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Home My WebLink AboutOrd 414 Amending the issuance and sale of combination tax and limited pledge revenue certificates of obligationTOWN OF WESTLAKE ORDINANCE NO. 414 AN ORDINANCE AMENDING "AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF COMBINATION TAX AND LIMITED PLEDGE REVENUE CERTIFICATES OF OBLIGATION TO FINANCE THE ACQUISITION OF AND IMPROVEMENTS TO FACILITIES FOR FIRE PROTECTION, LAW ENFORCEMENT, CIVIC ADMINISTRATION, RECREATION, AND CULTURAL AND CIVIC IMPROVEMENT, THE PAYMENT OF AND SECURITY FOR THE CERTIFICATES, THE DELIVERY OF A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT, THE AWARDING OF THE SALE OF THE CERTIFICATES, THE EXECUTION AND DELIVERY OF DOCUMENTS IN CONNECTION THEREWITH, THE TAKING OF ALL ACTION APPROPRIATE TO EFFECT THE SALE AND DELIVERY OF THE CERTIFICATES, AND RESOLVING RELATED MATTERS" WHEREAS, the Board of Aldermen (the `Board") of the Town of Westlake, Texas (the "Town") adopted a resolution on March 2, 2002 directing publication of a notice (such notice shall be referred to as the "Notice of Intent to Issue Certificates") of the Town's intention to authorize the issuance, on March 24, 2002, of a series of Combination Tax and Limited Pledge Revenue Certificates of Obligation designated as Series 2002 in a principal amount not exceeding $13,200,000 (the Certificates"). WHEREAS, the Certificates shall be issued and the proceeds thereof used for the purposes as described in the Notice of Intent to Issue Certificates; WHEREAS, the Notice of Intent to Issue Certificates has been published in accordance with law; WHEREAS, on January 14, 2002, the Town adopted a resolution, among other things approving an Official Notice of Sale and Bidding Instructions in connection with the issuance of the Certificates; WHEREAS, the Board hereby finds and determines that the Town is authorized to issue the Certificates in the amount and on the terms as contained in this Ordinance pursuant to the Certificate of Obligation Act, Chapter 271, Local Government Code, as amended, and other applicable law (collectively, the Certificate of Obligation Act and other applicable law shall be referred to as the "Authorizing Law;") WHEREAS, the Board adopted an Ordinance (the "Original Ordinance") on January 28, 2002 authorizing the issuance of the Certificates; WHEREAS, the Public Finance Division of the Office of the Attorney General of the State of Texas has advised the Town that it will not approve the issuance of the Certificates unless the Original Ordinance is amended, and, therefore, the Town hereby amends the Original Ordinance as provided herein. WHEREAS, the meeting at which this Ordinance has been considered was open to the public as required by law, and public notice of the time, place, and subject of the meeting has been given as required by Chapter 551 of the Texas Government Code; NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF ALDERMEN OF THE TOWN OF WESTLAKE, TEXAS, AS FOLLOWS: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.01. Definitions. Except as otherwise provided in this Ordinance, the capitalized terms in this Ordinance shall have the meanings specified in this Section unless the context requires otherwise. Accrued Interest Account—the account by that name established in the Interest and Sinking Fund. Arbitrage Rebate Rules - the provisions of the Code relating to the rebate of arbitrage on tax- exempt Certificate Proceeds to the United States government. Attorney General - the Attorney General of the State of Texas. Authorizing Law - the "Authorizing Law" as defined in the preamble of this Ordinance. Available Construction Proceeds - as of any date, the proceeds of the Certificates equal in amount to the amount received from the Purchaser as the purchase price of the Certificates (exclusive of the amount of any accrued interest to the Closing Date), plus the aggregate amount, as of such date, of the net investment earnings on such proceeds while on deposit in any Fund, minus the aggregate amount financed by the Certificates to pay Costs of Issuance. Board - the Board of Aldermen of the Town. Bond Counsel — after the issuance and sale of the Certificates any law firm that is engaged by the Board to render services to the Town as Bond Counsel or Co -Bond Counsel. Book Entry Representation Letter - any representation letter of, or agreement delivered by, the Town pursuant to this Ordinance providing for administration of a book entry system for the Certificates. Book Entry Certificate - any Certificate administered under a book entry system pursuant to this Ordinance. Business Day - any day that is a day on which financial institutions in the city where the principal corporate trust office of the Paying Agent/Registrar is located are not authorized by law or executive order to close. Certificate Form - the Form of the Series 2002 Certificates set forth in Exhibit A to this Ordinance. Certificate Obligations - the principal, premium (if any), and interest payment obligations of the Town under any Certificate(s). Certificate Owner - the Person who is the registered owner of any Certificate, as such ownership appears in the Register. Certificate Yield - the yield on the Certificates determined in accordance with the arbitrage rules under the Code. Certificates - the Certificates authorized by this Ordinance. Closing - the concurrent delivery of the Certificates to or upon the order of the Purchaser in exchange for payment therefor. Closing Date - the date of the Closing. Co -Bond Counsel — Thomas Allen Moon and the firm of Boyle & Lowry, LLP, or any law firm that is engaged by the Board to render services to the Town as Bond Counsel or Co -Bond Counsel. Code - the Internal Revenue Code of 1986, as amended, together with all published regulations promulgated thereunder and revenue rulings issued with respect thereto by the United States Department of the Treasury or the Internal Revenue Service. Costs of Issuance - the costs of issuance incurred in connection with the issuance of the Certificates. Eligible Investments - any securities or obligations in which the Town is authorized by law to invest the funds on deposit in the Funds. Event of Default — the occurrence of any of the following: (1) the failure to make payment of any Certificate Obligations as they come due; or (2) the default in the performance of any provision of this Ordinance by the Town, the default of which materially and adversely affects the rights of the Certificate Owners, including, but not limited to, the prospect of any Certificate Obligations not being paid when due, and the continuance of such default for a period of 60 days after the Town is in receipt of notice of such default from or on behalf of a Certificate Owner. Event of Taxability - any act or omission that could cause any interest on any of the Certificates not to be excludable under Section 103(a) of the Code from the gross income of the owner of the Certificate. Fund - any of the Funds. Funds - collectively, the Interest and Sinking Fund and the Project Fund. Government Obligations - any of the following: (1) any direct obligation of the United States of America; (2) any obligation the timely payment of the principal of and interest on which is unconditionally and fully guaranteed by the United States of America. Initial Certificates - the Certificates initially issued and delivered by the Town at the Closing. 3 Interest and Sinking Fund - the Fund established as the "Interest and Sinking Fund" pursuant to this Ordinance. Mayor - the Mayor of the Town, or any member of the Board authorized to act as Mayor. MSRB - the Municipal Securities Rulemaking Board. Net Certificate Proceeds — as of any date, the proceeds of the Certificates equal in amount to the amount received from the Purchaser as the purchase price of the Certificates, minus the amount of any accrued interest to the Closing Date, plus the aggregate amount, as of such date, of the net investment earnings on such proceeds while on deposit in any Fund. Notice of Intent to Issue Certificates — the "notice of intent to issue certificates," as defined in the preamble hereof, a copy of which is attached hereto as Exhibit C. NRMSIR — 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. Official Statement - the final official statement approved by the Mayor in connection with the offering for sale of the Certificates, including any supplements thereto, attached hereto as Exhibit -D. Ordinance - this Ordinance, including any amendments, which hereby amends and restates the Original Ordinance. Original Ordinance — the Ordinance adopted by the Town on January 28, 2002 authorizing the issuance of the Certificates. Paying Agent/Registrar - initially, J. P. Morgan Chase Bank, or any financial institution appointed by the Town in accordance with this Ordinance as the paying agent/registrar for the Certificates. Paying Agent/Registrar Agreement — the Paying Agent/Registrar Agreement, between the Town and the Paying Agent/Registrar, relating to the Certificates, and any amendments thereto. Penalty Proceeds Amount - the amount of the unspent Available Construction Proceeds that is periodically subject to a penalty (in lieu of rebate) pursuant to the Arbitrage Rebate Rules, which amount shall be calculated as follows: (1) as of the close of the initial Rebate Expenditure Period, an amount (if a positive number) equal to 10 percent of the Available Construction Proceeds minus the amount of the Net Certificate Proceeds that has been spent during such period; (2) as of the close of the second Rebate Expenditure Period, an amount (if a positive number) equal to 45 percent of the Net Certificate Proceeds minus the amount of the Net Certificate Proceeds that has been spent during such period; (3) as of the close of the third Rebate Expenditure Period, an amount (if a positive number) equal to 75 percent of the Net Certificate Proceeds minus the amount of the Net Certificate Proceeds that has been spent during such period; (4) as of the close of the fourth Rebate Expenditure Period, and as of the close of each successive Rebate Expenditure Period thereafter, an amount equal to 100 percent of the Net Certificate Proceeds minus the amount of the Net Certificate Proceeds that has been spent during such period, unless, prior to the