1998-194 ORDINANCE NO 98-tqq
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF
DENTON UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 1998A, AND
APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING
THERETO, AND PROVIDING AN EFFECTIVE DATE
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the City of Denton, Texas, heretofore has duly issued the following revenue bonds
City of Denton Utility System Revenue Bonds, Series 1988, dated August 1, 1988,
City of Denton Utility System Revenue Bonds, Series 1989, dated October 1, 1989,
City of Denton Utility System Revenue Bonds, Series 1992, dated March 1, 1992,
City of Denton Utility System Revenue Bonds, Series 1993, dated March 1, 1993,
City of Denton Utility System Revenue Refunding Bonds, Series 1993-A, dated June 1, 1993,
City of Denton Utility System Revenue Refunding Bonds, Taxable Series 1993-B, dated June 1, 1993,
City of Denton Utility System Revenue Bonds, Series 1996, dated May 1, 1996,
City of Denton Utility System Revenue Refunding Bonds, Series 1996A, dated May 1, 1996,
City of Denton Utility System Revenue Bonds, Series 1998, dated Mamh 15, 1998, and
City of Denton Utility System Revenue Bonds, Series 1998A, dated July 15, 1998,
WHEREAS, the City Council of the City of Denton deems ~t necessary and advisable to authorize,
issue, and deliver the additional Utility System Revenue Bonds hereinafter described, and
WHEREAS, the Series 1998A Bonds heremaf~er authorized and described am to be issued, sold, and
delivered pursuant to Vemon's Ann Tex Civ St Art 717k, the City's Home Rule Charter, and other
applicable laws, NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
Section 1 AMOUNT AND PURPOSE OF THE BONDS The bond or bonds of the Issuer are
hereby authorized to be issued and delivered m the aggregate principal amount of $36,795,000, for the purpose
of providing for refunding and prepaying certain obligations of the Issuer pursuant to a "Contract between the
United States of America and the City of Denton, Texas, for water storage spaces in Aubrey and Lewiswlle
Lakes, Texas", funding a reserve fund and paying a portion of the cost of issuing smd bonds, and shall be
designated "City of Denton Utility System Revenue Refunding Bonds, Series 1998A" (the "Series 1998A
Bonds")
Section 2 DESCRIPTION OF THE BONDS (a) With respect to the Series 1998A Bonds, initially
there shall be issued, sold, and delivered hereunder a single fully registered bond, vathout interest coupons,
payable in installments of principal (the "Imtial Series 1998A Bond"), but the Initial Series 1998A Bond may
be assigned and transferred and/or converted into and exchanged for a like aggregate prmclpal amount of fully
registered bonds, without interest coupons, having serial maturities, and in the denomination or denominations
of $5,000 or any integral multiple of $5,000, all in the manner hereinafter provided The term "Series 1998A
Bonds" as used in this Ordinance shall mean and include collectively the Initial Series 1998A Bond and all
substitut~ bonds exchanged therefor, as well as all other substitute bonds and replacement bonds issued
pursuant hereto, and the term "Series 1998A Bond" shall mean any of the Series 1998A Bonds
(b) the term "Imtlal Bond" as used in this Ordinance shall mean and include collectively the Initial
Series 1998A Bond, the term "Bonds" as used in this Ordinance shall mean and include collectively the Initial
Bond and all substitute bonds exchanged therefor, as well as all other substitute bonds and replacement bonds
issued pursuant hereto, and the term "Bond" shall mean any of the Bonds
Section 3 INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL BONDS (a) The Imtial Series
1998A BOnd is hereby anthonzed to be issued, sold, and dehvemd hereunder as a single fully registered Bond,
without interest coupons, dated JULY 15, 1998, in the denommatlon and aggregate principal amount of
$36,795,000, numbered R-1, payable in annual installments of principal to the lmtial registered owner thereof,
to-wit
SALOMON SMITH BARNEY
or to the registered assignee or assignees of said Series 1998A Bond or any portion or portions thereof (m each
case, the "registered owner"), with the annual installments of principal of the Imtial Series 1998A Bond to be
payable on the dates, respectively, and in the principal amounts, respectively, stated m the FORM OF INITIAL
SERIES 1998A BOND set forth m this Ordinance
(b) The Imtlal Bond (0 may and shall be prepaid or redeemed prior to the scheduled due dates of
installments of principal thereof, (ii) may be assigned and transferred, (iii) may be converted and exchanged
for other Bonds, (iv) shall have the characteristics, and (v) shall be signed and sealed, and the principal of and
interest on the Imt~al Bond shall be payable, all as provided, and in the manner required or indicated, m the
FORM OF INITIAL SERIES 1998A BOND set forth m this Ordinance
Section 4 INTEREST The unpmd pnncipal balance of the Imtial Bond shall bear interest from the
date of the Initial Bond to the respective scheduled due dates, or to the dates of prepayment or redemption, of
the mstallmants ofprmmpal of the Initial Bond, and said interest shall be payable, all m the manner provided
and at the rates and on the dates stated in the FORM OF INITIAL SERIES 1998A BOND set forth in this
Ordinance
Section 5 FORM OF INITIAL SERIES 1998A BOND The form of the Imtial Bond, including the
form of Registrauon Certificate of the Comptroller of Pubhc Accounts of the State of Texas to be endorsed
on the Initial Bond, shall be substantially as follows
FORM OF INITIAL SERIES 1998A BOND
NO R-1 $36,795,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON UTILITY SYSTEM REVENUE
REFUNDING BOND
SERIES 1998A
THE CITY OF DENTON, in Denton County, Texas (the "Issuer"), being a poht~cal subdlwsion of
the State of Texas, hereby pronuses to pay to
SALOMON SMITH BARNEY
or to the registered assignee or assignees of tlus Bond or any portion or portions hereof (m each case, the
"registered owner") the aggregate pnnc~pal amount of
$36,795,000
(THIRTY SIX MILLION SEVEN HUNDRED NINETY FIVE THOUSAND DOLLARS)
in annual mstallments of principal due and payable on December 1 in each of the years, and m the respective
principal amounts, as set forth m the following schedule
PRINCIPAL PRINCIPAL
YEAR AMOUNT YEAR AMOUNT
2006 $ 310,000 2015 $1,300,000
2007 510,000 2016 1,370,000
2008 735,000 2017 1,440,000
2009 950,000 2018 1,515,000
2010 1,015,000 ************************
2011 1,065,000 2023 8,875,000
2012 1,120,000 ************************
2013 1,175,000 2029(maturity) 14,180,000
2014 1,235,000
and to pay interest, from the date oftlus Bond hereinafter stated, on the balance of each such installment of
pnnclpal, respectively, from time to time remaining unpaid, at the rates as follows
6 650% per annum on the above installment due ~n 2006
6 650% per annum on the above installment due in 2007
4 650% per annum on the above installment due in 2008
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4 650% per annum on the above installment due m 2009
4 750% per annum on the above installment due in 2010
4 850% per annum on the above installment due ,n 2011
4 900% per annum on the above installment due m 2012
5 000% per annum on the above installment due ,n 2013
5 050% per annum on the above installment due in 2014
5 100% per annum on the above installment due in 2015
5 125% per annum on the above installment due in 2016
5 125% per annum on the above installment due in 2017
5 125% per annum on the above installment due in 2018
5 125% per annum on the above installment due in 2023
5 125% per annum on the above installment due in 2029
vath said interest being payable on December 1, 1998 and semiannually on each June 1 and December 1
thereafter while this Bond or any portion hereof is ontstandmg and unpaid Said interest shall be calculated
on the basis of a 360-day year composed of twelve 30-day months
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON tins Bond are payable m
lawful money of the Umted States of America, vathout exchange or collection charges The mstallments of
pnnclpal and the interest on tins Bond are payable to the registered owner hereof through the semces of
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, DALLAS, TEXAS, winch is the "Paying
Agent/Registrar" for flus Bond Payment of all principal of and interest on this Bond shall be made by the
Paying Agent/Registrar to the registered owner hereof on each principal and/or mtemst payment date by check,
dated as of such date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer
required by the ordinance authorizing the issuance of this Bond (the "Bond Ordinance") to be on deposit w~th
the Paying Agent]Registrar for such purpose as hereinafter provided, and such check shall be sent by the
Paying Agent/Registrar by Umted States mall, first-class postage prepaid, on each such principal and/or
mterest payment date, to the registered owner hereof, at the address of the registered owner, as it appeared on
the 15th day of the month next precedmg each such date (the "Record Date") on the Registration Books kept
by the Paying Agent/Registrar, as hereinafter described The Issuer covenants unth the registered owner ofthis
Bond that on or before each principal and/or interest payment date for tins Bond it will make available to the
Paying AgenffRegistrar, from the "Interest and Smkmg Fund" maintained pursuant to the Bond Ordinance, the
amounts required to prowde for the payment, m nnmediately available funds, of all principal of and interest
on tins Bond, when due
IF THE DATE for the payment of the principal of or interest on tlms Bond shall be a Saturday,
Sunday, a [legal holiday, or a day on wbach banking institutions in the City where the Paying AgentdReglstrar
is located are anthonzed by law or execulave order to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday, or day on winch banking institutions are
anthonzedlto close, and payment on such date shall have the same force and effect as if made on the original
date payment was due
TI,lIS BOND has been authorized in accordance vath the Constitution and laws of the State of Texas
in the pr~cipal amount of $36,795,000, for the purpose of providing for refunding and prepaying certam
obligations of the Issuer pursuant to a "Contract between the United States of America and the City of Denton,
Texas, for ~vater storage spaces in Aubrey and Lewlswlle Lakes, Texas", funding a reserve fund and paying
a portion of the cost of issuing the Bonds
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ON DECEMBER 1, 2008, or on any date whatsoever thereafter, the unpaid installments of principal
of this Bond may be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer, wxth
funds derived from any available source, as a whole, or in part, and, if in part, the particular portion of this
Bond to be prepaid or redeemed shall be selected and designated by the Issuer (provided that a portion of this
Bond may be redeemed only m an integral multiple of $5,000), at the prepayment or redemption price of the
par or principal amount thereof, plus accrued interest to the date fixed for prepayment or redemption
THE OUTSTANDING BONDS of tlus Series scheduled to mature on DECEMBER 1, 2023 arc
subject to mandatory redemption prior to their scheduled maturlttes, and shall be redeemed by the Issuer, in
part, prior to their scheduled maturities, with the particular Bonds or portions thereof to be redeemed to be
selected by the Paymg Agent/Registrar at random, by lot or other customary method (provided that a portion
ora Bond may be redeemed only in an integral multiple of $5,000), at a redemption price equal to the par or
principal amount thereof and accrued interest to the date of redemption, on the dates, and m the prmcxpal
amounts, respectively, as shown in the following schedule
December I~ 2023 Maturity
Mandatory Principal
Redemption Dates Amounts
December 1, 2019 1,595,000
December 1, 2020 1,680,000
December 1,2021 1,770,000
December 1, 2022 1,865,000
December 1, 2023 1,965,000 (payment at maturity)
The principal amount of the Bonds reqmred to be redeemed on the Mandatory Redemption Dates pursuant to
the foregoing shall be reduced, at the option of the Issuer by the pnnclpal amount of any Bonds out of the
maturity scheduled for December 1, 2023 which, at least 45 days prior to the aforesaid appropriate redemption
date (1) shall have been aeqmred by the Issuer at a price not exceedang the principal amount of such Bonds plus
accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation,
or (2) as shall have been redeemed pursuant to the optional redemption proxas~ons hereof and not prewously
credited to the Mandatory Smkang Fund redemptton
THE OUTSTANDING BONDS of tins Serles scheduled to mature on DECEMBER 1, 2029 are
subject to mandatory redemption pnor to their scheduled matur~ties, and shall be redeemed by the Issuer, m
part, prior to their scheduled maturities, wath the particular Bonds or portions thereof to be redeemed to be
selected by the Paying Agent/Registrar at random, by lot or other customary method (provided that a portion
of a Bond may be redeemed only m an ~ntegral multiple of $5,000), at a redemption price equal to the par or
principal amount thereof and accrued mterest to the date of redemption, on the dates, and in the pnnclpal
amounts, respectively, as shown m the follovang schedule
December 1, 2029 Maturity
Mandatory Principal
Redem~tion Dates Amounts
December l, 2024 2,065,000
December l, 2025 2,180,000
December l, 2026 2,295,000
December 1, 2027 2,415,000
December l, 2028 2,545,000
December l, 2029 2,680,000 (payment at maturity)
The principal amount of the Bonds reqmred to be redeemed on the Mandatory Redemption Dates pursuant to
the foregoing shall be reduced, at the option of the Issuer by the pnnc~pal amount of any Bonds out of the
maturity scheduled for December l, 2029 which, at least 45 days prior to the aforesaid appropriate redemption
date (1) shall have been acqmred by the Issuer at a pnee not exceeding the pnnc~pal amount of such Bonds plus
accrued interest to the date of purchase thereof, and dehvered to the Paying Agent/Registrar for cancellation,
or (2) as shall have been redeemed pursuant to the optional redemption prowslons hereof and not prewously
credited to the Mandatory Stoking Fund redemption
AT LEAST 30 days prior to the date fixed for any such prepayment or redemptmn a written not~ce
of such prepayment or redemption shall be marled bythe Paying Agent/Registrar to the registered owner hereof
By the date fixed for any such prepayment or redemptmn due provision shall be made by the Issuer w~th the
Paying Agent/Registrar for the payment of the required prepayment or redemptmn price for flus Bond or the
port~on hereof wbach ~s to be so prepaid or redeemed, plus accrued ~nterest thereon to the date fixed for
prepayment or redemption Ifsuchwnttennottceofprepaymentorredemptlon~sg~ven, andlfdueprovis~oo
for such payment ~s made, all as provaded above, flus Bond, or the portzon thereof wluch Is to be so prepaid
or redeemed, thereby automatically shall be treated as prepaid or redeemed prior to ~ts scheduled due date, and
shall not bear interest aider the date fixed for ~ts prepayment or redemption, and shall not be regarded as being
outstanding except for the right of the registered owner to receive the prepayment or redemption price plus
accrued ~nterest to the date fixed for prepayment or redemption from the Paying Agent/Registrar out of the
funds provided for such payment The Paying Agent/Registrar shall record ~n the Reg~straUon Books all such
prepaymeats or redemptmns ofpnncapal ofth~s Bond or any port~on hereof
THIS BOND, to the extent of the unpaid or unredeemed principal balance hereof, or any unpmd and
unredeemed portion hereof in any integral multiple of $$,000, may be assigned by the war,al registered owner
hereof and shall be transferred only m the Reg~strataon Books of the Issuer kept by the Paying Agent/Registrar
acting m the capacity of registrar for the Bonds, upon the terms and conditions set forth m the Bond Ordinance
Among other reqmroments for such transfer, flus Bond must be presented and surrendered to the Paying
Agent/Registrar for cancellation, together with proper instruments ofass~gnment, m form and w~th guarantee
of s~gnatures satisfactory to the Paying Agent/Registrar, ewdenemg assignment by the ~mt~al registered owner
of flus Bond, or any port~on or portions hereof~n any integral mufuple of $5,000, to the assignee or assignees
~n whose name or names th~s Bond or any such portmn or portzons hereof ~s or are to be transferred and
registered Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar may be
used to evidence the assignment of flus Bond or any such port~on or portions hereof by the mmal registered
owner hereof A new bond or bonds payable to such assignee or assignees (which then will be the new
