2013-113 f
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ORDINANCE NO. 2013-113
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELIVERY OF UP TO $68,265,000 IN PRINCIPAL
AMOUNT OF "CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 2013
AUTHORIZING THE ISSUANCE OF THE CERTIFICATES; DELEGATING THE
AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN
DOCUMENTS RELATING TO THE SALE OF THE CERTIFICATES; APPROVING
AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID
CERTIFICATES; AND ENACTING OTHER PROVISIONS RELATING TO THE
SUBJECT
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the City Council of the City of Denton, Texas (the "Issuer"), 'deems it advisable to
issue Certificates of Obligation in the amount of up to $68,265,000 for the purposes hereinafter set forth;
and
WHEREAS, the Certificates of Obligation hereinafter authorized and designated are to be issued
and delivered for cash pursuant to Subchapter C of Chapter 271, Texas Local Government Code,
Subchapter B, Chapter 1502, Texas Government Code and Chapter 1371, Texas Government Code; and
WHEREAS, the City Council has heretofore passed two ordinances authorizing and directing the
City Secretary to give notice of intention to issue Certificates of Obligation, and said notices have been duly
published in a newspaper of general circulation in said Issuer, said newspaper being a "newspaper" as
defined in 1 2051.044, Texas Government Code; and
WHEREAS, the Issuer received no petition from the qualified electors of the Issuer protesting the
issuance of such Certificates of Obligation;
WHEREAS, the Issuer is an "issuer" within the meaning of Section 1371.001(4)(P), Texas
Government Code, having (i) a principal amount of at least $100 million in outstanding long-term
indebtedness, in long-term indebtedness proposed to be issued, or in a combination of outstanding or
proposed long-term indebtedness and (ii) some amount of long-term indebtedness outstanding or proposed
to be issued that is rated in one of the four highest rating categories for long-term debt instruments by a
nationally recognized rating agency for municipal securities, without regard to the effect of any credit
agreement or other form of credit enhancement entered into in connection with the obligation; and
WHEREAS, it is officially found, determined, and declared that the meeting at which this
Ordinance has been adopted was open to the public and public notice of the time, place and subject matter
of the public business to be considered and acted upon at said meeting, including this Ordinance, was given,
all as required by the applicable provisions of Texas Government Code Chapter 551; Now, Therefore
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
Section 1. RECITALS, AMOUNT, PURPOSE AND DESIGNATION OF THE CERTIFICATES.
(a) The recitals set forth in the preamble hereof are incorporated herein and shall have the same
force and effect as if set forth in this Section.
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(b) The term "Certificates" as used in this Ordinance shall mean and include collectively the
certificate of obligation initially issued and delivered pursuant to this Ordinance (the "Initial Certificate")
and all substitute certificates of obligation exchanged therefor, as well as all other substitute certificates of
obligation and replacement certificates of obligation issued pursuant hereto, and the term "Certificate" shall
mean any of the Certificates.
(c) The Certificates of Obligation of the City of Denton, Texas (the "Issuer") are hereby
authorized to be issued and delivered in the maximum aggregate principal amount of $68,265,000 for the
purpose of paying all or a portion of the Issuer's contractual obligations incurred pursuant to contracts for
the purchase, construction and acquisition of certain real and personal property, to wit: up to $21,495,000
for the purpose of (a) acquisition of vehicles and equipment for, and acquiring, constructing, installing
and equipping additions, extensions, renovations and improvements to, the Issuer's solid waste disposal
system, including the acquisition of land for the City landfill; (b) renovations to, and equipping of, existing
municipal buildings, including the acquisition and installation of replacement heating, venting and air
conditioning equipment, roofing and flooring; (c) acquisition of vehicles and equipment for the fire,
police, building inspections, animal services, streets and traffic control, facilities management, and parks
and recreation departments; (d) constructing and improving streets, including installation of traffic signals;
(e) acquisition of land for the municipal airport; (f) acquiring, constructing, installing and equipping a
public safety training facility; (g) acquiring, constructing, installing and equipping additions,
extensions, renovations and improvements to existing fire stations, and (h) acquiring, constructing,
installing and equipping two animal shelters; and also for the purpose of paying all or a portion of the
Issuer's contractual obligations for professional services, including engineers, architects, attorneys, map
makers, auditors, and financial advisors, in connection with said projects and said Certificates; and up to
$46,770,000 for the purpose of the (a) acquisition of equipment for, and acquiring, constructing, installing
and equipping additions, extensions, renovations and improvements to, the Issuer's waterworks and sewer
system; (b) acquisition of equipment for, and acquiring, constructing, installing and equipping additions,
extensions, renovations and improvements to, the Issuer's electric light and power system; and also for the
purpose of paying all or a portion of the Issuer's contractual obligations for professional services, including
engineers, architects, attorneys, map makers, auditors, and financial advisors, in connection with said
projects and said Certificates (collectively, the "Projects").
(d) Each Certificate issued pursuant to this Ordinance shall be designated: "CITY OF DENTON
CERTIFICATE OF OBLIGATION, SERIES 2013," and initially there shall be issued, sold, and delivered
hereunder fully registered certificates, without interest coupons, payable to the respective registered owners
thereof (with the Initial Certificate being made payable to the Purchaser as described in Section 10 hereof),
or to the registered assignee or assignees of said Certificates or any portion or portions thereof (in each case,
the "Registered Owner"). The Certificates shall be in the respective principal amounts, shall be numbered,
shall mature and be payable on the date or dates in each of the years and in the principal amounts, 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 Section 1371.053, Texas Government Code, as amended, the City Manager
an Assistant City Manager (the "Pricing Officer") is hereby authorized to act on behalf of the Issuer in
selling and delivering the Certificates and carrying out the other procedures specified in this Ordinance,
including, determining the date of the Certificates, any additional or different designation or title by which
the Certificates shall be known, the price at which the Certificates will be sold, the years in which the
Certificates will mature, the principal amount to mature in each of such years, the rate of interest to be borne
by each such maturity, the interest payment and record dates, the price and terms upon and at which the
Certificates shall be subject to redemption prior to maturity at the option of the Issuer, as well as any
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mandatory sinking fund redemption provisions, and all other matters relating to the issuance, sale, and
delivery of the Certificates, including without limitation, obtaining municipal bond insurance for all or any
portion of the Certificates (including in connection therewith the execution of any commitment agreements,
membership agreements in mutual insurance companies, and other similar agreements) and providing for
the terms and provisions thereof applicable to the Certificates, all of which shall be specified in the Pricing
Certificate; provided that:
W the aggregate original principal amount of the Certificates shall not exceed the amount set
forth in Section 1(c) hereof;
(ii) the price to be paid for the Certificates 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 Certificates shall not exceed February 15, 2033;
(iv) none of the Certificates shall bear interest at a rate greater than 5.25% per annum and the
net effective interest rate on the Certificates shall not exceed 4.00%;
(v) the delegation made hereby shall expire if not exercised by the Pricing Officer on or prior
to October 16, 2013; and
(vi) on or prior to delivery, the Certificates 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 Certificates, the Pricing Officer shall
establish an amount not exceeding the aggregate principal amount authorized in Subsection (a) hereof, and
not exceeding the respective amounts set forth in Section 1(c) hereof for each group of Projects, which shall
be sufficient in amount to provide for the purposes for which the Certificates are authorized and to pay costs
of issuing the Certificates. The Certificates shall be sold with and subject to such terms asset forth in the
Pricing Certificate.
