12-B-21 - General Obligation Bonds Series 2012CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS §
COUNTIES OF GUADALUPE, BEXAR, §
AND COMAL §
CITY OF SCHERTZ §
THE UNDERSIGNED HEREBY CERTIFIES that:
1. On the 28th day of August, 2012, the City Council (the Council of the City of
Schertz, Texas (the Issuer} convened in regular session in the regular meeting place of the City at
the City Hall (the Meeting), the duly constituted members of the Council being as follows:
Vacant Mayor
George Antuna Mayor Pro-Tem
Jim Fowler Councilmember
David Scagliola Councilmember
Cedric Edwards, Sr. Councilmember
Michael Carpenter Councilmember
and all of such persons were present at the Meeting, except the following:
No~fE ,thus constituting a quorum. Among other business considered at the
Meeting, the attached Ordinance (the Ordinance) entitled:
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF SCHERTZ,
TEXAS AUTHORIZING THE ISSUANCE OF "CITY OF SCHERTZ, TEXAS
GENERAL OBLIGATION BONDS, SERIES 2012", LEVYING AN ANNUAL
AD VALOREM TAX, WITHIN THE LIMITATIONS PRESCRIBED BY LAW,
FOR THE PAYMENT OF THE BONDS; PRESCRIBING THE FORM, TERMS,
CONDITIONS, AND RESOLVING OTHER MATTERS INCIDENT AND
RELATED TO THE ISSUANCE, SALE, AND DELIVERY OF THE BONDS,
INCLUDING THE APPROVAL AND DISTRIBUTION OF AN OFFICIAL
STATEMENT PERTAINING THERETO; AUTHORIZING THE EXECUTION
OF A PAYING AGENTIREGISTRAR AGREEMENT; COMPLYING WITH
THE REQUIREMENTS IMPOSED BY THE LETTER OF
REPRESENTATIONS PREVIOUSLY EXECUTED WITH THE DEPOSITORY
TRUST COMPANY; AND PROVIDING FOR AN EFFECTIVE DATE
was introduced and submitted to the Council for passage and adoption. After presentation and
discussion of the Ordinance, a motion was made by Councilmember that
the Ordinance be finally passed and adopted in accordance with the City's ome Rule Chaz•ter.
The motion was seconded by Councilmember ~a[u7iardS ,,. , and caiYied by the
following vote:
52208543.1
voted "For" ~ voted "Against" ~ abstained
all as shown in the official Minutes of the Council for the Meeting.
2. The attached Ordinance is a true and correct copy of the original on file in the
official records of the City; the duly qualified and acting members of the Council on the date of
the Meeting are those persons spawn above, and, according to the records of my office, each
member of the Council was given actual notice of the time, place, and purpose of the Meeting
and had actual notice that the Ordinance would be considered; and the Meeting and deliberation
of the aforesaid public business, was open to the public and written notice of said meeting,
including the subject of the Ordinance, was posted and given in advance thereof in compliance
with the provisions of Chapter 551, as amended, Texas Government Code.
IN WITNESS WHEREOF, I have signed my name officially and affixed the seal of the
City, this 28t1i day of August, 2012.
{CITY SEAS Z
~a~»
Cit ecreta>y
_2_
52208SA3.1
FINAL
ORDINANCE NO. 12 B - 21
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS AUTHORIZING THE ISSUANCE OF "CITY OF
SCHERTZ, TEXAS GENERAL OBLIGATION BONDS, SERIES 2012",
LEVYING AN ANNUAL AD VALOREM TAX, WITHIN THE
LIMITATIONS PRESCRIBED BY LAW, FOR THE PAYMENT OF THE
BONDS; PRESCRIBING THE FORM, TERMS, CONDITIONS, AND
RESOLVING OTHER MATTERS INCIDENT AND RELATED TO THE
ISSUANCE, SALE, AND DELIVERY OF THE BONDS, INCLUDING THE
APPROVAL AND DISTRIBUTION OF AN OFFICIAL STATEMENT
PERTAINING THERETO; AUTHORIZING THE EXECUTION OF A
PAYING AGENT/REGISTRAR AGREEMENT; COMPLYING WITH
THE REQUIREMENTS IMPOSED BY THE LETTER OF
REPRESENTATIONS PREVIOUSLY EXECUTED WITH THE
DEPOSITORY TRUST COMPANY; AND PROVIDING FOR AN
EFFECTIVE DATE
WHEREAS, the City Council {the City Council} of the City of Schertz, Texas {the City)
hereby flnds and determines that general obligation bonds of the City in the total principal
amount of $7,b25,000 should be issued and sold at this time, being the second and final
installment of general obligation bonds approved and authorized to be issued at an election held
on November 2, 2010, the respective authorized purposes and amounts authorized to be issued
therefor, amounts previously issued, amounts being issued pursuant to this ordinance, and
amounts remaining to be issued fi•am such voted authorization subsequent to the date hereof
being as follows:
Bonds
Date Amount Previously Issued Amount
'Voted Purpose Authorized Issued Bands Herein Unissued
11/02110 Constructing a new enclosed $6,b25,000 $3,OD0,000 $3,625,DD0 $-D-
communit3~ swimming pool and
aquatic facility and improving
the existing Schertz Playscape
11/D2/l0 Constructing new athletic and $6,OOO,DDD $3,000,000 $3,0OO,ODO $-D-
recreational sports Felds and
related parking, restroom, and
concession facilities at the
existing Schertz Ballpark and
Masks Raad Soccer Complex
11/02/10 Constructing the existing $2,250,DD0 $2,250,000 $_D_ $_0_
Schertz Animal Services
Facility, constructing a new
animal adoption space, a new
animal vaccination facility, and
a dog park
5220$522.3
Bonas
Date Amount Previously Issued Amount
Voted Purnosc Authorized Issued fonds Herein Ilnissued
11/02!10 Constructinghnprovementsto $1,00O,OOD $-0- $1,000,000 $-0-
downtown in the area of FM 7S
and Main Street (with a priority
given to constructing features
welcoming persons to the City}
WHEREAS, the City Council intends to issue an aggregate principal amount of
$7,625,000 in general obligation bonds the proceeds of which will be utilized to provide for the
(i} purpose of making permanent public improvements and far public purposes described above
and (ii} payment of the costs of issuance of the general obligation bonds.
WHEREAS, the City Council hereby finds and determines that the issuance of the
general obligation bonds is in the hest interests of the residents of the City, now, therefore,
THAT:
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS
SECTION 1: Authorization - Desi nation - Princi al Amount - Pur ose. General
obligation bonds of the City shall be and are hereby authorized to be issued in the aggregate
principal amount of SEVEN MILLION SIX HUNDRED TWENTY FIVE THOUSAND AND
N0/100 DOLLARS ($7,625,000}, to be designated and bear the title of "CITY OF SCHERTZ,
TEXAS GENERAL OBLIGATION BONDS, SERIES 2012" (the Bonds}, for the purpose of
providing funds: (i} to make permanent public improvements or for other public purposes
disclosed in the preamble hereof and (ii) to pay the costs related to the issuance of the Bonds, all
in conformity with the laws of the State of Texas, particularly Chapters 1251 and 1331, as
amended, Texas Government Code, an election held in the City on November 2, 2010, an
ordinance adopted by the City Council on August 28, 2012, and the City's Home Rule Charter.
SECTION 2: Fully Registered Obligations - Authorized Denominations - Stated
Maturities -Interest Rates -Dated Date. The Bonds shall be issued as fully registered
obligations, without coupons, shall be dated August 1, 2012 (the Dated Date), shall be in
denominations of $5,000 or any integral multiple thereof, shall be lettered "R" and numbered
consecutively from One {1} upward, and principal shall become due and payable on February 1
in each of the years and in amounts (the Stated Maturities} and bear interest on the unpaid
principal amounts from the Dated Date, or from the most recent Interest Payment Date
{hereinafter defined) to which interest has been paid or duly provided for, to Stated Maturity, at
the per annum rates, while Outstanding, in accordance with the following schedule:
Years of Principal Interest
Stated Maturity Amounts $ Rates
2013 295,000 5.000
2014 285,000 5.000
2015 295,000 3.875
2016 310,000 3.875
52208522.3 -2-
Years of Principal Interest
Stated Maturity Amounts Rates
2017 320,000 4.350
2015 335,000 4.000
2019 345,000 2.000
2020 355,000 3.000
2021 365,000 3.000
2022 375,000 2.250
2023 3 85,000 2.250
2024 390,000 2.500
2025 400,000 2.700
2026 415,000 2.800
2028 865,000 3.000
2030 915,000 3.000
2032 975,000 3.100
The Bonds shall bear interest on the unpaid principal amounts from the Dated Date, or
fi-om the most recent Interest Payment Date to which interest has been paid or duly provided for,
to Stated Maturity or prior redemption, while Outstanding, at the rates per annum shown in the
above schedule (calculated an the basis of a 360-day year of twelve 30-day months}. Interest on
the Bands shall be payable on February 1 and August 1 in each year, commencing February 1,
2013 (the Interest Payment Date}, while the Bonds are Outstanding.
SECTION 3: Payment of Bonds - Paying A ent/Registrar. The principal of, premium,
if any, and the interest on the Bonds, due and payable by reason of Stated Maturity, redemption,
or otherwise, shall be payable in any coin or currency of the United States of America which at
the time of payment is legal tender for the payment of public and private debts, and such
payment of principal of, premium, if any, and interest on the Bonds shall be without exchange or
collection charges to the Holder (as hereinafter defined) of the Bonds.
The selection and appointment of BOKF, NA dba Bank of Texas, Austin, Texas, to serve
as the initial Paying AgentlRegistrar (the Paying Agent/Registrar) for the Bonds is hereby
approved and confirmed, and the City agrees and covenants to cause to be kept and maintained at
the corporate trust office of the Paying Agent/Regishar books and records {the Security Register}
for the registration, payment, and transfer of the Bonds, all as provided herein, in accordance
with the terms and provisions of a Paying AgendRegistrar Agreement, attached, in substantially
final form, as Exhibit A hereto, and such reasonable rules and regulations as the Paying
Agent/Registrar and the City may prescribe. The City covenants to maintain and provide a
Paying AgentlRegistrar at a91 times while the Bonds are Outstanding, and any successor Paying
AgenURegistrar shall be (i) a national or state banking institution or {ii} an association or a
52208522,3 -3-
corporation organized and doing business under the laws of the United States of America of of
any state, authorized under such laws to exercise trust powers. Such Paying AgentlRegistrar
shall be subject to supervision or examination by federal or state authority and authorized by law
to serve as a Paying AgentlRegistrar.
