HomeMy WebLinkAboutOrdinance No. 2010-1866
ORDINANCE NO. 'L G I Cy
AUTHORIZING THE ISSUANCE AND SALE OF CITY OF THE COLONY, TEXAS
COMBINATION TAX AND LIMITED SURPLUS REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2010-A; PROVIDING FOR THE PAYMENT OF SAID CERTIFICATES; APPROVING AN
OFFICIAL STATEMENT; AND ENACTING OTHER PROVISIONS RELATING TO THE
SUBJECT
THE STATE OF TEXAS §
COUNTY OF DENTON §
CITY OF THE COLONY §
WHEREAS, the City Council of the City of The Colony, Texas, deems it advisable to issue
Certificates of Obligation in the amount of $2,920,000 for the purposes hereinafter set forth; and
WHEREAS, the Certificates of Obligation hereinafter authorized and designated are to be issued and
delivered for cash pursuant to Subchapter C of Chapter 271, Local Government Code and Subchapter B,
Chapter 1502, Government Code; and
WHEREAS, the City Council has heretofore passed a resolution authorizing and directing the City
Secretary to give notice of intention to issue Certificates of Obligation, and said notice has been duly published
in a newspaper of general circulation in said City, said newspaper being a "newspaper" as defined in
§2051.044, Texas Government Code; and
WHEREAS, the City received no petition from the qualified electors of the City protesting the issuance
of such Certificates of Obligation; and
WHEREAS, it is officially found, determined, and declared that the meeting at which this Ordinance
has been adopted was open to the public and public notice of the time, place and subject matter of the public
business to be considered and acted upon at said meeting, including this Ordinance, was given, all as required
by the applicable provisions of Tex. Gov't Code Ann. ch. 551; Now, Therefore
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS:
Section 1. RECITALS, AMOUNT AND PURPOSE OF THE CERTIFICATES. The recitals set
forth in the preamble hereof are incorporated herein and shall have the same force and effect as if set forth in
this Section. The certificates of the City of The Colony, Texas (the "Issuer") are hereby authorized to be issued
and delivered in the aggregate principal amount of $2,920,000 for paying all or a portion of the Issuer's
contractual obligations to be incurred in connection with: (i) constructing and equipping a public services
building, including related parking and landscaping; (ii) acquiring vehicles and equipment for the fire and police
departments; (iii) constructing, installing, acquiring and equipping additions, extensions and improvements to
the City's waterworks and sanitary sewer system; and (iv) legal, fiscal and engineering fees in connection with
such projects (collectively, the "Project").
Section 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND MATURITIES AND
INTEREST RATES OF CERTIFICATES. Each certificate issued pursuant to this Ordinance shall be
designated: "CITY OF THE COLONY, TEXAS, COMBINATION TAX AND LIMITED SURPLUS
REVENUE CERTIFICATE OF OBLIGATION, SERIES 2010-A," and initially there shall be issued, sold,
and delivered hereunder one fully registered certificate, without interest coupons, dated September 15, 2010,
in the principal amount stated above and in the denominations hereinafter stated, numbered T-1, with
certificates issued in replacement thereof being in the denominations and principal amounts hereinafter stated
and numbered consecutively from R-1 upward, payable to the respective Registered Owners thereof (with the
initial certificate being made payable to the initial purchaser as described in Section 10 hereof), or to the
registered assignee or assignees of said certificates or any portion or portions thereof (in each case, the
"Registered Owner"), and said certificates shall mature and be payable serially on August 15 in each of the
years and in the principal amounts, respectively, and shall bear interest from the dates set forth in the FORM
OF CERTIFICATE set forth in Section 4 of this Ordinance to their respective dates of maturity or redemption
prior to maturity at the rates per annum, as set forth in the following schedule:
Principal Interest Principal Interest
Years Amount Rates Years Amount Rates
2011 $155,000 2.000% 2021 $125,000 4.000%
2012 145,000 2.000% 2022 130,000 4.000%
2013 150,000 2.000% - - - - - - - - -
2014 155,000 3.000% 2024 270,000 4.000%
2015 155,000 3.000% - - -
2016 130,000 3.000% 2026 295,000 4.000%
2017 130,000 4.000% - - - - - - - - -
2018 135,000 4.000% 2028 315,000 4.000%
2019 140,000 4.000% - - - - - -
2020 150,000 4.000% 2030 340,000 4.000%
The term "Certificates" as used in this Ordinance shall mean and include collectively the certificates initially
issued and delivered pursuant to this Ordinance and all substitute certificates exchanged therefor, as well as
all other substitute certificates and replacement certificates issued pursuant hereto, and the term "Certificate"
shall mean any of the Certificates.
Section 3. CHARACTERISTICS OF THE CERTIFICATES.
(a) Registration, Transfer, Conversion and Exchange; Authentication. The Issuer shall keep or cause
to be kept at the principal corporate trust office of Regions Bank, Dallas, Texas, (the "Paying
Agent/Registrar"), books or records for the registration of the transfer, conversion and exchange of the
Certificates (the "Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its
registrar and transfer agent to keep such books or records and make such registrations of transfers, conversions
and exchanges under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe; and
the Paying Agent/Registrar shall make such registrations, transfers, conversions and exchanges as herein
provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the
registered owner of each Certificate to which payments with respect to the Certificates shall be mailed, as
herein provided; but it shall be the duty of each registered owner to notify the Paying Agent/Registrar in writing
of the address to which payments shall be mailed, and such interest payments shall not be mailed unless such
notice has been given. The Issuer shall have the right to inspect the Registration Books during regular business
hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration
Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity.
The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such
registration, transfer, conversion, exchange and delivery of a substitute Certificate or Certificates. Registration
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of assignments, transfers, conversions and exchanges of Certificates shall be made in the manner provided and
with the effect stated in the FORM OF CERTIFICATE set forth in this Ordinance. Each substitute Certificate
shall bear a letter and/or number to distinguish it from each other Certificate.
Except as provided in Section 3(c) of this Ordinance, an authorized representative of the Paying
Agent/Registrar shall, before the delivery of any such Certificate, date and manually sign said Certificate, and
no such Certificate shall be deemed to be issued or outstanding unless such Certificate is so executed. The
Paying Agent/Registrar promptly shall cancel all paid Certificates and Certificates surrendered for conversion
and exchange. 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 of
any Certificate or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and
delivery of the substitute Certificates in the manner prescribed herein, and said Certificates shall be printed or
typed on paper of customary weight and strength. Pursuant to Chapter 1201, Government Code, as amended,
the duty of conversion and exchange of Certificates as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution of said Certificate, the converted and exchanged Certificate shall be
valid, incontestable, and enforceable in the same manner and with the same effect as the Certificates that
initially were issued and delivered pursuant to this Ordinance, approved by the Attorney General and registered
by the Comptroller of Public Accounts.
