O-2024-51 Issuance and Sale of Waterworks and Sewer System Revenue Bonds, Series 2024 - Wastewater Projects - Doe Branch Expansion Phase 3 & Parallel InterceptorCERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS
COUNTIES OF COLLIN AND DENTON
TOWN OF PROSPER
We, the undersigned officers of the Town of Prosper, Texas (the "Town"), hereby certify
as follows:
1. The Town Council of the Town (the "Council") convened in a regular meeting on
July 23, 2024, at the designated meeting place, and the roll was called of the duly constituted
officers and members of the Council, to wit:
David F. Bristol, Mayor
Marcus E. Ray, Mayor Pro-Tem
Amy Bartley, Deputy Mayor Pro -Tern
Craig Andres, Councilmember
Chris Kern, Councilmember
Jeff Hodges, Councilmember
Cameron Reeves, Councilmember
Michelle Lewis Sirianni, Town Secretary
and all of said persons were present except , thus
constituting a quorum. Whereupon, among other business, the following was transacted at said
meeting: a written
ORDINANCE AUTHORIZING THE ISSUANCE OF TOWN OF PROSPER, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 2024,
ESTABLISHING SALE PARAMETERS, PROVIDING FOR THE SECURITY FOR AND
PAYMENT OF SAID BONDS; AND ENACTING OTHER PROVISIONS RELATING TO
THE SUBJECT
was duly introduced for the consideration of the Council. It was then duly moved and seconded
that said Ordinance be adopted and, after due discussion, said motion, carrying with it the adoption
of said Ordinance, prevailed and carried with all members present voting "AYE" except the
following:
NAY: j] ABSTAIN:0
2. A true, full and correct copy of the aforesaid Ordinance adopted at the meeting
described in the above and foregoing paragraph is attached to and follows this Certificate; that said
Ordinance has been duly recorded in the Council's minutes of said meeting; that the above and
foregoing paragraph is a true, full and correct excerpt from the Council's minutes of said meeting
pertaining to the adoption of said Ordinance; that the persons named in the above and foregoing
paragraph are the duly chosen, qualified and acting officers and members of the Council as
indicated therein; that each of the officers and members of the Council was duly and sufficiently
notified officially and personally, in advance, of the time, place and purpose of the aforesaid
meeting, and that said Ordinance would be introduced and considered for adoption at said meeting,
and each of said officers and members consented, in advance, to the holding of said meeting for
such purpose, and that said meeting was open to the public and public notice of the time, place and
purpose of said meeting was given, all as required by Chapter 551, Texas Government Code.
3. The Council has approved and hereby approves the aforesaid Ordinance; and the
Mayor and the Town Secretary of the Town hereby declare that their signing of this Certificate
shall constitute the signing of the attached and following copy of said Ordinance for all purposes.
SIGNED AND SEALED THIS JULY 23, 2024.
k,u C'L', QA'0VUA S��
Michelle Lewis Sirianni, Town Secretary David F. Bristol, Mayor
Town of Prosper, Texas Town of Prosper, Texas
(Town Sea]) OF RR
1914,
TEXN�
TOWN OF PROSPER, TEXAS
ORDINANCE 2024-51
ORDINANCE AUTHORIZING THE ISSUANCE OF TOWN OF PROSPER,
TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS,
SERIES 2024, ESTABLISHING SALE PARAMETERS, PROVIDING FOR
THE SECURITY FOR AND PAYMENT OF SAID BONDS; AND
ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT.
THE STATE OF TEXAS §
COUNTIES OF COLLIN AND DENTON §
WHEREAS, Chapter 1502 (defined below) provides that the governing body of a
municipality may issue public securities for the public purposes of acquiring, constructing,
installing and equipping additions, improvements and extensions to the Town's waterworks and
sewer system, and the Town Council (the "Council") of the Town of Prosper, Texas (the "Town")
finds and determines that it is necessary, useful and appropriate for the Town to authorize and
provide for the issuance and sale of revenue bonds of the Town for such purposes, as hereinafter
provided; and
WHEREAS, the Bonds are being issued and delivered pursuant to Chapter 1371 (defined
below), Chapter 1502 and the Town's Home Rule Charter; and
WHEREAS, the Town is an "issuer" under Section 1371.001(4)(P), Texas Government
Code, having (i) a principal amount of at least $100 million in outstanding long-term indebtedness,
in long-term indebtedness proposed to be issued, or a combination of outstanding or proposed
long-term indebtedness and (ii) some amount of long-term indebtedness outstanding or proposed
to be issued that is rated in one of the four highest rating categories for long-term debt instruments
by a nationally recognized rating agency for municipal securities, without regard to the effect of
any credit agreement or other form of credit enhancement entered into in connection with the
obligation; and
WHEREAS, the Council hereby finds and determines that it is in the best interests of the
Town to issue the Bonds, in one or more series, for the purposes stated herein, and to delegate to
the Pricing Officer the authority to act on behalf of the Town in selling and delivering the Bonds
and setting the dates, price, interest rates, interest payment periods and other procedures relating
thereto, as hereinafter specified, with such information and terms to be included in one or more
Pricing Certificates to be executed by the Pricing Officer, all in accordance with the provisions of
Section 1371.053, Texas Government Code, as amended; and
WHEREAS, it is officially found, determined and declared that the meeting at which this
Ordinance has been adopted was open to the public, and public notice of the date, hour, place and
subject of said meeting, including this Ordinance, was given, all as required by the applicable
provisions of Chapter 551, Texas Government Code, as amended;
NOW, THEREFORE BE IT ORDAINED BY THE TOWN COUNCIL OF THE
TOWN OF PROSPER, TEXAS:
Section 1. RECITALS, AMOUNT, PURPOSE AND DESIGNATION OF THE BONDS.
(a) The recitals set forth in the preamble hereof are incorporated herein and shall have the same
force and effect as if set forth in this Section.
(b) The Bonds are hereby authorized to be issued and delivered, in one or more series,
in the maximum aggregate principal amount hereinafter set forth for the public purposes of
providing funds to (i) pay for the costs of the Project (defined below) and (ii) pay the costs incurred
in connection with the issuance of the Bonds.
(c) Each Bond issued pursuant to this Ordinance shall be designated (unless otherwise
provided in the Pricing Certificate): "TOWN OF PROSPER, TEXAS, WATERWORKS AND
SEWER SYSTEM REVENUE BOND, SERIES 2024," and initially there shall be issued, sold and
delivered hereunder fully registered Bonds, without interest coupons, payable to the respective
registered owners thereof (with the initial Bond(s) being made payable to the Underwriter as
described herein), or to the registered assignee or assignees of said bonds or any portion or portions
thereof (in each case, the "Registered Owner"). The Bonds shall be in the respective denominations
and principal amounts, shall be numbered, shall mature and be payable on the date or dates in each
of the years and in the principal amounts or amounts due at maturity, as applicable, and shall bear
interest to their respective dates of maturity or redemption, if applicable, prior to maturity at the
rates per annum, as set forth in the Pricing Certificate.
Section 2. DEFINITIONS. Unless otherwise expressly provided or unless the context
clearly requires otherwise, in this Ordinance the following terms shall have the meanings specified
below:
"Additional Bonds" means the additional parity bonds and other obligations permitted to
be issued or entered into under the provisions of this Ordinance.
"Annual Debt Service Requirements" means, as of the date of calculation, the principal of
and interest on all Bonds Similarly Secured coming due at Maturity or Stated Maturity (or that
could come due on demand of the owner thereof other than by acceleration or other demand
conditioned upon default by the Town on such Bonds Similarly Secured, or be payable in respect
of any required purchase of such Bonds Similarly Secured by the Town) in such Fiscal Year.
"Attorney General" means the Attorney General of the State.
"Authorized Officials" means the Mayor, the Mayor Pro Tem, the Town Secretary and each
Pricing Officer.
"Average Annual Debt Service Requirements" means that average amount which, at the
time of computation, will be required to pay the Annual Debt Service Requirements when due
(either at Stated Maturity or mandatory redemption) and derived by dividing the total of such
Annual Debt Service Requirements by the number of Fiscal Years then remaining before the latest
Stated Maturity of such Bonds Similarly Secured. For purposes of this definition, a fractional
period of a Fiscal Year shall be treated as an entire Fiscal Year. Capitalized interest payments
provided from bond proceeds, accrued interest on any Bonds Similarly Secured, and interest
earnings thereon shall be excluded in making such computation.
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"Bond Fund" means the Bond Fund described herein.
"Bonds" means the "Town of Prosper, Texas, Waterworks and Sewer System Revenue
Bonds, Series 2024", authorized and issued pursuant to this Ordinance. The term "Bonds" as used
in this Ordinance shall mean and include collectively the Bonds initially issued and delivered
pursuant to this Ordinance and all substitute Bonds exchanged therefor, as well as all other
substitute Bonds and replacement Bonds issued pursuant hereto, and the term "Bond" shall mean
any of the Bonds, unless the context clearly indicates otherwise in connection with the use of the
term "Bonds".
"Bonds Similarly Secured" means the Bonds and any Additional Bonds.
"Chapter 13 71 " means Chapter 1371, Texas Government Code, as amended.
"Chapter 1502" means Chapter 1502, Texas Government Code, as amended.
"Code" means the Internal Revenue Code of 1986, as amended.
"Comptroller" means the Comptroller of Public Accounts of the State.
"Council" means the Town Council of the Town.
"Dated Date" means the date of the Bonds set forth in the Pricing Certificate.
"Defeasance Securities" means any securities and obligations now or hereafter authorized
by State law that are eligible to refund, retire or otherwise discharge obligations such as the Bonds,
unless otherwise provided in the Pricing Certificate.
"Delivery Date" shall mean the date or dates of delivery of any series of Bonds to the
Underwriter against payment therefor, as determined by the Pricing Officer in the Pricing
Certificate.
"Designated Financial Officer" means the Town Manager or the Finance Director of the
Town, or such other Town official so designated by the Council.
"Fiscal Year" means the regular fiscal year used by the Town in connection with the
operation of the System, which may be any twelve consecutive month period established by the
Town.
"Gross Revenues" mean all revenues, income and receipts of every nature derived or
received by the Town from the operation and ownership of the System, including the interest
income from investment or deposit of money in any fund created by this Ordinance or maintained
by the Town in connection with the System.
"Maturity", when used with respect to Bonds Similarly Secured, means the date on which
the principal of any Outstanding Bonds Similarly Secured becomes due and payable as therein
provided, whether at the Stated Maturity thereof or by declaration of acceleration, call for
redemption, or otherwise.
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"Maintenance and Operating Expenses" means all current expenses of operating and
maintaining the System, including all salaries, labor, materials, repairs and extensions necessary
to render efficient service; provided, however, that only such repairs and extensions, as in the
judgment of the Council, reasonably and fairly exercised, are necessary to maintain the operations
and render adequate service to the Town and the inhabitants thereof, or such as might be necessary
to meet some physical accident or condition which would otherwise impair obligations payable
from Net Revenues shall be deducted in determining "Net Revenues." Depreciation shall never
be considered as a Maintenance and Operating Expense. Maintenance and Operating Expenses
shall include payments under contracts for the purchase of water supply or treatment of sewage or
other materials, goods or services for the System to the extent authorized by law and the provisions
of such contract.
"Maximum Annual Debt Service Requirements" means the greatest requirements of
Annual Debt Service Requirements (taking into account all mandatory principal redemption
requirements) scheduled to occur in any future Fiscal Year or in the then current Fiscal Year for
the particular obligations for which such calculation is made. Capitalized interest payments
provided from Bonds Similarly Secured proceeds, accrued interest on any Bonds Similarly
Secured, and interest earnings thereon shall be excluded in making such computation.
"Net Revenues" means the Gross Revenues of the System, with respect to any period, after
deducting the System's Maintenance and Operating Expenses during such period.
"Outstanding", when used in this Ordinance with respect to Bonds Similarly Secured,
means, as of the date of determination, all Bonds Similarly Secured theretofore sold, issued and
delivered by the Town, except:
(1) those Bonds Similarly Secured cancelled or delivered to the transfer agent or
registrar for cancellation in connection with the exchange or transfer of such Bonds;
(2) those Bonds Similarly Secured paid or deemed to be paid in accordance with the
provisions hereof, and
(3) those Bonds Similarly Secured that have been mutilated, destroyed, lost, or stolen
and replacement Bonds have been registered and delivered in lieu thereof.
"Paying Agent/Registrar" means the paying agent/registrar designated by the Pricing
Officer in the Pricing Certificate.
