1995-032 ORDINANCE NO. 95-032
ORDINANCE
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON
CERTIFICATES OF OBLIGATION, SERIES 1995, AND APPROVING AND AUTHORIZING
INSTRUMENTS AND PROCEDURES RELATING THERETO
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the Certificate of Obligation Act of 1971, as amended and codified (the "Act")
permits the City to issue and sell for cash the Certificates of Obligation hereinafter authorized; and
WHEREAS, the City has duly caused notice of its intention to issue the Certificates of
Obligation hereinafter authorized to be published at the times and in the manner required by the Act
and no petition has been filed protesting the issuance thereof.
THERF. FORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS THAT:
Section 1. AMOUNT AND PURPOSE OF THE CERTIFICATES. The certificate or
certificates of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and
delivered in the aggregate prindpal amount of $2,000,000, FOR THE PURPOSE OF PAYING ALL
OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS INCURRED PURSUANT
TO CONTRACTS FOR THE PURCHASE OF CERTAIN REAL AND PERSONAL PROPERTY,
TO-WIT: CERTAIN REAL PROPERTY FOR USE IN CONNECTION WITH THE CITY'S
LANDFILL OPERATIONS LOCATED ON EDWARDS ROAD AND CERTAIN FACILITIES
AND EQUIPMENT RELATED TO THE CITY'S LANDFILL OPERATIONS; AND ALSO FOR
THE PURPOSE OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL
OBLIGATIONS FOR PROFESSIONAL SERVICES OF ENGINEERING, ATTORNEYS, AND
FINANCIAL ADVISORS IN CONNECTION WITH THE ABOVE CONTRACTS AND SAID
CERTIFICATES OF OBLIGATION.
Section 2. DESIGNATION OF THE CERTIFICATES. Each certificate issued pursuant to
this Ordinance shall be designated: "CITY OF DENTON CERTIFICATE OF OBLIGATION,
SERIES 1995", and initially there shall be issued, sold, and delivered hereunder a single fully
registered certificate, without interest coupons, payable in installments of principal (the "Initial
Certificate"), but the Initial Certificate may be assigned and transferred and/or converted into and
exchanged for a like aggregate principal amount of fully registered certificates, without interest
coupons, having serial maturities, and in the denomination or denominations of $5,000 or any integral
multiple of $5,000, all in the manner hereinafter provided. The term "Certificates" as used in this
Ordinance shall mean and include collectively the Initial Certificate and all substitute certificates ex-
changed therefor, as well as all other substitute certificates and replacement certificates issued
pursuant hereto, and the term "Certificates" shall mean any of the Certificates.
Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL CERTIFICATE.
(a) The Initial Certificate is hereby authorized to be issued, sold, and delivered hereunder
as a single fully registered Certificate, without interest coupons, dated February 15, 1995, in the
denomination and aggregate principal amount of $2,000,000, numbered R-I, payable in annual
installments of principal to the initial registered owner thereof, to-wit:
SMITH BARNEY, INC.
or to the registered assignee or assignees of said Certificate or any portion or portions thereof (in
each case, the "registered owner"), .with the annual installments of principal of the Initial Certificate
to be payable on the dates, respectively, and in the principal amounts, respectively, stated in the
FORM OF INITIAL CERTIFICATE set forth in this Ordinance.
(b) The Initial Certificate (i) may be assigned and transferred, (ii) may be converted and
exchanged for other Certificates, (iii) shall have the characteristics, and (iv) shall be signed and sealed,
and the principal of and interest on the Initial Certificate shall be payable, all as provided, and in the
manner required or indicated, in the FORM OF INITIAL CERTIFICATE set forth in this Ordinance.
Section 4. INTEREST. The unpaid principal balance of the Initial Certificate shall bear
interest t?om the date of the Initial Certificate to the respective scheduled due dates of the installments
of principal of the Initial Certificate, and said interest shall be payable, all in the manner provided and
at the rates and on the dates stated in the FORM OF INITIAL CERTIFICATE set forth in this
Ordinance.
Section 5. FORM OF INITIAL CERTIFICATE. The form of the Initial Certificate, including
the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to
be endorsed on the Initial Certificate, shall be substantially as follows:
FORM OF INITIAL CERTIFICATE
NO. R-1 $2,000,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
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
SMITH BARNEY, INC.
or to the registered assignee or assignees of this Certificate or any portion or portions hereof (in each
case, the "registered owner") the aggregate principal amount of
$2,000,000
(TWO MILLION 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 $ 55,000 2007 $105,000
1998 60,000 2008 115,000
1999 65,000 2009 120,000
2000 65,000 2010 130,000
2001 70,000 2011 135,000
2002 75,000 2012 145,000
2003 80,000 2013 155,000
2004 85,000 2014 165,000
2005 95,000 2015 180,000
2006 100,000
and to pay interest, calculated on the basis of a 360-day year composed of twelve 30-day months,
from the date of this Certificate hereinat~er stated, on the balance of each such installment of
principal, respectively, from time to time remaining unpaid, at the rates as follows:
8.25% per annum on the above installment due in 1997
8.25% per annum on the above installment due in 1998
8.25% per annum on the above installment due in 1999
8.25% per annum on the above installment due in 2000
8.25% per annum on the above installment due in 2001
3
8.25% >er annum on the above installment due in 2002
8.25% >er annum on the above installment due in 2003
8.25% >er annum on the above installment due in 2004
8.00% >er annum on the above installment due in 2005
5.50% >er annum on the above installment due in 2006
5.50% >er annum on the above installment due in 2007
5.50% >er annum on the above installment due in 2008
5.50% >er annum on the above installmem due in 2009
5.50% >er annum on the above installment due in 2010
5.50% >er annum on the above installment due in 2011
5.50% >er annum on the above installment due in 2012
5.50% >er annum on the above installment due in 2013
5.50% >er annum on the above installment due in 2014
5.25% >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 thereat~er while this Certificate or any portion hereof is outstanding and
unpaid.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Certificate are
payable in lawful money of the United States of America~ without exchange or collection charges.
