1996-109 ORDINANCE NO 96-109
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF
DENTON CERTIFICATES OF OBLIGATION, SERIES 1996, AND APPROVING AND
AUTHOKIZING INSTRUMENTS AND PROCEDURES RELATING THERETO, AND
PROVIDING AN EFFECTIVE DATE
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the Cemficate of Obhgatmn Act of 1971, as amended and codified (the "Act")
permats the Cny to issue and sell for cash the Cemficates of Obhgauon heremaiter authorized, and
WHEREAS, the Caty has duly caused notace of ~ts retention to assue the Cemficates of
Obhgataon herematter authorized to be pubhshed at the t~mes and m the manner reqmred by the Act
and no petmon has been filed protesting the assuance thereof, NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
Section 1 AMOUNT AND PURPOSE OF THE CERTIFICATES The cemficate or
cemficates of the Caty of Denton, Texas (the "Issuer") are hereby authorized to be ~ssued and
dehvered m the aggregate pnnc~pal amount of $5,190,000, for the purpose of paying all or a pomon
of the C~ty's Contractual Obhgauons incurred pursuant to contracts for the purchase of certain real
and personal property, to-war (a) renovations to the Mumc~pal Building (Cny Hall) and (b) certain
real property for use an connectmn wath the C~ty's landfill operaUons located on Edwards Road, and
certain facflmes and eqmpment related to the C~ty's landfill operauons, and also for the purpose of
paying all or a pomon of the Ca~y's Contractual Obhgataons for professional servaces of Eng~neenng,
Attorneys, and Financial Ad,nsors m connection w~th the above contracts and smd Cemficates of
Obhgat~on
Section 2 DESIGNATION OF THE CERTIFICATES Each certificate assued pursuant to
th~s Ordinance shall be desagnated "CITY OF DENTON CERTIFICATE OF OBLIGATION,
SERIES 1996", and ~nmally there shall be ~ssued, sold, and dehvered hereunder a sangle fully
registered cemficate, wathout anterest coupons, payable an ~nstallments of principal (the "Imtml
CerUficate"), but the Inmal Cemfieate may be assigned and transferred and/or converted into and
exchanged for a hke aggregate prmcapal amount of fully registered cemficates, wnhout anterest
coupons, ha~lng serial matuntaes, and an the denoroanauon or denom~nauons of $5,000 or any antegral
multaple of $5,000, all m the manner here~nafier prowded The term "Certaficates" as used an thas
Ordinance shall mean and include collectavely the Inmal Certificate and all substnute certificates
changed therefor, as well as all other subsUtute cemficates and replacement cemflcates assued
pursuant hereto, and the term "Cemficates" shall mean any of the Cemficates
Section 3 INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL CERTIFICATE
(a) The Imtlal Certificate is hereby authorized to be issued, sold, and delivered hereunder
as a single fully registered Certificate, without interest coupons, dated May l, 1996, in the
denonunatlon and aggregate pnncipal amount of $5,190,000, numbered R-l, payable m annual
~nstallments of pnnc~pal to the lmtlal registered owner thereof, to-w~t
FIRST SOUTHWEST COMPANY
or to the registered assignee or assignees of said Certificate or any portion or portions thereof (m
each case, the "registered owner"), with the annual installments of pnncipal of the Imtial Certificate
to be payable on the dates, respectively, and in the pnncipal amounts, respectively, stated in the
FORM OF INITIAL CERTIFICATE set forth m this Ord,nance
(b) The Initial Certificate 0) may be assigned and transferred, 00 may be converted and
exchanged for other Certfllcates, (iii) shall have the charactenstlcs, and (iv) shall be signed and sealed,
and the pnnclpal of and interest on the Initial Certificate shall be payable, all as provided, and in the
manner required or indicated, m the FORM OF INITIAL CERTIFICATE set forth m this Ordinance
Section 4 INTEREST The unpaid pnncipal balance of the Initial Certificate shall bear
interest fi'om the date of the lmtial Certificate to the respective scheduled due dates of the ~nstallments
of pnnclpal of the Imtlal Certificate, and said interest shall be payable, all in the manner provided and
at the rates and on the dates stated in the FORM OF INITIAL CERTIFICATE set forth in this
Ordinance
Section 5 FORM OF INITIAL CERTIFICATE The form of the IvJtial Certificate, including
the form of Reg~stration Certificate of the Comptroller of Public Accounts of the State of Texas to
be endorsed on the Initial Certificate, shall be substantially as follows
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FORM OF INITIAL CERTIFICATE
NO R-1 $5,190,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 1996
THE CITY OF DENTON, m Denton County, Texas (the "Issuer"), being a pohtlcal
subd~v~ston of the State of Texas, hereby pronnses to pay to
FIRST SOUTHWEST COMPANY
or to the registered assignee or assignees ofth~s Certificate or any portion or portmns hereof 0n each
case, the '¥eg~stered owner") the aggregate pnnc~pal amount of
$5,190,000
( FIVE MILLION ONE HUNDRED NINETY THOUSAND DOLLARS)
~n annual ~nstallments of pnnc~pal due and payable on February 15 in each of the years, and m the
respective pnnc~pal amounts, as set forth m the following schedule
PRINCIPAL PRINCIPAL
YEAR AMOUNT YEAR AMOUNT
1997 $325,000 2007 $165,000
1998 435 000 2008 175 000
1999 460 000 2009 185 000
2000 490 000 2010 195 000
2001 515 000 2011 205 000
2002 145 000 2012 220 000
2003 150 000 2013 235 000
2004 160,000 2014 245 000
2005 170,000 2015 260 )00
2006 180,000 2016 275 ~00
and to pay interest, calculated on the basis of a 360-day year composed of twelve 30-day months,
from the date of th~s Cemficate hereinafter stated, on the balance of each such installment of
pnnclpal, respectively, from time to ttme rema~mng unpaid, at the rates as follows
7 00% per annum on the above installment due m 1997
7 00% per annum on the above ~nstallment due m 1998
7 00% per annum on the above installment due ~n 1999
7 00% per annum on the above installment due m 2000
6 50% per annum on the above installment due m 2001
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5 00% per annum on the above installment due in 2002
5 10% per annum on the above installment due in 2003
5 20% per annum on the above installment due in 2004
5 30% per annum on the above installment due m 2005
5 40% per annum on the above installment due in 2006
5 40% per annum on the above installment due in 2007
5 50% per annum on the above installment due in 2008
5 60% let annum on the above installment due in 2009
5 70% Der annum on the above installment due in 2010
5 75% Der annum on the above installment due in 2011
5 75% Der annum on the above installment due in 2012
5 75% ~er annum on the above installment due in 2013
5 75% ~er annum on the above installment due in 2014
5 75% ~er annum on the above installment due in 2015
5 75% ~er annum on the above installment due in 2016
with said interest being payable on February 15, 1997, and semiannually on each August 15 and
February 15 thereafter whale tlus Certificate or any portion bereofis outstanding and unpaid
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON tins Certificate are
payable in lawful money of the United States of America, vathout exchange or collection charges
The installments ofpnncipal and the interest on tins Certificate are payable to the registered owner
hereof through the sermces of TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
DALLAS, TEXAS, wluch is the "Paying Agent/Registrar" for this Certificate Payment of all pnnci-
pal of and interest on this Certificate shall be made by the Paying AgenffReglstrar to the registered
owner hereof on each pnnclpal and/or interest payment date by check dated as of such date, drawn
by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the
ordinance authorizing the issuance oftlus Certificate (the "Certificate 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 United States mml, first-class postage prepaid, on each such
pnnclpal and/or interest payment date, to the registered owner hereof, at the address oftbe registered
owner, as it appeared at the close of business on the last day of the month next preceding each such
date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as
hereinafter described The Issuer covenants w~th the registered owner of this Certificate that on or
before each pnnclpal and/or interest payment date for this Certificate it will make available to the
Paying AgenffReg~strar, from the "Interest and Sinking Fund" created by the Certificate Ordinance,
the amounts required to proxade for the payment, in immediately av~ulable funds, of all pnnclpal of
and interest on this Certificate, when due
IF THE DATE for the payment of the pnnclpal of or interest on this Certificate shall be a
Saturday, Sunday, a legal holday, or a day on wluch banlang msUtutions in the City where the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for such
payment shall be the next succeeding day whmh is not such a Saturday, Sunday, legal holiday, or day
on wtuch banl~ng mmtuuons 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
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THIS CERTIFICATE has been authorized m accordance vath the Conmtutlon and laws of
the State of Texas m the pnncmpal amount of $5,190,000 for the purpose of paying all or a port~on
of the City's Contractual Obhgatlons mcurred pursuant to contracts for the purchase of certain real
and personal property, to-vat (a) renovations to the Mumc~pal Bmldmg (City Hall) and (b) certain
real property for use m connectton vath the C~ty's landfill operations located on Edwards Road, and
certain facflmes and eqmpment related to the C~ty's landfill operations, and also for the purpose of
paying all or a pomon of the Cay's Contractual Obhgat~ons for professional servmes of Engmeenng,
Attorneys, and Financial Advisors m connection vath the above contracts and smd Certificates of
Obligation
ON FEBRUARY 15, 2006, or on any date whatsoever thereafter, the unpaid mnstallments of
pnncipal of tins Certlfiate of Obligation may be prepmd or redeemed prior to their scheduled due
dates, at the option of the Issuer, with funds derived from any avatlable source, as a whole, or mn part,
and, ffm part, the particular pomon of tins Certificate of Obhgatmon to be prepaid or redeemed shall
be selected and designated by the Issuer (prowded that a portion of this Certificate of Obhgatlon may
be redeemed only m an integral multiple of $5,000), at the prepayment or redemption price of the par
or pnnc~pal amount thereof, plus accrued interest to the date fixed for prepayment or redemption
AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a written
not,ce of such prepayment or redemption shall be totaled by the Paying AgenffReg~strar to the
registered owner hereof By the date fixed for any such prepayment or redemption due provlsmon
shall be made by the Issuer vath the Paying AgentJReglstrar for the payment of the required prepay-
ment or redemption price for tins Certlficate or the port,on hereof winch is to be so prepared or re-
deemed, plus accrued interest thereon to the date fixed for prepayment or redemptmon If such written
notice of prepayment or redemption is graven, and ~f due prowslon for such payment is made, all as
proxaded above, tins Cemficate, or the pomon thereof winch ms to be so prepaid or redeemed, thereby
automatically shall be treated as prepaid or redeemed prior to its scheduled due date, and shall not
bear interest at~er the date fixed for its prepayment or redemption, and shall not be regarded as being
outstanding except for the right of the regtstered owner to recemve the prepayment or redemption
prmce plus accrued interest to the date fixed for prepayment or redemption from the Paying
Agent/Regtstrar out of the funds prowded for such payment The Paying A~ent/Reglstrar shall record
m the Reg~stratmon Books all such prepayments or redemptions of prmcipal of tins Certificate or any
portmon hereof
THIS CERTIFICATE, to the extent of the unpamd pnncmpal balance hereof, or any unpaid
portmon hereof in any integral multiple of $5,000, may be assigned by the antlal registered owner
