2020-55 - OCERTIFICATE REGARDING ADOPTION OF ORDINANCE NO. 2020-55
THE STATE OF TEXAS §
COUNTIES OF COLLIN AND DENTON §
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 14TH DAY OF
JULY, 2020, 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
Curry Vogelsang, Jr., Mayor Pro-Tem
Jason Dixon, Deputy Mayor Pro-Tem
Craig Andres
Jeff Hodges
Meigs Miller
Marcus E. Ray
Melissa Lee, Town Secretary
and all of said persons were present, thus constituting a quorum. Whereupon, among other business, the
following was transacted at said Meeting: a written
ORDINANCE NO. 2020-55 APPROVING ALL MATTERS INCIDENT AND RELATED TO THE
ISSUANCE, SALE AND DELIVERY OF UP TO $12,500,000 IN PRINCIPAL AMOUNT OF "TOWN OF
PROSPER COMBINATION TAX AND SURPLUS REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2020"; AUTHORIZING THE ISSUANCE OF THE CERTIFICATES; DELEGATING THE
AUTHORITY TO CERTAIN TOWN OFFICIALS TO EXECUTE CERTAIN DOCUMENTS RELATING
TO THE SALE OF THE CERTIFICATES; APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING TO SAID CERTIFICATES; ENACTING OTHER PROVISIONS RELATING
TO THE SUBJECT; ENGAGING BOND COUNSEL; AND PROVIDING AN EFFECTIVE DATE
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: None ABSTAIN: None
2. That a true, full and correct copy of the aforesaid Ordinance adopted at the Meeting described in
the above and foregoing paragraph is attached to and follows this Certificate; that 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.
ORDINANCE NO. 2020-55
of the
TOWN OF PROSPER, TEXAS
AUTHORIZING THE ISSUANCE OF
TOW N OF PROSPER, TEXAS
COMBINATION TAX AND SURPLUS REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2020
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Table of Contents
Section 1. Recitals, Amount, Purpose and Designation of the Certificates..................2
Section 2. Definition............................................................2
Section 3. Delegation to Pricing Officer.............................................3
Section 4. Characteristics of the Certificates.........................................4
Section 5. Form of Certificates....................................................8
Section 6. Interest and Sinking Fund..............................................1 6
Section 7. Surplus Revenues.....................................................1 6
Section 8. Defeasance of Certificates..............................................1 7
Section 9. Damaged, Mutilated, Lost, Stolen, or Destroyed Certificates...................1 8
Section 10. Custody, Approval, and Registration of Certificates; Bond Counsel Opinion;
Engagement of Bond Counsel; Use of CUSIP Numbers; Contingent Insurance
Provision, if Obtained; Attorney General Filing Fee.............................1 9
Section 11. Covenants Regarding Tax Exemption of Interest on the Certificates............2 0
Section 12. Sale of Certificates; Official Statement...................................2 3
Section 13. Continued Perfection of Security Interest.................................2 4
Section 14. Compliance with Rule 15c2-12.........................................2 4
Section 15. Method of Amendment...............................................2 7
Section 16. Investments; Security for Funds.........................................2 9
Section 17. Governing Law.....................................................3 0
Section 18. Severability........................................................3 0
Section 19. Events of Default....................................................3 0
Section 20. Remedies for Default.................................................3 0
Section 21. Remedies Not Exclusive..............................................3 0
ORDINANCE NO. 2020-55 APPROVING ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELIVERY OF UP TO $12,500,000 IN PRINCIPAL
AMOUNT OF "TOWN OF PROSPER COMBINATION TAX AND SURPLUS REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2020"; AUTHORIZING THE ISSUANCE OF
THE CERTIFICATES; DELEGATING THE AUTHORITY TO CERTAIN TOWN
OFFICIALS TO EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE
CERTIFICATES; APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING TO SAID CERTIFICATES; ENACTING OTHER
PROVISIONS RELATING TO THE SUBJECT; ENGAGING BOND COUNSEL; AND
PROVIDING AN EFFECTIVE DATE
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 amount of up to $12,500,000 for the purposes
hereinafter set forth; and
WHEREAS, the Certificates of Obligation hereinafter authorized and designated are to be
issued and delivered for cash pursuant to Subchapter C of Chapter 271, Texas Local Government
Code, Subchapter B, Chapter 1502, Texas Government Code and Chapter 1371, Texas Government
Code; and
WHEREAS, the Town Council has heretofore passed a resolution authorizing and directing
the Town Secretary to give notice of intention to issue Certificates of Obligation, and said notice has
been duly published in a newspaper of general circulation in said Issuer, said newspaper being a
"newspaper" as defined in Section 2051.044, Texas Government Code, and posted to the Issuer's
Internet website, all in timing and manner provided in Section 271.049, Texas Local Government
Code ; and
WHEREAS, the Issuer received no petition from the qualified electors of the Issuer
protesting the issuance of such Certificates of Obligation; and
WHEREAS, no bond proposition to authorize the issuance of bonds for the same purpose
as any of the projects being financed with the proceeds of the Certificates of Obligation was
submitted to the voters of the Issuer during the preceding three years and failed to be approved; and
WHEREAS, the Issuer is an "issuer" within the meaning of Section 1371.001(4)(P), Texas
Government Code, having (i) a principal amount of at least $100 million in outstanding long term
indebtedness, in long term indebtedness proposed to be issued, or in a combination of outstanding
or proposed long term indebtedness and (ii) some amount of long term indebtedness outstanding or
proposed to be issued that is rated in one of the four highest rating categories for long term debt
instruments by a nationally recognized rating agency for municipal securities, without regard to the
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effect of any credit agreement or other form of credit enhancement entered into in connection with
the obligation; and
WHEREAS, it is officially found, determined, and declared that the meeting at which this
Ordinance has been adopted was open to the public and public notice of the time, place and subject
matter of the public business to be considered and acted upon at said meeting, including this
Ordinance, was given, all as required by the applicable provisions of Texas Government Code
Chapter 551;
NOW, THEREFORE BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF
PROSPER, TEXAS:
Section 1. RECITALS, AMOUNT, PURPOSE AND DESIGNATION OF THE
CERTIFICATES.
(a) The recitals set forth in the preamble hereof are incorporated herein and shall have the
same force and effect as if set forth in this Section.
(b) The Certificates of the Issuer are hereby authorized to be issued and delivered in one or
more series in the maximum aggregate principal amount hereinafter set forth for the public purpose
of paying all or a portion of the Issuer's contractual obligations incurred in connection with: (i)
constructing, improving, extending, expanding, upgrading and developing streets and roads and
intersections, including utility relocation, landscaping, sidewalks, traffic safety and operational
improvements and the purchase of any necessary right-of-way and other related costs; (ii)
constructing, improving, extending, expanding, upgrading and developing parks and recreation
facilities, including fields, trails, utility relocation, landscaping, sidewalks and operational
improvements, installation of lighting, the purchase of any necessary rights-of-way, drainage and
other related costs; and (iii) paying legal, fiscal, engineering and architectural fees in connection with
such projects.
(c) Unless otherwise provided in the Pricing Certificate, each certificate issued pursuant to
this Ordinance shall be designated: "TOWN OF PROSPER, TEXAS COMBINATION TAX AND
SURPLUS REVENUE CERTIFICATE OF OBLIGATION, SERIES 2020," and initially there shall
be issued, sold, and delivered hereunder fully registered Certificates, without interest coupons,
payable to the respective registered owners thereof (with the initial certificates being made payable
to the initial purchaser as described in Section 12 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 be in the respective denominations and principal amounts, shall be numbered, shall
mature and be payable on the date or dates in each of the years and in the principal amounts or
amounts due at maturity, as applicable, and shall bear interest to their respective dates of maturity
or redemption prior to maturity at the rates per annum, as set forth in the Pricing Certificate.
Section 2. DEFINITION. Unless otherwise expressly provided or unless the context clearly
requires otherwise in this Ordinance, the following term shall have the meaning specified below:
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"Certificates" means and includes collectively the Certificates initially issued and delivered
pursuant to this Ordinance and all substitute Certificates exchanged therefor, as well as all other
substitute certificates and replacement certificates issued pursuant hereto, and the term "Certificate"
shall mean any of the Certificates.