The installments of principal and the interest on this Certificate are payable to the registered owner
hereof through the services of NATIONSBANK OF TEXAS, N.A., DALLAS, TEXAS, which is the
"Paying Agent/Registrar" for this Certificate. Payment of all principal of and interest on this
Certificate shall be made by the Paying Agent/Registrar to the registered owner hereof on each princi-
pal 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
of this Certificate (the "Certificate Ordinance") to be on deposit with the Paying Agent/Registrar for
such purpose as hereinafter provided; and such check shall be sent by the Paying Agent/Registrar by
United States mail, first-class postage prepaid, on each such principal and/or interest payment date,
to the registered owner hereof, at the address of the registered owner, as it appeared at the close of
business on the last day of the month next preceding each such date (the "Record Date") on the
Registration Books kept by the Paying Agent/Registrar, as hereinafter described. The Issuer cove-
nants with the registered owner of this Certificate that on or before each principal and/or imerest
payment date for this Certificate it will make available to the Paying Agent/Registrar, from the "Inter-
est and Sinking Fund" created by the Certificate Ordinance, the mounts required to provide for the
payment, in immediately available funds, of all principal of and interest on this Certificate, when due.
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for such
payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day
on which banking institutions are authorized to close; and payment on such date shall have the same
force and effect as if made on the original date payment was due.
THIS CERTIFICATE has been authorized in accordance with the Constitution and laws of
the State of Texas FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE CITY'S
CONTRACTUAL OBLIGATIONS INCURRED PURSUANT TO CONTRACTS FOR THE
PURCHASE OF CERTAIN REAL AND PERSONAL PROPERTY, TO-WIT: CERTAIN REAL
PROPERTY FOR USE IN CONNECTION WITH THE CITY'S LANDFILL OPERATIONS
LOCATED ON EDWARDS ROAD, AND CERTAIN FACILITIES AND EQUIPMENT
RFJ.ATED TO THE CITY'S LANDFILL OPERATIONS; AND ALSO FOR THE PURPOSE OF
PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS FOR
PROFESSIONAL SERVICES OF ENGINEERING, ATTORNEYS, AND FINANCIAL
ADVISORS IN CONNECTION WITH THE ABOVE CONTRACTS AND SArr) CERTIFICATES
OF OBLIGATION.
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 Certificate or the portion hereof which is to be so prepaid or re-
deemed, 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 Cert'ificate, 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 Certificate or any
portion hereof.
THIS CERTIFICATE, to the extent of the unpaid principal balance hereof, or any unpaid
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 Certificates, upon the terms and conditions
set forth in the Certificate Ordinance. Among other requirements for such transfer, this Certificate
must be presented and surrendered to the Paying Agent/Registrar for cancellation, together with
proper instruments of assigranent, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, evidencing assignment by the initial registered owner of this Certificate, or any
portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees in whose
name or names this Certificate or any such portion or portions hereof is or are to be transferred and
registered. Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar
may be used to evidence the assignment of this Certificate or any such portion or portions hereof by
the initial registered owner hereof. A new certificate or certificates payable to such assignee or
assignees (which then will be the new registered owner or owners of such new Certificate or
Certificates) or to the initial registered owner as to any portion of this Certificate which is not being
assigned and transferred by the initial registered owner, shall be delivered by the Paying Agent/Regis-
trar in conversion of and exchange for this Certificate or any portion or portions hereof, but solely
in the form and manner as provided in the next paragraph hereof for the conversion and exchange of
this Certificate or any portion hereof. The registered owner of this Certificate shall be deemed and
treated by the Issuer and the Paying Agent/Registrar as the absolute ow!~. er hereof for all purposes,
including payment and discharge of liability upon this Certificate to the extent of such payment, and
the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary.
AS PROVIDED above and in the Certificate Ordinance, this Certificate, to the extent of the
unpaid principal balance hereof, may be converted into and exchanged for a like aggregate principal
amount of fully registered certificates, without interest coupons, payable to the assignee or assignees
duly designated in writing by the initial registered owner hereof, or to the initial registered owner as
to any portion of this Certificate which is not being assigned and transferred by the initial registered
owner, in any denomination or denominations in any integral multiple of $5,000 (subject to the
requirement hereinafter stated that each substitute certificate issued in exchange for any portion of
this Certificate shall have a single stated principal maturity date), upon surrender of this Certificate
to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set
forth in the Certificate Ordinance. If this Certificate or any portion hereof is assigned and transferred
or converted each certificate issued in exchange for any portion hereof shall have a single stated
principal maturity date corresponding to the due date of the installment of principal of this Certificate
or portion hereof for which the substitute certificate is being exchanged, and shall bear interest at the
rate applicable to and borne by such installment of principal or portion thereof. No such certificate
shall be payable in installments, but shall have only one stated principal maturity date. AS
PROVIDED IN THE CERTIFICATE ORDINANCE, THIS 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 this Certificate or any
portion hereof may be assigned and transferred, and converted, subsequently, as provided in the
Certificate Ordinance. The Issuer shall pay the Paying AgenffRegistrar's standard or customary fees
and charges for transferring, converting, and exchanging this Certificate or any portion thereof, but
the one requesting such transfer, conversion, and exchange shall pay any taxes or governmental
charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be required
to make any such assignment, conversion, or exchange during the period commencing with the close
of business on any Record Date and ending with the opening of business on the next following
principal or interest payment date.
IN THE EVENT any Paying Agent/Registrar for this Certificate is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that
it promptly will appoint a competent and legally qualified substitute therefor, and promptly will cause
written notice thereof to be mailed to the registered owner of this Certificate.
IT IS HEREBY certified, recited, and covenanted that this Certificate has been duly and
validly authorized, issued, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Certificate have been performed, existed, and been done in accordance with law; that this Certificate
is a general obligation of the Issuer, issued on the full faith and credit thereof} and that annual ad
valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate,
as such interest comes due and such principal matures, have been levied and ordered to be levied
against all taxable property in the Issuer, and have been pledged irrevocably for such payment, within
the limit prescribed by law; and that, together with other parity obligations, this Certificate
additionally is payable from and secured by certain surplus revenues (not to exceed $10,000 in
aggregate amount) derived by the Issuer from the ownership and operation of the City's Utility
System (consisting of the City's combined waterworks system, sanitary sewer system, and electric
light and power system), all as provided in the Certificate Ordinance.
