R-04-01-22-14B1 - 1/22/2004RESOLUTION NO. R-04-01-22-14131
WHEREAS, the Council of the City of Round Rock, Texas, has
previously consented to the creation of The Meadows at Chandler Creek
Municipal Utility District, and
WHEREAS, The Meadows at Chandler Creek Municipal Utility
District (the "District") is a conservation and reclamation district,
a body corporate and politic and governmental agency of the State of
Texas, created under Article XVI, Sec. 59 of the Texas Constitution
by order of the Texas Water Commission, now the Texas Commission on
Environmental Quality ("the TCEQ"), and the District operates under
Chapters 49 and 54 of the Texas Water Code, as amended, and
WHEREAS, the City of Round Rock previously granted its consent
to the creation of the District, and the City, the District and Nash
Phillips/Copus, Inc. entered into an "Agreement Concerning Creation
and Operation of The Meadows at Chandler Creek Municipal Utility
District" (the "Consent Agreement"), which sets forth the terms and
conditions for creation and operation of the District, and
WHEREAS, the District issued its Combination Unlimited Tax and
Revenue Refunding Bonds, Series 1994, dated September 1, 1994, in the
original aggregate principal amount of $2,124,995,80 (the 111994
Bonds"), of which an aggregate principal amount of $1,010,000 remains
outstanding, and
WHEREAS, the District proposes to issue bonds (the "Series 2004
Bonds") to refund all of the remaining outstanding 1994 Bonds in
order to provide for a gross debt service savings and net present
value savings, and
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WHEREAS, the Consent Agreement provides that the issuance of
bonds be approved by the City Council of the City 'of Round Rock,
Texas, and
WHEREAS, the District has submitted to the City for review and
approved a substantial draft of the 2004 Bond Order and requested
approval of the District's Series 2004 Bonds, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS THAT,
1. The issuance by the District of the Series 2004 Bonds in an
amount not to exceed $1,010,000 is hereby approved.
2. The City Council approves the substantial draft of the 2004
Bond Order and Preliminary Official Statement for the Series 2004
Bonds, the form and substance of which are attached as Exhibits "A"
and "B", respectively, incorporated by reference, and are approved.
The City Council hereby finds and declares that written notice
of the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to
the public as required by law at all times during which this
Resolution and the subject matter hereof were discussed, considered
and formally acted upon, all as required by the Open Meetings Act,
Chapter 551, Texas Government Code, as amended.
RESOLVED this 22nd day of January, k2004.
op
NYL LL, Mayor
City Round Rock, Texas
ATTEST:
le
CHRISTINE R. MARTINEZ, City Secret ry
2
CERTIFICATE FOR ORDER
THE STATE OF TEXAS §
COUNTY OF WILLIAMSON §
I, the undersigned officer of the Board of Directors of The Meadows at Chandler Creek Municipal
Utility District hereby certify as follows:
1. The Board of Directors of The Meadows at Chandler Creek Municipal Utility District
convened in a regular meeting on December 16, 2003 (the "Meeting"), at the regular meeting place within
the boundaries of the District, and the roll was called of the duly constituted officers and members of the
Board, to -wit:
Nancy Beleckis
President
Walter Berry
Vice President
Ann Mifflin
Secretary
Howard Hemberger
Treasurer
Bob Wohlford
Director
and all of said persons except N/A were present thus constituting a
quorum. Whereupon, among other business, the following was transacted at the Meeting: a written
ORDER AUTHORIZING THE ISSUANCE OF $1,010, 000 THE MEADOWS AT CHANDLER CREEK
MUNICIPAL UTILITY DISTRICT COMBINATION UNLIMITED TAX AND REVENUE
REFUNDING BONDS, SERIES 2004
(the "Order") was introduced for the consideration of the Board. It was then duly moved and seconded that
the Order be adopted; and, after due discussion, the motion, carrying with it the adoption of the Order,
prevailed and carried by the following vote:
Ayes: 5
Nays: 0_
Abstentions: 0-
2. That a true, full, and correct copy of the Order adopted at the Meeting is attached to and
follows this certificate; that the Order has _beenduly recorded in the Board's minutes of the Meeting that
the persons named in the above and foregoing paragraph are the duly chosen, qualified, and acting officers
and members of the Board as indicated therein; that each of the officers and members of the Board was
duly and sufficiently notified officially and personally, in advance, of the time, place, and purpose of the
Meeting, that the Order would be introduced and considered for adoption at the Meeting, and each of the
officers and members consented, in advance, to the holding of the Meeting for such purpose; that the
Meeting was open to the public as required by law; and that public notice of the time, place, and subject of
the Meeting was given as required by Chapter 551, Texas Government Code, and Section 49.063, Texas
Water Code.
(The remainder of this page intentionally left blank)
EXHIBIT
a
9 "An
SIGNED AND SEALED on this
Secretary, Board of Directors
(SEAL)
SIGNATURE PAGE FOR CERTIFICATE FOR ORDER AUTHORIZING ISSUANCE OF BONDS
ORDER
AUTHORIZING THE ISSUANCE OF
$1,010,000 THE MEADOWS AT CHANDLER CREEK MUNICIPAL UTILITY DISTRICT
COMBINATION UNLIMITED TAX AND REVENUE REFUNDING BONDS, SERIES 2004
Adopted: December 16, 2003
ORDER AUTHORIZING THE ISSUANCE OF $1,010,000 THE MEADOWS AT CHANDLER CREEK
MUNICIPAL UTILITY DISTRICT COMBINATION UNLIMITED TAX AND REVENUE
REFUNDING BONDS, SERIES 2004
THE STATE OF TEXAS
COUNTY OF WILLIAMSON
Recitals
WHEREAS, at an election held in the District on July 13, 1985 (the "election"), the District was
authorized to issue bonds in the maximum amount of $13,000,000 for the purpose or purposes of
purchasing, constructing, acquiring, owning, operating, repairing, improving, or extending a waterworks
system, sanitary sewer system, and drainage and storm sewer system, including, but not limited to, all
additions to such systems and all works, improvements, facilities, plants, equipment, appliances, interests in
property, and contract rights needed therefor and administrative facilities needed in connection therewith,
and all expenses incidental thereto, including expenses incidental to the organization, administration, and
financing of the District, and to provide for the payment of principal of and interest on such bonds by the
levy and collection of a sufficient tax upon all taxable property within the District and by a pledge of all or
any designated part or parts of the net revenues resulting from the ownership or operation of the District's
works, improvements, facilities, plants, equipment, and appliances, or under specific contracts;
WHEREAS, the election was called and held under and in strict conformity with the Constitution
and laws of the State of Texas, and of the United States of America, and the Board of Directors has
heretofore officially declared the results of the election and declared that the District was legally created
and authorized to issue the bonds described above;
WHEREAS, to construct the various phases of a waterworks, sanitary sewer, and drainage and
storm sewer systems within the District, the District previously issued its $2,450,000 Waterworks and
Sewer System Combination Unlimited Tax and Revenue Bonds, Series 1987 (the "Series 1987 Bonds"),
and in reliance upon the authority of Chapter 1207 of the Texas Government Code, its $2,124,995.80
Combination Unlimited Tax and Revenue Refunding Bonds, Series 1994 (the "Series 1994 Refunding
Bonds"). In addition, for the purpose of acquiring water, sewage, and drainage facilities, the District
previously issued its $1,410,000 Combination Unlimited Tax and Revenue Bonds, Series 1999, (the "Series
1999 Bonds"), its $1,950,000 Combination Unlimited Tax and Revenue Bonds, Series 2001 (the "Series
2001 Bonds"), and its $5,355,000 Combination Unlimited Tax and Revenue Bonds, Series 2003 (the
"Series 2003 Bonds"). No portion of the Series 1987 Bonds remains outstanding, and $1,010,000 of the
Series 1994 Bonds, $1,380,000 of the Series 1999 Bonds, $1,855,000 of the Series 2001 Bonds, and
$5,355,000 of the Series 2003 Bonds remain outstanding,
WHEREAS, the District desires to refund the $1,010,000 aggregate principal outstanding of the
Series 1994 Refunding Bonds (the "Refunded Obligations") by issuing $1,010,000 in refunding bonds (the
"Bonds") pursuant to the authority granted under Chapter 1207 of the Texas Government Code; and
WHEREAS, the Board of Directors of the District has found and determined that the issuance of
the Bonds (i) is in the best interests of the District to restructure the District's debt and (ii) will result in a
net present value savings; and
WHEREAS, upon the issuance of the Bonds herein authorized and payment in full of the
Refunded Obligations, the Refunded Obligations shall no longer be outstanding and the pledges, liens,
trust, and all other covenants, provisions, terms, and conditions of the order authorizing the issuance of the
Refunded Obligations shall be discharged, terminated, and defeased; and
WHEREAS, the District has been authorized to levy taxes, and the taxes to be collected, together
with the net revenues from the operation of the District's waterworks and sanitary sewer system to be
constructed or acquired, will be sufficient to make the principal and interest payments on the outstanding
bonds and the Bonds authorized by this Order;
IT IS, THEREFORE, ORDERED BY THE BOARD OF DIRECTORS OF THE MEADOWS AT
CHANDLER CREEK MUNICIPAL UTILITY DISTRICT THAT:
ARTICLE I
DEFINITIONS, FINDINGS, AND INTERPRETATION
Section 1.1. Definitions. For all purposes of this Order, unless the context requires a
different meaning or except as otherwise expressly provided, the following terms shall have the meanings
assigned to them below:
"Additional Bonds" means bonds or other evidences of indebtedness which the District reserves
the right to issue or enter into, as the case may be, in the future in accordance with the terms and
conditions provided in Article M hereof.
"Board" means the Board of Directors of the District.
"Bonds" shall mean the $1,010,000 The Meadows at Chandler Creek Municipal Utility District
Combination Unlimited Tax and Revenue Refunding Bonds, Series 2004 authorized to be issued
by this Order and certified or authenticated and delivered hereunder.
"Bond Date" shall mean January 15, 2004.
"Bond Purchase Agreement" shall mean the agreement dated as of December 16, 2003 and entered
into by the District and the Purchaser relating to the sale and purchase of the Bonds.
"Business Day" means any day which is not a Saturday, Sunday, or a day on which the Paying
Agent/Registrar is authorized by law or executive order to remain closed.
"Closing Date" means the date of initial delivery of and payment for the Bonds, which shall be
February 2, 2004.
"Code" shall mean the Internal Revenue Code of 1986, as amended by any amendments thereto
enacted prior to the Closing Date.
"Debt Service Fund" shall mean the District's Debt Service Fund established in Section 7.2 of this
Order.
"Definitive Bonds" shall mean the Initial Bond, as may be transferred and converted into or
exchanged for fully registered Bonds.
"Depository Bank" means any financial institution duly designated by the Board of Directors of
the District to serve as a depository for funds controlled by the Board of Directors of the District.
"District" shall mean The Meadows at Chandler Creek Municipal Utility District.
"Event of Default" means any event of default as provided in Section 12.1 hereof.
"Fiscal Year" means the twelve month accounting period used by the District in connection with
the operation of the System which may be any twelve consecutive month period established by the
District.
"Governmental Obligations" shall mean direct obligations of, or obligations which are fully and
unconditionally guaranteed by (including obligations issued or held in book entry form on the
books of) the United States of America.
"Initial Bond" shall mean the Initial Bond authorized to be issued hereunder which shall be
registered by the Comptroller of Public Accounts of the State of Texas, as contemplated by
Section 2.4 hereof.
"Interest Payment Date" shall mean with respect to any installment of interest on any Bond the
date specified in such Bond as the fixed date on which any such installment of interest is due and
payable.
"Maturity Date" or "Maturity" when used with respect to any Bond shall mean the date on which
the principal of such Bond becomes due and payable as therein provided, whether at the Stated
Maturity, by redemption, or otherwise.
"Paying Agent/Registrar Agreement" shall mean the agreement between the District and the
Paying Agent/Registrar referred to in Section 4.1 pursuant to which the Paying Agent/Registrar
will perform the duties required hereunder.
Paying Agent/Registrar" shall mean Wells Fargo Bank, Austin, Texas until a successor Paying
Agent/Registrar shall have been appointed to the
PPo pursuant applicable provisions of this Order, and
thereafter "Paying Agent/Registrar" shall mean such successor Paying Agent/Registrar.
"Person" shall mean any individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, or government or any agency or political subdivision
thereof.
"Place of Payment" shall mean the designated office of the Paying Agent/Registrar in Austin,
Texas.
"Purchaser" shall have the meaning stated in Section 11.1 hereof.
"Record Date" for the interest payable on any Interest Payment Date shall mean the fifteenth
calendar day (whether or not a business day) of the month next preceding such Interest Payment
Date.
"Refunded Obligations" shall mean The Meadows at Chandler Creek Municipal Utility District
Combination Unlimited Tax and Revenue Refunding Bonds, Series 1994.
"Register" shall mean the books of registration kept by the Paying Apm egistrar, in which are
maintained the names and addresses of and the principal amounts of the Bonds registered to, each
registered Owner.
"Registered Owner" shall mean any person who shall be -the registered owner of any outstanding
Bond.
"Regulations" shall mean the temporary or final income tax regulations applicable to the Bonds
issued pursuant to sections 103 and 141 through 150 of the Code. Any reference to a section of
the Regulations shall also refer to any successor provision to such section hereafter promulgated
by the Internal Revenue Service pursuant to sections 103 and 141 through 150 of the Code and
applicable to the Bonds.
"Order" shall mean this order authorizing the issuance of the Bonds.
"Series 1994 Refunding Bonds" means the District's Combination Unlimited Tax and Revenue
Refunding Bonds, Series 1994.
"Special Payment Date" shall have the meaning stated in Section 2.3 hereof.
"Special Record Date" shall have the meaning stated in Section 2.3 hereof.
"Stated Maturity" when used with respect to any Bond shall mean the date specified in such Bond
as the fixed date on which the principal of such Bond is due and payable.
"System" shall mean the waterworks and sewer system owned and operated by the District
together with any additions and extensions thereto, and any interest in the capacity of a regional
system or systems, and improvements and replacements thereof whatsoever acquired or
constructed. The System shall not include certain facilities which, while owned by the District,
are acquired or constructed to perform contracts between the District and other persons, including
private corporations, municipalities, and political subdivisions, and which are financed by
proceeds of the District's revenue bonds issued particularly to finance facilities needed to perform
such contracts.
Section 1.2. Findin¢s The declarations, determinations and findings declared, made and
found in the preamble to this Order are hereby adopted, restated and made a part of the operative provisions
hereof.
Section 1.3. Table of Contents, Titles and Headings. The table of contents, titles, and
headings of the Articles and Sections of this Order have been inserted for convenience of reference only
and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or
provisions hereof and shall never be considered or given any effect in construing this Order or any
provision hereof or in ascertaining intent, if any question of intent should arise.
Section 1.4. Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall be construed
to include correlative words of the feminine and neuter genders and vice versa, and words of the singular
number shall be construed to include correlative words of the plural number and vice versa.
(b) This Order and all the teams and provisions hereof shall be liberally construed to
effectuate the purposes set forth herein to sustain the validity of the Bonds and the validity of the taxes
levied in payment thereof.
ARTICLE II
AUTHORIZATION; GENERAL TERMS AND
PROVISIONS REGARDING THE BONDS
Section 2.1. Authorization. The District's bonds to be designated the "THE MEADOWS AT
CHANDLER CREEK MUNICIPAL UTILITY DISTRICT COMBINATION UNLIMITED TAX AND
REVENUE REFUNDING BONDS, SERIES 2004" are hereby authorized to be issued and delivered in
accordance with the Constitution and the laws of the State of Texas, particularly Section 59 of Article XVI
of the Constitution of the State of Texas, Chapters 49 and 54 of the Texas Water Code, as amended, and
Chapter 1207, Texas Government Code, as amended. The Bonds shall be issued in the total aggregate
amount of One Million Ten Thousand and No/100 Dollars ($1,010,000) for the purpose of refunding the
Refunded Obligations in order to restructure the District's debt and achieve debt service savings.
Section 2.2. Date Number. Maturities and Interest.
(a) The Bonds shall have a Bond Date of January 15, 2004. The Bonds shall be issued as
fully registered Bonds, without coupons, and shall be numbered consecutively from R-1 upwards.
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(b) The Bonds shall mature on February 1, 2008, and shall bear interest at the per annum rate
of 2.89%.
(c) Interest shall accrue and be paid on each Bond respectively until its Maturity from the
later of the Closing Date or the most recent Interest Payment Date to which interest has been paid or
provided for at the per annum rate specified in subsection (b) above. Such interest shall be payable
semiannually on February 1 and August 1 of each year, commencing August 1, 2004, computed on the
basis of a 360 -day year of twelve 30 -day months.
Section 2.3. Medium, Method, and Place of Payment.
