13-42 O - General Obligation Refunding Bonds Series 2013 ORDINANCE NO. 13-42
OF THE TOWN OF PROSPER, TEXAS
AUTHORIZING THE ISSUANCE OF
TOWN OF PROSPER, TEXAS
GENERAL OBLIGATION REFUNDING BONDS,
SERIES 2013
TABLE OF CONTENTS
Section 1. Recitals, Amount and Purpose of the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Designation, Date, Denominations, Numbers, Maturities of Bonds and Interest Rates 2
Section 3. Characteristics of the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4. Form of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5. Interest and Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 6. Continued Perfection of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7. Defeasance of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8. Damaged, Mutilated, Lost, Stolen, or Destroyed Bonds . . . . . . . . . . . . . . . . . . . . . 15
Section 9. Custody, Approval,and Registration of Bonds;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 Bonds . . . . . . . . . . . . . . . 17
Section 11. Sale of Bonds; Approval of Official Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 12. Allocation of Bond Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 13. Disposition of Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . . . . . . . . . . 20
Section 14. Approval of Escrow Agreement and Transfer of Funds . . . . . . . . . . . . . . . . . . . . . 20
Section 15. Redemption of Refunded Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 16. Compliance with Rule 15c2-12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 17. Method of Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 18. Inconsistent Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 19. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 20. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 21. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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Section 22. Remedies for Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 23. Remedies Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 24. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 25. Designation as Qualified Tax-exempt Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 26
Schedule I: Schedule of Refunded Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Exhibit A. Continuing Disclosure Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B: Notice of Defeasance and Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
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ORDINANCE NO. 13-42
AUTHORIZING THE ISSUANCE AND SALE OF TOWN OF PROSPER, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2013; LEVYING AN ANNUAL
AD VALOREM TAX FOR THE PAYMENT OF SAID BONDS; APPROVING AN
OFFICIAL STATEMENT; CALLING CERTAIN OUTSTANDING OBLIGATIONS FOR
REDEMPTION PRIOR TO MATURITY; APPROVING THE USE OF AN ESCROW
AGREEMENT AND PAYING AGENT/REGISTRAR AGREEMENT; ENGAGING BOND
COUNSEL; AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT
THE STATE OF TEXAS §
COLLIN AND DENTON COUNTIES §
TOWN OF PROSPER §
WHEREAS, certain previously issued and outstanding obligations of the Town of Prosper,
Texas (the "Issuer") described in Schedule I attached hereto and incorporated herein (collectively,
the "Refunded Obligations") are intended to be and shall be refunded pursuant to this Ordinance;
WHEREAS, Chapter 1207,Texas Government Code,authorizes the Issuer to issue refunding
bonds and to deposit the proceeds from the sale thereof, together with any other available funds or
resources, directly with a paying agent for the Refunded Obligations or a trust company or
commercial bank that does not act as a depository for the Issuer and is named in these proceedings,
and such deposit, if made before the payment dates of the Refunded Obligations, shall constitute the
making of firm banking and financial arrangements for the discharge and final payment of the
Refunded Obligations;
WHEREAS, Chapter 1207, Texas Government Code, further authorizes the Issuer to enter
into an escrow or similar agreement with such paying agent for the Refunded Obligations or trust
company or commercial bank with respect to the safekeeping, investment, reinvestment,
administration and disposition of any such deposit, upon such terms and conditions as the Issuer and
such paying agent or trust company or commercial bank may agree;
WHEREAS,U.S. Bank National Association is a paying agent for the Refunded Obligations,
and the Escrow Agreement,wherein U.S.Bank National Association is the Escrow Agent,hereinafter
authorized constitutes an escrow agreement of the kind authorized and permitted by said Chapter
1207;
WHEREAS,the Town Council hereby finds and declares a public purpose and it is in the best
interests of the Issuer to refund the Refunded Obligations in order to restructure its debt for tax rate
management purposes, and that the maximum amount by which the aggregate amount of payments
to be made under the Bonds hereinafter authorized exceeds the aggregate amount of payments that
would have been made under the terms of the Refunded Obligations is $1,772,970.22.
WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to
maturity within 20 years of the date of the bonds hereinafter authorized;
WHEREAS, the Bonds hereinafter authorized to be issued and are to be issued, sold and
delivered pursuant to the general laws of the State of Texas, including Texas Government Code,
Chapter 1207, 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:
Section 1. RECITALS, AMOUNT AND PURPOSE OF THE BONDS. 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 bonds of the Issuer are hereby authorized to be issued and delivered in the
aggregate principal amount of $3,830,000 for the purpose of refunding certain outstanding
obligations of the Issuer referenced in the preamble hereto and described in Schedule I hereto and to
pay the costs incurred in connection with the issuance of the Bonds.
Section 2. DESIGNATION,DATE,DENOMINATIONS,NUMBERS,MATURITIES OF
BONDS AND INTEREST RATES. Each certificate issued pursuant to this Ordinance shall be
designated: "TOWN OF PROSPER, TEXAS, GENERAL OBLIGATION REFUNDING BOND,
SERIES 2013", and initially there shall be issued, sold, and delivered hereunder one fully registered
bond, without interest coupons, dated June 15, 2013, in the principal amount stated above and in the
denominations hereinafter stated, numbered T-1, with bonds issued in replacement thereof being 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 bonds or any portion or portions thereof(in each case, the "Registered Owner").
The Bonds shall mature on August 15 in the years and in the principal amounts and interest rates set
forth below, interest on each Bond accruing on the basis of a 360-day year of twelve 30-day months
from the date of initial delivery of the Bonds to the purchaser thereof 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, 2014, as
follows:
Principal Interest Principal Interest
Year Amount Rate Year Amount Rate
2014 $135,000 2.000% 2023 $ 180,000 3.000%
2015 150,000 2.000 2024 185,000 4.000
2016 150,000 2.000 2025 190,000 4.000
2017 155,000 2.000 2026 200,000 4.000
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2018 155,000 2.000 2027 210,000 4.000
2019 160,000 3.000 2028 215,000 4.000
2020 165,000 3.000 2029 225,000 4.000
2021 170,000 3.000
2022 175,000 3.000 2033 1,010,000 5.000
Section 3. CHARACTERISTICS OF THE BONDS. (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 Bonds(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 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 Bond to which payments with respect to the Bonds shall be mailed,
as herein provided; but it shall be the duty of each registered owner to notify the Paying
Agent/Registrar in writing of the address to which payments shall be mailed, and such interest
payments shall not be mailed unless such notice has been given. The 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 Bond or Bonds. Registration of
assignments, transfers, conversions and exchanges of Bonds shall be made in the manner provided
and with the effect stated in the FORM OF BOND set forth in this Ordinance. Each substitute Bond
shall bear a letter and/or number to distinguish it from each other Bond.
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 Bond, date and manually sign said Bond,
and no such Bond shall be deemed to be issued or outstanding unless such Bond is so executed. The
Paying Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered for conversion
and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the
governing body of the Issuer or any other body or person so as to accomplish the foregoing
conversion and exchange of any Bond or portion thereof, and the Paying Agent/Registrar shall
provide for the printing, execution, and delivery of the substitute Bonds in the manner prescribed
herein, and said Bonds 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 Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon
the execution of said Bond, the converted and exchanged Bond shall be valid, incontestable, and
enforceable in the same manner and with the same effect as the Bonds that initially were issued and
delivered pursuant to this Ordinance, approved by the Attorney General and registered by the
Comptroller of Public Accounts.
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(b) Pavment of Bonds 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 Bonds, 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 Bonds, and of all conversions
and exchanges of Bonds, and all replacements of Bonds, as provided in this Ordinance. However,
in the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days
thereafter, a new record date for such interest payment(a "Special Record Date")will be established
by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the 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.
(c) In General. The Bonds (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be payable only to the registered owners
thereof, (ii) may be redeemed prior to their scheduled maturities (notice of which shall be given to
the Paying Agent/Registrar by the Issuer at least 3 5 days prior to any such redemption date), (iii)may
be converted and exchanged for other Bonds, (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 Bonds 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 Bonds, all as provided,
and in the manner and to the effect as required or indicated, in the FORM OF BOND set forth in this
Ordinance. The Bond 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 Bond issued in
conversion of and exchange for any Bond or Bonds issued under this Ordinance the Paying
Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION BOND,
in the form set forth in the FORM OF BOND.
(d) Book-Entry Onlv Svstem. The Bonds issued in exchange for the Bond initially issued
to the initial purchaser specified herein shall be initially issued in the form of a separate single fully
registered Bond for each of the maturities thereof. Upon initial issuance,the ownership of each such
Bond shall be registered in the name of Cede& Co., as nominee of The Depository Trust Company,
New York, New York ("DTC"), and except as provided in subsection (f) hereof, all of the
outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC.
With respect to Bonds registered in the name of Cede& Co., as nominee of DTC, the 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 Bonds. Without limiting the immediately preceding sentence, the
Issuer and the Paying Agent/Registrar shall have no responsibility or obligation with respect to(1)the
accuracy of the records of DTC, Cede& Co. or any DTC Participant with respect to any ownership
interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a
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Registered Owner of Bonds, as shown on the Registration Books, of any notice with respect to the
Bonds, or (iii) the payment to any DTC Participant or any other person, other than a Registered
Owner of Bonds, as shown in the Registration Books of any amount with respect to principal of or
interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the
Issuer and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name
each Bond is registered in the Registration Books as the absolute owner of such Bond for the purpose
of payment of principal and interest with respect to such Bond,for the purpose of registering transfers
with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall
pay all principal of and interest on the Bonds only to or upon the order of the Registered Owners, as
shown in the Registration Books as provided in this Ordinance, or their respective attorneys duly
authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge
the Issuer's obligations with respect to payment of principal of and interest on the Bonds to the extent
of the sum or sums so paid. No person other than a Registered Owner, as shown in the Registration
Books, shall receive a Bond 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 Depositorv.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 Bonds that they be able to obtain certificated Bonds, the Issuer shall (1)
appoint a successor securities depository, qualified to act as such under Section 17A of the Securities
and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of
such successor securities depository and transfer one or more separate Bonds to such successor
securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of
Bonds and transfer one or more separate certificated Bonds to DTC Participants having Bonds
credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being
registered in the Registration Books in the name of Cede & Co., as nominee of DTC, but may be
registered in the name of the successor securities depository, or its nominee, or in whatever name or
names Registered Owners transferring or exchanging Bonds shall designate, in accordance with the
provisions of this Ordinance.
(f) Pavments to Cede & Co. Notwithstanding any other provision of this Ordinance to
the contrary, so long as any Bond is registered in the name of Cede& Co., as nominee of DTC, all
payments with respect to principal of and interest on such Bond and all notices with respect to such
Bond shall be made and given, respectively, in the manner provided in the representations letter of
the Issuer to DTC.
(g) Cancellation of Initial Bond. On the closing date, one initial Bond representing the
entire principal amount of the Bonds, 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
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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 Bond, the
Paying Agent/Registrar shall cancel the initial Bond and deliver to the Depository Trust Company on
behalf of such purchaser one registered definitive Bond for each year of maturity of the Bonds, in the
aggregate principal amount of all of the Bonds for such maturity.
(h) Conditional Notice of Redemption. With respect to any optional redemption of the
Bonds, unless certain prerequisites to such redemption required by this Ordinance have been met and
moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to be
redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice
of redemption, such notice 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 Bonds and the Paying Agent/Registrar shall give notice, in the
manner in which the notice of redemption was given, to the effect that the Bonds have not been
redeemed.
Section 4. FORM OF BONDS. The form of the Bonds, including the form of Paying
Agent/Registrar's Authentication Bond, the form of Assignment and the form of Registration Bond
of the Comptroller of Public Accounts of the State of Texas to be attached to the Bonds initially
issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows, with
such appropriate variations, omissions or insertions as are permitted or required by this Ordinance.
(a) [Form of Bond]
NO. R- UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
TOWN OF PROSPER, TEXAS $
GENERAL OBLIGATION REFUNDING BOND,
SERIES 2013
Interest Rate Date of Initial Delivery Maturity Date CUSIP No.
July 25, 2013 August 15,
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
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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 the Date of Initial Delivery
set forth above at the Interest Rate per annum specified above. Interest is payable on February 15,
2014 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 Bond is required to be authenticated
and the date of its authentication is later than the first Record Date (hereinafter defined), such
Principal Amount shall bear interest from the interest payment date next preceding the date of
authentication, unless such date of authentication is after any Record Date but on or before the next
following interest payment date, in which case such principal amount shall bear interest from such
next following interest payment date; provided, however, that if on the date of authentication hereof
the interest on the Bond or Bonds, if any, for which this Bond is being exchanged is due but has not
been paid, then this Bond shall bear interest from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the registered owner hereof upon presentation and surrender of this Bond at maturity, or
upon the date fixed for its redemption prior to maturity, at the corporate trust office of U.S. Bank
National Association in Dallas, Texas, which is the "Paying Agent/Registrar" for this Bond. The
payment of interest on this Bond shall be made by the Paying Agent/Registrar to the registered owner
hereof on each interest payment date by check or draft, dated as of such interest payment date, drawn
by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the
ordinance authorizing the issuance of this Bond (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 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 Bond appearing on the Registration Books at the close of business on the
last business day next preceding the date of mailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Bond prior to
maturity as provided herein shall be paid to the registered owner upon presentation and surrender of
this Bond for redemption and payment at the corporate trust office of the Paying Agent/Registrar.
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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 Bonds, when due.
IF THE DATE for the payment of the principal of or interest on this Bond 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 BOND is one of a series of Bonds dated June 15, 2013, authorized in accordance with
the Constitution and laws of the State of Texas in the principal amount of$3,830,000 for the public
purposes of refunding certain outstanding obligations of the Issuer and to pay the costs incurred in
connection with the issuance of the Bonds.
THE BONDS OF THIS SERIES having stated maturities on and after August 15, 2024 may
be redeemed prior to their scheduled maturities, at the option of the Issuer, on August 15, 2023 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 Bonds, or portions thereof, to be redeemed shall be selected and
designated by the Issuer (provided that a portion of a Bond may be redeemed only in an integral
multiple of$5,000), at a redemption price equal to the principal amount to be redeemed plus accrued
interest to the date fixed for redemption.
THE BONDS scheduled to mature on August 15, 2033 (the "Term Bonds") are subject to
scheduled mandatory redemption by the Paying Agent/Registrar by lot, or by any other customary
method that results in a random selection, at a price equal to the principal amount thereof, plus
accrued interest to the redemption date, out of moneys available for such purpose in the interest and
sinking fund for the Bonds, on the dates and in the respective principal amounts, set forth in the
following schedule:
Term Bonds
Maturity: August 15, 2033
Principal
Mandatory Redemption Date Amount
August 15, 2030 $ 235,000
August 15, 2031 245,000
August 15, 2032 260,000
August 15, 2033(maturity) 270,000
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The principal amount of Term Bonds of a stated maturity required to be redeemed on any mandatory
redemption date pursuant to the operation of the mandatory sinking fund redemption provisions shall
be reduced, at the option of the Issuer, by the principal amount of any Term Bonds of the same
maturity which, at least 45 days prior to a mandatory redemption date (1) shall have been acquired
by the Issuer at a price not exceeding the principal amount of such Term Bonds plus accrued interest
to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation,(2) shall
have been purchased and canceled by the Paying Agent/Registrar at the request of the Issuer at a
price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of
purchase, or (3) shall have been redeemed pursuant to the optional redemption provisions and not
theretofore credited against a mandatory redemption requirement.
