2012-071ORDINANCE NO. 2012-�71
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELIVERY OF UP TO $42,000,000 IN PRINCIPAL
AMOUNT OF "CITY OF DENTON GENERAL OBLIGATION REFUNDING AND
IMPROVEMENT BONDS, SERIES 2012"; AUTHORIZING THE ISSUANCE OF THE
BONDS; DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO
EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE 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), and general obligation bonds and certificates of obligation which are secured
by the full faith and credit of the Issuer and a pledge by the Issuer to levy ad valorem taxes sufficient to pay
principal of and interest on the bonds and certiiicates of obligation as they become due and a pledge of
surplus revenues to further secure the certificates of obligation;
WHEREAS, the Issuer now desires to refund all or part of the outstanding revenue bonds, general
obligation bonds and certificates of obligation described in Schedule II attached hereto and incorporated
herein (collectively, the "Eligible Refunded Obligations"), and those Eligible Refunded Obligations
designated by the Pricing Officer in the Pricing Certificate, each as defined below, to be refunded are herein
referred to as the "Refunded Obligations";
WI IEREAS, 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 banlc 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 banlcing 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 banlc may agree;
WI IEREAS, 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 in order to achieve a debt service savings, with such savings,
among other information and terms to be included in a pricing certificate (the "Pricing Certificate") to be
executed by the Pricing Officer (hereinafter designated), all in accordance with the provisions of Section
1207.007, Texas Government Code;;
WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to maturity
within 20 years of the date of the bonds hereinafter authorized;
WIIEREAS, the Issuer is an "issuer" within the meaning of Section 1371.001(4)(P), Texas
Government Code, having (i) a principal amount of at least $100 million in outstanding long-term
indebtedness, in long-term indebtedness proposed to be issued, or in a combination of outstanding or
proposed long-term indebtedness and (ii) some amount of long-term indebtedness outstanding or proposed
to be issued that is rated in one of the four highest rating categories for long-term debt instruments by a
nationally recognized rating agency for municipal securities, without regard to the effect of any credit
agreement or other form of credit enhancement entered into in connection with the obligation;
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, 1331 and 1371, 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 subj ect 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, PURPOSE AND DESIGNATION OF THE BONDS.
(a) The recitals set forth in the preamble hereof are incorporated herein and shall have the same force
and effect as if set forth in this Section.
(b) The term "Bonds" as used in this Ordinance shall mean and include collectively the bond initially
issued and delivered pursuant to this Ordinance (the "Initial Bond") and all substitute bonds exchanged
therefor, as well as all other substitute bonds and replacement bonds issued pursuant hereto, and the term
"Bond" shall mean any of the Bonds.
(c) The Bonds of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and
delivered in the ma�mum aggregate principal atnount of $42,000,000 (i} up to $38,006,000 for the public
purpose of refunding the Refunded Obligations; (ii) for the purpose of the acquisition of property and making
improvements for public purposes in said Issuer, to wit: (a) $2,799,900 for street improvements and (b)
$1,194,100 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").
(d) Each bond issued pursuant to this Ordinance shall be designated: "CITY OF DENTON
GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BOND, SERIES 2012," and initially
there shall be issued, sold, and delivered hereunder fully registered bonds, without interest coupons, payable
to the respective registered owners thereof (with the Initial Bond being made payable to the Purchaser as
described in Section 10 hereo fl, or to the registered assignee or assignees of said Bonds or any portion or
portions thereof (in each case, the "Registered Owner"). The Bonds shall be in the respective principal
amounts, shall be numbered, shall mature and be payable on the date or dates in each of the years and in the
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principal amounts, and shall bear interest to their respective dates of maturity or redemption prior to maturity
at the rates per annum, as set forth in the Pricing Certificate.
Section 2. DELEGATION TO PRICING OFFICER.
