13-43 O - Combination Tax and Surplus Revenue Certificates of Obligation Series 2013ORDINANCE NO. 13-43
OF THE TOWN OF PROSPER, TEXAS
AUTHORIZING THE ISSUANCE OF
TOWN OF PROSPER, TEXAS
COMBINATION TAX AND SURPLUS REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2013
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TABLE OF CONTENTS
Section 1. Recitals, Amount and Purpose of the Certificates ............................1
Section 2. Designation, Date, Denom inations, Numbers, Maturities of Certificates and Interest
Rates..................................................................2
Section 3. Characteristics of the Certificates........................................2
Section 4. Form of Certificates...................................................6
Section 5. Interest and Sinking Fund.............................................13
Section 6. Surplus Revenues....................................................14
Section 7. Defeasance of Certificates.............................................14
Section 8. Damaged, Mutilated, Lost, Stolen, or Destroyed Certificates ..................15
Section 9. Custody, Approval, and Registration of Certificates; Bond Counsel's Opinion and
Engagement; Attorney General Filing Fee; CUSIP Numbers; Other Procedures......16
Section 10. Covenants Regarding Tax Exemption of Interest on the Certificates ...........17
Section 11. Sale of Certificates; Approval of Official Statement; Application of Premium ...19
Section 12. Allocation of Certificate Proceeds ......................................20
Section 13. Disposition of Project................................................20
Section 14. Interest Earnings on Certificate Proceeds ................................20
Section 15. Construction Fund ..................................................21
Section 16. Compliance with Rule 15c2-12 ........................................21
Section 17. Method of Amendment ..............................................24
Section 18. Continued Perfection of Security Interest ................................25
Section 19. Inconsistent Provisions ..............................................26
Section 20. Governing Law ....................................................26
Section 21. Severability .......................................................26
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Section 22. Events of Default ...................................................26
Section 23. Remedies for Default ................................................26
Section 24. Remedies Not Exclusive .............................................26
Section 25. Effective Date .....................................................27
Section 26. Designation as Qualified Tax-exempt Obligations .........................27
Exhibit A: Continuing Disclosure Information...................................A-1
ORDINANCE NO. 13-43
AUTHORIZING THE ISSUANCE AND SALE OF TOWN OF PROSPER, TEXAS
COMBINATION TAX AND SURPLUS REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2013; LEVYING AN ANNUAL AD VAL OREM TAX FOR THE PAYMENT OF
SAID CERTIFICATES AND PROVIDIN G OTHER SECURITY; APPROVING AN
OFFICIAL STATEMENT AND A PAYI NG 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, the Town Council of the Town of Prosper, Texas (the "Issuer") deems it
advisable to issue Certificates of Obligation in the principal amount of $5,235,000 for paying all or
a portion of the Issuer's contractual obligations incurred in connection with extending, constructing
and improving the Issuer's water system, including constructing improvements to pump stations and
extending water lines and paying legal, fiscal, engi neering and architectural fees in connection with
these projects; and
WHEREAS, the Certificates of Obligation here inafter authorized and designated are to be
issued and delivered for cash pursuant to Subchapt er C of Chapter 271, Local Government Code and
Chapter 1502, Government Code, as amended; and
WHEREAS, the Town Council has heretofore pa ssed a resolution authorizing and directing
the Town Secretary to give notice of intenti on to issue Certificates of Obligation; and
WHEREAS, said notice has been duly published in a newspaper of general circulation in the
Issuer, said newspaper being a "newspaper" as defined in §2051.044, Texas Government Code; and
WHEREAS, the Issuer received no petition fr om the qualified electors of the Issuer
protesting the issuance of such Certificates of Obligation; and
WHEREAS, it is considered to be to the best inte rest of the Issuer that said interest bearing
Certificates of Obligation be issued.
BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF PROSPER:
Section 1. RECITALS, AMOUNT AND PURPOSE OF THE CERTIFICATES. The
recitals set forth in the preamble hereof are incor porated herein and shall have the same force and
effect as if set forth in this S ection. The certificates of the Issuer are hereby authorized to be issued
and delivered in the aggregate principal amount of $5,235,000 for the purpose of paying all or a
portion of the Issuer's contractual obligations incurred in connection with extending, constructing
and improving the Issuer's water system, including constructing improvements to pump stations and
extending water lines and paying legal, fiscal, engi neering and architectural fees in connection with
these projects (collectively, the "Project").
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Section 2. DESIGNATION, DATE, DENOM INATIONS, NUMBERS, MATURITIES OF
CERTIFICATES AND INTEREST RATES. Each certificat e issued pursuant to this Ordinance shall
be designated: "TOWN OF PROSPER, TEXAS, COMBINATION TAX AND SURPLUS
REVENUE CERTIFICATE OF OBLIGATION, SERIES 2013", and initially there shall be issued,
sold, and delivered hereunder one fully registered certificate, without interest coupons, dated June
15, 2013, in the principal amount stated above and in the denominations hereinafter stated,
numbered T-1, with certificates i ssued in replacement thereof being in the denominations and
principal amounts hereinafter stated and numbere d consecutively from R-1 upward, payable to the
respective Registered Owners thereof (with the in itial certificate being made payable to the initial
purchaser as described in Section 11 hereof), or to the registered assignee or assignees of said
certificates or any portion or portions thereof (in each case, the "Registered Owner"). The
Certificates shall mature on August 15 in the year s and in the principal amounts and interest rates
set forth below, interest on each Certificate accrui ng on the basis of a 360-day year of twelve 30-day
months from the date of initial delivery of the Certif icates 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 a nd August 15 of each year until the principal amount
shall have been paid or provision for such pa yment shall have been made, commencing February
15, 2014, as follows:
Year
Principal
Amount
Interest
RateYear
Principal
Amount
Interest
Rate
2014$185,000 2.000%2023$ 245,000 3.000%
2015200,0002.0002024 255,0004.000
2016205,0002.0002025 265,0004.000
2017210,0002.0002026 275,0004.000
2018215,0002.0002027 285,0004.000
2019220,0003.0002028 295,0004.000
2020225,0003.0002029 305,0004.000
2021230,0003.000*********
2022240,0003.00020331,380,0005.000
Section 3. CHARACTERISTICS OF THE CERTIFICATES. (a) Registration, Transfer,
Conversion and Exchange; Authentication . The Issuer shall keep or cause to be kept at the corporate
trust office of U.S. Bank Nationa l Association, Dallas, Texas, the "Paying Agent/Registrar"), books
or records for the registration of the transfer, conversion and exchange of the Certificates (the
"Registration Books"), and the Issuer hereby appoint s 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 Certificate to which payments with
respect to the Certificates shall be mailed, as herein provided; but it shall be the duty of each
registered owner to notify the Pa ying Agent/Registrar in writing of the address to which payments
shall be mailed, and such interest payments sha ll not be mailed unless such notice has been given.
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The Issuer shall have the right to inspect th e Registration Books during regular business hours of
the Paying Agent/Registrar, but otherwise the Payi ng Agent/Registrar shall keep the Registration
Books confidential and, unless otherwise required by law, shall not permit their inspection by any
other entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and
charges for making such registration, transfer, conversion, exchange and delivery of a substitute
Certificate or Certificates. Registration of a ssignments, transfers, conversions and exchanges of
Certificates shall be made in the manner provide d and with the effect stated in the FORM OF
CERTIFICATE set forth in this Ordinance. Each substitute Certificate shall bear a letter and/or
number to distinguish it from each other Certificate.