AT LEAST 30 DAYS prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by
United States mail, first-class postage prepaid, at least 30 days prior to the date fixed for any such
redemption, to the registered owner of each Bond 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 Bond. By the date fixed for any
such redemption due provision shall be made with the Paying Agent/Registrar for the payment of the
required redemption price for the Bonds or portions thereof 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 Bonds 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 Bond shall be redeemed, a substitute Bond or Bonds
having the same maturity date, bearing interest at the same rate, in any denomination or
denominations in any integral multiple of$5,000, at the written request of the registered owner, and
in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the
registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as
provided in the Bond Ordinance.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds,without interest
coupons, in the denomination of any integral multiple of$5,000. As provided in the Bond Ordinance,
this Bond may,at the request of the registered owner or the assignee or assignees hereof, be assigned,
transferred, converted into and exchanged for a like aggregate principal amount of fully registered
bonds, without interest coupons, payable to the appropriate registered owner, assignee or assignees,
as the case maybe,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 Bond to the Paying Agent/Registrar for cancellation, all in accordance with
the form and procedures set forth in the Bond Ordinance. Among other requirements for such
assignment and transfer,this Bond must be presented and surrendered to the Paying Agent/Registrar,
together with proper instruments of assignment,in form and with guarantee of signatures satisfactory
to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof
in an integral multiple of$5 000 to the assignee or assignees in whose name or names this Bond or
Y g p g g
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any such portion or portions hereof is or are to be registered. The form of Assignment printed or
endorsed on this Bond may be executed by the registered owner to evidence the assignment hereof,
but such method is not exclusive, and other instruments of assignment satisfactory to the Paying
Agent/Registrar may be used to evidence the assignment of this Bond or any portion or portions
hereof from time to time by the registered owner. The Paying Agent/Registrar's reasonable standard
or customary fees and charges for assigning, transferring, converting and exchanging any Bond or
portion thereof will be paid by the 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 Bond
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 Bonds is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to
be mailed to the registered owners of the Bonds.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper to be
performed, exist and be done precedent to or in the authorization, issuance and delivery of this Bond
have been performed, existed and been done in accordance with law; that this Bond 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 Bond, 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 prescribed by law,
all as provided in the Bond Ordinance.
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 each
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(or in the absence thereof, by the Mayor Pro-tem) of the Issuer and
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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 Bond.
(signature) (signature)
Town Secretary Mayor
(SEAL)
(b) [Form of Paying Agent/Registrar's Authentication Bond]
PAYING AGENT/REGISTRAR'S AUTHENTICATION BOND
(To be executed if this Bond is not accompanied by an
executed Registration Bond of the Comptroller
of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in the text of this Bond; and that this Bond has been issued in conversion or
replacement of, or in exchange for, a certificate, bonds, or a portion of a bond or bonds 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
(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.)
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the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney,to register the transfer ofthe within
Bond on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed 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 Bond
association recognized signature guarantee in every particular, without alteration or
program. enlargement or any change whatsoever.
(d) [Form of Registration Bond of the Comptroller of Public Accounts]
COMPTROLLER'S REGISTRATION BOND: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity and approved by the
Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
(e) [Initial Bond Insertions]
(1) The initial Bond shall be in the form set forth is paragraph (a) of this Section, except
that:
A. immediately under the name of the Bond, the headings "Interest Rate" and
"Maturity Date" shall both be completed with the words "As shown below" and
"CUSIP No. " shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
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I
I
"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 August 15 in
each of the years, in the principal installments and bearing interest at the per annum rates set forth in
the following schedule:
Principal Interest Principal Interest
Years Installments Rates Years Installments Rates
2014 $135,000 2.000% 2023 $ 180,000 3.000%
2015 150,000 2.000 2024 185,000 4.000
2016 150,000 2.000 2025 190,000 4.000
2017 155,000 2.000 2026 200,000 4.000
2018 155,000 2.000 2027 210,000 4.000
2019 160,000 3.000 2028 215,000 4.000
2020 165,000 3.000 2029 225,000 4.000
2021 170,000 3.000
2022 175,000 3.000 2033 1,010,000 5.000
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 the Date of Initial Delivery set forth above at the
respective Interest Rate per annum specified above. Interest is payable on February 15, 2014 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
Bond is required to be authenticated and the date of its authentication is later than the first Record
Date (hereinafter defined), such Principal Amount shall bear interest from the interest payment date
next preceding the date of authentication, unless such date of authentication is after any Record Date
but on or before the next following interest payment date, in which case such principal amount shall
bear interest from such next following interest payment date; provided, however, that if on the date
of authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which such
interest has been paid in full."
C. The Initial Bond shall be numbered "T-1."
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 Bonds.
All amounts received from the sale of the Bonds as accrued interest and ad valorem taxes levied and
collected for and on account of the Bonds shall be deposited, as collected, to the credit of said
Interest and Sinking Fund. During each year while any of the Bonds 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 Bonds as such
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interest comes due, and to provide and maintain a sinking fund adequate to pay the principal of the
Bonds as such principal matures (but never less than 2% of the original amount of the Bonds 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 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 of the interest on and principal of
the Bonds, as such interest comes due and such principal matures, are hereby pledged for such
payment, within the limit prescribed by law.
Section 6. CONTINUED PERFECTION OF SECURITY INTEREST, Chapter 1208,
Government Code, applies to the issuance of the Bonds and the pledge of the ad valorem taxes
granted by the Issuer under Section 5 of this Ordinance, and such pledge is therefore valid, effective,
and perfected. If Texas law is amended at any time while the Bonds are outstanding and unpaid such
that the pledge of the taxes granted by the Issuer under Section 5 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 Bonds the perfection of the security interest in said pledge, 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 pledge to occur.
Section 7. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon shall be
deemed to be paid, retired and no longer outstanding(a "Defeased Bond")within the meaning of this
Ordinance, except to the extent provided in subsection (d) of this Section 7, 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 (1) shall have been made or caused to be made in accordance with the
terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably
depositing with or making available to the Paying Agent/Registrar in accordance with an 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 Bonds shall have become due and payable. At such time as a Bond shall
be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall
no longer be secured by,payable from, or entitled to the benefits of, the 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
Bonds 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 Bonds for redemption; (2)
gives notice of the reservation of that right to the owners of the Defeased Bonds immediately
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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 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. Any Future Escrow Agreement pursuant to which the money and/or Defeasance Securities
are held for the payment of Defeased Bonds may contain provisions permitting the investment or
reinvestment of such moneys in Defeasance Securities or the substitution of other Defeasance
Securities upon the satisfaction of the requirements specified in subsection 7(a)(1)or(ii). All income
from such Defeasance Securities received by the Paying Agent/Registrar that is not required for the
payment of the Defeased Bonds, with respect to which such money has been so deposited, shall be
remitted to the 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 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.
(e) In the event that the Issuer elects to defease less than all of the principal amount of
Bonds of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount
of Bonds by such random method as it deems fair and appropriate.
Section 8. 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 certificate of the same principal amount, maturity and interest rate, as the damaged, mutilated,
lost, stolen or destroyed Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,
mutilated, lost, stolen or destroyed Bonds shall be made by the registered owner thereof to the Paying
Agent/Registrar. In every case of loss, theft or destruction of a Bond, the registered owner applying
for a replacement certificate shall furnish to the Issuer and to the Paying Agent/Registrar such security
OF 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,
15
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 that is then continuing in
the payment of the principal of, redemption premium, if any, or interest on the Bond, the Issuer may
authorize the payment of the same (without surrender thereof except in the case of a damaged or
mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished
as above provided in this Section.
(d) Charge for Issuinp- Replacement Bonds. Prior to the issuance of any replacement
certificate, the Paying Agent/Registrar shall charge the registered owner of such Bond 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 Bond is lost, stolen or destroyed shall
constitute a contractual obligation 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) Authoritv for Issuing Replacement Bonds. 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 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 3(a) of this Ordinance for Bonds issued in conversion and exchange for other Bonds.
Section 9. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; 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 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 Bonds said Comptroller of Public
Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Bond attached to such Bonds, and the seal of said Comptroller shall be
impressed, or placed in facsimile, on such Bond. 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 Bonds
issued and delivered under this Ordinance, but neither shall have any legal effect, and shall be solely
for the convenience and information of the registered owners of the Bonds.
(b) The Mayor, Town Manager, Finance Director and Town Secretary 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 on behalf of the Issuer a
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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 Bonds, the sale of the Bonds and the Official Statement relating to
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.
(c) The obligation of the initial purchaser to accept delivery of the Bonds 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 Bonds to the initial purchaser. The engagement of such firm as bond counsel
to the Issuer in connection with issuance, sale and delivery of the Bonds 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 Bonds by the Attorney General of Texas for review and
approval, a statutory fee (an amount equal to 0.1% principal amount of the Bonds, subject to a
minimum of$750 and a maximum of$9,500)is required to be paid to the Attorney General upon the
submission of the transcript of proceedings for the Bonds. The Issuer hereby authorizes and directs
that a check in the amount of the Attorney General filing fee for the Bonds, made payable to the
"Texas Attorney General," be promptly furnished to the Issuer's Bond Counsel, for payment to the
Attorney General in connection with his review of the Bonds.
Section 10. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
BONDS. The Issuer covenants to take any action necessary to assure, or refrain from any action that
would adversely affect, the treatment of the Bonds 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 Bonds(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 Bonds, 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 Bonds 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
17
"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 Bonds(less amounts deposited into a reserve
fund, if any) is directly or indirectly used to finance loans to persons, other than state or local
governmental units, in contravention of section 141(c) of the Code;
(d) to refrain from taking any action that would otherwise result in the Bonds
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 Bonds 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 Bonds, 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 Bonds, other than investment property acquired with—
(1) proceeds of the Bonds invested for a reasonable temporary period of
3 years or less or, in the case of a refunding bond, for a period of 30 days or less until
such proceeds are needed for the purpose for which the bonds are issued,
(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
Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated
as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the
extent applicable, section 149(d) of the Code (relating to advance refundings), 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 Bonds) an amount that is at least equal to 90
percent of the"Excess Earnings,"within the meaning of section 148(0 of the Code and to pay
to the United States of America, not later than 60 days after the Bonds have been paid in full,
100 percent of the amount then required to be paid as a result of Excess Earnings under
section 148(f) of the Code.
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
18
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 Bonds. 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 Bonds, 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 Bonds under section 103 of the Code. In
the event that regulations or rulings are hereafter promulgated that impose additional requirements
applicable to the Bonds, 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 Bonds 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 Bonds.
Section 11. SALE OF BONDS APPROVAL OF OFFICIAL STATEMENT. (a) The
Bonds are hereby initially sold and shall be delivered to RBC Capital Markets, LLC and BOSC, Inc.
(the "Underwriters") for cash at a price set forth below, pursuant to the terms and provisions of a
Bond Purchase Agreement that the Mayor of the Issuer is hereby authorized to execute and deliver.
The Bonds shall initially be registered in the name of"RBC Capital Markets, LLC ". The Bonds are
sold to the Underwriters at a price of$3,972,678.76(representing the par amount of the Bonds, plus
an aggregate original issue premium of$168,874.90, less Underwriter's discount on the Bonds of
$26,196.14). A portion of the net original issue premium shall be applied to pay 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 Issuer hereby approves the form and content of the Official Statement relating to the
Bonds and any addenda, supplement or amendment thereto, and approves the distribution of such
Official Statement in the reoffering of the Bonds 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 19, 2013 prior to the date hereof is hereby ratified and confirmed.
Section 12. ALLOCATION OF BOND 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 projects financed with proceeds of the Refunded Obligations(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
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Issuer shall not expend proceeds of the sale of the Bonds or investment earnings thereon more than
60 days after the earlier of(1) the fifth anniversary of the delivery of the Bonds, or (2) the date the
Bonds 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 Bonds
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 Bonds. For 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. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS.
The Mayor or the Town Manager of the Issuer is hereby authorized and directed to execute and
deliver the Escrow Agreement with U.S. Bank National Association, in substantially the form
presented at this meeting. In addition, the Mayor or other officer of the Issuer is authorized to
purchase such securities, to execute subscriptions for the purchase of U. S. Treasury Securities, State
and Local Government Series,or other open market securities that are authorized investments for the
defeasance of the Refunded Obligations, if any such investments are required, and to authorize such
contributions of funds, as may be necessary for the Escrow Fund.
Section 15. REDEMPTION OF REFUNDED OBLIGATIONS.
(a) The Issuer hereby directs that certain of the Refunded Obligations be called for
redemption on the dates and as set forth on Schedule 1. Each of such Refunded Obligations shall be
redeemed at the redemption price of par plus accrued interest. The Mayor of the Issuer is hereby
authorized and directed to issue or cause to be issued the Notice of Redemption of the Refunded
Obligations in the forms set forth in Exhibit B attached hereto to the paying agent/registrars for the
Refunded Obligations.
(b) In addition, the paying agent/registrars for the Refunded Obligations are hereby directed
to provide the appropriate notices of redemption and defeasance as specified by the ordinances
authorizing the issuance of the Refunded Obligations and are hereby directed to make appropriate
arrangements so that the Refunded Obligations may be redeemed on their redemption dates. The
Refunded Obligations shall be presented for redemption at the respective paying agent/registrar
therefore, and shall not bear interest after the date fixed for redemption.
20
(c) The source of funds for payment of the principal of and interest on the Refunded
Obligations on their respective redemption dates shall be from the funds placed in escrow with the
Escrow Agent, pursuant to the Escrow Agreement approved in Section 14 of this Ordinance.
Section 16. COMPLIANCE WITH RULE 15c2-12.
(a) Definitions. As used in this Section, the following terms have the meanings ascribed to
such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reports. (1) The Issuer shall provide annually to the MSRB, in the electronic
format prescribed by the MSRB, within six months after the end of each fiscal year commencing in
2013, financial information and operating data with respect to the Issuer of the general type included
in the final Official Statement authorized by this Ordinance,being the information described in Exhibit
A attached hereto. Any financial statements so to be provided shall be (1) prepared in accordance
with the accounting principles described in the financial statements of the Issuer appended to the
Official Statement, 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 completed within such period, then the Issuer shall
provide unaudited financial information within such period, and audited financial statements for the
applicable fiscal year to the MSRB,when and if the audit report on such statements become available.
(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 documents available to the public on the
MSRB's internet website or filed with the SEC.
(c) Event Notices. The Issuer shall notify the MSRB, in a timely manner not in excess of ten
Business Days after the occurrence of the event, of any of the following events with respect to the
Bonds:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
21
6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB)
or other material notices or determinations with respect to the tax status of the Bonds,
or other material events affecting the tax status of the Bonds;
7. Modifications to rights of holders of the Bonds, if material;
8. Bond calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution,or sale of property securing repayment of the Bonds,if material.,
H.. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the Issuer;
13. The consummation of a merger, consolidation, or acquisition involving the Issuer or
the sale of all or substantially all of the assets of the Issuer, other than in the ordinary
course of business, the entry into a definitive agreement to undertake such an action
OF the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms, if material; and
14. Appointment of a successor Paying Agent/Registrar or change in the name of the
Paying Agent/Registrar, if material.
