2011-054ORDINANCE NO. 2011-054
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELIVERY OF UP TO $10,845,000 IN PRINCIPAL
AMOUNT OF "CITY OF DENTON GENERAL OBLIGATION REFUNDING AND
IMPROVEMENT BONDS, SERIES 2011"; 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, by virtue of elections held within the City of Denton, Texas ("the Issuer") on February
5, 2005, this City Council became authorized to issue, sell and deliver the general obligation bonds of the
Issuer, of which there have been issued heretofore, are authorized to be issued by this Ordinance, and will
remain authorized but unissued hereafter, as described in Schedule I attached hereto and incorporated herein;
WHEREAS, this City Council finds and determines that it is necessary and proper to order the
issuance, sale and delivery of such voted bonds;
WHEREAS, the City has previously issued, and there are presently outstanding, revenue bonds of
the Issuer secured by a pledge of 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, certain of such previously issued and outstanding revenue bonds are intended to be and
shall be refunded pursuant to this Ordinance, the revenue bonds to be refunded being described in Schedule
II attached hereto and incorporated herein (collectively, 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 or similar agreement with such paying agent for the Refunded Obligations or trust company or
commercial bank with respect to the safekeeping, investment, reinvestment, administration and disposition
of any such deposit, upon such terms and conditions as the Issuer and such paying agent or trust company
or commercial bank may agree;
WHEREAS, The Bank of New York Mellon Trust Company, N.A. is the paying agent for the
Refunded Obligations, and the Escrow Agreement, wherein The Bank of New York Mellon Trust Company,
N.A. is the Escrow Agent, hereinafter authorized constitutes an escrow agreement of the kind authorized and
permitted by said Chapter 1207;
WHEREAS, the City Council hereby finds and declares a public purpose and it is in the best interests
of the Issuer to refund the Refunded Obligations is in order to achieve a debt service savings and to
restructure the Issuer's outstanding debt service, and that such refunding will result in a present value debt
service savings of approximately $ and an actual debt service savings of approximately
$ to the Issuer;
WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to maturity
within 20 years of the date of the bonds hereinafter authorized;
WHEREAS, the Bonds hereinafter authorized to be issued were voted and are to be issued, sold and
delivered pursuant to the general laws of the State of Texas, including Texas Government Code Chapters
1207 and 1331, as amended, and the Issuer's Home Rule Charter; and
WHEREAS, it is officially found, determined, and declared that the meeting at which this Ordinance
has been adopted was open to the public and public notice of the time, place and subject matter of the public
business to be considered and acted upon at said meeting, including this Ordinance, was given, all as required
by the applicable provisions of Texas Government Code Chapter 551; Now, Therefore
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
Section 1. RECITALS, AMOUNT AND PURPOSE OF THE BONDS. The recitals set forth in the
preamble hereof are incorporated herein and shall have the same force and effect as if set forth in this Section.
The Bonds of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and delivered in the
aggregate principal amount of $10,845,000, to wit: (i) $8,620,000 for the public purpose of refunding the
Refunded Obligations; (ii) for the purpose ofthe acquisition of property and making improvements for public
purposes in said Issuer, to wit: (a) $1,190,000 for street improvements and (b) $1,035,000 for park land
acquisitions and improvements, all in accordance with and subject to the election propositions authorizing
such bonds (the "Improvement Projects"); and (iii) to pay the costs incurred in connection with the issuance
of the Bonds (collectively, the "Projects").
Section 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND MATURITIES AND
INTEREST RATES OF BONDS. Each bond issued pursuant to this Ordinance shall be designated: "CITY
OF DENTON GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BOND, SERIES 2011,"
and initially there shall be issued, sold, and delivered hereunder one fully registered bond, without interest
coupons, dated April 1, 2011, in the principal amount stated above and in the denominations hereinafter
stated, numbered T-1 (the "Initial Bond"), with bonds issued in replacement thereof being in the
denominations and principal amounts hereinafter stated and numbered consecutively from R-1 upward,
payable to the respective Registered Owners thereof (with the Initial Bond being made payable to the
Purchaser as described in Section 10 hereof), or to the registered assignee or assignees of said Bonds or any
portion or portions thereof (in each case, the "Registered Owner"), and said Bonds shall mature and be
payable serially on February 15 in each of the years and in the principal amounts, respectively, and shall bear
interest from the dates set forth in the FORM OF BOND set forth in Section 4 of this Ordinance to their
respective dates of maturity or redemption prior to maturity at the rates per annum, as set forth in the
following schedule:
Principal Interest
Principal Interest
Years
Amount Rates
Years
Amount Rates
2012
$4,055,000 %
2022
$110,000 %
2013
550,000
2023
115,000
2014
570,000
2024
120,000
2015
575,000
2025
125,000
2016
600,000
2026
130,000
2017
615,000
2027
135,000
2018
600,000
2028
145,000
2019
615,000
2029
150,000
2020
640,000
2030
160,000
2021
670,000
2031
165,000
The term "Bonds" as used in this Ordinance shall mean and include collectively the bonds initially issued and
delivered pursuant to this Ordinance and all substitute bonds exchanged therefor, as well as all other substitute
bonds and replacement bonds issued pursuant hereto, and the term "Bond" shall mean any of the Bonds.
Section 3. CHARACTERISTICS OF THE BONDS.
(a) Registration, Transfer, Conversion and Exchange; Authentication. The Issuer shall keep or cause
to be kept at the principal corporate trust office of The Bank of New York Mellon Trust Company, National
Association, Dallas, Texas, (the "Paying Agent/Registrar"), books or records for the registration of the
transfer, conversion and exchange of the Bonds (the "Registration Books"), and the Issuer hereby appoints
the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such
registrations of transfers, conversions and exchanges under such reasonable regulations as the Issuer and
Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations,
transfers, conversions and exchanges as herein provided. The Paying Agent/Registrar shall obtain and record
in the Registration Books the address of the Registered Owner of each Bond to which payments with respect
to the Bonds shall be mailed, as herein provided; but it shall be the duty of each Registered Owner to notify
the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and such interest
payments shall not be mailed unless such notice has been given. The Issuer shall have the right to inspect
the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying
Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall
not permit their inspection by any other entity. The Issuer shall pay the Paying Agent/Registrar's standard
or customary fees and charges for making such registration, transfer, conversion, exchange and delivery of
a substitute Bond or Bonds. Registration of assignments, transfers, conversions and exchanges of Bonds shall
be made in the manner provided and with the effect stated in the FORM OF BOND set forth in this
Ordinance. Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond.
Except as provided in Section 3(c) of this Ordinance, an authorized representative of the Paying
Agent/Registrar shall, before the delivery of any such Bond, date and manually sign said Bond, and no such
Bond shall be deemed to be issued or outstanding unless such Bond is so executed. The Paying
Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered for conversion and exchange.