Except as provided in Section 3(c) of this Or dinance, an authorized representative of the
Paying Agent/Registrar shall, before the delivery of any such Certificate, date and manually sign
said Certificate, and no such Certificate shall be deemed to be issued or outstanding unless such
Certificate is so executed. The Paying Agent/Regis trar promptly shall cancel all paid Certificates
and Certificates surrendered for conversion and ex change. No additional ordinances, orders, or
resolutions need be passed or adopted by the governing body of the Issuer or any other body or
person so as to accomplish the foregoing conversion and exchange of any Certificate or portion
thereof, and the Paying Agent/Registrar shall provi de for the printing, execution, and delivery of the
substitute Certificates in the manner prescribed herei n, and said Certificates shall be printed or typed
on paper of customary weight and strength. Pursuant to Chapter 1201, Government Code, and
particularly Subchapter D thereof, the duty of conve rsion and exchange of Certificates as aforesaid
is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Certificate, the
converted and exchanged Certificate shall be valid, incontestable, and enforceable in the same
manner and with the same effect as the Certificates that initially were issued and delivered pursuant
to this Ordinance, approved by the Attorney Gene ral and registered by the Comptroller of Public
Accounts.
(b)Payment of Certificates and Interest . The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Certificates,
all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all
payments made by the Issuer and the Paying Agent/R egistrar with respect to the Certificates, and
of all conversions and exchanges of Certificates, and all replacements of Certificates, as provided
in this Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date,
and for thirty (30) days thereafte r, a new record date for such interest payment (a "Special Record
Date") will be established by the Paying Agent/Regis trar, 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 Certificates (i) shall be issu ed in fully registered form, without
interest coupons, with the principal of and interest on such Certificates to be payable only to the
registered owners thereof, (ii) may be redeemed prior to their scheduled maturities (notice of which
shall be given to the Paying Agent/Registrar by the Issuer at least 35 days prior to any such
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redemption date), (iii) may be converted and exchanged for other Certificates, (iv) may be
transferred and assigned, (v) shall have the character istics, (vi) shall be signed, sealed, executed and
authenticated, (vii) the principal of and interest on the Certificates shall be payable, and (viii) shall
be administered and the Paying Agent/Registrar and the Issuer shall have certain duties and
responsibilities with respect to the Certificates, a ll as provided, and in the manner and to the effect
as required or indicated, in the FORM OF CERT IFICATE set forth in this Ordinance. The
Certificate initially issued and delivered pursuant to this Ordinance is not required to be, and shall
not be, authenticated by the Paying Agent/Registr ar, but on each substitute Certificate issued in
conversion of and exchange for any Certificate or Certificates issued under this Ordinance the
Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION
CERTIFICATE, in the form set forth in the FORM OF CERTIFICATE.
(d)Book-Entry Only System . The Certificates issued in exchange for the Certificate
initially issued to the initial purchaser specified he rein shall be initially i ssued in the form of a
separate single fully registered Certificate for each of the maturities thereo f. Upon initial issuance,
the ownership of each such Certificate shall be re gistered in the name of Cede & Co., as nominee
of The Depository Trust Company, New York, Ne w York ("DTC"), and except as provided in
subsection (f) hereof, all of the out standing Certificates shall be regi stered in the name of Cede &
Co., as nominee of DTC.
With respect to Certificates registered in th e 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, clear ing corporations and certain other organizations
on whose behalf DTC was created ("DTC Participant") to hold securities to facilitate the clearance
and settlement of securities tran sactions among DTC Participants or to any person on behalf of
whom such a DTC Participant holds an interest in the Certificates. Without limiting the immediately
preceding sentence, the Issuer and the Paying Agent/Registrar shall have no responsibility or
obligation with respect to (i) the accuracy of the records of DTC, Ce de & Co. or any DTC
Participant with respect to any ownership interest in the Certificates, (ii) the delivery to any DTC
Participant or any other person, other than a Regi stered Owner of Certificates, as shown on the
Registration Books, of any notice with respect to th e Certificates, or (iii) the payment to any DTC
Participant or any other person, other than a Regi stered Owner of Certificates, as shown in the
Registration Books of any amount with respect to principal of or interest on the Certificates.
Notwithstanding any other provision of this Ordina nce to the contrary, the Issuer and the Paying
Agent/Registrar shall be entitled to treat and cons ider the person in whose name each Certificate is
registered in the Registration Books as the abso lute owner of such Cer tificate for the purpose of
payment of principal and interest with respect to such Certificate, for the purpose of registering
transfers with respect to such Certificate, and for all other purposes whatsoever. The Paying
Agent/Registrar shall pay all principal of and inte rest on the Certificates only to or upon the order
of the Registered Owners, as show n in the Registration Books as provi ded 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 Certificates to the extent of th e sum or sums so paid. No person other than a
Registered Owner, as shown in the Registration Books, shall receive a Certificate evidencing the
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obligation of the Issuer to make pa yments 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 Depository; Transfers Outside Book-Entry Only System . In the
event that the Issuer determines that DTC is in capable of discharging its responsibilities described
herein and in the representations letter of the Issuer to DTC or that it is in the best interest of the
beneficial owners of the Certificates that they be able to obtain certificated Certificates, the Issuer
shall (i) appoint a successor securities depository, qua lified to act as such under Section 17A of the
Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the
appointment of such successor securities depository and transfer one or more separate Certificates
to such successor securities depository or (ii) no tify DTC and DTC Participants of the availability
through DTC of Certificates and transfer one or more separate certificated Certificates to DTC
Participants having Certificates credited to their DT C accounts. In such event, the Certificates shall
no longer be restricted to being registered in th e 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 Register ed Owners transferring or exchanging Certificates
shall designate, in accordance with the provisions of this Ordinance.
(f)Payments to Cede & Co. Notwithstanding any other pr ovision of this Ordinance to
the contrary, so long as any Certif icate is registered in the name of Cede & Co., as nominee of DTC,
all payments with respect to princi pal of and interest on such Certif icate and all notices with respect
to such Certificate shall be made and given, respectively, in the manner provided in the
representations letter of the Issuer to DTC.
(g)Cancellation of Initial Certificate . On the closing date, one initial Certificate
representing the entire principal amount of the Certificates, payable in stated installments to the
purchaser designated in Section 11 or its designee, executed by manual or facsimile signature of the
Mayor (or in the absence thereof, by the Mayor Pro-tem) and Town Secretary of the Issuer,
approved by the Attorney General of Texas, and registered and manually signed by the Comptroller
of Public Accounts of the State of Texas, will be delivered to such purchaser or its designee. Upon
payment for the initial Certificate, the Paying Agen t/Registrar shall cancel the initial Certificate and
deliver to the Depository Trust Company on behalf of such purchaser one registered definitive
Certificate for each year of maturity of the Certif icates, in the aggregate principal amount of all of
the Certificates for such maturity.
