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12-31 - O ORO 1z-31 CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS § COLLIN AND DENTON COUNTIES § TOWN OF PROSPER § We,the undersigned officers of the Town of Prosper,Texas(the "Town"),hereby certify as follows: 1. The Town Council of the Town (the "Town Council") convened in REGULAR MEETING ON THE 25TH DAY OF SEPTEMBER,2012,at the designated meeting place,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-Tem Jason Dixon Curry Vogelsang, Jr. Danny Wilson Vacancy Amy Piukana, Town Secretary and all of said persons were present,thus constituting a quorum. Whereupon,among other business, the following was transacted at said Meeting: a written ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF PROSPER, TEXAS,PROVIDING FOR THE ISSUANCE OF TOWN OF PROSPER, TEXAS GENERAL OBLIGATION BONDS, TAXABLE SERIES 2012; PRESCRIBING THE FORM OF THE BONDS;LEVYING AD VALOREM TAXES TO SECURE THE BONDS;AND ORDAINING OTHER MATTERS IN CONNECTION WITH THE ISSUANCE AND SALE OF THE GENERAL OBLIGATION BONDS was duly introduced for the consideration of the Town Council. It was then duly moved and seconded that the Ordinance be adopted and, after due discussion, said motion,carrying with it the adoption of the Ordinance, prevailed and carried by the following vote: AYES: All members of the Town Council shown present above voted "Aye," except as shown below: NOES: None ABSTAIN: None 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 the Ordinance has been duly recorded in the Town Council's minutes of the Meeting;that the above and foregoing paragraph is a true, full and correct excerpt from the Town Council's minutes of the Meeting pertaining to the adoption of the 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 the Ordinance would be introduced and considered for adoption at the Meeting, and each of the officers and members consented, in advance,to the holding of the Meeting for such purpose, and that the Meeting was open to the public and public notice of the time, place and purpose of the 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; 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 the Ordinance for all purposes. SIGNED AND SEALED the 25th day of September, 2012. Town Secre Mayor (SE�i,9�t11111/���� >®� ()V PRO "ti b i I • i � � • ORDINANCE OF THE TOWN OF PROSPER, TEXAS AUTHORIZING THE ISSUANCE OF TOWN OF PROSPER, TEXAS GENERAL OBLIGATION BONDS, TAXABLE SERIES 2012 TABLE OF CONTENTS Section 1. Incorporation of Preambles; Amount and Purpose of the Bonds . . . . . . . . . . . . . . . . 3 Section 2. Date, Denomination, Numbers, and Maturities of the Bond . . . . . . . . . . . . . . . . . . . 3 Section 3. Interest on the Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Section 4. General Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 5. Form of Bond 5 Section 6. Interest and Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 7. Tax Levy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Section 8. Defeasance of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Section 9. Damaged, Mutilated, Lost, Stolen, or Destroyed Bonds . . . . . . . . . . . . . . . . . . . . . 11 Section 10. Custody, Approval, and Registration of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 11. Remedies in Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 12. Appropriation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 13. Sale of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 14. Public Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 15. Ordinance Effective on Passage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 16. Method of Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 17. No Rule 15c2-12 Undertaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 18. Inconsistent Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 19. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 20. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . . . . . . . 14 Section 21. Further Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 i ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF PROSPER, TEXAS, PROVIDING FOR THE ISSUANCE OF TOWN OF PROSPER, TEXAS GENERAL OBLIGATION BONDS, TAXABLE SERIES 2012; PRESCRIBING THE FORM OF THE BONDS;LEVYINGAD VALOREM TAXES TO SECURE THE BONDS;AND ORDAINING OTHER MATTERS IN CONNECTION WITH THE ISSUANCE AND SALE OF THE GENERAL OBLIGATION BONDS THE STATE OF TEXAS § COUNTIES OF COLLIN AND DENTON § TOWN OF PROSPER § ViHEREAS, at an election held in the Town of Prosper, Texas (the "Issuer") on May 14, 2011 (the"Election"),the voters of the Issuer approved the issuance oftax bonds by the Issuer in five propositions totaling $25,040,000 for the following purposes and in the following amounts: Proposition Bonds Number Purpose Approved 1 Purpose of acquiring a site for, and designing, a multi-purpose $1,250,000 municipal facility to serve as Town Hall and for other municipal services, with any surplus bond proceeds to be used for the construction of such facility. 2 Purpose of acquiring a site for, and designing, a public works $450,000 facility, with any surplus bond proceeds to be used for the construction of such facility. 3 Purpose of designing, constructing, improving and equipping $3,850,000 public safety facilities in the Town,to-wit:police and fire stations and facilities to improve and expand the Town's public safety communications system for police, fire, emergency medical service and other communications relating to public safety and emergency conditions, and the acquisition of land and interests in land as necessary for such purposes. 4 Purpose of designing, constructing, improving and equipping $6,200,000 parks, trails and recreational facilities and a park administration facility, and the acquisition of land and interests in land for such purposes. 