(a) As authorized by Sections 1207.007 and 1371.053, Texas Government Code, as amended, the
City Manager or Chief Financial Officer (the "Pricing Officer") is hereby authorized to act on behalf of the
Issuer in selling and delivering the Bonds, determining which of the Eligible Refunded Obligations shall be
refunded and carrying out the other procedures specified in this Ordinance, including, determining the date
of the Bonds, any additional or different designation or title by which the Bonds shall be known, the price
at which the Bonds will be sold, the years in which the Bonds wi11 mature, the principal amount to mature
in each of such years, the rate of interest to be borne by each such maturity, the interest payment and record
dates, the price and terms upon and at which the Bonds shall be subject to redemption prior to maturity at the
option of the Issuer, as well as any mandatory sinking fund redemption provisions, and all other matters
relating to the issuance, sale, and delivery of the Bonds and the refunding of the Refunded Obligations,
including without limitation establishing the redemption date far and effecting the redemption of the
Refunded Obligations and obtaining municipal bond insurance for all or any portion of the Bonds and
providing for the terms and provisions thereof applicable to the Bonds, all of which shall be specified in the
Pricing Certificate; provided that:
(i) the aggregate original principal amount of the Bonds shall not exceed $42,000,000, with
$3,994,000 of such amount to be issued for the purposes described in Section 1(c)(ii) and
(iii) hereof, and up to $38,006,000 of such amount issued for the purposes described in
Section 1(c)(i) and (iii) hereof;
(ii) the price to be paid for the Bonds shall not be less than 97% of the aggregate original
principal amount thereof plus accrued interest thereon from its date to its delivery;
(iii) the maximum stated maturity of the Bonds shall not exceed February 15, 2032;
(iv) the refunding must produce present value debt service savings of at least 5.00%, net of any
Issuer contribution;
(v) the Bonds shall bear interest at a fixed rate, and none of the Bonds shall bear interest at a rate
greater than 5.25% per annum and the net effective interest rate on the Bonds shall not
exceed 4.00%;
(vi) the delegation made hereby shall expire if not exercised by the Pricing Officer on or prior
to Apri13, 2013; and
(vii) on or prior to delivery, the Bonds shall be rated by a nationally recognized rating agency for
municipal securities in one of the four highest categories for long-term obligations.
(b) In establishing the aggregate principal amount of the Bonds, the Pricing Officer sha11 establish
an amount not exceeding the amount authorized in Subsection (a) hereof, which shall be sufficient in amount
to provide for the purposes for which the Bonds are authorized and to pay costs of issuing the Bonds. The
Bonds shall be sold with and subject to such terms as set forth in the Pricing Certificate.
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Section 3. CHARACTERISTICS OF THE BONDS.
(a) Re�istration Transfer Conversion and Exchan�e: 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 ha�e the right to inspect
the Registration Books during regular business hours ofthe PayingAgent/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) Pavment of Bonds and Interest. The Issuer hereby further appoints the Paying Agent/Registrar
to act as the paying agent for paying the principal of and interest on the Bonds, all as provided in this
Ordinance. The Paying Agent/Registrar shall keep proper records of a11 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 ofBonds, 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, iirst-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
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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 ha�e 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 (as modified in the Pricing Certificate). 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 Certif cate, in the form
set forth in the FORM OF BOND.
(d) Pavin� A�ent/Re�istrar 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
qualiiied bank, trust company, fmancial 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 thereo fl, 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 ha�e 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.
(fl Book-Entrv-Onl�vstem. 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 sha11 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 sha11
ha�e no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any
DTC Participant with respect to any ownership interest in the 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 ofthe Registered Owners, as shown in the Registration Books
as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments
shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of
principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than a
Registered Owner, as shown in the Registration Books, shall receive a Bond evidencing the obligation of the
Issuer to make payments of principal and interest pursuant to this Ordinance. Upon delivery by DTC to the
Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee
in place of Cede & Co., and subject to the provisions in this Ordinance with respect to interest checks being
mailed to the Registered Owner at the close of business on the Record Date, the words "Cede & Co." in this
Ordinance shall refer to such new nominee of DTC.
