12-15 - O CERTIFICATE REGARDING ADOPTION OF RESOLUTION
THE STATE OF TEXAS §
COUNTY OF COLLIN §
TOWN OF PROSPER §
We,the undersigned officers of the Town, hereby certify as follows:
1. The Town Council of the Town convened in REGULAR MEETING ON THE 26TH DAY OF
JUNE,2012, at the Town Hall, and the roll was called of the duly constituted officers and members of the
Town Council, to-wit:
Ray Smith, Mayor
Meigs Miller, Mayor Pro-Tem
Kenneth Dugger, Deputy Mayor Pro-
Tern
-D.Ave Benetieict`- "-
Jason Dixon
Curry Vogelsang, Jr.
Danny Wilson
Amy Piukana, Town Secretary �3-UJ-C-e Ei-0
and all of said persons were present,except the following absentees: thus
constituting a quorum. Whereupon, among other business, the following was transacted at said Meeting:
a written
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF TOWN OF PROSPER,
TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2012;LEVYING AN ANNUAL AD VALOREM TAX FOR THE PAYMENT OF
SAID CERTIFICATES;APPROVING AN OFFICIAL STATEMENT;AND ENACTING
OTHER PROVISIONS RELATING TO THE SUBJECT
was duly introduced for the consideration of the Town 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 by the following vote:
AYES: All members of the Town Council shown present above voted "Aye," except as shown
below: r>
NOES: ABSTAIN:
2.That 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 said Town Council's minutes of said Meeting;that the above and foregoing paragraph is
a true,full and correct excerpt from the Town 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 Town Council as indicated therein;that each of the officers
and members of the Town 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.That the Mayor of the Town has approved and hereby approves the aforesaid Ordinance;that the
Mayor and the Town Secretary of the Town have duly signed said Ordinance; and that 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 this,the 26th day of June, 2012.
Town Secretary, �� Mayor
Opp ,e
s A�
� °e • 'aj ss
P•
w • e
o °
o
e °
• 1
• �P
'f F ®®
�����OA Sty!®®��
A
ORDINANCE
OF THE TOWN OF PROSPER, TEXAS
AUTHORIZING THE ISSUANCE OF
TOWN OF PROSPER, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2012
TABLE OF CONTENTS
Section 1. Recitals, Amount and Purpose of the Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Designation, Date, Denominations, Numbers, Maturities of Certificates and
InterestRates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 3. Characteristics of the Certificates 2
Section 4. Form of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5. Interest and Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 6. Surplus Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7. Defeasance of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 8. Damaged, Mutilated, Lost, Stolen, or Destroyed Certificates . . . . . . . . . . . . . . . . . . 15
Section 9. Custody, Approval, and Registration of Certificates; Bond Counsel's Opinion
and Engagement; Attorney General Filing Fee; CUSIP Numbers; Other Procedures . . . 16
Section 10. Covenants Regarding Tax Exemption of Interest on the Certificates . . . . . . . . . . . 17
Section 11. Sale of Certificates; Approval of Official Statement; Application of Premium
and Accrued Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 12. Allocation of Certificate Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 13. Disposition of Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 14. Interest Earnings on Certificate Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 15. Construction Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 16. Compliance with Rule 15c2-12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 17. Method of Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 18. Continued Perfection of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 19. Inconsistent Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 20. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
i
f
Section 21. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 22. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 22. Remedies for Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 23. Remedies Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 24, Designation as Qualified Tax-exempt Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 25, Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 26. Appropriation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Exhibit A Continuing Disclosure Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
ii
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF TOWN OF PROSPER,
TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2012; LEVYING AN ANNUAL AD VALOREM TAX FOR THE PAYMENT OF
SAID CERTIFICATES; APPROVING AN OFFICIAL STATEMENT; AND ENACTING
OTHER PROVISIONS RELATING TO THE SUBJECT
THE STATE OF TEXAS §
COLLIN AND DENTON COUNTIES §
TOWN OF PROSPER §
WHEREAS, the Town Council of the Town of Prosper, Texas (the "Issuer") deems it
advisable to issue Certificates of Obligation in the principal amount of$5,755,000 for the purpose
of paying all or a portion of the Issuer's contractual obligations incurred in connection with (1)
extending, constructing and improving the Issuer's water system, including the construction of water
storage facilities, constructing improvements to a water intake point for water purchased from the
North Texas Municipal Water District and constructing improvements to pump stations, (2)
developing and constructing drainage improvements in the Issuer, including improvements to water
retention ponds and culvert and drainage channel improvements, and (3) paying legal, fiscal,
engineering and architectural fees in connection with these projects; and
WHEREAS, the Certificates of Obligation hereinafter authorized and designated are to be
issued and delivered for cash pursuant to Subchapter C of Chapter 271,Local Government Code and
Chapter 1502, Government Code, as amended; and
WHEREAS, the Town Council has heretofore passed a resolution authorizing and directing
the Town Secretary to give notice of intention to issue Certificates of Obligation; and
WHEREAS, said notice has been duly published in a newspaper of general circulation in the
Issuer, said newspaper being a "newspaper" as defined in §2051.044, Texas Government Code; and
WHEREAS,the Town received no petition from the qualified electors ofthe Issuer protesting
the issuance of such Certificates of Obligation; and
WHEREAS, it is considered to be to the best interest of the Issuer that said interest bearing
Certificates of Obligation be issued.
BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF PROSPER:
Section 1. RECITALS, AMOUNT AND PURPOSE OF THE CERTIFICATES. The
recitals set forth in the preamble hereof are incorporated herein and shall have the same force and
effect as if set forth in this Section. The certificates of the Issuer are hereby authorized to be issued
and delivered in the aggregate principal amount of$5,755,000 for the purpose of paying all or a
portion of the Issuer's contractual obligations incurred in connection with(1)extending,constructing
and improving the Issuer's water system, including the construction of water storage facilities,
constructing improvements to a water intake point for water purchased from the North Texas
i
Municipal Water District and constructing improvements to pump stations, (2) developing and
constructing drainage improvements in the Issuer, including improvements to water retention ponds
and culvert and drainage channel improvements, and (3) paying legal, fiscal, engineering and
architectural fees in connection with these projects (collectively, the "Project").
Section 2. DESIGNATION,DATE,DENOMINATIONS,NUMBERS,MATURITIES OF
CERTIFICATES AND INTEREST RATES. Each certificate issued pursuant to this Ordinance shall
be designated: "TOWN OF PROSPER, TEXAS, COMBINATION TAX AND REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2012", and initially there shall be issued, sold, and
delivered hereunder one fully registered certificate, without interest coupons, dated June 15, 2012,
in the principal amount stated above and in the denominations hereinafter stated, numbered T-1,with
certificates issued in replacement thereofbeing in the denominations and principal amounts hereinafter
stated and numbered consecutively from R-1 upward, payable to the respective Registered Owners
thereof(with the initial certificate being made payable to the initial purchaser as described in Section
11 hereof), or to the registered assignee or assignees of said certificates or any portion or portions
thereof(in each case, the "Registered Owner"). The Certificates shall mature on February 15 in the
years and in the principal amounts and interest rates set forth below, interest on each Certificate
accruing on the basis of a 360-day year of twelve 30-day months from June 15, 2012 or the most
recent interest payment date to which interest has been paid or provided for at the per annum rates
of interest, payable semiannually on February 15 and August 15 of each year until the principal
amount shall have been paid or provision for such payment shall have been made, commencing
February 15, 2013, as follows:
Principal Interest Principal Interest
Year Amount Rate Year Amount Rate
2013 $ 70,000 0.40% 2023 $265,000 3.00%
2014 75,000 2.00 2024 275,000 3.00
2015 75,000 2.00 2025 285,000 3.25
2016 320,000 2.00 2026 295,000 3.25
2017 330,000 2.00 2027 305,000 3.25
2018 335,000 3.00 2028 315,000 3.25
2019 345,000 3.00 2029 325,000 3.25
2020 360,000 3.00 2030 335,000 3.25
2021 365,000 3.00 2031 345,000 3.25
2022 380,000 3.00 2032 355,000 3.25
Section 3. CHARACTERISTICS OF THE CERTIFICATES. (a) Registration, Transfer,
Conversion and Exchange;Authentication. The Issuer shall keep or cause to be kept at the corporate
trust office of U.S. Bank National Association, Dallas, Texas, the "Paying Agent/Registrar"), books
or records for the registration of the transfer, conversion and exchange of the Certificates (the
"Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and
transfer agent to keep such books or records and make such registrations of transfers, conversions
and exchanges under such reasonable regulations as the Issuer and Paying Agent/Registrar may
2
prescribe; and the Paying Agent/Registrar shall make such registrations, transfers, conversions and
exchanges as herein provided. The Paying Agent/Registrar shall obtain and record in the Registration
Books the address of the registered owner of each Certificate to which payments with respect to the
Certificates shall be mailed, as herein provided; but it shall be the duty of each registered owner to
notify the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and
such interest payments shall not be mailed unless such notice has been given. The Issuer shall have
the right to inspect the Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books
confidential and, unless otherwise required by law, shall not permit their inspection by any other
entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for
making such registration, transfer, conversion, exchange and delivery of a substitute Certificate or
Certificates. Registration of assignments, transfers, conversions and exchanges of Certificates shall
be made in the manner provided and with the effect stated in the FORM OF CERTIFICATE set forth
in this Ordinance. Each substitute Certificate shall bear a letter and/or number to distinguish it from
each other Certificate.
