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ORDINANCE NO. 2015 -223
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO THE
ISSUANCE, SALE AND DELIVERY OF UP TO $40,860,000 IN PRINCIPAL AMOUNT OF
"CITY OF DENTON GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015 ";
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; ENACTING OTHER PROVISIONS RELATING
TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, the City of Denton, Texas (the "Issuer ") has previously issued, and there are
presently outstanding revenue bonds of the Issuer secured by a pledge of revenues derived by the
Issuer from the ownership and operation of the Issuer's Utility System (consisting of the Issuer's
combined waterworks system, sanitary sewer system, and electric light and power system); and
WHEREAS, the Issuer now desires to refund all or part of the outstanding revenue bonds
described in Schedule I attached hereto and incorporated herein (the "Eligible Refunded Bonds "),
and those Eligible Refunded Bonds designated by the Pricing Officer in the Pricing Certificate,
each as defined below, to be refunded are herein referred to as the "Refunded Bonds "; and
WHEREAS, Chapter 1207, Texas Government Code, as amended ( "Chapter 1207 ")
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
Bonds or a trust company or commercial bank that does not act as a depository for the Issuer and
is named in these proceedings, and such deposit, if made before the payment dates of the Refunded
Bonds, shall constitute the making of firm banking and financial arrangements for the discharge
and final payment of the Refunded Bonds; and
WHEREAS, Chapter 1207 further authorizes the Issuer to enter into an escrow or similar
agreement with such paying agent for the Refunded Bonds or trust company or commercial bank
with respect to the safekeeping, investment, reinvestment, administration and disposition of any
such deposit, upon such terms and conditions as the Issuer and such paying agent or trust company
or commercial bank may agree; and
WHEREAS, the City Council hereby finds and declares a public purpose and it is in the
best interests of the Issuer to refund the Refunded Bonds 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; and
WHEREAS, all the Refunded Bonds mature or are subject to redemption prior to maturity
within 20 years of the date of the bonds hereinafter authorized; and
WHEREAS, the Issuer is a member city of the Texas Municipal Power Agency ( "TMPA ");
and
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WHEREAS, the Issuer, the Cities of Bryan, Garland and Greenville (together with the
Issuer, the "Member Cities ") and TMPA have entered into identical Power Sales Contracts dated
September 1, 1976, as amended (the "Power Sales Agreement "), under which TMPA is obligated
to sell electric energy to the Member Cities, and each of the Member Cities is unconditionally
obligated to pay to TMPA, without offset or counterclaim and without regard to whether energy
is delivered by TMPA to each Member City, including the Issuer, or whether the Member Cities,
including the Issuer, actually uses energy from TMPA's generating facilities, the percentage of
TMPA's Annual System Costs (as defined in the Power Sales Agreement), including the payment
of the Debt Service Requirements (as defined in the Power Sales Agreement) which may from
time to time exist, as set forth below:
City of Bryan: 21.7%
City of Denton: 21.3%
City of Garland: 47.0%
City of Greenville: 10.0%
Such payment percentages are hereinafter referred to as the "Contract Percentages "; and
WHEREAS, TMPA has outstanding its Refunding Revenue Bonds, Series 1993
constituting a "Debt" (within the meaning of the Power Sales Agreement, and referred to herein
as the "TMPA Series 1993 Bonds "), the Contract Percentage of which the Issuer is obligated to
pay under the Power Sales Agreement (the Issuer's Contract Percentage of a portion of the
September 1, 2016 maturity of the TMPA Series 1993 Bonds, as being more fully described in
Schedule I to this Ordinance, is herein referred to as the "Refunded TMPA Obligations "), which
represent a portion of the contractual obligations of the Member Cities incurred in accordance with
the Power Sales Agreement; and
WHEREAS, in accordance with resolution 2012 -7 -8 adopted by the TMPA Board of
Directors on July 12, 2012 (the "TMPA Resolution ") and an agreement among the Member Cities,
each Member City may individually prepay or restructure the portion of the contractual obligations
under the Power Sales Agreement of the Member Cities represented by the TMPA Series 1993
Bonds through the use of cash on hand or proceeds of bonds issued by a Member City; and
WHEREAS, Chapter 1207 authorizes the Issuer to issue refunding bonds to refund any
special obligation of the Issuer; and
WHEREAS, the bonds hereafter authorized are being issued and delivered pursuant to
Chapter 1207; and
WHEREAS, the Issuer finds that the Refunded TMPA Obligations, which constitute a
portion of the payment obligations of the Issuer under the Power Sales Agreement, constitute a
special obligation of the Issuer that may be refunded with proceeds of bonds issued under Chapter
1207; and
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WHEREAS, Chapter 1207 authorizes the Issuer to issue refunding bonds and to deposit
the proceeds from the sale thereof, and any other available funds or resources, directly with a place
of payment (paying agent) for the Refunded TMPA Obligations or other authorized depository,
and such deposit, if made before such payment dates, shall constitute the making of firm banking
and financial arrangements for the discharge and final payment of the Refunded TMPA
Obligations; and
WHEREAS, the TMPA Resolution provides for the defeasance and payment of the TMPA
Series 1993 Bonds consisting of the Refunded TMPA Bonds (as defined in Schedule I) upon
deposit of the necessary funds therefor, and the Issuer has been provided with an escrow agreement
(the "Refunded TMPA Obligations Escrow Agreement') with respect to the Refunded TMPA
Bonds to be executed and delivered, in substantially the form and substance presented, by TMPA
and the Issuer pursuant to the TMPA Resolution; and
WHEREAS, pursuant to subsection (a) of Section 1207.008, Texas Government Code, this
City Council hereby finds and determines that it is in the Issuer's best interests to issue the Bonds
in order to refund all or a portion of the Refunded TMPA Obligations incurred, due and owing by
the Issuer under the Power Sales Agreement, consistent with the terms of the TMPA Resolution,
and that the refunding of the contractual obligations of the Issuer incurred in connection with the
Refunded TMPA Bonds (as defined in Schedule I hereto) constitutes a public purpose in allowing
the Issuer to amortize the contractual obligations over a longer period of time. The City Council
further finds and determines that the aggregate amount of payments to be made under the Bonds
allocable to the refunding of the Refunded TMPA Obligations exceeds the aggregate amount of
payments that would have been made under the terms of the Refunded TMPA Obligations and the
maximum amount by which the aggregate amount of payments to be made under the Bonds
allocable to the refunding of the Refunded TMPA Obligations exceeds the aggregate amount of
payments that would have been made under the terms of the Refunded TMPA Obligations shall be
$750,000; and
WHEREAS, the bonds hereinafter authorized to be issued are to be issued, sold and
delivered pursuant to the general laws of the State of Texas, including Chapter 1207 and the Issuer's
Home Rule Charter; and
WHEREAS, it is officially found, determined, and declared that the meeting at which this
Ordinance has been adopted was open to the public and public notice of the time, place and subject
matter of the public business to be considered and acted upon at said meeting, including this
Ordinance, was given, all as required by the applicable provisions of Texas Government Code
Chapter 551; NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. RECITALS, AMOUNT, PURPOSE AND DESIGNATION OF THE
BONDS.
(a) The recitals set forth in the preamble hereof are incorporated herein and shall have the
same force and effect as if set forth in this Section.
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(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 maximum aggregate principal amount of $40,860,000 for the public
purpose of refunding the Refunded Bonds and the Refunded TMPA Obligations and to pay the
costs associated with the issuance of the Bonds.
(d) Each bond issued pursuant to this Ordinance shall be designated: "CITY OF DENTON
GENERAL OBLIGATION REFUNDING BOND, SERIES 2015," 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 hereof), or to the registered assignee or assignees of said Bonds or any
portion or portions thereof (in each case, the "Registered Owner "). The Bonds shall be in the
respective principal amounts, shall be numbered, shall mature and be payable on the date or dates
in each of the years and in the 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, 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
Bonds shall be refunded and carrying out the other procedures specified in this Ordinance,
including, determining the date of sale of the Bonds, 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 Bonds and the Refunded TMPA Obligations, including without limitation establishing
the redemption date for and effecting the redemption of the Refunded Bonds and obtaining
municipal bond insurance for all or any portion of the Bonds (including in connection therewith
the execution of any commitment agreements, membership agreements in mutual insurance
companies, and other similar agreements) and providing for the terms and provisions thereof
applicable to the Bonds, all of which shall be specified in the Pricing Certificate; provided that:
(i) the aggregate original principal amount of the Bonds shall not exceed
$40,860,000;
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(ii) the maximum stated maturity of the Bonds shall not exceed February 15,
2026;
(iii) the Bonds shall bear interest at a fixed rate, and the net effective interest rate
on the Bonds shall not exceed 3.25 %;
(iv) the refunding of the Refunded Bonds must produce present value debt
service savings of at least 3.00 %, net of any Issuer contribution;
(v) the amount by which the aggregate amount of payments to be made under
the Bonds allocable to the refunding of the Refunded TMPA Obligations
exceeds the aggregate amount of payments that would have been made
under the terms of the Refunded TMPA Obligations shall not exceed
$750,000; and
(vi) the delegation made hereby shall expire if not exercised by the Pricing
Officer through execution of the Pricing Certificate on or prior to November
2, 2015.
