1995-033 ORDINANCE NO. 95-033
ORDINANCE
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON
GENERAL OBLIGATION BONDS, SERI'ES 1995, LEVYING THE TAX TO PAY
SAME, AND APPROVING AND AUTHORIZING INSTRUMENTSAND PROCEDURES
REI.ATING THERETO
THE STATE OF TEXAS
COUNTY OF DENTON :
CITY OF DENTON
WHEREAS, the bonds hereinafter authorized were lawfully and favorably voted at an election
duly held in said City on DECEMBER 13, 1986; and
WHEREAS, out of the bonds aggregating the amount of $21,637,000 voted at said election,
the City has duly issued $16,155,000 thereof; represented by the City's bonds designated as: SERIE~S
1987, SERmS 1988, SERIES 1989, SERIES 1992 AND SERIES 1993; and
WHEREAS, the Council of said City deems it necessary and advisable to authorize, issue, and
deliver another installment or series of said bonds; and
WHEREAS, the bonds hereinafter authorized and designated were voted and are to be issued,
sold, and delivered pursuant to Vemon's Ann. Tex. Civ. St. Articles 823 and 1175, Article IX. of the
City's Home Rule Charter, and other applicable laws.
THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS THAT:
Section 1. AMOUNT AND PURPOSE OF THE BONDS. The bond or bonds of the City
of Denton, Texas (the "Issuer") are hereby authorized to be issued and delivered in the aggregate
principal amount of $1,610,000, FOR THE PURPOSE OF THE ACQUISITION OF PROPERTY
AND MAKING IMPROVEMENTS FOR PUBLIC PURPOSES IN SAID CITY, TO-WIT:
$885,000 FOR STREET AND TRAFFIC IMPROVEMENTS; $275,000 FOR DRAINAGE
IMPROVEMENTS AND $450,000 FOR PARKS AND RECREATION IMPROVEMENTS.
Section 2. DESIGNATION OF THE BONDS. Each bond issued pursuant to this Ordinance
shall be designated: "CITY OF DENTON GENERAL OBLIGATION BOND, SERIES 1995", and
initially there shall be issued, sold, and delivered hereunder a single fully registered bond, without
interest coupons, payable in installments of principal (the "Initial Bond"), but the Initial Bond may
be assigned and transferred and/or converted into and exchanged for a like aggregate principal
amount of fully registered bonds, without interest coupons, having serial maturities, and in the
denomination or denominations of $5,000 or any integral multiple of $5,000, all in the manner herein-
after provided. The te, m "Bonds" as used in this Ordinance shall mean and include collectively the
Initial Bond and ail substitute bonds exchanged therefor, as well as ail other substitute bonds and
replacement bonds issued pursuant hereto, and the term "Bonds" shall mean any of the Bonds.
Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL BOND.
(a) The Initial Bond is hereby authorized to be issued, sold, and delivered hereunder as a
single fully registered Bond, without interest coupons, dated FEBRUARY 15, 1995, in the
denomination and aggregate principal amount of $1,610,000, numbered R-l, payable in annuai
installments of principal to the initial registered owner thereof, to-wit:
A. G. EDWARDS & SONS, INC.
or to the registered assignee or assignees of said Bond or any portion or portions thereof(in each
case, the "registered owner"), with the annuai instailments of principal of the Initiai Bond to be
payable on the dates, respectively, and in the principal amounts, respectively, stated in the FORM OF
INITIAL BOND set forth in this Ordinance.
(b) The Initiai Bond (i) may be prepaid or redeemed prior to the respective scheduled due
dates of installments of principal thereof, (ii) may be assigned and transferred, (iii) may be converted
and exchanged for other Bonds, (iv) shall have the characteristics, and (v) shall be signed and sealed,
and the principal of and interest on the Initial Bond shall be payable, all as provided, and in the
manner required or indicated, in the FORM OF INITIAL BOND set forth in this Ordinance.
Section 4. INTEREST. The unpaid principai balance of the Initial Bond shall bear interest
fi.om the date of the Initiai Bond to the respective scheduled due dates, or to the respective dates of
prepayment or redemption, of the installments of principai of the Initial Bond, 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 BOND set forth in this Ordinance.
Section 5. FORM OF INITIAL BOND. The form of the Initiai Bond, including the form of
Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed
on the Initial Bond, shall be substantially as follows:
FORM OF INITIAL BOND
NO. R-1 $1,610,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON GENERAL OBLIGATION BOND
SERIES 1995
THE CITY OF DENTON, in Denton County, Texas (the "Issuer"), being a political
subdivision of the State of Texas, hereby promises to pay to
A. G. EDWARDS & SONS, INC.
or to the registered assignee or assignees of this Bond or any portion or portions hereof(in each case,
the "registered owner") the aggregate principal amount of
$1,610,000
(ONE MILLION SIX HUNDRED TEN THOUSAND DOLLARS)
in annual installments of principal due and payable on FEBRUARY 15 in each of the years, and in
the respective principal amounts, as set forth in the following schedule:
PRINCIPAL PRINCIPAL
YEAR AMOUNT YEAR AMOUNT
1997 $80,000 2007 $90,000
1998 80,000 2008 90,000
1999 80,000 2009 90,000
2000 80,000 2010 90,000
2001 80,000 2011 90,000
2002 80,000 2012 90,000
2003 80,000 2013 90,000
2004 80,000 2014 90,000
2005 80,000 2015 90,000
2006 80,000
and to pay interest, calculated on the basis of a 360-day year composed of twelve 30-day months,
from the date of this Bond hereinat~er stated, on the balance of each such installment of principal,
respectively, from time to time remaining unpaid, at the rates as follows:
8.50% per annum on the above installment due in 1997
8.50% per annum on the above installment due in 1998
8.50% per annum on the above installment due in 1999
8.50% per annum on the above installment due in 2000
6.75% per annum on the above installment due in 2001
5.50% Der annum on the above installment due in 2002
5.50% Der annum on the above installment due in 2003
5.50% aer annum on the above installment due in 2004
5.50% ~er annum on the above installment due in 2005
5.50% ~er annum on the above installment due in 2006
5.60% ~er annum on the above installment due in 2007
5.70% ,er annum on the above installment due in 2008
5.75% aer annum on the above installment due in 2009
5.75% ~er annum on the above installment due in 2010
5.75% aer annum on the above installment due in 2011
5.75% aer annum on the above installment due in 2012
5.75% ~er annum on the above installment due in 2013
5.75% aer annum on the above installment due in 2014
5.50% ~er annum on the above installment due in 2015
with said interest being payable on FEBRUARY 15, 1996, and semiannually on each AUGUST 15
AND FEBRUARY 15 therea~er while this Bond or any portion hereof is outstanding and unpaid.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Bond are
payable in lawful money of the United States of America, without exchange or collection charges.