Section 3. DELEGATION TO PRICING OFFICER.
(a) As authorized by Section 1371.053, Texas Government Code, as amended, the Town
Manager of the Issuer is hereby authorized to act on behalf of the Issuer in selling and delivering the
Certificates (such officer shall be hereinafter referred to as, and shall for all purposes be, the "Pricing
Officer") and carrying out the other procedures specified in this Ordinance, including, determining
(i) whether the Certificates shall be issued in one or more series or subseries, (ii) whether Certificates
of different series shall be issued concurrently or at different times within the delegation period
provided herein, (iii) the date of the Certificates, (iv) any additional or different designation or title
by which the Certificates shall be known, (v) the price at which the Certificates will be sold, (vi) the
principal amount to mature in each year, (vii) the years in which the Certificates will mature, (viii)
the rate of interest to be borne by each such maturity, (ix) the interest payment and record dates, (x)
the price and terms upon and at which the Certificates shall be subject to redemption prior to
maturity at the option of the Issuer, as well as any mandatory sinking fund redemption provisions,
(xi) whether if the Certificates qualify as "Qualified Tax-Exempt Obligations" for purposes of
Section 265(b), Internal Revenue Code, whether they shall be so designated, (xii) limiting the types
of securities and obligations that may be used as Defeasance Securities and all other matters relating
to the issuance, sale, and delivery of the Certificates, and (xiii) all other matters relating to the
issuance, sale, and delivery of the Certificates, including, without limitation, procuring municipal
bond insurance (if it is determined that such insurance would be financially desirable and
advantageous), and approving modifications to this Ordinance and executing such instruments,
documents and agreements as may be necessary with respect thereto, all of which shall be specified
in the Pricing Certificate. The delegations made hereby shall expire if not exercised by the Pricing
Officer on or prior to the ninetieth (90th) day following the adoption of this Ordinance. The
delegations made hereby are subject to the following parameters:
(i) the aggregate original principal amount of such Certificates shall not exceed $12,500,000;
(ii) the maximum true interest cost shall not exceed 4.5%; and
(iii) the final maturity shall not be longer than August 15, 2040.
(b) In establishing the aggregate principal amount of the Certificates, the Pricing Officer
shall establish an amount not exceeding the amount authorized in Subsection (a)(i) above, which
shall be sufficient in amount to provide for the purposes for which the Certificates are authorized and
to pay costs of issuing the Certificates. The Certificates shall be sold at such price, with and subject
to such terms as set forth in the Pricing Certificate. In the event that the Pricing Officer determines
to sell more than one series of Certificates, the parameters set forth in (a) shall apply to each series,
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provided the that Pricing Officer shall not sell an amount of Certificates for the purposes provided
in Subsection (a) above that exceed the aggregate amount authorized by Subsection (a)(i) above.
(c) The Certificates of one or more series may be issued as Current Interest Certificates or
Capital Appreciation Certificates, or a combination thereof, as set forth in the Pricing Certificate.
The Certificates of one or more series may be sold by public offering (either through a negotiated
or competitive offering) or by private placement. If any Certificates are sold by private placement,
the Pricing Certificate shall so state, and the Pricing Certificate may make changes to this Ordinance
to effect such private placement, including the provisions hereof that pertain to the book-entry-only
procedures (including eliminating the book-entry-only system of registrations, payment and
transfers) and to the provisions of Section 15 hereof relating to the Rule 15c2-12 undertaking
(including eliminating or replacing such undertaking with an agreement to provide alternative
disclosure information). In addition, if all or part of the Certificates are sold in a series with respect
to which the interest on the Certificates of such series is not exempt from federal income taxation,
the Pricing Certificate shall so state, and the Pricing Certificate may make changes to this Ordinance
to effect such taxable issuance, including, specifically providing that the covenants of Section 11
hereof shall not be applicable to such series.
(d) In the event any of the Certificates are issued as Capital Appreciation Certificates, the
Pricing Certificate shall have attached thereto a schedule which sets forth the rounded original
principal amounts at the Issuance Date for the Capital Appreciation Certificates and the
Compounded Amounts thereof (per $5,000 payment at maturity), including the initial premium, if
any, as of each date and commencing on the date set forth in such schedule. Reference shall be made
to such schedule, which shall set forth the rounded original principal amounts at the issuance date
for the Capital Appreciation Certificates and the Compounded Amounts thereof (per $5,000 payment
at maturity), including the initial premium, if any, as of each February 15 and August 15,
commencing on the first February 15 or August 15 following the issuance date, and continuing until
the final maturity of the Premium Capital Appreciation Certificates. The Compounded Amount with
respect to any date other than a February 15 or August 15 is the amount set forth on such schedule,
as the case may be, plus the portion of the difference between such amount and the amount set forth
on the schedule with respect to the next succeeding February 15 or August 15, as the case may be,
that the number of days (based on 30-day months) from such last preceding February 15 or August
15, as the case may be, to the date for which such determination is being calculated bears to the total
number of days (based on 30-day months) from such last preceding February 15 or August 15, as the
case may be, to the next succeeding February 15 or August 15, as the case may be.
(e) In satisfaction of Section 1201.022(a)(3)(B), Texas Government Code, the Council
hereby determines that the delegation of the authority to the Pricing Officer to approve the final
terms of the Certificates set forth in this Ordinance is, and the decisions made by the Pricing Officer
pursuant to such delegated authority and incorporated into the Pricing Certificate will be, in the
Issuer's best interests, and the Pricing Officer is hereby authorized to make and include in the Pricing
Certificate a finding to that effect.
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Section 4. CHARACTERISTICS OF THE CERTIFICATES.
(a) Registration, Transfer, Conversion and Exchange. The Issuer shall keep or cause to be
kept at the designated office of the bank named in the Pricing Certificate as the paying agent/registrar
for the Certificates (the "Paying Agent/Registrar"), books or records for the registration of the
transfer, conversion and exchange of the Certificates (the "Registration Books"), and the Issuer
hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or
records and make such registrations of transfers, conversions and exchanges under such reasonable
regulations as the Issuer and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar
shall make such registrations, transfers, conversions and exchanges as herein provided within three
days of presentation in due and proper form. The Paying Agent/Registrar shall obtain and record in
the Registration Books the address of the Registered Owner of each Certificate to which payments
with respect to the Certificates shall be mailed, as herein provided; but it shall be the duty of each
Registered Owner to notify the Paying Agent/Registrar in writing of the address to which payments
shall be mailed, and such interest payments shall not be mailed unless such notice has been given.
The Issuer shall have the right to inspect the Registration Books during regular business hours of the
Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books
confidential and, unless otherwise required by law, shall not permit their inspection by any other
entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for
making such registration, transfer, conversion, exchange and delivery of a substitute Certificate or
Certificates. Registration of assignments, transfers, conversions and exchanges of Certificates shall
be made in the manner provided and with the effect stated in the FORM OF CERTIFICATE set forth
in this Ordinance. Each substitute Certificate shall bear a letter and/or number to distinguish it from
each other Certificate.
(b) Authentication. Except as provided in Section 4(e) hereof, an authorized representative
of the Paying Agent/Registrar shall, before the delivery of any such Certificate, date and manually
sign said Certificate, and no such Certificate shall be deemed to be issued or outstanding unless such
Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all paid Certificates
and Certificates surrendered for conversion and exchange. No additional ordinances, orders or
resolutions need be passed or adopted by the governing body of the Issuer or any other body or
person so as to accomplish the foregoing conversion and exchange of any Certificate or portion
thereof, and the Paying Agent/Registrar shall provide for the printing, execution and delivery of the
substitute Certificates in the manner prescribed herein. Pursuant to Subchapter D, Chapter 1201,
Texas Government Code, the duty of conversion and exchange of Certificates as aforesaid is hereby
imposed upon the Paying Agent/Registrar, and, upon the execution of said Certificate, the converted
and exchanged Certificate shall be valid, incontestable, and enforceable in the same manner and with
the same effect as the Certificates which initially were issued and delivered pursuant to this
Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts.