(h)Conditional Notice of Redemption . With respect to any optional redemption of the
Certificates, unless certain prerequisites to such redemption required by this Ordinance have been
met and moneys sufficient to pay the principal of and premium, if any, and interest on the
Certificates to be redeemed shall have been received by the Paying Agent/Registrar prior to the
giving of such notice of redemption, such notice shall state that said redemption may, at the option
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of the Issuer, be conditional upon th e satisfaction of such prerequis ites and receipt of such moneys
by the Paying Agent/Registrar on or prior to th e date fixed for such redemption, or upon any
prerequisite set forth in such notice of redempti on. If a conditional notice of redemption is given
and such prerequisites to the redemption and suffi cient moneys are not received, such notice shall
be of no force and effect, the Issuer shall not redeem such Certificates and the Paying
Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to the
effect that the Certificates have not been redeemed.
Section 4. FORM OF CERTIFICATES. The fo rm of the Certificates, including the form
of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of
Registration Certificate of the Comptroller of Pub lic Accounts of the State of Texas to be attached
to the Certificates initially issued and delivered pursuant to this Ordinance, shall be, respectively,
substantially as follows, with such appropriate va riations, omissions or insertions as are permitted
or required by this Ordinance.
(a)[Form of Certificate]
NO. R-UNITED STATES OF AMERICA
STATE OF TEXAS
TOWN OF PROSPER, TEXAS
COMBINATION TAX AND SURPLUS REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2013
PRINCIPAL
AMOUNT
$
Interest RateDate of Initial DeliveryMaturity DateCUSIP No.
July 25, 2013August 15,____
REGISTERED OWNER:
PRINCIPAL AMOUNT:DOLLARS
ON THE MATURITY DATE specified above, the Town of Prosper, in Collin and Denton
Counties, Texas (the "Issuer"), being a political s ubdivision and municipal corporation of the State
of Texas, hereby promises to pay to the Regist ered 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 sp ecified 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 Certificate is required to be
authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
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before the next following interest payment date, in which case such principal amount shall bear
interest from such next following interest paym ent date; provided, however, that if on the date of
authentication hereof the interest on the Certificate or Certificates, if any, for which this Certificate
is being exchanged is due but has not been paid, then this Certificate shall bear interest from the date
to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Cer tificate are payable in lawful money
of the United States of America, without exchange or collection charges. The principal of this
Certificate shall be paid to the registered owner hereof upon presentation and surrender of this
Certificate at maturity, or upon the date fixed for its redemption prior to maturity, at the corporate
trust office of U.S. Bank National Associati on in Dallas, Texas, which is the "Paying
Agent/Registrar" for this Certificate. The payment of interest on this Certificate shall be made by
the Paying Agent/Registrar to the registered owne r hereof on each interest payment date by check
or draft, dated as of such interest paymen t date, drawn by the Paying Agent/Registrar on, and
payable solely from, funds of th e Issuer required by the ordinance authorizing the issuance of this
Certificate (the "Certificate Ordinance") to be on deposit with the Paying Agent/Registrar for such
purpose as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar
by United States mail, first-class postage prepaid, on each such interest payment date, to the
registered owner hereof, at its address as it a ppeared on the last day of the month preceding each
such date (the "Record Date") on the Registra tion 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, a nd for 30 days thereafter, a new
record date for such interest payment (a "Speci al 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 Reco rd Date and of the scheduled paym ent date of the past due interest
(which shall be 15 days after the Sp ecial Record Date) shall be sent at least five business days prior
to the Special Record Date by United States mail, first-class postage prepaid, to the address of each
owner of a Certificate appearing on the Registra tion Books at the close of business on the last
business day next preceding the date of mailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Certificate
prior to maturity as provided herein shall be paid to the registered owner upon presentation and
surrender of this Certificate for redemption and pa yment at the corporate trust office of the Paying
Agent/Registrar. The Issuer covenants with the regi stered owner of this Cer tificate that on or before
each principal payment date, interest payment date, and accrued interest payment date for this
Certificate it will make available to the Paying Agent/Registrar, from the "Interest and Sinking
Fund" created by the Certificate Ordinance, the amounts required to provide for the payment, in
immediately available funds, of all principal of and interest on the Certificates, when due.
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, a legal holiday or a day on wh ich 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 sh all be the next succeeding day that is not such a
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Saturday, Sunday, legal holiday or day on which ba nking institutions are authorized to close; and
payment on such date shall have the same force and effect as if made on the original date payment
was due.
THIS CERTIFICATE is one of a series of Certificates dated June 15, 2013, authorized in
accordance with the Constitution and laws of th e State of Texas in the principal amount of
$5,235,000 for the purpose of paying all or a portion of the Issuer's contractual obligations incurred
in connection with extending, constructing and improving the Issuer's water system, including
constructing improvements to pump stations and extending water lines and paying legal, fiscal,
engineering and architectural fees in connection with these projects.
THE CERTIFICATES OF THIS SERIES havi ng stated maturities on and after August 15,
2024 may be redeemed prior to their scheduled matu rities, at the option of the Issuer, on August 15,
2023 or on any date thereafter, with funds derived fr om any available and lawful source, as a whole,
or in part, and, if in part, the particular Certificates, or portions thereof, to be redeemed shall be
selected and designated by the Issuer (provided that a portion of a Certificate may be redeemed only
in an integral multiple of $5,000), at a redemp tion price equal to the principal amount to be
redeemed plus accrued interest to the date fixed for redemption.
THE CERTIFICATES scheduled to mature on August 15, 2033 (the "Term Certificates")
are subject to scheduled mandatory redemption by th e Paying Agent/Registrar by lot, or by any other
customary method that results in a random selection, at a price equal to the principal amount thereof,
plus accrued interest to the redemption date, out of moneys available for such purpose in the interest
and sinking fund for the Certificates, on the dates a nd in the respective principal amounts, set forth
in the following schedule:
Term Certificate
Maturity: August 15, 2033
Mandatory Redemption Date
Principal
Amount
August 15, 2030$ 320,000
August 15, 2031335,000
August 15, 2032355,000
August 15, 2033(maturity)370,000
The principal amount of Term Certificates 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
Certificates of the same maturity which, at leas t 45 days prior to a mandatory redemption date (1)
shall have been acquired by the Issuer at a pri ce not exceeding the principal amount of such Term
Certificates 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 Certificates plus accrued interest to the date of purchase, or (3) shall have been redeemed
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pursuant to the optional redemption provisions a nd not theretofore credited against a mandatory
redemption requirement.
AT LEAST 30 DAYS prior to the date fixed fo r any redemption of Certificates or portions
thereof prior to maturity a written notice of such redemption shall be sent by the Paying
Agent/Registrar by United States mail, first-class pos tage prepaid, at least 30 days prior to the date
fixed for any such redemption, to the registered owner of each Certificate to be redeemed at its
address as it appeared on the 45th day prior to such redemption date; provided, however, that the
failure of the registered owner to receive such notice, or any defect therein or in the sending or
mailing thereof, shall not affect the validity or e ffectiveness of the proceedings for the redemption
of any Certificate. By the date fixed for any such redemption due provision shall be made with the
Paying Agent/Registrar for the payment of the re quired redemption price for the Certificates or
portions thereof that are to be so redeemed. If such written notice of redemption is sent and if due
provision for such payment is made, all as provide d above, the Certificates or portions thereof that
are to be so redeemed thereby automatically sha ll be treated as redeemed prior to their scheduled
maturities, and they shall not bear interest after the date fixed for redemption, and they shall not be
regarded as being outstanding except for the right of the registered owner to receive the redemption
price from the Paying Agent/Registrar out of the funds provided for such payment. If a portion of
any Certificate shall be redeemed, a substitute Certificate or Certificates having the same maturity
date, bearing interest at the same rate, in any de nomination 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 Certificate Ordinance.