The City reserves the right to appoint a successor Paying AgentlRegistrar upon providing
the previous Paying AgentlRegistrar with a certified copy of a resolution or ordinance
terminating such agency. Additionally, the City agrees to promptly cause a written notice of this
substitution to be sent to each Holder of the Bonds by United States mail, first-class postage
prepaid, which notice shall also give the address of the new Paying Agent/Registrar.
Principal of and premium, if any, and interest on the Bonds, due and payable by reason of
Stated Maturity, redemption, or otherwise, shall be payable only to the registered owner of the
Bonds appearing on the Security Register (the Holdel• ox Holders) maintained on behalf of the
City by the Paying Agent/Registrar as hereinafter provided {i) on the Record Date (hereinafter
defined) for purposes of payment of interest on the Bonds, (ii) on the date of surrender of the
Bonds for purposes of receiving payment of principal thereof at the Bonds' Stated Maturity or
upon redemption of the Bonds, and (iii) on any date for any other purpose. The City and the
Paying Agent/Registrar, and any agent of either, shall treat the Holder as the owner of a Bond for
purposes of receiving payment and all other purposes whatsoever, and neither the City nor the
Paying AgentlRegistrar, or any agent of either, shall be affected by notice to the contrary.
Principal of and premium, if any, on the Bonds shall be payable only upon presentation
and surrender of the Bonds to the Paying Agent/Registrar at its corporate trust office. Interest on
the Bonds shall be paid to the Holder whose name appears in the Security Register at the close of
business on the fifteenth day of the month next preceding an Interest Payment Date for the Bonds
(the Record Date) and shall be paid (i) by check sent on or prior to the appropriate date of
payment by United States mail, first-class postage prepaid, by the Paying Agent/Registrar, to the
address of the Holder appearing in the Security Register or {ii) by such other method, acceptable
to the Paying Agent/Registrar, requested in writing by the Holder at the Holder's risk and
expense.
If the date for the payment of the principal of, premium, if any, or interest on the Bands
shall be a Saturday, a Sunday, a legal holiday, or a day on which banking institutions in the city
where the corporate trust office of the Paying Agent/Registrar is located are authorized bylaw or
executive order to close, then the date for such payment shall be the next succeeding day which
is not such a day. The payment on such date shall have the same force and effect as if made on
the original date any such payment on the Bonds was due.
In the event of anon-payment 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/Itegistrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (the 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
sa2ossaa.3 -4-
Holder of a Bond appearing on the Security Register at the close of business on the last business
day next preceding the date of mailing of such notice.
SECTION 4: Redemption,
A. Mandatory Redemption of Bonds. The Bonds stated to mature on February 1,
2028, February 1, 2030, and February 1, 2032 are collectively referred to herein as the "Term
Bonds". The Term Bonds are subject to mandatory sinking fund redemption prior to their stated
maturities from money required to be deposited in the Bond Fund far such purpose and shall be
redeemed in part, on a pro rata basis in accordance with the arrangements between the City and
the securities depository, at the principal amount thereof plus accrued interest to the date of
redemption in the following principal amounts on February 1 in each of the years as set forth
below:
Term Bonds
Stated to Mature
on February 1, 2028
Principal
Year Amount ($)
202 42s,ooo
2028 440,000*
Term Bonds
Stated to Mature
an Febiuar 1 2030
Principal
Year Amount ($)
2029 450,000
2030 465,000*
Term Bonds
Stated to Mature
on Febi•uaiy 1, 2032
Principal
Year Amount $
2031 480,000
2032 495,000*
*Payable at Stated Maturity
The principal amount of a Term Bond required to be redeemed pursuant to the operation
of such mandatory redemption provisions shall be reduced, at the option of the Ciry, by the
principal amount of any Term Bonds of such Stated Maturity which, at least 50 days prior to the
mandatory redemption date (1) shall have been defeased or acquired by the City and delivered to
the Paying AgentlRegistrar for cancellation, (2) shall have been purchased and canceled by the
Paying AgentlRegistrar at the request of the City with money in the Bond Fund, or (3) shall have
been redeemed pursuant to the optional redemption provisions set forth below and not
theretofore credited against a mandatory redemption requirement.
B. Optional Redemption. The Bonds having Stated Maturities on and after
February 1 2023 shall be subject to redemption prior to Stated Maturity at the option of the City,
on February 1, 2022, or on any date thereafter, as a whole or in part, in principal amounts of
52208522.3 -5-
$5,000 or any integral multiple thereof {and if within a Stated Maturity selected at random and
by lot by the Paying AgentlRegistrar), at the redemption price of par plus acczued interest to the
date of redemption.
C. Exercise of Redemption Option. At least forty-five (45} days prior to a date set
for the redemption of Bonds (unless a shorter notification period shall be satisfactory to the
Paying Agent/Registrar), the Clty shall notify the Paying AgentlRegistrar of its decision to
exercise the right to redeem Bonds, the principal amount of each Stated Maturity to be redeemed,
and the date set for the redemption thereof. The decision of the City to exercise the right to
redeem Bonds shat l be entered in the minutes of the governing body of the City.
D. Selection of Bonds for Redemption. If less than all Outstanding Bonds of the
same Stated Maturity are to be redeemed on a redemption date, the Paying AgentlRegistrar shall
select at random and by lot the Bonds to be redeemed, provided that if less than the entire
principal amount of a Bond is to 6e redeemed, the Paying AgentlRegistrar shall treat such Bond
then subject to redemption as representing the number of Bonds Outstanding which is obtained
by dividing the principal amount of such Bond by $5,000.
E. Notice of Redemption. Not less than thirty (30} days prior to a redemption date
for the Bonds, a notice of redemption shall be sent by United States mail, f rst-class postage
prepaid, in the name of the City and at the City's expense, by the Paying Agent/Registrar to each
Holder of a Bond to be redeemed, in whole or in part, at the address of the Holder appearing on
the Security Register at the close of business on the business day next preceding the date of
mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to
have been duly given irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Bonds,
{ii} identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, {iii) state the redemption price, {iv} state
that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due
and payable on the redemption date specified, and the interest thereon, or on the portion of the
principal amount thereof to be redeemed, shall cease to accrue from and after the redemption
date, and (v) specify that payment of the redemption price for the Bands, or the principal
amount thereof to be redeemed, shall be made at the corporate trust office of the Paying
Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject
by its terms to redemption and has been called far redemption and notice of redemption thereof
has been duly given or waived as herein provided, such Bond {or the principal amount thereof to
be redeemed} so called for redemption shall become due and payable, and if money sufficient for
the payment of such Bonds (or of the principal amount thereof to be redeemed} at the then
applicable redemption price is held for the purpose of such payment by the Paying
AgenilRegistrar, then an the redemption date designated in such notice, interest on said Bonds
{or the principal amount thereof to be redeemed) called for redemption shall cease to accrue, and
such Bonds shall not be deemed to be Outstanding in accordance with the provisions of this
Ordinance. This notice may also be published once in a financial publication, journal, or reporter
of general circulation among securities dealers in the City of New York, New York (including,
but not limited to, The Bond Buyer and The Wall Street Journal), or in the State of Texas
(including, but not limited to, The Texas Bond Reporter). Additionally, this notice may also be
szzosszz.3 -6-
sent by the City to any registered securities depository and to any national information service
that disseminates redemption notices.
F. TransferlExchange•.af Bonds. Neither the City nor the Paying Agent/Registrar
shall be required to transfer or exchange any Bond during a period beginning forty-five (45)
days prior to the date fixed for redemption of the Bonds or to transfer or exchange any Bond
selected for redemption; provided, however, such limitation of transfer shall not be applicable to
an exchange by the Holder of the unredeemed balance of a Bond which is subject to redemption
in part.
SECTION 5: Execution -Registration. The Bonds shall be executed on behalf of the
City by its Mayor or Mayor Pro-Tem under the seal of the City reproduced or impressed thereon
and attested by its City Secretary. The signature of any of said officers on the Bonds may be
manual or facsimile. Bonds bearing the manual ar facsimile signatures of individuals who were,
at the time of the Dated Date, the proper officers of the City shall bind the City, notwithstanding
that such individuals or either of them shall cease to hold such offices prior to the delivery of the
Bonds to the Purchasers (hereinafter defined}, all as authorized and provided in Chapter 1201, as
amended, Texas Government Cade.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 8C, executed by the Comptroller of Public
Accounts of the State of Texas or his duly authorized agent by manual signature, or a certificate
of registration substantially in the form provided in Section SD, executed by the Paying
Agent/Registrar by manual signature, and either such certificate upon any Bond shall be
conclusive evidence, and the only evidence, that such Bond has been duly certified or registered
and delivered.
SECTION 6: Re istration -Transfer - Exchan e of Bonds -Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of every owner of the Bonds, or, if appropriate, the nominee thereof. Any Bond may, in
accordance with its terms and the terms hereof, be transferred or exchanged for Bonds of other
authorized denominations upon the Security Register by the Holder, in person or by his duly
authorized agent, upon suiY~ender of such Bond to the Paying AgentlRegistrar for cancellation,
accompanied by a written instrument of transfer or request for exchange duly executed by the
Holder or by his duly authorized agent, inform satisfactory to the Paying Agent/Registrar.