hereof and shall be transferred only in the Registration Books of the Issuer kept by the Paying
Agent/Regtstrar acting m the capacity of registrar for the Certificates, upon the terms and cond~tions
set forth m the Certfficate Ordinance Among other reqmrements for such transfer, tins Certmficate
must be presented and surrendered to the Paying Agent/Registrar for cancellation, together vath
proper instruments of assignment, m form and vath guarantee of smgnatures satisfactory to the Paying
AgenffRegmstrar, evldenctng assignment by the lmtial registered owner of tins Certificate, or any
portion or portions hereof m any integral multiple of $5,000, to the assignee or assignees in whose
name or names tins Certificate or any such portion or portions hereof is or are to be transferred and
registered Any instrument or instruments of assignment satisfactory to the Paying Agent/Regmstrar
may be used to evmdenee the assignment of tins Cemficate or any such pomon or pomons hereof by
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the lmtlal registered owner hereof A new cemficate or certificates payable to such assignee or
assignees (which then wdl be the new registered owner or owners of such new Certificate or
Certflicates) or to the lmtial registered owner as to any portion of this Certificate which is not being
assigned and transferred by the mltlal registered owner, shall be delivered by the Paying Agent/Regis-
trar in conversion of and exchange for this Certificate or any portion or portions hereof, but solely
m the form and manner as provided m the next paragraph hereof for the conversion and exchange of
tins Cemficate or any portion hereof The registered owner ofth~s Certificate shall be deemed and
treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes,
including payment and discharge ofhablhty upon this Certificate to the extent of such payment, and
the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary
AS PROVIDED above and m the Certificate Ordinance, tins Certificate, to the extent of the
unpmd principal balance hereof, may be converted into and exchanged for a like aggregate pnnclpal
amoum of fully registered cemficates, vnthout interest coupons, payable to the assignee or assignees
duly designated m writing by the lmtlal registered owner hereof, or to the lmtlal registered owner as
to any porlaon ofttus Certificate winch is not being assigned and transferred by the imtlal registered
owner, in any denormnation or denormnations in any lmegral multiple of $5,000 (subject to the
requirement hereinafter stated that each substitute certificate issued in exchange for any portion of
tins Certificate shall have a single stated pnncipal maturity date), upon surrender of tins Certificate
to the Paying Agent/Registrar for cancellation, all in accordance wath the form and procedures set
forth m the Cemficate Ordinance Ifttus Cemficate or any port~on hereof Is assigned and transferred
or converted each cemficate issued in exchange for any portion hereof shall have a single stated
pnnclpal maturity date corresponding to the due date of the installment of pnncipal of tins Certificate
or pomon hereof for winch the substitute certificate is being exchanged, and shall bear interest at the
rate applicable to and borne by such installment ofpnncipal or portion thereof No such certificate
shall be payable in installments, but shall have only one stated pnncipal maturity date AS
PROVIDED IN THE CERTIFICATE ORDINANCE, THIS CERTIFICATE IN ITS PRESENT
FORM MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to
one or more assignees, but the certificates issued and delivered in exchange for tins Certificate or any
portion hereof may be assigned and transferred, and converted, subsequently, as proxaded in the
Certificate Ordinance The Issuer shall pay the Paying AgenffRegistrar's standard or customary fees
and charges for transfemng, converting, and exchanging tins Certificate 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 vath respect thereto The Payang Agent/Registrar shall not be required
to make any such assignment, conversion, or exchange dunng the period commencing w~th the close
of business on any Record Date and ending vath the opemng of business on the next following
pnnclpal or interest payment date
IN THE EVENT any Paying Agent/Registrar for tins Certificate is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that
it promptly will appoint a competent and legally quahfied substitute therefor, and promptly will cause
written notice thereof to be mmled to the registered owner of tins Certificate
IT IS HEREBY certified, recited, and covenanted that tins Certificate has been duly and
validly authorized, issued, and dehvered, that all acts, conditions, and tinngs required or proper to be
performed, eyast, and be done precedent to or in the authorization, issuance, and delivery of tins
6
Certificate have been performed, existed, and been done in accordance with law, that this Certificate
is a general obligation of the Issuer, issued on the full fatth and credit thereof, and that annual ad
valorem taxes suffcuent to provide for the payment of the interest on and pnncipal of this Certificate,
as such interest comes due and such pnncipal matures, have been levied and ordered to be levied
against all taxable property m the Issuer, and have been pledged irrevocably for such payment, within
the hrmt prescribed by law, and that, together with other panty obligations, this Certificate
addmonally is payable from and secured by certam surplus revenues (not to exceed $10,000 in
aggregate amount) derived by the Issuer from the ownership and operation of the City's Utility
System (consisting of the City's combined waterworks system, samtary sewer system, and electric
light and power system), all as provided in the Certificate Ordinance
THE ISSUER has reserved the right to issue, m accordance with law, and in accordance with
the Certificate Ordmance, other and additional obligations, and to enter into contracts, payable from
ad valorem taxes and/or revenues of the Cl~s Utlhty System, on a panty with, or wth respect to smd
revenues, superior in lien to, this Certificate
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Cemficate Ordmance, agrees to be bound by such
terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and available for
mspectlon m the official mmutes and records of the govermng body of the Issuer, and agrees that the
terms and provisions of this Certificate and the Certificate Ordinance constitute a contract between
the registered owner hereof and the Issuer
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the manual
signature of the Mayor of the Issuer and countersigned w~th the manual signature of the City
Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed on this
Certificate, and has caused this Certificate to be dated May 1, 1996
City Secretary, City of Denton, Texas Mayor, City of Denton, Texas
(CITY SEAL)
(INSERT BOND INSURANCE LEGEND, IF ANY)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS
COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO
I hereby certify that tins Certificate has been exarmned, certified as to validity, and approved
by the Attorney General of the State of Texas, and that tins Certificate has been registered by the
Comptroller of Public Accounts of the State of Texas
Witness my signature and seal tins
Comptroller of Pubhc Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Sectaon 6 ADDITIONAL CHARACTERISTICS OF THE CERTIFICATES Registration
and Transfer (a) The Issuer shall keep or cause to be kept at the pnnclpal corporate trust office of
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, DALLAS, TEXAS (the "Paying
Agent/Registrar") books or records of the reg~stration and transfer of the Certificates (the
"Registration Books"), and the Issuer hereby appolms the Paying Agent/Registrar 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
AgentYReg~strar shall make such transfers and registrations as herein proxaded The Paying
Agent/Registrar shall obtain and record m the Reg~stration Books the address of the registered owner
of each Certificate to which payments vath respect to the Certificates shall be marled, as here~n
provided, but It shall be the duty of each registered owner to notify the Paying Agent/Registrar m
writing of the address to winch payments shall be mailed, and such interest payments shall not be
totaled unless such not~ce has been given The Issuer shall have the right to inspect the Registration
Books dunng regular business hours of the Paying Agent/Registrar, but otherv~se the Payang
Agent/Registrar shall keep the Reg~stratton Books confidential and, unless otherwase required by law,
shall not pernut thetr inspection by any other entity Registration of each Certificate may be
transferred m the Reg~stratton Books only upon presentation and surrender of such Certificate to the
Paying Agent/Registrar for transfer of registration and cancellation, together with proper written
instruments of assignment, m form and vath guarantee of signatures satisfactory to the Paying
AgentYReg~strar, 0) evidencing the assignment of the Cemficate, or any portion thereof m any integral
multiple of $5,000, to the assignee or assignees thereof, and (u) the right of such assignee or
assignees to have the Certtficate or any such portion thereof registered in the name of such assignee
or assignees Upon the assignment and transfer of any Certificate or any portion thereof, a new
substatute Certtficate or Certtficates shall be issued m conversion and exchange therefor m the manner
hereto proxaded The Imtml Certtficate, to the extent of the unpaid pnncipal balance thereof, may be
assigned and transferred by the initial registered owner thereof once only, and to one or more
assignees designated m writing by the ~mtml registered owner thereof All Certificates issued and de-
hvered m conversion of and exchange for the Imtlal Certificate shall be in any denormnation or
denominations of any integral multiple of $5,000 (subject to the requirement hereinafter stated that
each substitute Certificate shall have a single stated pnnclpal maturity date), shall be m the form
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prescribed in the FORM OF SUBSTITUTE CERTIFICATE set forth m tins Ordinance, and shall
have the charactenstics, and may be assigned, transferred, and converted as hereinafter proxaded If
the Imual Certificate or any port,on thereof is assigned and transferred or converted the Imtial
Cendicate must be surrendered to the Paying Agnnt/Reglstrar for cancellation, and each Certificate
issued m exchange for any pomon of the Imt~al Cemficate shall have a single stated pnnclpal matunty
date, and shall not be payable m mstalknents, and each such Certificate shall have a pnncipal maturity
date corresponding to the due date of the installment of pnncipal or portion thereof for winch the
submtute Certtficate ~s being exchanged, and each such Certtficate shall bear interest at the single rate
applicable to and borne by such installment of pnncipal or portion thereof for winch it is being ex-
changed If only a po~on ofthe Imtial Certtficate is assigned and transferred, there shall be dchvered
to and registered m the name of the tmtial registered owner substitute Certificates in exchange for the
unassigned balance of the Irnt~al Cemficate in the same manner as if the imtlal registered owner were
the assignee thereof If any Cemficate or portion thereof other than the Imtlal Certificate is assigned
and transferred or converted each Cemficate issued m exchange therefor shall have the same principal
maturity date and bear interest at the same rate as the Certificate for winch it is exchanged A form
of assignment shall be pnnted or endorsed on each Certificate, excepting the Imtial Certificate, winch
shall be executed by the registered owner or its duly authorized attorney or representative to evidence
an assignment thereof Upon surrender of any Certificates or any portion or portions thereof for