(b) A Pricing Officer shall cause Bonds to be issued to refund all Refunded TMPA
Obligations within the parameters set forth herein to the extent the Refunded TMPA Obligations
are not defeased with cash on hand.
(c) 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.
SECTION 3. CHARACTERISTICS OF THE BONDS.
(a) Registration, Transfer ..._ Conversion and Exchl�n_g Authent cation. The Issuer shall
j,
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
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Books confidential and, unless otherwise required by law, shall not permit their inspection by any
other entity. The Issuer shall pay the Paying Agent /Registrar's standard or customary fees and
charges for making such registration, transfer, conversion, exchange and delivery of a substitute
Bond or Bonds. Registration of assignments, transfers, conversions and exchanges of Bonds shall
be made in the manner provided and with the effect stated in the FORM OF BOND set forth in
this Ordinance. Each substitute Bond shall bear a letter and /or number to distinguish it from each
other Bond.
Except as provided in Section 3(c) of this Ordinance, an authorized representative of the
Paying Agent /Registrar shall, before the delivery of any such Bond, date and manually sign said
Bond, and no such Bond shall be deemed to be issued or outstanding unless such Bond is so
executed. The Paying Agent /Registrar promptly shall cancel all paid Bonds and Bonds
surrendered for conversion and exchange. No additional ordinances, orders, or resolutions need
be passed or adopted by the governing body of the Issuer or any other body or person so as to
accomplish the foregoing conversion and exchange of any Bond or portion thereof, and the Paying
Agent /Registrar shall provide for the printing, execution, and delivery of the substitute Bonds in
the manner prescribed herein, and said Bonds shall be printed or typed on paper of customary
weight and strength. Pursuant to Chapter 1201, Government Code, as amended, the duty of
conversion and exchange of Bonds as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution of said Bond, the converted and exchanged Bond shall
be valid, incontestable, and enforceable in the same manner and with the same effect as the Bonds
that initially were issued and delivered pursuant to this Ordinance, approved by the Attorney
General of the State of Texas (the "Attorney General ") and registered by the Comptroller of Public
Accounts of the State of Texas (the "Comptroller ").
(b) Payment of Bonds and Interest. The Issuer hereby further appoints the Paying
Agent /Registrar to act as the paying agent for paying the principal of and interest on the Bonds,
all as provided in this Ordinance. The Paying Agent /Registrar shall keep proper records of all
payments made by the Issuer and the Paying Agent /Registrar with respect to the Bonds, and of all
conversions and exchanges of Bonds, and all replacements of Bonds, as provided in this
Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date, and
for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record
Date ") will be established by the Paying Agent /Registrar, if and when funds for the payment of
such interest have been received from the Issuer. Notice of the past due interest shall be sent at
least five (5) business days prior to the Special Record Date by United States mail, first -class
postage prepaid, to the address of each Registered Owner appearing on the Registration Books at
the close of business on the last business day next preceding the date of mailing of such notice.
(c) In General. The Bonds (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be payable only to the Registered
Owners thereof, (ii) may or shall be redeemed prior to their scheduled maturities (notice of which
shall be given to the Paying Agent /Registrar by the Issuer at least 45 days prior to any such
redemption date), (iii) may be converted and exchanged for other Bonds, (iv) may be transferred
and assigned, (v) shall have the characteristics, (vi) shall be signed, sealed, executed and
authenticated, (vii) the principal of and interest on the Bonds shall be payable, and (viii) shall be
administered and the Paying Agent /Registrar and the Issuer shall have certain duties and
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responsibilities with respect to the Bonds, all as provided, and in the manner and to the effect as
required or indicated, in the FORM OF BOND set forth in this Ordinance (as modified in the
Pricing Certificate). The Initial Bond is not required to be, and shall not be, authenticated by the
Paying Agent /Registrar, but on each substitute Bond issued in conversion of and exchange for any
Bond or Bonds issued under this Ordinance the Paying Agent /Registrar shall execute the Paying
Agent /Registrar's Authentication Certificate, in the form set forth in the FORM OF BOND.
(d) Paying_Agent /Registrar for the Bonds. The Issuer covenants with the Registered
Owners of the Bonds that at all times while the Bonds are outstanding the Issuer will provide a
competent and legally qualified bank, trust company, financial institution, or other entity to act as
and perform the services of Paying Agent/Registrar for the Bonds under this Ordinance, and that
the Paying Agent /Registrar will be a single entity. The Issuer reserves the right to, and may, at its
option, change the Paying Agent /Registrar upon not less than 120 days written notice to the Paying
Agent /Registrar, to be effective not later than 60 days prior to the next principal or interest payment
date after such notice. In the event that the entity at any time acting as Paying Agent /Registrar (or
its successor by merger, acquisition, or other method) should resign or otherwise cease to act as
such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank,
trust company, financial institution, or other agency to act as Paying Agent /Registrar under this
Ordinance. Upon any change in the Paying Agent /Registrar, the previous Paying Agent /Registrar
promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other
pertinent books and records relating to the Bonds, to the new Paying Agent /Registrar designated
and appointed by the Issuer. Upon any change in the Paying Agent /Registrar, the Issuer promptly
will cause a written notice thereof to be sent by the new Paying Agent /Registrar to each Registered
Owner of the Bonds, by United States mail, first -class postage prepaid, which notice also shall
give the address of the new Paying Agent /Registrar. By accepting the position and performing as
such, each Paying Agent /Registrar shall be deemed to have agreed to the provisions of this
Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying
Agent /Registrar.
(e) Authentication. Except as provided below, no Bond shall be valid or obligatory for
any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears
thereon the Paying Agent /Registrar's Authentication Certificate substantially in the form provided
in this Ordinance, duly authenticated by manual execution of the Paying Agent /Registrar. It shall
not be required that the same authorized representative of the Paying Agent /Registrar sign the
Paying Agent /Registrar's Authentication Certificate on all of the Bonds. In lieu of the executed
Paying Agent /Registrar's Authentication Certificate described above, the Initial Bond delivered on
the closing date shall have attached thereto the Comptroller's Registration Certificate substantially
in the form provided in this Ordinance, manually executed by the Comptroller or by her duly
authorized agent, which certificate shall be evidence that the Initial Bond has been duly approved
by the Attorney General and that it is a valid and binding obligation of the Issuer, and has been
registered by the Comptroller.
(f) Book - Entry -Onl S sy tem. 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
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except as provided in subsection (g) hereof, all of the outstanding Bonds shall be registered in the
name of Cede & Co., as nominee of DTC.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the Issuer
and the Paying Agent /Registrar shall have no responsibility or obligation to any securities brokers
and dealers, banks, trust companies, clearing corporations and certain other organizations on
whose behalf DTC was created ( "DTC Participant ") to hold securities to facilitate the clearance
and settlement of securities transactions among DTC Participants or to any person on behalf of
whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately
preceding sentence, the Issuer and the Paying Agent /Registrar shall have no responsibility or
obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC
Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC
Participant or any other person, other than a Registered Owner of Bonds, as shown on the
Registration Books, of any notice with respect to the Bonds, or (iii) the payment to any DTC
Participant or any other person, other than a Registered Owner of Bonds, as shown in the
Registration Books of any amount with respect to principal of or interest on the Bonds.
Notwithstanding any other provision of this Ordinance to the contrary, the Issuer and the Paying
Agent /Registrar shall be entitled to treat and consider the person in whose name each Bond is
registered in the Registration Books as the absolute owner of such Bond for the purpose of payment
of principal and interest with respect to such Bond, for the purpose of registering transfers with
respect to such Bond, and for all other purposes whatsoever. The Paying Agent /Registrar shall
pay all principal of and interest on the Bonds only to or upon the order of the Registered Owners,
as shown in the Registration Books as provided in this Ordinance, or their respective attorneys
duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and
discharge the Issuer's obligations with respect to payment of principal of and interest on the Bonds
to the extent of the sum or sums so paid. No person other than a Registered Owner, as shown in
the Registration Books, shall receive a Bond evidencing the obligation of the Issuer to make
payments of principal and interest pursuant to this Ordinance. Upon delivery by DTC to the Paying
Agent /Registrar of written notice to the effect that DTC has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions in this Ordinance with respect to
interest checks being mailed to the Registered Owner at the close of business on the Record Date,
the words "Cede & Co. " in this Ordinance shall refer to such new nominee of DTC.
The previous execution and delivery of the Blanket Issuer Letter of Representations with
respect to obligations of the Issuer is hereby ratified and confirmed; and the provisions thereof
shall be fully applicable to the Bonds.