(a) The District will duly and punctually pay the principal of and interest on the Bonds in
accordance with their tams in lawful money of the United States of America and shall deposit with the
Paying Agent/Registrar on or before each Interest Payment Date funds sufficient to pay the principal of and
interest on the Bonds then due, as otherwise provided in this Section.
(b) Interest on the Bonds shall be paid to the Registered Owners thereof as shown in the
Register at the close of business on the Record Date by check (dated as of the Interest Payment Date) and
sent by the Paying Agent/Registrar to the person entitled to such payment, first class United States mail,
postage prepaid, to the address of such person as it appears in the Register, or by such other customary
banking arrangements acceptable to the Paying Agent/Registrar and the person to whom interest is paid;
provided, however, that such person shall bear all risk and expense of such other customary banking
arrangement.
(c) The principal of each Bond shall be paid to the Registered Owner of such Bond on the
due date thereof (whether at the maturity date or the date of prior redemption thereof) upon presentation
and surrender of such Bond at the designated office of the Paying Agent/Registrar.
(d) If the specified date for any payment of principal of or interest on the Bonds shall be a
Saturday, Sunday, or legal holiday or equivalent (other than a moratorium) for banking institutions
generally in the city in which the Payment Place of the Paying Agent/Registrar is located, such payment
may be made on the next succeeding day which is not one of the foregoing days without additional interest
and with the same force and effect as if made on the specified date for such payment.
(e) In the event of nonpayment of interest on a Bond on an Interest Payment Date, and for
thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been
received from the District. Notice of the Special Record Date and of the scheduled payment date of the
past due interest (the "Special Payment Date" that shall be fifteen (15) days after the Special Record Date)
shall be sent at least five (5) business days prior to the Special Record Date by United States mail, first
class, postage prepaid, to the address of each Registered -Owner of -a Bond appearing on -the -books of the
Paying Agcnt/Registrar at the close of business on the last business day next preceding the date of mailing
of such notice.
(t) Unclaimed payments shall be segregated in a special escrow account and held in trust,
uninvested by the Paying Agent/Registrar, for the account of the Registered Owners to which the
unclaimed payments pertain. Subject to Title 6 of the Texas Property Code, payments remaining
unclaimed by the Registered Owners entitled thereto for three years after the applicable payment shall be
applied to the next payment or payments on the Bonds thereafter coming due and, to the extent any such
money remains after the retirement of all outstanding Bonds, shall be paid to the District to be used for any
lawful purpose. Thereafter, neither the District, the Paying Agent/Registrar, nor any other person shall be
liable or responsible to any Registered Owners of such Bonds for any further payment of such unclaimed
money or on account of any such Bonds, subject to Title 6 of the Texas Property Code.
Section 2.4. Execution and Initial Registration.
(a) The Bonds shall be executed on behalf of the District by the President or Vice President
and Secretary or Assistant Secretary of the Board, by their manual or facsimile signatures, and the official
seal of the District shall be impressed or placed in facsimile thereon. Such facsimile signatures on the
Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each
of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the
District had been manually impressed upon each of the Bonds.
(b) In the event that any officer of the District whose manual or facsimile signature appears
on the Bonds ceases to be such officer before the authentication of such Bonds or before the delivery
thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if
such officer had remained in such office.
(c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit of this Order unless and until there appears thereon the Certificate of
Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution
by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the
same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying
Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of Paying Agent/Registrar
described above, the Initial Bond delivered at the Closing Date shall have attached thereto the
Comptroller's Registration Certificate substantially in the form provided herein, 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 Bond has been duly approved by the Attorney General of the State of Texas, that
it is a valid and binding obligation of the District, and that it has been registered by the Comptroller of
Public Accounts of the State of Texas.
(d) On the Closing Date, one Initial Bond representing the entire principal amount of the
Bonds, payable to the Purchaser or its designee, executed by manual or facsimile signature of the President
and Secretary of the Board, approved by the Attorney General, and registered and manually signed by the
Comptroller of Public Accounts, will be delivered to the Purchaser or its designee. Upon payment for the
Initial Bond, the Paying Agent/Registrar, pursuant to written instructions from the Purchaser or its
designee, if so requested, shall cancel the Initial Bond and deliver to the Purchaser one registered Definitive
Bond for each year of maturity of the Bonds in the aggregate principal amount of all Bonds for such
maturity, registered in the name of the Purchaser.
Section 2.5. Ownership.
(a) The District, the Paying Agent/Registrar, and any other person may treat the person in
whose name any Bond is registered as the absolute Registered Owner of such Bond for the purpose of
In g an receiving payment o e prmcip r e er purpose o m g an receiving payment o-- the interest thereon (subject to the terms of this Order requiring the Paying Agent/Registrar to make
payments of interest to the person who is the Registered Owner on the Record Date or the Special Record
Date), and for all other purposes, whether or not such Bond is overdue, and neither the District nor the
Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary.
(b) All payments made to the person deemed to be the Registered Owner in accordance with
this Section shall be valid and effectual and shall discharge the liability of the District and the Paying
Agent/Registrar upon such Bond to the extent of the sums paid.
Section 2.6. Registration, Transfer. and Exchanee.
(a) So long as any Bonds remain outstanding, the District shall cause the Paying
Agent/Registrar to keep at its designated office a register (the "Register") in which, subject to such
reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and
transfer of Bonds in accordance with this Order.
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(b) Registration of any Bond may be transferred in the Register only upon the presentation
and surrender thereof at the designated office of the Paying Agent/Registrar for transfer of registration and
cancellation, together with proper written instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of the Bonds, to the assignee
or assignees thereof, and the right of such assignee or assignees thereof to have the Bond or any portion
thereof registered in the name of such assignee or assignees. No transfer of any Bond shall be effective
until entered in the Register. Upon assignment and transfer of any Bond, a new Bond or Bonds will be
issued by the Paying Agent/Registrar in exchange for such transferred and assigned Bond. To the extent
possible, the Paying Agent/Registrar will issue such new Bond or Bonds in not more than three (3)
Business Days after receipt of the Bond to be transferred in proper form and with proper instructions
directing such transfer.
(c) Any Bond may be exchanged only upon the presentation and surrender thereof at the
designated office of the Paying Agent/Registrar, together with a written request therefor duly executed by
the Registered Owner or assignee or assignees thereof, or its or their duly authorized attorney or
representatives, with guarantees of signatures satisfactory to the Paying Agent/Registrar, for a Bond of the
same maturity and interest rate and in an aggregate principal amount equal to the unpaid principal amount
of the Bond presented for exchange. To the extent possible, a new Bond will be required to be delivered by
the Paying Agent/Registrar to the Registered Owner of the Bond in not more than three (3) business days
after receipt of the Bond to be exchanged in proper form and with proper instructions directing such
exchange.
(d) Each Bond issued in exchange for any Bond assigned or transferred shall be of the same
tenor and shall have the same maturity date and bear interest at the same rate and in the same manner as the
Bond for which it is being exchanged. The Paying Agent/Registrar shall exchange the Bonds as provided
herein, and each substitute Bond delivered in accordance with this Section shall constitute an original
additional contractual obligation of the District and shall be entitled to the benefits and security of this
Order to the same extent as the Bond in lieu of which such substitute Bond is delivered.
(e) The District will pay the Paying Agent/Registrar's reasonable and customary charge for
the initial registration of the Bonds and the subsequent exchange of the Bonds pursuant to the provisions
hereof; however, the Paying Agent/Registrar will require the Registered Owner to pay a sum sufficient to
cover any tax or other governmental charge that is authorized to be imposed in connection with the
registration, transfer or exchange of a Bond. In addition, the District hereby covenants with the Registered
Owners of the Bonds that it will (i) pay the reasonable and standard or customary fees and charges of the
Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on the
Bonds, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect
to the transfer, registration and exchange of Bonds as provided herein to the extent such fees and charges
are payable hereunder by the District.
Section 2.7. Cancellation and Authentication.
(a) All Bonds paid and all Bonds in lieu of which exchange Bonds or replacement Bonds are
authenticated and delivered in accordance with this Order, shall be canceled and proper records shall be
made regarding such payment, exchange, or replacement. The Paying Agent/Registrar shall then return
such canceled Bonds to the District or may in accordance with law destroy such canceled Bonds and
periodically furnish the District with certificates of destruction of such. Bonds.
(b) Each substitute Bond issued in exchange for or replacement of (pursuant to the provisions
of Section 2.9 hereof) any Bond or Bonds issued under this Order shall have printed thereon a Paying
Agent/Registrar's Authentication Certificate (the "Certificate"), in the form hereinafter set forth. An
authorized representative of the Paying Agent/Registrar shall, before the delivery of any such bond,
manually sign and date such Certificate, and no such Bond shall be deemed to be issued or outstanding
unless such Certificate is so executed. No additional resolutions or orders need be passed or adopted by the
District or any other body or person so as to accomplish the foregoing exchange or replacement of any
Bond or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and
delivery of the substitute Bonds in the manner prescribed herein. Pursuant to Section 1203.021 et seq. of
the Texas Government Code; as amended, and particularly Section 1203.042 thereof, the duty of exchange
or replacement of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the
execution of the Certificate, the exchanged or replaced Bonds shall be valid, incontestable, and enforceable
in the same manner and with the same effect as the Bonds which originally were delivered pursuant to this
Order, approved by the Attorney General, and registered by the Comptroller of Public Accounts.
Section 2.8. Temporary Bonds.
(a) Pending the preparation of definitive Bonds, the proper officers of the District may
execute and, upon the District's request, the Paying Agent/Registrar shall authenticate and deliver, one or
more temporary Bonds that are printed, lithographed, typewritten, mimeographed, or otherwise produced,
substantially of the tenor of the definitive Bonds in lien of which they are delivered, without coupons and
with such appropriate insertions, omissions, substitutions, and other variations as the officers of the District
executing such temporary Bonds may determine, as evidenced by their signing of such temporary Bonds.
(b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be
entitled to the benefit and security of this Order.
(c) The District, without unreasonable delay, shall prepare, execute, and deliver to the Paying
Agent/Registrar the Bonds in definitive form and thereupon, upon the presentation and surrender of the
Bond or Bonds in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall
authenticate and deliver in exchange therefor a Bond or Bonds of the same maturity and series, in definitive
form, and in the same aggregate principal amount as the Bond in temporary form surrendered. Such
exchange shall be made without the making of any charge therefor to any Registered Owner.
Section 2.9. Replacement Bonds.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Bond,
the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like
tenor and principal amount, bearing a number not contemporaneously outstanding. The District or the
Paying Agent/Registrar may require the Registered Owner of such Bond to pay a sum sufficient to cover
any tax or other governmental charge that is authorized to be imposed in connection therewith and any
other expenses connected therewith.
(b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the Paying
Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or
knowledge that such Bond has been acquired by a bona fide purchaser, shall authenticate and deliver a
replacement Bond of like tenor and principal amount, bearing a number not contemporaneously
outstanding, provided that the Registered Owner first:
(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her
ownership of and the circumstances of the loss, destruction or theft of such Bond;
(ii) fiunishes such security or indemnity as may be required by the Paying
Agent/Registrar to save it and the District harmless;
(iii) pays all expenses and charges in connection therewith, including, but not limited
to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental
charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the District and the
Paying Agent/Registrar.
(c) If, after the delivery of such replacement Bond, a bona fide purchaser of the original
Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the
District and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from the person
to whom it was delivered or any person taldng therefrom, except a bona fide purchaser, and shall be
entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost,
or expense incurred by the District or the Paying Agent/Registrar in connection therewith.
(d) In the event that any such mutilated, lost, apparently destroyed, or wrongfully taken Bond
has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of
issuing a replacement Bond, may pay such Bond if it has become due and payable or may pay such Bond
when it becomes due and payable.
(e) Each replacement Bond delivered in accordance with this Section shall constitute an
original additional contractual obligation of the District and shall be entitled to the benefits and security of
this Order to the same extent as the Bond in lieu of which such replacement bond is delivered.
ARTICLE III
REDEMPTION OF BONDS BEFORE MATURITY
Section 3.1. Limitation on Redemption. (a) The Bonds shall be subject to redemption before
their scheduled maturity only as provided in this Article.
(b) Mandato Redem tion. The Bonds are subject to mandatory redemption on February 1
in the years and in the principal amounts set forth in the following schedule, at a price equal to the principal
amount to be redeemed plus accrued interest to the date of redemption
*Final Maturity.
Year of Mandatory Redemption
Princi al Amount
2005
$230,000
2006
245,000
2007
260,000
2008*
275,000
Section 3.2. No Optional Redemption. The Bonds are subject to optional redemption, in
whole, on any Interest Payment Date, for a redemption price of par plus accrued interest to the date of
redemption.
ARTICLE IV
PAYING AGENT/REGISTRAR
Section 4.1. Appointment of Paving_ Agent/Registrar.
(a) Wells Fargo Bank, Austin, Texas is hereby appointed as the initial Paying
Agent/Registrar for the Bonds.
(b) The President and the Vice President of the Board or either of than, and the Secretary
and any Assistant or Acting Secretary of the Board, or any of them, are hereby authorized and directed to
execute an agreement with the Paying Ageut/Registrar for the Bonds.
GJ
Section 4.2. Qualifications of Paving Agent/Registrar. Every Paying Agent/Registrar
appointed hereunder shall be a commercial bank, trust company organized under the laws of the State of
Texas, or other entity duly qualified and legally authorized to serve as, and perform the duties and services
of, paying agent and registrar for the Bonds. Every Paying Agent/Registrar shall maintain the Register at a
location in the State of Texas
Section 4.3. Maintaining Paving Agerit/Registrar.
(a) At all times while any Bonds are outstanding, the District will maintain a Paying
Agent/Registrar that is qualified under Section 4.2 of this Order.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the District
will promptly appoint a replacement.
Section 4.4. Termination of Paying Agent/Registrar.
(a) The District reserves the right to appoint a successor Paying Agent/Registrar by (i) filing
with the entity then performing such functions a certified copy of a resolution or order giving thirty (30)
days notice of the termination of the appointment, stating the effective date of such termination and (ii)
appointing a successor Paying Agent/Registrar.
(b) If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the
appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent books and
records relating to the Bonds to the successor Paying Agent/Registrar.
Section 4.5. Notice of Change of Paving Agent/Registrar to Registered Owners. Promptly
upon each change in the entity serving as Paying Agent/Registrar, the District will cause notice of the
change to be sent to each Registered Owner by first class United States mail, postage prepaid, at the
address in the Register, stating the effective date of the change and the name and mailing address of the
replacement Paying Agent/Registrar.
Section 4.6. Agreement of Paving Agent/Registrar to Perform Duties and Functions. By
accepting the appointment as Paying Agent/Registrar, the Paying Agent/Registrar is deemed to have agreed
to the provisions of this Order and that it will perform the duties and functions of Paying Agent/Registrar
prescribed hereby.
Section 4.7. Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such
Paying Agent/Registrar, promptly upon the appointment of the successor, will deliver the Register (or a
copy thereof) and all other pertinent books and records relating to the Bonds to the successor Paying
Agent/Registrar.
ARTICLE V
FORM OF BONDS
Section 5.1. Form. The form of the Bonds, including the form of the 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, which shall be attached or affixed
to the Bonds initially issued, shall be, respectively, substantially in the form set forth in this Article, with
such additions, deletions, and variations as may be necessary or desirable and not prohibited by this Order:
(a) Form of Bonds.
(Remainder of this page intentionally left blank)
10
(Face of Bond)
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF WILLIAMSON
REGISTERED REGISTERED
NUMBER AMOUNT,
R $1,010,000
THE MEADOWS AT CHANDLER CREEK MUNICIPAL UTILITY DISTRICT
COMBINATION UNLlIv1ITED TAX AND REVENUE REFUNDING BONDS,
SERIES 2004
Maturity Date Closing Date Bond Date
February 1, 2008 February 2, 2004 January 15, 2004
THE MEADOWS AT CHANDLER CREEK MUNICIPAL UTILITY DISTRICT (the
"District"), in the County of Williamson, State of Texas, for value received, hereby promises to pay to
or registered assigns, but solely from the
sources and in the manna hereinafter provided, on the Maturity Date specified above, the sum of
DOLLARS
and to pay interest on such principal amount from the lata of the Closing Date set forth above or the most
recent interest payment date to which interest has been paid or provided for until payment of such principal
amount has been paid or provided for, at the per annum rate of 2.89%, computed on the basis of a 360 -day
year of twelve 30 -day months, such interest to be paid semiannually on February 1 and August 1 of each
year, commencing August 1, 2004.