2 5 Purpose of constructing, improving, extending, expanding, $13,290,000 upgrading and developing streets and roads, bridges and intersections including,utility relocation,landscaping, sidewalks, traffic safety and operational improvements, the purchase of any necessary right-of-way, drainage and other related costs. WHEREAS, the Issuer has previously issued and delivered $320,000 of the authorization from Proposition 4 and $3,810,000 of the authorization from Proposition 5 for the purposes stated in the preceding paragraphs; and WHEREAS, the Town Council of the Issuer deems it necessary and advisable to authorize, issue and deliver $3,880,000 of the authorization from Proposition 4 for the purposes stated in the preceding paragraph, thereby leaving$1,970,000 from Proposition 4, $9,480,000 from Proposition 5 and all voted authorization from Propositions 1, 2, and 3; and WHEREAS, the bonds hereafter authorized are being issued and delivered pursuant to Chapter 1331, Texas Government Code, as amended; and WHEREAS, it is officially found, determined, and declared that the meeting at which this Ordinance has been adopted was open to the public and public notice of the time, place and subject matter of the public business to be considered and acted upon at said meeting, including this Ordinance, was given, all as required by the applicable provisions of Texas Government Code, Chapter 551; Now, Therefore BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF PROSPER, TEXAS: Section 1. INCORPORATION OF PREAMBLES; AMOUNT AND PURPOSE OF THE BONDS, The preambles hereto are hereby incorporated into and made a part here of for all purposes. Bonds of the Town of Prosper (the "Issuer") are hereby authorized to be issued and delivered in the aggregate principal amount of$3,880,000,forthe purpose of designing,constructing, improving and equipping parks,trails and recreational facilities and a park administration facility, and the acquisition of land and interests in land for such purposes. Section 2. DATE,DENOMINATION,NUMBERS,AND MATURITIES OF THE BOND. The Bond initially authorized hereby shall be dated September 1, 2012, shall be issued and delivered in the form of a fully-registered bond, without coupons(such bond is hereinafter referred to as the "Bond" and the series of which it is issued is hereinafter referred to as the 'Bonds"), payable in installments to the registered owners thereof, or registered assigns, all in the manner hereinafter provided, with the Bond to be numbered R-1, in the denomination and principal amount of $3,880,000 initially payable to Regions Equipment Finance Corporation, with the principal of said Bond to be payable on the dates and in the amounts as set forth in the FORM OF BOND in Section 5. The date of delivery of the Bond to the initial purchaser thereof shall be referred to in the Bond and this Bond Ordinance as the "Delivery Date". 3 Section 3. INTEREST ON THE BOND. The Bond initially authorized hereby shall bear interest on the unpaid balance of the principal amount thereof from the Delivery Date (which date shall be indicated by the Paying Agent/Registrar in the Delivery Certificate appearing on the Bond) to the scheduled due date, or date of prepayment or redemption prior to the scheduled due date, of the principal installments of the Bond, at a per annum rate of 1.04%. The interest shall be calculated and payable on the dates and in the manner provided in the FORM OF BOND set forth in Section 5. Section 4. GENERAL CHARACTERISTICS. (a) In General, The Bond initially authorized hereby shall be issued,shall be payable, may or shall be prepaid or redeemed prior to the scheduled principal installment payment dates, may be transferred and assigned, shall have the characteristics, and shall be signed and executed (and the Bond shall be sealed), all as provided, and in the manner indicated,in the FORM OF BOND set forth in Section 5. After the Bond has been authorized to be issued by the Town Council of the Issuer, and prior to the delivery of the Bond,the Comptroller of Public Accounts shall execute the Comptroller's Registration Certificate as provided in Section 5. In addition, on the date of delivery of the Bond to the initial purchaser thereof, the Paying Agent/Registrar shall fill in the date of delivery of the Bond in the Delivery Certificate appearing on the Bond as provided in Section 5. (b) Registration Books, The Issuer shall keep or cause to be kept at the principal operations office of the Paying Agent/Registrar books for the registration and transfer of the Bond (the "Bond Registration Books") and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books and make such registrations and transfers under such reasonable regulations as the Issuer or the Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar will register or transfer as herein provided, the Bond upon presentation thereof at such office. Registration of any Bond may be transferred (in whole, not in part) only on the Bond Registration Books upon surrender thereofby the registered owner in person or by its duly authorized attorney, by proper written instrument of transfer, in the form and with guaranty of signatures satisfactory to the Paying Agent/Registrar, duly executed by such owner or attorney. Upon such surrender for transfer of registration,the Paying Agent/Registrar shall make notation of such transfer on such Bond in the assignment section appearing thereon and in the Bond Registration Books. Such transfers of registration shall be made without charge to the owner of such Bond, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Bondholder requesting such transfer of registration, as a condition precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be required to make transfers of any Bond within five (5)days prior to an interest payment date or redemption date or subsequent to the date of mailing of notice of redemption of such Bond or a portion thereof, anything in such Bond to the contrary notwithstanding. 