(g) >lcces cll ur ics I c pw l lL� l:y� llansfers Otitsid Boo 1.a�1�attr -Only Sygejj�. In the
event that the Issuer determines that DTC is incapable of discharging its responsibilities described
herein and in the Blanket Issuer Letter of Representations to DTC or that it is in the best interest
of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the Issuer shall
(i) appoint a successor securities depository, qualified to act as such under Section 17A of the
Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the
appointment of such successor securities depository and transfer one or more separate Bonds to
such successor securities depository or (ii) notify DTC and DTC Participants of the availability
through DTC of Bonds and transfer one or more separate certificated Bonds to DTC Participants
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having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be
restricted to being registered in the Registration Books in the name of Cede & Co., as nominee of
DTC, but may be registered in the name of the successor securities depository, or its nominee, or
in whatever name or names Registered Owners transferring or exchanging Bonds shall designate,
in accordance with the provisions of this Ordinance.
(h) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of and interest on such Bond and all notices with respect to
such Bond shall be made and given, respectively, in the manner provided in the Blanket Issuer
Letter of Representations to DTC.
(i) Cancellation of Initial Bond. On the closing date, the Initial Bond, representing the
entire principal amount of the Bonds, payable in stated installments to the purchaser designated in
Section 10 or its designee, executed by manual or facsimile signature of the Mayor and City
Secretary of the Issuer, approved by the Attorney General, and registered and manually signed by
the Comptroller, will be delivered to such purchaser or its designee. Upon payment for the Initial
Bond, the Paying Agent /Registrar shall cancel the Initial Bond and deliver to DTC on behalf of
such purchaser one registered definitive Bond for each year of maturity of the Bonds, in the
aggregate principal amount of all of the Bonds for such maturity. To the extent that the Paying
Agent /Registrar is eligible to participate in DTC's FAST System, pursuant to an agreement
between the Paying Agent /Registrar and DTC, the Paying Agent /Registrar shall hold the definitive
Bonds in safekeeping for DTC.
0) Conditional Notice of Redemption. With respect to any optional redemption of the
Bonds, unless the prerequisites to such redemption required by this Ordinance have been met and
moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to be
redeemed shall have been received by the Paying Agent /Registrar prior to the giving of such notice
of redemption, such notice shall state that said redemption may, at the option of the Issuer, be
conditional upon the satisfaction of such prerequisites and receipt of such moneys by the Paying
Agent /Registrar on or prior to the date fixed for such redemption, or upon any prerequisite set forth
in such notice of redemption. If a conditional notice of redemption is given and such prerequisites
to the redemption and sufficient moneys are not received, such notice shall be of no force and
effect, the Issuer shall not redeem such Bonds and the Paying Agent /Registrar shall give notice, in
the manner in which the notice of redemption was given, to the effect that the Bonds have not been
redeemed.
SECTION 4. FORM OF BONDS. The form of the Bonds, including the form of Paying
Agent /Registrar's Authentication Certificate, the form of Assignment and the form of
Comptroller's Registration Certificate to be attached to the Bonds initially issued and delivered
pursuant to this Ordinance, shall be, respectively, substantially as follows, with such appropriate
variations, omissions or insertions as are permitted or required by this Ordinance, and with the
Form of Bond to be modified pursuant to, and completed with information set forth in, the Pricing
Certificate.
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(a) [Form of Bond]
0o .
Interest Rate
REGISTERED OWNER:
PRINCIPAL AMOUNT:
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF DENTON
GENERAL OBLIGATION REFUNDING
BOND
SERIES 2015
Dated Date
�...� ,_... 20
Maturity Date
February 15,
PRINCIPAL
A:MOUN'I`
CUSIP No.
DOLLARS
ON THE MATURITY DATE specified above, the City of Denton, in Denton County, Texas
(the "Issuer "), being a political subdivision and municipal corporation of the State of Texas, hereby
promises to pay to the Registered Owner specified above, or registered assigns (hereinafter called
the "Registered Owner "), on the Maturity Date specified above, the Principal Amount specified
above. The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on
the basis of a 360 -day year of twelve 30 -day months) from _, 2015 at the Interest Rate
per annum specified above. Interest is payable on , 20 and semiannually on each
and thereafter to the Maturity Date specified above, or the date of
redemption prior to maturity; except, if this Bond is required to be authenticated and the date of
its authentication is later than the first Record Date (hereinafter defined), such Principal Amount
shall bear interest from the interest payment date next preceding the date of authentication, unless
such date of authentication is after any Record Date but on or before the next following interest
payment date, in which case such principal amount shall bear interest from such next following
interest payment date; provided, however, that if on the date of authentication hereof the interest
on the Bond or Bonds, if any, for which this Bond is being exchanged is due but has not been paid,
then this Bond shall bear interest from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity,
or upon the date fixed for its redemption prior to maturity, at the principal corporate trust office of
The Bank of New York Mellon Trust Company, National Association, Dallas, Texas, which is the
"Paying Agent /Registrar" for this Bond. The payment of interest on this Bond shall be made by
the Paying Agent /Registrar to the Registered Owner hereof on each interest payment date by check
or draft, dated as of such interest payment date, drawn by the Paying Agent /Registrar on, and
payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of this
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Bond (the "Bond Ordinance ") to be on deposit with the Paying Agent /Registrar for such purpose
as hereinafter provided; and such check or draft shall be sent by the Paying Agent /Registrar by
United States mail, first -class postage prepaid, on each such interest payment date, to the
Registered Owner hereof, at its address as it appeared on the last business day of the month
preceding each such date (the "Record Date ") on the Registration Books kept by the Paying
Agent /Registrar, as hereinafter described. In addition, interest may be paid by such other method,
acceptable to the Paying Agent /Registrar, requested by, and at the risk and expense of, the
Registered Owner. In the event of a non - payment of interest on a scheduled payment date, and for
30 days thereafter, a new record date for such interest payment (a "Special Record Date ") will be
established by the Paying Agent /Registrar, if and when funds for the payment of such interest have
been received from the Issuer. Notice of the Special Record Date and of the scheduled payment
date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at
least five business days prior to the Special Record Date by United States mail, first -class postage
prepaid, to the address of each Registered Owner of a Bond appearing on the Registration Books
at the close of business on the last business day next preceding the date of mailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Bond prior
to maturity as provided herein shall be paid to the Registered Owner upon presentation and
surrender of this Bond for redemption and payment at the principal corporate trust office of the
Paying Agent /Registrar. The Issuer covenants with the Registered Owner of this Bond that on or
before each principal payment date, interest payment date, and accrued interest payment date for
this Bond it will make available to the Paying Agent /Registrar, from the "Interest and Sinking
Fund' created by the Bond Ordinance, the amounts required to provide for the payment, in
immediately available funds, of all principal of and interest on the Bonds, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, a legal holiday or a day on which banking institutions in the city where the
principal corporate trust office of the Paying Agent /Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day that is
not such a Saturday, Sunday, legal holiday or day on which banking institutions are authorized to
close; and payment on such date shall have the same force and effect as if made on the original
date payment was due.
THIS BOND is one of a series of Bonds dated [aa� _ _, 2015], authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
[$ _ ] for the public purpose of refunding the Refunded Bonds and the Refunded
TMPA Obligations and 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 fixed for redemption.
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[THE BONDS scheduled to mature on _ in the years and ( the
"Term Bonds ") are subject to scheduled mandatory redemption by the Paying Agent /Registrar by
lot, or by any other customary method that results in a random selection, at a price equal to the
principal amount thereof, plus accrued interest to the redemption date, out of moneys available for
such purpose in the interest and sinking fund for the Bonds, on the dates and in the respective
principal amounts, set forth in the following schedule:
Term Bond Term Bond
Maturity: February 15, 20_ Maturity: February 15,20_
Principal Principal
Mandatory Redemption Amount Mandatory Redemption Amount
Date Date
February 15,20 $ February 15,20 $
February 15,20 February 15,20
February 15,20_ February 15,20_
February 15,20 (maturity) February 15,20 (maturity)
The principal amount of Term Bonds of a stated maturity required to be redeemed on any
mandatory redemption date pursuant to the operation of the mandatory sinking fund redemption
provisions shall be reduced, at the option of the Issuer, by the principal amount of any Term Bonds
of the same maturity which, at least 50 days prior to a mandatory redemption date (1) shall have
been acquired by the Issuer at a price not exceeding the principal amount of such Term Bonds plus
accrued interest to the date of purchase thereof, and delivered to the Paying Agent /Registrar for
cancellation, (2) shall have been purchased and canceled by the Paying Agent /Registrar at the
request of the Issuer at a price not exceeding the principal amount of such Term Bonds plus accrued
interest to the date of purchase, or (3) shall have been redeemed pursuant to the optional
redemption provisions and not theretofore credited against a mandatory redemption requirement.]
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity a written notice of such redemption shall be sent by the Paying Agent /Registrar
by United States mail, first -class postage prepaid, to the Registered Owner of each Bond to be
redeemed at its address as it appeared on the 45th day prior to such redemption date; provided,
however, that the failure of the Registered Owner to receive such notice, or any defect therein or
in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings
for the redemption of any Bond. By the date fixed for any such redemption due provision shall be
made with the Paying Agent /Registrar for the payment of the required redemption price for the
Bonds or portions thereof that are to be so redeemed. If such written notice of redemption is sent
and if due provision for such payment is made, all as provided above, the Bonds or portions thereof
that are to be so redeemed thereby automatically shall be treated as redeemed prior to their
scheduled maturities, and they shall not bear interest after the date fixed for redemption, and they
shall not be regarded as being outstanding except for the right of the Registered Owner to receive
the redemption price from the Paying Agent /Registrar out of the funds provided for such payment.
