2006-183
ORDINANCE NO. 2006- /1/),1
AN ORDINANCE AUTHOR1ZING THE ISSUANCE, SALE, AND DELIVER Y OF CITY
OF DENTON CERTIFICATES OF OBLIGATION, SERIES 2006; APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO; AND
PROVIDING AN EFFECTIVE DATE.
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the Certificate of Obligation Act of 1971, Section 271(c) of the Texas Local
Government Code, as amended (the "Act") permits the City to issue and sell for cash the Certificates of
Obi igation hereinafter authorized; and
WHEREAS, the City has duly caused notice of its intention to issue the Certificates of Obligation
hereinafter authorized to be published at the times and in the manner required by the Act and no petition has
been filed protesting the issuance thereof, NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS;
Section 1. AMOUNT AND PURPOSE OF THE CERTIFICATES. The certificate or certificates
of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and delivered in the aggregate
principal amount of $12,665,000, for the purpose of paying all or a portion of the City's contractual
obligations incurred pursuant to contracts for the purchase of certain real and personal property, to-wit (a)
road street and parking improvements; (b) construction and equipping of westside fire station No.7; (c)
acquisition and installation of replacement heating venting and air conditioning equipment for City buildings;
(d) improvements to the City's solid waste disposal system and acquisition of related equipment; (e)
construction of a crematorium for the City's animal control department; (I) improvements to the municipal
airport; (g) acquisition of vehicles and equipment for the City's motor pool; (h) construction ofa multi-modal
transit station and the acquisition of interests in land in connection with the construction of such station; and
also for the purpose of paying all or a portion ofthe City's contractual obligations for professional services,
including engineers, architects, attorneys, map makers, auditors, and financial advisors, in connection with
said Certificates of Obligation.
Section 2. DESIGNATION OF THE CERTIFICA TES. Each certificate issued pursuant to this
Ordinance shall be designated; "CITY OF DENTON CERTIFICATE OF OBLIGATION, SERIES 2006",
and initially there shall be issued, sold, and delivered hereunder a single fully registered certificate, without
interest coupons, payable in installments of principal (the "Initial Certificate"), butthe Initial Certificate may
be assigned and transferred and/or converted into and exchanged for a like aggregate principal amount of
fully registered certificates, without interest coupons, having serial maturities, and in the denomination or
denominations of$5,000 or any integral multiple of$5,000, all in the manner hereinafter provided. The term
"Certificates" as used in this Ordinance shall mean and include collectivcly the Initial Certificate and all
substitute certificates exchanged therefor, as well as all other substitute certificates and replacement
certificates issued pursuant hereto, and the term "Certificates" shall mean any of the Certificates.
Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL CERTIFICATE.
(a) The Initial Certificate is hereby authorized to be issued, sold, and delivered hereunder as a
single fully registered Certificate, without interest coupons, dated July 15, 2006, in the denomination and
aggregate principal amount of$ I 2,665,000, numbered R-_, payable in annual installments of principal to
the initial registered owner thereof, to-wit;
RBC CAPITAL MARKETS
or to the registered assignee or assignees of said Certificate or any portion or portions thereof (in each case,
the "registered owner"), with the annual installments of principal of the Initial Certificate to be payable on
the dates, respectively, and in the principal amounts, respectively, stated in the FORM OF INITIAL
CERTIFICA TE set forth in this Ordinance.
(b) The Initial Certificate (i) mayor shall be prepaid or redeemed prior to the respective
scheduled due dates of installments of principal thereof, (ii) may be assigned and transferred, (iii) may be
converted and exchanged for other Certificates, (iv) shall have the characteristics, and (v) shall be signed and
sealed, and the principal of and interest on the Initial Certificate shall be payable, all as provided, and in the
manner required or indicated, in the FORM OF INITIAL CERTIFICATE set forth in this Ordinance.
Section 4. INTEREST. The unpaid principal balance ofthe Initial Certificate shall bear interest from
the date of the Initial Certificate to the respective scheduled due dates of the installments of principal of the
Initial Certificate, and said interest shall be payable, all in the manner provided and at the rates and on the
dates stated in the FORM OF INITIAL CERTIFICA TE set forth in this Ordinance.
Section 5. FORM OF INITIAL CERTIFICATE. The form of the Initial Certificate, including the
form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed
on the Initial Certificate, shall be substantially as follows;
NO.R-
FORM OF INITIAL CERTIFICATE
$12,665,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 2006
THE CITY OF DENTON, in Denton County, Texas (the "Issuer"), being a political subdivision of
the State of Texas, hereby promises to pay to
or to the registered assignee or assignees of this Certificate or any portion or portions hereof (in each case,
the "registered owner") the aggregate principal amount of
$12,665,000
(TWEL VE MILLION SIX HUNDRED SIXTY FIVE THOUSAND DOLLARS)
in annual installments of principal due and payable on February 15 in each of the years, and in the respective
principal amounts, as set forth in the following schedule, and to pay interest, from the date of this Certificatc
hereinafter stated, on the balance of each such installment of principal, respectively, from time to time
remaining unpaid, at the rates per annum as follows;
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PRINCIPAL INTEREST PRINCIPAL INTEREST
YEAR AMOUNT RATE(%) YEAR AMOUNT RA TE(%)
2007 $ 1,000,000 4.500 2017 $ 340,000 4.500
2008 1,090,000 4.500 2018 355,000 4.500
2009 I, I 35,000 4.500 2019 375,000 4.500
2010 1,190,000 4.500 2020 385,000 4.500
2011 1,235,000 4.750 2021 400,000 4.500
2012 765,000 4.500 2022 420,000 4.600
2013 805,000 4.500 2023 445,000 4.600
2014 405,000 4.000 2024 465,000 4.625
2015 425,000 4.100 2025 480,000 4.625
2016 450,000 4.125 2026 500,000 4.650
Interest shall first be due and payable on February 15,2007, and semiannually on each February 15
and August 15 thereafter while this Bond or any portion hereofis outstanding and unpaid. Said interest shall
be calculated on the basis ofa 360-day year composed of twelve 30-day months.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Certificate are payable
in lawful money of the United States of America, without exchange or collection charges. The installments
of principal and the interest on this Certificate are payable to the registered owner hereofthrough the services
of JPMORGAN CHASE BANK, NATIONAL ASSOCIA TION, DALLAS, TEXAS, which is the "Paying
Agent/Registrar" for this Certificate. Payment of all principal of and interest on this Certificate shall be made
by the Paying Agent/Registrar to the registered owner hereof on each principal and/or interest payment date
by check dated as of such date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of
the Issuer required by the ordinance authorizing the issuance ofthis Certificate (the "Certificate Ordinance")
to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check
shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such
principal and/or interest payment date, to the registered owner hereof, at the address of the registered owner,
as it appeared at the close of business on the last day of the month next preceding each such date (the "Record
Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. The Issuer
covenants with the registered owner ofthis Certificate that on or before each principal and/or interest payment
date for this Certificate it will make available to the Paying Agent/Registrar, from the "Interest and Sinking
Fund1t created by the Certificate Ordinance, the amounts required to provide for the payment, in immediately
available funds, of all prineipal of and interest on this Certificate, when due.
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 Special Record Date and ofthe scheduled payment date ofthe past due interest ("Special
Payment Date", which shall be fifteen (I 5) days after the Special Record Date) 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 Holder of a Certi ficate appearing on the registration books of the Paying Agent/Registrar at
the close of business on the 15th business day next preceding the date of mailing of such notice.
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a Saturday,
Sunday, a legal holiday, or a day on which banking institutions in the City where the 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 which 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 ifmade on the original
date payment was due.
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TH[S CERT[F[CA TE has been authorized in accordance with the Constitution and laws of the State
of Texas in the principal amount of $ [2,665,000 for the purpose of paying all or a portion of the City's
contractual obligations incurred pursuant to contracts for the purchase of certain real and personal property,
to-wit: (a) road street and parking improvements; (b) construction and equipping of wests ide fire station No.