calculation of the Rebate Penalty following the fourth Rebate Expenditure Period, the Town Manager determines that there exists a "retainage" (not to exceed 5 percent of the Net Certificate Proceeds or such other amount as permitted under the Arbitrage Rebate Rules) permissible under the Arbitrage Rebate Rules, in which event the Penalty Proceeds Amount as of the close of the fourth Rebate Expenditure Period, and as of the close of each successive Rebate Expenditure Period thereafter, is equal to zero if, as of the close of the sixth Rebate Expenditure Period, 100 percent of the Net Certificate Proceeds has been spent. For purposes of calculating the Penalty Proceeds Amount, Net Certificate Proceeds shall be considered to have been "spent" on (1) the date that (A) a warrant (or other instrument) in payment of the expenditure is issued by the Town, or (B) if no such warrant is issued, a check (or other instrument) in payment of the expenditure is issued by the Town, or (2) such other date as the Town Manager determines, after consultation with Co -Bond Counsel, appropriate for compliance with the Arbitrage Rebate Rules. Person - any individual, partnership, corporation, trust, or unincorporated organization or any governmental entity. Preliminary Official Statement - the preliminary official statement approved by the Mayor in connection with the offering for sale of the Certificates. Premium Account — the account by that name established in the Interest and Sinking Fund. Project — means the facilities to be financed from the proceeds of the Certificates, as described in the Notice of Intent to Issue Certificates, more specifically, facilities for a government center to include areas, among other uses, for the administration, Town council chamber, municipal meeting and conference rooms, fire protection, law enforcement, to include areas for, among other uses, municipal court, dispatch area, records, patrol and truck bays, civic administration, recreation, cultural and civic improvements. Project Completion Certificate — a certificate executed by the Town Manager to the effect that the Project has been completed or that no further funds are required from the Project Fund for the payment of Project Costs. Project Costs — means, collectively, all costs of the Project that are authorized under law to be paid from the proceeds of the Certificates. Project Fund - the Fund established as the 'Project Fund" pursuant to this Ordinance. Purchaser — Morgan Keegan & Company, Inc., or any successor thereto. Rebate Expenditure Period - the six-month period beginning with the Closing Date and, thereafter, each successive period beginning with the Closing Date and continuing for six months longer than the immediately preceding Rebate Expenditure Period. Rebate Penalty - an amount equal to 1.5 percent of the Penalty Proceeds Amount as of the close of each Rebate Expenditure Period, or such other amount as determined appropriate by the Town Manager, after consultation with Bond Counsel, for compliance with the Arbitrage Rebate Rules. Rebate Penalty Calculation Date - any day not later than the 70th day following the close of each Rebate Expenditure Period, or such other date as the Town Manager determines, after consultation with Bond Counsel, appropriate for compliance with the Arbitrage Rebate Rules. Rebate Penalty Payment Date - The 85th day following the last day of each Rebate Expenditure Period, or such other date as the Town Manager determines, after consultation with Bond Counsel, appropriate for compliance with the Arbitrage Rebate Rules. Record Date - the 15th day immediately preceding each "Interest Payment Date" (as defined in the Certificate Form). Register - the official registration records for the Certificates maintained by the Paying Agent/Registrar, as registrar for the Certificates, pursuant to this Ordinance. Revenues — the revenues of the Town's waterworks and sewer system, not to exceed $1,000, available after deduction of the reasonable expenses of the waterworks and sewer system and the payment of all debt service, reserve, and other requirements with respect to all of the Town's other obligations that are or may be payable in whole or in part from the revenues thereof. Rule — SEC Rule 15c2-12, as amended. SEC—the United States Securities and Exchange Commission. Secretary - the Secretary of the Town. Security Depository - any Person acting as a security depository for the Book Entry Certificates. SID — any person designated by the State, or an authorized department, officer, or agency thereof, and determined by the SEC to be a state information depositary, within the meaning of the Rule. State - the State of Texas. Sufficient Assets - with respect to the Certificate Obligations for any Certificate or Certificates, any combination of the following: (1) an amount of money sufficient, without investment, to pay such Certificate Obligations when due; (2) Government Obligations authorized by law that: (A) are not redeemable prior to maturity; and (B) mature as to principal and interest in such amounts and at such times as will provide, without reinvestment, money sufficient to pay such Certificate Obligations when due. Town - the Town of Westlake, Texas or any successor thereto. Town Manager — Initially, Trent O. Petty, as the president of Petty & Associates, Inc., or any other successor to Petty & Associates, Inc., as manager of the Town. Transaction Documents - collectively, this Ordinance, the Certificates, and the Paying Agent/Registrar Agreement. Section 1.02. General Rules of Construction. (a) Whenever in this Ordinance the context requires: (1) a reference to the singular number includes the plural and vice versa; and (2) a word denoting gender includes the masculine, feminine, and neuter. (b) The table of contents and the titles given to any article or Section of this Ordinance are for convenience only and are not intended to modify the article or Section. Section 1.03. Preamble. The statements and determinations in the preamble of this Ordinance are hereby adopted and made a part of this Ordinance. ARTICLE II AUTHORIZATION AND SECURITY FOR THE CERTIFICATES Section 2.01. Authorization and Purpose. (a) Pursuant to Authorizing Law, the Town hereby authorizes the issuance of the Certificates for the purpose of acquiring the Project. (b) The proceeds of the Certificates shall be used only to provide funds to acquire the Project. Section 2.02. Particular Terms and Provisions of the Certificates. The terms and provisions of the Certificates shall be as provided in the Certificate Form (which is hereby incorporated as a part of this Ordinance), as follows: (a) the initial aggregate principal amount of the Certificates; (b) the authorized denomination(s) of the Certificates; (c) the numbering of the Certificates; (d) the date of the Certificates; 7 (e) the interest rate(s) on the Certificates; (f) the amount of each regular maturity of principal of the Certificates; (g) provisions governing the time, place, and manner of payment of the Certificate Obligations; (h) early redemption provisions applicable to the Certificates; and (i) such other terms or provisions applicable to the Certificates as are set forth in the Certificate Form. Section 2.03. Security for the Certificates. (a) The Town hereby pledges the Revenues as security for the payment of Certificate Obligations. (b) The Town hereby appropriates, from funds lawfully available during the budget year in effect on the date of the adoption of this Ordinance, an amount sufficient to pay the Certificate Obligations that come due during this budget year, and each budget year thereafter, while Certificate Obligations remain outstanding, the Town may appropriate from funds lawfully available an amount sufficient to pay Certificate Obligations that come due during each such budget year. (c) To the extent that funds are not otherwise available to pay Certificate Obligations as they come due, the Town hereby agrees to levy an ad valorem tax to pay Certificate Obligations. As a means of providing for the payment of Certificate Obligations, including the greater of (1) a sinking fund for the payment of the Certificates at maturity or (2) a sinking fund of two percent, there is hereby levied an ad valorem tax, within legal limits, on each $100 valuation of taxable property in the Town, with full allowance being made for delinquencies and costs of collection, an amount that is sufficient to pay Certificate Obligations as they come due. ARTICLE III GENERAL PROVISIONS REGARDING THE CERTIFICATES Section 3.01. Execution. (a) The Certificates shall be executed on behalf of the Town by the manual or facsimile signature of the Mayor and the Secretary. The seal of the Town shall be placed on the Certificates manually or in facsimile. (b) If an officer who signed Certificates on the Town's behalf ceases to hold office before the authentication or delivery of the Certificates signed by such officer, such Certificates may be authenticated and delivered with the same effect as if such officer had remained in office. 