If a portion of any Bond shall be redeemed, a substitute Bond or Bonds having the same maturity
date, bearing interest at the same rate, in any denomination or denominations in any integral
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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 TIME OF MAILING of notice of optional redemption there shall not have
either been deposited with the Paying Agent /Registrar or legally authorized escrow agent
immediately available funds sufficient to redeem all the Bonds called for redemption, such notice
may state that it is conditional, and is subject to the deposit of the redemption moneys with the
Paying Agent /Registrar or legally authorized escrow agent at or prior to the redemption date or
any prerequisite set forth in such notice of redemption. If such redemption is not effectuated, the
Paying Agent /Registrar shall, within five days thereafter, give notice in the manner in which the
notice of redemption was given that such moneys were not so received or such prerequisites were
not met and shall rescind the redemption.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond
Ordinance, this Bond may, at the request of the Registered Owner or the assignee or assignees
hereof, be assigned, transferred, converted into and exchanged for a like aggregate principal
amount of fully registered Bonds, without interest coupons, payable to the appropriate Registered
Owner, assignee or assignees, as the case may be, having the same denomination or denominations
in any integral multiple of $5,000 as requested in writing by the appropriate Registered Owner,
assignee or assignees, as the case may be, upon surrender of this Bond to the Paying
Agent /Registrar for cancellation, all in accordance with the form and procedures set forth in the
Bond Ordinance. Among other requirements for such assignment and transfer, this Bond must be
presented and surrendered to the Paying Agent /Registrar, together with proper instruments of
assignment, in form and with guarantee of signatures satisfactory to the Paying Agent /Registrar,
evidencing assignment of this Bond or any portion or portions hereof in any integral multiple of
$5,000 to the assignee or assignees in whose name or names this Bond or any such portion or
portions hereof is or are to be registered. The Form of Assignment printed or endorsed on this
Bond may be executed by the Registered Owner to evidence the assignment hereof, but such
method is not exclusive, and other instruments of assignment satisfactory to the Paying
Agent /Registrar may be used to evidence the assignment of this Bond or any portion or portions
hereof from time to time by the Registered Owner. The Paying Agent /Registrar's reasonable
standard or customary fees and charges for assigning, transferring, converting and exchanging any
Bond or portion thereof will be paid by the Issuer. In any circumstance, any taxes or governmental
charges required to be paid with respect thereto shall be paid by the one requesting such
assignment, transfer, conversion or exchange, as a condition precedent to the exercise of such
privilege. The Paying Agent /Registrar shall not be required to make any such transfer, conversion,
or exchange (i) during the period commencing with the close of business on any Record Date and
ending with the opening of business on the next following principal or interest payment date, or
(ii) with respect to any Bond or any portion thereof called for redemption prior to maturity, within
45 days prior to its redemption date.
IN THE EVENT any Paying Agent /Registrar for the Bonds is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that
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it promptly will appoint a competent and legally qualified substitute therefor, and cause written
notice thereof to be mailed to the Registered Owners of the Bonds.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper to be
performed, exist and be done precedent to or in the authorization, issuance and delivery 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 taxable property in said Issuer, and have been pledged for such payment, within the
limit prescribed by law.
THE ISSUER HAS RESERVED THE RIGHT to amend the Bond Ordinance as provided
therein, and under some (but not all) circumstances amendments thereto must be approved by the
Registered Owners of a majority in aggregate principal amount of the outstanding Bonds.
BY BECOMING the Registered Owner of this Bond, the Registered Owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that
the terms and provisions of this Bond and the Bond Ordinance constitute a contract between each
Registered Owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual
or facsimile signature of the Mayor of the Issuer (or in the Mayor's absence, of the Mayor 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.
City Secretary Mayor
(SEAL)
[INSERT BOND INSURANCE LEGEND, IF ANY]
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(b) [Form of Paying Agent /Registrar's Authentication Certificate]
PAYING AGENT /REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Comptroller's Registration
Certificate)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in the text of this Bond; and that this Bond has been issued in conversion or
replacement of, or in exchange for, a bond, bonds, or a portion of a bond or bonds of a series that
originally was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State.of Texas.
Dated:
(c) [Form of Assignment]
The Bank of New York Mellon Trust Company,
National Association, Dallas, Texas
Paying Agent/Registrar
By:__.............�................
Authorized Representative
p ntative
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer Identification Number of Transferee
(Please print or typewrite name and address, including zip code, of Transferee.)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney, to register the transfer of the
the within Bond on books kept for registration thereof, with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
Page 15
I I i I IN I + +
NOTICE: Signature(s) must be guaranteed NOTICE: The signature above must
by an eligible guarantor institution correspond with the name of the Registered
participating in a securities transfer Owner as it appears upon the front of this
association recognized signature guarantee bond in every particular, without alteration or
program. enlargement or any change whatsoever.
(d) [Form of Comptroller's Registration Certificate]
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
(e) [Initial Bond Insertions]
(i) The Initial Bond shall be in the form set forth in paragraph (a) of this Section, except
that:
A. immediately under the name of the Bond, the headings "Interest Rate" and
"Maturity Date" shall both be completed with the words "As shown below" and "CUSIP
No. " shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"THE CITY OF DENTON, TEXAS, in Denton County, Texas (the "Issuer "), being a political
subdivision and municipal corporation of the State of Texas, hereby promises to pay to the
Registered Owner specified above, or registered assigns (hereinafter called the "Registered
Owner "), on February 15 in each of the years, in the principal installments and bearing interest at
the per annum rates set forth in the following schedule:
Years Principal Amounts Interest Rates
(Information from Pricing Certificate to be inserted)
The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis
of a 360 -day year of twelve 30 -day months) from 2015 at the respective Interest Rate
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per annum specified above. Interest is payable on m _, 20_, and semiannually on each
and thereafter to the date of payment of the principal installment
specified f 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-l."
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SECTION 5. INTEREST AND SINKING FUND.
(a) A special Interest and Sinking Fund (the "Interest and Sinking Fund ") is hereby created
solely for the benefit of the Bonds, and the Interest and Sinking Fund shall be established and
maintained by the Issuer at an official depository bank of the Issuer. The Interest and Sinking
Fund shall be kept separate and apart from all other funds and accounts of the Issuer, and shall be
used only for paying the interest on and principal of the Bonds. All ad valorem taxes levied and
collected for and on account of the Bonds, together with any accrued interest received upon sale
of the Bonds, shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During
each year while any of the Bonds or interest thereon are outstanding and unpaid, the governing
body of the Issuer shall compute and ascertain a rate and amount of ad valorem tax which will be
sufficient to raise and produce the money required to pay the interest on the Bonds as such interest
becomes due, and to provide and maintain a sinking fund adequate to pay the principal of its Bonds
as such principal matures or is scheduled for redemption (but never less than 2% of the original
principal amount of the Bonds as a sinking fund each year). Said tax shall be based on the latest
approval tax rolls of the Issuer, with full allowance being made for tax delinquencies and the cost
of tax collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered
to be levied, against all taxable property in the Issuer for each year while any of the Bonds or
interest thereon are outstanding and unpaid; and said tax shall be assessed and collected each such
year and deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes
sufficient to provide for the payment of the interest on and principal of the Bonds, as such interest
comes due and such principal matures or is scheduled for redemption, are hereby pledged for such
payment, within the limit prescribed by law. Notwithstanding the requirements of this Section, if
Surplus Revenues or other lawfully available moneys of the Issuer are actually on deposit or
budgeted and appropriated to be deposited in the Interest and Sinking Fund in advance of the time
when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes that
otherwise would have been required to be levied pursuant to this Section may be reduced to the
extent and by the amount of the Surplus Revenues or other lawfully available funds then on deposit
or budgeted and appropriated to be deposited in the Interest and Sinking Fund. For purposes of
this Section, "Surplus Revenues" means revenues derived by the Issuer from the ownership and
operation of the Issuer's Utility System (consisting of its combined waterworks system, sanitary
sewer system, and electric light and power system) that remain after the payment of all
maintenance and operation expenses thereof, and all debt service, reserve and other requirements
in connection with all of the Issuer's revenue obligations (now or hereafter outstanding) or
contractual obligations (now or hereafter existing) which are payable from all or any part of the
net revenues of the Issuer's Utility System. If Surplus Revenues are budgeted and appropriated
for deposit into the Interest and Sinking Fund, the Issuer:
(i) shall transfer and deposit in the Interest and Sinking Fund each month an amount
of not less than 1 /12th of the annual debt service on the Bonds to be paid from Surplus
Revenues until the amount on deposit in the Interest and Sinking Fund equals the
amount required for annual debt service on the Bonds;
(ii) shall establish, adopt and maintain an annual budget that provides for either the
monthly deposit of sufficient Surplus Revenues and /or tax revenues, the monthly
deposit of any other legally available funds on hand at the time of the adoption of the
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annual budget, or a combination thereof, into the Interest and Sinking Fund for the
repayment of the Bonds; and
(iii) shall at all times maintain and collect sufficient Utility System rates and charges
in conjunction with any other legally available funds that, after payment of the costs of
operating and maintaining the Utility System, produce revenues in an amount not less
than the debt service requirements of all outstanding Utility System revenue bonds of
the Issuer and other obligations of the Issuer which are secured in whole or in part by
a pledge of revenues of the Utility System and for which the Issuer is budgeting the
repayment of such obligations from the revenues of the Utility System, or the Issuer
shall provide documentation which evidences the levy of an ad valorem tax rate
dedicated to the Interest and Sinking Fund, in conjunction with any other legally
available funds except Utility System rates and charges, sufficient for the repayment of
Utility System debt service requirements.