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 (c) of this Section by the time required
by subsection (c). As used in clause (c)12 above, the phrase "bankruptcy, insolvency, receivership
or similar event" means the appointment of a receiver, fiscal agent or similar officer for the Issuer
in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal
law in which a court of governmental authority has assumed jurisdiction over substantially all of the
assets or business of the Issuer, or if jurisdiction has been assumed by leaving the Board and officials
or officers of the Issuer 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.
(d) 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 Bonds within the meaning of the Rule, except that
the Issuer in any event will give notice of any deposit made in accordance with this Ordinance or
applicable law that causes the Bonds no longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the registered owners and
beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any other person. The 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
22
Issuer does not make any representation or warranty concerning such information or its usefulness
to a decision to invest in or sell Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE ISSUER,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.
(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 Bonds in the
primary offering of the Bonds in compliance with the Rule, taking into account any amendments or
interpretations of the Rule since such offering as well as such changed circumstances and (2) either
(a)the registered owners of a majority in aggregate principal amount(or any greater amount required
by any other provision of this Ordinance that authorizes such an amendment) of the outstanding
Bonds consent to such amendment or (b) a person that is unaffiliated with the 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 Bonds. 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 (b) of this Section an explanation, in narrative form, of
the reason for the amendment and of the impact of any change in the type of financial information or
operating data so provided. The 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 Bonds in the primary offering of the Bonds.
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
23
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
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 Bonds aggregating in
principal amount 51% of the aggregate principal amount of then outstanding Bonds 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 Bonds,
nothing herein contained shall permit or be construed to permit amendment of the terms and
conditions of this Ordinance or in any of the Bonds so as to:
(1) Make any change in the maturity of any of the outstanding Bonds;
(2) Reduce the rate of interest borne by any of the outstanding Bonds;
(3) Reduce the amount of the principal of,or redemption premium,if any, payable
on any outstanding Bonds;
(4) Modify the terms of payment of principal or of interest or redemption
premium on outstanding Bonds or any of them or impose any condition with respect
to such payment; or
(5) Change the minimum percentage of the principal amount of any series of
Bonds 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 ofthe affected Bonds 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 Bonds.
(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 Bonds 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
24
amendatory Ordinance, and the respective rights, duties, and obligations of the Issuer and all holders
of such affected Bonds shall thereafter be determined, exercised, and enforced, subject in all respects
to such amendment.
(f) Any consent given by the holder of a Bond 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 Bond
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 Bonds then outstanding, have, prior to the attempted revocation,
consented to and approved the 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 18. 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 19. 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 20. 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 21. EVENTS OF DEFAULT. Each of the following occurrences or events for the
purpose of this Ordinance is hereby declared to be an event of default (an "Event of Default"):
(i) the failure to make payment of the principal of or interest on any of the Bonds when the
same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or obligation
of the 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
25
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 Bonds 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 Bonds
or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other
provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be
available as a remedy under this Ordinance.
(b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of
any other available remedy.
(c) By accepting the delivery of a Bond authorized under this Ordinance, such 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, 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 25. DESIGNATION AS QUALIFIED TAX-EXEMPT OBLIGATIONS. The Issuer
hereby designates the Bonds as "qualified tax-exempt obligations" as defined in section 265(b)(3) of
the Internal Revenue Code of 1986 (the "Code"), conditioned upon the Underwriters certifying that
the aggregate initial offering price of the Bonds and the Issuer's Combination Tax and Surplus
Revenue Certificates of Obligation, Series 2013 (the "Certificates of Obligation") which are being
sold to the Underwriters concurrently with the Bonds, to the public(excluding any accrued interest)
is no greater than $10 million (or such other 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 the following: (a) that during the calendar year in which the Bonds and the Certificates
of Obligation are issued, the Issuer (including any subordinate entities) has not designated nor will
designate obligations, which when aggregated with the Bonds and the Certificates of Obligation, will
result in more than $10,000,000 (or such other 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 Bonds and the
26
Certificates of Obligation are issued, by the Issuer (or any subordinate entities) will not exceed
$10,000,000 (or such other 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 Section I I(a) hereof, in order that the Bonds and the Certificates of Obligation will not be
considered "private activity bonds" within the meaning of section 141 of the Code.
27
SCHEDULE I
SCHEDULE OF REFUNDED OBLIGATIONS
Principal Principal
Amount Amount
Description Maturities Outstanding Refunded
General Obligation Bonds, Taxable Series 2012 2/15/2014 $3,880,000 $3,880,000
Total $3,880,000 $3,880,000
The Series 2012 Bonds are called for redemption on August 1, 2013, at par plus accrued interest.
I-1
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.
A-1
Exhibit B
NOTICE OF DEFEASANCE AND REDEMPTION
TOWN OF PROSPER, TEXAS
(COLLIN AND DENTON COUNTIES, TEXAS)
NOTICE IS HEREBY GIVEN that the Town of Prosper, Texas has called for early redemption the
outstanding certificates of obligation of the Town described as follows:
Town of Prosper, Texas General Obligation Bonds, Taxable Series 2012 (the "Series
2012 Bonds") dated September 1, 2012, bearing interest at the rate shown below and
maturing on February 15, 2014 and in the amounts shown below. Such Bonds have
been called for redemption on August 1, 2013 at the redemption price of par and
accrued interest to the date fixed for redemption:
Maturity Date Principal Principal Interest
Amount Amount
(Feb. 15) Outstanding Refunded Rate
2/15/2014 $3,880,000 $3,880,000 1.04%
aggregating $3,880,000 in principal amount. Provision has been made as of July 25, 2013 for the
Series 2012 Bonds shown above to be paid from amounts held in an escrow account administered
by U.S. Bank National Association, Dallas, Texas, which is the Escrow Agent for the Series 2012
Bonds, until the date of redemption specified above, when the redemption price shall be paid upon
presentation of the Series 2012 Bonds to the Paying Agent/Registrar for the Series 2012 Bonds, at
following address:
Regions Bank
1900 5th Avenue North, Suite
2400
Birmingham, Alabama 35203
Upon presentation of the Series 2012 Bonds at the Paying Agent/Registrar on the aforementioned
redemption date, the holder thereof shall be entitled to receive the redemption price equal to par plus
accrued interest to the redemption date, and thereafter the Series 2012 Bonds shall no longer bear
interest.
TOWN OF PROSPER, TEXAS
B-1
CERTIFICATE REGARDING ADOPTION OF ORDINANCE
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 25TH DAY OF
JUNE, 2013, 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-Tem
Jason Dixon
Michael Korbuly
Curry Vogelsang, Jr.
Danny Wilson
Robyn Battle, Town Secretary
and all of said persons were present, except the following absentees: ( thus
constituting a quorum. Whereupon, among other business, the following was tr acted at said Meeting: a
written
ORDINANCE NO. 13-42
AUTHORIZING THE ISSUANCE AND SALE OF TOWN OF PROSPER, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2013; LEVYING AN
ANNUAL AD VALOREM TAX FOR THE PAYMENT OF SAID BONDS,APPROVING
AN OFFICIAL STATEMENT; CALLING CERTAIN OUTSTANDING OBLIGATIONS
FOR REDEMPTION PRIOR TO MATURITY;APPROVING THE USE OF AN ESCROW
AGREEMENT AND PAYING AGENT/REGISTRAR AGREEMENT;ENGAGING BOND
COUNSEL_ 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:
NOES: JlOne ABSTAIN: r1UVl2
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 AND SEALED this, the 25th day of June, 2013.
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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 AND SEALED this, the 25th day of June, 2013.
Town Sec etary Mayor
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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 AND SEALED this, the 25th day of June, 2013.
Town Sec etary Mayor
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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 AND SEALED this, the 25th day of June, 2013.
Town S/cretary Mayor
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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 AND SEALED this, the 25th day of June, 2013.
Town Sec/etary e ,, Mayor
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PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT is entered into as of June 15, 2013 (this "Agreement"), by and between
the Town of Prosper, Texas (the "Issuer"), and U.S. Bank National Association, in Dallas, Texas,
a national banking association duly organized and existing under the laws of the United States of
America (the "Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its General
Obligation Refunding Bonds, Series 2013 (the "Securities") in the aggregate principal amount of
$3,830,000, such Securities to be issued in fully-registered form only as to the payment of principal
and interest thereon; and
WHEREAS, the Securities are scheduled to be delivered to the initial purchasers thereof on or
about July 25, 2013, and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in connection
with the payment of the principal of, premium, if any, and interest on said Securities and with respect
to the registration, transfer and exchange thereof by the registered owners thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and
has full power and authority to perform and serve as Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Aunointment.
The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities.
As Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer
the principal, premium (if any), and interest on the Securities as the same become due and payable
to the registered owners thereof, all in accordance with this Agreement and the "Order" (hereinafter
defined).
The Issuer hereby appoints the Bank as Registrar with respect to the Securities. As Registrar
for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Order."
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02. Compensation.
As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees
to pay the Bank the fees and amounts set forth in Schedule A attached hereto for the first year of this
Agreement and thereafter the fees and amounts set forth in the Bank's current fee schedule then in
effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer
on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon
the first day of the following Fiscal Year.
In addition,the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Bank in accordance with any of the provisions
hereof(including the reasonable compensation and the expenses and disbursements of its agents and
counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
"Acceleration Date" on any Security means the date on and after which the principal or any or
all installments of interest, or both, are due and payable on any Security which has become
accelerated pursuant to the terms of the Security.
"Bank Office" means the principal corporate trust office of the Bank as indicated on the
signature page hereof. The Bank will notify the Issuer in writing of any change in location of the
Bank Office.
"Financial Advisor" means First Southwest Company.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30.
"Holder" and "Security Holder" each means the Person in whose name a Security is registered
in the Security Register.
Issuer Request" and Issuer Order mea n s aw ri tte n request o r order signed
in the name of the
Issuer by the Mayor or Mayor Pro-tem of the Issuer, any one or more of said officials, delivered to
the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be closed.
2
"Order" means the order, ordinance or resolution of the governing body of the Issuer pursuant
to which the Securities are issued, certified by the Secretary of the Board of Trustees or any other
officer of the Issuer and delivered to the Bank.
"Person" means any individual, corporation, partnership,joint venture, association,joint stock
company, trust, unincorporated organization or government or any agency or political subdivision
of a government.
"Predecessor Securities" of any particular Security means every previous Security evidencing
all or a portion of the same obligation as that evidenced by such particular Security (and, for the
purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a replacement
Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the
Order).
"Record Date" means the last business day of the month next preceding payment.
"Redemption Date" when used with respect to any Bond to be redeemed means the date fixed
for such redemption pursuant to the terms of the Order.
"Responsible Officer" when used with respect to the Bank means the Chairman or Vice-
Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive Committee
of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or
Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to
those performed by any of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred because of his knowledge
�I
of and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of the Issuer providing
for the registration and transfer of the Securities.
"Stated Maturity" means the date specified in the Order the principal of a Security is scheduled
to be due and payable.
Section 2.02. Other Definitions.
The terms "Bank," "Issuer" and "Securities (Security)" have the meanings assigned to them in
the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and
functions of this Agreement.
3
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Pavinp- Agent.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it
for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each
Security at its Stated Maturity,Redemption Date,or Acceleration Date,to the Holder upon surrender
of the Security to the Bank at the Bank Office.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it
for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each
Security when due, by computing the amount of interest to be paid each Holder and preparing and
sending checks by United States Mail, first class postage prepaid, on each payment date, to the
Holders of the Securities (or their Predecessor Securities) on the respective Record Date, to the
address appearing on the Security Register or by such other method, acceptable to the Bank,
requested in writing by the Holder at the Holder's risk and expense.
The Bank is also authorized to transfer funds relating to the closing and initial delivery of the
securities in the manner disclosed in the closing memorandum as prepared by the Financial Advisor
or other agent. The Bank may act on a facsimile or e-mail transmission of the closing memorandum
acknowledged by the financial advisor or the Issuer as the final closing memorandum. The Bank shall
not be liable for any losses, costs or expenses arising directly or indirectly from the Bank's reliance
upon and compliance with such instructions.
Section 3.02. Payment Dates.
The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities on
the dates specified in the Order.
ARTICLE FOUR
REGISTRAR
Section 4.01. Securitv Register - Transfers and ExchanEes.
The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books
and records (herein sometimes referred to as the "Security Register") and, if the Bank Office is
located outside the State of Texas, a copy of such books and records shall be kept in the State of
Texas, for recording the names and addresses of the Holders of the Securities,the transfer, exchange
and replacement of the Securities and the payment of the principal of and interest on the Securities
to the Holders and containing such other information as may be reasonably required by the Issuer and
subject to such reasonable regulations as the Issuer and the Bank may prescribe. All transfers,
exchanges and replacement of Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied
by a written instrument of transfer, the signature on which has been guaranteed by an officer of a
4
federal or state bank or a member of the National Association of Securities Dealers, in form
satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a re-
registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to
an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be
completed and new Securities delivered to the Holder or the assignee of the Holder in not more than
three(3)business days after the receipt of the Securities to be canceled in an exchange or transfer and
the written instrument of transfer or request for exchange duly executed by the Holder, or his duly
authorized agent, in form and manner satisfactory to the Paying Agent/Registrar.
Section 4.02. Certificates.
At any time that the Securities are not subject to a book-entry-only system of registration and
transfer, the Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or
exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in
safekeeping pending their use, and reasonable care will be exercised by the Bank in maintaining such
Securities in safekeeping, which shall be not less than the care maintained by the Bank for debt
securities of other political subdivisions or corporations for which it serves as registrar, or that is
maintained for its own securities.
Section 4.03. Form of Security Register.
The Bank, as Registrar,will maintain the Security Register relating to the registration,payment,
g Y
transfer and exchange of the Securities in accordance with the Bank's general practices and
procedures in effect from time to time. The Bank shall not be obligated to maintain such Security
Register in any form other than those that the Bank has currently available and currently utilizes at
the time.
The Security Register may be maintained in written form or in any other form capable of being
converted into written form within a reasonable time.
Section 4.04. List of Security Holders.
The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the
required fee, a copy of the information contained in the Security Register. The Issuer may also
inspect the information contained in the Security Register at any time the Bank is customarily open
for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or
to convert the information into written form.
The Bank will not release or disclose the contents of the Security Register to any person other
than to, or at the written request of, an authorized officer or employee of the Issuer, except upon
receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to
the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so
5
that the Issuer may contest the court order or such release or disclosure of the contents of the
Security Register,
Section 4.05. Cancellation of Certificates.
All certificates surrendered to the Bank, at the designated Payment/Transfer Office, for
payment, redemption, transfer or replacement, shall be promptly canceled by the Bank. The Bank
will provide to the Issuer, at reasonable intervals determined by it, a certificate evidencing the
destruction of canceled certificates.