Except as provided in Section 3(c) of this Ordinance, an authorized representative of the
Paying Agent/Registrar shall,before the delivery of any such Certificate, date and manually sign said
Certificate,and no such Certificate shall be deemed to be issued or outstanding unless such Certificate
is so executed. The Paying Agent/Registrar promptly shall cancel all paid Certificates and Certificates
surrendered for conversion and exchange. No additional ordinances, orders, or resolutions need be
passed or adopted by the governing body of the Issuer or any other body or person so as to
accomplish the foregoing conversion and exchange of any Certificate or portion thereof, and the
Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute
Certificates in the manner prescribed herein, and said Certificates shall be printed or typed on paper
of customary weight and strength. Pursuant to Chapter 1201, Government Code, and particularly
Subchapter D thereof, the duty of conversion and exchange of Certificates as aforesaid is hereby
imposed upon the Paying Agent/Registrar, and,upon the execution of said Certificate,the converted
and exchanged Certificate shall be valid, incontestable, and enforceable in the same manner and with
the same effect as the Certificates that initially were issued and delivered pursuant to this Ordinance,
approved by the Attorney General and registered by the Comptroller of Public Accounts.
(b) Pavment of Certificates and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Certificates,
all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all
payments made by the Issuer and the Paying Agent/Registrar with respect to the Certificates, and of
all conversions and exchanges of Certificates, and all replacements of Certificates, as provided in this
Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date, and for
thirty(3 0)days thereafter, a new record date for such interest payment(a"Special Record Date")will
be established by the Paying Agent/Registrar,if and when funds for the payment of such interest have
been received from the Issuer. Notice of the past due interest shall be sent at least 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.
3 j
i
(c) In General. The Certificates(i)shall be issued in fully registered form,without interest
coupons, with the principal of and interest on such Certificates to be payable only to the registered
owners thereof, (ii) may be redeemed prior to their scheduled maturities (notice of which shall be
given to the Paying Agent/Registrar by the Issuer at least 3 5 days prior to any such redemption date),
(iii) may be converted and exchanged for other Certificates, (iv) may be transferred and assigned,
(v) shall have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the
principal of and interest on the Certificates shall be payable, and (viii) shall be administered and the
Paying Agent/Registrar and the Issuer shall have certain duties and responsibilities with respect to the
Certificates, all as provided,and in the manner and to the effect as required or indicated, in the FORM
OF CERTIFICATE set forth in this Ordinance. The Certificate initially issued and delivered pursuant
to this Ordinance is not required to be, and shall not be, authenticated by the Paying Agent/Registrar,
but on each substitute Certificate issued in conversion of and exchange for any Certificate or
Certificates issued under this Ordinance the Paying Agent/Registrar shall execute the PAYING
AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the FORM
OF CERTIFICATE.
(d) Book-Entry Onlv Svstem. The Certificates issued in exchange for the Certificate
initially issued to the initial purchaser specified herein shall be initially issued in the form of a separate
single fully registered Certificate for each of the maturities thereof. Upon initial issuance, the
ownership of each such Certificate shall be registered in the name of Cede& Co., as nominee of The
Depository Trust Company, New York, New York ("DTC"), and except as provided in subsection
(0 hereof, all of the outstanding Certificates shall be registered in the name of Cede & Co., as
nominee of DTC.
With respect to Certificates registered in the name of Cede & Co., as nominee of DTC, the
Issuer and the Paying Agent/Registrar shall have no responsibility or obligation to any securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organizations
on whose behalf DTC was created("DTC Participant") to hold securities to facilitate the clearance
and settlement of securities transactions among DTC Participants or to any person on behalf of whom
such a DTC Participant holds an interest in the Certificates. Without limiting the immediately
preceding sentence, the Issuer and the Paying Agent/Registrar shall have no responsibility or
obligation with respect to(i)the accuracy of the records of DTC,Cede&Co. or any DTC Participant
with respect to any ownership interest in the Certificates, (ii)the delivery to any DTC Participant or
any other person,other than a Registered Owner of Certificates, as shown on the Registration Books,
of any notice with respect to the Certificates, or(iii)the payment to any DTC Participant or any other
person, other than a Registered Owner of Certificates, as shown in the Registration Books of any
amount with respect to principal of or interest on the Certificates. Notwithstanding any other
provision of this Ordinance to the contrary,the Issuer and the Paying Agent/Registrar shall be entitled
to treat and consider the person in whose name each Certificate is registered in the Registration
Books as the absolute owner of such Certificate for the purpose of payment of principal and interest
with respect to such Certificate, for the purpose of registering transfers with respect to such
Certificate, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal
of and interest on the Certificates only to or upon the order of the Registered Owners, as shown in
the Registration Books as provided in this Ordinance, or their respective attorneys duly authorized
4
I
i
in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's
obligations with respect to payment of principal of and interest on the Certificates to the extent of the
sum or sums so paid. No person other than a Registered Owner, as shown in the Registration Books,
shall receive a Certificate evidencing the obligation of the Issuer to make payments of principal and
interest pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written
notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co.,
and subject to the provisions in this Ordinance with respect to interest checks being mailed to the
Registered Owner at the close of business on the Record date, the words "Cede & Co." in this
Ordinance shall refer to such new nominee of DTC.
(e) Successor Securities Devositorv;Transfers Outside Book-Entry Onlv Svstem. In the
event that the Issuer determines that DTC is incapable of discharging its responsibilities described
herein and in the representations letter of the Issuer to DTC or that it is in the best interest of the
beneficial owners of the Certificates that they be able to obtain certificated Certificates, the Issuer
shall (i) appoint a successor securities depository, qualified to act as such under Section 17A of the
Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the
appointment of such successor securities depository and transfer one or more separate Certificates
to such successor securities depository or (ii) notify DTC and DTC Participants of the availability
through DTC of Certificates and transfer one or more separate certificated Certificates to DTC
Participants having Certificates credited to their DTC accounts. In such event, the Certificates shall
no longer be restricted to being registered in the Registration Books in the name of Cede& Co., as
nominee of DTC, but may be registered in the name of the successor securities depository, or its
nominee, or in whatever name or names Registered Owners transferring or exchanging Certificates
shall designate, in accordance with the provisions of this Ordinance.