(b) Chapter 1208, Texas Government Code, applies to the issuance of the Bonds and the
pledge of the taxes granted by the Issuer under this Section and Section 9, respectively, and is
therefore valid, effective, and perfected. Should Texas law be amended at any time while the
Bonds are outstanding and unpaid, the result of such amendment being that the pledge of the taxes
granted by the Issuer under this Section is to be subject to the filing requirements of Chapter 9,
Texas Business & Commerce Code, in order to preserve to the Registered Owners of the Bonds a
security interest in said pledge, the Issuer agrees to take such measures as it determines are
reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9,
Texas Business & Commerce Code and enable a filing of a security interest in said pledge to occur.
SECTION 6. DEFEASANCE OF BONDS.
(a) Any Bond and the interest thereon shall be deemed to be paid, retired and no longer
outstanding (a "Defeased Bond') within the meaning of this Ordinance, except to the extent
provided in subsection (d) of this Section, when payment of the principal of such Bond, plus
interest thereon to the due date (whether such due date be by reason of maturity or otherwise)
either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii)
shall have been provided for on or before such due date by irrevocably depositing with or making
available to the Paying Agent /Registrar in accordance with an escrow agreement or other
instrument (the "Future Escrow Agreement ") for such payment (1) lawful money of the United
States of America sufficient to make such payment or (2) Government Obligations that mature as
to principal and interest in such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money to provide for such payment, and when proper arrangements
have been made by the Issuer with the Paying Agent /Registrar for the payment of its services until
all Defeased Bonds shall have become due and payable. At such time as a Bond shall be deemed
to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall no longer
be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and
pledged as provided in this Ordinance, and such principal and interest shall be payable solely from
such money or Government Obligations. Notwithstanding any other provision of this Ordinance
to the contrary, it is hereby provided that any determination not to redeem Defeased Bonds that is
made in conjunction with the payment arrangements specified in Subsection (a)(i) or (ii) of this
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Section shall not be irrevocable, provided that: (1) in the proceedings providing for such payment
arrangements, the Issuer expressly reserves the right to call the Defeased Bonds for redemption;
(2) gives notice of the reservation of that right to the Registered Owners of the Defeased Bonds
immediately following the making of the payment arrangements; and (3) directs that notice of the
reservation be included in any redemption notices that it authorizes.
(b) Any moneys so deposited with the Paying Agent /Registrar may at the written direction
of the Issuer be invested in Government Obligations, maturing in the amounts and times as
hereinbefore set forth, and all income from such Government Obligations received by the Paying
Agent /Registrar that is not required for the payment of the Bonds and interest thereon, with respect
to which such money has been so deposited, shall be turned over to the Issuer, or deposited as
directed in writing by the Issuer. Any Future Escrow Agreement pursuant to which the money
and /or Government Obligations are held for the payment of Defeased Bonds may contain
provisions permitting the investment or reinvestment of such moneys in Government Obligations
or the substitution of other Government Obligations upon the satisfaction of the requirements
specified in Subsection (a)(i) or (ii) of this Section. All income from such Government Obligations
received by the Paying Agent /Registrar which is not required for the payment of the Defeased
Bonds, with respect to which such money has been so deposited, shall be remitted to the Issuer or
deposited as directed in writing by the Issuer.
(c) The term "Government Obligations" means any securities and obligations now or
hereafter authorized by state law that are eligible to discharge obligations such as the Bonds,
including (i) direct, noncallable obligations of the United States of America, including obligations
that are unconditionally guaranteed by the United States of America, (ii) noncallable obligations
of an agency or instrumentality of the United States of America, including obligations that are
unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the
governing body of the Issuer adopts or approves the proceedings authorizing the financial
arrangements, are rated as to investment quality by a nationally recognized investment rating firm
not less than AAA or its equivalent, and (iii) noncallable obligations of a state or an agency or a
county, municipality, or other political subdivision of a state that have been refunded and that, on
the date the governing body of the Issuer adopts or approves the proceedings authorizing the
financial arrangements, are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent.
(d) Until all Defeased Bonds shall have become due and payable, the Paying Agent /Registrar
shall perform the services of Paying Agent /Registrar for such Defeased Bonds the same as if they
had not been defeased, and the Issuer shall make proper arrangements to provide and pay for such
services as required by this Ordinance.
(e) In the event that the Issuer elects to defease less than all of the principal amount of Bonds
of a maturity, the Paying Agent /Registrar shall select, or cause to be selected, such amount of
Bonds by such random method as it deems fair and appropriate.
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SECTION 7. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost,
stolen or destroyed, the Paying Agent /Registrar shall cause to be printed, executed and delivered,
a new Bond of the same principal amount, maturity and interest rate, as the damaged, mutilated,
lost, .stolen or destroyed Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,
mutilated, lost, stolen or destroyed Bonds shall be made by the Registered Owner thereof to the
Paying Agent /Registrar. In every case of loss, theft or destruction of a Bond, the Registered Owner
applying for a replacement Bond shall furnish to the Issuer and to the Paying Agent /Registrar such
security or indemnity as may be required by them to save each of them harmless from any loss or
damage with respect thereto. Also, in every case of loss, theft or destruction of a Bond, the
Registered Owner shall furnish to the Issuer and to the Paying Agent /Registrar evidence to their
satisfaction of the loss, theft or destruction of such Bond, as the case may be. In every case of
damage or mutilation of a Bond, the Registered Owner shall surrender to the Paying
Agent/Registrar for cancellation the Bond so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Ordinance, in
the event any such Bond shall have matured, and no default has occurred that is then continuing
in the payment of the principal of, redemption premium, if any, or interest on the Bond, the Issuer
may authorize the payment of the same (without surrender thereof except in the case of a damaged
or mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is
furnished as above provided in this Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement Bond,
the Paying Agent /Registrar shall charge the Registered Owner of such Bond with all legal, printing,
and other expenses in connection therewith. Every replacement Bond issued pursuant to the
provisions of this Section by virtue of the fact that any Bond is lost, stolen or destroyed shall
constitute a contractual obligation of the Issuer whether or not the lost, stolen or destroyed Bond
shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Ordinance equally and proportionately with any and all other Bonds duly issued under this
Ordinance.
(e) Authority for Issuing Replacement Bonds. In accordance with Sec. 1206.022,
Government Code, this Section 7 of this Ordinance shall constitute authority for the issuance of
any such replacement Bond without necessity of further action by the governing body of the Issuer
or any other body or person, and the duty of the replacement of such Bonds is hereby authorized
and imposed upon the Paying Agent /Registrar, and the Paying Agent /Registrar shall authenticate
and deliver such Bonds in the form and manner and with the effect, as provided in Section 3(a) of
this Ordinance for Bonds issued in conversion and exchange for other Bonds.
SECTION 8. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION,
IF OBTAINED; ENGAGEMENT OF BOND COUNSEL.
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(a) The Mayor of the Issuer is hereby authorized to have control of the Initial Bond and all
necessary records and proceedings pertaining to the Bonds pending its delivery and its
investigation, examination, and approval by the Attorney General, and its registration by the
Comptroller. Upon registration of the Initial Bond said Comptroller (or a deputy designated in
writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate
attached to such Bond, and the seal of said Comptroller shall be impressed, or placed in facsimile,
on such Bond. The approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP
numbers may, at the option of the Issuer, be printed on the Bonds issued and delivered under this
Ordinance, but neither shall have any legal effect, and shall be solely for the convenience and
information of the Registered Owners of the Bonds. In addition, if bond insurance is obtained, the
Bonds may bear an appropriate legend as provided by the insurer.
(b) The obligation of the Purchaser to accept delivery of the Bonds is subject to the Purchaser
being furnished with the final, approving opinion of McCall, Parkhurst & Horton L.L.P., bond
counsel to the Issuer, which opinion shall be dated as of and delivered on the date of initial delivery
of the Bonds to the Purchaser. The engagement of such firm as bond counsel to the Issuer in
connection with the issuance, sale and delivery of the Bonds is hereby approved and confirmed.
