1993-203ORDINANCE NO. 93-IZ3
ORDINANCE
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON
CERTIFICATES OF OBLIGATION, SERIES 1993-A, 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.
THEREFORE, 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 principal amount of $2,705,000, FOR THE PURPOSE OF PAYING
ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS INCURRED
PURSUANT TO CONTRACTS FOR THE CONSTRUCTION OF PUBLIC WORKS, TO-WIT:
(1) RENOVATING CERTAIN MUNICIPAL BUILDINGS OF THE CITY AND (2) THE
PURCHASE OF LAND AND CONSTRUCTION OF A LANDFILL SITE; 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 1993-A", 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 exchanged 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 November 1, 1993, in
the denomination and aggregate principal amount of $2,705,000,
numbered R-1, payable in annual installments of principal to the
initial registered owner thereof, to-wit:
FIRST SOUTHWEST COMPANY
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 from 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
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 1993-A
$2,705,000
THE CITY OF DENTON, in Denton County, Texas (the "Issuer"),
being a political subdivision of the State of Texas, hereby
promises to pay to
FIRST SOUTHWEST COMPANY
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
$2,705,000
(TWO MILLION SEVEN HUNDRED FIVE THOUSAND DOLLARS)
in annual installments of principal due and payable on JULY 1 in
each of the years, and in the respective principal amounts, as set
forth in the following schedule:
PRINCIPAL
PRINCIPAL
YEAR
AMOUNT
YEAR
AMOUNT
1995
$135,000
2005
$ 80,000
1996
140,000
2006
85,000
1997
145,000
2007
90,000
1998
150,000
2008
95,000
1999
160,000
2009
100,000
2000
170,000
2010
105,000
2001
180,000
2011
110,000
2002
190,000
2012
115,000
2003
200,000
2013
120,000
2004
205,000
2014
130,000
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
hereinafter stated, on the balance of each such installment of
principal, respectively, from time to time remaining unpaid, at the
rates as follows:
7.40%
7.40%
7.40%
7.40%
7.25%
4.40%
4.40%
4.50%
4.60%
per
per
per
per
per
per
per
per
per
annum on the
annum on the
annum on the
annum on the
annum on the
annum on the
annum on the
annum on the
annum on the
above
above
above
above
above
above
above
above
above
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installment
installment
installment
installment
installment
installment
installment
installment
installment
due
due
due
due
due
due
due
due
due
in 1995
in 1996
in 1997
in 1998
in 1999
in 2000
in 2001
in 2002
in 2003
4.75%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
per annum on the
per annum on the
per annum on the
per annum on the
per annum on the
per annum on the
per annum on the
per annum on the
per annum on the
per annum on the
per annum on the
above
above
above
above
above
above
above
above
above
above
above
installment
installment
installment
installment
installment
installment
installment
installment
installment
installment
installment
due
due
due
due
due
due
due
due
due
due
due
in 2004
in 2005
in 2006
in 2007
in 2008
in 2009
in 2010
in 2011
in 2012
in 2013
in 2014
with said interest being payable on JULY 1, 1994, and semiannually
on each JANUARY 1 AND JULY 1 thereafter 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 principal 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 15th day of the month next preceding
each such date (the "Record Date") on the Registration Books kept
by the Paying Agent/Registrar, as hereinafter described. The
Issuer covenants with the registered owner of this Certificate that
on or before each principal and/or 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
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 CONSTRUCTION OF PUBLIC
WORKS, TO-WIT: (1) RENOVATING CERTAIN MUNICIPAL BUILDINGS OF THE
CITY AND (2) THE PURCHASE OF LAND AND CONSTRUCTION OF A LANDFILL
SITE; 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.
ON JULY 1, 2003, or on any date whatsoever thereafter, the
unpaid installments of principal of this Certificate 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 part, the particular portion of this
Certificate to be prepaid or redeemed shall be selected and
designated by the Paying Agent/Registrar (provided that a portion
of this Certificate 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 prepay-
ment or redemption a written notice of such prepayment or redemp-
tion 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 prepayment
or redemption price for this Certificate 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
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 pro-
vided 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,
5
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
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/Registrar 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 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.