(f) Pavments to Cede & Co.. Notwithstanding any other provision of this Ordinance to
the contrary, so long as any Certificate is registered in the name of Cede&Co., as nominee of DTC,
all payments with respect to principal of and interest on such Certificate and all notices with respect
to such Certificate shall be made and given, respectively, in the manner provided in the
representations letter of the Issuer to DTC.
(g) Cancellation of Initial Certificate. On the closing date, one initial Certificate
representing the entire principal amount of the Certificates, payable in stated installments to the
purchaser designated in Section 11 or its designee, executed by manual or facsimile signature of the
Mayor(or in the absence thereof,by the Mayor Pro-tem)and Town Secretary of the Issuer,approved
by the Attorney General of Texas, and registered and manually signed by the Comptroller of Public
Accounts of the State of Texas, will be delivered to such purchaser or its designee. Upon payment
for the initial Certificate, the Paying Agent/Registrar shall cancel the initial Certificate and deliver to
the Depository Trust Company on behalf of such purchaser one registered definitive Certificate for
each year of maturity of the Certificates, in the aggregate principal amount of all of the Certificates
for such maturity.
(h) Conditional Notice of Redemption. With respect to any optional redemption of the
Certificates,unless certain prerequisites to such redemption required by this Ordinance have been met
5
and moneys sufficient to pay the principal of and premium, if any, and interest on the Certificates to
be redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice
of redemption, such notice shall state that said redemption may, at the option of the Issuer, 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 Issuer shall not redeem such Certificates and the Paying Agent/Registrar shall give notice, in the
manner in which the notice of redemption was given, to the effect that the Certificates have not been
redeemed.
Section 4. FORM OF CERTIFICATES. The form of the Certificates, including the form
of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of
Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached
to the Certificates initially issued and delivered pursuant to this Ordinance, shall be, respectively,
substantially as follows, with such appropriate variations, omissions or insertions as are permitted or
required by this Ordinance.
(a) [Form of Certificate]
NO. R- UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
TOWN OF PROSPER, TEXAS $
COMBINATION TAX AND REVENUE CERTIFICATE OF
OBLIGATION, SERIES 2012
Interest Rate Dated Date Maturity Date CUSIP No.
June 15, 2012 February 15,
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
ON THE MATURITY DATE specified above, the Town of Prosper, in Collin and Denton
Counties, Texas (the "Issuer"), being a political subdivision and municipal corporation of the State
of Texas, hereby promises to pay to the Registered Owner specified above, or registered assigns
(hereinafter called the "Registered Owner"), on the Maturity Date specified above, the Principal
Amount specified above. The Issuer promises to pay interest on the unpaid principal amount hereof
(calculated on the basis of a 360-day year of twelve 30-day months) from June 15, 2012 at the
Interest Rate per annum specified above. Interest is payable on February 15, 2013 and semiannually
on each August 15 and February 15 thereafter to the Maturity Date specified above, or the date of
redemption prior to maturity; except, if this Certificate is required to be authenticated and the date
6
of its authentication is later than the first Record Date (hereinafter defined), such Principal Amount
shall bear interest from the interest payment date next preceding the date of authentication, unless
such date of authentication is after any Record Date but on or before the next following interest
payment date, in which case such principal amount shall bear interest from such next following
interest payment date; provided, however, that if on the date of authentication hereof the interest on
the Certificate or Certificates, if any, for which this Certificate is being exchanged is due but has not
been paid, then this Certificate shall bear interest from the date to which such interest has been paid
in full.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money of
the United States of America without exchange or collection charges. The principal of this
Certificate shall be paid to the registered owner hereof upon presentation and surrender of this
Certificate at maturity, or upon the date fixed for its redemption prior to maturity, at the corporate
trust office ofU.S.Bank National Association in Dallas,Texas,which is the"Paying Agent/Registrar"
for this Certificate. The payment of interest on this Certificate shall be made by the Paying
Agent/Registrar to the registered owner hereof on each interest payment date by check or draft, dated
as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from,
funds of the Issuer required by the ordinance authorizing the issuance of this Certificate (the
"Certificate Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as
hereinafter 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 day of the month preceding each such date (the
"Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter
described. In addition, interest may be paid by such other method, acceptable to the Paying
Agent/Registrar, requested by, and at the risk and expense of, the registered owner. In the event of
a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date
for such interest payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the
Issuer. Notice of the Special Record Date and of the scheduled payment date of the past due interest
(which shall be 15 days after the Special Record Date) shall be sent at least 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 Certificate appearing on the Registration Books at the close of business on the last
business day next preceding the date of mailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Certificate prior
to maturity as provided herein shall be paid to the registered owner upon presentation and surrender
of this Certificate for redemption and payment at the corporate trust office of the Paying
Agent/Registrar. The Issuer covenants with the registered owner of this Certificate that on or before
each principal payment date, interest payment date, and accrued interest payment date for this
Certificate it will make available to the Paying Agent/Registrar,from the"Interest and Sinking Fund"
created by the Certificate Ordinance,the amounts required to provide for the payment,in immediately
available funds, of all principal of and interest on the Certificates, when due.
7
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, a legal holiday or a day on which banking institutions in the city where the
corporate trust office of the Paying Agent/Registrar is located are authorized by law or executive
order to close, then the date for such payment shall be the next succeeding day that is not such a
Saturday, Sunday, legal holiday or day on which banking institutions are authorized to close; and
payment on such date shall have the same force and effect as if made on the original date payment
was due.
THIS CERTIFICATE is one of a series of Certificates dated June 15, 2012, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
$5,755,000 for the purpose of paying all or a portion of the Issuer's contractual obligations incurred
in connection with(1)extending, constructing and improving the Issuer's water system,including the
construction of water storage facilities, constructing improvements to a water intake point for water
purchased from the North Texas Municipal Water District and constructing improvements to pump
stations, (2) developing and constructing drainage improvements in the Issuer, including
improvements to water retention ponds and culvert and drainage channel improvements, and (3)
paying legal, fiscal, engineering and architectural fees in connection with these projects.
THE CERTIFICATES OF THIS SERIES having stated maturities on and after February 15,
2023 may be redeemed prior to their scheduled maturities, at the option of the Issuer, on February
15, 2022 or on any date thereafter, with funds derived from any available and lawful source, as a
whole, or in part, and, if in part, the particular Certificates, or portions thereof, to be redeemed shall
be selected and designated by the Issuer (provided that a portion of a Certificate may be redeemed
only in an integral multiple of$5,000), at a redemption price equal to the principal amount to be
redeemed plus accrued interest to the date fixed for redemption.
AT LEAST 30 DAYS prior to the date fixed for any redemption of Certificates or portions
thereof prior to maturity a written notice of such redemption shall be sent by the Paying
Agent/Registrar by United States mail, first-class postage prepaid, at least 30 days prior to the date
fixed for any such redemption, to the registered owner of each Certificate to be redeemed at its
address as it appeared on the 45th day prior to such redemption date; provided, however, that the
failure of the registered owner to receive such notice, or any defect therein or in the sending or
mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of
any Certificate. By the date fixed for any such redemption due provision shall be made with the
Paying Agent/Registrar for the payment of the required redemption price for the Certificates or
portions thereof that are to be so redeemed. If such written notice of redemption is sent and if due
provision for such payment is made, all as provided above, the Certificates or portions thereof that
are to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled
maturities, and they shall not bear interest after the date fixed for redemption, and they shall not be
regarded as being outstanding except for the right of the registered owner to receive the redemption
price from the Paying Agent/Registrar out of the funds provided for such payment. If a portion of
any Certificate shall be redeemed, a substitute Certificate or Certificates having the same maturity
date, bearing interest at the same rate, in any denomination or denominations in any integral multiple
of$5,000, at the written request of the registered owner, and in aggregate principal amount equal to
8
the unredeemed portion thereof,will be issued to the registered owner upon the surrender thereof for
cancellation, at the expense of the Issuer, all as provided in the Certificate Ordinance.
ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered certificates,
without interest coupons, in the denomination of any integral multiple of$5,000. As provided in the
Certificate Ordinance, this Certificate may, at the request of the registered owner or the assignee or
assignees hereof,be assigned,transferred,converted into and exchanged for a like aggregate principal
amount of fully registered certificates,without interest coupons,payable to the appropriate registered
owner, assignee or assignees, as the case may be, having the same denomination or denominations
in any integral multiple of $5,000 as requested in writing by the appropriate registered owner,
assignee or assignees, as the case may be, upon surrender of this Certificate to the Paying
Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the
Certificate Ordinance. Among other requirements for such assignment and transfer, this Certificate
must be presented and surrendered to the Paying Agent/Registrar, together with proper instruments
of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar,
evidencing assignment of this Certificate or any portion or portions hereof in any integral multiple of
$5,000 to the assignee or assignees in whose name or names this Certificate or any such portion or
portions hereof is or are to be registered. The form of Assignment printed or endorsed on this
Certificate may be executed by the registered owner to evidence the assignment hereof, but such
method is not exclusive, and other instruments of assignment satisfactory to the Paying
Agent/Registrar may be used to evidence the assignment of this Certificate or any portion or portions
hereof from time to time by the registered owner. The Paying Agent/Registrar's reasonable standard
or customary fees and charges for assigning, transferring, converting and exchanging any Certificate
or portion thereof will be paid by the Issuer. In any circumstance, any taxes or governmental charges
required to be paid with respect thereto shall be paid by the one requesting such assignment,transfer,
conversion or exchange, as a condition precedent to the exercise of such privilege. The Paying
Agent/Registrar shall not be required to make any such transfer, conversion, or exchange (i) during
the period commencing with the close of business on any Record Date and ending with the opening
of business on the next following principal or interest payment date, or (ii) with respect to any
Certificate or any portion thereof called for redemption prior to maturity, within 45 days prior to its
redemption date.
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the Issuer,
resigns, or otherwise ceases to act as such,the Issuer has covenanted in the Certificate Ordinance that
it promptly will appoint a competent and legally qualified substitute therefor,and cause written notice
thereof to be mailed to the registered owners of the Certificates.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and
validly authorized, issued and delivered; that all acts, conditions and things required or proper to be
performed, exist and be done precedent to or in the authorization, issuance and delivery of this
Certificate have been performed, existed and been done in accordance with law;that this Certificate
is a general obligation of said Issuer, issued on the full faith and credit thereof, and that annual ad
valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate,
as such interest comes due and such principal matures, have been levied and ordered to be levied
against all taxable property in said Issuer, and have been pledged for such payment, within the limit
9
prescribed by law, and that this Certificate is additionally secured by and payable from a pledge of the
revenues of the Issuer's combined Waterworks and Sewer Systems remaining after payment of all
operation and maintenance expenses thereof, and all debt service, reserve and other requirements in
connection with all of the Issuer's revenue obligations(now or hereafter outstanding)that are payable
from all or part of said revenues, all as provided in the Certificate Ordinance.
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance,agrees to be bound by such
terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that the
terms and provisions of this Certificate and the Certificate Ordinance constitute a contract between
each registered owner hereof and the Issuer.
IN WITNESS WHEREOF,the Issuer has caused this Certificate to be signed with the manual
or facsimile signature of the Mayor (or in the absence thereof, by the Mayor Pro-tem) of the Issuer
and countersigned with the manual or facsimile signature of the Town Secretary of said Issuer, and
has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this
Certificate.
(signature) (signature)
Town Secretary Mayor
(SEAL)
(b) [Form of Paying Agent/Registrar's Authentication Certificate]
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Certificate is not accompanied by an
executed Registration Certificate of the Comptroller
of Public Accounts of the State of Texas)
It is hereby certified that this Certificate has been issued under the provisions of the Certificate
Ordinance described in the text of this Certificate; and that this Certificate has been issued in
conversion or replacement of,or in exchange for, a certificate, certificates, or a portion of a certificate
or certificates of a series that originally was approved by the Attorney General of the State of Texas
and registered by the Comptroller of Public Accounts of the State of Texas.
Dated:
U.S. Bank National Association
Dallas, Texas
Paying Agent/Registrar
By:
Authorized Representative
10
(c) [Form of Assignment]
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer Identification Number of Transferee
(Please print or typewrite name and address, including zip code, of Transferee.)
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
,attorney,to register the transfer ofthe within
Certificate on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed NOTICE: The signature above must
by an eligible guarantor institution correspond with the name of the registered
participating in a securities transfer owner as it appears upon the front of this
association recognized signature guarantee Certificate in every particular, without
program. alteration or enlargement or any change
whatsoever.
(d) [Form of Registration Certificate of the Comptroller of Public Accounts]
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate has been examined, certified as to validity and approved
by the Attorney General of the State of Texas, and that this Certificate has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
11
i
(e) [Initial Certificate Insertions]
(i) The initial Certificate shall be in the form set forth is paragraph (a) of this Section,
except that:
A. immediately under the name of the Certificate, the headings "Interest Rate"
and "Maturity Date" shall both be completed with the words "As shown below" and
"CUSIP No. " shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"THE TOWN OF PROSPER, TEXAS (the "Issuer"), being a political subdivision and
municipal corporation of the State of Texas, hereby promises to pay to the Registered Owner
specified above, or registered assigns (hereinafter called the "Registered Owner"), on February 15
in each of the years, in the principal installments and bearing interest at the per annum rates set forth
in the following schedule:
Principal Interest Principal Interest
Years Installments Rates Years Installments Rates
2013 $ 70,000 0.40% 2023 $265,000 3.00%
2014 75,000 2.00 2024 275,000 3.00
2015 75,000 2.00 2025 285,000 3.25
2016 320,000 2.00 2026 295,000 3.25
2017 330,000 2.00 2027 305,000 3.25
2018 335,000 3.00 2028 315,000 3.25
2019 345,000 3.00 2029 325,000 3.25
2020 360,000 3.00 2030 335,000 3.25
2021 365,000 3.00 2031 345,000 3.25
2022 380,000 3.00 2032 355,000 3.25
The Issuer promises to pay interest on the unpaid principal amount hereof(calculated on the basis
of a 360-day year of twelve 30-day months) from June 15, 2012 at the respective Interest Rate per
annum specified above. Interest is payable on February 15, 2013 and semiannually on each August
15 and February 15 and thereafter to the date of payment of the principal installment specified above,
or the date of redemption prior to maturity, except, that if this Certificate is required to be
authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding the
date of authentication, unless such date of authentication is after any Record Date but on or before
the next following interest payment date, in which case such principal amount shall bear interest from
such next following interest payment date; provided, however, that if on the date of authentication
hereof the interest on the Certificate or Certificates, if any, for which this Certificate is being
exchanged is due but has not been paid,then this Certificate shall bear interest from the date to which
such interest has been paid in full."
12
C. The Initial Certificate shall be numbered "T-1."
Section 5. INTEREST AND SINKING FUND. A special "Interest and Sinking Fund" is
hereby created and shall be established and maintained by the Issuer at an official depository bank of
the Issuer. Said Interest and Sinking Fund shall be kept separate and apart from all other funds and
accounts of the Issuer, and shall be used only for paying the interest on and principal of the
Certificates. All amounts received from the sale of the Certificates as accrued interest and ad valorem
taxes levied and collected for and on account of the Certificates shall be deposited, as collected, to
the credit of said Interest and Sinking Fund. During each year while any of the Certificates are
outstanding and unpaid, the governing body of the Issuer shall compute and ascertain a rate and
amount of ad valorem tax that will be sufficient to raise and produce the money required to pay the
interest on the Certificates as such interest comes due, and to provide and maintain a sinking fund
adequate to pay the principal of the Certificates as such principal matures(but never less than 2% of
the original amount of the Certificates as a sinking fund each year); and said tax shall be based on the
latest approved tax rolls of the Issuer, with full allowances being made for tax delinquencies and the
cost of tax collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered
to be levied, against all taxable property in the Issuer, for each year while any of the Certificates are
outstanding and unpaid, and said tax shall be assessed and collected each such year and deposited to
the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for
the payment of the interest on and principal of the Certificates, as such interest comes due and such
principal matures, are hereby pledged for such payment, within the limit prescribed by law.