(c) 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/Registrar with respect to the Certificates, and of
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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 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 (5) business days prior to the Special Record Date by United States mail, first-class postage
prepaid, to the address of each Registered Owner appearing on the Registration Books at the close
of business on the last business day next preceding the date of mailing of such notice.
(d) Substitute Paying Agent/Registrar. The Issuer covenants with the Registered Owners
of the Certificates that at all times while the Certificates are outstanding the Issuer will provide a
competent and legally qualified bank, trust company, financial institution or other agency to act as
and perform the services of Paying Agent/Registrar for the Certificates under this Ordinance, and
that the Paying Agent/Registrar will be one entity. The Issuer reserves the right to, and may, at its
option, change the Paying Agent/Registrar upon not less than 60 days written notice to the Paying
Agent/Registrar, to be effective not later than 45 days prior to the next principal or interest payment
date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar (or
its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such,
the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust
company, financial institution, or other agency to act as Paying Agent/Registrar under this
Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar
promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other
pertinent books and records relating to the Certificates, to the new Paying Agent/Registrar designated
and appointed by the Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly
will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each Registered
Owner of the Certificates, by United States mail, first-class postage prepaid, which notice also shall
give the address of the new Paying Agent/Registrar. By accepting the position and performing as
such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this
Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar.
(e) General Characteristics of the Certificates. The Certificates (i) shall be issued in fully
registered form, without interest coupons, with the principal of and interest on such Certificates to
be payable only to the Registered Owners thereof, (ii) may be redeemed prior to their scheduled
maturi t i es (n o t i ce o f wh i ch s h al l be given t o the P aying Agen t /Regi strar b y t h e Iss u er at leas t 50 days
prior to any such redemption date), (iii) may be transferred and assigned, (iv) may be converted and
exchanged for other Certificates, (v) shall have the characteristics, (vi) shall be signed, sealed,
executed and authenticated, (vii) the principal of and interest on the Certificates shall be payable, and
(viii) shall be administered and the Paying Agent/Registrar and the Issuer shall have certain duties
and responsibilities with respect to the Certificates, all as provided, and in the manner and to the
effect as required or indicated, in the FORM OF CERTIFICATE set forth in this Ordinance. The
Certificates initially issued and delivered pursuant to this Ordinance is not required to be, and shall
not be, authenticated by the Paying Agent/Registrar, but on each substitute Certificate issued in
conversion of and exchange for any Certificate or Certificates issued under this Ordinance the Paying
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Agent/Registrar shall execute the Paying Agent/registrar's Authentication Certificate, in the FORM
OF CERTIFICATE set forth in this Ordinance.
(f) Book-Entry Only System. Unless the Certificates are sold by private placement, the
Certificates issued in exchange for the Certificates initially issued to the purchaser specified herein
shall be initially issued in the form of a separate single fully registered Certificate for each of the
maturities thereof. Upon initial issuance, the ownership of each such Certificate shall be registered
in the name of Cede & Co., as nominee of The Depository Trust Company of New York ("DTC"),
and except as provided in subsection (g) hereof, all of the outstanding Certificates shall be registered
in the name of Cede & Co., as nominee of DTC.
With respect to Certificates registered in the name of Cede & Co., as nominee of DTC, the
Issuer and the Paying Agent/Registrar shall have no responsibility or obligation to any securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organizations
on whose behalf DTC was created ("DTC Participant") to hold securities to facilitate the clearance
and settlement of securities transactions among DTC Participants or to any person on behalf of
whom such a DTC Participant holds an interest in the Certificates. Without limiting the immediately
preceding sentence, the Issuer and the Paying Agent/Registrar shall have no responsibility or
obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant
with respect to any ownership interest in the Certificates, (ii) the delivery to any DTC Participant or
any other person, other than a registered owner of Certificates, as shown on the Registration Books,
of any notice with respect to the Certificates, or (iii) the payment to any DTC Participant or any other
person, other than a registered owner of Certificates, as shown in the Registration Books of any
amount with respect to principal of or interest on the Certificates. Notwithstanding any other
provision of this Ordinance to the contrary, the Issuer and the Paying Agent/Registrar shall be
entitled to treat and consider the person in whose name each Certificate is registered in the
Registration Books as the absolute owner of such Certificate for the purpose of payment of principal
and interest with respect to such Certificate, for the purpose of registering transfers with respect to
such Certificate, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all
principal of and interest on the Certificates only to or upon the order of the registered owners, as
shown in the Registration Books as provided in this Ordinance, or their respective attorneys duly
authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge
the Issuer's obligations with respect to payment of principal of and interest on the Certificates to the
extent of the sum or sums so paid. No person other than a registered owner, as shown in the
Registration Books, shall receive a Certificate certificate evidencing the obligation of the Issuer to
make payments of principal and interest pursuant to this Ordinance. Upon delivery by DTC to the
Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions in this Ordinance with respect to
interest checks being mailed to the registered owner at the close of business on the Record date, the
words "Cede & Co." in this Ordinance shall refer to such new nominee of DTC.
(g) Successor Securities Depository; Transfers Outside Book-Entry Only System. If the
Certificates are subject to the DTC book-entry system, and in the event that the Issuer determines
that DTC is incapable of discharging its responsibilities described herein and in the representation
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letter of the Issuer to DTC or that it is in the best interest of the beneficial owners of the Certificates
that they be able to obtain certificated Certificates, the Issuer shall (i) appoint a successor securities
depository, qualified to act as such under Section 17A of the Securities and Exchange Act of 1934,
as amended, notify DTC and DTC Participants of the appointment of such successor securities
depository and transfer one or more separate Certificates to such successor securities depository or
(ii) notify DTC and DTC Participants of the availability through DTC of Certificates and transfer
one or more separate Certificates to DTC Participants having Certificates credited to their DTC
accounts. In such event, the Certificates shall no longer be restricted to being registered in the
Registration Books in the name of Cede & Co., as nominee of DTC, but may be registered in the
name of the successor securities depository, or its nominee, or in whatever name or names registered
owners transferring or exchanging Certificates shall designate, in accordance with the provisions of
this Ordinance.
(h) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Certificate is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of and interest on such Certificate and all notices with respect to
such Certificate shall be made and given, respectively, in the manner provided in the representation
letter of the Issuer to DTC.
(i) Cancellation of Initial Certificates. On the closing date, one initial Certificate
representing the entire principal amount of the Certificates, payable in stated installments to the
purchaser designated in the Pricing Certificate 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 signed manually, by facsimile,
electronically or otherwise 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 Comptroller
or the Paying Agent/Registrar (whichever entity has custody of the initial Certificate) shall cancel
the initial Certificate. Thereupon, the Paying Agent/Registrar shall deliver to DTC on behalf of such
purchaser one registered definitive Certificate for each year of maturity of the Certificates, in the
aggregate p rincipal am o u n t of all o f t h e C ertifi cat es for s u c h matur i t y.
(j) 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
of the Is suer, b e conditional upon the s at i sfact i o n of s u ch prerequis i t es an d recei p t of s u ch moneys
by the Paying Agent/Registrar on or prior to the date fixed for such redemption, or upon any
prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given and
such prerequisites to the redemption and sufficient moneys are not received, such notice shall be of
no force and effect, the Issuer shall not redeem such Certificates and the Paying Agent/Registrar shall
give notice, in the manner in which the notice of redemption was given, to the effect that the
Certificates have not been redeemed.
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Section 5. FORM OF CERTIFICATES. The forms of the Certificates, including form of
the initial Certificate, the form of Paying Agent/Registrar's Authentication Certificate, the form of
Assignment and the form of Registration Certificate of the Comptroller of Public Accounts of the
State of Texas to be attached to the Certificates initially issued and delivered pursuant to this
Ordinance, shall be, respectively, substantially as follows, with such appropriate variations,
omissions, or insertions as are permitted or required by this Ordinance. The FORM OF
CERTIFICATE shall be completed with information set forth in the Pricing Certificate and shall be
attached to the Pricing Certificate as an exhibit thereto.
(a) Form of Certificate.
CERTIFICATE R-__UNITED STATES OF AMERICA
STATE OF TEXAS
TOWN OF PROSPER, TEXAS
COMBINATION TAX AND
SURPLUS REVENUE
CERTIFICATE OF OBLIGATION
SERIES 2020
PRINCIPAL
AMOUNT
$_______
INTEREST
RATE
DATE OF INITIAL
DELIVERY OF
CERTIFICATES
MATURITY
DATE CUSIP NO.