THE ISSUER has reserved the fight to issue, in accordance with law, and in accordance with
the Certificate Ordinance, other and additional obligations, and to enter into contracts, payable from
ad valorem taxes and/or revenues of the City's Utility System, on a parity with, or with respect to said
revenues, superior in lien to, this Certificate.
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinances agrees to be bound by such
terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that the
terms and provisions of this Certificate and the Certificate Ordinance constitute a contract between
the registered owner hereof and the Issuer.
IN WITNESS WHF. REOF, the Issuer has caused this Certificate 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
Certificate, and has caused this Certificate to be dated FEBRUARY 15, 1995.
City Secretary, City of Denton, Texas Mayor, City of Denton, Texas
(CITY SEAL)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate has been examined, certified as to validity, and approved
by the Attorney General of the State of Texas, and that this Certificate has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6. ADDITIONAL CHARACTERISTICS OF THE CERTIFICATES. Registration
and Transfer. (a) The Issuer shall keep or cause to be kept at the principal corporate trust office of
NATIONSBANK OF TEXAS, N.A., DALLAS, TEXAS (the "Paying Agent/Registrar") books or
records of the registration and transfer of the Certificates (the "Registration Books"), and the Issuer
hereby appoints the Paying 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-
tration Books the address of the registered owner of each Certificate to which payments with respect
to the Certificates shall be mailed, as herein provided; but it shall be the duty of each registered owner
to notify the Paying Agent/Registrar in va/ting 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 Certificate may be transferred in the Registration Books only upon
presentation and surrender of such Certificate to the Paying Agent/Registrar for transfer of
registration and cancellation, together with proper written instruments of assignment, in form and
with guarantee of signatures satisfactory to the Paying Agent/Registrar, (i) evidencing the assignment
of the Certificate, or any portion thereof in any integral multiple of $5,000, to the assignee or
assignees thereof, and (ii) the right of such assignee or assignees to have the Certificate or any such
portion thereof registered in the name of such assignee or assignees. Upon the assignment and
transfer of any Certificate or any portion thereof, a new substitute Certificate or Certificates shall be
issued in conversion and exchange therefor in the manner herein provided. The Initial Certificate, to
the extent of the unpaid principal balance thereof, may be assigned and transferred by the initial
registered owner thereof once only, and to one or more assignees designated in writing by the initial
registered owner thereof. All Certificates issued and delivered in conversion of and exchange for the
Initial Certificate shall be in any denomination or denominations of any integral multiple of $5,000
(subject to the requkement hereinafter stated that each substitute Certificate shall have a single stated
principal maturity date), shall be in the form prescribed in the FORM OF SUBSTITUTE
CERTIFICATE set forth in this Ordinance, and shall have the characteristics, and may be assigned,
transferred, and converted as hereinafter provided. If the Initial Certificate or any portion thereof is
assigned and transferred or converted the Initial Certificate must be surrendered to the Paying
Agent/Registrar for cancellation, and each Certificate issued in exchange for any portion of the Initial
Certificate shall have a single stated principal maturity date, and shall not be payable in installments;
and each such Certificate shall have a principal maturity date corresponding to the due date of the
installment of principal or portion thereof for which the substitute Certificate is being exchanged; and
each such Certificate shall bear interest at the single rate applicable to and borne by such installment
of principal or portion thereof for which it is being exchanged. If only a portion of the Initial
Certificate is assigned and transferred, there shall be delivered to and registered in the name of the
initial registered owner substitute Certificates in exchange for the unassigned balance of the Initial
Certificate in the same manner as if the initial registered owner were the assignee thereof. If any
Certificate or portion thereof other than the Initial Certificate is assigned and transferred or converted
each Certificate issued in exchange therefor shall have the same principal maturity date and bear
interest at the same rate as the Certificate for which it is exchanged. A form of assignment shall be
primed or endorsed on each Certificate, excepting the Initial Certificate, which shall be executed by
the registered owner or its duly authorized attorney or representative to evidence an assignment
thereof. Upon surrender of any Certificates or any portion or portions 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 Certificate or Certificates,
having the characteristics herein described, payable to such assignee or assignees (which then will be
the registered owner or owners of such new Certificate or Certificates), or to the previous registered
owner in case only a portion of a Certificate is being assigned and transferred, all in conversion of and
exchange for said assigned Certificate or Certificates or any portion or portions thereof, in the same
forth 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
AgentJRegistrar's standard or customary fees and charges for making such transfer and delivery of
a substitute Certificate or Certificates, but the one requesting such transfer shall pay any taxes or
other governmental charges required to be paid with respect thereto. The Paying Agent/Registrar
shall not be required to make transfers of registration of any Certificate or any portion thereof during
the period commencing with the close of business on any Record Date and ending with the opening
of business on the next following principal or interest payment date.
(b) Ownership of Certificates. The entity in whose name any Certificate shall be registered
in the Registration Books at any time shall be deemed and treated as the absolute owner thereof for
all purposes of this Ordinance, whether or not such Certificate shall be overdue, and the Issuer and
the Paying Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on
account of, the principal of, premium, if any, and interest on any such Certificate shall be made only
to such registered owner. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such Certificate to the extent of the sum or sums so paid.
(c) Payment of Certificates and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Certificates,
and to act as its agent to convert and exchange or replace Certificates, all as provided in this
Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the Issuer
and the Paying Agent/Registrar with respect to the Certificates, and of all conversions and exchanges
of Certificates, and all replacements of Certificates, as provided in this Ordinance. However, in the
event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter,
a new record date for such interest payment (a "Special Record Date") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received from
the Issuer. Notice of the Special Record Date and of the scheduled payment date of the past due
interest ("Special Payment Date", which shall be fifteen (15) days after the Special Record Date) shall
be sent at least five (5) business days prior to the Special Record Date by United States mail, first
class postage prepaid, to the address of each Holder of a Certificate appearing on the registration
books of the Paying Agent/Registrar at the close of business on the last business day next preceding
the date of mailing of such notice.
