ORD 2007-14TOWN OF TROPHY CLUB, TEXAS
ORDINANCE NO. 2007-14
AN ORDINANCE OF THE TOWN OF TROPHY CLUB, TEXAS
AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF TOWN OF
TROPHY CLUB, TEXAS GENERAL OBLIGATION BONDS, SERIES 2007,
IN THE PRINCIPAL AMOUNT OF $3,260,000, FOR THE PURPOSE OF
CONSTRUCTING AND IMPROVING THE TOWN'S STREETS; PROVIDING
FOR THE AMOUNT AND PURPOSE OF THE BONDS; 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 FOR THE ALLOCATION OF, AND LIMITATION ON,
EXPENDITURES FOR THE PROJECT; PROVIDING FOR THE
DISPOSITION OF PROJECT; PROVIDING FOR CONTINUING
DISCLOSURE; PROVIDING FOR SALE OF INITIAL BOND; PROVIDING
FOR INTEREST EARNINGS ON BOND PROCEEDS; PROVIDING FOR
PUBLIC NOTICE; PROVIDING A CUMULATIVE CLAUSE; PROVIDING A
SAVINGS CLAUSE; 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 general obligation bonds hereinafter authorized were lawfully and
favorably voted at an election duly held in said Town on July 15, 2000; and
WHEREAS, out of the $6,260,000 of bonds voted at said election, $3,000,000 has
been authorized, issued or delivered for the purpose of constructing and improving the
City's streets, being designated as the Town's General Obligation Bonds, Series 2002;
and
WHEREAS, the Town Council of said Town deems it necessary and advisable to
authorize, issue and deliver the final installment of the voted bonds; and
WHEREAS, the bonds hereinafter authorized and designated are to be issued and
delivered pursuant to Chapter 1331, Government Code; 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 Government
Code.
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, TEXAS (the "Issuer") are hereby authorized to be issued
and delivered in the aggregate principal amount of $3,260,000 for the purpose of
constructing and improving the Town's streets.
Section 2. DESIGNATION OFTHE BONDS. Each bond issued pursuantto this
Ordinance shall be designated: "TOWN OF TROPHY CLUB, TEXAS GENERAL
OBLIGATION BOND, SERIES 2007", and initiallythere shall be issued, sold, and delivered
hereunder a single fully registered bond, without interest coupons, payable in annual
installments 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 hereto, 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 May 1, 2007, in the denomination
and aggregate principal amount of $3,260,000, numbered R-1, payable in annual
installments of principal to the initial registered owner thereof, to -wit: A. G. Edwards &Sons,
Inc., 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, or to the respective
dates of prepayment or redemption, 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:
FORM OF INITIAL BOND
NO. R-1 $3,260,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
TOWN OF TROPHY CLUB, TEXAS
GENERAL OBLIGATION BOND, SERIES 2007
The TOWN OF TROPHY CLUB, in DENTON COUNTY (the "Issuer"), being a
political subdivision of the State of Texas, hereby promises to pay to
A. G. EDWARDS & SONS, INC.
orto 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
THREE MILLION TWO HUNDRED SIXTY THOUSAND DOLLARS
in annual installments of principal due and payable on September 1 in each of the years,
and in the respective principal amounts, as set forth in the following schedule:
YEARS
AMOUNTS
YEARS
AMOUNTS
2008
$ 60,000
2018
$165,000
2009
110,000
2019
170,000
2010
115,000
2020
180,000
2011
120,000
2021
185,000
2012
125,000
2022
195,000
2013
130,000
2023
205,000
2014
135,000
2024
215,000
2015
145,000
2025
220,000
2016
150,000
2026
235,000
2017 155,000 2027 245,000
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:
0
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and
validly voted, 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 thatthe 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 May 1, 2007.