THE PRINCIPAL OF THIS BOND SHALL BE PAYABLE without exchange or collection
charges in lawful money of the United States of America upon presentation and surrender of this Bond at
the designated office of the Paying Agent/Registrar or any successor thereto executing the registration
certificate appearing hereon. Interest on this Bond is payable by check, dated as of the interest payment
date, mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration
books kept by the Paying Agent/Registrar or by such other customary banking arrangements acceptable to
the Paying Agent/Registrar and the person to whom interest is paid; provided, however, that such person
shall bear all risk and expense of such other customary banking arrangements. For the purpose of the
-- --payment of interest on this Bond, the registered owner shall be the person in whose name this Bond is
registered at the close of business on the "Record Date," which shall be the fifteenth day of the month next
preceding such interest payment date. In the event of a nonpayment of interest on a scheduled payment
date, and for thirty 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 District. Notice of the Special Record Date and of the scheduled payment date of
the past due interest (the "Special Payment Date," which date shall be fifteen days after the Special Record
Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first
class, postage prepaid, to the address of each owner of a Bond appearing on the books of the Paying
Agent/Registrar at the close of business on the last Business Day next preceding the date of mailing of such
notice.
IF THE DATE FOR THE PAYMENT of the principal of or interest on this Bond is not a Business
Day, the date for such payment shall be the next succeeding Business Day, and payment on such date shall
for all purposes be deemed to have been made on the original date payment was due.
11
THIS BOND IS ONE OF A SERIES of fully registered bonds specified in the title hereof, dated
as of January 15, 2004, issued in the aggregate principal amount of $1,010,000 (herein referred to as the
"Bonds"), and issued pursuant to the authority provided by the Constitution and laws of the State of Texas,
particularly Chapters 49 and 54 of the Texas Water Code, as amended, by authority of an election held for
and within the District on July 13, 1985, and a certain order of the District (the "Order") for the purpose of
refunding the Refunded Obligations (as defined in the Order). Capitalized terms used herein and not
otherwise defined shall have the meaning assigned thereto in the Order.
THE BONDS ARE SUBJECT to optional redemption in whole on any Interest Payment Date, for
a redemption price of par plus accrued interest to the date of redemption.
THE BONDS ARE SUBJECT to mandatory redemption on February 1 in the years and in the
principal amounts set forth in the following schedule, at a price equal to the principal amount to be
redeemed plus accrued interest to the date of redemption.
*Final Maturity.
Year of Mandatory Redemption
Principal Amount
2005
$230,000
2006
245,000
2007
260,000
2008*
275,000
AS PROVIDED IN THE ORDER and subject to certain limitations therein and herein set forth,
this Bond is transferable upon surrender of this Bond for transfer at the designated corporate trust office of
the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the
Paying Agent/Registrar, and, thereupon, one or more new fully registered Bonds of the same Stated
Maturity, bearing the same rate of interest, and for the same aggregate principal amount will be issued to
the designated transferee or transferees.
THE DISTRICT, THE PAYING AGENT/REGISTRAR, and any other person may treat the
person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as
herein provided (except interest shall be paid to the person in whose name this Bond is registered on the
Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the District, the
Paying Agent/Registrar, nor any such agent shall be affected by notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, AND COVENANTED that this Bond has been duly and
validly issued and delivered; that all acts, conditions and things required or proper to be performed, to exist,
and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist and
have been done in accordance with law; and that annual ad valorem taxes, without legal limit as to rate or
amount, sufficient to provide for the payment of the interest on and principal of this Bond, as such interest
comes due and such principal matures, have been levied and ordered to be levied against all taxable
property in the District and have been pledged irrevocably for such payment.
IT IS FURTHER CERTIFIED, RECITED, AND COVENANTED that certain net revenues to be
derived from the ownership and operation of the District's waterworks and sanitary sewer system also have
been pledged to the payment of the interest on and principal of the Bonds to the extent that ad valorem
taxes levied and collected for the payment thereof, together with other amounts on deposit in the District's
Debt Service Fund, are insufficient for such purpose, all as set forth in the Order, to which reference is
made for all particulars, and that such Order also permits the District and its successors to issue obligations
secured in whole or in part by lien on and pledge of such net revenues on a parity with or subordinate to the
lien securing the Bonds.
Reference is hereby made to the Order for a complete description of the terms, conditions, and
provisions pursuant to which the Bonds are secured and made payable and the respective rights thereunder
of the registered owners of the Bonds and of the District and of the Paying Agent/Registrar. By acceptance
of this Bond, the registered owner hereof expressly assents to all of the provisions of the Order.
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IN WITNESS WHEREOF, this Bond has been signed with the manual or facsimile signature of
the President of the Board of Directors and countersigned with the manual or facsimile signature of the
Secretary (or the Assistant Secretary) of the Board of Directors, and the official seal of the District has been
duly impressed, or placed in facsimile, on this Bond.
The Meadows at Chandler Creek
Municipal Utility District
President, Board of Directors
Secretary, Board of Directors
(SEAL)
(b) Form of Comptroller's Rmig ation Certificate.
[to be printed on Initial Bond only]
COMPTROLLER'S REGISTRATION CERTIFICATE
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § . REGISTER NO.
STATE OF TEXAS §
I hereby certify that this Bond has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of Public
Accounts of the State of Texas.
(SEAL)
WITNESS MY SIGNATURE AND SEAL this
13
XXXXXXXXXXXXXXXXXXXX
Comptroller of Public Accounts
of the State of Texas
(c) Form of Registrar's Authentication Certificate
[to be printed on Definitive Bonds only]
AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been delivered pursuant to the Order described in the text
of this Bond, in exchange for or in replacement of a bond of a series which was originally approved by the
Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of
Texas.
(d) Form of Assignment.
ASSIGNMENT
. Texas
By.
Authorized Signature
Date of Authentication:
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
Please insert Social Security or Taxpayer Identification Number of Transferee) the within Bond and all
rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: Signature must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
Registered Owner(s)
NOTICE: The signature above must correspond to
the name of the Registered Owner(s) as shown on the
face of this Bond in every particular, without any
alteration, enlargement or change whatsoever.
14
(e) Form of Initial Bond. The Initial Bond shall be in the form set forth in subsection (a) of
this Section, except for the following alterations:
(1) in the first paragraph of the Bond, the words "executing the registration
certificate appearing hereon" shall be deleted and an additional sentence shall be added to the
paragraph as follows: "The initial Paying Agent/Registrar is Wells Fargo Bank, Austin, Texas";
and
(2) the Initial Bond shall be numbered T-1.
Section 5.2. CUSIP Registration. The President of the Board may, but is not required to,
secure the printing of identification numbers on the Bonds through the CUSIP Service Bureau Division of
Standard and Poor's Corporation, New York, New York.
Section 5.3. Legal Opinion. The approving opinion of Bond Counsel, Winstead Sechrest &
Minick P.C., may be printed on the back of the Bonds with the certification of the Secretary of the Board
which maybe executed in facsimile.
ARTICLE VI
SECURITY OF THE BONDS
Section 6.1. Security of Bonds. The Bonds are secured by and payable from the levy of a
continuing, direct, annual ad valorem tax, without limit as to rate or amount, upon all taxable property
within the District, and are further secured by and payable from a lien on and pledge of certain Net
Revenues (as defined below) of the District's System.
Section 6.2. Levy of Tax. To pay the interest on the Bonds, and to create a siuldng fiord for
the payment of the principal thereof when due, and to pay the expenses of assessing and collecting such
taxes, there is hereby levied, and shall be assessed and collected in due time, a continuing, direct annual ad
valorem tax, without limit as to rate or amount, on all taxable property in the District for each year while
any of the Bonds are outstanding. All of the proceeds of such collections, except expenses incurred in that
connection, shall be paid into the Debt Service Fund, and the aforementioned tax and such payments into
such fund shall continue until the Bonds and the interest thereon have been filly paid and discharged, and
such proceeds shall be used for such purposes and no other. While said Bonds, or any of them, are
outstanding and unpaid, an ad valorem tax each year at a rate from year to year as will be ample and
sufficient to provide funds to pay the interest on said Bonds and to provide the necessary sinking fund to
pay the principal when due, full allowance being made for delinquencies and costs of collection, shall be
levied, assessed, and collected and applied to the payment of principal and interest on the Bonds. In
determining the amount of taxes which should be levied each year, the Board of Directors may consider
whether the Board of Directors reasonably expects to have revenue or receipts available from other sources
which are legally available to pay principal of or interest on the Bonds.
Section 6.3. Net Revenue Pledge as Additional Security.
(a) For purposes of this Section the following terms shall have the following definitions:
(i) The term "Maintenance and Operation Expenses" shall mean the expenses necessary to provide
for the administration, efficient operation, and adequate maintenance of the System together with such
other costs and expenses as may now or hereafter be defined by law as proper Maintenance and Operation
Expenses of the System; and
(ii) The term "Net Revenues" shall mean all income derived from the ownership and operation of
the System after deducting the Maintenance and Operation Expenses and providing for the funding of any
operating reserve from time to time established by the Board.
15
(b) In order to further secure the Bonds, the District hereby grants a lien on and pledge of the
District's Net Revenues. Such Net Revenues, as herein provided, are hereby pledged to the payment of the
principal, interest, redemption price, and bank charges of the Bonds. If at any time ad valorem taxes levied
and collected for the payment thereof, together with other amounts in the Debt Service Fund, are
insufficient for such purpose, the District shall transfer to the Debt Service Fund such available Net
Revenues as shall be necessary to provide (together with other amounts on deposit in the Debt Service
Fund) for the payment of principal, interest, redemption price, and bank charges of the Bonds; provided,
however, that no transfers of revenues shall be made to the Debt Service Fund by the District until all
Maintenance and Operation Expenses, including the cost of maintaining an operating reserve, shall have
been paid by the District. The District reserves the right to apply Net Revenues not required for current
payments of principal, interest, redemption price, and bank charges of the Bonds for any lawful purpose of
the District. Notwithstanding the foregoing, no revenues generated from maintenance taxes shall be
included in Net Revenues or used to make payments on the Bonds.
(c) The pledge of the Net Revenues hereunder is on a parity with the pledge of the Net Revenues
made to secure the obligations relating to the Series 1999 Bonds, the Series 2001 Bonds, and the Series
2003 Bonds. The District reserves the right to issue Additional Bonds and incur obligations secured in
whole or in part by a lien on and pledge of Net Revenues on a parity with or subordinate to the lien on and
pledge of Net Revenues securing the Bonds, and to apply such Net Revenues to the payment of such
Additional Bonds and obligations on a parity with or subordinate to the Bonds.
(d) The District is located within the extraterritorial jurisdiction of the City of Round Rock, Texas
(the "City"). The City has the right to annex and dissolve the District. At such time, the obligations of the
District payable in whole or in part from ad valorem taxes shall become obligations of the City, and the
governing body of the City is thereafter required to levy and cause to be collected taxes on all taxable
property within the City sufficient to pay the principal of and interest on the obligations of the District so
assumed by the City. In order to allow the City to integrate the District's System into the City's water and
sewer system, the City may terminate the pledge of and lien on the Net Revenues of the District's System to
the payment of the Bonds. The City may under certain circumstances annex but not dissolve the District, in
which case the District may continue to provide retail water and wastewater service and the maintenance of
parks and recreation areas.
(e) State law permits the District to be consolidated with one or more conservation and
reclamation districts. In the event the District is consolidated with another district or districts, the District
reserves the right to:
(i) consolidate the System with a similar system of one or more districts with which the District is
consolidating and operate and maintain the systems as one consolidated system (the "Consolidated
System");
(i) apply the net revenues from the operation of the Consolidated System to the
payment of principal, interest, redemption price, and bank charges on the Bonds and any other
combination tax and revenue bonds or bonds or other obligations secured solely or primarily by
such net revenues (the "Revenue Bonds") of the District and of the district or districts with which
the District is consolidating (herein collectively, the "Consolidating Districts") without preference
to any series of bonds (except subordinate lien revenue bonds which shall be subordinate to the
Revenue Bonds ofthe Consolidating Districts); or
(ii) pledge the net revenues of the Consolidated System to the payment of principal,
interest, redemption price, and bank charges on any Revenue Bonds which may be issued by the
Consolidating Districts on a parity with the outstanding Revenue Bonds of the Consolidating
Districts.
Section 6.4. Perfection of Pledge. Chapter 1208, Texas Government Code, as amended,
applies to the issuance of the Bonds and the pledge of the taxes and Net Revenues granted by the District
under this Section, and such pledge is therefore valid, effective, and perfected. If Texas law is amended at
16
any time while the Bonds are outstanding and unpaid such that the pledge of the taxes and Net Revenues
granted hereunder is to be subject to the filing requirements of Chapter 9, Texas Business and Commerce
Code, as amended, then in order to preserve to the Registered Owner the perfection of the security interest
in the pledge, the District agrees to take such measures as it determines are reasonable and necessary under
Texas law to comply with the applicable provisions of Chapter 9, Texas Business and Commerce Code, as
amended, and enable a filing to perfect the security interest in the pledge to occur.
ARTICLE VII
FUNDS; FLOW OF FUNDS; AND INVESTMENTS
Section 7.1. Operating Fund. There is hereby affirmed the "Operating Fund," created and
maintained as set forth in the District's order authorizing the Series 1987 Bonds and affirmed in the
District's order authorizing the Series 1999 Bonds, the Series 2001 Bonds, and the Series 2003 Bonds. The
Operating Fund is the maintenance fund of the District into which shall be placed the revenues from
operations of the System. The Operating Fund shall be used first to pay all reasonable expenses of
administration, efficient operation, and adequate maintenance of the System and the District, including
payments to political subdivisions or municipalities for regional waste disposal and water supply services
and facilities, if necessary, after which Net Revenues, if any, shall either (i) periodically be transferred into
the Debt Service Fund for so long as any part of the principal of or interest on the Bonds is outstanding, or
(ii), to the extent that the balance in the Debt Service Fund and tax collections available for deposit thereto
are sufficient to pay when due the obligations of the District payable from the Debt Service Fund, to pay
other proper expenses of the District.
Section 7.2. Debt Service Fund. The District hereby creates The Meadows at Chandler
Creek Municipal Utility District Combination Unlimited Tax and Revenue Refunding Bonds, Series 2004
Debt Service Fund (the "Debt Service Fund"). The District shall deposit or cause to be deposited into the
Debt Service Fund the proceeds from collections of the ad valorem taxes levied pursuant to Section 6.2
hereof, less costs of collection, as collected. The District shall also deposit in the Debt Service Fund Net
Revenues to be used to pay principal of and interest on the Bonds. Not later than two (2) days prior to any
Interest Payment Date on the Bonds, the Board of Directors shall cause the transfer of money out of the
Debt Service Fund to the Paying Agent/Registrar in an amount not less than that which is sufficient to pay
the principal which matures on such date and the interest which is due on such date. The District shall pay
fees and charges of the Paying Agent/Registrar for its services as paying agent and registrar for the Bonds
from the Debt Service Fund.
Section 7.3. Investments- Security of Funds.
(a) Money in any fund established pursuant to this Order may, at the option of the District,
be invested in obligations and in the manner prescribed by the Public Funds Investment Act, as amended,
Chapter 2256, Texas Government Code, including investments held in book -entry form; provided, that, all
such deposits and investments shall be made in such a manner that the money required to be expended from
any fund will be available at the proper time or times. Such investments shall be valued in terms of current
market value within 45 days of the close of each Fiscal Year. All interest and income derived from
deposits and investments in the Debt Service Fund immediately shall be credited to, and any losses debited
to, the Debt Service Fund. All such investments shall be sold promptly when necessary to prevent any
default in connection with the Bonds.
(b) Money in all Funds created by this Order shall be secured in the manner and to the fullest
extent required by the laws of the State of Texas for the security of public funds, including Chapter 2257,
Texas Government Code, as amended.
17
ARTICLE VIII
REFUNDING OF REFUNDED OBLIGATIONS; USE OF
BOND PROCEEDS: ISSUER CONTRIBUTION
Section 8.1. Refunding of Refunded Obligations. The District hereby irrevocably calls the
Refunded Obligations for redemption prior to maturity on February 1, 2004, at the price of par plus accrued
interest and authorizes and directs that notice of such redemption is to be given in accordance with the
order authorizing the issuance of the Refunded Obligations.
Section 8.2. Use of Bond Proceeds. Proceeds of the Bonds in the amount of $1,010,000 will
be deposited with the Paying Agent/Registrar of the Refunded Obligations on February 2, 2004, for
payment in full of the principal outstanding of the Refunded Obligations.
Section 8.3. Issuer Contribution. The District hereby approves a contribution from the
Operating Fund (the "Contribution") for payment of the costs of issuing the Bonds, and a contribution from
the Debt Service Fund to pay accrued interest on the Refunded Obligations.
