2007-154ORDINANCE NO. 2007-154
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELIVERY OF "CITY OF DENTON GENERAL
OBLIGATION REFUNDING BONDS, SERIES 2007"; ESTABLISHING PARAMETERS
FOR THE REDEMPTION OF CERTAIN OUTSTANDING OBLIGATIONS OF THE
CITY; AUTHORIZING THE ISSUANCE OF THE BONDS; APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID BONDS;
AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT.
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, there are presently outstanding bonds and certificates of obligation of the City of Denton,
Texas (the "Issuer") payable from a pledge by the Issuer to levy ad valorem taxes sufficient to pay principal
of and interest on the bonds as they become due and, with respect to the certificates of obligation, further
secured by a limited pledge of surplus revenues derived by the Issuer from the ownership and operation of the
Issuer's Utility System (consisting of the Issuer's combined waterworks system, sanitary sewer system, and
electric light and power system);
WHEREAS, the Issuer now desires to refund all or part of the bonds and certificates of obligation
described in Schedule I attached hereto, collectively, the "Eligible Refunded Obligations", and those Eligible
Refunded Obligations designated by the Pricing Officer in the Pricing Certificate, each as defined below, to
be refunded are herein referred to as the "Refunded Obligations";
WHEREAS, Chapter 1207, Texas Government Code, authorizes the Issuer to issue refunding bonds
and to deposit the proceeds from the sale thereof, together with any other available funds or resources, directly
with a paying agent for the Refunded Obligations or a trust company or commercial bank that does not act as
a depository for the Issuer and is named in these proceedings, and such deposit, if made before the payment
dates of the Refunded Obligations, shall constitute the making of firm banking and financial arrangements for
the discharge and final payment of the Refunded Obligations;
WHEREAS, Chapter 1207, Texas Government Code, further authorizes the Issuer to enter into an
escrow agreement with such paying agent for the Refunded Obligations or trust company or commercial bank
with respect to the safekeeping, investment, reinvestment, administration and disposition of any such deposit,
upon such terms and conditions as the Issuer and such paying agent or trust company or commercial bank may
agree;
WHEREAS, the Escrow Agreement hereinafter authorized between the Issuer and The Bank of New
York Trust Company, N.A., Dallas, Texas, constitutes an agreement of the kind authorized and permitted by
said Chapter 1207, Texas Government Code, and The Bank of New York Trust Company, N.A., Dallas,
Texas, is so named as the Escrow Agent in accordance with Section 1207.061, Texas Government Code; and
WHEREAS, this City Council hereby finds and determines that it is a public purpose and in the best
interests of the Issuer to refund the Refunded Obligations in order to achieve a present value debt service
savings of not less than 3.5%, with such savings, among other information and terms to be included in a pricing
certificate (the "Pricing Certificate") to be executed by the Pricing Officer (hereinafter designated), all in
accordance with the provisions of Section 1207.007, Texas Government Code;
WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to maturity within
20 years of the date of the bonds hereinafter authorized;
WHEREAS, the bonds hereinafter authorized are to be issued, sold, and delivered pursuant to
Chapters 1207, Texas Government Code, as amended, the City's Home Rule Charter and other applicable laws;
and
WIEREAS, it is considered to be in the best interest of the City that said interest bearing bonds be
issued, NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
Section 1. RECITALS, AMOUNT AND PURPOSE OF THE BONDS. (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 bonds of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and
delivered in the aggregate principal amount hereinafter provided for the public purpose of providing funds to
refund a portion of the Issuer's outstanding indebtedness and to pay the costs incurred in connection with the
issuance of the Bonds.
Section 2. DESIGNATION OF THE BONDS. Each bond issued pursuant to this Ordinance shall
be designated: "CITY OF DENTON GENERAL OBLIGATION REFUNDING BOND, SERIES 2007, and
initially there shall be issued, sold, and delivered hereunder a single fully registered bond, without interest
coupons, payable in installments of principal (the "Initial Bond"), but the Initial Bond may be assigned and
transferred and/or converted into and exchanged for a like aggregate principal amount of fully registered bonds,
without interest coupons, having serial maturities, and in the denomination or denominations of $5, 000 or any
integral multiple of $5,000, all in the manner hereinafter provided. The term "Bonds" as used in this Ordinance
shall mean and include collectively the Initial Bond and all substitute bonds exchanged therefor, as well as all
other substitute bonds and replacement bonds issued pursuant hereto, and the term "Bonds" shall mean any of
the Bonds.
Section 3. DELEGATION TO PRICING OFFICER. (a) As authorized by Section 1207.007, Texas
Government Code, as amended, the City Manager or Assistant City Manager (the "Pricing Officer") is hereby
authorized to act on behalf of the Issuer in selling and delivering the Bonds, determining which of the Eligible
Refunded Obligations shall be refunded and carrying out the other procedures specified in this Ordinance,
including, determining the date ofthe Bonds, any additional or different designation or title by which the Bonds
shall be known, the price at which the Bonds will be sold, the years in which the Bonds will mature, the
principal amount to mature in each of such years, the rate of interest to be borne by each such maturity, the
interest payment and record dates, the price and terms upon and at which the Bonds shall be subject to
redemption prior to maturity at the option of the Issuer, as well as any mandatory sinking fund redemption
provisions, and all other matters relating to the issuance, sale, and delivery of the Bonds and the refunding of
the Refunded Obligations, including without limitation establishing the redemption date for and effecting the
redemption of the Refunded Obligations and obtaining municipal bond insurance for all or any portion of the
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Bonds and providing for the terms and provisions thereof applicable to the Bonds, all of which shall be
specified in the Pricing Certificate; provided that:
(i) the aggregate original principal amount of the Bonds shall not exceed $29,000,000;
(ii) the price to be paid for the Bonds shall not be less than 97% of the aggregate original principal
amount thereof plus accrued interest thereon from its date to its delivery;
(iii) none of the Bonds shall bear interest at a rate greater than 6.00% per annum and the net effective
interest rate on the Bonds shall not exceed 6.00%;
(iv) the refunding must produce present value debt service savings of at least 3.50%, net of any Issuer
contribution; and
(v) the delegation made hereby shall expire if not exercised by the Pricing Officer on or prior to
October 17, 2007.
(b) In establishing the aggregate principal amount ofthe Bonds, the Pricing Officer shall establish an
amount not exceeding the amount authorized in Subsection (a) hereof, which shall be sufficient in amount to
provide for the purposes for which the Bonds are authorized and to pay costs of issuing the Bonds. The Bonds
shall be sold with and subject to such terms as set forth in the Pricing Certificate.
Section 4. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, INTEREST AND CHARACTERISTICS OF THE INITIAL BOND.
(a) The Initial Bond is hereby authorized to be issued, sold, and delivered hereunder as a single
fully registered Bond, without interest coupons, dated the date set forth in the Pricing Certificate, in the
denomination and aggregate principal amount set forth in the Pricing Certificate, numbered R-1, payable in
annual instalhnents of principal to the initial registered owner thereof or to the registered assignee or assignees
of said Bond or any portion or portions thereof (in each case, the "registered owner"), with the annual
installments of principal of the Initial Bond to be payable on the dates, respectively, and in the principal
amounts, respectively, stated in the FORM OF INITIAL BOND set forth in this Ordinance.
(b) The Initial Bond (i) may be prepaid or redeemed prior to the respective scheduled due dates
of installments of principal thereof, (ii) may be assigned and transferred, (iii) may be converted and exchanged
for other Bonds, (iv) shall have the characteristics, and (v) shall be signed and sealed, and the principal of and
interest on the Initial Bond shall be payable, all as provided, and in the manner required or indicated, in the
FORM OF INITIAL BOND set forth in this Ordinance.
(c) The unpaid principal balance of the Initial Bond shall bear interest from the date of the Initial
Bond to the respective scheduled due dates, or to the respective dates of prepayment or redemption, of the
installments of principal of the Initial Bond, and said interest shall be payable, all in the manner provided and
at the rates and on the dates stated in the FORM OF INITIAL BOND set forth in this Ordinance.
Section 5. FORM OF INITIAL BOND. The form of the Initial Bond, including the form of
Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed on the
Initial Bond, shall be substantially as follows, with such appropriate variations, omissions or insertions as are
permitted or required by this Ordinance, and with the Initial Bond to be modified pursuant to, and completed
with information set forth in, the Pricing Certificate:
FORM OF INITIAL BOND
NO. R-1
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON GENERAL OBLIGATION
REFUNDING BOND
SERIES 2007
THE CITY OF DENTON, in Denton County, Texas (the "Issuer"), being a political subdivision of
the State of Texas, hereby promises to pay to
or to the registered assignee or assignees of this Bond or any portion or portions hereof (in each case, the
"registered owner") the aggregate principal amount of
DOLLARS)
in annual installments of principal due and payable on in each of the years, and in the
respective principal amounts, as set forth in the following schedule, and to pay interest, from the date of this
Bond, , on the balance of each such installment of principal, respectively, from time
to time remaining unpaid, at the rates per annum as follows:
PRINCIPAL INTEREST PRINCIPAL INTEREST
YEAR AMOUNT RATEM YEAR AMOUNT RATE(%)
(Information from Pricing Certificate to be inserted)
Interest shall first be due and payable on , and semiannually on each and
thereafter while this Bond or any portion hereof is outstanding and unpaid. Said interest shall
be calculated on the basis of a 360-day year composed of twelve 30-day months.