(b) Payment of Certificates 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 Certificates, 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 Certificates, and of all conversions and exchanges
of Certificates, and all replacements of Certificates, as provided in this Ordinance. However, in the event of
a nonpayment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such
interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when
funds for the payment of such interest have been received from the Issuer. Notice of the past due interest shall
be sent at least 5 business days prior to the Special Record Date by United States mail, first-class postage
prepaid, to the address of each registered owner appearing on the Registration Books at the close of business
on the last business day next preceding the date of mailing of such notice.
(c) In General. The Certificates (i) shall be issued in fully registered form, without interest coupons,
with the principal of and interest on such Certificates to be payable only to the registered owners thereof, (ii)
may be redeemed prior to their scheduled maturities (notice of which shall be given to the Paying
Agent/Registrar by the Issuer at least 50 days prior to any such redemption date), (iii) may be converted and
exchanged for other Certificates, (iv) may be transferred and assigned, (v) shall have the characteristics, (vi)
shall be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Certificates shall
be payable, and (viii) shall be administered and the Paying Agent/Registrar and the Issuer shall have certain
duties and responsibilities with respect to the Certificates, all as provided, and in the manner and to the effect
as required or indicated, in the FORM OF CERTIFICATE set forth in this Ordinance. The Certificate initially
issued and delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated by the
Paying Agent/Registrar, but on each substitute Certificate issued in conversion of and exchange for any
Certificate or Certificates issued under this Ordinance the Paying Agent/Registrar shall execute the PAYING
AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF
CERTIFICATE.
(d) Paying Agent/Registrar for the Certificates. The Issuer covenants with the registered owners of
the Certificates that at all times while the Certificates are outstanding the Issuer will provide a competent and
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legally qualified bank, trust company, financial institution, or other entity to act as and perform the services
of Paying Agent/Registrar for the Certificates 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 Certificates, 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 Certificates, 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.
(e) Authentication. Except as provided below, no Certificate shall be valid or obligatory for any
purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the
Certificate of Paying Agent/Registrar substantially in the form provided 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
Certificates. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Certificate
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 Certificate has been
duly approved by the Attorney General of the State of Texas and that it is a valid and binding obligation of the
Issuer, and has been registered by the Comptroller.
(f) Book-Entry Only System. The Certificates issued in exchange for the Certificate initially issued
to the initial purchaser specified herein shall be initially issued in the form of a separate single fully registered
Certificate for each of the maturities thereof. Upon initial issuance, the ownership of each such Certificate shall
be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York
("DTC"), and except as provided in subsection (f) hereof, all of the outstanding Certificates shall be registered
in the name of Cede & Co., as nominee of DTC.
With respect to Certificates 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 securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was
created ("DTC Participant") to hold securities to facilitate the clearance and settlement of securities
transactions among DTC Participants or to any person on behalf of whom such a DTC Participant holds an
interest in the Certificates. Without limiting the immediately preceding sentence, the 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 Certificates, (ii) the
delivery to any DTC Participant or any other person, other than a Registered Owner of Certificates, as shown
on the Registration Books, of any notice with respect to the Certificates, or (iii) the payment to any DTC
Participant or any other person, other than a Registered Owner of Certificates, as shown in the Registration
Books of any amount with respect to principal of or interest on the Certificates. Notwithstanding any other
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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 Certificate is registered in the Registration Books as the absolute
owner of such Certificate for the purpose of payment of principal and interest with respect to such Certificate,
for the purpose of registering transfers with respect to such Certificate, and for all other purposes whatsoever.
The Paying Agent/Registrar shall pay all principal of and interest on the Certificates only to or upon the order
of the Registered 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 and interest on the Certificates to the
extent of the sum or sums so paid. No person other than a Registered Owner, as shown in the Registration
Books, shall receive a Certificate evidencing the obligation of the Issuer to make payments of principal and
interest pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to
the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the
provisions in this Ordinance with respect to interest checks being mailed to the Registered Owner at the close
of business on the Record date, the words "Cede & Co." in this Ordinance shall refer to such new nominee of
DTC.
The previous execution and delivery of the Blanket Letter of Representations with respect to
obligations of the Issuer is hereby ratified and confirmed; and the provisions thereof shall be fully applicable
to the Certificates.
(g) Successor Securities Depository; Transfers Outside Book-Entry Only System. In the event that
the Issuer determines that DTC is incapable of discharging its responsibilities described herein and in the
representations letter of the Issuer to DTC or that it is in the best interest of the beneficial owners of the
Certificates that they be able to obtain certificated Certificates, the Issuer shall (i) appoint a successor securities
depository, qualified to act as such under Section 17A of the Securities and Exchange Act of 1934, as
amended, notify DTC and DTC Participants of the appointment of such successor securities depository and
transfer one or more separate Certificates to such successor securities depository or (ii) notify DTC and DTC
Participants of the availability through DTC of Certificates and transfer one or more separate certificated
Certificates to DTC Participants having Certificates credited to their DTC accounts. In such event, the
Certificates shall no longer be restricted to being registered in the 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 Registered Owners transferring or exchanging Certificates shall
designate, in accordance with the provisions of this Ordinance.
(h) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary,
so long as any Certificate is registered in the name of Cede & Co., as nominee of DTC, all payments with
respect to principal of and interest on such Certificate and all notices with respect to such Certificate shall be
made and given, respectively, in the manner provided in the representations letter of the Issuer to DTC.
(i) Cancellation of Initial Certificate. On the closing date, one initial Certificate representing the entire
principal amount of the Certificates, payable in stated installments to the purchaser designated in Section 10
or its designee, executed by manual or facsimile signature of the Mayor and City Secretary of the Issuer,
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 such purchaser or its designee. Upon payment for the
initial Certificate, the Paying Agent/Registrar shall cancel the initial Certificate and deliver to the Depository
Trust Company on behalf of such purchaser one registered definitive Certificate for each year of maturity of
the Certificates, in the aggregate principal amount of all of the Certificates for such maturity.