"Permitted Investments" means any security or obligation or combination thereof permitted
under the Public Funds Investments Act, Chapter 2256, Texas Government Code, as amended or
other applicable law.
"Pledged Revenues" means (i) the Net Revenues, plus (ii) any additional revenues, income,
receipts, or other resources, including, without limitation, any grants, donations or income received
or to be received from the United States Government, or any other public or private source, whether
pursuant to an agreement or otherwise, which hereafter are pledged by the Town to the payment
of the Bonds Similarly Secured, and excluding those revenues excluded from Gross Revenues or
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excluded from Net Revenues.
"Project" means the acquisition, construction, installation and equipment of additions,
improvements and extensions to the System.
"Purchase Contract" means (i) a bond purchase agreement between the Town and the
Underwriter, pertaining to the purchase of the Bonds by the Underwriter sold through a negotiated
sale conducted as a public underwriting; (ii) a private placement agreement between the Town and
the Underwriter, pertaining to the purchase of the Bonds by the Underwriter sold through a
negotiated sale conducted as a private placement; and (iii) the bid form prepared in accordance
with the notice of sale and bidding instructions and submitted by potential purchasers of any Bonds
sold pursuant to a competitive sale.
"Rating Agency" means any nationally recognized securities rating agency.
"Required Reserve" means 25% of the least of. (i) Maximum Annual Debt Service
Requirements on the Bonds as of the date of calculation, (ii) 125% of average Annual Debt Service
on the Bonds as of the date of calculation, and (iii) 10% of the lesser of the par amount of the
Outstanding Bonds or the proceeds of the Bonds; provided, however, that such amount shall be
recalculated in the manner described herein. The Required Reserve will be set forth in the Pricing
Certificate.
"Reserve Fund Obligation" means, to the extent permitted by law, (i) a policy of insurance
or a surety bond, issued by an Town of policies of insurance insuring the timely payment of debt
service on governmental obligations, provided that a Rating Agency, at the time of the delivery of
such credit facility, would rate the Bonds fully insured by a standard policy issued by the Town of
such credit facility in any one of its three highest generic rating categories for such obligations;
and (ii) a letter or line of credit issued by any financial institution, provided that a Rating Agency,
at the time of delivery of such letter or line of credit, would rate the Bonds in any one of its three
highest generic rating categories for such obligations if the letter or line of credit proposed to be
issued by such financial institution secured the timely payment of the entire principal amount of
the Bonds and the interest thereon.
"Reserve Fund Obligation Payment" means any payment the Town is obligated to make
from Pledged Revenues deposited in the Reserve Fund with respect to a Reserve Fund Obligation.
"Revenue Fund" means the revenue fund described herein.
"Special Project" means any water, sewer, wastewater reuse system property, improvement
or facility or other public improvement declared by the Town not to be part of the System, for
which the costs of acquisition, construction and installation are paid from proceeds of Special
Project Obligations and for which all Maintenance and Operating Expenses are payable from
sources other than Pledged Revenues, but only to the extent that and for so long as all or any part
of the revenues or proceeds of which are or will be pledged to secure the payment or repayment of
such costs of acquisition, construction and installation under such financing transaction.
"Special Project Obligations" means special revenue obligations of the Town which are not
secured by the Pledged Revenues, but which are secured by and payable solely from special
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contract revenues or payments received from the System, any other legal entity, or any
combination thereof, in connection with a Special Project; and such revenues or payments shall
not be considered as or constitute Gross Revenues of the System, unless and to the extent otherwise
provided in the ordinance or ordinances authorizing the issuance of such Special Project
Obligations.
"State" means the State of Texas.
"Stated Maturity" means the annual principal payments of the Bonds Similarly Secured
payable on the respective dates set forth in the ordinance(s) which authorized the issuance of such
Bonds Similarly Secured.
"Subordinate Lien Obligations" means any bonds, notes, warrants, contractual obligations
or other obligations issued or incurred by the Town that are payable, in whole or in part, from and
equally and ratably secured by a lien on and pledge of the Pledged Revenues, such pledge being
subordinate and inferior to the lien on and pledge of the Pledged Revenues that are or will be
pledged to the payment of any Bonds Similarly Secured issued by the Town.
"System" means the Town's existing combined waterworks and sewer system, together
with all future extensions, improvements, enlargements, and additions thereto, and all
replacements thereof, provided that, notwithstanding the foregoing, and to the extent now or
hereafter authorized or permitted by law, the term System shall not include any Special Projects
which are hereafter acquired or constructed by the Town with the proceeds of Special Project
Obligations.
"Town" means the Town of Prosper, Texas.
"Underwriter" shall mean the initial purchaser(s) of the Bonds designated by the Pricing
Officer in the Pricing Certificate.
Section 3. DELEGATION TO PRICING OFFICER. (a) As authorized by Section
1371.053, Texas Government Code, as amended, the Deputy Town Manager and the Finance
Director of the Town are each individually hereby authorized to act on behalf of the Town in
selling and delivering the Bonds (of which officers, the officer executing the Pricing Certificate
shall be hereinafter referred to as, and shall for all purposes be, the "Pricing Officer"), determining
whether the Bonds shall be issued in one or more series or subseries and carrying out the
procedures specified in this Ordinance, including determining the principal amount of Bonds to be
issued, the amount to be applied against each proposition, determining whether the Bonds shall be
issued in one or more series or subseries, the date or dates of the Bonds, any additional or different
designation or title by which the Bonds shall be known, the price at which the Bonds will be sold,
the years in which the Bonds will mature, the principal amount to mature in each of such years,
the rate of interest to be borne by each such maturity, the interest payment and record dates, the
price and terms, if any, upon and at which the Bonds shall be subject to redemption prior to
maturity at the option of the Town, as well as any mandatory sinking fund redemption provisions,
whether the Bonds of any series shall be designated as "qualified tax-exempt obligations" as
defined in section 265(b)(3) of the Code, approving modifications or additions to the Rule 15c2-
12 continuing disclosure undertaking, approving modifications to the term Defeasance Securities,
determining the Required Reserve and all other matters relating to the issuance, sale, and delivery
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of the Bonds, including without limitation procuring municipal bond insurance and approving
modifications to this Ordinance and executing such instruments, documents and agreements as
may be necessary with respect thereto, if it is determined that such insurance would be financially
desirable and advantageous, all of which shall be specified in the Pricing Certificate, provided that:
(i) the maximum original principal amount of the Bonds shall not exceed
$33,100,000;
(ii) no Bond of any series (if multiple series are issued) shall mature after
August 15, 2044; and
(iii) the true interest cost rate for the Bonds shall not exceed 4.75% in the aggregate.
(b) In establishing the aggregate principal amount of the Bonds, the Pricing Officer shall
establish an amount not exceeding the amount authorized in Subsection (a) above, which shall be
sufficient in amount to provide for the purposes for which the Bonds are authorized and to pay
costs of issuing the Bonds. The delegation made hereby shall expire if not exercised by the Pricing
Officer on or prior to the date that is 180 days after the adoption of this Ordinance. The Pricing
Officer may determine to issue one or more series of Bonds and may exercise the authority granted
herein on one or more dates to effectuate the issuance of multiple series of Bonds if multiple series
are issued and, if multiple series are issued, each separate series may close on separate dates or on
the same date, as determined by the Pricing Officer. The Bonds shall be sold at such prices, with
and subject to such terms as set forth in one or more Pricing Certificates.
(c) The Bonds of one or more series may be sold by public offering (either through a
negotiated or competitive offering) or by private placement. If the Bonds of one or more series
are sold by private placement, the applicable Pricing Certificate shall so state, and the applicable
Pricing Certificate may make changes to this Ordinance to effect such private placement of such
Bonds, including the provisions hereof that pertain to the book -entry -only procedures (including
eliminating the book -entry -only system of registrations, payment and transfers) and to the
provisions relating to the Rule 15c2-12 undertaking (including eliminating or replacing such
undertaking with an agreement to provide alternative disclosure information).
(d) In satisfaction of Section 1201.022(a)(3)(B), Texas Government Code, the Council
hereby determines that the delegation of the authority to the Pricing Officer to approve the final
terms of the Bonds set forth in this Ordinance is, and the decisions made by the Pricing Officer
pursuant to such delegated authority and incorporated into the Pricing Certificate will be, the most
advantageous reasonably available, and the Pricing Officer is hereby authorized to make and
include a finding to that effect in the Pricing Certificate.
Section 4. CHARACTERISTICS OF THE BONDS. (a) Registration, Transfer,
Conversion and Exchange. The Town shall keep or cause to be kept at the designated office of
the bank named in the Pricing Certificate as the paying agent/registrar for the Bonds (the "Paying
Agent/Registrar"), books or records for the registration of the transfer, conversion and exchange
of the Bonds (the "Registration Books"), and the Town hereby appoints the Paying Agent/Registrar
as its registrar and transfer agent to keep such books or records and make such registrations of
transfers, conversions and exchanges under such reasonable regulations as the Town and Paying
Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations,
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transfers, conversions and exchanges as herein provided within three days of presentation in due
and proper form. The Paying Agent/Registrar shall obtain and record in the Registration Books
the address of the registered owner of each Bond to which payments with respect to the Bonds
shall be mailed, as herein provided; but it shall be the duty of each registered owner to notify the
Paying Agent/Registrar in writing of the address to which payments shall be mailed, and such
interest payments shall not be mailed unless such notice has been given. The Town shall have the
right to inspect the Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books
confidential and, unless otherwise required by law, shall not permit their inspection by any other
entity. The Town shall pay the Paying Agent/Registrar's standard or customary fees and charges
for making such registration, transfer, conversion, exchange and delivery of a substitute Bond or
Bonds. Registration of assignments, transfers, conversions and exchanges of Bonds shall be made
in the manner provided and with the effect stated in the FORM OF BOND set forth as Exhibit A
of this Ordinance. Each substitute Bond shall bear a letter and/or number to distinguish it from
each other Bond.
(b) Authentication. Except as provided in subsection (e) of this Section, an authorized
representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date and
manually sign said Bond, and no such Bond shall be deemed to be issued or outstanding unless
such Bond is so executed. The Paying Agent/Registrar promptly shall cancel all paid Bonds and
Bonds surrendered for conversion and exchange. No additional ordinances, orders or resolutions
need be passed or adopted by the governing body of the Town or any other body or person so as
to accomplish the foregoing conversion and exchange 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 Subchapter D, Chapter 1201, Texas
Government Code, the duty of conversion and exchange of Bonds as aforesaid is hereby imposed
upon the Paying Agent/Registrar, and, upon the execution of said Bond, the converted and
exchanged Bond shall be valid, incontestable, and enforceable in the same manner and with the
same effect as the Bonds which initially were issued and delivered pursuant to this Ordinance,
approved by the Attorney General and registered by the Comptroller.
(c) Payment of Bonds and Interest. The Town hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds,
all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all
payments made by the Town and the Paying Agent/Registrar with respect to the Bonds, and of all
conversions and exchanges of Bonds, and all replacements of Bonds, as provided in this
Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date, and
for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record
Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of
such interest have been received from the Town. Notice of the Special Record Date and of the
scheduled payment date of the past due interest (which shall be 15 days after the Special Record
Date) shall be sent at least five (5) business days prior to the Special Record Date by United States
mail, first-class postage prepaid, to the address of each registered owner appearing on the
Registration Books at the close of business on the last business day next preceding the date of
mailing of such notice.
(d) Substitute Paying Agent/Registrar. The Town covenants with the registered
owners of the Bonds that at all times while the Bonds are outstanding the Town will provide a
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competent and legally qualified bank, trust company, financial institution or other agency to act as
and perform the services of Paying Agent/Registrar for the Bonds under this Ordinance, and that
the Paying Agent/Registrar will be one entity. The Town reserves the right to, and may, at its
option, change the Paying Agent/Registrar upon not less than 50 days written notice to the Paying
Agent/Registrar, to be effective not later than 45 days prior to the next principal or interest payment
date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar (or
its successor by merger, acquisition, or other method) should resign or otherwise cease to act as
such, the Town covenants that promptly it will appoint a competent and legally qualified bank,
trust company, financial institution, or other agency to act as Paying Agent/Registrar under this
Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar
promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other
pertinent books and records relating to the Bonds, to the new Paying Agent/Registrar designated
and appointed by the Town. Upon any change in the Paying Agent/Registrar, the Town promptly
will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each registered
owner of the Bonds, by United States mail, first-class postage prepaid, which notice also shall give
the address of the new Paying Agent/Registrar. By accepting the position and performing as such,
each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance,
and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar.