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 Depositorv: Transfers Outside Book-Entry-Onlv Svstem. In the event that
the Issuer determines that DTC is incapable of discharging its responsibilities described herein and in the
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 cerrificated Bonds, the Issuer shall (i) appoint a successor securities
depository, qualiiied 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) Pavments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary,
so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect
to principal of and interest on such Bond and all notices with respect to such Bond shall be made and given,
respectively, in the manner provided in the Blanlcet Issuer Letter of Representations to DTC.
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(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.
(j) 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 ha�e 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, and with the Form of Bond to be modified pursuant to, and
completed with information set forth in, the Pricing Certificate.
(a) [Form of Bond]
NO. R- UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF DENTON
GENERAL OBLIGATION
REFUNDING AND IMPROVEMENT BOND
SERIES 2012
Interest Rate
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Dated Date
, 2012
Maturity Date
February 15,
PRINCIPAL
AMOUNT
$
CUSIP No.
DOLLARS
ON THE MATURITY DATE specified above, the Ciry 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 speciiied 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 , 2012 at the Interest Rate per annum specified above. Interest is payable on
, 20 and semiannually on each and 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 cbarges. 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 ofNew 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 ofthis 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
AgentlRegistrar, 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 B onds, 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 of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date
for such payment shall be the next succeeding day that is not such a Saturday, Sunday, legal holiday or day
on which banking institutions are authorized to close; and payment on such date shall have the same force
and effect as if made on the original date payment was due.
THIS BOND is one of a series of Bonds dated , 2012, authorized in accordance with the
Constitution and laws of the State of Texas in the principal amount of $ 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 , 20 , 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.
THE BONDS scheduled to mature on in the years and ( the "Term
Bonds") are subject to scheduled mandatory redemption by the Paying Agent/Registrar by lot, or by any other
customary method that results in a random selection, at a price equal to the principal amount thereof, plus
accrued interest to the redemption date, out of moneys available for such purpose in the interest and sinking
fund for the Bonds, on the dates and in the respective principal amounts, set forth in the following schedule:
Term Bond Term Bond
Maturity: February 15, 20_ Maturity: February 15,20_
Principal Principal
Mandatorv Redemption Date Amount Mandatory Redemption Date Amount
February 15,20_ $ February 15,20_ $
February 15,20_ February 15,20_
February 15,20_ February 15,20_
February 15,20_ (maturity) February 15,20_ (maturity)
The principal amount of Term Bonds of a stated maturity required to be redeemed on any mandatory
redemption date pursuant to the operation of the mandatory sinking fund redemption provisions shall be
reduced, at the option of the Issuer, by the principal amount of any Term Bonds of the same maturity which,
at least 50 days prior to a mandatory redemption date (1) shall have been acquired by the Issuer at a price not
exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and
delivered to the Paying Agent/Registrar for cancellation, (2) shall have been purchased and canceled by the
Paying Agent/Registrar at the request of the Issuer at a price not exceeding the principal amount of such Term
Bonds plus accrued interest to the date of purchase, or (3) shall have been redeemed pursuant to the optional
redemption provisions and not theretofore credited against a mandatory redemption requirement.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof prior to
maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by United States
mail, first-class postage prepaid, 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
subj ect to the deposit of the redemption moneys with the 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 far the payment of the
interest on and principal of this Bond, as such interest comes due and such principal matures, have been
10
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,
acicnowledges that the Bond Ordinance is duly recorded and availab(e 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 ar 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.