The execution and delivery of an engagement letter between the Issuer and such firm, with respect
to such services as bond counsel, is hereby authorized in such form as may be approved by the
Mayor, and the Mayor is hereby authorized to execute such engagement letter.
SECTION 9. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
BONDS.
(a) Covenants. The Issuer covenants to take any action necessary to assure, or refrain from
any action that would adversely affect, the treatment of the Bonds as obligations described in
section 103 of the Internal Revenue Code of 1986, as amended (the "Code "), the interest on which
is not includable in the "gross income" of the holder for purposes of federal income taxation. In
furtherance thereof, the Issuer covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the
Bonds (less amounts deposited to a reserve fund, if any) are used for any "private business
use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds
or the projects financed or refinanced therewith are so used, such amounts, whether or not
received by the Issuer, with respect to such private business use, do not, under the terms of
this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for
the payment of more than 10 percent of the debt service on the Bonds, in contravention of
section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a "private business use" that is "related" and not
"disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental
use;
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(3) to take any action to assure that no amount that is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve
fund, if any) is directly or indirectly used to finance loans to persons, other than state or local
governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action that would otherwise result in the Bonds being
treated as "private activity bonds" within the meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Bonds being 'federally
guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly,
to acquire or to replace funds that were used, directly or indirectly, to acquire investment
property (as defined in section 148(b)(2) of the Code) that produces a materially higher yield
over the term of the Bonds, other than investment property acquired with:
(A) proceeds of the Bonds invested for a reasonable temporary period of 3 years
or less or, in the case of a refunding bond, for a period of 30 days or less until such
proceeds are needed for the purpose for which the bonds are issued,
(B) amounts invested in a bona fide debt service fund, within the meaning of
section 1.148 -1(b) of the rules and regulations of the United States Department of the
Treasury ( "Treasury Regulations "), and
(C) amounts deposited in any reasonably required reserve or replacement fund
to the extent such amounts do not exceed 10 percent of the proceeds of the Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as
proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene
the requirements of section 148 of the Code (relating to arbitrage) and, to the extent
applicable, section 149(d) of the Code (relating to advance refundings); and
(8) to pay to the United States of America at least once during each five -year period
(beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent
of the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the
United States of America, not later than 60 days after the Bonds have been paid in full, 100
percent of the amount then required to be paid as a result of Excess Earnings under section
148(f) of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a "Rebate
Fund" is hereby established by the Issuer for the sole benefit of the United States of America, and
such Rebate Fund shall not be subject to the claim of any other person, including without limitation
the Bondholders. The Rebate Fund is established for the additional purpose of compliance with
section 148 of the Code.
(c) Use of Proceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), the Issuer
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understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury
Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the
Refunded Bonds and Refunded TMPA Bonds expended prior to the date of issuance of the Bonds.
It is the understanding of the Issuer that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the United States
Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter
promulgated that modify or expand provisions of the Code, as applicable to the Bonds, the Issuer
will not be required to comply with any covenant contained herein to the extent that such failure
to comply, in the opinion of nationally recognized bond counsel, will not adversely affect the
exemption from federal income taxation of interest on the Bonds under section 103 of the Code.
In the event that regulations or rulings are hereafter promulgated that impose additional
requirements applicable to the Bonds, the Issuer agrees to comply with the additional requirements
to the extent necessary, in the opinion of nationally recognized bond counsel, to preserve the
exemption from federal income taxation of interest on the Bonds under section 103 of the Code.
In furtherance of such intention, the Issuer hereby authorizes and directs the Mayor or Pricing
Officer to execute any documents, certificates or reports required by the Code and to make such
elections, on behalf of the Issuer, that may be permitted by the Code as are consistent with the
purpose for the issuance of the Bonds.
(d) Disposition of Projects. The Issuer covenants that the projects refinanced by the Bonds
will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash
or other compensation, unless the Issuer obtains an opinion of nationally- recognized bond counsel
that such sale or other disposition will not adversely affect the tax - exempt status of the Bonds. For
purposes of the foregoing, the portion of the property comprising personal property and disposed
in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other
compensation. For purposes hereof, the Issuer shall not be obligated to comply with this covenant
if it obtains a legal opinion that such failure to comply will not adversely affect the excludability
for federal income tax proposes from gross income of the interest.
SECTION 10. SALE OF BONDS AND APPROVAL OF OFFICIAL STATEMENT;
FURTHER PROCEDURES.
(a) The Bonds shall be sold and delivered subject to the provisions of Section 1 and Section
2 hereof through a negotiated sale, competitive sale or private placement and pursuant to the terms
and provisions of a purchase contract or a notice of sale and official bid form (in either case, the
"Purchase Agreement "), the terms and provisions of which are to be determined by the Pricing
Officer in accordance with Section 2 hereof, and in which the purchaser or purchasers of the Bonds
(the "Purchaser ") shall be designated. The Pricing Officer is hereby authorized to execute and
deliver the Purchase Agreement for and on behalf of the Issuer. The Bonds shall initially be
registered in the name of the Purchaser or its designee.
(b) The Issuer hereby approves the form and content of the draft preliminary official
statement relating to the Bonds and any addenda, supplement or amendment thereto, and approves
the distribution of such preliminary official statement in the reoffering of the Bonds by the
Purchaser in final form, with such changes therein or additions thereto as the Pricing Officer may
deem advisable. The Pricing Officer is hereby authorized, in the name and on behalf of the Issuer,
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to approve, distribute, and deliver a final preliminary official statement and a final official
statement relating to the Bonds to be used by the Purchaser in the marketing of the Bonds.
(c) The Pricing Officer is authorized, in connection with effecting the sale of the Bonds, to
obtain from a municipal bond insurance company so designated in the Pricing Certificate (the
"Insurer') a municipal bond insurance policy (the "Insurance Policy ") in support of the Bonds. To
that end, should the Pricing Officer exercise such authority and commit the Issuer to obtain a
municipal bond insurance policy, for so long as the Insurance Policy is in effect, the requirements
of the Insurer relating to the issuance of the Insurance Policy as set forth in the Pricing Certificate
are incorporated by reference into this Ordinance and made a part hereof for all purposes,
notwithstanding any other provision of this Ordinance to the contrary. The Pricing Officer shall
have the authority to execute any documents to effect the issuance of the Insurance Policy by the
Insurer, including commitment agreements, membership agreements in mutual insurance
companies and other similar agreements.
(d) The Mayor and Mayor Pro Tern, the City Manager, Pricing Officer and City Secretary
and all other officers, employees and agents of the Issuer, and each of them, shall be and they are
hereby expressly authorized, empowered and directed from time to time and at any time to do and
perform all such acts and things and to execute, acknowledge and deliver in the name and under
the corporate seal and on behalf of the Issuer a Paying Agent /Registrar Agreement with the Paying
Agent /Registrar and all other instruments, whether or not herein mentioned, as may be necessary
or desirable in order to carry out the terms and provisions of this Ordinance, the Pricing Certificate,
the 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 officer had remained in office until such delivery.
SECTION 11. INVESTMENTS
(a) The Issuer may invest proceeds of the Bonds (including investment earnings thereon)
deposited into the Interest and Sinking Fund in investments authorized by the Public Funds
Investment Act, Chapter 2256, Texas Government Code, as amended; provided, however, that the
Issuer hereby covenants that the proceeds of the sale of the Bonds will be used as soon as
practicable for the purposes for which the Bonds are issued.
(b) All deposits authorized or required by this Ordinance shall be secured to the fullest extent
required by law for the security of public funds.
SECTION 12. COMPLIANCE WITH RULE 15c2 -12.
(a) Definitions. As used in this Section, the following terms have the meanings ascribed to
such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2 -12, as amended from time to time.
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"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reports.
(i) The Issuer shall provide annually to the MSRB, in the electronic format prescribed
by the MSRB, financial information and operating data (the "Annual Operating Report ")
with respect to the Issuer of the general type included in the final Official Statement
authorized by this Ordinance, being the information described in the Pricing Certificate. The
Issuer will additionally provide financial statements of the Issuer (the "Financial
Statements "), that will be (i) prepared in accordance with the accounting principles described
in the Pricing Certificate or such other accounting principles as the Issuer may be required
to employ from time to time pursuant to State law or regulation and shall be in substantially
the form included in the final Official Statement and (ii) audited, if the Issuer commissions
an audit of such Financial Statements and the audit is completed within the period during
which they must be provided. The Issuer will update and provide the Annual Operating
Report within six months after the end of each fiscal year and the Financial Statements within
12 months of the end of each fiscal year, in each case beginning with the fiscal year ending
in and after 2015. The Issuer may provide the Financial Statements earlier, including at the
time it provides its Annual Operating Report, but if the audit of such Financial Statements is
not complete within 12 months after any such fiscal year end, then the Issuer shall file
unaudited Financial Statements within such 12 -month period and audited Financial
Statements for the applicable fiscal year, when and if the audit report on such statements
become available. All documents provided to the MSRB pursuant to this Section shall be
accompanied by identifying information as prescribed by the MSRB.