8 Section 3.02. Form of the Certificates. (a) The Certificates, including the Registration Certificate of the Comptroller, the Certificate of Authentication, if any, and the Assignment form to appear thereon, shall be substantially in the form and content of the Certificate Form, with such insertions and variations as are permitted or required by this Ordinance. (b) The Certificates may be endorsed with such legends and endorsements and may be identified with such letters, numbers, or other distinguishing symbols as: (1) conform to usage or law and are approved by the Paying Agent/Registrar; (2) are authorized by the Book Entry Representation Letter; or (3) are approved by the Mayor, as evidenced by the execution thereof. (c) Any portion of the text of each of the Certificates may be set forth on the reverse side thereof, with appropriate reference thereto on the face of the Certificates. (d) A reproduction of the approving opinion of Co -Bond Counsel may be placed on the Certificates over the certification (executed manually or in facsimile) of any officer authorized to execute the Certificates. (e) CUSIP numbers may appear on the Certificates, but the presence or absence thereof shall not affect the legality or enforceability of the Certificates, and neither the Town nor Co - Bond Counsel is responsible for such numbers correctly appearing on the Certificates. Section 3.03. Authentication. (a) Only Certificates that have endorsed thereon the Certificate of Authentication of the Paying Agent/Registrar or the Registration Certificate of the Comptroller, duly executed in each case by manual signature, shall be valid or be entitled to any benefit of this Ordinance. Such a certificate so executed on any Certificate shall be conclusive evidence and the only evidence that (1) such Certificate has been duly issued under this Ordinance and (2) the Certificate Owner is entitled to the benefits hereof. (b) Each of the Initial Certificates shall have endorsed thereon a duly executed Registration Certificate of the Comptroller. Section 3.04. Ownership. A Certificate Owner is deemed to be the absolute owner of such owner's Certificate(s) for all purposes. M Section 3.05. Registration and Transfer. (a) The Certificates are issuable only as fully registered instruments as to principal, premium (if any), and interest. (b) The Register shall be maintained by the Paying Agent/Registrar, as registrar for the Certificates, at its principal office. (c) A transfer of a Certificate is not effective until entered in the Register. The transfer of a Certificate shall be made by the Paying Agent/Registrar upon the surrender to the Paying Agent/Registrar of the Certificate by the Certificate Owner (or such owner's duly authorized attorney), together with such endorsement or other evidence of transfer as is satisfactory to Paying Agent/Registrar. (d) To effect a transfer, the Town shall execute and the Paying Agent/Registrar shall authenticate and deliver to the transferee a new Certificate or Certificates (each in an authorized denomination) of the same tenor and aggregate principal amount as the Certificate surrendered for transfer. (e) A transfer of a Certificate shall be made without any charge to the Certificate Owner, except that any tax or other governmental charge imposed with respect to the transfer shall be paid by the Certificate Owner requesting the transfer. Section 3.06. Book Entry System. (a) The Certificates may be administered under a book entry system. The Town from time to time may enter into arrangements with other Persons to provide for administration of a book entry system for the Certificates. (b) The Book Entry Representation Letter, in substantially the form attached to this Ordinance as Exhibit B, is hereby approved by the Town. (c) Neither the Town nor the Paying Agent/Registrar shall have any responsibility to the participants of any Security Depository, any Person claiming a beneficial ownership interest in the Certificates through any Security Depository or any of its participants, or any other Person that is not a Certificate Owner, with respect to the following: (1) the accuracy of any records maintained by any Security Depository or any of its participants, (2) any payment by a Security Depository or any of its participants in respect of the principal of or premium or interest on the Certificates, (3) any notice given to Certificate Owners pursuant to this Ordinance, (4) the selection by a Security Depository or any of its participants of the Persons to whom partial early redemption payments on the Certificates are made, or IN (5) any consent given or other action taken by a Security Depository (or its nominee) as a Certificate Owner. Section 3.07. Exchange. (a) Any Certificate(s) may be exchanged for a new Certificate or Certificates (each in an authorized denomination) of the same tenor and aggregate principal amount upon the surrender to the Paying Agent/Registrar by the Certificate Owner (or such owner's duly authorized attorney) of the Certificate(s) as to which the exchange is desired. (b) To effect an exchange, the Town shall execute and the Paying Agent/Registrar shall authenticate and deliver to the Certificate Owner the new Certificate or Certificates in exchange for the surrendered Certificate(s). (c) A Certificate Owner exchanging any Certificate(s) shall pay: (1) an amount sufficient to reimburse any out-of-pocket expenses incurred by the Town and the Paying Agent/Registrar in connection with making the exchange; and (2) any tax or other governmental charge imposed with respect to the exchange. Section 3.08. Transfer or Exchange Not Required. The Paying Agent/Registrar is not required to transfer or exchange any Certificate: (1) during the 15 -day period preceding the date of publication of notice of an early redemption of Certificates; (2) that has been selected for redemption prior to maturity (or, as to a Certificate to be redeemed in part, that part of the Certificate selected for redemption); or (3) during the 30 -day period preceding the maturity date of such Certificate. Section 3.09. Replacement. (a) A Certificate that becomes mutilated, lost, stolen, or destroyed may be replaced with a new Certificate in accordance with applicable law. (b) Upon the request of the owner of a mutilated, lost, stolen, or destroyed Certificate and, in the case of a mutilated Certificate, upon surrender of the mutilated Certificate to the Paying Agent/Registrar by the Certificate Owner (or such owner's duly authorized attorney), the Town shall execute and the Paying Agent/Registrar shall authenticate and deliver to the Certificate Owner a new Certificate of the same tenor and principal amount to replace the mutilated, lost, stolen, or destroyed Certificate. (c) In the case of a requested replacement for a lost, stolen, or destroyed Certificate, a replacement Certificate may not be authenticated or delivered unless the Certificate Owner: (1) furnishes the Paying Agent/Registrar with evidence satisfactory to the Paying Agent/Registrar that the Certificate has been lost, stolen, or destroyed; (2) provides indemnity or security satisfactory to the Paying Agent/Registrar to save it and the Town harmless from any loss or damage with respect thereto; and (3) satisfies such other requirements as may reasonably be imposed by the Paying Agent/Registrar. (d) If a mutilated, lost, stolen, or destroyed Certificate has matured or will mature within the 90 -day period following the Certificate Owner's request for a replacement Certificate, the Paying Agent/Registrar, at the Town's direction, may pay the Certificate instead of delivering a replacement Certificate. (e) A Certificate Owner requesting a replacement Certificate shall pay: (1) an amount sufficient to reimburse any out-of-pocket expenses incurred by the Town and the Paying Agent/Registrar in connection with making the replacement; and (2) any tax or other governmental charge imposed with respect to the replacement. Section 3.10. Cancellation. (a) The Paying Agent/Registrar, by appropriate record in the Register, shall cancel a Certificate upon: (1) the redemption of such Certificate; or (2) the delivery of such Certificate to the Paying Agent/Registrar for cancellation; or (3) the delivery of a new Certificate or Certificates in place of such Certificate in accordance with this Ordinance. (b) Cancelled Certificates that are in the Paying Agent/Registrar's possession shall be destroyed by the Paying Agent/Registrar in a manner consistent with law. Upon such a destruction, the Paying Agent/Registrar shall furnish the Town with a certificate of destruction. Section 3.11. Temporary Certificates. (a) Certificates may be initially issued in temporary form, exchangeable for definitive Certificates when they are ready for delivery. 12 (b) The temporary Certificate(s) shall be of the same tenor as definitive Certificates with such variation(s) and of such denomination(s) deemed appropriate by the Mayor, as evidenced by the execution of such Certificate(s). (c) Each temporary Certificate shall be executed by the Town and registered by the Comptroller, or authenticated by the Paying Agent/Registrar, on the same conditions and in substantially the same manner as definitive Certificates. (d) When definitive Certificates are ready for delivery, upon surrender of the temporary Certificate(s), the Paying Agent/Registrar shall exchange therefor definitive Certificates of the same tenor and aggregate principal amount. (e) Upon the exchange of definitive Certificates for any temporary Certificate(s), the Paying Agent/Registrar shall cancel the temporary Certificate(s). The exchange shall be made without charge to any Certificate Owner. Section 3.12. Payment of Certificate Obligations. (a) The Town shall pay or cause to be paid all Certificate Obligations as provided in this Ordinance and the Certificate Form. (b) The Paying Agent/Registrar, as paying agent for the Certificates, shall calculate the amount of Certificate Obligations from time to time payable on each Certificate (other than a Book Entry Certificate) and make timely payment of the Certificate Obligations thereon from the funds available therefor under this Ordinance. The payment of Certificate Obligations with respect to Book Entry Certificates shall be made in accordance with the Book Entry Representation Letter. (c) Interest on each Certificate shall be paid to the Person who is the Certificate Owner at the close of business on the Record Date. (d) The Paying Agent/Registrar shall maintain proper records of all payments of Certificate Obligations. Section 3.13. Purchase in Lieu of Early Redemption. (a) Any funds held in the Interest and Sinking Fund for application to the early redemption of the Certificates may instead be applied, at the Town's discretion, to purchase one or more Certificates of the same maturity as those Certificates for the redemption of which such funds are held if: (1) the total cost to effect such purchase that is to be paid with such funds (including brokerage and other charges) is less than the amount of the Certificate Obligations owing on the purchased Certificates on the purchase date; (2) such purchase is consummated before notice of such early redemption is given to the Certificate Owners; and 13 (3) upon such purchase, the Certificate(s) so purchased are surrendered to the Paying Agent/Registrar for cancellation. (b) An amount equal to the principal amount of each Certificate so purchased shall be credited toward the particular redemption of Certificates for which such funds were held. ARTICLE IV MANAGEMENT OF FUNDS Section 