___%_______, 2020 _______________
REGISTERED OWNER:
PRINCIPAL AMOUNT:DOLLARS
ON THE MATURITY DATE specified above, the TOWN OF PROSPER, in Collin and
Denton Counties, Texas (the "Issuer"), being a political subdivision of the State of Texas, hereby
promises to pay to the Registered Owner set forth above, or registered assigns (hereinafter called the
"registered owner") the principal amount set forth above, and to pay interest thereon from the Date
of Initial Delivery of Certificates set forth above, on ___________ and on each ___________and
__________thereafter to the maturity date specified above, or the date of redemption prior to
maturity, at the interest rate per annum specified above; except that if this Certificate is required to
be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such principal amount shall bear interest from the interest payment date next preceding the
date of authentication, unless such date of authentication is after any Record Date but on or before
the next following interest payment date, in which case such principal amount shall bear interest
from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Certificate or Certificates, if any, for which this Certificate
11
is being exchanged or converted from is due but has not been paid, then this Certificate shall bear
interest from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money of
the United States of America, without exchange or collection charges. The principal of this
Certificate shall be paid to the registered owner hereof upon presentation and surrender of this
Certificate at maturity, or upon the date fixed for its redemption prior to maturity, at the designated
trust office of ____________, in _____________, _______, which is the "Paying Agent/Registrar"
for this Certificate. The payment of interest on this Certificate shall be made by the Paying
Agent/Registrar to the registered owner hereof on each interest payment date by check or draft, dated
as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from,
funds of the Issuer required by the order authorizing the issuance of the Certificates (the "Certificate
Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter
provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States mail,
first-class postage prepaid, on each such interest payment date, to the registered owner hereof, at its
address as it appeared on the last day of the month next preceding each such date (the "Record
Date"), on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In
addition, interest may be paid by such other method, acceptable to the Paying Agent/Registrar,
requested by, and at the risk and expense of, the registered owner. In the event of a non-payment of
interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest
payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when
funds for the payment of such interest have been received from the Issuer. Notice of the Special
Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after
the Special Record Date) shall be sent at least five business days prior to the Special Record Date
by United States mail, first-class postage prepaid, to the address of each owner of a Certificate
appearing on the Registration Books at the close of business on the last business day next preceding
the date of mailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Certificate prior
to maturity as provided herein shall be paid to the registered owner upon presentation and surrender
of this Certificate for payment at the designated trust office of the Paying Agent/Registrar. The
Issuer covenants with the registered owner of this Certificate that on or before each principal
payment date and 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 any payment due on this Certificate shall be a Saturday, Sunday, a legal
holiday, or a day on which banking institutions in the city where the designated trust office of the
Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for
s u ch paym en t s h al l be t h e nex t s u c c e e d i n g d a y w h i c h is not such a Satur d a y, Sunday, lega l 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.
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THIS CERTIFICATE is one of a Series of Certificates dated as of _________, authorized
in accordance with the Constitution and laws of the State of Texas in the principal amount of
$_____________, for the public purpose of paying all or a portion of the Issuer's contractual
obligations incurred in connection with: (i) constructing, improving, ex tending, expanding,
upgrading and developing streets and roads and intersections, including utility relocation,
landscaping, sidewalks, traffic safety and operational improvements and the purchase of any
necessary right-of-way and other related costs; (ii) constructing, improving, extending, expanding,
upgrading and developing parks and recreation facilities, including fields, trails, utility relocation,
landscaping, sidewalks and operational improvements, installation of lighting, the purchase of any
necessary rights-of-way, drainage and other related costs; and (iii) paying legal, fiscal, engineering
and architectural fees in connection with such projects.
THE CERTIFICATES OF THIS SERIES maturing on _________ in the years
_____________ are subject to mandatory redemption prior to maturity in part at random, by lot or
other customary method selected by the Paying Agent/Registrar, at par plus accrued interest to the
redemption date, and without premium, with funds on deposit in the Interest and Sinking Fund.
Such Certificates shall be redeemed by the Paying Agent/Registrar on ____________ in each of the
years and in the principal amounts, respectively, as are set forth in the following schedule:
Certificates Maturing
_________, ______
Certificates Maturing
_________, ______
Certificates Maturing
_________, ______
Year
Principal
Amount Year
Principal
Amount Year
Principal
Amount
Final maturity of Certificate.(1)
The principal amount of the Certificates required to be redeemed pursuant to the operation of such
mandatory sinking fund shall be reduced by the principal amount of any Certificates which, at least
45 days prior to the mandatory sinking fund redemption date (i) shall have been purchased by the
Issuer and delivered to the Paying Agent/Registrar for cancellation or (ii) redeemed pursuant to the
optional redemption provision described below and not theretofore credited against a mandatory
sinking fund requirement.
IN ADDITION TO THE FOREGOING MANDATORY REDEMPTION, the Certificates
of this series maturing on and after __________ may be redeemed prior to their scheduled maturities
on any date on or after ____________, at the option of the Issuer, with funds derived from any
available and lawful source, as a whole, or in part, and, if in part, the particular Certificates, or
portions thereof, to be redeemed shall be selected and designated by the Issuer (provided that a
13
portion of a Certificate may be redeemed only in an integral multiple of $5,000), at a redemption
price equal to the principal amount to be redeemed plus accrued interest to the date fixed for
redemption.
AT LEAST 30 days prior to the date fixed for any redemption of Certificates or portions
thereof prior to maturity a written notice of such redemption shall be sent by the Paying
Agent/Registrar by United States mail, first-class postage prepaid, to the registered owner of each
Current Interest Certificate to be redeemed at its address as it appeared on the day such notice of
redemption is mailed and to major securities depositories, national certificate rating agencies and
certificate information services; provided, however, that the failure of the registered owner to receive
such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity
or effectiveness of the proceedings for the redemption of any Certificate. By the date fixed for any
such redemption, due provision shall be made with the Paying Agent/Registrar for the payment of
the required redemption price for the Certificates or portions thereof which are to be so redeemed.
If such written notice of redemption is sent and if due provision for such payment is made, all as
provided above, the Certificates or portions thereof which are to be so redeemed thereby automati-
cally shall be treated as redeemed prior to their scheduled maturities, and they shall not bear interest
after the date fixed for redemption, and they shall not be regarded as being outstanding except for
the right of the registered owner to receive the redemption price from the Paying Agent/Registrar
out of the funds provided for such payment. If a portion of any Certificate shall be redeemed a
substitute Certificate or Certificates having the same maturity date, bearing interest at the same rate,
in any denomination or denominations in any integral multiple of $5,000, at the written request of
the registered owner, and in aggregate 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 issuable solely as fully registered Certificates,
without interest coupons, in the denomination of any integral multiple of $5,000. As provided in the
Certificate Ordinance, this Certificate may, at the request of the registered owner or the assignee or
assignees hereof, be assigned, transferred, converted into and exchanged for a like aggregate amount
of fully registered Certificates, without interest coupons, payable to the appropriate registered owner,
assignee or assignees, as the case may be, having any authorized denomination or denominations as
requested in writing by the appropriate registered owner, assignee or assignees, as the case may be,
upon surrender of this Certificate to the Paying Agent/Registrar for cancellation, all in accordance
with the form and procedures set forth in the Certificate Ordinance. Among other requirements for
such assignment and transfer, this Certificate must be presented and surrendered to the Paying
Agent/Registrar, together with proper instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Certificate or
any portion or portions hereof in any authorized denomination to the assignee or assignees in whose
name or names this Certificate or any such portion or portions hereof is or are to be registered. The
form of Assignment printed or endorsed on this Certificate may be executed by the registered owner
to evidence the assignment hereof, but such method is not exclusive, and other instruments of assign-
ment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this
Certificate or any portion or portions hereof from time to time by the registered owner. The Paying
Agent/Registrar's reasonable standard or customary fees and charges for assigning, transferring,
14
converting and exchanging any Certificate or portion thereof will be paid by the Issuer. In any cir-
cumstance, any taxes or governmental charges required to be paid with respect thereto shall be paid
by the one requesting such assignment, transfer, conversion or exchange, as a condition precedent
to the exercise of such privilege. The Paying Agent/Registrar shall not be required to make any such
transfer or exchange with respect to Certificates (i) during the period commencing with the close of
business on any Record Date and ending with the opening of business on the next following principal
or interest payment date, or (ii) with respect to any Certificate or any portion thereof called for
redemption prior to maturity, within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that
it promptly will appoint a competent and legally qualified substitute therefor, and cause written
notice thereof to be mailed to the registered owners of the Certificates.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and
validly authorized, issued and delivered; that all acts, conditions and things required or proper to be
performed, exist and be done precedent to or in the authorization, issuance and delivery of this
Certificate have been performed, existed and been done in accordance with law; that this Certificate
is a general obligation of said Issuer, issued on the full faith and credit thereof; and that annual ad
valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate,
as such interest comes due and such principal matures, have been levied and ordered to be levied
against all taxable property in said Issuer, and have been pledged for such payment, within the limit
prescribed by law, and that this Certificate is additionally secured by and payable from a pledge of
the revenues of the Issuer's combined Waterworks and Sewer Systems remaining after payment of
all operation and maintenance expenses thereof, and all debt service, reserve and other requirements
in connection with all of the Issuer's revenue obligations (now or hereafter outstanding) that are
payable from all or part of said revenues, all as provided in the Certificate Ordinance.
