2013-114ORDINANCE NO. 201.3-114
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELNERY OF UP TO $19,000,000 IN PRINCIl'AL
AMOUNT OF "CITY OF DENTON GENERAL OBLIGATION REFUNDING AND
IlVIPROVEMENT BONDS, SERIES 2013"; AUTHORIZING THE I.SSUANCE OF THE
BONDS; DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO
EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE BONDS;
APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES
RELATING TO SAID BONDS; AND ENACTING OTHER PROVISIONS RELATING
TO THE SUBJECT
" THE "ST1�TE"OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, by vu�tue of an election held within the City of Denton, Texas (the "Issuer") on
November 6, 2012, this City Council became authorized to issue, sell and deliver the general obligation
bonds of the Issuer, of which there are authorized to be issued by this Ordinance, and will remain
authorized but unissued hereafter, as described in Schedule I attached hereto and incorporated herein;
` WHEREAS9 fhis �ity �ouncil finds and determines thaf it'is necessary and proper to order the
issuance, sale and delivery of such voted bonds;
�-�VI�REAS, -�he �• Ci�ly ���ras � previously issued, and •t��re �a�e presently outstanding g�e�ierai
obligation bonds and certificates of obligation which are secured by the full faith and credit of the Issuer
and a pledge ��y t�e �Issuer ta le�ry�ad valorem taYes sufficient•to�pa��principal� of and interest on the bonds
and certificates of obligation as they become due and a pledge of surplus revenues to further secure the
certificates of obligation;
WHEREAS, the Issuer now desires to refund all or. part of the outstanding general obligation
bonds and certificates of obligation described in Schedule II attached hereto and incorporated herein
(collectively, the "Eligible Refunded Obligations"), and those Eligible Refunded Obligations designated
by the Pricing Officer in the Pricing Certificate, each as defined below, to be refunded are herein referred
to as the "Refunded Obligations' ;
,
WHEREAS, Chapter 1207, Texas Gove.rnment Code, authorizes the Issuer to issue refunding
bonds and to deposit the proceeds from the sale thereof, together with any other available funds or
resources, directly with a paying agent for the Refunded Obligations ar a triist company or commercial
bank that does not act as a depository for the Issuer and is named in these proceedings, and such deposit,
if made before the payment dates of the Refunded Obligations, shall constitute the making of firm
banking and financial arrangements for the discharge and fmal payment of the Refunded Obligations;
WHEREAS, Chapter 1207, Texas Government Code, further authorizes the Issuer to enter into an
escrow or similar agreement with such paying agent for the Refunded Obligations or trust company or
commer�ial ���ank �with °�respect °to the� safekeeping, investni�erit; �re��stmeist, administration °an�i
disposition of any such deposit, upon such terms and conditions as the Issuer and such paying agent or
tri.ist company or commercial bank may agree;
WHEREAS, the City Council hereby finds and declares a public purpose and it is in the best
interests of the Issuer to refiind the Refunded Obligations in order to achieve a debt service savings, with
such savings, among other information and terms to be included in a pricing certificate (the "Pricing
Certificate") to be executed by the Pricing Officer (hereinafter designated), all in accordance with the
provisions of Section 1207.007, Texas Government Code;
WI-�REAS, all the Refunded Obligations mature or are subject to redemption prior to maturity
within 20 years of the date of the bonds hereinafter authorized;
WI�REAS, 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 inunicipal securities, without regard to the effect
of any credit agreement or other form of credit enhancement entered into in connection with the
obligation;
WI�REAS, the bonds hereinafter authorized to be issued were voted and are to be issued, sold
and delivered pursuant to the general laws of the State of Texas, including Texas Goverrunent Code
Chapters 1207, 1331 and 1371, as amended, and the Issuer's Home Rule Charter; and
WI�REAS, 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 aiid 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, PiJRPOSE AND DESIGNATION OF THE BONDS.
(a) The recitals set forth in the preamble hereof are incorporated herein and shall have the same
force and effect as if set forth in this Section.
(b) The term "Bonds" as used in this Ordinance shall mean and include collectively the bond
initially issued and delivered pursuant to this Ordinance (the "Initial Bond") and all substitute bonds
exchanged therefor, as well as all other substitute bonds and replacement bonds issued pursuant hereto,
and the term "Bond" shall mean any of the Bonds.
(c) The Bonds of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and
delivered in the ma�mum aggregate principal amount of $19,000,000 (i) up to $15,000,000 for the public
purpose of refunding the Refunded Obligations, (ii) $4,000,000 for the purpose of acquiring and
constructing street improvements in accordance with and subject to the election propositions authorizing
such bonds (the "Improvement Projects"), and (iii) to pay the costs associated with the issuance of the
Bonds, (collectively, the "Projects").
(d) Each bond issued pursuant to this Ordinance shall be designated: "CITY OF DENTON
GENERAL OBLIGATION REFUNDING 11ND IlVLPROVEMENT BOND, SERIES 2013," and initially
there shall be issued, sold, and delivered hereunder fully registered bonds, without interest coupons,
payable to the respective registered owners thereof (with the Initial Bond being made payable to the
Purchaser as described in Section 10 hereo�, or to the registered assignee or assignees of said Bonds or
any portion or portions thereof (in each case, the "Registered Owner"). The Bonds shall be in the
respective principal amounts, sha11 be numbered, shall mature and be payable on the date or dates in each
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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 Sections 1207.007 and 1371.053, Texas Government Code, as amended, the
City Manager or an Assistant City Manager (the "Pricing Officer") is hereby authorized to act on behalf of
the Issuer in selling and delivering the Bonds, determining which of the Eligible Refunded Obligations
shall be refunded and carrying out the other procedures specified in this Ordinance, including,
determining the date of the Bonds, any additional or different designation or title by which the Bonds
shall be known, the price at which the Bonds will be sold, the years in which the Bonds will mature, the
principal amount to mature in each of such years, the rate of interest to be borne by each such maturity,
the interest payment and record dates, the price and terms upon and at which the Bonds shall be subject to
redemption prior to maturity at the option of the Issuer, as well as any mandatory sinking fund redemption
provisions, and all other matters relating to the issuance, sale, and delivery of the Bonds and the refunding
of the Refunded Obligations, including without limitation establishing the redemption date for and
effecting the redemption of the Refunded Obligations and obtaining municipal bond insurance for all or
any portion of the Bonds (including in connection therewith the execution of airy commitment
agreements, membership agreeinents in inutual insurance companies, and other similar agreements) and
providing for the tenns and provisions thereof applicable to the Bonds, all of which shall be speciiied in
the Pricing Certiiicate; provided that:
(i) the aggregate original principal amount of the Bonds shall not exceed $19,000,000, with
$4,000,000 of such amount to be issued for the purposes described in Section 1(c)(ii) and
(iii) hereof, and up to $15,000,000 of such amount issued for the purposes described in
Section 1(c)(i) and (iii) hereof;
(ii) the price to be paid for the Bonds shall not be less than 97% of the aggregate original
principal ainount thereof plus accrued interest thereon from its date to its delivery;
(iii) the maximum stated maturity of the Bonds shall not exceed February 15, 2033;
(iv) the refunding must produce present value debt service savings of at least 4.0%, net of any
Issuer contribution;
(v) the Bonds shall bear interest at a fixed rate, and none of the Bonds shall bear interest at a
rate greater than 5.25% per annum and the net effective interest rate on the Bonds shall
not exceed 4.00%;
(vi) the delegation made hereby shall expire if not exercised by the Pricing OfFicer on ar prior
to October 16, 2013; and
(vii) on or prior to delivery, the Bonds shall be rated by a nationally recognized rating agency
for municipal securities in one of the four highest categories for long-term obligations.
(b) In establishing the aggregate principal amount of the Bonds, the Pricing Officer shall
establish an amount not exceeding the amount authorized in Subsection (a) hereof, which shall be
sufficient in amount to provide for the purposes for which the Bonds are authorized and to pay costs of
issuing the Bonds. The Bonds shall be sold with and subject to such terms as set forth in the Pricing
Certificate.
[t3
Section 3. CHARACTERISTICS OF THE BONDS.
(a) Registration, Transfer, Conversion and Exchan�e; Authentication. The Issuer shall keep or
cause to be kept at the principal corporate trust office of The Bank of New York Mellon Trust Company,
National Association, Dallas, Texas, (the "Paying Agent/Registrar"), books or records for the registration
of the transfer, conversion and exchange of the Bonds (the "Registration Books"), and the Issuer hereby
appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and
make such registrations of transfers, conversions and exchanges under such reasonable regulations as the
Issuer and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such
registrations, transfers, conversions and exchanges as herein provided. The Paying Agent/Registrar shall
obtain and record in the Registration Books the address of the Registered Owner of each Bond to which
payments with respect to the Bonds shall be mailed, as herein provided; but it shall be the duty of each
Registered Owner to notify the Paying Agent/Registrar in writing of the address to which payments shall
be mailed, and such interest payments shall not be mailed unless such notice has been given. The Issuer
shall have the right to inspect the Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential
and, unless otherwise required by law, shall not permit their inspection by any other entity. The Issuer
shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such
registration, transfer, conversion, exchange and delivery of a substitute Bond or Bonds. Registration of
assignments, transfers; conversions and exchanges of Bonds shall be made in the manner provided and
with the effect stated in the FORM OF BOND set forth in this Ordinance. Each substitute Bond shall
bear a letter and/or number to distinguish it from each other Bond.