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 6. 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 THE BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION,
DALLAS, TEXAS, (the "Paying Agent/Registrar") books or records of the registration and
transfer of the Bonds (the "Registration Books"), and the Issuer hereby appoints the Paying
Agent/Registrar as its registrar and transfer agentto 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
registration and cancellation, together with proper written instruments of assignment, 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 or
unredeemed principal balance thereof, may 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 be 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 atthe 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 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 any Bond or any
portion thereof (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 30 days prior to its redemption 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 sum 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 from 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
10
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 or unredeemed
principal balance or principal amount thereof, may, upon surrender of such Bond at the
principal corporate trust office of the Paying Agent/Registrar, togetherwith 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 prescribed in 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 borne by such installment
of principal or portion thereof for which it is being exchanged. If a portion of any Bond
(other than the Initial Bond) shall be redeemed prior to its scheduled maturity as provided
herein, a substitute Bond or Bonds having the same maturity date, bearing interest at the
same rate, in the denomination or denominations of any integral multiple of $5,000 at the
request of the registered owner, and in aggregate principal amount equal to the
unredeemed portion thereof, will be issued to the registered owner upon surrender thereof
for cancellation. 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 permitted 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
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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.
Dated
Paying Agent/Registrar
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
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or any portion thereof (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 portion thereof called for
redemption prior to maturity, within 45 days prior to its redemption 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 redeemed prior to their scheduled maturities, (iii)
may be transferred and assigned, (iv) may be converted and exchanged for other Bonds,
(v) shall have the characteristics, (vi) 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) Payment 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, trustcompany, 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 under this
Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying
Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy
thereof), along with all other pertinent books and records relating to the 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.
13
(h) Book -Entry Only System. 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
(f) 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 forthe 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, premium, 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 Issuerto 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 effectthat DTC has determined to substitute
a new nominee in place of Cede & Co., and subjectto 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 Depository' Transfers Outside Book -Entry Only System. In
the event that the Issuer orthe 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
14
they be able 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 nominee, or in whatever name or names Bondholders transferring or
exchanging Bonds shall designate, in accordance with the provisions of this Ordinance.
0) 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 nominee
of DTC, all payments with respectto principal of, premium, if any, and interest on, oras 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 form of all Bonds issued in
conversion and exchange or replacement of any other Bond or portion thereof, including
the form 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
permitted or required by this Ordinance.
NO.
FORM OF SUBSTITUTE BOND
PRINCIPAL AMOUNT
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
TOWN OF TROPHY CLUB, TEXAS
GENERAL OBLIGATION BOND, SERIES 2007
INTEREST RATE MATURITY DATE DATE OF ORIGINAL CUSIP NO.
ISSUE
May 1, 2007
ON THE MATURITY DATE specified above the TOWN OF TROPHY CLUB, in
DENTON COUNTY (the "Issuer"), being a political subdivision of the State of Texas,
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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 May 1, 2007 to the maturity date specified above, or the
date of redemption prior to maturity, at the interest rate per annum specified above; with
interest being payable on March 1, 2008, and semiannually thereafter on each September
1 and March 1, except that if the date of authentication of this Bond is laterthan February
15, 2008, 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 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 or upon the date fixed for its redemption prior to maturity, at the principal
corporate trust office of THE BANK OF NEW YORK TRUST COMPANY, NATIONAL
ASSOCIATION, DALLAS, TEXAS, which 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 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 the risk
and expense of, the registered owner. Any accrued interest due upon the redemption of
this Bond prior to maturity as provided herein shall be paid to the registered owner upon
presentation and surrender of this Bond for redemption and payment at the principal
corporate trust office of the Paying Agent/Registrar. The Issuer covenants with the
registered owner of this Bond that on or before each principal payment date, interest
payment date, and accrued 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.
I F THE DATE for the payment of the principal of or interest on this Bond shall be a
16
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, 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 is one of an issue of Bonds initially dated May 1, 2007, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
$3,260,000, for the purpose of constructing and improving the Town's streets.