7; (c) acquisition and installation of replacement heating venting and air conditioning equipment for City
buildings; (d) improvements to the City's solid waste disposal system and acquisition of related equipment;
(e) construction ofacrematorium for the City's animal control department; (I) improvements to the municipal
airport; (g) acquisition of vehicles and equipment for the City's motor pool; (h) construction ofa multi-modal
transit station and the acquisition of interests in land in connection with the construction of such station; and
also for the purpose of paying all or a portion of the City's contractual obligations for professional services,
including engineers, architects, attorneys, map makers, auditors, and financial advisors, in connection with
said Certificates of Obligation.
ON FEBRUARY [5,2016, or on any date whatsoever thereafter, the unpaid installments ofprincipa[
of this Certificate of Obligation may be prepaid or redeemed prior to their scheduled due dates, at the option
of the Issuer, with funds derived from any available source, as a whole, or in part, at the prepayment or
redemption price ofthe par or principal amount thereof, plus accrued interest to the date fixed for prepayment
or redemption. Ifless than all of the Certificates are to be redeemed, the Issuer may select the maturities of
the Certificates to be redeemed. [fless than all of the Certificates of any maturity are to be redeemed, the
Paying Agent/Registrar shall determine by lot the Certificates, or portions thereof, within such maturity to
be redeemed.
A T LEAST 30 days prior to the date fixed for any such prepayment or redemption a written notice
of such prepayment or redemption shall be mailed by the Paying Agent/Registrar to the registered owner
hereof. By the date fixed for any such prepayment or redemption due provision shall be made by the Issuer
with the Paying AgentlRegistrar for the payment of the required prepayment or redemption price for this
Certificate or the portion hereof which is to be so prepaid or redeemed, plus accrued interest thereon to the
date fixed for prepayment or redemption. Ifsuch written notice of prepayment or redemption is given, and
if due provision for such payment is made, all as provided above, this Certificate, orthe portion thereof which
is to be so prepaid or redeemed, thereby automatically shall be treated as prepaid or redeemed prior to its
scheduled due date, and shall not bear interest after the date fixed for its prepayment or redemption, and shall
not be regarded as being outstanding except for the right of the registered owner to receive the prepayment
or redemption price plus accrued interest to the date fixed for prepayment or redemption from the Paying
Agent/Registrar out ofthe funds provided for such payment. The Paying AgentlRegistrar shall record in the
Registration Books all such prepayments or redemptions ofprincipa[ of this Certificate or any portion hereof.
TH[S CERTlF[CA TE, to the extent of the unpaid principal balance hereof, or any unpaid portion
hereofin any integral multiple of$5,000, may be assigned by the initial registered owner hereof and shall be
transferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the
capacity of registrar for the Certificates, upon the terms and conditions set forth in the Certificate Ordinance.
Among other requirements for such transfer, this Certificate must be presented and surrendered to the Paying
Agent/Registrar for cancellation, together with proper instruments of assignment, in form and with guarantee
of signatures satisfactory to the Paying AgentlRegistrar, evidencing assignment by the initial registered owner
of this Certificate, or any portion or portions hereof in any integral multiple of $5,000, to the assignee or
assignees in whose name or names this Certificate or any such portion or portions hereof is or are to be trans-
ferred and registered. Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar
may be used to evidence the assignment ofthis Certificate or any such portion or portions hereof by the initial
registered owner hereof. A new certificate or certificates payable to such assignee or assignees (which then
will be the new registered owner or owners of such new Certificate or Certificates) or to the initial registered
owner as to any portion of this Certificate which is not being assigned and transferred by the initial registered
owner, shall be delivered by the Paying Agent/Registrar in conversion of and exchange for this Certificate
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or any portion or portions hereof, but solely in the form and manner as provided in the next paragraph hereof
for the conversion and exchange of this Certificate or any portion hereof. The registered owner of this
Certificate shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner
hereof for all purposes, including payment and discharge ofliability upon this Certificate to the extent of such
payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary.
AS PROVIDED above and in the Certificate Ordinance, this Certificate, to the extent ofthe unpaid
principal balance hereof, may be converted into and exchanged for a like aggregate principal amount offully
registered certificates, without interest coupons, payable to the assignee or assignees duly designated in
writing by the initial registered owner hereof, or to the initial registered owner as to any portion of this
Certificate which is not being assigned and transferred by the initial registered owner, in any denomination
or denominations in any integral multiple of$5,000 (subject to the requirement hereinafter stated that each
substitute certificate issued in exchange for any portion of this Certificate shall have a single stated principal
maturity date), upon surrender of this Certificate to the Paying Agent/Registrar for cancellation, all in
accordance with the form and procedures set forth in the Certificate Ordinance. If this Certificate or any
portion hereof is assigned and transferred or converted each certificate issued in exchange for any portion
hereof shall have a single stated principal maturity date corresponding to the due date of the installment of
principal ofthis Certificate or portion hereoffor which the substitute certificate is being exchanged, and shall
bear interest at the rate applicable to and borne by such installment of principal or portion thereof. No such
certificate shall be payable in installments, but shall have only one stated principal maturity date. AS
PROVIDED IN THE CERTIFICATE ORDINANCE, THIS CERTIFICA TE IN ITS PRESENT FORM MA Y
BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONL Y, and to one or more assignees,
but the certificates issued and delivered in exchange for this Certificate or any portion hereof may be assigned
and transferred, and converted, subsequently, as provided in the Certificate Ordinance. The Issuer shall pay
the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and
exchanging this Certificate or any portion thereof, but the one requesting such transfer, conversion, and
exchange shall pay any taxes or governmental charges required to be paid with respect thereto. The Paying
Agent/Registrar shall not be required to make any such assignment, conversion, or exchange 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.
IN THE EVENT any Paying Agent/Registrar for this Certificate is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereof
to be mailed to the registered owner of this Certificate.
IT IS HEREBY certified, recited, and covenanted that this Certificate has been duly and validly
authorized, issued, and delivered; that all acts, conditions, and things required or proper to be performed,
exist, and be done precedent to or in the authorization, issuance, and delivery of this Certificate have been
performed, existed, and been done in accordance with law; that this Certificate is a general obligation of the
Issuer, issued on the full faith and credit thereof; and that annual ad valorem taxes sufficient to provide for
the payment of the interest on and principal of this Certificate, as such interest comes due and such principal
matures, have been levied and ordered to be levied against all taxable property in the Issuer, and have been
pledged irrevocably for such payment, within the limit prescribed by law; and that, together with other parity
obligations, this Certificate additionally is payable from and secured by certain surplus revenues (not to
exceed $10,000 in aggregate amount) derived by the Issuer from the ownership and operation of the City's
Utility System (consisting of the City's combined waterworks system, sanitary sewer system, and electric light
and power system), all as provided in the Certificate Ordinance.
THE ISSUER has reserved the right to issue, in accordance with law, and in accordance with the
Certificate Ordinance, other and additional obligations, and to enter into contracts, payable from ad valorem
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taxes and/or revenues of the City's Utility System, on a parity with, or with respect to said revenues, superior
in lien to, this Certificate.
BY BECOMING the registered owner ofthis Certificate, the registered owner thereby acknowledges
all ofthe terms and provisions ofthe Certificate Ordinance, agrees to be bound by such terms and provisions,
acknowledges that the Certificate Ordinance is duly recorded and available for inspection in the official
minutes and records of the governing body of the Issuer, and agrees that the terms and provisions of this
Certificate and the Certificate Ordinance constitute a contract between the registered owner hereof and the
Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the manual or
facsimile signature of the Mayor of the Issuer and countersigned and attested with the manual or facsimile
signature of the City Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed,
or placed in facsimile, on this Certificate, and has caused this Certificate to be dated July 15,2006.
ATTEST:
CITY OF DENTON, TEXAS
By:
Jennifer Walters
City Secretary, City of Denton, Texas
By:
Perry R. McNeill
Mayor, City of Denton, Texas
(CITY SEAL)
(INSERT BOND INSURANCE LEGEND, IF ANY)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this Certificate 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)
Section 6. ADDITIONAL CHARACTERISTICS OF THE CERTIFICATES. Registration and
Transfer. (a) The Issuer shall keep or cause to be kept at the principal corporate trust office of JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION, DALLAS, TEXAS (the "Paying Agent/Registrar") books
or records of the registration and transfer of the Certificates (the "Registration Books"), and the Issuer hereby
appoints the Paying AgentlRegistrar as its registrar and transfer agent to keep such books or records and make
such transfers and registrations under such reasonable regulations as the Issuer and Paying Agent/Registrar
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may prescribe; and the PayingAgent/Registrarshall make such transfers and registrations as herein provided.