No additional ordinances, orders, or resolutions need be passed or adopted by the governing body of the
Issuer or any other body or person so as to accomplish the foregoing conversion and exchange of any Bond
or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of
the substitute Bonds in the manner prescribed herein, and said Bonds shall be printed or typed on paper of
customary weight and strength. Pursuant to Chapter 1201, Government Code, as amended, the duty of
conversion and exchange of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and,
upon the execution of said Bond, the converted and exchanged Bond shall be valid, incontestable, and
enforceable in the same manner and with the same effect as the Bonds that initially were issued and delivered
pursuant to this Ordinance, approved by the Attorney General of the State of Texas (the "Attorney General")
and registered by the Comptroller of Public Accounts of the State of Texas (the "Comptroller").
(b) Payment of Bonds and Interest. The Issuer hereby further appoints the Paying Agent/Registrar
to act as the paying agent for paying the principal of and interest on the Bonds, all as provided in this
Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the Issuer and
the Paying Agent/Registrar with respect to the Bonds, and of all conversions and exchanges of Bonds, and
all replacements of Bonds, as provided in this Ordinance. However, in the event of a nonpayment of interest
on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payment
(a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the
payment of such interest have been received from the Issuer. Notice of the past due interest shall be sent at
least five (5) business days prior to the Special Record Date by United States mail, first-class postage prepaid,
to the address of each Registered Owner appearing on the Registration Books at the close of business on the
last business day next preceding the date of mailing of such notice.
(c) In General. The Bonds (i) shall be issued in fully registered form, without interest coupons, with
the principal of and interest on such Bonds to be payable only to the Registered Owners thereof, (ii) may or
shall be redeemed prior to their scheduled maturities (notice of which shall be given to the Paying
Agent/Registrar by the Issuer at least 45 days prior to any such redemption date), (iii) may be converted and
exchanged for other Bonds, (iv) may be transferred and assigned, (v) shall have the characteristics, (vi) shall
be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Bonds shall be payable,
and (viii) shall be administered and the Paying Agent/Registrar and the Issuer shall have certain duties and
responsibilities with respect to the Bonds, all as provided, and in the manner and to the effect as required or
indicated, in the FORM OF BOND set forth in this Ordinance. The Initial Bond is not required to be, and
shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in conversion
of and exchange for any Bond or Bonds issued under this Ordinance the Paying Agent/Registrar shall execute
the Paying Agent/Registrar's Authentication Certificate, in the form set forth in the FORM OF BOND.
(d) Paing_Asent/Registrar for the Bonds. 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 entity 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 a single
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 promptly it will appoint a competent and legally
qualified bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar under
this Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar
promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent
books and records relating to the 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.
(e) Authentication. Except as provided below, no Bond shall be valid or obligatory for any purpose
or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Paying
Agent/Registrar's Authentication Certificate substantially in the form provided in this Ordinance, duly
authenticated by manual execution of the Paying Agent/Registrar. It shall not be required that the same
authorized representative of the Paying Agent/Registrar sign the Paying Agent/Registrar's Authentication
Certificate on all of the Bonds. In lieu of the executed Paying Agent/Registrar's Authentication Certificate
described above, the Initial Bond delivered on the closing date shall have attached thereto the Comptroller's
Registration Certificate substantially in the form provided in this Ordinance, manually executed by the
Comptroller or by her duly authorized agent, which certificate shall be evidence that the Initial Bond has been
duly approved by the Attorney General and that it is a valid and binding obligation of the Issuer, and has been
registered by the Comptroller.
(f) Book-Entry-Only System. The Bonds issued in exchange for the Initial Bond shall be initially
issued in the form of a separate single fully registered Bond for each of the maturities thereof. Upon initial
issuance, the ownership of each such Bond shall be registered in the name of Cede & Co., as nominee of The
Depository Trust Company, New York, New York ("DTC"), and except as provided in subsection (g) hereof,
all of the outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the Issuer and the
Paying Agent/Registrar shall have no responsibility or obligation to any securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations on whose behalf DTC was created
("DTC Participant") to hold securities to facilitate the clearance and settlement of securities transactions
among DTC Participants or to any person on behalf of whom such a DTC Participant holds an interest in the
Bonds. Without limiting the immediately preceding sentence, the Issuer and the Paying Agent/Registrar shall
have no responsibility or obligation with respect to (i) the accuracy ofthe records of DTC, Cede & Co. or any
DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant
or any other person, other than a Registered Owner of Bonds, as shown on the Registration Books, of any
notice with respect to the Bonds, or (iii) the payment to any DTC Participant or any other person, other than
a Registered Owner of Bonds, as shown in the Registration Books of any amount with respect to principal
of or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the Issuer
and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond
is registered in the Registration Books as the absolute owner of such Bond for the purpose of payment of
principal and interest with respect to such Bond, for the purpose of registering transfers with respect to such
Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and
interest on the Bonds only to or upon the order of the Registered Owners, as shown in the Registration Books
as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments
shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of
principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than a
Registered Owner, as shown in the Registration Books, shall receive a B and evidencing the obligation of the
Issuer to make payments of principal and interest pursuant to this Ordinance. Upon delivery by DTC to the
Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee
in place of Cede & Co., and subject to the provisions in this Ordinance with respect to interest checks being
mailed to the Registered Owner at the close of business on the Record Date, the words "Cede & Co." in this
Ordinance shall refer to such new nominee of DTC.
The previous execution and delivery of the Blanket Issuer Letter of Representations with respect to
obligations of the Issuer is hereby ratified and confirmed; and the provisions thereof shall be fully applicable
to the Bonds.
(g) Successor Securities Depository: Transfers Outside Book-Entry-Only System. In the event that
the Issuer determines that DTC is incapable of discharging its responsibilities described herein and in the
Blanket Issuer Letter of Representations to DTC or that it is in the best interest of the beneficial owners of
the Bonds that they be able to obtain certificated Bonds, the Issuer shall (i) appoint a successor securities
depository, qualified to act as such under Section 17A of the Securities and Exchange Act -of 1934, as
amended, notify DTC and DTC Participants of the appointment of such successor securities depository and
transfer one or more separate Bonds to such successor securities depository or (ii) notify DTC and DTC
Participants of the availability through DTC of Bonds and transfer one or more separate certificated Bonds
to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer
be restricted to being registered in the Registration Books in the name of Cede & Co., as nominee of DTC,
but may be registered in the name of the successor securities depository, or its nominee, or in whatever name
or names Registered Owners transferring or exchanging Bonds shall designate, in accordance with the
provisions of this Ordinance.
(h) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary,
so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect
to principal of and interest on such Bond and all notices with respect to such Bond shall be made and given,
respectively, in the manner provided in the Blanket Issuer Letter of Representations to DTC.
(i) Cancellation of Initial Bond. On the closing date, the Initial Bond, representing the entire
principal amount of the Bonds, payable in stated installments to the purchaser designated in Section 10 or its
designee, executed by manual or facsimile signature of the Mayor and City Secretary of the Issuer, approved
by the Attorney General, and registered and manually signed by the Comptroller, will be delivered to such
purchaser or its designee. Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the
Initial Bond and deliver to DTC on behalf of such purchaser one registered definitive Bond for each year of
maturity of the Bonds, in the aggregate principal amount of all of the Bonds for such maturity. To the extent
that the Paying Agent/Registrar is eligible to participate in DTC's FAST System, pursuant to an agreement
between the Paying Agent/Registrar and DTC, the Paying Agent/Registrar shall hold the definitive Bonds
in safekeeping for DTC.