TIE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Bond are payable in
lawful money of the United States of America., without exchange or collection charges. The installments of
principal and the interest on this Bond are payable to the registered owner hereof through the services of THE
BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION, DALLAS, TEXAS, which is
the "Paying Agent/Registrar" for this Bond. Payment ofall principal of and interest on this Bond shall be made
by the Paying Agent/Registrar to the registered owner hereof on each principal and/or interest payment date
by check, dated as of such date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of
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the Issuer required by the ordinance authorizing the issuance of this Bond (the "Bond Ordinance") to be on
deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent
by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such principal and/or
interest payment date, to the registered owner hereof, at the address of the registered owner, as it appeared at
the close of business on the 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. The Issuer covenants with
the registered owner of this Bond that on or before each principal and/or interest payment date for this Bond
it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond
Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal
of and interest on this Bond, when due.
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 ofthe Special Record Date and ofthe scheduled payment date of the past due interest ("Special Payment
Date", which shall be fifteen (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
Holder of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of business
on the 15th business day next preceding the date of mailing of such notice.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying Agent/Registrar
is located are authorized by law or executive order to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are
authorized to close; and payment on such date shall have the same force and effect as if made on the original
date payment was due.
THIS BOND has been authorized in accordance with the Constitution and laws of the State of Texas
for the public purposes of refunding certain outstanding obligations of the Issuer, and to pay the costs incurred
in connection with the issuance of the Bonds.
ON , or on any date whatsoever thereafter, the unpaid installments of principal of
this Bond may be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer, with funds
derived from any available source, as a whole, or in part, and, if in part, the particular portion of this Bond to
be prepaid or redeemed shall be selected and designated by the Issuer (provided that a portion of this Bond may
be redeemed only in an integral multiple of $5,000), at the prepayment or redemption price of the par or
principal amount thereof, plus accrued interest to the date fixed for prepayment or redemption.
THE BONDS of this Series scheduled to mature on and ,
are subject to mandatory redemption prior to their scheduled maturities, and shall be redeemed by the Issuer,
in part, prior to their scheduled maturities, with money from the Mandatory Redemption Account of the Interest
and Sinking Fund, with the particular Bonds or portion thereof to be redeemed to be selected by the Paying
Agent/Registrar, by lot or other customary method (provided that a portion of a Bond may be redeemed only
in an integral multiple of $5,000), at a redemption price equal to the par or principal amount thereof and
accrued interest to the date of redemption, on the dates, and in the principal amounts, respectively, as show in
the following schedule:
Maturity
Mandatory Principal
Redemption Dates Amounts
(maturity)
Maturity
Mandatory Principal
Redemption Dates Amounts
(maturity)
The principal amount of the Bonds required to be redeemed on the Mandatory Redemption Dates pursuant to
the foregoing shall be reduced, at the option of the Issuer by the principal amount of any Bonds out of the
maturity scheduled for and which, at least 45 days prior to the aforesaid
appropriate redemption date (1) shall have been acquired by the Issuer at a price not exceeding the principal
amount of such Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying
Agent/Registrar for cancellation, or (2) as shall have been redeemed pursuant to the optional redemption
provisions hereof and not previously credited to the mandatory sinking fund redemption. During any period
in which ownership of the Bonds is determined by a book entry at a securities depository for the Bonds, if fewer
than all of the Bonds of the- same maturity and bearing such interest rate are to be redeemed, the Bonds, or
portions thereof, to be redeemed shall be selected in accordance with the arrangements between the Issuer and
the securities depository.
AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a written notice
of such prepayment or redemption shall be mailed by the Paying Agent/Registrar to the registered owner hereof.
By the date fixed for any such prepayment or redemption due provision shall be made by the Issuer with the
Paying Agent/Registrar for the payment of the required prepayment or redemption price for this Bond or the
portion hereof which is to be so prepaid or redeemed, plus accrued interest thereon to the date fixed for
prepayment or redemption. If such written notice of prepayment or redemption is given, and if due provision
for such payment is made, all as provided above, this Bond, or the portion thereof which is to be so prepaid
or redeemed, thereby automatically shall be treated as prepaid or redeemed prior to its scheduled due date, and
shall not bear interest after the date fixed for its prepayment or redemption, and shall not be regarded as being
outstanding except for the right of the registered owner to receive the prepayment or redemption price plus
accrued interest to the date fixed for prepayment or redemption from the Paying Agent/Registrar out of the
funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such
prepayments or redemptions of principal of this Bond or any portion hereof.
THIS BOND, to the extent of the unpaid or unredeemed principal balance hereof, or any unpaid and
unredeemed portion hereof in any integral multiple of $5,000, may be assigned by the initial registered owner
hereof and shall be transferred only in the Registration Books ofthe Issuer kept by the Paying Agent/Registrar
acting in the capacity of registrar for the Bonds, upon the terms and conditions set forth in the Bond Ordinance.
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Among other requirements for such transfer, this Bond must be presented and surrendered to the Paying
Agent/Registrar for cancellation, together with proper instruments of assignment, in form and with guarantee
of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment by the initial registered owner
of this Bond, or any portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees
in whose name or names this Bond or any such portion or portions hereof is or are to be transferred and
registered. Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar may be
used to evidence the assignment of this Bond or any such portion or portions hereof by the initial registered
owner hereof. A new bond or bonds payable to such assignee or assignees (which then will be the new
registered owner or owners of such new Bond or Bonds) or to the initial registered owner as to any portion of
this Bond which is not being assigned and transferred by the initial registered owner, shall be delivered by the
Paying Agent/Registrar in conversion of and exchange for this Bond or any portion or portions hereof, but
solely in the form and manner as provided in the next paragraph hereof for the conversion and exchange of this
Bond or any portion hereof. The registered owner of this Bond shall be deemed and treated by the Issuer and
the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of
liability upon this Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not
be affected by any notice to the contrary.
AS PROVIDED above and in the Bond Ordinance, this Bond, to the extent of the unpaid or
unredeemed principal balance hereof, may be converted into and exchanged for a like aggregate principal
amount of fully registered bonds, without interest coupons, payable to the assignee or assignees duly designated
in writing by the initial registered owner hereof, or to the initial registered owner as to any portion of this Bond
which is not being assigned and transferred by the initial registered owner, in any denomination or
denominations in any integral multiple of $5,000 (subject to the requirement hereinafter stated that each
substitute bond issued in exchange for any portion of this Bond shall have a single stated principal maturity
date), upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all in accordance with the
form and procedures set forth in the Bond Ordinance. If this Bond or any portion hereof is assigned and
transferred or converted each bond issued in exchange for any portion hereof shall have a single stated principal
maturity date corresponding to the due date of the installment of principal of this Bond or portion hereof for
which the substitute bond is being exchanged, and shall bear interest at the rate applicable to and borne by such
installment of principal or portion thereof. Such bonds, respectively, shall be subject to redemption prior to
maturity on the same dates and for the same prices as the corresponding installment of principal of this Bond
or portion hereof for which they are being exchanged. No such bond shall be payable in installments, but shall
have only one stated principal maturity date. AS PROVIDED IN THE BOND ORDINANCE, THIS BOND
IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY,
and to one or more assignees, but the bonds issued and delivered in exchange for this Bond or any portion
hereof may be assigned and transferred, and converted, subsequently, as provided in the Bond Ordinance. The
Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring,
converting, and exchanging this Bond or any portion thereof, but the one requesting such transfer, conversion,
and exchange shall pay any taxes or governmental charges required to be paid with respect thereto. The Paying
Agent/Registrar shall not be required to make any such assignment, conversion, or exchange (i) during the
period commencing with the close of business on any Record Date and ending with the opening of business on
the next following principal or interest payment date, or, (ii) with respect to any Bond or portion thereof called
for prepayment or redemption prior to maturity, within 45 days prior to its prepayment or redemption date.
IN THE EVENT any Paying Agent/Registrar for this Bond is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will appoint
a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be
mailed to the registered owner of this Bond.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly voted,
authorized, issued, sold, and delivered; that all acts, conditions, and things required or proper to be performed,
exist, and be done precedent to or in the authorization, issuance, and delivery of this Bond have been
performed, existed, and been done in accordance with law; that this Bond is a general obligation of the Issuer,
issued on the full faith and credit thereof, and that annual ad valorem taxes sufficient to provide for the
payment of the interest on and principal of this Bond, as such interest comes due and such principal matures,
have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged
irrevocably for such payment, within the limit prescribed by law.
BY BECOMING the registered owner ofthis Bond, the registered owner thereby acknowledges all of
the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions,
acknowledges that the Bond Ordinance is duly recorded and available for inspection in the official minutes and
records ofthe governing body of the Issuer, and agrees that the terms and provisions of this Bond and the Bond
Ordinance constitute a contract between the registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or facsimile
signature of the Mayor of the Issuer and countersigned and attested with the manual or facsimile signature of
the City Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed, or placed in
facsimile, on this Bond.
