manual or facsimile signature
appears on the Notes ceases to be such officer before the authentication of such Notes or before
the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient
for all purposes as if such officer had remained in such office.
(c) Except as provided below, no Note shall be valid or obligatory for any purpose or
be entitled to any security or benefit of this Ordinance unless and until there appears thereon the
Certificate of Paying Agent/Registrar substantially in the form provided in this Ordinance, duly
authenticated by manual execution of the Paying Agent/Registrar. It shall not be required that
the same authorized representative of the Paying Agent/Registrar sign the Certificate of Paying
Agent/Registrar on all of the Notes. In lieu of the executed Certificate of Paying Agent/Registrar
described above, the Initial Note delivered on the Closing Date shall have attached thereto the
Comptroller's Registration Certificate substantially in the form provided in this Ordinance,
manually executed by the Comptroller of Public Accounts of the State of Texas or by his duly
authorized agent, which certificate shall be evidence that the Initial Note has been duly approved
by the Attorney General of the State of Texas and that it is a valid and binding obligation of the
Town, and has been registered by the Comptroller.
(d) On the Closing Date, one Note (the "Initial Note") representing the entire
principal amount of the Notes, executed by manual or facsimile signature of the Mayor and
Town Secretary of the Town, approved by the Attorney General of Texas, and registered and
manually signed by the Comptroller of Public Accounts of the State of Texas, will be delivered
to the Purchaser or its designee against payment therefor.
Section 3.05. Ownership.
(a) The Town, the Paying Agent/Registrar and any other person may treat the person
in whose name any Note is registered as the absolute owner of such Note for the purpose of
making and receiving payment of the principal thereof and premium, if any, thereon, for the
further purpose of making and receiving payment of the interest thereon (subject to the
provisions herein that interest is to be paid to the person in whose name the Note is registered on
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the Record Date), and for all other purposes, whether or not such Note is overdue, and neither the
Town nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary.
(b) All payments made to the person deemed to be the Owner of any Note in
accordance with this Section shall be valid and effectual and shall discharge the liability of the
Town and the Paying Agent/Registrar upon such Note to the extent of the sums paid.
Section 3.06. Registration, Transfer and Exchange.
(a) So long as any Notes remain outstanding, the Town shall cause the Paying
Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register") in
which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar
shall provide for the registration and transfer of Notes in accordance with this Ordinance.
(b) The ownership of a Note may be transferred only upon the presentation and
surrender of the Note at the Designated Payment/Transfer Office of the Paying Agent/Registrar
with such endorsement or other evidence of transfer as is acceptable to the Paying
Agent/Registrar. No transfer of any Note shall be effective until entered in the Register.
(c) The Notes shall be exchangeable upon the presentation and surrender thereof at
the Designated Payment/Transfer Office of the Paying Agent/Registrar for a Note or Notes of the
same maturity and interest rate and in any denomination or denominations of any integral
multiple of $5,000 and in an aggregate principal amount equal to the unpaid principal amount of
the Notes presented for exchange. The Paying Agent/Registrar is hereby authorized to
authenticate and deliver Notes exchanged for other Notes in accordance with this Section.
(d) Each exchange Note delivered by the Paying Agent/ Registrar in accordance.with
this Section shall constitute an original contractual obligation of the Town and shall be entitled to
the benefits and security of this Ordinance to the same extent as the Note or Notes in lieu of
which such exchange Note is delivered.
(e) No service charge shall be made to the Owner for the initial registration,
subsequent transfer, or exchange for any different denomination of any of the Notes. The Paying
Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or
other governmental charge that is authorized to be imposed in connection with the registration,
transfer or exchange of a Note.
(f) Neither the Town nor the Paying Agent/Registrar shall be required to issue,
transfer, or exchange any Note called for redemption, in whole or in part, where such redemption
is scheduled to occur within forty-five (45) calendar days after the transfer or exchange date;
provided, however, such limitation shall not be applicable to an exchange by the Owner of the
uncalled principal balance of a Note.
Section 3.07. Cancellation and Authentication. All Notes paid or redeemed before
scheduled maturity in accordance with this Ordinance, and all Notes in lieu of which exchange
Notes or replacement Notes are authenticated and delivered in accordance with this Ordinance,
shall be cancelled upon the making of proper records regarding such payment, redemption,
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exchange or replacement. The Paying Agent/Registrar shall dispose of the cancelled Notes in
accordance with the Securities Exchange Act of 1934.
Section 3.08. Temporary Notes.
(a) Following the delivery and registration of the Initial Note and pending the
preparation of definitive Notes, the proper officers of the Town may execute and, upon the
Town's request, the Paying Agent/Registrar shall authenticate and deliver, one or more
temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any denomination, substantially of the tenor of the definitive Notes in lieu of which
they are delivered, without coupons, and with such appropriate insertions, omissions,
substitutions and other variations as the officers of the Town executing such temporary Notes
may determine, as evidenced by their signing of such temporary Notes.