The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the registered
owner of each Certificate to which payments with respect to the Certificates shall be mailed, as herein
provided; but it shall be the duty of each registered owner to notify the Paying Agent/Registrar in writing of
the address to which payments shall be mailed, and such interest payments shall not be mailed unless such
notice has been given. The Issuer shall have the right to inspect the Registration Books during regular
business hours of the Paying AgentlRegistrar, but otherwise the Paying Agent/Registrar shall keep the
Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by
any other entity. Registration of each Certificate may be transferred in the Registration Books only upon
presentation and surrender of such Certificate to the Paying Agent/Registrar for transfer of registration and
cancellation, together with proper written instruments of assignment, in form and with guarantee of signatures
satisfactory to the Paying AgentlRegistrar, (i) evidencing the assignment of the Certificate, or any portion
thereof in any integral multiple of $5,000, to the assignee or assignees thereof, and (ii) the right of such
assignee or assignees to have the Certificate or any such portion thereof registered in the name of such
assignee or assignees. Upon the assignment and transfer of any Certificate or any portion thereof, a new
substitute Certificate or Certificates shall be issued in conversion and exchange therefor in the manner herein
provided. The Initial Certificate, to the extent of the unpaid principal balance thereof, may be assigned and
transferred by the initial registered owner thereof once only, and to one or more assignees designated in
writing by the initial registered owner thereof. All Certificates issued and delivered in conversion of and
exchange for the Initial Certificate shall be in any denomination or denominations of any integral multiple
of $5,000 (subject to the requirement hereinafter stated that each substitute Certificate shall have a single
stated principal maturity date), shall be in the form prescribed in the FORM OF SUBSTITUTE
CERTlFICA TE set forth in this Ordinance, and shall have the characteristics, and may be assigned,
transferred, and converted as hereinafter provided. If the Initial Certificate or any portion thereof is assigned
and transferred or converted the Initial Certificate must be surrendered to the 'Paying Agent/Registrar for
cancellation, and each Certificate issued in exchange for any portion of the Initial Certificate shall have a
single stated principal maturity date, and shall not be payable in installments; and each such Certificate shall
have a principal maturity date corresponding to the due date ofthe installment of principal or portion thereof
for which the substitute Certificate is being exchanged; and each such Certificate shall bear interest at the
single rate applicable to and borne by such installment of principal or portion thereof for which it is being
exchanged. Ifonly a portion of the Initial Certificate is assigned and transferred, there shall be delivered to
and registered in the name of the initial registered owner substitute Certificates in exchange for the unassigned
balance of the Initial Certificate in the same manner as if the initial registered owner were the assignee
thereof. If any Certificate or portion thereof other than the Initial Certificate is assigned and transferred or
converted each Certificate issued in cxchange therefor shall have the same principal maturity date and bear
interest at the same rate as thc Certificate for which it is exchanged. A form of assignment shall be printed
or endorsed on each Certificate, excepting the Initial Certificate, which shall be executed by the registered
owner or its duly authorized attorney or representative to evidence an assignment thereof. Upon surrender
of any Certificates or any portion or portions thereoffortransfer of registration, an authorized representative
of the Paying Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new
fully registered substitute Certificatc or Certificates, having the characteristics herein described, payable to
such assignce or assignees (which then will be thc registered owner or owners of such new Certificate or
Certificates), or to the previous registered owner in case only a portion of a Certificate is being assigned and
transferred, all in conversion of and exchange for said assigned Certificate or Certificates or any portion or
portions thereof, in the same form and manner, and with the same effect, as provided in Section 6(d), below,
forthe conversion and exchange of Certificates by any registered owner of a Certificatc. The Issuer shall pay
the Paying Agent/Registrar's standard or customary fees and charges for making such transfer and delivery
of a substitute Certificate or Certificates, but the one requesting such transfer shall pay any taxes or other
governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be
required to make transfers of registration of any Certificate or any portion thereof during the period
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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.
(b) Ownershio of Certificates. The entity in whose name any Certificate shall be registered in
the Registration Books at any time shall be deemed and treated as the absolute owner thereoffor all purposes
of this Ordinance, whether or not such Certificate shall be overdue, and the Issuer and the Paying
Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on account of, the
principal of, premium, if any, and interest on any such Certificate shall be made only to such registered
owner. All such payments shall be valid and effectual to satisfy and discharge the liability upon such
Certificate to the extent of the sum or sums so paid.
(c) Pavment of Certificates and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Certificates, and to
act as its agent to convert and exchange or replace Certificates, all as provided in this Ordinance. The Paying
Agent/Registrar shall keep proper records ofall payments made by the Issuer and the Paying Agent/Registrar
with respect to the Certificates, and of all conversions and exchanges of Certificates, and all replacements of
Certificates, as provided in this Ordinance. However, in the event of a nonpayment of interest on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a "Special
Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such
interest have been received from the Issuer. Notice of the Special Record Date and of the scheduled payment
date of the past due interest ("Special Payment Date", which shall be tifteen (15) days after the Special
Record Date) 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 Holder of a Certificate appearing on the registration
books of the Paying Agent/Registrar at the close of business on the 15th business day next preceding the date
of mailing of such notice.
(d) Conversion and Exchange or Reolacement: Authentication. Each Certificate issued and
delivered pursuant to this Ordinance, to the extent of the unpaid principal balance orprincipal amountthereof,
may, upon surrender of such Certificate at the principal corporate trust office of the Paying AgentlRegistrar,
together with a written request therefor duly executed by the registered owner or the assignee or assignees
thereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory
to the Paying Agent/Registrar, may, at the option of the registered owner or such assignee or assignees, as
appropriate, be converted into and exchanged for fully registered certificates, without interest coupons, in the
form prescribed in the FORM OF SUBSTITUTE CERTIFICATE set forth in this Ordinance, in the
denomination of$5,000, or any integral multiple of$5,000 (subject to the requirement hereinafter stated that
each substitute Certificate shall have a single stated maturity date), as requested in writing by such registered
owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid principal balance
or principal amount of any Certificate or Certificates so surrendered, and payable to the appropriate registered
owncr, assignee, or assignees, as the case may be. If the Initial Certificate is assigned and transferred or
converted each substitute Certificate issued in exchange for any portion of the Initial Certificate shall have
a single stated principal maturity date, and shall not be payable in installments; and each such Certificate shall
have a principal maturity date corresponding to the due date ofthe installment of principal or portion thereof
for which the substitute Certificate is being exchanged; and each such Certificate shall bear interest at the
single rate applicable to and borne by such installment of principal or portion thereof for which it is being
exchanged. If any Certificate or portion thereof (other than the Initial Certi ficate) is assigned and transferred
or converted, each Certificate issued in exchange therefor shall have the same principal maturity date and bear
interest at the same rate as the Certificate for which it is being exchanged. Each substitute Certificate shall
bear a letter and/or number to distinguish it from each other Certificate. The Paying Agent/Registrar shall
convert and exchange or replace Certificates as provided herein, and each fully registered certificate delivered
in conversion of and exchange for or replacement of any Certificate or portion thereof as permitted or
required by any provision of this Ordinance shall constitute one of the Certificates for all purposes of this
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Ordinance, and may again be converted and exchanged or replaced. It is specifically provided that any
Certificate authenticated in conversion of and exchange for or replacement of another Certificate on or prior
to the first scheduled Record Date for the Initial Certificate shall bear interest from the date of the Initial
Certificate, but each substitute Certificate so authenticated after such first scheduled Record Date shall bear
interest from the interest payment date next preceding the date on which such substitute Certificate was so
authenticated, unless such Certificate is authenticated after any Record Date but on or before the next
following interest payment date, in which case it shall bear interest from such next following interest payment
date; provided, however, that if at the time of delivery of any substitute Certificate the interest on the
Certificate for which it is being exchanged is due but has not been paid, then such Certificate shall bear
interest from the date to which such interest has been paid in full. THE INITIAL CERTlFICA TE issued and
delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated by the Paying
Agent/Registrar, but on each substitute Certificate issued in conversion of and exchange for or replacement
of any Certificate or Certificates issued under this Ordinance there shall be printed a certificate, in the form
substantially as follows:
"PA YING AGENTIREGISTRAR'S AUTHENTICA TlON CERTIFICA TE
It is hereby certified that this Certificate has been issued under the provisions of the Certificate
Ordinance described on the face of this Certificate; and that this Certificate has been issued in conversion of
and exchange for or replacement of a certificate, certificates, or a portion of a certificate or certificates of an
issue which 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.