Section 3. CHARACTERISTICS OF THE CERTIFICATES.
(a) Registration, Transfer, Conversion and Exchange; Authentication. The Issuer shall keep or
cause to be kept at the principal corporate trust office of The Bank of New York Mellon Trust Company,
National Association, Dallas, Texas, (the "Paying Agent/Registrar"), books or records for the registration of
the transfer, conversion and exchange of the Certificates (the "Registration Books"), and the Issuer hereby
appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and
make such registrations of transfers, conversions and exchanges under such reasonable regulations as the
Issuer and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such
registrations, transfers, conversions and exchanges as herein provided. The Paying Agent/Registrar shall
obtain and record in the Registration Books the address of the Registered Owner of each Certificate to
which payments with respect to the Certificates shall be mailed, as herein provided; but it shall be the duty
of each Registered Owner to notify the Paying Agent/Registrar in writing of the address to which payments
shall be mailed, and such interest payments shall not be mailed unless such notice has been given. The
Issuer shall have the right to inspect the Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential
and, unless otherwise required by law, shall not permit their inspection by any other entity. The Issuer
shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such registration,
transfer, conversion, exchange and delivery of a substitute Certificate or Certificates. Registration of
assigmnents, transfers, conversions and exchanges of Certificates shall be made in the manner provided and
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with the effect stated in the FORM OF CERTIFICATE set forth in this Ordinance. Each substitute
Certificate shall bear a letter and/or number to distinguish it from each other Certificate.
Except as provided in Section 3(c) of this Ordinance, an authorized representative of the Paying
Agent/Registrar shall, before the delivery of any such Certificate, date and manually sign said Certificate,
and no such Certificate shall be deemed to be issued or outstanding unless such Certificate is so executed.
The Paying Agent/Registrar promptly shall cancel all paid Certificates and Certificates surrendered for
conversion and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by
the governing body of the Issuer or any other body or person so as to accomplish the foregoing conversion
and exchange of any Certificate or portion thereof, and the Paying Agent/Registrar shall provide for the
printing, execution, and delivery of the substitute Certificates in the manner prescribed herein, and said
Certificates 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 Certificates as aforesaid is
hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Certificate, the converted
and exchanged Certificate shall be valid, incontestable, and enforceable in the same manner and with the
same effect as the Certificates that initially were issued and delivered pursuant to this Ordinance, approved
by the Attorney General of the State of Texas (the "Attorney General") and registered by the Comptroller of
Public Accounts of the State of Texas (the "Comptroller").
(b) Payment of Certificates and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Certificates, all as
provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made
by the Issuer and the Paying Agent/Registrar with respect to the Certificates, and of all conversions and
exchanges of Certificates, and all replacements of Certificates, as provided in this Ordinance. However, in
the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new
record date for such interest payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer.
Notice of the past due interest shall be sent at least five (5) business days prior to the Special Record Date by
United States mail, first-class postage prepaid, to the address of each Registered Owner appearing on the
Registration Books at the close of business on the last business day next preceding the date of mailing of
such notice.
(c) In General. The Certificates (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Certificates to be payable only to the Registered Owners
thereof, (ii) may or shall be redeemed prior to their scheduled maturities (notice of which shall be given to
the Paying Agent/Registrar by the Issuer at least 45 days prior to any such redemption date), (iii) may be
converted and exchanged for other Certificates, (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 Certificates shall be payable, and (viii) shall be administered and the Paying Agent/Registrar and the
Issuer shall have certain duties and responsibilities with respect to the Certificates, all as provided, and in
the manner and to the effect as required or indicated, in the FORM OF CERTIFICATE set forth in this
Ordinance (as modified in the Pricing Certificate). The Initial Certificate is not required to be, and shall
not be, authenticated by the Paying Agent/Registrar, but on each substitute Certificate issued in conversion
of and exchange for any Certificate or Certificates issued under this Ordinance the Paying Agent/Registrar
shall execute the Paying Agent/Registrar's Authentication Certificate, in the form set forth in the FORM OF
CERTIFICATE.
(d) Paying Agent/Registrar for the Certificates. The Issuer covenants with the Registered
Owners of the Certificates that at all times while the Certificates are outstanding the Issuer will provide a
competent and legally qualified bank, trust company, financial institution, or other entity to act as and
perform the services of Paying Agent/Registrar for the Certificates under this Ordinance, and that the
Paying Agent/Registrar will be a single entity. The Issuer reserves the right to, and may, at its option,
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Ichange 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 anytime acting as Paying Agent/Registrar (or its successor
by merger, acquisition, or other method) should resign or otherwise cease to act as such, the Issuer
covenants that promptly it will appoint a competent and legally qualified bank, trust company, financial
institution, or other agency to act as Paying Agent/Registrar under this Ordinance. Upon any change in the
Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the
Registration Books (or a copy thereof), along with all other pertinent books and records relating to the
Certificates, to the new Paying Agent/Registrar designated and appointed by the Issuer. Upon any change
in the Paying Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new
Paying Agent/Registrar to each Registered Owner of the Certificates, by United States mail, first-class
postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By accepting
the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the
provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying
Agent/Registrar.
(e) Authentication. Except as provided below, no Certificate 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 Certificates. In lieu of the executed Paying Agent/Registrar's
Authentication Certificate described above, the Initial Certificate 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 Certificate has been duly approved by the Attorney General and that it is a valid
and binding obligation of the Issuer, and has been registered by the Comptroller.
(f) Book-Entry-Only System. The Certificates issued in exchange for the Initial Certificate shall
be initially issued in the form of a separate single fully registered Certificate for each of the maturities
thereof. Upon initial issuance, the ownership of each such Certificate shall be registered in the name of
Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), and except as
provided in subsection (g) hereof, all of the outstanding Certificates shall be registered in the name of Cede
& Co., as nominee of DTC.
With respect to Certificates registered in the name of Cede & Co., as nominee of DTC, the Issuer
and the Paying Agent/Registrar shall have no responsibility or obligation to any securities brokers and
dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC
was created ("DTC Participant") to hold securities to facilitate the clearance and settlement of securities
transactions among DTC Participants or to any person on behalf of whom such a DTC Participant holds an
interest in the Certificates. Without limiting the immediately preceding sentence, the Issuer and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of
DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Certificates, (ii) the
delivery to any DTC Participant or any other person, other than a Registered Owner of Certificates, as
shown on the Registration Books, of any notice with respect to the Certificates, or (iii) the payment to any
DTC Participant or any other person, other than a Registered Owner of Certificates, as shown in the
Registration Books of any amount with respect to principal of or interest on the Certificates.
Notwithstanding any other provision of this Ordinance to the contrary, the Issuer and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Certificate is
registered in the Registration Books as the absolute owner of such Certificate for the purpose of payment of
principal and interest with respect to such Certificate, for the purpose of registering transfers with respect to
such Certificate, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal
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of and interest on the Certificates only to or upon the order of the Registered Owners, as shown in the
Registration Books as provided in this Ordinance, or their respective attorneys duly authorized in writing,
and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations with
respect to payment of principal of and interest on the Certificates to the extent of the sum or sums so paid.
No person other than a Registered Owner, as shown in the Registration Books, shall receive a Certificate
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 Certificates.