transfer of re~stration, an authonzed representative of the Paying Agent/Registrar shall make such
transfer in the Registration Books, and shall deliver a new fully registered substitute Certificate or
Cemficates, having the characteristics berem descnbed, payable to such assignee or assignees (winch
then will be the registered owner or owners of such new Certificate or Certificates), or to the
previous registered owner m case only a portion of a Certificate is being assigned and transferred, all
m conversion of and exchange for sa~d assigned Certificate or Certificates or any portion or portions
thereof, m the same form and manner, and with the same effect, as provided in Section 6(d), below,
for the conversion and exchange of Certificates by any registered owner of a Certificate The Issuer
shall pay the Paying Agent/Registrar's standard or customary fees and charges for malang such
transfer and delivery of a substitute Certificate or Certificates, but the one requesting such transfer
shall pay any taxes or other governmental charges required to be pa~d with respect thereto The
Paying Agent/Registrar shall not be required to make transfers of registration of any Certificate or
any portion thereof dunng the penod commencing with the close of busmess on any Record Date and
ending with the opemng of business on the next following pnnc~pal or interest payment date
(b) Ownersinp of Certificates The entity in whose name any Certificate shall be registered
~n the Registration Books at any time shall be deemed and treated as the absolute owner thereof for
all purposes of tins Ordinance, whether or not such Certificate shall be overdue, and the Issuer and
the Paying Agent/Registrar shall not be affected by any notice to the contrary, and payment of, or on
account of, the pnncipal of, premium, if any, and interest on any such Certificate shall be made only
to such registered owner Aid such payments shall be valid and effectual to satisfy and discharge the
habdity upon such Certificate to the extent of the sum or sums so paid
(c) Pa_vment of Certificates and Interest The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the pnnclpal of and interest on the Certificates,
and to act as its agent to convert and exchange or replace Certificates, all as provided in tins
Ordinance The Paying Agent/Registrar shall keep proper records of all payments made by the Issuer
and the Paying A~ent/Registrar with respect to the Certificates, and of all conversions and exchanges
9
of Cemficates, and all replacements of Certificates, as provided In tins Ordinance However, in the
event of a nonpayment of interest on a scheduled payment date, and for tinrty (30) days thereafter,
a new record date for such interest payment (a "Special Record Date") wll be established by the
Paying AgentffReg~strar, ~fand when funds for the payment of such interest have been received from
the Issuer Notice of the Special Record Date and of the scheduled payment date of the past due
interest ("Special Payment Date", winch shall be fii~een (15) days after the Special Record Date) shall
be sent at least five (5) business days prior to the Special Record Date by Umted States mall, first
class postage prepaid, to the address of each Holder of a Certificate appeanng on the registration
books of the Paying Agent~eg~strar at the close of business on the 15th business day next preceding
the date ofmmhng of such notice
(d) Conversion and Exchange or Replacement. Authentication Each Certificate issued and
dehvered pursuant to tlus Ordinance, to the extent of the unpiud pnncipal balance or pnncipal amount
thereof, may, upon surrender of such Certificate at the pnncipal corporate trust office of the Paying
Agent/Rel~strar, together wath a written request therefor duly executed by the registered owner or
the assignee or assignees thereof, or its or their duly authorized attorneys or representatives, w~th
guarantee of s~gnatures satisfactory to the Paying Agent/Registrar, may, at the option of the regis-
tered owner or such assignee or assignees, as appropriate, be converted into and exchanged for fully
registered certificates, wathout Interest coupons, in the form prescribed in the FORM OF
SUBSTITUTE CERTIFICATE set forth in tins Ordinance, in the denormnation of $5,000, or any
integra] multiple of $5,000 (subJect to the requirement hereinafter stated that each substitute
Certificate shall have a single stated maturity date), as requested in venting by such registered owner
or such assignee or assignees, m an aggregate pnncipal amount equal to the unpaid pnnclpal balance
or pnncipal amount of any Certificate or Certificates so surrendered, and payable to the appropriate
registered owner, assignee, or assignees, as the case may be If the Imtial Certificate is assigned and
transferred or converted each substitute Certificate issued in exchange for any portion of the Imtial
Certificate shall have a single stated pnncipal matunty date, and shall not be payable in installments,
and each such Certificate shall have a pnnclpal maturity date corresponding to the due date of the
installment ofpnnclpal or portion thereof for winch the substitute Certificate is being exchanged, and
each such Certflicate shall bear interest at the single rate applicable to and borne by such installment
ofpnnclpal or portion thereof for winch it ~s being exchanged If any Certificate or portion thereof
(other than the Imtial Certrficate) IS assigned and transferred or converted, each Certificate issued in
exchange,therefor shall have the same pnnclpal matunty date and bear interest at the same rate as the
Certificate for winch it is being exchanged Each substitute Certificate shall bear a letter and/or
number to distinguish it from each other Certificate The Paying Agent/Registrar shall convert and
exchange or replace Certificates as prowded hereto, and each fully registered certificate delivered in
conversion of and exchange for or replacement of any Certificate or portion thereof as perrmtted or
required by any proxasion of this Ordinance shall constitute one of the Certificates for all purposes
of tins Ordinance, and may again be converted and exchanged or replaced It is specifically proxaded
that any Certificate authenticated in conversion of and exchange for or replacement of another
Certificate on or pnor to the first scheduled Record Date for the Imtial Cemficate shall bear interest
from the date of the Imtial Certificate, but each substitute Certificate so authenticated after such first
scheduled Record Date shall bear interest from the interest payment date next preceding the date on
wluch such substitute Certificate was so authenticated, unless such Certificate is authenticated after
any Record Date but on or before the next following interest payment date, in winch case it shall bear
interest from such next fullowmg interest payment date, promded, however, that if at the time of de-
10
hvery of any substitute Certificate the mterest on the Certificate for which it is being exchanged is due
but has not been prod, then such Certificate shall bear interest from the date to which such interest
has been prod m full THE INrrlAL CERTII~CATE issued and delivered pursuant to this Ordinance
is not required to be, and shall not be, authenticated by the Palnng Agent/Registrar, but on each
substitute Certificate issued m conversion of and exchange for or replacement of any Certificate or
Certtticates issued under this Ordinance there shall be pnnted a certificate, m the form substantially
as follows
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It ,s hereby certrfied that tins Certflicate has been issued under the prowslons of the Certificate
Ordinance described on the face of tins Certificate, and that this Certificate has been issued in
conversion of and exchange for or replacement of a certificate, cert,ficates, or a portion of a
certificate or certificates of an issue which originally was approved by the Attorney General of the
State of Texas and registered by the Comptroller of Public Accounts of the State of Texas
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, DALLAS, TEXAS
Paying Agent/Registrar
Dated By
Authonzed Representative"
An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such
Certificate, date and manually sign the above Certificate, and no such Certificate shall be deemed to
be issued or outstanding unless such Cemficate is so executed The Paying Agent/Registrar promptly
shall cancel all Cemficates surrendered for conversion and exchange or replacement No additional
ordinances, orders, or resolutions need be passed or adopted by the govermng body of the Issuer or
any other body or person so as to accomphsh the foregoing conversion and exchange or replacement
of any Certificate or portion thereof, and the Paying Agent/Registrar shall provide for the pnntlng,
execution, and delivery of the substitute Certificates in the manner prescribed herein, and said
Cemficates shall be of type compos0aon printed on paper vath hthographed or steel engraved borders
of customary weight and strength Pursuant to Vernon's Ann Tex Clv St Art 717k-6, and
particularly Section 6 thereof, the duty of conversion and exchange or replacement of Certificates as
aforesaid is hereby unposed upon the Paying Agent/Registrar, and, upon the execution of the above
Paying AgentJRegistrar's Authentication Certificate, the converted and exchanged or replaced
Cemficate shall be vahd, incontestable, and enforceable in the same manner and w~th the same effect
as the Initial Certificate which originally was issued pursuant to this Ordinance, approved by the
Attorney General, and registered by the Comptroller of Pubhc Accounts The Issuer shall pay the
Paying AgenffRegistrar's standard or customary fees and charges for transfemng, converting, and
exchanging any Certificate or any portion thereof, but the one requesting any such transfer,
conversion, and exchange shall pay any taxes or governmental charges required to be pa~d with
respect thereto as a condition precedent to the exercise of such privilege of conversion and exchange
The Paying Agent/Registrar shall not be required to make any such conversion and exchange or
replacement of Certificates or any portion thereof dunng the period commencing w~th the close of
11
business on any Record Date and ending wath the opemng of business on the next followang pnncipal
or interest payment date
(e) In General All Certificates issued m conversion and exchange or replacement of any
other Certificate or portion thereof, (0 shah be Issued m fully registered form. wathout interest
coupons, wath the pnncipal of and interest on such Certificates to be payable only to the registered
owners thereof. (n) may be transferred and assigned. (m) may be converted and exchanged for other
Certificates. 0v) shall have the characteristics. (v) shall be s~gned and sealed, and (vi) the pnncipal
of and interest on the Certtficates shall be payable, all as provided, and m the manner reqmred or md~-
cated. ~n the FORM OF SUBSTITUTE CERTIFICATE set forth m tins Ordmance
(f) P~yment of Fees and Char~es The Issuer hereby covenants wath the registered owners
of the Certtflcates that it wall (0 pay the standard or customary fees and charges of the Paying
AgentfReglstrar for its services wath respect to the payment of the pnnc~pal of and interest on the
Certificates. when due. and (n) pay the fees and charges of the Paying Agent/Registrar for sermces
wath respect to the transfer of reg~stration of Certificates. and wath respect to the conversion and
exchange of Certificates solely to the extent above pro,haled m tins Ordinance
(g) Substitute Paving A~ent/Reglstrar The Issuer covenants wath the registered owners of
the Certificates that at all t~mes winle the Certificates are outstanding the Issuer wdl provide a
competent and legally qualified bank. trust company, financial restitution, or other agency to act as
and perform the services of Paying Agent/Registrar for the Certificates under tins Ordinance. and that
the Paying Agent/Registrar will be one entity The Issuer reserves the right to. and may. at its option.