ARTICLE IX
TAX EXEMPTION
Section 9.1. Provisions Concerning Federal Income Tax Exclusion. The District covenants
to take any action to maintain, or refrain from any action which would adversely affect, the treatment of the
Bonds as obligations described in section 103 of the Internal Revenue Code of 1986, as amended (the
"Code"), the interest on which is not includable in "gross income" for federal income tax purposes. In
furtherance thereof, the District specifically covenants as follows:
(i) To refrain from taking any action which would result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(a) of the
Code;
(ii) To take any action to assure that no more than 10% of the proceeds of
the Bonds or the projects financed therewith 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, that amounts, whether or not received by the
District with respect to such private business use, do not under the terms of this Order or
any underlying arrangement, directly or indirectly, secure or provide for the payment of
more than 10% of the debt service on the Bonds, in contravention of section 141(b)(2) of
the Code;
(iii) To take any action to assure that in the event that the "private business
use" described in paragraph (ii) hereof exceeds 5% of the proceeds of the Bonds or the
projects financed therewith, then the amount in excess of 5% is used for a "private
business use" which is "related" and not "disproportionate," within the meaning of
section 141(b)(3) of the Code, to the governmental use;
(iv) To take any action to assure that no amount which is greater than the
lesser of $5,000,000 or 5% of the proceeds of the Bonds 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;
(v) To refrain from taking any action which would result in the Bonds
being "federally guaranteed" within the meaning of section 149(b) of the Code;
18
(vi) Except to the extent permitted by section 148 of the Code and the
regulations and rulings thereunder, to refrain from using any portion of the proceeds of
the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly
or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code)
which produces a materially higher yield over the tam of the Bonds.
(vii) To otherwise restrict the use of the proceeds of the Bonds or amounts
treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the
extent applicable, section 149(d) of the Code (relating to advance refundings);
(viii) Except to the extent otherwise provided in section 148(f) of the Code
and the regulations and rulings thereunder, to pay to the United States of America at least
once during each five year period (beginning on the date of delivery of the Bonds) an
amount that is at least equal to 90% of the "Excess Earnings," within the meaning of
section 148(f) of the Code, and to pay to the United States of America, not later than 60
days after the Bonds have been paid in full, 1000/c of the amount then required to be paid
as a result of Excess Earnings under section 148(f) of the Code; and
(ix) To maintain such records as will enable the District to fulfill its
responsibilities under this subsection and section 148 of the Code and to retain such
records for at least six years following the final payment of principal and interest on the
Bonds.
For the purposes of the foregoing, in the case of a refunding bond, the term proceeds includes transferred
proceeds and, for purposes of paragraphs (ii) and (iii), proceeds of the refunded bonds.
The covenants contained herein are intended to assure compliance with the Code and any
regulations or rulings promulgated by the U.S. Department of Treasury pursuant thereto. In the event that
regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as
applicable to the Bonds, the District will not be required to comply with any covenant contained herein to
the extent that such noncompliance, in the opinion of nationally -recognized bond counsel, will not
adversely affect the exclusion from gross income of interest on the Bonds under section 103 of the Code.
In the event that regulations or rulings are hereafter promulgated which impose additional requirements
which are applicable to the Bonds, the District agrees to comply with the additional requirements to the
extent necessary, in the opinion of nationally -recognized bond counsel, to preserve the exclusion from
gross income of interest on the Bonds under section 103 of the Code.
Proper officers of the District charged with the responsibility of issuing the Bonds are hereby
authorized and directed to execute any documents, certificates, or reports required by the Code and to make
such elections, on behalf of the District, which may be permitted by the Code as are consistent with the
purpose for the issuance of the Bonds.
Notwithstanding any other provision in this Order, to the extent necessary to preserve the
exclusion from gross income of interest on the Bonds under section 103 of the Code the covenants
contained in this subsection shall survive the later of the defeasance or discharge of the Bonds.
Section 9.2. Covenants Regarding Sale. Lease. or Disposition of Financed Property, The
District covenants that the District will regulate the use of the property financed, directly or indirectly, with
the proceeds of the Bonds and will not sell, lease, or otherwise dispose of such property unless (i) the
District takes the remedial measures as may be required by the Code and the regulations and rulings
thereunder in order to preserve the exclusion from gross income of interest on the Bonds under section 103
of the Code or (ii) the District seeks the advice of nationally -recognized bond counsel with respect to such
sale, lease, or other disposition.
19
Section 9.3. Designation as Qualified Tax -Exempt Obligations. The District hereby
designates the Bonds as "qualified tax-exempt obligations" as defined in section 265(b)(3) of the Code. In
furtherance of such designation, the District represents, covenants, and warrants the following: (a) during
the calendar year in which the Bonds are issued, the District (including any subordinate entities) has not
designated nor will designate obligations, which when aggregated with the Bonds, will result in more than
$10,000,000 of "qualified tax-exempt obligations" being issued; (b) the District reasonably anticipates that
the amount of tax-exempt obligations issued during 2004 by the District (including any subordinate
entities) will not exceed $10,000,000; and (c) the District will take such action which would assure, or to
refrain from such action which would adversely affect, the treatment of the Bonds as "qualified tax-exempt
obligations."
ARTICLE X
ADDITIONAL BONDS AND REFUNDING BONDS
Section 10.1. Additional Bonds. The District expressly reserves the right to issue, in one or
more installments, for the purpose of completing, repairing, improving, extending, enlarging, or replacing
the System or any other lawfid purpose (a) the unissued unlimited tax bonds which were authorized at the
bond election described in the recitals of this Order; and (2) such other unlimited tax bonds as may
hereafter be authorized at subsequent elections.
Section 10.2. Other Bonds. The District expressly reserves the right to issue unlimited tax and
revenue bonds, if authorized by election, and such other bonds as may be lawfully issued by the District
without the necessity for an election.
Section 10.3. Refunding Bonds. The District fiuther reserves the right to defease or refund the
Bonds or any other bonds issued by the District in any manner permitted by law at or prior to their
respective dates of maturity or redemption.
ARTICLE XI
SALE AND DELIVERY OF BONDS
Section 11.1. Sale and Delivery of Bonds.
to (a) The sale of the Bonds is hereby awarded to Wells Fargo Brokerage Services, LLC (the
Purchaser"), under the terms and conditions contained in its commitment for purchase of the Bonds
pursuant to the Bond Purchase Agreement dated as of the date of this Order. The Board hereby finds and
determines that the price of $1,010,000 and terms of the sale of the Bonds to the Purchaser are the most
advantageous and reasonably obtainable by the District.
(b) Upon the registration of all of the Bonds, the Comptroller of Public Accounts of the State
of Texas is authorized and instructed to deliver all of the Bonds to Winstead Sechrest & Minick P.C., or
pursuant to such firm's order, for delivery to the Purchaser.
(c) The obligation of the Purchaser to accept delivery of the Bonds is subject to the
Purchaser being furnished with the final, approving opinion of Winstead Sechrest & Minick P.C., Bond
Counsel for the District, which opinion shall be dated and delivered the Closing Date.
Section 11.2. Control and Delivery of Bonds.
(a) The President of the Board is hereby authorized to have control of the Initial Bond and all
necessary records and proceedings pertaining thereto pending investigation, examination, and approval of
the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State
and registration with, and initial exchange or transfer by, the Paying Agent/Registrar.
20
(b) After registration by the Comptroller of Public Accounts, delivery of the Bonds shall be
made to the Purchaser thereof under and subject to the general supervision and direction of the President of
the Board, against receipt by the District of all amounts due to the District under the terms of sale.
ARTICLE XII
DEFAULT AND REMEDIES
Section 12.1. Events of Default. Each of the following occurrences or events for the purpose
of this Order is hereby declared to be an Event of Default:
(a) the failure to make payment of the principal of or interest on any of the Bonds when the
same becomes due and payable;
(b) default in the performance or observance of any other covenant, agreement, or obligation
of the District and the continuation thereof for a period of 60 days after notice of such default is given by
any Registered Owner to the District; or
(c) the District files for protection under the federal Banlauptcy Code or other similar state
or federal statute.
Section 12.2. Remedies for Default.
(a) Upon the happening of any Event of Default, then any Registered Owner or an authorized
representative thereot; including but not limited to, a trustee or trustees therefor, may proceed against the
District for the purpose of protecting and enforcing the rights of the Registered Owners under this Order,
by mandamus or other snit, action or special proceeding in equity or at law, in any court of competent
jurisdiction, for any relief permitted by law, including the specific performance of any covenant or
agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of
any right of the Registered Owners hereunder or any combination of such remedies.
(b) All such proceedings shall be instituted and maintained for the equal benefit of all
Registered Owners.
Section 12.3. Remedies Not Exclusive.
(a) No remedy herein conferred or reserved is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity, provided,
however, that notwithstanding any other provision of this Order, the right to accelerate the debt evidenced
by the Bonds shall not be available as a remedy under this Order.
(b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of
any other available remedy.
ARTICLE XIII
DISCHARGE
Section 13.1. Defeasance. If the District shall pay or cause to be paid, or there shall otherwise
be paid to the Registered Owners, the principal of and interest on the Bonds, at the times and in the manner
stipulated in this Order, then the pledge of taxes and Net Revenues under this Order and all covenants,
agreements, and other obligations of the District to the Registered Owners shall thereupon cease, terminate,
and become void and be discharged and satisfied, and the Paying Agent/Registrar shall pay over or deliver
all money held by it under this Order to the District.
Bonds or interest installments for the payment of which money shall have been set aside and shall
be held in trust by the Paying Agent/Registrar or with any other bank or trust company which has agreed to
21
hold the same for such purpose (through deposit by the District of funds for such payment or otherwise) at
the Stated Maturity thereof shall be deemed to have been paid within the meaning and with the effect
expressed above in this Section. All Bonds outstanding shall be deemed to have been paid, prior to their
Stated Maturity, within the meaning and with the effect expressed above in this Section, if there shall have
been deposited with the Paying Agent/Registrar either (a) money in an amount which shall be sufficient to
make such payment, (b) Governmental Obligations certified by an independent public accounting firm of
national reputation to be of such maturities and interest payment dates and to bear such interest as will,
without further investment or reinvestment of either the principal amount thereof or the interest earnings
therefrom, be sufficient to make such payment, or (c) a combination of money and Governmental
Obligations together so certified to be sufficient to make such payment, provided that all the expenses
pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment
thereof provided for to the satisfaction of the Paying Agent/ Registrar (and to such other bank or trust
company).
Section 13.2. Investments for Defeasance. No money or Governmental Obligations so
deposited shall be invested or reinvested unless in Governmental Obligations and unless such money and
Governmental Obligations not invested and such new investments are together certified by an independent
public accounting firm to be of such amounts, maturities, and interest payment dates and to bear such
interest as will, without further investment or reinvestment of either the principal amount thereof or the
interest earnings therefrom, be sufficient to make such payment. Neither Governmental Obligations nor
money deposited with the Paying Agent/Registrar or other bank or trust company pursuant to this Section,
nor principal or interest payments on any such Governmental Obligations, shall be withdrawn or used for
any purpose other than, and shall be held in trust for, the payment of the principal of, and interest on such
Bonds. Any cash received from such principal of and interest on such investment securities deposited with
the Paying Ageat/Registrar, if not needed for such purpose, shall, to the extent practicable, be reinvested in
Governmental Obligations (which may be non-interest bearing) maturing at times and in amounts sufficient
to pay when due the principal of and interest on such Bonds on and prior to the maturity thereof, and
interest earned from such reinvestments shall be paid over to the District as received by the Paying
Agent/Registrar, free and clear of any trust, lien, or pledge and used in accordance with applicable law.
Any payment for Governmental Obligations purchased for the purpose of reinvesting cash as aforesaid
shall be made only against delivery of such Governmental Obligations.
ARTICLE XIV
MISCELLANEOUS
Section 14.1. Persons Deemed Registered Owners. The District, the Paying Agent/Registrar,
and any agent of either of them may treat the Person in whose name any Bond is registered as the owner of
such Bond for the purpose of receiving payment of the principal of and interest on such Bond and for all
other purposes whatsoever, and to the extent permitted by law, neither the District, the Paying
Agent/Registrar, nor any agent of either of them shall be affected by notice to the contrary.
Section 14.2. District's Successors and Assigns. Whenever in this Order the District is named
and referred to, it shall be deemed to include its successors and assigns, and all covenants and agreements
in this Order by or on behalf of the District, except as otherwise provided herein, shall bind and inure to
the benefit of its successors and assigns whether or not so expressed.
Section 14.3. Benefits of Order Provisions. Nothing in this Order or in the Bonds, expressed
or implied, shall give or be construed to give any person, firm or corporation, other than the District, the
Paying Agent/Registrar, and the Registered Owners any legal or equitable right or claim under or in respect
of this Order, or under any covenant, condition, or provision herein contained, all the covenants, conditions,
and provisions contained in this Order or in the Bonds being for the sole benefit of the District, the Paying
Agent/Registrar, and the Registered Owners.
Section 14.4. Severability Clause. If any word, phrase, clause, sentence, paragraph, section,
or other part of this Order , or the application thereof to any person or circumstance, shall ever be held to be
invalid or unconstitutional by any court of competent jurisdiction, the remainder of this Order and the
22
application of such word, phrase, clause, sentence, paragraph, section, or other part of this Order to any
other persons or circumstances shall not be affected thereby.
Section 14.5. Open Meeting. It is hereby officially found and determined that the meeting at
which this Order was adopted was open to the public, and public notice of the time, place and purpose of
said meeting was properly given, all as required by Chapter 551, Texas Government Code, and Section
49.063, Texas Water Code, as amended.
Section 14.6. Amendments. The District may, without the consent of or notice to any
Registered Owners of the Bonds, amend, change, or modify this Order as may be required (a) for the
purpose of curing any ambiguity, inconsistency, or formal defect or omission herein, or (b) in connection
with any other change which is not to the prejudice of the Registered Owners of the Bonds. Except for
such amendments, changes, or modifications, the District shall not amend, change, or modify this Order in
any manner without the consent of the Registered Owners of the Bonds.
Section 14.7. No Personal Liability. No recourse shall be had for payment of the principal of
or interest on any Bonds or for any claim based thereon, or on this Order, against any official or employee
of the District or any person executing any Bonds.
Section 14.8. Notice to Registered Owners. Except as may be otherwise provided in this
Order, where this Order provides for notice to Registered Owners of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage
prepaid, to each Registered Owner, at the address of such Registered Owner as it appears in the Register.
Neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Registered
Owner of Bonds shall affect the sufficiency of such notice with respect to all other Registered Owners.
Wherever this Order provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event with respect to which such notice is
given, and such waiver shall be the equivalent of such notice. Waivers of notice by Registered Owners
shall be filed with the District, but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
Section 14.9. District's Officers' Duties. The President, Vice President, and Secretary of the
Board of Directors are authorized to do any and all things proper and necessary to carry out the intent of
this Order.
ARTICLE XV
EFFECTIVENESS
Section 15.1. Effectiveness. This Order shall take effect and be in force from and after its
passage and approval.
(The remainder of this page intentionally left blank)
23
PASSED AND APPROVED on this
ATTEST:
Secretary, Board of Directors
(SEAL)
President, Board of Directors
SIGNATURE PAGE FOR ORDER AUTHORIZING ISSUANCE OF BONDS
AUSTIN\3
_ 1\238635
19239-4 12/22/2003
THE MEADOWS AT CHANDLER CREEK
MUNICIPAL UTILITY DISTRICT
$1,010,000
Combination Unlimited Tax and Revenue Refunding Bonds,
Series 2004
BOND ISSUE SUMMARY
2003 Assessed Valuation (provided by WCAD)
$197,167,830
Gross Debt Outstanding (On 2/1/04 at closing) $ 9,295,000
This is a refunding the amount of debt will be the same as it is now
Ratio of Gross Debt to 2003 Assessed Valuation
Estimated Direct & Overlapping Net Debt
Est. Ratio of Direct & Overlapping Net Debt to 2003 A. V.
Average Annual Debt Service Requirement (2004/2008) of the
Bonds and the Outstanding Bonds (Average Req.)
Debt Service Fund Balance as of December 16, 2003
Authorized but Unissued Bonds
4.71%
$ 16,515,790
8.38%
$ 858,764
$ 833,530
$ 1,835,000
At this time, the District does not anticipate issuing any additional debt.
2003 Tax Rate D/S $0.4799
O&M 0.1673 $0.6472
Number of active single family connection as of November 2003 1,400
Estimated population as of November 2003 4,900
1994 Refunding Bonds current debt service $1,178,050
2003 NEW Refunding Bonds - NEW D/S $1,083,695
Cumulative Savings $ 74,355
Net Present Value Savings 189% Equals $68,305.92 or 6.763% of the Prior Issue
Note: Present Value Savings is net of the initial transfer amount of $20,000 for issuance
cost.
EXHIBIT
L-=M"B11
DATE: January 16, 2004
SUBJECT: City Council Meeting - January 22, 2004
ITEM: 14. B. 1. Consider a resolution approving the issuance of $1,010,000
Combined Unlimited Tax and Revenue Refunding Bonds, Series
2004 by the Meadows of Chandler Creek Municipal Utility
District.