ON SEPTEMBER 1, 2017, 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 the maturity or maturities and the amountthat 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 redemption of Bonds or portions
thereof prior to maturity a written notice of such redemption shall be sent by the Paying
Agent/Registrar by United States mail, first class postage prepaid, not less than 30 days
prior to the date fixed for any such redemption, to the registered owner of each Bond to be
redeemed at its address as it appeared on the 45th day prior to such redemption date;
provided, however, that the failure to send, mail, or receive such notice, or any defect
therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of
the proceedings for the redemption of any Bond, and it is hereby specifically provided that
the mailing of such notice as required above shall be the only notice actually required in
connection with or as a prerequisite to the redemption of any Bonds or portions thereof. By
the date fixed for any such redemption due provision shall be made with the Paying
Agent/Registrar for the payment of the required redemption price for the Bonds or portions
thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for
redemption. If such written notice of redemption is published and if due provision for such
payment is made, all as provided above, the Bonds or portions thereof which are to be so
redeemed thereby automatically shall be treated as redeemed prior to their scheduled
maturities, and they shall not bear interest after the date fixed for redemption, and they
shall not be regarded as being outstanding except for the right of the registered owner to
receive the redemption price plus accrued interest from the Paying Agent/Registrar out of
the funds provided for such payment. If a portion of any Bond shall be redeemed a
substitute Bond or Bonds having the same maturity date, bearing interest atthe same rate,
in any denomination or denominations in any integral multiple of $5,000, at the written
request of the registered owner, and in aggregate principal amount equal to the
unredeemed portion thereof, will be issued to the registered owner upon the surrender
thereof for cancellation, at the expense of the Issuer, all as provided in the Bond
17
Ordinance.
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 terms 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 form 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 names 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 forthis 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 making 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/Registrarfor 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
W-1
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 (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 portion thereof called
for redemption prior to maturity, within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed bythe 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 voted, 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 thatthe 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 each registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has 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)
19
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 The Bank of New York Trust Company
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 NOTICE: This signature must correspond with the
a member of the New York Stock Exchange or a name or the Registered Owner appearing on the
commercial bank or trust company. face of this Bond in every particular without
alteration or enlargement or any change
whatsoever.
20
Section 8. TAX LEVY. 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 apartfrom 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 interest on the Bonds as
such interest comes due, and to provide and maintain a sinking fund adequate 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). Said taxshall be based on the
latest approved tax rolls of the Issuer, with full allowance being made fortax delinquencies
and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied,
and is hereby ordered to be levied, against all taxable property in the Issuer for each year
while any of the Bonds or interest thereon are outstanding and unpaid; and said tax shall
be assessed and collected each such year and deposited to the credit of the aforesaid
Interest and Sinking Fund. Said ad valorem taxes sufficient to provide forthe payment of
the interest on and principal of the Bonds, as such interest comes due and such principal
matures, are hereby pledged for such payment, within the limit prescribed by law.
Article 1208, Government Code, applies to the issuance of the Bonds and the
pledge of the taxes granted by the Issuer under this Section, and is therefore valid,
effective, and perfected. Should Texas law be amended at any time while the Bonds are
outstanding and unpaid, the result of such amendment being that the pledge of the taxes
granted by the Issuer under this Section is to be subject to the filing requirements of
Chapter 9, Business & Commerce Code, in order to preserve to the registered owners of
the Bonds a security interest in said pledge, the Issuer agrees to take such measures as it
determines are reasonable and necessary under Texas law to comply with the applicable
provisions of Chapter 9, Business & Commerce Code and enable a filing of a security
interest in said pledge to occur.