(e) General Characteristics of the Bonds. The Bonds (i) shall be issued in fully
registered form, without interest coupons, with the principal of and interest on such Bonds to be
payable only to the Registered Owners thereof, (ii) may be redeemed prior to their scheduled
maturities (notice of which shall be given to the Paying Agent/Registrar by the Town at least 35
days prior to any such redemption date), (iii) may be transferred and assigned, (iv) may be
converted and exchanged for other Bonds, (v) shall have the characteristics, (vi) shall be signed,
sealed, executed and authenticated, (vii) the principal of and interest on the Bonds shall be payable,
and (viii) shall be administered and the Paying Agent/Registrar and the Town shall have certain
duties and responsibilities with respect to the Bonds, all as provided, and in the manner and to the
effect as required or indicated, in the FORM OF BOND set forth as Exhibit A of this Ordinance.
The Bonds initially issued and delivered pursuant to this Ordinance are not required to be, and
shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in
conversion of and exchange for any Bond or Bonds issued under this Ordinance the Paying
Agent/Registrar shall execute the Paying Agent/registrar's Authentication Certificate, in the
FORM OF BOND set forth as Exhibit A of this Ordinance.
(f) Book -Entry -Only System. Unless the Bonds are sold by private placement, the
Bonds issued in exchange for the Bonds initially issued to the Underwriter shall be initially issued
in the form of a separate single fully registered Bond for each of the maturities thereof. Upon
initial issuance, the ownership of each such Bond shall be registered in the name of Cede & Co.,
as nominee of The Depository Trust Company of New York ("DTC"), and except as provided in
subsection (g) of this Section, all of the outstanding Bonds shall be registered in the name of Cede
& Co., as nominee of DTC.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the Town
and the Paying Agent/Registrar shall have no responsibility or obligation to any securities brokers
and dealers, banks, trust companies, clearing corporations and certain other organizations on
whose behalf DTC was created ("DTC Participant") to hold securities to facilitate the clearance
and settlement of securities transactions among DTC Participants or to any person on behalf of
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whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately
preceding sentence, the Town and the Paying Agent/Registrar shall have no responsibility or
obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC
Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC
Participant or any other person, other than a registered owner of Bonds, as shown on the
Registration Books, of any notice with respect to the Bonds, or (iii) the payment to any DTC
Participant or any other person, other than a registered owner of Bonds, as shown in the
Registration Books of any amount with respect to principal of or interest on the Bonds.
Notwithstanding any other provision of this Ordinance to the contrary, the Town and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is
registered in the Registration Books as the absolute owner of such Bond for the purpose of payment
of principal and interest with respect to such Bond, for the purpose of registering transfers with
respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall
pay all principal of and interest on the Bonds only to or upon the order of the registered owners,
as shown in the Registration Books as provided in this Ordinance, or their respective attorneys
duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and
discharge the Town's obligations with respect to payment of principal of and interest on the Bonds
to the extent of the sum or sums so paid. No person other than a registered owner, as shown in the
Registration Books, shall receive a Bond certificate evidencing the obligation of the Town to make
payments of principal and interest pursuant to this Ordinance. Upon delivery by DTC to the Paying
Agent/Registrar of written notice to the effect that DTC has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions in this Ordinance with respect to
interest checks being mailed to the registered owner at the close of business on the Record Date,
the words "Cede & Co." in this Ordinance shall refer to such new nominee of DTC.
(g) Successor Securities Depositary; Transfers Outside Book -Entry -Only System. If
the Bonds are subject to the DTC book -entry system, and in the event that the Town determines
that DTC is incapable of discharging its responsibilities described herein and in the Town's Blanket
Issuer Letter of Representations to DTC or that it is in the best interest of the beneficial owners of
the Bonds that they be able to obtain certificated Bonds, the Town shall (i) appoint a successor
securities depository, qualified to act as such under Section 17A of the Securities and Exchange
Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor
securities depository and transfer one or more separate Bonds to such successor securities
depository or (ii) notify DTC and DTC Participants of the availability through DTC of Bonds and
transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC
accounts. In such event, the Bonds shall no longer be restricted to being registered in the
Registration Books in the name of Cede & Co., as nominee of DTC, but may be registered in the
name of the successor securities depository, or its nominee, or in whatever name or names
registered owners transferring or exchanging Bonds shall designate, in accordance with the
provisions of this Ordinance.
(h) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to
the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of and interest on such Bond and all notices with respect to
such Bond shall be made and given, respectively, in the manner provided in the Town's Blanket
Issuer Letter of Representations to DTC.
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(i) Cancellation of Initial Bond(s). On the Delivery Date, one initial Bond representing
the entire principal amount of the Bonds, payable in stated installments to the order of the
Underwriter or its designee, executed by manual or facsimile signature of the Mayor and Town
Secretary, approved by the Attorney General, and registered and signed by the Comptroller in the
manner prescribed by law, will be delivered to the Underwriter or its designee. If the Bonds are
sold subject to the book -entry system of DTC, then upon payment for the initial Bond(s), the
Paying Agent/Registrar shall insert the Delivery Date on the initial Bond(s), cancel each of the
initial Bond(s) and deliver to DTC on behalf of the Underwriter one registered definitive Bond for
each year of maturity of the Bonds, in the aggregate principal amount of all of the Bonds for such
maturity, registered in the name of Cede & Co., as nominee of DTC. To the extent that the Paying
Agent/Registrar is eligible to participate in DTC's FAST System, pursuant to an agreement
between the Paying Agent/Registrar and DTC, the Paying Agent/Registrar shall hold the definitive
Bonds in safekeeping for DTC.
0) Conditional Notice of redemption. With respect to any optional redemption of the
Bonds, unless certain prerequisites to such redemption required by this Ordinance have been met
and moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to be
redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice
of redemption, such notice may state that said redemption may, at the option of the Town, be
conditional upon the satisfaction of such prerequisites and receipt of such moneys by the Paying
Agent/Registrar on or prior to the date fixed for such redemption, or upon any prerequisite set forth
in such notice of redemption. If a conditional notice of redemption is given and such prerequisites
to the redemption and sufficient moneys are not received, such notice shall be of no force and
effect, the Town shall not redeem such Bonds and the Paying Agent/Registrar shall give notice, in
the manner in which the notice of redemption was given, to the effect that the Bonds have not been
redeemed.
Section 5. FORM OF BONDS. The form of the Bond, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Registration
Certificate of the Comptroller of Public Accounts of the State to be attached only to the Bonds
initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially in the
form provided in Exhibit A, with such appropriate variations, omissions, or insertions as are
permitted or required by this Ordinance. The Form of Bond as it appears in Exhibit A shall be
completed, amended and modified by Bond Counsel to incorporate the information set forth in the
Pricing Certificate, but it is not required for the Form of Bond to be reproduced as an exhibit to
the Pricing Certificate.
Section 6. PLEDGE.
(a) The Town hereby covenants and agrees that a first lien on the Pledged Revenues are
hereby irrevocably pledged to the payment and security of the Bonds Similarly Secured, including
the establishment and maintenance of the special funds created, established and maintained for the
payment and security thereof, all as hereinafter provided; and it is hereby ordered that the Bonds
Similarly Secured, and the interest thereon, shall constitute a lien on and pledge of the Pledged
Revenues and be valid and binding without any physical delivery thereof or further act by the
Town, and the lien created hereby on the Pledged Revenues for the payment and security of the
Bonds Similarly Secured, including the establishment and maintenance of the special funds
created, established and maintained for the payment and security thereof, shall be superior to the
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lien on and pledge of the Pledged Revenues securing payment of any Subordinate Lien Obligations
heretofore or hereafter issued by the Town.
(b) Chapter 1208, Government Code, applies to the issuance of the Bonds and the pledge
of the Pledged Revenues granted by the Town under this Section, and is therefore valid, effective,
and perfected. Should Texas law be amended at any time while the Bonds are outstanding and
unpaid, the result of such amendment being that the pledge of the Pledged Revenues granted by
the Town under this Section is to be subject to the filing requirements of Chapter 9, Business and
Commerce Code, in order to preserve to the Holders of the Bonds a security interest in said pledge,
the Town agrees to take such measures as it determines are reasonable and necessary under Texas
law to comply with the applicable provisions of Chapter 9, Business and Commerce Code and
enable a filing of a security interest in said pledge to occur.
Section 7. FUNDS. The following special funds ("Funds") are hereby created and shall
be established and maintained so long as any of the Bonds Similarly Secured, or the interest
thereon, are outstanding and unpaid:
(a) "Town of Prosper Waterworks and Sewer System Revenue Fund", hereinafter called
the "System Fund." This fund shall be kept and maintained at a depository bank of the Town, and
moneys deposited in this fund shall be used as described herein.
(b) "Town of Prosper Waterworks and Sewer System Revenue Bond Fund", hereinafter
called the "Bond Fund."
(c) For each series or combination of series of Bonds Similarly Secured that are secured
by a Reserve Fund, a "Town of Prosper Waterworks and Sewer System Revenue Bond Reserve
Fund", hereinafter called a "Reserve Fund."
(d) All of such Funds may be held as subaccounts within another fund (or within the
System Fund) held by the Town's depository, and, as such, not held in separate bank accounts.
Such treatment shall not constitute a commingling of the monies in such Funds or of such Funds
and the Town shall keep full and complete records of the monies and investments credited to each
of such Funds.
Section 8. SYSTEM FUND. The Town hereby covenants, agrees and establishes that the
Gross Revenues shall be deposited and credited to the System Fund immediately as collected and
received. All Maintenance and Operating Expenses are and shall be paid from such Gross
Revenues as a first charge against same.
Section 9. FLOW OF FUNDS.
(a) All Gross Revenues deposited and credited to the System Fund shall be pledged and
appropriated to the extent required for the following uses and in the order of priority shown:
First: To the payment of all necessary and reasonable Maintenance and Operating
Expenses, and the payment of such Maintenance and Operating Expenses shall be a
first charge on and claim against the Gross Revenues.
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Second: To the payment of the amounts required to be deposited in the Bond Fund for
the payment of Annual Debt Service Requirements on the Bonds Similarly Secured as
the same becomes due and payable.
Third: To the payment of the amounts required to be deposited in the Reserve Fund to
establish and maintain the Required Reserve in accordance with the provisions of this
Ordinance or any other ordinance relating to the issuance of Bonds Similarly Secured.
Fourth: To make payment, including payment of amounts required for reserve fund
requirements, of all Subordinate Lien Obligations.
(b) Any Pledged Revenues remaining in the System Fund after satisfying the foregoing
payments, or making adequate and sufficient provision for the payment thereof, may be
appropriated and used for any other Town purpose now or hereafter permitted by law.
Section 10. BOND FUND.
(a) For purposes of providing funds to pay the principal of, premium, if any, and interest
on the Bonds Similarly Secured as the same become due and payable, including any mandatory
sinking fund redemption payments, the Town agrees that it shall maintain the Bond Fund. The
Town covenants to deposit and credit to the Bond Fund prior to each principal, interest payment
or redemption date from the available Pledged Revenues an amount equal to one hundred percent
(100%) of the amount required to fully pay the interest on and the principal of the Bonds Similarly
Secured then coming due and payable.
(b) The required deposits and credits to the Bond Fund shall continue to be made as
hereinabove provided until such time as (i) the total amount on deposit in and credited to the Bond
Fund and the Reserve Fund, if one is required, and in any reserve fund created pursuant to the
terms hereof, taking into account any Reserve Fund Obligation held in or for the benefit of any
such reserve fund) is equal to the amount required to fully pay and discharge all outstanding Bonds
Similarly Secured (principal, premium, if any, and interest) or (ii) the Bonds Similarly Secured are
no longer outstanding.
(c) Accrued interest and capitalized interest, if any, received from the purchaser of any
Bond Similarly Secured shall be taken into consideration and reduce the amount of the deposits
and credits hereinabove required into the Bond Fund.
Section 11. RESERVE FUND.
(a) There is hereby created and ordered held at a depository of the Town, for the benefit
of the Bonds, the Reserve Fund. In accordance with this Ordinance, the Town shall deposit and
credit to the Reserve Fund amounts required to maintain the balance in the Reserve Fund in an
amount equal to the Required Reserve. The Required Reserve shall be maintained in the Reserve
Fund at all times after the Delivery Date. The Town may fund the Reserve Fund with (i) cash on
hand, (ii) proceeds from the sale of the Bonds, (iii) one or more Reserve Fund Obligations or (iv)
any combination of (i) through (iii), and the Pricing Certificate shall set forth the method of
funding. All funds, investments and Reserve Fund Obligations on deposit and credited to the
Reserve Fund shall be used solely for (i) the payment of the principal of and interest on the Bonds,
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when and to the extent other funds available for such purposes are insufficient, (ii) to make Reserve
Fund Obligation Payments, or (iii) to retire the last stated maturity or stated maturities of or interest
on the Bonds, and any excess amount in the Reserve Fund may be transferred to the Pledged
Revenue Fund and allocated in accordance with this Ordinance.