Resource: David Kautz, Assistant City Manager/Chief Financial Officer
Cindy Demers, Finance Director
History: The District is in the extraterritorial jurisdiction (ETJ) of the City of Round
Rock and, therefore, the City's approval is required prior to the sale of
bonds. The District has 1,400 active single family connections with an
estimated District population of approximately 4,900.
The District is selling $1,010,000 principal amount of refunding bonds. The
bond proceeds will be used to restructure the District's annual debt service
expense and achieve debt service savings for the District. Although the
District does have authorized but unissued bonds, at this time the district
does not expect to sell any additional bonds for capital improvements.
Texas Commission on Environmental Quality approval is not required as
these are refunding bonds.
These bonds are an obligation of the District and no other entity. No
adverse impact is anticipated on the District's tax or utility rates.
Funding:
Cost:
Source of funds:
Outside Resources:
Impact/Benefit: N/A
Public Comment: N/A
Sponsor: N/A
N/A
N/A
Winstead, Sechrest & Minick, Bond Counsel
EXECUTED
DOCUMENT
FOLLOWS
WNSTEAD
December 23, 2003
direct dial: 512.370.2834
nhagquist@winstead.com
VIA HAND DELIVERY
Ms. Christine Martinez
Round Rock City Secretary
221 E. Main Street
Round Rock, TX 78664
Mr. Stephen Sheets
Round Rock City Attorney
Sheets & Crossfield
309 E. Main Street
Round Rock, Texas 78664
Ms. Cindy Demers
City of Round Rock Finance Dept.
221 E.Main Street
Round Rock, Texas 78664
Re: The Meadows at Chandler Creek Municipal Utility District Combination
Unlimited Tax and Revenue Refunding Bonds, Series 2004
Dear Ms. Martinez, Mr. Sheets and Ms. Demers:
The Meadows at Chandler Creek Municipal Utility District (the "District") intends to
issue $1,010,000 of its Combination Unlimited Tax and Revenue Refunding Bonds, Series 2004
(the "Bonds") to refinance water, wastewater, and drainage facilities within the District's
boundaries. We ask that the City of Round Rock, Texas (the "City") consider approval of the
Bonds at the City Council meeting scheduled for January 22, 2004.
Enclosed for your review and that of the City Attorney are the following documents
relating to the Bonds:
(1) A substantially final order of the District authorizing the sale of the Bonds;
(2) A summary of the District's finances (highlighting the impact the sale of the Bonds
will have on the District's finances); and
(3) A draft order prepared for the City regarding approval of the Bonds.
SUITE 800 PH 512. 17.1.- 330 A'�As'� � m),)[ ( Hlel:s'l & A11A1( K Austin, Dallas, Port Worth.
100 CONGRESS AVENUE FAX 51 2.370.2850 ilh.r�n't-� .lin1 ConixclocHouston. Alexno City.
AUSTIN, "I'P.XAS 78701 WINSTEAD.COM l Jnr. �C r'�,,;;_...... The Woodlands. WY i,hNngtwl, DC
Ms. Christine Martinez
Mr. Stephen Sheets
Ms. Cindy Demers
December 23, 2003
Page 2
If you need additional information or have any questions regarding the enclosed, please
call me. I plan on attending the City Council meeting on January 22, 2004, so will be available
for any questions you or the City Council members may have. Thank you for your assistance
with this matter.
Sincerely,
Nancy Hagquist
Enclosures
AUSTIN_ 1\239470\1
19239-4 12/23/2003
THE MEADOWS AT CHANDLER CREEK
MUNICIPAL UTILITY DISTRICT
$1,010,000
Combination Unlimited Tax and Revenue Refunding Bonds,
Series 2004
BOND ISSUE SUMMARY
2003 Assessed Valuation (provided by WCAD)
$197,167,830
Gross Debt Outstanding (On 2/1/04 at closing) $ 9,295,000
This is a refunding the amount of debt will be the same as it is now
Ratio of Gross Debt to 2003 Assessed Valuation
Estimated Direct & Overlapping Net Debt
Est. Ratio of Direct & Overlapping Net Debt to 2003 A.V.
Average Annual Debt Service Requirement (2004/2008) of the
Bonds and the Outstanding Bonds (Average Req.)
Debt Service Fund Balance as of December 16, 2003
Authorized but Unissued Bonds
4.71%
$ 16,515,790
8.38%
$ 858,764
$ 833,530
$ 1,835,000
At this time, the District does not anticipate issuing any additional debt.
2003 Tax Rate D/S $0.4799
O&M $0.1673 $0.6472
Number of active single family connection as of November 2003 1,400
Estimated population as of November 2003 4,900
1994 Refunding Bonds current debt service $1,178,050
2003 NEW Refunding Bonds - NEW D/S $1,083,695
Cumulative Savings $ 74,355
Net Present Value Savings 2 89 % Equals $68,305.92 or & 763 % of the Prior Issue
Note: Present Value Savings is net of the initial transfer amount of $20,000 for issuance
cost.
CERTIFICATE FOR ORDER
THE STATE OF TEXAS
COUNTY OF WILLIAMSON
I, the undersigned officer of the Board of Directors of The Meadows at Chandler Creek Municipal
Utility District hereby certify as follows:
1. The Board of Directors of The Meadows at Chandler Creek Municipal Utility District
convened in a regular meeting on December 16, 2003 (the "Meeting"), at the regular meeting place within
the boundaries of the District, and the roll was called of the duly constituted officers and members of the
Board, to -wit:
Nancy Beleckis
President
Walter Berry
Vice President
Ann Mifflin
Secretary
Howard Hemberger
Treasurer
Bob Wohlford
Director
and all of said persons except N/A were present thus constituting
quorum. Whereupon, among other business, the following was transacted at the Meeting: a written
ORDER AUTHORIZING THE ISSUANCE OF $1,010, 000 THE MEADOWS AT CHANDLER CREEK
MUNICIPAL UTILITY DISTRICT COMBINATION UNLIMITED TAX AND REVENUE
REFUNDING BONDS, SERIES 2004
(the "Order") was introduced for the consideration of the Board. It was then duly moved and seconded that
the Order be adopted; and, after due discussion, the motion, carrying with it the adoption of the Order,
prevailed and carried by the following vote:
Ayes: 5_
Nays: 0
Abstentions: 0-
2. That a true, full, and correct copy of the Order adopted at the Meeting is attached to and
follows this certificate; that the Order has been duly recorded in the Board's minutes of the Meeting, that
the persons named in the above and foregoing paragraph are the duly chosen, qualified, and acting officers
and members of the Board as indicated therein; that each of the officers and members of the Board was
duly and sufficiently notified officially and personally, in advance, of the time, place, and purpose of the
Meeting, that the Order would be introduced and considered for adoption at the Meeting, and each of the
officers and members consented, in advance, to the holding of the Meeting for such purpose; that the
Meeting was open to the public as required by law; and that public notice of the time, place, and subject of
the Meeting was given as required by Chapter 551, Texas Government Code, and Section 49.063, Texas
Water Code.
(The remainder of this page intentionally left blank)
SIGNED AND SEALED on this
Secretary, Board of Directors
(SEAL)
SIGNATURE PAGE FOR CERTIFICATE FOR ORDER AUTHORIZING ISSUANCE OF BONDS
ORDER
AUTHORIZING THE ISSUANCE OF
$1,010,000 THE MEADOWS AT CHANDLER CREEK MUNICIPAL UTILITY DISTRICT
COMBINATION UNLIMITED TAX AND REVENUE REFUNDING BONDS, SERIES 2004
Adopted: December 16, 2003
ORDER AUTHORIZING THE ISSUANCE OF $1,010,000 THE MEADOWS AT CHANDLER CREEK
MUNICIPAL UTILITY DISTRICT COMBINATION UNLIMITED TAX AND REVENUE
REFUNDING BONDS, SERIES 2004
THE STATE OF TEXAS
COUNTY OF WILLIAMSON
Recitals
WHEREAS, at an election held in the District on July 13, 1985 (the "election"), the District was
authorized to issue bonds in the maximum amount of $13,000,000 for the purpose or purposes of
purchasing, constructing, acquiring, owning, operating, repairing, improving, or extending a waterworks
system, sanitary sewer system, and drainage and storm sewer system, including, but not limited to, all
additions to such systems and all works, improvements, facilities, plants, equipment, appliances, interests in
property, and contract rights needed therefor and administrative facilities needed in connection therewith,
and all expenses incidental thereto, including expenses incidental to the organization, administration, and
financing of the District, and to provide for the payment of principal of and interest on such bonds by the
levy and collection of a sufficient tax upon all taxable property within the District and by a pledge of all or
any designated part or parts of the net revenues resulting from the ownership or operation of the District's
works, improvements, facilities, plants, equipment, and appliances, or under specific contracts;
WHEREAS, the election was called and held under and in strict conformity with the Constitution
and laws of the State of Texas, and of the United States of America, and the Board of Directors has
heretofore officially declared the results of the election and declared that the District was legally created
and authorized to issue the bonds described above;
WHEREAS, to construct the various phases of a waterworks, sanitary sewer, and drainage and
storm sewer systems within the District, the District previously issued its $2,450,000 Waterworks and
Sewer System Combination Unlimited Tax and Revenue Bonds, Series 1987 (the "Series 1987 Bonds"),
and in reliance upon the authority of Chapter 1207 of the Texas Government Code, its $2,124,995.80
Combination Unlimited Tax and Revenue Refunding Bonds, Series 1994 (the "Series 1994 Refunding
Bonds"). In addition, for the purpose of acquiring water, sewage, and drainage facilities, the District
previously issued its $1,410,000 Combination Unlimited Tax and Revenue Bonds, Series 1999, (the "Series
1999 Bonds"), its $1,950,000 Combination Unlimited Tax and Revenue Bonds, Series 2001 (the "Series
2001 Bonds"), and its $5,355,000 Combination Unlimited Tax and Revenue Bonds, Series 2003 (the
"Series 2003 Bonds"). No portion of the Series 1987 Bonds remains outstanding, and $1,010,000 of the
Series 1994 Bonds, $1,380,000 of the Series 1999 Bonds, $1,855,000 of the Series 2001 Bonds, and
$5,355,000 of the Series 2003 Bonds remain outstanding,
WHEREAS, the District desires to refund the $1,010,000 aggregate principal outstanding of the
Series 1994 Refunding Bonds (the "Refunded Obligations") by issuing $1,010,000 in refunding bonds (the
"Bonds") pursuant to the authority granted under Chapter 1207 of the Texas Government Code; and
WHEREAS, the Board of Directors of the District has found and determined that the issuance of
the Bonds (i) is in the best interests of the District to restructure the District's debt and (ii) will result in a
net present value savings; and
WHEREAS, upon the issuance of the Bonds herein authorized and payment in full of the
Refunded Obligations, the Refunded Obligations shall no longer be outstanding and the pledges, liens,
trust, and all other covenants, provisions, terms, and conditions of the order authorizing the issuance of the
Refunded Obligations shall be discharged, terminated, and defeased; and
WHEREAS, the District has been authorized to levy taxes, and the taxes to be collected, together
with the net revenues from the operation of the District's waterworks and sanitary sewer system to be
constructed or acquired, will be sufficient to make the principal and interest payments on the outstanding
bonds and the Bonds authorized by this Order;
IT IS, THEREFORE, ORDERED BY THE BOARD OF DIRECTORS OF THE MEADOWS AT
CHANDLER CREEK MUNICIPAL UTILITY DISTRICT THAT:
ARTICLE I
DEFINITIONS, FINDINGS, AND INTERPRETATION
Section 1.1. Definitions. For all purposes of this Order, unless the context requires a
different meaning or except as otherwise expressly provided, the following terms shall have the meanings
assigned to them below:
"Additional Bonds" means bonds or other evidences of indebtedness which the District reserves
the right to issue or enter into, as the case may be, in the future in accordance with the terms and
conditions provided in Article XI hereof.
"Board" means the Board of Directors of the District.
"Bonds" shall mean the $1,010,000 The Meadows at Chandler Creek Municipal Utility District
Combination Unlimited Tax and Revenue Refunding Bonds, Series 2004 authorized to be issued
by this Order and certified or authenticated and delivered hereunder.
"Bond Date" shall mean January 15, 2004.
"Bond Purchase Agreement" shall mean the agreement dated as of December 16, 2003 and entered
into by the District and the Purchaser relating to the sale and purchase of the Bonds.
"Business Day" means any day which is not a Saturday, Sunday, or a day on which the Paying
Agent/Registrar is authorized by law or executive order to remain closed.
"Closing Date" means the date of initial delivery of and payment for the Bonds, which shall be
February 2, 2004.
"Code" shall mean the Internal Revenue Code of 1986, as amended by any amendments thereto
enacted prior to the Closing Date.
"Debt Service Fund" shall mean the District's Debt Service Fund established in Section 7.2 of this
Order.
"Definitive Bonds" shall mean the Initial Bond, as may be transferred and converted into or
exchanged for fully registered Bonds.
"Depository Bank" means any financial institution duly designated by the Board of Directors of
the District to serve as a depository for funds controlled by the Board of Directors of the District.
"District" shall mean The Meadows at Chandler Creek Municipal Utility District.
"Event of Default" means any event of default as provided in Section 12.1 hereof.
"Fiscal Year" means the twelve month accounting period used by the District in connection with
the operation of the System which may be any twelve consecutive month period established by the
District.
"Governmental Obligations" shall mean direct obligations of, or obligations which are fully and
unconditionally guaranteed by (including obligations issued or held in book entry form on the
books of) the United States of America.
"Initial Bond" shall mean the Initial Bond authorized to be issued hereunder which shall be
registered by the Comptroller of Public Accounts of the State of Texas, as contemplated by
Section 2.4 hereof.
"Interest Payment Date" shall mean with respect to any installment of interest on any Bond the
date specified in such Bond as the fixed date on which any such installment of interest is due and
payable.
"Maturity Date" or "Maturity" when used with respect to any Bond shall mean the date on which
the principal of such Bond becomes due and payable as therein provided, whether at the Stated
Maturity, by redemption, or otherwise.
"Paying Agent/Registrar Agreement" shall mean the agreement between the District and the
Paying Agent/Registrar referred to in Section 4.1 pursuant to which the Paying Agent/Registrar
will perform the duties required hereunder.
"Paying Agent/Registrar" shall mean Wells Fargo Bank, Austin, Texas until a successor Paying
Agent/Registrar shall have been appointed pursuant to the applicable provisions of this Order, and
thereafter "Paying Agent/Registrar" shall mean such successor Paying Agent/Registrar.
"Person" shall mean any individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, or government or any agency or political subdivision
thereof.
"Place of Payment" shall mean the designated office of the Paying Agent/Registrar in Austin,
Texas.
"Purchaser" shall have the meaning stated in Section 11.1 hereof.
"Record Date" for the interest payable on any Interest Payment Date shall mean the fifteenth
calendar day (whether or not a business day) of the month next preceding such Interest Payment
Date.
"Refunded Obligations" shall mean The Meadows at Chandler Creek Municipal Utility District
Combination Unlimited Tax and Revenue Refunding Bonds, Series 1994.
"Register" shall mean the books of registration kept by the Paying Agent/Registrar, in which are
maintained the names and addresses of, and the principal amounts of the Bonds registered to, each
registered Owner.
"Registered Owner" shall mean any person who shall be the registered owner of any outstanding
Bond.
"Regulations" shall mean the temporary or final income tax regulations applicable to the Bonds
issued pursuant to sections 103 and 141 through 150 of the Code. Any reference to a section of
the Regulations shall also refer to any successor provision to such section hereafter promulgated
by the Internal Revenue Service pursuant to sections 103 and 141 through 150 of the Code and
applicable to the Bonds.
"Order" shall mean this order authorizing the issuance of the Bonds.
"Series 1994 Refunding Bonds" means the District's Combination Unlimited Tax and Revenue
Refunding Bonds, Series 1994.
"Special Payment Date" shall have the meaning stated in Section 2.3 hereof.
"Special Record Date" shall have the meaning stated in Section 2.3 hereof.
"Stated Maturity" when used with respect to any Bond shall mean the date specified in such Bond
as the fixed date on which the principal of such Bond is due and payable.
"System" shall mean the waterworks and sewer system owned and operated by the District
together with any additions and extensions thereto, and any interest in the capacity of a regional
system or systems, and improvements and replacements thereof whatsoever acquired or
constructed The System shall not include certain facilities which, while owned by the District,
are acquired or constructed to perform contracts between the District and other persons, including
private corporations, municipalities, and political subdivisions, and which are financed by
proceeds of the District's revenue bonds issued particularly to finance facilities needed to perform
such contracts.
Section 1.2. Fes. The declarations, determinations and findings declared, made and
found in the preamble to this Order are hereby adopted, restated and made a part of the operative provisions
hereof.
Section 1.3. Table of Contents, Titles and Headings. The table of contents, titles, and
headings of the Articles and Sections of this Order have been inserted for convenience of reference only
and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or
provisions hereof and shall never be considered or given any effect in construing this Order or any
provision hereof or in ascertaining intent, if any question of intent should arise.