(d) Conversion and Exchange or Replacement; Authentication. Each Certificate issued and
delivered pursuant to this Ordinance, to the extent of the unpaid principal balance or principal amount
thereof, may, upon surrender of such Certificate 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 regis-
tered owner or such assignee or assignees, as appropriate, be convened into and exchanged for fully
registered certificates, without interest coupons, in the form prescribed in the FORM OF
SUBSTITUTE CERTIFICATE set forth in this Ordinance, in the denomination of $5,000, or any
integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute
Certificate shall have a single stated maturity date), as requested in writing by such registered owner
or such assignee or assignees, in an aggregate principal amount equal to the unpaid principal balance
or principal amount of any Certificate or Certificates so surrendered, and payable to the appropriate
registered owner, assignee, or assignees, as the case may be. Iftbe Initial Certificate is assigned and
transferred or converted each substitute Certificate issued in exchange for any portion of the Initial
Certificate shall have a single stated principal maturity date, and shall not be payable in installments;
and each such Certificate .~hall have a principal maturity date corresponding to the due date of the
installment of principal or portion thereof for which the substitute Certificate is being exchanged; and
each such Certificate shall bear interest at the single rate applicable to and borne by such installment
of principal or portion thereof for which it is being exchanged. If any Certificate or portion thereof
(other than the Initial Certificate) is assigned and transferred or converted, each Certificate issued in
exchange therefor shall have the same principal maturity date and bear interest at the same rate as the
Certificate for which it is being exchanged. Each substitute Certificate shall bear a letter and/or
number to distinguish it from each other Certificate. The Paying Agent/Registrar shall convert and
exchange or replace Certificates as provided herein, and each fully registered certificate delivered in
conversion of and exchange for or replacement of any Certificate or portion thereof as permitted or
required by any provision of this Ordinance shall constitute one of the Certificates for all purposes
of this Ordinance, and may again be converted and exchanged or replaced. It is specifically provided
that any Certificate authenticated in conversion of and exchange for or replacement of another
Certificate on or prior to the first scheduled Record Date for the Initial Certificate shall bear interest
from the date of the Initial Certificate, but each substitute Certificate so authenticated after such first
scheduled Record Date shall bear interest from the interest payment date next preceding the date on
which such substitute Certificate was so authenticated, unless such Certificate is authenticated after
any Record Date but on or before the next following interest payment date, in which case it shall bear
interest fi'om such next following interest payment date; provided, however, that if at the time of de-
livery of any substitute Certificate the interest on the Certificate for which it is being exchanged is due
but has not been paid, then such Certificate shall bear interest from the date to which such interest
has been paid in full. THE INITIAL CERTIFICATE issued and delivered pursuant to this Ordinance
is not required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each
substitute Certificate issued in conversion of and exchange for or replacement of any Certificate or
Certificates issued under this Ordinance there shall be printed a certificate, in the form substantially
as follows:
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate has been issued under the provisions of the Certificate
Ordinance described on the face of this Certificate; and that this Certificate has been issued in
conversion of and exchange for or replacement of a certificate, certificates, or a portion of a
certificate or certificates of an issue which originally was approved by the Attorney General of the
State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
10
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
Certificate, date and manually sign the above Certificate, and no such Certificate shall be deemed to
be issued or outstanding unless such Certificate is so executed. The Paying Agent/Registrar promptly
shall cancel all Certificates surrendered for conver.4on and exchange or replacement. No additional
ordinances, orders, or resolutions need be passed or adopted by the governing body of the Issuer or
any other body or person so as to accomplish the foregoing conversion and exchange or replacement
of any Certificate or portion thereof, and the Paying Agent/Registrar shall provide for the printing,
execution, and delivery of the substitute Certificates in the manner prescribed herein, and said
Certificates shall be of type composition printed on paper with lithograpbed or steel engraved borders
of customary weight and strength. Pursuant to Vernoffs Ann. Tex. Civ. St. Art. 717k-6, and
particularly Section 6 thereof, the duty of conversion and exchange or replacement of Certificates 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
Certificate shall be valid, incontestable, and enforceable in the same manner and with the same effect
as the Initial Certificate which originally was issued pursuant to this Ordinance, approved by the
Attorney General, and registered by the Comptroller of Public Accounts. The Issuer shall pay the
Paying AgentfRegistrar's standard or customary fees and charges for transferring, converting, and
exchanging any Certificate or any portion thereof, but the one requesting any such transfer,
conversion, and exchange shall pay any taxes or governmental charges required to be paid with
respect thereto as a condition precedent to the exercise of such privilege of conversion and exchange.
The Paying Agent/Registrar shall not be required to make any such conversion and exchange or
replacement of Certificates or any portion thereof during the period commencing with the close of
business on any Record Date and ending with the opening of business on the next following principal
or interest payment date.
(e) In General. All Certificates issued in conversion and exchange or replacement of any
other Certificate or portion thereof, (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Certificates to be payable only to the registered
owners thereof, (ii) may be transferred and assigned, (iii) may be converted and exchanged for other
Certificates, (iv) shall have the characteristics, (v) shall be signed and sealed, and (vi) the principal
of and interest on the Certificates shall be payable, all as provided, and in the manner required or indi-
cated, in the FORM OF SUBSTITUTE CERTIFICATE set forth in this Ordinance.
(f) Payment of Fees and Charges. The Issuer hereby covenants with the registered owners
of the Certificates that it will (i) pay the standard or customary fees and charges of the Paying
Agent/Registrar for its services with respect to the payment of the principal of and interest on the
Certificates, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services
11
with respect to the transfer of registration of Certificates, and with respect to the conversion and
exchange of Certificates solely to the extent above provided in this Ordinance.