ATTEST:
By:
CITY OF DENTON, TEXAS
By:
Jennifer Walters Perry R. McNeill
City Secretary, City of Denton, Texas Mayor, City of Denton, Texas
(CITY SEAL)
(INSERT BOND INSURANCE LEGEND, IF ANY)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS:
(To be attached to Initial Bond only)
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by the Attorney
General of the State of Texas, and that this Bond has been registered by the Comptroller of Public Accounts
of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6. ADDITIONAL CHARACTERISTICS OF THE BONDS. (a) Registration and Transfer.
The Issuer shall keep or cause to be kept at the principal corporate trust office of THE BANK OF NEW
YORK TRUST COMPANY, NATIONAL ASSOCIATION, DALLAS, TEXAS (the "Paying
Agent/Registrar") books or records of the registration and transfer of the Bonds (the "Registration Books"),
and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books
or records and make such transfers and registrations under such reasonable regulations as the Issuer and Paying
Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such transfers and registrations as
herein provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address of
the registered owner of each Bond to which payments with respect to the Bonds shall be mailed, as herein
provided; but it shall be the duty of each registered owner to notify the Paying Agent/Registrar in writing of
the address to which payments shall be mailed, and such interest payments shall not be mailed unless such
notice has been given. The Issuer shall have the right to inspect the Registration Books during regular business
hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration
Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity.
Registration of each Bond may be transferred in the Registration Books only upon presentation and surrender
of such Bond to the Paying Agent/Registrar for transfer of registration and cancellation, together with proper
written instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, (i) evidencing the assignment of the Bond, or any portion thereof in any integral multiple of
$5,000, to the assignee or assignees thereof, and (ii) the right of such assignee or assignees to have the Bond
or any such portion thereof registered in the name of such assignee or assignees. Upon the assignment and
transfer of any Bond or any portion thereof, a new substitute Bond or Bonds shall be issued in conversion and
exchange therefor in the manner herein provided. The Initial Bond, to the extent of the unpaid or unredeemed
principal balance thereof, may be assigned and transferred by the initial registered owner thereof once only,
and to one or more assignees designated in writing by the initial registered owner thereof. All Bonds issued
and delivered in conversion of and exchange for the Initial Bond shall be in any denomination or denominations
of any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Bond shall
have a single stated principal maturity date), shall be in the form prescribed in the FORM OF SUBSTITUTE
BOND set forth in this Ordinance, and shall have the characteristics, and may be assigned, transferred, and
converted as hereinafter provided. If the Initial Bond or any portion thereof is assigned and transferred or
converted the Initial Bond must be surrendered to the Paying Agent/Registrar for cancellation, and each Bond
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issued in exchange for any portion of the Initial Bond shall have a single stated principal maturity date, and
shall not be payable in installments; and each such Bond shall have a principal maturity date corresponding
to the due date of the installment of principal or portion thereof for which the substitute Bond is being ex-
changed; and each such Bond shall bear interest at the single rate applicable to and borne by such installment
of principal or portion thereof for which it is being exchanged. If only a portion of the Initial Bond is assigned
and transferred, there shall be delivered to and registered in the name of the initial registered owner substitute
Bonds in exchange for the unassigned balance of the Initial Bond in the same manner as if the initial registered
owner were the assignee thereof. If any Bond or portion thereof other than the Initial Bond is assigned and
transferred or converted each Bond issued in exchange therefor shall have the same principal maturity date and
bear interest at the same rate as the Bond for which it is exchanged. A form of assignment shall be printed or
endorsed on each Bond, excepting the Initial Bond, which shall be executed by the registered owner or its duly
authorized attorney or representative to evidence an assignment thereof. Upon surrender of any Bonds or any
portion or portions thereof for transfer of registration, an authorized representative of the Paying
Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new fully registered
substitute Bond or Bonds, having the characteristics herein described, payable to such assignee or assignees
(which then will be the registered owner or owners of such new Bond or Bonds), or to the previous registered
owner in case only a portion of a Bond is being assigned and transferred, all in conversion of and exchange for
said assigned Bond or Bonds or any portion or portions thereof, in the same form and manner, and with the
same effect, as provided in Section 6(d), below, for the conversion and exchange of Bonds by any registered
owner of a Bond. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges
for making such transfer and delivery of a substitute Bond or Bonds, but the one requesting such transfer shall
pay any taxes or other governmental charges required to be paid with respect thereto. The Paying
Agent/Registrar shall not be required to make transfers of registration of any Bond or any portion thereof (i)
during the period commencing with the close of business on any Record Date and ending with the opening of
business on the next following principal or interest payment date, or, (ii) with respect to any Bond or any
portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date.
(b) Ownership of Bonds. The entity in whose name any Bond shall be registered in the
Registration Books at any time shall be deemed and treated as the absolute owner thereof for all purposes of
this Ordinance, whether or not such Bond shall be overdue, and the Issuer and the Paying Agent/Registrar shall
not be affected by any notice to the contrary; and payment of, or on account of, the principal of, premium, if
any, and interest on any such Bond shall be made only to such registered owner. All such payments shall be
valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so
paid.
(c) Payment ofBonds and Interest. The Issuer hereby further appoints the Paying Agent/Registrar
to act as the paying agent for paying the principal of and interest on the Bonds, and to act as its agent to
convert and exchange or replace Bonds, all as provided in this Ordinance. The Paying Agent/Registrar shall
keep proper records of all payments made by the Issuer and the Paying Agent/Registrar with respect to the
Bonds, and of all conversions and exchanges of Bonds, and all replacements of Bonds, as provided in this
Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date, and for thirty (30)
days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by
the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the
Issuer. Notice ofthe Special Record Date and ofthe scheduled payment date ofthe past due interest ("Special
Payment Date", which shall be fifteen (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 Holder of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of
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business on the 15th business day next preceding the date of mailing of such notice.
(d) Conversion and Exchange or Replacement, Authentication. Each Bond issued and delivered
pursuant to this Ordinance, to the extent of the unpaid or unredeemed principal balance or principal amount
thereof, may, upon surrender of such Bond at the principal corporate trust office of the Paying Agent/Registrar,
together with a written request therefor duly executed by the registered owner or the assignee or assignees
thereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory
to the Paying Agent/Registrar, may, at the option of the registered owner or such assignee or assignees, as
appropriate, be converted into and exchanged for fully registered bonds, without interest coupons, in the form
prescribed in the FORM OF SUBSTITUTE BOND set forth in this Ordinance, in the denomination of $5,000,
or any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Bond shall
have a single stated maturity date), as requested in writing by such registered owner or such assignee or
assignees, in an aggregate principal amount equal to the unpaid or unredeemed principal balance or principal
amount of any Bond or Bonds so surrendered, and payable to the appropriate registered owner, assignee, or
assignees, as the case may be. If the Initial Bond is assigned and transferred or converted each substitute Bond
issued in exchange for any portion of the Initial Bond shall have a single stated principal maturity date, and
shall not be payable in installments; and each such Bond shall have a principal maturity date corresponding
to the due date of the installment of principal or portion thereof for which the substitute Bond is being
exchanged; and each such Bond shall bear interest at the single rate applicable to and borne by such installment
of principal or portion thereof for which it is being exchanged. If a portion of any Bond (other than the Initial
Bond) shall be redeemed prior to its scheduled maturity as provided herein, a substitute Bond or Bonds having
the same maturity date, bearing interest at the same rate, in the denomination or denominations of any integral
multiple of $5,000 at the request of the registered owner, and in aggregate principal amount equal to the
unredeemed portion thereof, will be issued to the registered owner upon surrender thereof for cancellation. If
any Bond or portion thereof (other than the Initial Bond) is assigned and transferred or converted, each Bond
issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as
the Bond for which it is being exchanged. Each substitute Bond shall bear a letter and/or number to distinguish
it from each other Bond. The Paying Agent/Registrar shall convert and exchange or replace Bonds as provided
herein, and each fully registered bond delivered in conversion of and exchange for or replacement of any Bond
or portion thereof as permitted or required by any provision of this Ordinance shall constitute one of the Bonds
for all purposes of this Ordinance, and may again be converted and exchanged or replaced. It is specifically
provided that any Bond authenticated in conversion of and exchange for or replacement of another Bond on
or prior to the first scheduled Record Date for the Initial Bond shall bear interest from the date of the Initial
Bond, but each substitute Bond so authenticated after such first scheduled Record Date shall bear interest from
the interest payment date next preceding the date on which such substitute Bond was so authenticated, unless
such Bond is authenticated after any Record Date but on or before the next following interest payment date,
in which case it shall bear interest from such next following interest payment date; provided, however, that if
at the time of delivery of any substitute Bond the interest on the Bond for which it is being exchanged is due
but has not been paid, then such Bond shall bear interest from the date to which such interest has been paid in
full. THE INITIAL BOND issued and delivered pursuant to this Ordinance is not required to be, and shall not
be, authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in conversion of and
exchange for or replacement of any Bond or Bonds issued under this Ordinance there shall be printed a bond,
in the form substantially as follows:
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance
11
described in this Bond; and that this Bond has been issued in conversion of and exchange for or replacement
of a bond, bonds, or a portion of a bond or bonds of an issue which originally was approved by the Attorney
General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
THE BANK OF NEW YORK TRUST COMPANY,
NATIONAL ASSOCIATION, DALLAS, TEXAS,
Paying Agent/Registrar
Dated
By
Authorized Representative"
An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date
and manually sign the above Bond, and no such Bond shall be deemed to be issued or outstanding unless such
Bond is so executed. The Paying Agent/Registrar promptly shall cancel all Bonds surrendered for conversion
and exchange or replacement. 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 or replacement of any Bond or portion thereof, and the Paying Agent/Registrar shall provide for the
printing, execution, and delivery of the substitute Bonds in the manner prescribed herein, and said Bonds shall
be of type composition printed on paper with lithographed or steel engraved borders of customary weight and
strength. Pursuant to Chapter 1201, Texas Government Code, the duty of conversion and exchange or
replacement of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution
of the above Paying Agent/Registrar's Authentication Certificate, the converted and exchanged or replaced
Bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Initial
Bond which originally was issued pursuant to this Ordinance, approved by the Attorney General, and registered
by the Comptroller of Public Accounts. The Issuer shall pay the Paying Agent/Registrar's standard or
customary fees and charges for transferring, converting, and exchanging any Bond or any portion thereof, but
the one requesting any such transfer, conversion, and exchange shall pay any taxes or governmental charges
required to be paid with respect thereto as a condition precedent to the exercise of such privilege of conversion
and exchange. The Paying Agent/Registrar shall not be required to make any such conversion and exchange
or replacement of Bonds or any portion thereof (i) during the period commencing with the close of business on
any Record Date and ending with the opening of business on the next following principal or interest payment
date, or, (ii) with respect to any Bond or portion thereof called for redemption prior to maturity, within 45 days
prior to its redemption date.