JPMORGAN CHASE BANK, NATIONAL
ASSOCIA TlON, DALLAS, TEXAS,
Paying Ageilt/Registrar
Dated
By
"Authorized Representative"
An authorized representative of the Paying AgentlRegistrar shall, before the delivery of any such Certificate,
date and manually sign the above Certificate, and no such Certificate shall be deemed to be issued or
outstanding unless such Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all
Certificates surrendered for conversion and exchange or replacement. 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 or replacement of any Certificate or portion thereof,
and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute
Certificates in the manner prescribed herein. Pursuant to Chapter 120 I, Texas Government Code, the duty
of conversion and exchange or replacement of Certificates as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution ofthe above Paying Agent/Registrar's Authentication Certificate,
the converted and exchanged or replaced Certi ficate shall be valid, incontestable, and enforceable in the same
manner and with the same effect as the Initial Certificate which originally was issued pursuant to this
Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. The
Issuer shall pay the Paying AgentlRegistrar's standard or customary fees and charges for transferring,
converting, and exchanging any Certificate or any portion thereof, but the one requesting any such transfer,
conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect
thereto as a condition precedent to the exercise of such privilege of conversion and exchange. The Paying
Agent/Registrar shall not be required to make any such conversion and exchange or replacement of
9
Certificates or any portion thereof 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.
(e) In General. All Certificates issued in conversion and exchange or replacement of any other
Certificate or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the
principal of and interest on such Certificates to be payable only to the registered owners thereof, (ii) mayor
shall be redeemed prior to their scheduled maturities, (Iii) may be transferred and assigned, (iv) may be
converted and exchanged for other Certificates, (v) shall have the characteristics, (vi) shall be signed and
sealed, and (vii) the principal of and interest on the Certificates shall be payable, all as provided, and in the
manner required or indicated, in the FORM OF SUBSTITUTE CERTIFICA TE set forth in this Ordinance.
(I) Pavment of Fees and Charges. The Issuer hereby covenants with the registered owners of
the Certificates that it will (I) pay the standard or customary fees and charges of the Paying Agent/Registrar
for its services with respect to the payment of the principal of and interest on the Certificates, when due, and
(ii) pay the fees and charges of the Paying Agent/Registrar for services with respect to the transfer of
registration of Certificates, and with respect to the conversion and exchange of Certificates solely to the extent
above provided in this Ordinance.
(g) Substitute Paving Agent/Registrar. The Issuer covenants with the registered owners ofthe
Certificates that at all times while the Certificates are outstanding the Issuer will provide a competent and
legally qualified bank, trust company, financial institution, or other agency to act as and perform the services
of Paying Agent/Registrar for the Certificates under this Ordinance, and that the Paying Agent/Registrar will
be one 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 it will promptly 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 shall
promptly transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books
and records relating to the Certificates, to the new Paying Agent/Registrar designated and appointed by the
Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a written notice
thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Certificates, by United
States mail, first-class postage prepaid, which notice also shall give the address of the new Paying
Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall be
deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be
delivered to each Paying Agent/Registrar.
Section 7. FORM OF SUBSTITUTE CERTIFICATES. The form of all Certificates issued in
conversion and exchange or replacement of any other Certificate or portion thereof, including the form of
Paying Agent/Registrar's Certificate to be printed on each of such Certificates, and the Form of Assignment
to be printed on each of the Certificates, shall be, respectively, substantially as follows, with such appropriate
variations, omissions, or insertions as are permitted or required by this Ordinance.
10
FORM OF SUBSTITUTE CERTIFICA TE
(Book-Entry Only Legend, if appropriate)
NO.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICA TE OF OBUGA TION
SERIES 2006
PRINCIPAL AMOUNT
$
INTEREST RATE
MA TURITY DATE
DA TED DA TE
CUSIP NO.
%
ON THE MATURITY DATE specified above the CITY OF DENTON, in Denton County, Texas
(the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to
or to the registered assignee hereof (either being hereinafter called the "registered owner") the principal
amount of
and to pay interest thereon, calculated on the basis ofa 360-day year composed of twelve 30-day months,
from July 15,2006, to the maturity date specified above, at the interest rate per annum specified above; with
interest being first due and payable on February 15,2007, and semiannually on each August 15 and
February IS thereafter, except that ifthe date of authentication of this Certificate 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 (hereinafter
defined) 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.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Certificate shall be
paid to the registered owner hereof upon presentation and surrender of this Certificate at maturity, at the
principal corporate trust office of JPMORGAN CHASE BANK, NATIONAL ASSOCIA TION, DALLAS,
TEXAS, which is the "Paying Agent/Registrar" for this Certificate. The payment of interest on this
Certificate shall be made by the Paying Agent/Registrar to the registered owner hereof on each interest
payment date by check dated as of such interest payment date, drawn by the Paying AgentfRegistrar on, and
payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of the Certificates
(the "Certificate Ordinance") to be on deposit with the Paying AgentfRegistrar for such purpose as hereinafter
provided; and such check 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 the address of the
registered owner, as it appeared at the close of business on the last day ofthe month next preceding each such
date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter
described. However, the payment of such interest may be made by any other method acceptable to the Paying
Agent/Registrar and requested by, and at the risk and expense of, the registered owner hereof. The Issuer
covenants with the registered owner of this Certificate that on or before each principal payment date, interest
payment date, and accrued interest payment date for this Certificate it will make available to the Paying
Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate Ordinance, the amounts
II
required to provide for the payment, in immediately available funds, of all principal of and interest on the
Certificates, when due.
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 Special Record Date and ofthe scheduled payment date of the past due interest ("Special
Payment Date", which shall be fifteen (15) days after the Special Record Date) 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 Holder of a Certificate appearing on the registration books of the Paying Agent/Registrar at
the close of business on the 15th business day next preceding the date of mailing of such notice.
IF THE DA TE for the payment ofthe principal of or interest on this Certificate shall be a Saturday,
Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying AgentlRegistrar
is located are authorized by law or executive order to close, then the date for such payment shall be the next
succeeding day which 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 ifmade on the original
date payment was due.
THIS CERTIFICATE is one of an issue of Certificates initially dated July 15,2006, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of$ I 2,665,000, for
the purpose of paying all or a portion of the City's contractual obligations incurred pursuant to contracts for
the purchase of certain real and personal property, to-wit: (a) road street and parking improvements; (b)
construction and equipping of westside fire station No.7; (c) acquisition and installation of replacement
heating venting and air conditioning equipment for City buildings; (d) improvements to the City's solid waste
disposal system and acquisition of related equipment; (e) construction ofa crematorium for the City's animal
control department; (I) improvements to the municipal airport; (g) acquisition of vehicles and equipment for
the City's motor pool; (h) construction ofa multi-modal transit station and the acquisition of interests in land
in connection with the construction of such station; and also for the purpose of paying all or a portion of the
City's contractual obligations for professional services, including engineers, architects, attorneys, map
makers, auditors, and financial advisors, in connection with said Certificates of Obligation.
ON FEBRUARY 15,20 t 6, or on any date whatsoever thereafter, the Certificates of this Series may
be redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived from any
available and lawful source, as a whole, or in part, at the redemption price of the par or principal amount
thereof, plus accrued interest to the date fixed for redemption. If less than all of the Certificates are to be
redeemed, the Issuer may select the maturities of the Certificates to be redeemed. If less than all of the
Certificates of any maturity are to be redeemed, the Paying Agent/Registrar shall determine by lot the
Certificates, or portions thereof, within such maturity to be redeemed.