Section 1.4. Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall be construed
to include correlative words of the feminine and neuter genders and vice versa, and words of the singular
number shall be construed to include correlative words of the plural number and vice versa.
(b) This Order and all the terms and provisions hereof shall be liberally construed to
effectuate the purposes set forth herein to sustain the validity of the Bonds and the validity of the taxes
levied in payment thereof.
ARTICLE II
AUTHORIZATION; GENERAL TERMS AND
PROVISIONS REGARDING THE BONDS
Section 2.1. Authorization. The District's bonds to be designated the "THE MEADOWS AT
CHANDLER CREEK MUNICIPAL UTILITY DISTRICT COMBINATION UNLIMITED TAX AND
REVENUE REFUNDING BONDS, SERIES 2004" are hereby authorized to be issued and delivered in
accordance with the Constitution and the laws of the State of Texas, particularly Section 59 of Article XVI
of the Constitution of the State of Texas, Chapters 49 and 54 of the Texas Water Code, as amended, and
Chapter 1207, Texas Government Code, as amended. The Bonds shall be issued in the total aggregate
amount of One Million Ten Thousand and No/100 Dollars ($1,010,000) for the purpose of refunding the
Refunded Obligations in order to restructure the District's debt and achieve debt service savings.
Section 2.2. Date, Number, Maturities, and Interest.
(a) The Bonds shall have a Bond Date of January 15, 2004. The Bonds shall be issued as
fully registered Bonds, without coupons, and shall be numbered consecutively from R-1 upwards.
4
(b) The Bonds shall mature on February 1, 2008, and shall bear interest at the per annum rate
of 2.89%.
(c) Interest shall accrue and be paid on each Bond respectively until its Maturity from the
later of the Closing Date or the most recent Interest Payment Date to which interest has been paid or
provided for at the per annum rate specified in subsection (b) above. Such interest shall be payable
semiannually on February 1 and August 1 of each year, commencing August 1, 2004, computed on the
basis of a 360 -day year of twelve 30 -day months.
Section 2.3. Medium, Method, and Place of Payment.
(a) The District will duly and punctually pay the principal of and interest on the Bonds in
accordance with their terms in lawful money of the United States of America and shall deposit with the
Paying Agent/Registrar on or before each Interest Payment Date funds sufficient to pay the principal of and
interest on the Bonds then due, as otherwise provided in this Section.
(b) Interest on the Bonds shall be paid to the Registered Owners thereof as shown in the
Register at the close of business on the Record Date by check (dated as of the Interest Payment Date) and
sent by the Paying Agent/Registrar to the person entitled to such payment, first class United States mail,
postage prepaid, to the address of such person as it appears in the Register, or by such other customary
banking arrangements acceptable to the Paying Agent/Registrar and the person to whom interest is paid;
provided, however, that such person shall bear all risk and expense of such other customary banking
arrangement.
(c) The principal of each Bond shall be paid to the Registered Owner of such Bond on the
due date thereof (whether at the maturity date or the date of prior redemption thereof) upon presentation
and surrender of such Bond at the designated office of the Paying Agent/Registrar.
(d) If the specified date for any payment of principal of or interest on the Bonds shall be a
Saturday, Sunday, or legal holiday or equivalent (other than a moratorium) for banking institutions
generally in the city in which the Payment Place of the Paying Agent/Registrar is located, such payment
may be made on the next succeeding day which is not one of the foregoing days without additional interest
and with the same force and effect as if made on the specified date for such payment.
(e) In the event of nonpayment of interest on a Bond on an Interest Payment Date, and for
thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been
received from the District. Notice of the Special Record Date and of the scheduled payment date of the
past due interest (the "Special Payment Date" that shall be fifteen (15) days after the Special Record Date)
shall be sent at least five (5) business days prior to the Special Record Date by United States mail, first
class, postage prepaid, to the address of each Registered Owner of a Bond appearing on the books of the
Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing
of such notice.
(f) Unclaimed payments shall be segregated in a special escrow account and held in trust,
uninvested by the Paying Agent/Registrar, for the account of the Registered Owners to which the
unclaimed payments pertain. Subject to Title 6 of the Texas Property Code, payments remaining
unclaimed by the Registered Owners entitled thereto for three years after the applicable payment shall be
applied to the next payment or payments on the Bonds thereafter coming due and, to the extent any such
money remains after the retirement of all outstanding Bonds, shall be paid to the District to be used for any
lawful purpose. Thereafter, neither the District, the Paying Agent/Registrar, nor any other person shall be
liable or responsible to any Registered Owners of such Bonds for any further payment of such unclaimed
money or on account of any such Bonds, subject to Title 6 of the Texas Property Code.
Section 2.4. Execution and Initial Registration.
(a) The Bonds shall be executed on behalf of the District by the President or Vice President
and Secretary or Assistant Secretary of the Board, by their manual or facsimile signatures, and the official
seal of the District shall be impressed or placed in facsimile thereon. Such facsimile signatures on the
Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each
of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the
District had been manually impressed upon each of the Bonds.
(b) In the event that any officer of the District whose manual or facsimile signature appears
on the Bonds ceases to be such officer before the authentication of such Bonds or before the delivery
thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if
such officer had remained in such office.
(c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit of this Order unless and until there appears thereon the Certificate of
Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution
by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the
same officer or authorized signatory of the Paying Ageat/Registrar sign the Certificate of Paying
Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of Paying Agent/Registrar
described above, the Initial Bond delivered at the Closing Date shall have attached thereto the
Comptroller's Registration Certificate substantially in the form provided herein, 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 Bond has been duly approved by the Attorney General of the State of Texas, that
it is a valid and binding obligation of the District, and that it has been registered by the Comptroller of
Public Accounts of the State of Texas.
(d) On the Closing Date, one Initial Bond representing the entire principal amount of the
Bonds, payable to the Purchaser or its designee, executed by manual or facsimile signature of the President
and Secretary of the Board, approved by the Attorney General, and registered and manually signed by the
Comptroller of Public Accounts, will be delivered to the Purchaser or its designee. Upon payment for the
Initial Bond, the Paying Agent/Registrar, pursuant to written instructions from the Purchaser or its
designee, if so requested, shall cancel the Initial Bond and deliver to the Purchaser one registered Definitive
Bond for each year of maturity of the Bonds in the aggregate principal amount of all Bonds for such
maturity, registered in the name of the Purchaser.
Section 2.5. Ownership.
(a) The District, the Paying Agent/Registrar, and any other person may treat the person in
whose name any Bond is registered as the absolute Registered Owner of such Bond for the purpose of
making and receiving payment of the principal, for the further purpose of making and receiving payment of
the interest thereon (subject to the terms of this Order requiring the Paying Agent/Registrar to make
payments of interest to the person who is the Registered Owner on the Record Date or the Special Record
Date), and for all other purposes, whether or not such Bond is overdue, and neither the District nor the
Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary.
(b) All payments made to the person deemed to be the Registered Owner in accordance with
this Section shall be valid and effectual and shall discharge the liability of the District and the Paying
Agent/Registrar upon such Bond to the extent of the sums paid.
Section 2.6. Registration, Transfer, and Exchange.
(a) So long as any Bonds remain outstanding, the District shall cause the Paying
Agent/Registrar to keep at its designated office a register (the "Register") in which, subject to such
reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and
transfer of Bonds in accordance with this Order.
M
(b) Registration of any Bond may be transferred in the Register only upon the presentation
and surrender thereof at the designated office of the Paying Agent/Registrar for transfer of registration and
cancellation, together with proper written instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of the Bonds, to the assignee
or assignees thereof, and the right of such assignee or assignees thereof to have the Bond or any portion
thereof registered in the name of such assignee or assignees. No transfer of any Bond shall be effective
until entered in the Register. Upon assignment and transfer of any Bond, a new Bond or Bonds will be
issued by the Paying Agent/Registrar in exchange for such transferred and assigned Bond. To the extent
possible, the Paying Agent/Registrar will issue such new Bond or Bonds in not more than three (3)
Business Days after receipt of the Bond to be transferred in proper form and with proper instructions
directing such transfer.
(c) Any Bond may be exchanged only upon the presentation and surrender thereof at the
designated office of the Paying Agent/Registrar, together with a written request therefor duly executed by
the Registered Owner or assignee or assignees thereof, or its or their duly authorized attorney or
representatives, with guarantees of signatures satisfactory to the Paying Agent/Registrar, for a Bond of the
same maturity and interest rate and in an aggregate principal amount equal to the unpaid principal amount
of the Bond presented for exchange. To the extent possible, a new Bond will be required to be delivered by
the Paying Agent/Registrar to the Registered Owner of the Bond in not more than three (3) business days
after receipt of the Bond to be exchanged in proper form and with proper instructions directing such
exchange.
(d) Each Bond issued in exchange for any Bond assigned or transferred shall be of the same
tenor and shall have the same maturity date and bear interest at the same rate and in the same manner as the
Bond for which it is being exchanged. The Paying Agent/Registrar shall exchange the Bonds as provided
herein, and each substitute Bond delivered in accordance with this Section shall constitute an original
additional contractual obligation of the District and shall be entitled to the benefits and security of this
Order to the same extent as the Bond in lieu of which such substitute Bond is delivered.
(e) The District will pay the Paying Agent/Registrar's reasonable and customary charge for
the initial registration of the Bonds and the subsequent exchange of the Bonds pursuant to the provisions
hereof; however, the Paying Agent/Registrar will require the Registered Owner to pay a sum sufficient to
cover any tax or other governmental charge that is authorized to be imposed in connection with the
registration, transfer or exchange of a Bond. In addition, the District hereby covenants with the Registered
Owners of the Bonds that it will (i) pay the reasonable and standard or customary fees and charges of the
Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on the
Bonds, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect
to the transfer, registration and exchange of Bonds as provided herein to the extent such fees and charges
are payable hereunder by the District.
Section 2.7. Cancellation and Authentication.
(a) All Bonds paid and all Bonds in lieu of which exchange Bonds or replacement Bonds are
authenticated and delivered in accordance with this Order, shall be canceled and proper records shall be
made regarding such payment, exchange, or replacement. The Paying Agent/Registrar shall then return
such canceled Bonds to the District or may in accordance with law destroy such canceled Bonds and
periodically fiirnish the District with certificates of destruction of such Bonds.
(b) Each substitute Bond issued in exchange for or replacement of (pursuant to the provisions
of Section 2.9 hereof) any Bond or Bonds issued under this Order shall have printed thereon a Paying
Agent/Registrar's Authentication Certificate (the "Certificate"), in the form hereinafter set forth. An
authorized representative of the Paying Agent/Registrar shall, before the delivery of any such bond,
manually sign and date such Certificate, and no such Bond shall be deemed to be issued or outstanding
unless such Certificate is so executed. No additional resolutions or orders need be passed or adopted by the
District or any other body or person so as to accomplish the foregoing exchange or replacement of any
Bond or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and
VA
delivery of the substitute Bonds in the manner prescribed herein. Pursuant to Section 1203.021 et seq. of
the Texas Government Code; as amended, and particularly Section 1203.042 thereof, the duty of exchange
or replacement of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the
execution of the Certificate, the exchanged or replaced Bonds shall be valid, incontestable, and enforceable
in the same manner and with the same effect as the Bonds which originally were delivered pursuant to this
Order, approved by the Attorney General, and registered by the Comptroller of Public Accounts.
Section 2.8. Temporary Bonds.
(a) Pending the preparation of definitive Bonds, the proper officers of the District may
execute and, upon the District's request, the Paying Agent/Registrar shall authenticate and deliver, one or
more temporary Bonds that are printed, lithographed, typewritten, mimeographed, or otherwise produced,
substantially of the tenor of the definitive Bonds in lieu of which they are delivered, without coupons and
with such appropriate insertions, omissions, substitutions, and other variations as the officers of the District
executing such temporary Bonds may determine, as evidenced by their signing of such temporary Bonds.
(b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be
entitled to the benefit and security of this Order.
(c) The District, without unreasonable delay, shall prepare, execute, and deliver to the Paying
Agent/Registrar the Bonds in definitive form and thereupon, upon the presentation and surrender of the
Bond or Bonds in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall
authenticate and deliver in exchange therefor a Bond or Bonds of the same maturity and series, in definitive
form, and in the same aggregate principal amount as the Bond in temporary form surrendered. Such
exchange shall be made without the making of any charge therefor to any Registered Owner.
Section 2.9. Replacement Bonds.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Bond,
the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like
tenor and principal amount, bearing a number not contemporaneously outstanding. The District or the
Paying Agent/Registrar may require the Registered Owner of such Bond to pay a sum sufficient to cover
any tax or other governmental charge that is authorized to be imposed in connection therewith and any
other expenses connected therewith.
(b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the Paying
Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or
knowledge that such Bond has been acquired by a bona fide purchaser, shall authenticate and deliver a
replacement Bond of like tenor and principal amount, bearing a number not contemporaneously
outstanding, provided that the Registered Owner first:
(i) fitmishes to the Paying Agent/Registrar satisfactory evidence of his or her
ownership of and the circumstances of the loss, destruction or theft of such Bond;
(ii) furnishes such security or indemnity as may be required by the Paying
Agent/Registrar to save it and the District harmless;
(iii) pays all expenses and charges in connection therewith, including, but not limited
to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental
charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the District and the
Paying Agent/Registrar.
(c) If, after the delivery of such replacement Bond, a bona fide purchaser of the original
Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the
District and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from the person
to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be
entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost,
or expense incurred by the District or the Paying Agent/Registrar in connection therewith.
(d) In the event that any such mutilated, lost, apparently destroyed, or wrongfully taken Bond
has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of
issuing a replacement Bond, may pay such Bond if it has become due and payable or may pay such Bond
when it becomes due and payable.
(e) Each replacement Bond delivered in accordance with this Section shall constitute an
original additional contractual obligation of the District and shall be entitled to the benefits and security of
this Order to the same extent as the Bond in lieu of which such replacement bond is delivered.
ARTICLE III
REDEMPTION OF BONDS BEFORE MATURITY
Section 3.1. Limitation on Redemption. (a) The Bonds shall be subject to redemption before
their scheduled maturity only as provided in this Article.
(b) Mandatory Redemption. The Bonds are subject to mandatory redemption on February 1
in the years and in the principal amounts set forth in the following schedule, at a price equal to the principal
amount to be redeemed plus accrued interest to the date of redemption.
*Final Maturity.
Year of Mandatory Redemption
Princi al Amount
2005
$230,000
2006
245,000
2007
260,000
2008*
275,000
Section 3.2. No Optional Redemption. The Bonds are subject to optional redemption, in
whole, on any Interest Payment Date, for a redemption price of par plus accrued interest to the date of
redemption.
ARTICLE IV
PAYING AGENT/REGISTRAR
Section 4.1. Appointment of Paying Agent/Registraz.
(a) Wells Fargo Bank, Austin, Texas is hereby appointed as the initial Paying
Agent/Registrar for the Bonds.
(b) The President and the Vice President of the Board or either of than, and the Secretary
and any Assistant or Acting Secretary of the Board, or any of them, are hereby authorized and directed to
execute an agreement with the Paying Agent/Registrar for the Bonds.
Section 4.2. Qualifications of Paving Agent/Registrar. Every Paying Agent/Registrar
appointed hereunder shall be a commercial bank, trust company organized under the laws of the State of
Texas, or other entity duly qualified and legally authorized to serve as, and perform the duties and services
of, paying agent and registrar for the Bonds. Every Paying Agent/Registrar shall maintain the Register at a
location in the State of Texas
Section 4.3. Maintaining Paving Agent/Registrar.
(a) At all times while any Bonds are outstanding, the District will maintain a Paying
Agent/Registrar that is qualified under Section 4.2 of this Order.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the District
will promptly appoint a replacement.
Section 4.4. Termination of Paving Agent/Registrar.
(a) The District reserves the right to appoint a successor Paying Agent/Registrar by (i) filing
with the entity then performing such functions a certified copy of a resolution or order giving thirty (30)
days notice of the termination of the appointment, stating the effective date of such termination and (ii)
appointing a successor Paying Agent/Registrar.
(b) If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the
appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent books and
records relating to the Bonds to the successor Paying Agent/Registrar.
Section 4.5. Notice of Change of Paving Agent/Registrar to Registered Owners. Promptly
upon each change in the entity serving as Paying Agent/Registrar, the District will cause notice of the
change to be sent to each Registered Owner by first class United States mail, postage prepaid, at the
address in the Register, stating the effective date of the change and the name and mailing address of the
replacement Paying Agent/Registrar.
Section 4.6. Agreement of Paving Agent/Registrar to Perform Duties and Functions. By
accepting the appointment as Paying Agent/Registrar, the Paying Agent/Registrar is deemed to have agreed
to the provisions of this Order and that it will perform the duties and functions of Paying Agent/Registrar
prescribed hereby.