(g) Substitute Paying Agent/Registrar. The Issuer covenants with the registered owners of
the Certificates that at all times while the Certificates are outstanding the Issuer will provide a
competent and legally qualified bank, trust company, financial institution, or other agency to act as
and perform the services of Paying Agent]Registrar for the Certificates under this Ordinance, and that
the Paying Agent/Registrar will be one entity. The Issuer reserves the right to, and may, at its option,
change the Paying Agent/Registrar upon not less than 120 days written notice to the Paying
Agent/Registrar, to be effective not later than 60 days prior to the next principal or interest payment
date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar (or
its successor by merger, acquisition, or other method) should re,qign or otherwise cease to act as such,
the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust
company, financial institution, or other agency to act as Paying Agent/Registrar under this Ordinance.
Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall
transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books
and records relating to the Certificates, to the new Paying Agent/Registrar designated and appointed
by the Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a
written notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the
Certificates, by United States mail, first-class postage prepaid, which notice also shall give the address
of the new Paying Agent/Registrar. By accepting the position and performing as such, each Paying
Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified
copy of this Ordinance shall be delivered to each Paying Agent/Registrar.
Section 7. FORM OF SUBSTITUTE CERTIFICATES. The form of all Certificates issued
in conversion and exchange or replacement of any other Certificate or portion thereof, including the
form of Paying Agent/Registrax's Certificate to be printed on each of such Certificates, and the Form
of Assignment to be printed on each of the Certificates, shall be, respectively, substantially as follows,
with such appropriate variations, omissions, or insertions as are permitted or required by this
Ordinance.
12
FORM OF SUBSTITUTE CERTIFICATE
(Book-Entry Only Legend, if appropriate)
NO. UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIF. S 1995
ORIGINAL ISSUE
_INTEREST RATE MATURITY DATE DATE 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, from FEBRUARY 15, 1995, to the maturity date specified above, 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 thereafter, except that if the date of authentication of this
Certificate is later than the first Record Date (hereinafter defined), such principal amount shall bear
interest from the interest payment date next preceding the date of authentication, unless such date of
authentication is after any Record Date (hereinafter defined) but on or before the next following
interest payment date, in which case such principal amount shall bear interest from such next
following interest payment date.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money of
the United States of America, without exchange or collection charges. The principal of this
Certificate shall be paid to the registered owner hereof upon presentation and surrender of this
Certificate at maturity, at the principal corporate trust office of NATIONS BANK OF TEXAS, N.A.,
DALLAS, TEXAS, which is the "Paying Agent/Registrar" for this Certificate. The payment of
interest on this Certificate shall be made by the Paying Agent/Registrar to the registered owner hereof
on each interest payment date by check dated as of such interest payment date, drawn by the Paying
Agent/Registrar on, and payable soldy 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
Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the Paying
3.3
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 Agent/Registrar
and requested by, and at the risk and expense of, the registered owner hereof. The Issuer covenants
with the registered owner of this Certificate that on or before each principal payment date, interest
payment date, and accrued interest payment date for this Certificate it will make available to the
Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate Ordinance,
the amounts required to provide for the payment, in immediately available funds, of all principal of
and interest on the Certificates, when due.
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying
Agent/Registrar is located are authorized by law or executive order to dose, 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 dose; and payment on such date shall have the same
force and effect as if made on the original date payment was due.
THIS CERTIFICATE is one of an issue of Certificates initially dated FEBRUARY 15, 1995,
authorized in accordance with the Constitution and laws oftbe State of Texas in the principal amount
of $2,000,000, FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE CITY'S
CONTRACTUAL OBLIGATIONS INCURRED PURSUANT TO CONTRACTS FOR THE
PURCHASE OF CERTAIN REAL AND PERSONAL PROPERTY, TO-WIT: CERTAIN REAL
PROPERTY FOR USE IN CONNECTION WITH THE CITY'S LANDFILL OPERATIONS
LOCATED ON EDWARDS ROAD, AND CERTAIN FACILITIES AND EQUIPMENT
RELATED TO THE CITY'S LANDFILL OPERATIONS; AND ALSO FOR THE PURPOSE OF
PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS FOR
PROFESSIONAL SERVICES OF ENGINEERING, ATTORNEYS, AND FINANCIAL
ADVISORS IN CONNECTION WITH THE ABOVE CONTRACTS AND SAID CERTIFICATES
OF OBLIGATION.
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 Certificate or the portion hereof which is to be so prepaid or re-
deemed, 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 Certificate, 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
14
in the Registration Books all such prepayments or redemptions of principal of this Certificate or any
portion hereof.
THIS CERTIFICATE OR ANY PORTION OR PORTIONS HF. REOF IN ANY INTEGRAL
MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books of
the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Certificates,
upon the terms and conditions set forth in the Certificate Ordinance. Among other requirements for
such assignment and transfer, this Certificate must be presented and surrendered to the Paying
Agent/Registrar, together with proper instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Certificate or any
portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose
name or _names this Certificate or any such portion or portions hereof is or are to be transferred and
registered. The form of Assignment printed or endorsed on this Certificate shall be executed by the
registered owner or its duly authorized attorney or representative, to evidence the assignment hereof.
A new Certificate or Certificates payable to such assignee or assignees (which then will be the new
registered owner or owners of such new Certificate or Certificates), or to the previous registered
owner in the case of the assignment and transfer of only a portion of this Certificate, may be delivered
by the Paying Agent/Registrar in conversion of and exchange for this Certificate, all in the fomi and
manner as provided in the next paragraph hereof for the conversion and exchange of other
Certificates. The Issuer shall pay the Paying AgenffRegistrar'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 requked to be paid with respect thereto. The Paying Agent/Registrar shall not
be requked to make transfers of registration of this Certificate or any portion hereof during the period
commencing with the close of business on any Record Date and ending with the opening of business
on the next following principal or interest payment date. The registered owner of this Certificate
shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner
hereof for all purposes, including payment and discharge of liability upon this Certificate to the extent
of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice
to the contrary.