change the Paying Agent/Registrar upon not less than 120 days written not~ce to the Paying
Agent/Registrar. to be effective not later than 60 days prior to the next pnnc~pal or interest payment
date after such not,ce In the event that the entity at any t~me acting as Paying AgentfReg~strar (or
its successor by merger, acqu~s~tton, or other method) should resign or otherwase cease to act as such,
the Issuer covenants that promptly ~t will appoint a competent and legally quahfied bank, trust
company, financial mst~tution, or other agency to act as Paying Agent/Registrar under tins Ordinance
Upon any change m the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall
transfer and dehver the Reg~stratmn Books (or a copy thereof), along wath all other pemnent books
and records relating to the Cemficates, to the new Paying Agent/Registrar designated and appointed
by the Issuer Upon any change m the Paying Agent/Registrar, the Issuer promptly wall cause a
wntten not~ee thereof to be sent by the new Paying Agent/Registrar to each registered owner of the
Cemficates, by Umted States mad, first-class postage preptud, wluch nouce also shall give the address
of the new Paying Agent/Registrar By accepting the poslt~on and perfornung as such, each Paying
AgentfReg~strar shall be deemed to have agreed to the prowsmns of tins Ordinance, and a cemfied
copy oftlus Ordinance shall be delivered to each Paying Agent/Registrar
SecUon 7 FORM OF SUBSTITUTE CERTIFICATES The form of all Cemficates ~ssued
m conversion and exchange or replacement of any other Certificate or pomon thereof, mcludmg the
form of Paying Agent~eg~strafs Certfllcate to be pnnted on each of such Cemficates, and the Form
of Assignment to be printed on each of the Certtficates, shall be, respectively, substantially as follows,
wath such appropriate variations, onuss~ons, or ~nsert~ons as are perrmtted or reqmred by tins
Ordinance
12
FORM OF SUBSTITUTE CERTIFICATE
(Book-Entry Only Legend, if appropnate)
NO UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 1996
ORIGINAL DATE
INTEREST RATE MATURITY DATE OF ISSUE CUSIP NO
% May 1, 1996
ON THE MATURITY DATE specified above the CITY OF DENTON, in Denton County,
Texas (the "Issuer"), being a pohtmal subdlvmon of the State of Texas, hereby promises to pay to
or to the registered assignee hereof (either being hereinafter called the "registered owner") the
pnnclpal amount of
and to pay interest thereon, calculated on the basis of a 360-day year composed of twelve 30-day
months, from May 1, 1996, to the maturity date specified above, at the interest rate per annum
specified above, with interest being payable on February 15, 1997, and semiannually on each August
15 and Fabmary 15 thereafter, except that ri'the date of authentication of tins Certificate is later than
the first Record Date (hereinafter defined), such pnnclpal amount shall bear interest from the interest
payment date next preceding the date of authent~cation, unless such date of authentication is after any
Record Date (hereinafter defined) but on or before the next following interest payment date, in winch
case such pnncipal amount shall bear interest from such next following interest payment date
THE PRINCIFAL OF AND INTEREST ON tins Certificate are payable in lawful money of
the United States of America, without exchange or collection charges The pnnclpal of tins
Certificate shall be pa~d to the registered owner hereof upon presentation and surrender of tins
Certificate at maturity, at the pnncipal corporate trust office of TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, DALLAS, TEXAS, winch is the "Paying Agent/ll. eg~strar" for this
Cemficate The payment of interest on tins Certificate shall be made by the Paying Agent/Registrar
to the registered owner hereof on each interest payment date by check dated as of such interest
payment date, drawn by the Paying AgentdReglstrar on, and payable solely from, funds of the Issuer
required by the ordinance authorizing the issuance of the Certificates (the "Certificate Ordinance")
to be on deposit with the Paying A~ent/Registrar for such purpose as hereinafter proxaded, and such
13
check shall be sent by the Paying AgentJRegtstrar by Umted States mini, first-class postage prepmd,
on each such ~nterest payment date, to the res~stered owner hereof, at the address of the registered
owner, as ~t appeared at the close of business on the last day of the month next preceding each such
date (the "Record Date") on the Registration Books kept by the Paying Agent/Regnstrar, as
heremat~er described However, the payment of such interest may be made by any other method
acceptable to the Paying Agent/Re/om'ar and requested by, and at the risk and expense of, the regis-
tered owner hereof The Issuer covenants w~th the registered owner oftlus Certificate that on or
before each pnncipal payment date, interest payment date, and accrued interest payment date for this
Certificate it wdl make avadable to the Paying Agent/Registrar, from the "Interest and Slnlong Fund"
created by the Certificate Ordinance, the mounts required to pro,nde for the payment, in ~mmediately
available funds, of all pnncipal of and ~nterest on the Certificates, when due
IF THE DATE for the payment of the pnncipal of or interest on tlus Certificate shall be a
Saturday, Sunday, a legal hohday, or a day on which banking mstitut~ons in the City where the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for such
payment shall be the next succeedm8 day wbach ts not such a Saturday, Sunday, legal holiday, or day
on wtuch banking mst~tutaons are authorized to close, and payment on such date shall have the same
force and effect as ~f made on the original date payment was due
THIS CERTIFICATE is one of an ~ssue of Cemficates ~mtaally dated May 1, 1996, authorized
~n accordance vnth the Constitution and laws of the State of Texas m the pnncipal amount of
$5,190,000, for the purpose of paying all or a portion of the C~ty's Contractual Obhgat~ons incurred
pursuant to contracts for the purchase of certmn real and personal property, to-vnt (a) renovations
to the Mumcipal Building (City Hall) and (b) certain real property for use ~n connection w~th the
C~ty's landfill operations located on Edwards Road, and certmn facd~ties and equipment related to the
C~t~fs landfill operataons, and also for the purpose of paying all or a port~on of the City's Contractual
Obhgat~ons for profess~unal services of Engmeerms, Attorneys, and Financial Adxasors ~n connection
with the above contracts and sa~d Certificates of Obhgat~on
ON FEBRUARY 15, 2006, or on any date whatsoever thereafter, the Certificates ofth~s
Series may be redeemed prior to their scheduled maturities, at the option of the Issuer, w~th funds
derived from any available and lawful source, as a whole, or in part, and, ~f m part, the particular
Certificates, or portions thereof, to be redeemed shall be selected and designated by the Issuer
(proxaded that a portion of a Certificate may be redeemed only in an integral multiple of $5,000), at
the redemption price of the par or pnncipal amount thereof, plus accrued interest to the date fixed
for redemption
AT LEAST 30 days pnor to the date fixed for any such prepayment or redemption a written
notice of such prepayment or redemption shall be totaled by the Paying Agent/Registrar to the
registered owner hereof By the date fixed for any such prepayment or redemption due proxns~on
shall be made by the Issuer vnth the Paying Agent/Registrar for the payment of the required prepay-
ment or redemption price for ttus Certificate or the portion hereof wluch is to be so prepaid or re-
deemed, plus accrued interest thereon to the date fixed for prepayment or redemption If such written
not,ce of prepayment or redemptmn is given, and ~f due prowsion for such payment ~s made, all as
provided above, flus Cert~cate, or the portion thereofwluch is to be so prepmd or redeemed, thereby
automatically shall be treated as prepmd or redeemed prior to ~ts scheduled due date, and shall not
14
bear mterest al~er the date fixed for its p~payment or redemption, and shall not be regarded as bemg
outstanding except for the right of the registered owner to receive the prepayment or redemption
price plus accrued interest to the date fixed for prepayment or redemption from the Paying
AgentJRegistrar out of the funds provided for such payment The Paymg AgentJReglstrar shall record
m the RegistratJon Books all such prepayments or redemptions of pnnclpal oft}us Certificate or any
portion hereof
THIS CERTIFICATE 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 acting in the capacity of registrar for the Certificates,
upon the terms and conditions set forth in the Certificate Ordinance Among other requirements for
such assignment and transfer, t}us Certificate must be presented and surrendered to the Paying
Agent/Registrar, together with proper instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paymg Agent/Registrar, ewdencmg assignment oft}us Certificate or any
portion or portions hereof m any integral multiple of $5,000 to the assignee or assignees in whose
name or names t}us Certificate or any such portion or portions hereof is or are to be transferred and
registered The form of Assignment pnnted or endorsed on t}us Certificate shall be executed by the
registered owner or its duly authorized attorney or representative, to ewdence the assignment hereof
A new Certificate or Certificates payable to such assignee or assignees (w}uch then will be the new
registered owner or owners of such new Certificate or Certificates), or to the previous registered
owner m the case of the assignment and transfer of only a portion oft}us Certificate, may be delivered
by the Paymg Agent/Registrar m conversion of and exchange for t}us Certificate, all in the form and
manner as prowded in the next paragraph hereof for the conversion and exchange of other
Certificates The Issuer shall pay the Paying AgentiReglstrar's standard or customary fees and
charges for malong such transfer, but the one requesting such transfer shall pay any taxes or other
governmental charges required to be prod with respect thereto The Paying Agent/Registrar shall not
be required to make transfers of registration ofttus Certificate or any portion hereof dunng the period
commencmg with the close ofbusmess on any Record Date and ending with the opening of business
on the next following pnncipal or interest payment date The registered owner oft}us Certificate
shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner
hereof for all purposes, mc}udmg payment and discharge of hablhty upon t}us Certificate to the extent
of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice
to the contrary
ALL CERTIFICATES OF THIS SERIES are lssuable solely as fully registered certificates,
without mterest coupons, mn the denomination of any integral multiple of $5,000 As prowded in the
Certificate Ordmance, t}us Ce~ficate, may, at the request of the registered owner or the assignee or
assignees hereof, be converted into and exchanged for a like aggregate pnncipal amount of fully
registered certificates, without interest coupons, payable to the appropriate registered owner,