0) Conditional Notice of Redemption. With respect to any optional redemption of the Bonds, unless
the prerequisites to such redemption required by this Ordinance have been met and moneys sufficient to pay
the principal of and premium, if any, and interest on the Bonds to be redeemed shall have been received by
the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice shall state that said
redemption may, at the option of the Issuer, be conditional upon the satisfaction of such prerequisites and
receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for such redemption, or
upon any prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given
and such prerequisites to the redemption and sufficient moneys are not received, such notice shall be of no
force and effect, the Issuer shall not redeem such Bonds and the Paying Agent/Registrar shall give notice, in
the manner in which the notice of redemption was given, to the effect that the Bonds have not been redeemed.
Section 4. FORM OF BONDS. The form of the Bonds, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Comptroller's
Registration Certificate to be attached to the Bonds initially issued and delivered pursuant to this Ordinance,
shall be, respectively, substantially as follows, with such appropriate variations, omissions or insertions as
are permitted or required by this Ordinance.
(a) [Form of Bond]
6
NO. R- UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
CITY OF DENTON $
GENERAL OBLIGATION
REFUNDING AND IMPROVEMENT BOND
SERIES 2011
Interest Rate Dated Date Maturity Date CUSIP No.
April 1, 2011 February 15,
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
ON THE MATURITY DATE specified above, the City of Denton, in Denton County, Texas (the
"Issuer"), being a political subdivision and municipal corporation of the State of Texas, hereby promises to
pay to the Registered Owner specified above, or registered assigns (hereinafter called the "Registered
Owner"), on the Maturity Date specified above, the Principal Amount specified above. The Issuer promises
to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-day year of twelve 30-
day months) from April 1, 2011 at the Interest Rate per annum specified above. Interest is payable on
February 15, 2012 and semiannually on each August 15 and February 15 thereafter to the Maturity Date
specified above, or the date of redemption prior to maturity; except, if this Bond is required to be
authenticated and the date of its authentication is later than the first Record Date (hereinafter defined), such
Principal Amount shall bear interest from the interest payment date next preceding the date of authentication,
unless such date of authentication is after any Record Date but on or before the next following interest
payment date, in which case such principal amount shall bear interest from such next following interest
payment date; provided, however, that if on the date of authentication hereof the interest on the Bond or
Bonds, if any, for which this Bond is being exchanged is due but has not been paid, then this Bond shall bear
interest from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the United
States of America, without exchange or collection charges. The principal of this Bond shall be paid to the
Registered Owner hereof upon presentation and surrender of this Bond at maturity, or upon the date fixed for
its redemption prior to maturity, at the principal corporate trust office of The Bank of New York Mellon 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 or draft, dated as of such interest payment date, drawn by the Paying
Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing the
issuance of this Bond (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such
purpose as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by
United States mail, first-class postage prepaid, on each such interest payment date, to the Registered Owner
hereof, at its address as it appeared on the last business day of the month preceding each such date (the
"Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In
addition, interest may be paid by such other method, acceptable to the Paying Agent/Registrar, requested by,
and at the risk and expense of, the Registered Owner. In the event of a non-payment of interest on a
scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special
Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such
interest have been received from the Issuer. Notice of the Special Record Date and of the scheduled payment
date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five
business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the
address of each Registered Owner of a Bond appearing on the Registration Books at the close of business on
the last business day next preceding the date of mailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Bond prior to maturity
as provided herein shall be paid to the Registered Owner upon presentation and surrender of this Bond for
redemption and payment at the 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.
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 principal corporate trust
office ofthe Paying Agent/Registrar is located are authorized by law or executive order to close, then the date
for such payment shall be the next succeeding day that is not such a Saturday, Sunday, legal holiday or day
on which banking institutions are authorized to close; and payment on such date shall have the same force
and effect as if made on the original date payment was due.
THIS BOND is one of a series of Bonds dated April 1, 2011, authorized in accordance with the
Constitution and laws of the State of Texas in the principal amount of $10,845,000 for the public purposes
of (i) refunding certain outstanding obligations of the Issuer, (ii) the acquisition of property and making
improvements for public purposes in the Issuer, to wit: street improvements and park land acquisitions and
improvements, and (iii) paying the costs incurred in connection with the issuance of the Bonds.
ON FEBRUARY 15, 2021, or on any date 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 a redemption price equal to the principal amount to be redeemed plus accrued
interest to the date fixed for redemption.
AT LEAST 30 days prior to the date fixed for any redemption of 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 of the Registered
Owner to receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the
validity or effectiveness of the proceedings for the redemption of any Bond. By the date fixed for any such
redemption due provision shall be made with the Paying Agent/Registrar for the payment of the required
redemption price for the Bonds or portions thereof that are to be so redeemed. If such written notice of
redemption is sent and if due provision for such payment is made, all as provided above, the Bonds or
portions thereof that are to be so redeemed thereby automatically shall be treated as redeemed prior to their
scheduled maturities, and they shall not bear interest after the date fixed for redemption, and they shall not
be regarded as being outstanding except for the right of the Registered Owner to receive the redemption price
from the Paying Agent/Registrar out of the funds provided for such payment. If a portion of any Bond shall
be redeemed, a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in
any denomination or denominations in any integral multiple of $5,000, at the written request ofthe Registered
Owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the
Registered Owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as provided
in the Bond Ordinance.
IF AT THE TIME OF MAILING of notice of optional redemption there shall not have either been
deposited with the Paying Agent/Registrar or legally authorized escrow agent immediately available funds
sufficient to redeem all the Bonds called for redemption, such notice may state that it is conditional, and is
subject to the deposit ofthe redemption moneys withthe Paying Agent/Registrar or legally authorized escrow
agent at or prior to the redemption date. If such redemption is not effectuated, the Paying Agent/Registrar
shall, within five days thereafter, give notice in the manner in which the notice of redemption was given that
such moneys were not so received and shall rescind the redemption.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond Ordinance, this
Bond may, at the request of the Registered Owner or the assignee or assignees hereof, be assigned,
transferred, converted into and exchanged for a like aggregate principal amount of fully registered Bonds,
without interest coupons, payable to the appropriate Registered Owner, assignee or assignees, as the case may
be, having the same denomination or denominations in any integral multiple of $5,000 as requested in writing
by the appropriate Registered Owner, assignee or assignees, as the case may be, upon surrender of this Bond
to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in
the Bond Ordinance. Among other requirements for such assignment and transfer, this Bond must be
presented and surrendered to the Paying Agent/Registrar, together with proper instruments of assignment,
in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment
of this Bond or any portion or portions hereof in 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 registered. The Form
of Assignment printed or endorsed on this Bond may be executed by the Registered Owner to evidence the
assignment hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the
Paying Agent/Registrar may be used to evidence the assignment of this Bond or any portion or portions
hereof from time to time by the Registered Owner. The Paying Agent/Registrar's reasonable standard or
customary fees and charges for assigning, transferring, converting and exchanging any Bond or portion
thereof will be paid by the Issuer. In any circumstance, any taxes or governmental charges required to be paid
with respect thereto shall be paid by the one requesting such assignment, transfer, conversion or exchange,
as a condition precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be required
to make any such transfer, conversion, or exchange (i) during the period commencing with the close of
business on any Record Date and ending with the opening of business on the next following principal or
interest payment date, or (ii) with respect to any Bond or any portion thereof called for redemption prior to
maturity, within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will appoint
a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed to the
Registered Owners of the Bonds.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly authorized,
issued and delivered; that all acts, conditions and things required or proper to be performed, exist and be done
precedent to or in the authorization, issuance and delivery ofthis Bond have been performed, existed and been
done in accordance with law; and that annual ad valorem taxes sufficient to provide for the payment of the
interest on and principal of this Bond, as such interest comes due and such principal matures, have been
levied and ordered to be levied against all taxable property in said Issuer, and have been pledged for such
payment, within the limit prescribed by law.