The installments of principal and the interest on this Bond are payable to the registered owner hereof
through the services of NATIONSBANK OF TEXAS, N.A., DALLAS, TEXAS, which is the
"Paying Agent/Registrar" for this Bond. Payment of all principal of and interest on this Bond shall
be made by the Paying Agent/Registrar to the registered owner hereof on each principal and/or inter-
est payment date by check, dated as of such date, drawn by the Paying Agent/Registrar on, and
payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of this
Bond (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as
hereinafter provided; and such check shall be sent by the Paying Agent/Registrar by United States
mail, first-class postage prepaid, on each such principal and/or interest payment date, to the registered
owner hereof, at the address of the registered owner, as it appeared at the close of business on the
last day of the month next preceding each such date (the "Record Date") on the Registration Books
kept by the Paying Agent/Registrar, as hereinafter described. The Issuer covenants with the regis-
tered owner of this Bond that on or before each principal and/or interest payment date for this Bond
it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created
by the Bond Ordinance, the amounts required to provide for the payment, in immediately available
funds, of ail principal of and interest on this Bond, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for such
payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day
on which banking institutions are authorized to close; and payment on such date shall have the same
force and effect as if made on the original date payment was due.
THIS BOND has been authorized in accordance with the Constitution and laws of the State
of Texas FOR THE PURPOSE OF THE ACQUISITION OF PROPERTY AND MAKING
IMPROVEMENTS FOR PUBLIC PURPOSES IN SAID C1TY, TO-WIT: $885,000 FOR STREET
AND TRAFFIC IMPROVEMENTS; $275,000 FOR DRAINAGE IMPROVEMENTS AND
$450,000 FOR PARKS AND RECREATION IMPROVEMENTS.
ON FFJtRUARY 15, 2005, or on any date whatsoever thereafter, the unpaid installments of
principal of this Bond may be prepaid or redeemed prior to their scheduled due dates, at the option
of the Issuer, with funds derived from any available source, as a whole, or in part, and, if in pan, the
particular portion of this Bond to be prepaid or redeemed shall be selected and designated by the
Issuer (provided that a portion of this Bond may be redeemed only in an integral multiple of $5,000),
at the prepayment or redemption price of the par or principal amount thereof, plus accrued interest
to the date fixed for prepayment or redemption.
AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a written
notice of such prepayment or redemption shall be mailed by the Paying Agent/Registrar to the
registered owner hereof. By the date fixed for any such prepayment or redemption due provision
shall be made by the Issuer with the Paying Agent/Registrar for the payment of the required prepay-
ment or redemption price for this Bond or the portion hereof which is to be so prepaid or redeemed,
plus accrued interest thereon to the date fixed for prepayment or redemption. If such written notice
of prepayment or redemption is given, and if due provision for such payment is made, all as provided
above, this Bond, or the portion thereof which is to be so prepaid or redeemed, thereby automatically
shall be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear interest
after the date fixed for its prepayment or redemption, and shall not be regarded as being outstanding
except for the right of the registered owner to receive the prepayment or redemption price plus
accrued interest to the date fixed for prepayment or redemption from the Paying Agent/Registrar out
of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration
Books all such prepayments or redemptions of principal of this Bond or any portion hereof.
THIS BOND, to the extent of the unpaid or unredeemed principal balance hereof, or any
unpaid and unredeemed portion hereof in any integral multiple of $5,000, may be assigned by the
initial registered owner hereof and shall be transferred only in the Registration Books of the Issuer
kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms
and conditions set forth in the Bond Ordinance. Among other requirements for such transfer, this
Bond must be presented and surrendered to the Paying Agent/Registrar for cancellation, together
with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the
Paying Agent/Registrar, evidencing assignment by the initial registered owner of this Bond, or any
portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees in whose
name or names this Bond or any such portion or portions hereof is or are to be transferred and
registered. Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar
may be used to evidence the assignment of this Bond or any such portion or portions hereof by the
initial registered owner hereof. A new bond or bonds payable to such assignee or assignees (which
then will be the new registered owner or owners of such new Bond or Bonds) or to the initial
registered owner as to any portion of this Bond which is not being assigned and transferred by the
initial registered owner, shall be delivered by the Paying Agent/Registrar in conversion of and
exchange for this Bond or any portion or portions hereof, but solely in the form and manner as
provided in the next paragraph hereof for the conversion and exchange of this Bond or any portion
hereof. The registered owner of this Bond shall be deemed and treated by the Issuer and the Paying
Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of
liability upon this Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar
shall not be affected by any notice to the contrary.
AS PROVIDED above and in the Bond Ordinance, this Bond, to the extent of the unpaid or
unredeemed principal balance hereof, may be converted into and exchanged for a like aggregate
principal amount of fully registered bonds, without interest coupons, payable to the assignee or
assignees duly designated in writing by the initial registered owner hereof, or to the initial registered
owner as to any portion of this Bond which is not being assigned and transferred by the initial
registered owner, in any denomination or denominations in any integral multiple of $5,000 (subject
to the requirement hereinafter stated that each substitute bond issued in exchange for any portion of
this Bond shall have a single stated principal maturity date), upon surrender of this Bond to the
Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in
the Bond Ordinance. If this Bond or any portion hereof is assigned and transferred or converted each
bond issued in exchange for any portion hereof shall have a single stated principal maturity date
corresponding to the due date oftbe installment of principal of this Bond or portion hereof for which
the substitute bond is being exchanged, and shall bear interest at the rate applicable to and borne by
such installment of principal or portion thereof. Such bonds, respectively, shall be subject to
redemption prior to maturity on the same dates and for the same prices as the corresponding
installment of principal of this Bond or portion hereof for which they are being exchanged. No such
bond shall be payable in installments, but shall have only one stated principal maturity date. AS
PROVIDED IN THE BOND ORDINANCE, THIS BOND IN ITS PRESENT FORM MAY BE
ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more
assignees, but the bonds issued and delivered in exchange for this Bond or any portion bereofmay
be assigned and transferred, and converted, subsequently, as provided in the Bond Ordinance. The
Issuer shall pay the Paying AgenffRegistrafs standard or customary fees and charges for transferring,
converting, and exchanging this Bond or any portion thereof, but the one requesting such transfer,
conversion, and exchange shall pay any taxes or governmental charges required to be paid with
respect thereto. The Paying Agent/Registrar shall not be required to make any such assignment,
conversion, or exchange (i) during the period commencing with the close of business on any Record
Date and ending with the opening of business on the next following principal or interest payment date,
or, (ii) with respect to any Bond or portion thereof called for prepayment or redemption prior to
maturity, within 45 days prior to its prepayment or redemption date.