4 (c) Pavment to registered owner. The person in whose name any Bond shall be registered on the Bond Registration Books may be deemed and treated as the absolute owner thereof for all purposes of this Bond Ordinance whether or not such Bond shall be overdue, and neither the Issuer nor the Paying Agent/Registrar shall be affected by any notice to the contrary; and payment of, or on account of, the principal of, premium, if any, agreed liquidated damages, if any, and interest on any such Bond shall be made only to such registered owner thereof,but such registration may be changed as provided herein. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. (d) Notation of Pavment and Prepavment. The Issuer hereby appoints Regions Bank, Birminghham,Alabama as the Paying Agent/Registrar for the Bond. Upon the prepayment or partial redemption of the Bond,the Paying Agent/Registrar, shall note in the Prepayment Record appearing on such Bond the amount of such prepayment or partial redemption,the date said payment was made and the remaining unpaid principal balance of said Bond and shall then have said entry signed by an authorized official of the Paying Agent/Registrar. The Paying Agent/Registrar shall also record such information in the Bond Registration Books, and the Paying Agent/Registrar shall also record in the Bond Registration Books all payments of principal installments on such Bond when made on their respective due dates. Section 5. FORM OF BOND. The form of the Bond, together with the forms of the various certificates and forms to appear on the Bond, shall be, respectively, substantially as follows, with necessary and appropriate variations, omissions,and insertions as permitted or required by this Bond Ordinance: FORM OF BOND NO. R- UNITED STATES OF AMERICA PRINCIPAL STATE OF TEXAS AMOUNT TOWN OF PROSPER, TEXAS $---,000 GENERAL OBLIGATION BOND, TAXABLE SERIES 2012 Interest Rate Date of Delivery Maturity Date 1.04% October 25, 2012 February 15, 2014 REGISTERED OWNER: PRINCIPAL AMOUNT: The Town ofProsper, Texas(the"Issuer"),being a political subdivision of the State of Texas located in Collin and Denton Counties, for value received, promises to pay, from the sources described herein,to the registered owner specified above, or registered assigns,the principal amount specified above on the Maturity Date shown above, and to pay interest thereon, from the Date of Delivery set forth above,on the balance of said principal amount from time to time remaining unpaid, 5 at the rate per annum set forth above, calculated on the basis of a 360-day year of twelve 30-day months. The principal of and interest on this Bond are payable in lawful money of the United States of America, without exchange or collection charges. The Issuer shall pay interest on this Bond on February 15, 2013 and on each August 15 and February 15 thereafter to the date of maturity or redemption prior to maturity. The principal of this Bond and the interest payable at maturity or upon redemption shall be paid to the registered owner hereofupon presentation and surrender of this Bond at maturity, or upon the date fixed for its redemption prior to maturity, at the principal office of Regions Bank, in Birmingham, Alabama, which is the "Paying Agent/Registrar" for this Bond. The payment of all other installments of interest on this Bond shall be made by the Paying Agent/Registrar to the registered owner hereof on each interest payment date by check or draft, dated as of such interest payment date, drawn by the Paying Agent/Registrar on,and payable solely from,funds of the Issuer required by the Bond Ordinance to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment date, to the registered owner hereof,at its address as it appeared on the last day of the month next preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In addition, principal and 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. The Issuer covenants with the registered owner of this Bond that on or before each principal payment date, interest payment date, and accrued interest payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Bond, when due. If the date for the payment of this Bond shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the designated principal office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday,or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. This Bond is the sole bond of the authorized series ofthe Issuer designated"Town ofProsper, Texas General Obligation Bonds, Taxable Series 2012," in the aggregate principal amount of $3,880,000(the"Bonds"),issued for the purpose ofdesigning,constructing,improving and equipping parks, trails and recreational facilities and a park administration facility, and the acquisition of land and interests in land for such purposes. On February 15,2013 or any date thereafter,the principal ofthis Bond may be redeemed prior to scheduled maturity at the option of the Issuer, with funds derived from any available and lawful source, as a whole, or in part, at a redemption price of par, without redemption premium, plus accrued but unpaid interest to the date fixed for redemption. 