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Section 4. FORM OF CERTIFICATES. The form of the Certificates, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Registration Certificate
of the Comptroller of Public Accounts of the State of Texas to be attached to the Certificates initially issued
and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows, with such appropriate
variations, omissions or insertions as are permitted or required by this Ordinance.
(a) Form of Certificate.
NO. R- UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
CITY OF THE COLONY, TEXAS
COMBINATION TAX AND LIMITED SURPLUS REVENUE CERTIFICATE OF OBLIGATION
SERIES 2010-A
Interest Rate Dated Date Maturity Date CUSIP No.
September 15, 2010 August 15,
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
ON THE MATURITY DATE specified above, the City of The Colony, in Denton County, Texas (the
"Issuer"), being a political subdivision and municipal corporation of the State of Texas, hereby promises to pay
to the Registered Owner specified above, or registered assigns (hereinafter called the "Registered Owner"), on
the Maturity Date specified above, the Principal Amount specified above. The Issuer promises to pay interest
on the unpaid principal amount hereof (calculated on the basis of a 360-day year of twelve 30-day months)
from September 15, 2010 at the Interest Rate per annum specified above. Interest is payable on February 15,
2011, and semiannually on each August 15 and February 15 thereafter to the Maturity Date specified above,
or the date of redemption prior to maturity; except, if this Certificate is required to be authenticated and the
date of its authentication is later than the first Record Date (hereinafter defined), 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 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; provided, however,
that if on the date of authentication hereof the interest on the Certificate or Certificates, if any, for which this
Certificate is being exchanged is due but has not been paid, then this Certificate shall bear interest from the date
to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Certificate shall be
paid to the registered owner hereof upon presentation and surrender of this Certificate at maturity, or upon the
date fixed for its redemption prior to maturity, at the principal corporate trust office of Regions Bank, Dallas,
Texas, which is the "Paying Agent/Registrar" for this Certificate. The payment of interest on this Certificate
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 this Certificate (the
"Certificate Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter
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provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class
postage prepaid, on each such interest payment date, to the registered owner hereof, at its address as it appeared
on the last business day of the month preceding each such date (the "Record Date") on the Registration Books
kept by the Paying Agent/Registrar, as hereinafter described. In addition, interest may be paid by such other
method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered
owner. In the event of a non-payment of interest on a scheduled 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 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 5 business days prior to the Special Record Date by United
States mail, first-class postage prepaid, to the address of each owner of a Certificate appearing on the
Registration Books at the close of business on the last business day next preceding the date of mailing of such
notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Certificate prior to
maturity as provided herein shall be paid to the registered owner upon presentation and surrender of this
Certificate for redemption and payment at the principal corporate trust office of the Paying Agent/Registrar.
The Issuer covenants with the registered owner of this Certificate that on or before each principal payment date,
interest payment date, and accrued interest payment date for this Certificate it will make available to the Paying
Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate Ordinance, the amounts
required to provide for the payment, in immediately available funds, of all principal of and interest on the
Certificates, when due.
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a Saturday,
Sunday, a legal holiday or a day on which banking institutions in the city where the principal corporate trust
office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date
for such payment shall be the next succeeding day that is not such a Saturday, Sunday, legal holiday or day
on which banking institutions are authorized to close; and payment on such date shall have the same force and
effect as if made on the original date payment was due.
THIS CERTIFICATE is one of a series of Certificates dated September 15, 2010, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of $2,920,000 for
paying all or a portion of the Issuer's contractual obligations to be incurred in connection with: (i) constructing
and equipping a public services building, including related parking and landscaping; (ii) acquiring vehicles and
equipment for the fire and police departments; (iii) constructing, installing, acquiring and equipping additions,
extensions and improvements to the City's waterworks and sanitary sewer system; and (iv) legal, fiscal and
engineering fees in connection with such projects.
ON AUGUST 15, 2020, or any date thereafter, the certificates 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 particular Certificates, or portions thereof, to be redeemed
shall be selected and designated by the Issuer (provided that a portion of a Certificate may be redeemed only
in an integral multiple of $5,000), at a redemption price equal to the principal amount to be redeemed plus
accrued interest to the date fixed for redemption.
THE CERTIFICATES scheduled to mature on August 15 in the years 2024, 2026, 2028 and 2030
(the "Term Certificates") are subject to scheduled mandatory redemption by the Paying Agent/Registrar by lot,
or by any other customary method that results in a random selection, at a price equal to the principal amount
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thereof, plus accrued interest to the redemption date, out of moneys available for such purpose in the interest
and sinking fund for the Certificates, on the dates and in the respective principal amounts, set forth in the
following schedule:
Term Certificate Term Certificate
Maturity: August 15, 2024 Maturity: August 15, 2026
Principal Principal
Mandatory Redemption Date Amount Mandatory Redemption Date Amount
August 15, 2023 $135,000 August 15, 2025 $145,000
August 15, 2024 (maturity) 135,000 August 15, 2026 150,000
Term Certificate Term Certificate
Maturity: August 15, 2028 Maturity: August 15, 2030
Principal Principal
Mandatory Redemption Date Amount Mandatory Redemption Date Amount
August 15, 2027 $155,000 August 15, 2029 $165,000
August 15, 2028 (maturity) 160,000 August 15, 2030 175,000
The principal amount of Term Certificates of a stated maturity required to be redeemed on any mandatory
redemption date pursuant to the operation of the mandatory sinking fund redemption provisions shall be
reduced, at the option of the District, by the principal amount of any Term Certificates of the same maturity
which, at least 50 days prior to a mandatory redemption date (1) shall have been acquired by the District at
a price not exceeding the principal amount of such Term Certificates plus accrued interest to the date of
purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, (2) shall have been purchased
and canceled by the Paying Agent/Registrar at the request of the District at a price not exceeding the principal
amount of such Term Certificates plus accrued interest to the date of purchase, or (3) shall have been redeemed
pursuant to the optional redemption provisions and not theretofore credited against a mandatory redemption
requirement.
AT LEAST 30 days prior to the date fixed for any redemption of Certificates 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, at least 30 days prior to the date fixed for any such redemption, to the
registered owner of each Certificate to be redeemed at its address as it appeared on the 45th day prior to such
redemption date; provided, however, that the failure of the registered owner to 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 Certificate. 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 Certificates or portions
thereof that are to be so redeemed. If such written notice of redemption is sent and if due provision for such
payment is made, all as provided above, the Certificates or portions thereof that 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 from the Paying Agent/Registrar out of the funds provided
for such payment. If a portion of any Certificate shall be redeemed, a substitute Certificate or Certificates
having the same maturity date, bearing interest at the 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
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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 Certificate Ordinance.