Except as provided in Section 3(c) of this Ordinance, an authorized representative of the Paying
Agent/Registrar shall, before the delivery of any such Bond, date and manually sign said Bond, and no
such Bond shall be deemed to be issued or outstanding unless such Bond is so executed. The Paying
Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered for conversion and
exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the governing
body of the Issuer or any other body or person so as to accomplish the foregoing conversion and exchange
of any Bond or portion thereof, and the Paying AgentlRegistrar shall provide for the printing, execution,
and delivery of the substitute Bonds in the manner prescribed herein, and said Bonds shall be printed or
typed on paper of customary weight and strength. Pursuant to Chapter 1201, Government Code, as
amended, the duty of conversion and exchange of Bonds as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution of said Bond, the converted and exchanged Bond shall be valid,
incontestable, and enforceable in the same manner and with the same effect as the Bonds that initially
were issued and delivered pursuant to this Ordinance, approved by the Attorney General of the State of
Texas (the "Attorney General") and registered by the Comptroller of Public Accounts of the State of Texas
(the "Comptroller").
(b) Payment of Bonds and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds, all as
provided in this Ordinance. The Paying AgentlRegistrar shall keep proper records of all payments made
by the Issuer and the Paying Agent/Registrar with respect to the Bonds, and of all conversions and
exchanges of Bonds, and all replacements of Bonds, as provided in this Ordinance. However, in the event
of a nonpayment of interest on a scheduled payinent 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
AgentlRegistrar, 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.
i�
(c) In General. The Bonds (i) shall be issued in fully registered form, without interest coupons,
with the principal of and interest on such Bonds to be payable only to the Registered Owners thereof, (ii)
may or shall be redeemed prior to their scheduled inaturities (notice of which shall be given to the Paying
Agent/Registrar by the Issuer at least 45 days prior to any such redemption date), (iii) may be converted
and exchanged for other Bonds, (iv) may be transferred and assigned, (v) shall have the characteristics,
(vi) shall be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Bonds
shall be payable, and (viii) shall be administered and the Paying Agent/Registrar and the Issuer shall have
certain duties and responsibilities with respect to the Bonds, all as provided, and in the manner and to the
effect as required or indicated, in the FORM OF BOND set forth in this Ordinance (as modiiied in the
Pricing Certificate). The Initial Bond is not required to be, and shall not be, authenticated by the Paying
Agent/Registrar, but on each substitute Bond issued in conversion of and exchange for any Bond or
Bonds issued under this Ordinance the Paying Agent/Registrar shall execute the Paying Agent/Registrar's
Authentication Certificate, in the form set forth in the FORM OF BOND.
(d) Pavin�A e� ntlRegistrar for the Bonds. The Issuer covenants with the Registered Owners of
the Bonds that at all times while the Bonds are outstanding the Issuer will provide a competent and
legally qualified bank, trust company, financial institution, or other entity to act as and perfonn the
services of Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying
Agent/Registrar will be a single entity. The Issuer reserves the right to, and inay, at its option, change the
Paying AgentlRegistrar upon not less than 120 days written notice to the Paying Agent/Registrar, to be
effective not later than 60 days prior to the next principal or interest payment date after such notice. In
the event that the entity at any time acting as Paying AgentlRegistrar (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 AgentlRegistrar promptly shall transfer and deliver the Registration
Books (or a copy thereo�, along with all other pertinent books and records relating to the Bonds, to the
new Paying Agent/Registrar designated and appointed by the Issuer. Upon any change in the Paying
Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new Paying
Agent/Registrar to each Registered Owner of the Bonds, by United States mail, first-class postage
prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By accepting the
position and perfonning as such, each Paying Agent/Registrar shall be deemed to have agreed to the
provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying
Agent/Registrar.
(e) Authentication. Except as provided below, no Bond shall be valid or obligatory for any
purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon
the Paying Agent/Registrar's Authentication Certificate substantially in the form provided in this
Ordinance, duly authenticated by manual execution of the Paying Agent/Registrar. It shall not be required
that the same authorized representative of the Paying AgendRegistrar sign the Paying Agent/Registrar's
Authentication Certificate on all of the Bonds. In lieu of the executed Paying Agent/Registrar's
Authentication Certificate described above, the Initial Bond delivered on the closing date shall have
attached thereto the Comptroller's Registration Certifcate substantially in the form provided in this
Ordinance, manually executed by the Comptroller or by her duly authorized agent, which certificate shall
be evidence that the Initial Bond has been duly approved by the Attorney General and that it is a valid and
binding obligation of the Issuer, and has been registered by the Comptroller.
(� Book-Entry-Only Svstem. The Bonds issued in exchange for the Initial Bond shall be
initially issued in the form of a separate single fully registered Bond for each of the maturities thereof.
Upon initial issuance, the ownership of each such Bond shall be registered in the name of Cede & Co., as
nominee of The Depository Trust Company, New York, New York ("DTC"), and except as provided in
subsection (g) hereof, all of the outstanding Bonds shall be registered in the name of Cede & Co., as
nominee of DTC.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the Issuer and
the Paying Agent/Registrar shall have no responsibility or obligation to any securities brokers and dealers,
banlcs, trust companies, clearing corporations and certain other organizations on whose behalf DTC was
created ("DTC Participant") to hold securities to facilitate the clearance and settlement of securities
transactions among DTC Participants or to any person on behalf of whom such a DTC Participant holds
an interest in the Bonds. Without limiting the immediately preceding sentence, the Issuer and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of
DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the
delivery to any DTC Participant or any other person, other than a Registered Owner of Bonds, as shown
on the Registration Books, of any notice with respect to the Bonds, or (iii) the payment to any DTC
Participant or any other person, other than a Registered Owner of Bonds, as shown in the Registration
Books of any amount with respect to principal of or interest on the Bonds. Notwithstanding any other
provision of this Ordinance to the contrary, the Issuer and the Paying Agent/Registrar shall be entitled to
treat and consider the person in whose name each Bond is registered in the Registration Books as the
absolute owner of such Bond for the purpose of payment of principal and interest with respect to such
Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes
whatsoever. The Paying Agent/Regish-ar shall pay all principal of and interest on the Bonds only to or
upon the order of the Registered Owners, as shown in the Registration Books as provided in this
Ordinance, or their respective attorneys duly authorized in writing, and all such payinents shall be valid
and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal of
and interest on the Bonds to the extent of the sum or suins so paid. No person other than a Registered
Owner, as shown in the Registration Books, shall receive a Bond evidencing the obligation of the Issuer
to make payments of principal and interest pursuant to this Ordinance. Upon delivery by DTC to the
Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions in this Ordinance with respect to interest
checks being mailed to the Registered Owner at the close of busuiess on the Record Date, the words
"Cede & Co." in this Ordinance shall refer to such new nominee of DTC.
The previous execution and delivery of the Blanket Issuer Letter of Representations with respect
to obligations of the Issuer is hereby ratified and confirmed; and the provisions thereof shall be fully
applicable to the Bonds.
(g) Successor Securities Depository; Transfers Outside Book-Entry-Only System. In the event
that the Issuer detennines that DTC is incapable of discharging its responsibilities described herein and in
the Blanket Issuer Letter of Representations to DTC or that it is in the best interest of the beneficial
owners of the Bonds that they be able to obtain certificated Bonds, the Issuer shall (i) appoint a successor
securities depository, qualified to act as such under Section 17A of the Securities and Exchange Act of
1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities
depository and transfer one or more separate Bonds to such successar securities depository or (ii) notify
DTC and DTC Participants of the availability through DTC of Bonds and transfer one or more separate
certiiicated Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the
Bonds shall no longer be restricted to being registered in the Registration Books in the name of Cede &
Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its
nominee, or in whatever name or names Registered Owners transferring or exchanging Bonds shall
designate, in accordance with the provisions of this Ordinance.
(h) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments
with respect to principal of and interest on such Bond and all notices with respect to such Bond shall be
0
made and given, respectively, in the manner provided in the Blanket Issuer Letter of Representations to
DTC.
(i) Cancellation of Initial Bond. On the closing date, the Initial Bond, representing the entire
principal amount of the Bonds, payable in stated installxnents to the purchaser designated in Section 10 or
its designee, executed by manual or facsimile signature of the Mayor and City Secretary of the Issuer,
approved by the Attorney General, and registered and manually signed by the Comptroller, will be
delivered to such purchaser or its designee. Upon payment for the Initial Bond, the Paying
Agent/Registrar shall cancel the Initial Bond and deliver to DTC on behalf of such purchaser one
registered definitive Bond for each year of maturity of the Bonds, in the aggregate principal amount of all
of the Bonds for such maturity. To the extent that the Paying Agent/Registrar is eligible to participate in
DTC's FAST Systein, pursuant to an agreement between the Paying Agent/Registrar and DTC, the Paying
Agent/Registrar sha11 hold the defmitive Bonds in safekeeping for DTC.