ALL CERTIFICATES OF THIS SERIES are issuab le solely as fully registered certificates,
without interest coupons, in the denomination of any integral multiple of $5,000. As provided in
the Certificate Ordinance, this Certificate may, at the request of the register ed owner or the assignee
or assignees hereof, be assigned, transferred, converted into and exchanged for a like aggregate
principal amount of fully registered certificates, without interest coupons, payable to the appropriate
registered owner, assignee or assignees, as the case may be, having the same denomination or
denominations in any integral multiple of $5,000 as requested in writing by the appropriate
registered owner, assignee or assignees, as the cas e may be, upon surrender of this Certificate to the
Paying Agent/Registrar for cancellation, all in accord ance with the form and procedures set forth
in the Certificate Ordinance. Among other requirements for such assignment and transfer, this
Certificate must be presented and surrendered to the Paying Agent/Registrar, together with proper
instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, evidencing assignment of this Cer tificate or any portion or portions hereof in any
integral multiple of $5,000 to the assignee or assign ees in whose name or names this Certificate or
any such portion or portions hereof is or are to be registered. The form of Assignment printed or
endorsed on this Certificate may be executed by the registered owner to evidence the assignment
hereof, but such method is not exclusive, and ot her instruments of assignment satisfactory to the
Paying Agent/Registrar may be used to evidence the assignment of this Certificate or any portion
or portions hereof from time to time by the re gistered owner. The Paying Agent/Registrar's
reasonable standard or customary fees and ch arges for assigning, transferring, converting and
exchanging any Certificate or portion thereof will be paid by the Issuer. In any circumstance, any
taxes or governmental charges required to be paid with respect thereto shall be paid by the one
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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 bus iness on the next following principal or interest
payment date, or (ii) with respect to any Certificate or any portion thereof called for redemption
prior to maturity, within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the Issuer,
resigns, or otherwise ceases to act as such, the I ssuer has covenanted in the Certificate Ordinance
that it promptly will appoint a competent and lega lly qualified substitute therefor, and cause written
notice thereof to be mailed to the registered owners of the Certificates.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and
validly authorized, issued and delivered; that all acts, conditions and things required or proper to be
performed, exist and be done precedent to or in the authorization, issuance and delivery of this
Certificate have been performed, existed and been done in accordance with law; that this Certificate
is a general obligation of said Issuer, issued on the full faith and credit thereof; and that annual ad
valorem taxes sufficient to provide for the payment of the interest on and principal of this
Certificate, as such interest comes due and such principal matures, have been levied and ordered to
be levied against all taxable property in said Issu er, and have been pledged for such payment, within
the limit prescribed by law, and that this Certifi cate is additionally secured by and payable from a
pledge of the revenues of the Issuer's combined Waterworks and Sewer Systems remaining after
payment of all operation and maintenance expenses thereof, and all debt service, reserve and other
requirements in connection with all of the Issu er's revenue obligations (now or hereafter
outstanding) that are payable from all or part of said revenues, all as provided in the Certificate
Ordinance.
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of th e Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and
available for inspection in the official minutes and records of the governi ng body of the Issuer, and
agrees that the terms and provisions of this Cer tificate and the Certificate Ordinance constitute a
contract between each registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the
manual or facsimile signature of the Mayor (or in the absence thereof, by the Mayor Pro-tem) of the
Issuer and countersigned with the manual or facs imile signature of the Town Secretary of said
Issuer, and has caused the official seal of the Issu er to be duly impressed, or placed in facsimile, on
this Certificate.
(signature) (signature)
Town SecretaryMayor
(SEAL)
11
(b)[Form of Paying Agent/Registrar's Authentication Certificate]
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Certificate is not accompanied by an
executed Registration Certificate of the Comptroller
of Public Accounts of the State of Texas)
It is hereby certified that this Certificate has been issued under the provisions of the
Certificate Ordinance described in the text of this Certificate; and that this Certificate has been
issued in conversion or replacement of, or in exch ange for, a certificate, certificates, or a portion of
a certificate or certificates of a se ries that originally was approved by the Attorney General of the
State of Texas and registered by the Comptrolle r 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 here by sells, assigns and transfers unto
_______________________________________________________________________________.
Please insert Social Security or Taxpayer Identification Number of Transferee
______________________________________________________________________________
(Please print or typewrite name and address, including zip code, of Transferee.)
______________________________________________________________________________
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
___________________________________________, attorne y, to register the transfer of the within
Certificate on the books kept for registration thereof, with full power of substitution in the premises.
Dated: ___________________________
Signature Guaranteed:
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NOTICE: Signature(s) must be guaranteed
by an eligible guarantor institution
participating in a securities transfer
association recognized signature guarantee
program.
NOTICE: The signature above must
correspond with the name of the registered
owner as it appears upon the front of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.
(d)[Form of Registration Certificate of the Comptroller of Public Accounts]
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate has been examined, certified as to validity and approved
by the Attorney General of the State of Texas, a nd that this Certificate ha s 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 Certificate Insertions]
(i)The initial Certificate shall be in the form set forth is paragraph (a) of this Section,
except that:
A.immediately under the name of the Certificate, the headings "Interest Rate"
and "Maturity Date" shall both be completed with the words "As shown below" and
"CUSIP No. _____" shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"THE TOWN OF PROSPER, TEXAS (the "I ssuer"), 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 (hereina fter called the "Registered Owner"), on August15 in
each of the years, in the principal installments a nd bearing interest at the per annum rates set forth
in the following schedule:
Years
Principal
Installments
Interest
RatesYears
Principal
Installments
Interest
Rates
2014$185,000 2.000%2023$ 245,000 3.000%
2015200,0002.0002024 255,0004.000
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2016205,0002.0002025 265,0004.000
2017210,0002.0002026 275,0004.000
2018215,0002.0002027 285,0004.000
2019220,0003.0002028 295,0004.000
2020225,0003.0002029 305,0004.000
2021230,0003.000*********
2022240,0003.00020331,380,0005.000
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 th e Date of Initial Delivery set forth above at the
respective Interest Rate per annum specified a bove. 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
Certificate is required to be authenticated and the date of its authentication is later than the first
Record Date (hereinafter defined), such Princi pal Amount shall bear interest from the interest
payment date next preceding the date of authentica tion, 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 au thentication hereof the interest on the Certificate or Certificates,
if any, for which this Certificate is being exchanged is due but has not been paid, then this
Certificate shall bear interest from the date to which such interest has been paid in full."
C.The Initial Certificate shall be numbered "T-1."
Section 5. INTEREST AND SINKING FUND. A special "Interest and Sinking Fund" is
hereby created and shall be established and maintain ed by the Issuer at an official depository bank
of the Issuer. Said Interest and Sinking Fund sha ll be kept separate and apart from all other funds
and accounts of the Issuer, and shall be used only for paying the interest on and principal of the
Certificates. All amounts received from the sale of the Certificates as accrued interest and ad
valorem taxes levied and collected for and on account of the Certificates shall be deposited, as
collected, to the credit of said Interest and Sinking Fund. During each year while any of the
Certificates are outstanding and unpaid, the governi ng body of the Issuer shall compute and ascertain
a rate and amount of ad valorem tax that will be sufficient to ra ise and produce the money required
to pay the interest on the Certificates as such interest comes due, and to provide and maintain a
sinking fund adequate to pay the principal of the Ce rtificates as such principal matures (but never
less than 2% of the original amount of the Certif icates as a sinking fund each year); and said tax
shall be based on the latest approved tax rolls of th e 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, agains t all taxable property in the Issuer, for each year
while any of the Certificates ar e outstanding and unpaid, and said ta x 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
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Certificates, as such interest comes due and such principal matures, are hereby pledged for such
payment, within the limit prescribed by law.