assignee, or assignees, as the case may be, hawng the same maturity date, and beanng interest at the
same rate, in any denormnation or denonunations in any integral multiple of $5,000 as requested iff
wntmg by the appropriate registered owner, assignee, or assignees, as the case may be, upon sur-
render oft}us Certificate to the Paying Agent/Registrar for cancellation, all in accordance with the
form and procedures set forth in the Certificate Ordinance The Issuer shall pay the Paymg
Agent/Registrar's standard or customary fees and charges for transfemng, converting, and exchanging
any CerUflcate or any portion thereof, but the one requestmg such transfer, conversion, and exchange
15
shall pay any taxes or governmental charges reqmred to be pa~d wath respect thereto as a cond~tmon
precedent to the exercise of such privilege of conversmn and exchange The Paying Agent~Reg~strar
shall not be reqtnred to make any such conversion and exchange dunng the period cormnencmg wath
the close of business on any Record Date and enchng wath the opemng of business on the next follow-
mg pnnc~pal or uaterest payment date
IN THE EVENT any Paying Agent/Refi~strar for the Certxficates is changed by the Issuer,
resmgns, or otherwise ceases to act as such, the Issuer has covenanted m the Certmficate Ordinance that
~t promptly will appoint a competent and legally qu~ied substmtute therefor, and promptly wall cause
written nottce thereof to be marled to the regmstered owners of the Certmficates
IT IS HEREBY certified, recited, and covenanted that tbas Certificate has been duly and
vahdly authonzed, Issued, and dehvered, that all acts, condmons, and ttnngs reqmred or proper to be
performed, erast, and be done precedent to or m the authorization, mssuance, and dehvery of flus
Cemficate have been performed, ex~sted, and been done m accordance wath law, that flus Certmficate
ns a general obhgatmn of the Issuer, tssued on the full faith and credit thereof, and that annual ad
valorem taxes sufficment to provide for the payment of the interest on and pnncmpal of thins Certmficate,
as such interest comes due and such principal matures, have been levied and ordered to be levied
against all taxable property ua the Issuer, and have been pledged ~rrevocably for such payment, wattun
the hrmt prescribed by law, and that, together wath other panty obhgatmons, tbas Certmficate, and the
other Certtficates of this Series, additionally are payable from and secured by certain surplus revenues
(not to exceed $10,000 m aggregate amount) derived by the Issuer from the ownersbap and operatmon
of the Ctty's Utility System (cons~stuag of the C~ty's combuaed waterworks system, samtary sewer
system, and electric hght and power system), all as provmded mn the Certxficate Ordinance
THE ISSUER has reserved the nflht to issue, tn accordance wath law, and mn accordance wath
the Cemficate Ordinance, other and add~tmnal obhgat~ons, and to enter mnto contracts, payable from
ad valorem taxes and/or revenues of the City's Utility System, on a panty wath, or wath respect to sa~d
revenues, superior mn hen to, fins Certificate
BY BECOMING the regmstered owner of thxs Certmflcate, the regmstered owner thereby
acknowledges all of the terms and provisions of the Certtficate Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Certificate Ordinance ~s duly recorded and avadable for
uaspec*aon ua the oftle~al mutes and records of the govermng body of the Issuer, and agrees that the
terms and provismons of flus Certmficate and the Certificate Ordinance constmtute a contract between
each registered owner hereof and the Issuer
16
IN WITNESS WHEREOF, the Issuer has caused tins Certtficate to be s~gned wtth the manual
or facs~rmle s~gnature of the Mayor of the Issuer and countersigned vnth the manual or facsmule
s~gnature of the C~ty Secretary of the Issuer, and has caused the official seal of the Issuer to be duly
impressed, or placed m facs~rmle, on tlus Certificate
C~ty Secretary, C~ty of Denton, Texas Mayor, C~ty of Demon, Texas
(CITY SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It ~s hereby cemfied that tl~s Certtficate has been ~ssued under the provisions of the Cemficate
Ordinance described on the face of thas Certificate, and that this Certificate has been ~ssued ~n
conversion of and exchange for or replacement of a certificate, cemflcates, or a port,on of a
certificate or certificates of an ~ssue wbach originally was approved by the Attorney General of the
State of Texas and regnstered by the Comptroller of Public Accounts of the State of Texas
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, DALLAS, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative
(INSERT BOND INSURANCE LEGEND, IF ANY)
17
FORIVl OF ASSIGNMENT
A$$IGNIVIENT
FOR VALUE RECEIVED, the undersigned registered owner of tins Certificate, or duly
authorized representative or attorney
thereof, hereby assigns tins Certificate to
/ /
(Assignee's Social (pnnt or typewrite Asslgnee's name and
Security or Taxpayer address, mcludmg zip code)
Identification Number
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Certificate on the Paying Agent/Reglstrar's Registration
Books w~th full power of substitution in the premises
Dated
Signature Guaranteed
NOTICE Signature(s) must be Registered Owner
guaranteed by an ehg~ble guarantor NOTICE Tins signature must
~nsUtuUon participating in a correspond with the name of the
securities transfer association Registered Owner appeanng on
recogmzed signature guarantee the face of tins Certificate
program
Section 8 TAX LEVY' A special Interest and S~nkm8 Fund (the "Interest and Sinking
Fund") is hereby created solely for the benefit of the Certificates, and the Interest and S~nlang Fund
shall be established and maintained by the Issuer at an official depository bank of the Issuer The
Interest and Smlang Fund shall be kept separate and apart from all other funds and accounts of the
Issuer, and shall be used only for paying the interest on and pnncipal of the Certificates All ad
valorem taxes lexaed and collected for and on account of the Certificates shall be deposited, as
collected, to the credit of the Interest and Smlang Fund Dunng each year winle any of the
Certificates or interest thereon are outstanding and unpaid, the govermng body of the Issuer shall
compute and ascertain a rate and amount of ad valorem tax winch will be sufficient to raise and
produce the money reqmred to pay the interest on the Certificates as such interest becomes due, and
to provide and maintain a smlang fund adequate to pay the pnnc~pal of its Certificates as such
principal matures (but never less than 2% of the original pnnclpal amount of the Certificates as a
sinking fund each year), and smd tax shall be based on the latest approved tax rolls of the Issuer, w~th
18
full allowance being made for tax delinquencies and the cost of tax collection Smd rate and amount
of ed valorem tax Is hereby lexaed, and Is hereby ordered to be levied, agmnst all taxable property in
the Issuer for each year while any of the Certificates or interest thereon are outstanding and unpatd,
and smd tax shall be assessed and collected each such year and deposited to the credit of the aforesmd
Interest and Stoking Fund SMd ed valorem taxes sufficient to proxade for the payment of the interest
on and principal of the Certificates, as such interest comes due and such pnnclpal matures, are hereby
pledged for such payment, within the hnut prescribed by law
Section 9 SURPLUS REVENUES The Certificates additionally shall be payable from and
secured by surplus revenues, to the ex tent hereinaf~er penmtted, derived by the Issuer from the
ownership and operation of the Issuer's Utility System (consisting of its combined waterworks
system, samta~ sewer system, and electric light and power system) remmmng after (a) payment of
all amounts constituting operation and maintenance expenses of said Utlhty System, and (b) payment
of all debt service, reserve, and other requirements and amounts required to be paid under all
ordinances heretofore or hereafter authorizing (l) all bonds and (ii) all other obligations not on a
panty with the Certificates, which are payable from and secured by any Utility System revenues, and
(c) payment of all amounts payable from any Utlhty System revenues pursuant to contracts heretofore
or hereaf[er entered into by the Issuer in accordance with law (the "Surplus Revenues") If, for any
reason, the Issuer fmls to deposit ad valorem taxes lev~ed pursuant to Section 8 hereof to the credit
of the Interest and Stoking Fund m an amount s~ffi¢lent to pay, when due, the pnnclpal of and interest
on the Certrficetes, then Surplus Revenues, to the extent hereinafter permitted, shall be deposited to
the credit of the Interest and Sinking Fund and used to pay such pnnclpal and/or interest A
mammum aggregate of $10,000 of Surplus Revenues may be used to pay pnncipal and/or interest on
the Certificates and any obligations on a panty therewith The Certificates and any obligations on a
parity therewith are not, and shall not be deemed to be, payable from or secured by any Surplus
Revenues in excess of an aggregate orS10,000 Un~ and unless an aggregate of $10,000 of Surplus
Revenues actually is used to pay any such pnncipal and/or interest, additional obligations, payable
from and secured by all or any remmmng unused part of smd aggregate of $10,000 of Surplus
Revenues, may be issued by the Issuer on a panty with the Certificates and any other then outstanding
panty obhgations, with the Certificates and all such additional panty obligations to be payable from
and secured equally and ratably by all or any remmning unused part of said aggregate The Issuer
reserves, and shall have, the right to issue bonds, and other obligations not on a panty with the
Certificates, and to enter into contracts, in accordance with applicable laws, to be payable from and
secured by any Utility System revenues other than the aggregate of $10,000 of Surplus Revenues as
descnbed above The Certificates are on a panty w~th those issues of City of Denton Certificates of
Obhgation, Series 1987, Senes 1987-A, Series 1989, Series 1989-A, Senes 1991, Series 1992, Series
1993, Series 1993-A, Series 1994 and Series 1995 (the "Outstanding Certificates"), as pernutted in
the Ordinances authonzmg same, and it is hereby found and deternuned that none of the above
defined Surplus Revenues have ever been used to pay any principal and/or interest on the Outstanding
Certificates
Section 10 DEFEASANCE OF CERTIFICATES (a) Any Certificate and the interest
thereon shall be deemed to be pud, retired, and no longer outstanding (a "Defeased Certificate")
w~thm the meamng of this Ordinance, except to the extent provided m subsection (d) of this Section,
when payment of the principal of such Certificate, plus interest thereon to the due date either (l) shall
have been made or caused to be made in accordance w~th the terms thereof, or (il) shall have been
19
provided for on or before such due date by irrevocably depositing voth or malong avmlable to the
Paying Agent/Registrar for such payment (1) lawful money of the Umted States of America suffioent
to make such payment or (2) Government Obligations wluch mature as to pnnc~pal and interest m