(b) When and for so long as the cash, investments and Reserve Fund Obligations in the
Reserve Fund equal the Required Reserve or the portion then required to be on deposit therein, no
deposits need be made to the credit of the Reserve Fund; but, if and when the Reserve Fund at any
time contains less than the Required Reserve then required to be on deposit therein, the Town
covenants and agrees that the Town shall cure the deficiency in the Reserve Fund by making
Required Reserve Fund Deposits to such fund from the Pledged Revenues in accordance with the
terms hereof by monthly deposits in amounts equal to not less than 1 /60th of the Required Reserve,
with any such deficiency payments being made on or before the last day of each month until the
Required Reserve has been fully funded or restored. In addition, in the event that a portion of the
Required Reserve is represented by a Reserve Fund Obligation, the Required Reserve shall be
restored as soon as possible from monthly deposits of Pledged Revenues on deposit in the System
Fund in accordance with the terms hereof, but subject to making the full deposits and credits to the
Bond Fund required to be made by Section 10. The Town further covenants and agrees that, subject
only to the prior deposits to be made to the Bond Fund, the Pledged Revenues shall be applied and
appropriated and used to establish and maintain the Required Reserve, including by paying
Reserve Fund Obligation Payments when due, and any reserve established for the benefit of any
issue or series of Additional Bonds and to cure any deficiency in such amounts as required by the
terms of this Ordinance and any other ordinance pertaining to the issuance of Additional Bonds.
Reimbursements to the provider, if any, of a Reserve Fund Obligation shall constitute the making
up of a deficiency in the Reserve Fund to the extent that such reimbursements result in the
reinstatement, in whole or in part, as the case may be, of the amount of the Reserve Fund
Obligation.
(c) Earnings and income derived from the investment of amounts held for the credit of the
Reserve Fund shall be retained in the Reserve Fund until the Reserve Fund contains the Required
Reserve. During such time as the Reserve Fund contains the Required Reserve or any cash or
Permitted Investment is replaced with a Reserve Fund Obligation pursuant to subsection (d) below,
the Town may, at its option, withdraw all surplus funds in the Reserve Fund and deposit such
surplus in the System Fund; provided that the face amount of any Reserve Fund Obligation may
be reduced at the option of the Town in lieu of such transfer. Notwithstanding the foregoing, any
surplus funds in the Reserve Fund that consist of proceeds of the Bonds or interest thereon shall
be used for purposes for which the Bonds were issued or deposited to the Bond Fund.
(d) The Town may at any time deposit, supplement, replace or substitute a Reserve Fund
Obligation for cash or Permitted Investments on deposit in the Reserve Fund or in substitution for
or replacement of any existing Reserve Fund Obligation, provided, that the deposit, supplement,
replacement or substitution of the Reserve Fund Obligation will not, in and of itself, cause any
ratings then assigned to the Bonds by any Rating Agency to be lowered and the ordinance
authorizing the substitution of the Reserve Fund Obligation for all or part of the Required Reserve
contains a finding that such substitution is cost effective. Notwithstanding any other provision of
this Ordinance, if a Reserve Fund Obligation is utilized in connection with the Bonds after the
issuance date of the Bonds, the Town must specifically approve any such Reserve Fund Obligation
and any such Reserve Fund Obligation must be submitted to the Attorney General of Texas (if
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submission is then required by law) for approval.
(e) If the Town is required to make a withdrawal from the Reserve Fund for any of the
purposes described in this Section, the Town shall promptly notify the issuer of such Reserve Fund
Obligation of the necessity for a withdrawal from the Reserve Fund for any such purposes, and
shall make such withdrawal FIRST from available moneys or Permitted Investments then on
deposit in the Reserve Fund, and NEXT from a drawing under any Reserve Fund Obligation to the
extent of such deficiency.
(f) In the event there is a draw upon the Reserve Fund Obligation, the Town shall reimburse
the issuer of such Reserve Fund Obligation for such draw, in accordance with the terms of any
agreement pursuant to which the Reserve Fund Obligation is used, from Pledged Revenues,
however, such reimbursement from Pledged Revenues shall be in accordance with the provisions
of Section 9 hereof and shall be subordinate and junior in right of payment to the payment of
principal of and premium, if any, and interest on the then outstanding Bonds Similarly Secured.
(g) The Town may create and establish a debt service reserve fund pursuant to the
provisions of any ordinance or other instrument authorizing the issuance of Bonds Similarly
Secured for the purpose of securing that particular issue or series of Bonds Similarly Secured or
any specific group of issues or series of Bonds Similarly Secured (including the combining of debt
service reserve funds for Bonds Similarly Secured so long as the requirements of each ordinance
authorizing such Bonds Similarly Secured are satisfied), and the amounts once deposited or
credited to said debt service reserve funds shall no longer constitute Pledged Revenues and shall
be held solely for the benefit of the owners of the particular Bonds Similarly Secured for which
such debt service reserve fund was established. Each debt service reserve fund shall receive a pro
rata amount of the Pledged Revenues after the requirements of the Bond Fund, which secures all
Bonds Similarly Secured, have first been met. Each such debt service reserve fund shall be
designated in such manner as is necessary to identify the Bonds Similarly Secured it secures and
to distinguish such debt service reserve fund from the debt service reserve funds created for the
benefit of other Bonds Similarly Secured. Each ordinance authorizing the issuance of Bonds
Similarly Secured that are to be secured by a debt service reserve fund shall specify the amount or
a manner of calculating the amount to be held and maintained on deposit therein.
(h) The Designated Financial Officer shall recalculate the Required Reserve at the
following times: (i) on the first day of each Fiscal Year, (ii) upon the issuance of Additional Bonds,
to the extent such Additional Bonds will be secured by the Reserve Fund, (iii) upon the refunding
or defeasance of the Bonds or any Additional Bonds secured by the Reserve Fund and (iv) upon
the deposit, supplement, replacement or substitution of a Reserve Fund Obligation (each of the
foregoing, a "Required Reserve Recalculation").
Section 12. INVESTMENTS; SECURITY FOR FUNDS.
(a) Money in any fund established pursuant to this Ordinance may, at the option of the
Town, be invested in investments authorized by the Public Funds Investment Act, Chapter 2256,
Texas government Code, as amended, consistent with the investment policy approved by the
Council; provided that all such deposits and investments shall be made in such manner that the
money required to be expended from any fund will be available at the proper time or times. All
interest and income derived from such deposits and investments immediately shall be credited to,
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and any losses debited to, the Fund from which the deposit or investment was made, and surpluses
in any Fund shall or may be disposed of as hereinafter provided. Such investments shall be sold
promptly when necessary to prevent any default in connection with any Bonds Similarly Secured.
(b) Money in all funds created by this Ordinance, to the extent not invested, shall be
secured in the manner prescribed by law for securing funds of the Town.
Section 13. DEFICIENCIES, EXCESS PLEDGED REVENUES.
(a) If on any occasion there shall not be sufficient Pledged Revenues to make the required
deposits into the Bond Fund and any Reserve Fund, then such deficiency shall be made up as soon
as possible from the next available Pledged Revenues, or at the option of the Town from any other
sources legally available for such purpose.
(b) Subject to making the required deposits to the credit of the Bond Fund and Reserve
Funds, when and as required by this Ordinance, or any ordinances authorizing the issuance of
Additional Bonds, the excess Pledged Revenues may be used by the Town for any lawful purpose.
Section 14. PAYMENT OF BONDS SIMILARLY SECURED. While any of the Bonds
Similarly Secured are outstanding, the Town shall transfer to the respective paying agent/registrar
therefor, from funds on deposit in and credited to the Bond Fund, and, if necessary, in the Reserve
Fund with respect to the Bonds, amounts sufficient to fully pay and discharge promptly the interest
on and principal of the Bonds Similarly Secured as shall become due on each interest or principal
payment date, or date of redemption of the Bonds Similarly Secured; such transfer of funds must
be made in such manner as will cause immediately available funds to be deposited with each
respective paying agent/registrar for the Bonds Similarly Secured not later than the business day
next preceding the date such payment is due on the Bonds Similarly Secured. The Paying
Agent/Registrar shall destroy all paid Bonds Similarly Secured and furnish the Town with an
appropriate certificate of cancellation or destruction.
Section 15. ADDITIONAL BONDS.
(a) The Town shall have the right and power at any time and from time to time and in one
or more series or issues, to authorize, issue and deliver Additional Bonds, in accordance with law,
in any amounts, for purposes of extending, improving or repairing the System or for the purpose
of refunding of any Bonds Similarly Secured, Subordinate Lien Obligations or other obligations
of the Town incurred in connection with the ownership or operation of the System. Such
Additional Bonds, if and when authorized, issued and delivered in accordance with this Ordinance,
shall be secured by and made payable equally and ratably on a parity with all other Bonds Similarly
Secured at the time outstanding and unpaid, from a first lien on and pledge of the Pledged Revenues
herein granted.
(b) The Bond Fund shall secure and be used to pay all Bonds Similarly Secured. Each
ordinance under which Additional Bonds are issued shall provide and require that, in addition to
the amounts required by the provisions of this Ordinance and the provisions of any other ordinance
or ordinances authorizing Additional Bonds to be deposited to the credit of the Bond Fund, the
Town shall deposit to the credit of the Bond Fund at least such amounts as are required for the
payment of all principal of and interest on said Additional Bonds then being issued, as the same
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come due.
(c) Additional Bonds shall be issued only in accordance with this Ordinance, but
notwithstanding any provisions of this Ordinance to the contrary, no installment, series or issue of
Additional Bonds shall be issued or delivered unless:
(i) The Designated Financial Officer shall have executed a certificate stating (A) (i)
that, to the best of such person's knowledge and belief, the Town is not then in default as
to any covenant or requirement contained in any ordinance authorizing the issuance of
outstanding Bonds Similarly Secured, and (ii) payments into all special funds or accounts
created and established for the payment and security of all outstanding Bonds Similarly
Secured have been made and that the amounts on deposit in such special funds or accounts
are the amounts then required to be on deposit therein or (B) the application of the proceeds
of sale of such obligations then being issued will cure any such default or deficiency; and
(ii) The Designated Financial Officer shall have executed a certificate stating that
based on the books and records of the Town, during either the preceding Year, or any
twelve (12) consecutive months out of the fifteen (15) months immediately preceding the
date of the then proposed Additional Bonds, the Net Earnings are at least equal to 1.25
times the Average Annual Debt Service Requirements (computed on a fiscal year basis)
and 1.10 times the Maximum Annual Debt Service Requirements of the Bonds Similarly
Secured to be outstanding after the issuance of the then proposed Additional Bonds.
(d) In making a determination of Net Earnings for any of the purposes described in this
Section, the Designated Financial Officer may take into consideration a change in the rates and
charges for services and facilities afforded by the System that became effective at least sixty (60)
days prior to the date the ordinance authorizing the issuance of the Additional Bonds is adopted
and, for purposes of satisfying the Net Earnings tests described above, make a pro forma
determination of the Net Earnings of the System for the period of time covered by said Designated
Financial Officer's certification or opinion based on such change in rates and charges being in
effect for the entire period covered by said Designated Financial Officer's certificate or opinion.
(e) Bonds Similarly Secured may be refunded (pursuant to any law then available) upon
such terms and conditions as the Town may deem to be in the best interest of the Town, and the
proposed refunding bonds shall be considered as "Additional Bonds" under the provisions of this
Section and the certificate required in subsection (c)(ii) shall give effect to the issuance of the
proposed refunding bonds and shall exclude the bonds being refunded from the calculation of
Average Annual Debt Service Requirements.
(f) All calculations of Average Annual Debt Service Requirements made pursuant to this
Section shall be made as of and from the date of the Additional Bonds then proposed to be issued.
Section 16. NO ISSUANCE OF OBLIGATIONS SENIOR TO THE BONDS
SIMILARLY SECURED. The Town covenants and agrees that it will not issue any obligations
payable from and secured, in whole or in part, by a lien on and pledge of the Pledged Revenues,
senior in rank and dignity to the lien on and pledge of such Pledged Revenues securing the payment
of the Bonds Similarly Secured.