4.01. Creation of Funds. (a) The following funds and accounts shall be created by the Town pursuant to this Ordinance: (1) the Interest and Sinking Fund, and within such fund, the Accrued Interest Account, and the Premium Account; and (2) the Project Fund. (b) The Funds shall be maintained by the Town, separate from any other funds of the Town, and shall be held in trust at the depositary of the Town for application as provided by this Ordinance. Section 4.02. Disposition of Certificate Proceeds. (a) Except for that portion of the proceeds of the sale of the Certificates to the Purchaser constituting premium and accrued interest, all such proceeds shall be received by the Town, and, concurrently, such proceeds shall be deposited into the Project Fund. (b) The proceeds of the sale of the Certificates constituting premium shall be deposited into the Premium Account, and the proceeds of the sale of the Certificates constituting accrued interest shall be deposited into the Accrued Interest Account. Section 4.03. Deposit of Funds into the Interest and Sinking Fund. From funds that are pledged and/or otherwise available under this Ordinance, the Town shall cause to be deposited into the Interest and Sinking Fund, not later than the third Business Day preceding each date on which any Certificate Obligations come due, funds in an amount that is sufficient (together with any other funds on deposit therein) to provide for the timely payment of the Certificate Obligations. Section 4.04. Application of Interest and Sinking Fund. (a) The funds on deposit in the Interest and Sinking Fund shall be applied, in accordance with this Ordinance, at such times and in such amounts as required for the timely payment of Certificate Obligations. 14 (b) Amounts deposited into the Premium Account shall be applied for the sole purpose of paying the principal of the Certificates on the first date on which the principal of the Certificates comes due. (c) Amounts deposited into the Accrued Interest Account shall be applied for the sole purpose of paying accrued interest on the Certificates. (d) The Town shall cause to be transferred to the Paying Agent/Registrar, not less than two Business Days prior to each date on which Certificate Obligations come due, an amount sufficient to pay such obligations. Section 4.05. Application of Project Fund. (a) Costs of Issuance shall be paid from the Project Fund as soon as practicable after the Closing. (b) The proceeds of the Certificates are authorized to be applied to the Project. (c) In making expenditures of the proceeds of the Certificates to pay Project Costs, the Town shall comply with all applicable law. (d) On or before each Rebate Penalty Payment Date, the Town shall pay any Rebate Penalty and any other amount due to the Secretary of the Treasury of the United States (or such other payee as required by the Arbitrage Rebate Rules) in accordance with the Arbitrage Rebate Rules. Once the amount of a Rebate Penalty and any other amount owed have been determined, such amount shall be retained in the Project Fund pending payment to the United States government pursuant to the Arbitrage Rebate Rules. (f) After the Project Completion Certificate is received for the Project, the Town Manager shall transfer to the Interest and Sinking Fund (if and to the extent permitted by the Authorizing Law) any funds not needed for the payment of Project Costs that remain on deposit in the Project Fund if such funds are not needed for the payment to the United States government pursuant to the Arbitrage Rebate Rules. Section 4.06. Investment of Funds. (a) The funds on deposit in any Fund may be invested and reinvested only in Eligible Investments by the Town. (b) The investments of each Fund shall be made under conditions that will timely provide funds sufficient to satisfy the purpose(s) for which such Fund is intended. (c) The proceeds received from the disposition of any investment acquired with funds from any Fund, and any income received from any such investment, shall be deposited into such Fund. (d) Uninvested funds (if any) in any Fund shall be secured in the manner and to the extent required by law. 15 Section 4.07. Unclaimed Payment. (a) Any funds held for the payment of Certificate Obligations due on any Certificate, which funds are unclaimed by the Certificate Owner, shall be set aside in an escrow account, uninvested, and held for the exclusive benefit of the Certificate Owner, without liability for any interest thereon. (b) Any such funds remaining unclaimed for three years after such Certificate Obligations became due (or such other period as specified by applicable law) shall be transferred to the Town, which shall dispose of such funds pursuant to Title 6 of the Texas Property Code or other applicable law. After such disposal, all liability of the Town and the Paying Agent/Registrar for the payment of such funds shall cease. (c) The Town and the Paying Agent/Registrar shall comply with the reporting requirements of Chapter 74 of the Texas Property Code or other applicable law with respect to such unclaimed funds. ARTICLE V FEDERAL TAX PROVISIONS Section 5.01. Preservation of Tax -Exempt Status. (a) The Town will not take any action that constitutes (or omit to take any action, which omission constitutes) an Event of Taxability. (b) Compliance with the provisions of this Ordinance or the Transaction Documents relating to the tax-exempt status of the Certificates under the Code is not required to the extent that, in the opinion of Bond Counsel, such noncompliance will not constitute an Event of Taxability. (c) The Town may provide for alternate procedures to those prescribed by the Transaction Documents relating to the tax-exempt status of the Certificates to the extent that, in the opinion of Bond Counsel, such alternate procedures are necessary for compliance that the provisions of the Code regulating tax-exempt Certificates. Section 5.02. Investment Restrictions. (a) The Town may reduce the yield on the investments in any Fund any time it is determined that it is necessary to do so, or to take any other action with respect to any Fund, in order to avoid or mitigate the effect of a violation of the arbitrage rules of the Code. (b) If any funds representing proceeds of the Certificates (including the investment earnings, if any, thereon) remain on deposit in any Fund as of the close of the three-year period commencing with the Closing Date (or such other period as the Town determines, after consultation with Bond Counsel, appropriate for compliance with arbitrage rules under IR the Code), upon the close of such period the Town shall restrict the investments of such funds to a yield (determined in accordance with the arbitrage rules under the Code) not greater than the Certificate Yield, unless the Town obtains an opinion of Bond Counsel to the effect that the failure to so restrict the yield will not constitute an Event of Taxability. Section 5.03. Federal Tax Certifications. Appropriate officers, employees, and agents of the Town are hereby authorized to certify to such facts as requested by Co -Bond Counsel to enable Co -Bond Counsel to render its opinion regarding the tax-exempt status of the Certificates or other opinions as may be required under this Ordinance or the Transaction Documents. Section 5.04. Calculation of Certificate Yield. The Certificate Yield shall be calculated as of the Closing Date by the Town's financial advisor based on information furnished by the Purchaser or any other appropriate Person. Section 5.05. Arbitrage Rebate. (a) The Town shall be responsible for filing the appropriate documentation with the United States government and taking other action as from time to time may be necessary to comply with the Arbitrage Rebate Rules in connection with the Certificates. (b) The Town hereby elects, pursuant to Section 148(f)(4)(C)(vii) of the Code (relating to the penalty for failure to spend the proceeds of tax-exempt Certificates within certain periods of time), to pay the Rebate Penalty in lieu of rebate of arbitrage with respect to the Certificates. (c) On the first Business Day following each Rebate Penalty Payment Date (or as soon thereafter as practicable), the Town Manager shall certify to the Board that the Town is in compliance with the Arbitrage Rebate Rules with respect to the Certificates, or, if such certification cannot be made, the Town Manager shall report the reason(s) therefor to the Board. (d) The Town Manager, in consultation with the Town's financial advisor, shall calculate the Rebate Penalty on each Rebate Penalty Calculation Date and shall continue to make such calculations until such calculations are no longer necessary for compliance with the Arbitrage Rebate Rules. The Town Manager shall retain records documenting the Rebate Penalty calculations as official records. ARTICLE VI PARTICULAR REPRESENTATIONS, STIPULATIONS, AND COVENANTS Section 6.01. Ordinance Constitutes a Contract. This Ordinance shall constitute a contract between the Town and the Certificate Owners, and the provisions hereof shall inure to the benefit of the Certificate Owners equally and ratably except as otherwise expressly provided in this Ordinance. 