Section 6. SURPLUS REVENUES. The Certificates are additionally secured by and
payable from a pledge of the revenues of the Issuer's combined Waterworks and Sewer Systems
remaining after payment of all operation and maintenance expenses thereof, and all debt service,
reserve and other requirements in connection with all of the Issuer's revenue obligations (now or
hereafter outstanding) that are payable from a ll or part of the Net Revenues of the Issuer's
Waterworks and Sewer Systems, constituting "Surplus Revenues." The Issuer shall deposit such
Surplus Revenues to the credit of the Interest a nd Sinking Fund created pursuant to Section 5, to the
extent necessary to pay the principal and interest on the Certificates. Notwithstanding the
requirements of Section 5, if Surplus Revenues ar e actually on deposit in the Interest and Sinking
Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the
amount of taxes that otherwise would have been re quired to be levied pursuant to Section 5 may be
reduced to the extent and by the amount of the Su rplus Revenues then on deposit in the Interest and
Sinking Fund. The Issuer reserves the right, without condition or limitation, to issue other
obligations secured in whole or in part by a par ity lien on and pledge of the Surplus Revenues, for
any purpose permitted by law.
Section 7. DEFEASANCE OF CERTIFICATES.(a) Any Certificate and the interest
thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased Certificate")
within the meaning of this Ordina nce, except to the extent provided in subsection (d) of this Section
7, when payment of the principal of such Certificate, plus interest thereon to the due date (whether
such due date be by reason of matur ity or otherwise) either (i) sha ll 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 (t he "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 sufficien t money to provide for such payment, and when
proper arrangements have been made by the Issuer with the Paying Agent/Registrar for the payment
of its services until all Defeased Certificates sha ll have become due and payable. At such time as
a Certificate shall be deemed to be a Defeased Certificate hereunder, as aforesaid, such Certificate
and the interest thereon shall no longer be secure d by, payable from, or entitled to the benefits of,
the ad valorem taxes or revenues herein levied a nd 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 Ordinan ce to the contrary, it is hereby provided that any
determination not to redeem Defeased Certificates that is made in conjunction with the payment
arrangements specified in subsection 7(a)(i) or (ii) shall not be irrevocable, provided that: (1) in the
proceedings providing for such payment arrangements, the Issuer expressly reserves the right to call
the Defeased Certificates for redemption; (2) give s notice of the reservation of that right to the
owners of the Defeased Certificates imme diately following the making of the payment
arrangements; and (3) directs that notice of the reservation be included in any redemption notices
that it authorizes.
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(b)Any moneys so deposited with the Pa ying Agent/Registrar may at the written
direction of the Issuer be invested in Defeas ance 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 paymen t of the Certificates and interest thereon, with
respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited
as directed in writing by the Issuer. Any Future Escrow Agreement pursuant to which the money
and/or Defeasance Securities are held for the payment of Defeased Certificates may contain
provisions permitting the investment or reinvestment of such moneys in Defeasance Securities or
the substitution of other Defeasance Securities upon the satisfaction of the requirements specified
in subsection 7(a)(i) or (ii). All income from such Defeasance Securities received by the Paying
Agent/Registrar that is not required for the payment of the Defeased Certificates, with respect to
which such money has been so deposited, shall be re mitted to the Issuer or deposited as directed in
writing by the Issuer.
(c)The term "Defeasance Securities" mean s any securities and obligations now or
hereafter authorized by Texas law that are elig ible to refund, defease or otherwise discharge
obligations such as the Certificates.
(d)Until all Defeased Certificates shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Payi ng Agent/Registrar for such Defeased Certificates
the same as if they had not been defeased, and the Issuer shall make proper arrangements to provide
and pay for such services as required by this Ordinance.
(e)In the event that the Issuer elects to de fease less than all of the principal amount of
Certificates of a maturity, the Paying Agent/Registr ar shall select, or cause to be selected, such
amount of Certificates by such random method as it deems fair and appropriate.
Section 8. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES.
(a) Replacement Certificates . In the event any outstanding Certificate is damaged,
mutilated, lost, stolen or destroyed, the Paying Agen t/Registrar shall cause to be printed, executed
and delivered, a new certificate of the same princi pal amount, maturity and interest rate, as the
damaged, mutilated, lost, stolen or destroyed Certifi cate, in replacement for such Certificate in the
manner hereinafter provided.
(b)Application for Replacement Certificates . Application for replacement of damaged,
mutilated, lost, stolen or destroyed Certificates sha ll be made by the registered owner thereof to the
Paying Agent/Registrar. In every cas e of loss, theft or destruction of a Certificate, the registered
owner applying for a replacement certificate sha ll furnish to the Issu er and to the Paying
Agent/Registrar such security or indemnity as may be required by them to save each of them
harmless from any loss or damage with respect thereto. Also, in every case of loss, theft or
destruction of a Certificate, the registered owne r shall furnish to the I ssuer and to the Paying
Agent/Registrar evidence to their satisfaction of the loss, theft or destruction of such Certificate, as
16
the case may be. In every case of damage or mutilation of a Certificate, the registered owner shall
surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or mutilated.
(c)No Default Occurred . Notwithstanding the foregoing provisions of this Section, in
the event any such Certificate shall have matured, and no default has occurred that is then continuing
in the payment of the principal of, redemption prem ium, if any, or interest on the Certificate, the
Issuer may authorize the payment of the same (w ithout surrender thereof except in the case of a
damaged or mutilated Certificate) instead of issu ing a replacement Certificate, provided security or
indemnity is furnished as above provided in this Section.
(d)Charge for Issuing Replacement Certificates . Prior to the issuance of any
replacement certificate, the Paying Agent/Registra r shall charge the registered owner of such
Certificate with all legal, printing, and other e xpenses in connection therewith. Every replacement
certificate issued pursuant to the provisions of this Section by virtue of the fact that any Certificate
is lost, stolen or destroyed shall constitute a cont ractual obligation of the Issuer whether or not the
lost, stolen or destroyed Certificate shall be found at any time, or be enforceable by anyone, and
shall be entitled to all the benef its of this Ordinance equally and proportionately with any and all
other Certificates duly issued under this Ordinance.
(e)Authority for Issuing Replacement Certificates . In accordance with Subchapter D
of Chapter 1201, Government Code, this Section 8 of this Ordinance shall constitute authority for
the issuance of any such replacem ent certificate without necessity of further action by the governing
body of the Issuer or any other body or person, and the duty of the replacement of such certificates
is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar
shall authenticate and deliver such Certificates in the form and manner and with the effect, as
provided in Section 3(a) of this Ordinance for Certificates issued in conversion and exchange for
other Certificates.