Section 4.7. Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such
Paying Agent/Registrar, promptly upon the appointment of the successor, will deliver the Register (or a
copy thereof) and all other pertinent books and records relating to the Bonds to the successor Paying
Agent/Registrar.
ARTICLE V
FORM OF BONDS
Section 5.1. Form. The form of the Bonds, including the form of the 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, which shall be attached or affixed
to the Bonds initially issued, shall be, respectively, substantially in the form set forth in this Article, with
such additions, deletions, and variations as may be necessary or desirable and not prohibited by this Order:
(a) Form of Bonds.
(Remainder of this page intentionally left blank)
10
(Face of Bond)
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF WILLIAMSON
REGISTERED REGISTERED
NUMBER AMOUNT
R-
$1,010,000
THE MEADOWS AT CHANDLER CREEK MUNICIPAL UTILITY DISTRICT
COMBINATION UNLIMITED TAX AND REVENUE REFUNDING BONDS,
SERIES 2004
Maturity Date Closing Date Bond Date
February 1, 2008 February 2, 2004 January 15, 2004
THE MEADOWS AT CHANDLER CREEK MUNICIPAL UTILITY DISTRICT (the
"District"), in the County of Williamson, State of Texas, for value received, hereby promises to pay to
or registered assigns, but solely from the
sources and in the manner hereinafter provided, on the Maturity Date specified above, the sum of
DOLLARS
and to pay interest on such principal amount from the later of the Closing Date set forth above or the most
recent interest payment date to which interest has been paid or provided for until payment of such principal
amount has been paid or provided for, at the per annum rate of 2.89%, computed on the basis of a 360 -day
year of twelve 30 -day months, such interest to be paid semiannually on February 1 and August 1 of each
year, commencing August 1, 2004.
THE PRINCIPAL OF THIS BOND SHALL BE PAYABLE without exchange or collection
charges in lawful money of the United States of America upon presentation and surrender of this Bond at
the designated office of the Paying Agent/Registrar or any successor thereto executing the registration
certificate appearing hereon. Interest on this Bond is payable by check, dated as of the interest payment
date, mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration
books kept by the Paying Agent/Registrar or by such other customary banking arrangements acceptable to
the Paying Agent/Registrar and the person to whom interest is paid; provided, however, that such person
shall bear all risk and expense of such other customary banking arrangements. For the purpose of the
payment of interest on this Bond, the registered owner shall be the person in whose name this Bond is
registered at the close of business on the "Record Date," which shall be the fifteenth day of the month next
preceding such interest payment date. In the event of a nonpayment of interest on a scheduled payment
date, and for thirty 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 District. Notice of the Special Record Date and of the scheduled payment date of
the past due interest (the "Special Payment Date," which date shall be fifteen days after the Special Record
Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first
class, postage prepaid, to the address of each owner of a Bond appearing on the books of the Paying
Agent/Registrar at the close of business on the last Business Day next preceding the date of mailing of such
notice.
IF THE DATE FOR THE PAYMENT of the principal of or interest on this Bond is not a Business
Day, the date for such payment shall be the next succeeding Business Day, and payment on such date shall
for all purposes be deemed to have been made on the original date payment was due.
11
THIS BOND IS ONE OF A SERIES of fully registered bonds specified in the title hereof, dated
as of January 15, 2004, issued in the aggregate principal amount of $1,010,000 (herein referred to as the
"Bonds"), and issued pursuant to the authority provided by the Constitution and laws of the State of Texas,
particularly Chapters 49 and 54 of the Texas Water Code, as amended, by authority of an election held for
and within the District on July 13, 1985, and a certain order of the District (the "Order") for the purpose of
refunding the Refunded Obligations (as defined in the Order). Capitalized terms used herein and not
otherwise defined shall have the meaning assigned thereto in the Order.
THE BONDS ARE SUBJECT to optional redemption in whole on any Interest Payment Date, for
a redemption price of par plus accrued interest to the date of redemption.
THE BONDS ARE SUBJECT to mandatory redemption on February 1 in the years and in the
principal amounts set forth in the following schedule, at a price equal to the principal amount to be
redeemed plus accrued interest to the date of redemption.
Year of Mandatory Redemption
Principal Amount
2005
$230,000
2006
245,000
2007
260,000
2008*
275,000
*Final Maturity.
AS PROVIDED IN THE ORDER and subject to certain limitations therein and herein set forth,
this Bond is transferable upon surrender of this Bond for transfer at the designated corporate trust office of
the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the
Paying Agent/Registrar, and, thereupon, one or more new fully registered Bonds of the same Stated
Maturity, bearing the same rate of interest, and for the same aggregate principal amount will be issued to
the designated transferee or transferees.
THE DISTRICT, THE PAYING AGENT/REGISTRAR, and any other person may treat the
person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as
herein provided (except interest shall be paid to the person in whose name this Bond is registered on the
Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the District, the
Paying Agent/Registrar, nor any such agent shall be affected by notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, AND COVENANTED that this Bond has been duly and
validly issued and delivered; that all acts, conditions and things required or proper to be performed, to exist,
and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist and
have been done in accordance with law; and that annual ad valorem taxes, without legal limit as to rate or
amount, sufficient to provide for the payment of the interest on and principal of this Bond, as such interest
comes due and such principal matures, have been levied and ordered to be levied against all taxable
property in the District and have been pledged irrevocably for such payment.
IT IS FURTHER CERTIFIED, RECITED, AND COVENANTED that certain net revenues to be
derived from the ownership and operation of the District's waterworks and sanitary sewer system also have
been pledged to the payment of the interest on and principal of the Bonds to the extent that ad valorem
taxes levied and collected for the payment thereof, together with other amounts on deposit in the District's
Debt Service Fund, are insufficient for such purpose, all as set forth in the Order, to which reference is
made for all particulars, and that such Order also permits the District and its successors to issue obligations
secured in whole or in part by lien on and pledge of such net revenues on a parity with or subordinate to the
lien securing the Bonds.
Reference is hereby made to the Order for a complete description of the terms, conditions, and
provisions pursuant to which the Bonds are secured and made payable and the respective rights thereunder
of the registered owners of the Bonds and of the District and of the Paying Agent/Registrar. By acceptance
of this Bond, the registered owner hereof expressly assents to all of the provisions of the Order.
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IN WITNESS WHEREOF, this Bond has been signed with the manual or facsimile signature of
the President of the Board of Directors and countersigned with the manual or facsimile signature of the
Secretary (or the Assistant Secretary) of the Board of Directors, and the official seal of the District has been
duly impressed, or placed in facsimile, on this Bond.
The Meadows at Chandler Creek
Municipal Utility District
President, Board of Directors
Secretary, Board of Directors
(SEAL)
(b) Form of Comptroller's Registration Certificate.
[to be printed on Initial Bond only]
COMPTROLLER'S REGISTRATION CERTIFICATE
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
STATE OF TEXAS
REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of Public
Accounts of the State of Texas.
(SEAL)
WITNESS MY SIGNATURE AND SEAL this
13
XXXXXXXXXXXXXXXXXXXX
Comptroller of Public Accounts
of the State of Texas
(c) Form of Registrar's Authentication Certificate.
[to be printed on Definitive Bonds only]
AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been delivered pursuant to the Order described in the text
of this Bond, in exchange for or in replacement of a bond of a series which was originally approved by the
Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of
Texas.
(d) Form of Assignment.
ASSIGNMENT
By.
, Texas
Authorized Signature
Date of Authentication:
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
Please insert Social Security or Taxpayer Identification Number of Transferee) the within Bond and all
rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: Signature must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
Registered Owner(s)
NOTICE: The signature above must correspond to
the name of the Registered Owner(s) as shown on the
face of this Bond in every particular, without any
alteration, enlargement or change whatsoever.
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(e) Form of Initial Bond. The Initial Bond shall be in the form set forth in subsection (a) of
this Section, except for the following alterations:
(1) in the first paragraph of the Bond, the words "executing the registration
certificate appearing hereon" shall be deleted and an additional sentence shall be added to the
paragraph as follows: "The initial Paying Agent/Registrar is Wells Fargo Bank, Austin, Texas";
and
(2) the Initial Bond shall be numbered T-1.
Section 5.2. CUSIP Registration. The President of the Board may, but is not required to,
secure the printing of identification numbers on the Bonds through the CUSIP Service Bureau Division of
Standard and Poor's Corporation, New York, New York.
Section 5.3. Legal Opinion. The approving opinion of Bond Counsel, Winstead Sechrest &
Minick P.C., may be printed on the back of the Bonds with the certification of the Secretary of the Board
which maybe executed in facsimile.
ARTICLE VI
SECURITY OF THE BONDS
Section 6.1. Security of Bonds. The Bonds are secured by and payable from the levy of a
continuing, direct, annual ad valorem tax, without limit as to rate or amount, upon all taxable property
within the District, and are further secured by and payable from a lien on and pledge of certain Net
Revenues (as defined below) of the District's System.
Section 6.2. Levy of Tax To pay the interest on the Bonds, and to create a sinking fund for
the payment of the principal thereof when due, and to pay the expenses of assessing and collecting such
taxes, there is hereby levied, and shall be assessed and collected in due time, a continuing, direct annual ad
valorem tax, without limit as to rate or amount, on all taxable property in the District for each year while
any of the Bonds are outstanding. All of the proceeds of such collections, except expenses incurred in that
connection, shall be paid into the Debt Service Fund, and the aforementioned tax and such payments into
such fund shall continue until the Bonds and the interest thereon have been fully paid and discharged, and
such proceeds shall be used for such purposes and no other. While said Bonds, or any of them, are
outstanding and unpaid, an ad valorem tax each year at a rate from year to year as will be ample and
sufficient to provide funds to pay the interest on said Bonds and to provide the necessary sinking fund to
pay the principal when due, full allowance being made for delinquencies and costs of collection, shall be
levied, assessed, and collected and applied to the payment of principal and interest on the Bonds. In
determining the amount of taxes which should be levied each year, the Board of Directors may consider
whether the Board of Directors reasonably expects to have revenue or receipts available from other sources
which are legally available to pay principal of or interest on the Bonds.
Section 6.3. Net Revenue Pledge as Additional Security.
(a) For purposes of this Section the following terms shall have the following definitions:
(i) The term "Maintenance and Operation Expenses" shall mean the expenses necessary to provide
for the administration, efficient operation, and adequate maintenance of the System together with such
other costs and expenses as may now or hereafter be defined by law as proper Maintenance and Operation
Expenses of the System; and
(ii) The term "Net Revenues" shall mean all income derived from the ownership and operation of
the System after deducting the Maintenance and Operation Expenses and providing for the funding of any
operating reserve from time to time established by the Board.
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(b) In order to further secure the Bonds, the District hereby grants a lien on and pledge of the
District's Net Revenues. Such Net Revenues, as herein provided, are hereby pledged to the payment of the
principal, interest, redemption price, and bank charges of the Bonds. If at any time ad valorem taxes levied
and collected for the payment thereof, together with other amounts in the Debt Service Fund, are
insufficient for such purpose, the District shall transfer to the Debt Service Fund such available Net
Revenues as shall be necessary to provide (together with other amounts on deposit in the Debt Service
Fund) for the payment of principal, interest, redemption price, and bank charges of the Bonds; provided,
however, that no transfers of revenues shall be made to the Debt Service Fund by the District until all
Maintenance and Operation Expenses, including the cost of maintaining an operating reserve, shall have
been paid by the District. The District reserves the right to apply Net Revenues not required for current
payments of principal, interest, redemption price, and bank charges of the Bonds for any lawful purpose of
the District. Notwithstanding the foregoing, no revenues generated from maintenance taxes shall be
included in Net Revenues or used to make payments on the Bonds.
(c) The pledge of the Net Revenues hereunder is on a parity with the pledge of the Net Revenues
made to secure the obligations relating to the Series 1999 Bonds, the Series 2001 Bonds, and the Series
2003 Bonds. The District reserves the right to issue Additional Bonds and incur obligations secured in
whole or in part by a lien on and pledge of Net Revenues on a parity with or subordinate to the lien on and
pledge of Net Revenues securing the Bonds, and to apply such Net Revenues to the payment of such
Additional Bonds and obligations on a parity with or subordinate to the Bonds.
(d) The District is located within the extraterritorial jurisdiction of the City of Round Rock, Texas
(the "City"). The City has the right to annex and dissolve the District. At such time, the obligations of the
District payable in whole or in part from ad valorem taxes shall become obligations of the City, and the
governing body of the City is thereafter required to levy and cause to be collected taxes on all taxable
property within the City sufficient to pay the principal of and interest on the obligations of the District so
assumed by the City. In order to allow the City to integrate the District's System into the City's water and
sewer system, the City may terminate the pledge of and lien on the Net Revenues of the District's System to
the payment of the Bonds. The City may under certain circumstances annex but not dissolve the District, in
which case the District may continue to provide retail water and wastewater service and the maintenance of
parks and recreation areas.
(e) State law permits the District to be consolidated with one or more conservation and
reclamation districts. In the event the District is consolidated with another district or districts, the District
reserves the right to:
(i) consolidate the System with a similar system of one or more districts with which the District is
consolidating and operate and maintain the systems as one consolidated system (the "Consolidated
System");
(i) apply the net revenues from the operation of the Consolidated System to the
payment of principal, interest, redemption price, and bank charges on the Bonds and any other
combination tax and revenue bonds or bonds or other obligations secured solely or primarily by
such net revenues (the "Revenue Bonds") of the District and of the district or districts with which
the District is consolidating (herein collectively, the "Consolidating Districts") without preference
to any series of bonds (except subordinate lien revenue bonds which shall be subordinate to the
Revenue Bonds of the Consolidating Districts); or
(ii) pledge the net revenues of the Consolidated System to the payment of principal,
interest, redemption price, and bank charges on any Revenue Bonds which may be issued by the
Consolidating Districts on a parity with the outstanding Revenue Bonds of the Consolidating
Districts.
Section 6.4. Perfection of Pledge. Chapter 1208, Texas Government Code, as amended,
applies to the issuance of the Bonds and the pledge of the taxes and Net Revenues granted by the District
under this Section, and such pledge is therefore valid, effective, and perfected. If Texas law is amended at
16
any time while the Bonds are outstanding and unpaid such that the pledge of the taxes and Net Revenues
granted hereunder is to be subject to the filing requirements of Chapter 9, Texas Business and Commerce
Code, as amended, then in order to preserve to the Registered Owner the perfection of the security interest
in the pledge, the District agrees to take such measures as it determines are reasonable and necessary under
Texas law to comply with the applicable provisions of Chapter 9, Texas Business and Commerce Code, as
amended, and enable a filing to perfect the security interest in the pledge to occur.
ARTICLE VII
FUNDS; FLOW OF FUNDS; AND INVESTMENTS
Section 7.1. Operating Fund. There is hereby affirmed the "Operating Fund," created and
maintained as set forth in the District's order authorizing the Series 1987 Bonds and affirmed in the
District's order authorizing the Series 1999 Bonds, the Series 2001 Bonds, and the Series 2003 Bonds. The
Operating Fund is the maintenance fund of the District into which shall be placed the revenues from
operations of the System. The Operating Fund shall be used first to pay all reasonable expenses of
administration, efficient operation, and adequate maintenance of the System and the District, including
payments to political subdivisions or municipalities for regional waste disposal and water supply services
and facilities, if necessary, after which Net Revenues, if any, shall either (i) periodically be transferred into
the Debt Service Fund for so long as any part of the principal of or interest on the Bonds is outstanding, or
(ii), to the extent that the balance in the Debt Service Fund and tax collections available for deposit thereto
are sufficient to pay when due the obligations of the District payable from the Debt Service Fund, to pay
other proper expenses of the District.
Section 7.2. Debt Service Fund. The District hereby creates The Meadows at Chandler
Creek Municipal Utility District Combination Unlimited Tax and Revenue Refunding Bonds, Series 2004
Debt Service Fund (the "Debt Service Fund"). The District shall deposit or cause to be deposited into the
Debt Service Fund the proceeds from collections of the ad valorem taxes levied pursuant to Section 6.2
hereof, less costs of collection, as collected. The District shall also deposit in the Debt Service Fund Net
Revenues to be used to pay principal of and interest on the Bonds. Not later than two (2) days prior to any
Interest Payment Date on the Bonds, the Board of Directors shall cause the transfer of money out of the
Debt Service Fund to the Paying Ageat/Registrar in an amount not less than that which is sufficient to pay
the principal which matures on such date and the interest which is due on such date. The District shall pay
fees and charges of the Paying Agent/Registrar for its services as paying agent and registrar for the Bonds
from the Debt Service Fund.
Section 7.3. Investments- Security of Funds.