(SEAL)
(si�naturel
City Secretary
(si�naturel
Mayor
[INSERT BOND INSURANCE LEGEND, IF ANY]
(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 certifed 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:
(c) [Fortn of Assignment]
The Bank of New York Mellon Trust Company,
National Association, Dallas, Texas
Paying Agent/Registrar
By:
Authorized Representative
ASSIGNMENT
11
For value received, the undersigned hereby sells, assigns
Please insert Social Security or Taxpayer ldentification Number of Transferee
(Please print or typewrite name and address, including zip code, of Transferee.)
and transfers unto
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
eligible guarantor institution participating in a
securities transfer association recognized
signature guarantee program.
N�TICE; The signature above must correspond
with the name of the Registered Owner as it
appears upon the front of this bond in every
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
12
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:
Years Principal Amounts Interest Rates
(Information from Pricing Certificate to be inserted)
The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-
day year of twelve 30-day months) from , 2012 at the respective Interest Rate per annum
specified above. Interest is payable on , 20 , and semiannually on each and
thereafter to the date of payment of the principal installment specified above, or the date of
redemption prior to maturity; except, that if this 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 sha11 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 FtJND.
(a) A special Interest and Sinking Fund (the "Interest and Sinking Fund") is hereby created solely for
the benefit ofthe 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 taac sha11 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 t� 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 a�ailable 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 a�ailable funds then on deposit or budgeted and appropriated to be deposited in the Interest
and Sinlcing 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
13
maintenance and operation expenses thereof, and all debt service, reserve and other requirements in
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 sufiicient 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 sufiicient 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 ofthe 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 aeailable 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
14
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 ofthe 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 any securities and obligations now or hereafter
authorized by state law that are eligible to discharge obligations such as the Bonds, including (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.
15
(b) Apnlication 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 faregoing provisions of this Ordinance, in the event
any such Bond shall ha�e 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 a11 other Bonds
duly issued under this Ordinance.
(e) Authoritv far Issuin� 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 Purchaser to accept delivery of the Bonds is subject to the Purchaser being
furnished with the final, approving opinion of McCall, Parkhurst & Horton L.L.P., bond counsel to the Issuer,
which opinion shall be dated as of and delivered on the date of initial delivery of the Bonds to the Purchaser.
The engagement of such firm as bond counsel to the Issuer in connection with the issuance, sale and delivery
16
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,
(B) amounts invested in a bona fide debt service fund,
1.148-1(b) of the rules and regulations of the United States
("Treasury Regulations"), and
17
within the meaning of section
Department of the Treasury
(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 contra�ene 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( fl 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( fl 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 or Pricing
Officer 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 eaxnings 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 sha11 not be obligated to comply with this
covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for
federal income tax purposes from gross income of the interest.
(e) Disposition of Pro'lects. 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
18
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
faregoing, 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.
(� Reimbursement. This Ordinance is intended to satisfy the official intent requirements set forth in
section 1.150-2 of the Treasury Regulations.
(g) Procedures to Monitor Compliance with Tax Covenants. Unless superseded by another action of
the Issuer, to ensure compliance with the covenants contained in this Ordinance regarding private business
use, remedial actions, arbitrage and rebate, the Issuer hereby adopts and establishes the instructions attached
hereto as E�ibit B as its written procedures.
Section 10, SALE OF BONDS AND APPROVAL OF OFFICIAL STATEMENT; FURTHER
PROCEDURES.
(a) The Bonds shall be sold and delivered subject to the provisions of Section 1 and Section 2 hereof
through a negotiated sale, competitive sale or private placement and pursuant to the terms and provisions of
a purchase contract or a notice of sale and official bid form (in either case, the "Purchase Agreement"), the
terms and provisions of which are to be determined by the Pricing Officer in accordance with Section 2
hereof, and in which the purchaser or purchasers of the Bonds (the "Purchaser") shall be designated. The
Pricing Officer is hereby authorized to execute and deliver the Purchase Agreement for an on behalf of the
Issuer. The Bonds shall initially be registered in the name of the Purchaser or its designee.