Section 6. SURPLUS REVENUES. The Certificates are additionally secured by and payable
from a pledge of the revenues of the Issuer's combined Waterworks and Sewer Systems remaining
after payment of all operation and maintenance expenses thereof, and all debt service, reserve and
other requirements in connection with all of the Issuer's revenue obligations (now or hereafter
outstanding) that are payable from all or part of the Net Revenues of the Issuer's Waterworks and
Sewer Systems, constituting "Surplus Revenues." The Issuer shall deposit such Surplus Revenues
to the credit of the Interest and Sinking Fund created pursuant to Section 5, to the extent necessary
to pay the principal and interest on the Certificates. Notwithstanding the requirements of Section 5,
if Surplus Revenues are actually on deposit in the Interest and Sinking Fund in advance of the time
when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes that
otherwise would have been required to be levied pursuant to Section 5 may be reduced to the extent
and by the amount of the Surplus Revenues then on deposit in the Interest and Sinking Fund. The
Issuer reserves the right, without condition or limitation, to issue other obligations secured in whole
or in part by a parity lien on and pledge of the Surplus Revenues, for any purpose permitted by law.
Section 7. DEFEASANCE OF CERTIFICATES. (a) Any Certificate and the interest
thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased Certificate")
within the meaning of this Ordinance, except to the extent provided in subsection(d) of this Section
7, when payment of the principal of such Certificate, plus interest thereon to the due date (whether
such due date be by reason of maturity or otherwise) either(i) shall have been made or caused to be
made in accordance with the terms thereof, or(ii) shall have been provided for on or before such due
date by irrevocably depositing with or making available to the Paying Agent/Registrar in accordance
13
with an escrow agreement or other instrument (the "Future Escrow Agreement") for such payment
(1)lawful money of the United States of America sufficient to make such payment or(2)Defeasance
Securities that mature as to principal and interest in such amounts and at such times as will insure the
availability,without reinvestment, of sufficient money to provide for such payment, and when proper
arrangements have been made by the Issuer with the Paying Agent/Registrar for the payment of its
services until all Defeased Certificates shall have become due and payable. At such time as a
Certificate shall be deemed to be a Defeased Certificate hereunder, as aforesaid, such Certificate and
the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad
valorem taxes or revenues herein levied and pledged as provided in this Ordinance, and such principal
and interest shall be payable solely from such money or Defeasance Securities. Notwithstanding any
other provision of this Ordinance to the contrary, it is hereby provided that any determination not to
redeem Defeased Certificates that is made in conjunction with the payment arrangements specified
in subsection 7(a)(i) or(ii) shall not be irrevocable, provided that: (1) in the proceedings providing
for such payment arrangements, the Issuer expressly reserves the right to call the Defeased
Certificates for redemption; (2) gives notice of the reservation of that right to the owners of the
Defeased Certificates immediately following the making of the payment arrangements,and(3)directs
that notice of the reservation be included in any redemption notices that it authorizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction
of the Issuer be invested in Defeasance Securities, maturing in the amounts and times as hereinbefore
set forth, and all income from such Defeasance Securities received by the Paying Agent/Registrar that
is not required for the payment of the Certificates and interest thereon, with respect to which such
money has been so deposited, shall be turned over to the Issuer, or deposited as directed in writing
by the Issuer. Any Future Escrow Agreement pursuant to which the money and/or Defeasance
Securities are held for the payment of Defeased Certificates may contain provisions permitting the
investment or reinvestment of such moneys in Defeasance Securities or the substitution of other
Defeasance Securities upon the satisfaction of the requirements specified in subsection 7(a)(i)or(ii).
All income from such Defeasance Securities received by the Paying Agent/Registrar that is not
required for the payment of the Defeased Certificates, with respect to which such money has been
so deposited, shall be remitted to the Issuer or deposited as directed in writing by the Issuer.
(c) The term "Defeasance Securities" means any securities and obligations now or
hereafter authorized by Texas law that are eligible to refund, defease or otherwise discharge
obligations such as the Certificates.
(d) Until all Defeased Certificates shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Certificates
the same as if they had not been defeased, and the Issuer shall make proper arrangements to provide
and pay for such services as required by this Ordinance.
(e) In the event that the Issuer elects to defease less than all of the principal amount of
Certificates of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such
amount of Certificates by such random method as it deems fair and appropriate.
14
Section 8. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES.
(a) Replacement Certificates. In the event any outstanding Certificate is damaged,mutilated,
lost, stolen or destroyed, the Paying Agent/Registrar shall cause to be printed, executed and
delivered, a new certificate of the same principal amount, maturity and interest rate, as the damaged,
mutilated, lost, stolen or destroyed Certificate, in replacement for such Certificate in the manner
hereinafter provided.
(b) Application for Replacement Certificates. Application for replacement of damaged,
mutilated, lost, stolen or destroyed Certificates shall be made by the registered owner thereof to the
Paying Agent/Registrar. In every case of loss, theft or destruction of a Certificate, the registered
owner applying for a replacement certificate shall furnish to the Issuer and to the Paying
Agent/Registrar such security or indemnity as may be required by them to save each of them harmless
from any loss or damage with respect thereto. Also, in every case of loss, theft or destruction of a
Certificate, the registered owner shall furnish to the Issuer and to the Paying Agent/Registrar
evidence to their satisfaction of the loss, theft or destruction of such Certificate, as the case may be.
In every case of damage or mutilation of a Certificate, the registered owner shall surrender to the
Paying Agent/Registrar for cancellation the Certificate so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in
the event any such Certificate shall have matured, and no default has occurred that is then continuing
in the payment of the principal of, redemption premium, if any, or interest on the Certificate, the
Issuer may authorize the payment of the same (without surrender thereof except in the case of a
damaged or mutilated Certificate) instead of issuing a replacement Certificate, provided security or
indemnity s furnished as above provided in this Section.
Y p
(d) Charze for Issuinz Replacement Certificates. Prior to the issuance of any replacement
certificate, the Paying Agent/Registrar shall charge the registered owner of such Certificate with all
legal, printing, and other expenses in connection therewith. Every replacement certificate issued
pursuant to the provisions of this Section by virtue of the fact that any Certificate is lost, stolen or
destroyed shall constitute a contractual obligation of the Issuer whether or not the lost, stolen or
destroyed Certificate shall be found at any time, or be enforceable by anyone, and shall be entitled to
all the benefits of this Ordinance equally and proportionately with any and all other Certificates duly
issued under this Ordinance.
(e) Authoritv for Issuing Replacement Certificates. In accordance with Subchapter D of
Chapter 1201, Government Code, this Section 8 of this Ordinance shall constitute authority for the
issuance of any such replacement certificate without necessity of further action by the governing body
of the Issuer or any other body or person, and the duty of the replacement of such certificates is
hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar
shall authenticate and deliver such Certificates in the form and manner and with the effect, as
provided in Section 3(a) of this Ordinance for Certificates issued in conversion and exchange for
other Certificates.