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(g) Successor Securities Depository; Transfers Outside Book-Entry-Only s~ tem. 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 Certificates that they be able to obtain certificated Certificates, the Issuer shall (i) appoint a successor
securities depository, qualified to act as such under Section 17A of the Securities and Exchange Act of
1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities
depository and transfer one or more separate Certificates to such successor securities depository or (ii)
notify DTC and DTC Participants of the availability through DTC of Certificates and transfer one or more
separate certificated Certificates to DTC Participants having Certificates credited to their DTC accounts.
In such event, the Certificates shall no longer be restricted to being registered in the Registration Books in
the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities
depository, or its nominee, or in whatever name or names Registered Owners transferring or exchanging
Certificates shall designate, in accordance with the provisions of this Ordinance.
(h) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Certificate is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of and interest on such Certificate and all notices with respect to such
Certificate shall be made and given, respectively, in the manner provided in the Blanket Issuer Letter of
Representations to DTC.
(i) Cancellation of Initial Certificate. On the closing date, the Initial Certificate, representing the
entire principal amount of the Certificates, 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 Certificate, the Paying
Agent/Registrar shall cancel the Initial Certificate and deliver to DTC on behalf of such Purchaser one
registered definitive Certificate for each year of maturity of the Certificates, in the aggregate principal
amount of all of the Certificates 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 Certificates in safekeeping for DTC.
0) Conditional Notice of Redemption. With respect to any optional redemption of the
Certificates, 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 Certificates to be
redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice of
redemption, such notice shall state that said redemption may, at the option of the Issuer, be conditional upon
the satisfaction of such prerequisites and receipt of such moneys by the Paying Agent/Registrar on or prior
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to the date fixed for such redemption, or upon any prerequisite set forth in such notice of redemption. If a
conditional notice of redemption is given and such prerequisites to the redemption and sufficient moneys
are not received, such notice shall be of no force and effect, the Issuer shall not redeem such Certificates and
the Paying Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to
the effect that the Certificates have not been redeemed.
Section 4. FORM OF CERTIFICATES. The form of the Certificates, 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 Certificates initially issued and delivered pursuant to this
Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, omissions or
insertions as are permitted or required by this Ordinance, and with the Form of Certificate to be modified
pursuant to, and completed with information set forth in, the Pricing Certificate.
(a) [Form of Certificate]
NO. R- UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
CITY OF DENTON $
CERTIFICATE OF OBLIGATION
SERIES 2013
Interest Rate Dated Date Maturity Date CUSIP No.
20_ February 15, 20_
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
ON THE MATURITY DATE specified above, the City of Denton, in Denton County, Texas (the
"Issuer"), being a political subdivision and municipal corporation of the State of Texas, hereby promises to
pay to the Registered Owner specified above, or registered assigns (hereinafter called the "Registered
Owner"), on the Maturity Date specified above, the Principal Amount specified above. The Issuer
promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 3 60-day year of
twelve 30-day months) from 2013 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 Certificate is
required to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding the date
of authentication, unless such date of authentication is after any Record Date but on or before the next
following interest payment date, in which case such principal amount shall bear interest from such next
following interest payment date; provided, however, that if on the date of authentication hereof the interest
on the Certificate or Certificates, if any, for which this Certificate is being exchanged is due but has not been
paid, then this Certificate shall bear interest from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Certificate shall
be paid to the Registered Owner hereof upon presentation and surrender of this Certificate at maturity, or
upon the date fixed for its redemption prior to maturity, at the principal corporate trust office of The Bank of
New York Mellon Trust Company, National Association, Dallas, Texas, which is the "Paying
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Agent/Registrar" for this Certificate. The payment of interest on this Certificate shall be made by the
Paying Agent/Registrar to the Registered Owner hereof on each interest payment date by check or draft,
dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from,
funds of the Issuer required by the ordinance authorizing the issuance of this Certificate (the "Certificate
Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and
such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class postage
prepaid, on each such interest payment date, to the Registered Owner hereof, at its address as it 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 Certificate appearing on the Registration Books at the close of business on the last business day
next preceding the date of mailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Certificate prior to
maturity as provided herein shall be paid to the Registered Owner upon presentation and surrender of this
Certificate for redemption and payment at the principal corporate trust office of the Paying Agent/Registrar.
The Issuer covenants with the Registered Owner of this Certificate that on or before each principal payment
date, interest payment date, and accrued interest payment date for this Certificate it will make available to
the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate Ordinance, the
amounts required to provide for the payment, in immediately available funds, of all principal of and interest
on the Certificates, when due.
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a Saturday,
Sunday, a legal holiday or a day on 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 CERTIFICATE is one of a series of Certificates dated 2013, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
for the purpose of paying all or a portion of the Issuer's contractual obligations incurred pursuant to
contracts for the purchase, construction and acquisition of certain real and personal property, to wit:
1 for the purpose of (a) acquisition of vehicles and equipment for, and acquiring,
constructing, installing and equipping additions, extensions, renovations and improvements to, the
Issuer's solid waste disposal system, including the acquisition of land for the City landfill; (b) renovations
to, and equipping of, existing municipal buildings, including the acquisition and installation of replacement
heating, venting and air conditioning equipment, roofing and flooring; (c) acquisition of vehicles and
equipment for the fire, police, building inspections, animal services, streets and traffic control, facilities
management, and parks and recreation departments; (d) constructing and improving streets, including
installation of traffic signals; (e) acquisition of land for the municipal airport; (f) acquiring, constructing,
installing and equipping a public safety training facility; (g) acquiring, constructing, installing and
equipping additions, extensions, renovations and improvements to existing fire stations, and (h)
acquiring, constructing, installing and equipping two animal shelters; and also for the purpose of paying
all or a portion of the Issuer's contractual obligations for professional services, including engineers,
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architects, attorneys, map makers, auditors, and financial advisors, in connection with said projects and said
Certificates; and for the purpose of the (a) acquisition of equipment for, and acquiring,
constructing, installing and equipping additions, extensions, renovations and improvements to, the Issuer's
waterworks and sewer system; (b) acquisition of equipment for, and acquiring, constructing, installing and
equipping additions, extensions, renovations and improvements to, the Issuer's electric light and power
system; and also for the purpose of paying all or a portion of the Issuer's contractual obligations for
professional services, including engineers, architects, attorneys, map makers, auditors, and financial
advisors, in connection with said projects and said Certificates.
ON , 20 , or on any date thereafter, the Certificates 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 Certificates, or portions thereof, to be
redeemed shall be selected and designated by the Issuer (provided that a portion of a Certificate may be
redeemed only in an integral multiple of $5,000), at a redemption price equal to the principal amount to be
redeemed plus accrued interest to the date fixed for redemption.