(b) Until exchanged for Notes in definitive form, such Notes in temporary form shall
be entitled to the benefit and security of this Ordinance.
(c) The Town, without unreasonable delay, shall prepare, execute and deliver to the
Paying Agent/Registrar the Notes in definitive form; thereupon, upon the presentation and
surrender of the Note or Notes in temporary form to the Paying Agent/Registrar, the Paying
Agent/Registrar shall cancel the Notes in temporary form and authenticate and deliver in
exchange therefor a Note or Notes of the same maturity and series, in definitive form, in the
authorized denomination, and in the same aggregate principal amount, as the Note or Notes in
temporary form surrendered. Such exchange shall be made without the making of any charge
therefor to any Owner.
Section 3.09.: Replacement Notes.
(a) Upon the presentation and surrender to the Paying Agent/Registrar, at the
Designated Payment/Transfer Office, of a mutilated Note, the Paying Agent/Registrar shall
authenticate and deliver in exchange therefor a replacement Note of like tenor and principal
amount, bearing a number not contemporaneously outstanding. The Town or the Paying
Agent/Registrar may require the Owner of such Note to pay a sum sufficient to cover any tax or
other governmental charge that is authorized to be imposed in connection therewith and any
other expenses connected therewith.
(b) In the event that any Note is lost, apparently destroyed or wrongfully taken, the
Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence
of notice or knowledge that such Note has been acquired by a bona fide purchaser,, shall
authenticate and deliver a replacement Note of like tenor and principal amount, bearing a number
not contemporaneously outstanding, provided that the Owner first:
(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her
ownership of and the circumstances of the loss, destruction or theft of such Note;
(ii) furnishes such security or indemnity as may be required by the Paying
Agent/Registrar and the Town to save them harmless;
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(iii) pays all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or
other governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the Town and the
Paying Agent/Registrar.
(c) If, after the delivery of such replacement Note, a bona fide purchaser of the
original Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Town and the Paying Agent/Registrar shall be entitled to recover such
replacement Note from the person to whom it was delivered or any person taking therefrom,
except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by the Town or the
Paying Agent/Registrar in connection therewith.
(d) In the event that any such mutilated, lost, apparently destroyed or wrongfully
taken Note has become or is about to become due and payable, the Paying Agent/Registrar, in its
discretion, instead of issuing a replacement Note, may pay such Note.
(e) Each replacement Note delivered in accordance with this Section shall constitute
an original contractual obligation of the Town and shall be entitled to the benefits and security of
this Ordinance to the same extent as the Note or Notes in lieu of which such replacement Note is
delivered.
ARTICLE IV
REDEMPTION OF NOTES BEFORE MATURITY
Section 4.01. No Optional Redemption.
The Notes shall not be subject to optional redemption before their scheduled maturity.
Section 4.02. Mandatory Sinking Fund Redemption.
(a) The Notes stated to mature on March 1, 2016 (the "Term Notes"), are subject to
scheduled mandatory redemption and will be redeemed by the Town, in part at a price equal to
the principal amount thereof, without premium, plus accrued interest to the redemption date, out
of moneys available for such purpose in the Interest and Sinking Fund, on the dates and in the
respective principal amounts as set forth in the following schedule:
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Term Notes Maturing March 1, 2016
Redemption Date Principal Amount
March 1, 2015 $ 300,000
March 1, 2016* 300,000
*maturity
(b) At least ten (10) days prior to each scheduled mandatory redemption date, the
Paying Agent/Registrar shall select for redemption by lot, or by any other customary method that
results in a random selection, a principal amount of Term Notes equal to the aggregate principal
amount of such Term Notes to be redeemed, shall call such Term Notes for redemption on such
scheduled mandatory redemption date.
(c) . The principal amount of the Term Notes required to be redeemed on any
redemption date pursuant to subparagraph (a) of this Section 4.03 shall be reduced, at the option
of the Town, by the principal amount of any Term Notes which, at least 15 days prior to the
mandatory sinking fund redemption date (i) shall have been acquired by the Town at a price not
exceeding the principal amount of such Term Notes plus accrued interest to the date of purchase
thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been
redeemed pursuant to the optional redemption provisions hereof and not previously credited to a
mandatory sinking fund redemption.
Section 4.03. Payment Upon Redemption.
(a) Before or on each redemption date, the Town shall deposit with the Paying
Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying
Agent/Registrar shall make provision for the payment of the Notes to be redeemed on such date
by setting aside and holding in trust such amounts as are received by the Paying Agent/Registrar
from the Town and shall use such funds solely for the purpose of paying the principal of,
redemption premium, if any, and accrued interest on the Notes being redeemed.