15
Section 9. CUSTODY,APPROVAL,AND REGISTRATION OF CERTIFICATES;BOND
COUNSEL'S OPINION AND ENGAGEMENT; ATTORNEY GENERAL FILING FEE; CUSIP
NUMBERS; OTHER PROCEDURES. (a) The Mayor of the Issuer is hereby authorized to have
control of the Certificates initially issued and delivered hereunder and all necessary records and
proceedings pertaining to the Certificates pending their delivery and their investigation, examination,
and approval by the Attorney General of the State of Texas, and their registration by the Comptroller
of Public Accounts of the State of Texas. Upon registration of the Certificates said Comptroller of
Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign
the Comptroller's Registration Certificate attached to such Certificates, and the seal of said
Comptroller shall be impressed, or placed in facsimile, on such Certificate. The approving legal
opinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option of the
Issuer,be printed on the Certificates issued and delivered under this Ordinance,but neither shall have
any legal effect, and shall be solely for the convenience and information of the registered owners of
the Certificates.
b The Mayor, Town Manager,Finance Director and Town Secretary and all other officers,
( ) Y g
employees and agents of the Issuer and each of them shall be and they are hereby expressly
authorized, empowered and directed from time to time and at any time to do and perform all such
acts and things and to execute, acknowledge and deliver in the name and on behalf of the Issuer a
Paying Agent/Registrar Agreement with the Paying Agent/Registrar and all other instruments,
whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and
provisions of this Ordinance, the Certificates, the sale of the Certificates and the Official Statement
relating to the Certificates. 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.
(c) The obligation of the initial purchaser to accept delivery of the Certificates is subject
to the initial purchaser being furnished with the final, approving opinion of McCall, Parkhurst &
Horton L.L.P., bond counsel to the Issuer, which opinion shall be dated as of and delivered on the
date of initial delivery of the Certificates to the initial purchaser. The engagement of such firm as
bond counsel to the Issuer in connection with issuance, sale and delivery of the Certificates is hereby
approved and confirmed. The execution and delivery of an engagement letter between the Issuer and
such firm, with respect to such services as bond counsel, is hereby authorized in such form as may
be approved by the Mayor of the Issuer and the Mayor is hereby authorized to execute such
engagement letter.
(d) In accordance with the provisions of Section 1202.004, Tex. Gov't Code Ann., in
connection with the submission of the Certificates by the Attorney General of Texas for review and
approval, a statutory fee (an amount equal to 0.1% principal amount of the Certificates, 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 Certificates. The Issuer hereby authorizes and
directs that a check in the amount of the Attorney General filing fee for the Certificates,made payable
to the "Texas Attorney General," be promptly furnished to the Issuer's Bond Counsel, for payment
to the Attorney General in connection with his review of the Certificates.
16
Section 10. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
CERTIFICATES. The Issuer covenants to take any action necessary to assure, or refrain from any
action that would adversely affect,the treatment of the Certificates as Obligation described in section
103 of the Code, the interest on which is not includable in the "gross income" of the holder for
purposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of
the Certificates (less amounts deposited to a reserve fund, if any) are used for any "private
business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the
proceeds or the projects financed therewith are so used, such amounts, whether or not
received by the Issuer, with respect to such private business use, do not, under the terms of
this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the
payment of more than 10 percent of the debt service on the Certificates, in contravention of
section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection(a)hereof exceeds 5 percent of the proceeds of the Certificates or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a "private business use" that is "related" and not
"disproportionate,"within the meaning of section 141(b)(3)of the Code,to the governmental
use;
(c) to take any action to assure that no amount that is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Certificates (less amounts deposited into a
reserve fund, if any)is directly or indirectly used to finance loans to persons, other than state
or local governmental units, in contravention of section 141(c) of the Code;
(d) to refrain from taking any action that would otherwise result in the Certificates
being treated as "private activity bonds" within the meaning of section 141(b) of the Code;
(e) to refrain from taking any action that would result in the Certificates being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Certificates, directly
or indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code)that produces a materially
higher yield over the term of the Certificates, other than investment property acquired with
(1) proceeds ofthe Certificates invested for a reasonable temporary period
of 3 years or less or, in the case of a refunding bond, for a period of 30 days or less
until such proceeds are needed for the purpose for which the bonds are issued,
17
(2) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148-1(b) of the Treasury Regulations, and
(3) 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
Certificates;
(g) to otherwise restrict the use of the proceeds of the Certificates or amounts
treated as proceeds of the Certificates, as may be necessary, so that the Certificates do not
otherwise contravene the requirements of section 148 of the Code(relating to arbitrage)and,
to the extent applicable, section 149(d) of the Code (relating to advance refundings); and
(h) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Certificates) an amount that is at least equal
to 90 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 Certificates 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.
In order to facilitate compliance with the above covenant (h), a "Rebate Fund" is hereby
established by the Issuer for the sole benefit of the United States of America, and such Fund shall not
be subject to the claim of any other person, including without limitation the certificateholders. The
Rebate Fund is established for the additional purpose of compliance with section 148 of the Code.
For purposes of the foregoing (a) and (b), the Issuer understands that the term "proceeds"
includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding
bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date
of issuance of the Certificates. It is the understanding of the Issuer that the covenants contained
herein are intended to assure compliance with the Code and any regulations or rulings promulgated
by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are
hereafter promulgated that modify or expand provisions of the Code, as applicable to the Certificates,
the Issuer will not be required to comply with any covenant contained herein to the extent that such
failure to comply, in the opinion of nationally recognized bond counsel, will not adversely affect the
exemption from federal income taxation of interest on the Certificates under section 103 of the Code.
In the event that regulations or rulings are hereafter promulgated that impose additional requirements
applicable to the Certificates, the Issuer agrees to comply with the additional requirements to the
extent necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption
from federal income taxation of interest on the Certificates under section 103 of the Code. In
furtherance of such intention, the Issuer hereby authorizes and directs the Mayor to execute any
documents, certificates or reports required by the Code and to make such elections, on behalf of the
Issuer, that may be permitted by the Code as are consistent with the purpose for the issuance of the
Certificates.
Section 11. SALE OF CERTIFICATES; APPROVAL OF OFFICIAL STATEMENT,
APPLICATION OF PREMIUM AND ACCRUED INTEREST. (a) The Certificates are hereby
18
initially sold and shall be delivered to BOSC, Inc. and RBC Capital Markets, LLC (the
"Underwriters") for cash at a price set forth below, pursuant to the terms and provisions of a
Purchase Contract that the Mayor of the Issuer is hereby authorized to execute and deliver. The
Certificates shall initially be registered in the name of"BOSC, Inc." The Certificates are sold to the
Underwriters at a price of$6,045,098.66 (representing the par amount of the Certificates, plus an
aggregate original issue premium of$334,605.40, less Underwriter's discount on the Certificates of
$44,506.74), plus accrued interest on the Certificates in the amount of$19,273.42. The accrued
interest received from the sale of the Certificates shall be deposited into the Interest and Sinking Fund
and the net original issue premium shall be applied to pay a portion of the Underwriter's discount.
It is hereby officially found, determined, and declared that the terms of this sale are the most
advantageous reasonably obtainable.
(b) The accrued interest received from the sale of the Certificates in the amount of
$19,273.42 and excess proceeds from the sale of the Certificates in the amount of$98.66 shall be
deposited to the Interest and Sinking Fund. Proceeds of the sale of the Certificates (i)in the amount
of $5,980,000.00 shall be deposited to the construction fund of the Issuer to be used for the
construction of the project financed with the Certificates (the "Project") and (ii) in the amount of
$65,000.00 shall be applied to pay the costs of issuance of the Certificates.
(c) The Issuer hereby approves the form and content of the Official Statement relating to the
Certificates and any addenda, supplement or amendment thereto, and approves the distribution of
such Official Statement in the reoffering of the Certificates by the Underwriter in final form,with such
changes therein or additions thereto as the officer executing the same may deem advisable, such
determination to be conclusively evidenced by his execution thereof. The distribution and use of the
Preliminary Official Statement dated June 20, 2012 prior to the date hereof is hereby ratified and
confirmed.
Section 12. ALLOCATION OF CERTIFICATE PROCEEDS. The Issuer covenants to
account for the expenditure of sale proceeds and investment earnings to be used for the construction
and acquisition of the Project on its books and records by allocating proceeds to expenditures within
18 months of the later of the date that (1) the expenditure is made, or (2) the Project is completed.