THE CERTIFICATES scheduled to mature on in the years and ( the
"Term Certificates") 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 Certificates, on the dates and in the respective principal amounts, set forth
in the following schedule:
Term Certificate Term Certificate
Maturity: February 15, 20_ Maturity: February 15,20_
Principal Principal
Mandatory 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 Certificates of a stated maturity required to be redeemed on any mandatory
redemption date pursuant to the operation of the mandatory sinking fund redemption provisions shall be
reduced, at the option of the Issuer, by the principal amount of any Term Certificates of the same maturity
which, at 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 Certificates plus accrued interest to the date of
purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, (2) shall have been
purchased and canceled by the Paying Agent/Registrar at the request of the Issuer at a price not exceeding
the principal amount of such Term Certificates plus accrued interest to the date of purchase, or (3) shall
have been redeemed 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 Certificates or portions thereof
prior to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by United
States mail, first-class postage prepaid, to the Registered Owner of each Certificate to be redeemed at its
address as it appeared on the 45th day prior to such redemption date; provided, however, that the failure of
the Registered Owner to receive such notice, or any defect therein or in the sending or mailing thereof, shall
not affect the validity or effectiveness of the proceedings for the redemption of any Certificate. By the date
fixed for any such redemption due provision shall be made with the Paying Agent/Registrar for the payment
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of the required redemption price for the Certificates or portions thereof that are to be so redeemed. If such
written notice of redemption is sent and if due provision for such payment is made, all as provided above,
the Certificates 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 Certificate shall be redeemed, a substitute Certificate or Certificates having
the same maturity date, bearing interest at the same rate, in any denomination or denominations in any
integral multiple of $5,000, at the written request of the Registered Owner, and in aggregate principal
amount equal to the unredeemed portion thereof, will be issued to the Registered Owner upon the surrender
thereof for cancellation, at the expense of the Issuer, all as provided in the Certificate Ordinance.
IF AT THE TIM- OF MAILING of notice of optional redemption there shall not have either been
deposited with the Paying Agent/Registrar or legally authorized escrow agent inunediately available funds
sufficient to redeem all the Certificates called for redemption, such notice may state that it is conditional,
and is subject 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 CERTIFICATES OF THIS SERIES are issuable solely as fully registered certificates, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Certificate
Ordinance, this Certificate may, at the request of the Registered Owner or the assignee or assignees hereof,
be assigned, transferred, converted into and exchanged for a like aggregate principal amount of fully
registered Certificates, without interest coupons, payable to the appropriate Registered Owner, assignee or
assignees, as the case may be, having the same denomination or denominations in any integral multiple of
$5,000 as requested in writing by the appropriate Registered Owner, assignee or assignees, as the case may
be, upon surrender of this Certificate to the Paying Agent/Registrar for cancellation, all in accordance with
the form and procedures set forth in the Certificate Ordinance. Among other requirements for such
assignment and transfer, this Certificate must be presented and surrendered to the Paying Agent/Registrar,
together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the
Paying Agent/Registrar, evidencing assignment of this Certificate or any portion or portions hereof in any
integral multiple of $5,000 to the assignee or assignees in whose name or names this Certificate or any such
portion or portions hereof is or are to be registered. The Form of Assignment printed or endorsed on this
Certificate may be executed by the Registered Owner to evidence the assignment hereof, but such method is
not exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used
to evidence the assignment of this Certificate or any portion or portions hereof from time to time by the
Registered Owner. The Paying Agent/Registrar's reasonable standard or customary fees and charges for
assigning, transferring, converting and exchanging any Certificate or portion thereof will be paid by the
Issuer. In any circumstance, any taxes or governmental charges required to be paid with respect thereto
shall be paid by the one 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 Certificate or any portion thereof called for redemption prior to maturity,
within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be
mailed to the Registered Owners of the Certificates.
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IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper to be performed,
exist and be done precedent to or in the authorization, issuance and delivery of this Certificate have been
performed, existed and been done in accordance with law; and that annual ad valorem taxes sufficient to
provide for the payment of the interest on and principal of this Certificate, as such interest comes due and
such principal matures, have been levied and ordered to be levied against all taxable property in said Issuer,
and have been pledged for such payment, within the limit prescribed by law; and that this Certificate is
additionally secured by and payable from a limited pledge (not to exceed $1,000) of the surplus revenues
derived by the Issuer from the ownership and operation of the Issuer's Utility System (consisting of the
Issuer's combined waterworks system, sanitary sewer system, and electric light and power system), all as
provided in the Certificate Ordinance.
THE ISSUER HAS RESERVED THE RIGHT to issue, in accordance with law, and in accordance
with the Certificate Ordinance, other and additional obligations, and to enter into contracts, payable from ad
valorem taxes and/or revenues of the Issuer's Utility System, on a parity with, or with respect to said
revenues, superior in lien to, this Certificate.
THE ISSUER HAS RESERVED THE RIGHT to amend the Certificate Ordinance as provided
therein, and under some (but not all) circumstances amendments thereto must be approved by the
Registered Owners of a majority in aggregate principal amount of the outstanding Certificates.
BY BECOMING the Registered Owner of this Certificate, the Registered Owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by such terms
and provisions, acknowledges that the Certificate Ordinance is duly recorded and available for inspection in
the official minutes and records of the governing body of the Issuer, and agrees that the terms and
provisions of this Certificate and the Certificate Ordinance constitute a contract between each Registered
Owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the manual or
facsimile signature of the Mayor of the Issuer (or in 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 Certificate.
(signature) (signature)
City Secretary Mayor
(SEAL)
[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 Certificate is not accompanied by an executed Comptroller's Registration
Certificate)
It is hereby certified that this Certificate has been issued under the provisions of the Certificate
Ordinance described in the text of this Certificate; and that this Certificate has been issued in conversion or
replacement of, or in exchange for, a certificate, certificates, or a portion of a certificate or certificates of a
series 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.
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Dated:
The Bank of New York Mellon Trust Company,
National Association, Dallas, Texas
Paying Agent/Registrar
By:
Authorized Representative
(c) [Form of Assignment]
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer Identification Number of Transferee
(Please print or typewrite name and address, including zip code, of Transferee.)
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney, to register the transfer of the within
Certificate on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by NOTICE: The signature above must correspond
an eligible guarantor institution participating in a with the name of the Registered Owner as it
securities transfer association recognized appears upon the front of this certificate in every
signature guarantee program. particular, without alteration or enlargement or
any change whatsoever.
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(d) [Form of Comptroller's Registration Certificate]
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
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I hereby certify that this Certificate of Obligation has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and that this Certificate of Obligation has been
registered by the Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
II
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
(e) [Initial Certificate Insertions]
(i) The Initial Certificate shall be in the form set forth in paragraph (a) of this Section, except
that:
A. immediately under the name of the Certificate, the headings "Interest Rate" and
"Maturity Date" shall both be completed with the words "As shown below" and "CUSIP No.
" shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"THE CITY OF DENTON, TEXAS, in Denton County, Texas (the "Issuer"), being a political subdivision
and municipal corporation of the State of Texas, hereby promises to pay to the Registered Owner specified
above, or registered assigns (hereinafter called the "Registered Owner"), on February 15 in each of the
years, in the principal installments and bearing interest at the per annum rates set forth in the following
schedule:
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 , 2013 at the respective Interest Rate per
annum specked 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 Certificate is required to be authenticated and the date of
its authentication is later than the first Record Date (hereinafter defined), such Principal Amount shall bear
interest from the interest payment date next preceding the date of authentication, unless such date of
authentication is after any Record Date but on or before the next following interest payment date, in which
case such principal amount shall bear interest from such next following interest payinent date; provided,
however, that if on the date of authentication hereof the interest on the Certificate or Certificates, if any, for
which this Certificate is being exchanged is due but has not been paid, then this Certificate shall bear
interest from the date to which such interest has been paid in full."