(b) Upon presentation and surrender of any Note called for redemption at the
Designated Payment/Transfer Office of the Paying Agent/Registrar on or after the date fixed for
redemption, the Paying Agent/Registrar shall pay the principal of, redemption premium, if any,
and accrued interest on such Note to the date of redemption from the money set aside for such
purpose.
Section 4.04. Effect of Redemption.
(a) The Notes or portions thereof called for redemption shall become due and payable
on the date fixed for redemption and, unless the Town defaults in its obligation to make
provision for the payment of the principal thereof, redemption premium, if any, or accrued
interest thereon, such Notes or portions thereof shall cease to bear interest from and after the date
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fixed for redemption, whether or not such Notes are presented and surrendered for payment on
such date.
(b) If the Town shall fail to make provision for payment of all sums due on a
redemption date, then any Note or portion thereof called for redemption shall continue. to bear
interest at the rate stated on the Note until due provision is made for the payment of same by the
Town.
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01. Appointment of Initial Paving A ent�/Re isg tray. Branch Banking & Trust
Company, is hereby appointed as the initial Paying Agent/Registrar for the Notes.
Section 5.02. Qualifications. Each Paying Agent/Registrar shall be a commercial bank,
a trust company organized under the laws of the State of Texas, or any other entity duly qualified
and legally authorized to serve as and perform the duties and services of paying agent and
registrar for the Notes.
Section 5.03. Maintaining Paying. A eg nt/Re isg tray.
(a) At all times while any Notes are outstanding, the Town will maintain a Paying
Agent/Registrar that is qualified under Section 5.02 of this Ordinance. The Mayor is hereby
authorized and directed to execute an agreement with the Paying Agent/Registrar specifying the
duties and responsibilities of the Town and the Paying Agent/Registrar. The signature of the
Mayor shall be attested by the Town Secretary.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the
Town will promptly appoint a replacement.
Section 5.04. Termination. The Town, upon not less than 60 days notice, reserves the
right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity
whose appointment is to be terminated written notice of such termination, provided, that such
termination shall not be effective until a successor Paying Agent/Registrar has been appointed
and has accepted the duties of Paying Agent/Registrar for the Notes.
Section 5.05. Notice of Change. Promptly upon each change in the entity serving as
Paying Agent/Registrar, the Town will cause notice of the change to be sent to each Owner and
any bond insurer by first class United States mail, postage prepaid, at the address in the Register,
stating the effective date of the change and the name and mailing address of the replacement
Paying Agent/Registrar.
Section 5.06. Agreement to Perform Duties and Functions. By accepting the
appointment as Paying Agent/Registrar, and executing the Paying Agent/Registrar Agreement,
the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that
it will perform the duties and functions of Paying Agent/Registrar prescribed thereby.
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Section 5.07. Delivery of Records to Successor. If a Paying Agent/Registrar is replaced,
such Paying Agent, promptly upon the appointment of the successor, will deliver the Register (or
a copy thereof) and all other pertinent books and records relating to the Notes to the successor
Paying Agent/Registrar.
ARTICLE VI
FORM OF THE NOTES
Section 6.01. Form Generally.
(a) The Notes, including the Registration Certificate of the Comptroller of Public
Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and the
Assignment form to appear on each of the Notes, (i) shall be substantially in the form set forth in
this Article, with such appropriate insertions, omissions, substitutions, and other variations as are
permitted or required by this Ordinance, and (ii) may have such letters, numbers, or other marks
of identification (including identifying numbers and letters of the Committee on Uniform
Securities Identification Procedures .of the American Bankers Association) and such legends and
endorsements (including any reproduction of an opinion of counsel) thereon as, consistently
herewith, may be determined by the Town or by the officers executing such Notes, as evidenced
by their execution thereof.
(b) Any portion of the text of any Notes may be set forth on the reverse side thereof,
with an appropriate reference thereto on the face of the Notes.
(c) The Notes, including the Initial Note submitted to the Attorney General of Texas
and any temporary Notes, shall be typed, printed, lithographed, photocopied or engraved, and
may be produced by any combination of these methods or produced in any other similar manner,
all as determined by the officers executing such Notes, as evidenced by their execution thereof.