registered owner or owners of such new Bond or Bonds) or to the mmal registered owner as to any port~on of
flus Bond which ~s not being assigned and transferred by the ant~al registered owner, shall be delivered by the
Paying Agent/Registrar m eoovers~on of and exchange for this Bond or any port~on or port~ons hereof, but
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solely m the form and manner as provided m the next paragraph hereof for the conversion and exchange of this
Bond or any portion hereof The registered owner of flus Bond shall be deemed and treated by the Issuer and
the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of
hab~hty upon flus Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not
be affected by any nonce to the contrary
AS PROVIDED above and m the Bond Ordinance, flus Bond, to the extent of the unpaid or
unredeemed prmclpal balance hereof, may be converted into and exchanged for a like aggregate prmctpal
amount of fully registered bonds, wxthout interest coupons, payable to the asstgnee or assignees duly designated
m ~vntlng by the initial registered owner hereof, or to the ~nltlal regtstered owner as to any portion of this Bond
which Is not being assigned and transferred by the lmtml registered o~vner, tn any denomination or
denomtnanons In any integral multiple of $5,000 (subject to the reqmrement herematter stated that each
substitute bond issued m exchange for any portion of flus Bond shall have a smgle stated prmclpal maturity
date), upon surrender of flus Bond to the Paymg Agent/Registrar for cancellatton, all m accordance w~th the
form and procedures set forth m the Bond Ordinance If this Bond or any portion hereof is assigned and
transferred or converted each bond Issued m exchange for any port~on hereof shall have a single stated principal
maturity date corresponding to the due date of the Installment of principal of flus Bond or portion hereof for
which the substitute bond ts being exchanged, and shall bear interest atthe rate applicable to and borne by such
Installment of pnnclpal or port~on thereof Such bonds, respecttvely, shall be subject to redempnon prmr to
maturity on the same dates and for the same prices as the correspondmg installment of principal of flus Bond
or portion hereof for which they are being exchanged No such bond shall be payable m tnstallments, but shall
have only one stated principal maturity date AS PROVIDED IN THE BOND ORDINANCE, THIS BOND
IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY,
and to one or more assignees, but the bonds issued and dehvered in exchange for this Bond or any portion
hereof may be assigned and transferred, and converted, subsequently, as provided m the Bond Ordmance The
Issuer shall pay the Paying Agent/Reglstrar's standard or customary fees and charges for transferring,
converting, and exehangmg flus Bond or any portion thereof, but the one requesttng such transfer, conversion,
and exchange shall pay any taxes or governmental charges required to be paid w~th respect thereto The Paying
AgenffReglstrar shall not be required to make any such assignment, conversion, or exchange (1) dunng the
period commencing with the close of business on any Record Date and ending ~wth the openmg of business on
the next following principal or interest payment date, or, (u) w~th respect to any Bond or port~on thereof called
for prepayment or redemption prior to maturity, w~thln 45 days prior to its prepayment or redemption date
IN THE EVENT any Paymg Agent/Registrar for flus Bond is changed by the Issuer, resxgns, or
otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordmance that tt promptly will appomt
a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be
mailed to the registered owner of flus Bond
IT IS HEREBY certified, recited, and covenanted that th~s Bond has been duly and validly authorized,
issued, sold, and dehvered, that all acts, eond~ttons, and things reqmred or proper to be performed, eyast, and
be done precedent to or in the authorization, issuance, and delivery of flus Bond have been performed, eyasted,
and been done in accordance w~th law, that this Bond ts a spectal obligation of the Issuer, secured by and
payable, together w~th other bonds, from a first lien on and pledge of the "Pledged Revenues", wluch include
lmttally the "Net Revenues of the System" as such terms are defined ~n the Bond Ordtnance, with the System
consisting of the City's entire combined waterworks, sewer, and electric hght and power system
THE ISSUER has reserved the right, subject to the restrictions stated in the Bond Ordinance, to issue
Addlttonal Bonds payable from and secured by a first lien on and pledge of the "Pledged Revenues" on a panty
w~th flus Bond
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THE ISSUER also has reserved thc right, subject to the restrictions stated in the Bond Ordinance, to
amend the Bond Ordinance w~th the approval of thc holders or owners of fifty-one percent ~n pnnc~pal amount
of all outstanding bonds whmh are secured by and payable from a first hen on and pledge of the Pledged
Revenues
THE REGISTERED OWNER hereof shall never have the right to demand payment ofth~s Bond or
the ~nterest hereon out of any funds rinsed or to be ratsed by taxation or from any source whatsoever other than
spemfied m the Bond Ordinance
BY BECOMING the registered owner ofth~s Bond, the reg,stered owner thereby acknowledges all of
the terms and prowsions of the Bond Ordinance, agrees to be bound by such terms and provls,ons,
acknowledges that the Bond Ordinance ~s duly recorded and available for ,nspect~on ~n the offic,al minutes and
records of the governing body of the Issuer, and agrees that the terms and prov~smns ofth~s Bond and the Bond
Ordinance constitute a contract between the regtstered owner hereof and the Issuer
IN WITNESS WHEREOF, the Issuer has caused th~s Bond to be stgned vath the manual or facs~nule
signature of the Mayor of the Issuer and countersigned w~th the manual or facsimile s~gnamre of the C~ty
Secretary of the Issuer, has caused the officml seal of the Issuer to be duly tmpressed, or placed m facsmule,
on this Bond, and has caused th~s Bond to be dated July 15, 1998
C~ty Secretary, City of Denton, Texas Mayor, City of Denton, Texas
(CITY SEAL)
(BOND INSURANCE LEGEND, IF ANY)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS
COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO
I hereby certify that this Bond has been examined, certified as to valid~ty, and approved by the Attomey
General of the State of Texas, and that this Bond has been registered by the Comptroller of Pubhc Accounts
of the State of Texas
Witness my signature and seal flus
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6 ADDITIONAL CHARACTERISTICS OF THE BONDS Registration and Transfer (a)
The Issuer shall keep or cause to be kept at the prmmpal corporate trust office of CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, DALLAS, TEXAS (the "Paying Agent/Registrar") books or records of the
registration and transfer of the Bonds (the "Registration Books"), and the Issuer hereby appoints the Paying
AgenffRegistrar as its registrar and transfer agent to keep such books or records and make such transfers and
registrations under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe, and
the Paying Agent/Registrar shall make such transfers and registrations as hereto provided The Paying
AgenffRegistrar shall obtain and record m the Registration Books the address of the registered owner of each
Bond to which payments wath respect to the Bonds shall be marled, as heroin provided, but it shall be the duty
of each registered owner to notify the Paying Agent/Registrar m wnUng of the address to winch payments shall
be marled, and such interest payments shall not be mailed unless such notice has been given The Issuer shall
have the right to respect the Registration Books during regular business hours of the Paying Agent/Registrar,
but othemnse the Paying Agent/Registrar shall keep the Registration Books confidential and, unless othemase
required by law, shall not pernut their lnspectaon by any other entity Registration of each Bond may be
transferred m the Registration Books only upon presentation and surrender of such Bond to the Paying
Agent/Registrar for transfer of registrat~on and cancellation, together with proper written instruments of
assignment, m form and wth guarantee of signatures satisfactory to the Paying Agent/Registrar, ewdencmg
(,) the assignment of the Bond, or any portaon thereof m any integral mulUple of $5,000, to the assignee or
assxgnees thereof, and 00 the right of such assignee or assignees to have the Bond or any such pomon thereof
registered m the name of such assignee or assignees Upon the assignment and transfer of any Bond or any
portion thereof, a new substnute Bond or Bonds shall be issued in conversion and exchange therefor m the
manner hereto provided The Inmal Bond, to the exteat ofthe unpaid or unredeemed principal balance thereof,
may be assigned and transferred by the antial registered owner thereof once only, and to one or more assignees
designated in writing by the lmtial registered owner thereof All Bonds issued and delivered in conversion of
and exchange for the Initial Bond shall be in any denomination or denominations of any mtegral multiple of
$5,000 (subject to the requirement hereinafter stated that each substitute Bond shall have a single stated
pr,ncipal maturity date), shall be in the form prescribed in the FORM OF SUBSTITUTE SERIES 1998A
BOND set forth in tins Ordinance, and shall have the characteristics, and may be assigned, transferred, and
converted as hereinafter prowded If the Initial Bond or any portion thereof ,s assigned and transferred or
converted the Initial Bond must be surrendered to the Paying Agent/Registrar for cancellation, and each Bond
issued m oxehange for any portion of the Initial Bond shall have a single stated pnncipal maturity date, and
shall not be payable in installments, and each such Bond shall have a principal maturity date corresponding
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to the due date of the installment of principal or portion thereof for which the substitute Bond is being ex-
changed, and each such Bond shall bear interest at the single rate apphcable to and borne by such installment
ofpnncipal or portion thereof for which ~t is being exchanged If only a portion ofthe Inmal Bond is assigned
and transferred, there shall be dehvered to and registered m the name of the initial registered owner substitute
Bonds m exchange for the unassigned balance of the Initial Bond in the same manner as if the antial registered
owner were the assignee thereof If any Bond or portion thereof other than the Inmal Bond is assigned and
transferred or converted each Bond issued m exchange therefor shall have the same pnnc~pal maturity date and
bear interest at the same rate as the Bond for which it is exchanged A form of assignment shall be pnnted or
endorsed,on each Bond, excepting the Imtial Bond, which shall be executed by the registered owner or its duly
authorized attorney or representative to evidence an assignment thereof Upon surrender of any Bonds or any
port~on or portions thereof for transfer of reg~straUon, an authorized representative of the Paying
Agent/Registrar shall make such transfer m the Registration Books, and shall deliver a new fully registered
substitute Bond or Bonds, having the characteristics herein described, payable to such assignee or assignees
(which then will be the registered owner or owners of such new Bond or Bonds), or to the previous registered
owner in case only a portion ora Bond xs being assigned and transferred, all in conversion of and exchange for
said assigned Bond or Bonds or any portion or portions thereof, in the same form and manner, and w~th the
same effect, as provided in Section 6(d), below, for the conversion and exchange of Bonds by any registered
owner ofa Bond The Issuer shall pay the Paymg Agent/R~gistrar's standardor customary fees and charges
for making such transfer and delivery of a substitute Bond or Bonds, but the one requesting such transfer shall
pay any taxes or other governmental charges required to be paid w~th respect thereto The Paying
Agent/Registrar shall not be required to make transfers of registration of any Bond or any portion thereof (i)
during the period commencing w~th the close of business on any Record Date and ending w~th the opening of
business on the next following pnneipal or interest payment date, or, 0I) wth respect to any Bond or any
portion thereof called for redemption prior to maturity, w~thm 45 days prior to its redemption date
(b) Ownerstup of Bonds The entity m whose name any Bond shall be registered m the Registranon
Books at any time shall be deemed and treated as the absolute owner thereof for all purposes of tins Ordinance,
whether or not such Bond shall be overdue, and the Issuer and the Paying Agent/Registrar shall not be affected
by any notice to the contrary, and payment of, or on account of, the principal of, premium, If any, and interest
on any such Bond shall be made only to such registered owner All such payments shall be vahd and effectual
to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid
(e) Payment of Bonds and Interest The Issuer hereby further appoints the Paying Agent/Registrar
to act as the paying agent for paying the pnncipal of and interest on the Bonds, and to act as its agent to
convert and exchange or replace Bonds, all as provided in tins Ordinance The Paying Agent/Registrar shall
keep proper records of all payments made by the Issuer and the Paying Agent/Registrar w~th respect to the
Bonds, and of all conversions and exchanges of Bonds, and all replacements of Bonds, as prowded m this
Ordinance
(d) Conversion and Exchange or Reulaeement, Authentication Each Bond issued and delivered
pursuant to this Ordinance, to the extent of the unpmd or unredeemed pnnc~pal balance or pnncipal amount
thereof, may, upon surrender of such Bond at the principal corporate trust office of the Payang Agent/Registrar,
together w~th a written request therefor duly executed by the registered owner or the assignee or assignees
thereof, or its or their duly anthonzed attorneys or representatives, w~th guarantee of signatares satisfactory
to the Paying Agent/Registrar, may, at the option of the registered owner or such assignee or assignees, as
appropriate, be converted Into and exchanged for fully registered bonds, w~thout interest coupons, in the form
prescribed m the FORM OF SUBSTITUTE SERIES 1998A BOND set forth m this Ordinance, in the
denomination of $5,000, or any integral multiple of $5,000 (subject to the requirement hereinafter stated that
each substitute Bond shall have a single stated maturity date), as requested in writing by such registered owner
10
or such assignee or assignees, in an aggregate pnncipal amount equal to the unpaid or unredeemed pnncipal
balance or principal amount of any Bond or Bonds so surrendered, and payable to the appropriate registered
owner, assignee, or assignees, as the case may be If the Imt~al Bond is assigned and transferred or converted
each substitute Bond issued m exchange for any portion of the Imtlal Bond shall have a single stated pnnmpal
maturity date, and shall not be payable in installments, and each such Bond shall have a principal maturity date
corresponding to the due date of the installment of principal or portion thereof for which the substitute Bond
is being exchanged, and each such Bond shall bear interest at the s~ngle rate apphcable to and home by such
installment of prmmpal or portion thereof for whmh it is being exchanged If a portion ofany Bond (other than
the lmtml Bond) shall be redeemed prior to its scheduled maturity as provided herein, a substitute Bond or
Bonds having the same maturity date, beanng interest at the same rote, m the denomination or denominations
of any integral multiple of $5,000 at the request of the registered owner, and in aggregate pnncipal amount
equal to the unredeemed portion thereof, will be issued to the registered owner upon surrender thereof for
cancellation If any Bond or portion thereof (other than the Initial Bond) is assigned and transferred or
convened, each Bond issued m exchange therefor shall have the same pnncipal maturity date and bear interest
at the same rate as the Bond for which it Is being exchanged Each substitute Bond shall bear a letter and/or
number tO distinguish it from each other Bond The Paying Agent/Registrar shall convert and exchange or
replace Bonds as provided hereto, and each fully registered bond delivered m conversion of and exchange for
or replacement of any Bond or portion thereof as penmtted or reqmred by any prows~on of flus Ordinance shall
constitute one of the Bonds for all purposes of this Ordinance, and may again be convened and exchanged or