(e) In General. All Bonds issued in conversion and exchange or replacement of any other Bond
or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of
and interest on such Bonds to be payable only to the registered owners thereof, (ii) may or shall be redeemed
prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be converted and exchanged
for other Bonds, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the principal of and
interest on the Bonds shall be payable, all as provided, and in the manner required or indicated, in the FORM
OF SUBSTITUTE BOND set forth in this Ordinance.
(f) Payment of Fees and Charges. The Issuer hereby covenants with the registered owners of the
Bonds that it will (i) pay the standard or customary fees and charges of the Paying Agent/Registrar for its
services with respect to the payment of the principal of and interest on the Bonds, when due, and (ii) pay the
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fees and charges of the Paying Agent/Registrar for services with respect to the transfer of registration of Bonds,
and with respect to the conversion and exchange of Bonds solely to the extent above provided in this Ordinance.
(g) Substitute Pmjm Agent/Re ig_strar. The Issuer covenants with the registered owners of the
Bonds that at all times while the Bonds 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 Bonds 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
120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 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 it will promptly 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 shall promptly transfer and
deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to
the Bonds, 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 Bonds, 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.
Section 7. FORM OF SUBSTITUTE BONDS. The form of all Bonds issued in conversion and
exchange or replacement of any other Bond or portion thereof, including the form of Paying Agent/Registrar's
Bond to be printed on each of such Bonds, and the Form of Assignment to be printed on each of the Bonds,
shall be, respectively, substantially as follows, with such appropriate variations, omissions, or insertions as
are permitted or required by this Ordinance, and with the Bonds to be modified pursuant to, and completed
with information set forth in, the Pricing Certificate.
FORM OF SUBSTITUTE BOND
(Book-Entry Only Legend, if appropriate)
NO. UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON GENERAL OBLIGATION
REFUNDING BOND
SERIES 2007
INTEREST RATE MATURITY DATE DATED DATE CUSIP NO.
ON THE MATURITY DATE specified above the CITY OF DENTON, in Denton County, Texas
(the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to
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, or to the registered assignee
hereof (either being hereinafter called the "registered owner") the principal amount of
and to pay interest thereon, calculated on the basis of a 360-day year composed of twelve 30-day months, from
to the maturity date specified above, or the date of redemption prior to maturity, at the
interest rate per annum specified above; with interest being first due and payable on and
semiannually on each and thereafter, except that if the date of authentication of this
Bond 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 (hereinafter defined) 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.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the United
States of America, without exchange or collection charges. The principal of this Bond shall be paid to the
registered owner hereof upon presentation and surrender of this Bond at maturity or upon the date fixed for its
redemption prior to maturity, at the principal corporate trust office of THE BANK OF NEW YORK TRUST
COMPANY, NATIONAL ASSOCIATION, DALLAS, TEXAS, which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the registered
owner hereof on each interest payment date by check, dated as of such interest payment date, drawn by the
Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing
the issuance of the Bonds (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such
purpose as hereinafter provided; and such check 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 the
address of the registered owner, as it appeared at the close of business on the 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. However, the payment of such interest may be made by any other method acceptable
to the Paying Agent/Registrar and requested by, and at the risk and expense of, the registered owner hereof.
Any accrued interest due upon the redemption of this Bond prior to maturity as provided herein shall be paid
to the registered owner at the principal corporate trust office of the Paying Agent/Registrar upon presentation
and surrender of this Bond for redemption and payment at the principal corporate trust office of the Paying
Agent/Registrar. The Issuer covenants with the registered owner of this Bond that on or before each principal
payment date, interest payment date, and accrued interest payment date for this Bond it will make available
to the Paying Agent/ Registrar, from the "Interest and Sinking Fund" created by the Bond Ordinance, the
amounts required to provide for the payment, in immediately available funds, of all principal of and interest
on the Bonds, when due.
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 ofthe Special Record Date and ofthe scheduled payment date of the past due interest ("Special Payment
Date", which shall be fifteen (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
Holder of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of business
on the 15th business day next preceding the date of mailing of such notice.
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IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying Agent/Registrar
is located are authorized by law or executive order to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are
authorized to close; and payment on such date shall have the same force and effect as if made on the original
date payment was due.
THIS BOND is one of an issue of Bonds initially dated authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
$ for the public purposes of refunding certain outstanding obligations of the Issuer, and to
pay the costs incurred in connection with the issuance of the Bonds.
ON , or on any date whatsoever thereafter, the Bonds of this Series may be
redeemed prior to their scheduled maturities, 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 Bonds, or portions thereof, to be
redeemed shall be selected and designated by the Issuer (provided that a portion of a Bond may be redeemed
only in an integral multiple of $5,000), at the redemption price of the par or principal amount thereof, plus
accrued interest to the date fixed for redemption.
THE BONDS of this Series scheduled to mature on and ,
are subject to mandatory redemption prior to their scheduled maturities, and shall be redeemed by the Issuer,
in part, prior to their scheduled maturities, with money from the Mandatory Redemption Account of the Interest
and Sinking Fund, with the particular Bonds or portion thereof to be redeemed to be selected by the Paying
Agent/Registrar, by lot or other customary method (provided that a portion of a Bond may be redeemed only
in an integral multiple of $5,000), at a redemption price equal to the par or principal amount thereof and
accrued interest to the date of redemption, on the dates, and in the principal amounts, respectively, as show in
the following schedule:
Maturi
Mandatory Principal
Redemption Dates Amounts
(maturity)
Maturity
Mandatory Principal
Redemption Dates Amounts
(maturity)
The principal amount of the Bonds required to be redeemed on the Mandatory Redemption Dates pursuant to
the foregoing shall be reduced, at the option of the Issuer by the principal amount of any Bonds out of the
15
maturity scheduled for and which, at least 45 days prior to the aforesaid
appropriate redemption date (1) shall have been acquired by the Issuer at a price not exceeding the principal
amount of such Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying
Agent/Registrar for cancellation, or (2) as shall have been redeemed pursuant to the optional redemption
provisions hereof and not previously credited to the mandatory sinking fund redemption. During any period
in which ownership of the Bonds is determined by a book entry at a securities depository for the Bonds, if fewer
than all of the Bonds of the same maturity and bearing such interest rate are to be redeemed, the Bonds, or
portions thereof, to be redeemed shall be selected in accordance with the arrangements between the Issuer and
the securities depository.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof prior to
maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by United States mail,
first-class postage prepaid, to the registered owner of each Bond to be redeemed at its address as it appeared
on the 45th day prior to such redemption date; provided, however, that the failure to send, mail, or receive such
notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness
of the proceedings for the redemption of any Bond. By the date fixed for any such redemption due provision
shall be made with the Paying Agent/Registrar for the payment of the required redemption price for the Bonds
or portions thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption.
If such written notice of redemption is given and if due provision for such payment is made, all as provided
above, the Bonds or portions thereof which are to be so redeemed thereby automatically shall be treated as
redeemed prior to their scheduled maturities, and they shall not bear interest after the date fixed for redemption,
and they shall not be regarded as being outstanding except for the right of the registered owner to receive the
redemption price plus accrued interest from the Paying Agent/Registrar out of the funds provided for such
payment. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same maturity
date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000,
at the written request of the registered owner, and in aggregate principal amount equal to the unredeemed
portionthereof, will be issued to the registered owner upon the surrender thereof for cancellation, at the expense
of the Issuer, all as provided in the Bond Ordinance.