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Section 17. ISSUANCE OF SUBORDINATE LIEN OBLIGATIONS. The Town hereby
reserves the right to issue, at any time, obligations including, but not limited to, Subordinate Lien
Obligations, payable from and equally and ratably secured, in whole or in part, by a lien on and
pledge of the Pledged Revenues, subordinate and inferior in rank and dignity to the lien on and
pledge of the Pledged Revenues securing the payment of the Bonds Similarly Secured, as may be
authorized by the laws of the State.
Section 18. ISSUANCE OF SPECIAL PROJECT OBLIGATIONS. The Town reserves
the right to issue Special Project Obligations. Except as otherwise provided in the proceedings
authorizing the issuance of the Special Project Obligations, all revenues received for the Special
Project in excess of revenues required to pay principal and interest on the Special Project
Obligations and to establish reserves and to secure, maintain and operate the Special Project shall
be considered as a part of Gross Revenues.
Section 19. PARTICULAR REPRESENTATIONS AND COVENANTS.
(a) Rate Covenant. The Town shall fix, establish, maintain and collect such rates, charges
and fees for the use and availability of the System at all times as are necessary to produce Gross
Revenues equal to the greater than the amounts sufficient:
(i) (1) to pay all current Maintenance and Operating Expenses, and (2) to produce
Net Revenues for each Fiscal Year at least equal to 1.20 times the Annual Debt Service
Requirements of all then outstanding Bonds Similarly Secured; or
(ii) to pay the sum of: (1) all current Maintenance and Operating Expenses, (2) the
Annual Debt Service Requirements of all then outstanding Bonds Similarly Secured and
Subordinate Lien Obligations, (3) required deposits to a reserve fund for any Bonds
Similarly Secured and Subordinate Lien Obligations then outstanding, and (4) amounts
required to pay all other obligations of the System reasonably anticipated to be paid from
Gross Revenues during the current Fiscal Year.
(b) Maintenance and Operation; insurance. The Town hereby covenants and agrees that
the System shall be maintained in good condition and operated in an efficient manner and at
reasonable cost. So long as any of the Bonds Similarly Secured are outstanding, the Town agrees
to maintain casualty and other insurance on the System of a kind and in an amount customarily
carried by municipal corporations owning and operating similar properties. Nothing in this
Ordinance shall be construed as requiring the Town to expend any funds which are derived from
sources other than the operation of the System but nothing herein shall be construed as preventing
the Town from doing so.
(c) No Free Service. The Town covenants and agrees that no free service of the System
shall be allowed except to institutions and buildings owned and operated by the Town.
(d) Records and Accounts; Accounting Reports. The Town hereby covenants and agrees
that so long as any of the Bonds or any interest thereon remain outstanding and unpaid, it will keep
and maintain a proper and complete system of records and accounts pertaining to the operation of
the System parts separate and apart from all other records and accounts of the Town in which
complete and correct entries shall be made of all transactions relating to said System, as provided
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by Chapter 1502, Texas Government Code, or other applicable law. The Owner or Owners of any
Bonds or any duly authorized agent or agents of such Owners shall have the right at all reasonable
times to inspect all such records, accounts and data relating thereto and to inspect the System and
all properties comprising same. The Town further agrees that following the close of each Fiscal
Year, it will cause an audit of such books and accounts to be made by an independent firm of
certified public accountants. Each such audit, in addition to whatever other matters may be thought
proper by the accountant, shall particularly include the following:
(i) A statement of the income and expenditures of the components of the System
for such fiscal year;
(ii) A balance sheet as of the end of such Fiscal Year; and
(iii) A list of the insurance policies in force at the end of the Fiscal Year on the
System properties, setting out as to each policy the amount thereof, the risk covered, the
name of the insurer, and the policy's expiration date.
Expenses incurred in making the audits above referred to are to be regarded as Maintenance
and Operating Expenses of the System and paid as such. Copies of the aforesaid annual audit shall
be immediately furnished, upon written request, to the original purchasers of the Bonds and any
subsequent Owner.
(e) Sale or Lease of Properties. The Town, to the extent and in the manner authorized by
law, may sell or exchange for consideration representing the fair value thereof, as determined by
the Council, any property not necessary or required in the efficient operations of the System, or
any equipment not necessary or useful in the operations thereof or which is obsolete, damaged or
worn out or otherwise unsuitable for use in the operation of the System. The proceeds of any sale
of properties of the System shall be deposited in the System Fund.
(f) Competition. That so far as it legally may and subject existing agreements and
certifications, the Town covenants and agrees, for the protection and security of the Bonds
Similarly Secured and the holders thereof from time to time and until all Bonds Similarly Secured
shall have been retired and that it will not grant a franchise for the installation or operation of any
water and/or wastewater system other than those owned by the Town, that it will prohibit the
operation of any waterworks or wastewater system other than those operated by the Town.
(g) Further Covenants. The Town further covenants and agrees by and through this
Ordinance as follows:
(i) That it has the lawful power to pledge the revenues supporting this issue of
Bonds and has lawfully exercised said power under the Constitution and laws of the State
of Texas, including power existing under Chapter 1502;
(ii) That other than for the Bonds, the Pledged Revenues have not been pledged in
any manner to the payment of any debt or obligation of the Town, nor of the System, which
is senior to or on a parity with the pledge of the Pledged Revenues to Bonds Similarly
Secured;
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(iii) It will duly and punctually keep, observe and perform each and every
undertaking, covenant and condition on its part to be kept, observed and performed,
contained in this Ordinance and in the ordinances authorizing any Additional Bonds, and
that it will prior to the maturity of each installment of interest and prior to the maturity of
each Bond and Additional Bond issued thereunder, make available at the principal office
of the Paying Agent/Registrar, but only from the sources herein provided, sufficient funds
to promptly pay such principal and interest; and
(iv) The Town will comply with all of the terms and conditions of any and all
franchises, permits and authorizations applicable to or necessary with respect to the
System, and which have been obtained from any governmental agency; and the Town has
or will obtain and keep in full force and effect all franchises, permits, authorizations and
other requirements applicable to or necessary with respect to the acquisition, construction,
equipment, operation and maintenance of the System.
Section 20. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon shall be
deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") within the meaning of
this Ordinance, except to the extent provided in subsection (d) of this Section, when payment of
the principal of such Bond, plus interest thereon to the due date (whether such due date be by
reason of maturity or otherwise) either (i) shall have been made or caused to be made in accordance
with the terms thereof, or (ii) shall have been provided for on or before such due date by
irrevocably depositing with or making available to the Paying Agent/Registrar in accordance with
an agreement or other instrument (the "Future Escrow Agreement") for such payment (1) lawful
money of the United States of America sufficient to make such payment or (2) Defeasance
Securities that mature as to principal and interest in such amounts and at such times as will insure
the availability, without reinvestment, of sufficient money to provide for such payment, and when
proper arrangements have been made by the Town with the Paying Agent/Registrar for the
payment of its services until all Defeased Bonds shall have become due and payable. At such time
as a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the
interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the
System revenues herein pledged as provided in this Ordinance, and such principal and interest
shall be payable solely from such money or Defeasance Securities, and thereafter the Town will
have no further responsibility with respect to amounts available to the Paying Agent/Registrar (or
other financial institution permitted by applicable law) for the payment of such Defeased Bonds,
including any insufficiency therein caused by the failure of the Paying Agent/Registrar (or other
financial institution permitted by applicable law) to receive payment when due on the Defeasance
Securities. Notwithstanding any other provision of this Ordinance to the contrary, it is hereby
provided that any determination not to redeem Defeased Bonds that is made in conjunction with
the payment arrangements specified in subsections (a)(i) or (ii) of this Section shall not be
irrevocable, provided that (1) in the proceedings providing for such payment arrangements, the
Town expressly reserves the right to call the Defeased Bonds for redemption; (2) gives notice of
the reservation of that right to the owners of the Defeased Bonds immediately following the
making of the payment arrangements; and (3) directs that notice of the reservation be included in
any redemption notices that it authorizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written
direction of the Town also be invested in Defeasance Securities, maturing in the amounts and times
as hereinbefore set forth, and all income from such Defeasance Securities received by the Paying
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Agent/Registrar that is not required for the payment of the Bonds and interest thereon, with respect
to which such money has been so deposited, shall be turned over to the Town, or deposited as
directed in writing by the Town. Any Future Escrow Agreement pursuant to which the money
and/or Defeasance Securities are held for the payment of Defeased Bonds may contain provisions
permitting the investment or reinvestment of such moneys in Defeasance Securities or the
substitution of other Defeasance Securities upon the satisfaction of the requirements specified in
subsections (a)(i) or (ii) of this Section. All income from such Defeasance Securities received by
the Paying Agent/Registrar which is not required for the payment of the Defeased Bonds, with
respect to which such money has been so deposited, shall be remitted to the Town or deposited as
directed in writing by the Town.
(c) Until all Defeased Bonds shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Bonds the
same as if they had not been defeased, and the Town shall make proper arrangements to provide
and pay for such services as required by this Ordinance.
(d) In the event that the Town elects to defease less than all of the principal amount of
Bonds of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount
of Bonds by such random method as it deems fair and appropriate.
Section 21. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS. (a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost,
stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered,
a new bond of the same principal amount, maturity, and interest rate, as the damaged, mutilated,
lost, stolen, or destroyed Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,
mutilated, lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to the
Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the registered owner
applying for a replacement bond shall furnish to the Town and to the Paying Agent/Registrar such
security or indemnity as may be required by them to save each of them harmless from any loss or
damage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond, the
registered owner shall furnish to the Town and to the Paying Agent/Registrar evidence to their
satisfaction of the loss, theft, or destruction of such Bond. In every case of damage or mutilation
of a Bond, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the
Bond so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in
the event any such Bond shall have matured, and no default has occurred which is then continuing
in the payment of the principal of or interest on the Bond, the Town may authorize the payment of
the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of
issuing a replacement Bond, provided security or indemnity is furnished as above provided in this
Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement
bond, the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal,
printing, and other expenses in connection therewith. Every replacement bond issued pursuant to
the provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall
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constitute a contractual obligation of the Town whether or not the lost, stolen, or destroyed Bond
shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Ordinance equally and proportionately with any and all other Bonds duly issued under this
Ordinance.
(e) Authority for Issuing Replacement Bonds. In accordance with Subchapter B,
Chapter 1206, Texas Government Code, this Section shall constitute authority for the issuance of
any such replacement bond without necessity of further action by the governing body of the Town
or any other body or person, and the duty of the replacement of such bonds is hereby authorized
and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate
and deliver such Bonds in the form and manner and with the effect, as provided in this Ordinance
for Bonds issued in conversion and exchange for other Bonds.
Section 22. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION,
IF OBTAINED. The Mayor (or, in the absence of the Mayor, the Mayor Pro Tem) is hereby
authorized to have control of the Bonds initially issued and delivered hereunder and all necessary
records and proceedings pertaining to the Bonds pending their delivery and their investigation,
examination and approval by the Attorney General, and their registration by the Comptroller.
Upon registration of the Bonds, the Comptroller (or a deputy designated in writing to act for the
Comptroller) shall sign the Comptroller's Registration Certificate attached to such Bonds in the
manner prescribed by law, and the seal of the Comptroller shall be impressed, or placed in
facsimile, on such Bond. The approving legal opinion of the Town's Bond Counsel and the
assigned CUSIP numbers may, at the option of the Town, be printed on the Bonds issued and
delivered under this Ordinance, but neither shall have any legal effect, and shall be solely for the
convenience and information of the registered owners of the Bonds. In addition, if bond insurance
is obtained, the Bonds may bear an appropriate legend as provided by the insurer.