(j) Conditional Notice of Redemption. With respect to any optional redemption of the Bonds,
unless the prerequisites to such redemption required by this Ordinance have been met and moneys
sufficient to pay the principal of and premium, if any, and interest on the Bonds to be redeemed shall have
been received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice
shall state that said redemption may, at the option of the Issuer, be conditional upon the satisfaction of
such prerequisites and receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed
for such redemption, or upon any prerequisite set forth in such notice of redemption. If a conditional
notice of redemption is given and such prerequisites to the redemption and sufficient moneys are not
received, such notice shall be of no force and effect, the Issuer shall not redeem such Sonds and the
Paying Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to
the effect that the Bonds have not been redeemed.
Section 4. FORM OF BONDS. The form of the Bonds, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Comptroller's
Registration Certificate to be attached to the Bonds initially issued and delivered pursuant to this
Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, omissions or
insertions as are permitted or required by this Ordinance, and with the Form of Bond to be modified
pursuant to, and completed with information set forth in, the Pricing Certificate.
(a) [Form of Bond]
���
Interest Rate
REGISTERED OWNER:
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF DENTON
GENERAL OBLIGATION
REFUNDING AND IlVIPROVEMENT BOND
SERIES 2013
Dated Date
, 20
Maturity Date
February 15,
PRINCIl'AL
AMOUNT
$
C�111.'11' � •
PRINCIPAL AMOUNT: DOLLARS
ON THE MATiJRITY 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
proinises 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 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 inaturity; except, if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preced'uig the date
of authentication, unless such date of authentication is after any Record Date but on or before the next
following interest payment date, in which case such principal amount shall bear interest from such next
following interest payment date; provided, however, that if on the date of authentication hereof the
interest on the Bond or Bonds, if any, for which this Bond is being exchanged is due but has not been
paid, then this Bond shall beax interest from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the United
States of America, without exchange or collection charges. The principal of this Bond shall be paid to the
Registered Owner hereof upon presentation and surrender of this Bond at maturity, or upon the date fixed
for its redemption prior to maturity, at the principal corporate trust office of The Banlc of New York
Mellon Trust Company, National Association, Dallas, Texas, which is the "Paying AgentlRegistrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
Registered Owner hereof on each interest payinent date by check or draft, dated as of such interest
payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer
required by the ordinance authorizing the issuance of this Bond (the "Bond Ordinance") to be on deposit
with the Paying Agent/Registrar far such purpose as hereinafter provided; and such check or draft shall be
sent by the Paying Agent/Registrar by United States mail, iirst-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 inonth preceding each such date (the "Record Date") on the Registration Books kept by the
Paying Agent/Registrar, as hereinafter described. In addition, interest may be paid by such other method,
acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Registered
Owner. In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter,
a new record date for such interest payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer.
Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall
be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special
Record Date by United States mail, first-class postage prepaid, to the address of each Registered Owner
of a Bond appearing on the Registration Books at the close of business on the last business day next
preceding the date of mailing of such notice.
ANY ACCRLTED INTEREST due at maturity or upon the redemption of this Bond prior to
maturity as provided hereui shall be paid to the Registered Owner upon presentation and surrender of this
Bond for redemption and payment at the principal corporate trust office of the Paying Agent/Registrar.
The Issuer covenants with the Registered Owner of this Bond that on or before each principal payment
date, interest payment date, and accrued interest payment date for this Bond it will make available to the
Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond Ordinance, the
amounts required to provide for the payment, in unmediately available funds, of all principal of and
interest on the Bonds, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday or a day on which banking institutions in the city where the principal corporate
trust office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then
the date for such payinent shall be the next succeeding day that is not such a Saturday, Sunday, legal
holiday or day on which banking institutions are authorized to close; and payment on such date shall have
the same force and effect as if made on the original date payment was due.
THIS BOND is one of a series of Bonds dated � , 2013], authorized in accordance
with the Constitution and laws of the State of Texas in the principal amount of [$ �(i) up
to $� � for the public purpose of refunding the Refunded Obligations, (ii) $f 1
for acquiring and constructing street improvements, and (iii) to pay the costs associated with the issuance
of the Bonds.
ON , 20_, or on any date thereafter, the Bonds of this series may be redeemed prior
to their scheduled maturities, at the option of the Issuer, with funds derived from any available and lawful
source, as a whole, or in part, and, if in part, the particular Bonds, or portions thereof, to be redeemed
shall be selected and designated by the Issuer (provided that a portion of a Bond may be redeemed only in
an integral multiple of $5,000), at a redemption price equal to the principal amount to be redeemed plus
accrued interest to the date fxed for redemption.
THE BONDS scheduled to mature on in the years and ( the "Term
Bonds") are subject to scheduled mandatory redemption by the Paying Agent/Registrar by lot, or by any
other customary inethod 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 Bouds, on the dates and in the respective principal amounts, set forth in
the following schedule:
Term Bond
Maturity: February 15, 20_
Principal
Mandatory Redemption Date Amount
February 15,20_ $
February 15,20_
February 15,20_
February 15,20_ (maturity)
Term Bond
Maturity: February 15,20_
Principal
Mandatory Redemption Date Amount
February 15,20_ $
February 15,20_
February 15,20_
February 15,20_ (maturity)
The principal amount of Term Bonds of a stated maturity required to be redeemed on any mandatory
redemption date pursuant to the operation of the mandatory sinking fund redemption provisions shall be
reduced, at the option of the Issuer, by the pruicipal amount of any Term Bonds of the same maturity
which, at least 50 days prior to a mandatory redemption date (1) shall have been acquired by the Issuer at
a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of
purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, (2) shall have been
purchased and canceled by the Paying AgentlRegistrar at the request of the Issuer at a price not exceeding
the principal amount of such Term Bonds plus accrued interest to the date of purchase, or (3) shall ha�e
been redeemed pursuant to the optional redemption provisions and not theretofore credited against a
mandatory redemption requirement.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof prior
to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by United
States mail, first-class postage prepaid, to the Registered Owner of each Bond to be redeemed at its
address as it appeared on the 45th day prior to such redemption date; provided, however, that the failure
of the Registered Owner to receive such notice, or any defect therein or in the sending or mailing thereof,
0
shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond. By the
date fixed for any such redemption due provision shall be made with the Paying Agent/Registxar for the
payment of the required redemption price for the Bonds or portions thereof that are to be so redeemed. If
such written notice of redemption is sent and if due provision for such payment is made, all as provided
above, the Bonds or portions thereof that are to be so redeemed thereby automatically shall be treated as
redeemed prior to their scheduled maturities, and they shall not bear interest after the date f�ed for
redemption, and they shall not be regarded as being outstanding except for the right of the Registered
Owner to receive the redemption price from the Paying Agent/Registrar out of the funds provided for such
payment. If a portion of any Bond shall be redeemed, a substitute Bond or Bonds having the same
maturity date, bearing interest at the same rate, in any denomination or denominations in any integral
multiple of $5,000, at the written request 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 Bond Ordinance.
IF AT THE TIlVIE OF MAILING of notice of optional redemption there shall not have either been
deposited with the Paying Agent/Registrar or legally authorized escrow agent unmediately available funds
sufficient to redeem all the Bonds called for redemption, such notice may state that it is conditional, and is
subject to the deposit 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/Regish•ar shall, within five days thereafter, give notice in the manner in which the notice of
redemption was given that such moneys were not so received and shall rescind the redemption.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomuiation of any integral multiple of $5,000. As provided in the Bond Ordinance, this
Bond may, at the request of the Registered Owner or the assignee or assignees hereof, be assigned,
transferred, converted into and exchanged for a like aggregate principal amount of fully registered Bonds,
without interest coupons, payable to the appropriate Registered Owner, assignee or assignees, as the case
may be, having the same denomination or denominations in any integral multiple of $5,000 as requested
in writing by the appropriate Registered Owner, assignee or assignees, as the case may be, upon surrender
of this Bond to the Paying Agent/Registrar for cancellation, all in accordance with the form and
procedures set forth in the Bond Ordinance. Among other requirements for such assignment and transfer,
this Bond must be presented and surrendered to the Paying Agent/Registrar, together with proper
instruments of assignment, in form and with guarantee of signatures satisfactoiy to the Paying
Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof in any integral
multiple of $5,000 to the assignee or assignees in whose name or names this Bond or any such portion or
portions hereof is or are to be registered. The Form of Assignment printed or endorsed on this Bond may
be executed by the Registered Owner to evidence the assignment hereof, but such method is not
exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used to
evidence the assignment of this Bond or any portion or portions hereof from time to time by the
Registered Owner. The Paying Agent/Registrar's reasonable standard or customary fees and charges for
assigning, transferring, converting and exchanging any Bond or portion thereof will be paid by the Issuer.
In any circumstance, any taxes or goverrunental 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 AgentlRegistrar shall not be required to make any such
transfer, conversion, or exchange (i) during the period commencing with the close of business on any
Record Date and ending with the opening of business on the next following principal or interest payment
date, or (ii) with respect to any Bond or any portion thereof called for redemption prior to maturity, within
45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will
10
appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed
to the Registered Owners of the Bonds.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper to be performed,
exist and be done precedent to or in the authorization, issuance and delivery of this Bond have been
performed, existed and been done in accordance with law; and that annual ad valorem taxes sufficient to
provide for the payment of the interest on and principal of this Bond, as such interest comes due and such
principal matures, have been levied and ordered to be levied against all taYable property in said Issuer,
and have been pledged for such payment, within the limit prescribed by law.