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE
OF $5,000 may be assigned and shall be transferred only in the Registration Books of the Issuer kept by the
Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms and conditions set forth
in the Bond Ordinance. Among other requirements for such assignment and transfer, this Bond must be
presented and surrendered to the Paying Agent/Registrar, together with proper instruments of assignment, in
form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of
this Bond or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in
whose name or names this Bond or any such portion or portions hereof is or are to be transferred and
registered. The form of Assignment printed or endorsed on this Bond shall be executed by the registered owner
or its duly authorized attorney or representative, to evidence the assignment hereof. A new Bond or Bonds
payable to such assignee or assignees (which then will be the new registered owner or owners of such new Bond
or Bonds), or to the previous registered owner in the case of the assignment and transfer of only a portion of
this Bond, may be delivered by the Paying Agent/Registrar in conversion of and exchange for this Bond, all
in the form and manner as provided in the next paragraph hereof for the conversion and exchange of other
Bonds. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making
such transfer, but the one requesting such transfer shall pay any taxes or other governmental charges required
to be paid with respect thereto. The Paying Agent/Registrar shall not be required to make transfers of
registration of this Bond or any portion hereof (i) during the period commencing with the close of business on
16
any Record Date and ending with the opening of business on the next following principal or interest payment
date, or, (ii) with respect to any Bond or any portion thereof called for redemption prior to maturity, within 45
days prior to its redemption date. The registered owner of this Bond shall be deemed and treated by the Issuer
and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge
of liability upon this Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall
not be affected by any notice to the contrary.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond Ordinance, this
Bond, or any unredeemed portion hereof, may, at the request of the registered owner or the assignee or
assignees hereof, be converted into and exchanged for a like aggregate principal amount of fully registered
bonds, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case
may be, having the same maturity date, and bearing interest at the same rate, in any denomination or
denominations in any integral multiple of $5,000 as requested in writing by the appropriate registered owner,
assignee, or assignees, as the case may be, upon surrender of this Bond to the Paying Agent/Registrar for
cancellation, all in accordance with the form and procedures set forth in the Bond Ordinance. The Issuer shall
pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and
exchanging any Bond or any portion thereof, but the one requesting such transfer, conversion, and exchange
shall pay any taxes or governmental charges required to be paid with respect thereto as a condition precedent
to the exercise of such privilege of conversion and exchange. The Paying Agent/Registrar shall not be required
to make any such conversion and exchange (i) during the period commencing with the close of business on any
Record Date and ending with the opening of business on the next following principal or interest payment date,
or, (ii) with respect to any Bond or portion thereof called for redemption prior to maturity, within 45 days prior
to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will appoint
a competent and legally qualified substitute therefor, and will promptly cause written notice thereof to be
mailed to the registered owners of the Bonds.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly voted,
authorized, issued, sold, and delivered; that all acts, conditions, and things required or proper to be performed,
exist, and be done precedent to or in the authorization, issuance, and delivery of this Bond have been
performed, existed, and been done in accordance with law; that this Bond is a general obligation of the Issuer,
issued on the full faith and credit thereof, and that annual ad valorem taxes sufficient to provide for the
payment of the interest on and principal of this Bond, as such interest comes due and such principal matures,
have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged
irrevocably for such payment, within the limit prescribed by law.
BY BECOMING the registered owner of this Bond, the registered owner thereby acknowledges all of
the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions,
acknowledges that the Bond Ordinance is duly recorded and available for inspection in the official minutes and
records of the governing body of the Issuer, and agrees that the terms and provisions ofthis Bond and the Bond
Ordinance constitute a contract between each registered owner hereof and the Issuer.
17
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or facsimile
signature of the Mayor of the Issuer and countersigned and attested with the manual or facsimile signature of
the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed
in facsimile, on this Bond.
ATTEST:
By:
Jennifer Walters
City Secretary, City of Denton, Texas
CITY OF DENTON, TEXAS
By:
Perry R. McNeill
Mayor, City of Denton, Texas
(CITY SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Registration
Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance
described in this Bond; and that this Bond has been issued in conversion of and exchange for or replacement
of a bond, bonds, or a portion of a bond or bonds of an issue which originally was approved by the Attorney
General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
THE BANK OF NEW YORK TRUST COMPANY,
NATIONAL ASSOCIATION, DALLAS, TEXAS,
Paying Agent/Registrar
Dated
By
Authorized Representative
(INSERT BOND INSURANCE LEGEND, IF ANY)
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly authorized
representative or attorney thereof, hereby assigns this Bond to
18
(Assignee's Social (print or typewrite Assignee's name and
Security or Taxpayer address, including zip code)
Identification Number)
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books 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.
Registered Owner
NOTICE: This signature must correspond with
the name of the Registered Owner appearing on
the face of this Certificate in every particular
without alteration or enlargement or any change
whatsoever.
Section 8. TAX LEVY. A special Interest and Sinking Fund (the "Interest and Sinking Fund") is
hereby created solely for the benefit of the Bonds, and the Interest and Sinking Fund shall be established and
maintained by the Issuer at an official depository bank of the Issuer. A Mandatory Redemption Account is
hereby established within the Interest and Sinking Fund if so required pursuant to the Pricing Certificate. The
Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the Issuer, and
shall be used only for paying the interest on and principal of the Bonds. All ad valorem taxes levied and
collected for and on account of the Bonds, together with any premium and accrued interest received upon sale
of the Bonds, shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year
while any of the Bonds or interest thereon are outstanding and unpaid, the governing body of the Issuer shall
compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the
money required to pay the interest on the Bonds as such interest becomes due, and to provide and maintain a
sinking fund adequate to pay the principal of its Bonds as such principal matures or is scheduled for redemption
(but never less than 2% of the original principal amount of the Bonds as a sinking fund each year), including
such amounts as are necessary to satisfy the mandatory sinking fund schedule for the Bonds as may be set forth
in the Pricing Certificate, which amounts shall be deposited into the Mandatory Redemption Account, with such
mandatory redemption constituting payment at maturity. Said tax shall be based on the latest approved tax
rolls of the Issuer, with full allowance being made for tax delinquencies and the cost of tax collection. Said
rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied, against all taxable
property in the Issuer for each year while any of the Bonds or interest thereon are outstanding and unpaid; and
said tax shall be assessed and collected each such year and deposited to the credit of the aforesaid Interest and
Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of
the Bonds, as such interest comes due and such principal matures or is scheduled for redemption, are hereby
pledged for such payment, within the limit prescribed by law.
19
Section 9. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon shall be deemed to
be paid, retired, and no longer outstanding (a "Defeased Bond") within the meaning of this Ordinance, except
to the extent provided in subsection (d) of this Section 9, when payment of the principal of such Bond, plus
interest thereon to the due date (whether such due date be by reason of maturity, upon redemption, or
otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof (including
the giving of any required notice of redemption), or (ii) shall have been provided for on or before such due date
by irrevocably depositing with or making available to the Paying Agent/Registrar for such payment (1) lawful
money of the United States of America sufficient to make such payment or (2) Government Obligations which
mature as to principal and interest in such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money to provide for such payment, and when proper arrangements have been made
by the Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased Bonds shall
have become due and payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as
aforesaid, such Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the
benefits of, the ad valorem taxes herein levied and pledged as provided in this Ordinance, and such principal
and interest shall be payable solely from such money or Government Obligations.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the
Issuer also be invested in Government Obligations, maturing in the amounts and times as hereinbefore set forth,
and all income from such Government Obligations received by the Paying Agent/Registrar which is not
required for the payment of the Bonds and interest thereon, with respect to which such money has been so
deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer.
(c) The term "Government Obligations" as used in this Section shall mean (i) direct, noncallable
obligations of the United States of America, including obligations that are unconditionally guaranteed by the
United States of America., (ii) noncallable obligations of an agency or instrumentality of the United States of
America, including obligations that are unconditionally guaranteed or insured by the agency or intstrumentality
and that, on the date of the purchase thereof are rated as to investment quality by a nationally recognized
investment rating firm not less than AAA or its equivalent, and (iii) noncallable obligations of a state or an
agency or a county, municiplaity , or other political subdivision or a state that have been refunded and that,
on the date the governing body of the District adopts or approves the proceedings authorizing the financial
arrangements are rated as to investment quality by a nationally recognized investment rating firm not less than
AAA or its equivalent.
(d) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall
perform the services of Paying Agent/Registrar for such Defeased Bonds the same as if they had not been
defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required by
this Ordinance.
Section 10. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS. (a)
Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the
Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond of the same principal
amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement
for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged, mutilated, lost,
stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying Agent/Registrar. In
every case of loss, theft, or destruction of a Bond, the registered owner applying for a replacement bond shall
20
furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may be required by them
to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft,
or destruction of a Bond, the registered owner shall furnish to the Issuer and the Paying Agent/Registrar
evidence to their satisfaction of the loss, theft, or destruction of such Bond, as the case may be. In every case
of damage or mutilation of a Bond, the registered owner shall surrender to the Paying Agent/Registrar for
cancellation the Bond so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the event
of any such Bond shall have matured, and no default has occurred which is then continuing in the payment of
the principal of, redemption premium, if any, or interest on the Bond, the Issuer may authorize the payment
of the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing
a replacement Bond, provided security or indemnity is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond, the
Paying Agent/Registrar shall charge the registered owner of such Bond with all legal, printing, and other
expenses in connection therewith. Every replacement bond issued pursuant to the provisions of this Section
by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the
Issuer whether or not the lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by
anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all
other Bonds duly issued under this Ordinance.