IF AT THE TIME OF MAILING of notice of optional redemption there shall not have either been
deposited with the Paying Agent/Registrar or legally authorized escrow agent immediately available funds
sufficient to redeem all the Certificates called for redemption, such notice may state that it is conditional, and
is subject to the deposit of the redemption moneys with the Paying Agent/Registrar or legally authorized escrow
agent at or prior to the redemption date, and such notice shall be of no effect unless such moneys are so
deposited on or prior to the redemption date. If such redemption is not effectuated, the Paying Agent/Registrar
shall, within 5 days thereafter, give notice in the manner in which the notice of redemption was given that such
moneys were not so received and shall rescind the redemption.
ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered certificates, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Certificate
Ordinance, this Certificate may, at the request of the registered owner or the assignee or assignees hereof, be
assigned, transferred, converted into and exchanged for a like aggregate principal amount of fully registered
certificates, without interest coupons, payable to the appropriate registered owner, assignee or assignees, as
the case may be, having the same 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 Certificate to the Paying Agent/Registrar for cancellation, all in accordance with the form and
procedures set forth in the Certificate Ordinance. Among other requirements for such assignment and transfer,
this Certificate 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 Certificate or any portion or portions hereof in any integral multiple of $5,000
to the assignee or assignees in whose name or names this Certificate or any such portion or portions hereof is
or are to be registered. The form of Assignment printed or endorsed on this Certificate may be executed by
the registered owner to evidence the assignment hereof, but such method is not exclusive, and other instruments
of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this
Certificate or any portion or portions hereof from time to time by the registered owner. The Paying
Agent/Registrar's reasonable standard or customary fees and charges for assigning, transferring, converting
and exchanging any Certificate or portion thereof will be paid by the Issuer. In any circumstance, any taxes
or governmental charges required to be paid with respect thereto shall be paid by the one requesting such
assignment, transfer, conversion or exchange, as a condition precedent to the exercise of such privilege. The
Paying Agent/Registrar shall not be required to make any such transfer, conversion, or 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 Certificate or any 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 Certificates is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed to
the registered owners of the Certificates.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper to be performed, exist
and be done precedent to or in the authorization, issuance and delivery of this Certificate have been performed,
existed and been done in accordance with law; that annual ad valorem taxes sufficient to provide for the
payment of the interest on and principal of this Certificate, as such interest comes due and such principal
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matures, have been levied and ordered to be levied against all taxable property in said Issuer, and have been
pledged for such payment, within the limit prescribed by law, and that this Certificate is additionally secured
by and payable from a limited pledge of the surplus revenues of the Issuer's waterworks and sewer system
remaining after payment of all operation and maintenance expenses thereof, and all debt service, reserve, and
other requirements in connection with all of the Issuer's revenue bonds or other obligations (now or hereafter
outstanding) which are payable from all or any part of the net revenues of the Issuer's waterworks and sewer
system, all as provided in the Certificate Ordinance.
THE ISSUER HAS RESERVED THE RIGHT to amend the Certificate Ordinance as provided
therein, and under some (but not all) circumstances amendments thereto must be approved by the registered
owners of a majority in aggregate principal amount of the outstanding Certificates.
BY BECOMING the registered owner of this Certificate, the registered owner thereby acknowledges
all of the terms and provisions of the Certificate Ordinance, agrees to be bound by such terms and provisions,
acknowledges that the Certificate Ordinance is duly recorded and available for inspection in the official minutes
and records of the governing body of the Issuer, and agrees that the terms and provisions of this Certificate and
the Certificate Ordinance constitute a contract between each registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the manual or
facsimile signature of the Mayor of the Issuer (or in the Mayor's absence, by the Major Pro-Tem) and
countersigned with the manual or facsimile signature of the City Secretary of said Issuer, and has caused the
official seal of the Issuer to be duly impressed, or placed in facsimile, on this Certificate.
(signature) (signature)
City Secretary Mayor
(SEAL)
(b) Form of Paying Agent/Registrar's Authentication Certificate.
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Certificate 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 Certificate has been issued under the provisions of the Certificate
Ordinance described in the text of this Certificate; and that this Certificate has been issued in conversion or
replacement of, or in exchange for, a certificate, certificates, or a portion of a certificate or certificates of a
series that originally was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
Dated: REGIONS BANK
Dallas, Texas
Paying Agent/Registrar
By:
Authorized Representative
(c) Form of Assignment.
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ASSIGNMENT
(Please print or type clearly)
For value received, the undersigned hereby sells, assigns and transfers unto:
Transferee's Social Security or Taxpayer Identification Number:
Transferee's name and address, including zip code:
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney, to register the transfer of
the within Certificate on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an NOTICE: The signature above must correspond with
eligible guarantor institution participating in a the name of the registered owner as it appears upon
securities transfer association recognized signature the front of this Certificate in every particular,
guarantee program. without alteration or enlargement or any change
whatsoever.
(d) Form of Registration Certificate of the Comptroller of Public Accounts.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate has been examined, certified as to validity and approved by the
Attorney General of the State of Texas, and that this Certificate has been registered by the Comptroller of
Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller ofPublic Accounts of the State of Texas
(COMPTROLLER'S SEAL)
(e) Initial Certificate Insertions.
(i) The initial Certificate shall be in the form set forth is paragraph (a) of this Section, except
that:
A. immediately under the name of the Certificate, the headings "Interest Rate" and
"Maturity Date" shall both be completed with the words "As shown below" and "CUSIP No.
" shall be deleted.
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B. the first paragraph shall be deleted and the following will be inserted:
"THE CITY OF THE COLONY, TEXAS, in Denton County, Texas (the "Issuer"), being a political
subdivision and municipal corporation of the State of Texas, hereby promises to pay to the Registered Owner
specified above, or registered assigns (hereinafter called the "Registered Owner"), on August 15 in each of the
years, in the principal installments and bearing interest at the per annum rates set forth in the following
schedule:
Years Principal Installments Interest Rates
(Information from Section 2 to be inserted)
The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-day
year of twelve 30-day months) from September 15, 2010, at the respective Interest Rate per annum specified
above. Interest is payable on February 15, 2011, and semiannually on each August 15 and February 15
thereafter to the date of payment of the principal installment specified above, or the date of redemption prior
to maturity; except, that if this Certificate is required to be authenticated and the date of its authentication is
later than the first Record Date (hereinafter defined), 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 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; provided, however, that if on the date of authentication
hereof the interest on the Certificate or Certificates, if any, for which this Certificate is being exchanged is due
but has not been paid, then this Certificate shall bear interest from the date to which such interest has been paid
in full."