THE ISSUER HAS RESERVED THE RIGHT to amend the Bond Ordinance as provided therein,
and under some (but not all) circumstances amendments thereto must be approved by the Registered Owners
of a majority in aggregate principal amount of the outstanding Bonds.
BY BECOMING the Registered Owner of this Bond, the Registered Owner thereby acknowledges
all of the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions,
acknowledges that the Bond Ordinance is duly recorded and available for inspection in the official minutes
and records of the governing body of the Issuer, and agrees that the terms and provisions of this Bond and
the Bond Ordinance constitute a contract between each Registered Owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or facsimile
signature of the Mayor of the Issuer (or in the Mayor's absence, of the Major Pro-Tem) and countersigned
with the manual or facsimile signature of the City Secretary of said Issuer, and has caused the official seal
of the Issuer to be duly impressed, or placed in facsimile, on this Bond.
(signature)
City Secretary
(SEAL)
(signature)
Mayor
(b) [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 Comptroller's Registration Certificate)
It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance
described in the text of this Bond; and that this Bond has been issued in conversion or replacement of, or in
exchange for, a bond, bonds, or a portion of a bond or bonds of a series that originally was approved by the
Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of
Texas.
Dated:
The Bank of New York Mellon Trust Company,
National Association, Dallas, Texas
Paying Agent/Registrar
BY:
(c) [Form of Assignment]
Authorized Representative
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer Identification Number of Transferee
to
(Please print or typewrite name and address, including zip code, of Transferee.)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney, to register the transfer of the within Bond
on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an NOTICE: The signature above must correspond
eligible guarantor institution participating in a with the name of the Registered Owner as it
securities transfer association recognized appears upon the front of this bond in every
signature guarantee program. particular, without alteration or enlargement or any
change whatsoever.
(d) [Form of Comptroller's Registration Certificate]
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)
(e) [Initial Bond Insertions]
(i) The Initial Bond shall be in the form set forth in paragraph (a) of this Section, except that:
A. immediately under the name of the Bond, the headings "Interest Rate" and "Maturity
Date" shall both be completed with the words "As shown below" and "CUSIP No. " shall
be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"THE CITY OF DENTON, TEXAS, in Denton County, Texas (the "Issuer"), being a political subdivision
and municipal corporation of the State of Texas, hereby promises to pay to the Registered Owner specified
above, or registered assigns (hereinafter called the "Registered Owner"), on February 15 in each of the years,
in the principal installments and bearing interest at the per annum rates set forth in the following schedule:
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Years Principal Installments Interest Rates
(Information from Section 2 to be inserted)
The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-
day year of twelve 30-day months) from April 1, 2011 at the respective Interest Rate per annum specified
above. Interest is payable on February 15, 2012, and semiannually on each August 15 and February 15
thereafter to the date of payment of the principal installment specified above, or the date of redemption prior
to maturity; except, that if this Bond is required to be authenticated and the date of its authentication is later
than the first Record Date (hereinafter defined), such Principal Amount shall bear interest from the interest
payment date next preceding the date of authentication, unless such date of authentication is after any Record
Date but on or before the next following interest payment date, in which case such principal amount shall bear
interest from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being exchanged is
due but has not been paid, then this Bond shall bear interest from the date to which such interest has been paid
in full."
C. The Initial Bond shall be numbered "T 1."
Section 5. INTEREST AND SINKING FUND.
(a) 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. 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
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). Said tax shall be based on the latest approval 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. Notwithstanding the requirements of this Section, if
Surplus Revenues or other lawfully available moneys of the Issuer are actually on deposit or budgeted and
appropriated to be deposited in the Interest and Sinking Fund in advance of the time when ad valorem taxes
are scheduled to be levied for any year, then the amount of taxes that otherwise would have been required
to be levied pursuant to this Section may be reduced to the extent and by the amount of the Surplus Revenues
or other lawfully available funds then on deposit or budgeted and appropriated to be deposited in the Interest
and Sinking Fund. For purposes of this Section, "Surplus Revenues" means revenues derived by the Issuer
from the ownership and operation of the Issuer's Utility System (consisting of its combined waterworks
system, sanitary sewer system, and electric light and power system) that remain after the payment of all
maintenance and operation expenses thereof, and all debt service, reserve and other requirements in
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connection with all of the Issuer's revenue obligations (now or hereafter outstanding) or contractual
obligations (now or hereafter existing) which are payable from all or any part of the net revenues of the
Issuer's Utility System. If Surplus Revenues are budgeted and appropriated for deposit into the Interest and
Sinking Fund, the Issuer:
(i) shall transfer and deposit in the Interest and Sinking Fund each month an amount of not less than
1/12th of the annual debt service on the Bonds to be paid from Surplus Revenues until the amount on
deposit in the Interest and Sinking Fund equals the amount required for annual debt service on the
Bonds;
(ii) shall establish, adopt and maintain an annual budget that provides for either the monthly deposit
of sufficient Surplus Revenues and/or tax revenues, the monthly deposit of any other legally available
funds on hand at the time of the adoption of the annual budget, or a combination thereof, into the
Interest and Sinking Fund for the repayment of the Bonds; and
(iii) shall at all times maintain and collect sufficient Utility System rates and charges in conjunction
with any other legally available funds that, after payment of the costs of operating and maintaining the
Utility System, produce revenues in an amount not less than the debt service requirements of all
outstanding Utility System revenue bonds of the Issuer and other obligations of the Issuer which are
secured in whole or in part by a pledge of revenues of the Utility System and for which the Issuer is
budgeting the repayment of such obligations from the revenues of the Utility System, or the Issuer shall
provide documentation which evidences the levy of an ad valorem tax rate dedicated to the Interest and
Sinking Fund, in conjunction with any other legally available funds except Utility System rates and
charges, sufficient for the repayment of Utility System debt service requirements.
(b) Chapter 1208, Texas Government Code, applies to the issuance of the Bonds and the pledge of the
taxes granted by the Issuer under this Section and Section 9, respectively, and is therefore valid, effective,
and perfected. Should Texas law be amended at any time while the Bonds are outstanding and unpaid, the
result of such amendment being that the pledge of the taxes granted by the Issuer under this Section is to be
subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, in order to preserve to
the Registered Owners of the Bonds a 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 of a security interest in said pledge to
occur.