(e) Authority for Issuing _Replacement Bonds. In accordance with Chapter 1201, Texas
Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such
replacement bond without necessity of further action by the governing body of the Issuer or any other body or
person, and the duty of the replacement of such bonds is hereby authorized and imposed upon the Paying
Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form and
manner and with the effect, as provided in Section 6(d) of this Ordinance for Bonds issued in conversion and
exchange for other Bonds.
Section 11. COVENANTS REGARDING TAX-EXEMPTION. The Issuer covenants to refrain from
taking any action which would adversely affect, or to take such action to assure, the treatment of the Bonds
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 taxation.
In furtherance thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of the Bonds
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, under the terms of this Ordinance or any
underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10
percent of the debt service on the Bonds, in contravention of section 141(6)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use" described
in subsection (a) hereof exceeds five percent of the proceeds of the Bonds or the projects financed
therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of five percent
21
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;
(c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or five percent of the proceeds of the Bonds (less amounts deposited into a reserve fund,
if any) is, directly or indirectly, used to finance loans to persons, other than state or local governmental
units, in contravention of section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Bonds being
treated as "private activity bonds" within the meaning of section 141(b) of the Code;
(e) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly,
to acquire or to replace funds 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 Bonds, other than investment property acquired with
(1) proceeds of the Bonds invested for a reasonable temporary period of 3 years
or less, or in the case of a refunding bonds, for a period of 90 days or less until such proceeds
are needed for the purpose for which the Bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning of
section 1.148-1(b) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement fund
to the extent such amounts do not exceed 10 percent of the stated principal amount (or, in the
case of a discount, the issue price) of the proceeds of the Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as
proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the
requirements of section 148 of the Code (relating to arbitrage), section 149(8) of the Code (relating
to hedge bonds), and, to the extent applicable, section 149(d) of the Code (relating to advance
refundings); and
(h) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the
"Excess Earnings", within the meaning of section 148(f) of the Code and to pay to the United States
of America, not later that 60 days after the Bonds have been paid in full, 100 percent of the amount
then required to be paid as a result of Excess Earnings under section 148(f) of the Code.
For purposes of the foregoing (a) and (b), the Issuer understands that the term "proceeds" includes
"disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred
proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the Bonds. It
is the understanding of the Issuer that the covenants contained herein are intended to assure compliance with
the Code and any regulations or rulings promulgated by the U. S. Department of the Treasury pursuant thereto.
22
In the event that regulations or rulings are hereafter promulgated which modify, or expand provisions of the
Code, as applicable to the Bonds, the Issuer will not be required to comply with any covenant contained herein
to the extent that such failure to comply, in the opinion of nationally-recognized bond counsel, will not
adversely affect the exemption from federal income taxation of interest on the Bonds under section 103 of the
Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements
which are applicable to the Bonds, the Issuer agrees to comply with the additional requirements to the extent
necessary and reasonably possible, in the opinion of nationally-recognized bond counsel, to preserve the
exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance
of such intention, the Issuer hereby authorizes and directs the Mayor of the Issuer 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 Bonds. The Issuer covenants
to comply with the covenants in this section after defeasance of the Bonds.
In order to facilitate compliance with the above covenant (h), a "Rebate Fund" is hereby established
by the Issuer for the sole benefit of the United States of America, and such fund shall not be subject to the
claim of any other person, including without limitation, the bondholders. The Rebate Fund is established for
the additional purpose of compliance with section 148 of the Code.
Section 12. DISPOSITION OF PROJECT. The Issuer covenants that the property constituting the
projects financed with the Refunded Obligations will not be sold or otherwise disposed in a transaction resulting
in the receipt by the Issuer of cash or other compensation, unless the Issuer obtains an opinion of nationally-
recognized bond counsel that such sale or other disposition will not adversely affect the tax-exempt status of
the Bonds. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains a
legal opinion that such failure to comply will not adversely affect the excludability for federal income tax
purposes from gross income of the interest.
Section 13. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND COUNSEL'S
OPINION, CUSIP NUMBERS, PREAMBLE AND INSURANCE. The Mayor of the Issuer is hereby
authorized to have control of the Initial Bond issued hereunder and all necessary records and proceedings
pertaining to the Initial Bond pending its delivery and its investigation, examination, and approval by the
Attorney General of the State of Texas, and its registration by the Comptroller of Public Accounts of the State
of Texas. Upon registration of the Initial Bond said Comptroller of Public Accounts (or a deputy designated
in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate on the
Initial Bond, and the seal of said Comptroller shall be impressed, or placed in facsimile, on the Initial Bond.
The approving legal opinion ofthe Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option
of the Issuer, be printed on the Initial Bond or on any Bonds issued and delivered in conversion of and exchange
or replacement of any Bond, but neither shall have any legal effect, and shall be solely for the convenience and
information ofthe registered owners ofthe Bonds. The preamble to this Ordinance is hereby adopted and made
a part hereof for all purposes. If insurance is obtained on any of the Bonds, the Initial Bond and all other
Bonds shall bear an appropriate legend concerning insurance as provided by the insurer.
Section 14. SALE OF INITIAL BOND; BOND INSURANCE. (a) The Bonds shall be sold and
delivered subject to the provisions of Section 1 and Section 2 and pursuant to the terns and provisions of a
bond purchase agreement (the "Purchase Agreement"), the terms and provisions of which are to be determined
by the Pricing Officer in accordance with Section 3, and in which the purchaser or purchasers (the
"Underwriters") of the Bonds shall be designated. The Pricing Officer is hereby authorized to execute and
23
deliver the Purchase Agreement for an on behalf of the Issuer. The Bonds shall initially be registered in the
name of the Underwriters as set forth in the Pricing Certificate.
(b) The Pricing Officer is authorized, in connection with effecting the sale of the Bonds, to obtain
from a municipal bond insurance company so designated in the Purchase Agreement (the "hisurer") a municipal
bond insurance policy (the "Insurance Policy") in support of the Bonds. To that end, should the Pricing Officer
exercise such authority and commit the Issuer to obtain a municipal bond insurance policy, for so long as the
Insurance Policy is in effect, the requirements of the Insurer relating to the issuance of the Insurance Policy as
set forth in the Pricing Certificate are incorporated by reference into this Ordinance and made a part hereof for
all purposes, notwithstanding any other provision of this Ordinance to the contrary. The Pricing Officer shall
have the authority to execute any documents to effect the issuance of the Insurance Policy by the Insurer.
Section 15. OFFICIAL STATEMENT. The Mayor and the City Secretary are authorized and
directed to execute and deliver for and on behalf of the Issuer copies of a Preliminary Official Statement and
Official Statement, prepared in connection with the offering of the Bonds by the Underwriters, in final form
as may be required by the Underwriters, and such final Official Statement in the form and content as approved
by the Pricing Officer or as manually executed by said officials shall be deemed to be approved by the City
Council of the Issuer and constitute the Official Statement authorized for distribution and use by the
Underwriters.
Section 16. REFUNDING OF REFUNDED OBLIGATIONS. (a) Subject to execution and delivery
of the Purchase Agreement with the Underwriters, the Issuer hereby directs that the Refunded Obligations be
called for redemption on the dates and at such prices as set forth in the Pricing Certificate. The Pricing Officer
is hereby authorized and directed to issue or cause to be issued Notice of Redemption of the Refunded
Obligations in substantially the form set forth in Exhibit A attached hereto, completed with information from
the Pricing Certificate, to the paying agents for the Refunded Obligations.
(b) In addition, the paying agents for the Refunded Obligations are hereby directed to provide the
appropriate notices of redemption and defeasance as specified by the orders or ordinances authorizing the
issuance of Refunded Obligations and are hereby directed to make appropriate arrangements so that the
Refunded Obligations may be redeemed on their redemption dates. The Refunded Obligations shall be
presented for redemption at the paying agent therefor, and shall not bear interest after the date fixed for
redemption.
(c) If the redemption of the Refunded Obligations results in the partial refunding of any maturity
of the Refunded Obligations, the Pricing Officer shall direct the paying agent/registrar for the Refunded
Obligations to designate at random and by lot which of the Refunded Obligations will be payable from and
secured solely from ad valorem taxes and pledged revenues, as the case may be, pursuant to the ordinance of
the Issuer authorizing the issuance of such Refunded Obligations (the 'Refunded Obligation Ordinance"). For
purposes of such determination and designation, all Refunded Obligations registered in denominations greater
than $5,000 shall be considered to be registered in separate $5,000 denominations. The paying agent/registrar
shall notify by first-class mail all registered owners of all affected bonds of such maturities that: (i) a portion
of such bonds have been refunded and are secured until final maturity solely with cash and investments
maintained by the Escrow Agent in the Escrow Fund, (ii) the principal amount of all affected bonds of such
maturities registered in the name of such registered owner that have been refunded and are payable solely from
cash and investments in the Escrow Fund and the remaining principal amount of all affected bonds of such
maturities registered in the name of such registered owner, if any, have not been refunded and are payable and
24
secured solely from ad valorem taxes and pledged revenues, as the case may be, of the Issuer described in the
Refunded Obligation Ordinance, (iii) the registered owner is required to submit his or her Refunded Obligations
to the paying agent/registrar, for the purposes of re-registering such registered owner's bonds and assigning
new CUSIP numbers in order to distinguish the source of payment for the principal and interest on such bonds,
and (iv) payment of principal of and interest on such bonds may, in some circumstances, be delayed until such
bonds have been re-registered and new CUSIP numbers have been assigned as required by (iii) above.