C. The Initial Certificate shall be numbered 7-1."
Section 5. INTEREST AND SINKING FUND; SURPLUS REVENUES.
(a) A special "Interest and Sinking Fund" is hereby created and shall be established and maintained
by the Issuer at an official depository bank of said Issuer. Said Interest and Sinking Fund shall be kept
separate and apart from all other funds and accounts of said Issuer, and shall be used only for paying the
interest on and principal of said Certificates. All amounts received from the sale of the Certificates as accrued
interest shall be deposited upon receipt to the Interest and Sinking Fund, and all ad valorem taxes levied and
collected for and on account of said Certificates shall be deposited, as collected, to the credit of said Interest
and Sinking Fund. During each year while any of said Certificates are outstanding and unpaid, the governing
body of said Issuer shall compute and ascertain a rate and amount of ad valorem tax that will be sufficient to
raise and produce the money required to pay the interest on said Certificates as such interest comes due, and
to provide and maintain a sinking fund adequate to pay the principal of said Certificates as such principal
matures (but never less than 2% of the original amount of said Certificates as a sinking fund each year); and
said tax shall be based on the latest approved tax rolls of said Issuer, with full allowances being made for tax
delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied, and is
hereby ordered to be levied, against all taxable property in said Issuer, for each year while any of said
Certificates are outstanding and unpaid, and said tax shall be assessed and collected each such year and
deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide
for the payment of the interest on and principal of said Certificates, as such interest comes due and such
principal matures, are hereby pledged for such payment, within the limit prescribed by law.
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(b) The Certificates are additionally secured by revenues of the Issuer's waterworks and sewer system
that remain after the payment of all maintenance and operation expenses thereof, and all debt service, reserve
and other requirements in connection with all of the Issuer's revenue obligations (now or hereafter outstanding)
which are payable from all or any part of the net revenues of the Issuer's waterworks and sewer system,
constituting "Surplus Revenues", not to exceed $ 1,000. The Issuer shall deposit such Surplus Revenues to the
credit of the Interest and Sinking Fund created pursuant to this Section, to the extent necessary to pay the
principal and interest on the Certificates. If Surplus Revenues or other lawfully available moneys of the Issuer
are actually on deposit in the Interest and Sinking Fund in advance of the time when ad valorem taxes are
scheduled to be levied for any year, then the amount of taxes that otherwise would have been required to be
levied pursuant to subsection (a) of this Section may be reduced to the extent and by the amount of the Surplus
Revenues or other lawfully available funds then on deposit in the Interest and Sinking Fund.
(c) Article 1208, Government Code, applies to the issuance of the Certificates and the pledge of the
taxes and Surplus Revenues granted by the Issuer under this Section and Section 9, respectively, and is
therefore valid, effective, and perfected. Should Texas law be amended at any time while the Certificates are
outstanding and unpaid, the result of such amendment being that the pledge of the taxes and Surplus Revenues
granted by the Issuer under this Section and Section 9, respectively, is to be subject to the filing requirements
of Chapter 9, Business & Commerce Code, in order to preserve to the registered owners of the Certificates a
security interest in said pledge, the Issuer agrees to take such measures as it determines are reasonable and
necessary under Texas law to comply with the applicable provisions of Chapter 9, Business & Commerce Code
and enable a filing of a security interest in said pledge to occur.
Section 6. DEFEASANCE OF CERTIFICATES.
(a) Any Certificate and the interest thereon shall be deemed to be paid, retired and no longer
outstanding (a "Defeased Certificate") within the meaning of this Ordinance, except to the extent provided in
subsection (d) of this Section, when payment of the principal of such Certificate, plus interest thereon to the
due date (whether such due date be by reason of maturity or otherwise) either (i) shall have been made or
caused to be made in accordance with the terms thereof, or (ii) shall have been provided for on or before such
due date by irrevocably depositing with or making available to the Paying Agent/Registrar in accordance with
an escrow agreement or other instrument (the "Future Escrow Agreement") for such payment (1) lawful money
of the United States of America sufficient to make such payment or (2) Defeasance Securities that mature as
to principal and interest in such amounts and at such times as will insure the availability, without reinvestment,
of sufficient money to provide for such payment, and when proper arrangements have been made by the Issuer
with the Paying Agent/Registrar for the payment of its services until all Defeased Certificates shall have
become due and payable. At such time as a Certificate shall be deemed to be a Defeased Certificate hereunder,
as aforesaid, such Certificate and the interest thereon shall no longer be secured by, payable from, or entitled
to the benefits of, the ad valorem taxes herein levied and pledged as provided in this Ordinance, and such
principal and interest shall be payable solely from such money or Defeasance Securities. Notwithstanding any
other provision of this Ordinance to the contrary, it is hereby provided that any determination not to redeem
Defeased Certificates that is made in conjunction with the payment arrangements specified in subsection 6(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 Certificates for redemption; (2) gives notice of the
reservation of that right to the owners of the Defeased Certificates 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.
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(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the
Issuer be invested in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth, and
all income from such Defeasance Securities received by the Paying Agent/Registrar that is not required for the
payment of the Certificates 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 Certificates
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
6(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 Certificates, 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 Certificates shall have become due and payable, the Paying Agent/Registrar
shall perform the services of Paying Agent/Registrar for such Defeased Certificates the same as if they had not
been defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required
by this Ordinance.
(e) In the event that the Issuer elects to defease less than all of the principal amount of Certificates of
a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Certificates by such
random method as it deems fair and appropriate.
Section 7. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED CERTIFICATES.
(a) Replacement Certificates. In the event any outstanding Certificate is damaged, mutilated, lost,
stolen or destroyed, the Paying Agent/Registrar shall cause to be printed, executed and delivered, a new
certificate of the same principal amount, maturity and interest rate, as the damaged, mutilated, lost, stolen or
destroyed Certificate, in replacement for such Certificate in the manner hereinafter provided.