C. The Initial Certificate shall be numbered "T-1."
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Section 5. INTEREST AND SINKING FUND; SURPLUS REVENUES.
(a) A special Interest and Sinking Fund (the "Interest and Sinking Fund") is hereby created solely
for the benefit of the Certificates, 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 Certificates. All ad valorem taxes levied and collected for and on account of the
Certificates, together with any accrued interest received upon sale of the Certificates, shall be deposited, as
collected, to the credit of the Interest and Sinking Fund. During each year while any of the Certificates 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 Certificates as such interest becomes due, and to provide and maintain a sinking fund
adequate to pay the principal of its Certificates as such principal matures or is scheduled for redemption
(but never less than 2% of the original principal amount of the Certificates as a sinking fund each year).
Said tax shall be based on the latest approval tax rolls of the Issuer, with full allowance being made for tax
delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied, and
is hereby ordered to be levied, against all taxable property in the Issuer for each year while any of the
Certificates 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 Certificates, 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.
(b) The Certificates are additionally secured by revenues derived by the Issuer from the ownership
and operation of the Issuer's Utility System (consisting of its combined waterworks system, sanitary sewer
system, and electric light and power system) that remain after the payment of all maintenance and operation
expenses thereof, and all debt service, reserve and other requirements in 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, constituting
"Surplus Revenues", not to exceed $1,000. The Issuer shall deposit such Surplus Revenues to the credit of
the Interest and Sinking Fund created pursuant to this Section, to the extent necessary to pay the principal
and interest on the Certificates. Notwithstanding the requirements of this Section, if Surplus Revenues or
other lawfully available moneys of the Issuer are actually on deposit or budgeted and appropriated to be
deposited in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be
levied for any year, then the amount of taxes that otherwise would have been required to be levied pursuant
to subsection (a) of this Section may be reduced to the extent and by the amount of the Surplus Revenues or
other lawfully available funds then on deposit or budgeted and appropriated to be deposited in the Interest
and Sinking Fund. 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 Certificates 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 Certificates;
(ii) shall establish, adopt and maintain an annual budget that provides for either the monthly deposit
of sufficient Surplus Revenues and/or tax revenues, the monthly deposit of any other legally available
funds on hand at the time of the adoption of the annual budget, or a combination thereof, into the
Interest and Sinking Fund for the repayment of the Certificates; and
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(iii) shall at all times maintain and collect sufficient Utility System rates and charges in conjunction
with any other legally available funds that, after payment of the costs of operating and maintaining
the Utility System, produce revenues in an amount not less than the debt service requirements of all
outstanding Utility System revenue bonds of the Issuer and other obligations of the Issuer which are
secured in whole or in part by a pledge of revenues of the Utility System and for which the Issuer is
budgeting the repayment of such obligations from the revenues of the Utility System, or the Issuer
shall provide documentation which evidences the levy of an ad valorem tax rate dedicated to the
Interest and Sinking Fund, in conjunction with any other legally available funds except Utility
System rates and charges, sufficient for the repayment of Utility System debt service requirements.
(c) Chapter 1208, Texas Government Code, applies to the issuance of the Certificates and the pledge
of the taxes and Surplus Revenues 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
Certificates are outstanding and unpaid, the result of such amendment being that the pledge of the taxes and
Surplus Revenues 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
Certificates a security interest in said pledge, the Issuer agrees to take such measures as it deterinines 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 CERTIFICATES.
(a) Any Certificate and the interest thereon shall be deemed to be paid, retired and no longer
outstanding (a "Defeased Certificate") within the meaning of this Ordinance, except to the extent provided
in subsection (d) of this Section, when payment of the principal of such Certificate, plus interest thereon to
the due date (whether such due date be by reason of maturity or otherwise) either (i) shall have been made
or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for on or before
such due date by irrevocably depositing with or making available to the Paying Agent/Registrar in
accordance with an escrow agreement or other instrument (the "Future Escrow Agreement") for such
payment (1) lawful money of the United States of America sufficient to make such payment or
(2) 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 Certificates shall have become due and payable. At such time as a
Certificate shall be deemed to be a Defeased Certificate hereunder, as aforesaid, such Certificate and the
interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem
taxes herein levied and pledged as provided in this Ordinance, and such principal and interest shall be
payable solely from such money or Government Obligations. Notwithstanding any other provision of this
Ordinance to the contrary, it is hereby provided that any determination not to redeem Defeased Certificates
that is made in conjunction with the payment arrangements specified in Subsection (a)(i) or (ii) of this
Section shall not be irrevocable, provided that: (1) in the proceedings providing for such payment
arrangements, the Issuer expressly reserves the right to call the Defeased Certificates for redemption; (2)
gives notice of the reservation of that right to the Registered Owners of the Defeased Certificates
immediately following the making of the payment arrangements; and (3) directs that notice of the
reservation be included in any redemption notices that it authorizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the
Issuer be invested in Government Obligations, maturing in the amounts and times as hereinbefore set forth,
and all income from such Government Obligations received by the Paying Agent/Registrar that is not
required for the payment of the Certificates and interest thereon, with respect to which such money has been
so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer. Any
Future Escrow Agreement pursuant to which the money and/or Government Obligations are held for the
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payment of Defeased Certificates 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 Certificates, with respect to which such money has been so deposited, shall be remitted to the
Issuer or deposited as directed in writing by the Issuer.
(c) 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 Certificates, 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 Certificates shall have become due and payable, the Paying Agent/Registrar
shall perform the services of Paying Agent/Registrar for such Defeased Certificates the same as if they had
not been defeased, and the Issuer shall make proper arrangements to provide and pay for such services as
required by this Ordinance.
(c) In the event that the Issuer elects to defease less than all of the principal amount of Certificates of
a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Certificates by
such random method as it deems fair and appropriate.
Section 7. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED CERTIFICATES.
(a) Replacement Certificates. In the event any outstanding Certificate is damaged, mutilated, lost,
stolen or destroyed, the Paying Agent/Registrar shall cause to be printed, executed and delivered, a new
Certificate of the same principal amount, maturity and interest rate, as the damaged, mutilated, lost, stolen
or destroyed Certificate, in replacement for such Certificate in the manner hereinafter provided.
(b) Application for Replacement Certificates. Application for replacement of damaged, mutilated,
lost, stolen or destroyed Certificates shall be made by the Registered Owner thereof to the Paying
Agent/Registrar. In every case of loss, theft or destruction of a Certificate, the Registered Owner applying
for a replacement Certificate shall furnish to the Issuer and to the Paying Agent/Registrar such security or
indemnity as may be required by them to save each of them harmless from any loss or damage with respect
thereto. Also, in every case of loss, theft or destruction of a Certificate, the Registered Owner shall furnish
to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft or destruction
of such Certificate, as the case may be. In every case of damage or mutilation of a Certificate, the
Registered Owner shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged
or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Ordinance, in the event
any such Certificate shall have matured, and no default has occurred that is then continuing in the payment
of the principal of, redemption premium, if any, or interest on the Certificate, the Issuer may authorize the
payment of the same (without surrender thereof except in the case of a damaged or mutilated Certificate)
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instead of issuing a replacement Certificate, provided security or indemnity is furnished as above provided
in this Section.