THE ISSLTER HAS RESERVED THE RIGHT to amend the Bond Ordinance as provided therein,
and under some (but not all) circumstances amendments thereto inust be approved by the Registered
Owners of a majority in aggregate principal amount of the outstanding Bonds.
BY BECONIlNG the Registered Owner of this Bond, the Registered Owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such terms
and provisions, acknowledges that the Bond Ordinance is duly recorded and available for inspection in
the official rninutes and records of the governing body of the Issuer, and agrees that the tenns and
provisions of this Bond and the Bond Ordinance constitute a contract between each Registered Owner
hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the Issuer (or in the Mayor's absence, of the Major Pro-Tem) and
countersigned with the manual or facsimile signature of the City Secretary of said Issuer, and has caused
the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Bond.
(SEAL)
(si�nature)
City Secretary
si n�)
Mayor
[INSERT BOND INSUR�INCE LEGEND, IF ANY]
11
(b) [Foim of Paying Agent/Registrar's Authentication Certificate]
PAYIlVG AGENT/REGISTR.AR'S AUTI�NTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Comptroller's Registration Certificate)
It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance
described in the text of this Bond; and that this Bond has been issued in conversion or replacement of, or
in exchange for, a bond, bonds, or a portion of a bond or bonds of a series that originally was approved by
the Attorney General of the State of Texas and registered by the Coinptroller of Public Accounts of the
State of Texas.
Dated:
The Banlc of New York Mellon Trust Company,
National Association, Dallas, Texas
Paying AgentJRegistrar
By:
Authorized Representative
(c) [Form of Assignment]
ASSIGNIV�NT
For value received, the undersigned hereby sells, assigns
Please insert Social Security or Taxpayer ldentification Number of Transferee
(Please print or typewrite name and address, including zip code, of Transferee.)
and transfers unto
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney, to register the transfer of the within Bond
on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by
an eligible guarantor institution participating in
a securities transfer association recognized
signature guarantee program.
fI!•1
NOTICE: The signature above must correspond
with the name of the Registered Owner as it
appears upon the front of this bond in every
particular, without alteration or enlargement or
any change whatsoever.
(d) [Form of Comptroller's Registration Certificate]
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity and approved by the
Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of
Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
(e) [Initial Bond Insertions]
(i) The Initial Bond shall be in the form set forth in paragaph (a) of this Section, except that:
A. iinmediately under the name of the Bond, the headings "Interest Rate" and
"Maturity Date" shall both be completed with the words "As shown below" and "CUSIP No.
" shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"THE CTTY 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 Ainounts 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
specified above. Interest is payable on � 20 , and semiannually on each and
thereafter to the date of payment of the principal installment specified above, or the date
of redemption prior to maturity; except, that if this Bond is required to be authenticated and the date of its
authentication is later than the first Record Date (hereinafter defined), such Principal Amount shall bear
interest from the interest payment date next preceding the date of authentication, unless such date of
authentication is after any Record Date but on or before the next following interest payment date, in
which case such principal amount shall bear interest from such next following interest payment date;
provided, however, that if on the date of authentication hereof the interest on the Bond or Bonds, if any,
for which this Bond is being exchanged is due but has not been paid, then this Bond shall bear interest
from the date to which such interest has been paid in full."
C. The Initial Bond shall be numbered "T-1."
13
Section 5. INTERESTAND SINKING F1JND.
(a) A special Interest and Sinking Fund (the "Interest and Sinking Fund"} is hereby created solely
for the benefit of the Bonds, and the Interest and Sinking Fund shall be established and maintained by the
Issuer at an official depository bank of the Issuer. The Interest and Sinking Fund shall be kept separate
and apart from all other funds and accounts of the Issuer, and shall be used only for payuig the interest on
and principal of the Bonds. All ad valorem t�es levied and collected for and on account of the Bonds,
together with any accrued interest received upon sale of the Bonds, shall be deposited, as collected, to the
credit of the Interest and Sinking Fund. During each year while any of the Bonds or interest thereon are
outstanding and unpaid, the governing body of the Issuer shall compute and ascertaui a rate and amount
of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on
the Bonds as such interest becomes due, and to provide and maintain a sinking fund adequate to pay the
principal of its Bonds as such principal matures or is scheduled for redemption (but never less than 2% of
the original principal amount of the Bonds as a sinking fund each year). Said tax shall be based on the
latest approval tax rolls of the Issuer, with full allowance being made for t� delinquencies and the cost of
t� collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be
levied, against all taxable property in the Issuer for each year while any of the Bonds or interest thereon
are outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to
the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the
payuient of the interest on and principal of the Bonds, as such interest comes due and such principal
matures or is scheduled for redemption, are hereby pledged for such payment, within the limit prescribed
by law. Notwithstanding the requirements of this Section, if Surplus Revenues or other lawfully a�ailable
moneys of the Issuer are actually on deposit or budgeted and appropriated to be deposited in the Interest
and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year,
then the amount of taxes that otherwise would have been required to be levied pursuant to this Section
inay be reduced to the extent and by the amount of the Surplus Revenues or other lawfully available funds
then on deposit ar budgeted and appropriated to be deposited in the I�rterest and Sinking Fund. For
purposes of this Section, "Surplus Revenues" ineans 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 remaui 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. If Surplus Revenues are budgeted and appropriated for deposit into the Interest and Sinking
Fund, the Issuer:
(i) shall transfer and deposit in the Interest and Sinking Fund each month an amount of not less
than 1/12th of the annual debt service on the Bonds to be paid from Surplus Revenues until the
amount on deposit in the Interest and Sinking Fund equals the amount required for annual debt
service on the Bonds;
(ii) shall establish, adopt and inaintain an annual budget that provides for either the monthly
deposit of sufficient Surplus Revenues and/or tax revenues, the monthly deposit of any other legally
available funds on hand at the time of the adoption of the annual budget, or a combination thereof,
into the Interest and Sinking Fund for the repayment of the Bonds; and
(iii) shall at all times maintain and collect sufficient Utility System rates and charges in conjunction
with any other legally available funds that, after payment of the costs of operating and maintaining
the Utility System, produce revenues in an amount not less than the debt service requirements of all
outstanding Utility System revenue bonds of the Issuer and other obligations of the Issuer which are
secured in whole or in part by a pledge of revenues of the Utility System and for which the Issuer is
budgeting the repayment of such obligations from the revenues of the Utility System, or the Issuer
14
shall provide documentation which evidences the levy of an ad valorem tax rate dedicated to the
Interest and Sinking Fund, in conjunction with any other legally available funds except Utility
System rates and charges, sufficient for the repayment of Utility System debt service requirements.
(b) Chapter 1208, Texas Government Code, applies to the issuance of the Bonds and the pledge of
the taxes granted by the Issuer under this Section and Section 9, respectively, and is therefore valid,
effective, and perfected. Should Texas law be amended at any fvne while the Bonds are outstanding and
unpaid, the result of such amendment being that the pledge of the taxes granted by the Issuer under this
Section is to be subject to the filing requirements of Chapter 9, Texas Business & Coinmerce Code, ui
order to preserve to the Registered Owners of the Bonds a security interest in said pledge, the Issuer
agrees to take such measures as it determines are reasonable and necessary under Texas law to comply
with the applicable provisions of Chapter 9, Texas Business & Commerce Code and enable a filing of a
security interest in said pledge to occur.
Section 6. DEFEASANCE OF BONDS.
(a) Any Bond and the interest thereon shall be deemed to be paid, retired and no longer outstanding
(a "Defeased Bond") within the meaning of this Ordinance, except to the extent provided in subsection (d)
of this Section, when payment of the principal of such Bond, plus interest thereon to the due date
(whether such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to
be made in accordance with the terms thereof, or (ii) shall have been provided for on or before such due
date by irrevocably depositing with or making a�ailable to the Paying Agent/Registrar in accardance with
an escrow agreement ar 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 su�cient money to provide for such payment, and when proper arrangements
have been made by the Issuer with the Paying Agent/Registrar far the payment of its services until all
Defeased Bonds shall have become due and payable. At such time as a Bond shall be deemed to be a
Defeased Bond hereunder, as aforesaid, such Boiid and the interest thereon shall no longer be secured by,
payable froin, or entitled to the benefits of, the ad valarem 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 detennination not to redeein Defeased Bonds that is made in conjunction with the payment
arrangements specified in Subsection (a)(i) or (ii) of this Section shall not be irrevocable, provided that:
(1) in the proceedings providing for such payment arrangements, the Issuer expressly reserves the right to
call the Defeased Bonds far redemption; (2) gives notice of the reservation of that right to the Registered
Owners of the Defeased Bonds irxunediately 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 hereinbefare set
forth, and all income from such Government Obligations received by the Paying AgendRegistrar that is
not required for the payment of the Bonds and interest thereon, with respect to which such money has
been so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer. Any
Future Escrow Agreement pursuant to which the money and/or Governtnent Obligations are held for the
payment of Defeased Bonds may contain provisions permitting the investment or reinvestment of such
moneys in Governrnent Obligations or the substitution of other Government Obligations upon the
satisfaction of the requirements speciiied in Subsection (a)(i) or (ii) of this Section. All income from such
Government Obligations received by the Paying Agent/Registrar which is not required for the payment of
the Defeased Bonds, with respect to which such money has been so deposited, shall be remitted to the
Issuer or deposited as directed in writing by the Issuer.