THE ISSUER ALSO HAS RESERVED THE RIGHT to amend the Certificate Ordinance
as provided therein, and under some (but not all) circumstances amendments thereto must be
approved by the registered owners of a majority in aggregate principal amount of the outstanding
Certificates.
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and
available for inspection in the official minutes and records of the governing body of the Issuer, and
agrees that the terms and provisions of this Certificate and the Certificate Ordinance constitute a
contract between each registered owner hereof and the Issuer.
15
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the manual
or facsimile signature of the Mayor of the Issuer (or in his absence, the Mayor Pro-tem) and counter-
signed with the manual or facsimile signature of the Town Secretary of the Issuer, and has caused
the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Certificate.
Town Secretary Mayor
(SEAL)
(b) Form of Paying Agent/Registrar's Authentication Certificate
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Certificate is not accompanied by an executed Registration Certificate
of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Certificate has been issued under the provisions of the
Certificate Ordinance described in the text of this Certificate; and that this Certificate has been issued
in conversion or replacement of, or in exchange for, a certificate, certificates, or a portion of a
certificate or certificates of a Series which originally was approved by the Attorney General of the
State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
Date of authentication: _________________.
_____________,
_________, ________
Paying Agent/Registrar
By______________________________________
Authorized Signatory
(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
16
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney, 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:
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:
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS §REGISTER NO. ____________
OF THE STATE OF TEXAS §
I hereby certify that this Certificate has been examined, certified as to validity, and approved
by the Attorney General of the State of Texas, and that this Certificate has been registered by the
Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this _________________.
______________________________________
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
(e) Insertions for the initial Certificate.
(i) The initial Certificate shall be in the form set forth in paragraph (a) of this
Section, except that:
17
(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 (the "Issuer"), being a political subdivision located in Collin
and Denton Counties, Texas, hereby promises to pay to the Registered Owner specified above, or
registered assigns (hereinafter called the "Registered Owner"), on the dates, in the principal
installments and bearing interest at the per annum rates set forth in the following schedule:
Maturity Dates Principal Installments Interest Rates
(Information for the Certificates from the Pricing Certificate to be inserted.)
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 _________ at the respective Interest Rate per
annum specified above. Interest is payable from the Date of Initial Delivery of Certificates shown
above on __________, and on each __________ and __________ thereafter to the date of payment
of the principal installment specified above, or the date of redemption prior to maturity; except, that
if this Certificate is required to be authenticated and the date of its authentication is later than the
first Record Date (hereinafter defined), such principal amount shall bear interest from the interest
payment date next preceding the date of authentication, unless such date of authentication is after
any Record Date but on or before the next following interest payment date, in which case such
principal amount shall bear interest from such next following interest payment date; provided,
however, that if on the date of authentication hereof the interest on the Certificate or Certificates, if
any, for which this Certificate is being exchanged is due but has not been paid, then this Certificate
shall bear interest from the date to which such interest has been paid in full."
(C) The initial Certificate shall be numbered "T-1".
Section 6. INTEREST AND SINKING FUND. A special "Interest and Sinking Fund" is
hereby created and shall be established and maintained by the Issuer at an official depository bank
of the Issuer. Said Interest and Sinking Fund shall be kept separate and apart from all other funds
and accounts of the Issuer, and shall be used only for paying the interest on and principal of the
Certificates. All amounts received from the sale of the Certificates as accrued interest and ad
valorem taxes levied and collected for and on account of the Certificates shall be deposited, as
collected, to the credit of said Interest and Sinking Fund. During each year while any of the
Certificates are outstanding and unpaid, the governing body of the Issuer shall compute and ascertain
a rate and amount of ad valorem tax that will be sufficient to raise and produce the money required
to pay the interest on the Certificates as such interest comes due, and to provide and maintain a
sinking fund adequate to pay the principal of the Certificates as such principal matures (but never
less than 2% of the original amount of the Certificates as a sinking fund each year); and said tax shall
be based on the latest approved tax rolls of the Issuer, with full allowances being made for tax
delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby
18
levied, and is hereby ordered to be levied, against all taxable property in the Issuer, for each year
while any of the Certificates are outstanding and unpaid, and said tax shall be assessed and collected
each such year and deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad
valorem taxes sufficient to provide for the payment of the interest on and principal of the
Certificates, as such interest comes due and such principal matures, are hereby pledged for such
payment, within the limit prescribed by law.
Section 7. 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 (the "Net Revenues"), and all debt
service, reserve and other requirements in connection with all of the Issuer's revenue obligations
(now or hereafter outstanding) that are payable from all or part of the Net Revenues of the Issuer's
Waterworks and Sewer Systems, constituting "Surplus Revenues." The Issuer shall deposit such
Surplus Revenues to the credit of the Interest and Sinking Fund created pursuant to Section 6, to the
extent necessary to pay the principal and interest on the Certificates. Notwithstanding the
requirements of Section 6, if Surplus Revenues are actually on deposit in the Interest and Sinking
Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the
amount of taxes that otherwise would have been required to be levied pursuant to Section 6 may be
reduced to the extent and by the amount of the Surplus Revenues then on deposit in the Interest and
Sinking Fund. The Issuer reserves the right, without condition or limitation, to issue other
obligations secured in whole or in part by a parity lien on and pledge of the Surplus Revenues, for
any purpose permitted by law.
Section 8. DEFEASANCE OF CERTIFICATES.
(a) Defeasance. Any Certificate and the interest thereon shall be deemed to be paid, retired,
and no longer outstanding (a "Defeased Certificate") within the meaning of this Ordinance, except
to the extent provided in subsection (d) of this Section, when payment of the principal of such
Certificate, plus interest thereon to the due date (whether such due date be by reason of maturity or
otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof,
or (ii) shall have been provided for on or before such due date by irrevocably depositing with or
making available to the Paying Agent/Registrar in accordance with an escrow agreement or other
instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the United States
of America sufficient to make such payment or (2) Defeasance Securities that mature as to principal
and interest in such amounts and at such times as will insure the availability, without reinvestment,
of sufficient money to provide for such payment, and when proper arrangements have been made by
the Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased
Certificates shall have become due and payable. At such time as a Certificate shall be deemed to be
a Defeased Certificate hereunder, as aforesaid, such Certificate and the interest thereon shall no
longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied
and pledged as provided in this Ordinance, and such principal and interest shall be payable solely
from such money or Defeasance Securities, and thereafter the Issuer will have no further
responsibility with respect to amounts available to the Paying Agent/Registrar (or other financial
institution permitted by applicable law) for the payment of such Defeased Certificates, including any
insufficiency therein caused by the failure of the Paying Agent/Registrar (or other financial
19
institution permitted by applicable law) to receive payment when due on the Defeasance Securities.