IN THE EVENT any Paying Agent/Registrar for this Bond is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owner of this Bond.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
voted, authorized, issued, sold, and delivered; that all acts, conditions, and things required or proper
to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law; that this Bond is a general
obligation of the Issuer, issued on the full faith and credit thereof, and that annual ad valorem taxes
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sufficient to provide for the payment of the interest on and principal of this Bond, as such interest
comes due and such principal matures, have been levied and ordered to be levied against all taxable
property in the Issuer, and have been pledged irrevocably for such payment, within the limit pre-
scribed by law.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that the
temps and provisions of this Bond and the Bond Ordinance constitute a contract between the
registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual
signature of the Mayor of the Issuer and countersigned with the manual signature of the City
Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed on this Bond,
and has caused this Bond to be dated FEBRUARY 15, 1995.
City Secretary, Mayor,
City of Denton, Texas City of Denton, Texas
(CITY SEAL)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certit~ that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6. ADDITIONAL CHARACTERISTICS OF THE BONDS. Registration and
Transfer. (a) The Issuer shall keep or cause to be kept at the principal corporate trust office of
NATIONSBANK OF TEXAS, N.A., DALLAS, TEXAS (the "Paying Agent/Registrar") books or
records of the registration and transfer of the Bonds (the "Registration Books"), and the Issuer hereby
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appoints 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 Agent/Registrar shall make such transfers and
registrations as herein provided. The Paying Agent/Registrar shall obtain and record in the Regis-
trafion Books the address of the registered owner of each Bond to which payments with respect to
the Bonds shall be mailed, as herein provided; but it shall be the duty of each registered owner to
notify the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and
such interest payments shall not be mailed unless such notice has been given. The Issuer shall have
the right to inspect the Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books
confidential and, unless otherwise required by law, shall not permit their inspection by any other
entity. Registration of each Bond may be transferred in the Registration Books only upon
presentation and surrender of such Bond to the Paying Agent/Registrar for transfer of registration
and cancellation, together with proper written instruments of assignment, in form and with guarantee
of signatures satisfactory to the Paying Agent/Registrar, (i) evidencing the assignment of the Bond,
or any portion thereof in any integral multiple of $5,000, to the assignee or assignees thereof, and (ii)
the right of such assignee or assignees to have the Bond or any such portion thereof registered in the
name of such assignee or assignees. Upon the assignment and transfer of any Bond or any portion
thereof, a new substitute Bond or Bonds shall be issued in conversion and exchange therefor in the
manner herein provided. The Initial Bond, to the extent of the unpaid or unredeemed principal
balance thereof, may be assigned and transferred by the initial registered owner thereof once only, and
to one or more assignees designated in writing by the initial registered owner thereof. All Bonds
issued and delivered in conversion of and exchange for the Initial Bond shall be in any denomination
or denominations of any integral multiple of $5,000 (subject to the requirement hereinafter stated that
each substitute Bond shall have a single stated principal maturity date), shall be in the form prescribed
in the FORM OF SUBSTITUTE BOND set forth in this Ordinance, and shall have the characteristics,
and may be assigned, transferred, and converted as hereinafter provided. If the Initial Bond or any
portion thereof is assigned and transferred or converted the Initial Bond must be surrendered to the
Paying Agent/Registrar for cancellation, and each Bond issued in exchange for any portion of the
Initial Bond shall have a single stated principal maturity date, and shall not be payable in installments;
and each such Bond shall have a principal maturity date corresponding to the due date of the
installment of principal or portion thereof for which the substitute Bond is being exchanged; and each
such Bond shall bear interest at the single rate applicable to and borne by such installment of principal
or portion thereof for which it is being exchanged. If only a portion of the Initial Bond is assigned
and transferred, there shall be delivered to and registered in the name of the initial registered owner
substitute Bonds in exchange for the unassigned balance of the Initial Bond in the same manner as
if the initial registered owner were the assignee thereof. If any Bond or portion thereof other than
the Initial Bond is assigned and transferred or converted each Bond issued in exchange therefor shall
have the same principal maturity date and bear interest at the same rate as the Bond for which it is
exchanged. A form of assignment shall be printed or endorsed on each Bond, excepting the Initial
Bond, which shall be executed by the registered owner or its duly authorized attorney or
representative to evidence an assignment thereof. Upon surrender of any Bonds or any portion or
portions thereof for transfer of registration, an authorized representative of the Paying
Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new fully
registered substitute Bond or Bonds, having the characteristics herein described, payable to such
assignee or assignees (which then will be the registered owner or owners of such new Bond or
Bonds), or to the previous registered owner in case only a portion of a Bond is being assigned and
transferred, all in conversion of and exchange for said assigned Bond or Bonds or any portion or
portions thereof~ in the same form and manner, and with the same effect, as provided in Section 6(d),
below, for the conversion and exchange of Bonds by any registered owner ora Bond. The Issuer
shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such trans-
fer and delivery of a substitute Bond or Bonds, but the one requesting such transfer shall pay any
taxes or other governmental charges required to be paid with respect thereto. The Paying
Agent/Registrar shall not be requirexl to make transfers of registration of any Bond or any portion
thereof(i) during the period commencing with the close of business on any Record Date and ending
with the opening of business on the next following principal or interest payment date, or, (ii) with
respect to any Bond or any portion thereof called for redemption prior to maturity, within 45 days
prior to its redemption date.
(b) Ownership of Bonds. The entity in whose name any Bond shall be registered in the
Registration Books at any time shall be deemed and treated as the absolute owner thereof for all
purposes of this Ordinance, whether or not such Bond shall be overdue, and the Issuer and the Paying
Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on account
of, the principal of, premium, if any, and interest on any such Bond shall be made only to such
registered owner. All such payments shall be valid and effectual to satisfy and discharge the liability
upon such Bond to the extent of the sum or sums so paid.
(c) Payment of Bonds and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds, and
to act as its agent to convert and exchange or replace Bonds, all as provided in this Ordinance. The
Paying Agent/Registrar shall keep proper records of all payments made by the Issuer and the Paying
Agent/Registrar with respect to the Bonds, and of all conversions and exchanges of Bonds, and all
replacements of Bonds, as provided in this Ordinance. However, in the event ora nonpayment of
interest on a scheduled payment date, and for thirty (30) days thereat'ret, a new record date for such
interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and
when funds for the payment of such interest have been received from the Issuer. Notice of the
Special Record Date and of the scheduled payment date of the past due interest ("Special Payment
Date", which shall be fifteen (15) days after the Special Record Date) shall be sent at least five (5)
business days prior to the Special Record Date by United States mail, first class postage prepaid, to
the address of each Holder of a Bond appearing on the registration books of the Paying
Agent/Registrar at the close of business on the last business day next preceding the date of mailing
of such notice.