15
(c) The term "Government Obligations" means any securities and obligations now or hereafter
authorized by state law that are eligible to discharge obligations such as the Bonds, including (i) direct,
noncallable obligations of the United States of America, including obligations that are unconditionally
guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of
the United States of America, including obligations that are unconditionally guaranteed or insured by the
agency or instrumentality and that, on the date the governing body of the Issuer adopts or approves the
proceedings authorizing the imancial 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 11AA or its equivalent.
(d) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall
perform the services of Paying Agent/Registrar for such Defeased Bonds the same as if they had not been
defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required
by this Ordinance.
(e) In the event that the Issuer elects to defease less than all of the principal amount of Bonds of a
maturity, the Paying Agent/Kegistrar shall select, or cause to be selected, such amount of Bonds by such
random method as it deems fair and appropriate.
Section 7. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen ar
destroyed, the Paying Agent/Registrar shall cause to be printed, executed and delivered, a new Bond of
the same principal amount, maturity and interest rate, as the damaged, mutilated, lost, stolen or destroyed
Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged, mutilated, lost,
stolen or destroyed Bonds shall be made by the Registered Owner thereof to the Payuig Agent/Registrar.
In every case of loss, theft or destruction of a Bond, the Registered Owner applying for a replacement
Bond shall furnish to the Issuer and to the Paying Agent/Registrar such security or indeinnity as may be
required by them to save each of them harmless from any loss or damage with respect thereto. Also, in
every case of loss, theft or destruction of a Bond, the Registered Owner shall furnish to the Issuer and to
the Paying Agent/Registrar evidence to their satisfaction of the loss, theft or destruction of such Bond, as
the case may be. In every case of damage or mutilation of a Bond, the Registered Owner shall surrender
to the Paying Agent/Registrar for cancellation the Bond so damaged or inutilated.
(c) No Default Occurred. Notwithstand'uig the foregoing provisions of this Ordinance, in the event
any such Bond shall have matured, and no default has occurred that is then continuing in the payment of
the principal of, redemption premium, if any, or interest on the Bond, the Issuer may authorize the
payment of the same (without surrender thereof except in the case of a damaged or mutilated Bond)
instead of issuing a replacement Bond, provided security or indemnity is furnished as above provided in
this Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement Bond, the
Paying Agent/Registrar shall charge the Registered Owner of such Bond with all legal, printing, and other
expenses in connection therewith. Every replacement Bond issued pursuant to the provisions of this
Section by virtue of the fact that any Bond is lost, stolen or destroyed shall constitute a contractual
obligation of the Issuer whether or not the lost, stolen or destroyed Bond shall be found at any time, or be
16
enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and
proportionately with any and all other Bonds duly issued under this Ordinance.
(e) Authoritv for Issuing Replacement Bonds. In accordance with Sec. 1206.022, Government
Code, this Section 7 of this Ordinance shall constitute authority for the issuance of any such replacement
Bond without necessity of further action by the governing body of the Issuer or any other body or person,
and the duty of the replacement of such Bonds is hereby authorized and imposed upon the Paying
Agent/Registrar, and the Paying AgentlRegistrar shall authenticate and deliver such Bonds in the form
and mamier and with the effect, as provided in Section 3(a) of this Ordinance for Bonds issued in
conversion and exchange for other Bonds.
Section 8. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND COiJNSEL'S
OPINION; CUSIl' NUMBERS AND CONTINGENT 1NSURANCE PROVISION, IF OBTAINED;
ENGAGEMENT OF BOND COUNSEL.
(a) The Mayor of the Issuer is hereby authorized to have control of the Initial Bond and all
necessary records and proceedings pertaining to the Bonds pending its delivery and its investigation,
examination, and approval by the Attorney General, and its registration by the Comptroller. Upon
registration of the Initial Bond said Comptroller (or a deputy designated in writing to act for said
Comptroller) shall manually sign the Coinptroller's Registration Certificate attached to such Bond, and
the seal of said Comptroller shall be impressed, or placed in facsimile, on such Bond. The approving
legal opmion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option of the
Issuer, be printed on the Bonds issued and delivered under this Ordinance, but neither shall have any legal
effect, and shall be solely for the convenience and information of the Registered Owners of the Bonds. In
addition, if bond insurance is obtained, the Bonds may bear an appropriate legend as provided by the
insurer.
(b) The obligation of the Purchaser to accept delivery of the Bonds is subject to the Purchaser
being furnished with the final, approving opinion of McCall, Parkhurst & Horton L.L.P., bond counsel to
the Issuer, which opinion shall be dated as of and delivered on the date of initial delivery of the Bonds to
the Purchaser. The engagement of such iirm as bond counsel to the Issuer in connection with the
issuance, sale and delivery of the Bonds is hereby approved and confirmed. The execution and delivery
of an engagement letter between the Issuer and such firm, with respect to such services as bond counsel,
is hereby authorized in such fonn as may be approved by the Mayor, and the Mayor is hereby authorized
to execute such engagement letter.
Section 9. COVENANTS REG11RD1NG TAX EXEMPTION OF INTEREST ON THE BONDS.
(a) Covenants. The Issuer covenants to take any action necessary to assure, or refrain from any
action that would adversely affect, the treatment of the Bonds as obligations described 'm 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 t�ation. In furtherance thereof, the
Issuer covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the Bonds
(less amounts deposited to a reserve fund, if any) are used for any "private bnsiness use," as defined
in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds or the projects fmanced
or refinanced therewith are so used, such amounts, whether or not received by the Issuer, with
respect to such private business use, do not, under the terms of this Ordinance or any underlying
arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent of the
debt service on the Bonds, in contravention of section 141(b)(2) of the Code;
17
(2) to take any action to assure that in the event that the "private business use" described in
subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the projects financed
therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent
is used for a"private business use" that is "related" and not "disproportionate," within the ineaning
of section 141(b)(3) of the Code, to the governmental use;
(3) to take any action to assure that no alnount that is greater than the lesser of $5,000,000, or
5 percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is
directly or indirectly used to fmance loans to persons, other than state or local governmental units,
in contravention of section 141(c) of tk�e Code;
(4) to refrain fi-oin taking any action that would otherwise result in the Bonds being treated as
"private activity bonds" within the meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to
acquire or to replace funds that were used, directly or indirectly, to acquire inveshnent property (as
deimed in section 148(b)(2) of the Code) that produces a materially higher yield over the ter�n of
the Bonds, other than investment property acquired with —
(A) proceeds of the Bonds invested for a reasonable temporary period of 3 years or
less or, in the case of a refunding bond, far 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 Deparhnent of the Treasury
("Treasury Regulations"), and
(C) amounts deposited in any reasonably required reserve or replacement fund to the
e�ent such amounts do not exceed 10 percent of the proceeds of the Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds
of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements
of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the
Code (relating to advance refundings); and
(8) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Bonds) an ainount that is at least equal to 90 percent of the
'Bxcess Earnings," within the meaning of section 148(� of the Code and to pay to the United States
of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount
then required to be paid as a result of Excess Earnings under section 148(� of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a"Rebate Fund"
is hereby established by the Issuer for the sole benefit of the United States of America, and such Rebate
Fund shall not be subject to the claim of any other person, including without limitation the Bondholders.
The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code.
(c) Use of Proceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), the Issuer
understands that the term "proceeds" includes "disposition proceeds" as deimed in the Treasury
Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the
18
refunded bonds expended prior to the date of issuance of the Bonds. It is the understanding of the Issuer
that the covenants contained herein are intended to assure compliance with the Code and any regulations
or rulings promulgated by the United States Department of the Treasury pursuant thereto. In the event
that regulations or rulings are hereafter promulgated that modify or expand provisions of the Code, as
applicable to the Bonds, the Issuer will not be required to comply with any covenant contained herein to
the e�tent that such failure to comply, in the opinion of nationally recognized bond counsel, will not
adversely affect the exemption from federal income t�ation of interest on the Bonds under section 103 of
the Code. In the event that regulations or rulings are hereafter promulgated that iinpose additional
requireinents applicable to the Bonds, the Issuer agrees to comply with the additional requirements to the
extent necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption froin
federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance of such
intention, the Issuer hereby authorizes and directs the Mayor or Pricing Officer to execute any docuinents,
certificates or reports required by the Code and to make such elections, on behalf of the Issuer, that may
be permitted by the Code as are consistent with the purpose for the issuance of the Bonds.