replaced It is specifically provided that any Bond authenticated m conversion of and exchange for or
replacement of another Bond on or prior to the first scheduled Record Date for the Initial Bond shall bear
interest from the date of the Initial Bond, but each substitute Bond so authenticated after such first scheduled
Record Date shall bear interest from the interest payment date next preceding the date on which such substitute
Bond was so authenticated, unless such Bond is authenticated after any Record Date but on or before the next
followmg interest payment date, in which case it shall bear interest from such next following interest payment
date, provided, however, that if at the tune ofdehvery of any substitute Bond the interest on the Bond for which
it ~s being exchanged is due but has not been paid, then such Bond shall bear interest from the date to which
such interest has been pa~d m full THE INITIAL SERIES 1998A BOND issued and delivered pursuant to
this Ordinance is not required to be, and shall not be, authenticated by the Paymg Agent/Registrar, but on each
substitute Bond issued in conversion of and exchange for or replacement of any Bond or Bonds issued under
flus Ordinance there shall be printed a certificate, m the form substantially as follows
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the prowsions of the Bond Ordinance
described m this Bond, and that this Bond has been issued m conversion of and exchange for or replacement
of a bond, bonds, or a portion of a bond or bonds of an issue which originally was approved by the Attorney
General oft he State of Texas and registered by the Comptroller of Public Accounts of the State of Texas
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, DALLAS, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative"
11
An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date
and manually sign the above Certificate, and no such Bond shall be deemed to be issued or outstanding unless
such Certificate is so executed The Paying Agent/Registrar promptly shall cancel all Bonds surrendered for
conversion and exchange or replacement No additional ordinances, orders, or resolutions need be passed or
adopted by the govemmg body of the Issuer or any other body or person so as to accomplish the foregnmg
conversion and exchange or replacement of any Bond or portion thereof, and the Paying Agent/Registrar shall
provide for the pnnting, execution, and dehvery of the substitute Bonds in the manner prescribed hereto, and
said Bonds shall be of type composition printed on paper w~th hthographed or steel engraved borders of
customary weight and strength Pursuant to Vemon's Ann Tex C,v St Art 717k-6, and particularly Section
6 thereof, the duty of conversion and exchange or replacement of Bonds as aforesaid is hereby imposed upon
the Paying Agent/Registrar, and, upon the execution of the above Paying Agent/Reglstrar's Authentication
Certificate, the converted and exchanged or replaced Bond shall be valid, incontestable, and enforceable in the
same manner and wth the same effect as the Initial Bond which originally was issued pursuant to this
Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts The
Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring,
conve~ng, and exchanging any Bond or any portion thereof, but the one requesting any such transfer,
conversion, and exchange shall pay any taxes or governmental charges required to be paid w~th respect thereto
as a cond~tion precedent to the exercise of such privilege of conversion and exchange The Paying
AgentYR~gistrar shall not be required to make any such conversion and exchange or replacement of Bonds or
any port~on thereof (0 dunng the period commencing wth the close of business on any Record Date and ending
v~th the operang of business on the next following principal or interest payment date, or, (ii) w~th respect to
any Bond or portion thereof called for redemption prior to maturity, wthm 45 days prior to its redemption date
(e) In General All Bonds issued m conversion and exchange or replacement of any other Bond or
portion thereof, (l) shall be issued in fully registered form, w~thout interest coupons, w~th the principal of and
interest on such Bonds to be payable only to the registered owners thereof, (ii) may and shall be redeemed prior
to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be converted and exchanged for
other Bonds, (v) shall have the characterlstacs, (vi) shall be signed and scaled, and (vii) the principal of and
interest on the Bonds shall be payable, all as provided, and in the manner required or ln&cated, in the FORM
OF SUBSTITUTE SERIES 1998A BOND set forth m this Ordinance
(f) Payment of Fees and Chames The Issuer hereby covenants w~th the registered owners of the
Bonds that it will (0 pay the standard or customary fees and charges of the Paying AgentdRegistrar for ns
services w~th respect to the payment of the pnncipal of and interest on the Bonds, when due, and (ii) pay the
fees and charges of the Paying Agent/Relpstrar for services wth respect to the transfer of registration of Bonds,
and wth respect to the conversion and exchange of Bonds solely to the extent above provided m flus Ordinance
(g) Substatute Pavma Aaent/Remstrar The Issuer covenants w~th the registered owners of the Bonds
that at all tunes wtnle the Bonds are outstanding the Issuer will provide a competent and legally qualified bank,
trust company, financial restitution, or other agency to act as and perform the senates of Paying
Agent/Registrar for the Bonds under flus Ordinance, and that the Paying Agent/Registrar vail be one entity
The Issuer reserves the right to, and may, at its opUon, change the Paying Agent/Registrar upon not less than
120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days prior to the next
pnncipal or interest payment date after such noUce In the event that the entity at any t~e acting as Paying
Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to
act as such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust
company,,flnancial restitution, or other agency to act as Paying Agent/Registrar under flus Ordinance Upon
any change m the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and
deliver the Registration Books (or a copy thereof), along w~th all other pertinent books and records relating to
12
the Bonds, to the new Paying Agent/Registrar designated and appmnted by the Issuer Upon any change ~n the
Paying Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new Paying
Agent/Registrar to each registered owner of the Bonds, by United States mall, first-class postage prepaid,
which notice also shall give the address of the new Paying Agent/Registrar By accepting the position and
performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this
Ordinance, and a certified copy of flus Ordinance shall be delivered to each Paying Agent/Registrar
Section 7 FORM OF SUBSTITUTE BONDS The form of all Bonds ~ssued in conversion and
exchange or replacement of any other Bond or portion thereof, including the form of Paying Agent~Registrar's
Certificate to be printed on each of such Bonds, and the Form of Assignment to be prmted on each of the
Bonds, shall be, respent~vely, substantially as follows, vath such appropriate variations, omissions, or insertions
as are permitted or required by flus Ordinance
FORM OF SUBSTITUTE SERIES 1998A BOND
NO UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON UTILITY SYSTEM REVENUE
REFUNDING BOND
SERIES 1998A
INTEREST MATURITY ORIGINAL DATE
RATE DATE OF ISSUE CUSIP NO
% JULY 15, 1998
ON THE MATURITY DATE specified above the CITY OF DENTON, ~n Denton County, Texas
(the "Issuer"), being a polmcal subthvlslon of the State of Texas, hereby promises to pay to
, or to the registered assignee
hereof (e~ther being heremafier called the "registered owner") the principal amount of
and to pay interest thereon from July 15, 1998, to the matunty date specified above, or the date of redemption
prior to matunty, at the interest rate per annum specified above, wnh interest being payable on December 1,
1998, and semmnnually on each June 1 and December 1 thereafter, except that ffthe date of authentication of
this Bond is later than the first Record Date (hereinafter defined), such principal amount shall bear interest
from the interest payment date next preceding the date of authentication, unless such date ofauthent~cation ~s
after any Record Date (hereinafter defined) but on or before the next following interest payment date, in which
case such principal amount shall bear interest from such next following interest payment date Said interest
shall be calculated on the basis of a 360-day year composed of twelve 30-day months
THE PRINCIPAL OF AND INTEREST ON flus Bond are payable ~n lawful money of the Umted
States of America, vnthout exchange or collection charges The principal of this Bond shall be paid to the
registered owner hereof upon pmseatation and surrender ofth~s Bond at maturity or upon the date fixed for its
redemption prior to maturity, at the prmmpal corporate trust office of CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, DALLAS, TEXAS, which is the "Paymg Agent/Registrar" forflus Bond The
payment of interest on flus Bond shall be made by the Paying Agent/Registrar to the registered owner hereof
13
on each interest payment date by check, dated as of such interest payment date, drawn by the Paying
Agent/Registrar on, and payable solely from, funds of the Issuer reqmred by the ordinance authorizing the
issuance of the Bonds (the "Bond Orchnance') to be on deposit with the Paying AgenffRegistrar for such
purpose as hereinafter provided, and such check shall be sent by the Paying Agent/Registrar by United States
marl, first-class postage prepaid, on each such interest payment date, to the registered owner hereof, at the
address of the registered owner, as it appeared at the close of business on the 15th day of the month next
preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar,
as hereinafter described However, the payment of such mterest may be made by any other method anceptable
to the Paying Ageot/Reg~strar and requested by, and at the r, sk and expense of, the registered owner hereof
Any accrued interest due upon the redemption of this Bond prior to maturity as provided herein shall be pa~d
to the registered owner at the pnnc~pal corporate trust office of the Paying Agent/Registrar upon presentation
and surrender oftbas Bond for redemption and payment at the pnncipal corporate trust office of the Paying
Agent/Registrar The Issuer eovenants w~th the registered owner ofthls Bond that on or before each principal
payment date, interest payment date, and accrued interest payment date for this Bond it wall make available
to the Paying Agent/Registrar, from the "Interest and Slnkang Fund" created by the Bond Ordinance, the
anaounts required to provide for the payment, m mmaediately available funds, of all principal of and interest
on the Bonds, when due
IF THE DATE for the payment of the principal of or interest on tins Bond shall be a Saturday,
Sunday, a legal holiday, or a day on winch hankmg institutions in the City where the Paying Agent/Registrar
is located are anthonzed by law or executive order to close, then the date for such payment shall be the next
succeeding day winch is not such a Saturday, Sunday, legal holiday, or day on winch bankang restitutions are
authorized to close, and payment on such date shall have the same force and effect as if made on the original
date payment was due
THIS BOND is one of an issue of Bonds initially dated July 15, 1998, authorized m accordance wath
the Constitution and laws of the State of Texas m the principal amount of $36,795,000, for the purpose of
providing for refunding and prepaying certain obligations of the Issuer pursuant to a "Contract between the
Umted States of America and the C~ty of Denton, Texas, for water storage spaces m Aubrey and Lewaswlle
Lakes, Texas", funding a reserve fund and paying a portion of the cost of issuing the Bonds
ON DECEMBER l, 2008, or on any date whatsoever thereafter, the Bonds of tins Series may be
redeemed prior to their scheduled matuntaes, at the option of the Issuer, wath funds derived from any available
and lawful source, as a whole, or in part, and, if in part, the particular Bonds, or portions thereof, to be
redeemed shall be selected and designated by the Issuer (provided that a port,on of a Bond may be redeemed
only m an integral multaple of $5,000), at the redemption price of the par or principal amount thereof, plus
accrued interest to the date fixed for redemption
THE OUTSTANDING BONDS of tins Series scheduled to mature on DECEMBER l, 2023 are
subject to mandatory redemption prior to their scheduled maturities, and shall be redeemed by the Issuer, in
part, prior to their scheduled maturities, vath the particular Bonds or portions thereof to be redeemed to be
selected by the Paying Agent/Registrar at random, by lot or other customary method (proxaded that a portion
of a Bond may be redeemed only m an integral multiple of $5,000), at a redemption price equal to the par or
pnncipal amount thereof and ancrued interest to the date of redemption, on the dates, and in the pnneipal
amounts, respectively, as shown in the followang schedule
14
December 1, 2023 Maturity
Mandatory Pnnclpal
Redemntion Dates Amounts
December 1, 2019 1,595,000
December I, 2020 1,680,000
December 1,2021 1,770,000
December 1, 2022 1,865,000
December 1, 2023 1,965,000 (payment at maturity)
The principal amount of the Bonds required to be redeemed on the Mandatory Redemption Dates pursuant to
the foregoing shall be reduced, at the option of the Issuer by the principal amount of any Bonds out of the
maturity scheduled for December 1, 2023 which, at least 45 days prior to the aforesaid appropriate redemption
date (1) shall have been acquired by the Issuer at a price not exceeding the pnncipal amount of such Bonds plus
accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation,
or (2) as shall have been redeemed pursuant to the optional redemption proxasions hereof and not prewously
credited to the Mandatory Sinking Fund redemption
THE OUTSTANDING BONDS oflius Series scheduled to mature on DECEMBER 1, 2029 are
subject to mandatory redemption prior to their scheduled maturities, and shall be redeemed by the Issuer, m
part, prior to their scheduled maturities, w~th the particular Bonds or portions thereof to be redeemed to be
selected by the Paying Agent/Registrar at random, by lot or other customary method (provided that a portion
of a Bond may be redeemed only m an mtegral multiple of $5,000), at a redemption price equal to the par or
pnnelpal amount thereof and accrued interest to the date of redemption, on the dates, and m the principal
amounts, respectively, as shown in the following schedule
December 1. 2029 Maturity
Mandatory Pnncipal
Redempt~0n Dates Amounts
December 1, 2024 2,065,000
December 1, 2025 2,180,000
December 1, 2026 2,295,000
December 1, 2027 2,415,000
December 1, 2028 2,545,000
December 1, 2029 2,680,000 (payment at matunty)
The principal amount of the Bonds required to be redeemed on the Mandatory Redemption Dates pursuant to
the foregoing shall be reduced, at the option of the Issuer by the pnncipal amount of any Bonds out of the
maturity scheduled for December 1,2029 wluch, at least 45 days prior to the aforesaid appropriate redemption
date (I) shall have been acqmred by the Issuer at a price not exceeding the pnneipal amount of such Bonds plus
accrued interest to the date of purchase thereof, and delivered to the Paying AgenffReglstrar for cancellation,
or (2) as shall have been redeemed pursuant to the optional redemption provisions hereof and not previously
credited to the Mandatory Stoking Fund r~demption
15
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or port~ons thereof prior to
maturity a written not,ce of such redemption shall be pubhshed once ~n a financial pubbeat~on, .Ioumal, or
reporter of general clrculat~on among securities dealers ~n The C~ty of New York, New York (including, but
not hm~ted to, The Bond Buyer and The Wall Street Journal), or m the State of Texas (Including, but not
hmited to, The Texas Bond Reporter) Such notice also shall be sent by the Paying Agent/Registrar by Umted
States mall, first-class postage prepmd, not less than 30 days prior to the date fixed for any such redemption,
to the registered owner of each Bond to be redeemed at its address as it appeared on the 45th day prior to such
redemption date, provided, however, that the failure to send, mall, or receive such noUce, or any defect therein
or m the senchng or mmhng thereof, shall not affect the vahdaty or effectiveness of the proceedmgs for the
redemption of any Bond, and ~t ~s hereby specifically prowded that the pubhcat~on of such not,ce as reqmred
above shall be the only notice actually reqmred m connection w~th or as a prereqms~te to the redemption of any