(d) Conversion and Exchange or Replacement; Authentication. Each Bond issued and
delivered pursuant to this Ordinance, to the extent oftbe unpaid or unredeemed principal balance or
principal amount thereof, may, upon surrender of such Bond at the principal corporate trust office
of the Paying Agent/Registrar, together with a written request therefor duly executed by the
registered owner or the assignee or assignees thereof, or its or their duly authorized attorneys or
representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, may, at the
option of the registered owner or such assignee or assignees, as appropriate, be converted into and
exchanged for fully registered bonds, without interest coupons, in the form prescribed in the FORM
OF SUBSTITUTE BOND set forth in this Ordinance, in the denomination of $5,000, or any integral
multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Bond shall have
a single stated maturity date), as requested in writing by such registered owner or such assignee or
assignees, in an aggregate principal amount equal to the unpaid or unredeemed principal balance or
principal amount of any Bond or Bonds so surrendered, and payable to the appropriate registered
owner, assignee, or assignees, as the case may be. If the Initial Bond is assigned and transferred or
converted each substitute Bond issued in exchange for any portion of the Initial Bond shall have a
single stated prindpal maturity date, and shall not be payable in installments; and each such Bond shall
have a principal maturity date corresponding to the due date of the installment of principal or portion
thereof for which the substitute Bond is being exchanged; and each such Bond shall bear interest at
the single rate applicable to and borne by such installment of principal or portion thereof for which
it is being exchanged. Ifa portion of any Bond (other than the Initial Bond) shall be redeemed prior
to its scheduled maturity as provided herein, a substitute Bond or Bonds having the same maturity
date, bearing interest at the same rate, in the denomination or denonfinations of any integral multiple
of $5,000 at the request of the registered owner, and in aggregate principal amount equal to the
unredeemed portion thereof, will be issued to the registered owner upon surrender thereof for
cancellation. If any Bond or portion thereof(other than the Initial Bond) is assigned and transferred
or converted, each Bond issued in exchange therefor shall have the same principal maturity date and
bear interest at the same rate as the Bond for which it is being exchanged. Each substitute Bond shall
bear a letter and/or number to distinguish it from each other Bond. The Paying Agent/Registrar shall
convert and exchange or replace Bonds as provided herein, and each fully registered bond delivered
in conversion of and exchange for or replacement of any Bond or portion thereof as permitted or
required by any provision of this Ordinance shall constitute one of the Bonds for all purposes of this
Ordinance, and may again be converted and exchanged or replaced. It is specifically provided that
any Bond authenticated in conversion of and exchange for or replacement of another Bond on or
prior to the first scheduled Record Date for the Initial Bond shall bear interest from the date of the
Initial Bond, but each substitute Bond so authenticated after such first scheduled Record Date shall
bear interest from the interest payment date next preceding the date on which such substitute Bond
was so authenticated, unless such Bond is authenticated after any Record Date but on or before the
next following interest payment date, in which case it shall bear interest from such next following
interest payment date; provided, however, that if at the time of delivery of any substitute Bond the
interest on the Bond for which it is being exchanged is due but has not been paid, then such Bond
shall bear interest from the date to which such interest has been paid in full. THE INITIAL BOND
issued and delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated
by the Paying Agent/Registrar, but on each substitute Bond issued in conversion of and exchange for
or replacement of any Bond or Bonds issued under this Ordinance there shall be printed a bond, in
the form substantially as follows:
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in this Bond; and that this Bond has been issued in conversion of and exchange
for or replacement ora bond, bonds, or a portion of a bond or bonds 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.
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NATIONSBANK OF TEXAS, N.A.,
DALLAS, TEXAS
Paying Agent/Registrar
Dated
By.
Authorized Representative"
An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such
Bond, date and manually sign the above Bond, and no such Bond shall be deemed to be issued or out-
standing unless such Bond is so executed. The Paying Agent/Registrar promptly shall cancel all
Bonds surrendered for conversion and exchange or replacement. No additional ordinances, orders,
or resolutions need be passed or adopted by the governing body oftbe Issuer or any other body or
person so as to accomplish the foregoing conversion and exchange or replacement of any Bond or
portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery
of the substitute Bonds in the manner prescribed herein, and said Bonds shall be of type composition
printed on paper with lithographed or steel engraved borders of customary weight and strength.
Pursuant to Vernon's Ann. Tex. Civ. St. Art. 717k-6, and particularly Section 6 thereof, the duty of
conversion and exchange or replacement &Bonds as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution of the above Paying Agent/Registrar's Authentication
Certificate, the converted and exchanged or replaced Bond shall be valid, incontestable, and
enforceable in the same manner and with the same effect as the Initial Bond which originally was
issued pursuant to this Ordinance, approved by the Attorney General, and registered by the
Comptroller of Public Accounts. The Issuer shall pay the Paying Agent/Registrar's standard or
customary fees and charges for transferring, converting, and exchanging any Bond or any portion
thereof, but the one requesting any such transfer, conversion, and exchange shall pay any taxes or
governmental charges required to be paid 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 Bonds or any portion thereof
(i) during the period commenting with the close of business on any Record Date and ending with the
opening of business on the next following principal or interest payment date, or, (ii) with respect to
any Bond or portion thereof called for redemption prior to maturity, within 45 days prior to its
redemption date.
(e) In General. All Bonds issued in conversion and exchange or replacement of any other
Bond or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with
the principal of and interest on such Bonds to be payable only to the registered owners thereof, (ii)
may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may
be converted and exchanged for other Bonds, (v) shall have the characteristics, (vi) shall be signed
and sealed, and (vii) the principal of and interest on the Bonds shall be payable, all as provided, and
in the manner required or indicated, in the FORM OF SUBSTITUTE BOND set forth in this
Ordinance.
(f) Pawnent &Fees and Charges. The Issuer hereby covenants with the registered owners
of the Bonds that it will (i) pay the standard or customary fees and charges of the Paying
Agent/Registrar for its services with respect to the payment of the principal of and interest on the
11
Bonds, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with
respect to the transfer of registration of Bonds, and with respect to the conversion and exchange of
Bonds solely to the extent above provided in this Ordinance.
(g) Substitute Paving Agent/Registrar. The Issuer covenants with the registered owners of
the Bonds that at ail times while the Bonds are outstanding the Issuer will provide a competent and
legally qualified bank, trust company, financiai institution, or other agency to act as and perform the
services of Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying
AgenffRegistrar will be one entity. The Issuer reserves the right to, and may, at its option, change
the Paying Agent/Registrar upon not less than 120 days written notice to the Paying Agent/Registrar,
to be effective not later than 60 days prior to the next principal or interest payment date after such
notice. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by
merger, acquisition, or other method) should resign or otherwise cease to act as such, the Issuer
covenants that promptly it will appoint a competent and legaily quaiified bank, trust company,
financial institution, or other agency to act as Paying Agent/Registrar under this Ordinance. Upon
any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shail
transfer and deliver the Registration Books (or a copy thereof), aiong with all other pertinent hooks
and records relating to the Bonds, to the new Paying Agent/Registrar designated and appointed by
the Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a written
notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Bonds,
by United States mail, first-class postage prepaid, which notice aiso shall give the address of the new
Paying Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Regis-
trar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this
Ordinance shail be delivered to each Paying Agent/Registrar.