Section 4.06. Mutilated, Destroved, Lost or Stolen Securities.
The Issuer hereby instructs the Bank, subject to the applicable provisions of the Order, to
deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost or stolen Securities
as long as the same does not result in an over-issuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank, in its discretion,
may execute and deliver a replacement Security of like form and tenor, and in the same denomination
and bearing a number not contemporaneously outstanding, in exchange and substitution for such
mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only
after i the filing b the Holder thereof with the Bank of evidence satisfactory to the Bank of the
( ) g Y rY
destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii)
the furnishing to the Bank of indemnification in an amount satisfactory to hold the Issuer and the
Bank harmless. All expenses and charges associated with such indemnity and with the preparation,
execution and delivery of a replacement Security shall be borne by the Holder of the Security
mutilated, or destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer.
The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish
the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has
delivered upon the transfer or exchange of any Securities pursuant to Section 4.01, and Securities it
has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to
Section 4,06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank.
The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care
p g
in the performance thereof.
6
Section 5.02. Reliance on Documents, Etc.
(a) The Bank may conclusively rely, as to the truth of the statements and correctness of the
opinions expressed therein, on certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or
otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note, security, or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties. Without limiting the generality of the foregoing
statement, the Bank need not examine the ownership of any Securities,but is protected in acting upon
receipt of Securities containing an endorsement or instruction of transfer or power of transfer
executed in accordance with Section 4.01 hereof, which appears on its face to be signed by the
Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the
facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request,direction,consent,order,bond,note, security or other paper or document supplied by Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or any opinion
of counsel shall be full and complete authorization and protection with respect to any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties hereunder
either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer.
The recitals contained herein with respect to the Issuer and in the Securities shall be taken as
the statements of the Issuer, and the Bank assumes no responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any
other Person for any amount due on any Security from its own funds.
Section 5.04. May Hold Securities.
The Bank, in its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Issuer with the same rights it would have if it were not
the Paying Agent/Registrar, or any other agent.
7
Section 5.05. Monevs Held by Bank.
The Bank shall deposit any moneys received from the Issuer into a trust account to be held in
a fiduciary capacity for the payment of the Securities, with such moneys in the account that exceed
the deposit insurance available to the Issuer by the Federal Deposit Insurance Corporation,to be fully
collateralized with securities or obligations that are eligible under the laws of the State of Texas to
secure and be pledged as collateral for trust accounts until the principal and interest on such securities
have been presented for payment and paid to the owner thereof. Payments made from such trust
account shall be made by check drawn on such trust account unless the owner of such Securities shall,
at its own expense and risk, request such other medium of payment.
Subject to the Unclaimed Property Law of the State of Texas, any money deposited with the
Bank for the payment of the principal, premium (if any), or interest on any Security and remaining
unclaimed for three years after the final maturity of the Security has become due and payable will be
paid by the Bank to the Issuer if the Issuer so elects, and the Holder of such Security shall hereafter
look only to the Issuer for payment thereof, and all liability of the Bank with respect to such monies
shall thereupon cease. If the Issuer does not elect, the Bank is directed to report and dispose of the
funds in compliance with Title Six of the Texas Property Code, as amended.
Section 5.06. Indemnification.
TO THE EXTENT PERMITTED BY LAW, THE ISSUER AGREES TO INDEMNIFY THE BANK,ITS
DIRECTORS,OFFICERS AND EMPLOYEES,AND HOLD IT HARMLESS AGAINST,ANY LOSS,LIABILITY
OR EXPENSE INCURRED WITHOUT NEGLIGENCE OR BAD FAITH ON ITS PART,ARISING OUT OF OR
IN CONNECTION WITH ITS ACCEPTANCE OR ADMINISTRATION OF ITS DUTIES HEREUNDER,
INCLUDING THE COST AND EXPENSE AGAINST ANY CLAIM OR LIABILITY IN CONNECTION WITH
THE EXERCISE OR PERFORMANCE OF ANY OF ITS POWERS OR DUTIES UNDER THIS AGREEMENT.
Section 5.07. InterDleader.
The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim,
demand, or controversy over its person as well as funds on deposit, in either a Federal or State
District Court located in the State and County where the administrative offices of the Issuer are
located, and agree that service of process by certified or registered mail, return receipt requested, to
the address referred to in Section 6.03 of this Agreement shall constitute adequate service. The
Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court
of competent jurisdiction in the State of Texas to determine the rights of any Person claiming any
interest herein.
Section 5.08. Depository Trust Companv Services.
It is hereby represented and warranted that, in the event the Securities are otherwise qualified
and accepted for "Depository Trust Company" services or equivalent depository trust services by
other organizations, the Bank has the capability and,to the extent within its control, will comply with
the "Operational Arrangements," effective August 1, 1987, which establishes requirements for
securities to be eligible for such type depository trust services, including, but not limited to,
8
requirements for the timeliness of payments and funds availability, transfer turnaround time, and
notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the parties
hereto.
Section 6.02. Assignment.
This Agreement may not be assigned by either party without the prior written consent of the
other.
Section 6.03. Notices.
i
Any request, demand, authorization, direction, notice, consent, waiver or other document
provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or
delivered to the Issuer or the Bank, respectively, at the addresses shown on the signature page of this
Agreement.
Section 6.04. Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the
construction hereof.
Section 6.05. Successors and Assigns.
All covenants and agreements herein by the Issuer shall bind its successors and assigns,whether
so expressed or not.
Any corporation or association into which the Bank may be converted or merged, or with which
it may be consolidated, or to which it may sell,lease, or transfer its corporate trust business and assets
as a whole or substantially as a whole, or any corporation or association resulting from any such
conversion, sale, merger, consolidation, or transfer to which it is a party, ipso facto, shall be and
become successor Paying Agent/Registrar hereunder and vested with all of the powers, rights,
obligations, duties, remedies, discretions, immunities, privileges, and all other matters as was its
predecessor, without the execution or filing of any instruments or any further act, deed, or
conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
Section 6.06. Severabilitv.
In case any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
9
I
Section 6.07. Benefits of Agreement.
Nothing herein, express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement.
This Agreement and the Order constitute the entire agreement between the parties hereto
relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this
Agreement and the Order, the Order shall govern.
Section 6.09. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed
an original and all of which shall constitute one and the same Agreement.
Section 6.10. Termination.
This Agreement will terminate (i) on the date of final payment of the principal of and interest
on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty
(60) days written notice; provided, however, an early termination of this Agreement by either party
shall not be effective until (a) a successor Paying Agent/Registrar has been appointed by the Issuer
and such appointment accepted and (b) notice has been given to the Holders of the Securities of the
appointment of a successor Paying Agent/Registrar. Furthermore, the Bank and Issuer mutually
agree that the effective date of an early termination of this Agreement shall not occur at any time
which would disrupt, delay or otherwise adversely affect the payment of the Securities.
The resigning Paying Agent/Registrar may petition any court of competent jurisdiction for the
appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a successor
Paying Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixty
(60) days after the giving of such notice of resignation.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver
the Security Register (or a copy thereof), together with other pertinent books and records relating
to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force and
effect following the termination of this Agreement.
Section 6.11. Governing Law.
This Agreement shall be construed in accordance with and governed by the laws of the State
of Texas.
10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
U.S. BANK, NATIONAL ASSOCIATION
By
Title
14241 Dallas Parkway, Suite 490
EX-TX-DCRE
Dallas, Texas 75254
TOWN OF PROSPER, TEXAS
By
Mayor
P.O. Box 307
Prosper, Texas 75078
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
U.S. BANK, NATIONAL ASSOCIATION
By
Title
14241 Dallas Parkway, Suite 490
EX-TX-DCRE
Dallas, Texas 75254
TOWN OF PROSPER, TEXAS
By
Mayor r
I
P.O. Box 307
Prosper, Texas 75078
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
U.S. BANK, NATIONAL ASSOCIATION
By
Title
14241 Dallas Parkway, Suite 490
EX-TX-DCRE
Dallas, Texas 75254
TOWN OF PROSPER, TEXAS
r ,
B
Mayor
P.O. Box 307
Prosper, Texas 75078
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
U.S. BANK, NATIONAL ASSOCIATION
By
Title
14241 Dallas Parkway, Suite 490
EX-TX-DCRE
Dallas, Texas 75254
TOWN OF PROSPER, TEX�S
ByL� �;
Mayor i
P.O. Box 307
Prosper, Texas 75078
i
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
U.S. BANK, NATIONAL ASSOCIATION
By
Title
14241 Dallas Parkway, Suite 490
EX-TX-DCRE
Dallas, Texas 75254
TOWN OF PROSPER, TEXAS
t
By
Mayor
P.O. Box 307
Prosper, Texas 75078
TOWN OF PROSPER, TEXAS
(A political subdivision and municipal corporation of
the State of Texas located within Collin and Denton Counties)
$3,830,000
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2013
PURCHASE AGREEMENT
June 25, 2013
Honorable Mayor and Town Council
Town of Prosper, Texas
P.O. Box 307
Prosper, Texas 75078
Ladies and Gentlemen:
The undersigned, RBC Capital Markets, LLC(the "Representative"), acting on its own
behalf and on behalf of the other underwriters listed on Schedule I hereto (collectively, the
"Underwriters") and not acting fiduciary or agent for you, offers to enter into the following
agreement (this "Agreement") with the Town of Prosper, Texas (the "Issuer") which, upon the
Issuer's written acceptance of this offer, will be binding upon the Issuer and upon the
Underwriters. This offer is made subject to the Issuer's written acceptance hereof on or before
10:00 p.m., Prosper, Texas time, on June 25, 2013, and, if not so accepted, will be subject to
withdrawal by the Underwriters upon written notice delivered to the Issuer at any time prior to
the acceptance hereof by the Issuer. Terms not otherwise defined in this Agreement shall have
the same meanings set forth in the Ordinance (as defined herein) or in the Official Statement (as
defined herein).
1. Purchase and Sale of the Bonds. Subject to the terms and conditions and in
reliance upon the representations, warranties and agreements set forth herein, the Underwriters
hereby agree, jointly and severally, to purchase from the Issuer, and the Issuer hereby agrees to
sell and deliver to the Underwriters, all, but not less than all, of the Issuer's $3,830,000 General
Obligation Refunding Bonds, Series 2013 (the "Bonds"). Inasmuch as this purchase and sale
represents a negotiated transaction, the Issuer acknowledges and agrees that: (i) the transaction
contemplated by this Agreement is an arm's length, commercial transaction between the Issuer
and the Underwriters in which the Underwriters are acting solely as principals and are not acting
as municipal advisors, financial advisors or fiduciaries to the Issuer; (ii) the Underwriters have
11013:3326832.4
not assumed any advisory or fiduciary responsibility to the Issuer with respect to the transaction
contemplated hereby and the discussions, undertakings and procedures leading thereto
(irrespective of whether the Underwriters have provided other services or are currently providing
other services to the Issuer on other matters); (iii) the Underwriters are acting solely in their
capacity as underwriters for their own accounts, (iv) the only obligations the Underwriters have
to the Issuer with respect to the transaction contemplated hereby expressly are set forth in this
Agreement; and (v) the Issuer has consulted its own legal, accounting, tax, financial and other
advisors, as applicable, to the extent it has deemed appropriate. The Representative has been
duly authorized to execute this Agreement and to act hereunder.
The principal amount of the Bonds to be issued, the dated date therefor, the maturities
and redemption provisions and interest rates per annum are set forth in Schedule II hereto. The
Bonds shall be as described in, and shall be issued and secured under and pursuant to the
provisions of an ordinance adopted by the Issuer on June 25, 2013 (the "Ordinance").
The purchase price for the Bonds shall be $3,972,678.76 (representing the par amount of
the Bonds, plus a reoffering premium of $168,874.90 and less an underwriting discount of
$26,196.14).
Delivered to the Issuer herewith as a good faith deposit is a corporate check of the
Representative payable to the order of the Issuer in the amount of $110,400. In the event the
Issuer accepts this Agreement, such check shall be held by the Issuer as security for the
performance of the Underwriters of their obligation to purchase, accept delivery of and pay for
the Bonds under this Agreement. Such check shall be held uncashed by the Issuer until the time
of Closing, at which time such check shall be returned uncashed to the Representative. In the
event that the Issuer does not accept this Agreement, such check will be immediately returned to
the Representative. Should the Issuer fail to deliver the Bonds at the Closing, or should the
Issuer be unable to satisfy the conditions of the obligations of the Underwriters to purchase,
accept delivery of and pay for the Bonds, as set forth in this Agreement (unless waived by the
Representative), or should such obligations of the Underwriters be terminated for any reason
permitted by this Agreement, such check shall immediately be returned to the Representative. In
the event that the Underwriters fail (other than for a reason permitted hereunder) to purchase,
accept delivery of and pay for the Bonds at the Closing as herein provided, such check shall be
cashed and the amount thereof retained by the Issuer as and for fully liquidated damages, and not
as a penalty for such failure of the Underwriters, and for any defaults hereunder on the part of the
Underwriters. Acceptance of such check by the Issuer shall constitute a full release and
discharge of all claims and damages for such failure and/or any and all such defaults, and the
Issuer shall have no further action for damages, specific performance, or any other legal or
equitable relief against the Underwriters. The Underwriters and the Issuer understand that in
such event the Issuer's actual damages may be greater or may be less than such amount.
Accordingly, the Underwriters hereby waive any right to claim that the Issuer's actual damages
are less than such amount, and the Issuer's acceptance of this Agreement shall constitute a
waiver of any right the Issuer may have to additional damages from the Underwriters. The
Representative hereby agrees not to stop or cause payment on the check to be stopped unless the
Issuer has breached any material term of this Agreement.
HOL 3326832.4 2
2. Public Offering. The Underwriters agree to make a bona fide public offering of
all of the Bonds at a price not to exceed the public offering price set forth on page 2 of the
Official Statement and may subsequently change such offering prices or yields without any
requirement of prior notice. The Underwriter may offer and sell the Bonds to certain dealers
(including dealers depositing Bonds into investment trusts) and others at a price lower than the
public offering price stated on page 2 of the Official Statement. The Underwriters may offer and
sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) and
others at prices lower than the public offering prices or yields stated on page 2 of the Official
Statement; provided that on or before the Closing, the Representative shall execute and deliver to
McCall, Parkhurst & Horton, L.L.P., Dallas, Texas ("Bond Counsel') an issue price certificate
for the Bonds prepared by Bond Counsel verifying the initial offering prices at which the
Representative reasonably expected to sell or in fact sold a substantial amount of each stated
maturity of the Bonds to the public.