Upon surrender for transfer of any Bond at the corporate trust office of the Paying
Agent/Registrar, the City shall execute and the Paying Agent/Regish~ar shall register and deliver,
in the name of the designated transferee or transferees, one or more new Bonds of authorized
denomination and having the same Stated Maturity and of a like interest rate and aggregate
principal amount as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds may be exchanged for other Bonds of authorized
denominations and having the same Stated Maturity, bearing the same rate of interest and of like
aggregate principal amount as the Bonds surrendered far exchange upon surrender of the Bonds
to be exchanged at the corporate trust office of the Paying AgentlRegistrar. Whenever any
52208522,3 -7-
Bonds are so surrendered for exchange, the City shall execute, and the Paying Agent/Registrar
shall register and deliver, the Bonds to the Holder requesting the exchange.
All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the
corporate trust office of the Paying AgenllRegistrar, or be sent by registered mail to the Holder at
his request, risk, and expense, and upon the delivery thereof, the same shall be the valid and
binding obligations of the City, evidencing the same obligation to pay, and entitled to the same
benefits under this Ordinance, as the Bonds surrendered upon such transfer or exchange.
All transfers or exchanges of Bands pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that the
Paying AgentlRegistrar shall require payment by the Holder requesting such transfer or exchange
of any fee, tax or ater governmental charges required to be paid with respect to such transfer or
exchange.
Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereof are
hereby defined to be Predecessor Bonds, evidencing all or a portion, as the case may be, of the
same debt evidenced by the new Bond or Bonds registered and delivered in the exchange or
transfer therefor, Additionally, the term Predecessor Bonds shall include any Bond registered
and delivered pursuant to Section 17 in lieu of a mutilated, lost, destroyed, or stolen Bond which
shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond.
SECTION 7: Initial Bonds. The Bonds herein authorized shall be initially issued as a
single fully registered Bond in the aggregate principal amount of $7,625,000 with principal
installments to become due and payable as provided in Section 2 hereof and numbered T-1, (the
Initial Bonds), and the Initial Bonds shall be registered in the name of the Purchasers or the
designee thereof. The Initial Bonds shall be the Bonds submitted to the Office of the Attorney
General of the State of Texas for approval, certified and registered by the Office of the
Comptroller of Public Accounts of the State of Texas and delivered to the Purchasers. Any time
after the delivery of the Initial Bonds to the Purchasers, the Paying Agent/Registrar, pursuant to
written instructions from the Purchasers, or the designee thereof, shall cancel the Initial Bonds
delivered hereunder and exchange therefor definitive Bonds of like kind and of authorized
denominations, Stated Maturities, principal amounts bearing applicable interest rates, on the
unpaid principal amounts from the Dated Date, or from the most recent Interest Payment Date
(hereinafter defined} to which interest has been paid or duly provided for, to Stated Maturity, and
shall be lettered "R" and numbered consecutively from one (1) upward for transfer and delivery
to the Holders named at the addresses identified therefor; all pursuant to and in accordance with
such written instructions fi•om the Purchasers, or the designee thereof, and such other
information and documentation as the Paying AgentlRegistrar may reasonably require.
SECTION 8: Forms.
A. Forms Generally. The Bonds, the Registration Certificate of the Camptroller of
Public Accounts of the State of Texas, the Registration Certificate of Paying AgentlRegistrar,
and the form of Assignment to be printed on each of the Bands shall be substantially in the forms
set forth in this Section with such appropriate insertions, omissions, substitutions, and other
variations as are permitted or required by this Ordinance and may have such letters, numbers, or
52208522.3 -g-
other marks of identification (including insurance legends in the event the Bonds, or any Stated
Maturities thereof, are insured and identifying numbers and letters of the Committee an Uniform
Securities Identification Procedures of the American Bankers Association) and such legends and
endorsements (including any reproduction of an opinion of counsel) thereon as may, consistent
herewith, be established by the City or determined by the officers executing the Bonds as
evidenced by their execution thereof. Any portion of the text of any Bond may be set forth on
the reverse thereof, with an appropriate reference thereto an the face of the Bond.
The definitive Bonds shall be printed, lithographed, ar engraved, produced by any
combination of these methods, or produced in any other similar manner, all as determined by the
officers executing the Bonds as evidenced by their execution thereof, but the Initial Bond(s)
submitted to the Attorney General of Texas may be typewritten or photocopied or otherwise
reproduced.
The remainder of this page intentionally left blank]
52208522.3 -9-
B. Form of Definitive Bond.
REGISTERED
NO.
REGISTERED
PRINCIPAL AMOUNT
United States of America
State of Texas
Dated Date:
Counties of Guadalupe, Bexar, and Comal
CITY OF SCHERTZ, TEXAS
GENERAL OBLIGATION BOND,
SERIES 2012
Interest Rate: Stated Maturity;
CUSIP NO:
August 1, 2012
REGISTERED OWNER
PRINCIPAL AMOUNT:
The City of Schertz, Texas (the City}, a body corporate and a municipal corporation in
the Counties of Guadalupe, Bexar, and Comal, State of Texas, for value received, acknowledges
itself indebted to and hereby promises to pay to the order of the Registered Owner specified
above, or the registered assigns thereof, on the Stated Maturity date specified above, the
Principal Amount specified above (or so much thereof as shall not have been paid upon prior
redemption} and to pay interest on the unpaid Principal Amount hereof from the Dated Date or
fiom the most recent interest payment date to which interest has been paid or duly provided far
until such Principal Amount has become due and payment thereof has been made or duly
provided for, to the earlier of redemption or Stated Maturity, while Outstanding, at the per
annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day
months; such interest being payable on February 1 and August 1 of each year commencing
February 1, 2013.
Principal and premium, if any, on this Bond shall be payable to the Registered Owner
hereof {the Holder), upon presentation and surrender, at the corporate ti~ast office of the Paying
Agent/Regishar executing the registration certificate appearing hereon or a successor thereof
Interest shall be payable to the Holder of this Band (or one or more Predecessor Bands, as
defined in the Ordinance hereinafter referenced} whose name appears on the Security Register
maintained by the Paying Agent/Registrar at the close of business on the Record Date, which is
the fifteenth day of the month next preceding each interest payment date. All payments of
principal of, and interest on this Bond shall be in any coin or currency of the United States of
America which at the time of payment is legal tender for the payment of public and private debts.
Interest shall be paid by the Paying Agent/Registrar by check sent on or prior to the appropriate
date of payment by United States mail, first-class postage prepaid, to the Holder hereof at the
address appearing in the Security Register or by such other method, acceptable to the Paying
Agent/Regish'ar, requested by the Holder hereof at the Holder's risk and expense.
5220&522,3 -10-
This Bond is one of the series specified in its title issued in the aggregate principal
amount of $7,625,000 {the Bonds} pursuant to an ordinance adopted by the governing body of
the City {the 4rdirrance), for the purpose of providing funds: (i) to make permanent public
improvements or for other public purposes disclosed in the preamble of the Ordinance and (ii) to
pay the costs related to the issuance of the Bonds, all in conformity with the laws of the State of
Texas, particularly Chapters 1251 and 1331, as amended, Texas Government Code, an election
held in the City on November 2, 2010, the Ordinance, and the City's Home Rule Charter.
As specified in the Ordinance, the Bonds stated to mature on February 1, 2028,
February 1, 2030 and February 1, 2032 are collectively referred to herein as the "Team Bonds".
The Term Bonds are subject to mandatory sinking fund redemption prior to their stated
maturities from money required to be deposited in the Bond Fund for such pwpose and shall be
redeemed in part, on a pro rata basis in accordance with the arrangements between the City and
the securities depository, at the principal amount thereof plus accrued interest to the date of
redemption in the following principal amounts on February 1 in each of the years as set forth
below;
Term Bonds
Stated to Mature
on Februarv 1.2028
Term Bands
Stated to Mature
on February 1, 2030
Principal
Year Amount ($}
2027 425,000
2028 440,000*
Term Bonds
Stated to Mature
on Februar 1 2032
Principal
Year Amount
2031 480,000
2032 495,000*
*Payable at Stated Maturity
Principal
Year Amount ($}
2029 450,000
2030 465,000*
The principal amount of a Term Bond required to be redeemed pursuant to the operation
of such mandatory redemption provisions shall be reduced, at the option of the City, by the
principal amount of any Term Bonds of such Stated Maturity which, at least 50 days prior to the
mandatary redemption date (1}shall have been defeased or acquired by the City and delivered to
the Paying AgentlRegistrar for cancellation, {2) shall have been purchased and canceled by the
Paying Agent/Registrar at the request of the City with money in the Bond Fund, or (3) shall have
been redeemed pursuant to the optional redemption provisions set forth below and not
theretofore credited against a mandatory redemption requirement.
52208522, 3 -11-
As specified in the Ordinance, the Bonds having Stated Maturities on and after
February 1, 2023 shall be subject to redemption prior to Stated Maturity, at the option of the
City, on February 1, 2022 or on any date thereaftex, in whale or in part in principal amounts of
$5,000 or any integral multiple thereof (and if within a Stated Maturity selected at random and
by lot by the Paying Agent/Registrar) at the redemption price of par, together with accrued
interest to the date of redemption, and upon thirty (30) days prior written notice being given by
United States mail, first-class postage prepaid, to Holders of the Bands to be redeemed, and
subject to the terms and provisions relating thereto contained in the Ordinance. If this Bond is
subject to redemption prior to Stated Maturity and is in a denomination in excess of $5,000,
portions of the principal sum hereof in installments of $5,000 or any integral multiple thereof
may be redeemed, and, if less than all of the principal sum hereof is to be redeemed, there shall
be issued, without charge therefor, to the Holder hereof, upon the surrender of this Band to the
Paying Agent/Registrar at its corporate h~ust office, a new Bond or Bonds of like Stated Maturity
and interest rate in any authorized denominations provided in the Ordinance for the then
unredeemed balance of the principal sum hereof.
If this Bond (or any portion of the principal sum hereof) shall have been duly called for
redemption and notice of such redemption has been duly given, then upon such redemption date
this Band (or the portion of the principal sum hereof to be redeemed) shall become due and
payable, and, if money for the payment of the redemption price and the interest accrued on the
principal amount to be redeemed to the date of redemption is held for the purpose of such
payment by the Paying AgentlRegistrar, interest shall cease to accrue and be payable hereon
from and after the redemption date on the principal amount hereof to be redeemed. If this Bond
is called for redemption, in whole or in part, the City or the Paying Agent/Registrar shall not be
required to issue, transfer, or exchange this Bond within forty-five (45) days of the date fixed for
redemption; provided, however, such limitation of transfer shall not be applicable to an exchange
by the Holder of the unredeemed balance hereof in the event of its redemption in part.