Section 6.02. Form of Notes. The form of Notes, including the form of the Registration
Certificate of the Comptroller of Public Accounts of the State of Texas, the form of Certificate of
the Paying Agent/Registrar and the form of Assignment appearing on the Notes, shall be
substantially as follows:
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(a) f Form of Note]
REGISTERED
we
United States of America
State of Texas
TOWN OF TROPHY CLUB, TEXAS
TAX NOTES
SERIES 2014
INTEREST RATE
CLOSING
MATURITY DATE DATE
REGISTERED
% March 1, September 23, 2014
The Town of Trophy Club (the "Town") in the Counties of Tarrant and Denton, State of
Texas, for value received, hereby promises to pay to
or registered assigns, on the Maturity Date specified above, the sum of
DOLLARS
unless this Note shall have been sooner called for redemption and the payment of the principal
hereof shall have been paid or provision for such payment shall have been made, and to pay
interest on the unpaid principal amount hereof from the later of the Closing Date specified above
or the most recent interest payment date to which interest has been paid or provided for until
such principal amount shall have been paid or provided for, at the per annum rate of interest
specified above, computed on the basis of a 360 -day year of twelve 30 -day months, such interest
to be paid semiannually on March 1 and September 1 of each year, commencing March 1, 2015.
The principal of this Note shall be payable without exchange or collection charges in
lawful money of the United States of America upon presentation and surrender of this Note at the
corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of Branch
Banking & Trust Company, as initial Paying Agent/Registrar, or, with respect to a successor
Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. Interest
on this Note is payable by check dated as of the interest payment date, mailed by the Paying
Agent/Registrar to the registered owner at the address shown on the registration books kept by
the Paying Agent/Registrar or by such other customary banking arrangements acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the person to whom interest
is to be paid. For the purpose of the payment of interest on this Note, the registered owner shall
be the person in whose name this Note is registered at the close of business on the "Record
Date," which shall be the last business day of the month next preceding such interest payment
date; provided, however, that in the event of nonpayment of interest on a scheduled interest
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payment date, and for 30 days thereafter, anew record date for such interest payment (a "Special
Record Date") will be established by the Paying Agent/Registrar, if and when funds for the
payment of such interest have been received from the Town. Notice of the Special Record Date
and of the scheduled payment date of the past due interest (the "Special Payment Date," which
shall be 15 days after the Special Record Date) shall be sent at least five business days prior to
the Special Record Date by United States mail, first class postage prepaid, to the address of each
Owner of a Note appearing on the books of the Paying Agent/Registrar at the close of business
on the last business day preceding the date of mailing such notice.
If a date for the payment of the principal of or interest on the Notes is a Saturday,
Sunday, legal holiday, or a day on which banking institutions in the Town in which the
Designated Payment/Transfer Office 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 a Saturday, Sunday,
legal holiday, or day on which such 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 Note is one of a series of fully registered notes specified in the title hereof, dated as
of September 23, 2014, issued in the aggregate principal amount of $600,000 (herein referred to
as the "Notes") pursuant to a certain ordinance of the Town Council of the Town (the
"Ordinance") for the public purpose of providing funds for authorized purchase of equipment
and machinery and the construction of public improvements, as described in the Ordinance, for
and within the Town, and to pay the costs of issuance related to the Notes.
The Notes and the interest thereon are payable from the levy of a direct and continuing ad
valorem tax levied, within the limit prescribed by law, against all taxable property in the Town as
described and provided in the Ordinance.
The Notes are not subject to optional redemption prior to maturity.
The Notes stated to mature on March 1, 2016 (the "Term Notes"), are subject to
scheduled mandatory redemption and will be redeemed by the Town, in part at a price equal to
the principal amount thereof, without premium, plus accrued interest to the redemption date, out
of moneys available for such purpose in the Interest and Sinking Fund, on the dates and in the
respective principal amounts as set forth in the following schedule:
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Term Notes Maturing March 1, 2016
Redemption Date Principal Amount
March 1, 2015 $ 300,000
March 1, 2016* 300,000
*maturity
At least ten (10) days prior to each scheduled mandatory redemption date, the Paying
Agent/Registrar shall select for redemption by lot, or by any other customary method that results
in a random selection, a principal amount of Term Notes equal to the aggregate principal amount
of such Term Notes to be redeemed, shall call such Term Notes for redemption on such
scheduled mandatory redemption date.
The principal amount of the Term Notes required to be redeemed on any redemption date
shall be reduced, at the option of the Town, by the principal amount of any Term Notes which, at
least 15 days prior to the mandatory sinking fund redemption date (i) shall have been acquired by
the Town at a price not exceeding the principal amount of such Term Notes plus accrued interest
to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation.
As provided in the Ordinance, and subject to certain limitations therein set forth, this
Note is transferable upon surrender of this Note for transfer at the Designated Payment/Transfer
Office, with such endorsement or other evidence of transfer as is acceptable to the Paying
Agent/Registrar, and, thereupon, one or more new fully registered Notes of the same stated
maturity, of authorized denominations, bearing the same rate of interest, and for the same
aggregate principal amount will be issued to the designated transferee or transferees.