3. The Official Statement.
(a) The Issuer previously has delivered, or caused to be delivered, to the
Underwriters the Preliminary Official Statement dated June 18, 2013 (the "Preliminary
Official Statement") in a "designated electronic format," as defined in the Municipal
Securities Rulemaking Board ("MSRB") Rule G-32 ("Rule G-32"). The Issuer will
prepare, or cause to be prepared, a final Official Statement relating to the Bonds, which
will be (i) dated the date of this Agreement, (ii) complete within the meaning of the
United States Securities and Exchange Commission's Rule 15c2-12, as amended (the
"Rule"), (iii) in a "designated electronic format" and (iv) substantially in the form of the
most recent version of the Preliminary Official Statement provided to the Underwriters
before the execution hereof. Such final Official Statement, including the cover page
thereto, all exhibits, schedules, appendices, maps, charts, pictures, diagrams, reports, and
statements included or incorporated therein or attached thereto, and all amendments and
supplements thereto that may be authorized for use with respect to the Bonds, is herein
referred to as the "Official Statement." Until the Official Statement has been prepared
and is available for distribution, the Issuer shall provide to the Underwriters sufficient
quantities (which may be in electronic format) of the Preliminary Official Statement as
the Representative deems necessary to satisfy the obligation of the Underwriters under
the Rule with respect to distribution to each potential customer, upon request, of a copy
of the Preliminary Official Statement.
(b) The Preliminary Official Statement has been prepared for use by the
Underwriters in connection with the public offering, sale and distribution of the Bonds.
The Issuer hereby represents and warrants that the Preliminary Official Statement has
been deemed final by the Issuer as of its date, except for the omission of such information
which is dependent upon the final pricing of the Bonds for completion, all as permitted to
be excluded by Section (b)(1) of the Rule.
(c) The Issuer hereby authorizes the Official Statement and the information
therein contained to be used by the Underwriters in connection with the public offering
and the sale of the Bonds. The Issuer consents to the use by the Underwriters prior to the
HOU:3326832.4 3
date hereof of the Preliminary Official Statement in connection with the public offering
of the Bonds. The Issuer shall provide, or cause to be provided, to the Underwriters as
soon as practicable after the date of the Issuer's acceptance of this Agreement (but, in any
event, not later than within seven (7) business days after the Issuer's acceptance of this
Agreement and in sufficient time to accompany any confirmation that requests payment
from any customer) copies of the Official Statement which is complete as of the date of
its delivery to the Underwriters. The Issuer shall provide the Official Statement, or cause
the Official Statement to be provided, (i) in a "designated electronic format" consistent
with the requirements of Rule G-32 and (ii) in a printed format in such quantity as the
Representative shall reasonably request in order for the Underwriters to comply with
Section (b)(4) of the Rule and the rules of the MSRB.
(d) If, after the date of this Agreement to and including the date the
Underwriters are no longer required to provide an Official Statement to potential
customers who request the same pursuant to the Rule (the earlier of(i) ninety (90) days
from the "end of the underwriting period" (as defined in the Rule) and (ii) the time when
the Official Statement is available to any person from the MSRB, but in no case less than
twenty-five (25) days after the "end of the underwriting period" for the Bonds), the Issuer
becomes aware of any fact or event which might or would cause the Official Statement,
as then supplemented or amended, to contain any untrue statement of a material fact or to
omit to state a material fact required to be stated therein, or necessary to make the
statements therein in light of the circumstances under which they were made, not
misleading, or if it is necessary to amend or supplement the Official Statement to comply
with law, the Issuer will notify the Representative (and for the purposes of this clause
provide the Representative with such information as it may from time to time reasonably
request), and if, in the reasonable opinion of the Representative, such fact or event
requires preparation and publication of a supplement or amendment to the Official
Statement, the Issuer will forthwith prepare and furnish, at the Issuer's own expense (in a
form and manner approved b the Representative), either an amendment or supplement
pp y a a
to the Official Statement so that the statements in the Official Statement as so amended
and supplemented will not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein, or necessary to make the statements therein
q Y
in light of the circumstances under which they were made, not misleading or so that the
Official Statement will comply with law, provided, however, that for all purposes of this
Agreement and any certificate delivered by the Issuer in accordance herewith, the Issuer
makes no representations with respect to the descriptions in the Preliminary Official
Statement or the Official Statement of The Depository Trust Company, New York, New
York ("DTC ), or its book-entry-only system. If such notification shall be subsequent to
the Closing, the Issuer shall furnish such legal opinions, certificates, instruments and
other documents as the Representative may deem reasonably necessary to evidence the
truth and accuracy of such supplement or amendment to the Official Statement. The
Issuer shall provide any such amendment or supplement, or cause any such amendment
or supplement to be provided, in a "designated electronic format" consistent with the
requirements of Rule G-32.
HOL'3326832 4 4
(e) The Representative hereby agrees to file the Official Statement and the
Escrow Agreement (as defined herein) with the MSRB through its Electronic Municipal
Market Access ("F.MMA") system on or before the date of the Closing. Unless otherwise
notified in writing by the Representative, the Issuer can assume that the "end of the
underwriting period" for purposes of the Rule is the date of the Closing.
4. Representations, Warranties and Covenants of the Issuer. The Issuer hereby
represents and warrants to and covenants with the Underwriters that:
(a) The Issuer is a home rule city duly created and existing under the laws of
the State of Texas (the "State") and is issuing the Bonds pursuant to the provisions of
Chapter 1207, Texas Government Code, as amended (the "Act") and has full legal right,
power and authority under the Act, and at the date of the Closing will have full legal
right, power and authority (1) to enter into, execute and deliver this Agreement, the
Ordinance, the escrow agreement defined in the Ordinance (the "Escrow Agreement")
and the Continuing Disclosure Undertaking (as defined in Section 60)(3) hereof) (this
Agreement, the Escrow Agreement and the Ordinance (including the Continuing
Disclosure Undertaking set forth in the Ordinance) are hereinafter referred to as the
"Issuer Documents"), (ii) to sell, issue and deliver the Bonds to the Underwriters as
provided herein, and (iii) to carry out and consummate the transactions described in the
Issuer Documents and the Official Statement, and the Issuer has complied, and will at the
Closing be in compliance in all material respects, with the terms of the Act and the Issuer
Documents as they pertain to such transactions;
(b) By all necessary official action of the Issuer prior to or concurrently with
the acceptance hereof, the Issuer has duly authorized all necessary action to be taken by it
for (1) the adoption of the Ordinance and the issuance and sale of the Bonds, (ii) the
approval, execution and delivery of, and the performance by the Issuer of the obligations
on its part, contained in the Bonds and the Issuer Documents and (iii) the consummation
by it of all other transactions described in the Official Statement and the Issuer
Documents and any and all such other agreements and documents as may be required to
be executed, delivered and/or received by the Issuer in order to carry out, give effect to,
and consummate the transactions described herein and in the Official Statement,
(c) The Issuer Documents constitute legal, valid and binding obligations of
the Issuer subject to bankruptcy, insolvency, reorganization, moratorium, sovereign
immunity of political subdivisions and other similar laws and principles of equity relating
to or affecting the enforcement of creditors' rights, the Bonds, when issued, delivered and
paid for, in accordance with the Ordinance and this Agreement, will constitute legal,
valid and binding obligations of the Issuer, entitled to the benefits of the Ordinance and
enforceable in accordance with their terms, by mandamus or other relief permitted by
law, subject to sovereign immunity of political subdivisions, bankruptcy, insolvency,
reorganization, moratorium and other similar laws and principles of equity relating to or
affecting the enforcement of creditors' rights and upon the issuance, authentication and
delivery of the Bonds as aforesaid, the Ordinance will provide, for the benefit of the
HOLT 3326832.4 5
holders, from time to time, of the Bonds, the legally valid and binding pledge of and lien
on the ad valorem tax revenues the Ordinance purports to create;
(d) To the best of its knowledge, after due and proper inquiry, on the date
hereof and on the date of Closing, the Issuer is not in material breach of or default under
any applicable constitutional provision, law or administrative regulation of the State or
the United States relating to the Issuer's ability to borrow money or otherwise obtain
credit or any applicable judgment or decree that would have a material adverse effect
upon the operations or financial condition of the Issuer; or any loan agreement, indenture,
bond, note, resolution, agreement or other instrument to which the Issuer is a party or to
which the Issuer is otherwise subject, and no event has occurred and is continuing which
constitutes or with the passage of time or the giving of notice, or both, would constitute a
material default or event of default by the Issuer under any of the foregoing to the extent
it relates to the Issuer's ability to borrow money or otherwise obtain credit; and the
execution and delivery of the Bonds, the Issuer Documents and the adoption of the
Ordinance and compliance with the provisions on the Issuer's part contained therein, will
not conflict with or constitute a material breach of or default under any constitutional
provision, law or administrative regulation, judgment or decree, or any loan agreement,
indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a
party or to which the Issuer is otherwise subject or under the terms of any such law,
regulation or instrument, to the extent it relates to the Issuer's ability to borrow money or
otherwise obtain credit;
(e) All authorizations, approvals, licenses, permits, consents and orders of any
governmental authority, legislative body, board, agency or commission having
jurisdiction of the matters which are required for the due authorization of, which would
constitute a condition precedent to, or the absence of which would materially adversely
affect the due performance by the Issuer of its obligations under the Issuer Documents
and the Bonds have been duly obtained or will be obtained prior to Closing, except for
such approvals, consents and orders as may be required under the Blue Sky or securities
laws of any jurisdiction in connection with the offering and sale of the Bonds;
(f) The Bonds and the Ordinance conform to the descriptions thereof
contained in the Official Statement under the captions "THE OBLIGATIONS", the
proceeds of the sale of the Bonds will be applied generally as described in the Official
Statement under the subcaption "THE OBLIGATIONS— Sources and Uses of Obligation
Proceeds" and the Continuing Disclosure Undertaking conforms to the description
thereof contained in the Official Statement under the caption "CONTINUING
DISCLOSURE OF INFORMATION";
(g) During the last five (5) years the Issuer has complied in all material
respects with its previous Continuing Disclosure Undertakings made by it in accordance
with the Rule;
(h) Except to the extent disclosed in the Official Statement, there is no
litigation, action, suit, proceeding, inquiry or investigation, at law or in equity, before or
HOU 33268314 6
by any court, government agency, public board or body, pending or, to the knowledge of
the Issuer after due inquiry, threatened against the Issuer, affecting the existence of the
Issuer or the titles of its officers to their respective offices, or affecting or seeking to
prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the collection of
taxes pledged to the payment of principal of and interest on the Bonds pursuant to the
Ordinance or in any way contesting or affecting the validity or enforceability of the
Bonds or the Issuer Documents, or contesting the exclusion from gross income of interest
on the Bonds for federal income tax purposes, or contesting in any way the completeness
or accuracy of the Preliminary Official Statement or the Official Statement or any
supplement or amendment thereto, or contesting the powers of the Issuer or any authority
for the issuance of the Bonds, the adoption of the Ordinance or the execution and delivery
of the Issuer Documents, nor, to the knowledge of the Issuer, is there any basis therefor,
wherein an unfavorable decision, ruling or finding would materially adversely affect the
validity or enforceability of the Bonds or the Issuer Documents; provided, however, that
for all purposes of this Agreement and any certificate delivered by the Issuer in
accordance herewith, the Issuer makes no representations with respect to the descriptions
in the Preliminary Official Statement or the Official Statement of The Depository Trust
Company, New York New York, or its book-entry-only system;
(i) As of the date thereof, the Preliminary Official Statement did not contain
any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
0) At the time of the Issuer's acceptance hereof and (unless the Official
Statement is amended or supplemented pursuant to paragraph (d) of Section 3 of this
Agreement) at all times subsequent thereto during the period up to and including twenty-
five (25) days subsequent to the "end of the underwriting period," the Official Statement
does not and will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(k) If the Official Statement is supplemented or amended pursuant to
paragraph (d) of Section 3 of this Agreement, at the time of each supplement or
amendment thereto and (unless subsequently again supplemented or amended pursuant to
such paragraph) at all times subsequent thereto during the period up to and including
twenty-five (25) days subsequent to the "end of the underwriting period", the Official
Statement as so supplemented or amended will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which made, not
misleading;
(1) The Issuer will apply, or cause to be applied, the proceeds from the sale of
the Bonds as provided in and subject to all of the terms and provisions of the Ordinance
and not take or omit to take any action which action or omission will adversely affect the
I[OU 3326832.4 7
exclusion from gross income for federal income tax purposes of the interest on the
Bonds;
(m) The Issuer will furnish such information and execute such instruments and
take such action in cooperation with the Underwriters, at the sole expense of the
Underwriters, as the Representative may reasonably request (1) to (i) qualify the Bonds
for offer and sale under the Blue Sky or other securities laws and regulations of such
states and other jurisdictions in the United States as the Representative may designate and
(ii) determine the eligibility of the Bonds for investment under the laws of such states and
other jurisdictions and (2) to continue such qualifications in effect so long as required for
the distribution of the Bonds (provided, however, that the Issuer will not be required to
qualify as a foreign corporation or to file any general or special consents to service of
process under the laws of any jurisdiction) and will advise the Representative
immediately of receipt by the Issuer of any notification with respect to the suspension of
the qualification of the Bonds for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose;
(n) The financial statements of, and other financial information regarding, the
Issuer in the Official Statement fairly present the financial position, results of operations
and condition of the Issuer as of the dates and for the periods therein set forth, and there
has been no adverse change of a material nature in such financial position, results of
operations or condition, financial or otherwise, of the Issuer since the dates of such
statements and information;
(o) The Issuer is not a party to any litigation or other proceeding pending or,
to its knowledge, threatened which, if decided adversely to the Issuer, would have a
materially adverse effect on the financial condition of the Issuer,
(p) Prior to the Closing, the Issuer will not offer or issue any bonds, notes or
other obligations for borrowed money or incur any material liabilities, direct or
contingent, payable from or secured by any of the revenues which will secure the Bonds
(except the Issuer's Combination Tax and Surplus Revenue Certificates of Obligation,
Series 2013), except as may be incurred in the ordinary course of business, without the
prior approval of the Representative, which approval shall not be unreasonably withheld;
(q) The Issuer, to the extent heretofore requested in writing by the
Underwriters, has delivered to the Underwriters true, correct, complete, and legible
copies of all information, applications, reports, or other documents of any nature
whatsoever submitted to any rating agency for the purpose of obtaining a rating for the
Bonds or to any municipal bond insurance company to obtain a municipal bond insurance
policy on the Bonds and, in each instance, true, correct, complete, and legible copies of
all correspondence or other communications relating thereto;
(r) Any certificate, signed by any official of the Issuer authorized to do so in
connection with the transactions described in this Agreement, shall be deemed a
HO1'.3326832.4 8
representation and warranty by the Issuer to the Underwriters as to the statements made
therein; and
(s) The Issuer covenants that between the date hereof and the Closing it will
not intentionally take actions which will cause the representations and warranties made in
this Section to be untrue as of the Closing.
By delivering the Official Statement to the Underwriters, the Issuer shall be deemed to
have reaffirmed, with respect to such Official Statement, the representations, warranties and
covenants set forth above with respect to the Preliminary Official Statement.
5. Closing.
(a) At 10:00 a.m. Prosper, Texas, time, on July 25, 2013, or at such other time
and date as shall have been mutually agreed upon by the Issuer and the Underwriters (the
"Closing"), the Issuer will, subject to the terms and conditions hereof, deliver the Bonds
to the Underwriters one initial Bond representing the entire principal amount (the "Initial
Bond") duly executed and authenticated, together with the other documents hereinafter
mentioned, and the Underwriters will, subject to the terms and conditions hereof, accept
such delivery and pay the purchase price of the Bonds as set forth in Section 1 of this
Agreement in immediately available funds by wire transfer to the account of the Issuer as
indicated by U.S. Bank National Association, Dallas Texas (the "Paying
Agent,Registrar"). Payment for the Bonds as aforesaid shall be made at the offices of the
Paying Agent/Registrar or such other place as shall have been mutually agreed upon by
the Issuer and the Representative. The Initial Bonds shall be registered in the name of the
Representative.