(b) The Issuer hereby approves the form and content ofthe draft preliminary official statement relating
to the Bonds and any addenda, supplement or amendment thereto, and approves the distribution of such
preliminary official statement in the reoffering of the Bonds by the Purchaser in final form, with such changes
therein or additions thereto as the Pricing Officer executing the same may deem advisable. The Pricing
Officer is hereby authorized, in the name and on behalf of the Issuer, to approve, distribute, and deliver a final
preliminary official statement and a final official statement relating to the Bonds to be used by the Purchaser
in the marketing of the Bonds.
(c) The Pricing Officer is authorized, in connection with effecting the sale of the Bonds, to obtain from
a municipal bond insurance company so designated in the Pricing Certificate (the "Insurer") a municipal bond
insurance policy (the "Insurance Policy") in support of the Bonds. To that end, should the Pricing Officer
exercise such authority and commit the Issuer to obtain a municipal bond insurance policy, for so long as the
Insurance Policy is in effect, the requirements of the Insurer relating to the issuance of the Insurance Policy
as set forth in the Pricing Certificate are incorporated by reference into this Ordinance and made a part hereof
for a11 purposes, notwithstanding any other provision of this Ordinance to the contrary. The Pricing Officer
shall have the authority to execute any documents to effect the issuance of the Insurance Policy by the
Insurer.
(d) The Mayor and Mayor Pro Tem, the City Manager, Pricing Officer 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
19
provisions of this Ordinance, the Pricing Certificate, the Bonds, the sale of the Bonds, any Purchase
Agreement and the Official Statement. In case any officer whose signature shall appear on any Bond shall
cease to be such ofiicer 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
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 FUNID.
(a) The Issuer hereby creates and establishes and shall maintain on the boolcs of the Issuer a separate
fund to be entitled the "Series 2012 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 ha�e the meanings ascribed to such terms
below:
"MSRB" means the Municipal Securities Rulemaking Boaxd.
"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 iiscal year ending in or after 2012,
financial infortnation 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 the Pricing Certificate. Any fmancial statements so to be provided shall be (1) prepared in
accordance with the accounting principles described in the financial statements appended to the Official
20
Statement, or such other accounting principles as the Issuer may be required to employ from time to
time pursuant to state law or regulation, and (2) audited, if the Issuer commissions an audit of such
statements and the audit is completed within the period during which they must be provided. If the
audit of such financial statements is not completed within such period, then the Issuer shall provide
unaudited financial statements within such period, and audited fmancial statements for the applicable
iiscal year to the MSRB, when and if the audit report 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 iiscal 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:
l. Non-payment related defaults;
2. Modif cations to rights of holders of the Bonds;
3. Bond ca11s;
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 tertns;
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;
3. Unscheduled draws on credit enhancements reflecting fmancial difficulties;
4. Substitution of credit or liquidity providers, or their failure to perform;
5. Adverse tax opinions or the issuance by the Internal Revenue Service of proposed
or iinal 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 material events affecting the tax-exempt
status of the Bonds;
6. Tender offers;
7. Defeasances;
21
8. Rating changes;
9. Bankruptcy, insolvency, receivership or similar event of an obligated person
(iii) The Issuer sha11 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 ofthe 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,
1N 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 CO VENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY
SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH
SHALL BE LIMITED TO AN ACTION FOR MANDAIVIUS 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
22
provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule
are invalid, but only if and to the extent that the provisions of this sentence would not prevent an
underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. 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.
(e) Amendment of the Rule. The provisions of this Section shall be revised by the Pricing Officer to
reflect the requirements of the Rule if the Rule is amended after the adoption of this Ordinance but prior to
the delivery of the Bonds so as to permit an underwriter to purchase or sell Bonds in the primary offering of
the Bonds in compliance with the Rule. Any such revisions shall be set forth in the Pricing Certiiicate and
are incorporated by reference into this Ordinance and made a part hereof for all purposes, notwithstanding
any other provision of this Ordinance to the contrary.