6 At least 30 days prior to the date fixed for any optional redemption of the Bond or portions thereof prior to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, to the Registered Owner of the Bond at its address as it appeared on the Registration Books on the day such notice of redemption is mailed;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 this Bond. By the date fixed for any such redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the required redemption price for the Bond or portions thereof which are to be so redeemed. If such written notice of redemption is sent and if due provision for such payment is made, all as provided above, the Bond or portions thereof which are to be so redeemed thereby automatically shall be treated as redeemed prior to its scheduled maturity,and shall not bear interest after the date fixed for redemption,and 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. The Paying Agent/Registrar shall record information regarding payment of interest and the payment of the maturity or redemption price of this Bond in the Bond Registration Books, The Bond of this series is issuable in the form of one fully-registered Bond without coupons in the denomination of$3,880,000 or the remaining principal amount of the outstanding Bond of this series if an exchange of the Bond is made after a reduction in the principal amount of the series due to a redemption(the "Authorized Denomination"). This Bond may be transferred or exchanged in whole and not in part as provided in the Bond Ordinance, only upon the registration books kept for that purpose at the above-mentioned office of the Paying Agent/Registrar upon surrender of this Bond together with a written instrument of transfer or authorization for exchange satisfactory to the Paying Agent/Registrar and duly executed by the registered owner or his duly authorized attorney, and thereupon a new Bond of the same maturity and in the Authorized Denomination shall be issued by the Paying Agent/Registrar to the transferee in exchange therefor as provided in the Bond Ordinance, and upon payment of the charges therein prescribed. The Issuer and the Paying Agent/Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes. In the Bond Ordinance, the Issuer has reserved the right to amend the Bond Ordinance as provided therein, and under some(but not all)circumstances amendments thereto must be approved by the registered owner of the outstanding Bonds. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication shall have been executed by the Paying Agent/Registrar or the Comptroller's Registration Certificate hereon shall have been executed by the Texas Comptroller of Public Accounts. It is hereby certified, recited, and covenanted that this Bond has been duly and validly authorized, issued, sold, 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 ofthis Bond have been performed, existed, and been done in accordance with law; that this Bond is a general obligation ofthe Issuer,issued on the full faith and credit thereof,and that ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond, as such interest and principal come due, have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged for such payment, within the limit prescribed by law. By becoming the registered owner of this Bond, the registered owner thereby acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for inspection in the official minutes and records of the governing body of the Issuer, and agrees that the terms and provisions of this Bond and the Bond Ordinance constitute a contract between the registered owner hereof and the Issuer. IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or facsimile signature of the Mayor of the Issuer(or the Mayor Pro-tern in the absence of the Mayor), countersigned with the manual or facsimile signature of the Town Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed or placed in facsimile on this Bond, which is dated September 1, 2012. Town Secretary Mayor (TOWN SEAL) FORM OF REGISTRATION CERTIFICATE OF THE COMPTROLLER OF PUBLIC ACCOUNTS: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Bond has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of Public Accounts of the State of Texas. Witness my signature and seal this Comptroller of Public Accounts of the State of Texas (COMPTROLLER'S SEAL) FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE 8 (To be executed if this Bond is not accompanied by an executed Registration Certificate of the Comptroller of Public Accounts of the State of Texas) It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance described on the face of this Bond; and that this Bond has been issued in exchange for or replacement of a Bond of an issue which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated: Regions Bank Birminghham, Alabama By Authorized Representative [FORM OF ASSIGNMENT] ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Print or Type Name, Address and Social Security Number or other Taxpayer Identification Number of Transferee the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept by the Trustee for the registration and transfer of Bonds, with full power of substitution in the premises. Dated: Assignee Signature: Printed Name: NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular. Signature Guaranteed By: By: Title: 9 Section 6. INTEREST AND SINKINGFUND. Town ofProsper,Texas General Obligation Bonds, Taxable Series 2012 Interest and Sinking Fund, hereinafter called the "Interest and Sinking Fund"is hereby authorized and shall be established and maintained in a depository bank ofthe Issuer, so long as the Bonds, or interest thereon, are outstanding and unpaid. The 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 Bonds. All ad valorem taxes levied and collected for and on account of said Bonds shall be deposited, as collected, to the credit ofthe Interest and Sinking Fund. Section 7. TAX LEVY. During each year while any of said Bonds are outstanding and unpaid,the governing body of the Issuer shall compute and ascertain a rate and amount of ad valorem tax which together with any other lawfully available funds that are on deposit in the Interest and Sinking Fund at the time of such levy will be sufficient to pay the interest on