Neither the Town nor the Paying Agent/Registrar shall be required to issue, transfer or
exchange any Note called for redemption where such redemption is scheduled to occur within 45
calendar days of the transfer or exchange date; provided, however, such limitation shall not be
applicable to an exchange by the registered owner of the uncalled principal balance of a Note.
The Town, the Paying Agent/Registrar, and any other person may treat the person in
whose name this Note is registered as the owner hereof for the purpose of receiving payment as
herein provided (except interest shall be paid to the person in whose name this Note is registered
on the Record Date or Special Record Date, as applicable) and for. all other purposes, whether or
not this Note be overdue, and neither the Town nor the Paying Agent/Registrar shall be affected
by notice to the contrary.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Note and the
series of which it is a part is duly authorized by law; that all acts, conditions and things required
to be done precedent to and in the issuance of the Notes have been properly done and performed
and have happened in regular and due time, form and manner, as required by law; and that the
total indebtedness of the Town, including the Notes, does not exceed any constitutional or
statutory limitation.
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IN WITNESS WHEREOF, this Note has been duly executed on behalf of the Town,
under its official seal, in accordance with law.
Town Secretary Mayor
Town of Trophy Club, Texas Town of Trophy Club, Texas
(b) (Form of Certificate of Paying Agent/Registrar]
CERTIFICATE OF PAYING AGENT/REGISTRAR
This is one. of the Notes referred to in the within mentioned Ordinance. The series of
Notes of which this Note is a part was originally issued as one Initial Note which 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:
(c) Form of Assignment.
BRANCH BANKING & TRUST COMPANY,
as Paying Agent/Registrar
En
Authorized Signatory -.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
(print or typewrite name, address and Zip Code of transferee):
(Social Security or other identifying number: ) the within Note and all
rights hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Note on the books kept for registration hereof, with full power of
substitution in the premises.
Date:
Signature Guaranteed By:
Authorized Signatory
#4659128.2
NOTICE: The signature on this Assignment must
correspond with the name of the registered owner
as it appears on the face of the within Note in every
particular and must be guaranteed in a manner
acceptable to the Paying Agent/Registrar.
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(d) The following Registration Certificate of Comptroller of Public Accounts shall
appear on the Initial Note:
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § REGISTER NO.
THE STATE OF TEXAS §
I HEREBY CERTIFY THAT there is on file and of record in my office a certificate to
the effect that the Attorney General of the State of Texas has approved this Note, and that this
Note has been registered this day by me.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
Comptroller of Public Accounts of the
State of Texas
[SEAL]
(e) The Initial Note shall be numbered T-1 and shall be in the form set forth in
paragraphs (a), (b) and (d) of this Section, except for the following alterations:
(i) immediately under the name of the Note, the words the headings
"INTEREST RATE" and "MATURITY DATE" shall both be completed with the words
"As shown below"; and
(ii) in the first paragraph of the Note, the words "on the Maturity Date
specified above" shall be deleted and the following will be inserted: "on March 1 in each
of the years, in the principal installments and bearing interest at the per annum rates in
accordance with the following schedule:
Years Principal Installments Interest Rate
(Information to be inserted from Section 3.02 of this Ordinance)
Section 6.03. CUSIP Registration. The Town may secure identification numbers
through the CUSIP Service Bureau Division of Standard& Poor's Corporation, New York, New
York, and may authorize the printing of such numbers on the face of the Notes. It is expressly
provided, however, that the presence or absence of CUSIP numbers on the Notes shall be of no
significance or effect as regards the legality thereof and neither the Town nor the attorneys
approvirig said Notes as to legality are to be held responsible for CUSIP numbers incorrectly
printed on the Notes.
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Section 6.04. Legal Opinion. The approving legal opinion of Bracewell & Giuliani
LLP, Bond Counsel, may be printed on each Note over the certification of the Town Secretary of
the Town, which may be executed in facsimile.
ARTICLE VII
SALE OF THE NOTES;
CONTROL AND DELIVERY OF THE NOTES
Section 7.01. Sale of Notes.
(a) The Notes are hereby officially sold and awarded to Branch Banking & Trust
Company (the "Purchaser"), for a purchase price equal to the principal amount thereof, being the
best terms available to the Town, pursuant to a purchase agreement (the "Purchase Agreement")
between the Town and the Purchaser, such Purchase Agreement being hereby approved. The
Mayor of the Town is hereby authorized and directed to execute and deliver the Purchase
Agreement to the Purchaser. The Initial Note shall be registered in the name of the Purchaser or
its designee.