such amounts and at such times as will insure the avmlabdity, w~thout reinvestment, of sufficient
money to prowde for such payment, and when proper arrangements have been made by the Issuer
with the Paying Agent/Registrar for the payment of its services until all Defeased Certificates shall
have become due and payable At such time as a Certificate shall be deemed to be a Defeased
Certcficate hereunder, as aforesaid, such Cert~cate and the interest thereon shall no longer be secured
by, payable from, or entitled to the benefits of, the ad valorem taxes herein lev~ed and pledged as
provided in tlus Ordinance, and such pnncipal and interest shall be payable solely from such money
or Government Obligations
(b) Any moneys so deposited w~th the Paying Agent/Registrar may at the written direction
of the Issuer also be invested m Government Obligations, maturing m the amounts and times as
hereinbefore set forth, and all income from such Government Obligations received by the Paying
AgenffRe~strar wluch is not required for the payment of the Certificates and interest thereon, w~th
respect to wluch such money has been so deposited, shall be turned over to the Issuer, or deposited
as d~rected m writing by the Issuer
(c) The term "Government Obligations" as used in this Section shall mean &rect
obhgatmons of the Umted States of America, ~ncludmg obhgat~ons the prmclpal of and interest on
wluch are uncondmonally guaranteed by the Umted States of America, wluch may be Umted States
Treasury obligations such as its State and Local Government Series, wluch may be in book-entry
form
(d) Until all Defeased Certificates shall have become due and payable, the Paying
Agent/Registrar shall perform the sermces of Paying Agent/Registrar for such Defeased Cemficates
the same as ri'they had not been defeased, and the Issuer shall make proper arrangements to prowde
and pay for such services as required by this Ordinance
Section 11 DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES (a) Replacement Certificates In the event any outstanding Certificate is
damaged, mutdated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed,
executed, and delivered, a new certificate of the same pnnclpal amount, maturity, and interest rate,
as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement for such Certificate
in the manner hereinafter proxaded
(b) App!~e.A/~on for Replacement Certificates ApphcaUon for replacement of damaged,
mutdated, lost, stolen, or destroyed Certificates shall be made by the registered owner thereof to the
Paying Agent/Registrar In every case of loss, theft, or destruction ora Certificate, the reggstered
owner applying for a replacement certificate shall furmsh to the Issuer and to the Paying
Agent/Registrar such security or mdemmty as may be reqmred by them to save each of them harmless
from any loss or damage vath respect thereto Also, in every case of loss, theft, or destruction of a
Certrficate, the registered owner shall furmsh to the Issuer and the Paying Agent/Registrar ewdence
to their satisfaction of the loss, theft, or destruction of such Certificate, as the case may be In every
20
case of damage or mutilation of a Certtficate, the regtstered owner shall surrender to the Paling
Agent/Regtstrar for cancellation the Cemficate so damaged or mutdated
(c) N~Jl~IftlI~L~IZ~ Notwithstanding the foregoing prowsxons of tins Sectmn, m
the event of any such Certificate shall have matured, and no default has occurred winch ~s then
continuing m the payment of the pnnctpal of, or interest on the Cemficate, the Issuer may authorize
the payment of the same (w~thout surrender thereof except m the case of a damaged or mutilated
Cemficate) instead of~ssumg a replacement Cemficate, prowded security or mdemmty xs furmshed
as above proxaded m tlus Section
(d) Charge for Issuing Replacement Certificates Prior to the xssuance of any replacement
cemficate, the Paying Agant/Reg~strar shall charge the reglstered owner of such Cemflcate w~th all
legal, pnntmg, and other expenses m connectaon therewth Every replacement cemficate ~ssued
pursuant to the provisions of tins Section by v~rtue of the fact that any Certtficate ~s lost, stolen, or
destroyed shall consutute a contractual obhgatton of the Issuer whether or not the lost, stolen, or
destroyed Cemficate shall be found at any txme, or be enforceable by anyone, and shall be entitled to
all the benefits of tins Ordinance equally and propomonately w~th any and all other Cemficates duly
~ssued under tins Ordinance
(e) Authority for Issum_~ Renlacement Certtficates In accordance w~th Section 6 of Vernon's
Ann Tex C~v St Art 717k-6, tins Section of tins Ordinance shall constxtute authority for the
~ssuance of any such replacement cemficate w~thout necessity of further acuon by the govermng body
of the Issuer or any other body or person, and the duty of the replacement of such cemficates ns
hereby authorized and tmposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar
shall authenttcate and dehver such Certificates m the form and manner and w~th the effect, as
prowded m Section 6(d) of tins Ordinance for Cemficates ~ssued m conversmn and exchange for
other Certificates
Sectxon 12 CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES,
CERTIFICATE COUNSEL'S OPINION, CUSIP NUMBERS, PREAMBLE AND INSURANCE
The Mayor of the Issuer ~s hereby authorized to have control of the Imt~al Cemficate ~ssued
hereunder and all necessary records and proceedings perta~mng to the Inmal Cemficate pending ~ts
dehvery and ~ts investigation, exarmnat~on, and approval by the Attorney General of the State of
Texas, and ~ts regtstrat~on by the Comptroller of Pubhc Accounts of the State of Texas Upon
reg~stratxon of the Imual Cemficate smd Comptroller of Pubhc Accounts (or a deputy designated m
wntmg to act for smd Comptroller) shall manually s~gn the Comptroller's Registration Cemficate on
the Imt~al Cemficate, and the seal of smd Comptroller shall be ~mpressed, or placed m facsmule, on
the Imt~al Cemficate The approvmg legal op~mon of the Issuer's Bond Counsel and the assigned
CUSIP numbers may, at the optton of the Issuer, be printed on the Imt~al Certificate or on any
Certrficates xssued and dehvered m conversion of and exchange or replacement of any Cemflcate, but
nenher shall have any legal effect, and shall be solely for the convemence and mformat~on of the
registered owners of the Cemficates The preamble to tins Ordinance ~s hereby adopted and made
a part hereof for all purposes If insurance ~s obtained on any of the Cemflcates, the Imt~al Cemficate
and all other Cemficates shall bear an appropriate legend concermng insurance as proxqded by the
insurer
21
Section 13 COVENANTS REGARDING TAX-EXEMPTION The Issuer covenants to
refrain from tal~ng any action winch would adversely affect, and to take any acuon reqmred to
ensure, the treatment of the Certtficates as obhgat~ons described m secUon 103 of the Code, the
interest on whtch ~s not includable m the "gross income" of the holder for purposes of federal income
taxation In furtherance thereof, the Issuer covenants as follows
(a) to take any action to assure that no more than 10 percent of the proceeds of
the Certaficates or the project financed therewith (less amounts deposited to a reserve fund,
ffany) are used for any "private business use", as defined m section 141(b)(6) of the Code or,
if more than 10 percent of the proceeds or the project financed therewath are so used, such
mounts, whether or not received by the Issuer, unth respect to such private business use, do
not, under the terms ofttus Ordinance or any underlying arrangement, d~rectly or indirectly,
secure or provtde for the payment of more than 10 percent of the debt serwce on the
Certificates, m contravention of secUon 141 (b)(2) of the Code,
(b) to take any action to assure that m the event that the "private business use"
described m subsectton (a) hereof exceeds 5 percent of the proceeds of the Certificates or the
project financed therewith (less amounts deposited into a reserve fund, If any) then the
amount m excess of 5 percent ~s used for a "private business use" which is "related" and not
"d~sproporttonate", w~thm the meaning ofsemon 141(b)(3) of the Code, to the governmental
use,
(c) to t~ke any action to assure that no amount whmh is greater than the lesser of
$5,000,000, or $ percent of the proceeds of the Certificates (less amounts depomed into a
reserve fund, tt'any) ~s dtrectly or indirectly used to finance loans to persons, other than state
or local governmental umts, m contravention of section 141 (c) of the Code,
(d) to refrain fi'om tatung any action whtch would otherwise result in the
Certificates being treated as "private acuwty bonds" Wlttun the meaning of section 14 l(b) of
the Code,
(e) to refrain from taking any action that would result in the Cemficates being
"federally guaranteed" w~ttun the meamng of section 149(b) of the Code,
(f) to refrain from using any portion of the proceeds of the Certificates, directly
or mdtrectly, to acqutre or to replace funds wbach were used, &rectly or ~ndirectly, to acquire
investment property (as defined m section 148(b)(2) of the Code) wl~ch produces a materially
lugher y~eld over the term of the Certificates, other than investment property acquired w~th --
(1) proceeds of the Cemficates invested for a reasonable temporary period
of 3 years or less, or in the case ora refunding certificate for a period of 30 days or
less, untd such proceeds are needed for the purpose for wtuch the certificates are
issued,
(2) amounts invested m a bona fide debt servme fund, watlun the meamng
of section l 148-1(b) of the Treasury Regulations, and
22
(3) amounts deposited m any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the stated pnnclpal
amount (or, m the case ora discount, the issue price) of the Certificates,
(g) to other~v~se restrict the use of the proceeds of the Certificates or amounts
treated as proceeds of the Certificates, as may be necessary, so that the Certificates do not
othervose contravene the reqmrements of section 148 of the Code (relating to arbitrage),
Sectson 149(g) of the Code (relatmg to hedge bonds), and, to the extent applicable, secuon
149(d) of the Code (relating to advance refundings), and
(h) to pay to the Umted States of America at least once dunng each five-year
period (begmmng on the date of dehvery of the Certificates) an amount that is at least equal
to 90 percent of the "Excess Earmngs", w~tlun the meanmg of section 148(0 of the Code and
to pay to the Umted States of America, not later that 60 days aider the Certificates have been
prod m full, 100 percent of the amount then required to be prod as a result of Excess Earmngs
under section 148(0 of the Code
For purposes of the foregoing (a) and (b), the Issuer understands that the term "proceeds"
includes "disposition proceeds" as defined in the Treasury Regulations and, In the case of refundmg
bonds, transferred proceeds 0f any) and proceeds of the refunded bonds expended prior to the date
of issuance of the Bonds It ~s the understandmg of the Issuer that the covenants contmned herein
are mtended to assure comphance w~th the Code and any regulations or rulings promulgated by the