(d) Charge for Issuing Replacement Certificates. Prior to the issuance of any replacement
Certificate, the Paying Agent/Registrar shall charge the Registered Owner of such Certificate with all legal,
printing, and other expenses in connection therewith. Every replacement Certificate issued pursuant to the
provisions of this Section by virtue of the fact that any Certificate is lost, stolen or destroyed shall constitute
a contractual obligation of the Issuer whether or not the lost, stolen or destroyed Certificate shall be found at
any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and
proportionately with any and all other Certificates duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates. In accordance with Sec. 1206.022,
Government Code, this Section 7 of this Ordinance shall constitute authority for the issuance of any such
replacement Certificate without necessity of further action by the governing body of the Issuer or any other
body or person, and the duty of the replacement of such Certificates is hereby authorized and imposed upon
the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Certificates
in the form and manner and with the effect, as provided in Section 3(a) of this Ordinance for Certificates
issued in conversion and exchange for other Certificates.
Section 8. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES; 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 Certificate and all
necessary records and proceedings pertaining to the Initial Certificate pending its delivery and its
investigation, examination, and approval by the Attorney General, and its registration by the Comptroller.
Upon registration of the Initial Certificate said Comptroller (or a deputy designated in writing to act for said
Comptroller) shall manually sign the Comptroller's Registration Certificate attached to such Certificate,
and the seal of said Comptroller shall be impressed, or placed in facsimile, on such Certificate. The
approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option of
the Issuer, be printed on the Certificates issued 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
Certificates. In addition, if bond insurance is obtained, the Certificates may bear an appropriate legend as
provided by the insurer.
(b) The obligation of the Purchaser to accept delivery of the Certificates 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 Certificates
to the Purchaser. The engagement of such firm as bond counsel to the Issuer in connection with the
issuance, sale and delivery of the Certificates is hereby approved and confirmed. The execution and
delivery of an engagement letter between the Issuer and such firm, with respect to such services as bond
counsel, is hereby authorized in such form as may be approved by the Mayor, and the Mayor is hereby
authorized to execute such engagement letter.
Section 9. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
CERTIFICATES.
(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 Certificates as obligations described in section 103
of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which is not includable in
the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the Issuer
covenants as follows:
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(1) to take any action to assure that no more than 10 percent of the proceeds of the Certificates
(less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in
section 141(b)(6) of the Code or, if more than 10 percent of the proceeds or the projects financed
therewith are so used, such amounts, whether or not received by the Issuer, with respect to such
private business use, do not, under the terms of this Ordinance or any underlying arrangement,
directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on
the Certificates, in contravention of section 141(b)(2) of the Code;
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(2) to take any action to assure that in the event that the "private business use" described in
subsection (1) hereof exceeds 5 percent of the proceeds of the Certificates or the projects financed
therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is
used for a "private business use" 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 Certificates (less amounts deposited into a reserve fund, if any) is
directly or indirectly used to finance loans to persons, other than state or local governmental units, in
contravention of section 141(c) of the Code;
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(4) to refrain from taking any action that would otherwise result in the Certificates being
treated as "private activity bonds" within the meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Certificates being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Certificates, directly or indirectly,
to acquire or to replace funds that were used, directly or indirectly, to acquire investment property (as
defined in section 148(b)(2) of the Code) that produces a materially higher yield over the term of the
Certificates, other than investment property acquired with -
(A) proceeds of the Certificates 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, within the meaning of section
1.148-1(b) of the rules and regulations of the United States Department of the Treasury
("Treasury Regulations"), and
(C) amounts deposited in any reasonably required reserve or replacement fund to the
extent such amounts do not exceed 10 percent of the proceeds of the Certificates;
(7) to otherwise restrict the use of the proceeds of the Certificates or amounts treated as
proceeds of the Certificates, as may be necessary, so that the Certificates do not otherwise contravene
the requirements of section 148 of the Code (relating to arbitrage) 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 Certificates) an amount that is at least equal to 90 percent of
the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the United
States of America, not later than 60 days after the Certificates have been paid in full, 100 percent of
the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code.
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(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
Certificateholders. 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 Certificates. It is the understanding of the Issuer that the
covenants contained herein are intended to assure compliance with the Code and any regulations or rulings
promulgated by the 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 Certificates, the Issuer will not be required to comply with any covenant contained herein to the
extent that such failure to comply, in the opinion of nationally recognized bond counsel, will not adversely
affect the exemption from federal income taxation of interest on the Certificates under section 103 of the
Code. In the event that regulations or rulings are hereafter promulgated that impose additional
requirements applicable to the Certificates, the Issuer agrees to comply with the additional requirements to
the extent necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption from
federal income taxation of interest on the Certificates under section 103 of the Code. In furtherance of
such intention, the Issuer hereby authorizes and directs the Mayor or the 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 Certificates.
(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 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 Projects are completed. The foregoing
notwithstanding, the Issuer shall not expend proceeds of the sale of the Certificates or investment earnings
thereon more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Certificates, or
(2) the date the Certificates are retired, unless the Issuer obtains an opinion of nationally-recognized bond
counsel that such expenditure will not adversely affect the status, for federal income tax purposes, of the
Certificates or the interest thereon. For purposes hereof, the Issuer shall not be obligated to comply with
this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability
for federal income tax purposes from gross income of the interest.
(e) Disposition of Projects. The Issuer covenants that the Projects will not be sold or otherwise
disposed in a transaction resulting in the receipt by the Issuer of cash or other compensation, unless the
Issuer obtains an opinion of nationally-recognized bond counsel that such sale or other disposition will not
adversely affect the tax-exempt status of the Certificates. For purposes of the foregoing, the portion of the
property comprising personal property and disposed in the ordinary course shall not be treated as a
transaction resulting in the receipt of cash or other compensation. For purposes hereof, the Issuer shall not
be obligated to comply with this covenant if it obtains a legal opinion that such failure to comply will not
adversely affect the excludability for federal income tax proposes from gross income of the interest.
(f) Reimbursement. This Ordinance is intended to satisfy the official intent requirements set forth
in section 1.150-2 of the Treasury Regulations.
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Section 10. SALE OF CERTIFICATES AND APPROVAL OF OFFICIAL STATEMENT;
FURTHER PROCEDURES.
(a) The Certificates 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 Certificates (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 Certificates shall initially be registered in the name of the Purchaser or its
designee.
(b) The Issuer hereby approves the form and content of the draft preliminary official statement
relating to the Certificates and any addenda, supplement or amendment thereto, and approves the
distribution of such preliminary official statement in the reoffering of the Certificates by the Purchaser in
final form, with such changes therein or additions thereto as the Pricing Officer 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 Certificates to be
used by the Purchaser in the marketing of the Certificates.
(c) The Pricing Officer is authorized, in connection with effecting the sale of the Certificates, 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 Certificates. To that end,
should the Pricing Officer exercise such authority and commit the Issuer to obtain a municipal bond
insurance policy, for so long as the Insurance Policy is in effect, the requirements of the Insurer relating to
the issuance of the Insurance Policy as set forth in the Pricing Certificate are incorporated by reference into
this Ordinance and made a part hereof for all purposes, notwithstanding any other provision of this
Ordinance to the contrary. The Pricing Officer shall have the authority to execute any documents to effect
the issuance of the Insurance Policy by the Insurer, including commitment agreements, membership
agreements in mutual insurance companies and other similar agreements.