(b) All officers and officials of the Town are authorized to take such actions and to
execute such documents, certificates and receipts, and to make such elections with respect to the
tax-exempt status of the Notes, as they may deem necessary and appropriate in order to
consummate the delivery of the Notes. Further, in connection with the submission of the record
of proceedings for the Notes to the Attorney General of the State of Texas for examination and
approval of such Notes, the appropriate officer of the Town is hereby authorized and directed to
issue a check of the Town payable to the Attorney General of the State of Texas as a
nonrefundable examination fee in the amount required by Chapter 1202, Texas Government
Code (such amount to be the lesser of (i) 1/10th of 1% of the principal amount of the Notes or
(ii) $9,500).
(c) The obligation of the Purchaser identified in subsection (a) of this Section to
accept delivery of the Notes is subject to the Purchaser being furnished with the final, approving
opinion of Bracewell & Giuliani LLP, Bond Counsel for the Town, which opinion shall be dated
as of and delivered on the Closing Date.
Section.7.02. Control and Delivery of Notes.
(a) The Mayor is hereby authorized to have control of the Initial Note and all
necessary records and proceedings pertaining thereto pending investigation, examination and
approval of the Attorney General of the State of Texas, registration by the Comptroller of Public
Accounts of the State of Texas, and registration with, and initial exchange or transfer by, the
Paying Agent/Registrar.
(b) After registration by the Comptroller of Public Accounts, delivery of the Notes
shall be made to the Purchaser under and subject to the general supervision and direction of the
Mayor, against receipt by the Town of all amounts due to the Town under the terms of sale.
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#4659128.2
(c) In the event the Mayor or Town Secretary is absent or otherwise unable to execute
any document or take any action authorized herein, the Mayor Pro Tem and the Town Secretary,
respectively, shall be authorized to execute such documents and take such actions, and the
performance of such duties by the Mayor Pro Tem and the Town Secretary shall for the purposes
of this Ordinance have the same force and effect as if such duties were performed by the Mayor
and Town Secretary, respectively.
Town.
ARTICLE VIII
CREATION OF FUNDS AND ACCOUNTS;
DEPOSIT OF PROCEEDS; INVESTMENTS
Section 8.01. Creation of Funds.
(a) The Town hereby establishes the following special funds or accounts:
(i) The Town of Trophy Club, Texas, Tax Notes, Series 2014, Interest and
Sinking Fund; and
(ii) The Town of Trophy Club, Texas, Tax Notes, Series 2014, Project Fund.
(b) Each of said funds or accounts shall be maintained at an official depository of the
Section 8.02. Interest and Sinking Fund.
(a) The taxes levied under Section 2.01 shall be deposited to the credit of the Interest
and Sinking Fund at such times and in such amounts as necessary for the timely payment of the
principal of and interest on the Notes.
(b) If the amount of money in the Interest and Sinking Fund is at least equal to the
aggregate principal amount of the outstanding Notes plus the aggregate amount of interest due
and that will become due and payable on such Notes, no further deposits to that fund need be
made.
(c) Money on deposit in the Interest and Sinking Fund shall be used to pay the
principal of and interest on the Notes as, such become due and payable.
Section 8.03. Project Fund.
(a) Money on deposit in the Project Fund, including investment earnings thereof,
shall be used for the purposes specified in Section 3.01 of this Ordinance.
(b) All amounts remaining in the Project Fund after the accomplishment of the
purposes for which the Notes are hereby issued, including investment earnings of the Project
Fund, shall be deposited into the Interest and Sinking Fund.
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#4659128.2
Section 8.04. Security of Funds. All moneys on deposit in the funds referred to in this
Ordinance shall be secured in the manner and to the fullest extent required by the laws of the
State of Texas for the security of public funds, and moneys on deposit in such funds shall be
used only for the purposes permitted by this Ordinance.
Section 8.05. Deposit of Proceeds.
(a) The proceeds from the sale of the Notes shall be deposited to the Project Fund,
such moneys to be dedicated and used for the purposes specified in Section 3.01.
(b) All amounts remaining in the Project Fund after the accomplishment of the
purposes for which the Notes are hereby issued, including investment earnings of the Project
Fund, shall be deposited into the Interest and Sinking Fund.
Section 8.06. Investments.
(a) Money in the Interest and Sinking Fund, and the Acquisition and. Construction
Fund, at the option of the Town, may be invested in such securities or obligations as permitted
under applicable law.
(b) Any securities or obligations in which money is so invested shall be kept and held
in trust for the benefit of the Owners and shall be sold and the proceeds of sale shall be timely
applied to the making of all payments required to be made from the fund from which the
investment was made.
Section 8.07. Investment Income. Interest and income derived from investment of any
fund created by this Ordinance shall be credited to such fund.