(ii) If the Issuer changes its fiscal year, it will notify the MSRB of the change (and of
the date of the new fiscal year end) prior to the next date by which the Issuer otherwise would
be required to provide financial information and operating data pursuant to this Section. The
financial information and operating data to be provided pursuant to this Section may be set
forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from
the MSRB) that theretofore has been provided to the MSRB or filed with the SEC.
(c) Event Notices.
(i) The Issuer shall notify the MSRB in an electronic format as prescribed by the
MSRB, in a timely manner (but not in excess of ten business days after the occurrence of the
event) of any of the following events with respect to the Bonds, if such event is material
within the meaning of the federal securities laws:
1. Non - payment related defaults;
2. Modifications to rights of holders of the Bonds;
3. Bond calls;
4. Release, substitution, or sale of property securing repayment of the Bonds;
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5. The consummation of a merger, consolidation, or acquisition involving an
obligated person or the sale of all or substantially all of the assets of the
obligated person, other than in the ordinary course of business, the entry
into a definitive agreement to undertake such an action or the termination
of a definitive agreement relating to any such actions, other than pursuant
to its terms;
6. Appointment of a successor or additional trustee or the change of name of
a trustee.
(ii) The Issuer shall notify the MSRB in an electronic format as prescribed by the
MSRB, in a timely manner (but not in excess of ten business days after the occurrence of the
event) of any of the following events with respect to the Bonds, without regard to whether
such event is considered material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Unscheduled draws on debt service reserves reflecting financial difficulties;
3. Unscheduled draws on credit enhancements reflecting financial difficulties;
4. Substitution of credit or liquidity providers, or their failure to perform;
5. Adverse tax opinions or the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue
(IRS Form 5701BTEB) or other material notices or determinations with
respect to the tax - exempt status of the Bonds, or other material events
affecting the tax - exempt status of the Bonds;
6. Tender offers;
7. Defeasances;
8. Rating changes;
9. Bankruptcy, insolvency, receivership or similar event of an obligated person
(iii) The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer
to provide financial information or operating data in accordance with subsection (b) of this
Section by the time required by such subsection.
(d) Limitations, Diset. ti!iic s and Amendments.
(i) The Issuer shall be obligated to observe and perform the covenants specified in this
Section for so long as, but only for so long as, the Issuer remains an "obligated person" with
respect to the Bonds within the meaning of the Rule, except that the Issuer in any event will
give notice of any deposit made in accordance with this Ordinance or applicable law that
causes the Bonds no longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the Registered Owners
and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall
give any benefit or any legal or equitable right, remedy, or claim hereunder to any other
person. The Issuer undertakes to provide only the financial information, operating data,
financial statements, and notices which it has expressly agreed to provide pursuant to this
Section and does not hereby undertake to provide any other information that may be relevant
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or material to a complete presentation of the Issuer's financial results, condition, or prospects
or hereby undertake to update any information provided in accordance with this Section or
otherwise, except as expressly provided herein. The Issuer does not make any representation
or warranty concerning such information or its usefulness to a decision to invest in or sell
Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN
PART FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR
WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS
SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN
CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
(iv) No default by the Issuer in observing or performing its obligations under this
Section shall comprise a breach of or default under this Ordinance for purposes of any other
provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim,
waive, or otherwise limit the duties of the Issuer under federal and state securities laws.
(v) The provisions of this Section may be amended by the Issuer from time to time to
adapt to changed circumstances that arise from a change in legal requirements, a change in
law, or a change in the identity, nature, status, or type of operations of the Issuer, but only if
(1) the provisions of this Section, as so amended, would have permitted an underwriter to
purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule,
taking into account any amendments or interpretations of the Rule since such offering as well
as such changed circumstances and (2) either (a) the Registered Owners of a majority in
aggregate principal amount (or any greater amount required by any other provision of this
Ordinance that authorizes such an amendment) of the outstanding Bonds consent to such
amendment or (b) a person that is unaffiliated with the Issuer (such as nationally recognized
bond counsel) determined that such amendment will not materially impair the interest of the
Registered Owners and beneficial owners of the Bonds. The Issuer may also amend or repeal
the provisions of this continuing disclosure agreement if the SEC amends or repeals the
applicable provision of the Rule or a court of final jurisdiction enters judgment that such
provisions of the Rule are invalid, but only if and to the extent that the provisions of this
sentence would not prevent an 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 financial information or operating data next provided in
accordance with subsection (b) of this Section an explanation, in narrative form, of the reason
for the amendment and of the impact of any change in the type of financial information or
operating data so provided.
(e) Amendment of the Rule. The provisions of this Section shall be revised by the Pricing
Officer to reflect the requirements of the Rule if the Rule is amended after the adoption of this
Ordinance but prior to the delivery of the Bonds so as to permit an underwriter to purchase or sell
Bonds in the primary offering of the Bonds in compliance with the Rule. Any such revisions shall
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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 13. METHOD OF AMENDMENT. The Issuer hereby reserves the right to
amend this Ordinance subject to the following terms and conditions, to -wit:
(a) The Issuer may from time to time, without the consent of any holder, except as otherwise
required by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any
ambiguity, defect or omission in this Ordinance that does not materially adversely affect the
interests of the holders, (ii) grant additional rights or security for the benefit of the holders, (iii)
add events of default as shall not be inconsistent with the provisions of this Ordinance and that
shall not materially adversely affect the interests of the holders, (iv) qualify this Ordinance under
the Trust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from
time to time in effect, or (v) make such other provisions in regard to matters or questions arising
under this Ordinance as shall not be inconsistent with the provisions of this Ordinance and that
shall not in the opinion of the Issuer's Bond Counsel materially adversely affect the interests of the
holders.
(b) Except as provided in paragraph (a) above, the holders of Bonds aggregating in principal
amount a majority of the aggregate principal amount of then outstanding Bonds that are the subject
of a proposed amendment shall have the right from time to time to approve any amendment hereto
that may be deemed necessary or desirable by the Issuer; provided, however, that without the
consent of 100% of the holders in aggregate principal amount of the then outstanding Bonds,
nothing herein contained shall permit or be construed to permit amendment of the terms and
conditions of this Ordinance or in any of the Bonds so as to:
(1) Make any change in the maturity of any of the outstanding Bonds;
(2) Reduce the rate of interest borne by any of the outstanding Bonds;
(3) Reduce the amount of the principal of, or redemption premium, if any, payable on
any outstanding Bonds;
(4) Modify the terms of payment of principal or of interest or redemption premium on
outstanding Bonds or any of them or impose any condition with respect to such
payment; or
(5) Change the minimum percentage of the principal amount of Bonds necessary for
consent to such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the
Issuer shall send by U.S. mail to each Registered Owner of the affected Bonds a copy of the
proposed amendment and cause notice of the proposed amendment to be published at least once
in a financial publication published in The City of New York, New York or in the State of Texas.
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Such published notice shall briefly set forth the nature of the proposed amendment and shall state
that a copy thereof is on file at the office of the Issuer for inspection by all holders of such Bonds.
(d) Whenever at any time within one year from the date of publication of such notice the
Issuer shall receive an instrument or instruments executed by the holders of at least a majority in
aggregate principal amount of all of the Bonds then outstanding that are required for the
amendment, which instrument or instruments shall refer to the proposed amendment and that shall
specifically consent to and approve such amendment, the Issuer may adopt the amendment in
substantially the same form.
(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be modified and amended in accordance with such
amendatory Ordinance, and the respective rights, duties, and obligations of the Issuer and all
holders of such affected Bonds shall thereafter be determined, exercised, and enforced, subject in
all respects to such amendment.
(f) Any consent given by the holder of a Bond pursuant to the provisions of this Section shall
be irrevocable for a period of six months from the date of the publication of the notice provided
for in this Section, and shall be conclusive and binding upon all future holders of the same Bond
during such period. Such consent may be revoked at any time after six months from the date of
the publication of said notice by the holder who gave such consent, or by a successor in title, by
filing notice with the Issuer, but such revocation shall not be effective if the holders of a majority
in aggregate principal amount of the affected Bonds then outstanding, have, prior to the attempted
revocation, consented to and approved the amendment.
For the purposes of establishing ownership of the Bonds, the Issuer shall rely solely upon the
registration of the ownership of such Bonds on the Registration Books kept by the Paying
Agent /Registrar.
SECTION 14. DEFAULT AND REMEDIES.
(a) Events of Default. Each of the following occurrences or events for the purpose of this
Ordinance is hereby declared to be an Event of Default:
(i) the failure to make payment of the principal of or interest on any of the Bonds when
the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or
obligation of the Issuer, the failure to perform which materially, adversely affects the rights
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.
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(i) Upon the happening of any Event of Default, then and in every case, any Registered
Owner or an authorized representative thereof, including, but not limited to, a trustee or
trustees therefor, may proceed against the Issuer for the purpose of protecting and enforcing
the rights of the Registered Owners under this Ordinance, by mandamus or other suit, action
or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief
permitted by law, including the specific performance of any covenant or agreement contained
herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right
of the Registered Owners hereunder or any combination of such remedies.