The Bonds of this series are payable from the proceeds of an annual ad valorem tax
levied upon all taxable property within the City within the limitations prescribed by law.
Reference is hereby made to the Ordinance, a copy of which is on file in the corporate
trust office of the Paying AgentlRegistrar, and to all of the provisions of which the Holder by his
acceptance hereof hereby assents, for definitions of terms; the description of and the nature and
extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the
transfer or exchange of the Bonds; the conditions upon which the Ordinance may be amended or
supplemented with or without the consent of the Holders; the rights, duties, and obligations of
the City and the Paying AgenllRegistrar; the terms and provisions upon which this Bond may be
redeemed or discharged at or prior to the Stated Maturity thereof, and deemed to be no longer
Outstanding thereunder; and for the other terms and provisions specified in the Ordinance.
Capitalized terms used herein have the same meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance, may be transferred
on the Security Register upon presentation and sur7ender at the corporate trust office of the
Paying Agent/Regish'ar, duly endorsed by, or accompanied by a written inshument of transfer in
form satisfactory to the Paying AgentlRegish•ar duly executed by the Holder hereof, or his duly
authorized agent, and thereupon one or more new fully registered Bands of the same Stated
52208522.3 - I2-
Maturity of authorized denominations, bearing the same rate of interest, and of the same
aggregate principal amount will be issued to the designated transferee ar transferees,
The City and the Paying AgentlRegistrar, and any agent of either, shall treat the Holder
hereof whose name appears on the Security Register (i) on the Record Date as the owner hereof
for purposes of receiving payment of interest hereon, {ii) on the date of surrender of this Bond as
the owner hereof for purposes of receiving payment of principal hereof at its Stated Maturity or
its redemption, in whole or in part, and (iii} on any other date as the owner hereof for all other
pwposes, and neither the City nor the Paying Agent/Registrar, or any such agent of either, shall
be affected by notice to the contrary. In the event of anon-payment of interest on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a
Specral 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 City. Notice of the Special Record
Date and of the scheduled payment date of the past due interest (the Special Payment Date -
which shall be fifteen (l5) days after the Special Record Date) shall be sent at least five (S)
business days prior to the Special Record Date by United States mail, first-class postage prepaid,
to the address of each Holder appearing on the Security Register at the close of business on the
last business day next preceding the date of mailing of such notice.
It is hereby certified, covenanted, and represented that all acts, conditions, and things
required to be performed, exist, and be done precedent to the issuance of this Bond in order to
render the same a legal, valid, and binding obligation of the City have been performed, exist, and
have been done, in regular and due time, form, and manner, as required by law, and that issuance
of the Bonds does not exceed any constitutional or statutory limitation; and that due provision
has been made for the payment of the principal of, premium if any, and interest on the Bonds by
the levy of a tax as aforestated. In case any provision in this Band or any application thereof
shall be deemed invalid, illegal, or unenforceable, the validity, legality, and enforceability of the
remaining provisions and applications shall not in any way be affected or impaired thereby. The
terms and provisions of this Bond and the Ordinance shall be construed in accordance with and
shall be governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the City has caused this Bond to be duly executed under its
official seal.
CITY OF SCHERTZ, TEXAS
ATTEST:
Mayor Pro-Tem
City Secretary
{CITY SEAL)
52208522.3 -13-
C. *Farm of Registration Certificate of,Comptroller of Public Accounts to Appear on
Initial Bonds Only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER OF §
PUBLIC ACCOUNTS §
§ REGISTER NO.
THE STATE OF TEXAS §
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
* Note to Printer: Not to appear on printed Bonds
D. Form of Certificate of Pa in A entlRe istrar to A ear an Definitive Bonds
Only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued under the provisions of the within-mentioned Ordinance;
the Bond or Bonds of the above-entitled and designated series originally delivered having been
approved by the Attorney General of the State of Texas and registered by the Comptroller of
Public Accounts, as shown by the records of the Paying AgentlRegistrar.
Registered this date:
BOKF, NA dba BANK OF TEXAS, Austin,
Texas, as Paying Agent/Registrar
By:
Authorized Signature
s22osszz.s -14-
E. Form of Assignment,
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee):
(Social Security or other identifying number):
the within Bond and all rights thereunder, and hereby i~xevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration
thereof, with full power of substitution in the premises.
DATED:
NOTICE: The signature on this assignment must
correspond with the name of the registered owner as it
appears on the face of the within Bond in every particular,
Signature guaranteed:
F. The Initial Bonds shall be in the respective forms set forth in.paragraph B of this
Section, extent that the farm of a single fully registered Initial Bond shall be modified as
follows•
{i) immediately under the name of the Bond(s) the headings "Interest Rate"
and "Stated Maturity" shall both be completed "as shown below";
(ii) the first two paragraphs shall read as follows:
Registered Owner:
Principal Amount:
The City of Schertz, Texas (the Ciry), a body corporate and municipal corporation in the
Counties of Guadalupe, Bexar, and Comal, State of Texas, for value received, acknowledges
itself indebted to and hereby promises to pay to the order of the Registered Owner named above,
or the registered assigns thereof, the Principal Amount specified above on the first day of
February in each of the years and in principal amounts and bearing interest at per annum rates in
accordance with the following schedule:
5220$522,3 -15-
Years of Principal Interest
Stated Maturity Amounts ($) Rates
(Information to be inserted from
schedule in Section 2 hereof).
(or so much thereof as shall not have been paid upon prior redemption} and to pay interest on the
unpaid Principal Amount hereof fiom the Dated Date or from the most recent interest payment
date to which interest has been paid or duly provided for until the Principal Amount has become
due and payment thereof has been made or duly provided for, at the per annum rates of interest
specified above computed on the basis of a 360-day year of twelve 30-day months; such interest
being payable on February 1 and August 1 of each year, commencing February 1, 2013.
Principal of this Bond shall be payable to the Registered Owner hereof (the Holder),
upon its presentation and surrender, at the corporate trust office of BOKF, NA dba Bank of
Texas, Austin, Texas (the Paying Agent/Registrar). Interest shall be payable to the Holder of
this Bond whose name appears on the Security Register maintained by the Paying
Agent/Registrar at the close of business on the Record Date, which is the fifteenth day of the
month next preceding each interest payment date. All payments of principal of and interest on
this Bond shall be in any coin or currency of the United States of America which at the time of
payment is legal tender for the payment of public and private debts, Interest shall be paid by the
Paying Agent/Registrar by check sent on or prior to the appropriate date of payment by United
States mail, first-class postage prepaid, to the Holder hereof at the address appearing in the
Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested
by, and at the risk and expense of, the Holder hereo#:
G. Insurance Le end, If bond insurance is obtained by the City or the Purchasers for
the Bonds, the Definitive Bonds and the Initial Bonds shall bear an appropriate legend as
provided by the insurer.
SECTION 9; Definitions. For all purposes of this Ordinance (as defined below}, except
as otherwise expressly provided or unless the context otherwise requires: (i) the terms defined in
this Section have the meanings assigned to them in this Section, and certain terms used in
Sections 19 and 36 of this Ordinance have the meanings assigned to them in such Sections, and
all such terms include the plural as well as the singular; (ii) all references in this Ordinance to
designated "Sections" and other subdivisions are to the designated Sections and ather
subdivisians of this Ordinance as originally adopted; and (iii} the words "herein", "hereof', and
"hereunder" and other words of similar import refer to this Ordinance as a whole and not to any
parkicular Section or other subdivision.
A. The term Authorized Officials shall mean the Mayor, Mayor Pro-Tem, City
Manager, Director of Finance, andlox the City Secretary.
B. The term Bond Fund shall mean the special Fund created and established by the
provisions of Section 10 of this Ordinance.
C. The term Bonds shall mean the $7,625,000 "CITY OF SCHERTZ, TEXAS
GENERAL OBLIGATION BONDS, SERIES 2012" authorized by this Ordinance.
s22oss22,3 -16-
D. The term City shall mean City of Schertz, located in the Counties of Guadalupe,
Bexar, and Comal, Texas and, where appropriate, the City Council of the City,
E. The term Closing Date shall mean the date of physical delivery of the Initial
Bonds in exchange for the payment in fiill by the Purchasers.
F. The term Debt Service Requirements shall mean, as of any particular date of
computation, with respect to any obligations and with respect to any period, the aggregate of the
amaunts to be paid or set aside by the City as of such date or in such period for the payment of
the principal of, premium, if any, and interest {to the extent not capitalized) on such obligations;
assuming, in the case of obligations without a fixed numerical rate, that such obligations bear
interest at the maximum rate permitted by the terms thereof and further assuming in the case of
obligations required to be redeemed or prepaid as to principal prior to Stated Maturity, the
principal amaunts thereof will be redeemed prior to Stated Maturity in accordance with the
mandatory redemption provisions applicable thereto.
G. The term Depository shall mean an official depository bank of the City.
H• The term Government Securities, as used herein, shall mean (i) direct noncallable
obligations of the United States, including obligations that are unconditionally guaranteed by, the
United States of America; (ii} noncallable obligations of an agency or instrumentality of the
United States, including obligations that are unconditionally guaranteed or insured by the agency
or instrumentality and that, on the date the governing body of the issuer adopts or approves the
proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a
nationally recognized investment rating firm not less than AAA or its equivalent;
{iii) noncallable obligations of a state or an agency or a county, municipality, or other political
subdivision of a state that have been refunded and that, on the date the governing body of the
issuer adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated
as to investment quality by a nationally recognized investment rating firm not less than AAA or
its equivalent; or {iv) any additional securities and abligations hereafter authorized by the Iaws of
the State of Texas as eligible for use to accomplish the discharge of obligations such as the
Bonds.
I. The term Holder or Holders shall mean the registered owner, whose name
appears in the Security Register, for any Bond.