(b) Application for Replacement Certificates. Application for replacement of damaged, mutilated,
lost, stolen or destroyed Certificates shall be made by the registered owner thereof to the Paying
Agent/Registrar. In every case of loss, theft or destruction of a Certificate, the registered owner applying for
a replacement certificate shall furnish to the Issuer and to the Paying Agent/Registrar such security or
indemnity as may be required by them to save each of them harmless from any loss or damage with respect
thereto. Also, in every case of loss, theft or destruction of a Certificate, the registered owner shall furnish to
the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft or destruction of
such Certificate, as the case may be. In every case of damage or mutilation of a Certificate, the registered
owner shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or mutilated.
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(c) No Default Occurred. Notwithstanding the foregoing provisions of this , in the event any such
Certificate shall have matured, and no default has occurred that is then continuing in the payment of the
principal of, redemption premium, if any, or interest on the Certificate, the Issuer may authorize the payment
of the same (without surrender thereof except in the case of a damaged or mutilated Certificate) instead of
issuing a replacement Certificate, provided security or indemnity is furnished as aboveprovided in this Section.
(d) Charge for Issuing Replacement Certificates. Prior to the issuance of any replacement certificate,
the Paying Agent/Registrar shall charge the registered owner of such Certificate with all legal, printing, and
other expenses in connection therewith. Every replacement certificate issued pursuant to the provisions of this
Section by virtue of the fact that any Certificate is lost, stolen or destroyed shall constitute a contractual
obligation of the Issuer whether or not the lost, stolen or destroyed Certificate 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 Certificates duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates. In accordance with Sec. 1206.022, Government
Code, this Section 7 of this Ordinance shall constitute authority for the issuance of any such replacement
certificate 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 certificates is hereby authorized and imposed upon the Paying
Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Certificates in the form
and manner and with the effect, as provided in Section 3(a) of this Ordinance for Certificates issued in
conversion and exchange for other Certificates.
Section 8. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES; BOND
COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION, IF
OBTAINED; ENGAGEMENT OF BOND COUNSEL.
(a) The Mayor of the Issuer is hereby authorized to have control of the Certificates initially issued and
delivered hereunder and all necessary records and proceedings pertaining to the Certificates pending their
delivery and their investigation, examination, and approval by the Attorney General of the State of Texas, and
their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the
Certificates said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller)
shall manually sign the Comptroller's Registration Certificate attached to such Certificates, and the seal of said
Comptroller shall be impressed, or placed in facsimile, on such Certificate. 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
Certificates issued and delivered under this Ordinance, but neither shall have any legal effect, and shall be
solely for the convenience and information of the registered owners of the Certificates. In addition, if bond
insurance is obtained, the Certificates may bear an appropriate legend as provided by the insurer.
(b) The obligation of the initial purchaser to accept delivery of the Certificates is subject to the initial
purchaser being furnished with the final, approving opinion of McCall, Parkhurst & Horton L.L.P., bond
counsel to the Issuer, which opinion shall be dated as of and delivered on the date of initial delivery of the
Certificates to the initial purchaser. The engagement of such firm as bond counsel to the Issuer in connection
with issuance, sale and delivery of the Certificates is hereby approved and confirmed. The execution and
delivery of an engagement letter between the Issuer and such firm, with respect to such services as bond
counsel, is hereby authorized in such form as may be approved by the Mayor or the City Manager, and the
Mayor or the City Manager is hereby authorized to execute such engagement letter.
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Section 9. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
CERTIFICATES.
(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 Certificates as obligations described in section 103 of the
Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income
taxation. In furtherance thereof, the Issuer covenants as follows:
(1) to take any action to assure that no more than 2% of the proceeds of the Certificates (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% 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% of the debt service on the Certificates, in
contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use" described in
subsection (1) hereof exceeds 5% of the proceeds of the Certificates or the projects financed therewith
(less amounts deposited into a reserve fund, if any) then the amount in excess of 5% 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% of the proceeds of the Certificates (less amounts deposited into a reserve fund, if any) is directly
or indirectly used to finance loans to persons, other than state or local governmental units, in
contravention of section 141(c) of the Code;
(4) to refrain from taking any action that would otherwise result in the Certificates 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 Certificates 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 Certificates, 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
Certificates, other than investment property acquired with -
(A) proceeds of the Certificates invested for a reasonable temporary period of three
years or less or, in the case of a refunding bond, for a period of 30 days or less until such
proceeds are needed for the purpose for which the Certificates 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% of the proceeds of the Certificates;
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(7) to otherwise restrict the use of the proceeds of the Certificates or amounts treated as
proceeds of the Certificates, as may be necessary, so that the Certificates 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);
(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 Certificates) an amount that is at least equal to 90% 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 Certificates have been paid in full, 100% of the amount
then required to be paid as a result of Excess Earnings under section 148(f) of the Code; and
(9) to assure that the proceeds of the Certificates will be used solely for new money projects.
(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 holders of the Certificates. The
Rebate Fund is established for the additional purpose of compliance with section 148 of the Code.
(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 prior to the date
of issuance of the Certificates. 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 Certificates, the Issuer will 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 Certificates under section 103 of the Code. In the event that regulations or rulings are hereafter
promulgated that impose additional requirements applicable to the Certificates, 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 Certificates under section 103 of the
Code. In furtherance of such intention, the Issuer hereby authorizes and directs the Mayor, Mayor Pro Tern
or the City Manager 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 Certificates.
(d) Allocation of, and Limitation on, Expenditures for the Project. The Issuer covenants to account
for the expenditure of sale proceeds and investment earnings to be used for the construction and acquisition of
the Project on its books and records by allocating proceeds to expenditures within 18 months of the later of the
date that (1) the expenditure is made, or (2) the Project is completed. The foregoing notwithstanding, the Issuer
shall not expend proceeds of the sale of the Certificates or investment earnings thereon more than 60 days after
the earlier of (1) the fifth anniversary of the delivery of the Certificates, or (2) the date the Certificates are
retired, unless the Issuer obtains an opinion of nationally-recognized bond counsel that such expenditure will
not adversely affect the status, for federal income tax purposes, of the Certificates or the interest thereon. For
purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains an opinion that such
failure to comply will not adversely affect the excludability for federal income tax purposes from gross income
of the interest.
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(e) Disposition of Project. The Issuer covenants that the Project will not be sold or otherwise disposed
in a transaction resulting in the receipt by the Issuer of cash or other compensation, unless the Issuer obtains
an opinion of nationally-recognized bond counsel that such sale or other disposition will not adversely affect
the tax-exempt status of the Certificates. For purposes of the foregoing, the portion of the property comprising
personal property and disposed in the ordinary course shall not be treated as a transaction resulting in the
receipt of cash or other compensation. For purposes hereof, the Issuer shall not be obligated to comply with
this covenant if it obtains a legal opinion that such failure to comply will not adversely affect the excludability
for federal income tax proposes from gross income of the interest.