Section 9. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES; BOND
COUNSEL'S OPINION AND ENGAGEMENT; ATTO RNEY GENERAL FILING FEE; CUSIP
NUMBERS; OTHER PROCEDURES. (a) The Mayor of the Issuer is hereby authorized to have
control of the Certificates initially issued and delivered hereunder and all necessary records and
proceedings pertaining to the Certificates pending their delivery and their investigation,
examination, and approval by the Attorney General of the State of Texas, and their registration by
the Comptroller of Public Accounts of the State of Texas. Upon regi stration of the Certificates said
Comptroller of Public Accounts (o r a deputy designated in writing to act for said Comptroller) shall
manually sign the Comptroller's Registration Certifi cate attached to such Certificates, and the seal
of said Comptroller shall be impressed, or placed in facsimile, on such Certificate. The approving
legal opinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option of
the Issuer, be printed on the Certificates issued a nd delivered under this Ordinance, but neither shall
have any legal effect, and shall be solely for the convenience and information of the registered
owners of the Certificates.
17
(b) The Mayor, Town Manager, Finance Direct or 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 deliv er in the name and on behalf of the Issuer a
Paying Agent/Registrar Agreement with the Payi ng Agent/Registrar and all other instruments,
whether or not herein mentioned, as may be necessa ry or desirable in order to carry out the terms
and provisions of this Ordinance, the Certificates , the sale of the Certificates and the Official
Statement relating to the Certificates. In case a ny officer whose signature shall appear on any Bond
shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be
valid and sufficient for all purposes the same as if such officer had remained in office until such
delivery.
(c)The obligation of the initial purchaser to accept delivery of the Certificates is subject
to the initial purchaser being furnished with th e final, approving opinion of McCall, Parkhurst &
Horton L.L.P., bond counsel to the Issuer, which opi nion shall be dated as of and delivered on the
date of initial delivery of the Certificates to the initial purchaser. The engagement of such firm as
bond counsel to the Issuer in connection with issuance, sale and delivery of the Certificates is hereby
approved and confirmed. The execution and delivery of an engagement letter between the Issuer
and such firm, with respect to such services as bond counsel, is hereby authorized in such form as
may be approved by the Mayor of the Issuer and the Mayor is hereby authorized to execute such
engagement letter.
(d)In accordance with the provisions of Section 1202.004, Tex. Gov't Code Ann., in
connection with the submission of the Certificates by the Attorney General of Texas for review and
approval, a statutory fee (an amount equal to 0.1% principal amount of the Certificates, subject to
a minimum of $750 and a maximum of $9,500) is requi red to be paid to the Attorney General upon
the submission of the transcript of proceedings for the Certificates. The Issuer hereby authorizes
and directs that a check in the amount of the Atto rney General filing fee for the Certificates, made
payable to the "Texas Attorney General," be prom ptly furnished to the Issuer's Bond Counsel, for
payment to the Attorney General in connection with his review of the Certificates.
Section 10. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
CERTIFICATES. The Issuer covenants to take any action necessary to assure, or refrain from any
action that would adversely affect, the treatment of the Certificates as Obligation described in
section 103 of the Code, the interest on which is not includable in the "gross income" of the holder
for purposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows:
(a)to take any action to assure that no more than 10 percent of the proceeds of
the Certificates (less amounts deposited to a re serve 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, dir ectly or indirectly, secure or provide for
18
the payment of more than 10 percent of the debt service on the Certificates, in contravention
of section 141(b)(2) of the Code;
(b)to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds 5 pe rcent of the proceeds of the Certificates or
the projects financed therewith (less amounts de posited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a "private business use" that is "related" and not
"disproportionate," within the meaning of sec tion 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 Ce rtificates (less amounts deposited into a
reserve fund, if any) is directly or indirectly us ed to finance loans to persons, other than state
or local governmental units, in contravention of section 141(c) of the Code;
(d)to refrain from taking any action that would otherwise result in the
Certificates being treated as "private activ ity bonds" within the meaning of section 141(b)
of the Code;
(e)to refrain from taking any action that would result in the Certificates being
"federally guaranteed" within the mean ing of section 149(b) of the Code;
(f)to refrain from using any portion of th e proceeds of the Certificates, directly
or indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) that produces a materially
higher yield over the term of the Certificates , other than investment property acquired with
–
(1)proceeds of the Certificates invested for a reasonable temporary
period of 3 years or less or, in the cas e of a refunding bond, fo r 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 de bt 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 ex ceed 10 percent of the proceeds of the
Certificates;
(g) to otherwise restrict the use of th e proceeds of the Certificates or amounts
treated as proceeds of the Certificates, as ma y be necessary, so that the Certificates do not
otherwise contravene the requirements of secti on 148 of the Code (relating to arbitrage) and,
to the extent applicable, section 149(d) of the Code (relating to advance refundings); and
19
(h)to pay to the United States of Amer ica at least once during each five-year
period (beginning on the date of delivery of the Ce rtificates) an amount that is at least equal
to 90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and
to pay to the United States of America, not late r than 60 days after the Certificates have been
paid in full, 100 percent of the amount then requi red to be paid as a result of Excess Earnings
under section 148(f) of the Code.
In order to facilitate compliance with the a bove covenant (h), a "Rebate Fund" is hereby
established by the Issuer for the so le benefit of the United States of America, and such Fund shall
not be subject to the claim of any other pers on, including without limitation the certificateholders.
The Rebate Fund is established for the additiona l purpose of compliance with section 148 of the
Code.
For purposes of the foregoing (a) and (b), the Issuer understands that the term "proceeds"
includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding
bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date
of issuance of the Certificates. It is the unders tanding 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 pr ovisions of the Code, as applicable to the
Certificates, the Issuer will not be required to co mply with any covenant contained herein to the
extent that such failure to comply, in the opinion of nationally recognized bond counsel, will not
adversely affect the exemption from federal income taxation of interest on the Certificates under
section 103 of the Code. In the event that regul ations or rulings are hereafter promulgated that
impose additional requirements applicable to the Certificates, the Issuer agrees to comply with the
additional requirements to the extent necessary, in the opinion of nationally recognized bond
counsel, to preserve the exemption from federal in come taxation of interest on the Certificates under
section 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs
the Mayor to execute any documents, certificates or reports required by the Code and to make such
elections, on behalf of the Issuer , that may be permitte d by the Code as are consistent with the
purpose for the issuance of the Certificates.
Section 11. SALE OF CERTIFICATES; APPROVAL OF OFFICIAL STATEMENT;
APPLICATION OF PREMIUM. (a) The Certif icates are hereby initially sold and shall be
delivered to RBC Capital Markets, LLC and BOSC, In c. (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 deliv er. The Certificates shall initially be registered
in the name of "RBC Capital Markets, LLC". The Cer tificates are sold to the Underwriters at a price
of $5,429,065.56 (representing the par amount of the Certif icates, plus an aggregate original issue
premium of $231,175.70, less Underwriter's discount on the Certificates of $37,110.14). 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 th e terms of this sale are the most advantageous
reasonably obtainable.
20
(b) Excess proceeds from the sale of the Certificates in the amount of $4,065.56 shall be
deposited to the Interest and Sinking Fund. Proceeds of the sale of the Certificates (i) in the amount
of $125,000.00 shall be deposited to the construction fund of the Issuer to be used for the
construction of the Project financed with the Ce rtificates and (ii) in the amount of $65,000.00 shall
be applied to pay the costs of issuance of the Certificates.