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01. Payment of the Notes. While any of the Notes are outstanding and unpaid,
there shall be made available to the Paying Agent/Registrar, out of the Interest. and Sinking Fund,
money sufficient to pay the interest on and the principal of the Notes, as applicable, as will
accrue or mature on each applicable Interest Payment Date.
Section 9.02. Other Representations and Covenants.
(a) The Town will faithfully perform at all times any and all covenants, undertakings,
stipulations, and provisions contained in this Ordinance and in each Note; the Town will
promptly pay or cause to be paid the principal of and interest on each Note on the dates and at
the places and manner prescribed in such Note; and the Town will, at the times and in the
manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money
specified by this Ordinance.
(b) The Town is duly authorized under the laws of the State of Texas to issue the
Notes; all action on its part for the creation and issuance of the Notes has been duly and
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effectively taken; and the Notes in the hands of the Owners thereof are and will be valid and
enforceable obligations of the Town in accordance with their terms.
Section 9.03. Provisions Concerning_ Federal Income Tax Exclusion. The Town intends
that the interest on the Notes shall be excludable from gross income for purposes of federal
income taxation pursuant to sections 103 and 141 through 150 of the Internal Revenue Code of
1986, as amended (the "Code"), and the applicable regulations promulgated thereunder the
("Regulations"). The Town covenants and agrees not to take any action, or knowingly omit to
take any action within its control, that if taken or omitted, respectively, would cause the interest
on the Notes to be includable in the gross income, as defined in section 61 of the Code, of the
holders thereof for purposes of federal income taxation. In particular, the Town covenants and
agrees to comply with each requirement of Sections 9.03 through 9.11 of, this Article IX;
provided, however, that the Town shall not be required to comply with any particular
requirement of Sections 9.03 through 9.11 of this Article IX if the Town has received an opinion
of nationally recognized bond counsel ("Counsel's Opinion") that such noncompliance will not
adversely affect the exclusion from gross income for federal income tax purposes of interest on
the Notes or if the Town has received a Counsel's Opinion to the effect that compliance with
some other requirement set forth in Sections 9.03 through 9.11 of this Article IX will satisfy the
applicable requirements of the Code, in which case compliance with such other requirement
specified in such Counsel's Opinion shall constitute compliance with the corresponding
requirement specified in Sections 9.03 through 9.11 of this Article IX.
Section 9.04. No Private Use or Payment and No Private Loan Financing. The Town
shall certify, through an authorized officer, employee or agent, that, based upon all facts and
estimates known or reasonably expected to be in existence on the date the Notes are delivered,
the proceeds of the Notes will not be used in a manner that would cause the Notes to be "private
activity bonds" within the meaning of section 141 of the Code and the Regulations. The Town
covenants and agrees that it will make such use of the proceeds of the Notes, including interest or
other investment income derived from Note proceeds, regulate the use of property financed,
directly or indirectly, with such proceeds, and take such other and further action as may be
required so that the Notes will not be "private activity bonds" within the meaning of section 141
of the Code and the Regulations.
Section 9.05. No Federal Guaranty. The Town covenants and agrees not to take any
action, or knowingly omit to take any action within its control, that, if taken or omitted,
respectively, would cause the Notes to be "federally guaranteed" within the meaning of section
149(b) of the Code and the Regulations, except as permitted by section 149(b)(3) of the Code
and the Regulations.
Section 9.06. Notes are not Hedge Bonds. The Town covenants and agrees not to take
any action, or knowingly omit to take any action, and has not knowingly omitted and will not
knowingly omit to take any action, within its control, that, if taken or omitted, respectively,
would cause the Notes to be "hedge bonds" within the meaning of section 149(g) of the Code
and the Regulations.
Section 9.07. No -Arbitrage Covenant. The Town shall certify, through an authorized
officer, employee or agent, that, based upon all facts and estimates known or reasonably
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expected to be in existence on the date the Notes are delivered, the Town will reasonably expect
that the proceeds of the Notes will not be used in a manner that would cause the Notes to be
"arbitrage bonds" within the meaning of section 148(a) of the Code and the Regulations.
Moreover, the Town covenants and agrees that it will make such use of the proceeds of the Notes
including interest or other investment income derived from Note proceeds, regulate investments
of proceeds of the Notes and take such other and further action as may be required so that the
Notes will not be "arbitrage bonds" within the meaning of section 148(a) of the Code and the
Regulations.