Section 6. 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, when payment of the principal of such Bond, plus interest thereon to the due date (whether
such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to be made in
accordance with the terms thereof, or (ii) shall have been provided for on or before such due date by
irrevocably depositing with or making available to the Paying Agent/Registrar in accordance with an escrow
agreement or other instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the
United States of America sufficient to make such payment or (2) Government Obligations that mature as to
principal and interest in such amounts and at such times as will insure the availability, without reinvestment,
of sufficient money to provide for such payment, and when proper arrangements have been made by the
Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased Bonds shall have
become due and payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as
aforesaid, such Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the
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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. Notwithstanding any other
provision of this Ordinance to the contrary, it is hereby provided that any determination not to redeem
Defeased Bonds that is made in conjunction with the payment arrangements specified in Subsection (a)(i) or
(ii) of this Section shall not be irrevocable, provided that: (1) in the proceedings providing for such payment
arrangements, the Issuer expressly reserves the right to call the Defeased Bonds for redemption; (2) gives
notice of the reservation of that right to the Registered Owners of the Defeased Bonds immediately following
the making of the payment arrangements; and (3) directs that notice of the reservation be included in any
redemption notices that it authorizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer
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 that is not required for
the payment of the Bonds and interest thereon, with respect to which such money has been so deposited, shall
be turned over to the Issuer, or deposited as directed in writing by the Issuer. Any Future Escrow Agreement
pursuant to which the money and/or Government Obligations are held for the payment of Defeased Bonds
may contain provisions permitting the investment or reinvestment of such moneys in Government Obligations
or the substitution of other Government Obligations upon the satisfaction of the requirements specified in
Subsection (a)(i) or (ii) of this Section. All income from such Government Obligations received by the
Paying Agent/Registrar which is not required for the payment of the Defeased Bonds, with respect to which
such money has been so deposited, shall be remitted to the Issuer or deposited as directed in writing by the
Issuer.
(c) The term "Government Obligations" means (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 instrumentality and that, on the date the
governing body of the Issuer 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, and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political
subdivision of a state that have been refunded and that, on the date the governing body of the Issuer 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.
(e) In the event that the Issuer elects to defease less than all of the principal amount of Bonds of a
maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Bonds by such
random method as it deems fair and appropriate.
Section 7. 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.
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(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
furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may be required by them
to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft
or destruction of a Bond, the Registered Owner shall furnish to the Issuer and to the Paying Agent/Registrar
evidence to their satisfaction of the loss, theft or destruction of such Bond, as the case may be. In every case
of damage or mutilation of a Bond, the Registered Owner shall surrender to the Paying Agent/Registrar for
cancellation the Bond so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Ordinance, in the event
any such Bond shall have matured, and no default has occurred that is then continuing in the payment of the
principal of, redemption premium, if any, or interest on the Bond, the Issuer may authorize the payment of
the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing
a replacement Bond, provided security or indemnity is furnished as above provided in this Section.
(d) Charge for 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 Sec. 1206.022, Government Code,
this Section 7 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 3(a) of this Ordinance for Bonds issued in conversion and exchange for
other Bonds.
Section 8. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND COUNSEL'S
OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION, IF OBTAINED;
ENGAGEMENT OF BOND COUNSEL.
(a) The Mayor of the Issuer is hereby authorized to have control of the Initial Bond and all necessary
records and proceedings pertaining to the Bonds pending its delivery and its investigation, examination, and
approval by the Attorney General, and its registration by the Comptroller. Upon registration of the Initial
Bond said Comptroller (or a deputy designated in writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate attached to such Bond, and the seal of said Comptroller shall be
impressed, or placed in facsimile, on such Bond. The approving legal opinion of the Issuer's Bond Counsel
and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Bonds issued and
delivered under this Ordinance, but neither shall have any legal effect, and shall be solely for the convenience
and information of the Registered Owners of the Bonds. In addition, if bond insurance is obtained, the Bonds
may bear an appropriate legend as provided by the insurer.
(b) The obligation of the initial purchaser to accept delivery of the Bonds is subject to the initial
purchaser being furnished with the final, approving opinion of McCall, Parkhurst & Horton L.L.P., bond
counsel to the Issuer, which opinion shall be dated as of and delivered on the date of initial delivery of the
15
Bonds to the initial purchaser. The engagement of such firm as bond counsel to the Issuer in connection with
the issuance, sale and delivery of the Bonds is hereby approved and confirmed. The execution and delivery
of an engagement letter between the Issuer and such firm, with respect to such services as bond counsel, is
hereby authorized in such form as may be approved by the Mayor, and the Mayor is hereby authorized to
execute such engagement letter.
Section 9. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE BONDS.
(a) Covenants. The Issuer covenants to take any action necessary to assure, or refrain from any action
that would adversely affect, the treatment of the Bonds as 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:
(1) to take any action to assure that no more than 10 percent of the proceeds of the Bonds (less
amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in
section 141(b)(6) of the Code or, if more than 10 percent of the proceeds or the projects financed or
refinanced therewith are so used, such amounts, whether or not received by the Issuer, with respect to
such private business use, do not, under the terms of this Ordinance or any underlying arrangement,
directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on
the Bonds, in contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use" described in
subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the projects financed therewith
(less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for
a "private business use" that is "related" and not "disproportionate," within the meaning of section
141(b)(3) of the Code, to the governmental use;
(3) to take any action to assure that no amount that is greater than the lesser of $5,000,000, or
5 percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly
or indirectly used to finance loans to persons, other than state or local governmental units, in
contravention of section 141(c) of the Code;
(4) to refrain from taking any action that would otherwise result in the Bonds being treated as
"private activity bonds" within the meaning of section 141(b) of the Code;
(5) 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;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to
acquire or to replace funds that were used, directly or indirectly, to acquire investment property (as
defined in section 148(b)(2) of the Code) that produces a materially higher yield over the term of the
Bonds, other than investment property acquired with -
(A) proceeds of the Bonds invested for a reasonable temporary period of 3 years or less
or, in the case of a refunding bond, for a period of 30 days or less until such proceeds are needed
for the purpose for which the bonds are issued,
16
(B) amounts invested in a bona fide debt service fund, within the meaning of section
1.148-1(b) of the rules and regulations of the United States Department of the Treasury
("Treasury Regulations"), and
(C) amounts deposited in any reasonably required reserve or replacement fund to the
extent such amounts do not exceed 10 percent of the proceeds of the Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of
the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of
section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code
(relating to advance refundings); and
(8) 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 than 60 days after the Bonds have been paid in full, 100 percent of the amount then required
to be paid as a result of Excess Earnings under section 148(f) of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a "Rebate Fund"
is hereby established by the Issuer for the sole benefit of the United States of America, and such Rebate 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.
(c) Use of Proceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), 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 United
States Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter
promulgated that modify or expand provisions of the Code, as applicable to the Bonds, the Issuer will not be
required to comply with any covenant contained herein to the extent that such failure to comply, in the
opinion of nationally recognized bond counsel, will not adversely affect the exemption from federal income
taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or rulings are
hereafter promulgated that impose additional requirements applicable to the Bonds, the Issuer agrees to
comply with the additional requirements to the extent necessary, in the opinion of nationally recognized bond
counsel, to preserve the exemption from federal income taxation of interest on the Bonds under section 103
of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs the Mayor to execute
any documents, certificates or reports required by the Code and to make such elections, on behalf of the
Issuer, that may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds.