(f) Designation as Qualified Tax-Exempt Obligations. The Issuer hereby designates the Certificates
as "qualified tax-exempt obligations" as defined in section 265(b)(3) of the Code. In furtherance of such
designation, the Issuer represents, covenants and warrants the following: (a) that during the calendar year in
which the Certificates are issued, the Issuer (including any subordinate entities) has not designated nor will
designate tax-exempt obligations, which when aggregated with the Certificates, will result in more than
$10,000,000 ($30,000,000 for taxable years beginning after December 31, 2008 and ending prior to January
1, 2011) of "qualified tax-exempt obligations" being issued; (b) that the Issuer reasonably anticipates that the
amount of tax-exempt obligations issued, during the calendar year in which the Certificates are issued, by the
Issuer (or any subordinate entities) will not exceed $10,000,000 ($30,000,000 for taxable years beginning after
December 31, 2008 and ending prior to January 1, 2011); and, (c) that the Issuer will take such action or
refrain from such action as necessary, and as more particularly set forth in this Section, in order that the
Certificates will not be considered "private activity bonds" within the meaning of section 141 of the Code.
Section 10. SALE OF CERTIFICATES AND APPROVAL OF OFFICIAL STATEMENT;
FURTHER PROCEDURES.
(a) The Certificates of Obligation are hereby sold and shall be delivered to The Frost National Bank
(the "Underwriter") for the purchase price of $3,054,719.75 (representing the par amount of the Certificates
of $2,920,000.00 plus a net original issue premium of $158,811.75 and less an underwriter's discount of
$24,092.00) plus interest accrued thereon to date of delivery (accrued interest to be deposited into the Interest
and Sinking Fund) pursuant to the terms and provisions of a Purchase Agreement with the Underwriter. It is
hereby officially found, determined, and declared that the Certificates have been sold pursuant to the terms and
provisions of a Purchase Agreement in substantially the form presented at this meeting, which the Mayor of
the Issuer is hereby authorized and directed to execute. It is hereby officially found, determined, and declared
that the terms of this sale are the most advantageous reasonably obtainable. The Initial Certificate shall be
registered in the name of Jefferies & Company, Inc. or its designee.
(b) The Issuer hereby approves the form and content of the Official Statement relating to the
Certificates and any addenda, supplement or amendment thereto, and approves the distribution of such Official
Statement in the reoffering of the Certificates by the Underwriter in final form, with such changes therein or
additions thereto as the officer executing the same may deem advisable, such determination to be conclusively
evidenced by his execution thereof. The distribution and use of the Preliminary Official Statement dated
September 14, 2010, prior to the date hereof is hereby ratified and confirmed.
(c) The Mayor and Mayor Pro Tern, the City Manager and City Secretary and all other officers,
employees and agents of the Issuer, and each of them, shall be and they are hereby expressly authorized,
empowered and directed from time to time and at any time to do and perform all such acts and things and to
execute, acknowledge and deliver in the name and on behalf of the Issuer a Paying Agent/Registrar Agreement
with the Paying Agent/Registrar and all other instruments, whether or not herein mentioned, as may be
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necessary or desirable in order to carry out the terms and provisions of this Ordinance, the Certificates, the sale
of the Certificates and the Official Statement. In case any officer whose signature shall appear on any
Certificate shall cease to be such officer before the delivery of such Certificate, such signature shall
nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such
delivery.
Section 11. INTEREST EARNINGS ON CERTIFICATE PROCEEDS. Interest earnings derived
from the investment of proceeds from the sale of the Certificates shall be used along with other certificate
proceeds for the Project; provided that after completion of such purpose, if any of such interest earnings remain
on hand, such interest earnings shall be deposited in the Interest and Sinking Fund. It is further provided,
however, that any interest earnings on certificate proceeds that are required to be rebated to the United States
of America pursuant to Section 9 hereof in order to prevent the Certificates from being arbitrage bonds shall
be so rebated and not considered as interest earnings for the purposes of this Section.
Section 12. CONSTRUCTION FUND.
(a) The Issuer hereby creates and establishes and shall maintain on the books of the Issuer a separate
fund to be entitled the "Series 2010-A Certificate of Obligation Construction Fund" for use by the Issuer for
payment of all lawful costs associated with the Project as hereinbefore provided. Proceeds of the Certificates,
shall be deposited into the Construction Fund, other than amounts paid at closing for issuance costs. Upon
payment of all such Project costs, any moneys remaining on deposit in said Fund shall be transferred to the
Interest and Sinking Fund. Amounts so deposited to the Interest and Sinking Fund shall be used in the manner
described in Section 5 of this Ordinance.
(b) The Issuer may place proceeds of the Certificates (including investment earnings thereon) and
amounts deposited into the Interest and Sinking Fund in investments authorized by the Public Funds Investment
Act, Chapter 2256, Texas Government Code, as amended; provided, however, that the Issuer hereby covenants
that the proceeds of the sale of the Certificates will be used as soon as practicable for the purposes for which
the Certificates are issued.
(c) All deposits authorized or required by this Ordinance shall be secured to the fullest extent required
by law for the security of public funds.
Section 13. COMPLIANCE WITH RULE 15c2-12.
(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.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reports.
(i) The Issuer shall provide annually to the MSRB, in an electronic format as prescribed by
the MSRB, within six months after the end of each fiscal year ending in or after 2010, financial
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information and operating data with respect to the Issuer of the general type included in the final
Official Statement authorized by Section 10 of this Ordinance, being the information described in
Exhibit A hereto. Any financial statements so to be provided shall be (1) prepared in accordance with
the accounting principles described in Exhibit A hereto, 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 complete
within such period, then the Issuer shall provide unaudited financial statements by the required time,
and shall provide audited financial statements for the applicable fiscal year to the MSRB, when and
if the audit report on such statements become available.
(ii) If the Issuer changes its fiscal year, it will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by 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 that is available to the public on
the MSRB's internet website or filed with the SEC. All documents provided to the MSRB pursuant
to this Section shall be accompanied by identifying information as prescribed by the MSRB.