Bonds or portmns thereof By the date fixed for any such redemption due prows~on shall be made w~th the
Paymg Agent/Registrar for the payment of the reqmred redempUon price for the Bonds or portmns thereof
which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption If such written
notice of rederaptlon is pubhshed and ff due prows~on for such payment ~s made, ali as provxded above, the
Bonds or portions thereof winch are to be so redeemed thereby automatically shall be treated as redeemed pnor
to their scheduled maturities, and they shall not bear interest after the date fixed for redemption, and they shall
not be regarded as being outstanding except for the right of the registered owner to receive the redemption price
plus accrued interest from the Paying Agent/Registrar out ofthe funds prowded for such payment Ifapomon
of any Bond shall be redeemed a substitute Bond or Bonds hawng the same maturity date, bearing ~nterest at
the same rate, m any denomination or denominations m any mtegral muinple of $5,000, at the written request
of the registered owner, and m aggregate pnnc~pal amount equal to the unredeemed port,on thereof, vall be
~ssued to the registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as
prowded m the Bond Ordinance
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE
OF $5,000 may be assigned and shall be transferred only m the Registration Books of the Issuer kept by the
Paying Agent/Registrar actmg ~n the capacity of registrar for the Bonds, upon the terms and concht~ons set forth
m the Bond Ordinance Among other reqmrements for such assignment and transfer, fins Bond must be
presented and surrendered to the Paymg Agent/Registrar, together vath proper mstruments of assignment, m
form and vath guarantee of signatures satisfactory to the Paymg Agent/Registrar, exndencmg assignment of
fins Bond or any pomon or portions hereof m any integral muinple of $5,000 to the assagnee or assignees m
whose name or names fins Bond or any such port,on or portions hereof as or are to be transferred and
registered The form of Assignment pnnted or eadorsed on th~s Bond shall be executed by the registered owner
or ~ts duly anthonzed attorney or representative, to ewdence the asslgnraent hereof A new Bond or Bonds
payable to such assignee or assignees (winch then vall be the new registered owner or owners of such new Bond
or Bonds), or to the prevaous registered owner m the case of the assignment and transfer of only a pomon of
fins Bond, may be dehvered by the Paying Agent/Registrar m conversmn of and exchange for fins Bond, all
m the form and manner as prowded m the next paragraph hereof for the conversion and exchange of other
Bonds The Issuer shall pay the Paymg Agent/Reg~strar's standard or customary fees and charges for making
such transfer, but the one requesting such transfer shall pay any taxes or other governmental charges reqmred
to be prod vath respect thereto The Paying AgentJReglstrar shall not be reqmred to make transfers of reg~s-
tratmn of fins Bond or any portmn hereof (~) during the period commencing wath the close of business on any
Record Date and ending vath the opening of business on the next following pnnc~pal or interest payment date,
or, (u) w~th respect to any Bond or any portion thereofealled for redempUon prior to maturity, vafinn 45 days
prior to its redemption date The registered owner of fins Bond shall be deemed and treated by the Issuer and
the Paym8 Agent/Registrar as the absolute owner hereof for all purposes, including payment and d~scharge of
habfl~ty upon fins Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not
be affected by any not,ce to the contrary
16
ALL BONDS OF THIS SERIES are lssuable solely as fully registered bonds, wathout interest
coupons, m the denomination of any integral multiple of $5,000 As provided in the Bond Ordinance, this
Bond, or any unredeemed portion hereof, may, at the request of the registered owner or the assignee or as-
s,gnees hereof, be converted unto and exchanged for a hke aggregate prunclpal amount of fully registered bonds,
without interest coupons, payable to the appropr, ate registered owner, assignee, or assignees, as the case may
be, having the same maturity date, and bear,ng interest at the same rate, in any denomination or denonunations
in any ~ntegral multiple of $5,000 as requested in writing by the appropriate registered owner, assignee, or
assignees, as the case may be, upon surrender of this Bond to the Paying Agent/Registrar for cancellatmn, all
,n accordance wath the form and procedures set forth un the Bond Ordinance The Issuer shall pay the Paying
Agent/Regtstrar's standard or customary fees and charges for transferring, converting, and exchanging any
Bond or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes
or governmental charges required to be pa~d with respect thereto as a condition precedent to the exercise of such
privilege of conversunn and exchange The Paying Agent/Registrar shall not be required to make any such
conversion and exchange (~) dunng the period commencing wath the close of business on any Record Date and
ending wlth the opening of business on the next following principal or interest payment date, or, (ii) wath
respect to any Bond or portion thereof called for redemption prior to maturity, within 45 days prior to its
redemption date
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will appount
a competent and legally quahfied substitute therefor, and promptly wall cause written not,ce thereof to be
mailed to the registered owners of the Bonds
IT IS HEREBY cert, fied, recited, and covenanted that fins Bond has been duly and vahdly authorized,
issued, sold, and dehvered, that all acts, conditions, and things requnred or proper to be performed, exist, and
be done precedent to or m the anthonzation, ~ssuance, and delivery ofttus Bond have been performed, erasted,
and been done m accordance with law, that tlus Bond is a special obhgauon of the Issuer, secured by and
payable, together with other bonds, from a first lien on and pledge of the "Pledged Revenues", wluch unclude
initially the "Net Revenues of the System", as such terms are defined tn the Bond Ordinance, with the System
consisting of the City's entire combined waterworks, sewer, and electric hght and power system
THE IS SUER has reserved the right, subject to the restrictions stated m the Bond Ordinance, to issue
Additional Bonds payable from and secured by a first lien on and pledge of the "Pledged Revenues" on a panty
with th~s Bond and series of which ~t is a part
THE ISSUER also has reserved the right, subject to the restrictions stated m the Bond Ordinance, to
amend the Bond Ordinance with the approval of the holders or owners of fifty-one percent m principal amount
of all outstanding bonds which are secured by and payable from a first lien on and pledge of the Pledged
Revenues
THE REGISTERED OWNER hereof shall never have the right to demand payment of this Bond or
the interest hereon out of any funds rinsed or to be raised by taxation or from any source whatsoever other than
specified m the Bond Ordinance
BY BECOMING the registered owner of fins Bond, the registered owner thereby acknowledges all of
the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions,
acknowledges that the Bond Ordinance is duly recorded and available for unspection m the official minutes and
records of the governing body of the Issuer, and agrees that the terms and provisions of flus Bond and the Bond
Ordunance constitute a contract between each regtstered owner hereof and the Issuer
17
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed wath the manual or facsimde
signature of the Mayor of the Issuer and countersigned w~th the manual or facsimile signature of the City
Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed an
fats,mile, on flus Bond
City Secretary, City of Denton, Texas Mayor, City of Denton, Texas
(CITY SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance
described in flus Bond, and that flus Bond has been issued m conversion of and exchange for or replacement
of a bond, bonds, or a portion of a bond or bonds of an issue wluch originally was approved by the Attorney
General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, DALLAS, TEXAS
Paying Agent/Registrar
Dated By.
Authorized Representative
(BOND INSURANCE LEGEND, IF ANY)
18
FORM OF ASSIGNMENT
AS S IGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly authorized
representative or attorney thereof, hereby assigns flus Bond to
/ /
(Ass~gnee's Social (print or typewrite Ass~gnee's name and
Security or Taxpayer address, including zip code)
Identification Number)
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of flus Bond on the Paying AgentgRegistrar's Registration Books w~th full
power of substitution in the prermses
Dated
Signature Guaranteed
NOTICE Signature(s) must be guaranteed by an Registered Owner
eligible guarantor institution participating m a NOTICE Tins signaturemustcorrespondvaththe
secunt~estransferassociat~onrecogmzedsignature name of the Registered owner appearing on the
guarantee face of flus Bond in every pamcular vathout
alteration or enlargement or any change
whatsoever
Section 8 DEFINITIONS As used m flus Orchnance the following terms shall have the meanings
set forth below, unless the text hereof specifically mdmates otherwise
(a) The terms "City" and "Issuer" shall mean the City of Denton, m Denton County, Texas
(b) The term "City Council" or "Council" shall mean the governing body of the City
(c) The term "Bonds" shall mean collectively the Initial Bond as defined and descnbed m Section
2 ofttus Ordinance and all substatute bonds exchanged therefur, and all other substitute bonds and replacement
bonds, issued pursuant to and as proxaded m flus Ordinance
(d) The term "Panty Bonds" shall mean collectively (0 the outstandmg City of Denton Utility System
Revenue Bonds, Sones 1988, authorized by ordinance passed on August 2, 1988 (the "Sones 1988 Bonds"),
(ii) the outstanding City of Denton Utahty System Revenue Bonds, Sones 1989, authorized by ordinance passed
on October 24, 1989 (the "Series 1989 Bonds"), (iii) the outstanding City of Denton Utility System Revenue
Bonds, Sones 1992, authorized by ordinance passed on March 3, 1992 (the "Series 1992 Bonds"), (iv) the
outstanding City of Denton Utility System Revenue Bonds, Sones 1993, authorized by ordmanoe passed on
March 16, 1993 (the "Series 1993 Bonds"), (v) the outstandmg City of Denton Utility System Revenue
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Refundmg Bonds, Sexes 1993-A, authonzed by ordtnance passed on June 8, 1993 (the "Sexes 1993-A Bond"),
(w) the outstanding Ctty of Denton Utd~ty System Revenue Refundtng Bonds, Taxable Sexes 1993-B,
authorized by ordmance passed on June 8, 1993 (the "Sexes 1993-B Bonds"), (w0 the outstanding C~ty of
Denton Utthty System Revenue Bonds, Sexes 1996, anthonzed by ordtnance passed on May 7, 1996 (the
'Sexes 1996 Bonds"), (vut) the C~ty of Denton Utility System Revenue Refundmg Bonds, Sexes 1996A,
authorized by ordmance passed on May 7, 1996 (the "Sexes 1996A Bonds"), 0x) the Ctty of Denton Utdtty
System Revenue Bonds, Sexes 1998, authorized by ordtnance passed on March 24, 1998 (the "Sexes 1998
Bonds"), and (x) the Bonds
(e) The term "Addmonal Bonds" shall mean the additional panty revenue bonds winch the Ctty
reserves the right to ISSUe m the future, m accordance w~th Secnon 25 of tins Ordinance
(f) The term "System" shall mean (l) the Ctty's enttre extst~ng waterworks and sewer system and the
C~ty's entire erdsttng electric hght and power system, together uath all future extenstons, uuprovements,
enlargements, and addttlons thereto, and all replacements thereof, and (2) any other related facfl~ttes, all or any
part of the revenues or raceme from winch do, ~n the future, at the optton of the C~ty, and tn accordance vath
law, become "Pledged Revenues" as hereinafter defined, prowded that, notwithstanding the foregoing, and to
the extent now or hereafter authorized or permitted by law, the term System shall not mean any water, sewer,
electric, or other facilities of any kind winch are declared not to be a part of the System, and winch are acqmred
or constructed by the C~ty unth the proceeds from the tssuance of "Spectal Facfl~ttes Bonds", winch are hereby
defined as being specxal revenue obligations of the C~ty wl,ach are not payable from or secured by any Pledged
Revenues, but winch are secured by and payable from bens on and pledges of any other revenues, sources, or
payments, including, but not lnmted to, specml contract revenues or payments recetved from any other legal
enttty m coanectton v, uth such facdmes, and such revenues, sources, or payments shall not be constdered as
or consntute Gross Revenues of the System, unless and to the extent otheru~se prowded m the ordtnance or
ordinances authorizing the ~ssuance of such "Special Facdtttes Bonds"
(g) The terms "Gross Revenues of the System" and "Gross Revenues" shall mean all revenues and
mcome of every nature derived or recetved by the C~ty from the operauon and ownersinp of the System,
lncludtng the interest raceme from the investment or depostt of money m any Fund created by fins Ordinance
(h) The terms "Net Revenues of the System", and "Net Revenues" shall mean all Gross Revenues after
deducting therefrom an amount equal to the current expenses of operatton and mamtenance of the System, m-
eluding all salanes, labor, materials, repmrs, and extensions necessary to render efficient sennce, prowded,
however, that only such repatrs and extensions, as m the judgment of the Ctty Council, reasonably and fairly
exerctsed by the adoption of appropriate resolutaons, are necessary to keep the System m operatton and render
adequate service to smd C~ty and the xnhaintants thereof, or such as mtght be necessary to meet some phystcal
acetdent or eonchtlon winch would othervnse ~mpatr the Bonds or Add~ttonal Bonds, shall be deducted tn
determunng "Net Revenues" Payments reqmred to be made by the Ctty for water supply or water facd~ttes,
sewer serwees or sewer facfl~ttes, fuel supply, and for the purchase ofelecmc power, winch payments under
law constitute operation and maintenance expenses of any part of the System, shall constttute and be regarded
as expenses of operation and matntenance ofthe System under fins Ordinance Deprectat~on and amorttzatton
shall not constitute or be regarded as expenses of operanon and mmntenance of the System
(t) The term "Pledged Revenues" shall mean
(l) the Net Revenues, plus
2O
(2) any additional revenues, mncome, or other resources which are expected to be avmlable
to the C~ty on a regular penodzc bas~s, including, w~thout hn~tatxon, any grants, donatxons, or income
received or to be received from the Umted States Government, or any other pubhc or private source,
whether pursuant to an agreement or otherwse, which m the future may, at the option of the C~ty, be
pledged to the payment of the Panty Bonds or Additional Bonds
0) The term "year" or "fiscal year" shall mean the fiscal year used by the C~ty ~n coaneet~on w~th the
operation of the System
(k) The term "Government Obhgat~ons" shall mean d~reet obhgat~ons of the United States of America,
including obhgat~ons the principal of and interest on which are unconditionally guaranteed by the Umted States
of America, which may be Umted States Treasury obhgat~ons such as ~ts State and Local Government Series,
and which may be ~n book-entry form
(1) The term "Contract" means that "Contract between the Unned States of America and the C~ty of
Denton, Texas, for Water Storage Spaces m Aubrey and Lew~svllle Lakes, Texas", dated August 15, 1980
(m) The term "Refunded Obhgatmons" means those obhgatlons owed by the Issuer to the Umted States
of America pursuant to the Contract and to be refunded and prepaid w~th a port~on of the proceeds of the
Bonds
Seetxon 9 PLEDGE (a) The Bonds are "Additional Bonds" as penmtted by Seetmns 2~, and 25 of'
the ordinance passed on March 10, 1983, anthonzmg the C~ty of Denton Refunding Bonds, Series 1983 (the
"Series 1983 Bonds"), and ~t is hereby determined, declared, and resolved that all of the Panty Bonds (including
the Bonds) are secured and payable equally and ratably on a panty, and that Sections 8 through 28 ofth~s
Ordinance are supplemental to and cumulative of Sections 7 through 27 of the aforesmd ordinance passed on
March 10, 1983, w~th Sections 8 through 28 of flus Ordinance being applicable to all of the Pan.fy Bonds
(b) The Panty Bonds and any Additional Bonds, and the interest thereon, including any ~nterest
coupons appertaining thereto, are and shall be secured by and payable from a first hen on and pledge of the
Pledged Revenues, and the Pledged Revenues are further pledged to the estabhshment and maintenance of the
Funds created by flus Ordinance, and any Funds created by any ordinance authorizing the issuance of any