Section 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 ofthe principal of such Bond, plus interestthereon 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 times as will insure the availability,
without reinvestment, of sufficient money to provide for such payment, and when proper
21
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 interestthereon shall no longer be secured by, payablefrom, orentitled
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. Notwithstanding any other provision of this Ordinance to the
contrary, it is hereby provided that any determination not to redeem Defeased Bonds that is
made in conjunction with the payment arrangements specified in subsection 9(a)(i) or (ii)
shall not be irrevocable, provided that: (1) in the proceedings providing for such payment
arrangements, the Issuer expressly reserves the right to call the Defeased Bonds for
redemption; (2) gives notice of the reservation of that right to the owners of the Defeased
Bonds immediately following the making of the payment arrangements, and (3) directs that
notice of the reservation be included in any redemption notices that it authorizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written
direction of the Issuer 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 AgenURegistrar 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 permitting the investment or
reinvestment of such moneys in Defeasance Securities or the substitution of other
Defeasance Securities upon the satisfaction of the requirements specified in subsection
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 term "Defeasance Securities" means (i) direct, noncallable obligations of
the United States of America, including obligations that are unconditionally guaranteed by
the United States of America, (ii) noncallable obligations of an agency or instrumentality of
the United States of America, including obligations that are unconditionally guaranteed or
insured by the agency or instrumentality and that, on the date of the purchase thereof are
rated as to investment quality by a nationally recognized investment rating firm not less
than AAA or its equivalent, and (iii) noncallable obligations of a state or an agency or a
county, municipality, or other political subdivision of a state that have been refunded and
that, on the date the governing body of the Issuer adopts or approves the proceedings
authorizing the financial arrangements are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent.
(d) Until 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.
22
(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. In 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 ownerthereof 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 furnish to the Issuer and to the
Paying Agent/Registrar such security or indemnity as may be required by them to save
each of them harmless from any loss or damage with respect thereto. Also, in every case
of loss, theft, or destruction of a 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 surrenderto the Paying Agent/Registrarfor 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 an 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 factthat
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) Authority for Issuing Replacement Bonds. In accordance with Chapter 1201,
Government Code, this Section 10 of this Ordinance shall constitute authority for the
issuance of any such replacement bond without necessity of further action by the
governing body of the Issuer or any other body or person, and the duty of the replacement
of such bonds 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
23
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 numbers
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. (a) Covenants. The Issuer
covenants to take any action necessary to assure, or refrain from any action that would
adversely affect, the treatment of the Bonds as obligations described in section 103 of the
Code, the interest on which is not includable in the "gross income" of the Bonds holder for
purposes of federal income taxation. In furtherance thereof, the Issuer covenants as
follows:
(1) to take any action to assure that no more than 10 percent of the
proceeds of the Bonds (less amounts deposited to a reserve fund, if any) are used
for any "private business use," as defined in section 141(b)(6) of the Code or, if
more than 10 percent of the proceeds or the projects financed therewith are so
used, such amounts, whether or not received by the Issuer, with respect to such
private business use, do not, under the terms of this Ordinance or any underlying
arrangement, directly or indirectly, secure or provide for the payment of more than
10 percent of the debt service on the Bonds, in contravention of section 141(b)(2) of
the Code;
(2) to take any action to assure that in the eventthatthe "private business
use" described in subsection (1) 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" that is "related" and not "disproportionate," within the meaning of section
141(b)(3) of the Code, to the governmental use;
(3) to take any action to assure that no amount that is greater than the
lesser of $5,000,000, or 5 percent of the proceeds of the 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
24
141(c) of the Code;
(4) to refrain from taking any action that would otherwise result in the
Bonds being treated as "private activity bonds" within the meaning of section 141(b)
of the Code;
(5) to refrain from taking any action that would result in the Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly
or indirectly, to acquire or to replace funds that were used, directly or indirectly, to
acquire investment property (as defined in section 148(b)(2) of the Code) that
produces a materially higher yield over the term of the Bonds, otherthan investment
property acquired with —
(A) proceeds of the Bonds invested for a reasonable temporary
period of 3 years or less or, in the case of a refunding bond, for a period of
30 days or less until such proceeds are needed forthe purpose for which the
Bonds are issued,
(B) amounts invested in a bona fide debt service fund, within the
meaning of section 1.148-1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or
replacement fund to the extent such amounts do not exceed 10 percent of
the proceeds of the Bonds;
(7) 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
(8) to pay to the United States of America at least once during each five-
year period (beginning on the date of delivery of the 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 the Bonds have been paid in full, 100 percent of the amount then
required to be paid as a result of Excess Earnings under section 148(f) of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a
"Rebate Fund" is hereby established by the Issuer for the sole benefit of the United States
of America, and such Fund shall not be subject to the claim of any other person, including
without limitation the Bondholders. The Rebate Fund is established for the additional
purpose of compliance with section 148 of the Code.