Section 14. METHOD OF AIVIENDMENT. 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 atnount 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.
23
(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 iile at the office of the Issuer for
inspection by a11 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
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 modiiied 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.
( fl 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. DEFAiJLT 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 of the Registered Owners
ofthe 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
24
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.
(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. In
furtherance of authority granted by Section 1207.007(b), Texas Government Code, the Mayor or the Pricing
Officer are furkher authorized to enter into and execute on behalf of the Issuer with the escrow agent named
therein, an escrow or similar agreement, in the form and substance as shall be approved by the Pricing
Officer, which agreement will provide for the payment in full of the Refunded Obligations. In addition, the
Mayor, Pricing Officer or other offtcer of the Issuer is authorized to purchase such securities, to execute such
subscriptions for the purchase of the Escrowed Securities, (as defined in the agreement), if any, and to
authorize such contributions to the escrow fund as provided in the agreement.
Section 17. REDEMPTION OF REFtJNDED OBLIGATIONS.
(a) Subject to the execution and delivery of the Purchase Agreement with the Purchaser, the Issuer
hereby directs that the Refunded Obligations be called for redemption on the dates and at such prices as set
forth in the Pricing Certificate. The Pricing Officer is hereby authorized and directed to issue or cause to be
issued the Notices of Redemption of the Refunded Obligations in substantially the form set forth in Exhibit
A attached hereto, completed with infortnation from the Pricing Certificate, to 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 speciiied 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) If the redemption of the Refunded Obligations results in the partial refunding of any maturity of
the Refunded Obligations, the Pricing Officer shall direct the paying agent/registrar(s) for the Refunded
Obligations to designate at random and by lot which of the Refunded Obligations will be payable from and
secured solely from ad valorem taxes of the Issuer pursuant to the ordinance of the Issuer authorizing the
25
issuance of such Refunded Obligations (the "Refunded Obligation Ordinance"). The paying agent/registrar(s)
shall notify by iirst-class mail all registered owners of a11 affected obligations of such maturities that: (i) a
portion of such obligations have been refunded and are secured until final maturity solely with cash and
investments maintained by the Escrow Agent in the Escrow Fund, (ii) the principal amount of all affected
obligations of such maturities registered in the name of such registered owner that have been refunded and
are payable solely from cash and investments in the Escrow Fund and the remaining principal amount of all
affected obligations of such maturities registered in the name of such registered owner, if any, have not been
refunded and are payable and secured solely from ad valorem taxes of the Issuer described in the Refunded
Obligation Ordinance, (iii) the registered owner is required to submit his or her Refunded Obligations to the
paying agent/registrar(s), for the purposes of re-registering such registered owner's obligations and assigning
new CUSIP numbers in order to distinguish the source of payment for the principal and interest on such
obligations, and (iv) payment of principal of and interest on such obligations may, in some circumstances,
be delayed until such obligations have been re-registered and new CUSIP numbers have been assigned as
required by (iii) above.
(d) The source of funds for payment of the principal of and interest on the Refunded Obligations on
their respective maturity or redemption dates shall be from the funds 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 sha11 be used for no other purpose.
Section 19. 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 20. 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]
�
PASSED, APPROVED AND EFFECTIVE this Apri13, 2012.
Mayor, City o enton, Tex
ATTEST;
�
i Secreta , ity of Denton, Texas
APPROVED AS TO LEGAL FORM:
��
� City ttorney, City of Den , Texa
SCHEDULEI
Voted Bonds
Amount
Amount Previously Unissued
Purpose Authorized Issued* Balance
Februarv 5, 2005 Election
Senior Center & Library $4,000,000 $4,000,000 $0
(Prop. 1)
Street, Roadway, Sidewallc & 27,700,000 24,900,100 2,799,900
Traffic Control
(Prop. 2)
Park Improvements 10,700,000 9,505,900 1,194,100
(Prop. 3)
* Includes principal and premium.