J. The term Interest Payment Date shall mean the date interest is payable on the
Bonds, being February 1 and August 1 of each year, commencing February 1, 2013, while any of
the Bonds remain Outstanding.
K. The term Ordinance shall mean this ordinance adopted by the City Council of the
City on August 28, 2012.
L. The term Outstanding when used in this Ordinance with respect to Bonds shall
mean, as of the date of determination, all Bonds issued and delivered under this Ordinance,
except:
52208522.3 -17-
(1} those Bonds canceled by the Paying AgentlRegistrar or delivered to the
Paying AgentlRegistrar for cancellation;
{2) those Bonds for which payment has been duly provided by the City in
accordance with the provisions of Section 21 of this Ordinance; and
(3) those Bonds that have been mutilated, destroyed, lost, or stolen and
replacement Bonds have been registered and delivered in lieu thereof as provided in
Section 17 of this Ordinance.
M. The term Purchasers shall mean the initial purchasers of the Bonds named in
Section 1 S of this Ordinance.
N. The term Stated Maturity shall mean the annual principal payments of the Bonds
payable on February 1 of each year, as set forth in Section 2 of this Ordinance.
SECTION 10: Bond Fund -Investments. For the purpose of paying the interest on and
to provide a sinking fund for the payment, redemption and retirement of the Bonds, there shall be
and is hereby created a special fund to be designated "GENERAL OBLIGATION BONDS,
SERIES 2012 INTEREST AND SINKING FUND" (the Bond Fund, which Fund shall be kept
and maintained at the Depository, and money deposited in such Fund shall be used for no other
purpose and shall be maintained as provided in Section 19. Authorized Officials of the City are
hereby authorized and directed to make withdrawals from the Bond Fund sufficient to pay the
purchase price or the amount of principal of, premium, if any, and interest on the Bands as the
same become due and payable and shall cause to be transferred to the Paying AgentlRegistrar
fiom money on deposit in the Band Fund an amount sufficient to pay the amount of principal
and/or interest stated to mature an the Bonds, such transfer of funds to the Paying
AgentlRegistrar to be made in such manner as will cause immediately available funds to be
deposited with the Paying Agent/Registrar on or before the business day next preceding each
interest and principal payment date for the Bonds.
Pending the transfer of funds to the Paying Agent/Registrar, money in any fund created
and established by this Ordinance, at the option of the City, may be placed in time deposits,
certificates of deposit, guaranteed investment contracts, or similar contractual agreements, as
permitted by the provisions of the Public Funds Investment Act, as amended, Chapter 2256,
Texas Government Code, secured (to the extent not insured by the Federal Deposit Insurance
Corporation} by obligations of the type hereinafter described, or be invested, as authorized by
any law, including investments held in book-entry form, in securities including, but not limited
to, direct obligations of the United States of America, obligations guaranteed or insured by the
United States of America, which, in the opinion of the Attorney General of the United States, are
backed by its full faith and credit or represent its general obligations, or invested in indirect
obligations of the United States of America, including, but not limited to, evidences of
indebtedness issued, insured or guaranteed by such governmental agencies as the Federal Land
Banks, Federal Intermediate Credit Banks, Banks for Cooperatives, Federal Home Loan Banks,
Government National Mortgage Association, Farmers Home Administration, Federal Home
Loan Mortgage Association, Small Business Administration, or Federal Housing Association;
provided that all such deposits and investments shall be made in such a manner that the money
52208522, 3 -1$-
required to be expended from such fund will be available at the proper time or times. All interest
and income derived from deposits and investments in such Fund shall be credited to, and any
losses debited to, such fund. All such investments shall be sold promptly when necessary to
prevent any default in connection with the Bonds.
SECTION 11: Tax Levy. To provide for the payment of the Debt Service Requirements
on the Bonds being {i) the interest on the Bonds and (ii) a sinking fund fox their redemption at
Stated Maturity or a sinking fund of 2% (whichever amount shall be the greater), there shall be
and there is hereby levied for the cu~-~•ent year and each succeeding year thereafter while the
Bonds or any interest thereon shall remain Outstanding, a sufficient tax, within the limitations
prescribed by law, on each one hundred dollars' valuation of taxable property in the City,
adequate to pay such Debt Service Requirements, full allowance being made for delinquencies
and costs of collection; said tax shall be assessed and collected each year and applied to the
payment of the Debt Service Requirements, and the same shall not be diverted to any other
purpose. The taxes so levied and collected shall be paid into the Bond Fund and are thereafter
pledged to the payment of the Bonds. The City Council hereby declares its purpose and intent to
provide and levy a tax legally and fully sufficient to pay such Debt Service Requirements, it
having been determined that the existing and available taxing authority of the City for such
purpose is adequate to permit a legally sufficient tax in consideration of all other outstanding
indebtedness and other obligations of the Ciry.
SECTION 12: Deposits to Bond Fund -Surplus Bond Proceeds. The City hereby
covenants and agrees to cause to be deposited in the Bond Fund prior to a principal and interest
payment date for the Bonds, from the annual levy of an ad valorem tax or from other lawfully
available funds, amounts sufficient to fully pay and discharge promptly each installment of
interest and principal of the Bonds as the same accrues or matures or comes due by reason of
Stated Maturity.
Accrued interest received from the Purchasers shall be deposited to the Bond Fund. In
addition, any surplus proceeds from the sale of the Bonds, including investment income thereon,
not expended for authorized purposes shall be deposited in the Bond Fund, and such amounts so
deposited shall reduce the sums otherwise required to be depasited in said Fund from ad valorem
taxes.
SECTION 13: Securitx of Funds. All money on deposit in the Funds for which this
Ordinance makes provision (except any poztion thereof as may be at any time properly invested
as provided herein) shall be secured in the manner and to the fullest extent required by the laws
of the State of Texas for the security of public funds, and money on deposit in such Funds shall
be used only far the purposes permitted by this Ordinance.
SECTION 14: Remedies in Event of Default. In addition to all the rights and remedies
provided by the laws of the State of Texas, the City covenants and agrees particularly that in the
event the City {a} defaults in the payments to be made to the Bond Fund or (b) defaults in the
observance or performance of any other of the covenants, conditions, or obligations set forth in
this Ordinance, the Holders of any of the Bonds shall be entitled to seek a writ of mandamus
issued by a court of proper jurisdiction compelling and requiring the governing body of the City
szzosszz.3 -19-
and other officers of the City to observe and perform any covenant, condition, or obligation
prescribed in this Ordinance.
No delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver of any such default or
acquiescence therein, and every such right and power may be exercised from time to time and as
often as may be deemed expedient. The specific remedies herein provided shall be cumulative of
all other existing remedies and the specification of such remedies shall not be deemed to be
exclusive.
SECTION 15: Notices to Holders --- Waiver. Wherever this Ordinance provides for
notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States mail, first-class postage prepaid, to
the address of each Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Holders. Where this Ordinance provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, eithe~• before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying AgentlRegish•ar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 16: Cancellation. AlI Bonds surrendered for payment, redemption, transfer,
exchange, or replacement, if surrendered to the Paying AgentlRegishar, shall be promptly
canceled by it and, if surrendered to the City, shall be delivered to the Paying AgentlRegistrar
and, if not already canceled, shall be promptly canceled by the Paying AgentlRegistrar. The City
may at any time deliver to the Paying AgentlRegistrar for cancellation any Bonds previously
certified or registered and delivered which the City may have acquired in any manner
whatsoever, and all Bonds so delivered shall be promptly canceled by the Paying
AgentlRegistrar, All canceled Bonds held by the Paying AgentlRegistrar shall be destroyed as
directed by the City.
SECTION 17: Mutilated Desho ed Lost and Stolen Bonds. If {1}any mutilated Bond
is surrendered to the Paying AgentlRegistrar, or the City and the Paying Agent/Registrar receive
evidence to their satisfaction of the destruction, loss, or theft of any Bond, and (2) there is
delivered to the City and the Paying AgentlRegistrar such security or indemnity as may be
required to save each of them harmless, then, in the absence of notice to the City or the Paying
Agent/Registrar that such Bond has been acquired by a bona fide purchaser, the City shall
execute and, upon its request, the Paying Agent/Registrar shall register and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost, or stolen Bond, a new Bond of the same
Stated Maturity and interest rate and of like tenor and principal amount, bearing a number not
contemporaneously outstanding,
52208522.3 -2~-
In case any such mutilated, destroyed, lost, or stolen Bond has become or is about to
become due and payable, the City in its discretion may, instead of issuing a new Bond, pay such
Bond.
Upon the issuance of any new Bond or payment in lieu thereof, under this Section, the
City may require payment by the Holder of a sum sufficient to cover any tax or other
governmental charge imposed in relation thereto and any other expenses (including attorney's
fees and the fees and expenses of the Paying Agent/Registrar) connected therewith.
Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost,
ox stolen Bond shall constitute a replacement of the prior obligation of the City, whether or not
the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Ordinance equally and ratably with all other
Outstanding Bonds.
The provisions of this Section are exclusive and shall preclude (to the extent lawful} all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost, or stolen Bonds.
SECTION 1 S: Sale of Bonds at Competitive Sale -Official Statement Approval -Use of
Proceeds. The Bonds authorized by this Ordinance are hereby sold by the City to Hutchinson,
Shockey, Exley & Company, Houston, Texas (the Purchasers, having all the rights, benefits, and
obligations of a Holder}, at the price of par, plus a net original issue reoffering premium of
$175,473.10, and accrued interest in the amount of $28,135.19 to the date of initial delivery of
the Bonds to the Purchasers, and is hereby approved and confirmed. The Purchasers'
compensation is derived from the Purchasers' reoffering of the Bonds at a yield determined by
the City's financial advisor to result in total compensation of $96,230.70. The pricing and terms
of the sale of the Bonds are hereby found and determined to be the most advantageous
reasonably obtainable by the City. The Initial Bonds shall be registered in the name of
Hutchinton, Shockey, Exley & Company. It is hereby officially found, determined, and declared
that the Purchasers are the highest bidder for the Bonds as a result of invitations for competitive
bids in compliance with applicable law.