(d) Allocation of, and Limitation on, Expenditures for the Projects. The Issuer covenants to account
for the expenditure of sale proceeds and investment earnings to be used for the construction and acquisition
of the Improvement Projects on its books and records by allocating proceeds to expenditures within 18
months of the later of the date that (1) the expenditure is made, or (2) the Improvement Projects are
completed. The foregoing notwithstanding, the Issuer shall not expend proceeds of the sale of the Bonds or
investment earnings thereon more than 60 days after the earlier of (1) the fifth anniversary of the delivery of
the Bonds, or (2) the date the Bonds are retired, unless the Issuer obtains an opinion of nationally-recognized
bond counsel that such expenditure will not adversely affect the status, for federal income tax purposes, of
the Bonds or the interest thereon. For purposes hereof, the Issuer shall not be obligated to comply with this
17
covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for
federal income tax purposes from gross income of the interest.
(e) Disposition of Projects. The Issuer covenants that the Projects and the projects refinanced by the
Bonds will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or
other compensation, unless the Issuer obtains an opinion of nationally-recognized bond counsel that such sale
or other disposition will not adversely affect the tax-exempt status of the Bonds. For purposes of the
foregoing, the portion of the property comprising personal property and disposed in the ordinary course shall
not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof,
the Issuer shall not be obligated to comply with this covenant if it obtains a legal opinion that such failure to
comply will not adversely affect the excludability for federal income tax proposes from gross income of the
interest.
(f) Reimbursement. This Ordinance is intended to satisfy the official intent requirements set forth in
section 1.150-2 of the Treasury Regulations.
Section 10. SALE OF BONDS AND APPROVAL OF OFFICIAL STATEMENT; FURTHER
PROCEDURES.
(a) The Bonds are hereby sold and shall be delivered to ,
(the"Purchaser") for cash for the par value thereof and accrued interest thereon to date of delivery, plus a cash
premium of $ . The Bonds shall initially be registered in the name of the Purchaser or its
designee. It is officially found, determined, and declared that the Bonds have been sold at public sale to the
bidder offering the lowest interest cost, after receiving sealed bids pursuant to an Notice of Sale and Bidding
Instructions and Preliminary Official Statement prepared and distributed in connection with the sale of the
Bonds. Said Notice of Sale and Bidding Instructions and Preliminary Official Statement, and any addenda,
supplement, or amendment thereto have been and are hereby approved by the governing body of the Issuer,
and their use in the offer and sale of the Bonds is hereby approved. The Initial Bond shall be registered in
the name of the Purchaser or its designee.
(b) The Issuer hereby approves the form and content of the Official Statement relating to the Bonds
and any addenda, supplement or amendment thereto, and approves the distribution of such Official Statement
in the reoffering of the Bonds by the Purchaser in final form, with such changes therein or additions thereto
as the officer executing the same may deem advisable, such determination to be conclusively evidenced by
his execution thereof. The distribution and use ofthe Preliminary Official Statement dated , 2011
prior to the date hereof is hereby ratified and confirmed.
(c) The Mayor and Mayor Pro Tem, the City Manager and City Secretary and all other officers,
employees and agents of the Issuer, and each of them, shall be and they are hereby expressly authorized,
empowered and directed from time to time and at any time to do and perform all such acts and things and to
execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the Issuer a
Paying Agent/Registrar Agreement with the Paying Agent/Registrar and all other instruments, whether or not
herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this
Ordinance, the Bonds, the sale of the Bonds, the Notice of Sale and Bidding Instructions and the Official
Statement. 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 11. INTEREST EARNINGS ON BOND PROCEEDS. Interest earnings derived from the
investment of proceeds from the sale of the Bonds issued for the Improvement Projects shall be used along
18
with other Bond proceeds for the Improvement Projects; provided that after completion of such purpose, if
any of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and
Sinking Fund. It is further provided, however, that any interest earnings on Bond proceeds that are required
to be rebated to the United States of America pursuant to Section 9 hereof in order to prevent the Bonds from
being arbitrage bonds shall be so rebated and not considered as interest earnings for the purposes of this
Section.
Section 12. CONSTRUCTION FUND.
(a) The Issuer hereby creates and establishes and shall maintain on the books of the Issuer a separate
fund to be entitled the "Series 2011 General Obligation Bonds Construction Fund" (the "Construction Fund")
for use by the Issuer for payment of all lawful costs associated with the acquisition and construction of the
Improvement Projects as hereinbefore provided. Upon payment of all such costs, any moneys remaining on
deposit in said fund shall be transferred to the Interest and Sinking fund. Amounts so deposited to the Interest
and Sinking Fund shall be used in the manner described in Section 5 of this Ordinance.
(b) The Issuer may invest proceeds of the Bonds (including investment earnings thereon) issued for
Improvement Projects and amounts deposited into the Interest and Sinking Fund in investments authorized
by the Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended; provided,
however, that the Issuer hereby covenants that the proceeds of the sale of the Bonds will be used as soon as
practicable for the purposes for which the Bonds are issued.
(c) All deposits authorized or required by this Ordinance shall be secured to the fullest extent required
by law for the security of public funds.
Section 13. COMPLIANCE WITH RULE 15c2-12.
(a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms
below:
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reports.
(i) The Issuer shall provide annually to the MSRB, in a designated electronic format as
prescribed by the MSRB, within six months after the end of each fiscal year ending in or after 2011,
financial information and operating data with respect to the Issuer of the general type included in the
final Official Statement authorized by Section 10 of this Ordinance, being the information described
in Exhibit A hereto. Any financial statements so to be provided shall be (1) prepared in accordance
with the accounting principles described in Exhibit A hereto, or such other accounting principles as the
Issuer may be required to employ from time to time pursuant to state law or regulation, and (2) audited,
if the Issuer commissions an audit of such statements and the audit is completed within the period
during which they must be provided. If the audit of such financial statements is not completed within
such period, then the Issuer shall provide unaudited financial statements within such period, and
audited financial statements for the applicable fiscal year to the MSRB, when and if the audit report
19
on such statements become available. All documents provided to the MSRB pursuant to this Section
shall be accompanied by identifying information as prescribed by the MSRB.
(ii) If the Issuer changes its fiscal year, it will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the Issuer otherwise would be required to
provide financial information and operating data pursuant to this Section. The financial information
and operating data to be provided pursuant to this Section may be set forth in full in one or more
documents or may be included by specific reference to any document (including an official statement
or other offering document, if it is available from the MSRB) that theretofore has been provided to the
MSRB or filed with the SEC.
(c) Event Notices.