Additional Bonds The Panty Bonds and any Additional Bonds are not and will not be secured by or payable
from a mortgage or deed of trust on any real, personal, or n~xed propertmes constituting the System
Sectmn 10 SYSTEM FUND There heretofore has been and is hereby created and there shall be
estabhshed and maintained on the books of the City, and accounted for separate and apart from all other funds
of the Cmty, a special fund to be entitled the "C~ty of Denton Utility System Fund" (the "System Fund") All
Gross Revenues shall be credtted to the System Fund muned~ately upon receipt, unless otherwise provided m
th~s Ordinance All current expenses of operation and maintenance of the System shall be paid from such
Gross Revenues credited to the System Fund as a first charge against same Before making any deposxts
hereinafter required to be made from the System Fund, the City shall retain xn the System Fund at all tunes an
amount at least equal to one-s~xth of the amount budgeted for the then current fiscal year for the current
operation and maintenance expenses of the System
Section 11 INTEREST AND SINKING FUND For the sole purpose of paying the principal of and
interest on all Panty Bonds and Add~tmnal Bonds, there heretofore has been and ~s hereby created and there
shall be estabhshed and maintained on the books of the C~ty, and accounted for separate and apart from all
21
other funds of the City, a separate fund to be entitled the "City of Denton Utility System Revenue Bonds Inter-
est and Stoking Fund" (the "Interest and Sinking Fund")
Section 12 RESERVE FUND There heretofore has been, and is hereby, created, and there shall be
established and maintained at Chase Bank of Texas, National Association, and hereafter, at the option of the
City, established and maintained at any time at any national bank having a capital and surplus in excess of
$25,000,000, a separate fund to be entitled the "City of Denton Utility System Bonds and Additional Bonds
Reserve Fund" (the "Reserve Fund") The Reserve Fund shall be used to pay the principal of and interest on
any Parity Bonds or Additional Bonds when and to the extent the amounts in the Interest and Sinking Fund
available for such payment are msufficlent for such purpose, and may be used for the purpose of finally retlnng
the last of any Panty Bonds or Additional Bonds
Section 13 EXTENSION AND IMPROVEMENT FUND There heretofore has been and IS hereby
created and there shall be established and maintained on the books of the City, and accounted for separate and
apart from all other funds of the City, a separate fund to be entitled the "City of Denton Utility System
Extension and Improvement Fund" (the "Extensmn and Improvement Fund") The Extension and Improvement
Fund shall be used for the purpose of paying the costs of maprovements, enlargements, extensions, additions,
replacements, or other capital expenditures related to the System, or for paying the costs of unexpected or
extraordinary repairs or replacements of the System for which System funds are not available, or for paying
unexpected or extraordinary expenses of operation and maintenance of the System for which System funds are
not otherw:se available, or for any other lawful purpose
Section 14 EMERGENCY FUND There ~s hereby created and there shall be established and
mamtamed on the books of the City, and accounted for separate and apart from all other funds of the City, a
separate fund to be entitled the "City of Denton Utility System Emergency Fund" (the "Emergency Fund")
The Emergency Fund shall be used for the purpose of paying unexpected or extranrdmary expenses of repair,
replacement, operation, and maintenance of the System for which neither System funds nor the moneys m the
Extension and Improvement Fund are available There was deposited m the Emergency Fund sanultaneously
w~th the delivery of the Series 1983 Bonds to the ~mtlal purchasers thereof from lawfully available funds of
the City the amount of $250,000 All investment interest raceme from the Emergency Fund shall be transferred
to the System Fund as received
Seetmn 15 DEPOSITS OF PLEDGED REVENUES Pledged Revenues shall be credited to or
deposited m the Interest and Stoking Fund, the Reserve Fund, the Extension and Improvement Fund, and other
funds when and as reqmred by fins Ordinance and any ordinance authonzmg the issuance of Add:tmnal Bonds
Se~on 16 INVESTMENTS Money m any Fund established pursuant to this Ordinance or any
ordmance, authorizing the ~ssuanee of Add~tmnal Bonds, may, at the option of the City, be placed m time
deposits dr certificates of deposit secured by obhgat~ons of the type hereinafter described, or be invested in
Government Obhgatmns (as defined m Section 8 hereo0 or obhgatmns guaranteed or insured by the United
States of Arnenca, which, m the opimon of the Attorney General of the Umted States, are backed by its full
faith and credit or represent :ts general obligations, or invested m obhgat~ons ofmstrumentalmes of the Umted
States of America, including, but not hrmted to, evidences of indebtedness issued, insured, or guaranteed by
such governmental agenctes as the Federal Land Banks, Federal Intermediate Credit Banks, Banks for
Cooperatives, Federal Home Loan Banks, Government National Mortgage Association, Umted States Postal
Service, Farmers Home Adrmmstrat~on, Federal Home Loan Mortgage Asset,at,on, Small Business
Adm~mstrat~on, Federal Housing Assoc~atmn, or Partlc:patlon Certificates in the Federal Assets Financing
Trust, pray,tied that all such deposits and investments shall be made m such manner as will, m the opunon of
the City, permit the money required to be expended from any Fund to be available at the proper t~me or tines
22
as expected to be needed Such investments (except United States Treasury Obhgat~ons--State and Local
Government Series investments held in hook entry form, which shall at all t~mes be valued at cost) shall be
valued in terms ofcurrent market value as ofthe last day of each fiscal year Unless otherwise set forth hereto,
ali interest and income derived from such depoms and investments ~mmediately shall be credited to, and any
losses det01ted to, the Fund from which the deposit or investment was made, and surpluses in any Fund shall
or may be d~sposed of as hereinafter provided Such investments shall be sold promptly when necessary to
prevent any default in connection w~th the Panty Bonds or Additional Bonds consistent vath the ordinances,
respectively, authorizing their issuance
Section 17 FUNDS SECURED That money in all Funds created by this Ordinance, to the extent
not invested, shall be secured m the manner prescribed by law
Section 18 PRIORITY OF DEPOSITS AND PAYMENTS FROM SYSTEM FUND That the City
shall make the deposits and payments from Pledged Revenues m the System Fund when and as required by this
Ordinance and any ordinance anthonzmg any Additional Bonds, and such deposits shall be made m the
following manner and w~th the following irrevocable priorities, respectively
First, to the Interest and Stoking Fund, when and m the amounts required by this Ordinance
and any ordinance anthonzmg any Additional Bonds,
Second, to the Reserve Fund, when and m the amounts required by fi'us Ordinance and any
ordinance authorizing any Addnional Bonds, and
Third, to the Extension and Improvement Fund, when and as required by Section 2 1 of this
Ordinance
Section 19 INTEREST AND SINKING FUND REQUIREMENTS The City shall cause to be
deposited to the credit of the Interest and Stoking Fund the accrued interest and any pmrmum received from
the sale of the Imtlal Bond, and on or before the 25th day of each month, the City shall cause to be deposited
to the credit of the Interest and Smkaag Fund, m approxnnately equal monthly payments, amounts sufficient,
together w~th any other funds on hand therein, to pay all of the interest or prmmpal and lmerest coming due,
including the principal amount of any Panty Bonds required to be redeemed prior to maturity pursuant to any
mandatory redemption mqmmmants, on the Panty Bonds and any Additional Bonds on the next succeeding
interest payment date Any moneys so deposited m the Interest and Stoking Fund w~th respect to a mandatory
redemption requirement, together w~th other lawfully available funds of the City, may be used by the City, to
purchase, m advance of a mandatory redemplaon date and at a price not exceeding the principal amount thereof
plus accrued interest thereon to the date of purchase, Panty Bonds winch would be subject to being chosen for
mandatory redemption on such mandatory redemption date The Paying Agent shall cancel any Panty Bonds
so pumhased
Section 20 RESERVE FUND REQUIREMENTS Them is now on hand in the Reserve Fund an
amount of raoney and Govemmeot Obligations wluch is in excess of $3,000,000 and wInch is at least equal
to the average annual principal and interest requirements of the outstanding Series 1988 Bonds, the Series 1989
Bonds, the Series 1992 Bonds, the Series 1993 Bonds, the Series 1993-A Bonds, the Taxable Series 1993-B
Bonds, the Series 1996 Bonds, the Series 1996A Bonds and the Series 1998 Bonds (the current "Required
Reserve Amount") Following the issuance and dehvery of the Initial Bonds the Required Reserve Amount
shall become and be an amount of money and mvestmeots equal to the average annual pnncipal and interest
reqmmments of all the outstanding Panty Bonds and Additional Bonds, provided further, however, that the
Required Reserve Amount shall never be less than $3,000,000 if the maramum annual pnncipal and interest
23
requirements on all outstanding Panty Bonds and Additional Bonds exceeds $3,000,000 Immediately after
the issuance and delivery of the Initial Bonds there shall be deposited to the credit of the Reserve Fund, from
the proceeds of the sale of the Initial Series 1998A Bond, money sufficient to cause the Reserve Fund to contain
an aggregate amount of money and investments equal to the Required Reserve Amount for all then outstanding
Panty Bonds Aiter the dehvery of any future Additmnal Bonds the City shatl cause the Reserve Fund to be
increased, if and to the extent necessary, so that such Fund vall contain an amount of money and investments
equal to the Required Reserve Amount Any increase in the Required Reserve Amount may be funded from
Pledged Revenues, or from proceeds from the sale of any Additional Bonds, or any other available source or
combinatmn of sources All or any part ofthe Required Reserve Amount not funded initially and immediately
after the delivery of any installment or issue of Additional Bonds shall be funded, vathin not more than five
years from the date of such delivery, by deposits of Pledged Revenues in approximately equal monthly
installments on or before the 25th day ofeach month Principal amounts ofthe Panty Bonds and any Add~tion-
al Bonds which must be redeemed pursuant to any applicable mandatory redemption requirements shall be
deemed to be matunng amounts ofpnncipal for the purpose of calculating principal and interest requirements
on such bonds When and so long as the amount m the Reserve Fund is not less than the Required Reserve
Amount no deposits shall be made to the credit of the Reserve Fund, but when and if the Reserve Fund at any
time contains less than the Required Reserve Amount, then the City shall transfer from Pledged Revenues in
the System Fund, and deposit to the credit of the Reserve Fund, monthly on or before the 25th day of each
month, a sum equal to 1/60th of the Required Reserve Amount, until the Reserve Fund is restored to the
Required Reserve Amount The City specifically covenants that when and so long as the Reserve Fund
contains the Required Reserve Amount, the City shall cause all amounts in excess of the Required Reserve
Amount to be deposited to the credit of the Interest and Stoking Fund
Section 21 EXTENSION AND IMPROVEMENT FUND REQUIREMENTS During each year,
subject and subordinate to makang the required deposits to the credit of the Interest and Stoking Fund and the
Reserve Fund, the City shall be required to deposit to the credit of the Extension and Improvement Fund, from
Pledged Revenues m the System Fund, an amount equal to 8% of the "Adjusted Gross Revenues of the
System", which term is hereby defined to mean the following
the Gross Revenues of the System for such year after deducting from such Gross Revenues
an amount equal to the current expenses of operation and maantenance of the System for such
year which are directly attributable to (l) all fuel costs related to the production of electric
energy by the City and/or (u) the purchase of electnc energy by the City
Additional excess Pledged Revenues may, at the option of the City Council, be deposited to the credit of the
Improvement Fund as permitted by Sentmn 22 (b) hereof, but no such additional deposit is required All
investment interest income from the Extension and Improvement Fund shall be retained in and remain a part
of such Fund
Section 22 DEFICIENCIES, EXCESS PLEDGED REVENUES (a) If on any occasion there shall
not be sufficient Pledged Revenues to make the required deposits into the Interest and Sinking Fund or the
Reserve Fund, such deficiency shall be made up as soon as possible from the next available Pledged Revenues
(b) Subject to making the required deposits to the credit of the various Funds when and as required
by this Ordinance or any ordinance authorizing the issuance of Additional Bonds, any surplus Pledged
Revenues may be used by the City for any lawful purpose
24
Sectmn 23 PAYMENT OF PARITY BONDS AND ADDITIONAL BONDS On or before
December l, 1998, and seunannually on or before each June I and December 1 thereafter while any of the
Panty Bonds or Addlt:onal Bonds are outstanding and unpaid the C~ty shall make available to the Paying
Agents therefor, out of the Interest and Stoking Fund, or ffnecessary, out of the Reserve Fund, money suffic,ent
to pay, on each of such dates, the pnnolpal of and mterest on the Panty Bonds and Additional Bonds as the
same matures and comes due, or to redeem the Panty Bonds or Adthtlonal Bonds prior to maturity, either upon
mandatory redemptton or at the option of the City At the d:rectaon of the Ctty the Paying Agents shall e~ther
dehver pa:d Panty Bonds and Add,t~onal Bonds, and any interest coupons appertammg thereto, to the Ctty or
destroy all pa, d Panty Bonds and Additional Bonds, and any coupons apperta:nmg thereto, and furnish the C~ty
wath an appropriate eert,fieate of cancellation or destruction
Sectmn 24 FINAL DEPOSITS (a) Any Panty Bond or Add~ttonal Bond shall be deemed to be pa~d,
rettred, and no longer outstandmg wathm the mean,ng of thxs Ord:nance when payment of the prmc:pal of,
redempt;on premium, ~f any, on such Panty Bond or Adthtional Bond, plus interest thereon to the due date
thereof (whother such due date be by reason of maturity, upon redempt,on, or otherwase) etther (~) shall have
been made or caused to be made m accordance w~th the terms thereof (mcludmg the gtvmg of any reqmred
not,ce of redemption or prov, sion for the proper giving of such notice havang been made), or (n) shall have been
provided by :rrevocably depositing wath or malang available to a Pay,ng Agent therefor, m trust and
:rrevoeably set aside exclusively for such payment, (l) money suffic,ent to make such payment or (2)
Government Obhgataons wbach mature as to pnnc~pal and ~nterest tn such amounts and at such tunes as wall
insure the avaflabthty, vnthout remvestment, of suffictent money to make such payment, and all necessary and
proper fees, compensation, and expenses of such Paying Agent pertaining to the Panty Bonds and Additional
Bonds wath respect to wl.ach such deposit is made shall have been pa~d or the payment thereofprov,dad for to
the sat~sfact,on of such paying agent At such tune as a Bond or Addltmnal Bond shall be deemed to be pa~d
hereunder, as aforesaid, it shall no longer be secured by or entitled to the benefits of ttus Ordinance or a hen
on and pledge of the Pledged Revenues, and shall be entitled to payment solely from such money or Govern-
ment Obhgatmns
(b) Any moneys so deposited wath a paying agent may at the threct~on of the C:ty also be invested m
Government Obhgatmns, maturing m the amounts and tunes as herembefore set forth, and all meome from all
Government Obligations m the hands of the payang agent pursuant to th~s Sect:on which ts not required for the
payment of the Panty Bonds and Additional Bonds, the redemption premmm, ffany, and interest thereon, wath
respect to wh:ch such money has been so deposited, shall be turned over to the C~ty or deposited as d~rected
by the C:ty
Section 25 ADDITIONAL BONDS (a) The City shall have the nght and power at any tune and
from tune to tune, and m one or more sones or :ssues. to authorize, tssue, and deliver additional panty revenue
bonds (hereto called "Addit,onal Bonds"), m ancordanee with law, tn any amounts, for any law'rial purpose.