25
(c) Use of Proceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), the
Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in
the Treasury Regulations and, in the case of refunding Bonds, transferred proceeds (if any)
and proceeds of the refunded Bonds expended priorto 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 that modify or expand provisions of the Code, as applicable to the
Bonds, the Issuerwill not be required to comply with any covenant contained herein to the
extent that such failure to comply, in the opinion of nationally recognized bond counsel, will
not adversely affect the exemption from federal income taxation of interest on the Bonds
under section 103 of the Code. In the event that regulations or rulings are hereafter
promulgated that impose additional requirements applicable to the Bonds, the Issuer
agrees to comply with the additional requirements to the extent necessary, in the opinion of
nationally recognized bond counsel, to preserve the exemption from federal income
taxation of interest on the Bonds under section 103 of the Code. In furtherance of such
intention, the Issuer hereby authorizes and directs the Chairman to execute any
documents, certificates or reports required by the Code and to make such elections, on
behalf of the Issuer, that may be permitted by the Code as are consistent with the purpose
for the issuance of the Bonds.
Section 13. ALLOCATION OF AND LIMITATION ON EXPENDITURES FOR THE
PROJECT. The Issuer covenants to account for the expenditure of sale proceeds and
investment earnings to be used for the purposes described in Section 1 of this Ordinance
(the "Project") on its books and records by allocating proceeds to expenditures within 16
months of the later of the date that (1) the expenditure is made, or (2) the Project is
completed. The foregoing notwithstanding, the Issuer shall not expend sale proceeds or
investment earnings thereon more than 60 days after the earlier of (1) the fifth anniversary
of the delivery of the Bonds, or (2) the date the Bonds are retired, unless the Issuer obtains
an opinion of nationally -recognized bond counsel that such expenditure will not adversely
affect the tax-exempt status of the Bonds. 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 affectthe excludability for federal income tax purposesfrom gross income of
the interest.
Section 14. DISPOSITION OF PROJECT. The Issuer covenants that the property
constituting the project will not be sold or otherwise disposed in a transaction resulting in
the receipt by the Issuer of cash or other compensation, unless the Issuer obtains an
opinion of nationally -recognized bond counsel that such sale or other disposition will not
adversely affect the tax-exempt status of the 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 from gross income of the interest.
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Section 15. CONTINUING DISCLOSURE. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning
of the Rule from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized
department, officer, or agency thereof as, and determined by the SEC or its staff to
be, a state information depository within the meaning of the Rule from time to time.
(b) Annual Reports. (i) The Issuer shall provide annually to each NRMSIR and any
SID, within six months after the end of each fiscal year ending in or after 2005, financial
information and operating data with respect to the Issuer of the general type included in the
final Official Statement authorized by Section 11 of this Order, being the information
described in the Pricing Certificate. Any financial statements so to be provided shall be (1)
prepared in accordance with the accounting principles described in the financial statements
of the Issuer appended to the Official Statement, or such other accounting principles as the
Issuer may be required to employ from time to time pursuant to state law or regulation, and
(2) 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 completed within such period, then the Issuer shall provide
unaudited financial statements within such period, and audited financial statements forthe
applicable fiscal year to each NRMSIR and any SID, when and if the audit report on such
statements become available.
(ii) If the Issuer changes its fiscal year, it will notify each NRMSIR and 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 information and operating data to be provided
pursuant to this Section may be set forth in full in one or more documents or may be
included by specific 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
each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The Issuer shall notify any SID and either each
NRMSIR 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:
27
1. Principal and interest payment delinquencies;
2. Non-payment 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;
6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
7. Modifications to rights of holders of the Bonds;
8. Bond calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds;
and
11. Rating changes.
The Issuer shall notify any SID and either each NRMSIR orthe MSRB, in a timely manner,
of any failure by the Issuer to provide financial information or operating data in accordance
with subsection (b) of this Section by the time required by such subsection.