Section 7. FORM OF SUBSTITUTE BONDS. The form of all Bonds issued in conversion
and exchange or replacement of any other Bond or portion thereof, including the form of Paying
Agent/Registrar's Bond to be printed on each of such Bonds, and the Fo~m of Assignment to be
printed on each of the Bonds, shall be, respectively, substantiaily as follows, with such appropriate
variations, omissions, or insertions as are permitted or required by this Ordinance.
12
FORM OF SUBSTITUTE BOND
(Book-Entry Only Legend, if appropriate)
NO. UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON GENERAL OBLIGATION BOND
SERIES 1995
ORIGINAL DATE
INTEREST RATE MATURITY DATE OF ISSUE CUSIP NO.
% FEBRUARY 15, 1995
ON THE MATURITY DATE specified above the CITY OF DENTON, in Denton County,
Texas (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to
· or to the registered
assignee hereof(either being hereinafter called the "registered owner") the principal amount of
and to pay interest thereon, calculated on the basis of a 360-day year composed of twelve 30-day
months, fi.om FEBRUARY 15, 1995, to the maturity date specified above, or the date of redemption
prior to maturity, at the interest rate per annum specified above; with interest being payable on
FEBRUARY 15, 1996, and semiannually on each AUGUST 15 and FEBRUARY 15 thereaRer,
except that if the date of authentication of this Bond is later than the first Record Date (hereinafter
defined), such principal amount shall bear interest from the interest payment date next preceding the
date of authentication, unless such date of authentication is aRer any Record Date (hereinafter
defined) but on or before the next following interest payment date, in which case such principal
amount shall bear interest fi.om such next following interest payment date.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the registered owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for its redemption prior to maturity, at the principal corporate trust office of
NATIONSBANK OF TEXAS, N.A., DALLAS, TEXAS, which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
registered owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required
by the ordinance authorizing the issuance of the Bonds (the "Bond Ordinance") to be on deposit with
the Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by
the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the registered owner hereof, at the address of the registered owner, as it appeared
at the close of business on the last day of the month next preceding each such date (the "Record
Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described.
However, the payment of such interest may be made by any other method acceptable to the Paying
13
Agent?Registrar and requested by, and at the risk and expense of, the registered owner hereof. Any
accrued interest due upon the redemption of this Bond prior to maturity as provided herein shall be
paid to the registered owner at the principal corporate trust office of the Paying Agent/Registrar upon
presentation and surrender of this Bond for redemption and payment at the principal corporate trust
office of the Paying Agent/Registrar. The Issuer covenants with the registered owner of this Bond
that on or before each principal payment date, interest payment date, and accrued interest payment
date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest and
Sinking Fund" created by the Bond Ordinance, the amounts required to provide for the payment, in
immediately available funds, of all principal of and interest on the Bonds, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for such
payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day
on which banking institutions are authorized to close; and payment on such date shall have the same
force and effect as if made on the original date payment was due.
THIS BOND is one of an issue of Bonds initially dated FEBRUARY 1, 1995, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
$1,610,000, FOR THE PURPOSE OF THE ACQUISITION OF PROPERTY AND MAKING
IMPROVEMENTS FOR PUBLIC PURPOSES IN SAID CITY, TO-WIT: $885,000 FOR STREET
AND TRAFFIC IMPROVEMENTS; $275,000 FOR DRAINAGE IMPROVEMENTS AND
$450,000 FOR PARKS AND RECREATION IMPROVEMENTS.
ON FEBRUARY 15, 2005, or on any date whatsoever thereafter, the Bonds of this Series
may be redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived
from any available and lawful source, as a whole, or in part, and, if in part, the particular Bonds, or
portions thereof, to be redeemed shall be selected and designated by the Issuer (provided that a
portion of a Bond may be redeemed only in an integral multiple of $5,000), at the redemption price
of the par or principal amount thereof, plus accrued interest to the date fixed for redemption.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity a written notice of such redemption shall be published once in a financial publication,
journal, or reporter of general circulation among securities dealers in The City of New York, New
York (including, but not limited to, The Bond Buyer and The Wall Street Journal), or in the State of
Texas (including, but not limited to, The Texas Bond Reporter). Such notice also shall be sent by
the Paying Agent/Registrar by United States mail, first-class postage prepaid, not less than 30 days
prior to the date fixed for any such redemption, to the registered owner of each Bond to be redeemed
at its address as it appeared on the 45th day prior to such redemption date; provided, however, that
the failure to send, mail, or receive such notice, or any defect therein or in the sending or mailing
thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any
Bond, and it is hereby specifically provided that the publication of such notice as required above shall
be the only notice actually required in connection with or as a prerequisite to the redemption of any
Bonds or portions thereof. By the date fixed for any such redemption due provision shall be made
with the Paying Agent/Registrar for the payment of the required redemption price for the Bonds or
portions thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for
14
redemption. If such written notice of redemption is published and if due provision for such payment
is made, all as provided above, the Bonds or portions thereof which are to be so redeemed thereby
automatically shall be treated as redeemed prior to their scheduled maturities, and they shall not bear
interest after the date fixed for redemption, and they shall not be regarded as being outstanding except
for the right of the registered owner to receive the redemption price plus accrued interest from the
Paying Agent/Registrar out of the funds provided for such payment. Ifa portion of any Bond shall
be redeemed a substitute Bond or Bonds having the same maturity date, bearing interest at the same
rate, in any denomination or denominations in any integral multiple of $5,000, at the written request
of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof,
will be issued to the registered owner upon the surrender thereof for cancellation, at the expense of
the Issuer, all as provided in the Bond Ordinance.