Notwithstanding any other provision of this Ordinance to the contrary, it is hereby provided that any
determination not to redeem Defeased Certificates that is made in conjunction with the payment
arrangements specified in subsection (a)(i) or (ii) of this Section shall not be irrevocable, provided
that: (1) in the proceedings providing for such payment arrangements, the Issuer expressly reserves
the right to call the Defeased Certificates for redemption; (2) gives notice of the reservation of that
right to the Registered Owners of the Defeased Certificates immediately following the making of the
payment arrangements; and (3) directs that notice of the reservation be included in any redemption
notices that it authorizes.
(b) Investment and Disposition of Funds. Any moneys so deposited with the Paying
Agent/Registrar may at the written direction of the Issuer also be invested in Defeasance Securities,
maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance
Securities received by the Paying Agent/Registrar that is not required for the payment of the
Certificates and interest thereon, with respect to which such money has been so deposited, shall be
turned over to the Issuer, or deposited as directed in writing by the Issuer. Any Future Escrow
Agreement pursuant to which the money and/or Defeasance Securities are held for the payment of
Defeased Certificates may contain provisions permitting the investment or reinvestment of such
moneys in Defeasance Securities or the substitution of other Defeasance Securities upon the
satisfaction of the requirements specified in subsection (a)(i) or (ii) of this Section. All income from
such Defeasance Securities received by the Paying Agent/Registrar which is not required for the
payment of the Defeased Certificates, with respect to which such money has been so deposited, shall
be remitted to the Issuer or deposited as directed in writing by the Issuer.
(c) Defeasance Securities. The term "Defeasance Securities" means any securities and
obligations now or hereafter authorized by State law that are eligible to refund, retire or otherwise
discharge obligations such as the Certificates.
(d) Paying Agent/Registrar Services. Until all Defeased Certificates shall have become due
and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for
such Defeased Certificates the same as if they had not been defeased, and the Issuer shall make
proper arrangements to provide and pay for such services as required by this Ordinance.
(e) Selection of Defeased Certificates. In the event that the Issuer elects to defease less than
all of the principal amount of Certificates of a maturity, the Paying Agent/Registrar shall select, or
cause to be selected, such amount of Certificates by such random method as it deems fair and
appropriate.
Section 9. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES.
(a) Replacement Certificates. In the event any outstanding Certificate is damaged, mutilated,
lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and
delivered, a new certificate of the same principal amount, maturity, and interest rate, as the damaged,
20
mutilated, lost, stolen, or destroyed Certificate, in replacement for such Certificate in the manner
hereinafter provided.
(b) Application for Replacement Certificates. Application for replacement of damaged,
mutilated, lost, stolen, or destroyed Certificates shall be made by the Registered Owner thereof to
the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Certificate, the Registered
Owner applying for a replacement certificate shall furnish to the Issuer and to the Paying
Agent/Registrar such security or indemnity as may be required by them to save each of them
harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or
destruction of a Certificate, the Registered Owner shall furnish to the Issuer and to the Paying
Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Certificate.
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 which is then continuing
in the payment of the principal of or interest on the Certificate, the Issuer may authorize the payment
of the same (without surrender thereof except in the case of a damaged or mutilated Certificate)
instead of issuing a replacement Certificate, provided security or indemnity 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/Registrar shall charge the Registered Owner of such Certificate with
all legal, printing, and other expenses in connection therewith. Every replacement certificate issued
pursuant to the provisions of this Section by virtue of the fact that any Certificate is lost, stolen, or
destroyed shall constitute a contractual obligation of the Issuer whether or not the lost, stolen, or
destroyed Certificate shall be found at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Ordinance equally and proportionately with any and all other Certificates
duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates. In accordance with Subchapter B,
Chapter 1206, Texas Government Code, this Section shall constitute authority for the issuance of
any such replacement certificate without necessity of further action by the governing body of the
Issuer or any other body or person, and the duty of the replacement of such certificates is hereby
authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall
authenticate and deliver such Certificates in the form and manner and with the effect, as provided
in Section 4(b) of this Ordinance for Certificates issued in conversion and exchange for other
Certificates.
Section 10. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES;
BOND COUNSEL OPINION; ENGAGEMENT OF BOND COUNSEL; USE OF CUSIP
NUMBERS; CONTINGENT INSURANCE PROVISION, IF OBTAINED; ATTORNEY
GENERAL FILING FEE; APPROPRIATION.
21
(a) The Mayor, Town Manager, Finance Director, Executive Director of Administrative
Services, 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 under the corporate seal and on behalf of the Issuer the Paying Agent/Registrar
Agreement with the Paying Agent/Registrar in substantially the form presented to the Council at the
meeting at which this Ordinance was adopted 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 Letter of Representations, the Certificates, the sale of the Certificates and the Official
Statement. Notwithstanding anything to the contrary contained herein, while the Certificates are
subject to DTC's Book-Entry Only System and to the extent permitted by law, the Letter of
Representations is hereby incorporated herein and its provisions shall prevail over any other
provisions of this Ordinance in the event of conflict. In case any officer whose signature shall appear
on any Certificate shall cease to be such officer before the delivery of such Certificate, such signature
shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained
in o ffi ce until such d el i v ery.
(b) The obligation of the initial purchasers to accept delivery of the Certificates is subject
to the initial purchasers being furnished with the final, approving opinion of McCall, Parkhurst &
Horton L.L.P., bond counsel to the Issuer, which opinion shall be dated as of and delivered on the
date of initial delivery of the Certificates to the initial purchasers. The execution and delivery of a
professional services agreement between the Issuer and McCall, Parkhurst & Horton L.L.P. with
respect to services as bond counsel to the Issuer, is hereby authorized in such form as may be
approved by the Mayor or City Manager, and the Mayor or City Manager is hereby authorized to
execute such agreement.
(c) To pay the debt service coming due on the Certificates, if any (as determined by the
Pricing Certificate) prior to receipt of the taxes levied to pay such debt service, there is hereby
appropriated from current funds on hand, which are hereby certified to be on hand and available for
such purpose, an amount sufficient to pay such debt service, and such amount shall be used for no
other purpose.
(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 Certificate, subject to a
minimum of $750 and a maximum of $9,500) is required to be paid to the Attorney General upon
the submission of the transcript of proceedings for the Certificates. The Issuer hereby authorizes and
directs that a check, wire transfer or other form of payment acceptable to the Attorney General, and
in the amount of the Attorney General filing fee for the Certificates, be promptly provided for
payment to the Attorney General in connection with his review of the Certificates.
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Section 11. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
CERTIFICATES. Subject to the determination of the Pricing Officer, as set forth in the Pricing
Certificate as to the treatment of the Certificates pursuant to the Code, the Issuer makes the following
covenants with respect to the Certificates.
(a) Covenants. The Issuer covenants to take any action necessary to assure, or refrain from
any action which would adversely affect, the treatment of the Certificates as obligations described
in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which
is not includable in the "gross income" of the holder for purposes of federal income tax ation. In
furtherance thereof, the Issuer covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the
Certificates or the projects financed therewith (less amounts deposited to a reserve fund, if
any) are used for any "private business use," as defined in section 141(b)(6) of the Code or,
if more than 10 percent of the proceeds or the projects financed therewith are so used, such
amounts, whether or not received by the Issuer, with respect to such private business use, do
not, u n d er the term s o f t h i s Ordinance o r an y u n d erlyi n g arran gement, dir e c t l y or i n d i rectly,
secure or provide for the payment of more than 10 percent of the debt service on the
Certificates, in contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Certificates or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a "private business use" which is "related" and not
"disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental
use;
(3) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Certificates (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state
or local governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action which would otherwise result in the Certificates
being treated as "private activity bonds" within the meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Certificates being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Certificates, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) which produces a
materially higher yield over the term of the Certificates, other than investment property
acquired with –
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(A) proceeds of the Certificates invested for a reasonable temporary period
of 3 years or less or, in the case of a refunding certificate, for a period of 90 days or
less until such proceeds are needed for the purpose for which the certificates are
issued,
(B) amounts invested in a bona fide debt service fund, within the meaning
of section l.148-1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Certificates;
(7) to otherwise restrict the use of the proceeds of the Certificates or amounts treated
as proceeds of the Certificates, as may be necessary, so that the Certificates do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage);
(8) to refrain from using the proceeds of the Certificates or proceeds of any prior
certificates to pay debt service on another issue more than 90 days after the date of issue of
the Certificates in contravention of the requirements of section 149(d) of the Code (relating
to advance refundings); and
(9) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Certificates) an amount that is at least equal to 90
percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and to
pay to the United States of America, not later than 60 days after the Certificates have been
paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings
under section 148(f) of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (9), a "Rebate
Fund" is hereby established by the Issuer for the sole benefit of the United States of America, and
such fund shall not be subject to the claim of any other person, including without limitation the
certificateholders. The Rebate Fund is established for the additional purpose of compliance with
section 148 of the Code.