(d) Allocation of, and L'unitation on, Expenditures for the Projects. The Issuer covenants to
account for the expenditure of sale proceeds and investment earnings to be used for the construction and
acquisition of the Improvement Projects on its books and recards by allocating proceeds to expenditures
within 18 months of the later of the date that (1) the expenditure is made, or (2) the Improvement Projects
are completed. The foregoing notwithstanding, the Issuer shall not expend proceeds of the sale of the
Bonds or investment earnings thereon more than 60 days after the earlier of (1) the fifth anniversary of the
delivery of the Bonds, or (2) the date the Bonds are retired, unless the Issuer obtains an opuiion of
nationally-recognized bond counsel that such expenditure will not adversely affect the status, for federal
income ta�c purposes, of the Bonds ar the interest thereon. For purposes hereof, the Issuer shall not be
obligated to comply with this covenant if it obtains an opuiion that such failure to comply will not
adversely affect the excludability for federal income tax purposes from gross income of the interest.
(e) Disposition of Projects. The Issuer covenants that the Projects and the projects refmanced by
the Bonds will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of
cash or other compensation, unless the Issuer obtains an opinion of nationally-recognized bond counsel
that such sale or other disposition will not adversely affect the tax-exempt staius of the Bonds. For
purposes of the foregoing, the portion of the property coinprising 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 taY
proposes from gross income of the interest.
( fl Reimbursement. This Ordinance is intended to satisfy the official intent requirements set forth
in section L 150-2 of the Treasury Regulations.
Section 10. SALE OF BONDS AND APPROVAL OF OFFICIAL STATEMENT; FURTHER
' ��Z�7�1�1/J3�I:�
(a) The Bonds shall be sold and delivered subject to the provisions of Section 1 and Section 2
hereof through a negotiated sale, competitive sale ar 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 Secdon 2 hereof, and in which the purchaser or purchasers of the Bonds (the "Purchaser") shall be
designated. The Pricing Officer is hereby autharized to execute and deliver the Pnrchase Agreement for
an on behalf of the Issuer. The Bonds shall initially be registered in the name of the Purchaser or its
designee.
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(b) The Issuer hereby approves the form and content of the draft preliminary o�cial statement
relating to the Bonds and any addenda, supplement or ainendment thereto, and approves the distribution
of such preliminary official statement in the reoffering of the Bonds by the Purchaser in final form, with
such changes therein or additions thereto as the Pricing Officer may deem advisable. The Pricing Officer
is hereby authorized, in the naine and on behalf of the Issuer, to approve, distribute, and deliver a final
preliminary off'icial statement and a iinal official statement relating to the Bonds to be used by the
Purchaser in the marketing of the Bonds.
(c) The Pricing Officer is authorized, in connection with effecting the sale of the Bonds, to obtain
from a municipal bond insurance company so designated in the Pricing Certificate (the "Insurer") a
municipal bond insurance policy (the "Insurance Policy") in support of the Bonds. To that end, should the
Pricing Officer exercise such authority and commit the Issuer to obtain a municipal bond insurance
policy, for so long as the Insurance Policy is in effect, the requirements of the Insurer relating to the
issuance of the Insurance Policy as set forth in the Pricing Certificate are incorporated by reference into
this Ordinance and made a part hereof for all purposes, notwithstanding any other provision of this
Ordinance to the contrary. The Pricing Officer shall ha�e the authority to execute any documents to effect
the issuance of the Insurance Policy by the Insurer, including commitment agreeinents, inembership
agreements in mutual insui•ance companies and other snnilar 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 perfonn 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 AgentlRegistrar Agreement with the Paying AgentlRegistrar 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 Bonds, the sale of the Bonds, any
Purchase Agreement and the Official Statement. In case-any officer whose signature shall appear on any
Bond shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be
valid and sufficient for all purposes the same as if such off'icer had remained in office until such delivery..
Section 11. INTEREST EARNINGS ON BOND PROCEEDS. Interest earnings derived from the
investment of proceeds from the sale of the Bonds issued for the Improvement Projects sha11 be used
along with other Bond proceeds for the Improvement Projects; provided that after completion of such
purpose, if any of such interest earnings remain on hand, such interest earnings shall be deposited in the
Interest and Sinking Fund. It is further provided, however, that any interest earnings on Bond proceeds
that are required to be rebated to the United States of America pursuant to Section 9 hereof in order to
prevent the Bonds from being arbitrage bonds shall be so rebated and not considered as interest earnings
for the purposes of this Section.
Section 12. CONSTRUCTION FLJND ORACCOUNT; INVESTMENT.
(a) The proceeds of sale of the Bonds, excluding any accrued interest received from the initial
purchaser of the Bonds and any other amounts to be deposited into the Interest and Sinking Fund, any
amounts to be deposited into the escrow fund under the Escrow Agreement approved in Section 16 of this
Ordinance and amounts to pay costs of issuance of the Bonds, 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 Improvement Projects
as hereinbefore provided. Upon payment of all such costs, any moneys remaining on deposit in said
funds ar 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.
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(b) The Issuer may invest proceeds of the Bonds (including investment earnings thereon) issued for
Improvement Projects and amounts deposited into the Interest and Suiking Fund in investments
authorized by the Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended;
provided, however, that the Issuer hereby covenants that the proceeds of the sale of the Bonds will be
used as soon as practicable for the purposes for which the Bonds are issued.
(c) All deposits authorized or required by this Ordinance shall be secured to the fullest extent
required by law far the security of public funds.
Section 13. COMPLIANCE WITH RULE 15c2-12.
(a) Definitions. As used in this Section, the following terms have the meanings ascribed to such
terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule"meaus SEC Rule 15c2-12, as amended froin tune to time.
"SEC" means the United States Secw•ities and Exchange Commission.
(b) Annual Reports.
(i) The Issuer shall provide annually to the MSRB, in a designated electronic fonnat as
prescribed by the MSRB, within six months after the end of each fiscal year ending in ar after 2013,
financial information and operating data with respect to the Issuer of the general type included in
the final O�cial Statement authorized by Section 10 of this Ordinance, being the information
described in the Pricing Certificate. Any financial statements so to be provided shall be (1)
prepared in accordance with the accounting principles described in the fmancial statements
appended to the Official Statement, or such other accounting principles as the Issuer may be
required to employ from time to time pursuant to state law or regulation, and (2) audited, if the
Issuer coinrnissions 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 accoinpanied 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 �nancial information and operating data pursuant to this Section. The fmancial
information and operating data to be provided pursuant to this Section may be set forth in full in
one ar more documents or may be included by specific reference to any document (including an
official statement or other offering document, if it is available from the MSRB) that theretofore has
been provided to the MSRB or filed with the SEC.
(c) Event Notices.
(i) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a
timely manner (but not i.n excess of ten business days after the occurrence of the event) of any of
the following events with respect to the Bonds, if such event is material within the meaning of the
federal securities laws:
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1. Non-payment related defaults;
2. Modif'ications to rights of holders of the Bonds;
3. Bond calls;
4. Release, substitution, or sale of properly securing repayment of the Bonds;
5. The consummation of a merger, consolidation, ar acquisition involvi�ig 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 de�nitive
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 tiinely inanner (but not in excess of ten business days after the occurrence of the event) of any of
the following events with respect to the Bonds, without regard to whether such event is considered
inaterial 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 t� opinions or the issuance by the Internal Revenue Service of
proposed or fmal determinations of taxability, Notices of Proposed Issue (IRS
Form 5701-TEB) or other material notices or detertninations with respect to the
tax-exempt status of the Bonds, or other material events affecting the tax-exempt
status of the Bonds;
6. Tender offers;
7. Defeasances;
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 fmancial information or operating data in accordance with subsection (b) of this Section by
the time required by such subsection.
(d) Limitations, Disclaimers, and Ainendrnents.
(i) The Issuer shall be obligated to observe and perform the covenants specified in this
Section for so long as, but only for so long as, the Issuer remains an "obligated person" with respect
to the Bonds within the meaning of the Rule, except that the Issuer in any event will give notice of
any deposit made in accordance with this Ordinance or applicable law that causes the Bonds no
longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the Registered Owners and
beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any
benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Issuer
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the Issuer's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as expressly
22
provided herein. The Issuer does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Bonds at any future date.
(iii) UNDER NO CIlZCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE ISSUER, WIIETHER 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 SIIALL BE LIMITED TO AN ACTION FOR MANDAMiIS 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 ui 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 inay be amended by the Issuer from time to tune 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, ar type of operations of the Issuer, but only if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell
Bonds in the primary offering of the Bonds in compliance with the Rule, talcing into account any
amendinents or interpretations of the Rule since such offering as well as such changed
circumstances and (2) either (a) the Registered Owners of a majority in aggregate principal amount
(or any greater amount required by any other provision of this Ordinance that authorizes such an
amendment) of the outstanding Bonds consent to such ainendment or (b) a person that is
unaffiliated with the Issuer (such as nationally recognized bond counsel) determined that such
amendment will not materially impair the interest of the Registered Owners and beneficial owners
of the Bonds. The Issuer inay 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 fmal
jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the
extent that the provisions of this sentence would not prevent an underwriter from lawfully
purchasing or selling Bonds in the primary offering of the Bonds. If the Issuer so amends the
provisions of this Section, it shall include with any amended fmancial 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 unpact of any change in the type of financial information
or operatuig data so provided.