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL
MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books of
the Issuer kept by the Paying Agent]Registrar acting in the capacity of registrar for the Bonds, upon
the terms and conditions set forth in the Bond Ordinance. Among other requirements for such
assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar,
together with proper instruments of assignment, in form and with guarantee of signatures satisfactory
to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof
in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Bond or
any such portion or portions hereof is or are to be transferred and registered. The form of
Assignment printed or endorsed on this Bond shall be executed by the registered owner or its duly
authorized attorney or representative, to evidence the assignment hereof. A new Bond or Bonds
payable to such assignee or assignees (which then will be the new registered owner or owners of such
new Bond or Bonds), or to the previous registered owner in the case of the assignment and transfer
of only a portion of this Bond, may be delivered by the Paying Agent/Registrar in conversion of and
exchange for this Bond, all in the form and manner as provided in the next paragraph hereof for the
conversion and exchange of other Bonds. The Issuer shall pay the Paying Agent/Registrar's standard
or customary fees and charges for making such transfer, but the one requesting such transfer shall pay
any taxes or other governmental charges required to be paid with respect thereto. The Paying
Agent/Registrar shall not be required to make transfers of registration of this Bond or any portion
hereof(i) during the period commencing with the close of business on any Record Date and ending
with the opening of business on the next following principal or interest payment date, or, (ii) with
respect to any Bond or any portion thereof called for redemption prior to maturity, within 45 days
prior to its redemption date. The registered owner of this Bond shall be deemed and treated by the
Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including
payment and discharge of liability upon this Bond 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 BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond
Ordinance, this Bond, or any unredeemed portion hereof, may, at the request oftbe registered owner
or the assignee or assignees hereof, be converted into and exchanged for a like aggregate principal
amount of fully registered bonds, without interest coupons, payable to the appropriate registered
owner, assignee, or assignees, as the case may be, having the same maturity date, and beating interest
at the same rate, in any denomination or denominations in any integral multiple of $5,000 as requested
15
in writing by the appropriate registered owner, assignee, or assignees, as the case may be, upon sur-
render of this Bond to the Paying Agent/Registrar for cancellation, ail in accordance with the fo~m
and procedures set forth in the Bond Ordinance. The Issuer shail pay the Paying Agent/Registrar's
standard or customary fees and charges for transferring converting, and exchanging any Bond or any
portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes
or governmental charges required to be paid with respect thereto as a condition precedent to the
exercise of such privilege of conversion and exchange. The Paying Agent/Registrar shail not be
required to make any such conversion and exchange (i) during the period commencing with the close
of business on any Record Date and ending with the opening of business on the next following
principal or interest payment date, or, (ii) with respect to any Bond or portion thereof cailed for
redemption prior to maturity, within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legaily qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owners of the Bonds.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
voted, authorized, issued, sold, and delivered; that all acts, conditions, and things required or proper
to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law; that this Bond is a generai
obligation of the Issuer, issued on the full faith and credit thereof; and that annuai ad valorem taxes
sufficient to provide for the payment of the interest on and principal of this Bond, as such interest
comes due and such pfincipai matures, have been levied and ordered to be levied against ail taxable
property in the Issuer, and have been pledged irrevocably for such payment, within the limit pre-
scribed by law.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges ail of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that the
terms and provisions of this Bond and the Bond Ordinance constitute a contract between each
registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the Issuer and countersigned with the manual or facsimile
signature of the City Secretary of the Issuer, and has caused the officiai seal of the Issuer to be duly
impressed, or placed in facsimile, on this Bond.
City Secretary, City of Denton, Texas Mayor, City of Denton, Texas
(CITY SEAL)
16
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Registration
Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in this Bond; and that this Bond has been issued in conversion of and exchange
for or replacement ora bond, bonds, or a portion of a bond or bonds 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.
NATIONSBANK OF TEXAS, N.A.,
DALLAS, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly authorized
representative or attorney thereof, hereby assigns this Bond to
/ /
(Assignee's Social (print or typewrite Assignee's name and
Security or Taxpayer address, including zip code)
Identification Number)
and hereby irrevocably constitutes and appoints
attomey to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books
with full power of substitution in the premises.
Dated:
17
Signature Guaranteed:
NOTICE: This signature must be Registered Owner
guaranteed by a member of the NOTICE: This signature must correspond
New York Stock Exchange or a with the name of the Registered Owner
commercial bank or trust company, appearing on the face of this Bond in every
particular without alteration or enlargement
or any change whatsoever.
Section 8. TAX LEVY. A special Interest and Sinking Fund (the "Interest and Sinking
Fund") is hereby created solely for the benefit of the Bonds, and the Interest and Sinking Fund shall
be established and maintained by the Issuer at an official depository bank of the Issuer. The Interest
and Sinking Fund shall be kept separate and apart from all other fimds and accounts of the Issuer, and
shall be used only for paying the interest on and principal of the Bonds. All ad valorem taxes levied
and collected for and on account of the Bonds shall be deposited, as collected, to the credit of the
Interest and Sinking Fund. During each year while any of the Bonds or interest thereon are
outstanding and unpaid, the governing body of the Issuer shall compute and ascertain a rate and
amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the
interest on the Bonds as such interest becomes due, and to provide and maintain a sinking fund
adequate to pay the principal of its Bonds as such principal matures (but never less than 2% of the
original principal amount of the Bonds as a sinking fund each year); and said tax shall be based on the
latest approved tax rolls of the Issuer, with full allowance being made for tax delinquencies and the
cost of tax collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered
to be levied, against all taxable property in the Issuer for each year while any of the Bonds or interest
thereon are outstanding and unpaid; and said tax shall be assessed and collected each such year and
deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient
to provide for the payment of the interest on and principal of the Bonds, as such interest comes due
and such principal matures, are hereby pledged for such payment, within the limit prescribed by law.
Section 10. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon shall be
deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") within the meaning of this
Ordinance, except to the extent provided in subsection (d) of this Section 10, when payment of the
principal of such Bond, plus interest thereon to the due date (whether such due date be by reason of
maturity, upon redemption, or otherwise) either (i) shall have been made or caused to be made in
accordance with the terms thereof (including the giving of any required notice of redemption), or (ii)
shall have been provided for on or before such due date by irrevocably depositing with or making
available to the Paying Agent/Registrar for such payment (1) lawful money of the United States of
America sufficient to make such payment or (2) Govemment Obligations which mature as to principal
and interest in such amounts and at such times as will insure the availability, without reinvestment,
of sufficient money to provide for such payment, and when proper arrangements have been made by
the Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased Bonds
shall have become due and payable. At such time as a Bond shall be deemed to be a Defeased Bond
hereunder, as aforesaid, such Bond and the interest thereon shall no longer be secured by, payable
t~om, or entitled to the benefits of, the ad valorem taxes herein levied and pledged as provided in this
18
Ordinance, and such principal and interest shall be payable solely from such money or Government
Obligations.
(b) Any moneys so deposited with the Paying A~ent/Registrar may at the written direction
of the Issuer also be invested in Government Obligations, maturing in the amounts and times as
hereinbefore set forth, and all income from such Government Obligations received by the Paying
Agent/Registrar which is not required for the payment of the Bonds and interest thereon, with respect
to which such money has been so deposited, shall be turned over to the Issuer, or deposited as
directed in writing by the Issuer.
(c) The term "Government Obligations" as used in this Section shall mean direct
obligations of the United States of America, including obligations the principal of and interest on
which are unconditionally guaranteed by the United States of America, which may be United States
Treasury obligations such as its State and Local Government Series, which may be in book-entry
form.
(d) Until all Defeased Bonds shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Bonds the
same as if they had not been defeased, and the Issuer shall make proper arrangements to provide and
pay for such services as required by this Ordinance.
Section 11. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen, or
destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond
of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or
destroyed Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged, mutilated,
lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying
Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the registered owner applying
for a replacement bond shall furnish to the Issuer and to the Paying Agent/Registrar such security or
indemnity as may be required by them to save each of them harmless from any loss or damage with
respect thereto. Also, in every case of loss, theft, or destruction of a Bond, the registered owner shall
furnish to the Issuer and the Paying Agent/Registrar evidence to their satisfaction of the loss, theft,
or destruction of such Bond, as the case may be. In every case of damage or mutilation of a Bond,
the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so
damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in
the event of any such Bond shall have matured, and no default has occurred which is then continuing
in the payment of the principal of, redemption premium, if any, or interest on the Bond, the Issuer
may authorize the payment of the same (without surrender thereof except in the case of a damaged
or mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished
as above provided in this Section.