(c) Proceeds. 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 certificates or bonds expended prior to the date of
issuance of the Certificates. It is the understanding of the Issuer that the covenants contained herein
are intended to assure compliance with the Code and any regulations or rulings promulgated by the
U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are
hereafter promulgated which modify or expand provisions of the Code, as applicable to the
Certificates, the Issuer will not be required to comply with any covenant contained herein to the
extent that such failure to comply, in the opinion of nationally recognized bond counsel, will not
adversely affect the exemption from federal income taxation of interest on the Certificates under
section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which
impose additional requirements which are applicable to the Certificates, the Issuer agrees to comply
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with the additional requirements to the extent necessary, in the opinion of nationally recognized bond
counsel, to preserve the exemption from federal income taxation of interest on the Certificates under
section 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs
the Mayor or City Manager to execute any documents, certificates or reports required by the Code
and to make such elections, on behalf of the Issuer, which may be permitted by the Code as are
consistent with the purpose for the issuance of the Certificates.
(d) Allocation of, and Limitation on, Expenditures for the Project. The Issuer covenants to
account for the expenditure of sale proceeds and investment earnings to be used for the purposes
described in Section 1 of this Ordinance (the "Project") on its books and records in accordance with
the requirements of the Internal Revenue Code. The Issuer recognizes that in order for the proceeds
to be considered used for the reimbursement of costs, the proceeds must be allocated to expenditures
within 18 months of the later of the date that (1) the expenditure is made, or (2) the Project is
completed; but in no event later than three years after the date on which the original expenditure is
paid. The foregoing notwithstanding, the Issuer recognizes that in order for proceeds to be expended
under the Internal Revenue Code, the sale proceeds or investment earnings must be expended no
more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Certificate, or
(2) the date the Certificate is retired. The Issuer agrees to obtain the advice of nationally-recognized
bond counsel if such expenditure fails to comply with the foregoing to assure that such expenditure
will not adversely affect the tax-exempt status of the Certificate. 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.
(e) Disposition of Project. The Issuer covenants that the property financed with the proceeds
of the Certificates in accordance with the Election, as described in the recitals to this Ordinance will
not be sold or otherwise disposed of in a transaction resulting in the receipt by the Issuer of cash or
other compensation, unless any action taken in connection with such disposition will not adversely
affect the tax-exempt status of the Certificates. For purpose of the foregoing, the Issuer may rely on
an opinion of nationally-recognized bond counsel that the action taken in connection with such sale
or other disposition will not adversely affect the tax-exempt status of the Certificates. 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 an opinion that such failure to comply will not adversely affect the excludability for
federal income tax purposes from gross income of the interest.
(f) Reimbursement. This Ordinance is intended to satisfy the official intent requirements
set forth in section 1.150-2 of the Treasury Regulations.
Section 12. SALE OF CERTIFICATES; OFFICIAL STATEMENT.
(a) The Certificates shall be sold and delivered subject to the provisions of Sections 1 and
3 and pursuant to the terms and provisions of a certificate purchase agreement, notice of sale and
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bidding instructions or private placement agreement (collectively, the "Purchase Agreement") which
the Pricing Officer is hereby authorized to execute and deliver and in which the purchaser or
purchasers (collectively, the "Purchaser") of the Certificates shall be designated. The Certificates
shall initially be registered in the name of the purchaser thereof as set forth in the Pricing Certificate.
(b) The Pricing Officer is hereby authorized, in the name and on behalf of the Issuer, to
approve, distribute, and deliver a preliminary official statement and a final official statement relating
to the Certificates to be used by the Underwriters in the marketing of the Certificates.
Section 13. CONTINUED PERFECTION OF SECURITY INTEREST. Chapter 1208,
Government Code, applies to the issuance of the Certificates and the pledge of the ad valorem taxes
granted by the Issuer under Section 6 of this Ordinance and the pledge of the Surplus Revenues
under Secti on 7 of this Ordinance, and such pledge is therefore valid, effective, and perfected. If
Texas law is amended at any time while the Certificates are outstanding and unpaid such that the
pledge of the taxes granted by the Issuer under Section 6 of this Ordinance or the pledge of the
Surplus Revenues under Section 7 of this Ordinance is to be subject to the filing requirements of
Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the
Certificates the perfection of the security interest in said pledges, the Issuer agrees to take such
measures as it determines are reasonable and necessary under Texas law to comply with the
applicable provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the
security interest in said pledges to occur.
Section 14. COMPLIANCE WITH RULE 15c2-12.
(a)If the Certificates of a series are sold by public offering, and are subject to the Rule
(as d efined b el o w), the following pro v i sions s h al l apply:
(i) Definitions. As used in this Section, the following terms have the meanings ascribed to
such terms below:
"Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in
connection with, or pledged as security or a source of payment for, an existing or planned
debt obligation; or (c) guarantee of a debt obligation or any such derivative instrument;
provided that "financial obligation" shall not include municipal securities as to which a final
official statement (as defined in the Rule) has been provided to the MSRB consistent with
the Rule.
"MSRB" means the Municipal Securities Rulemaking Council.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(ii) Annual Reports. (A) The Issuer shall provide annually to the MSRB, in the electronic
format prescribed by the MSRB, financial information and operating data (the "Annual Operating
Report") with respect to the Issuer of the general type included in the final Official Statement
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authorized by this Ordinance, being the information described in the Pricing Certificate. The Issuer
will additionally provide financial statements of the Issuer (the "Financial Statements"), that will be
(i) prepared in accordance with the accounting principles described in the Pricing Certificate or such
other accounting principles as the Issuer may be required to employ from time to time pursuant to
State law or regulation and shall be in substantially the form included in the final Official Statement
and (ii) audited, if the Issuer commissions an audit of such Financial Statements and the audit is
completed within the period during which they must be provided. The Issuer will update and
provide the Annual Operating Report within six months after the end of each fiscal year and the
Financial Statements within 12 months of the end of each fiscal year, in each case beginning with
the fiscal year ending in and after 2020. The Issuer may provide the Financial Statements earlier,
including at the time it provides its Annual Operating Report, but if the audit of such Financial
Statements is not complete within 12 months after any such fiscal year end, then the Issuer shall file
unaudited Financial Statements within such 12-month period and audited Financial Statements for
the applicable fiscal year, when and if the audit report on such Financial Statements becomes
available.
(B) 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.
(iii) 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 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, Notices of Proposed Issue (IRS Form 5701-TEB)
or other material notices or determinations with respect to the tax status of the
Certificates, or other material events affecting 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;
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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
or the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms, if material;
14.Appointment of a successor Paying Agent/Registrar or change in the name of the
Paying Agent/Registrar, if material;
15.Incurrence of a Financial Obligation of the Issuer, if material, or agreement to
covenants, events of default, remedies, priority rights, or other similar terms of a
Financial Obligation of the Issuer, any of which affect security holders, if material;
and
16.Default, event of acceleration, termination event, modification of terms, or other
similar events under the terms of a Financial Obligation of the Issuer, any of which
reflect financial difficulties.
For these purposes, any event described in the immediately preceding paragraph (iii)12 is considered
to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar
officer for the Issuer in a proceeding under the United States Bankruptcy Code or in any other
proceeding under state or federal law in which a court or governmental authority has assumed
jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has
been assumed by leaving the existing governing body and officials or officers 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.
The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer to provide
the Annual Operating Report or Financial Statements in accordance with subsection (ii) of this
Section by the time required by subsection (ii).