(d) The source of funds for payment of the principal of and interest on the Refunded Obligations
on their respective maturity or redemption dates shall be from the funds deposited with the Escrow Agent
pursuant to the Escrow Agreement approved in Section 17 of this Ordinance.
Section 17. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS. The
Pricing Officer or the Mayor and City Secretary are further authorized to enter into and execute on behalf of
the Issuer with the escrow agent named herein, an escrow agreement, in the form and substance as shall be
approved by the Pricing Officer, which escrow agreement will provide for the payment in full of the Refunded
Obligations. In addition, the Mayor or the Pricing Officer is authorized to purchase such securities, to execute
such subscriptions for the purchase of the Escrowed Securities (as defined in the Escrow Agreement), and to
authorize such contributions for the escrow fund as provided in the Escrow Agreement.
Section 18. DTC REGISTRATION. The Bonds initially shall be issued and delivered in such manner
that no physical distribution of the Bonds will be made to the public, and The Depository Trust Company
("DTC"), New York, New York, initially will act as depository for the Bonds. DTC has represented that it is
a limited purpose trust company incorporated under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered under Section 17A of the federal Securities Exchange Act of 1934,
as amended, and the Issuer accepts, but in no way verifies, such representations. The Initial Bond authorized
by this Ordinance shall be delivered to and registered in the name of the Purchaser. However, it is a condition
of delivery and sale that the Purchaser, immediately after such delivery, shall cause the Paying Agent/Registrar,
as provided for in this Ordinance, to cancel said Initial Bond and deliver in exchange therefor a substitute Bond
for each maturity of such Initial Bond, with each such substitute Bond to be registered in the name of CEDE
& CO., the nominee of DTC, and it shall be the duty of the Paying Agent/Registrar to take such action. It is
expected that DTC will hold the Bonds on behalf of the Purchaser and/or The DTC Participants, as defined
and described in the Official Statement referred to and approved in Section 15 hereof (the "DTC Participants").
So long as each Bond is registered in the name of CEDE & CO., the Paying Agent/Registrar shall treat and
deal with DTC in all respects the same as if it were the actual and beneficial owner thereof. It is expected that
DTC will maintain a book entry system which will identify beneficial ownership of the Bonds by DTC
Participants in integral amounts of $5,000, with transfers of ownership being effected on the records of DTC
and the DTC Participants pursuant to rules and regulations established by them, and that the substitute Bonds
initially deposited with DTC shall be immobilized and not be further exchanged for substitute Bonds except
as hereinafter provided. The Issuer is not responsible or liable for any functions of DTC, will not be
responsible for paying any fees or charges with respect to its services, will not be responsible or liable for
maintaining, supervising, or reviewing the records of DTC or the DTC Participants, or protecting any interests
or rights of the beneficial owners of the Bonds. It shall be the duty of the Purchaser and the DTC Participants
to make all arrangements with DTC to establish this book-entry system, the beneficial ownership of the Bonds,
and the method of paying the fees and charges of DTC. The Issuer does not represent, nor does it in any way
covenant that the initial book-entry system established with DTC will be maintained in the future. The Issuer
reserves the right and option at any time in the future, in its sole discretion, to terminate the DTC (CEDE &
25
CO.) book-entry only registration requirement described above, and to permit the Bonds to be registered in the
name of any owner. If the Issuer exercises its right and option to terminate such requirement, it shall give
written notice of such termination to the Paying Agent/Registrar and to DTC, and thereafter the Paying
Agent/Registrar shall, upon presentation and proper request, register any Bond in any name as provided for
in this Ordinance. Notwithstanding the initial establishment of the foregoing book-entry system with DTC, if
for any reason any of the originally delivered substitute Bonds is duly filed with the Paying Agent/Registrar
with proper request for transfer and substitution, as provided for in this Ordinance, substitute Bonds will be
duly delivered as provided in this Ordinance, and there will be no assurance or representation that any
book-entry system will be maintained for such Bonds.
Section 19. CONTINUING DISCLOSURE. (a) Annual Reports. (i) The Issuer shall provide
annually to each NRMSIR and any SID, within six months after the end of each fiscal year ending in or after
2007, financial information and operating data with respect to the Issuer ofthe general type included in the final
Official Statement authorized by Section 15 of this Ordinance, being the information described in the Pricing
Certificate. Any financial statements so to be provided shall be (1) prepared in accordance with the accounting
principles described in the financial statements appended to the Official Statement, or such other accounting
principles as the Issuer may be required to employ from time to time pursuant to state law or regulation, and
(2) audited, if the Issuer commissions an audit of such statements and the audit is completed within the period
during which they must be provided. If the audit of such financial statements is not complete within such
period, then the Issuer shall provide unaudited financial statements by the required time and will provide
audited financial statements for the applicable fiscal year to each NRMSIR and any SID, when and if the audit
report on such statements become available.
(ii) If the. Issuer changes its fiscal year, it will notify each NRMSIR and any SID of the change (and
of the date of the new fiscal year end) prior to the next date by which the Issuer otherwise would be required
to provide financial information and operating data pursuant to this Section. The financial information and
operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may
be included by specific reference to any document (including an official statement or other offering document,
if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed
with the SEC.
(b) Material Event Notices. The Issuer shall notify any SID and each NRMSIR, in a timely manner,
of any of the following events with respect to the Bonds, if such event is material within the meaning of the
federal securities laws:
Principal and interest payment delinquencies;
Non-payment related defaults;
Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
26
Modifications to rights of holders of the Bonds;
8. Bond calls;
Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds; and
11. Rating changes.
The Issuer shall notify any SID and each NRMSIR, in a timely manner, of any failure by the Issuer to provide
financial information or operating data in accordance with subsection (a) of this Section by the time required
by such subsection.
(c) Limitations. Disclaimers, and Amendments. (i) The Issuer shall be obligated to observe and
perform the covenants specified in this Section for so long as, but only for so long as, the Issuer remains an
"obligated person" with respect to the Bonds within the meaning of the Rule, except that the Issuer in any event
will give the notice required by Subsection (b) hereof of any Bond calls and defeasance that cause the Issuer
to no longer be such an "obligated person".
(ii) The provisions of this Section are for the sole benefit of the registered owners and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or
equitable right, remedy, or claim hereunder to any other person. The Issuer undertakes to provide only the
financial information, operating data, financial statements, and notices which it has expressly agreed to provide
pursuant to this Section and does not hereby undertake to provide any other information that may be relevant
or material to a complete presentation of the Issuer's financial results, condition, or prospects or hereby
undertake to update any information provided in accordance with this Section or otherwise, except as expressly
provided herein. The Issuer does not make any representation or warranty concerning such information or its
usefulness to a decision to invest in or sell Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER, ITS OFFICERS, AGENTS AND
EMPLOYEES, BE LIABLE TO THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY
BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN
WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR
WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY
RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT
OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
(iv) No default by the Issuer in observing or performing its obligations under this Section shall
comprise a breach of or default under the Ordinance for purposes of any other provision of this Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the Issuer
under federal and state securities laws.
(v) The provisions ofthis Section maybe 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 ofthis Section, as so amended,
27
would have pernutted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in
compliance with the Rule, taking into account any amendments or interpretations of the Rule since such
offering as well as such changed circumstances and (2) either (a) the registered owners of a majority in
aggregate principal amount (or any greater amount required by any other provision of this Ordinance that
authorizes such an amendment) of the outstanding Bonds consent to such amendment or (b) a person that is
unaffiliated with the Issuer (such as nationally recognized bond counsel) determined that such amendment will
not materially impair the interest of the registered owners and beneficial owners of the Bonds. If the Issuer so
amends the provisions of this Section, it shall include with any amended financial information or operating data
next provided in accordance with subsection (a) of this Section an explanation, in narrative form, ofthe 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 ofthe Rule or a court of final jurisdiction enters judgment that
such provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would
not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds.
below:
(d) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staffhas determined to be a nationally recognized
municipal securities information repository within the meaning of the Rule from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department, officer, or
agency thereof as, and determined by the SEC or its staff to be, a state information depository within the
meaning of the Rule from time to time.
Section 20. PROTECTION OF PLEDGE. Chapter 1208, Government Code, applies to the issuance
of the Bonds and the pledge of the taxes granted by the Issuer under Section 8 of this Ordinance, and is
therefore valid, effective, and perfected. If Texas law is amended at any time while the Bonds are outstanding
and unpaid such that the pledge of the taxes granted by the Issuer under Section 8 of this Ordinance is to be
subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, then in order to preserve
to the registered owners of the Bonds the perfection of the security interest in said pledge, the Issuer agrees to
take such measures as it determines are reasonable and necessary under Texas law to comply with the
applicable provisions of Chapter 9, Texas Business & Commerce Code and enable a filing to perfect the
security interest in said pledge to occur.