Section 23. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
BONDS. (a) Covenants. The Town covenants to take any action necessary to assure, or refrain
from any action which would adversely affect, the treatment of the Bonds as obligations described
in section 103 of the Code, the interest on which is not includable in the "gross income" of the
holder for purposes of federal income taxation. In furtherance thereof, the Town covenants as
follows:
(i) to take any action to assure that no more than 10 percent of the proceeds of
the Bonds or the projects financed therewith (less amounts deposited to a reserve fund, if
any) are used for any "private business use," as defined in section 141(b)(6) of the Code
or, if more than 10 percent of the proceeds or the projects financed therewith are so used,
such amounts, whether or not received by the Town, with respect to such private business
use, do not, under the terms of this Ordinance or any underlying arrangement, directly or
indirectly, secure or provide for the payment of more than 10 percent of the debt service
on the Bonds, in contravention of section 141(b)(2) of the Code;
(ii) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
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amount in excess of 5 percent 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;
(iii) to take any action to assure that no amount which is greater than the lesser
of $5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of section 141(c) of the Code;
(iv) to refrain from taking any action which would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(b) of the Code;
(v) to refrain from taking any action that would result in the Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(vi) 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, other than investment property acquired
with:
(A) proceeds of the Bonds invested for a reasonable temporary period of
3 years or less or, in the case of a refunding bond, for a period of 90 days or less
until such proceeds are needed for the purpose for which the bonds are issued,
(B) amounts invested in a bona fide debt service fund, within the
meaning of section 1.148 1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or
replacement fund to the extent such amounts do not exceed 10 percent of the
proceeds of the Bonds;
(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);
(viii) to refrain from using the proceeds of the Bonds or proceeds of any prior
bonds to pay debt service on another issue more than 90 days after the date of issue of the
Bonds in contravention of the requirements of section 149(d) of the Code (relating to
advance refundings); and
(ix) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to
90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and
to pay to the United States of America, not later than 60 days after the Bonds have been
paid in full, 100 percent of the amount then required to be paid as a result of Excess
Earnings under section 148(f) of the Code.
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(b) Rebate Fund. In order to facilitate compliance with the above covenant (8), a
"Rebate Fund" is hereby established by the Town for the sole benefit of the United States of
America, and such fund shall not be subject to the claim of any other person, including without
limitation the bondholders. The Rebate Fund is established for the additional purpose of
compliance with section 148 of the Code.
(c) Use of Proceeds. The Town understands that the term "proceeds" includes
"disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds,
transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of
issuance of the Bonds. It is the understanding of the Town that the covenants contained herein are
intended to assure compliance with the Code and any regulations or rulings promulgated by the
U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are
hereafter promulgated which modify or expand provisions of the Code, as applicable to the Bonds,
the Town will not be required to comply with any covenant contained herein to the extent that such
failure to comply, in the opinion of nationally recognized bond counsel, will not adversely affect
the exemption from federal income taxation of interest on the 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 Town agrees to comply with the additional
requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to
preserve the exemption from federal income taxation of interest on the Bonds under section 103
of the Code. In furtherance of such intention, the Town hereby authorizes and directs the
Authorized Officials to execute any documents, certificates or reports required by the Code and to
make such elections, on behalf of the Town, which may be permitted by the Code as are consistent
with the purpose for the issuance of the Bonds.
(d) AIIocation of, and Limitation on, Expenditures for the Project. The Town
covenants to account for the expenditure of sale proceeds and investment earnings to be used for
the Project on its books and records in accordance with the requirements of the Code. The Town
recognizes that in order for the proceeds to be considered used for the reimbursement of costs, the
proceeds must be allocated to expenditures within 18 months of the later of the date that (1) the
expenditure is made, or (2) the Project is completed; but in no event later than three years after the
date on which the original expenditure is paid. The foregoing notwithstanding, the Town
recognizes that in order for proceeds to be expended under the Code, the sale proceeds or
investment earnings must be expended no more than 60 days after the earlier of (1) the fifth
anniversary of the Delivery Date, or (2) the date the Bonds are retired. The Town agrees to obtain
the advice of nationally -recognized bond counsel if such expenditure fails to comply with the
foregoing to assure that such expenditure will not adversely affect the tax-exempt status of the
Bonds. For purposes hereof, the Town shall not be obligated to comply with this covenant if it
obtains an opinion that such failure to comply will not adversely affect the excludability for federal
income tax purposes from gross income of the interest.
(e) Disposition of the Project. The Town covenants that the property constituting the
Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the Town
of cash or other compensation, unless any action taken in connection with such disposition will
not adversely affect the tax-exempt status of the Bonds. For purpose of the foregoing, the Town
may rely on an opinion of nationally -recognized bond counsel that the action taken in connection
with such sale or other disposition will not adversely affect the tax-exempt status of the Bonds.
For purposes of the foregoing, the portion of the property comprising personal property and
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disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of cash
or other compensation. For purposes hereof, the Town shall not be obligated to comply with this
covenant if it obtains an opinion that such failure to comply will not adversely affect the
excludability for federal income tax purposes from gross income of the interest.
Section 24. SALE OF BONDS; OFFICIAL STATEMENT. (a) The Bonds shall be sold
and delivered subject to the provisions hereof and pursuant to the terms and provisions of a
Purchase Contract, which the Pricing Officer is hereby authorized to execute and deliver and in
which the Underwriter shall be designated. The Bonds shall initially be registered in the name of
the Underwriter, unless otherwise set forth in the Pricing Certificate.
(b) The Pricing Officer is hereby authorized, in the name and on behalf of the Town, to
approve the distribution and delivery of a preliminary official statement and a final official
statement relating to the Bonds to be used by the Underwriter in the marketing of the Bonds, if
applicable.
Section 25. FURTHER PROCEDURES; ENGAGEMENT OF BOND COUNSEL;
ATTORNEY GENERAL FILING FEE. (a) The Authorized Officials, individually or jointly,
shall be and they are hereby expressly authorized, empowered and directed from time to time and
at any time to do and perform all such acts and things and to execute, acknowledge and deliver in
the name and under the corporate seal and on behalf of the Town such documents, certificates and
instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry
out the terms and provisions of this Ordinance, the Letter of Representations, the Bonds and the
sale of the Bonds. In addition, prior to the delivery of the Bonds, the Authorized Officials are each
hereby authorized and directed to approve any changes or corrections to this Ordinance or to any
of the documents authorized and approved by this Ordinance: (i) in order to cure any ambiguity,
formal defect, or omission in this Ordinance or such other document, or (ii) as requested by the
Attorney General or his representative to obtain the approval of the Bonds by the Attorney General.
In case any officer whose signature shall appear on any Bond shall cease to be such officer before
the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes
the same as if such officer had remained in office until such delivery.
(b) The obligation of the Underwriter to accept delivery of the Bonds is subject to the
Underwriter being furnished with the final, approving opinion of McCall, Parkhurst & Horton
L.L.P., bond counsel to the Town, which opinion shall be dated as of and delivered on the Delivery
Date. The engagement of such firm as bond counsel to the Town in connection with issuance, sale
and delivery of the Bonds is hereby approved and confirmed.
(c) In accordance with the provisions of Section 1202.004, Texas Government Code, in
connection with the submission of the Bonds to the Attorney General for review and approval, a
statutory fee (an amount equal to 0.1% principal amount of the Bonds, subject to a minimum of
$750 and a maximum of $9,500) is required to be paid to the Attorney General upon the submission
of the transcript of proceedings for the Bonds. The Town hereby authorizes and directs that a
check in the amount of the Attorney General filing fee for the Bonds, made payable to the "Texas
Attorney General," be promptly furnished to the Town's Bond Counsel, for payment to the
Attorney General in connection with his review of the Bonds.
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Section 26. COMPLIANCE WITH RULE 15c2-12. (a) If the Bonds are sold by public
offering, and are subject to the Rule (as defined below), the following provisions shall apply, unless
modified by the Pricing Officer in the Pricing Certificate:
(i) Definitions. As used in this Section, the following terms have the meanings
ascribed to such terms below:
"Financial Obligation" means a: (a) debt obligation; (b) derivative instrument entered into
in connection with, or pledged as security or a source of payment for, an existing or planned debt
obligation; or (c) a guarantee of the foregoing (a) and (b). The term Financial Obligation does not
include any municipal securities as to which a final official statement has been provided to the
MSRB consistent with the Rule.
"MSRB" means the Municipal Securities Rulemaking Board or any successor to its
functions under the Rule.
"Rule" means SEC Rule 15c2 12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(ii) Annual Reports, (A) The Town shall provide annually to the MSRB, within the
timeframe set forth in the Pricing Certificate, in the electronic format prescribed by the MSRB,
certain updated financial information and operating data pertaining to the Town, being the
information described in the Pricing Certificate.
(B) Any financial information described in the Pricing Certificate to be
provided shall be (i) prepared in accordance with the accounting principles described in the
financial statements of the Town appended to the Official Statement, or such other
accounting principles as the Town may be required to employ from time to time pursuant
to state law or regulation, and (ii) audited, if the Town commissions an audit of such
statements and the audit is completed within the period during which they must be
provided. If the audit of such financial statements is not completed within the period set
forth in the Pricing Certificate, then the Town shall provide unaudited financial information
of the type described in the Pricing Certificate within such period, and audited financial
statements for the applicable fiscal year to the MSRB, when and if the audit report on such
statements becomes available.
(C) If the Town changes its fiscal year, it will notify the MSRB of the change
(and of the date of the new fiscal year end) prior to the next date by which the Town
otherwise would be required to provide financial information and operating data pursuant
to this Section.
(D) All financial information, operating data, financial statements and notices
required by this Section to be provided to the MSRB shall be provided in an electronic
format and be accompanied by identifying information prescribed by the MSRB. Financial
information and operating data to be provided pursuant to this Section may be set forth in
full in one or more documents or may be included by specific reference to any document
W]
(including an official statement or other offering document) available to the public on the
MSRB's Internet Web site or filed with the SEC.
(iii) Event Notices. The Town shall notify the MSRB, in a timely manner not in excess
of ten business days after the occurrence of the event, of any of the following events with respect
to the Bonds:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue
(IRS Form 5701-TEB), or other material notices or determinations with
respect to the tax status of the Bonds, or other material events affecting the
tax status of the Bonds;
(7) Modifications to rights of holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds,
if material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the Town;
(13) The consummation of a merger, consolidation, or acquisition involving the
Town or the sale of all or substantially all of the assets of the Town, other
than in the ordinary course of business, the entry into of a definitive
agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if
material; and
(14) Appointment of a successor or additional paying agent/registrar or the
change of name of a paying agent/registrar, if material;
(15) Incurrence of a Financial Obligation of the Town, if material, or agreement
to covenants, events of default, remedies, priority rights, or other similar
terms of a Financial Obligation of the Town, any of which affect security
holders, if material; and
(16) Default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a Financial Obligation of the Town,
any of which reflect financial difficulties.
For these purposes, (a) any event described in the immediately preceding paragraph (12) is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent,
or similar officer for the Town in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has assumed
jurisdiction over substantially all of the assets or business of the Town, or if such jurisdiction has
been assumed by leaving the existing governing body and officials or officers of the Town in
possession but subject to the supervision and orders of a court or governmental authority, or the
entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or
27
governmental authority having supervision or jurisdiction over substantially all of the assets or
business of the Town, and (b) the Town intends the words used in the immediately preceding
paragraphs (15) and (16) and the definition of Financial Obligation in this Section to have the same
meanings as when they are used in the Rule, as evidenced by SEC Release No. 34-83885, dated
August 20, 2018.
The Town shall notify the MSRB, in a timely manner, of any failure by the Town to provide
financial information or operating data in accordance with subsection (a)(ii) of this Section by the
time required by subsection (a)(ii).
(iv) Limitations, Disclaimers and Amendments. (A) The Town shall be obligated to
observe and perform the covenants specified in this Section for so long as, but only for so long as,
the Town remains an "obligated person" with respect to the Bonds within the meaning of the Rule,
except that the Town in any event will give notice of any deposit made in accordance with this
Ordinance or applicable law that causes the Bonds no longer to be outstanding.
(B) The provisions of this Section are for the sole benefit of the registered
owners and beneficial owners of the Bonds, and nothing in this Section, express or implied,
shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any
other person. The Town undertakes to provide only the financial information, operating
data, financial statements, and notices which it has expressly agreed to provide pursuant to
this Section and does not hereby undertake to provide any other information that may be
relevant or material to a complete presentation of the Town's financial results, condition,
or prospects or hereby undertake to update any information provided in accordance with
this Section or otherwise, except as expressly provided herein. The Town does not make
any representation or warranty concerning such information or its usefulness to a decision
to invest in or sell Bonds at any future date.
(C) UNDER NO CIRCUMSTANCES SHALL THE TOWN BE LIABLE TO
THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY
OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN
WHOLE OR IN PART FROM ANY BREACH BY THE TOWN, WHETHER
NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH
PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
(D) No default by the Town in observing or performing its obligations under
this Section shall comprise a breach of or default under the Ordinance for purposes of any
other provision of this Ordinance. Nothing in this Section is intended or shall act to
disclaim, waive, or otherwise limit the duties of the Town under federal and state securities
laws.