Furthermore, the City hereby ratifies, confirms, and approves in all respects (i) the City's
prior determination that the Preliminary Official Statement was, as of its date, "deemed final" in
accordance with the Rule {hereinafter defined}, and (ii) the use and distribution of the Official
Notice of Sale, Official Bid Form, and Preliminary Official Statement by the Purchasers in
connection with the public offering and sale of the Bonds. The final Official Statement, being a
modification and amendment of the Preliminary Official Statement to reflect the terms of sale
(together with such changes approved by the Mayor or Mayor Pro-Tem and City Secretary and
the City Manager, any one or mare of said officials), shall be and is hereby in all respects
approved and the Purchasers are hereby authorized to use and distribute the final Official
Statement, dated August 28, 2012, in the reoffering, sale and delivery of the Bonds to the public.
The Mayor ox Mayor Pro-Tem, and City Secretary are further authorized and directed to
manually execute and deliver for and on behalf of the City copies of the Official Statement in
final form as may be required by the Purchasers, and such final Official Statement in the form
and content manually executed by said officials shall be deemed to be approved by the City
52208522.3 -21-
Council and constitute the Official Statement authorized for distribution and use by the
Purchasers. The proper officials of the City are hereby authorized to execute and deliver a
certificate pertaining to such Official Statement as prescribed therein, dated as of the date of
payment for and delivery of the Bonds.
Proceeds from the sale of the Bonds shall be applied as follows:
A. Accrued interest on the Bonds (in the amount of $28,135.19) received from the
Purchasers shall be deposited into the Bond Fund.
B. The City received a net original issue reoffeiting premium from the sale of the
Bonds of $175,473.10 which is hereby allocated by the City in the following manner:
(1) $96,230.74 to pay the Purchasers' compensation, (2} $2,992.40 shall be deposited into the
Bond Fund as the rounding amount, and (3) $76,250.00 to pay the remaining costs of issuance of
the Bonds.
C. $7,625,000.00 (representing $7,625,000.00 of principal and $-0- of remaining
original issue premium allocated against each respective voted authorization as specified in the
preamble of this Ordinance) shall be deposited into the special conshuctoni account or accounts
created for the projects to be constructed with the Band proceeds. This special construction
account shall be established and maintained at the Depository and shall be invested in
accordance with the provisions of Section 10 of this Ordinance. Interest earned an the proceeds
of the Bonds pending completion of the projects financed with such proceeds shall be accounted
for, maintained, deposited, and expended as permitted by the provisions of Chapter 1201, as
amended, Texas Government Code, or as required by any other applicable law. Thereafter, such
amounts shall be expended in accordance with Section 12 of this Ordinance.
SECTION 19: Covenants to Maintain Tax-Exempt Status.
A. Definitions. When used in this Section, the following terms have the following
meanings:
Code means the Internal Revenue Cade of 1986, as amended by all legislation, if
any, effective on or before the Closing Date. .
Computation Date has the meaning set forth in Section 1.148-1(b) of the
Regulations.
Gross Proceeds means any proceeds as defined in Section 1.148-1(b) of the
Regulations, and any replacement proceeds as defined in Section 1.148-1(c} of the
Regulations, of the Bonds.
Investment has the meaning set forth in Section 1.148-1(b) of the Regulations.
Nonpurpose Investment means any investment property, as defined in
section 148{b) of the Code, in which Gross Proceeds of the Bonds are invested and which
is not acquired to carry out the governmental purposes of the Bands.
szzoaszz.3 -22-
Rebate Amount has the meaning set forth in Section 1.148-1(b) of the
Regulations.
Regulations means any proposed, temporary, or final Income Tax Regulations
issued pursuant to sections 143 and 141 through 150 of the Code, and 103 of the Internal
Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific
Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax
Regulation designed to supplement, amend or replace the specific Regulation referenced.
Yield of
(1} any Investment has the meaning set forth in Section 1.148-5 of the
Regulations; and
{2) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations.
B. Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts {or any property the acquisition,
construction or improvement of which is to be financed or refinanced directly or indirectly with
Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on
any Bond to become includable in the gross income, as defined in section 61 of the Code, of the
owner thereof far federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
C. No Private Use or Private Payments. Except to the extent that it will not cause the
Bonds to become "private activity bonds" within the meaning of section 141 of the Code and the
Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of
Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Grass
Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds (including
all contractual arrangements with terms different than those applicable to the general
public) or any property acquired, conshucted or improved with such Gross Proceeds in
any activity carried on by any person ar entity (including the United States or any agency,
department and instrumentality thereof) other than a state or local government, unless
such use is solely as a member of the general public; and
{2) not directly or indirectly impose or accept any charge or other payment by
any person or entity who is treated as using Gross Proceeds of the Bonds ar any property
the acquisition, construction or improvement of which is to be financed or refinanced
directly or indirectly with such Gross Proceeds, other than taxes of general application
within the City or interest earned on investments acquired with such Gross Proceeds
pending application for their intended purposes.
s22osszx.3 -23-
D. No Private Loan. Except to the extent that it will not cause the Bonds to become
"private activity bonds" within the meaning of section 141 of the Code and the Regulations and
rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans
to any person ax entity other than a state or local government. For purposes of the foregoing
covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if:
(1) praperty acquired, constructed or improved with such Gross Proceeds is sold or leased to
such person or entity in a transaction which creates a debt far federal income tax purposes;
(2) capacity in or service from such property is committed to such person or entity under a
take-or-pay, output or similar contract or arrangement; or (3} indirect benefits, or burdens and
benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved
with such Gross Proceeds are otherwise transferred in a transaction which is the economic
equivalent of a loan.
E. Not to Invest at Higher Yield. Except to the extent that it will not cause the
Bonds to become "arbitrage bonds" within the meaning of section 148 of the Code and the
Regulations and rulings thereunder, the City shall not at any time prior to the final Stated
Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment, if as a
result of such investment the Yield of any Investment acquired with Gross Proceeds, whether
then held or previously disposed of, materially exceeds the Yield of the Bonds.
F. Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the
Code and the Regulations and rulings thereunder, the City shall not take ox omit to take any
action which would cause the Bonds to be federally guaranteed within the meaning of
section 149(b} ofthe Code and the Regulations and rulings thereunder.
G. Information Rem. The City shall timely file the information required by
section 149{e) of the Cade with the Secretary of the Treasury on Farm 8038-G or such other
form and in such place as the Secretary may prescribe.
H. Rebate of Arbitrage Profits. Except to the extent otherwise provided in
section 148(f) of the Cade and the Regulations and rulings thereunder:
{1) The City shall account for all Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and apart from
all other funds (and receipts, expenditures and investments thereof] and shall retain all
records of accounting for at least six years after the day on which the last Outstanding
Bond is discharged. However, to the extent permitted by law, the City may commingle
GT055 Proceeds of the Bonds with other money of the City, provided that the City
separately accounts for each receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
{2} Not less frequently than each Computation Date, the City shall calculate
the Rebate Amount in accordance with rules set forth in section 148{f) of the Code and
the Regulations and rulings thereunder. The City shall maintain such calculations with its
official transcript of proceedings relating to the issuance of the Bands until six years after
the final Computation Date.
saaossaa.s -24-
(3) As additional consideration for the puurchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to induce such
purchase by measures designed to insure the excludability of the interest thereon from the
gross income of the owners thereof for federal income tax purposes, the City shall pay to
the United States out of the Bond Fund or its general fund, as permitted by applicable
Texas statute, regulation or opinion of the Attorney General of the -State of Texas, the
amount that when added to the future value of previous rebate payments made for the
Bonds equals {i) in the case of a Final Computation Date as defined in
Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate
Amount on such date; and (ii) in the case of any other Computation Date, ninety percent
{90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be
made at the times, in the installments, to the place and in the manner as is or may be
required by section 148(f) of the Cade and the Regulations and rulings thereunder, and
shall be accompanied by Form 8438-T or such other forms and information as is or may
be required by section 148(f} of the Code and the Regulations and rulings thereunder.
{4) The City shall exercise zeasonable diligence to assure that no errors are
made in the calculations and payments required by paragraphs (2) and (3), and if an error
is made, to discover and promptly correct such error within a reasonable amount of time
thereafter (and in all events within one hundred eighty {180) days after discovery of the
error}, including payment to the United States of any additional Rebate Amount owed to
it, interest thereon, and any penalty imposed under ,Section 1. i 48-3{h) of the Regulations.
I. Not to Divert Arbitra eg Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to Subsection H of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Bonds not been
relevant to either party.
J. Bonds Not Hedge Bonds.
{1) The Issuer reasonably expects to spend at least 85% of the spendable
proceeds of the Bonds within three years after such Bonds are issued.
(2) Not more than 50% of the proceeds of the Bands will be invested in
Nanpuzpose Investments having a substantially guaranteed Yield for a period of four
years or more.
K. Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem,
City Manager, Director of Finance, City Attorney, or City Secretary, either or any combination
of the foregoing, to make such elections in the Certificate as to Tax Exemption or similar or
other appropriate certificate, form, or document permitted or required pursuant to the provisions
of the Code or the Regulations, as they deem necessary or appropriate in connection with the
Bonds. Such elections shall be deemed to be made on the Closing Date.
52208522.3 -2$-
SECTION 20: Control and Custody of Bonds. The Mayor or Mayor Pro-Tem shall be
and is hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas and shall take and have charge and
control of the Bands pending their approval by the Attorney General, the registration thereof by
the Comptroller of Public Accounts and the delivery of the Bonds to the Purchasers.
Furthermore, the Mayor, Mayor Pro Tem, City Manager, Director of Finance, City
Attorney, or City Secretary, either or all, are hereby authorized and directed to fiarnish and
execute such documents relating to the City and its financial affairs as may be necessary for the
issuance of the Bonds, the approval of the Attorney General and their registration by the
Comptroller of Public Accounts and, together with the City's financial advisors, Bond Counsel,
and the Paying AgentlRegistrar, make the necessary arrangements for the delivery of the Initial
Bonds to the Purchasers and the initial exchange thereof for defnitive Bands.