(e) Amendment of the Rule. The provisions of this Section shall be revised by the Pricing Officer
to reflect the requirements of the Rule if the Rule is amended after the adoption of this Ordinance but
prior to the delivery of the Bonds so as to permit an underwriter to purchase or sell Bonds in the primary
offering of the Bonds in compliance with the Rule. Any such revisions shall be set forth in the Pricing
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
��1e3
be inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the
interests of the holders, (iv) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or
corresponding provisions of federal laws from time to time in effect, or (v) make such other provisions in
regard to matters or questions arising under this Ordinance as shall not be inconsistent with the provisions
of this Ordinance and that shall not in the opinion of the Issuer's Bond Counsel materially adversely affect
the interests of the holders.
(b) Except as provided in paragraph (a) above, the holders of Bonds aggregating in principal
amount a majority of the aggregate principal amount of then outstanding Bonds that are the subject of a
proposed amendment shall have the right from time to time to approve any amendrnent hereto that may be
deemed necessary or desirable by the Issuer; provided, however, that without the consent of 100% of the
holders in aggregate principal amount of the then outstanding Bonds, nothing herein contained shall
permit or be construed to permit amendment of the terms and conditions of this Ordinance or in any of the
Bonds so as to:
(1) Make any change in the maturity of any of the outstanding Bonds;
(2) Reduce tlie rate of interest borne by any of the outstanding Bonds;
(3) Reduce the amount of the principal of, or redemption premium, if any, payable on any
outstanding Bonds;
(4) Modify the tenns of payment of principal or of interest or redeinption premium on
outstanding Bonds or any of them or impose any condition with respect to such payment; or
(5) Change the minunum percentage of the principal amount of Bonds necessary for consent
to such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the Issuer shall
send by U.S. mail to each Registered Owner of the affected Bonds a copy of the proposed amendment and
cause notice of the proposed amendment to be published at least once in a fmancial 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 ainendment and shall state that a copy thereof is on file at the office of the
Issuer for inspection by all holders of such Bonds.
(d) Whenever at any time within one year from the date of publication of such notice the Issuer
shall receive an instrument or instruments executed by the holders of at least a majority in aggregate
principal amount of all of the Bonds then outstanding that are required for the amendment, which
instrument or instruments shall refer to the proposed amendment and that shall specifically consent to and
approve such amendment, the Issuer may adopt the amendment in substantially the same form.
(e) Upon the adoption of any ainendatory Ordinance pursuant to the provisions of this Section, this
Ordinance shall be deemed to be modified and amended in accardance with such amendatory Ordinance,
and the respective rights, duties, and obligations of the Issuer and all holders of such affected Bonds shall
thereafter be determined, exercised, and enforced, subject in all respects to such amendment.
(� Any consent given by the holder of a Bond pursuant to the provisions of this Section shall be
irrevocable for a period of six months from the date of the publication of the notice provided for in this
Section, and shall be conclusive and binding upon all future holders of the same Bond during such period.
Such consent may be revoked at any time after six months from the date of the publication of said notice
by the holder who gave such consent, or by a successor in title, by filing notice with the Issuer, but such
revocation shall not be effective if the holders of a majority in aggregate principal amount of the affected
24
Bonds then outstanding, have, prior to the attempted revocation, consented to and approved the
amendment.
For the purposes of establishing ownership of the Bonds, the Issuer sha11 rely solely upon the
registration of the ownership of such Bonds on the Registration Books kept by the Paying
AgentlRegistrar.
Section 15. DEFAULT AND REMEDIES.
(a) Events of Default. Each of the following occurrences or events for the purpose of this
Ordinance is hereby declared to be an Event of Default:
(i) the failure to make payment of the principal of or interest on any of the Bonds when the
same becoines due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or obligation
of the Issuer, the failure to perfonn which materially, adversely affects the rights of the Registered
Owners of the Bonds, including, but not limited to, their prospect or ability to be repaid in
accordance with this Ordinance, and the continuation thereof for a period of 60 days after notice of
such default is given by any Registered Owner to the Issuer.
(b) Remedies for Default.
(i) Upon the happening of any Event of Default, then and in every case, any Registered
Owner or an authorized representative thereof, including, but not limited to, a trustee or trustees
therefor, may proceed against the Issuer far 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 aud maintained for the equal
benefit of all Registered Owners of Bonds then outstanding.
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or under the Bonds or now or hereafter existing at law or in
equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to
accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance.
(ii) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of
any other available remedy.
(iii) By accepting the delivery of a Bond authorized under this Ordinance, such Registered
Owner agrees that the certifications required to effectuate any covenants or representations
contained in this Ordinance do not and shall never constitute or give rise to a personal or pecuniary
liability or charge against the officers, employees or agents of the Issuer or the members of its
governing body.
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Section 16. APPROVAL OF ESCROW AGREEMENT t1ND TRANSFER OF FUNDS. In
furtherance of authority granted by Section 1207.007(b), Texas Government Code, the Mayor ar the
Pricing Officer are further authorized to enter into and execute on behalf of the Issuer with the escrow
agent named therein, an escrow or sunilar agreement, in the form and substance as shall be approved by
the Pricing Officer, which agreement will provide for the payment in full of the Refunded Obligations. I�i
addition, the Mayor, Pricing Officer or other officer of the Issuer is authorized to purchase such securities,
to execute such subscriptions for the purchase of the Escrowed Securities, (as deiined in the agreement),
if any, and to authorize such contributions to the escrow fund as provided in the agreement.
Section 17. REDEMPTION OF REFUNDED OBLIGATIONS.
(a) Subject to the execution and delivery of the Purchase Agreement with the Purchaser, the Issuer
hereby directs that the Refunded Obligations be called for redemption on the dates and at such prices as
set forth in the Pricing Certificate. The Pricing Officer is hereby authorized and directed to issue or cause
to be issued the Notices of Redemption of the Refunded Obligations in substantially the form set forth in
E�ibit A attached hereto, completed with information from the Pricing Certificate, to the paying
agent/registrar(s) for the Refunded Obligations.
(b) In addition, the paying agent/registrar(s) for the Refunded Obligations is hereby directed to
provide the appropriate notices of redemption and defeasance as specified by the ordinances authorizing
the issuance of the Refunded Obligations and is hereby directed to make appropriate arrangements so that
the Refunded Obligations may be redeemed on their respective redemption dates. The Refunded
Obligations shall be presented for redemption at the paying agent/registrar therefore, and shall not bear
interest after the date fixed for redemption.
(c) If the redemption of the Refunded Obligations results in the partial refunding of any maturity of
the Refunded Obligations, the Pricing Officer shall direct the paying agent/registrar(s) for the Refunded
Obligations to designate at random and by lot which of the Refunded Obligations will be payable from
and secured solely from ad valorem taaces of the Issuer pursuant to the ordinance of the Issuer authorizing
the issuance of such Refunded Obligations (the "Refunded Obligation Ordinance"). The paying
agent/registrar(s) shall notify by first-class mail all registered owners of all affected obligations of such
maturities that: (i) a portion of such obligations have been refunded and are secured until final maturity
solely with cash and investments inaintained by the Escrow Agent in the Escrow Fund, (ii) the principal
amount of a11 affected obligations of such maturities registered in the name of such registered owner that
have been refunded and are payable solely from cash and investments in the Escrow Fund and the
remaining principal amount of all affected obligations of such maturities registered in the naine of such
registered owner, if any, have not been refunded and are payable and secured solely from ad valorem
taxes of the Issuer described in the Refunded Obligation Ordinance, (iii) the registered owner is required
to submit his or her Refunded Obligations to the paying agent/registrar(s), for the purposes of
re-registering such registered owner's obligations and assigning new CUSIl' numbers in order to
distinguish the source of payment for the principal and interest on such obligations, and (iv) payment of
principal of and interest on such obligations may, in some circumstances, be delayed until such
obligations have been re-registered and new CUSIP numbers have been assigned as required by (iii)
above.
(d) The source of funds for payment of the principal of and interest on the Refunded Obligations on
their respective maturity or redemption dates shall be from the funds placed in escrow with the Escrow
Agent, pursuant to the Escrow Agreement approved in Section 16 of this Ordinance.
Section 18. APPROPRIATION. To pay the debt service coming due on the Bonds, if any, prior to
receipt of the t�es 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
26
with capitalized interest received from the sale of the Bonds, if any, will be sufficient to pay such debt
service, and such amount shall be used for no other purpose.
Section 19. EFFECTNE DATE. In accordance with the provisions of Texas Governrnent Code
Section 1201.028, this Ordinance shall be effective unmediately upon its adoption by the City Council.
Section 20. SEVERABII,ITY. 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 Ord'mance, despite such invalidity, which remaining portions shall remain in full
force and effect.
[Signature page follows]
27
PASSED, APPROVED AND EFFECTIVE this April 16, 2013.
_�
� �
Mayor, City of on Tex
ATTEST:
Ci S cretary, 't of Denton, Texas
APPR VED AS TO LEGAL FORM:
� ��
City Attorney, City of Denton, Texas �
Purpose
Street Improvements
* Includes principal and premium.