ALL CERTIFICATES OF THIS SERIF. S are issuable solely as fully registered certificates,
without interest coupons, in the denomination of any integral multiple of $5,000. As provided in the
Certificate Ordinance, this Certificate, may, at the request of the registered owner or the assignee or
assignees hereof, be converted into and exchanged for a like aggregate principal amount of fully
registered certificates, without interest coupons, payable to the appropriate registered owner,
assignee, or assignees, as the case may be, having the same maturity date, and bearing interest at the
same rate, in any denomination or denominations in any integral multiple of $5,000 as requested in
writing by the appropriate registered owner, assignee, or assignees, as the case may be, upon sur-
render of this Certificate to the Paying Agent/Registrar for cancellation, all in accordance with the
form and procedures set forth in the Certificate Ordinance. The Issuer shall pay the Paying
AgenffRegistrat's standard or customary fees and charges for transferring, converting, and exchanging
any Certificate or any portion thereof, but the one requesting such transfer, conversion, and exchange
shall pay any taxes or governmental charges required to be paid with respect thereto as a condition
precedent to the exerdse of such privilege of conversion and exchange. The Paying Agent/Registrar
shall not be required to make any such conversion and exchange during the period commencing with
15
the dose of business on any Record Date and ending with the opening of business on the next follow-
ing principal or interest payment date.
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that
it promptly will appoint a competent and legally qualified substitute therefor, and promptly will cause
written notice thereof to be mailed to the registered owners of the Certificates.
IT IS HEREBY certified, recited, and covenanted that this Certificate has been duly and
validly authorized, issued, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Certificate have been performed, existed, and been done in. accordance with law; that this Certificate
is a general obligation of the Issuer, issued on the full faith and credit thereof} and that annual ad
valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate,
as such interest comes due and such prindpal matures, have been levied and ordered to be levied
against all taxable property in the Issuer, and have been pledged irrevocably for such payment, within
the limit prescribed by law; and that, together with other parity obligations, this Certificate, and the
other Certificates of this Series, additionally are payable fi.om and secured by certain surplus revenues
(not to exceed $10,000 in aggregate amount) derived by the Issuer from the ownership and operation
of the City's Utility System (consisting of the City's combined waterworks system, sanitary sewer
system, and electric light and power system), all as provided in the Certificate Ordinance.
THE ISSUER has reserved the fight to issue, in accordance with law, and in accordance with
the Certificate Ordinance, other and additional obligations, and to enter into contracts, payable from
ad valorem taxes and/or revenues of the City's Utility System, on a parity with, or with respect to said
revenues, superior in lien to, this Certificate.
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that the
terms and provisions of this Certificate and the Certificate Ordinance constitute a contract between
each registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the manual
or facsimile signature of the Mayor of the Issuer and countersigned with the manual or facsimile
signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly
impressed, or placed in facsimile, on this Certificate.
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
It is hereby certified that this Certificate has been is~aed under the provisions of the Certificate
Ordinance described on the face of this Certificate; and that this Certificate has been issued in
conversion of and exchange for or replacement of a certificate, certificates, or a portion of a
certificate or certificates of an issue which originally was approved by the Attorney General of the
State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
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 Certificate, or duly
authorized representative or attorney
thereof, hereby assigns this Certificate 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
attorney to transfer the registration of this Certificate on the Paying Agent/Registrar's Registration
Books with full power of substitution in the premises.
Dated:
Signature Guaranteed:
17
NOTICE: Signature(s) must be Registered Owner
guaranteed by an eligible guaranotr NOTICE: This signature must
institution participating in a correspond with the name of the
securities transfer assoeation Registered Owner appearing on
recognized signature guarantee the face of this Certificate.
program.
Section 8. TAX LEVY. A special Interest and Sinking Fund (the "Interest and Sinking
Fund") is hereby created solely for the benefit of the Certificates, and the Interest and Sinking Fund
shall be established and maintained by the Issuer at an official depository bank of the Issuer. The
Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the
Issuer, and shall be used only for paying the interest on and principal of the Certificates. All ad
valorem taxes levied and collected for and on account of the Certificates shall be deposited, as
collected, to the credit of the Interest and Sinking Fund. During each year while any of the
Certificates or interest thereon are outstanding and unpaid, the governing body of the Issuer shall
compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and
produce the money required to pay the interest on the Certificates as such interest becomes due, and
to provide and maintain a sinking fund adequate to pay the principal of its Certificates as such
principal matures (but never less than 2% of the original principal amount of the Certificates 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 Certificates or interest thereon are outstanding and unpaid;
and said tax shall be assessed and collected each such year and deposited to the credit of the aforesaid
Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of the interest
on and principal of the Certificates, as such interest comes due and such principal matures, are hereby
pledged for such payment, within the limit prescribed by law.