(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
provisions of this Ordinance, the Pricing Certificate, the Certificates, the sale of the Certificates, any
Purchase Agreement and the Official Statement. In case any officer whose signature shall appear on any
Certificate shall cease to be such officer before the delivery of such Certificate, such signature shall
nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until
such delivery.
Section 11. INTEREST EARNINGS ON CERTIFICATE PROCEEDS. Interest earnings derived
from the investment of proceeds from the sale of the Certificates issued for the Projects shall be used along
with other Certificate proceeds for the 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 Certificate proceeds that are required to
be rebated to the United States of America pursuant to Section 9 hereof in order to prevent the Certificates
from being arbitrage bonds shall be so rebated and not considered as interest earnings for the purposes of
this Section.
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Section 12. CONSTRUCTION FUND OR ACCOUNT; INVESTMENTS.
(a) The proceeds of sale of the Certificates, excluding any accrued interest received from the initial
purchaser of the Certificates and any other amounts to be deposited into the Interest and Sinking Fund, and
amounts to pay costs of issuance of the Certificates, shall be deposited in one or more construction funds or
accounts for use, along with any investment earnings thereon, by the Issuer for payment of all lawful costs
associated with the acquisition and construction of the Projects as hereinbefore provided. Upon payment
of all such costs, any moneys remaining on deposit in said funds or accounts, including investment
earnings, 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 Certificates (including investment earnings thereon)
issued for the 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 Certificates will be used as
soon as practicable for the purposes for which the Certificates are issued.
(c) All deposits authorized or required by this Ordinance shall be secured to the fullest extent
required by law for the security of public funds.
Section 13. COMPLIANCE WITH RULE 15c2-12.
(a) Definitions. As used in this Section, the following terms have the meanings ascribed to such
terms below:
WSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reports.
(i) The Issuer shall provide annually to the MSRB, in a designated electronic format as
prescribed by the MSRB, within six months after the end of each fiscal year ending in or after 2013,
financial information and operating data with respect to the Issuer of the general type included in the
final Official Statement authorized by Section 10 of this Ordinance, being the information set forth in
the Pricing Certificate. Any financial statements so to be provided shall be (1) prepared in
accordance with the accounting principles described in the financial statement appended to the
Official Statement, or such other accounting principles as the Issuer may be required to employ from
time to time pursuant to state law or regulation, and (2) audited, if the Issuer commissions an audit of
such statements and the audit is completed within the period during which they must be provided. If
the audit of such financial statements is not completed within such period, then the Issuer shall
provide unaudited financial statements within such period, and audited financial statements for the
applicable fiscal year to the MSRB, when and if the audit report on such statements become available.
All documents provided to the MSRB pursuant to this Section shall be accompanied by identifying
information as prescribed by the MSRB.
(ii) If the Issuer changes its fiscal year, it will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the Issuer otherwise would be required to
provide financial information and operating data pursuant to this Section. The financial information
and operating data to be provided pursuant to this Section may be set forth in full in one or more
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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 Certificates, if such event is material within the meaning of the
federal securities laws:
1. Non-payment related defaults;
2. Modifications to rights of holders of the Certificates;
3. Certificate calls;
4. Release, substitution, or sale of property securing repayment of the Certificates;
5. The consummation of a merger, consolidation, or acquisition involving an
obligated person or the sale of all or substantially all of the assets of the obligated
person, other than in the ordinary course of business, the entry into a definitive
agreement to undertake such an action or the termination of a definitive agreement
relating to any such actions, other than pursuant to its terms;
6. Appointment of a successor or additional trustee or the change of name of a
trustee.
(ii) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a
timely manner (but not in excess of ten business days after the occurrence of the event) of any of the
following events with respect to the Certificates, 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 financial 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 final determinations of taxability, Notices of Proposed Issue (IRS Form
5701-TEB) or other material notices or determinations with respect to the
tax-exempt status of the Certificates, or other material events affecting the
tax-exempt status of the Certificates;
6. Tender offers;
7. Defeasances;
8. Rating changes;
9. Bankruptcy, insolvency, receivership or similar event of an obligated person.
(iii) The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer to
provide financial information or operating data in accordance with subsection (b) of this Section by
the time required by such subsection.
(d) Limitations, Disclaimers, and Amendments.
(i) The Issuer shall be obligated to observe and perform the covenants specified in this
Section for so long as, but only for so long as, the Issuer remains an "obligated person" with respect to
the Certificates within the meaning of the Rule, except that the Issuer in any event will give notice of
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any deposit made in accordance with this Ordinance or applicable law that causes the Certificates no
longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the Registered Owners and
beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any
benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Issuer
undertakes to provide only the financial information, operating data, financial statements, and notices
which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to
provide any other information that may be relevant or material to a complete presentation of the
Issuer's financial results, condition, or prospects or hereby undertake to update any information
provided in accordance with this Section or otherwise, except as expressly provided herein. The
Issuer does not make any representation or warranty concerning such information or its usefulness to
a decision to invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON
ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
(iv) No default by the Issuer in observing or performing its obligations under this Section
shall comprise a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Issuer under federal and state securities laws.
(v) The provisions of this Section may be amended by the Issuer from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a change in
the identity, nature, status, or type of operations of the Issuer, but only if (1) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Certificates in the
primary offering of the Certificates in compliance with the Rule, taking into account any amendments
or interpretations of the Rule since such offering as well as such changed circumstances and (2) either
(a) the Registered Owners of a majority in aggregate principal amount (or any greater amount
required by any other provision of this Ordinance that authorizes such an amendment) of the
outstanding Certificates consent to such amendment or (b) a person that is unaffiliated with the Issuer
(such as nationally recognized bond counsel) detennined that such amendment will not materially
impair the interest of the Registered Owners and beneficial owners of the Certificates. The Issuer
may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends
or repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that
such provisions of the Rule are invalid, but only if and to the extent that the provisions of this
sentence would not prevent an underwriter from lawfully purchasing or selling Certificates in the
primary offering of the Certificates. If the Issuer so amends the provisions of this Section, it shall
include with any amended financial information or operating data next provided in accordance with
subsection (b) of this Section an explanation, in narrative form, of the reason for the amendment and
of the impact of any change in the type of financial information or operating data so provided.
(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 Certificates so as to permit an underwriter to purchase or sell Certificates in the
primary offering of the Certificates in compliance with the Rule. Any such revisions shall be set forth in
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the Pricing Certificate 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 AMENDMENT. The Issuer hereby reserves the right to amend this
Ordinance subject to the following terms and conditions, to-wit:
(a) The Issuer may from time to time, without the consent of any holder, except as otherwise
required by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any ambiguity,
defect or omission in this Ordinance that does not materially adversely affect the interests of the holders,
(ii) grant additional rights or security for the benefit of the holders, (iii) add events of default as shall not be
inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the interests
of the holders, (iv) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or
corresponding provisions of federal laws from time to time in effect, or (v) make such other provisions in
regard to matters or questions arising under this Ordinance as shall not be inconsistent with the provisions
of this Ordinance and that shall not in the opinion of the Issuer's Bond Counsel materially adversely affect
the interests of the holders.