SECTION 21: Satisfaction of Obligation~of City. If the City shall pay or cause to be
paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and
interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge
of taxes levied under this Ordinance and all covenants, agreements, and other obligations of the
City to the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Bonds, or any principal amount(s) thereof, shall be deemed to have been paid within the
meaning and with the effect expressed above in this Section when (i} money sufficien# to pay in
full such Bonds ar the principal amount{s) thereof at Stated Matwity or the redemptian date
therefor, together with all interest due thereon, shall have been irrevocably deposited with and
held in trust by the Paying Agent/Registrar, or an authorized escrow agent, andlor
{ii} Government Securities shall have been irrevocably deposited in trust with the Paying
Agent/Registrar, or an authorized escrow agent, which Government Securities, in the case of a
net defeasance, have been certified by an independent accounting firm to mature as to principal
and interest in such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money, together with any money deposited therewith, if any, to pay
when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and
prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or
if irrevocable arrangements therefor acceptable to the Paying AgentlRegistrar have been made)
the redemption date thereof for the Bonds. In the event of a gross defeasance of the Bonds, the
City shall deliver a certificate fi•om its financial advisor, the Paying Agent/Registrar, or another
qualified third party concerning the deposit of cash and/or Government Securities to pay, when
due, the principal of, redemption premium (if any), and interest due an any defeased Bonds. The
City covenants that no deposit of money or Government Securities will be made under this
Section and no use made of any such deposit which would cause the Bonds to be treated as
arbitrage bonds within the meaning of section 148 of the Code (as defined in Section 19 hereof).
Any money so deposited with the Paying Agent/Registrar, and all income from
Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow
agent, pursuant to this Section which is not required for the payment of the Bonds, or any
principal amounts} thereof, or interest thereon with respect to which such money has been so
deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any
money held by the Paying Agent/Registrar for the payment of the principal of and interest on the
522085223 -2b-
Bonds and remaining unclaimed for a period of three {3} years after the Stated Maturity or
applicable redemption date of the Bonds such money was deposited and is held in trust to pay
shall upon the request of the City be remitted to the Clty against a written receipt therefor,
subject to the unclaimed property laws of the State of Texas.
Notwithstanding any other provision of this Ordinance to the contrary, it is hereby
provided that any determination not to redeem defeased Bonds that is made in conjunction with
the payment aiY'angements specified in subsection (i) or (ii) above shall not be irrevocable,
provided that: (1) in the proceedings providing for such defeasance, the City expressly reserves
the right to call the defeased Bonds for redemption; (2) gives notice of the reservation of that
right to the owners of the defeased Bonds immediately following the defeasance; (3) directs that
notice of the reservation be included in any redemption notices that it authorizes; and (4) at the
time of the redemption, satisfies the conditions of (i) or (ii) above with respect to such defeased
debt as though it was being defeased at the time of the exercise of the option to xedeem the
defeased Bonds, after taking the redemption into account in determining the sufficiency of the
provisions made for the payment of the defeased Bonds.
SECTION 22: Printed Opinion. The Purchasers' obligation to accept delivery of the
Bonds is subject to its being furnished a final opinion of Fulbright & Jaworski L.L.P., as Bond
Counsel, approving certain legal matters as to the Bonds, said opinion to be dated and delivered
as of the date of initial delivery and payment for such Bonds. Printing of a true and correct copy
of said opinion on the reverse side of each of the Bonds, with appropriate certificate pertaining
thereto executed by facsimile signature of the City Secretary of the City is hereby approved and
authorized.
SECTION 23: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Bonds shall be of no significance or effect as regards the legality
thereof, and neither the City nor attorneys approving said Bonds as to legality are to be held
responsible far CUSIP numbers incorrectly printed ar typed on the definitive Bonds.
SECTION 24: Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
SECTION 25: Ordinance aContract -- Amendments -Outstanding Bonds. The City
acknowledges that the covenants and obligations of the City herein contained are a material
inducement to the purchase of the Bonds. This Ordinance shall constitute a contract with the
Holders from time to time, shall be binding on the City and its successors and assigns, and shall
not be amended or repealed by the City so long as any Bond remains Outstanding except as
permitted in this Section. The City may, without the consent of or notice to any Holders, from
time to time and at any time, amend this Ordinance in any manner not detrimental to the interests
of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or
omission herein. In addition, the City may, with the written consent of Holders holding a
majority in aggregate principal amount of the Bonds then Outstanding affected thereby, amend,
add to, or rescind any of the provisions of this Ordinance; provided; however, that, without the
consent of all Holders of Outstanding Bonds, na such amendment, addition, or rescission shall
(1) extend the time or times of payment of the principal of and interest on the Bonds, reduce the
522D$522,3 -27-
principal amount thereof, ox the rate of interest thereon, or in any other way modify the terms of
payment of the principal of ,the redemption price therefor, or interest on the Bonds, (2) give any
preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of
Bonds required for consent to any such amendment, addition, or rescission.
SECTION 26: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is
intended or shall be construed to confer upon any person other than the City, Bond Counsel,
Paying AgentlRegistrar, and the Holders, any right, remedy, or claim, legal or equitable, under or
by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being
intended to be and being for the sole and exclusive benefit of the City, Bond Counsel, the Paying
Agent/Registrar, and the Holders.
SECTION 27: Inconsistent Provisions. All ordinances and resolutions, ox parts thereof,
which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to
the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling
as to the matters ordained herein,
SECTION 2$: Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural
number shall be considered to include the singular, and words of the masculine, feminine or
neuter gender shall be considered to include the other genders.
SECTION 29: Governing, Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 30: Severability. If any provision of this Ordinance or the application thereof
to any person or circumstance shall be held to be invalid, the remainder of this Ordinance and the
application of such pravision to other persons and circumstances shall nevertheless be valid, and
the City Council hereby declares that this Ordinance would have been enacted without such
invalid provision.
SECTION 31: Incorporation of Preamble Recitals. The recitals contained in the
preamble hereof are hereby found to be true, and such recitals are hereby made a part of this
Ordinance for all purposes and are adopted as a part of the judgment and findings of the City
Council.
SECTION 32; Authorization_of Paying AaentlRe istg rar Agreement. The City Council of
the City hereby finds and determines that it is in the best interest of the City to authorize the
execution of a Paying Agent/Registrar Agreement concerning the payment, exchange, and
transferability of the Bonds. A copy of the Paying AgentlRegistrar Agreement is attached
hereto, in substantially final form, as Exhibit A and is incorporated by reference to the provisions
of this Ordinance.
SECTION 33: Public Meeting. It is officially found, determined, and declared that the
meeting at which this Ordinance is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Ordinance, was given, all as required by Chapter 551, as amended, Texas Government Code.
52208522.3 -2 $-
SECTION 34: Unavailabilit of Authorized Publication. If, because of the temporary or
permanent suspension of any newspaper, journal, or other publication, or, for any reason,
publication of notice cannot be made meeting any requirements herein established, any notice
required to be published by the provisions of this Ordinance shall be given in such other manner
and at such time or times as in the judgment of the City or of the Paying AgentlRegistrar shall
most effectively approximate such required publication and the giving of such notice in such
manner shall for all purposes of this Ordinance be deemed to be in compliance with the
requirements for publication thereof.
SECTION 35: No Recourse Against City Officials. No recourse shall be had for the
payment of principal of, premium, if any, or interest on any Bond or for any claim based thereon
or on this Ordinance against any official of the City or any person executing any Bond.
SECTION 36: Continuin Disclosure of Information.
below:
A. Definitions.
As used in this Section, the following terms have the meanings ascribed to such terms
EMMA means the MSRB's Electronic Municipal Market Access system, accessible by
the general public, without charge, on the intereet through the uniform resource locator (URL)
http a/www. emma. msrb. org,
MSRB means the Municipal Securities Rulemaking Board.
Rule means SEC Rule 15c2-12, as amended from time to time.
SEC means the United States Securities and Exchange Commission.
B, Annual Reports.
The City shall file annually with the MSRB, (1) within six months after the end of each
fiscal year of the City ending in or after 2012, financial information and operating data with
respect to the City of the general type included in the final Official Statement authorized by
Section 18 of this Ordinance, being the information described in Exhibit B hereto, and (2) if not
provided as part such financial information and operating data, audited financial statements of
the City, when and if available. Any financial statements so to be provided shall be (i} prepared
in accordance with the accounting principles described in Exhibit B hereto, or such other
accounting principles as the City may be required to employ from time to time pursuant to state
law ar regulation, and (ii} audited, if the City commissions an audit of such financial 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 City shall file unaudited
financial statements within such period and audited financial statements for the applicable fiscal
year to the MSRB, when and if the audit report on such statements becomes available.
szzoasaz.s -29-
If the City changes its fiscal year, it will file notice of such change (and of the date of the
new fiscal year end) with the MSRB prior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section.
C. Notice of Certain Events.
The City shall file notice of any of the following events with respect to the Bonds to the
MSRB in a timely manner and not more than 10 business days after occurrence of the event:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt sezvice 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;
(G) Adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (IRS Foam 5701-
TEB}, or other material notices or determinations with respect to the tax status of the Bonds,
or other material events affecting the tax status of the Bonds;
(7) Modifications to rights of holders of the Bonds, if material;
(S) Bond calls, if material, and tender offers;
(9) Defeasances;
{10) Release, substitution, or sale of property securing repayment of the Bonds, if
material;
{11) Rating changes;
(12} Bankruptcy, insolvency, receivership, or similar event of the City, which
shall occur as described below;
{13) The consummation of a merger, cansolidatian, ox acquisition involving the
City or the sale of all or substantially all of its assets, other than in the ordinary course of
business, the entry into of a definitive agreement to undertake such an action or the
termination of a definitive agreement relating to any such actions, other than pursuant to its
terms, if material; and
(14} Appointment of a successor or additional paying agent/registrar or the change
of name of a paying agentlregistrar, if material.
For these purposes, any event described in the immediately preceding paragraph (12) is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent,
52208522.3 -30-
or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has
assumed jurisdiction over substantially all of the assets or business of the City, or if such
jurisdiction has been assumed by leaving the existing governing body and officials or officers in
possession but subject to the supervision and orders of a court or govermnental authority, or the
entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the assets or
business of the City.