Section 9. SURPLUS REVENUES. The Certificates additionally shall be payable from and
secured by surplus revenues, to the extent hereinafter permitted, derived by the Issuer from the
ownership and operation of the Issuer's Utility System (consisting of its combined waterworks
system, sanitary sewer system, and electric light and power system) remaining after (a) payment of
all amounts constituting operation and maintenance expenses of said Utility System, and (b) payment
of all debt service, reserve, and other requirements and amounts required to be paid under all
ordinances heretofore or hereafter authorizing (i) all bonds and (ii) all other obligations not on a
parity with the Certificates, which are payable from and secured by any Utility System revenues, and
(c) payment of all amounts payable fi.om any Utility System revenues pursuant to contracts heretofore
or hereafter entered into by the Issuer in accordance with law (the "Surplus Revenues"). If, for any
reason, the Issuer fails to deposit ad valorem taxes levied pursuant to Section 8 hereof to the credit
of the Interest and Sinking Fund in an amount sufficient to pay, when due, the principal of and interest
on the Certificates, then Surplus Revenues, to the extent hereinafter permitted, shall be deposited to
the credit of the Interest and Sinking Fund and used to pay such principal and/or interest. A
maximum aggregate of $10,000 of Surplus Revenues may be used to pay principal and/or interest on
the Certificates and any obligations on a parity therewith. The Certificates and any obligations on a
parity therewith are not, and shall not be deemed to be, payable from or secured by any Surplus
Revenues in excess of an aggregate of $10,000. Until and unless an aggregate of $10,000 of Surplus
Revenues actually is used to pay any such principal and/or interest, additional obligations, payable
from and secured by all or any remaining unused part of said aggregate of $10,000 of Surplus
Revenues, may be issued by the Issuer on a parity with the Certificates and any other then outstanding
parity obligations, with the Certificates and all such additional parity obligations to be payable from
and secured equally and ratably by all or any remaining unused part of said aggregate. The Issuer
reserves, and shall have, the right to issue bonds, and other obligations not on a parity with the
Certificates, and to enter into contracts, in accordance with applicable laws, to be payable from and
secured by any Utility System revenues other than the aggregate of $10,000 of Surplus Revenues as
described above. The Certificates are on a parity with those issues of City of Denton Certificates of
Obligation, Series 1987, Series 1987-A, Series 1989, Series 1989-A, Series 1991, Series 1992, Series
!993, Series 1993-A and Series 1994, as permitted in the Ordinances authorizing same; and it is
hereby found and determined that none of the above defined Surplus Revenues have ever been used
to pay any principal and/or interest on said City of Denton Certificates of Obligation, Series 1987,
Series 1987-A, Series 1989, Series 1989-A, Series 1991, Series 1992, Series 1993, Series 1993-A
or Series 1994.
Section 10. DEFEASANCE OF CERTIFICATES. (a) Any Certificate and the interest
thereon shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Certificate")
within the meaning of this Ordinance, except to the extent provided in subsection (d) of this Section,
when payment of the principal of such Certificate, plus interest thereon to the due date either (i) shall
have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been
provided for on or before such due date by irrevocably depositing with or making available to the
Paying Agent/Registrar for such payment (1) lawful money of the United States of America sufficient
to make such payment or (2) Government Obligations which mature as to principal and interest in
such amounts and at such times as will insure the availability, without reinvestment, 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 Certificates shall
have become due and payable. At such time as a Certificate shall be deemed to be a Defeased
Certificate hereunder, as aforesaid, such Certificate and the interest thereon shall no longer be secured
by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and pledged as
provided in this Ordinance, and such principal and interest shall be payable solely from such money
or Government Obligations.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction
of the Issuer also be invested in Government Obligations, maturing in the amounts and times as
hereinbefore set forth, and all income fi'om such Government Obligations received by the Paying
Agent/Registrar which is not required for the payment of the Certificates and interest thereon, with
respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited
as directed in writing by the Issuer.
(c) The term "Government Obligations" as used in this Section shall mean 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 Certificates shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Certificates
the same as if they had not been defeased, and the Issuer shall make proper arrangements to provide
and pay for such services as required by this Ordinance.
Section 11. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES. (a) Replacement Certificates. In the event any outstanding Certificate is
damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed,
executed, and delivered, a new certificate of the same principal amount, maturity, and interest rate,
as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement for such Certificate
in the manner hereinafter provided.
(b) Application for Replacement Certificates. Application for replacement of damaged,
mutilated, lost, stolen, or destroyed Certificates shall be made by the registered owner thereof to the
Paying Agent/Registrar. In every case of loss, theft, or destruction of a Certificate, the registered
owner applying for a replacement certificate shall furnish to the Issuer and to the Paying
Agent/Registrar such security or indemnity as may be required by them to save each of them harmless
from any loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a
Certificate, the registered owner shall furnish to the Issuer and the Paying Agent/Registrar evidence
to their satisfaction of the loss, their, or destruction of such Certificate, as the case may be. In every
case of damage or mutilation of a Certificate, the registered owner shall surrender to the Paying
Agent/Registrar for cancellation the Certificate so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in
the event of any such Certificate shall have matured, and no default has occurred which is then
continuing in the payment of the principal of, or interest on the Certificate, the Issuer may authorize
the payment of the same (without surrender thereof except in the case of a damaged or mutilated
Certificate) instead of issuing a replacement Certificate, provided security or indemnity is furnished
as above provided in this Section.
(d) Charge for Issuing Replacement Certificates. Prior to the issuance of any replacement
certificate, the Paying Agent/Registrar shall charge the registered owner of such Certificate with all
legal, printing, and other expenses in connection therewith. Every replacement certificate issued
pursuant to the provisions of this Section by virtue of the fact that any Certificate is lost, stolen, or
destroyed shall constitute a contractual obligation of the Issuer whether or not the lost, stolen, or
destroyed Certificate shall be found at any time, or be enforceable by anyone, and shall be entitled to
all the benefits of this Ordinance equally and proportionately with any and all other Certificates duly
issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates. 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 certificate without necessity of further action by the governing body
of the Issuer or any other body or person, and the duty of the replacement of such certificates is
hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar
shall authenticate and deliver such Certificates in the form and manner and with the effect, as
20
provided in Section 6(d) of this Ordinance for Certificates issued in conversion and exchange for
other Certificates.
Section 12. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES;
CERTIFICATE COUNSEL'S OPINION, CUSIP NUMBERS, PREAMBLE AND INSURANCE.
The Mayor of the Issuer is hereby authorized to have control of the Initial Certificate issued
hereunder and all necessary records and proceedings pertaining to the Initial Certificate pending its
delivery and its investigation, 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 Certificate said Comptroller of Public Accounts (or a deputy designated in
writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate on
the Initial Certificate, and the seal of said Comptroller shall be impressed, or placed in facsimile, on
the Initial Certificate. The approving legal opinion of the Issuer's Bond Counsel and the assigned
CUSIP numbers may, at the option of the Issuer, be printed on the Initial Certificate or on any
Certificates issued and delivered in conversion of and exchange or replacement of any Certificate, but
neither shall have any legal effect, and shall be solely for the convenience and information of the
registered owners of the Certificates. The preamble to this Ordinance is hereby adopted and made
a part hereof for all purposes. If insurance is obtained on any of the Certificates, the Initial Certificate
and all other Certificates shall bear an appropriate legend concerning insurance as provided by the
insurer.