U S Department of the Treasury pursuant thereto In the event that regulations or rulings are
hereafter promulgated which modify, or expand provisions of the Code, as applicable to the Certifi-
cates, the Issuer will not be required to comply wath any covenant contained herein to the extent that
such failure to comply, m the op~mon ofnauonally-recogmzed bond counsel, will not adversely affect
the exemption from federal income taxation of interest on the Certificates under section 103 of the
Code In the event that regulations or rulings are m furtherance of such intention, the Issuer hereby
authorizes and directs the Mayor and/or the Director of Finance of the Issuer to execute any
documents, cemficates or reports required by the Code and to make such elections, on behalf of the
Issuer, wluch may be pemutted by the Code as are consistent with the purpose for the issuance of the
Certificate
In order to facilitate comphance w~th the above covenant (h), a "Rebate Fund" ~s hereby
estabhshed by the Issuer for the sole benefit of'the United States of America, and such fund shall not
be subject to the claim of any other person, mcludmg without limitation, the owners of the
Certificates The Rebate Fund ~s estabhshed for the additional purpose of comphance wnh Section
148 of the Code
Sect;on 14 SALE OF INITIAL CERTIFICATE The Initial Certificate is hereby sold and
shall be dehvered to First Southwest Company, for cash for the par value thereof and accrued interest
thereon to date ofdehvery, plus a premium of $ -0- It is hereby officially found, deternuned,
and declared that the Initial Certificate has been sold at public sale to the bidder offering the lowest
~nterest cost, a~er receiving sealed bids pursuant to an Official Notice of Sale and Bidding
Instructions and Official Statement dated Apn123, 1996, prepared and d~stnbuted m connectmn with
the sale of the Imtlal Certificate Sa~d Official Notice of Sale and Bidding Instructions and Official
23
Statement, and any addenda, supplement, or amendment thereto have been and are hereby approved
by the Issuer, and thetr use m the offer and sale of the Certtficates ts hereby approved It is further
offictally found, detemuned, and declared that the statements and representattons contmned ~n satd
Official Notace of Sale and Official Statement are true and correct tn all material respects, to the best
knowledge and behef of the C~ty Councd and the Issuer
Sectton 15 INTEREST EARNINGS ON CERTIFICATE PROCEEDS Interest earmngs
derived from the tnvestment of proceeds from the sale of the Imttal Certtficate shall be used along
w~th other proceeds for the purposes for winch the Certtficates are xssued, proxaded that after
completion of such purposes, ~f any of such tnterest earmngs remain on hand, such interest earmngs
shall be deposited m the Interest and Stoking Fund It ts further proxaded, however, that any interest
earnmgs on certtficate proceeds which are required to be rebated to the Umted States of America
pursuant to Sectton 13 hereofm order to prevent the Certtficates from betng "arbttrage bonds" witinn
the meaning of the Code shall be so rebated and not constdered as ~nterest earmngs for the purposes
of tins Sectton
Section 16 DTC REGISTRATION The Certificates tmttally shall be ~ssued and delivered
in such manner that no physical dtstnbutlon of the Certificates will be made to the pubhc, and The
Depository Trust Company ("DTC"), New York, New York, ~mUally w~ll act as deposttory for the
Certrficates DTC has represented that it ts a hn~ted purpose trust company incorporated under the
laws of the State of New York, a member of the Federal Reserve System, a "cleanng corporation"
w~thm the meamng of the New York Umform Commercial Code, and a "cleanng agency" regtstered
under Section 17A of the federal Secunues Exchange Act of 1934, as amended, and the Issuer
accepts, but m no way verifies, such representaUons The IraUal Certtficate authorized by this
Ordinance shall be delivered to and regtstered m the name of the Purchaser However, It ~s a
condxt~on of dehvery and sale that the Purchaser, unmedmtely after such dehvery, shall cause the
Paying Agent/Registrar, as provided for m tlus Ordinance, to cancel smd Imttal Certtficate and deliver
~n exchange therefor a substitute Certtficate for each maturity of such Imtxal Certificate, w~th each
such substttute Certtficate to be regxstered tn the name of CEDE & CO, the nonunee of DTC, and
it shall be the duty of the Paying Agent/Regtstrar to take such actton It is expected that DTC will
hold the Certtficates on behalf of the Purchaser and/or the DTC Parttctpants, as defined and described
~n the Offictal Statement referred to and approved m Sectton 14 hereof(the "DTC Participants") So
long as each Cert~cate is regtstered tn the name of CEDE & CO, the Paytng Agent/R. egtstrar shall
treat and deal vnth DTC m all respects the same as tflt were the actual and benefictal owner thereof
It ts expected that DTC wtll mmntmn a book entry system winch w~ll tdenufy beneficial ownersinp
of the Certtficates by DTC Pamclpants ~n tntegral amounts of $5,000, w~th transfers of ownersinp
being effected on the records of DTC and the DTC Participants pursuant to rules and regulaUons
established by them, and that the subsUtute Certificates imttally depostted w~th DTC shall be
immobdm~l and not be further exchanged for substitute Certificates except as hereinafter provided
The Issuer ts not responstble or hable for any functions of DTC, will not be responsible for paying
any fees, or charges w~th respect to tts services, wtll not be responsible or hable for mmntalmng,
supervising, or rewew~ng the records of DTC or the DTC Participants, or protecting any mterests or
rights of the beneficial owners of the Certificates It shall be the duty of the Purchaser and the DTC
Parttctpants to make all arrangements w~th DTC to estabhsh tins book-entry system, the benefictal
ownership of the Certificates, and the method of paying the fees and charges of DTC The Issuer
does not represent, nor does tt m any way covenant that the tmttal book-entry system established vnth
24
DTC will be maintained In the future The Issuer reserves the nght and option at any time In the
future, m its sole chscretion, to terminate the DTC (CEDE & CO ) book-entry only registration
requirement described above, and to permit the Certflicates to be registered in the name of any owner
If the Issuer exercises its nght and option to tenmnate such requirement, it shall give written notice
of such ternunat~on to the Palong Agent/Registrar and to DTC, and thereafter the Paying
Agent/Re~strar shall, upon presentation and proper request, re~ster any Certificate in any name as
provided for m this Ordinance Notwithstanding the uutial estabhshment of the foregoing book-entry
system wlth DTC, ii'for any reason any of the originally dehvered substitute Certificates ~s duly filed
vath the Paying Agent/Registrar with proper request for transfer and substitution, as provided for in
flus Ordinance, substitute Certificates w~ll be duly delivered as provided in this Ordinance, and there
will be no assurance or representation that any book-entry system vail be maintained for such
Certificates
Section l? COMPLIANCE WITH RULE 15c2-12 (a) AnnualReports 0) TheIssuer
shall prowde annually to each NRJVISIR and any SH), vathin six months afier the end of each fiscal
year ending m or after 1996, financial reformation and operating data vath respect to the Issuer of the
general type included m the final Official Statement authorized by Section 14 of this Ordinance, being
the reformation described in Exhibit A hereto, which Exhibit is attached to and incorporated m this
Ordinance as fl'written word for word hereto Any financial statements so to be provided shall be (1)
prepared in accordance vath the accounting pnnclples described in Exhibit A hereto, or such other
accountml~ pnncuples as the Issuer may be required to employ from time to time pursuant to state law
or regulat~ort, and (2) audited, if the Issuer comnussIons an audit of such statements and the audit is
completed within the period dunng which they must be provtded If the audit of such financial
statements is not complete within such period, then the Issuer shall provide unaudited finanaal
statements by the reqmred t~me and vall provide audited financial statements for the applicable fiscal
year to each NRMSIR and any SID, when and if the audit report on such statements become
available
(il) If the Issuer changes its fiscal year, it vail notify each NRMSIR and any SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the Issuer
otherwise would be required to provide financial information and operating data pursuant to this
Section The financial information and operating data to be provided pursuant to this Section may
be set forth in full In one or more documents or may be included by specific reference to any
document (including an official statement or other offenng document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed vath the SEC
(b) Ma al Even s The Issuer shall notify any SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Certificates, if such
event is material vathin the meamng of the federal securities laws
1 Pnncipal and interest payment delinquencies,
2 Non-payment related defaults,
3 Unscheduled draws on debt service reserves reflecting financial difficulties,
25
4 Unscheduled draws on credit enhancements reflecting financial difficulties,
5 Substitution of credit or hqmd~ty proxaders, or their fmlure to perform,
6 Adverse tax op~mons or events affecting the tax-exempt status of the
Certificates,
7 Modifications to nghts of holders of the Certificates,
8 Certificate calls,
9 Defeasances,
10 Release, substitution, or sale of property secunng repayment of the
Certificates, and
11 Rating changes
The Issuer shall noufy any SID and either each NRMSIR or the MSRB, m a timely manner, of any
failure by the Issuer to prowde financial mformat~on or operating data ~n accordance w~th subsection
(a) of this Section by the t~me reqmred by such subsection
(c) !.~rn~tat~ons. Dlsclanners. and Amendments 0) The Issuer shall be obhgated to observe
and perform the covenants specrfied m th~s Section for so long as, but only for so long as, the Issuer
remains an "obhgated person" w~th respect to the Certificates w~ttun the meamng of the Rule, except
that the Issuer m any event will 8~ve the not~ce reqmred by Subsection (b) hereof of any Cerhficate
calls and defeasance that cause the Issuer to no longer be such an "obhgated person"
(n) The provisions of t}us Sectton are for the sole benefit of the registered owners and
beneficml owners of the Certtficates, and nottung m ttus Section, express or ~mphed, shall give any
benefit or any legal or eqmtable right, remedy, or claim hereunder to any other person The Issuer
undertakes to prowde only the financml mformat~on, operating data, financial statements, and notices
wl~ch it has expressly agreed to proxade pursuant to fins Section and does not hereby undertake to
proxade any other information that may be relevant or material to a complete presentation of the
Issuer's financial results, condition, or prospects or hereby undertake to update any ~nformauon