(i) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a
timely manner (but not in excess of ten business days after the occurrence of the event) of any of the
following events with respect to the Bonds, if such event is material within the meaning of the federal
securities laws:
1. Non-payment related defaults;
2. Modifications to rights of holders of the Bonds;
3. Bond calls;
4. Release, substitution, or sale of property securing repayment of the Bonds;
5. The consummation of a merger, consolidation, or acquisition involving an obligated
person or the sale of all or substantially all of the assets of the obligated person,
other than in the ordinary course of business, the entry into a definitive agreement
to undertake such an action or the termination of a definitive agreement relating to
any such actions, other than pursuant to its terms;
6. Appointment of a successor or additional trustee or the change of name of a trustee.
(ii) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a
timely manner (but not in excess of ten business days after the occurrence of the event) of any of the
following events with respect to the Bonds, without regard to whether such event is considered material
within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. 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 the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701-TEB) or other material notices or determinations with respect to the
tax-exempt status of the Bonds, or other events affecting the tax-exempt status of the
Bonds;
7. Tender offers;
8. Defeasances;
9. Rating changes;
10. Bankruptcy, insolvency, receivership or similar event of an obligated person
20
(iii) The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer to provide
financial information or operating data in accordance with subsection (b) of this Section by the time
required by such subsection.
(d) Limitations, Disclaimers, and Amendments.
(i) The Issuer shall be obligated to observe and perform the covenants specified in this Section
for so long as, but only for so long as, the Issuer remains an "obligated person" with respect to the
Bonds within the meaning of the Rule, except that the Issuer in any event will give notice of any
deposit made in accordance with this Ordinance or applicable law that causes the Bonds no longer to
be outstanding.
(ii) The provisions of this Section are for the sole benefit of the Registered Owners and
beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any other person. The Issuer undertakes
to provide only the financial information, operating data, financial statements, and notices which it has
expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other
information that may be relevant or material to a complete presentation of the Issuer's financial results,
condition, or prospects or hereby undertake to update any information provided in accordance with this
Section or otherwise, except as expressly provided herein. The Issuer does not make any representation
or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any
future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON,
IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY
BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF
ANY COVENANT SPECIFIED IN THIS SECTION, B UT 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 this Ordinance for purposes of any other provision of this
Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Issuer under federal and state securities laws.
(v) The provisions of this Section may be amended by the Issuer from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a change in
the identity, nature, status, or type of operations of the Issuer, but only if (1) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary
offering of the Bonds in compliance with the Rule, taking into account any amendments or
interpretations of the Rule since such offering as well as such changed circumstances and (2) either (a)
the Registered Owners of a majority in aggregate principal amount (or any greater amount required by
any other provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds
consent to such amendment or (b) a person that is unaffiliated with the Issuer (such as nationally
recognized bond counsel) determined that such amendment will not materially impair the interest of
the Registered Owners and beneficial owners of the Bonds. The Issuer may also amend or repeal the
provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable
provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule
are invalid, but only if and to the extent that the provisions of this sentence would not prevent an
21
underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. If the
Issuer so amends the provisions ofthis Section, it shall include with any amended financial information
or operating data next provided in accordance with subsection (b) of this Section an explanation, in
narrative form, of the reason for the amendment and of the impact of any change in the type of financial
information or operating data so provided.
Section 14. METHOD OF AMENDMENT. The Issuer hereby reserves the right to amend this
Ordinance subject to the following terms and conditions, to-wit:
(a) The Issuer may from time to time, without the consent of any holder, except as otherwise required
by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any ambiguity, defect or
omission in this Ordinance that does not materially adversely affect the interests of the holders, (ii) grant
additional rights or security for the benefit of the holders, (iii) add events of default as shall not be
inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the interests
of the holders, (iv) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or
corresponding provisions of federal laws from time to time in effect, or (v) make such other provisions in
regard to matters or questions arising under this Ordinance as shall not be inconsistent with the provisions
of this Ordinance and that shall not in the opinion of the Issuer's Bond Counsel materially adversely affect
the interests of the holders.
(b) Except as provided in paragraph (a) above, the holders of Bonds aggregating in principal amount
a majority of the aggregate principal amount of then outstanding Bonds that are the subject of a proposed
amendment shall have the right from time to time to approve any amendment hereto that may be deemed
necessary or desirable by the Issuer; provided, however, that without the consent of 100% of the holders in
aggregate principal amount of the then outstanding Bonds, nothing herein contained shall permit or be
construed to permit amendment of the terms and conditions of this Ordinance or in any of the Bonds so as
to:
(1) Make any change in the maturity of any of the outstanding Bonds;
(2) Reduce the rate of interest borne by any of the outstanding Bonds;
(3) Reduce the amount of the principal of, or redemption premium, if any, payable on any
outstanding Bonds;
(4) Modify the terms of payment of principal or of interest or redemption premium on
outstanding Bonds or any of them or impose any condition with respect to such payment; or
(5) Change the minimum percentage of the principal amount of Bonds necessary for consent to
such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the Issuer shall
send by U.S. mail to each Registered Owner of the affected Bonds a copy of the proposed amendment and
cause notice of the proposed amendment to be published at least once in a financial publication published in
The City of New York, New York or in the State of Texas. Such published notice shall briefly set forth the
nature of the proposed amendment and shall state that a copy thereof is on file at the office of the Issuer for
inspection by all holders of such Bonds.
(d) Whenever at any time within one year from the date of publication of such notice the Issuer shall
receive an instrument or instruments executed by the holders of at least a majority in aggregate principal
22
amount of all of the Bonds then outstanding that are required for the amendment, which instrument or
instruments shall refer to the proposed amendment and that shall specifically consent to and approve such
amendment, the Issuer may adopt the amendment in substantially the same form.
(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this Section, this
Ordinance shall be deemed to be modified and amended in accordance with such amendatory Ordinance, and
the respective rights, duties, and obligations of the Issuer and all holders of such affected Bonds shall
thereafter be determined, exercised, and enforced, subject in all respects to such amendment.
(f) Any consent given by the holder of a Bond pursuant to the provisions of this Section shall be
irrevocable for a period of six months from the date of the publication of the notice provided for in this
Section, and shall be conclusive and binding upon all future holders of the same Bond during such period.
Such consent may be revoked at any time after six months from the date of the publication of said notice by
the holder who gave such consent, or by a successor in title, by filing notice with the Issuer, but such
revocation shall not be effective if the holders of a majority in aggregate principal amount of the affected
Bonds then outstanding, have, prior to the attempted revocation, consented to and approved the amendment.
For the purposes of establishing ownership of the Bonds, the Issuer shall rely solely upon the
registration of the ownership of such Bonds on the Registration Books kept by the Paying Agent/Registrar.
Section 15. DEFAULT AND REMEDIES.
(a) Events of Default. Each of the following occurrences or events for the purpose of this Ordinance
is hereby declared to be an Event of Default:
(i) the failure to make payment of the principal of or interest on any of the Bonds when the same
becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or obligation of
the Issuer, the failure to perform which materially, adversely affects the rights ofthe Registered Owners
of the Bonds, including, but not limited to, their prospect or ability to be repaid in accordance with this
Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by
any Registered Owner to the Issuer.
(b) Remedies for Default.
(i) Upon the happening of any Event of Default, then and in every case, any Registered Owner
or an authorized representative thereof, including, but not limited to, a trustee or trustees therefor, may
proceed against the Issuer for the purpose of protecting and enforcing the rights of the Registered
Owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at
law, in any court of competent jurisdiction, for any relief permitted by law, including the specific
performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that
may be unlawful or in violation of any right of the Registered Owners hereunder or any combination
of such remedies.