Section 13. COVENANTS REGARDING TAX-EXEMPTION. 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 Certificates 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 Certificates or the project financed therewith (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 or the project financed therewith are so used, such
amounts, whether or not received by the Issuer, with respect to such private business use, do
not, under the terms of this 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
Certificates, 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 Certificates or the
project financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a "private business use" which is "related" and not
"disproportionate", within the meaning of section 141(b)(3) of the Code, to the governmental
use;
21
(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 Certificates (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state
or local governmental units, in contravention of section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the
Certificates being treated as "private activity bonds" within the meaning of section 14 l(b) of
the Code;
(e) to refrain from taking any action that would result in the Certificates being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Certificates, directly
or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section 148(bX2) of the Code) which produces a materially
higher yield over the term of the Certificates, other than investment property acquired with --
(1) proceeds of the Certificates 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, until such proceeds are needed for the purpose for which the certificates are
issued,
(2) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148-1(b)(12) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacemem
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Certificates;
(g) to otherwise 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
otherevise 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 Certificates) an amount that is at least equal
to 90 percent of the "Excess Earnings", 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 Certificates have been
paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings
under section 148(f) oftbe 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 Certificates.
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It is the understanding of the Issuer that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the
Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which
modify, or expand provisions of the Code, as applicable to the Certificates, the Issuer will not be
required to comply with any covenant contained herein to the extent that such failure to comply, in
the opinion of nationally-recognized bond counsel, will not adversely affect the exemption from
federal income taxation of interest on the Certificates under section 103 of the Code. In the event
that regulations or rulings are in 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, certificates or
reports required by the Code and to make such elections, on behalf of the Issuer, which may be
permitted by the Code as are consistent with the purpose for the issuance of the Certificate.
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 14. SALE OF INITIAL CERTIFICATE. The Initial Certificate is hereby sold and
shall be delivered to Smith Barney, 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 Certificate 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 Certificate. 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 Certificates is hereby approved. It
is further offidally 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 and the Issuer.
Section 15. INTEREST EARNINGS ON CERTIFICATE PROCEEDS. Interest earnings
derived from the investment of proceeds from the sale of the Initial Certificate shall be used along
with other proceeds for the purposes for which the Certificates are issued; provided that after
completion of such purposes, if any of such interest earnings remain on hand, such interest earnings
shall be deposited in the Interest and Sinking Fund. It is further provided, however, that any interest
earnings on certificate proceeds which are required to be rebated to the United States of America
pursuant to Section 13 hereof in order to prevent the Certificates from being "arbitrage bonds" within
the meaning of the Code shall be so rebated and not considered as interest earnings for the purposes
of this Section.
Section 16. DTC REGISTRATION. The Certificates initially shall be issued and delivered
in such manner that no physical distribution of the Certificates will be made to the public, and the
Depository Trust Company ("DTC"), New York, New York, initially will act as depository for the
Certificates. DTC has represented that it is a limited purpose trust company incorporated under the
laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation"
23
within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered
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 Certificate authorized by this
Ordinance shall be delivered to and registered in the name of the Purchaser. However, it is a
condition of delivery and sale that the Purchaser, immediately after such delivery, shall cause the
Paying Agent/Registrar, as provided for in this Ordinance, to cancel said Initial Certificate and deliver
in exchange therefor a substitute Certificate for each maturity of such Initial Certificate, with each
such substitute Certificate 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 Certificates on behalf of the Purchaser and/or the DTC Participants, as defined and described
in the Official Statement referred to and approved in Section 14 hercof (the "DTC Participants"). So
long v~q each Certificate is registered in the name of CEDE & CO., the Paying Agent/Registrar shall
treat and deal with DTC in ail respects the same as if it were the actual and beneficial owner thereof.
It is expected that DTC will maintain a book entry system which will identify beneficial ownership
of the Certificates by DTC Participants in integral amounts of $5,000, with transfers of ownership
being effected on the records of DTC and the DTC Participants pursuant to rules and regulations
established by them, and that the substitute Certificates initially deposited with DTC shall be
immobilized and not be further exchanged for substitute Certificates except as hercinat~er 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 beneficiai owners of the Certificates. It shall be the duty of the Purchaser and the DTC
Participants to make all arrangements with DTC to establish this book-entry system, the beneficial
ownership of the Certificates, and the method of paying the fees and charges of DTC. The 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 right and option at any time in the
future, in its sole discretion, to terminate the DTC (CEDE & CO.) book-entry only registration
requkement described above, and to permit the Certificates to be registered in the name of any owner.
If the Issuer exercises its fight and option to terminate 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 Certificate in any name as
provided for in this Ordinance. Notwithstanding the initiai establishment of the foregoing book-entry
system with DTC, if for any reason any of the originaily delivered substitute Certificates is duly filed
with the Paying Agent/Registrar with proper request for transfer and substitution, as provided for in
this Ordinance, substitute Certificates will be duly delivered as provided in this Ordinance, and there
will be no assurance or representation that any book-entry system will be maintained for such
Certificates.
Section 17. 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 time to time and at any time to do
and perform all such acts and things and to execute, acknowledge, and deliver in the name and under
the corporate seal and on behalf of the Issuer all such instruments, whether or not herein mentioned,
as may be necessary or desirable in order to carry out the terms and provisions of this Certificate
Ordinance, the Certificates, the sale of the Certificates, and the Notice of Sale and Officiai Statement;
and the Director of Finance of the City shall cause the expenses of issuance of the Certificates to be
paid from the proceeds of sale of the Initial Certificate. In case any officer whose signature shall
appear on any Certificate shall cease to be such officer before the delivery of such Certificate, such
signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had
remained in office until such delivery.
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CERTIFICATE FOR
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 1995,
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 Council 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 Tern
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 CERTIFICATES OF OBLIGATION, SERIES 1995,
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 carried by the following vote:
AYES: 6
NOES: 0
AB STENTIONS: 0