prowded m accordance w~th tlus Sectton or otherwise, except as expressly proxaded here~n The
Issuer does not make any representation or warranty concermng such reformation or ~ts usefulness
to a decision to revest ~n or sell Cemficates at any future date
(iu) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE 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
26
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE
(iv) No default by the Issuer tn obsermng or perforrmng its obligations under tbJs Section
shall comprise a breach of or default under the Ordinance for purposes of any other prowslon oftbas
Ordinance Nothing tn th~s Section Is tntended or shall act to dlsclmtn, waive, or otherwse htmt the
duties of the Issuer under federal and state securities laws
(v) The prowslons oftlus Section may be amended by the Issuer from time to time to adapt
to changed ctrcumstances that anse from a change tn legal requirements, a change m law, or a change
m the ~danttty, nature, status, or type of operations of the Issuer, but only if(l) the provisions oftlus
Section, as so amended, would have permatted an underwriter to purchase or sell Certificates In the
primary offertng of the Certtficates tn comphance vath the Rule, talrang into account any amendments
or mterpretatJons of the Rule stnce such offering as well as such changed circumstances and (2) either
(a) the registered owners ora majority tn aggregate pnncipal amount (or any greater amount required
by any other prov~sion of tlus Ordinance that authorizes such an amendment) of the outstanding
Certificates consent to such amendment or (b) a person that ~s unaffiliated w~th the Issuer (such as
nationally recogmzed bond counsel) deterrmned that such amendment vail not materially impair the
interest of the registered owners and beneficial owners of the Certificates If the Issuer so amends
the proxasions oftlms Sect, on, It shall include vath any amended financial information or operat,ng
data neott prowded tn accordance vath subseceaon (a) ofthts Section an explanation, tn narrative form,
of the reason for the amendment and of the impact of any change tn the type of financial information
or operattng data so prowded The Issuer may also amend or repeal the provisions of thts conttnumg
disclosure agreement ~fthe SEC amends or repeals the applicable prowslon of the Rule or a court of
final jurisdiction enters judgment that such provisions of the Rule are tnval~d, but only if and to the
extent that the prowstons of thts sentence would not prevent an underwriter from lawfully purchasing
or selling Certificates In the primary offenng of the Certificates
(d) Dotlmtions As used m th~s Section, the following terms have the meamngs ascribed to
such terms below
"MSRB" tneans the Mumclpal Securities Rulemakang Board
"NR_MSIR" means each person whom the SEC or ~ts staff has deterrmned to be a
nataonally recogmzed tnumcipol securities reformation repository vathtn the meamng of the Rule from
time to time
"Rule" means SEC Rule 1 $c2-12, as amended from time to time
"SEC" means the Utnted States Securities and Exchange Comrmss~on
"SID" means any person designated by the State of Texas or an authorized
department, officer, or agency thereof as, and detenmned by the SEC or its staff to he, a state
information depository within the meamng of the Rule from time to t~me
27
*SID" means any person designated by the State of Texas or an authorized
department, officer, or agency thereof as, and detemuned by the SEC or its staff to be, a state
reformation depository w~tlun the meaning of the Rule from ume to time
Section 18 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 authorized, empowered, and directed from Ume to time and at any time to do
and perform ali such acts and things and to execute, acknowledge, and deliver m the name end under
the cetporate seal and on behslfof the Issuer all such instruments, whether or not herein mentioned,
as may be necessary or desirable in order to carry out the terms and prowslons oftlus Certificate
Ordinance, the Cemticetes, the sale of the Cemficate~ and the Notice of Sale and Officual Statement,
apxi the Du-ector of Finance of the City shall cause the expenses of Issuance of the Ceruficates to be
prod fi.om the proceeds of sale oftbe Imtlal Certafieate or from other lawfully avmlable funds of the
Issuer In case any officer whose signature shall appear on any Certificate shall cease to be such
officer before the dehvery of such Cemiieate, such signature shall nevertheless be valid and sufficient
for all purposes the same as If such officer had remmned in office until such delivery
Section 19 OPEN MEETINGS The City Council has found and detemuned that the
meeting at which tlus Ordinance is conmdered is open to the public and that notice thereof was g~ven
m accordance w~th the prows~ons of the Texas Open Meetings, Law, Te× Gov't Code, Chapter 551,
as amended
Sec~on 20 EFb~CTIVE DATE Tlus Ordinance shall become effective immediately upon
its passage and approval
PASSED AND APPROVED tlus the ~~96
ATTEST
Jenmfer Walters, C~ty Secretary
APPROVED AS TO LEGAL FORM
Herbert L ProuVJ, City Attorney
28
EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following ilLFormatlon is referred to ~n Section 17 ofttus Ordinance
Annual Financial Statements and Operating Data
The financial mformaUon and operaUng data vnth respect to the Issuer to be provided annually
m accordance w~th such Section are as specified (and included m the Appendix or under the tables
of the Official Statement referred to) below
Tables numbered 1 through 14, inclusive, under the captions "Tax Information", "Debt
Service P. eqmrements" and "Fmanc~al Information" in the Official Statement
Appendix B m the Official Statement
Accounting Principles
The accounting pnnclples referred to ~n such Section are the accounting pnnc~ples described
~n the notes to the financial statements referred to ~n the paragraph above
CERTIFICATE FOR
ORDINANCE AU'rHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF
DENTON CERTIFICATES OF OBLIGATION, SERIES 1996, AND APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO, AND
PROVIDING AN EFFECTIVE DATE
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
We, the undersigned officers of smd C~ty, hereby certify as follows
1 The C~ty Council of smd C~ty convened xn REGULAR MEETING ON THE 7TH DAY
OF MAY, 1996, at the Mumopal Building (City Hall), and the roll was called of the duly constituted
officers and members of smd Ctty Council, to-w~t
Ienmfer K Walters, Bob Castleberry, Mayor
C~ty Secretary Euhne Brock
David Biles, Mayor Pro Tem JeffKrueger
Jerry Cott Carl G Young, Sr
Jack Miller
and all of sa~d persons were present, except the following absentees None, thus consUtutmg a
quorum Whereupon, among other business, the following was transacted at smd Meet, nga written
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF
DENTON CERTIFICATES OF OBLIGATION, SERIES 1996, AND APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO, AND
PROVIDING AN EFFECTIVE DATE
was duly introduced for the cons~deraUon of~d C~ty Council and duly read It was then duly moved
and seconded that sa~d Ordinance be passed, and, aRer due discussion, sa~d mouon, carrying wnh it
the passage of sa~d Ordinance, preva,led and ca'ned by the following vote
AYES 6
NOES 1
AB STENTIONS 0
2 That a tree, full, and correct copy of the aforesmd Ordinance passed at the Meeting
described in the above and foregoing paragraph is attached to and follows tins Certificate, that mud
Ordinance has been duly recorded m sa~d City Councffs nunutes of smd Meeting, that the above and
foregoing paragraph is a true, full, and correct excerpt from smd City Council's nunutas of smd
Meeting pertmmng to the passage of smd Ordinance, that the persons named in the above and fore-
going paragraph are the duly chosen, qualified, and acting officers and members of smd City Council
as Indicated therein, and that each of the officers and members of smd City Council was duly and
sufficiently notified officially and personally, In advance, of the time, place, and purpose of the
aforesmd Meeting, and that smd Ordinance would be introduced and considered for passage at smd
Meeung, and that smd Meeting was open to the public, and public notice of the time, place, and
purpose or,md meeting was g~ven, all as required by Chapter 551, Texas Government Code
3 That the Mayor of smd City has approved, and hereby approves, the aforesmd Ordinance,
that the Mayor and the City Secretary of smd City have duly signed smd Ordinance, and that the
Mayor and the City Secretary of smd City hereby declare that their slgmng of tins Certificate shall
constitute the slgmng of the attached and following copy of smd Ordinance for all purposes
SIGNED AND SEALED the 7th day of May, 1996
(,~' Ci~ Secretary f_/z Mayor
(sEAL)
We, the undersigned, being respectively the City Attorney and the Bond Attorneys of the City
of Demon, Texas, hereby certify that we prepared and approved as to legality the attached and
follovang Ordinance prior to Its passage as aforesaid
City Attorney ~
Bond Attorneys
LAW OFFICES
MC_CALL, PARKHURST ~, HORTON L L P
3100 ONE AMERICAN CENTER 717 NORTH HARWOOD 1225 ONE RIVERWALK PLACE
AUSTIN TEXAS 78701 3248 NINTH FLOOR SAN ANTONIO TEXAS 78205 3503
May 7, 1996
Honorable Mayor and Council of
the City of Denton
Denton, Texas
Ladies and Gentlemen
Re City of DenWn Certificate of Obhgatlon, being the "Initial Certificate" proposed to be
anthonzed by the ordinance described below
In compliance with Section 9 02 and Section 9 04 of the City Charter of the City of Denton, you are
advised that the bids for the captioned Imtlal Certificate received by the City pursuant to its Official Statement
and Notice of Sale and Bidding Instructions dated April 23, 1996, have been tabulated, and that we fred, based
on calculaUons performed by Fn'st Southv~st Company, as financial advisor, that the bid of a syndicate managed
or headed by the following
w~th the installments of principal of the Initial Certificate to bear interest at the rates therein specified, with such
bidder to pay par and accrued interest to date of dehve~, plus a premium of $ O , for the Initial
Certificate, is the lowest and best bid received, and we recommend that it be accepted
We further certify that we have examined the ordinance (the "Certificate Ordinance") presently placed
before the Mayor and Council for the purpose of authorizing the issuance, sale, and delivery of said Initial
Certificate, and, m our opuuon, the said proposed Certificate Ordinance is legal, and the certificates to be issued
thereunder roll be general obhgatlous of the City payable from ad valorem taxes levied and ordered to be levied
against aH taxable property m the City, within the limit prescribed by law, and additionally are payable from and
secured by certain surplus revenues (not to exceed $10,000 in aggregate amount) derived by the Issuer from the
ownership and operation of the City's Utahty System (consisting of the City's combined waterworks system,
samtary sewer system, and electric light and power system)
Respectfully,
McCall, Parkhurst & Horton L L P
L E (Ted) Bnzzolera, III