(c) The Issuer hereby approves the form and cont ent of the Official Statement relating to the
Certificates and any addenda, supplement or am endment thereto, and approves the distribution of
such Official Statement in the reoffering of the Certificates by the Underwriter in final form, with
such changes therein or additions thereto as the officer executing the same may deem advisable,
such determination to be conclusively evidenced by his execution thereof. The distribution and use
of the Preliminary Official Statement dated June 19, 2013 prior to the date he reof is hereby ratified
and confirmed.
Section 12. ALLOCATION OF CERTIFICA TE PROCEEDS. The Issuer covenants to
account for the expenditure of sale proceeds and inve stment earnings to be used for the construction
and acquisition of the Project on its books and records by allocating proceeds to expenditures within
18 months of the later of the date that (1) the e xpenditure is made, or (2) the Project is completed.
The foregoing notwithstanding, the Issuer shall not e xpend proceeds of the sale of the Certificates
or investment earnings thereon more than 60 days af ter the earlier of (1) the fifth anniversary of the
delivery of the Certificates, or (2) the date the Ce rtificates are retired, unless the Issuer obtains an
opinion of nationally-recognized bond counsel that such expenditure will not adversely affect the
status, for federal income tax purposes, of the Certificates or the interest thereon. For purposes
hereof, the Issuer shall not be obligated to comply with this covenant if it obtains an opinion that
such failure to comply will not adversely affect the excludability for federal income tax purposes
from gross income of the interest.
Section 13. DISPOSITION OF PR OJECT. The Issuer covenants that the Project will not
be sold or otherwise disposed in a transaction re sulting in the receipt by the Issuer of cash or other
compensation, unless the Issuer obtains an opini on of nationally-recognized bond counsel that such
sale or other disposition will not adversely affect the tax-exempt status of the Certificates. For
purposes of the foregoing, the portion of the pr operty 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 co mply will not adversely affect the excludability for
federal income tax proposes from gross income of the interest.
Section 14. INTEREST EARNINGS ON CERT IFICATE PROCEEDS. Interest earnings
derived from the investment of pr oceeds from the sale of the Certificates shall be used along with
other certificate proceeds for the Project; provided th at after completion of such purpose, if any of
such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and
Sinking Fund. It is further provi ded, however, that any interest ea rnings on certificate proceeds that
are required to be rebated to the United States of America pursuant to Section 10 hereof in order to
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prevent the Certificates from being arbitrage bonds sh all be so rebated and not considered as interest
earnings for the purposes of this Section.
Section 15. CONSTRUCTION FUND. The Issuer hereby creates and establishes and shall
maintain on the books of the Issuer a separate fund to be entitled the "Series 2013 Combination Tax
and Surplus Revenue Certificate of Obligation Cons truction Fund" for use by the Issuer for payment
of all lawful costs associated with the acquisiti on and construction of the Project as hereinbefore
provided. Upon payment of all such costs, any moneys remaining on deposit in said Fund shall be
transferred to the Interest and Sinking Fund. Am ounts so deposited to the Interest and Sinking Fund
shall be used in the manner described in Section 5 of this Ordinance.
Section 16. COMPLIANCE WITH RULE 15c2-12.
(a) Definitions . As used in this Section, the followi ng 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 . (i) The Issuer shall provide a nnually to the MSRB, in the electronic
format prescribed by the MSRB, within six months after the end of each fi scal year commencing in
2013, financial information and operating data with resp ect to the Issuer of the general type included
in the final Official Statement authorized by th is 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 la w 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 financ ial 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 e nd) prior to the next date by which the Issuer otherwise would be
required to provide financial information and operati ng data pursuant to this Section. The financial
information and operating data to be provided pursuan t 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.
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(c) Event Notices . The Issuer shall notify the MSRB, in a timely manner not in excess of
ten Business Days after the occurre nce of the event, of any of the following events with respect to
the Certificates:
1.Principal and interest payment delinquencies;
2.Non-payment related defaults, if material;
3.Unscheduled draws on debt service reserves reflecting financial difficulties;
4.Unscheduled draws on credit enhancements reflecting financial difficulties;
5.Substitution of credit or liquidity providers, or their failure to perform;
6.Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Noti ces of Proposed Issue (IRS Form 5701-TEB)
or other material notices or determinations with respect to the tax status of the
Certificates, or other material events aff ecting the tax status of the Certificates;
7.Modifications to rights of holders of the Certificates, if material;
8.Certificate calls, if material, and tender offers;
9.Defeasances;
10.Release, substitution, or sale of property securing repayment of the Certificates, if
material;
11.Rating changes;
12.Bankruptcy, insolvency, receivership or similar event of the Issuer;
13.The consummation of a merger, consolida tion, or acquisition involving the Issuer or
the sale of all or substantially all of the a ssets of the Issuer, other than in the ordinary
course of business, the entry into a defi nitive agreement to undertake such an action
or the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms, if material; and
14.Appointment of a successor 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 accordan ce 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 appointme nt of a receiver, fiscal agent or similar officer
for the Issuer in a proceeding under the U.S. Bankr uptcy Code or in any other proceeding under state
or federal law in which a court of governmental au thority 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 possessi on 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 government al 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 Secti on for so long as, but only for so long as, the Issuer
remains an "obligated person" with respect to the Certificates within the meaning of the Rule, except
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that the Issuer in any event w ill give notice of any deposit made in accordance with this Ordinance
or applicable law that causes the Certificates no longer to be outstanding.
(ii) The provisions of this Section are for th e sole benefit of the registered owners and
beneficial owners of the Certifi cates, and nothing in this Section, e xpress 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 S ection or otherwise, except as expressly provided
herein. The Issuer does not make any represen tation or warranty concerning such information or
its usefulness to a decision to invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCES SHA LL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE ISSUER, WHETH ER NEGLIGENT OR WITHOUT FAULT ON
ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRA CT 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 Or dinance 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 am ended by the Issuer from time to time to adapt
to changed circumstances that arise from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the Issuer, but only if (1) the provisions
of this Section, as so amended, would have permitted an underwriter to purchase or sell Certificates
in the primary offering of the Certificates in compliance with the Rule, taking into account any
amendments or interpretations of the Rule since su ch offering as well as such changed circumstances
and (2) either (a) the registered owners of a majo rity in aggregate principal amount (or any greater
amount required by any other provision of this Ordi nance that authorizes such an amendment) of
the outstanding Certificates consent to such amendm ent 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 ow ners and beneficial owners of the Certificates. If
the Issuer so amends the provisions of this Section, it shall include with any amended financial
information or operating data next provided in accordance with subsection (b) of this Section an
explanation, in narrative form, of the reason for th e 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 agreem ent if the SEC amends or repeals the applicable
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provision of the Rule or a court of final jurisdicti on enters judgment that such provisions of the Rule
are invalid, but only if and to the extent that th e provisions of this sentence would not prevent an
underwriter from lawfully purchasing or selling Certificates in the primary offering of the
Certificates.