SCHEDULEI
November 6, 2012 Election Voted Bonds
Amount
Authorized
$20,400,000
Amount
Previously
Issued*
$0
S-1
Unissued
Balance
$20,400,000
Amount
Being
Issued*
$4,000,000
Remaining
Balance
$16,400,000
�:����»�rr
5chedule of Eligible Refunded Obligations
City of Denton General Obligation Refunding and
Improvement Bonds, Series 2003
Maturitv Date
2/15/2014
2/15/2015
2/15/2016
2/15/2017
2/15/2018
2/15/2019
2/15/2020
2/15/2021
2/15/2022
2/15/2023
Total
Principal Amount
Outstandin�
$ 55,000
35,000
35,000
35,000
40,000
40,000
40,000
45,000
45,000
50,000
$ 420,000
City of Denton Certificates of Obligation, Series 2003
Maturitv Date
2/15/2014
2/15/2015
2/15/2016
2/15/2017
2/15/2018
2/15/2019
2/15/2020
2/15/2021
2/15/2022
2/15/2023
Principal Amount
Outstandin�
$ 30,000
30,000
35,000
35,000
35,000
35,000
35,000
35,000
40,000
40,000
Total $ 350,000
S-1
City of Denton General Obligation Bonds, Series 2005
Maturity Date
2/15/2014
2/15/2015
2/15/2016
2/15/2017
2/15/2018
2/15/2019
2/15/2020
2/15/2021
2/15/2022
2/15/2023
2/15/2024
2/15/2025
Total
Principal Amount
Outstandin�
$ 235,000
245,000
255,000
265,000
275,000
285,000
300,000
310,000
325,000
340,000
355,000
370,000
$ 3,560,000
City of Denton Certificates of Obligation, Series 2005
Maturi _ Date
2/15/2014
2/15/2015
2/15/2016
2/15/2017
2/15/2018
2/15/2019
2/15/2020
2/15/2021
2/15/2022
2/15/2023
2/15/2024
2/15/2025
Principal Amount
Outstanding
$ 230,000
235,000
245,000
250,000
265,000
275,000
290,000
295,000
310,000
325,000
340,000
355,000
Total $ 3,415,000
S-2
City of Denton General Obligation Bonds, Series 2006
Maturi . � Date
2/15/2014
2/15/2015
2/15/2016
2/15/2017
2/15/2018
2/15/2019
2/15/2020
2/15/2021
2/15/2022
2/15/2023
2/15/2024
2/ 15/2025
2/ 15/2026
Total
Principal Amount
Outstandin�
$ 160,000
165,000
175,000
185,000
195,000
200,000
210,000
220,000�1�
230,000�1�
245,000�2�
255,OOO�z�
265,000�2�
280,OOO�Z�
$ 2,785,000
�l� Represents a mandatory sinking fund redemption payxnent of a term bond maturing on 2/15/2022.
�z� Represents a mandatory sinking fund redemption payment of a term bond maturing on 2/15/2026.
City of Denton Certificates of Obligation, Series 2006
Maturi . Date
2/15/2014
2/15/2015
2/15/2016
2/15/2017
2/15/2018
2/15/2019
2/15/2020
2/15/2021
2/15/2022
2/15/2023
2/15/2024
2/15/2025
2/15/2026
Principal Amount
Outstandin�
$ 405,000
425,000
450,000
340,000
355,000
375,000
385,000
400,000
420,000
445,000
465,000
480,000
500,000
Total $ 5,445,000
S-3
� 11: �
Notice of Redemption
NOTICE IS HEREBY GIVEN that the City of Denton, Texas has called for redemption the
outstanding Bonds of the City described as follows:
City of Denton General Obligation Refunding and Improvement Bonds, Series 2003, dated
March 15, 2003, scheduled to mature on February 15, 20_ through February 15, 20_, aggregating
$ (and being all of the outstanding bonds of said series scheduled to mature on and after
February 15, 20�;
Call date: , 20 ; redeemable at a redemption price of par plus accrued interest at the
principal corparate offices of The Bank of New York Mellon Trust Company, N.A., only upon
presentation by the owner thereof.
City of Denton Certificates of Obligation, Series 2003, dated March 15, 2003, scheduled to
mature on February 15, 20_ through February 15, 20_, aggregating $ (and being a11 of the
outstanding bonds of said series scheduled to mature on and after February 15, 20�;
Call date: , 20 ; redeemable at a redemption price of par plus accrued interest at the
principal corporate offices of The Bank of New York Mellon Trust Coinpany, N.A., only upon
presentation by the owner thereof.
City of Denton General Obligation Bonds, Series 2005, dated May 15, 2005, scheduled to mature
on February 15, 20 through February 15, 20_, aggregating $ (and being all of the
outstanding bonds of said series scheduled to mature on and after February 15, 20�;
Call date: , 20 ; redeemable at a redemption price of par plus accrued interest at the
principal corporate offices of The Bank of New York Mellon Trust Company, N.A., only upon
presentation by the owner thereof.
City of Denton Certificates of Obligation, Series 2005, dated May 15, 2005, scheduled to mature
on February 15, 20_ through February 15, 20� aggregating $ (and being all of the
outstanding bonds of said series scheduled to mature on and after February 15, 20�;
Call date: , 20 ; redeemable at a redeinption price of par plus accrued interest at the
principal corporate offices of The Bank of New Yark Mellon Trust Company, N.A., only upon
presentation by the owner thereof.
City of Denton General Obligation Bonds, Series 2006, dated July 15, 2006, scheduled to mature
on February 15, 20_ through February 15, 20_, February 15, 20_ and February 15, 20_ aggregating
$ (and being all of the outstanding bonds of said series scheduled to mature on and after February 15,
20�;
Call date: , 20 ; redeemable at a redemption price of par plus accrued interest at the
principal corporate offices of The Bank of New York Mellon Trust Company, N.A., only upon
presentation by the owner thereof.
I.QiI
City of Denton Certificates of Obligation, Series 2006, dated July 15, 2006, scheduled to mature
on February 15, 20 through February 15, 20_, aggegating $ (and being all of the
outstanding bonds of said series scheduled to inature on and after February 15, 20�;
Call date: , 20 ; redeemable at a redemptioii price of par plus accrued interest at the
principal corporate offices of The Bank of New Yark Mellon Trust Company, N.A., only upon
presentation by the owner thereof.
If moneys sufficient for the payment of such redemption price are held by or on behalf of the
paying agent, the described Bonds shall become due and payable on the redemption date specified, and
the interest thereon shall cease to accrue from and after the redemption date.
In compliance with section 3406 of the Internal Revenue Code of 1986, payors making certain
payments due on debt securities may be obligated to deduct and withhold 30 percent of such payment
from the remittance to any payee who has failed to provide such payor with a valid taxpayer identification
number. To avoid the imposition of the withholding of tax, such payees should submit a taxpayer
identification number when surrendering the bonds for redemption.
NOTICE IS FURTHER GNEN that all Bonds should be submitted to one of the following address:
First Class/Registered/
Certified Mail
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
P.O. Box 396
East Syracuse, New York 13057
Dated:
20
Express Delivery
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
111 Sanders Creek Parkway
East Syracuse, New York 13057
Hand Delivery
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
Corporate Trust Window
101 Barclay Street
1ST Floor East
New Yark, New York 10286
By: The Bank of New York Mellon Trust Company, National Association
A-2
CERTIFICATE FOR
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELIVERY OF UP TO $19,000,000 IN PRINCIPAL
AMOUNT OF "CITY OF DENTON GENERAL OBLIGATION REFUNDING AND
IlVIPROVEMENT BONDS, SERIES 2013"; AUTHORIZING THE ISSUANCE OF THE
BONDS; DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO
EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE BONDS;
APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES
RELATING TO SAID BONDS; AND ENACTING OTHER PROVISIONS RELATING
TO THE SUBJECT
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
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 16� DAY OF
APRIL, 2013, at the Municipal Building (City Hall), and the roll was called of the duly constituted
ofiicers and members of said City Council, to-wit: �
Mark Burroughs, Mayor
Jim Engelbrecht
Dalton Gregory
James King
Pete Kamp, Mayor Pro Tem
Chris Watts
Kevin Roden
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 ]NCIDENT AND RELATED TO THE
ISSUANCE, SALE AND DELIVERY OF UP TO $19,000,000 IN PRINCIPAL AMOUNT OF
"CITY OF DENTON GENERAL OBLIGATION REFUNDING AND IlVIPROVEMENT
BONDS, SERIES 2013"; AUTHORIZING THE ISSUANCE OF THE BONDS; DELEGATING
THE AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN
DOCUMENTS RELATING TO THE SALE OF THE BONDS; APPROVING �1ND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID BONDS; AND
ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT
was duly introduced for the consideration of said City Council and duly read. It was then duly moved and
seconded that said Ordinance be passed; and, after due discussion, said motion, carrying with it the
passage of said Ordinance, prevailed and carried by the following vote:
AYES: 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 narned 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 Governrnent 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 16� day of APRIL, 2013.
r�
� -
Secretary y
(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 atta.ched and following
Ordinance prior to its passage as aforesaid.
, � �
�
City Attorney
� �
Bon Attorneys �