A T LEAST 30 days priorlo the date fixed for any redemption of Certificates or portions thereof prior
to maturity a written notice of such redemption shall be sent by the Paying AgentlRegistrar by United States
mail, first-class postage prepaid, to the registered owner of each Certificate to be redeemed at its address as
it appeared on the 45th day prior to such redemption date; provided, however, that the failure to send, mail,
or receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity
or effectiveness of the proceedings for the redemption of any Certificate. By the date fixed for any such
redemption due provision shall be made with the Paying Agent/Registrar for the payment of the required
redemption price for the Certificates or portions thereof which are to be so redeemed, plus accrued interest
thereon to the date fixed for redemption. Ifsuch written notice of redemption is given and if due provision
for such payment is made, all as provided above, the Certificates or portions thereof which are to be so
redeemed thereby automatically shall be treated as redeemed prior to their scheduled maturities, and they shall
12
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 plus accrued interest from the
Paying Agent/Registrar out of the funds provided for such payment. If a portion of any Certificate shall be
redeemed a substitute Certifieate or Certificates having the same maturity date, bearing interest at the same
rate, in any denomination or denominations in any integral multiple of$5,000, at the written request of the
registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued
to the registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as
provided in the Bond Ordinance.
THIS CERTIFICATE OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL
MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books of the Issuer
kept by the Paying Agent/Registrar acting in the capacity of registrar for the Certificates, upon the terms and
conditions set forth in the Certificate Ordinance. Amongother requirements for such assignment and transfer,
this Certificate must be presented and surrendered to the Paying Agent/Registrar, together with proper
instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
AgentlRegistrar, evidencing assignment of this Certificate or any portion or portions hereof in any integral
multiple of$5,000 to the assignee or assignees in whose name or names this Certificate or any such portion
or portions hereof is or are to be transferred and registered. The form of Assignment printed or endorsed on
this Certificate shall be executed by the registered owner or its duly authorized attorney or representative, to
evidence the assignment hereof. A new Certificate or Certificates payable to such assignee or assignees
(which then will be the new registered owner or owners of such new Certificate or Certificates), or to the
previous registered owner in the case of the assignment and transfer of only a portion of this Certificate, may
be delivered by the Paying Agent/Registrar in conversion of and exchange forthis Certificate, all in the form
and manner as provided in the next paragraph hereof for the conversion and exchange of other Certificates.
The Issuer shall pay the Paying Agent/Registrar's standard or customaty fees and charges for making such
transfer, but the one requesting such transfer shall pay any taxes or other governmental charges required to
be paid with respect thereto. The Paying Agent/Registrar shall not be required to make transfers of
registration of this Certificate or any portion hereof 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. The registered owner of this Certificate shall be deemed and treated by the Issuer and the
Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of
liability upon this Certificate to the extent of such payment, and the Issuer and the Paying Agent/Registrar
shall not be affected by any notice to the contrary.
ALL CERTlFICA TES OF THIS SERIES are issuable solely as fully registered certificates, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Certificate
Ordinance, this Certificate, may, at the request of the registered owner or the assignee or assignees hereof,
be converted into and exchanged for a like aggregate principal amount of fully registered certificates, without
interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case may be,
having the same maturity date, and bearing interest at the same rate, in any denomination or denominations
in any integral multiple of $5,000 as requested in writing by the appropriate registered owner, assignee, or
assignees, as the case may be, upon surrender of this Certificate to the Paying Agent/Registrar for
cancellation, all in accordance with the form and procedures set forth in the Certificate Ordinance. The Issuer
shall pay the Paying Agent/Registrar's standard or customary fees and eharges for transferring, converting.
and exchanging any Certificate or any portion thereof, but the one requesting sueh transfer, conversion, and
exehange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition
preeedent to the exercise of sueh privilege of conversion and exchange. The Paying Agent/Registrar shall
not be required to make any sueh conversion and exchange during the period eommencing with the close of
business on any Reeord Date and ending with the opening of business on the next following principal or
interest payment date.
13
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and will promptly cause written notice thereof
to be mailed to the registered owners of the Certificates.
IT IS HEREBY certified, recited, and covenanted that this Certificate has been duly and validly
authorized, issued, and delivered; that all acts, conditions, and things required or proper to be perfooned,
exist, and be done precedent to or in the authorization, issuance, and delivery of this Certificate have been
performed, existed, and been done in accordance with law; that this Certificate is a general obligation of the
Issuer, issued on the full faith and credit thereof; and that annual ad valorem taxes sufficient to provide for
the payment of the interest on and principal of this Certificate, as such interest comes due and such principal
matures, have been levied and ordered to be levied against all taxable property in the Issuer, and have been
pledged irrevocably for such payment, within the limit prescribed by law; and that, together with other parity
obligations, this Certificate, and the other Certificates of this Series, additionally are payable from and
secured by certain surplus revenues (not to exceed $10,000 in aggregate amount) derived by the Issuer from
the ownership and operation of the City's Utility System (consisting of the City's combined waterworks
system, sanitary sewer system, and electric light and power system), all as provided in the Certificate
Ordinance.
THE ISSUER has reserved the right to issue, in accordance with law, and in accordance with the
Certificate Ordinance, other and additional obligations, and to enter into contracts, payable from ad valorem
taxes and/or revenues of the City's Utility System, on a parity with, or with respect to said revenues, superior
in lien to, this Certificate.
BY BECOMING the registered owner of this Certificate, the registered ownerlttereby acknowledges
all of the terms and provisions ofthe Certificate Ordinance, agrees to be bound by such teons and provisions,
acknowledges that the Certificate Ordinance is duly recorded and available for inspection in the official
minutes and records of the governing body of the Issuer, and agrees that the teons and provisions of this
Certificate and the Certificate Ordinance constitute a contract between each registered owner hereof and the
Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the manual or
facsimile signature of the Mayor of the Issuer and countersigned and attested with the manual or facsimile
signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly
impressed, or placed in facsimile, on this Certificate.
ATTEST:
CITY OF DENTON, TEXAS
By:
Jennifer Walters
City Secretary, City of Denton, Texas
By:
Perry R. McNeill
Mayor, City of Denton, Texas
(CITY SEAL)
FORM OF PA YING AGENTfREGISTRAR'S AUTHENTICA TrON CERTIFICATE
PA YING AGENT/REGISTRAR'S AUTHENTICA TION CERTIFICA TE
It is hereby certified that this Certificate has been issued under the provisions of the Certificate
Ordinance described on the face of this Certificate; and that this Certificate has been issued in conversion of
14
and exchange for or replacement of a certificate, certificates, or a portion of a certificate or certificates of an
issue which 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.
JPMORGAN CHASE BANK, NA TlONAL
ASSOCIA TION, DALLAS, TEXAS,
Paying AgentlRegistrar
Dated
By
Authorized Representative
(INSERT BOND INSURANCE LEGEND, IF ANY)
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Certificate, or duly authorized
representative or attorney
thereof, hereby assigns this Certificate to
/
(Assignee's Social
Security or Taxpayer
Identification Number
/
(print or typewrite Assignee's name and
address, including zip code)
and hereby irrevocably constitutes and appoints
attorney to transferthe registration ofthis Certificate on the Paying Agent/Registrar's Registration Books with
full power of substitution in the premises.
Dated:
15
Signature Guaranteed:
Registered Owner
NOTICE: Signature(s) must be guaranteed by
an eligible guarantor institution participating in
a securities transfer association recognized
signature guarantee program.
NOTICE: This signature must correspond with
the name of the Registered Owner appearing on
the face of this Certificate in every particular
without alteration or enlargement or any
change whatsoever.
Section 8. TAX LEVY. A special Interest and Sinking Fund (the "Interest and Sinking Fund") is
hereby created solely for the benefit of the Certificates, and the Interest and Sinking Fund shall be established
and maintained by the Issuer at an official depository bank of the Issuer. The Interest and Sinking Fund shall
be kept separate and apart from all other funds and accounts of the Issuer, and shall be used only for paying
the interest on and principal of the Certificates. All ad valorem taxes levied and collected for and on account
of the Certificates, together with any premium and accrued interest received upon sale of the Certificates,
shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any
of the Certificates or interest thereon are outstanding and unpaid, the governing body of the Issuer shall
compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the
money required to pay the interest on the Certificates as such interest becomes due, and to provide and
maintain a sinking fund adequate to pay the principal of its Certificates as such principal matures or is
scheduled for redemption (but never less than 2% of the original principal amount of the Certificates as a
sinking fund each year). Said tax shall be based on the latest approval tax rolls of the Issuer, with full
allowance being made for tax delinquencies and the cost of tax collection. Said rate and amount of ad
valorem tax is hereby levied, and is hereby ordered to be levied, against all taxable property in the Issuer for
each year while any of the Certificates or interest thereon are outstanding and unpaid; and said tax shall be
assessed and collected each such year and deposited to the credit of the aforesaid Interest and Sinking Fund.