.Section 9.08. Arbitrage Rebate. If the Town does not qualify for an exception to the
requirements of Section 148(f) of the Code, the Town will take all necessary steps to comply
with the requirement that certain amounts earned by the Town on the investment of the "gross
proceeds" of the Notes (within the meaning of section 148(f)(6)(B) of the Code), be rebated to
the federal government. Specifically, the Town will (i) maintain records regarding the
investment of the gross proceeds of the Notes as may be required to calculate the amount earned
on the investment of the gross proceeds of the Notes separately from records of amounts on
deposit in the funds and accounts of the Town allocable to other bond issue of the Town or
moneys which do not represent gross proceeds of any bonds of the Town, (ii) calculate at such
times as are required by the Regulations, the amount earned from the investment of the gross
proceeds of the Notes which is required to be rebated to the federal government, and (iii) pay,
not less often than every fifth anniversary date of the delivery of the Notes or on such other.dates
as may be permitted under the Regulations, all amounts required to be rebated to the federal
government. Further, the Town will not indirectly pay any amount otherwise payable to the
federal government pursuant to the foregoing requirements to any person other than the federal
government by entering into any investment arrangement with respect to the gross proceeds of
the Notes that might result in a reduction in the amount required to be paid to . the federal
government because such arrangement results in a smaller profit or a larger loss than would have
resulted if the arrangement had been at arm's length and had the yield on the issue not been
relevant to either party.
Section 9.09. Information Reporting. The Town covenants and agrees to file or cause to
be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar
month after the close of the calendar quarter in which the Notes are issued, an information
statement concerning the Notes, all under and in accordance with section 149(e) of the Code and
the Regulations.
Section 9.10. Continuing Obligation. Notwithstanding any other provision of this
Ordinance, the Town's obligations under the covenants and provisions of Sections 9.03 through
9.09 and Section 9.11 of this Article IX shall survive the defeasance and discharge of the Notes.
Section 9.11. Qualified Tax -Exempt Obligations. The Town hereby designates the
Notes as "qualified tax-exempt obligations" for purposes of section 265(b) of the Code. In
connection therewith, the Town represents (a) that the aggregate amount of tax-exempt
obligations issued by the Town during calendar year 2014, including the Notes, which have been
designated as "qualified tax-exempt obligations" under section 265(b)(3) of the Code does not
exceed $10,000,000, and (b) that the reasonably anticipated amount of its tax-exempt obligations
which will be issued by the Town during calendar year 2014, including the Notes, will not
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exceed $10,000,000. For purposes of this Section 9.11, the term "tax-exempt obligations" does
not include "private activity bonds" within the meaning of section 141 of the Code, other than
"qualified 501(c)(3) bonds" within the meaning of section 145 of the Code. In addition, for
purposes of this Section 9.11, the Town includes all governmental units which are aggregate with
the Town under section 265(b) of the Code.
ARTICLE X
DEFAULT AND REMEDIES
Section 10.01. Events of Default. Each of the following occurrences or events for the
purpose of this Ordinance is hereby declared to be an "Event of Default," to -wit:
(i) the failure to make payment of the principal of, redemption premium, if
any, or interest on any of the Notes when the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant,
agreement or obligation of the Town, the failure to perform which materially, adversely
affects the rights of the Owners, including but not limited to, their prospect or ability to
be repaid in accordance with this Ordinance, and the continuation thereof for a period of
60 days after notice of such default is given by any Owner to the Town.
Section 10.02. Remedies for Default.
(a) Upon the happening of any Event of Default, then and in every case any Owner or
an authorized representative thereof, including but not limited to, a trustee or trustees therefor,
may proceed against the Town for the purpose of protecting and enforcing the rights of the
Owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity
or at law, in any court of competent jurisdiction, for any relief permitted by law, including the
specific performance of any covenant or agreement contained herein, or thereby to enjoin any act
or thing that may be unlawful or in violation of any right of the Owners hereunder or any
combination of such remedies.
(b) It is provided that all such proceedings shall be instituted and maintained for the
equal benefit of all Owners of Notes then outstanding.
Section 10.03. Remedies Not Exclusive.
(a) No remedy herein conferred or reserved is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or under the Notes or now or hereafter
existing at law or in equity; provided, however, that notwithstanding any other provision of this
Ordinance, the right to accelerate the debt evidenced by the Notes shall not be available as a
remedy under this Ordinance.
(b) The exercise of any remedy herein conferred or reserved shall not be deemed a
waiver of any other available remedy.
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ARTICLE XI
DISCHARGE
Section 11.01. Discharize. The Town reserves the right to defease, discharge or refund
the Notes in any manner permitted by applicable law.
ARTICLE XII
EFFECTIVE IMMEDIATELY
Section 12.01. Effectiveness. This Ordinance shall become effective immediately upon
its adoption at this meeting pursuant to Section 1201.028, Texas Government Code.
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APPROVED this 26th day of August, 2014.
Mayor, Town of Trophy Club, Texas
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Town Attorney, Town of Trophy Club, Texas
Town of Trophy Club, Texas
Signature Page for Ordinance