The foregoing notwithstanding, the Issuer shall not expend proceeds of the sale of the Certificates
or investment earnings thereon more than 60 days after the earlier of(1) the fifth anniversary of the
delivery of the Certificates, or (2) the date the Certificates are retired, unless the Issuer obtains an
opinion of nationally-recognized bond counsel that such expenditure will not adversely affect the
status, for federal income tax purposes, of the Certificates or the interest thereon. For purposes
hereof,the Issuer shall not be obligated to comply with this covenant if it obtains an opinion that such
failure to comply will not adversely affect the excludability for federal income tax purposes from
gross income of the interest.
Section 13. DISPOSITION OF PROJECT. The Issuer covenants that the Project will not
be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or other
compensation, unless the Issuer obtains an opinion of nationally-recognized bond counsel that such
sale or other disposition will not adversely affect the tax-exempt status of the Certificates. For
19
purposes of the foregoing,the portion of the property comprising personal property and disposed in
the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other
compensation. For purposes hereof, the Issuer shall not be obligated to comply with this covenant
if it obtains a legal opinion that such failure to comply will not adversely affect the excludability for
federal income tax proposes from gross income of the interest.
Section 14. INTEREST EARNINGS ON CERTIFICATE PROCEEDS. Interest earnings
derived from the investment of proceeds from the sale of the Certificates shall be used along with
other certificate proceeds for the Project; provided that after completion of such purpose, if any of
such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and
Sinking Fund. It is further provided, however, that any interest earnings on certificate proceeds that
are required to be rebated to the United States of America pursuant to Section 10 hereof in order to
prevent the Certificates from being arbitrage bonds shall be so rebated and not considered as interest
earnings for the purposes of this Section.
Section 15. CONSTRUCTION FUND. The Issuer hereby creates and establishes and shall
maintain on the books of the Issuer a separate fund to be entitled the "Series 2012 Combination Tax
and Revenue Certificate of Obligation Construction Fund" for use by the Issuer for payment of all
lawful costs associated with the acquisition and construction of the Project as hereinbefore provided.
Upon payment of all such costs, any moneys remaining on deposit in said Fund shall be transferred
to the Interest and Sinking Fund. Amounts so deposited to the Interest and Sinking Fund shall be
used in the manner described in Section 5 of this Ordinance.
Section 16. COMPLIANCE WITH RULE 15c2-12. (a) Annual Reports. (i) The Issuer
shall provide annually to the MSRB, within six months after the end of each fiscal year ending in or
after 2012, financial information and operating data with respect to the Issuer of the general type
included in the final Official Statement authorized by Section 11 of this Ordinance, being the
information described in Exhibit A hereto. Any financial statements so to be provided shall be (1)
prepared in accordance with the accounting principles described in Exhibit A hereto, or such other
accounting principles as the Issuer may be required to employ from time to time pursuant to state law
or regulation, and (2) audited, if the Issuer commissions an audit of such statements and the audit is
completed within the period during which they must be provided. If the audit of such financial
statements is not complete within such period, then the Issuer shall provide unaudited financial
information by the required time and will provide audited financial statements for the applicable fiscal
year to the MSRB, when and if the audit report on such statements become available. Such
information shall be transmitted electronically to the MSRB, in such format and accompanied by such
identifying information as prescribed by the MSRB.
(ii) If the Issuer changes its fiscal year, it will notify the MSRB of the change(and of the date
of the new fiscal year end) prior to the next date by which the Issuer otherwise would be required to
provide financial information and operating data pursuant to this Section. The financial information
and operating data to be provided pursuant to this Section may be set forth in full in one or more
documents or may be included by specific reference to any document(including an official statement
20
or other offering document, if it is available from the MSRB)that theretofore has been provided to
the MSRB or filed with the SEC.
(b) Event Notices.
(i) The Issuer shall notify the MSRB in an electronic format as prescribed by the
MSRB, in a timely manner(but not in excess of ten business days after the occurrence of the
event)of any of the following events with respect to the Certificates, if such event is material
within the meaning of the federal securities laws:
I. Non-payment related defaults;
2. Modifications to rights of Certificateholders;
3. Certificate calls;
4. Release, substitution, or sale of property securing repayment of the
Certificates;
5. The consummation of a merger, consolidation, or acquisition
involving an obligated person or the sale of all or substantially all of
the assets of the obligated person, other than in the ordinary course of
business, the entry into 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;
6. Appointment of a successor or additional trustee or the change of
name of a trustee.
(ii) The Issuer shall notify the MSRB in an electronic format as prescribed by the
MSRB, in a timely manner(but not in excess of ten business days after the occurrence of the
event) of any of the following events with respect to the Certificates, without regard to
whether such event is considered material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Unscheduled draws on debt service reserves reflecting financial
difficulties;
4. Unscheduled draws on credit enhancements reflecting financial
difficulties;
5. Substitution of credit or liquidity providers,or their failure to perform;
6. Adverse tax opinions or 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 Certificates, or
other events affecting the tax status of the Certificates;
7. Tender offers;
8. Defeasances;
9. Rating changes;
21
10. Bankruptcy, insolvency, receivership or similar event of an obligated
person(which is considered to occur when any of the following occur:
the appointment of a receiver, fiscal agent, or similar officer for the
Issuer 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 Issuer, or if such jurisdiction has been
assumed by leaving the existing governing body and officials or
officers 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
governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the Issuer).
(iii) The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer
to provide financial information or operating data in accordance with subsection (b) of this
Section by the time required by such subsection.
(c) Limitations, Disclaimers, and Amendments. (i) The Issuer shall be obligated to observe
and perform the covenants specified in this Section for so long as, but only for so long as, the Issuer
remains an "obligated person"with respect to the Certificates within the meaning of the Rule, except
that the Issuer in any event will give the notice required by Subsection (b) hereof of any Certificate
calls and defeasance that cause the Issuer to no longer be such an "obligated person".
(ii) The provisions of this Section are for the sole benefit of the registered owners and
beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any
benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Issuer
undertakes to provide only the financial information, operating data,financial statements,and notices
which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to
provide any other information that may be relevant or material to a complete presentation of the
Issuer's financial results, condition, or prospects or hereby undertake to update any information
provided in accordance with this Section or otherwise, except as expressly provided herein. The
Issuer does not make any representation or warranty concerning such information or its usefulness
to a decision to invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER
PERSON,IN CONTRACT OR TORT,FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE IS SUER,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.
22
(iv) No default by the Issuer 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 Issuer under federal and state securities laws.
(v) The provisions of this Section may be amended by the Issuer from time to time to adapt
to changed circumstances that arise from a change in legal requirements, a change in law, or a change
in the identity, nature, status, or type of operations of the Issuer, but only if(1)the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Certificates in the
primary offering of the Certificates in compliance with the Rule,taking into account any amendments
or interpretations of the Rule since such offering as well as such changed circumstances and(2)either
(a)the registered owners of a majority in aggregate principal amount(or any greater amount required
by any other provision of this Ordinance that authorizes such an amendment) of the outstanding
Certificates consent to such amendment or (b) a person that is unaffiliated with the Issuer (such as
nationally recognized bond counsel) determined that such amendment will not materially impair the
interest of the registered owners and beneficial owners of the Certificates. If the Issuer so amends
the provisions of this Section, it shall include with any amended financial information or operating
data next provided in accordance with subsection(a)of this Section an explanation,in narrative form,
of the reason for the amendment and of the impact of any change in the type of financial information
or operating data so provided. The Issuer may also amend or repeal the provisions of this continuing
disclosure agreement if the SEC amends or repeals the applicable provision of the Rule or a court of
final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the
extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing
or selling Certificates in the primary offering of the Certificates.
(d) Definitions. As used in this Section, the following terms have the meanings ascribed to
such terms below:
"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.