Said ad valorem taxes sufficient to provide for the payment ofthe interest on and principal ofthe Certificates,
as such interest comes due and such principal matures or is scheduled for redemption, are hereby pledged for
such payment, within the limit prescribed by law.
Section 9. SURPLUS REVENUES. The Certificates additionally shall be payable from and secured
by surplus revenues in accordance with Section 1502 of the Texas Government Code, as amended, to the
extent hereinafter permitted, 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) remaining after (a) payment of all amounts constituting operation and maintenance expenses of said
Utility System, and (b) payment of all debt service, reserve, and other requirements and amounts required to
be paid under all ordinances heretofore or hereafter authorizing (i) all bonds and (Ii) all other obligations not
on a parity with the Certificates, which are payable from and secured by any Utility System revenues, and
(c) payment of all amounts payable from any Utility System revenues pursuant to contracts heretofore or
hereafter entered into by the Issuer in accordance with law (the "Surplus Revenues"). If, for any reason, the
Issuer fails to deposit ad valorem taxes levied pursuant to Section 8 hereof to the credit of the Interest and
Sinking Fund in an amount sufficient to pay, when due, the principal of and interest on the Certificates, then
Surplus Revenues, to the extent hereinafter permitted, shall be deposited to the credit of the Interest and
Sinking Fund and used to pay such principal and/or interest. A maximum aggregate of $10,000 of Surplus
Revenues may be used to pay principal and/or interest on the Certificates and any obligations on a parity
therewith. The Certificates and any obligations on a parity therewith are not, and shall not be deemed to be,
payable from or secured by any Surplus Revenues in excess of an aggregate of$ 10,000. Until and unless an
16
aggregate of $10,000 of Surplus Revenues actually is used to pay any such principal and/or interest,
additional obligations, payable from and secured by all or any remaining unused part of said aggregate of
$10,000 of Surplus Revenues, may be issued by the Issuer on a parity with the Certificates and any other then
outstanding parity obligations, with the Certificates and all such additional parity obligations to be payable
from and secured equally and ratably by all or any remaining unused part of said aggregate. The Issuer
reserves, and shall have, the right to issue bonds, and other obligations not on a parity with the Certificates,
and to enter into contracts, in accordance with applicable laws, to be payable from and secured by any Utility
System revenues other than the aggregate of $10,000 of Surplus Revenues as described above. The
Certificates are on a parity with those issues of City of Denton Certificates of Obligation, Series 1998, Series
1999, Series 2000, Series 200 I, Series 2002, Series 2003, Series 2004 and Series 2005 (the "Outstanding
Certificates"), as permitted in the Ordinances authorizing same; and it is hereby found and determined that
none of the above defined Surplus Revenues have ever been used to pay any principal and/or interest on the
Outstanding Certificates.
Section 10. DEFEASANCE OF CERTIFICA TES. (a) Any Certificate and the interest thereon shall
be deemed to be paid, retired, and no longer outstanding (a "Defeased Certificate") within the meaning of this
Ordinance, except to the extent provided in subsection (d) of this Section, when payment of the principal of
such Certificate, plus interest thereon to the due date 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 for such payment (I) lawful
money of the United States of America sufficient to make such payment or (2) Government Obligations
which mature as to principal and interest in such amounts and at such times as will insure the availability,
without reinvestment, ofsufticient money to provide for such payment, and when proper arrangements have
been made by the Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased
Certificates shall have become due and payable. At such time as a Certificate shall be deemed to be a
Defeased Certificate hereunder, as aforesaid, such Certificate and the interest thereon shall no longer be
secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and pledged as
provided in this Ordinance, and such principal and interest shall be payable solely from such money or
Government Obligations.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of
the Issuer also 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 which
is not required for thc payment of the Certificates and interest thereon, with respect to which such money has
been so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer.
(c) The term "Government Obligations" as used in this Section shall mean (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 thc United States of America, including obligations that are
unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of the
purchase thereof are rated as to investment quality by a nationally recognized investment rating firrn
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 District adopts or approves the proceedings authorizing the
financial arrangements are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent.
(d) Until all Defeased Certificates shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Certificates the same
17
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.
Section 11. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED CERTIFICATES.
(a) Replacement Certificates. In the event any outstanding Certificate is damaged, mutilated, lost, stolen,
or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new certificate
of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed
Certificate, in replacement for such Certificate in the manner hereinafter provided.
(b) Aoolication for Replacement Certificates. Application for replacement of damaged,
mutilated, lost, stolen, or destroyed Certificates shall be made by the registered owner thereof to the Paying
Agent/Registrar. In every case of loss, theft, or destruction of a Certificate, the registered owner applying
for a replacement certi ficate shall furnish to the Issuer and to the Paying Agent/Registrar such security or
indemnity as may be required by them to save each of them harmless from any loss or damage with respect
thereto. Also, in every case of loss, theft, or destruction of a Certificate, the registered owner shall furnish
to the Issuer and the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of
such Certificate, as the case may be. In every case of damage or mutilation of a Certificate, the registered
owner shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the event
of any such Certificate shall have matured, and no default has occurred which is then continuing in the
payment of the principal of, or interest on the Certificate, the Issuer may authorize the payment of the same
(without surrender thereof except in the case of a damaged or mutilated Certificate) instead of issuing a
replacement Certificate, provided security or indemnity is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Certificates. Prior to the issuance of any replacement
certificate, the Paying Agent/Registrar shall charge the registered owner of such Certificate with all legal,
printing, and other expenses in connection therewith. Every replacement certificate issued pursuant to the
provisions of this Section by virtue of the fact that any Certificate is lost, stolen, or destroyed shall constitute
a contractual obligation of the Issuer whether or not the lost, stolen, or destroyed Certificate shall be found
at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally
and proportionately with any and all other Certificates duly issued under this Ordinance.
(e) Authoritv for Issuing Replacement Certificates. In accordance with Chapter 1201, Texas
Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such
replacement certificate without necessity of further action by the governing body of the Issuer or any other
body or person, and the duty of the replacement of such certificates is hereby authorized and imposed upon
the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Certificates
in the form and manner and with the effect, as provided in Section 6(d) of this Ordinance for Certificates
issued in conversion and exchange for other Certificates.
Section 12. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES;
CERTlFICA TE COUNSEL'S OPINION, CUSIP NUMBERS, PREAMBLE AND INSURANCE. The Mayor
of the Issuer is hereby authorized to have control of the Initial Certificate issued hereunder and all necessary
records and proceedings pertaining to the Initial Certificate pending its delivery and its investigation, exami-
nation, and approval by the Attorney General of the State of Texas, and its registration by the Comptroller
of Public Accounts of the State of Texas. Upon registration of the Initial Certificate said Comptroller of
Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate on the Initial Certificate, and the seal of said Comptroller shall be
impressed, or placed in facsimile, on the Initial Certificate. The approving legal opinion of the Issuer's Bond
Counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Initial Certificate
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or on any Certificates issued and delivered in conversion of and exchange or replacement of any Certificate,
but neither shall have any legal effect, and shall be solely for the convenience and information of the
registered owners of the Certificates. The preamble to this Ordinance is hereby adopted and made a part
hereoffor all purposes. Ifinsurance is obtained on any ofthe Certificates, the Initial Certificate and all other
Certificates shall bear an appropriate legend concerning insurance as provided by the insurer.