19
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond,
the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal, printing,
and other expenses in connection therewith. Every replacement bond issued pursuant to the
provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall
constitute a contractual obligation of the Issuer whether or not the lost, stolen, or destroyed Bond
shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this
Ordinance equally and proportionately with any and all other Bonds duly issued under this Ordinance.
(e) Authority for Issuing Replacement Bonds. In accordance with Section 6 of Vernon's
Ann. Tex. Civ. St. Art. 717k-6, this Section of this Ordinance shall constitute authority for the
issuance of any such replacement bond without necessity offurtber action by the governing body of
the Issuer or any other body or person, and the duty of the replacement of such bonds is hereby
authorized and imposed upon the Paying AgenffRegistrar, and the Paying Agent/Registrar shall
authenticate and deliver such Bonds in the form and manner and with the effect, as provided in
Section 6(d) of this Ordinance for Bonds issued in conversion and exchange for other Bonds.
Section 12. COVENANTS REGARDING TAX-EXEMPTION. The Issuer covenants to
refrain from taking any action which would adversely affect, and to take any action required to
ensure, the treatment of the Bonds as obligations described in section 103 of the Code, the interest
on which is not includable in the "gross income" of the holder for purposes of federal income
taxation. In furtherance thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds
of the Bonds (less amounts deposited to a reserve fund, if any) are used for any "private
business use", as defined in section 141(b)(6) of the Code or, if more than 10 percent of
the proceeds are so used, that amounts, whether or not received by the Issuer, with respect
to such private business use, do not, under the terms of this Ordinance or any underlying
arrangement, directly or indirectly, secure or provide for the payment of more than 10
percent of the debt service on the Bonds, in contravention of section 141 (b)(2) of the
Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds 5 percent of the proceeds of the Bonds (less
amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is
used for a "private business use" which is "related" and not "disproportionate", within the
meaning of section 141 (b)(3) of the Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser
of $5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of section 14 l(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(b) of the Code;
20
(e) to refrain from taking any action that would result in the Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment propen~y (as defined in section 148(b)(2) of the Code) which produces a
materially higher yield over the te, m of the Bonds, other than investment property acquired
with --
(1) proceeds of the Bonds invested for a reasonable temporary period
of 3 years or less until such proceeds are needed for the purpose for which the
Bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the
meaning of section 1.103-13 (b)(12) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or
replacement fund to the extent such amounts do not exceed 10 percent of the
proceeds of the Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts
treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the
extent applicable, section 149(d) of the Code (relating to advance refundings);
(h) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to
90 percent of the "Excess Eamings", within the meaning of section 148(0 of the Code and
to pay to the United States of America, not later that 60 days after the Bonds have been
paid in full, 100 percent of the amount then required to be paid as a result of Excess
Earnings under section 148(0 of the Code; and
(i) to maintain such records as will enable the Issuer to fulfill its responsibilities
under this section and section 148 of the Code and to retain such records for at least six
years following the final payment of principal and interest on the Bonds.
It is the understanding of the Issuer that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the 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 Bonds, the Issuer will not
be required to comply with any covenant contained herein to the extent that such modification or
expansion, in the opinion of nationally-recognized bond counsel, will not adversely affect the
exemption from federal income taxation of interest on the Bonds under section 103 of the Code.
In the event that regulations or rulings are hereafter promulgated which impose additional
requirements which are applicable to the Bonds, the Issuer agrees to comply with the additional
requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to
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preserve the exemption fi.om federal income taxation of interest on the Bonds under section 103
of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs the Mayor
of the Issuer to execute any documents, certificates or reports required by the Code and to make
such elections, on belaalfofthe Issuer, which may be permitted by the Code as are consistent with
the purpose for the issuance of the Bonds.
In order to facilitate compliance with the above covenants (h) and (i), a "Rebate Fund" is
hereby established 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, including without limitation, the bondholders.
The Rebate Fund is established for the additional purpose of compliance with Section 148 of the
Code.
Section 13. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION, CUSIP NUMBERS, PREAMBLE AND INSURANCE. The Mayor of
the Issuer is hereby authorized to have control of the Initial Bond issued hereunder and all
necessary records and proceedings pertaining to the Initial Bond pending its delivery and its
investigation, examination, and approval by the Attorney General of the State of Texas, and its
registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the
Initial Bond said Comptroller of Public Accounts (or a deputy designated in writing to act for said
Comptroller) shall manually sign the Comptroller's Registration Certificate on the Initial Bond, and
the seal of said Comptroller shall be impressed, or placed in facsimile, on the Initial Bond. The
approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at
the option of the Issuer, be printed on the Initial Bond or on any Bonds issued and delivered in
conversion of and exchange or replacement of any Bond, but neither shall have any legal effect,
and shall be solely for the convenience and information of the registered owners of the Bonds.
The preamble to this Ordinance is hereby adopted and made a part hereof for all purposes. If
insurance is obtained on any of the Bonds, the Initial Bond and all other Bonds shall bear an
appropriate legend concerning insurance as provided by the insurer.
Section 14. SALE OF INITIAL BOND. The Initial Bond is hereby sold and shall be
delivered to A. G. Edwards & Sons, Inc., for cash for the par value thereof and accrued interest
thereon to date of delivery, plus a premium of $-0-. It is hereby officially found, determined, and
declared that the Initial Bond has been sold at public sale to the bidder offering the lowest interest
cost, after receiving sealed bids pursuant to an Official Notice of Sale and Bidding Instructions and
Official Statement dated February 7, 1995, prepared and distributed in connection with the sale
of the Initial Bond. Said Official Notice of Sale and Bidding Instructions and Official Statement,
and any addenda, supplement, or amendment thereto have been and are hereby approved by the
Issuer, and their use in the offer and sale of the Bonds is hereby approved. It is further officially
found, determined, and declared that the statements and representations contained in said Official
Notice of Sale and Official Statement are true and correct in all material respects, to the best
knowledge and belief of the City Council.
Section 15. INTEREST EARNINGS ON BOND PROCEEDS. Interest earnings derived
fi.om the investment of proceeds from the sale of the Initial Bond shall be used along with other
bond proceeds for the acquisition and construction of the improvements for which the Bonds are
issued; provided that after completion of such improvements, if any of such interest earnings
22
remain on hand, such interest earnings shall be deposited in the Interest and Sinking Fund. It is
timber provided, however, that any interest earnings on bond proceeds which are required to be
rebated to the United States of America pursuant to Section 12 hereof in order to prevent the
Bonds fi.om being arbitrage bonds shall be so rebated and not considered as interest earnings for
the purposes of this Section.