(c) Material Event Notices. The Issuer shall notify the MSRB in an electronic format as prescribed
by the MSRB, in a timely manner, of any of the following events with respect to the Certificates, if such event
is material within the meaning of the federal securities laws:
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 Certificates;
7. Modifications to rights of holders of the Certificates;
8. Certificate calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Certificates; and
11. Rating changes.
The Issuer shall notify the 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.
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(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
Certificates within the meaning of the Rule, except that the Issuer in any event will give notice of any
deposit made in accordance with this Ordinance or applicable law that causes Certificates 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 Certificates, 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 pursuant to this Section and does not hereby undertake to
provide any other information that may be relevant or material to a complete presentation of the
Issuer's financial results, condition, or prospects or hereby undertake to update any information
provided in accordance with this Section or otherwise, except as expressly provided herein. The Issuer
does not make any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON
ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
(iv) No default by the Issuer in observing or performing its obligations under this Section
shall comprise a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Issuer under federal and state securities laws.
(v) Should the Rule be amended to obligate the Issuer to make filings with or provide notices
to entities other than the MSRB, the Issuer hereby agrees to undertake such obligation with respect
to the Certificates in accordance with the Rule as amended. The provisions of this Section may be
amended by the Issuer from time to time to adapt to changed circumstances that arise from a change
in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations
of the Issuer, but only if (1) the provisions of this Section, as so amended, would have permitted an
underwriter to purchase or sell Certificates in the primary offering of the Certificates 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 Ordinance
that authorizes such an amendment) of the outstanding Certificates 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 Certificates. 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
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final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the
extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing
or selling Certificates in the primary offering of the Certificates. 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.
Section 14. METHOD OF AMENDMENT. The Issuer hereby reserves the right to amend this
Ordinance subject to the following terms and conditions, to-wit:
(a) The Issuer may from time to time, without the consent of any holder, except as otherwise required
by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any ambiguity, defect or
omission in this Ordinance that does not materially adversely affect the interests of the holders, (ii) grant
additional rights or security for the benefit of the holders, (iii) add events of default as shall not be inconsistent
with the provisions of this Ordinance and that shall not materially adversely affect the interests of the holders,
(v) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions of
federal laws from time to time in effect, or (iv) make such other provisions in regard to matters or questions
arising under this Ordinance as shall not be inconsistent with the provisions of this Ordinance and that shall
not in the opinion of the Issuer's Bond Counsel materially adversely affect the interests of the holders.
(b) Except as provided in paragraph (a) above, the holders of Certificates aggregating in principal
amount 51% of the aggregate principal amount of then outstanding Certificates that are the subject of a
proposed amendment shall have the right from time to time to approve any amendment hereto that may be
deemed necessary or desirable by the Issuer; provided, however, that without the consent of 100% of the
holders in aggregate principal amount of the then outstanding Certificates, nothing herein contained shall permit
or be construed to permit amendment of the terms and conditions of this Ordinance or in any of the Certificates
so as to:
(1) Make any change in the maturity of any of the outstanding Certificates;
(2) Reduce the rate of interest borne by any of the outstanding Certificates;
(3) Reduce the amount of the principal of, or redemption premium, if any, payable on any
outstanding Certificates;
(4) Modify the terms of payment of principal or of interest or redemption premium on
outstanding Certificates or any of them or impose any condition with respect to such payment; or
(5) Change the minimum percentage of the principal amount of any series of Certificates
necessary for consent to such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under subsection (b) of this Section,
the Issuer shall send by U.S. mail to each registered owner of the affected Certificates a copy of the proposed
amendment and cause notice of the proposed amendment to be published at least once in a financial publication
published in The City of New York, New York or in the State of Texas. Such published notice shall briefly
set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the office of the
Issuer for inspection by all holders of such Certificates.
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(d) Whenever at any time within one year from the date of publication of such notice the Issuer shall
receive an instrument or instruments executed by the holders of at least 51 % in aggregate principal amount of
all of the Certificates then outstanding that are required for the amendment, which instrument or instruments
shall refer to the proposed amendment and that shall specifically consent to and approve such amendment, the
Issuer may adopt the amendment in substantially the same form.
(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this Section, this
Ordinance shall be deemed to be modified and amended in accordance with such amendatory Ordinance, and
the respective rights, duties, and obligations of the Issuer and all holders of such affected Certificates shall
thereafter be determined, exercised, and enforced, subject in all respects to such amendment.
(f) Any consent given by the holder of a Certificate pursuant to the provisions of this Section shall be
irrevocable for a period of six months from the date of the publication of the notice provided for in this Section,
and shall be conclusive and binding upon all future holders of the same Certificate during such period. Such
consent may be revoked at any time after six months from the date of the publication of said notice by the
holder who gave such consent, or by a successor in title, by filing notice with the Issuer, but such revocation
shall not be effective if the holders of 51% in aggregate principal amount of the affected Certificates then
outstanding, have, prior to the attempted revocation, consented to and approved the amendment.
(g) For the purposes of establishing ownership of the Certificates, the Issuer shall rely solely upon the
registration of the ownership of such Certificates on the registration books kept by the Paying Agent/Registrar.
Section 15. EFFECTIVE DATE. In accordance with the provisions of V.T.C.A., Government Code,
Section 1201.028, this Ordinance shall be effective immediately upon its adoption by the City Council.
Section 16. SEVERABILITY. If any section, article, paragraph, sentence, clause, phrase or word
in this Ordinance, or application thereof to any persons or circumstances is held invalid or unconstitutional by
a court of competent jurisdiction, such holding shall not affect the validity of the remaining portion of this
Ordinance, despite such invalidity, which remaining portions shall remain in full force and effect.
(Execution Page Follows)
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DULY PASSED AND APPROVED by the City Council of the City of The Colony, Texas, on the 21st
day of September, 2010.
J E McCO Y, Mayor
City of Th Colony, Texas
J ~ ~ 1 1
Gi, C/~ ffv"`- (CITY SEAL)
CHRISTIE WILSON, City Secretary
City of The Colony, Texas
EXHIBIT A
Annual Financial Statements and Operating Data
The following information is referred to in Section 13(b) of this Ordinance:
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
referred to) below:
Tables 1 through 5, inclusive, and 7 through 14, inclusive
APPENDIX B (FINANCIAL STATEMENTS FOR THE LAST COMPLETED FISCAL YEAR WHICH
WILL BE UNAUDITED, UNLESS AN AUDIT IS PERFORMED IN WHICH EVENT THE AUDITED
FINANCIAL STATEMENTS WILL BE MADE AVAILABLE)
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 above.
A-1