17 Section 6.02. Amendment of Ordinance. (a) Except as otherwise provided by this Section, this Ordinance may not be amended without the consent of the owners of at least a majority in aggregate principal amount of the outstanding Certificates. (b) The consent of the owners of all outstanding Certificates is required for any proposed amendment to this Ordinance that would: (1) permit a preference or priority of any Certificate over another Certificate; or (2) reduce the percentage of Certificate Owners that is required to consent to an amendment of this Ordinance. (c) The consent of the Owner of each affected outstanding Certificate is required for any proposed amendment to this Ordinance that would: (1) change the time of any regularly scheduled payment of Certificate Obligations, the principal amount of any Certificate, the interest rate on any Certificate, the currency in which Certificate Obligations are required to be paid, or any of the other terms of this Ordinance governing the time, place, or manner of payment of Certificate Obligations: (2) impair the security for any Certificate; or (3) result in a reduction of any then existing rating on the Certificates. (d) Subject to Subsections (b) and (c) of this Section, no Certificate Owner consent is required for an amendment to this Ordinance if the amendment, in the opinion of Bond Counsel, will not adversely affect the rights of any Certificate Owner under this Ordinance or the Certificates. Section 6.03. Written Communications by Certificate Owners. (a) Any communication required or authorized by this Ordinance to be executed by Certificate Owners may be in any number of concurrent instruments of similar tenor and may be executed by Certificate Owners in person or by agent appointed by written instrument. (b) The fact and date of the execution by any Person of any such communication may be proved by: (1) the certificate of any officer in any jurisdiction who, under the law thereof, has power to take acknowledgments within such jurisdiction, to the effect that the Person signing such communication acknowledged before such officer the execution thereof; or 18 (2) an affidavit of a witness to such execution. (c) Proof of execution of instruments in the manner provided by this Section shall be sufficient for any purpose of this Ordinance and shall be conclusive in favor of the Town, the Treasurer, and the Paying Agent/Registrar with respect to any action taken in reliance thereon. Section 6.04. Effect of Prior Action. Any consent of or other communication from a Certificate Owner shall bind every future owner of the same Certificate in respect of anything done by or on behalf of the Town or the Paying Agent/Registrar pursuant to such communication. Section 6.05. Determining Certificate Ownership. The Paying Agent/Registrar is not bound to recognize any Person as the owner of any Certificate or take action at such Person's request unless such Person furnishes evidence of its identity as the Certificate Owner satisfactory to the Paying Agent/Registrar. Section 6.07. Special Record Date. The Town may fix, with respect to any notice or other communication to be given to, or any consent or other action to be taken by, Certificate Owners under this Ordinance, a record date in order to establish the identity of the Certificate Owners for purposes of such communication or action. ARTICLE VII DISCHARGE Section 7.01. Discharge of Claim against Revenues and Taxes Pledged Under this Ordinance. (a) The claim of this Ordinance against the pledge of revenues and taxes provided under this Ordinance shall be deemed discharged and of no further force and effect when: (1) the Certificate Obligations on all Certificates have been discharged; and (2) all other amounts payable under this Ordinance (including, without limitation, compensation of the Paying Agent/Registrar) have been paid, or arrangements satisfactory to the Person to whom any such payment is due for making such payment have been made. (b) The Certificate Obligations on any Certificate or Certificates shall be deemed discharged when: (1) such Certificate Obligations have: (A) been paid in accordance with the terms of such Certificate(s); or 19 (B) become due (whether at stated maturity or otherwise) and an amount of money sufficient for the payment thereof has been deposited in the Interest and Sinking Fund or with the Paying Agent/Registrar; (2) such Certificate(s) has (have) been cancelled or surrendered for cancellation; or (3) such Certificate Obligations have been defeased in accordance with law by a deposit of Sufficient Assets pursuant to this Ordinance. (c) Upon the discharge of the Certificate Obligations on any Certificate, such Certificate shall no longer be entitled to the security provided under this Ordinance. (d) When the claim of this Ordinance against finds provided pursuant to this Ordinance ceases to be of force and effect, the Paying Agent/Registrar, at the Town's request, shall execute and deliver such instruments (if any) as are necessary to effect the discharge. Section 7.02. Defeasance of Certificate Obligations. (a) The Certificate Obligations on any Certificate (or Certificates) shall be deemed defeased when the following requirements have been satisfied: (1) the payment of such Certificate Obligations has been provided for by irrevocably depositing Sufficient Assets into the Interest and Sinking Fund or with the Paying Agent/Registrar, which (in accordance with applicable law) shall be held in trust in a separate escrow account and applied exclusively to the payment of such Certificate Obligations; (2) the Town has received an opinion of Bond Counsel to the effect that: (A) such deposit of Sufficient Assets: (i) will not constitute an Event of Taxability; and (ii) complies with State law; and (B) all conditions precedent to such Certificate Obligations being deemed defeased have been satisfied; (3) all amounts (other than Certificate Obligations) due, or reasonably estimated by the Paying Agent/Registrar to become due, under this Ordinance (including, without limitation, compensation of the Paying Agent/Registrar) with respect to such Certificate(s) have been paid, or provision satisfactory to the Person to whom any such payment is or will be due for making such payment has been made; 20 (4) if any such Certificate is to be redeemed prior to maturity, notice of such redemption has been duly given, or arrangements satisfactory to the Paying Agent/Registrar for giving such notice have been made; (5) if any such Certificate is to be redeemed more than 180 days after the date of such deposit of Sufficient Assets, notice of such deposit has been given by the Paying Agent/Registrar to the owner of each such Certificate, or arrangements satisfactory to the Paying Agent/Registrar for giving such notice have been made; and (6) the Paying Agent/Registrar has received such other documentation and assurance as the Paying Agent/Registrar reasonably may request. (b) If a deposit of Sufficient Assets pursuant to this Section is to provide for the payment of Certificate Obligations on less than all of the outstanding Certificates, the particular maturity or maturities of Certificates (or, if less than a maturity, the principal amount within a maturity) shall be as specified by the Town, and the particular Certificates (or portions thereof) shall be selected by the Paying Agent/Registrar by lot in such manner as the Paying Agent/Registrar shall determine. (c) The Paying Agent/Registrar shall transfer funds from the Interest and Sinking Fund or the escrow account established pursuant to this Section (as applicable) at such times and in such amounts as necessary for the timely payment of the Certificate Obligations on the Certificate(s). (d) To the extent permitted by law, the Paying Agent/Registrar, at the Town Manager's direction, may substitute, for any of the securities or obligations deposited as Sufficient Assets pursuant to this Section, other securities or obligations constituting Sufficient Assets if, upon such substitution, the requirements of Subsection (a) of this section are satisfied. Any net proceeds realized from such a substitution shall be paid to the Town. (e) If a provision of this section conflicts with law, this section shall be applied, to the extent practicable, as if such provision were consistent with law. ARTICLE VIII CONCERNING THE PAYING AGENT/REGISTRAR Section 8.01 Appointment of Paying Aaent/Re istrar. (a) The Town hereby appoints the Paying Agent/Registrar, and the appointment shall take effect immediately. (b) The Town may enter into an agreement with any Paying Agent/Registrar governing the duties and functions to be performed by such Paying Agent/Registrar, compensation, termination and resignation, or such other matters as the Board determines appropriate. 21 Section 8.02. Confidentiality of Records. (a) The Paying Agent/Registrar shall be required to keep the Register and any other records it maintains in connection with the Certificates confidential, except as otherwise required by law. (b) The Town (or its designee) reserves the right to inspect the Register and such other records during the regular business hours of the Paying Agent/Registrar. Section 8.03. Qualifications. To be qualified to serve as Paying Agent/Registrar, a Person must be a bank, trust company, or other entity that: (1) is authorized under law to exercise trust powers and perform the duties and functions of Paying Agent/Registrar prescribed by this Ordinance; and (2) is subject to supervision or examination by a federal or state governmental Town with jurisdiction over financial institutions. Section 8.04. Maintaining Paying Agent/Registrar. While any Certificates are outstanding, the Town will maintain a qualified Paying Agent/Registrar and will promptly appoint a replacement if the Paying Agent/Registrar resigns, is tenninated, or otherwise ceases to serve. Section 8.05. Termination. The Town reserves the right to terminate the appointment of the Paying Agent/Registrar at any time by causing written notice of such termination, stating the effective date thereof, to be given to the Paying Agent/Registrar. Section 8.06. Notice of Change to Certificate Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the Town will cause notice of such change to be sent to the owner of each outstanding Certificate, which notice shall state the effective date of such change and the name and mailing address of the replacement Paying Agent/Registrar. Failure to give notice under this Section does not affect the validity of a change in the entity serving as Paying Agent/Registrar. Section 8.07. Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, the Town shall cause such Paying Agent/Registrar, promptly upon the appointment of its replacement, to deliver the Register and all other records it maintained in connection with the Certificates (or a copy thereof) to the replacement Paying Agent/Registrar. 