S-I-1
Amount
Being Remaining
Issued* Balance
$0 $0
2,799,900 $0
1,194,100 $0
SCHEDULEII
Schedule of Eligible Refunded Obligations
City of Denton Certiiicates of Obligation, Series 2003
Maturi , Date
2/15/2014
2/15/2015
2/15/2016
2/15/2017
2/15/2018
2/15/2019
2/15/2020
2/15/2021
2/ 15/2022
2/15/2023
Total
Principal Amount
Outstandin�
$190,000
195,000
200,000
215,000
225,000
200,000
210,000
220,000
230,000
240,000
$2,125,000
City of Denton General Obligation Refunding and
Improvement Bonds, Series 2003
Maturitv Date
2/15/2014
2/15/2015
2/15/2016
2/15/2017
2/15/2018
2/15/2019
2/ 15/2020
2/15/2021
2/ 15/2022
2/15/2023
Principal Amount
Outstandin�
$315,000
205,000
215,000
220,000
235,000
245,000
255,000
270,000
280,000
295,000
Total $2,535,000
S-II-1
City of Denton Utility System Revenue Refunding and
Improvement Bonds, Series 2003
Maturity Date
12/1/2014
12/1/2015
12/1/2016
12/1/2017
12/1/2018
12/1/2019
12/1/2020
12/1/2021
12/ 1 /2022
Tota1
Principal Amount
Outstandin�
$2,000,000
2,100,000
2,215,000
2,330,000
2,445,000
2,575,000
2,700,000
2,845,000
3,000,000
$22,210,000
City of Denton Certificates of Obligation, Series 2004
Maturi Date
2/15/2015
2/15/2016
2/15/2017
2/15/2018
2/15/2019
2/ 15/2020
2/ 15/2021
2/15/2022
****
2/15/2024
Total
S-II-2
Principal Amount
Outstandin�
$ 670,000
�os,000
735,000
775,000
810,000
850,000
890,000
935,000
****
2,020,000
$ 8,390,000
EXHIBIT A
Notice of Redemption
NOTICE IS HEREBY GIVEN that the City of Denton, Texas has called for redemption the outstanding
Bonds of the City described as follows:
City of Denton General Obligation Refunding and Improvement Bonds, Series 2003, dated March
15, 2003, scheduled to mature on February 15, 20_ through February 15, 20_, aggregating $
(and being all of the outstanding bonds of said series scheduled to mature on and after February 15, 20�;
Call date: , 20_; redeemable at a redemption price of par plus accrued interest at the
principal corporate off'ices of The Bank of New York Mellon Trust Company, N.A., only upon presentation
by the owner thereof.
City of Denton Certiiicates of Obligation, Series 2003, dated March 15, 2003, scheduled to mature
on February 15, 20_ through February 15, 20_, aggregating $ (and being all of the outstanding
bonds of said series scheduled to mature on and after February 15, 20�;
Call date: , 20 ; redeemable at a redemption price of par plus accrued interest at the
principal corporate ofiices of The Bank of New York Mellon Trust Company, N.A., only upon presentation
by the owner thereof.
City of Denton Utility System Revenue Refunding and Improvement Bonds, Series 2003, dated
April 1, 2003, scheduled to mature on December 1, 20 through December 1, 20_, aggregating
$ (and being all of the outstanding bonds of said series scheduled to mature on and after
December 1, 20�;
Call date: , 20 ; 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.
City of Denton Certificates of Obligation, Series 2004, dated May 1, 2004, scheduled to mature on
February 15, 20_ through February 15, 20_, aggregating $ (and being all of the outstanding
bonds of said series scheduled to mature on and after February 15, 20�;
Call date: , 20 ; 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 speciiied, 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.
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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
Dated:
20
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 Deliverv
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
Corporate Trust Window
101 Barclay Street
15T Floor East
New York, New York 10286
By: The Bank of New York Mellon Trust Company, National Association
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