(d) 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 Order or applicable law that causes the Bonds no longer to
be outstanding.
(ii) The provisions of this Section are for the sole benefit of the registered owners
and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall
give any benefit or any legal 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 pursuantto 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
REGISTERED OWNER 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 BYTHE 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
K]
Section shall constitute a breach or default under the Order for purposes of any other
provision of this Order. Nothing in this Section is intended or shall actto 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 underwriterto 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 registered
owners of a majority in aggregate principal amount (or any greater amount required by any
other provision of this Order that authorizes such an amendment) of the outstanding Bonds
consent to such amendment or (b) a person that is unaffiliated with the Issuer (such as
nationally recognized bond counsel) determined that such amendment will not materially
impair the interest of the registered owners and beneficial owners of the Bonds. If the
Issuer so amends the provisions of this Section, it shall include with any amended financial
information or operating data next provided in accordance with subsection (b) 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
finaljurisdiction 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 eselling Bonds in the primary offering of the Bonds.
Section 16. SALE OF INITIAL BOND. The Initial Bond is hereby sold and shall be
delivered to A. G. EDWARDS & SONS, INC. for cash for the par value thereof and accrued
interest thereon to date of delivery (accrued interest to be deposited into the Interest and
Sinking Fund), plus a premium of $489.00 (premium to be deposited into the Interest and
Sinking Fund). It is hereby officially found, determined, and declared that the Initial Bond
has been sold at public sale to the bidder offering the lowest interest cost, after receiving
sealed bids pursuant to an Official Notice of Sale and Bidding Instructions and Preliminary
Official Statement dated March 26, 2007, prepared and distributed in connection with the
sale of the Initial Bond. Said Official Notice of Sale and Bidding Instructions and
Preliminary Official Statement, and any addenda, supplement, or amendment thereto have
been and are hereby approved by the governing body of the Issuer, and their use in the
offer and sale of the Bonds is hereby approved and deemed final. It is further officially
found, determined, and declared thatthe statements and representations contained in said
Official Notice of Sale and Preliminary Official Statement are true and correct in all material
respects, to the best knowledge and belief of the governing body of the Issuer.
Section 17. INTEREST EARNINGS ON BONDS PROCEEDS. The earnings
derived from the investment of proceeds from the sale of the Bonds shall be used along
with other Bond 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
29
shall be deposited in the Interest and Sinking Fund. It is further provided, however, that
interest earnings on 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 18. INSURANCE. The Issuer approves the insurance of the Bonds by
Financial Security Assurance Inc. and the payment of such premium and covenant to
comply with all of the terms of the insurance commitment, a copy of which is attached
hereto as Exhibit B and is hereby adopted by this Ordinance.
Section 19. 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 20. CUMULATIVE. This ordinance shall be cumulative of all provisions of
the Ordinances of the Issuer, 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 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 21. SAVINGS. All rights and remedies of the Issuer, 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 may be prosecuted until final disposition by the courts.
Section 22. 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 23. PUBLICATION. The Town Secretary of the Issuer 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 24. ENGROSSMENT AND ENROLLMENT. The Town Secretary of the
Issuer 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 Issuer.
30
Section 25. ADOPTION OF ORDINANCE. This Ordinance was adopted on one reading
to become effective immediately in accordance with Section 1201.028, Texas Government Code.
PASSED AND APPROVED by the Town Council of the Town of Trophy Club,
Texas, this 2nd day of April, 2007.
Mayor, Town of Trophy Club, Texas
ATTEST:
Town Secre ary, Town of Trophy Club, Texas
[SEAL]
APPROVED AS TO FORM:
Ci(/ �CJ�3'C�
4Bond e Attorney, Town of Trophy Club, Texas
31
.Zi
EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 15 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 Official Statement and Tables referred to) below:
Tables 1, 11, 12 and 13 ofAppendix A
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.
INSURANCE COMMITMENT