(b) Delivery of the definitive Bonds shall be made to The Depository Trust
Company, New York, New York ("DICC'). The definitive Bonds shall be delivered in
definitive fully registered form, bearing CUSIP numbers without coupons, with one Bond
for each maturity of the Bonds registered in the name of Cede & Co., all as provided in
the Ordinance and shall be made available to the Underwriters at least one (1) business
day before Closing for purposes of inspection (i) DTC or (ii) at the Paying
Agent/Registrar, if the definitive Bonds are to be held in safekeeping for DTC by the
Paying Agent Registrar pursuant to DTC's FAST System.
6. Closing Conditions. The Underwriters have entered into this Agreement in
reliance upon the representations, warranties and agreements of the Issuer contained herein, and
in reliance upon the representations, warranties and agreements to be contained in the documents
and instruments to be delivered at the Closing and upon the performance by the Issuer of its
obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly,
the Underwriters' obligations under this Agreement to purchase, to accept delivery of and to pay
for the Bonds shall be conditioned upon the performance by the Issuer of its obligations to be
performed hereunder and under such documents and instruments at or prior to the Closing, and
shall also be subject to the following additional conditions, including the delivery by the Issuer
FIOU 3326832 4 9
of such documents as are enumerated herein, in form and substance reasonably satisfactory to the
Representative:
(a) The representations and warranties of the Issuer contained herein shall be
true, complete and correct in all material respects on the date hereof and on and as of the
date of the Closing, as if made on the date of the Closing;
(b) The Issuer shall have performed and complied with all agreements and
conditions required by this Agreement to be performed or complied with by it prior to or
at the Closing;
(c) At the time of the Closing, (i) the Issuer Documents and the Bonds shall
be in full force and effect and shall not have been amended, modified or supplemented,
and the Official Statement shall not have been supplemented or amended, except in any
such case as may have been agreed to by the Representative; (ii) the net proceeds of the
sale of the Bonds and any funds to be provided by the Issuer shall be deposited and
applied as described in the Official Statement and in the Ordinance and (iii) all actions of
the Issuer required to be taken by the Issuer shall be performed in order for Bond Counsel
and counsel to the Underwriters to deliver their respective opinions referred to hereafter,
(d) At the time of the Closing, all official action of the Issuer relating to the
Bonds and the Issuer Documents shall be in full force and effect and shall not have been
amended, modified or supplemented except as may have been approved by the
Representative;
(e) At or prior to the Closing, the Ordinance shall have been duly executed
and delivered by the Issuer and the Issuer shall have duly executed and delivered and the
Paying Agent/Registrar shall have duly authenticated the Bonds;
(0 At the time of the Closing, there shall not have occurred any change or
any development involving a prospective change in the condition, financial or otherwise,
or in the revenues or operations of the Issuer, from that set forth in the Official Statement
that in the reasonable judgment of the Representative is material and adverse and that
makes it, in the reasonable judgment of the Representative, impracticable to market the
Bonds on the terms and in the manner described in the Official Statement;
(h) The Issuer shall not currently be in default in the timely payment of
principal or interest when due on any of its outstanding obligations for borrowed money;
(1) All steps to be taken and all instruments and other documents to be
executed, and all other legal matters in connection with the transactions described in this
Agreement shall be reasonably satisfactory in legal form and effect to the Representative,
to Bond Counsel and to counsel for the Underwriters; and
0) At or prior to the Closing, the Representative shall have received copies of
each of the following documents:
HOU:3326832.4 10
(1) The Official Statement, and each supplement or amendment
thereto, if any, as may have been agreed to by the Representative;
(2) A copy of the Ordinance, certified as having been duly adopted
and in full force and effect, with such supplements or amendments as may have
been agreed to by the Underwriters;
(3) A copy of the executed Escrow Agreement;
(4) The undertaking of the Issuer set forth in the Ordinance (the
"Continuing Disclosure Undertaking") which satisfies the requirements of
Section (d)(2) of the Rule;
(5) The approving opinion of McCall, Parkhurst & Horton L.L.P.,
Dallas, Texas ("Bond Counsel"), with respect to the Bonds, in substantially the
form attached to the Official Statement;
(6) A supplemental opinion of Bond Counsel addressed to the Issuer
and the Underwriters substantially to the effect that:
(1) the Ordinance has been duly adopted and is in full force
and effect;
(ii) the Bonds are exempt securities that do not require
registration under the Securities Act of 1933, as amended (the "1933
Act"), and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and it is not necessary, in connection with the offering
and sale of the Bonds to register the Bonds under the 1933 Act or to
qualify the Ordinance under the Trust Indenture Act; and
(iii) such firm was not requested to participate, and did not take
part, in the preparation of the Official Statement, and such firm has not
assumed any responsibility with respect thereto or undertaken
independently to verify any of the information contained therein, except
that, in its capacity as Bond Counsel, such firm has reviewed the
information in the Official Statement under the captions and subcaptions
"The Plan of Financing" (exclusive of "Sources and Uses of Obligation
Proceeds"), "The Obligations" (exclusive of subcaptions "Book-Entry-
Only System" "Sources and Uses of Obligation Proceeds" and
"Obligationholders' Remedies"), "Tax Matters," and "Continuing
Disclosure of Information" (except for the information under the
subcaption "Compliance with Prior Undertakings") and the subcaptions
"Other Information - Registration and Qualification of Obligations for
Sale," "Other Information - Legal Investments and Eligibility to Secure
Public Funds in Texas" and "Other Information - Legal Matters" (except
HOU 3326832.4 11
for the last sentence of the first paragraph thereof) and such firm is of the
opinion that the information relating to the Bonds and the legal issues
contained under such captions and subcaptions is an accurate and fair
description of the laws and legal issues addressed therein and, with respect
to the Bonds, such information conforms to the Ordinance;
(7) An opinion, dated the date of the Closing and addressed to the
Underwriters, of counsel to the Underwriters, to the effect that:
(i) the Bonds are exempt securities under the 1933 Act and the
Trust Indenture Act and it is not necessary, in connection with the offering
and sale of the Bonds, to register the Bonds under the 1933 Act and the
Ordinance need not be qualified under the Trust Indenture Act; and
(ii) based upon their participation in the preparation of the
Official Statement as counsel for the Underwriters and their participation
at conferences at which the Official Statement was discussed, but without
having undertaken to determine independently the accuracy, completeness
or fairness of the statements contained in the Official Statement, such
counsel has no reason to believe that the Official Statement contains any
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (except for any financial,
forecast, technical and statistical statements and data included in the
Official Statement and the information regarding DTC and its book-entry-
only system, in each case as to which no view need be expressed);
(8) A certificate, dated the date of the Closing, of an appropriate
official of the Issuer to the effect that (1) the representations and warranties of the
Issuer contained herein are true and correct in all material respects on and as of
the date of the Closing as if made on the date of the Closing; (ii) except as may be
disclosed in the Official Statement no litigation, proceeding or tax challenge
against the Issuer is pending or, to the best of his or her knowledge, threatened in
any court or administrative body nor is there a basis for litigation which would (a)
contest the right of the council members, officers or officials of the Issuer to hold
and exercise their respective positions, (b) contest the due organization and valid
existence of the Issuer, (c) contest the validity, due authorization and execution of
the Bonds or the Issuer Documents or (d) attempt to limit, enjoin or otherwise
restrict or prevent the Issuer from functioning and collecting ad valorem taxes,
including for payments on the Bonds, pursuant to the Ordinance, or the levy or
collection of the ad valorem taxes pledged or to be pledged to pay the principal of
and interest on the Bonds, or the pledge thereof, (iii) all official action of the
Issuer relating to the Official Statement, the Bonds and the Issuer Documents
have been duly taken by the Issuer, are in full force and effect and have not been
modified, amended, supplemented or repealed; (iv) to the best of his or her
knowledge, no event affecting the Issuer has occurred since the date of the
1101'.3326832.4 12
Official Statement which should be disclosed in the Official Statement for the
purpose for which it is to be used or which it is necessary to disclose therein in
order to make the statements and information therein, in light of the
circumstances under which made, not misleading in any material respect as of the
time of the Closing, and the information contained in the Official Statement is
correct in all material respects and, as of the date of the Official Statement did
not, and as of the date of the Closing does not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading; and (v) there has not been any
material adverse change in the financial condition of the Issuer since
September 30, 2012, the latest date as of which audited financial information is
available;
(9) A certificate of the Issuer in form and substance satisfactory to
Bond Counsel and counsel to the Underwriters setting forth the facts, estimates
and circumstances in existence on the date of the Closing, which establish that it
is not expected that the proceeds of the Bonds will be used in a manner that would
cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the
Internal Revenue Code of 1986, as amended (the "Code"), and any applicable
regulations (whether final, temporary or proposed), issued pursuant to the Code;
(10) The approving opinion of the Attorney General of the State of
Texas and the registration certificates of the Comptroller of Public Accounts of
the State of Texas in respect of the Bonds,
(11) The certificate of the Issuer's financial advisor of the sufficiency of
the deposit with the Escrow Agent for the payment of the Refunded Bonds;
(12) Any other certificates and opinions required by the Ordinance for
the issuance thereunder of the Bonds;
(13) Evidence satisfactory to the Representative that the Bonds have
been rated "Aa3" by Moody's Investor Services and that such rating is in effect as
of the date of the Closing; and
(14) Such additional legal opinions, certificates, instruments and other
documents as Bond Counsel, the Representative or counsel to the Underwriters
may reasonably request to evidence the truth and accuracy, as of the date hereof
and as of the date of the Closing, of the Issuer's representations and warranties
contained herein and of the statements and information contained in the Official
Statement and the due performance or satisfaction by the Issuer on or prior to the
date of the Closing of all the respective agreements then to be performed and
conditions then to be satisfied by the Issuer.
1101':3326832 4 13
All of the opinions, letters, certificates, instruments and other documents mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions
hereof if, but only if, they are in form and substance reasonably satisfactory to the
Representative.
If the Issuer shall be unable to satisfy the conditions to the obligations of the
Underwriters to purchase, to accept delivery of and to pay for the Bonds contained in this
Agreement, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay
for the Bonds shall be terminated for any reason permitted by this Agreement, this Agreement
shall terminate and neither the Underwriters nor the Issuer shall be under any further obligation
hereunder, except that the respective obligations of the Issuer and the Underwriters set forth in
Sections I (with respect to the Check), 4 and 8 hereof shall continue in full force and effect.
7. Termination. The Underwriters shall have the right to cancel their respective
obligations to purchase the Bonds if, between the date of this Agreement and the Closing, the
market price or marketability of the Bonds shall be materially adversely affected, in the
reasonable judgment of the Representative by the occurrence of any of the following:
(a) legislation shall be enacted by or introduced in the Congress of the United States
or recommended to the Congress for passage by the President of the United States, or the
Treasury Department of the United States or the Internal Revenue Service or favorably reported
for passage to either House of the Congress by any committee of such House to which such
legislation has been referred for consideration, a decision by a court of the United States or of the
State or the United States Tax Court shall be rendered, or an order, ruling, regulation (final,
temporary or proposed), press release, statement or other form of notice by or on behalf of the
Treasury Department of the United States, the Internal Revenue Service or other governmental
agency shall be made or proposed, the effect of any or all of which would be to impose, directly
or indirectly, federal income taxation upon interest received on obligations of the general
character of the Bonds, of the interest on the Bonds as described in the Official Statement, or
other action or events shall have transpired which may have the purpose or effect, directly or
indirectly, of changing the federal income tax consequences of any of the transactions described
herein;
(b) legislation introduced in or enacted (or resolution passed) by the Congress or an
order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling,
regulation (final, temporary, or proposed), press release or other form of notice issued or made
by or on behalf of the Securities and Exchange Commission, or any other governmental agency
having jurisdiction of the subject matter, to the effect that obligations of the general character of
the Bonds, including any or all underlying arrangements, are not exempt from registration under
or other requirements of the 1933 Act, or that the Ordinance is not exempt from qualification
under or other requirements of the Trust Indenture Act, or that the issuance, offering, or sale of
obligations of the general character of the Bonds, including any or all underlying arrangements,
as described herein or in the Official Statement or otherwise, is or would be in violation of the
federal securities laws as amended and then in effect;
HOU:3326832.4 14
(c) a general suspension of trading in securities on the New York Stock Exchange,
the establishment of minimum prices on such exchange, the establishment of material restrictions
(not in force as of the date hereof) upon trading securities generally by any governmental
authority or any national securities exchange, a general banking moratorium declared by federal,
State of New York, or State officials authorized to do so,
(d) the New York Stock Exchange or other national securities exchange or any
governmental authority shall impose, as to the Bonds or as to obligations of the general character
of the Bonds, any material restrictions not now in force, or increase materially those now in
force, with respect to the extension of credit by, or the charge to the net capital requirements of,
the Underwriters, which change shall occur subsequent to the date hereof and shall not be due to
the malfeasance, misfeasance or nonfeasance of the Underwriters;
(e) any amendment to the federal or State Constitution or action by any federal or
state court, legislative body, regulatory body, or other authority materially adversely affecting
the tax status of the Issuer, its property, income, securities (or interest thereon), or the validity or
enforceability of the levy of taxes to pay principal of and interest on the Bonds,
(f) any state blue sky or securities commission or other governmental agency or body
in any state in which more than 10% of the Bonds have been offered and sold shall have
withheld registration, exemption or clearance of the offering of the Bonds as described herein, or
issued a stop order or similar ruling relating thereto;
(g) any event occurring, or information becoming known which, in the reasonable
judgment of the Representative, makes untrue in any material respect any statement or
information contained in the Official Statement, or has the effect that the Official Statement
contains any untrue statement of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(h) there shall have occurred since the date of this Agreement any materially adverse
change in the affairs or financial condition of the Issuer, except for changes which the Official
Statement discloses are expected to occur;
(i) between the date of this Agreement and the date of the closing, the United States
shall have become engaged in new hostilities which have resulted in a declaration of war or a
national emergency, or there shall have occurred any other outbreak or escalation of hostilities or
a national or international calamity or crisis, financial or otherwise, the effect of such outbreak,
calamity or crisis on the financial markets of the United States being such as, in the reasonable
opinion of the Representative, would materially and adversely affect the ability of the
Underwriters to market the Bonds,
(j) any fact or event shall exist or have existed that, in the Representative's
reasonable judgment, requires or has required an amendment of or supplement to the Official
Statement;
HOU 3326832.4 15
(k) there shall have occurred any downgrading, or any notice shall have been given of
(1) any intended or potential downgrading or (2) any possible change that does not indicate a
possible upgrade, in a rating accorded any of the Issuer's obligations that are secured in a like
manner as the Bonds (including the rating to be accorded the Bonds); or
(1) the purchase of and payment for the Bonds by the Underwriters, or the resale of
the Bonds by the Underwriters, on the terms and conditions herein provided shall be prohibited
by any applicable law, governmental authority, board, agency or commission; provided that such
prohibition occurs after the date of this Agreement and is not caused by the action or failure to
act, of the Underwriters.