(E) The provisions of this Section may be amended by the Town from time to
time to adapt to changed circumstances that arise from a change in legal requirements, a
change in law, or a change in the identity, nature, status, or type of operations of the Town,
but only if (1) the provisions of this Section, as so amended, would have permitted an
28
underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance
with the Rule, taking into account any amendments or interpretations of the Rule since
such offering as well as such changed circumstances and (2) either (a) the registered owners
of a majority in aggregate principal amount (or any greater amount required by any other
provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds
consent to such amendment or (b) a person that is unaffiliated with the Town (such as
nationally recognized bond counsel) determined that such amendment will not materially
impair the interest of the registered owners and beneficial owners of the Bonds. If the
Town so amends the provisions of this Section, it shall include with any amended financial
information or operating data next provided in accordance with subsection (b) of this
Section an explanation, in narrative form, of the reason for the amendment and of the
impact of any change in the type of financial information or operating data so provided.
The Town may also amend or repeal the provisions of this continuing disclosure agreement
if the SEC amends or repeals the applicable provision of the Rule or a court of final
jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to
the extent that the provisions of this sentence would not prevent an underwriter from
lawfully purchasing or selling Bonds in the primary offering of the Bonds.
(b) If the Bonds are sold by private placement, the Pricing Officer may agree to provide
for an undertaking in accordance with the Rule or may agree to provide other public information
to the Underwriter as may be necessary for the sale of the Bonds on the most favorable terms to
the Town.
Section 27. METHOD OF AMENDMENT. The Town hereby reserves the right to amend
this Ordinance subject to the following terms and conditions, to -wit:
(a) The Town may from time to time, without the consent of any Registered Owner,
except as otherwise required by paragraph (b) below, amend or supplement this Ordinance to
(i) cure any ambiguity, defect or omission in this Ordinance that does not materially adversely
affect the interests of the Registered Owners, (ii) grant additional rights or security for the benefit
of the Registered Owners, (iii) add events of default as shall not be inconsistent with the provisions
of this Ordinance and that shall not materially adversely affect the interests of the Registered
Owners, (v) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or
corresponding provisions of federal laws from time to time in effect, or (iv) make such other
provisions in regard to matters or questions arising under this Ordinance as shall not be materially
inconsistent with the provisions of this Ordinance and that shall not, in the opinion of nationally -
recognized bond counsel, materially adversely affect the interests of the Registered Owners.
(b) Except as provided in paragraph (a) above, the holders of Bonds aggregating in a
majority of the principal amount of then outstanding Bonds that are the subject of a proposed
amendment shall have the right from time to time to approve any amendment hereto that may be
deemed necessary or desirable by the Town; provided, however, that without the consent of 100%
of the Registered Owners in aggregate principal amount of the then outstanding Bonds, nothing
herein contained shall permit or be construed to permit amendment of the terms and conditions of
this Ordinance or in any of the Bonds so as to:
(1) Make any change in the maturity of any of the outstanding Bonds;
29
(2) Reduce the rate of interest borne by any of the outstanding Bonds;
(3) Reduce the amount of the principal of, or redemption premium, if any,
payable on any outstanding Bonds;
(4) Modify the terms of payment of principal or of interest or redemption
premium on outstanding Bonds or any of them or impose any condition with
respect to such payment; or
(5) Change the minimum percentage of the principal amount of the Bonds
necessary for consent to such amendment.
(c) If at any time the Town shall desire to amend this Ordinance under this Section, the
Town shall send by U.S. mail to each registered owner of the affected Bonds a copy of the proposed
amendment.
(d) Whenever at any time within one year from the date of mailing of such notice the
Town shall receive an instrument or instruments executed by the Registered Owners of at least a
majority in aggregate principal amount of all of the Bonds then outstanding that are required for
the amendment (or 100% if such amendment is made in accordance with paragraph (b)), which
instrument or instruments shall refer to the proposed amendment and which shall specifically
consent to and approve such amendment, the Town may adopt the amendment in substantially the
same form.
(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be modified and amended in accordance with such
amendatory Ordinance, and the respective rights, duties, and obligations of the Town and all
Registered Owners of such affected Bonds shall thereafter be determined, exercised, and enforced,
subject in all respects to such amendment.
(f) Any consent given by the Registered Owner of a Bond pursuant to the provisions
of this Section shall be irrevocable for a period of six months from the date of such consent and
shall be conclusive and binding upon all future Registered Owners of the same Bond during such
period. Such consent may be revoked at any time after six months from the date of said consent
by the Registered Owner who gave such consent, or by a successor in title, by filing notice with
the Town, but such revocation shall not be effective if the Registered Owners the required amount
of the affected Bonds then outstanding, have, prior to the attempted revocation, consented to and
approved the amendment.
(g) For the purposes of establishing ownership of the Bonds, the Town shall rely solely
upon the registration of the ownership of such Bonds on the Registration Books kept by the Paying
Agent/Registrar.
Section 28. INTEREST EARNINGS ON BOND PROCEEDS; USE OF PREMIUM
RECEIVED FROM SALE OF BONDS. (a) Interest Earnin&s. Interest earnings derived from the
proceeds that are deposited to the Capital Projects Fund (defined below) shall be retained therein
and used for the purposes for which the Bonds were issued, provided that after the completion of
such purposes, any amounts remaining therein shall be deposited to the Interest and Sinking Fund
30
for the Bonds. It is further provided, however, that any interest earnings on bond proceeds that are
required to be rebated to the United States of America pursuant to this Ordinance in order to
prevent the Bonds from being arbitrage bonds shall be so rebated and not considered as interest
earnings for purposes of this Section.
(b) Use of Bend Premium. The net premium received from the sale of the Bonds shall
be applied as determined by the Pricing Officer in the Pricing Certificate.
(c) Use of Bond Proceeds.
(i) The Town has heretofore created and established, and hereby covenants to
continue to maintain on the books of the Town, a separate fund entitled the "Capital
Projects Fund" (the "Capital Projects Fund") for use by the Town for payment of all lawful
costs associated with the Project. Proceeds of the Bonds in the amount determined by the
Pricing Officer in the Pricing Certificate shall be deposited into the Capital Projects Fund.
In addition, the amount to be applied against each bond proposition shall be determined by
the Pricing Officer in the Pricing Certificate, and the table in the preambles hereto shall be
reproduced in the Pricing Certificate to reflect such determination. Upon payment of all
Project costs, any Bond proceeds remaining on deposit in the Capital Projects Fund shall
be transferred to the Interest and Sinking Fund. Amounts so deposited to the Interest and
Sinking Fund shall be used in the manner described in this Ordinance.
(ii) The Town may place proceeds of the Bonds (including investment earnings
thereon) and amounts deposited into the Interest and Sinking Fund in investments
authorized by the Public Funds Investment Act, Chapter 2256, Texas Government Code,
as amended; provided, however, that the Town hereby covenants that the proceeds of the
sale of the Bonds will be used as soon as practicable for the Project.
(iii) All deposits authorized or required by this Ordinance shall be secured to the
fullest extent required by law for the security of public funds.
Section 28. GOVERNING LAW. This Ordinance shall be construed and enforced in
accordance with the laws of the State and the United States of America.
Section 29. SEVERABILITY. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application
thereof to other circumstances shall nevertheless be valid, and this governing body hereby declares
that this Ordinance would have been enacted without such invalid provision.
Section 30. EVENTS OF DEFAULT. Each of the following occurrences or events for the
purpose of this Ordinance is hereby declared to be an event of default (an "Event of Default"):
(i) the failure to make payment of the principal of or interest on any of the
Bonds when the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement
or obligation of the Town, the failure to perform which materially, adversely affects the
rights of the Registered Owners, including, but not limited to, their prospect or ability to be
31
repaid in accordance with this Ordinance, and the continuation thereof for a period of 60
days after notice of such default is given by any Registered Owner to the Town.
Section 31. REMEDIES FOR DEFAULT. (a) Upon the happening of any Event of
Default, then and in every case, any Owner or an authorized representative thereof, including, but
not limited to, a trustee or trustees therefor, may proceed against the Town for the purpose of
protecting and enforcing the rights of the Owners under this Ordinance, by mandamus or other
suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for
any relief permitted by law, including the specific performance of any covenant or agreement
contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any
right of the Owners hereunder or any combination of such remedies.
(b) It is provided that all such proceedings shall be instituted and maintained for the
equal benefit of all Owners of Bonds then outstanding.
Section 32. 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 Ordinance, the right to accelerate the debt evidenced
by the Bonds shall not be available as a remedy under this Ordinance.
(b) The exercise of any remedy herein conferred or reserved shall not be deemed a
waiver of any other available remedy.
(c) By accepting the delivery of a Bond authorized under this Ordinance, such Owner
agrees that the certifications required to effectuate any covenants or representations contained in
this Ordinance do not and shall never constitute or give rise to a personal or pecuniary liability or
charge against the officers, employees or officials of the Town or the Council.
Section 33. EFFECTIVE DATE. In accordance with the provisions of Texas Government
Code, Section 1201.028, this Ordinance shall be effective immediately upon its adoption by the
Council.
[Execution page follows]
32
DULY PASSED, APPROVED, AND ADOPTED BY THE TOWN COUNCIL OF
THE TOWN OF PROSPER, TEXAS, ON THIS 23RD DAY OF JULY, 2024.
ATTEST:
Michelle Lewis Sirianni, Town Secretary
APPROVED AS TO FORM AND LEGALITY:
Terrence S. Welch, Town Attorney
is OF p�'ip
(Town Seal)
191
�'Ax'ks
-..0
David F. Bristol, Mayor
33
Exhibit A
FORM OF BOND
(a) The form of the Bond, including the form of Paying Agent/Registrar's
Authentication Certificate, the form of Assignment and the form of Registration Certificate of the
Comptroller of Public Accounts of the State of Texas to be attached only to the Bonds initially
issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows,
with such appropriate variations, omissions, or insertions as are permitted or required by this
Ordinance and with the Bonds to be completed with information set forth in the Pricing Certificate.
The Form of Bond as it appears in this Exhibit A shall be completed, amended and modified by
Bond Counsel to incorporate the information set forth in the Pricing Certificate, but it is not
required for the Form of Bond to be reproduced as an exhibit to the Pricing Certificate.
UNITED STATES OF AMERICA
STATE OF TEXAS
TOWN OF PROSPER, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE BOND,
SERIES 2024
INTEREST
RATE
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DELIVERY
DATE
52024
MATURITY
DATE
August 15, 20_
PRINCIPAL
AMOUNT
CUSIP NO.
ON THE MATURITY DATE specified above, TOWN OF PROSPER, TEXAS, in Collin
and Denton Counties, Texas (the "Town"), being a political subdivision of the State of Texas,
hereby promises to pay to the Registered Owner set forth above, or registered assigns (hereinafter
called the "registered owner") the principal amount set forth above, and to pay interest thereon
from the [Delivery Date], on [February 15, 2025, and on each August 15 and February 15]
thereafter to the maturity date specified above, or the date of redemption prior to maturity, at the
interest rate per annum specified above; except that if this Bond is required to be authenticated and
the date of its authentication is later than the first Record Date (hereinafter defined), such principal
amount shall bear interest from the interest payment date next preceding the date of authentication,
unless such date of authentication is after any Record Date but on or before the next following
interest payment date, in which case such principal amount shall bear interest from such next
following interest payment date; provided, however, that if on the date of authentication hereof the
interest on the Bond or Bonds, if any, for which this Bond is being exchanged or converted from
is due but has not been paid, then this Bond shall bear interest from the date to which such interest
has been paid in full.
EN
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the registered owner hereof upon presentation and surrender of this Bond at maturity,
or upon the date fixed for its redemption prior to maturity, at the designated corporate trust office
of U.S. Bank Trust Company, National Association, Dallas, Texas, which is the "Paying
Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made by the Paying
Agent/Registrar to the registered owner hereof on each interest payment date by check or draft,
dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely
from, funds of the Town required by the ordinance authorizing the issuance of the Bonds (the
"Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as
hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by United
States mail, first-class postage prepaid, on each such interest payment date, to the registered owner
hereof, at its address as it appeared on the last business day of the month next preceding each such
date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as
hereinafter described. In addition, interest may be paid by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. In the
event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new
record date for such interest payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the
Town. Notice of the Special Record Date and of the scheduled payment date of the past due
interest (which shall be 15 days after the Special Record Date) shall be sent at least five 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 Registration Books at the close of business on
the last business day next preceding the date of mailing of such notice. Capitalized terms used
herein but not otherwise defined shall have the meanings given to such terms in the Bond
Ordinance.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Bond prior
to maturity as provided herein shall be paid to the registered owner upon presentation and surrender
of this Bond for payment at the principal corporate trust office of the Paying Agent/Registrar. The
Town covenants with the registered owner of this Bond that on or before each principal payment
date and interest payment date for this Bond it will make available to the Paying Agent/Registrar,
from the "Bond Fund" created by the Bond Ordinance, the amounts required to provide for the
payment, in immediately available funds, of all principal of and interest on the Bonds, when due.