22 ARTICLE IX SALE AND DELIVERY OF THE CERTIFICATES Section 9.01. Authorization of Sale of the Certificates and the Execution and Delivery of the Transaction Documents. In response to the Official Notice of Sale and Bidding Instructions pertaining to the Certificates, the Purchaser submitted the lowest bid for the Certificates, and, therefore, the Board hereby authorizes the sale of the Certificates to the Purchaser on the terms prescribed in the bid for a price equal to $12,400,097. The Board also hereby authorizes the execution and delivery of the Paying Agent/Registrar Agreement and the Official Statement. Section 9.02. Control and Delivery of the Certificates. (a) The Town Manager is hereby authorized to have control of the Certificates and of all records and proceedings pertaining thereto pending the governmental approval(s) and other official action(s) necessary for the lawful issuance of the Certificates and their delivery to the Purchaser. (b) After all action necessary for the lawful issuance of the Certificates has been taken, the Certificates shall be delivered under the general supervision of the Town Manager against receipt by the Town of all suns due under the terms of sale of the Certificates. (c) The Certificates shall be initially registered and delivered as directed by the Purchaser (or the designee(s) thereof) unless the Book Entry Representation Letter is in effect, in which event the Certificates shall be initially registered and delivered as provided therein. (d) Upon payment for the Initial Certificates, the Paying Agent/Registrar, if requested by the Purchaser, shall cancel the Initial Certificates and deliver in exchange therefor Certificates authenticated by the Paying Agent/Registrar and registered in accordance with instructions of the Purchaser (or the designee(s) thereof). If the Paying Agent/Registrar does not receive such instructions at least three Business Days before the Closing Date, the delivery of such authenticated Certificates may be delayed. Section 9.03. Preliminary Official Statement. (a) The Town authorizes the Preliminary Official Statement to be: (1) supplemented to include the information arising from the sale of the Certificates that, in the opinion of Co -Bond Counsel, is necessary under the Rule for the Preliminary Official Statement to constitute a "final' official statement; and (2) modified, if in the opinion of Co -Bond Counsel, such modification is necessary to satisfy the disclosure requirements of the federal securities laws. (b) Upon the Preliminary Official Statement being supplemented and (if necessary) modified pursuant to Subsection (a) of this Section, the Preliminary Official Statement, as so 23 supplemented and modified, shall be deemed to be approved by the Town as the final official statement for the Certificates and an appropriate number of copies shall be delivered to the Purchaser for use in connection with the offer and sale of the Certificates. Section 9.04. Official Statement. (a) Subject to Subsection (b) below, the Town hereby authorizes the Official Statement to be delivered in connection with the issuance and sale of the Certificates. (b) The Town authorizes the Official Statement to be modified, if in the opinion of Co -Bond Counsel, such modification is necessary to satisfy the disclosure requirements of the federal securities laws. (c) Upon the Official Statement being modified pursuant to Subsection (a) of this Section, the Official Statement, as so modified, shall be deemed to be approved by the Town as the final official statement for the Certificates and an appropriate number of copies shall be delivered to the Purchaser for use in connection with the offer and sale of the Certificates. ARTICLE X CONTINUING DISCLOSURE MATTERS Section 10.01. Annual Statements. (a) The Town shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year ending in or after the year in which the Certificates are issued, financial information and operating data with respect to the Town of the general type of the financial information and operating data contained in the Official Statement. (b) Any financial statements that are provided by the Town shall be (1) prepared (A) in accordance with the accounting principles used in preparing the financial statements contained in the Official Statement or (B) as the Town may otherwise be required to use as result of state law or regulation and (2) audited if the Town commissions an audit and the audit is completed within the time required for providing the financial statements; provided that, if the audit is not complete, the Town shall provide unaudited financial statements to the NRMSIR and any SID and shall provide audited financial statements for the applicable fiscal year when such audit becomes available. (c) If the Town changes its fiscal year, it will notify each NRMSIR and any SID of the change (and of the new fiscal year) prior to the next day by which the Town would otherwise be required to provide financial information and operating data pursuant to this section. (d) The financial information and operating data to be provided pursuant to this Section may be contained in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if available from the MSRB) that had been previously provided to each NRMSIR and any SID or filed with the SEC. 24 Section 10.02. Material Event Notices. (a) The Town shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, if any of the following events occur regarding the Certificates and such event is material within the meaning of the federal securities laws: (1) principal and interest payment defaults; (2) on -payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancement 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 Certificate Owners; (8) Certificate calls; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Certificates; and (11) rating changes. (b) The Town shall notify any SID and either NRMSIR or the MSRB, in a timely manner, of any failure by the Town to provide financial information or operating data in accordance with this Section. Section 10.03. Limitation and Disclaimer. (a) The Town shall be obligated to perform the agreements contained in this Article as long as the Town remains an "obligated person," within the meaning of the Rule, with respect to the Certificates. (b) The provisions of this Article are for the sole benefit of the Certificate Owners. Nothing in this Article, express or implied, shall be for the benefit of or confer any legal or equitable right, remedy, or claim hereunder to any other Person. The Town agrees to provide only the financial information, operating data, financial statements, and notices that it has expressly agreed to provide pursuant to this Article and does not agree to provide any other information that may be relevant or material to a complete presentation of the Town's financial results, condition, or prospects. The Town does not make any representation or warranty concerning the information it provides pursuant to this Article in terms of its usefulness to a decision to invest or sell the Certificates at any future date. 25 (c) Under no circumstances shall the Town be liable to the Certificate Owners, or any beneficial owner of a Certificate or any other Person, in contract or tort, for damages resulting in whole or in part from any breach by the Town, whether negligent or without fault on its part, of any covenant specified in this Article. Notwithstanding any provision of this Ordinance to the contrary, every right and remedy of any such Person, in contract or tort, for or on account of any breach of any duty under this Articles hall be limited to an action for mandamus or specific performance. (d) No default by the Town in performing its obligations under this Article shall be a breach or default under this Ordinance for any other purpose thereof. (e) Nothing in this Article is intended or shall act as a disclaimer, waiver, or otherwise limit the duties of the Town under federal or state securities laws. Section 10.04. Amendments. (a) The provisions of this Article may be amended by the Town 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 Town, but only if (1) the provisions of this Article, as amended, would have permitted an underwriter to purchase or sell the Certificates in the primary offering of the Certificates in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (A) the Certificate 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 Town (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Certificate Owners. (b) The Town may also repeal or amend the provisions of this Article if the SEC amends or repeals the applicable provisions of the Rule or any court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if such change would not prevent an underwriter from lawfully purchasing or selling the Certificates in the primary offering of the Certificates. (c) If the Town amends the provisions of this Article, it shall provide an explanation, in narrative form, of the reasons for the amendment and the effect of any change in the type of financial information or operating data provided. ARTICLE XI REMEDIES Section 11.0 L Remedies Upon Event of Default. Upon the occurrence of an Event of Default, each Certificate Owner, including any authorized representative thereof, may take any action against the Town, authorized or permitted under law or equity, to enforce the rights of the Certificate Owners under this Ordinance by mandamus or other suit, action, or special proceeding, in any court of competent jurisdiction, including, but not limited to, the specific 26 performance of any covenant or agreement contained herein or to enjoin any act or thing that may be unlawful or in violation of any right of the Certificate Owners hereunder. All enforcement of remedies under this Ordinance shall be instituted and maintained for the equal benefit of all Certificate Owners then outstanding. Notwithstanding any other provision of this Ordinance, the principal amount due under the Certificates shall not be subject to acceleration upon the occurrence of an Event of Default or otherwise. Section 11.02. Remedies not Exclusive. No remedy authorized or permitted under this Ordinance shall be exclusive of any other remedy. Each remedy shall be cumulative and shall be supplementary to every other remedy. The failure to exercise any remedy shall not be deemed a waiver of any rights under this Ordinance. ARTICLE XII MISCELLANEOUS PROVISIONS Section 12.01. Execution and Delivery of Documents. (a) The Town hereby authorizes the execution and delivery of and the performance of the Town's obligations under: (1) the Transaction Documents approved by this Ordinance; and (2) any other instruments, certificates, or other documents required or contemplated by the Transaction Documents or to effect the transactions contemplated by this Ordinance and such documents. (b) Subsequent to the adoption of this Ordinance, the provisions of this Ordinance and any document approved by this Ordinance may be changed prior to the execution and delivery of such document, if such change is required by the Attorney General as a condition to approving the Certificates and/or to the extent permitted by law, at the request of any party to such document, if the change: (1) would not result in an Event of Taxability; (2) does not violate the Authorizing Law and does not change the substantive intent of the Board with respect to the terms and conditions of the Ordinance; (3) does not constitute a breach of any existing agreement between the Town and the Purchaser without the express consent of the affected party; and (4) is approved by each party to the document (which approval may be given on each party's behalf by the authorized officer(s) of such party executing such document, which execution shall evidence such approval). 