(a) Money in any fund established pursuant to this Order may, at the option of the District,
be invested in obligations and in the manner prescribed by the Public Funds Investment Act, as amended,
Chapter 2256, Texas Government Code, including investments held in book -entry form; provided, that, all
such deposits and investments shall be made in such a manner that the money required to be expended from
any fund will be available at the proper time or times. Such investments shall be valued in terms of current
market value within 45 days of the close of each Fiscal Year. All interest and income derived from
deposits and investments in the Debt Service Fund immediately shall be credited to, and any losses debited
to, the Debt Service Fund. All such investments shall be sold promptly when necessary to prevent any
default in connection with the Bonds.
(b) Money in all Funds created by this Order shall be secured in the manner and to the fullest
extent required by the laws of the State of Texas for the security of public funds, including Chapter 2257,
Texas Government Code, as amended.
17
ARTICLE VIII
REFUNDING OF REFUNDED OBLIGATIONS; USE OF
BOND PROCEEDS, ISSUER CONTRIBUTION
Section 8.1. Refunding of Refunded Obligations. The District hereby irrevocably calls the
Refunded Obligations for redemption prior to maturity on February 1, 2004, at the price of par plus accrued
interest and authorizes and directs that notice of such redemption is to be given in accordance with the
order authorizing the issuance of the Refunded Obligations.
Section 8.2. Use of Bond Proceeds . Proceeds of the Bonds in the amount of $1,010,000 will
be deposited with the Paying Agent/Registrar of the Refunded Obligations on February 2, 2004, for
payment in full of the principal outstanding of the Refunded Obligations.
Section 8.3. Issuer Contribution. The District hereby approves a contribution from the
Operating Fund (the "Contribution") for payment of the costs of issuing the Bonds, and a contribution from
the Debt Service Fund to pay accrued interest on the Refunded Obligations.
ARTICLE IX
TAX EXEMPTION
Section 9.1. Provisions Concerning Federal Income Tax Exclusion. The District covenants
to take any action to maintain, or refrain from any action which would adversely affect, the treatment of the
Bonds as obligations described in section 103 of the Internal Revenue Code of 1986, as amended (the
"Code"), the interest on which is not includable in "gross income" for federal income tax purposes. In
fiutherance thereof, the District specifically covenants as follows:
(i) To refrain from taking any action which would result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(a) of the
Code;
(ii) To take any action to assure that no more than 10% of the proceeds of
the Bonds or the projects financed therewith 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, that amounts, whether or not received by the
District with respect to such private business use, do not under the terms of this Order or
any underlying arrangement, directly or indirectly, secure or provide for the payment of
more than 10% of the debt service on the Bonds, in contravention of section 141(b)(2) of
the Code;
(iii) To take any action to assure that in the event that the "private business
use" described in paragraph (ii) hereof exceeds 5% of the proceeds of the Bonds or the
projects financed therewith, then the amount in excess of 5% is used for a "private
business use" which is "related" and not "disproportionate," within the meaning of
section 141(b)(3) of the Code, to the governmental use;
(iv) To take any action to assure that no amount which is greater than the
lesser of $5,000,000 or 5% of the proceeds of the Bonds 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;
(v) To refrain from taking any action which would result in the Bonds
being "federally guaranteed" within the meaning of section 149(b) of the Code;
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(vi) Except to the extent permitted by section 148 of the Code and the
regulations and rulings thereunder, to refrain from using any portion of the proceeds of
the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly
or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code)
which produces a materially higher yield over the term of the Bonds.
(vii) To otherwise restrict the use of the proceeds of the Bonds or amounts
treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the
extent applicable, section 149(d) of the Code (relating to advance refundings);
(viii) Except to the extent otherwise provided in section 148(f) of the Code
and the regulations and rulings thereunder, to pay to the United States of America at least
once during each five year period (beginning on the date of delivery of the Bonds) an
amount that is at least equal to 90% of the "Excess Earnings," within the meaning of
section 148(f) of the Code, and to pay to the United States of America, not later than 60
days after the Bonds have been paid in full, 100% of the amount then required to be paid
as a result of Excess Earnings under section 148(f) of the Code; and
(ix) To maintain such records as will enable the District to fulfill its
responsibilities under this subsection and section 148 of the Code and to retain such
records for at least six years following the final payment of principal and interest on the
Bonds.
For the purposes of the foregoing, in the case of a refunding bond, the term proceeds includes transferred
proceeds and, for purposes of paragraphs (ii) and (iii), proceeds of the refunded bonds.
The covenants contained herein are intended to assure compliance with the Code and any
regulations or rulings promulgated by the U.S. Department of Treasury pursuant thereto. In the event that
regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as
applicable to the Bonds, the District will not be required to comply with any covenant contained herein to
the extent that such noncompliance, in the opinion of nationally -recognized bond counsel, will not
adversely affect the exclusion from gross income of interest on the Bonds under section 103 of the Code.
In the event that regulations or rulings are hereafter promulgated which impose additional requirements
which are applicable to the Bonds, the District agrees to comply with the additional requirements to the
extent necessary, in the opinion of nationally -recognized bond counsel, to preserve the exclusion from
gross income of interest on the Bonds under section 103 of the Code.
Proper officers of the District charged with the responsibility of issuing the Bonds are hereby
authorized and directed to execute any documents, certificates, or reports required d by the Code and to make
such elections, on behalf of the District, which may be permitted by the Code as are consistent with the
purpose for the issuance of the Bonds.
Notwithstanding any other provision in this Order, to the extent necessary to preserve the
exclusion from gross income of interest on the Bonds under section 103 of the Code the covenants
contained in this subsection shall survive the later of the defeasance or discharge of the Bonds.
Section 9.2. Covenants Regarding Sale. Lease or Disposition of Financed Property. The
District covenants that the District will regulate the use of the property financed, directly or indirectly, with
the proceeds of the Bonds and will not sell, lease, or otherwise dispose of such property unless (i) the
District takes the remedial measures as may be required by the Code and the regulations and rulings
thereunder in order to preserve the exclusion from gross income of interest on the Bonds under section 103
of the Code or (ii) the District seeks the advice of nationally -recognized bond counsel with respect to such
sale, lease, or other disposition.
19
Section 9.3. Designation as Qualified Tax -Exempt Obligations. The District hereby
designates the Bonds as "qualified tax-exempt obligations" as defined in section 265(b)(3) of the Code. In
furtherance of such designation, the District represents, covenants, and warrants the following: (a) during
the calendar year in which the Bonds are issued, the District (including any subordinate entities) has not
designated nor will designate obligations, which when aggregated with the Bonds, will result in more than
$10,000,000 of "qualified tax-exempt obligations" being issued; (b) the District reasonably anticipates that
the amount of tax-exempt obligations issued during 2004 by the District (including any subordinate
entities) will not exceed $10,000,000; and (c) the District will take such action which would assure, or to
refrain from such action which would adversely affect, the treatment of the Bonds as "qualified tax-exempt
obligations."
ARTICLE X
ADDITIONAL BONDS AND REFUNDING BONDS
Section 10.1. Additional Bonds. The District expressly reserves the right to issue, in one or
more installments, for the purpose of completing, repairing, improving, extending, enlarging, or replacing
the System or any other lawful purpose (a) the unissued unlimited tax bonds which were authorized at the
bond election described in the recitals of this Order and (2) such other unlimited tax bonds as may
hereafter be authorized at subsequent elections.
Section 10.2. Other Bonds. The District expressly reserves the right to issue unlimited tax and
revenue bonds, if authorized by election, and such other bonds as may be lawfully issued by the District
without the necessity for an election.
Section 10.3. Refunding Bonds. The District further reserves the right to defease or refund the
Bonds or any other bonds issued by the District in any manner permitted by law at or prior to their
respective dates of maturity or redemption.
ARTICLE XI
SALE AND DELIVERY OF BONDS
Section 11.1. Sale and Delivery of Bonds.
(a) The sale of the Bonds is hereby awarded to Wells Fargo Brokerage Services, LLC (the
"Purchaser"), under the terms and conditions contained in its commitment for purchase of the Bonds
pursuant to the Bond Purchase Agreement dated as of the date of this Order. The Board hereby finds and
determines that the price of $1,010,000 and terms of the sale of the Bonds to the Purchaser are the most
advantageous and reasonably obtainable by the District.
(b) Upon the registration of all of the Bonds, the Comptroller of Public Accounts of the State
of Texas is authorized and instructed to deliver all of the Bonds to Winstead Sechrest & Minick P.C., or
pursuant to such firm's order, for delivery to the Purchaser.
(c) The obligation of the Purchaser to accept delivery of the Bonds is subject to the
Purchaser being furnished with the final, approving opinion of Winstead Sechrest & Minick P.C., Bond
Counsel for the District, which opinion shall be dated and delivered the Closing Date.
Section 11.2. Control and Delivery of Bonds.
(a) The President of the Board is hereby authorized to have control of the Initial Bond and all
necessary records and proceedings pertaining thereto pending investigation, examination, and approval of
the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State
and registration with, and initial exchange or transfer by, the Paying Agent/Registrar.
Oki]
(b) After registration by the Comptroller of Public Accounts, delivery of the Bonds shall be
made to the Purchaser thereof under and subject to the general supervision and direction of the President of
the Board, against receipt by the District of all amounts due to the District under the terms of sale.
ARTICLE XII
DEFAULT AND REMEDIES
Section 12.1. Events of Default. Each of the following occurrences or events for the purpose
of this Order is hereby declared to be an Event of Default:
(a) the failure to make payment of the principal of or interest on any of the Bonds when the
same becomes due and payable;
(b) default in the performance or observance of any other covenant, agreement, or obligation
of the District and the continuation thereof for a period of 60 days after notice of such default is given by
any Registered Owner to the District; or
(c) the District files for protection under the federal Bankruptcy Code or other similar state
or federal statute.
Section 12.2. Remedies for Default.
(a) Upon the happening of any Event of Default, then any Registered Owner or an authorized
representative thereof, including but not limited to, a trustee or trustees therefor, may proceed against the
District for the purpose of protecting and enforcing the rights of the Registered Owners under this Order,
by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent
jurisdiction, for any relief permitted by law, including the specific performance of any covenant or
agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of
any right of the Registered Owners hereunder or any combination of such remedies.
(b) All such proceedings shall be instituted and maintained for the equal benefit of all
Registered Owners.
Section 12.3. Remedies Not Exclusive.
(a) No remedy herein conferred or reserved is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity, provided,
however, that notwithstanding any other provision of this Order, the right to accelerate the debt evidenced
by the Bonds shall not be available as a remedy under this Order.
(b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of
any other available remedy.
ARTICLE XIII
DISCHARGE
Section 13.1. Defeasance. If the District shall pay or cause to be paid, or there shall otherwise
be paid to the Registered Owners, the principal of and interest on the Bonds, at the times and in the manner
stipulated in this Order, then the pledge of taxes and Net Revenues under this Order and all covenants,
agreements, and other obligations of the District to the Registered Owners shall thereupon cease, terminate,
and become void and be discharged and satisfied, and the Paying Agent/Registrar shall pay over or deliver
all money held by it under this Order to the District.
Bonds or interest installments for the payment of which money shall have been set aside and shall
be held in trust by the Paying Agent/Registrar or with any other bank or trust company which has agreed to
21
hold the same for such purpose (through deposit by the District of funds for such payment or otherwise) at
the Stated Maturity thereof shall be deemed to have been paid within the meaning and with the effect
expressed above in this Section. All Bonds outstanding shall be deemed to have been paid, prior to their
Stated Maturity, within the meaning and with the effect expressed above in this Section, if there shall have
been deposited with the Paying Agent/Registrar either (a) money in an amount which shall be sufficient to
make such payment, (b) Governmental Obligations certified by an independent public accounting firm of
national reputation to be of such maturities and interest payment dates and to bear such interest as will,
without further investment or reinvestment of either the principal amount thereof or the interest earnings
therefrom, be sufficient to make such payment, or (c) a combination of money and Governmental
Obligations together so certified to be sufficient to make such payment, provided that all the expenses
pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment
thereof provided for to the satisfaction of the Paying Agent/ Registrar (and to such other bank or trust
company).
Section 13.2. Investments for Defeasance. No money or Governmental Obligations so
deposited shall be invested or reinvested unless in Governmental Obligations and unless such money and
Governmental Obligations not invested and such new investments are together certified by an independent
public accounting firm to be of such amounts, maturities, and interest payment dates and to bear such
interest as will, without further investment or reinvestment of either the principal amount thereof or the
interest earnings therefrom, be sufficient to make such payment. Neither Governmental Obligations nor
money deposited with the Paying Agent/Registrar or other bank or trust company pursuant to this Section,
nor principal or interest payments on any such Governmental Obligations, shall be withdrawn or used for
any purpose other than, and shall be held in trust for, the payment of the principal of, and interest on such
Bonds. Any cash received from such principal of and interest on such investment securities deposited with
the Paying Agent/Registrar, if not needed for such purpose, shall, to the extent practicable, be reinvested in
Governmental Obligations (which may be non-interest bearing) maturing at times and in amounts sufficient
to pay when due the principal of and interest on such Bonds on and prior to the maturity thereof, and
interest earned from such reinvestments shall be paid over to the District as received by the Paying
Agent/Registrar, free and clear of any trust, lien, or pledge and used in accordance with applicable law.
Any payment for Governmental Obligations purchased for the purpose of reinvesting cash as aforesaid
shall be made only against delivery of such Governmental Obligations.
ARTICLE XIV
MISCELLANEOUS
Section 14.1. Persons Deemed Registered Owners. The District, the Paying Agent/Registrar,
and any agent of either of them may treat the Person in whose name any Bond is registered as the owner of
such Bond for the purpose of receiving payment of the principal of and interest on such Bond and for all
other purposes whatsoever, and to the extent permitted by law, neither the District, the Paying
Agent/Registrar, nor any agent of either of them shall be affected by notice to the contrary.
Section 14.2. District's Successors and Assign - Whenever in this Order the District is named
and referred to, it shall be deemed to include its successors and assigns, and all covenants and agreements
in this Order by or on behalf of the District, except as otherwise provided herein, shall bind and inure to
the benefit of its successors and assigns whether or not so expressed.
Section 14.3. Benefits of Order Provisions. Nothing in this Order or in the Bonds, expressed
or implied, shall give or be construed to give any person, firm or corporation, other than the District, the
Paying Agent/Registrar, and the Registered Owners any legal or equitable right or claim under or in respect
of this Order, or under any covenant, condition, or provision herein contained, all the covenants, conditions,
and provisions contained in this Order or in the Bonds being for the sole benefit of the District, the Paying
Agent/Registrar, and the Registered Owners.
Section 14.4. Severability Clause. If any word, phrase, clause, sentence, paragraph, section,
or other part of this Order , or the application thereof to any person or circumstance, shall ever be held to be
invalid or unconstitutional by any court of competent jurisdiction, the remainder of this Order and the
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application of such word, phrase, clause, sentence, paragraph, section, or other part of this Order to any
other persons or circumstances shall not be affected thereby.
Section 14.5. Open Meeting. It is hereby officially found and determined that the meeting at
which this Order was adopted was open to the public, and public notice of the time, place and purpose of
said meeting was properly given, all as required by Chapter 551, Texas Government Code, and Section
49.063, Texas Water Code, as amended.
Section 14.6. Amendments. The District may, without the consent of or notice to any
Registered Owners of the Bonds, amend, change, or modify this Order as may be required (a) for the
purpose of curing any ambiguity, inconsistency, or formal defect or omission herein, or (b) in connection
with any other change which is not to the prejudice of the Registered Owners of the Bonds. Except for
such amendments, changes, or modifications, the District shall not amend, change, or modify this Order in
any manner without the consent of the Registered Owners of the Bonds.
Section 14.7. No Personal Liabilitv. No recourse shall be had for payment of the principal of
or interest on any Bonds or for any claim based thereon, or on this Order, against any official or employee
of the District or any person executing any Bonds.
Section 14.8. Notice to Registered Owners. Except as may be otherwise provided in this
Order, where this Order provides for notice to Registered Owners of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage
prepaid, to each Registered Owner, at the address of such Registered Owner as it appears in the Register.
Neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Registered
Owner of Bonds shall affect the sufficiency of such notice with respect to all other Registered Owners.
Wherever this Order provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event with respect to which such notice is
given, and such waiver shall be the equivalent of such notice. Waivers of notice by Registered Owners
shall be filed with the District, but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
Section 14.9. District's Officers' Duties. The President, Vice President, and Secretary of the
Board of Directors are authorized to do any and all things proper and necessary to carry out the intent of
this Order.
ARTICLE XV
EFFECTIVENESS
Section 15.1. Effectiveness. This Order shall take effect and be in force from and after its
passage and approval.
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PASSED AND APPROVED on this
ATTEST:
Secretary, Board of Directors
(SEAL)
President, Board of Directors
SIGNATURE PAGE FOR ORDER AUTHORIZING ISSUANCE OF BONDS
AUSTIN_ 1\238635\3
19239-4 12/22/2003