Section 17. METHOD OF AMENDMENT. The Issuer hereby reserves the right to amend
this Ordinance subject to the following terms and conditions, to-wit:
(a) The Issuer may from time to time, without the consent of any holder, except as
otherwise required by paragraph(b)below, amend or supplement this Ordinance in order to (i) cure
any ambiguity, defect or omission in this Ordinance that does not materially adversely affect the
interests of the holders, (ii) grant additional rights or security for the benefit of the holders, (iii) add
events of default as shall not be inconsistent with the provisions of this Ordinance and which shall not
materially adversely affect the interests of the holders, (v) qualify this Ordinance under the Trust
23
Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time
in effect, or (iv) make such other provisions in regard to matters or questions arising under this
Ordinance as shall not be inconsistent with the provisions of this Ordinance and which shall not in the
opinion of the Issuer's Bond Counsel materially adversely affect the interests of the holders.
(b) Except as provided in paragraph(a) above,the holders of Certificates aggregating in
principal amount 51% of the aggregate principal amount of then outstanding Certificates which are
the subject of a proposed amendment shall have the right from time to time to approve any
amendment hereto which may be deemed necessary or desirable by the Issuer; provided, however,
that without the consent of 100%of the holders in aggregate principal amount of the then outstanding
Certificates, nothing herein contained shall permit or be construed to permit amendment of the terms
and conditions of this Ordinance or in any of the Certificates so as to:
(1) Make any change in the maturity of any of the outstanding Certificates;
(2) Reduce the rate of interest borne by any of the outstanding Certificates;
(3) Reduce the amount of the principal of,or redemption premium,if any, payable
on any outstanding Certificates;
(4) Modify the terms of payment of principal or of interest or redemption
premium on outstanding Certificates or any of them or impose any condition with
respect to such payment; or
(5) Change the minimum percentage of the principal amount of any series of
Certificates necessary for consent to such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the
Issuer shall send by U.S. mail to each registered owner of the affected Certificates a copy of the
proposed amendment and cause notice of the proposed amendment to be published at least once in
a financial publication published in The City of New York,New York or in the State of Texas. Such
published notice shall briefly set forth the nature of the proposed amendment and shall state that a
copy thereof is on file at the office of the Issuer for inspection by all holders of such Certificates.
(d) Whenever at any time within one year from the date of publication of such notice the
Issuer shall receive an instrument or instruments executed by the holders of at least 51%in aggregate
principal amount of all of the Certificates then outstanding which are required for the amendment,
which instrument or instruments shall refer to the proposed amendment and which shall specifically
consent to and approve such amendment, the Issuer may adopt the amendment in substantially the
same form.
(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be modified and amended in accordance with such
amendatory Ordinance, and the respective rights, duties, and obligations of the Issuer and all holders
24
of such affected Certificates shall thereafter be determined, exercised, and enforced, subject in all
respects to such amendment.
(0 Any consent given by the holder of a Certificate pursuant to the provisions of this
Section shall be irrevocable for a period of six months from the date of the publication of the notice
provided for in this Section, and shall be conclusive and binding upon all future holders of the same
Certificate during such period. Such consent may be revoked at any time after six months from the
date of the publication of said notice by the holder who gave such consent, or by a successor in title,
by filing notice with the Issuer, but such revocation shall not be effective if the holders of 51% in
aggregate principal amount of the affected Certificates then outstanding, have, prior to the attempted
revocation, consented to and approved the amendment.
For the purposes of establishing ownership of the Certificates,the Issuer shall rely solely upon
the registration of the ownership of such Certificates on the registration books kept by the Paying
Agent/Registrar.
Section 18. CONTINUED PERFECTION OF SECURITY INTEREST. Chapter 1208,
Government Code, applies to the issuance of the Certificates and the pledge of the ad valorem taxes
granted by the Issuer under Section 5 of this Ordinance and the pledge of the Surplus Revenues under
Section 6 of this Ordinance, and such pledge is therefore valid, effective, and perfected. If Texas law
is amended at any time while the Certificates are outstanding and unpaid such that the pledge of the
taxes granted by the Issuer under Section 5 of this Ordinance or the pledge of the Surplus Revenues
under Section 6 of this Ordinance is to be subject to the filing requirements of Chapter 9, Business
& Commerce Code, then in order to preserve to the registered owners of the Certificates the
perfection of the security interest in said pledges, the Issuer agrees to take such measures as it
determines are reasonable and necessary under Texas law to comply with the applicable provisions
of Chapter 9, Business & Commerce Code and enable a filing to perfect the security interest in said
pledges to occur.
Section 19. INCONSISTENT PROVISIONS. All indentures, ordinances or resolutions, or
parts thereof, that are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
Section 20. GOVERNING LAW. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
Section 21. 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 22. 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"):
25
(i) the failure to make payment of the principal of or interest on any of the Certificates when
the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or obligation
of the Issuer, 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 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 Issuer.
Section 22. REMEDIES FOR DEFAULT. (a) Upon the happening of any Event of Default,
then and in every case, any Registered Owner or an authorized representative thereof, including, but
not limited to, a trustee or trustees therefor, may proceed against the may proceed against the Issuer
or the Town Council of the Issuer, as appropriate for the purpose of protecting and enforcing the
rights of the Registered 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 Registered 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 Registered Owners of Certificates then outstanding.
Section 23. 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
Certificates 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 Certificates
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 Certificate authorized under this Ordinance, such
Registered 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 trustees of the Issuer or the Town
Council of the Issuer.
Section 24. DESIGNATION AS QUALIFIED TAX-EXEMPT OBLIGATIONS. The Issuer
hereby designates the Certificates as"qualified tax-exempt obligations"as defined in section 265(b)(3)
of the Code, conditioned upon the Underwriters (as defined below) certifying that the aggregate
initial offering price of the Certificates to the public(excluding any accrued interest)is no greater than
$10 million (or such higher amount permitted by such section 265 of the Code). Assuming such
condition is met, in furtherance of such designation, the Issuer represents, covenants and warrants
26
the following: (a) that during the calendar year in which the Certificates are issued, the Issuer
(including any subordinate entities) has not designated nor will designate Certificates, which when
aggregated with the Certificates, will result in more than $10,000,000 (or such higher amount
permitted by such section 265 of the Code) of"qualified tax-exempt obligations" being issued; (b)
that the Issuer reasonably anticipates that the amount of tax-exempt obligations issued during the
calendar year in which the Certificates are issued, by the Issuer(or any subordinate entities)will not
exceed$10,000,000(or such higher amount permitted by such section 265 of the Code),and, (c)that
the Issuer will take such action or refrain from such action as necessary, and as more particularly set
forth in this Section, in order that the Certificates will not be considered "private activity bonds"
within the meaning of section 141 of the Code.
Section 25. EFFECTIVE DATE. In accordance with the provisions of V.T.C.A.,
Government Code, Section 1201.028,this Ordinance shall be effective immediately upon its adoption
by the Town Council.
Section 26. APPROPRIATION. There is hereby appropriated for transfer into the Interest
and Sinking Fund, from available funds of the Issuer, moneys sufficient to pay the principal and
interest coming due on the Certificates on February 15, 2013.
27
Exhibit A
Continuing Disclosure Information
The following information is referred to in Section 16(a) of this Ordinance:
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the Issuer to be provided annually in
accordance with such Section are as specified (and included in the Appendices of the Official
Statement referred to) below:
The quantitative financial information and operating data pertaining to the Issuer of the general type
included in Tables numbered 1 through 5 and 7 through 14 and in Appendix B to the Official
Statement.
The financial statements of the Issuer that will be provided will be unaudited, unless an audit is
performed, in which event the audited financial statements will be made available.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described in the
notes to the financial statements that are attached to the Official Statement as Appendix C, or such
other accounting principles as the Issuer may be required to employ from time to time pursuant to
state law or regulation.
I
A-1