27 Section 12.02. Notices and other Communications. (a) Notices, consents, requests, and other communications under this Ordinance shall be in writing and delivered by first class United States mail, postage paid, by telex, telegram, or other electronic transmission, or by express or personal delivery. (b) Communications to a Certificate Owner under this Ordinance shall be deemed properly delivered if sent by first class United States mail, postage paid, to such owner's address appearing in the Register. (c) A provision of this Ordinance that provides for a different method of communication or otherwise conflicts with this Section supersedes this Section to the extent of the conflict. Section 12.03. Governmental Action. The Town hereby directs that the Certificates, this Ordinance, and other appropriate proceedings and documents relating to the Certificates be submitted to any governmental entity, agency, or office to which any such material must be submitted to effect the lawful issuance of the Certificates. Section 12.04. Authorized Representatives. The Mayor, the Mayor Pro Tem, and the other member(s) of the Board, the Town Manager and the other officers of the Town, and appropriate employees of the Town are each hereby authorized and directed to do all things necessary to carry out the terms and effect the purposes of this Ordinance. Section 12.05. Ratification of Prior Action. The adoption by the Town of both the Original Ordinance and this Ordinance and all actions taken by the Town, or by any of its officers, employees, or agents, in connection with the financing of the Project or the issuance or sale of the Certificates, to the extent such actions are not inconsistent with this Ordinance, are hereby ratified and confirmed. Section 12.06. No Personal Liability. No obligation imposed under this Ordinance, the Certificates, or any document executed by the Town in connection therewith shall be deemed to be the obligation, in an individual capacity, of any officer, employee, or agent of the Town, and no such officer, employee, or agent or any individual executing the Certificates or any such other document on behalf of any such entity shall be subject to any personal liability with respect thereto. Section 12.07. Successor to Town. All covenants and other agreements provided in this Ordinance by or on behalf or for the benefit of the Town shall bind and inure to the benefit of the successors and assigns of the Town. 28 Section 12.08. Benefit of Ordinance. Except as otherwise expressly provided in this Ordinance or in the Certificates, neither this Ordinance nor the Certificates confers any right, remedy, or claim on any Person other than the Town, the Paying Agent/Registrar, and the Certificate Owners. Section 12.09. Severability. If any part of this Ordinance is ruled unenforceable by a court of competent jurisdiction, this Ordinance shall remain operable to the greatest extent possible under the application of such ruling. PASSED AND APPROVED THIS 24TH DAY OF MARCH, 2002. ATTEST: r f / Ginger -C osswy, Town Secre �- APPROVED AS TO LEGAL FORM: Scotty, Mayor � r Trent O. Pettq; Town Manage 29 EXHIBIT A (a) Except as provided by Paragraph (b) (below) of this Exhibit A, the Certificates shall be issued in substantially the following form: (Form of Certificate) Registered Number: Registered UNITED STATES OF AMERICA STATE OF TEXAS TOWN OF WESTLAKE, TEXAS COMBINATION TAX AND LIMITED PLEDGE REVENUE CERTIFICATES OF OBLIGATION SERIES 2002 Interest Rate Maturity Date Original Issue Date CUSIP Number % February 1, 2002 Registered Owner: Paying Agent/Registrar: J. P. Morgan Chase Bank The Town of Westlake, Texas (the "Town"), located in Tarrant County and Denton County, State of Texas, for value received, promises to pay to the Registered Owner (identified above), or registered assigns, on the Maturity Date specified above, the principal sum of DOLLARS and to pay interest thereon from the Original Issue Date specified above at the per annum Interest Rate specified above and on the dates set forth herein. This Certificate is one of a series of fully registered Certificates, designated as "Town of Westlake, Texas, Combination Tax and Limited Pledge Revenue, Certificates of Obligation, Series 2002" (the "Certificates" or, as to any of the Certificates, individually, a "Certificate") issued by the Town, pursuant to the Certificate of Obligation Act, as amended (Chapter 271, Subchapter C, Local Government Code) and other applicable law, in the initial aggregate principal amount of $12,400,000, in denominations of $5,000 or any integral multiple thereof, each dated the Original Issue Date, and numbered consecutively or as otherwise determined by the Paying Agent/Registrar identified above (or any successor, the "Paying Agent/Registrar"). The Certificates have been issued pursuant to a certain Ordinance of the Town (together with any amendments, the "Ordinance") for the purpose of financing the acquisition of and improvement to facilities to be used for a government center as described in the Ordinance. The principal of the Certificates is payable without exchange or collection charges upon surrender to the Paying Agent/Registrar. The interest on each Certificate shall be paid semiannually beginning on 30 November 1, 2002 and on the first day of each sixth month thereafter (each such day of payment, an "Interest Payment Date") by check mailed to the person in whose name the Certificate is registered (the "Owner" or as to the Certificates collectively, the "Owners"), at the close of business on the 15th day immediately preceding the Interest Payment Date, in the Certificate register maintained by the Paying Agent/Registrar, at the address shown in the Certificate register (the "Record Address") or at such other address as is furnished in writing by the Owner to the Paying Agent/Registrar. Any Owner may arrange with the Paying Agent/Registrar for payment, at such Owner's risk and expense, in a different manner that is mutually acceptable. Payment will be made in lawful money of the United States of America. The Certificates shall be numbered from 1 upward or in any other manner as agreed between the Town and Paying Agent/Registrar. The Ordinance authorizes the Certificates to be administered under a book entry system (any such Certificates, "Book Entry Certificates"). Payments on any Book Entry Certificates shall be made in accordance with the book entry arrangements authorized by the Town. Any time any payment is due on the Certificates on a day that is not a "Business Day" (as defined in the Ordinance), such payment may be made on the first Business Day occurring after such due day (without any interest accruing on such payment from such due day). Any unpaid interest on the Certificates shall be paid at maturity. Interest on the Certificates shall be calculated on the basis of a 360 -day year consisting of 12 30 -day months. Interest on any overdue payment on any Certificate, to the extent permitted by law, shall accrue at the interest rate borne by such Certificate. The Certificates shall mature on May 1 of the years and in the principal amounts and bear interest at the per annum rates as follows: Year Principal Interest Rate Year Principal Interest Rate Amount Amount 2006 $210,000 6.50% 2013 $315,000 6.50% 2007 $225,000 6.50% 2014 $330,000 6.50% 2008 $235,000 6.50% 2015 $350,000 6.50% 2009 $250,000 6.50% 2016 $365,000 6.50% 2010 $265,000 6.50% 2017 $385,000 6.50% 2011 $280,000 6.50% 2024 $3,310,000 5.75 % 2012 $295,000 6.50% 2032 $5,585,000 5.80% Certificates maturing on or after May 1, 2015 may be redeemed, at the option of the Town, in whole or part on May 1, 2014 or on any date thereafter, if, at least 30 days prior to the redemption date, the Paying Agent/Registrar causes notice of such redemption to be published one time in a financial publication of general circulation in the United States that regularly carries notices of state and local bond redemptions. The redemption price of the Certificates to be so redeemed shall be the principal amount of such Certificates plus accrued interest thereon to the redemption date. The Certificates maturing on May 1, 2024 shall be subject to mandatory sinking fund redemption prior to maturity, in part, at a redemption price equal to the par amount thereof plus interest accrued to the redemption date, in the principal amounts and on the dates as follows: 31 Year Principal Amount Year Principal Amount 2018 $405,000 2022 $495,000 2019 $425,000 2023 $520,000 2020 $445,000 2024 $550,000 2021 $470,000 2032 $830,000 The Certificates maturing on May 1, 2032 shall be subject to mandatory sinking fund redemption prior to maturity, in part, at a redemption price equal to the par amount thereof plus interest accrued to the redemption date, in the principal amounts and on the dates as follows: Year Principal Amount Year Principal Amount 2025 $580,000 2029 $710,000 2026 $610,000 2030 $750,000 2027 $640,000 2031 $790,000 2028 $675,000 2032 $830,000 The notice of an early redemption of the Certificates shall state the redemption date, the redemption price, and the place of payment thereof and, in the case of a partial redemption, shall identify the Certificates or portions thereof to be redeemed. In addition to publication, the Paying Agent/Registrar shall give notice of an early redemption by mailing a copy of such notice by first