said Bonds as such interest comes due, and to provide and maintain a sinking fund adequate to pay the principal of such Bonds as such principal matures (but never less than 2% of the original principal amount of said Bonds as a Sinking Fund each year); and said tax shall be based on the latest approved tax rolls of said Issuer, with full allowance being made for tax delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied and is hereby ordered to be levied, against all taxable property in said Issuer for each year while any of said Bonds 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 ofthe interest on and principal of said Bonds, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. In addition, until expended for the herein authorized purposes, the proceeds of the Bonds are pledged to the payment of the principal and interest on the Bonds. Notwithstanding the requirements of this Section 7, if lawfully available funds of the Issuer are actually on deposit in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes which otherwise would have been required to be levied pursuant to this Section 7 may be reduced to the extent and by the amount of the revenues then on deposit in the Interest and Sinking Fund. Section 8. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon shall be deemed to be paid, retired, and no longer outstanding(a"Defeased Bond")within the meaning ofthis Ordinance, except to the extent provided in Subsection (d) of this Section, when payment of the principal of such Bond, plus interest thereon to the due date (whether such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof, or(ii)shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Defeasance Securities which mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, or 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 Bonds shall have become due and payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as 10 aforesaid, such Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of,the ad valorem taxes herein levied as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Defeasance Securities. (b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer also be invested in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance Securities received by the Paying Agent/Registrar/Registrar which is not required for the payment of the Bonds and interest thereon, with respect to which such money has been so deposited, shall be turned over to the 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 State law that are eligible to refund, retire or otherwise discharge obligations such as the Bonds. (d) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Bonds the same as if they had not been defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required by this Ordinance. Section 9. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS. (a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new Bond of the same principal amount,maturity,and interest rate, as the damaged,mutilated,lost, stolen, or destroyed Bond, in replacement for such Bond in the manner hereinafter provided. (b) Application for Replacement Bonds. Application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying Agent/Registrar/ Registrar. In every case of loss, theft, or destruction of a Bond, the registered owner applying for a replacement Bond 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 Bond,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 Bond, as the case may be. In every case of damage or mutilation of a Bond, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated. (c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the event any such Bond shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, or interest on this Bond, the Issuer may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Bond)instead ofissuing a replacement Bond,provided security or indemnity is furnished as above provided in this Section 9. (d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement Bond, the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal, printing, and other expenses in connection therewith. Every replacement Bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a Bond of the Issuer whether or not the lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Bonds duly issued under this Ordinance. (e) Authority for Issuing Replacement Bonds. In accordance with Tex. Gov't Code Ann. Chapter 1201, Subchapter D,this Section of this Ordinance shall constitute authority for the issuance of any such replacement certificate without necessity of further action by the Issuer or any other body or person, and the duty of the replacement of such bonds is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form and manner and with the effect, as provided in Section 4(a) of this Ordinance for Bonds issued in exchange of other Bonds. Section 10. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS. The Mayor of the Issuer(or the Mayor Pro-tem in the absence of the Mayor)is hereby authorized to have control of the Bonds initially issued and delivered hereunder and all necessary records and proceedings pertaining to the Bonds pending their delivery and their investigation, examination, and approval by the Attorney General 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 Bonds, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such Certificate. Section 11. REMEDIES IN EVENT OF DEFAULT. In additional to all of the rights and remedies provided by the laws of the State of Texas,the Issuer covenants and agrees that in the event of default in payment of principal or interest on any of the Bonds when due, or, in the event it fails to make the payments required to be made into the Interest and Sinking Fund or defaults in the observance of performance of any other of the