including tiao refunding ofany Panty Bonds or Adchtmnal Bonds, or other obhgat~ons Such Addlt,onal Bonds,
ff and when authorized, ,ssued, and dehvered m accordance wath tins Ordinance, shall be payable from and
secured by an irrevocable first hen on and pledge of the Pledged Revenues, equally and ratably on a panty m
all respects wath the Panty Bonds and any other outstandmg Addit~onal Bonds
(b) The prmclpal of all Additional Bonds must be scheduled to be pard or mature on December 1 of
the years m wh:ch such pnnc,pal ~s scheduled to be patd or mature
Sect,on 26 FURTHER REQUIREMENTS FOR ADDITIONAL BONDS Additional Bonds shall
be ~ssued only m accordance wathth~s Ordinance, and no installment, Sones, or ,ssue of Add~tmnal Bonds shall
be ~ssued or dahvered unless
25
(a) The Mayor of the City and the City Secretary sign a written certificate to the effect that the City
,s not in default as to any covenant, condition, or obhgat,on in connection vath all then outstanding Panty
Bonds and Additional Bonds, and the ordinances authorizing same, and that the Interest and Sinking Fund and
the ReserVe Fund each contains the amount then required to be therem
(b) An independent certified public accountant, or independent firm of certified public accountants,
acting by and through a certified public accountant, signs a written certificate to the effect that, in his or its
opinion, during either the next preceding fiscal year, or any twelve consecutive calendar month period out of
the 18-month period mnnediately preceding the month m which the ordinance authorizing the issuance of the
then proposed Additional Bonds is passed, the Pledged Revenues were at least 0) 1 25 times an amount equal
to the average annual principal and interest requirements, and (ii) 1 10 tunes an amount equal to the principal
and interest requirements durmg the fiscal year during which such requirements are scheduled to be the
greatest, of all Panty Bonds and Add~tional Bonds wtuch are scheduled to be outstanding aider the delivery of
the then proposed Additional Bonds It is specifically provided, however, that in calculating the amount of
Pledged Revenues for the purposes of this subsection (b), if there has been any increase in the rates or charges
for serwces of the System which is then in effect, but which was not in effect during all or any part of the entire
period for which the Pledged Revenues are being calculated (heremafter referred to as the "entire period") then
the certified pubho accountant, or m lieu of the certified public accountant a firm of consulting engineers, shall
determine and certify the amount of Pledged Revenues as being the total of (1) the actual Pledged Revenues for
the entire period, plus (ii) a sum equal to the aggregate amount by which the actual bfllmgs to customers of the
System during the entire period would have been increased if such increased rates or charges had been m effect
dunng the entire period
(c) Provision shall be made m the ordinance anthonzmg their issuance for mcreasmg the Reserve Fund
to the Required Reserve Amount as required by Section 20 hereof
(d) All calculations of average annual principal and interest requirements of any bonds made m
connection vath the issuance of any then proposed Additional Bonds shall be made as of the date of such
Additional Bonds, and also in making calculations for such purpose, and for any other purpose under this
Ordinance, principal amounts of any bonds which must be redeemed prior to maturity pursuant to any
apphcabl¢ mandatory redemption requirements shall be deemed to be maturing amounts of pnncipal of such
bonds
Section 27 GENERAL COVENANTS The City further covenants and agrees that m accordance
vath and to the extent reqmred or penmtted by law
(a) Performance It vail fa~thfi~lly perform at all times any and all covenants, undertakings,
stipulations, and provisions contained m tins Ordinance, and each ordinance anthonzmg the issuance of
Additional Bonds, and m each and every Panty Bond and Additional Bond, that it will promptly pay or cause
to be pa~d the prmcapal of and mterest on every Panty Bond and Addmonal Bond, on the dates and m the places
and manner prescribed in such ordinances and Panty Bonds or Additional Bonds, and that ~t vail, at the tunes
and an the manner prescribed, deposit or cause to be deposited the amounts required to be deposited into the
Interest and Smlang Fund and the Reserve Fund, and any holder of the Panty Bonds or Addmonal Bonds may
require the City, its officials, and employees, to carry out, respect, or enforce the covenants and obligations of
this Ordinance, or any ordinance authorizing the issuance of Additional Bonds, by all legal and eqmtable
means, including specifically, but vathout hm~tation, the use and filing of mandamus proceedings, m any court
of competent jurisdiction, ag~unst the C~ty, ~ts officials, and employees
26
(b) City's Legal Authont~ The City is a duly created and ex~stmg home rule city of the State of
Texas, and is duly authorized under the laws of the State o~'Texas to create and issue the Parity Bonds and
Additional Bonds, that all action on its part for the creation and issuance of the said obligations has been or
will be duly and effectively taken, and that said obhgat~ons ~n the hands of the holders and owners thereof are
and will be valid and enforceable special obligations of the City In accordance with their terms
(c) Title The City has or will obtain lawful title to the lands, buildings, structures, and facflit~es
constituting the System, that it warrants that it wall defend the title to all the aforesaid lands, buddmgs,
structures, and facilities, and every part thereof, for the benefit of the holders and owners of the Panty Bonds
and Additional Bonds, agamst the claims and demands of ali persons whomsoever, that ~t is lawfully qualified
to pledge the Pledged Revenues to the payment of the Parity Bonds and Add~tional Bonds in the manner
prescribed herein, and has lawfully exercised such rights
(d) Liens The City will from tnne to tnne and before the same become delmquent pay and d~scharge
all taxes, assessments, and governmental charges, if any, which shall be lawfully maposefl upon it, or the
System, that it will pay all lawful clauns for rents, royalties, labor, materials, and supplies wluch if unpaid
might by law become a lien or charge thereon, the lien of which would be prior to or interfere wath the liens
hereof, so that the priority of the liens granted hereunder shall be fully preserved in the manner provided hereto,
and that it will not create or suffer to be created any mechamc's, laborer's, materialman's, or other lien or
charge wbach nught or could be prior to the liens hereof, or do or suffer any matter or thing whereby the liens
hereofanght or could be unpaired, provided, however, that no such tax, assessment, or charge, and that no such
clauns wtuch nught be used as the basis ora mechanic's, laborer's, materialman's, or other lien or charge, shall
be required to be paid so long as the validity of the same shall be contested m good faith by the City
(e) Qperataon of System. No Free Service Whale the Panty Bonds or any Add~tional Bonds are
outstanding and unpmd the City shall continuously and efficiently operate the System, and shall maintain the
System m good condition, repair, and working order, all at reasonable cost No free service of the System shall
be allowed, and should the City or any of its agencies, mstrumentahties, lessors, or concessionaires make use
of the serwces and facflitaes of the System, payment monthly of the standard retail price of the servtces
prowded shall be made by the City or any of its agencies, instrumentalities, lessors, or concessionaires out of
funds from sources other than the revenues of the System, unless made from surplus Pledged Revenues as
penmtted by Section 22(b) hereof
(0 Further Encumbrance Wtnle the Parity Bonds or any Add~tional Bonds are outstanding and
unpaid, the City shall not additionally encumber the Pledged Revenues m any manner, except as penmtted m
ttus Ordinance m connection wth Additional Bonds, unless said encumbrance ~s made jumor and subordinate
m all respects to the liens, pledges, covenants, and agreements oftlus Ordinance and any ordinance anthonzmg
the issuance of Additional Bonds, but the right of the City to issue revenue bonds payable from a subordanate
lien on surplus Pledged Revenues is specifically recogmzed and retained, as permitted under Section 22(b)
hereof)
(g) Sale or Dlsuosal of Prooertv Wlule the Panty Bonds or any Additional Bonds are outstanding
and unpaid, the C~ty shall not sell, convey, mortgage, encumber, lease, or in any manner transfer title to, or
dedicate to other use, or otherv,~se d~speae of, the System, or any significant or substantial part thereof,
provided that whenever the City deems it necessary to dispose of any property, machinery, fixtures, or
equipment, or dedicate such property to other use, it may do so either when it has made arrangements to replace
the same or provide substitutes therefor, or it is determmed by resolutmn of the City Council that no such
replacement or substatute is necessary
27
(h) Insurance (1) The City shall cause to be insured such parts of the System as would usually be
insured by corporations operatmg hke properties, w~th a responsible insurance company or companies, against
risks, accidents, or casnalt~es against which and to the extent insurance ~s usually earned by corporataons
operatang like properties, including, to the extent reasonably obtainable, fire and extended coverage ~nsurance,
insurance against damage by floods, and use and occupancy insurance Public habdity and property damage
insurance also shall be earned unless the City Attorney g~ves a written op~mon to the effect that the Cxty ~s not
hable for clmms wbach would be protected by such insurance All insurance premiums shall be prod as an
expense of operation ofthe System At any tame while any contractor engaged ~n construction work shall be
fully responsible therefor, the C~ty shall not be reqmred to carry insurance on the work being constructed ffthe
contractor ~s required to carry appropriate insurance All such policies shall be open to the mspectaon of the
Bondholders and their representataves at all reasonable tames Upon the happemng of any loss or damage
covered by insurance from one or more of smd causes, the C~ty shall make due proof of loss and shall do all
things neeessaPy or desirable to canse the msunng companies to make payment m full d~rectly to the City The
proceeds of insurance covering such property, together wath any other funds necessary and avadable for such
purpose, shall be used forthwith by the C~ty for repamng the property damaged or replacing the property
destroyed, provided, however, that if smd insurance proceeds and other funds are msuffictent for such purpose,
then smd insurance proceeds pertaining to the System shall be deposited m a specml and separate trust fund,
at an offioml depository of the City, to be designated the Insurance Account The Insurance Account shall be
held untal such tune as other funds become avadable wtuch, together wth the Insurance Account, v~ll be
suffiment to make the repmrs or replacements ongmally required
(2) The annual audit hereinafter reqmred may contmn a secUon commentmg on whether or not the Cny
has complied w~th the requirements oftbas Section w~th respect to the maintenance of msurance, and shall state
whether or not all msurance premiums upon the insurance poheles to wbach reference Is made have been prod
0) Annuol B~-dget and Rate Covenant The City shall prepare, prior to the beginning of each fiscal
year, an annual budget, m accordance wth law, reflecting an estamate of cash receipts and d~sbursements for
the ensuing fiscal year m sufficient detail to ~ndxeate the probable Gross Revenues and Pledged Revenues for
such fiscal year The City shall fix, establish, maintain, and collect, such rates, charges, and fees for the use
and avadabfl~ty of the System at all tnnes as are necessary (1) to produce Gross Revenues sufficient, together
w~th any other Pledged Revenues, to pay all current operation and mmntenance expenses of the System, and
(2) to produce an amount of Pledged Revenues dunng each fiscal year at least equal to the greater of 1 25 tunes
the average annual pnnc~pal and interest requirements of all then outstanding Panty Bonds and Adchtaonal
Bonds or 1 25 times the succeeding fiscal year's principal and mterest reqmrements of all then outstanding
Panty Bonds and Additional Bonds
(I) Records The City shall keep proper books of record and account m wtuch full, true, proper, and
correct entries vail be made of all dealings, act~vitaes, and transactions relating to the System, the Pledged
Revenues, and the Funds created pursuant to tins Ordinance, and all books, documents, and vouchers relating
thereto shall at all reasonable tames be made available for ~nspectaon upon request of any Bondholder or citazen
of the City To the extent consistent wath the prows~ons ofth~s Ordinance, the C~ty shall keep its books and
records m a manner conforming to standard accounting practaces as usually would be followed by private
corporaUons owning and operating a sunflar System, uath appropriate reeogrataon bemg g~ven to essentaal
dlfference~ between mumeipal and corporate accountmg practaees
(k) AudlSs After the close of each fiscal year wtule any of the Panty Bonds or any Add~taonal Bonds
are outstanding, an audit will be made of the books and accounts relatang to the System and the Pledged
Revenues by an independent eemfled public accountant or an independent firm of certified pubhc accountants
As soon as praetacable after the close of each such year, and when satd ancht has been completed and made
28
avadable to the City, a copy of such audit for the preceding year shall be mailed to the Municipal Advisory
Courted 0fTexas, to each paying agent for any bonds payable from Pledged Revenues, and to any Bondholders
who shall so request ,n writing The annual audit reports shall be open to the inspection of the Bondholders
and their,agents and representatives at all reasonable times
(1) Governmental Agenmes It will comply w~th all of the terms and conditions of any and all
franchises, permits, and authorizations applicable to or necessary with respect to the System, and whmh have
been obtained from any governmental agency, and the C,ty has or will obtain and keep m full force and effect
all francttises, pernuts, authorization, and other requirements applicable to or necessary vath respect to the
acqmsmon, construction, equipment, operation, and maintenance of the System
(m) No Com~etition It will not operate, or grant any francluse or, to the extent it legally may, pemut
the acqm~mon, construction, or operation of, any facilities whmh would be in competition vath the System, and
to the extent that it legally may, the City vail protublt any such competing facilities
(n) No Arbitra~e The City covenants to and vath the purchasers of the Panty Bonds and any
Additional Bonds that no use vail be made of the proceeds of any of such bonds at any time throughout the term
of any of such bonds wbach, if such use had been reasonably expected on the date of delivery of any of such
bonds to and payment therefor by the purchasers, would have caused any of such bonds to be arbitrage bonds
vatlun the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), or any
regulatlo,s or rulings pertatmng thereto, and by t/us covenant the City is obligated to comply vath the
reqmremCnts of the aforesmd Code and all applicable and pertinent Department of the Treasury regulations
relating t0 arbitrage bonds The City further coveaants that the proceeds of all such bonds vail not othervase
be used chrectly or indirectly so as to cause all or any part of such bonds to be or become arbitrage bonds
within the meaning of the aforesmd Code, or any regulations pertaining thereto
Section 28 AMENDMENT OF ORDINANCE (a) The holders or owners of Panty Bonds and
Additional Bonds aggregating m principal amount 51% of the aggregate principal amount of then outstanding
Parity Bonds and Adchtmnal Bonds shall have the nght from trine to tnne to approve any amendment to ttus
Ordinance wbach may be deemed necessary or desirable by the City, prowded, however, that nothing hereto
contained shall perrmt or be construed to pemut the amendment of the terms and conditions m flus Ordinance
or m the Panty Bonds or Adchtlonal Bonds so as to
(I) Make any change m the maturity of the outstandmg Panty Bonds or Adchtlonal Bonds,
(2) Reduce the rate of interest borne by any of the outstanding Panty Bonds or Additional Bonds,
(3) Reduce tho amount of the pnnmpal payable on the outstanding Panty Bonds or Additional
Bonds,
(4) Modify the terms of payment of prmmpal of or interest on the outstanding Panty Bonds or
Additional Bonds, or impose any conditions vath respect to such payment,
(5) Affect the rights of the holders or owners of less than all of the Panty Bonds and Additional
Bonds then outstanding,
(6) Change the muumum percentage of the principal amount of Panty Bonds and Addmonal
Bonds necessary for consent to such amendment
29
(b) If at any t,me the City shall desire to amend the Ordinance under th,s Section, the City shall cause