class United States mail, postage paid, at least 30 days prior to redemption date, to each affected Owner at such Owner's Record Address. Failure to give (or to properly give) notice of early redemption by mail shall not affect the validity of the redemption. If less than all the Certificates are to be redeemed prior to maturity, the Certificates to be redeemed shall be redeemed only in authorized denominations, and the maturity or maturities (or, if less than an entire maturity, the amount thereof) to be redeemed shall be as specified by the Town, the particular Certificates (or portions thereof) to be redeemed being selected at random, with each portion of each such Certificate equal to the minimum authorized denomination being treated for purposes of such selection as if it were a single Certificate. Such random selection shall be conducted by the Paying Agent/Registrar in the manner it deems appropriate, unless the Certificates to be redeemed are Book Entry Certificates, in which event such selection shall be conducted in accordance with the book entry arrangements authorized by the Town. If only a portion of a Certificate is to be redeemed, an exchange Certificate or Certificates in the aggregate principal amount of the unredeemed portion shall be delivered to the Owner. The Certificates (or portions thereof) called for redemption shall become due on the redemption date and, if sufficient funds available solely for such redemption are on deposit in the interest and sinking fund for the Certificates or with the Paying Agent/Registrar on the redemption date, such Certificates (or portions thereof) shall cease to bear interest on the redemption date. This Certificate is transferable by the Owner, in person or by attorney duly authorized in writing, upon surrender of this Certificate for transfer to the Paying Agent/Registrar and payment of the charges and subject to the conditions provided in the Ordinance. Upon such a transfer, a new Certificate or Certificates in the same aggregate principal amount will be issued to the designated transferee. Notwithstanding any notice to the contrary, the Paying Agent/Registrar or any transfer agent may deem the transferee for all purposes to be the absolute owner of a transferred Certificate. This Certificate may be exchanged for Certificates of like tenor in authorized denominations upon payment of the charges and subject to the conditions provided in the Certificate Ordinance. The Paying Agent/Registrar will not be required to transfer or exchange any Certificate: 32 (1) during the I5 -day period preceding the date of publication of notice of an early redemption of the Certificates; (2) that has been selected for early redemption; or (3) during the 30 -day period preceding the maturity date of such Certificate. A surrender of this Certificate to the Paying Agent/Registrar shall be made at the Paying Agent/Registrar's principal corporate trust office (or, if the Town is the Paying Agent/Registrar, at its principal business office) located in the city specified above in this Certificate. Reference is made to the Ordinance, a copy of which is on file with the Town, concerning the security for the Certificates, the respective rights and obligations of the Town and the Owners thereunder, and the other stipulations and covenants with respect to the Certificates. The Ordinance may be amended upon compliance with the provisions thereof governing such amendment. By accepting this Certificate, the Owner hereof consents to the provisions of the Ordinance. Neither the officers, employees, nor agents of the Town nor any person executing the Certificates shall be subject to any personal liability because of the issuance thereof. The Town certifies that all conditions required to be satisfied for the lawful issuance of the Certificates have been satisfied, and the total indebtedness of the Town, including the issuance of the Certificates and other certificates pursuant to the Ordinance, does not exceed any constitutional or statutory limitation. This Certificate shall not be valid or be entitled to any benefit of the Ordinance unless the Certificate of Authentication appearing hereon has been executed by the Paying Agent/Registrar. IN WITNESS WHEREOF, the Town has caused this Certificate to be executed in its name by the manual or facsimile signature of the Mayor of the Town, and the Town has caused its seal or a facsimile thereof to be affixed to this Certificate. Town Sedtetary, Town of Westlakb Texas [SEAL] 33 Mayor, Town of Westlake, Te` S (Form of Certificate of Authentication) [The Certificate of Authentication may be deleted from the Initial Certificates if the Comptroller's Registration Certificate appears thereon.] CERTIFICATE OF AUTHENTICATION This Certificate is one of the Certificates of the issue described in tire within -mentioned Certificate Ordinance. The series of Certificates of which this Certificate is a part was originally issued as one Initial Certificate, which was approved by the Attorney General of the State of Texas and registered with the Comptroller of Public Accounts of the State of Texas. [Name of Paying Agent/Registrar,] as Paying Agent/Registrar By: Dated: Title: Authorized Signatory 34 (Form of Registration Certificate of the Comptroller of Public Accounts) [The Registration Certificate of the Comptroller may be deleted from Certificates that are authenticated by the Paying Agent/Registrar if such certificate on each of the Initial Certificates is fully executed.] OFFICE OF COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NUMBER: THE STATE OF TEXAS 6 I hereby certify that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Certificate has been examined by him as required by law, that he finds that it has been issued in conformity with the laws of the State of Texas, and that it is a valid and binding general obligation of the State of Texas and that this Certificate has this day been registered by me. Witness my hand and seal of office this Comptroller of Public Accounts of the State of Texas 35 (Form of Assignment) ASSIGNMENT The undersigned hereby appoints, with power to transfer the within Certificate on the books kept for registration hereof, with full power of substitution in the premises, as attorney: Dated: NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular and must be guaranteed by a member of the New York Stock Exchange or a commercial bank or trust company. Signature Guaranteed by: Authorized Signatory (Form of Abbreviations) The following abbreviations, when used in the Assignment above or on the face of the within SeriesA Certificate, shall be construed as though they were written in full according to applicable law. Abbreviation Meaning TEN COM: As Tenants in Common TEN ENT: As Tenants by Entirety JT TEN: As Joint Tenant with right of Survivorship and not as Tenants in Common UNIF GIFT MIN ACT: Uniform Gifts to Minors Act Additional Abbreviations may also be used although not listed above. (c) The Initial Certificates shall be in substantially the form set forth in Paragraph (a) (above) of this Exhibit A, with the following alterations: (1) immediately below the name of the Certificates, the headings "Interest Rate," "Maturity Date, and "CUSIP Number" shall be completed'; (2) in the first paragraph, the dollar amount shall be completed; (3) in the last paragraph of the Certificate Form, delete "Certificate of Authentication appearing hereon has been executed by the Paying Agent/Registrar" and 36 Name of Transferee Address of Transferee Social Security and Zip Code Number or Tax ID Number of Transferee FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers the within Certificate and all rights thereunder unto: The undersigned hereby appoints, with power to transfer the within Certificate on the books kept for registration hereof, with full power of substitution in the premises, as attorney: Dated: NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular and must be guaranteed by a member of the New York Stock Exchange or a commercial bank or trust company. Signature Guaranteed by: Authorized Signatory (Form of Abbreviations) The following abbreviations, when used in the Assignment above or on the face of the within SeriesA Certificate, shall be construed as though they were written in full according to applicable law. Abbreviation Meaning TEN COM: As Tenants in Common TEN ENT: As Tenants by Entirety JT TEN: As Joint Tenant with right of Survivorship and not as Tenants in Common UNIF GIFT MIN ACT: Uniform Gifts to Minors Act Additional Abbreviations may also be used although not listed above. (c) The Initial Certificates shall be in substantially the form set forth in Paragraph (a) (above) of this Exhibit A, with the following alterations: (1) immediately below the name of the Certificates, the headings "Interest Rate," "Maturity Date, and "CUSIP Number" shall be completed'; (2) in the first paragraph, the dollar amount shall be completed; (3) in the last paragraph of the Certificate Form, delete "Certificate of Authentication appearing hereon has been executed by the Paying Agent/Registrar" and 36 substitute therefor "registration certificate of the Comptroller of Public Accounts appearing hereon has been executed"; (4) the Initial Certificates shall be numbered consecutively IC -I and upward; and (5) such other changes in the Certificate Form as are necessary to effect the issuance of the Initial Certificates and are approved by the Town (which approval may be given on the Town's behalf by the authorized officers of the Town executing the Initial Certificates, which execution shall evidence such approval). 37 I solemnly swear that a true and correct copy of the Public Notice Ordinance No. 414 was published in THE KELLER CITIZEN, a newspaper having general circulation in the counties of Denton and Tarrant, and that the dates that said issues of the newspaper bore in which such notice was published were April 30, 2002. A copy of the notice as published, clipped from the newspaper is attached hereto. Pam Nolte, Classified Ad Manager THE STATE OF TEXAS COUNTY OF TARRANT § Pam Nolte this 1 st day of May, 2002, to certify which witness my hand and seal of office. a f' A Notary Public, State of Texas Printed Name of Notary My commission expires PubNc, State of %xis aNotary My CorriPt116 Ion E)Ores April 17, 2006