(iv) Limitations, Disclaimers, and Amendments. (A) The Issuer shall be obligated to
observe and perform the covenants specified in this Section for so long as, but only for so long as,
the Issuer remains an "obligated person" with respect to the Certificates within the meaning of the
Rule, except that the Issuer in any event will give notice of any deposit made in accordance with this
Ordinance or applicable law that causes the Certificates no longer to be outstanding.
(B) The provisions of this Section are for the sole benefit of the registered owners and
beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any
benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Issuer
undertakes to provide only the financial information, operating data, financial statements, and notices
which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to
provide any other information that may be relevant or material to a complete presentation of the
Issuer's financial results, condition, or prospects or hereby undertake to update any information
provided in accordance with this Section or otherwise, except as expressly provided herein. The
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Issuer does not make any representation or warranty concerning such information or its usefulness
to a decision to invest in or sell Certificates at any future date.
(C) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE 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 S UCH BREACH S HALL BE LIM IT ED TO AN AC TIO N FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
(D) 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.
(E) The provisions of this Section may be amended by the Issuer from time to time to adapt
to changed circumstances that arise from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the Issuer, but only if (1) the provisions
of this Section, as so amended, would have permitted an underwriter to purchase or sell Certificates
in the primary offering of the Certificates in compliance with the Rule, taking into account any
amendments or interpretations of the Rule since such offering as well as such changed circumstances
and (2) either (a) the registered owners of a majority in aggregate principal amount (or any greater
amount required by any other provision of this Ordinance that authorizes such an amendment) of the
outstanding Certificates consent to such amendment or (b) a person that is unaffiliated with the
Issuer (such as nationally recognized bond counsel) determined that such amendment will not
materially impair the interest of the registered owners and beneficial owners of the Certificates. If
the Issuer so amends the provisions of this Section, it shall include with any amended financial
information or operating data next provided in accordance with subsection (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 Certificates in the primary offering of the
Certificates.
(b)If the Certificates of a series are sold by private placement, the Pricing Officer may
agree to provide for an undertaking in accordance with the Rule or may agree to provide other public
information to the purchaser as may be necessary for the sale of the Certificates on the most
favorable terms to the Issuer.
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Section 15. METHOD OF AMENDMENT. The Issuer hereby reserves the right to amend
this Ordinance subject to the following terms and conditions, to-wit:
(a) Amendment without Consent of Registered Owners. The Issuer may from time to time,
without the consent of any Registered Owner, except as otherwise required by paragraph (b) below,
amend or supplement this Ordinance to (i) cure any ambiguity, defect or omission in this Ordinance
that does not materially adversely affect the interests of the Registered Owners, (ii) grant additional
rights or security for the benefit of the Registered Owners, (iii) add events of default as shall not be
inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the
interests of the Registered Owners, (v) qualify this Ordinance under the Trust Indenture Act of 1939,
as amended, or corresponding provisions of federal laws from time to time in effect, or (iv) make
such other provisions in regard to matters or questions arising under this Ordinance as shall not be
materially inconsistent with the provisions of this Ordinance and that shall not, in the opinion of
nationally-recognized bond counsel, materially adversely affect the interests of the Registered
Owners.
(b) Amendment with Consent of Registered Owners. Except as provided in paragraph (a)
above, the Registered Owners of a majority in aggregate principal amount and maturity amount (if
applicable) of the Certificates then outstanding that are the subject of a proposed amendment shall
have the right from time to time to approve any amendment hereto that may be deemed necessary
or desirable by the Issuer; provided, however, that without the consent of 100% of the Registered
Owners in aggregate principal amount and maturity amount (if applicable) of the then outstanding
Certificates, nothing herein contained shall permit or be construed to permit amendment of the terms
and conditions of this Ordinance or in any of the Certificates so as to:
(1) Make any change in the maturity of any of the outstanding Certificates;
(2) Reduce the rate of interest borne by any of the outstanding Certificates;
(3) Reduce the amount of the principal of, or redemption premium, if any, or
maturity amount (if applicable), payable on any outstanding Certificates;
(4) Modify the terms of payment of principal or of interest or redemption premium
on outstanding Certificates or any of them or impose any condition with respect to
such payment; or
(5) Change the minimum percentage of the principal amount or maturity amount (if
applicable) of the Certificates necessary for consent to such amendment.
(c) Notice of Amendment. If at any time the Issuer shall desire to amend this Ordinance
under this Section, the Issuer shall deliver to each Registered Owner of the affected Certificates a
copy of the proposed amendment.
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(d) Receipt of Consent to Amendment. Whenever at any time within one year from the date
of giving of such notice the Issuer shall receive an instrument or instruments executed by the
Registered Owners of at least a majority in aggregate principal amount of all of the Certificates then
outstanding that are required for the amendment (or 100% if such amendment is made in accordance
with paragraph (b)), which instrument or instruments shall refer to the proposed amendment and
which shall specifically consent to and approve such amendment, the Issuer may adopt the
amendment in substantially the same form.
(e) Effect of Amendment. Upon the adoption of any amendatory Ordinance pursuant to the
provisions of this Section, this Ordinance shall be deemed to be modified and amended in
accordance with such amendatory Ordinance, and the respective rights, duties, and obligations of the
Issuer and all Registered Owners of such affected Certificates shall thereafter be determined,
exercised, and enforced, subject in all respects to such amendment.
(f) Duration of Revocation of Consent. Any consent given by the Registered Owner of a
Certificate pursuant to the provisions of this Section shall be irrevocable for a period of six months
from the date of such consent and shall be conclusive and binding upon all future Registered Owners
of the same Certificate during such period. Such consent may be revoked at any time after six
months from t h e date o f said co n sent b y t h e R egis t e r e d Owner who gave such c o n sent, or by a
successor in title, by filing notice with the Issuer, but such revocation shall not be effective if the
Registered Owners the required amount of the affected Certificates then outstanding, have, prior to
the attempted revocation, consented to and approved the amendment.
(g) Reliance on Registration Certificates. For the purposes of establishing ownership of the
Certificates, the Issuer shall rely solely upon the registration of the ownership of such Certificates
on the Registration Books kept by the Paying Agent/Registrar.
Section 16. INVESTMENTS; SECURITY FOR FUNDS.
(a) Investment Earnings. Interest earnings derived from the investment of proceeds from the
sale of the Certificates issued to finance costs of the projects approved at the Election shall be used
for the purposes for which such Certificates are issued as set forth in Section 1 hereof; provided that
after completion of such purposes, if any of such interest earnings remain on hand, such interest
earnings shall be deposited in the Interest and Sinking Fund. It is further provided, however, that
any interest earnings on certificate proceeds which are required to be rebated to the United States of
America pursuant to Section 11 hereof in order to prevent the Certificates from being arbitrage
certificates shall be so rebated and not considered as interest earnings for the purposes of this
Section.
(b) Authorized Investments. The Issuer may place proceeds of the Certificates issued to
finance costs of the projects approved at the Election (including investment earnings thereon) and
amounts deposited into the Interest and Sinking Fund in investments authorized by the Public Funds
Investment Act, Chapter 2256, Texas Government Code, as amended; provided, however, that the
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Issuer hereby covenants that the proceeds of the sale of such Certificates will be used as soon as
practicable for the purposes for which such Certificates are issued.
(c) Security for Funds. All deposits authorized or required by this Ordinance shall be
secured to the fullest extent required by law for the security of public funds.
Section 17. 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 18. 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 19. 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 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 20. 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 Issuer for the purpose of
protecting and enforcing the rights of the Registered Owners under this Ordinance, by mandamus
or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction,
for any relief permitted by law, including the specific performance of any covenant or agreement
contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any
right of the Registered Owners hereunder or any combination of such remedies.
(b)It is provided that all such proceedings shall be instituted and maintained for the equal
benefit of all Registered Owners of Certificates then outstanding.
Section 21. REMEDIES NOT EXCLUSIVE. (a) No remedy herein conferred or reserved
is intended to be exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under
the Certificates or now or hereafter existing at law or in equity; provided, however, that
notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by
the Certificates shall not be available as a remedy under this Ordinance.
(b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver
of any other available remedy.
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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 councilmembers of the
Issuer or the Council.
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