Section 13. COVENANTS REGARDING TAX-EXEMPTION OF INTEREST ON THE
CERTIFICATES. (a) Covenants. The Issuer covenants to take any action necessary to assure, or refrain from
any action which would adversely affect, the treatment of the Certificates as obligations described in section
103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which is not includable
in the "gross income" ofthe holder for purposes of federal income taxation. In furtherance thereof, the Issuer
covenants as follows:
(I) to take any action to assure that no more than 10 percent of the proceeds of the
Certificates or the projects financed therewith (less amounts deposited to a reserve fund, if any) are
used for any "private business use," as defined in section 14I(b)(6) of the Code or, ifmore than 10
percent of the proceeds or the projects financed therewith are so used, such amounts, whether or not
received by the Issuer, with respect to such private business use, do not, under the terms of this Order
or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than
10 percent of the debt service on the Certificates, in contravention of section 141 (b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use" described
in subsection (1) hereof exceeds 5 percent ofthe proceeds of the Certificates or the projects financed
therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent
is used for a "private business use" which is "related" and not "disproportionate," within the meaning
of section 141(b)(3) of the Code, to the governmental use;
(3) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Certificates (less amounts deposited into a reserve
fund, if any) is directly or indirectly used to finance loans to persons, other than state or local
governmental units, in contravention of section 141 (c) of the Code;
(4) to refrain from taking any action which would otherwise result in the Certificates
being treated as "private activity bonds" within the meaning of section 14I(b) of the Code;
(5) to refrain from taking any action that would result in the Certificates being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Certificates, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section I 48(b )(2) of the Code) which produces a materially higher
yield over the term of the Certi ficates, other than investment property acquired with __
(A) proceeds of the Certificates invested for a reasonable temporary period of3
years or less or, in the case of a refunding bond, for a period of 90 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
I.I48-I(b) of the Treasury Regulations, and
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(C) amounts deposited in any reasonably required reserve or replacement fund to
the extent such amounts do not exceed 10 percent of the proceeds of the Certificates;
(7) to otherwise restrict the use ofthe proceeds ofthe Certificates or amounts treated as
proceeds of the Certificates, as may be necessary, so that the Certificates do not otherwise contravene
the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable,
section I 49(d) of the Code (relating to advance refundings); and
(8) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Certificates) an amount that is at least equal to 90 percent
of the "Excess Earnings," within the meaning of section 148(1) ofthe Code and to pay to the United
States of America, not later than 60 days after the Certificates have been paid in full, 100 percent of
the amount then required to be paid as a result of Excess Earnings under section 148(1) of the Code.
(b) Proceeds. The Issuer understands that the term "proceeds" includes "disposition proceeds"
as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and
proceeds of the refunded bonds expended prior to the date of issuance of the Certificates. It is the
understanding of the Issuer that the covenants contained herein are intended to assure compliance with the
Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto.
In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the
Code, as applicable to the Certificates, the Issuer will not be required to comply with any covenant contained
herein to the extent that such failure to comply, in the opinion of nationally recognized bond counsel, will
not adversely affect the exemption from federal income taxation of interest on the Certificates under section
103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional
requirements which are applicable to the Certificates, the Issuer agrees to comply with the additional
requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to preserve the
exemption from federal income taxation of interest on the Certificates under section 103 of the Code. In
furtherance of such intention, the Issuer hereby authorizes and directs the Mayor to execute any documents,
certificates or reports required by the Code and to make such elections, on behalf of the Issuer, which may
be permitted by the Code as are consistent with the purpose for the issuance of the Certificates.
Section 14. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE PROJECT.
The Issuer covenants to account for the expenditure of sale proceeds and investment earnings to be used for
the purposes described in Section I of this Ordinance (the "Project") on its books and records in accordance
with the requirements of the Internal Revenue Code. The Issuer recognizes that in order for the proceeds to
be considered used for the reimbursement of costs, the proceeds must be allocated to expenditures within 18
months of the later of the date that (I) the expenditure is made, or (2) the Project is completed; but in no event
later than three years after the date on which the original expenditure is paid. The foregoing notwithstanding,
the Issuer recognizes that in order for proceeds to be expended under the Internal Revenue Code, the sale
proceeds or investment earnings must be expended no more than 60 days after the earlier of (I) the fifth
anniversary of the delivery of the Certificates, or (2) the date the Certificates are retired. The Issuer agrees
to obtain the advice of nationally-recognized bond counsel if such expenditure fails to comply with the
foregoing to assure that such expenditure will not adversely affect the tax-exempt status of the Certificates.
For purposes hereof, the Issuer shall not be obligated to comply with this covenant ifit obtains an opinion
that such failure to comply will not adversely affect the excludability for federal income tax purposes from
gross income of the interest.
Section 15. DISPOSITION OF PROJECT. The Issuer covenants that the property constituting the
Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash
or other compensation, unless the Issuer obtains an opinion of nationally-recognized bond counsel that such
sale or other disposition will not adversely affect the tax-exempt status of the Certificates. For purposes
20
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 purposes from gross
income of the interest.
Section 16. INTEREST EARNINGS ON CERTIFICATE PROCEEDS. Interest earnings derived
from the investment of proceeds from the sale ofthe Initial Certificate shall be used along with other proceeds
for the purposes for which the Certificates are issued; provided that after completion of such purposes, ifany
of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinking
Fund. It is further provided, however, that any interest earnings on certificate proceeds which are required
to be rebated to the United States of America pursuant to Section 13 hereof in orderto prevent the Certificates
from being "arbitrage bonds" within the meaning of the Code shall be so rebated and not considered as
interest earnings for the purposes of this Section.
Section 17. SALE OF INITIAL CERTIFICA TE. The Initial Certificate is hereby sold and shall be
delivered to RBC Capital Markets, for cash for the par value thereof and accrued interest thereon to date of
delivery plus a premium of$11 ,472.35 (accrued interest to be deposited into the Interest and Sinking Fund).
It is hereby officially found, determined, and declared that the Initial Certificate has been sold at public sale
to the bidder offering the lowest interest cost, after receiving sealed bids pursuant to a Notice of Sale and
Bidding Instructions and Preliminary Official Statement dated July 7, 2006, prepared and distributed in
connection with the sale of the Initial Certificate. Said Notice of Sale and Bidding Instructions and
Preliminary Official Statement, and any addenda, supplement, or amendment thereto have been and are
hereby approved by the governing body of the Issuer, and their use in the offer and sale of the Certificate is
hereby approved. It is further officially found, determined, and declared that the statements and
representations contained in said Notice of Sale and Bidding Instructions and Preliminary Official Statement
are trne and correct in all material respects, to the best knowledge and belief of the governing body of the
Issuer.
Section 18. OFFICIAL STATEMENT. An Official Statement dated as ofthe date ofthis meeting
has been prepared in connection with the sale of the Initial Certificate and the Certificates, in the form and
substance submitted at this meeting. Said Official Statement and any supplement or addenda thereto have
been and are hereby approved, and their use in the offer and sale of the Certificates is hereby approved.
It is further officially found, determined, and declared that the statements and representations contained
in said Official Statement are true and correct in all material respects, to the best knowledge and belief of
the Issuer. The distribution and use of the Preliminary Official Statement dated July 7, 2006, prior to the
date hereof is hereby ratified and approved.