contracts, covenants, conditions or obligations set forth in this Ordinance or in the Bonds, the following remedies shall be available: (a) the registered owners shall be entitled to a writ of mandamus issued by a court of competent jurisdiction compelling and requiring the Issuer and the officials thereof to observe and perform the contracts, covenants, obligations or conditions prescribed in this Ordinance; and (b) any delay or omission to exercise any right or power accruing upon any default shall not impair any such right or power nor be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. Section 12. APPROPRIATION. The Issuer hereby appropriates from current funds on hand, and directs the transfer to the Interest and Sinking Fund for the Bonds of, an amount of money 12 sufficient to pay the principal and interest scheduled to come due on the Bonds on February 15, 2013 and August 15, 2013. Section 13. SALE OF BONDS. The Bonds are hereby sold and shall be delivered to Regions Equipment Finance Corporation for the par value thereof in accordance with the Private Placement Letter presented to the Town Council on the date of adoption of this Ordinance. The Mayor(or the Mayor Pro-tern in the absence of the Mayor)is authorized to accept the offer of Regions Equipment Finance Corporation as set forth in the Private Placement Letter and to execute said Letter on behalf of the Issuer. It is hereby found that the terms of the Bonds as set forth herein are in the Issuer's best interests. Section 14. PUBLIC NOTICE. It is hereby officially found and determined that public notice of the time, place and purpose of said meeting was given, all as required by the Government Code, Chapter 551. Section 15. ORDINANCE EFFECTIVE ON PASSAGE. This Ordinance shall become effective immediately upon passage. Section 16. METHOD OF AMENDMENT. The Issuer hereby reserves the right to amend this Bond Ordinance subject to the following terms and conditions, to-wit: (a) The Issuer may from time to time,without the consent of any registered owner,except as otherwise required by paragraph (b) below, amend or supplement this Bond Ordinance in order to (i) cure any ambiguity, defect or omission in this Bond Ordinance that does not materially adversely affect the interests of the registered owners, (ii)grant additional rights or security for the benefit of the registered owners, (iii) add events of default as shall not be inconsistent with the provisions of this Bond Ordinance and which shall not materially adversely affect the interests of the registered owners, (v) qualify this Bond Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time in effect, or(iv)make such other provisions in regard to matters or questions arising under this Bond Ordinance as shall not be inconsistent with the provisions of this Bond Ordinance and which shall not in the opinion of bond counsel to the Issuer materially adversely affect the interests of the registered owners. (b) Except as provided in paragraph (a) above, the registered owner of the Bond shall have the right from time to time to approve any amendment hereto which may be deemed necessary or desirable by the Issuer. (c) If at any time the Issuer shall desire to amend this Bond Ordinance under this Section, the Issuer shall send by U.S. mail to the registered owner of the Bond a copy of the proposed amendment. (d) Whenever at any time within one year from the date of mailing of such notice the Issuer shall receive an instrument or instruments executed by the registered owner,which instrument 13 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 Bond Ordinance pursuant to the provisions of this Section, this Bond Ordinance shall be deemed to be modified and amended in accordance with such amendatory Bond Ordinance, and the respective rights,duties, and obligations of the Issuer and all registered owners of such affected Bonds shall thereafter be determined, exercised, and enforced, subject in all respects to such amendment. For the purposes of establishing ownership of the Bonds,the Issuer shall rely solely upon the registration of the ownership of such bonds on the registration books kept by the Paying Agent/Registrar. Section 17. NO RULE 15c2-12 UNDERTAKING. The offering of the Bonds is exempt from the requirements of Rule 15c2-12 and the Issuer has therefore not made an undertaking with respect to the Bonds in accordance with such Rule. Section 18. INCONSISTENT PROVISIONS. All indentures, ordinances or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Bond Ordinance are hereby repealed to the extent of such conflict and the provisions of this Bond Ordinance shall be and remain controlling as to the matters contained herein. Section 19. GOVERNING LAW. This Bond Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 20. SEVERABILITY. If any provision of this Bond Ordinance or the application thereof to any circumstance shall be held to be invalid,the remainder of this Bond Ordinance and the application thereofto other circumstances shall nevertheless be valid, and this governing body hereby declares that this Bond Ordinance would have been enacted without such invalid provision. Section 21. FURTHER PROCEDURES. The Mayor,Mayor Pro-Tem, Town Manager and Town Secretary of the Issuer and all other officers, employees and agents of the Issuer, and each of them, shall be and they are hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the Issuer, a Paying Agent/Registrar Agreement with the Paying Agent/Registrar in the form presented to the Council at the meeting at which this Ordinance was adopted, and all other instruments, receipts, instructions and certifications whether or not herein mentioned,as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance and the sale of the Bonds. 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. 14