(ii) It is provided that all such proceedings shall be instituted and maintained for the
equal benefit of all Registered Owners of Bonds then outstanding.
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given hereunder or under the Bonds or now or hereafter
existing at law or in equity; provided, however, that notwithstanding any other provision of
this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available
as a remedy under this Ordinance.
(ii) The exercise of any remedy herein conferred or reserved shall not be deemed a
waiver of any other available remedy.
(iii) By accepting the delivery of a Bond authorized under this Ordinance, such
Registered Owner agrees that the certifications required to effectuate any covenants or
representations contained in this Ordinance do not and shall never constitute or give rise to
a personal or pecuniary liability or charge against the officers, employees or agents of the
Issuer or the members of its governing body.
SECTION 15. APPROVAL OF ESCROW AGREEMENTS AND TRANSFER OF FUNDS.
In furtherance of authority granted by Section 1207.007(b), Texas Government Code, the
Mayor or the Pricing Officer are further authorized to enter into and execute on behalf of the Issuer
with the escrow agent named therein and any other necessary parties, one or more escrow or similar
agreements, in the form and substance as shall be approved by the Pricing Officer, which
agreement or agreements will provide for the payment in full of the Refunded Bonds and the
Refunded TMPA Bonds. In 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 defined in the agreement), if any, and to authorize such contributions to
the escrow fund as provided in the agreement.
SECTION 16. REDEMPTION OF REFUNDED BONDS.
(a) Subject to the execution and delivery of the Purchase Agreement with the Purchaser, the
Issuer hereby directs that the Refunded Bonds be called for redemption on the dates and at such
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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 Bonds in substantially
the form set forth in Exhibit A attached hereto, completed with information from the Pricing
Certificate, to the paying agent /registrar(s) for the Refunded Bonds.
(b) In addition, the paying agent /registrar(s) for the Refunded Bonds is hereby directed to
provide the appropriate notices of redemption and defeasance as specified by the ordinances
authorizing the issuance of the Refunded Bonds and is hereby directed to make appropriate
arrangements so that the Refunded Bonds may be redeemed on their respective redemption dates.
The Refunded Bonds 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 Bonds results in the partial refunding of any maturity
of the Refunded Bonds, the Pricing Officer shall direct the paying agent /registrar(s) for the
Refunded Bonds to designate at random and by lot which of the Refunded Bonds will be payable
from and secured solely from ad valorem taxes of the Issuer pursuant to the ordinance of the Issuer
authorizing the issuance of such Refunded Bonds (the "Refunded Bond 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 maintained by the escrow agent in the escrow fund, (ii)
the principal amount of all affected obligations of such maturities registered in the name of such
registered owner that have been refunded and are payable solely from cash and investments in the
Escrow Fund and the remaining principal amount of all affected obligations of such maturities
registered in the name of such registered owner, if any, have not been refunded and are payable
and secured solely from ad valorem taxes of the Issuer described in the Refunded Bond Ordinance,
(iii) the registered owner is required to submit his or her Refunded Bonds to the paying
agent /registrar(s), for the purposes of re- registering such registered owner's obligations and
assigning new CUSIP numbers in order to distinguish the source of payment for the principal and
interest on such obligations, and (iv) payment of principal of and interest on such obligations may,
in some circumstances, be delayed until such obligations have been re- registered and new CUSIP
numbers have been assigned as required by (iii) above.
(d) The source of funds for payment of the principal of and interest on the Refunded Bonds
on their respective maturity or redemption dates shall be from the funds placed in escrow with the
escrow agent, pursuant to an escrow agreement approved in Section 15 of this Ordinance.
SECTION 17. PAYMENT OF REFUNDED TMPA OBLIGATIONS. There is hereby
appropriated u
ed from current funds on hand, which are hereby certified to be on hand and available,
$10,000,000 to be applied against the Refunded TMPA Obligations and placed into escrow with
the escrow agent pursuant to an escrow agreement approved in Sections 15 of this Ordinance. The
Pricing Officer is hereby authorized and directed to provide any necessary notices to TMPA that
the Issuer is providing funds to pay, pursuant to the Power Sales Agreement and the TMPA
Resolution, the amount necessary to pay the Refunded TMPA Obligations in full and requesting
TMPA to take such actions as are necessary to cause the defeasance of the Refunded TMPA Bonds,
including application of the amounts in the funds securing payment of the Refunded TMPA Bonds
to pay the maturity value of said obligations. The Mayor, City Manager or Assistant City Manager
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is hereby authorized and directed to execute and deliver such certificates or other instruments or
agreements necessary to provide for the redemption, payment and defeasance of the Refunded
TMPA Obligations and the Refunded TMPA Bonds.
SECTION 18. APPROPRIATION. To pay the debt service coming due on the Bonds, if
any, prior to receipt of the taxes levied to pay such debt service, there is hereby appropriated from
current funds on hand, which are hereby certified to be on hand and available for such purpose, an
amount, which together with capitalized interest received from the sale of the Bonds, if any, will
be sufficient to pay such debt service, and such amount shall be used for no other purpose.
SECTION 19. EFFECTIVE DATE. In accordance with the provisions of Texas Government
Code Section 1201.028, this Ordinance shall be effective immediately upon its adoption by the
City Council.
SECTION 20. SEVERABILITY. If any section, article, paragraph, sentence, clause, phrase
or word in this Ordinance, or application thereof to any persons or circumstances is held invalid
or unconstitutional by a court of competent jurisdiction, such holding shall not affect the validity
of the remaining portion of this Ordinance, despite such invalidity, which remaining portions shall
remain in full force and effect.
PASSED AND APPROVED this the day of , 2015a
CHRI'+ .TTS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
',le
BY:
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SCHEDULEI
Schedule of Eligible Refunded Bonds
City of Denton
Utility System Revenue Refunding Bonds, Series
2005
Principal Amount
Maturity Date Outstanding
12/01/2016
$5,980,000
12/01/2017
6.270.000
12/01/2018
6.240.000
12/01/2019
6.575.000
12/01/2020
2.720.000
12/01/2021
2.875.000
12/01/2022
1,775,000
Total $ 32,435,000
City of Denton
Utility System Revenue Bonds, Series 2006
Principal Amount
Maturity Date
Outstanding
12/01/2017
$440.000
12/01/2018
460,000
12/01/2019
485,000
12/01/2020
505,000
12/01/2021
530,000
12/01/2023
1,145,000
12/01/2025
1,260,000
Total
$4,825,000
Schedule of Refunded TMPA Obligations
A portion of the contractual obligations of the Issuer under the Power Sales Agreement relating to
the payment of the Issuer's Contract Percentage of such portion of $120,725,000 in maturity value
of the September 1, 2016 maturity of the TMPA's outstanding "Texas Municipal Power Agency
Refunding Revenue Bonds, Series 1993" (the "Refunded TMPA Bonds ") with such Contract
Percentage of such portion being $13,430,000.
S -1
EXHIBIT A
Notice of Redemption
NOTICE IS HEREBY GIVEN that the City of Denton, Texas has called for redemption the
outstanding Bonds of the City described as follows:
City of Denton Utility System Revenue Refunding Bonds, Series 2005, dated May 15,
2005, scheduled to mature on December 1, 20_ through December 1, 20_, aggregating
$ (and being all of the outstanding bonds of said series scheduled to mature on and
after December 1, 20 _);
Call date: y 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 Utility System Revenue Bonds, Series 2006, dated July 15, 2006, scheduled
to mature on December 1, 20_ through December 1, 20_, aggregating $ __ .................. (and being
all of the outstanding bonds of said series scheduled to mature on and after December 1, 20 _);
Call date: , 20_; redeemable at a redemption price of par plus accrued interest at
the principal corporate offices of The Bank of New York Mellon Trust Company, N.A., only upon
presentation by the owner thereof.
If moneys sufficient for the payment of such redemption price are held by or on behalf of the
paying agent, the described Bonds shall become due and payable on the redemption date specified,
and the interest thereon shall cease to accrue from and after the redemption date.
In compliance with section 3406 of the Internal Revenue Code of 1986, payors making
certain payments due on debt securities may be obligated to deduct and withhold 30 percent of
such payment from the remittance to any payee who has failed to provide such payor with a valid
taxpayer identification number. To avoid the imposition of the withholding of tax, such payees
should submit a taxpayer identification number when surrendering the bonds for redemption.
NOTICE IS FURTHER GIVEN that all Bonds should be submitted to one of the following
address:
First Class /Registered/
Certified Mail
The Bank of New York
Mellon Trust Company, N.A
Global Corporate Trust
P.O. Box 396
East Syracuse, New York
13057
Express Delivery
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
111 Sanders Creek Parkway
East Syracuse, New York
13057
A -1
Hand Delivery
The Bank of New York
Mellon Trust Company, N.A.
Global Corporate Trust
Corporate Trust Window
101 Barclay Street
1 ST Floor East
New York, New York 10286
s:\Iegal\ourdocuments\ordinances\15\ordinance 7-25-15 (with $10mm).docx
20_
By: The Bank of New York Mellon Trust Company, National Association
MH