The City shall file notice with the MSRB, in a timely manner, of any failure by the City
to provide financial information or operating data in accordance with this Section by the time
required by this Section.
D. Limitations Disclaimers and Amendments.
The City shall be obligated to observe and perform the covenants specified in this Section
for so long as, but only for so long as, the City remains an "obligated person" with respect to the
Bonds within the meaning of the Rule, except that the City in any event will give notice of any
deposit that causes the Bonds to be no longer Outstanding.
The provisions of this Section are far the sale benefit of the holders and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or
any legal or equitable right, remedy, or claim hereunder to any other person. The City
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 City'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 City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE CITY, WHETHER NEGLIGENT OR WITH OR WITHOUT FAULT ON ITS PART, OF
ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY
OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY
SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing their obligations under this Section
shall constitute a breach of or default under this Ordinance for purposes of any other provision of
this Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
s2zoas22,3 -31-
The provisions of this Scction maybe amended by the City from time to time to adapt to
changed circumstances that arise fiam a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the City, but only if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase ar
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule to the date of such amendment, as well as such
changed circumstances, and (2} either (a} the holders of a majority in aggregate principal amount
(or any greater amount required by any other provision of this Ordinance that authorizes such an
amendment) of the Outstanding Bonds consent to such amendment or (b} a person that is
unaffiliated with the City {such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interests of the holders and beneficial owners of the
Bonds. The City may also repeal or amend the provisions of this Section if the SEC amends ar
repeals the applicable provisions of the Rule or any court of final jurisdiction enters judgment
that such provisions of the Rule are invalid, and the City also may amend the provisions of this
Section in its discretion in any other manner ar circumstance, but in either case only if and to the
extent that the provisions of this sentence would not have prevented an undei~'iter from
lawfully purchasing or selling Bonds in the primary offering of the Bonds, giving effect to (a)
such provisions as so amended and (b) any amendments or interpretations of the Rule. If the
City so amends the provisions of this Section, the City shall include with any amended financial
information or operating data next provided in accordance with this Section an explanation, in
naiY'ative form, of the reasons for the amendment and of the impact of any change in the type of
financial information or operating data so provided.
E. Information Format - Incoi oration b Reference.
The City information required under this Section shall be filed with the MSRB through
EMMA in such format and accompanied by such identifying information as may be specified
from time to time thereby. Under the current rules of the MSRB, continuing disclosure
documents submitted to EMMA must be in word-searchable portable document format (PDF)
files that permit the document to be saved, viewed, printed, and retransmitted by electronic
means and the series of obligations to which such continuing disclosure documents relate must
be identified by CUSIP number or numbers.
Financial information and operating data to be provided pursuant to this Section may 6e
set forth in fiall in one or more documents or may be included by specific reference to any
document (including an official statement or other offering documcnt) available to the public
through EMMA ar filed with the SEC.
SECTION 37: Book-Entry System.
It is intended that the Bonds will be registered so as to participate in a securities
depository system (the DTC System) with the Depository Trust Company, New York, New York,
or any successor entity thereto (DTC, as set forth herein. Each Stated Maturity of the Bonds
shall be issued {following cancellation of the Initial Bonds described in Section 7) in the form of
a separate single definitive Band. Upon issuance, the ownership of each such Bond shall be
registered in the name of Cede & Co., as the nominee of DTC, and all of the Outstanding Bonds
shall be registered in the name of Cede & Co., as the nominee of DTC. The City and the Paying
s22osszz.3 -32-
Agent/Registrar are authorized to execute, deliver, and take the actions set forth in such letters to
or agreements with DTC as shall be necessary to effectuate the DTC System, including the Letter
of Representations attached hereto as Exhibit C {the Representation Letter}.
With respect to the Bonds registered in the name of Cede & Co., as nominee of DTC, the
City and the Paying AgentlRegistrar shall have no responsibility or obligation to any
broker-dealer, bank, or other financial institution for which DTC holds the Bonds fiom time to
time as securities depository (a Depository Participant} or to any person on behalf of whom such
a Depository Participant holds an interest in the Bonds {an Indirect Participant). Without
limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have
no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede &
Co., or any Depository Participant with respect to any ownership interest in the Bonds, (ii} the
delivery to any Depository Participant or any other person, other than a registered owner of the
Bonds, as shown on the Security Register, of any notice with respect to the Bonds, including any
notice of redemption, or (iii} the delivery to any Depository Participant or any Indirect
Participant or any other Person, other than a Holder of a Bond, of any amount with respect to
principal of, premium, if any, or interest on the Bonds. While in the DTC System, no person
other than Cede & Co., or any successor thereto, as nominee for DTC, shall receive a bond
certificate evidencing the obligation of the City to make payments of principal, premium, if any,
ar interest pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of
written notice to the effect that DTC has determined to substitute a new nominee in place of
Cede & Co., and subject to the provisions in this Ordinance with respect to interest checks or
drafts being mailed to the Holder, the word "Cede & Co." in this Ordinance shall refer to such
new nominee of DTC.
In the event that (a) the City determines that DTC is incapable of discharging its
responsibilities described herein and in the Representation Letter, (b} the Representation Letter
shall be terminated far any reason, or (c} DTC or the City determines that it is in the best interest
of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the City shall
notify the Paying AgentlRegistrar, DTC, and the Depository Participants of the availability
within a reasonable period of time through DTC of bond certificates, and the Bonds shall no
longer be restricted to being registered in the name of Cede & Co., as nominee of DTC, At that
time, the City may determine that the Bonds shall be registered in the name of and deposited
with a successor depository operating a securities depository system, as may be acceptable to the
City, or such depository's agent or designee, and if the City and the Paying AgentlRegistrar do
not select such alternate securities depositary system then the Bonds may be registered in
whatever name or names the Holders of Bonds transferring or exchanging the Bonds shall
designate, in accordance with the provisions hereof.
Notwithstanding any other provision of this Ordinance to the contrary, so long as any
Band is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to
principal of, premium, if any, and interest on such Bond and all notices with respect to such
Bond shall be made and given, respectively, in the manner provided in the Representation Letter.
SECTION 38: Further Procedures. The officers and employees of the City are hereby
authorized, empowered and directed fiom 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
szzoasz2,~ -33-
and on behalf of the City 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 Ordinance, the initial
sale and delivery of the Bonds, the Paying AgentlRegistrar Agreement, and the Official
Statement, In addition, prior to the initial delivery of the Bonds, the Mayor, Mayor Pro-Tem,
City Manager, or the City Secretary and Bond Counsel are hereby authorized and directed to
approve any technical changes or corrections to this Ordinance or to any of the instruments
authorized and approved by this Ordinance necessary in order to (i) correct any ambiguity or
mistake or properly or more completely document the transactions contemplated and approved
by this Ordinance and as described in the Official Statement, (ii) obtain a rating from any of the
national bond rating agencies, or (iii) obtain the approval of the Bonds by the Texas Attorney
General's office. In case any officer of the City whose signature shall appear on any certificate
shall cease to be such officer before the delivery of such certificate, such signature shall
nevertheless be valid and sufficient for all purposes the same as if such officer had remained in
office until such delivery.
SECTION 39: Effective Date. Pursuant to the provisions of Section 1201.028, as
amended, Texas Government Code, this Ordinance shall be effective immediately upon
adoption, notwithstanding any provision in the City's Home Rule Charter to the contrary
concerning a multiple reading requirement fox the adoption of ordinances.
The remainder' of this page intentionally left blame]
szzosszz.3 -34-
PASSED, APPROVED AND ADOPTED on the 28`h day of August, 2012,
ATTEST:
City Secretary
(CI`T'Y SEAL)
CITY OF SCHERTZ, TEXAS
Mayor ro-Tem
Exhibit A -Paying Agent/Registrar Agreement
Exhibit B -Annual Financial Information
Exhibit C - DTC Letter of Re}~resentations
52208522, 2 S-1
I+;XHIBIT A
Paying AgentlRegistrar Agreement
See Tab No. 3
s2zosszz.3 A-1
EXHIBIT B
Description of Annual Financial Information
The following information is referred to in Section 3G of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified {and included in the Appendix or
under the headings of the Official Statement referred to) below;
1. Subject to the provisions of Section 36 of the Ordinance, the quantitative financial
information and aperating data of the City of the general type included in Table 1 of the Official
Statement and Tables 1 through 10 of Appendix A to the Official Statement.
2. The City's audited financial statements for the most recently concluded fiscal year
or to the extent these audited financial statements are not available, the portions of the unaudited
financial statements of the City appended to the Official Statement as Appendix D, but for the
most recently concluded fiscal year.
Accounting Principles
The accounting principles referred to in such Section are generally accepted accounting
principles for governmental units as prescribed by the Government Accounting Standards Board
from time to time.
52248522.3 B-1
EXHIBIT C
DTC Letter of Representations
See Tab No. 4
52208522, 3 C-1
FLILBRIGHT
(~Ja>;vorski L.L.P
Attorncpc rtr Lrnu
300 Convent Street, Suite 2100 • San Antonio, Texas 78205-3792
jwhidcomb a ulbrighd.com • Direcd: 210 270 9335 • Main: 210 224 5575 • Facsimile: 210270 7205
December 18, 2012
VIA FEDERAL EXPRESS
Ms. Brenda Dennis
City Secretary
City of Schertz
1400 Schertz Parkway
Schertz, Texas 7$154
Re: City of Schertz, Texas General Obligation Bands, Series 2012
Dear Ms. Dennis:
I have enclosed the executed ordinance as requested. Please feel free to contact me if you need
anything further.
Very truly yours,
Jo e Whitcomb
Project Assistant
JMW/jmw
Enclosure
AUSTIN • BEIJING .DALLAS • DENVER • DU8A1. NQNG KONG • HDUSTQN • LONDON • LOS ANGELES .MINNEAPOLIS
lJiUNICH .NEW YORK • PlTTSBURGHSQUTtiPOINTE • RIYADH .SAN ANTONID • ST. LQUIS • WASHINGTON DC
wlew f rlbrrght.com