With respect to the condition described in subparagraph (1) above, the Underwriters are
not aware of any current, pending or proposed law or government inquiry or investigation, as of
the date of execution of this Agreement, which would permit the Underwriters to invoke their
termination rights hereunder.
8. Kxpenses.
(a) The Underwriters shall be under no obligation to pay, and the Issuer shall
pay, any expenses incident to the performance of the Issuer's obligations hereunder,
including, but not limited to (1) the cost of preparation and printing of the Bonds; (ii) the
fees and disbursements of Bond Counsel and the Issuer's Financial Advisor; (iii) the fees
and disbursements of any other engineers, accountants, and other experts, consultants or
advisers retained by the Issuer; (iv) the fees for bond ratings and municipal bond
insurance, if any; (v) the costs of preparing, printing and mailing the Preliminary Official
Statement and the Official Statement; (vi) the fees and expenses of the Paying
Agent/Registrar and the Escrow Agent, (vii) advertising expenses (except any advertising
expenses of the Underwriters as set forth below); (viii) the out-of-pocket, miscellaneous
and closing expenses, including the cost of travel, of the officers and council members of
the Issuer; (ix) the Attorney General's review fee; and (x) any other expenses mutually
agreed to by the Issuer and the Representative to be reasonably considered expenses of
the Issuer which are incident to the transactions described herein.
The Issuer acknowledges that the Representative has advised the Issuer that it will
pay from the underwriters' expense allocation of the underwriting discount the applicable
per bond assessment charged by the Municipal Advisory Council of Texas, a non-profit
corporation whose purpose is to collect, maintain and distribute information relating to
issuing entities of municipal securities. An employee of the Representative serves on the
Board of the Municipal Advisory Council of Texas.
The Issuer acknowledges that it has had an opportunity, in consultation with such
advisors as it may deem appropriate, if any, to evaluate and consider the fees and
expenses being incurred as part of the issuance of the Bonds.
(b) The Underwriters shall pay (i) the cost of preparation and printing of this
Agreement, the Blue Sky Survey and Legal Investment Memorandum, if any; (ii) all
advertising expenses in connection with the public offering of the Bonds, and (iii) all
IIOL':3326832.4 16
other expenses incurred by it in connection with the public offering of the Bonds,
including the fees and disbursements of counsel retained by the Underwriters
9. Notices. Any notice or other communication to be given to the Issuer under this
Agreement may be given by delivering the same in writing to Town of Prosper, Texas, P.O. Box,
307, Texas 75078; Attention: Town Manager and any notice or other communication to be given
to the Underwriters under this Agreement may be given by delivering the same in writing to
RBC Capital Markets, LLC, 200 Crescent Court, Suite 200, Dallas, Texas 75201, Attention:
Matt Boles.
10. Parties in Interest. This Agreement as heretofore specified shall constitute the
entire agreement between us and is made solely for the benefit of the Issuer and the Underwriters
(including successors or assigns of the Underwriters) and no other person shall acquire or have
any right hereunder or by virtue hereof. This Agreement may not be assigned by the Issuer. All
of the Issuer's representations and warranties contained in this Agreement shall remain operative
and in full force and effect, regardless of (i) any investigations made by or on behalf of the
Underwriters; (ii) delivery of and payment for the Bonds pursuant to this Agreement, and
(iii) any termination of this Agreement.
11. Effectiveness. This Agreement shall become effective upon the acceptance
hereof by the Issuer and shall be valid and enforceable in accordance with its terms at the time of
such acceptance.
12. Choice of Laiv. This Agreement shall be governed by and construed in
accordance with the laws of the State.
13. Severability. If any provision of this Agreement shall be held or deemed to be or
shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provision or
provisions of any constitution, statute, rule of public policy or any other reason, such
circumstances shall not have the effect of rendering the provision in question invalid, inoperative
or unenforceable in any other case or circumstance, or of rendering any other provision or
provisions of this Agreement invalid, inoperative or unenforceable to any extent whatever.
14. Business Day. For purposes of this Agreement, "business day" means any day on
which the New York Stock Exchange is open for trading.
15. Section Headings. Section headings have been inserted in this Agreement as a
matter of convenience of reference only, and it is agreed that such section headings are not a part
of this Agreement and will not be used in the interpretation of any provisions of this Agreement.
16. Counterparts. This Agreement may be executed in several counterparts each of
which shall be regarded as an original (with the same effect as if the signatures thereto and
hereto were upon the same document) and all of which shall constitute one and the same
document.
HOU.3326832.4 17
17. No Personal Liability. None of the members of the Town Council, nor any
officer, agent, or employee of the Issuer, shall be charged personally by the Underwriters with
any liability, or be held liable to the Underwriters under any term or provision of this Agreement,
or because of execution or attempted execution, or because of any breach or attempted or alleged
breach, of this Agreement.
[Execution Page Follows]
FIOL':3326832.4 18
If you agree with the foregoing, please sign the enclosed counterpart of this Agreement
and return it to the Representative. This Agreement shall become a binding agreement between
the Issuer and the Underwriters when at least one counterpart hereof shall have been signed by or
on behalf of each of the parties hereto.
RBC CAPITAL MARKETS, LLC, as
Representative of the Underwriters
By:
Name: MATTHEW BOLES
Title: MANAGING DIRECTOR
ACCEPTED AND AGREED to as of 2013 at (a.m./p.m.) Central Time
TOWN OF PROSPER, TEXAS
By:
Name:
Title:
Execution Page
Town of Prosper, Texas, General Obligation Refunding Bonds, Series 2013
nOU 3326832.4
Schedule I
RBC Capital Markets, LLC
200 Crescent Court, Suite 1500
Dallas, TX 75201
BOSC, Inc.
333 West Campbell
Suite 350
Richardson, TX 75080
HOU 3326832 4
Schedule II
$3,830,000
Town of Prosper, Texas
General Obligation Refunding Bonds
Series 2013
Interest Accrues From: Date of Delivery
Maturity Principal Interest Price`'
Amount Rate
08/15/2014 $135,000 2.000% 101.577%
08/15/2015 150,000 2.000 102.338
08/15/2016 150,000 1000 102.544
08/15/2017 155,000 2.000 101.761
09/15/2018 155,000 2.000 100.720
08/15/2019 160,000 3.000 105.675
08/15/2020 165,000 3.000 104.866
08/15/2021 170,000 3.000 103.626
08/15/2022 175,000 3.000 102.394
08/15/2023 180,000 3.000 100.865
08/15/2024(b) 185,000 4.000(c) 108.262
08/15/2025(b) 190,000 4.000(c) 107.008
08/15/2026(b) 200,000 4.000(c) 105.596
08/15/2027(b) 210,000 4.000(c) 104.292
08/15/2028(b) 215,000 4.000(c) 103.262
08/15/2029(b) 225,000 4.000(c) 102.244
$1,010,000 5.000%Term Bonds due August 15, 2033, Price 106.504%ca>(b)cc'(d)
' The initial reoffering prices of the Bonds are furnished by the Underwriters and represent the initial offering prices to the
public,which may be changed by the Undervriters at any time.
The Bonds stated to mature on and after August 15,2024 are subject to optional redemption, in whole or in part,prior to
maturity on August 15, 2023 or any date thereafter at the par value thereof plus accrued interest to the date fixed for
redemption.
Priced to call.
d' The Term Bonds are subject to mandatory sinking fund redemption as set forth in the Bond Order.
HOU 3326832.4
If you agree with the foregoing, please sign the enclosed counterpart of this Agreement
and return it to the Representative. This Agreement shall become a binding agreement between
the Issuer and the Underwriters when at least one counterpart hereof shall have been signed by or
on behalf of each of the parties hereto.
RBC CAPITAL MARKETS, LLC, as
Representative of the Underwriters
By:
Name: MATTHEW BOLES
Title: MANAGING DIRECTOR
r
ACCEPTED AND AGREED to as ofJu , 2013 at �(`( (a.m.0 Central Time
TOWN OF PROSPER, TEXP,S
By: v-'
Name:
Title:
Execution Page
Town of Prosper, Texas, General Obligation Refunding Bonds, Series 2013
HOU:3326832.4
If you agree with the foregoing, please sign the enclosed counterpart of this Agreement
and return it to the Representative. This Agreement shall become a binding agreement between
the Issuer and the Underwriters when at least one counterpart hereof shall have been signed by or
on behalf of each of the parties hereto.
RBC CAPITAL MARKETS, LLC, as
Representative of the Underwriters
By:
Name: MATTHEW BOLES
Title: MANAGING DIRECTOR
ACCEPTED AND AGREED to as A'W A5, 2013 at 61: Gr (a.m./ Central Time
TOWN OF PROSPER, TEXAS
,1-1
By: i 6"ZA'
Name: i 44"
Title: 1,Y
I
Execution Page
Town of Prosper, Texas, General Obligation Refunding Bonds, Series 2013
HOU33268324
If you agree with the foregoing, please sign the enclosed counterpart of this Agreement
and return it to the Representative. This Agreement shall become a binding agreement between
the Issuer and the Underwriters when at least one counterpart hereof shall have been signed by or
on behalf of each of the parties hereto.
RBC CAPITAL MARKETS, LLC, as
Representative of the Underwriters
By:
Name: MATTHEW BOLES
Title: MANAGING DIRECTOR
ACCEPTED AND AGREED to as of j U (2013 at `1 ) (a.m. p.m ) Central Time
TOWN OF PROSPER, TEXAS
By: � � / �1n
Name: 1Ct�
Title:
Execution Page
Town of Prosper, Texas, General Obligation Refunding Bonds, Series 2013
HOU:3326832.4
If you agree with the foregoing, please sign the enclosed counterpart of this Agreement
and return it to the Representative. This Agreement shall become a binding agreement between
the Issuer and the Underwriters when at least one counterpart hereof shall have been signed by or
on behalf of each of the parties hereto.
RBC CAPITAL MARKETS, LLC, as
Representative of the Underwriters
By:
Name: MATTHEW BOLES
Title: MANAGING DIRECTOR
ACCEPTED AND AGREED to as ofJ q-tlt,4, ,2013 at 1•Cj) (a.m p.m Central Time
TOWN OF PROSPER, TEXAS
By: (
Name:
Title:
Execution Page
Town of Prosper, Texas, General Obligation Refunding Bonds, Series 2013
HOU:3326832.4
If you agree with the foregoing, please sign the enclosed counterpart of this Agreement
and return it to the Representative. This Agreement shall become a binding agreement between
the Issuer and the Underwriters when at least one counterpart hereof shall have been signed by or
on behalf of each of the parties hereto.
RBC CAPITAL MARKETS, LLC, as
Representative of the Underwriters
By:
Name: MATTHEW BOLES
Title: MANAGING DIRECTOR
ACCEPTED AND AGREED to as ofIltxA5 , 2013 at 61,.07) (a.m. Central Time
TOWN OF PROSPER, TEXAS
C)-,By: I,
Name: .SbY1 �
Title:
Execution Page
Town of Prosper, Texas, General Obligation Refunding Bonds, Series 2013
1IOU:3326832.4
ESCROW AGREEMENT
TOWN OF PROSPER, TEXAS
GENERAL OBLIGATION BONDS, TAXABLE SERIES 2013
THIS ESCROW AGREEMENT, dated as of June 15, 2013 (herein, together with any
amendments or supplements hereto,called the"Agreement")is entered into by and between the Town
of Prosper, Texas(herein called the "Issuer")and U.S. Bank National Association, Dallas, Texas, as
escrow agent(herein,together with any successor in such capacity, called the"Escrow Agent"). The
addresses of the Issuer and the Escrow Agent are shown on Exhibit A attached hereto and made a
part hereof.
WITNESSETH:
WHEREAS, the Issuer heretofore issued and there presently remain outstanding the
obligations (the "Refunded Obligations") described in the sufficiency certificate of First Southwest
Company (the "Report") relating to the Refunded Obligations, attached hereto as Exhibit "B" and
made a part hereof, and
WHEREAS, the Refunded Obligations are scheduled to mature in such years, bear interest
at such rates, and be payable at such times and in such amounts as are set forth in the Report, and
WHEREAS, when firm banking arrangements have been made for the payment of principal
and interest to the maturity or redemption dates of the Refunded Obligations, then the Refunded
Obligations shall no longer be regarded as outstanding except for the purpose of receiving payment
from the funds provided for such purpose; and
WHEREAS, Chapter 1207,Texas Government Code("Chapter 1207"), authorizes the Issuer
to issue refunding bonds and to deposit the proceeds from the sale thereof, and any other available
funds or resources, directly with any paying agent for the Refunded Obligations, or a trust company
or commercial bank that does not act as a depository for the Issuer, and such deposit, if made before
such payment dates and in sufficient amounts, shall constitute the making of firm banking and
financial arrangements for the discharge and final payment of the Refunded Obligations; and
WHEREAS, Chapter 1207 further authorizes the Issuer to enter into an escrow agreement
with any such paying agent for any of the Refunded Obligations, or a trust company or commercial
bank that does not act as a depository for the Issuer, with respect to the safekeeping, investment,
administration and disposition of any such deposit, upon such terms and conditions as the Issuer and
such paying agent, trust company or commercial bank may agree; and
WHEREAS,the Escrow Agent is also a paying agent for certain of the Refunded Obligations,
and this Agreement constitutes an escrow agreement of the kind authorized and required by said
Chapter 1207; and
WHEREAS, Chapter 1207 makes it the duty of the Escrow Agent to comply with the terms
of this Agreement and timely make available to the places of payment (paying agents) for the
Refunded Obligations the amounts required to provide for the payment of the principal of and interest
on such obligations when due, and in accordance with their terms, but solely from the funds, in the
manner, and to the extent provided in this Agreement, and
WHEREAS, the issuance, sale, and delivery of the $3,830,000 Town of Prosper, Texas
General Obligation Refunding Bonds, Series 2013 (the "Refunding Obligations") have been issued,
sold and delivered for the purpose, among others, of obtaining the funds required to provide for the
payment of the principal of the Refunded Obligations at their respective maturity dates or dates of
redemption and the interest thereon to such dates; and
WHEREAS, the Issuer desires that, concurrently with the delivery of the Refunding
Obligations to the purchasers thereof, certain proceeds of the Refunding Obligations, together with
certain other available funds of the Issuer, if applicable, shall be deposited to the credit of the Escrow
Fund created pursuant to the terms of this Agreement to establish a beginning cash balance in such
Escrow Fund; and
WHEREAS, the cash on deposit in the Escrow Fund, will be sufficient to pay interest on the
Refunded Obligations as it accrues and becomes payable and the principal of the Refunded
Obligations on their maturity dates or dates of redemption; and
WHEREAS, the Issuer desires to establish the Escrow Fund at the principal corporate trust
office of the Escrow Agent.
NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements
herein contained, the sufficiency of which hereby are acknowledged, and to secure the full and timely
payment of principal of and the interest on the Refunded Obligations, the Issuer and the Escrow
Agent mutually undertake,promise,and agree for themselves and their respective representatives and
successors, as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Recitals. 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.
Section 1.02. Definitions. Unless the context clearly indicates otherwise,the following terms
shall have the meanings assigned to them below when they are used in this Agreement:
"Code" means the Internal Revenue Code of 1986, as amended, or to the extent applicable
the Internal Revenue Code of 1954, together with any other applicable provisions of any successor
federal income tax laws.
2
"Escrow Fund" means the fund created by this Agreement to be administered by the Escrow
Agent pursuant to the provisions of this Agreement.
"Paving Agent" means, with respect to the Refunded Series 2004 Obligations, U.S. Bank
National Association, as paying agent/registrar therefor, and with respect to the Refunded Series
2012 Obligations, Regions Bank, as paying agent/registrar therefor.
Section 1.03. Other Definitions. The terms "Agreement", "Issuer", "Escrow Agent",
"Refunded Obligations", "Refunding Obligations" and "Report", when they are used in this Agree-
ment, shall have the meanings assigned to them in the preamble to this Agreement.
Section 1.04. Interpretations. The titles and headings of the articles and sections of this
Agreement have been inserted for convenience and reference only and are not to be considered a part
hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all of the
terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and
to achieve the intended purpose of providing for the refunding of the Refunded Obligations in
accordance with applicable law.
ARTICLE II
DEPOSIT OF FUNDS
Section 2.01. Deposits in the Escrow Fund. Concurrently with the sale and delivery of the
Refunding Obligations the Issuer shall deposit, or cause to be deposited, with the Escrow Agent, for
deposit in the Escrow Fund, the funds described in the Report, and the Escrow Agent shall, upon the
receipt thereof, acknowledge such receipt to the Issuer in writing.
ARTICLE III
CREATION AND OPERATION OF ESCROW FUND
Section 3.01. Escrow Fund. The Escrow Agent has created on its books a special trust fund
and irrevocable escrow to be known as the Town of Prosper 2012 Escrow Fund (the "Escrow
Fund"). The Escrow Agent hereby agrees that upon receipt thereof it will irrevocably deposit to the
credit of the Escrow Fund the funds described in the Report. Such deposit, all proceeds therefrom,
and all cash balances from time to time on deposit therein (a) shall be the property of the Escrow
Fund, (b) shall be applied only in strict conformity with the terms and conditions of this Agreement,
and(c)are hereby irrevocably pledged to the payment of the principal of and interest on the Refunded
Obligations, which payment shall be made by timely transfers of such amounts at such times as are
provided for in Section 3.02 hereof. When the final transfers have been made for the payment of such
principal of and interest on the Refunded Obligations,any balance then remaining in the Escrow Fund
shall be transferred to the Issuer, and the Escrow Agent shall thereupon be discharged from any
further duties hereunder.
3
Section 3.02. Pavment of Principal and Interest. The Escrow Agent is hereby irrevocably
instructed to transfer from the cash balances from time to time on deposit in the Escrow Fund, the
amounts required to pay the principal of the Refunded Obligations at the redemption date for the
Refunded Obligations as shown in the Report.
Section 3.03. Sufficiencv of Escrow Fund. The Issuer represents that the cash balance on
deposit from time to time in the Escrow Fund will be at all times sufficient to provide moneys for
transfer to the Paying Agent at the times and in the amounts required to pay the redemption price of
the Refunded Obligations, all as more fully set forth in the Report. If, for any reason, at any time, the
cash balances on deposit or scheduled to be on deposit in the Escrow Fund shall be insufficient to
transfer the amounts required by each place of payment (paying agent)for the Refunded Obligations
to make the payments set forth in Section 3.02 hereof, the Issuer shall timely deposit in the Escrow
Fund, from any funds that are lawfully available therefor, additional funds in the amounts required
to make such payments. Notice of any such insufficiency shall be given as promptly as practicable
as hereinafter provided, but the Escrow Agent shall not in any manner be responsible for any
insufficiency of funds in the Escrow Fund or the Issuer's failure to make additional deposits thereto.
Section 3.04. Trust Fund. The Escrow Agent shall hold at all times the Escrow Fund and
all other assets of the Escrow Fund, wholly segregated from all other funds and securities on deposit
with the Escrow Agent; it shall never allow the assets of the Escrow Fund to be commingled with any
other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the
Escrow Fund only as set forth herein. The assets of the Escrow Fund shall always be maintained by
the Escrow Agent as trust funds for the benefit of the owners of the Refunded Obligations, and a
special account thereof shall at all times be maintained on the books of the Escrow Agent. The
owners of the Refunded Obligations shall be entitled to the same preferred claim and first lien upon
the assets of the Escrow Fund to which they are entitled as owners of the Refunded Obligations. The
amounts received by the Escrow Agent under this Agreement shall not be considered as a banking
deposit by the Issuer, and the Escrow Agent shall have no right to title with respect thereto except
as a constructive trustee and Escrow Agent under the terms of this Agreement. The amounts
received by the Escrow Agent under this Agreement shall not be subject to warrants, drafts or checks
drawn by the Issuer or, except to the extent expressly herein provided, by the Paying Agent.
Section 3.05. Securitv for Cash Balances. Cash balances from time to time on deposit in the
Escrow Fund shall, to the extent not insured by the Federal Deposit Insurance Corporation or its
successor,be continuously secured by a pledge of direct obligations of, or obligations unconditionally
guaranteed by, the United States of America, having a market value at least equal to such cash
balances.
4
ARTICLE VII
CONCERNING THE PAYING AGENTS AND ESCROW AGENT
Section 7.01. Representations. The Escrow Agent hereby represents that it has all necessary
power and authority to enter into this Agreement and undertake the obligations and responsibilities
imposed upon it herein, and that it will carry out all of its obligations hereunder.
Section 7.02. Limitation on Liability. The liability of the Escrow Agent to transfer funds for
the payment of the principal of and interest on the Refunded Obligations shall be limited to the cash
balances from time to time on deposit in the Escrow Fund. Notwithstanding any provision contained
herein to the contrary, neither the Escrow Agent nor the Paying Agent shall have any liability
whatsoever for the insufficiency of funds from time to time in the Escrow Fund, except for the
obligation to notify the Issuer as promptly as practicable of any such occurrence.
The recitals herein and in the proceedings authorizing the Refunding Obligations shall be taken
as the statements of the Issuer and shall not be considered as made by, or imposing any obligation or
liability upon, the Escrow Agent. The Escrow Agent is not a party to the proceedings authorizing
the Refunding Obligations or the Refunded Obligations and is not responsible for nor bound by any
of the provisions thereof(except as a place of payment and paying agent and/or a Paying Agent/-
Registrar therefor). In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look
only to the terms and provisions of this Agreement.
The Escrow Agent makes no representations as to the value, conditions or sufficiency of the
Escrow Fund, or any part thereof, or as to the title of the Issuer thereto, or as to the security afforded
thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in respect to
any of such matters.
It is the intention of the parties hereto that the Escrow Agent shall never be required to use
or advance its own funds or otherwise incur personal financial liability in the performance of any of
its duties or the exercise of any of its rights and powers hereunder.
The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in
good faith in any exercise of reasonable care and believed by it to be within the discretion or power
conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the consequences
of any error of judgment, and the Escrow Agent shall not be answerable except for its own action,
neglect or default, nor for any loss unless the same shall have been through its negligence or willful
misconduct.
Unless it is specifically otherwise provided herein,the Escrow Agent has no duty to determine
or inquire into the happening or occurrence of any event or contingency or the performance or failure
of performance of the Issuer with respect to arrangements or contracts with others, with the Escrow
Agent's sole duty hereunder being to safeguard the Escrow Fund, to dispose of and deliver the same
in accordance with this Agreement. If, however,the Escrow Agent is called upon by the terms of this
Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obli-
gated, in making such determination, only to exercise reasonable care and diligence, and in event of
6
error in making such determination the Escrow Agent shall be liable only for its own willful
misconduct or its negligence. In determining the occurrence of any such event or contingency the
Escrow Agent may request from the Issuer or any other person such reasonable additional evidence
as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the
occurrence of such event or contingency, and in this connection may make inquiries of, and consult
with, among others, the Issuer at any time.
Section 7.03. Compensation. (a) Concurrently with the sale and delivery of the Refunding
Bonds, the Issuer shall pay to the Escrow Agent, as a fee for performing the services hereunder and
for all expenses incurred or to be incurred by the Escrow Agent in the administration of this
Agreement, the amount set forth in Exhibit C attached hereto, the sufficiency of which is hereby
acknowledged by the Escrow Agent. In the event that the Escrow Agent is requested to perform any
extraordinary services hereunder, the Issuer hereby agrees to pay reasonable fees to the Escrow
Agent for such extraordinary services and to reimburse the Escrow Agent for all expenses incurred
by the Escrow Agent in performing such extraordinary services, and the Escrow Agent hereby agrees
to look only to the Issuer for the payment of such fees and reimbursement of such expenses. The
Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow
Fund for any fees for its services, whether regular or extraordinary, as Escrow Agent, or in any other
capacity, or for reimbursement for any of its expenses.
(b) The Issuer covenants to timely pay for all future paying agency services of the Paying
Agent for the Refunded Obligations in accordance with the paying agent fee schedule now in effect
through the final payment of the Refunded Obligations, the sufficiency of which is hereby
acknowledged by the Paying Agent. Additionally, the Paying Agent has agreed to look only to the
Issuer for the payment of such fees and reimbursement of such expenses, and for the benefit of the
registered owners of the Refunded Obligations, to perform the services as Paying Agent without
regard to the future payment of such fees and expenses. The Paying Agent shall in no event assert
any claim or lien against the Escrow Fund for any fees for their services, whether regular or
extraordinary, as Paying Agent, or in any other capacity,or for reimbursement for any of its expenses.
Section 7.04. Successor Escrow Agents. If at any time the Escrow Agent or its legal
successor or successors should become unable, through operation or law or otherwise, to act as
escrow agent hereunder, or if its property and affairs shall be taken under the control of any state or
federal court or administrative body because of insolvency or bankruptcy or for any other reason, a
vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event the Issuer, by
appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy. If no successor
Escrow Agent shall have been appointed by the Issuer within 60 days, a successor may be appointed
by the owners of a majority in principal amount of the Refunded Obligations then outstanding by an
instrument or instruments in writing filed with the Issuer, signed by such owners or by their duly
authorized attorneys-in-fact. If, in a proper case, no appointment of a successor Escrow Agent shall
be made pursuant to the foregoing provisions of this section within three months after a vacancy shall
have occurred, the owner of any Refunded Obligation may apply to any court of competent
jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if
any, as it may deem proper, prescribe and appoint a successor Escrow Agent.
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Any successor Escrow Agent shall be a corporation organized and doing business under the
laws of the United States or the State of Texas, authorized under such laws to exercise corporate
trust powers, authorized under Texas law to act as an escrow agent, having its principal office and
place of business in the State of Texas, having a combined capital and surplus of at least $5,000,000
and subject to the supervision or examination by Federal or State authority.
Any successor Escrow Agent shall execute, acknowledge and deliver to the Issuer and the
Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall
execute and deliver an instrument transferring to such successor Escrow Agent, subject to the terms
of this Agreement, all the rights,powers and trusts of the Escrow Agent hereunder. Upon the request
of any such successor Escrow Agent, the Issuer shall execute any and all instruments in writing for
more fully and certainly vesting in and confirming to such successor Escrow Agent all such rights,
powers and duties.
The Escrow Agent at the time acting hereunder may at any time resign and be discharged
from the trust hereby created by giving not less than sixty(60) days' written notice to the Issuer and
publishing notice thereof, specifying the date when such resignation will take effect, in a newspaper
printed in the English language and with general circulation in New York, New York, such
publication to be made once at least three(3)weeks prior to the date when the resignation is to take
effect. No such resignation shall take effect unless a successor Escrow Agent shall have been
appointed by the owners of the Refunded Obligations or by the Issuer as herein provided and such
successor Escrow Agent shall be a paying agent for the Refunded Obligations and shall have accepted
such appointment,in which event such resignation shall take effect immediately upon the appointment
and acceptance of a successor Escrow Agent.
Under any circumstances, the Escrow Agent shall pay over to its successor Escrow Agent
proportional parts of the Escrow Agent's fee and, if applicable, its Paying Agent's fee hereunder.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Notice. Any notice, authorization request, or demand required or permitted
to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed
by registered or certified mail, postage prepaid addressed to the Issuer or the Escrow Agent at the
address shown on Exhibit "A" attached hereto. The United States Post Office registered or certified
mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of
delivery. Any party hereto may change the address to which notices are to be delivered by giving to
the other parties not less than ten 10 days prior notice thereof. Prior written notice of an
P ( ) Y p Y
amendment to this Agreement contemplated pursuant to Section 8.08 and immediate written notice
of any incidence of a severance pursuant to Section 8.04 shall be sent to Moody's Investors Service,
Attn: Public Finance Rating Desk/Refunded Bonds,99 Church Street,New York,New York 10007,
Standard& Poor's Corporation, Attn: Municipal Bond Department, 25 Broadway, New York,New
York 10004 and Fitch, Inc., One State Street Plaza, New York, New York 10004.
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Section 8.02. Termination ofResvonsibilities. Upon the taking of all the actions as described
herein by the Escrow Agent, the Escrow Agent shall have no further obligations or responsibilities
hereunder to the Issuer, the owners of the Refunded Obligations or to any other person or persons
in connection with this Agreement.
Section 8.03. Binding Agreement. This Agreement shall be binding upon the Issuer and the
Escrow Agent and their respective successors and legal representatives, and shall inure solely to the
benefit of the owners of the Refunded Obligations, the Issuer, the Escrow Agent and their respective
successors and legal representatives.
Section 8.04. Severabilitv. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but
this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never
been contained herein.
Section 8.05. Texas Law Governs. This Agreement shall be governed exclusively by the
provisions hereof and by the applicable laws of the State of Texas.
Section 8.06. Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Escrow Agent by this Agreement.
Section 8.07. Effective date of Agreement. This Agreement shall be effective upon receipt
by the Escrow Agent of the funds described in the Report, together with the specific sums stated in
subsections (a) and (b) of Section 7.03 for Escrow Agent and paying agency fees, expenses, and
services.
Section 8.08. Amendments. This Agreement shall not be amended except to cure any
ambiguity or formal defect or omission in this Agreement. No amendment shall be effective unless
the same shall be in writing and signed by the parties thereto. No such amendment shall adversely
affect the rights of the holders of the Refunded Obligations.
Section 8.09. Counterparts. This Agreement may be executed in one or more counterparts,
each and all of which shall constitute one and the same instrument.
[Signature pages follow.]
U.S. BANK NATIONAL ASSOCIATION
By.
Title:
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INDEX TO EXHIBITS
Exhibit A Addresses of the Issuer and Escrow Agent
Exhibit B Verification Report of First Southwest Company
Exhibit C Escrow Agent Fees
II
EXECUTED as of the date first written above.
TOWN OF PROSPER, TEXAS
Mayor V
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