notice of the proposed amendment to be publ,shed ,n a flnanc,al pubhcatton of general circulation tn The City
of New York, New York, once durmg each calendar week for at least two successive calendar weeks Such
not,ce shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof ts on file
at the pnnetpal office of the Paying Agents for ,nspectton by all holders or owners of Panty Bonds and Add,-
t,onal Bonds Such pubhcation ts not required, however, ffnottce in writing is given to each holder or owner
of Panty Bonds and Additional Bonds
(c) Whenever at any tmae not less than thirty days, and uathm one year, from the date of the first
publ,catton ofsa,d notice or other service of written notxce the City shall receive an instrument or instruments
executed by the holders or owners of at least 51% m aggregate pnnc,pal amount of all Panty Bonds and
Adfltttenal Bonds then outstanding, wh,ch instrument or mstmments shall refer to the proposed amendment
described tn said notice and wbach specifically consent to and approve such amendment m substant,ally the
form of the copy thereof on file w~th the Paying Agents, the City Council may pass the amendatory ordinance
tn substantially the same form
(d) Upon the passage of any amendatory ordinance pursuant to the provisions of tins Section, this
Ordinance shall be deemed to be amended m accordance vath such amendatory ordinance, and the respective
rights, duties, and obhgatlons under flus Ordinance of the City, and ali the holders or owners of then out-
standing Panty Bonds and Additional Bonds and all future Panty Bonds and Additional Bonds shall thereafter
be detenmned, exercised, and enforced hereunder, subject tn all respects to such amendments
(e) Any consent given by the holder or owner of a Panty Bond or Additional Bond pursuant to the
prowstons of flus Soction shall be irrevocable for a period of six months from the date of the first pubhcatton
of the notice provided for mth, s Seetmn, and shall be conclusive and binding upon all future holders or owners
of the same Panty Bond or Addlt~onal Bond during such period Such consent may be revoked at any tune
after slx months from the date of the first pubhcatlon of such notice by the holder or owner who gave such
consent, or by a successor tn t~tle, by filing notice thereof uath the paying agents and the City, but such revoca-
tion shall not be effective ffthe holders or owners of 51% m aggregate pnnctpal amount of the then outstanding
Panty Bonds and Add~t,onal Bonds as m flus Secuon defined have, prior to the attempted revocation, consented
to, and approved the amendment
(f) For the purpose of flus SecUon, the fact of the holding of Panty Bonds or Additional Bonds wtueh
are tn bearer, coupon form, by any bondholder and the amount and numbers of such bearer Panty Bonds or
Adthttonal Bonds and the date of their holding same, may be proved by the affida,at of the person clamung to
be such holder or owner, or by a cerUficate executed by any trust company, bank, banker, or any other
depository wherever situated show,rig that at the date thereto mentioned such person had on deposit wuth such
trust company, bank, banker, or other depository, the Panty Bonds and A&httonal Bonds described m such
certificate The City may conclusively assume that such ownersbap contmues until written notice to the
contrary is served upon the City The ownership ofall registered Panty Bonds and Addtuonal Bonds shall be
determined from the registrar,on books kept by the reg, strar therefor
Sect,on 29 DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS (a)
Renlacement Bonds In the event any outstanding Bond ts damaged, mutilated, lost, stolen, or destroyed, the
Paying Agent/Registrar shall cause to bo printed, executed, and del,vered, a new bond of the same principal
amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, tn replacement
for such Bond ,n the manner hereinafter prowded
3O
(b) Aoohcation for Reolacement Bonds Application for replacement of damaged, mutilated, lost,
stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying AgentYRegistrar In
every case of loss, theft, or destruction of a Bond, the registered owner applying for a replacement bond shall
furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may be required by them
to save each ofthem harmless from any loss or damage with respect thereto Also, in every case ofloss, theft,
or destruction of a Bond, thc registered owner shall furnish to the Issuer and to the Paying Agent/Registrar
evidence to their satisfaction ortho loss, theft, or destruction of such Bond, as the case may be In every case
of damage or mutilation of a Bond, the registered owner shall surrender to the Paying Agent/Registrar for
cancellatton the Bond so damaged or mutilated
(c) No Default Occurred Notwithstanding the foregoing provisions of flus Section, in the event any
such Bond shall have matured, and no default has occurred wluch is then continuing in the payment of the
principal of, redemption prermum, if any, or interest on the Bond, the Issuer may authorize the payment of the
same (without surrender thereof except m the case of a damaged or mutilated Bond) instead of issuing a
replacement Bond, provided secunty or mdemmty is fumished as above provided m this Section
(d) Ch~,rge for Issuing, Renlacement Bonds Prior to the issuance of any replacement bond, the Paying
Agent/Registrar shall charge the registered owner of such Bond with all legal, printing, and other expenses m
connection therewith Every replacement bond issued pursuant to the prowsions oftbas Section by wrme of
the fact that any Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the Issuer whether
or not the lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be
entgled to all the benefits of flus Orchnance equally and proportionately with any and all other Bonds duly
issued under this Ordinance
(e) Authority for Issum~ Renlacement Bonds In accordance with Section 6 of Vemon's Ann Tex
Clv St Art 717k-6, this Seetinn of flus Ordinance shall constitute authority for the issuance of any such
replacement bond without necessity of further action by the governing body of the Issuer or any other body or
person, and the duty of the replacement of such bonds is hereby anthonzed and unposefl upon the Paying
Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form and
manner and with the effect, as prowded m SectJon 6(d) of flus Ordinance for Bonds issued in conversion and
exchange for other Bonds
Section30 COVENANTSREOARDINGTAX-EXEMPTION TheIssuercovenantstoreframfrom
any action winch would adversely affect, and to take such action to ensure, the treatment of the Bonds as
obligations described in seetaon 103 of the Code, the interest on which is not includable m the "gross raceme"
of the holder for purposes of federal raceme taxataon In furtherance thereof, the Issuer covenants as follows
(a) to take any action to assure that no more than l0 percent of the proceeds of the Bonds
(less amounts deposited to a reserve fund, if any) are used for any "pnvnte business use", as defined
in section 141(b)(6) of the Code or, if more than l0 percent of the proceeds are so used, that amounts,
wh~ther or not received by the Issuer, with respect to such private business use, do not, under the terms
of flus Ordinance or any underlying arrangement, directly or indirectly, secure or proxade for the
payment of more than l0 percent of the debt service on the Bonds, in contravention of section
141(b)(2) nfthe Code,
(b) to take any action to assure that in the event that the "private business use" described
m subsection (a) hereof exceeds 5 percent of the proceeds of the Bonds (less amounts deposited rote
a reserve fund, if any) then the amount m excess of 5 percent is used for a "private business use" which
31
IS "related" and not "disproport~onate", within the meaning of section 141 (b)(3) of the Code, to the
governmental use,
(e) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if
any) is directly or indirectly used to finance loans to persons, other than state or local governmental
units, in contravention of section 14 l(c) of the Code,
(d) to refrain frotn taking any action which would otherwise result in the Bonds being
treated as "private activity bonds" w~th~n the meaning of secUon 14 l(b) of the Code,
(e) to refrain frotn taking any action that would result xn the Bonds being "federally
guaranteed" within the tneanmg of section 149(b) of the Code,
(f) to refrain from using any portion of the proceeds of the Bonds, chrectly or ~nd~rectly,
to aeqmre or to replace funds winch were used, chreetly or tnd~rectly, to acquire tnvestment property
(as defined tn section 148(b)(2) of the Code) winch produces a matenally ingher yaeld over the term
of the Bonds, other than tnvestment property acquired vath --
(1) proceeds of the Bonds invested for a reasonable tetnporary period of 3 years
or less until such proceeds are needed for the purpose for winch the Bonds are issued,
(2) amounts invested tn a bona fide debt service fund, w~thtn the tneanmg of
section 1 148-1(b) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacetnent fund
to the extent such amounts do not exceed l0 percent of the stated pnnc~pal amount (or, tn the
case of a d~scount, the issue pnce) of the Certificates,
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as
proceeds of the Bonds, as may be necessary, so that the Bonds do not othervnse contravene the
requirements of section 148 of the Code (relating to arbitrage), Section 149(g) of the Code (relattng
to hedge bonds), and, to the extent appheable, section 149(d) of the Code (relattng to advance
refundings), and
(h) to pay to the Umted States of America at least once during each five-year period
(begmmng on the date of dehvery of the Bonds) an amount that is at least equal to 90 percent of the
"Excess Earmngs", vathtn the meaning of section 148(f) of the Code and to pay to the Umted States
of America, not later that 60 days after the Bonds have been paid tn full, 100 percent of the amount
then reqmred to be pa~d as a result of Excess Earntngs under section 148(0 of the Code
For purposes of the foregotng (a) and (b), the Issuer understands that the term "proceeds" includes
"disposmOn proceeds" as defined in the Treasury Regulations and, in the case of refundtng bonds, transferred
proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance ofthe Bonds It
ns the understanding of the Issuer that the covenants eontatned herein are intended to assure eomphance w~th
the Code and any regulatmns or rulings protnulgated by the U S Department of the Treasury pursuant thereto
In the event that regulations or rulings are herea~er protnulgated winch modify, or expand provisions of the
Code, as appheable to the Bonds, the Issuer will not be required to cotnply with any covenant contained here~n
to the extent that such fmlure to cotnply, m the op~mon of nationally-recognized bond counsel, will not
32
adversely affect the exemption from federal income taxation of interest on the Bonds under section 103 of the
Code In the event that regulations or rulings are hereafter promulgated which ~mpose addntional requirements
which are appheable to the Bonds, the Issuer agrees to comply with the addit~onal requirements to the extent
necessary, m the opinion ofnatlonally-recogmzed bond counsel, to preserve the exemption from federal income
taxatnon of interest on the Bonds under seet~on 103 of the Code
In order to facd~tate compliance w~th the above covenant (h), a "Rebate Fund" ns hereby established
by the Issuer for the sole benefit of the Umted States of America, and such fund shall not be subject to the
claim of any other person, including without limitation, the owners of the Certificates The Rebate Fund ~s
estabhshod for the additional purpose of comphanee with Section 148 of the Code
Section 31 DISPOSITION OF PROJECT The Issuer covenants that the property constituting the
Project will not be sold or otherwise dnsposed m a transaction resuinng m the recenpt by the Issuer of cash or
other compensation, unless the Issuer obtains an opinion of nat~onally-recogmzed bond counsel that such sale
or other disposit~on wall not adversely affect the tax-exempt status of the Bonds
Section 32 INTEREST EARNINGS ON BOND PROCEEDS Interest earnings derived from the
~nvestment of proceeds from the sale of the Imtnal Bond, other than proceeds deposited m the Interest and
Smknng Fund and the Reserve Fund, shall be used along wath other avmlable proceeds for improving the
System, prowded that after completion of the ~mprovements if any of such interest earnings remain on hand,
such interest earrangs shall be deposited m the Interest and S~nking Fund It ns further prowdefl, however, that
any interest earnings on bond proceeds wbach are required to be rebated to the Umted States of America
pursuant to the Covenants Regarding Tax-Exemption herein so as to prevent the Bonds from being arbntrage
bonds shall be so rebated and not considered as interest earnings for the purposes of this Ordinance
Section 33 CUSTODY, APPROVAL, AND REGISTRATION OF BONDS, BOND COUNSEL'S
OPINION, CUSIP NUMBERS, PREAMBLE, AND INSURANCE The Mayor of the Issuer is hereby
authorized to have control of the Imtlal Bond nssued hereunder and all necessary records and proceedings
pertaining to the Imt~al Bond pending ~ts dehvery and ~ts ~nvest~gation, examination, and approval by the Attor-
ney General of the State of Texas, and ~ts registration by the Comptroller of Public Accounts of the State of
Texas Upon reg~stration ofthe Imt~al Bond said Comptroller of Pubhc Accounts (or a deputy designated m
writing to act for sa~d Comptroller) shall manually s~gn the Comptroller's Reg~stration Certificate on such
Initial Bond, and the seal of said Comptroller shall be nnpressed, or placed m fansnmale, on such Imtml Bond
The approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option
of the Issuer, be pnnted on the Initial Bond or on any Bonds issued and delivered m conversion of and exchange
or replacement of any Bond, but neither shall have any legal effect, and shall be solely for the convemence and
reformation ofthe registered owners ofthe Bonds The preamble to ttus Ordinance is hereby adopted and made
a part hereof for all purposes If insurance ~s obtained on any ofthe Bonds, the respective Imtial Bond and all
other Bonds shall bear an appropriate legend concerning insurance as provided by the insurer
Section 34 SALE OF INITIAL BONDS The Imtlal Series 1998A Bond is hereby sold and shall
be dehvered to Salomon Smith Barney for cash for 98 5% of the par value thereof and accrued ~nterest thereon
to date of dehvery It ~s hereby officially found, determined, and declared that the Imtnal Series 1998A Bond
has been sold at pubh¢ sale to the b~dder offering the lowest interest cost, after rece~ving sealed bids pursuant
to an Official Notice of Sale and B~ddmg Instructions and Official Statement dated July 7, 1998, prepared and
d~str~bute~lmconnectionwaththesaleofthelmtialSenes 1998ABond Sa~d Official Notice of Sale and
Blddnng Instructions and Official Statement, and any addenda, supplement, or amendment thereto have been
and are hereby approved by the Issuer, and their use in the offer and sale of the Series 1998A Bonds is hereby
33
approved It is further officially found, determined, and declared that the statements and representations
contained In said Official Notice of Sale and Official Statement are tree and correct m all material respects
Section 35 DTC REGISTILATION The Bonds initially shall be issued and dehvemd in such manner
that no physical distribution of the Bonds will be made to the public, and The Depository Trust Company
("DTC"), New York, New York, lmtiaily will act as depository for the Bonds DTC has represented that it is
a limited ,purpose trust company incorporated under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" w~thm the meaning of the New York Uniform Commercial
Code, and a "¢leanng agency" registered under Section 17A of the federal Securities Exchange Act of 1934,
as amended, and the Issuer accepts, but m no way verifies, such representations The Initial Bond authorized
by this Ordinance shall be dehvered to and registered m the name ofthe Purchaser However, it is a condmon
ofdehvery and sale thatthe Purchaser, m,mediately after such delivery, shall cause the Paying Agent/Registrar,
as provided for in this Ordinance, to cancel said Initial Bond and deliver in exchange therefor a substitute Bond
for each maturity of such Initial Bond, w~th each such substitute Bond to be registered in the name of CEDE
& CO, the nominee of DTC, and it shall be the duty of the Paying Agent/Registrar to take such action It is
expected that DTC wll hold the Bonds on behalf of the Purchaser and/or the DTC Participants, as defined and
described m the Official Statement referred to and approved m Section 34 hereof (the "DTC Participants")
So long as each Bond is registered m the name of CEDE & CO, the Paying Agent/Registrar shall treat and
deal w~th DTC m all respects the same as lflt were the actual and beneficial owner thereof It is expected that
DTC will maintain a book entry system wbach v, all identify beneficial ownerstup of the Bonds by DTC Partacl-
pants in integral amounts of $5,000, w~th transfers of ownership being effected on the records of DTC and the