Section 19. DTC REGISTRA TION. The Certificates initially shall be issued and delivered in such
manner that no physical distribution of the Certificates will be made to the publie, and The Depository Trust
Company ("DTC"), New York, New York, initially will aet as depository for the Certifieates. DTC has
represented that it is a limited purpose trust company incorporated underthe laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered under Seetion 17 A of the federal Securities
Exchange Act of 1934, as amended, and the Issuer accepts, but in no way verities, sueh representations. The
Initial Certificate authorized by this Ordinance shall be delivered to and registered in the name of the
Purchaser. However, it is a condition of delivery and sale thatthe Purchaser, immediately aftersueh delivery,
shall cause the Paying Agent/Registrar, as provided for in this Ordinanee, to cancel said Initial Certificate and
deliver in exchange therefor a substitute Certifieate for eaeh maturity of such Initial Certificate, with each
such substitute Certificate to be registered in the name of CEDE & CO., the nominee ofDTC, and it shall be
the duty of the Paying Agent/Registrar to take such action. It is expected that DTC will hold the Certificates
on behalf of the Purchaser and/or the DTC Participants, as defined and described in the Official Statement
referred to and approved in Section 18 hereof (the "DTC Participants"). So long as each Certificate is
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registered in the name of CEDE & CO., the Paying Agent/Registrar shall treat and deal with DTC in all
respects the same as if it were the actual and beneficial owner thereof. It is expected that DTC will maintain
a book entry system which will identify beneficial ownership of the Certificates by DTC Participants in
integral amounts of$5,000, with transfers of ownership being effected on the records of DTC and the DTC
Participants pursuant to rules and regulations established by them, and that the substitute Certificates initially
deposited with DTC shall be immobilized and not be further exchanged for substitute Certificates except as
hereinafter provided. The Issuer is not responsible or liable for any functions ofDTC, will not be responsible
for paying any fees or charges with respect to its services, will not be responsible or liable for maintaining,
supervising, or reviewing the records of DTC or the DTC Participants, or protecting any interests or rights
of the beneficial owners of the Certificates. It shall be the duty of the Purchaser and the DTC Participants
to make all arrangements with DTC to establish this book-entry system, the beneficial ownership of the
Certificates, and the method of paying the fees and charges of DTC. The I ssuer does not represent, nor does
it in any way covenant that the initial book-entry system established with DTC will be maintained in the
future. The Issuer reserves the right and option at any time in the future, in its sole discretion, to tenninate
the DTC (CEDE & CO.) book-entry only registration requirement described above, and to pennit the
Certificates to be registered in the name of any owner. If the Issuer exercises its right and option to terminate
such requirement, it shall give written notice of such tennination to the Paying Agent/Registrar and to DTC,
and thereafter the Paying Agent/Registrar shall, upon presentation and proper request, register any Certificate
in any name as provided for in this Ordinance. Notwithstanding the initial establishment of the foregoing
book-entry system with DTC, iffor any reason any of the originally delivered substitute Certificates is duly
filed with the Paying AgentlRegistrar with proper request for transfer and substitution, as provided for in this
Ordinance, substitute Certificates will be duly delivered as provided in this Ordinance, and there will be no
assurance or representation that any book-entry system will be maintained for such Certificates.
Section 20. CONTINUING DISCLOSURE. (a) Annual Reports. (i) The Issuer shall provide
annually to each NRMSIR and any SID, within six months after the end of each fiscal year ending in or after
2006, financial infonnation and operating data with respect to the Issuer of the general type included in the
final Official Statement authorized by Section 18 of this Ordinance, being the information described in
Exhibit A hereto, which Exhibit is attached to and incorporated in this Ordinance as if written word for word
herein. Any financial statements so to be provided shall be (I) prepared in accordance with the accounting
principles described in Exhibit A hereto, or such other accounting principles as the Issuer may be required
to employ from time to time pursuant to state law or regulation, and (2) audited, if the Issuer commissions
an audit of such statements and the audit is completed within the period during which they must be provided.
If the audit of such financial statements is not complete within such period, then the Issuer shall provide
unaudited financial statements by the required time and will provide audited financial statements for the
applicable fiscal yearto each NRMSIR and any SID, when and if the audit report on such statements become
available.
(ii) If the Issuer changes its fiscal year, it will notify each NRMSIR and any SID 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 infonnation and operating data pursuant to this Section. The financial
infonnation 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, ifit is available from the MSRB) that theretofore has been provided to each NRMSIR and
any SID or filed with the SEC.
(b) Material Event Notices. The Issuer shall notify any SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Certiticates, if such event is
material within the meaning of the federal securities laws:
I. Principal and interest payment delinquencies;
22
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the Certificates;
7. Modifications to rights of holders of the Certificates;
8. Certificate calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Certificates; and
I 1. Rating changes.
The Issuer shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure
by the Issuer to provide financial information or operating data in accordance with subsection (a) of this
Section by the time required by such subsection.
(c) Limitations. Disclaimers. and Amendments. (i) The Issuer shall be obligated to observe and
perform the covenants specified in this Section for so long as, but only for so long as, the Issuer remains an
"obligated person" with respect to the Certificates within the meaning of the Rule, except that the Issuer in
any event will give the notice required by Subsection (b) hereof of any Certificate calls and defeasance that
cause the Issuer to no longer be such an "obligated person".
(ii) The provisions of this Section are for the sole benefit of the registered owners and beneficial
owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit or any legal
or equitable right, remedy, or claim hereunder to any other person. The Issuer undertakes to provide only
the financial information, operating data, financial statements, and notices which it has expressly agreed to
provide pursuant to this Section and does not hereby undertake to provide any other information that may be
relevant or material to a complete presentation of the Issuer's financial results, condition, or prospects or
hereby undertake to update any information provided in accordance with this Section or otherwise, except
as expressly provided herein. The Issuer does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER, ITS OFFICERS, AGENTS AND
EMPLOYEES, BE LIABLE TO THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY
CERTIFICA TE 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 FAUL TON 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 the Ordinance for purposes of any other provision of this Ordinance.
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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(l) the provisions of this Section, as so
amended, would have permitted an underwriter to purchase or sell Certificates in the primary offering ofthe
Certificates in compliance with the Rule, taking into account any amendments or interpretations of the Rule
since such offering as well as such changed circumstances and (2) either (a) the registered owners of a
majority in aggregate principal amount (or any greater amount required by any other provision of this
Ordinance that authorizes such an amendment) of the outstanding Certificates consent to such amendment
or (b) a person that is unaffiliated with the Issuer (such as nationally recognized bond counsel) determined
that such amendment will not materially impair the interest of the registered owners and beneficial owners
of the Certificates. If the Issuer so amends the provisions of this Section, it shall include with any amended
financial information or operating data next provided in accordance with subsection (a) 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. 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 ifand to the
extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or
selling Certificates in the primary offering of the Certificates.
(d) Definitions. As used in this Section, the following terms have the meanings ascribed to such
terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEen means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department, officer, or
agency thereof as, and determined by the SEC or its staff to be, a state information depository within the
meaning of the Rule from time to time.
Section 21. PROTECTION OF PLEDGE. Chapter 1208, Government Code, applies to the issuance
ofthe Certificates and the pledge of the taxes and surplus revenues granted by the Issuer under Sections 8 and
9 of this Ordinance, and is therefore valid, effective, and perfected. If Texas law is amended at any time
while the Certificates are outstanding and unpaid such that the pledge of the taxes and surplus revenues
granted by the Issuer under Sections 8 and 9 of this Ordinance is to be subject to the filing requirements of
Chapter 9, Texas Business & Commerce Code, then in order to preserve to the registered owners of the
Certificates the perfection of the 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 to perfect the security interest in said
pledge to occur.
Section 22. FURTHER PROCEDURES. The Mayor of the Issuer, the City Secretary of the Issuer,
and all other officers, employees, and agents of the Issuer, and each of them, shall be and they are hereby
24
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 all such instruments, whether or not herein mentioned, as may be necessary or desirable
in order to carry out the terms and provisions of this Certificate Ordinance, the Certificates, the sale of the
Certificates, the Notice of Sale and Bidding Instructions and the Official Statement; and the Assistant City
ManagerlFiscal and Municipal Services of the City shall cause the expenses of issuance of the Certificates
to be paid from the proceeds of sale of the Initial Certificate or from other lawfully available funds of the
Issuer. In case any officer whose signature shall appear on any Certificate shall cease 10 be such officer
before the delivery of such Certificate, such signature shall nevertheless be valid and sufficient for all
purposes the same as if such officer had remained in office until such delivery.
Section 23. OPEN MEETINGS. The City Council has found and determined that the meeting at
which this Ordinance is considered is open to the public and that notice thereof was given in accordance with
the provisions of the Texas Open Meetings, Law, Tex. Gov'!. Code, Chapter 551, as amended.
Section 24. EFFECTIVE DATE. This Ordinance shall become effective immediately upon its
passage and approval.
25
""eo AND ",,"veo '""", ,""..,", '"'" '"~VY/fflJ
ATTEST:
n
'fer Wa ters, City Secretary
\
APPROVED AS TO LEGAL FORM:
26
EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMA nON
The following information is referred to in Section 20 of this Ordinance:
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the Issuer to be provided annually in
accordance with such Section are as specified (and included in the Appendix or under the tables of the
Official Statement referred to) below:
Tables numbered I through 6 and 8 through 15, inclusive, under the captions "Tax Information",
"Debt Information # " and "Financial Information" in the Official Statement.
Appendix B in the Official Statement.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described in the
notes to the financial statements referred to in the paragraph above,
A-I