Section 16. DTC REGISTRATION. The Bonds initially shall be issued and delivered in
such manner that no physical distribution of the Bonds will be made to the public, and the Deposi-
tory Trust Company ("DTC"), New York, New York, initially will act as depository for the
Bonds. DTC has represented that it is a limited purpose trust company incorporated under the
laws of the State of New York, a member of the Federal Reserve System, a "cleating corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing agency" regis-
tered under Section 17A of the federal Securities Exchange Act of 1934, as amended, and the
Issuer accepts, but in no way verifies, such representations. The Initial Bond authorized by this
Ordinance shall be delivered to and registered in the name of the Purchaser. However, it is a
condition of delivery and sale that the Purchaser, immediately after such delivery, shall cause the
Paying Agent/Registrar, as provided for in this Ordinance, to cancel said Initial Bond and deliver
in exchange therefor a substitute Bond for each maturity of such Initial Bond, with each such
substitute Bond to be registered in the name of CEDE & CO., the nominee of DTC, and it shall
be the duty of the Paying Agent/Registrar to take such action. It is expected that DTC will hold
the Bonds on behalf of the Purchaser and/or the DTC Participants, as defined and described in the
Official Statement referred to and approved in Section 14 hereof (the "DTC Participants"). So
long as each Bond is registered in the name of CEDE & CO., the Paying Agent/Registrar shall
treat and deal with DTC in all respects the same as if it were the actual and beneficial owner
thereof It is expected that DTC will maintain a book entry system which will identify beneficial
ownership of the Bonds by DTC Participants in integral amounts of $5,000, with transfers of
ownership being effected on the records of DTC and the DTC Participants pursuant to rules and
regulations established by them, and that the substitute Bonds initially deposited with DTC shall
be immobilized and not be further exchanged for substitute Bonds except as hereinatter provided.
The Issuer is not responsible or liable for any functions of DTC, will not be responsible for paying
any fees or charges with respect to its services, will not be responsible or liable for maintaining,
supervising, or reviewing the records of DTC or the DTC Participants, or protecting any interests
or fights of the beneficial owners of the Bonds. It shall be the duty of the Purchaser and the DTC
Participants to make all arrangements with DTC to establish this book-entry system, the beneficial
ownership of the Bonds, and the method of paying the fees and charges of DTC. The Issuer does
not represent, nor does it in any way covenant that the initial book-entry system established with
DTC will be maintained in the future. The Issuer reserves the fight and option at any time in the
future, in its sole discretion, to terminate the DTC (CEDE & CO.) book-entry only registration
requirement described above, and to pemfit the Bonds to be registered in the name of any owner.
If the Issuer exercises its right and option to temfinate such requirement, it shall give written
notice of such termination to the Paying Agent/Registrar and to DTC, and thereafter the Paying
Agent/Registrar shall, upon presentation and proper request, register any Bond in any name as
provided for in this Ordinance. Notwithstanding the initial establishment of the foregoing book-
entry system with DTC, if for any reason any of the originally delivered substitute Bonds is duly
filed with the Paying Agent/Registrar with proper request for transfer and substitution, as provided
for in this Ordinance, substitute Bonds will be duly delivered as provided in this Ordinance, and
23
there will be no assurance or representation that any book-entry system will be maintained for such
Bonds.
Section 17. FURTIqF~R 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 time to time and at any
time to do and perform all such acts and things and to execute, acknowledge, and deliver in the
name and under the corporate seal and on behalf of the Issuer all such instruments, whether or not
herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions
of this Bond Ordinance, the Bonds, the sale of the Bonds, and the Notice of Sale and Official
Statement; and the Director of Finance of the City shall cause the expenses of issuance of the
Bonds to be paid from the proceeds of sale of the Initial Bond. In case any officer whose
signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond,
such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer
had remained in office until such delivery.
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CERTIFICATE FOR
ORDINANCE AUTHORIZING THE ISSUANCE, SAI~F., AND DFJ,IVERY OF CITY OF
DENTON GENERAL OBLIGATION BONDS, SERmS 1995, LEVYING THE TAX TO
PAY SAME, AND APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING THERETO
THE STATE OF TEXAS :
COUNTY OF DENTON :
CITY OF DENTON
We, the undersigned officers of said City, hereby certify as follows:
1. The City Counc'fl of said City convened in REGULAR MEETING ON THE 21ST DAY
OF FEBRUARY, 1995, at the Municipal Building (City Hall), and the roll was called of the duly
constituted officers and members of said City Council, to-wit:
Jennifer K. Walters, Bob Castleberry, Mayor
City Secretary Euline Brock, Mayor Pro Tem
Harold Perry Margaret Smith
Jack Miller Mark Chew
Jerry Cott
and all of said persons were present, except the following absentees: Mark Chew, thus constituting
a quorum. Whereupon, among other business, the following was transacted at said Meeting: a
written
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF
DENTON GENERAL OBLIGATION BONDS, SERIF~S 1995, LEVYING THE TAX TO
PAY SAME, AND APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING THERETO
was duly introduced for the consideration of said City Council and duly read. It was then duly moved
and seconded that said Ordinance be passed; and, after due discussion, said motion, carrying with it
the passage of said Ordinance, prevailed and carded by the following vote:
AYES: 6
NOES: 0
ABSTENTIONS: 0
2. That a true, full, and correct copy of the aforesaid Ordinance passed at the Meeting
described in the above and foregoing paragraph is attached to and follows this Certificate; that said
Ordinance has been duly recorded in said City Council's minutes of said Meeting; that the above and
foregoing paragraph is a true, full, and correct excerpt from said City Council's minutes of said
Meeting pertaining to the passage of said Ordinance; that the persons named in the above and fore-
going paragraph are the duly chosen, qualified, and acting officers and members of said City Council
as indicated therein; and that each of the officers and members of said City Council was duly and
sufficiently notified officially and personally, in advance, of the time, place, and purpose of the
aforesaid Meeting, and that said Ordinance would be introduced and considered for passage at said
Meeting; and that said Meeting was open to the public, and public notice of the time, place, and
purpose of said meeting was given, all as required by Chapter 551, Texas Government Code.
3. That the Mayor of said City has approved, and hereby approves, the aforesaid Ordinance;
that the Mayor and the City Secretary of said City have duly signed said Ordinance; and that the
Mayor and the City Secretary of said City hereby declare that their signing of this Certificate shall
constitute the signing of the attached and following copy of said Ordinance for all purposes.
SIGNED AND SEALED the 21st day of February, 1995.
(SEAL)
We, the undersigned, being respectively the City Attorney and the Bond Attorneys of the City
of Denton, Texas, hereby certify that we prepared and approved as to legality the attached and
following Ordinance prior to its passage as aforesaid.
City Attorney
B~nd Attorneys