IF THE DATE for any payment due on this Bond shall be a Saturday, Sunday, a legal
holiday, or a day on which banking institutions in the city where the principal corporate trust office
of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the
date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal
holiday, or day on which banking institutions are authorized to close, and payment on such date
shall have the same force and effect as if made on the original date payment was due.
THIS BOND is dated , 2024, and is authorized in accordance with the Constitution
and laws of the State of Texas in the principal amount of $ for the acquisition, construction,
installation and equipment of additions, improvements and extensions to the Town's waterworks
and sewer system and paying the costs incurred in connection with the issuance of the Bonds.
A-2
ON AUGUST 15, 20, or on any date thereafter, the Bonds may be redeemed prior to
their scheduled maturities, at the option of the Town, with funds derived from any available and
lawful source, as a whole, or in part, and, if in part, the particular Bonds, or portions thereof, to be
redeemed shall be selected and designated by the Town (provided that a portion of a Bond may be
redeemed only in an integral multiple of $5,000), at a redemption price equal to the principal
amount to be redeemed plus accrued interest to the date fixed for redemption.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar
by United States mail, first-class postage prepaid, to the registered owner of each Bond to be
redeemed at its address as it appeared at the close of business on the day of mailing such notice;
provided, however, that the failure of the registered owner to receive such notice, or any defect
therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the
proceedings for the redemption of any Bond. By the date fixed for any such redemption, due
provision shall be made with the Paying Agent/Registrar for the payment of the required
redemption price for the Bonds or portions thereof which are to be so redeemed. If such written
notice of redemption is sent and if due provision for such payment is made, all as provided above,
the Bonds or portions thereof which are to be so redeemed thereby automatically shall be treated
as redeemed prior to their scheduled maturities, and they shall not bear interest after the date fixed
for redemption, and they shall not be regarded as being outstanding except for the right of the
registered owner to receive the redemption price from the Paying Agent/Registrar out of the funds
provided for such payment. If a portion of any Bond shall be redeemed a substitute Bond or Bonds
having the same maturity date, bearing interest at the same rate, in any denomination or
denominations in any integral multiple of $5,000, at the written request of the registered owner,
and in aggregate amount equal to the unredeemed portion thereof, will be issued to the registered
owner upon the surrender thereof for cancellation, at the expense of the Town, all as provided in
the Bond Ordinance.
WITH RESPECT TO ANY OPTIONAL REDEMPTION OF THE BONDS, unless certain
prerequisites to such redemption required by the Bond Ordinance have been met and moneys
sufficient to pay the principal of and premium, if any, and interest on the Bonds to be redeemed
shall have been received by the Paying Agent/Registrar prior to the giving of such notice of
redemption, such notice may state that said redemption may, at the option of the Town, be
conditional upon the satisfaction of such prerequisites and receipt of such moneys by the Paying
Agent/Registrar on or prior to the date fixed for such redemption, or upon any prerequisite set forth
in such notice of redemption. If a conditional notice of redemption is given and such prerequisites
to the redemption and sufficient moneys are not received, such notice shall be of no force and
effect, the Town shall not redeem such Bonds and the Paying Agent/Registrar shall give notice, in
the manner in which the notice of redemption was given, to the effect that the Bonds have not been
redeemed.
ALL BONDS OF THIS SERIES are issuable solely as fully registered Bonds, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond
Ordinance, this Bond may, at the request of the registered owner or the assignee or assignees
hereof, be assigned, transferred, converted into and exchanged for a like aggregate amount of fully
A-3
registered Bonds, without interest coupons, payable to the appropriate registered owner, assignee
or assignees, as the case may be, having any authorized denomination or denominations as
requested in writing by the appropriate registered owner, assignee or assignees, as the case may
be, upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all in accordance
with the form and procedures set forth in the Bond Ordinance. Among other requirements for such
assignment and transfer, this Bond must be presented and surrendered to the Paying
Agent/Registrar, together with proper instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond or any
portion or portions hereof in any authorized denomination to the assignee or assignees in whose
name or names this Bond or any such portion or portions hereof is or are to be registered. The
form of Assignment printed or endorsed on this Bond may be executed by the registered owner to
evidence the assignment hereof, but such method is not exclusive, and other instruments of
assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of
this Bond or any portion or portions hereof from time to time by the registered owner. The Paying
Agent/Registrar's reasonable standard or customary fees and charges for assigning, transferring,
converting and exchanging any Bond or portion thereof will be paid by the Town. In any
circumstance, any taxes or governmental charges required to be paid with respect thereto shall be
paid by the one requesting such assignment, transfer, conversion or exchange, as a condition
precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be required to
make any such transfer or exchange of any Bonds during the period commencing with the close of
business on any Record Date and ending with the opening of business on the next following
principal or interest payment date or, with respect to any Bond or any portion thereof called for
redemption prior to maturity, within 30 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Town,
resigns, or otherwise ceases to act as such, the Town has covenanted in the Bond Ordinance that
it promptly will appoint a competent and legally qualified substitute therefor, and cause written
notice thereof to be mailed to the registered owners of the Bonds.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper to be
performed, exist and be done precedent to or in the authorization, issuance and delivery of this
Bond have been performed, existed and been done in accordance with law; that this Bond and all
of the bonds of the series of which it is a part constitute special obligations of the Town, and,
together with all other Outstanding Bonds Similarly Secured, are payable as to both principal and
interest solely from and equally secured by a first lien on and pledge of the Pledged Revenues.
Reference is hereby made to the Ordinance for a more complete statement of the covenants and
provisions securing the payment of this Bond and the series of which it is one.
THE TOWN EXPRESSLY RESERVES the right to issue further and additional special
revenue obligations equally secured by a lien on and pledge of the Pledged Revenues on a parity
with the Bonds of this issue; provided, however, that any and all such additional parity obligations
may be issued only in accordance with and subject to the covenants, conditions, limitations and
restrictions relating thereto which are set out and contained in the Ordinance, to which reference
is hereby made for more complete and full particulars.
THE HOLDER HEREOF shall never have the right to demand payment of this obligation
out of any funds raised or to be raised by taxation.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Town, and agrees that
the terms and provisions of this Bond and the Bond Ordinance constitute a contract between each
registered owner hereof and the Town.
IN WITNESS WHEREOF, the Town has caused this Bond to be signed with the manual
or facsimile signature of the Mayor of the Town and countersigned with the manual or facsimile
signature of the Town Secretary of the Town, and has caused the official seal of the Town to be
duly impressed, or placed in facsimile, on this Bond.
Town Secretary
Mayor
Town of Prosper, Texas Town of Prosper, Texas
(Town Seal)
(b) Form of Ming Agent/Registrar's Authentication Certificate.
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an
executed Registration Certificate of the Comptroller
of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in the text of this Bond; and that this Bond has been issued in conversion or
replacement of, or in exchange for, a bond, bonds, or a portion of a bond or bonds of a Series
which originally was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
Dated: U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, Dallas, Texas,
Paying Agent/Registrar
By:
Authorized Representative
(c) Form of Assignment.
ASSIGNMENT
(Please print or type clearly)
A-5
For value received, the undersigned hereby sells, assigns and transfers unto:
Transferee's Social Security or Taxpayer Identification Number:
Transferee's name and address, including zip code:
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney, to register the transfer of
the within Bond on the books kept for registration thereof, with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by
an eligible guarantor institution participating in
a securities transfer association recognized
signature guarantee program.
NOTICE: The signature above must
correspond with the name of the Registered
Owner as it appears upon the front of this Bond
in every particular, without alteration or
enlargement or any change whatsoever.
(d) Form of Registration Certificate of the Comptroller of Public Accounts.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
(e) Insertions for the Initial Bond.
(i) The initial Bond shall be in the form set forth in paragraph (a) of this Section,
except that:
(A) immediately under the name of the Bond, the headings "INTEREST
RATE" and "MATURITY DATE" shall both be completed with the words "As
shown below" and "CUSIP NO. " shall be deleted.
(B) the first paragraph shall be deleted and the following will be inserted:
"THE TOWN OF PROSPER, TEXAS (the "Town"), being a political subdivision located
in Collin and Denton Counties, Texas, hereby promises to pay to the Registered Owner specified
above, or registered assigns (hereinafter called the "Registered Owner"), on August 15 in each of
the years, in the principal installments and bearing interest at the per annum rates set forth in the
following schedule:
Maturity Principal Interest
Date Amount Rate
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
The Town promises to pay interest on the unpaid principal amount hereof (calculated on the basis
of a 360-day year of twelve 30-day months) from the [Delivery Date] at the respective Interest
Rate per annum specified above. Interest is payable on [February 15, 2025 and on each August
15 and February 15] thereafter to the date of payment of the principal installment specified above,
or the date of redemption prior to maturity; except, that if this Bond is required to be authenticated
and the date of its authentication is later than the first Record Date (hereinafter defined), such
principal amount shall bear interest from the interest payment date next preceding the date of
A-7
authentication, unless such date of authentication is after any Record Date but on or before the
next following interest payment date, in which case such principal amount shall bear interest from
such next following interest payment date; provided, however, that if on the date of authentication
hereof the interest on the Bond or Bonds, if any, for which this Bond is being exchanged is due
but has not been paid, then this Bond shall bear interest from the date to which such interest has
been paid in full."
(C) The initial Bond shall be numbered "T-1."
A-8
Town of Prosper, TX
Certificates of Obligation, Series 2024
OR Water and Sewer Revenue Bonds, Series 2024
Preliminary Schedule of Events (as of May 8, 2024)
May-24
S M T W T F S"
1
J 2
3
4
5
12
6
13
7
14
81
15
9
16
10 11
17 18
19:20
21
22
23
24 2S
26
27
28
29
30
31
Jul-24
S M T W T F S
1
2
1 3
4
5
12
6
7
14
8
15
9
10
11
l3
16
17
18
19
20
21
22
23
24
25
26127
2$
T
31
Jun-24
S M T W T F S
I
2.
3
4
5
6
7 S
9
10
11
12
13
14113
2-
2812.0
16
23
17
24
18
25
19
26
20121
27
M
i
Aug-24
S M T W T F S
1
2
3
4
5
6
7
8
9
110
11
12
13
14
15
16
19
26
21
22
23
25
26
27
28
2930
d1718
Sep-24
S M T W T F S
1
2
3
4
1 5
6
1 7
8
9
10
11
12
13
14
1S
22
16
23
T7
24
18
25
19
26
20
27
21
28
29
30
I
Complete
By
Day
Event
28-May-24
Tuesday
Town Council approves publication of Notice of Intent for the
Certificates. Publication will occur in the Town's paper of record.
3-Jun-24
Monday
HilltopSecurities requests information for preparation of the Official Statement
5-Jun-24
Wednesday
1st publication of Notice of Intent for Certificates
10-Jun-24
Monday
HilltopSecurities receives requested information
12-Jun-24
Wednesday
2nd publication of Notice of Intent for Certificates
17-Jun-24
Monday
Draft Official Statement distributed to the Town and Bond Counsel
24-Jun-24
Monday
HilltopSecurities receives comments on Official Statement
1-Jul-24
Monday
Distribute POS to Rating Agencies
16-Jul-24
Tuesday
Rating Agency meetings at the Town
(Potentially meeting w/ S&P, Moody's and Fitch)
23-Jul-24
Tuesday
Town Council approval of Parameter Ordinance for Certificates of
Obligation* OR Water and Sewer Revenue Bonds
29-Jul-24
Monday
Anticipated receipt of credit ratings
30-Jul-24
Tuesday
Electronically mail CO Official Statement OR Water and Sewer
Revenue Bond Official Statement to potential purchasers**
6-Aug-24
Tuesday
Pricing; Pricing Officer adopts final pricing**
4-Sep-24
Wednesday
Closing and delivery of funds to the Town**
* Pricing must occur
within 90 days of Council approval of the Parameter Ordinance.
** Preliminary, subject to change.
EXHIBIT B
Project Name
Wastewater Projects
Doe Branch Expansion, Phase 3 WWTP: 2322-WW
Doe Branch Parallel Interceptor: 2103-WW
TOTAL REVENUE BONDS ISSUANCE
No water projects for the Series 2024 issuance.
Revenue Bonds
Issuance
$27,500,000
$3,750,000
$31,250,000