(b) Except as provided in paragraph (a) above, the holders of Certificates aggregating in principal
amount a majority of the aggregate principal amount of then outstanding Certificates that are the subject of
a proposed amendment shall have the right from time to time to approve any amendment hereto that may be
deemed necessary or desirable by the Issuer; provided, however, that without the consent of 100% of the
holders in aggregate principal amount of the then outstanding Certificates, nothing herein contained shall
permit or be construed to permit amendment of the terms and conditions of this Ordinance or in any of the
Certificates so as to:
(1) Make any change in the maturity of any of the outstanding Certificates;
(2) Reduce the rate of interest borne by any of the outstanding Certificates;
(3) Reduce the amount of the principal of, or redemption premium, if any, payable on any
outstanding Certificates;
(4) Modify the terms of payment of principal or of interest or redemption premium on
outstanding Certificates or any of them or impose any condition with respect to such payment;
or
(5) Change the minimum percentage of the principal amount of Certificates necessary for
consent to such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the Issuer shall
send by U. S. mail to each Registered Owner of the affected Certificates a copy of the proposed amendment
and cause notice of the proposed amendment to be published at least once in a financial publication
published in The City of New York, New York or in the State of Texas. Such published notice shall briefly
set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the office of
the Issuer for inspection by all holders of such Certificates.
(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 Certificates 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.
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(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this Section, this
Ordinance shall be deemed to be modified and amended in accordance with such amendatory Ordinance,
and the respective rights, duties, and obligations of the Issuer and all holders of such affected Certificates
shall thereafter be determined, exercised, and enforced, subject in all respects to such amendment.
(f) Any consent given by the holder of a Certificate 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 Certificate during such
period. Such consent may be revoked at any time after six months from the date of the publication of said
notice by the holder who gave such consent, or by a successor in title, by filing notice with the Issuer, but
such revocation shall not be effective if the holders of a majority in aggregate principal amount of the
affected Certificates then outstanding, have, prior to the attempted revocation, consented to and approved
the amendment.
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For the purposes of establishing ownership of the Certificates, the Issuer shall rely solely upon the
registration of the ownership of such Certificates on the Registration Books kept by the Paying
Agent/Registrar.
Section 15. DEFAULT AND REMEDIES.
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(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 Certificates when
the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or obligation
of the Issuer, the failure to perform which materially, adversely affects the rights of the Registered
Owners of the Certificates, including, but not limited to, their prospect or ability to be repaid in
accordance with this Ordinance, and the continuation thereof for a period of 60 days after notice of
such default is given by any Registered Owner to the Issuer.
(b) Remedies for Default.
(i) Upon the happening of any Event of Default, then and in every case, any Registered Owner
or an authorized representative thereof, including, but not limited to, a trustee or trustees therefor,
may proceed against the Issuer for the purpose of protecting and enforcing the rights of the Registered
Owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at
law, in any court of competent jurisdiction, for any relief permitted by law, including the specific
performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that
may be unlawful or in violation of any right of the Registered Owners hereunder or any combination
of such remedies.
(ii) It is provided that all such proceedings shall be instituted and maintained for the equal
benefit of all Registered Owners of Certificates 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 Certificates or now or hereafter existing at law or in
equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to
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c e tot e cate shall not be available as a re 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 Certificate authorized under this Ordinance, such
Registered Owner agrees that the certifications required to effectuate any covenants or
representations contained in this Ordinance do not and shall never constitute or give rise to a personal
or pecuniary liability or charge against the officers, employees or agents of the Issuer or the members
of its governing body.
Section 16. APPROPRIATION. To pay the debt service coming due on the Certificates, if any,
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 Certificates, if any, will be sufficient to pay
such debt service, and such amount shall be used for no other purpose.
Section 17. 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 18. 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.
[Signature page follows]
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PASSED, APPROVED AND EFFECTIVE this April 16, 2013.
Ma or, City Denton, Te
ATTEST:
1~ IA)'M-'L 6)
Ci y ecretary, 'ty of Denton, Texas
I
APPROVED AS TO LEGAL FORM:
1'L /I Lt-. ~ 'e
City Attorney, City of Denton, Texas
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CERTIFICATE FOR
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELIVERY OF UP TO $68,265,000 IN PRINCIPAL
AMOUNT OF "CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES
2013"; AUTHORIZING THE ISSUANCE OF THE CERTIFICATES; DELEGATING
THE AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN
DOCUMENTS RELATING TO THE SALE OF THE CERTIFICATES; APPROVING
AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID
CERTIFICATES; AND ENACTING OTHER PROVISIONS RELATING TO THE
SUBJECT
THE STATE OF TEXAS '
COUNTY OF DENTON '
CITY OF DENTON '
We, the undersigned officers of said City, hereby certify as follows:
1. The City Council of said City convened in a REGULAR MEETING ON THE 16TH DAY OF
APRIL, 2013, at the Municipal Building (City Hall), and the roll was called of the duly constituted
officers and members of said City Council, to-wit:
Mark Burroughs, Mayor Pete Kamp, Mayor Pro Tem
Jim Engelbrecht Chris Watts
Dalton Gregory Kevin Roden
James King
and all of said persons were present, except Pete Kamp, thus constituting a quorum. Whereupon, among
other business, the following was transacted at said Meeting: a written
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELIVERY OF UP TO $68,265,000 IN PRINCIPAL
AMOUNT OF "CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES
2013"; AUTHORIZING THE ISSUANCE OF THE CERTIFICATES; DELEGATING
THE AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN
DOCUMENTS RELATING TO THE SALE OF THE CERTIFICATES; APPROVING
AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID
CERTIFICATES; AND ENACTING OTHER PROVISIONS RELATING TO THE
SUBJECT
was duly introduced for the consideration of said City Council and duly read. It was then duly moved and
seconded that said Ordinance be passed; and, after due discussion, said motion, carrying with it the
passage of said Ordinance, prevailed and carried by the following vote:
AYES: 6 NOES: 0 ABSTENTIONS: 0
2. That a true, full, and correct copy of the aforesaid Ordinance passed at the Meeting described
in the above and foregoing paragraph is attached to and follows this Certificate; that said Ordinance has
been duly recorded in said City Council's minutes of said Meeting; that the above and foregoing
paragraph is a true, full, and correct excerpt from said City Council's minutes of said Meeting pertaining
to the passage of said Ordinance; that the persons named in the above and foregoing paragraph are the
duly chosen, qualified, and acting officers and members of said City Council as indicated therein; and that
each of the officers and members of said City Council was duly and sufficiently notified officially and
personally, in advance, of the time, place, and purpose of the aforesaid Meeting, and that said Ordinance
would be introduced and considered for passage at said Meeting; and that said Meeting was open to the
public, and public notice of the time, place, and purpose of said meeting was given, all as required by
Chapter 551, Texas Government Code.
3. That the Mayor of said City has approved, and hereby approves, the aforesaid Ordinance; that
the Mayor and the City Secretary of said City have duly signed said Ordinance; and that the Mayor and
the City Secretary of said City hereby declare that their signing of this Certificate shall constitute the
signing of the attached and following copy of said Ordinance for all purposes.
SIGNED AND SEALED the 16TH day of APRIL, 2013.
wc.C
ayo
ity Secretary
(SEAL)
We, the undersigned, being respectively the City Attorney and the Bond Attorneys of the City of
Denton, Texas, hereby certify that we prepared and approved as to legality the attached and following
Ordinance prior to its passage as aforesaid.
r
City Attorney
cc~ LLB
Bo Attorneys
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