Section 17. METHOD OF AMENDMENT. The Issu er hereby reserves the right to amend
this Ordinance subject to the following terms and conditions, to-wit:
(a)The Issuer may from time to time, without the consent of any holder, except as
otherwise required by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure
any ambiguity, defect or omission in this Ordinance that does not materially adversely affect the
interests of the holders, (ii) grant additional rights or security for the benefit of the holders, (iii) add
events of default as shall not be inconsistent w ith 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 Certificates aggregating
in principal amount 51% of the aggregate principa l amount of then outstanding Certificates which
are the subject of a proposed amendment shall ha ve the right from time to time to approve any
amendment hereto which may be deemed necessary or desirable by the Issuer; provided, however,
that without the consent of 100% of the holders in aggregate principal amount of the then
outstanding Certificates, nothing herein contained sh all permit or be construed to permit amendment
of the terms and conditions of this Ordinance or in any of the Certificates so as to:
(1)Make any change in the maturity of any of the outstanding Certificates;
(2)Reduce the rate of interest borne by any of the outstanding Certificates;
(3)Reduce the amount of the principal of, or rede mption premium, if any,
payable on any outstanding Certificates;
(4)Modify the terms of payment of pr incipal or of interest or redemption
premium on outstanding Certificates or any of them or impose any condition with
respect to such payment; or
(5)Change the minimum percentage of the principal amount of any series of
Certificates necessary for consent to such amendment.
(c)If at any time the Issuer shall desire to amend this Ordinance under this Section, the
Issuer shall send by U.S. mail to each registered owner of the affected Certificates a copy of the
proposed amendment and cause notice of the propos ed amendment to be published at least once in
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a financial publication published in The City of New York, New York or in the State of Texas. Such
published notice shall briefly set forth the nature of the proposed amendment and shall state that a
copy thereof is on file at the office of the Issuer for inspection by all holders of such Certificates.
(d)Whenever at any time within one year from the date of publication of such notice the
Issuer shall receive an instrument or instru ments executed by the holders of at least 51% in
aggregate principal amount of all of the Certifi cates then outstanding which are required for the
amendment, which instrument or instruments sha ll 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 Ordi nance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be modified and amended in accordance with such
amendatory Ordinance, and the respective rights, du ties, and obligations of the Issuer and all holders
of such affected Certificates shall thereafter be determined, exercised, and enforced, subject in all
respects to such amendment.
(f)Any consent given by the holder of a Cer tificate pursuant to the provisions of this
Section shall be irrevocable for a period of six mont hs from the date of th e publication of the notice
provided for in this Section, and shall be conclu sive and binding upon all futu re holders of the same
Certificate during such period. Such consent may be revoked at any time after six months from the
date of the publication of said notice by the holder who gave such consent, or by a successor in title,
by filing notice with the Issuer, but such revocation shall not be effective if the holders of 51% in
aggregate principal amount of the a ffected Certificates then outstanding, have, prior to the attempted
revocation, consented to and approved the amendment.
For the purposes of establishing ownership of th e Certificates, the Issuer shall rely solely
upon the registration of the ownership of such Ce rtificates on the registration books kept by the
Paying Agent/Registrar.
Section 18. CONTINUED PERFECTION OF SECURITY INTEREST. Chapter 1208,
Government Code, applies to the i ssuance of the Certificates and the pledge of the ad valorem taxes
granted by the Issuer under Section 5 of this Or dinance and the pledge of the Surplus Revenues
under Section 6 of this Ordinance, and such pledge is therefore valid, effective, and perfected. If
Texas law is amended at any time while the Certificates are outstanding and unpaid such that the
pledge of the taxes granted by the Issuer under Sec tion 5 of this Ordinance or the pledge of the
Surplus Revenues under Section 6 of this Ordinance is to be subject to the filing requirements of
Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the
Certificates the perfection of the security interest in said pledges, the Issuer agrees to take such
measures as it determines are reasonable and necessary under Texas law to comply with the
applicable provisions of Chapter 9, Business & Co mmerce Code and enable a filing to perfect the
security interest in said pledges to occur.
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Section 19. INCONSISTENT PROVISIONS. All i ndentures, ordinances or resolutions, or
parts thereof, that are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
Section 20. GOVERNING LAW. This Ordina nce shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
Section 21. SEVERABILITY. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, th e remainder of this Ordinance and the application
thereof to other circumstances shall neverthele ss be valid, and this governing body hereby declares
that this Ordinance would have been enacted without such invalid provision.
Section 22. EVENTS OF DEFAULT. Each of the following occurrences or events for the
purpose of this Ordinance is hereby declared to be an event of default (an "Event of Default"):
(i) the failure to make payment of the principal of or interest on any of the Certificates when
the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or obligation
of the Issuer, the failure to perform which ma terially, adversely affects the rights of the
Registered Owners, including, but not limited to, their prospect or ab ility to be repaid in
accordance with this Ordinance, and the conti nuation thereof for a period of 60 days after
notice of such default is given by any Registered Owner to the Issuer.
Section 23. REMEDIES FOR DEFAULT. (a) Upon the happening of any Event of Default,
then and in every case, any Registered Owner or an authorized representative thereof, including, but
not limited to, a trustee or trustees therefor, may proceed against the may proceed against the Issuer
or the Town Council of the Issuer, as appropriate for the purpose of protecting and enforcing the
rights of the Registered Owners unde r 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 cove nant or agreement contained herein, or thereby
to enjoin any act or thing that may be unlawful or in violation of any right of the Registered Owners
hereunder or any combination of such remedies.
(b)It is provided that all such proceedings shall be instituted and maintained for the equal
benefit of all Registered Owners of Certificates then outstanding.
Section 24. REMEDIES NOT EXCLUSIVE. (a) No remedy herein conferred or reserved
is intended to be exclusive of any other availa ble remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under
the Certificates or now or hereafter existi ng at law or in equity; provided, however, that
notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by
the Certificates shall not be available as a remedy under this Ordinance.
(b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver
of any other available remedy.
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(c) By accepting the delivery of a Certificate authorized under this Ordinance, such
Registered Owner agrees that the certifications required to effectuate any covenants or
representations contained in this Ordinance do not and shall never constitute or give rise to a
personal or pecuniary liability or charge against the officers, employees or trustees of the Issuer or
the Town Council of the Issuer.
Section 25. EFFECTIVE DATE. In accordance with the provisions of V.T.C.A.,
Government Code, Section 1201.028, this Ordina nce shall be effective immediately upon its
adoption by the Town Council.
Section 26. DESIGNATION AS QUALIFIED TAX-EXEMPT OB LIGATIONS. The Issuer
hereby designates the Certificates 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 Certificates and the Issuer's General
Obligation Refunding Bonds, Series 2013 (the "Bonds") which are being sold to the Underwriters
concurrently with the Certificat es, 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 designa tion, the Issuer represents, covenants and warrants
the following: (a) that during the calendar year in which the Bonds and the Certificates are issued,
the Issuer (including any subordinate entities) has not designated nor will designate obligations,
which when aggregated with the Bonds and th e Certificates, will re sult in more than $10,000,000
(or such other amount permitted by such secti on 265 of the Code) of "qualified tax-exempt
obligations" being issued; (b) that the Issuer r easonably anticipates that the amount of tax-exempt
obligations issued during the calendar year in wh ich the Bonds and the Certificates 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); a nd, (c) that the Issuer will take such action or refrain from such
action as necessary, and as more particularly set forth in Section 11(a) hereof, in order that the
Bonds and the Certificates will not be consider ed "private activity bonds" within the meaning of
section 141 of the Code.
A-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 da ta 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 w ill be provided w ill 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 Sec tion 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.