DTC Par~clpants pursuant to rules and regulations established by them, and that the substitute Bonds antially
deposited w~th DTC shall be unmobthzed and not be further exchanged for substitute Bonds except as hereinaf-
ter provided The Issuer is not responsible or liable for any functions of DTC, will not be responsible for
paying any fees or charges w~th respect to its serwces, will not be responsible or liable for maintaining,
supervising, or reviewing the records of DTC or the DTC Participants, or protecting any ~nterests or rights of
the beneficial owners ofthe Bonds It shall be the duty ofthe Purchaser and the DTC Participants to make all
arrangements w~th DTC to establish thas book-entry system, the beneficial ownersbap of the Bonds, and the
method of'paying the fees and charges of DTC The Issuer does not represent, nor does it m any way covenant
that the antiai book-entry system established w~th DTC will be maintained in the future The Issuer reserves
the right and option at any tune m the future, m its sole discretion, to terminate the DTC (CEDE & CO ) book-
entry only registration requirement described above, and to penmt the Bonds to be registered m the name of
any owner Ifthe Issuer exercises its right and option to terminate such reqmrement, it shall give written notice
of such termination to the Paying Agent~egistrar and to DTC, and thereafter the Paying Agent/Registrar shall,
upon pre~entatmn and proper request, register any Bond m any name as provided for m th~s Ordinance
Notwithstanding the lmt~ai establishment of the foregoing book-entry system w~th DTC, if fur any reason any
of'the originally delivered substitute Bonds is duly filed w~th the Paying Agent/Registrar with proper request
for transfer and substitution, as provided for in this Ordinance, substitute Bonds will be duly delivered as
provided m tlus Ordinance, and there will be no assurance or representation that any book-entry system will
be maintained for such Bonds
Section 36 COMPLIANCE WITH RULE 15c2-12 (a) Annual Reports 0) The Issuer shall
provide annually to each NRMSIR and any SID, vathm s~x months after the end of each fiscal year ending in
or after 1998, financial reformation and operating data vath respect to the Issuer of the general type included
in the final Official Statement authorized by Section 34 of tins Ordinance, being the information described in
Exhibit Aihereto, wluch Exhibit is attached to and incorporated in tlus Ordinance as If written word for word
hereto Any financial statements so to be provided shall be (1) prepared in accordance vnth the accounting
principles described in Ex3~lblt A her~o, or such other accountLug principles as the Issuer may be required to
employ from time to time pursuant to state la~v or regulation, and (2) audited, if the Issuer commissions an
34
audit of such statements and the aud,t is completed wathtn the period during wbach they must be provided If
the audtt of such financ,al statements ts not complete w~tNn such period, then the Issuer shall prowde unaudtted
finanmal statements by the reqmmd ttme and will provide audited financml statements for the apphcable fiscal
year to each NRMSIR and any SID, when and ~fthe audit report on such statements become available
(n) If the Issuer changes ,ts fiscal year, ~t wall not,fy each NRMSIR and any SID of the change (and
of the date of the new fiscal year end) prior to the next date by whmh the Issuer otherwase would be reqmred
to prey,de financial mformaUon and operating data pursuant to thts Sect,on The financml mformaUon and
operating data to be prey,dud pursuant to this Section may be set forth m full ,n one or mom documents or may
be included by specific reference to any document 0ncludmg an offimal statement or other offenng document,
tf ~t ,s available from the MSRB) that theretofore has been prowded to each NRMSIR and any SID or filed
wath the SEC
(b) Material Event Notmes The Issuer shall notify any SID and rather each NRMSIR or the MSRB,
m a tunely manner, of any of the followang events wath respect to the Bonds, ff such event is material watlun
the meaning of the federal securities laws
1 Prmmpal and ~nterest payment dehnquenc~es,
2 Non-payment related defaults,
3 Unscheduled draws on debt service reserves reflecting financtal difficulties,
4 Unscheduled draws on credit enhancements reflectmg financial thfficult~es,
5 Substitution of credit or liquidity prowders, or their fadure to perform,
6 Adverse tax optmons or events affecting the mx-exempt status of the Bonds,
7 Modifications to rights of holders of the Bonds,
8 Bond calls,
9 Defeasances,
l0 Release, substitution, or sale of property securing repayment of the Bonds, and
11 Rating changes
The Issuer shall notify any SID and e~ther each NRMSIR or the MSRB, m a twaely manner, of any failure by
the Issuer to provide finanmal mformatmn or operating data In accordance wath subsection (a) ofth~s Sectmn
by the t~me required by such subsectmn
(c) Limitations. Disclaimers. and Amendments (l) The Issuer shall be obhgated to observe and
perform the covenants specified m this Section for so long as, but only for so long as, the Issuer remains an
"obhgated person" w~th respect to the Bonds w~thm the meanmg of the Rule, except that the Issuer tn any event
will gtve the notice reqmred by Subsectmn (b) hereof of any Bond calls and defeasance that cause the Issuer
to no longer be such an "obligated person"
35
(ii) The provisions of this Section are for the sole benefit of the registered owners and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or
equitable right, remedy, or claim hereunder to any other person The Issuer undertakes to provide only the
financialinformation, 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 reformation that may be relevant
or material to a complete presentation of the Issuer's financial results, condition, or prospects or hereby
undertake to update any reformation provided in accordance w~th this Section or otherwise, except as expressly
provided herein The Issuer does not make any representation or warranty concerning such reformation or its
usefulness to a decision to revest in or sell Bonds at any future date
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER, ITS OFFICERS OR EMPLOYEES
BE LIABLE TO THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY
OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS
PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY
OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE
(iv) No default by the Issuer in obsemng or performing its obligations under ttus Section shall
comprise a breach of or default under the Ordinance for purposes of any other promsion of fins Orchnance
Nothing m this Section is intended or shall act to dlsclaun, waive, or othemase lamt the duties of the Issuer
under federal and state securities laws
(v) The prowsions of this Section may be amended by the Issuer from tLme to tane to adapt to changed
circumstances that arise from a change in legal requirements, a change in law, or a change m the identity,
nature, status, or type of operations of the Issuer, but only if (1) the provisions ofttns Section, as so amended,
would have penmtted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in
compliance w~th the Rule, taking rote account any amendments or interpretations of the Rule since such
offering as well as such changed circumstances and (2) either (a) the registered owners of a majority m
aggregate prmmpnl amount (or any greater amount required by any other promslon of ttus Ordinance that
authorizes such an amendment) of the outstanding Bonds consent to such amendment or Co) a person that is
unaffihatcd w~th the Issuer (such as nanonally recognized bond counsel) determined that such amendmem w~ll
not materially ~mpa~r the interest of the registered owners and beneficial owners of the Bonds If the Issuer so
amends the prowslons of flus Section, it shall include w~th any amended financial reformation or operating data
next promded m accordance w~th subsemon (a) oftlus Section an explanation, m narrative form, of the reason
for the amendment and of the anpact of any change m the type of financial information or operating data so
provided The Issuer may nlso amend or repeal the promsions offins continuing d~sclosure agreement If the
SEC amends or repeals the applicable promsion of the Rule or a court of final junsdmtlon enters judgment that
such provisions of the Rule am invalid, but only if and to the extent that the provisions of fins sentence would
not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds
(d) Defimtions As used in this Section, the following terms have the meanings ascribed to such terms
below
"MSRB" means the Municipal Securities Rulemakmg Board
"IqRMSIR" means each person whom the SEC or its staffhas determined to be a nationally recognized
municipal securities information reposito~ w~thm the meaning of the Rule from time to time
36
"Rule" means SEC Rule 15c2-12, as amended from time to time
"SEC" means the United States Securities and Exchange Commission
"SID" means any person designated by the State of Texas or an authorized department, officer, or
agency thereof as, and determined by the SEC or its staff to be, a state information depository vat]un the
meamng of the Rule from time to tune
Section 37 REFUNDING OF REFUNDED OBLIGATIONS That concurrently vath the delivery
of the Imtial Bond the Issuer shall deposit an amount from the proceeds from the sale of the Imtial Bond vath
Texas Bank, as Escrow Agent, sufficient, together vath other available amounts, to refund all of the Refunded
Obligations m accordance vath Section 7A of Vernon's Ann Tex C~v St Article 717k, as amended The
Issuer hereby authorizes the execution of the Escrow Agreement dated as of July 15, 1998 betweenthe Escrow
Agent and the Issuer The Mayor of the Issuer is authorized and directed to exeente, on behalf of the Issuer,
said Escrow Agreement m the funn and substance presented to this meeting It is hereby fuund and determined
that the refundmg of the Refunded Obligations is advisable and necessary m order to restructure the debt
service requirements and procedures of the Issuer, and that the debt service requirements on the Bonds vail be
less than those on the Refunded Obhgataons, resulting in a reduction m the amount of principal and interest
which otherwase would be payable both on an actual and a present value basis bemg an actual gross debt
service sawngs of approxunately $34,007,197 77, and a present value debt service savings ofapprommately
$8,125,294 83
Secaon 38 FURTHER PROCEDURES The Mayor of the Issuer, the City Secretary of the Issuer,
and all other officers, employees, and agents of the Issuer, and each of them, shall be and they are hereby
expressly anthonzed, empowered, and d~rected from tune to tune and at any tune to do and perform all such
acts and flungs and to execute, acknowledge, and deliver m the name and under the corporate seal and on behalf
of the Issuer all such mstruments, whether or not hereto mentmned, as may be necessary or desirable m order
to carry out the terms and proxasions of flus Bond Ordinance, the Bonds, the sale of the Bonds, the Escrow
Agreement and the Notice of Sale and Official Statement, and the Director of Finance of the City shall cause
the expenses of issuance of the Bonds to be paid from the proceeds of sale of the Imtial Bond or from other
lawfully avmlable funds ofthe Issuer In ease any officer whose signature shall appear on any Bond shall cease
to be such of:fleer before the dehvery of such Bond, such signature shall nevertheless be valid and sufficient
for all purposes the same as if such officer had remained in office until such delivery
Section 39 OPEN MEETINGS The City Council has found and determined that the meeting at
which flus Ordinance is considered is open to the public and that not, ce thereof was given in accordance vath
the provisions of the Texas Open Meetings, Law, Tex Gov't Code, Chapter 551, as amended
Section40 EFFECTIVE DATE This Ordmance shall become effectlve immedlately upon its passage
and approval
37
PASSED AND APPROVED ttus 'dae 21st day of July, 1998
Jack~, Mayo~
ATTEST
APPROVED AS TO LEGAL FORM
Herbert L Prouty, City A'ttomcy
38
EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following mfonnat~on ~s referred to m Section 36 ofth~s Ordinance
Annual Fmancaal Statements and Operating Data
The financml mfonnatmn and operating data vath respect to the Issuer to be prowded annually ~n
accordance w~th such Section are as specified (and included ~n the Appendix or under the tables of the Official
Statement referred to) below
Tables numbered 1 through 14, molus~ve, under the captxons "The Utility System", "Debt Serwce
Reqmrements" and "Financial Information" m the Official Statement
Appenchx B m the Official Statement
Accountmg Principles
The accounting principles referred to m such Section are the accounting principles described m the
notes to tile financial statements referred to m the paragraph above
OFFICIAL BID FORM
Honorable Mayor and City Council July 21, 1998
City of De~ton, Texas
Members of the City Counctl
Reference is made to your Offictal Statement and Nottce of Sale and Btddmg Instmct}ons dated July 7, 1998 of $36,795 000 CITY
OF DENTON, TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 1998A both of which const~tate a part
hereof
Ft~z~,t~.our legally issued Bonds as descrthed m smd Not,ce of Sale and B~ddtng Instructions and Officml Statement, we wdl pay you % of par and accrued interest from date of tssue to date of dehve~y to us for Bonds maturing and beanng mtarest as follows
Principal Interest Principal Interest Principal Interest
Maturny Amount Rate Maturity Amount Rate Matumy Amount Rate
12/1/06 $ 310000 ~"°lo 12/1/14 $ 1235000 ~ 12/I/22 $ 1865000 ~ %
m/07 5~0 000 q, % 12/I/15 1 300 000 ~b' IO % 1211123 ~ 965 000
12/1/08 735000 ~ 12/1/16 1370000 ~ 12/1/24 2065000
12/1/09 950 000 ~,/ °/o 12/I/17 I 440 000 .~ ~% 12/I/25 2 180 000 %
12/1/10 I 015 000 ~°/o 12/1/18 I 515 000 12/I/26 2 295 000 %
12/I/19 I595 000 ~ 12/I/27 2 415 000 %
000 ~ ~O % 1211/20 I 680 000 .~ */* 1211/28 2 545 000 %
120
12/I/13 I 175000 ~'~)O % 12/1/21 I 770000 I°/o 12/I/29 2680000 ,~ %
Bonds maturing on December 1 2006 through December 1,2011 shall be Serial Bonds As mdtcated below, the Btdder may b~d one
or two term bonds cons~stmg of the December 1, 2012 through December I 2029 maturmes with each term conststmg of two or
more consecuttve annual prmctpal amounts accumulated from the maturity schedule shown above For those years which have been
combmed mto term bonds, the prtnctpal amount shown tn the table above shall be the mandatory stoking fund redemptton amounts
m such years except that the amount shown in the year of the term bond maturity date shill mamm m such year The term bonds
created are as follows
Year of
Maturtty Date Ftrst Mandatory Pnnctpal Interest
, December I Redemption Amount Rate
$
$
Our calculation (whmh ~s note part of th~s bid) of the tree ~nterest cost from the above ~s
T uE I TEREST COST pdg O %
We are having the Ronds of the following maturtues /~(/~ insured by ~/fi~2 ata
premmm orS/t~e~, o~'O(..) satd premmm to be paid by the Purchaser Any fees to be prod to the rating agencms as a
result of sa~d thanrahce mil be pard by the Ctty
The Initial Bonds shall be registered In the name of _'~) J/.' t~ A ~£vt, J~,~ ~zrtl e-,/' , which will upon payment
for the Bonds be canceled by the Paying Agent/Regtstrar The Bonds w~ll then be registered ~,l the name of Cede & Co (D~IC's
partnership nominee), under the Book-Entry-Only System
Abankcashlerschcckorcertthedcheckofthe ! ,, [ ~,~' / Bank ~." ./ In the amount oi $735 900 00
which represents our Good Froth Deposit 0s attached hereto) br (has been made available to you prior to the opemng of this bid) and ts
submitted m accordance w~th the terms as %t Iorth m the Officml Statement and Not~ce of Sale and Bidding Instructions
Wc agree to accept dehvery ol thc Bonds utdtTmg the Book Entry On15 System through DTC and make payment for the Imtlal Bond m
nnmedmtely avadablc funds ~n the Corporate ~lrust D~wsmn, Chase Bank of lexas National Association Dallas lexas not later than
I 0 00 AM (_ D I on August 25 1998 or thereafter on the date the Bonds are tendered for dehvery pursuant to the terms set forth m thc
Notice oI Sale and B~ddmg Instructtons It wdl be the obhgatlon of the purchaser of the Bonds to complete the DTC Ehg~bfl~t5
Questionnaire
I he undersigned agrees to complete execute and dehvcr to the C~ty at least s~x business days prior to dcbvery of the Bonds a certltlcate
relating to the tssuc price" of the Bonds m the form aud to the effect accompanying the Notme of Sale and Btddmg Instructions w~th
such changes thereto as may be acceptable to the C~ty
We agree to provide ~n writing the ~mtml reoffemng prices and other terms, ffany, to the F~nanclal Admsor by the close of the next
business day after the award
Respectfully submated Syndicate Members
Name of Underwriter or Manager
Authorized Reprasentat~ve
ACCEPTANCE CLAUSE
I he above and foregoing btd ~s hereby m ali things accepted by the C~ty of Denton, Texas, subject to and in accordance w~th the Nottce of
Sale and Btddlng Instructions th~s the 21st day of July 1998 ~
A I'TES F
// Mayor
~ ~..~/ C~ty of Denton lexas
C~ty Secretary