Section 21. FURTHER PROCEDURES. The Mayor of the Issuer, the City Secretary of the Issuer,
and all other officers, employees, and agents of the Issuer, and each of them, shall be and they are hereby
expressly authorized, empowered, and directed from time to time and at any time to do and perform alJ such
acts and things and to execute, acknowledge, and deliver in the name and under the corporate seal and on behalf
of the Issuer all such instruments, whether or not herein mentioned, as may be necessary or desirable in order
to carry out the terms and provisions of this Ordinance, the Bonds, the sale of the Bonds, and the Official
28
Statement; and the Assistant City Manager of the City shall cause the expenses of issuance of the Bonds to be
paid from the proceeds of sale of the initial Bond or from any other lawfully available funds of the Issuer. In
case any officer whose signature shall appear on any Bond shall cease to be such officer before the delivery
of such Bond, such signature shall nevertheless be valid and sufficient for all purposes the same as if such
officer had remained in office until such delivery.
Section 22. OPEN MEETINGS. The City Council has found and determined that the meeting at
which this Ordinance is considered is open to the public and that notice thereof was given in accordance with
the provisions of the Texas Open Meetings, Law, Tex. Gov't. Code, Chapter 551, as amended.
Section 23. EFFECTIVE DATE. This Ordinance shall become effective immediately upon its passage
and approval.
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PASSED AND APPROVED this the 17th July, 2007.
rry R. eill, Mayor
ATTEST:
Jennifer Walters, City Secretary
By.
APPROVED AS TO LEGAL FORM:
Edi
By:
SCHEDULEI
City of Denton Certificates of Obligation, Series 1998
Principal Amount
Maturity Date
Outstanding
2/15/2012
$70,000
2/15/2013
75,000
2/15/2016
255,000
2/15/2018
195,000
Total
$595,000
City of Denton General
Obligation Bonds, Series 1998
Principal Amount
Maturity Date
Outstanding
2/15/2012
$480,000
2/15/2013
480,000
2/15/2014
480,000
2/15/2015
480,000
2/15/2017
480,000
2/15/2018
480,000
Total $3,360,000
City of Denton Certificates of Obligation, Series 1999
Principal Amount
Maturity Date
Outstanding
2/15/2013
$295,000
2/15/2014
295,000
2/15/2015
295,000
2/15/2016
295,000
2/15/2017
295,000
2/15/2018
295,000
2/15/2019
295,000
Total $2,065,000
City of Denton General Obligation Bonds, Series 1999
Principal Amount
Maturity Date
Outstanding
2/15/2013
$410,000
2/15/2014
410,000
2/15/2015
410,000
2/15/2016
410,000
2/15/2017
410,000
2/15/2018
410,000
2/15/2019
410,000
Total
$2,870,000
City of Denton Certificates of Obligation, Series 2001
Principal Amount
Maturity Date
Outstanding
2/15/2014
$265,000
2/15/2015
260,000
2/15/2016
260,000
2/15/2017
260,000
2/15/2018
260,000
2/15/2019
260,000
2/15/2020
260,000
2/15/2021
260,000
Total
$2,085,000
City of Denton General Obligation Bonds, Series 2001
Principal Amount
Maturity Date
Outstanding
2/15/2014
$715,000
2/15/2015
715,000
2/15/2016
715,000
2/15/2017
715,000
2/15/2018
715,000
2/15/2019
715,000
2/15/2020
715,000
2/15/2021
715.000
Total $5,720,000
City of Denton Certificates of Obligation, Series 2002
Principal Amount
Maturity Date
Outstanding
2/15/2015
$475,000
2/15/2016
495,000
2/15/2017
520,000
2/15/2018
555,000
2/15/2019
580,000
2/15/2020
610,000
2/15/2021
645,000
2/15/2022
680.000
Total $4,560,000
City of Denton General Obligation Bonds, Series 2002
Principal Amount
Maturity Date
Outstanding
2/15/2015
$670,000
2/15/2016
705,000
2/15/2017
745,000
2/15/2018
785,000
2/15/2020
1,695,000
2/15/2022
1.890.000
Total $6,490,000
EXHIBIT A
NOTICE OF PRIOR REDEMPTION
THE CITY OF DENTON, TEXAS
NOTICE IS HEREBY GIVEN that the City of Denton, Texas has called for redemption the outstanding
Certificates or Bonds of the City described as follows:
[City of Denton General Obligation Bonds, Series , dated , scheduled to mature on
February 15, through February 15, aggregating $ (and being all of the outstanding bonds of said
series scheduled to mature on and after February 15,
Call date: ; redeemable at a redemption price of par plus accrued interest at the
principal corporate offices of The Bank of New York Trust Company, N.A., only upon presentation by the owner
thereof.]
[City of Denton Certificates of Obligation, Series dated , scheduled to mature on
February 15, through February 15, , aggregating $ (and being all of the outstanding bonds
of said series scheduled to mature on and after February 15,
Call date: ; redeemable at a redemption price of par plus accrued interest at the
principal corporate offices of The Bank of New York Trust Company, N.A., only upon presentation by the owner
thereof.]
If moneys sufficient for the payment of such redemption price are held by or on behalf of the paying agent, the
described Bonds shall become due and payable on the redemption date specified, and the interest thereon shall cease
to accrue from and after the redemption date.
In compliance with section 3406 of the Internal Revenue Code of 1986, payors making certain payments due
on debt securities may be obligated to deduct and withhold 30 percent of such payment from the remittance to any
payee who has failed to provide such payor with a valid taxpayer identification number. To avoid the imposition of
the withholding of tax, such payees should submit a taxpayer identification number when surrendering the bonds for
redemption.
NOTICE IS FURTHER GIVEN that all Bonds should be submitted to the following address:
The Bank of New York Trust Company, National Association
(successor to JPMorgan Chase Bank, N.A.)
2001 Bryan Street, 10th Floor
Dallas, Texas 75201
Attn:
Dated: 12007 By: The Bank of New York Trust Company, National Association
CERTIFICATE FOR
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELIVERY OF "CITY OF DENTON GENERAL
OBLIGATION REFUNDING BONDS, SERIES 2007"; ESTABLISHING PARAMETERS
FOR THE REDEMPTION OF CERTAIN OUTSTANDING OBLIGATIONS OF THE
CITY; AUTHORIZING THE ISSUANCE OF THE BONDS; APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID BONDS;
AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
We, the undersigned officers of said City, hereby certify as follows:
1. The City Council of said City convened in REGULAR MEETING ON THE 17TH DAY OF
JULY, 2007, at the Municipal Building (City Hall), and the roll was called of the duly constituted officers and
members of said City Council, to-wit:
Perry McNeill, Mayor Pete Kamp, Mayor Pro Tem
Jack Thomson Charlye Heggins
Bob Montgomery Chris Watts
Joe Mulroy
and all of said persons were present, except the following absentees: None, thus constituting a quorum.
Whereupon, among other business, the following was transacted at said Meeting: a written
ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO THE
ISSUANCE, SALE AND DELIVERY OF "CITY OF DENTON GENERAL OBLIGATION
REFUNDING BONDS, SERIES 2007; ESTABLISHING PARAMETERS FOR THE
REDEMPTION OF CERTAIN OUTSTANDING OBLIGATIONS OF THE CITY;
AUTHORIZING THE ISSUANCE OF THE BONDS; APPROVING AND AUTHORIZING
INSTRUMENTS AND PROCEDURES RELATINGTO SAID BONDS; AND ENACTING
OTHER PROVISIONS RELATING TO THE SUBJECT
was duly introduced for the consideration of said City Council and duly read. It was then duly moved and
seconded that said Ordinance be passed; and, after due discussion, said motion, carrying with it the passage
of said Ordinance, prevailed and carried by the following vote:
AYES: 7
NOES:
ABSTENTIONS: 0
2. That a true, full, and correct copy of the afec'esaid Ordinance passed 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 City Council's minutes of said Meeting; that the above and foregoing paragraph is a true, full,
and correct excerpt from said City Council's minutes of said Meeting pertaining to the passage of said
Ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified, and
acting officers and members of said City Council as indicated therein; and that each of the officers and
members of said City Council was duly and sufficiently notified officially and personally, in advance, of the
time, place, and purpose ofthe aforesaid Meeting, and that said Ordinance would be introduced and considered
for passage at said Meeting; and that said Meeting was open to the public, and public notice of the time, place,
and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code.
3. That the Mayor of said City has approved, and hereby approves, the aforesaid Ordinance; that the
Mayor and the City Secretary of said City have duly signed said Ordinance; and that the Mayor and the City
Secretary of said City hereby declare that their signing of this Bond shall constitute the signing of the attached
and following copy of said Ordinance for all purposes.
SIGNED AND SEALED the 17th day of July, 2007.
c
Arw r, I 9~
17
City ecretary Mayor
(SEAL)
We, the undersigned, being respectively the City Attorney and the Bond Attorneys of the City of
Denton, Texas, hereby certify that we prepared and approved legality the attached and following
Ordinance prior to its passage as aforesaid.