(ii) It is provided that all such proceedings shall be instituted and maintained for the equal
benefit of all Registered Owners of Bonds then outstanding.
23
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity;
provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate
the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance.
(ii) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any
other available remedy.
(iii) By accepting the delivery of a Bond authorized under this Ordinance, such Registered
Owner agrees that the certifications required to effectuate any covenants or representations contained
in this Ordinance do not and shall never constitute or give rise to a personal or pecuniary liability or
charge against the officers, employees or agents of the Issuer or the members of its governing body.
Section 16. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS. The Mayor
of the Issuer is hereby authorized and directed to execute and deliver and the City Secretary of the Issuer is
hereby authorized and directed to attest an Escrow Agreement with The Bank of New York Mellon Trust
Company, National Association, in substantially the form presented at this meeting. In addition, the Mayor
or other officer of the Issuer is authorized to purchase such securities, to execute subscriptions for the
purchase of United States Treasury Securities, State and Local Government Series, and to authorize such
contributions, as may be necessary for the Escrow Fund.
Section 17. REDEMPTION OF REFUNDED OBLIGATIONS.
(a) The Issuer hereby directs that the Refunded Obligations be called for redemption on the dates set
forth on Schedule II. Each of such Refunded Obligations shall be redeemed at the redemption price of par
plus accrued interest. The Mayor of the Issuer is hereby authorized and directed to issue or cause to be issued
the Notices of Redemption of the Refunded Obligations in the form set forth in Exhibit B attached hereto by
the paying agent/registrar(s) for the Refunded Obligations.
(b) In addition, the paying agent/registrar(s) for the Refunded Obligations is hereby directed to provide
the appropriate notices of redemption and defeasance as specified by the ordinances authorizing the issuance
of the Refunded Obligations and is hereby directed to make appropriate arrangements so that the Refunded
Obligations may be redeemed on their respective redemption dates. The Refunded Obligations shall be
presented for redemption at the paying agent/registrar therefore, and shall not bear interest after the date fixed
for redemption.
(c) 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 placed in escrow with the Escrow Agent,
pursuant to the Escrow Agreement approved in Section 16 of this Ordinance.
Section 18. APPROPRIATION. To pay the debt service coming due on the Bonds prior to receipt of
the taxes levied to pay such debt service, there is hereby appropriated from current funds on hand, which are
hereby certified to be on hand and available for such purpose, an amount, which together with capitalized
interest received from the sale of the Bonds, if any, will be sufficient to pay such debt service, and such
amount shall be used for no other purpose.
24
Section 19. DISPOSITION OF FUNDS. The accrued interest received from the sale of the Bonds in
the amount of $ shall be deposited to the Interest and Sinking Fund. The premium received
from the sale of the Bonds in the amount of $ shall be applied as follows: the sum of
$ shall be applied to pay costs of issuance; and the sum of $2,225,000 shall be applied against
voted authorization and deposited into the Construction Fund and used for the purposes approved by the
voters at the election. Proceeds of the Bonds in the amount of $ shall be deposited into
the Escrow Fund for the Refunded Obligations. The remainder of the proceeds of the sale of the Bonds in
the amount of $ shall be deposited to a Construction Fund and used for the purposes
approved by the voters at the election.
Section 20. EFFECTIVE DATE. In accordance with the provisions of Texas Government Code
Section 1201.028, this Ordinance shall be effective immediately upon its adoption by the City Council.
Section 21. SEVERABILITY. If any section, article, paragraph, sentence, clause, phrase or word in
this Ordinance, or application thereof to any persons or circumstances is held invalid or unconstitutional by
a court of competent jurisdiction, such holding shall not affect the validity of the remaining portion of this
Ordinance, despite such invalidity, which remaining portions shall remain in full force and effect.
[Execution page follows]
25
PASSED, APPROVED AND EFFECTIVE this April 5, 2011.
ATTEST:
4 All JA 1'a/B )n
y Secret , City of Denton, Texas
APPROVED AS TO LEGAL FORM:
rty Attorney, Ci Denton, Texas
Z
SCHEDULEI
Purpose
February 5, 2005 Election
Senior Center & Library
(Prop. 1)
Street, Roadway, Sidewalk &
Traffic Control
(Prop. 2)
Park Improvements
(Prop. 3)
Votei
Amount
Authorized
$4,000,000
27,700,000
I Bonds
Amount
Previously
Issued
$4,000,000
23,710,100
Amount
Unissued Being
Balance Issued*
$0 $0
3,989,900 1,190,000
10,700,000 8,470,900 2,229,100 1,035,000
* Includes principal and premium.
SCHEDULE II
Schedule of Refunded Obligations
City of Denton Utility System Revenue
Refunding and Improvement Bonds
Series 2001
Principal
Principal
Maturity Date
Amount
Amount
Outstanding
Refunded
12/01/2011
$4,100,000
$4,100,000
12/01/2012
470,000
470,000
12/01/2013
500,000
500,000
12/01/2014
520,000
520,000
12/01/2015
550,000
550,000
12/01/2016
575,000
575,000
12/01/2017
570,000
570,000
12/01/2018
600,000
600,000
12/01/2019
630,000
630,000
12/01/2020
665.000
665.000
Total $9,180,000 $9,180,000
Call Date: June 1, 2011
EXHIBIT A
Annual Financial Statements and Operating Data
The following information is referred to in Section 13(b) of this Ordinance:
The financial information and operating data with respect to the Issuer to be provided annually in accordance
with such Section are as specified (and included in the Appendix or under the headings of the Official
Statement referred to) below:
Tables 1 through 5, inclusive, and 7 through 14, inclusive
APPENDIX B (FINANCIAL STATEMENTS FOR THE LAST COMPLETED FISCAL YEAR WHICH
WELL BE UNAUDITED, UNLESS AN AUDIT IS PERFORMED IN WHICH EVENT THE AUDITED
FINANCIAL STATEMENTS WILL BE MADE AVAILABLE)
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described in the notes to
the financial statements referred to in paragraph above.
A-1
EXHIBIT B
Notice of Redemption
NOTICE IS HEREBY GIVEN that the City ofDenton, Texas has called for redemption the outstanding
Bonds of the City described as follows:
City of Denton Utility System Revenue Refunding and Improvement Bonds, Series 2001, dated April
15,200 1, scheduled to mature on December 1, 2011 through December 1, 2020, aggregating $9,180,000 (and
being all of the outstanding bonds of said series scheduled to mature on and after December 1, 2011);
Call date: June 1, 2011; redeemable at a redemption price of par plus accrued interest at the principal
corporate offices of The Bank of New York Mellon 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 one of the following address:
First Class/Registered/
Certified Mail
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
P.O. Box 396
East Syracuse, New York 13057
Express Delivery
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
111 Sanders Creek Parkway
East Syracuse, New York 13057
Hand Delivery
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
Corporate Trust Window
101 Barclay Street
1ST Floor East
New York, New York 10286
Dated: .2011
By: The Bank of New York Mellon Trust Company, National Association
B-1