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 Agent/Registrar'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 right 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
7
Certificate ordinance constitute a contract between the registered
owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate to
be signed with the manual signature of the Mayor of the Issuer and
countersigned 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 NOVEMBER 1, 1993.
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 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 Registration
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 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
a
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
requirement 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 printed 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 form and manner, and with
the same effect, as provided in Section 6(d), below, for the
conversion and exchange of Certificates by any registered owner of
a Certificate. The Issuer shall pay the Paying Agent/Registrar's
standard or customary fees and charges for 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.
(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
10
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 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. If the 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 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 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 from such next following
interest payment date; provided, however, that if at the time of
delivery 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
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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.
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 conversion 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 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 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 Agent/Registrar'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
12
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 indicated, 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
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 Paving 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 resign 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
13
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/Registrar'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.
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
SERIES 1993-A
ORIGINAL ISSUE
INTEREST RATE MATURITY DATE DATE CUSIP NO.
% November 1, 1993
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 NOVEMBER 1, 1993, to
the maturity date specified above, at the interest rate per annum
specified above; with interest being payable on JULY 1, 1994, and
semiannually on each JANUARY 1 and JULY 1 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.
14
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 solely from, funds of
the Issuer required by the ordinance authorizing the issuance of
the Certificates (the "Certificate Ordinance") to be on deposit
with the Paying 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 15th day of the month next preceding each such
date (the "Record Date") on the Registration Books kept by the
Paying Agent/Registrar, as hereinafter described. However, the
payment of such 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 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 is one of an issue of Certificates initially
dated NOVEMBER 1, 1993, authorized in accordance with the
Constitution and laws of the State of Texas in the principal amount
of $2,705,000, FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE
CITY'S CONTRACTUAL OBLIGATIONS INCURRED PURSUANT TO CONTRACTS FOR
THE CONSTRUCTION OF PUBLIC WORKS, TO-WIT: (1) RENOVATING CERTAIN
MUNICIPAL BUILDINGS OF THE CITY AND (2) THE PURCHASE OF LAND AND
CONSTRUCTION OF A LANDFILL SITE; 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.
15
ON JULY 1, 2003, or on any date whatsoever thereafter, the
Certificates 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 Certificates, or portions
thereof, to be redeemed shall be selected and designated by the
Paying Agent/Registrar (provided that a portion of a Certificate
may be redeemed only in an integral multiple of $5,000), at the
redemption price of the par or 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
Certificates or portions thereof prior to maturity a written notice
of such redemption shall be published once in a financial publica-
tion, 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 Certificate 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
Certificate, 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 Certificates 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 redemp-
tion price for the Certificates or portions thereof which are to be
so redeemed, plus accrued interest thereon to the date fixed for
redemption. If such written notice of redemption is published and
if due provision for such payment is made, all as provided above,
the Certificates 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. If a
portion of any Certificate shall be redeemed a substitute
Certificate or Certificates 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 Certificate ordinance.
16
THIS CERTIFICATE 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 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 form
and manner as provided in the next paragraph hereof for the
conversion and exchange of other Certificates. 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
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 SERIES 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
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. The Issuer shall pay the
17
Paying Agent/Registrar'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
exercise 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 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 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
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,
and the other Certificates of this Series, additionally are payable
from and secured by certain surplus revenues (not to exceed $10,000
in aggregate amount) derived by the Issuer from the ownership and
operation of the City's 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 right 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
is
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)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
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.
NATIONSBANK OF TEXAS, N.A.,
DALLAS, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative
19
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:
NOTICE: This signature must be
guaranteed by a member of the
New York Stock Exchange or a
commercial bank or trust
company.
Registered Owner
NOTICE: This signature must
correspond with the name of
the Registered Owner appear-
ing on the face of this Cer-
tificate.
Section 8. (a) 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
20
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.
(b) APPROPRIATION. There is hereby appropriated from surplus
funds of the Issuer now on hand and lawfully available for such
purpose, and shall be deposited into the Interest and Sinking Fund
for the Certificates, the amount of money required to pay the
interest coming due on the Certificates on July 1, 1994. The money
thus appropriated and deposited shall be used for no purpose other
than to pay said interest on the Certificates. The appropriate
officials of the Issuer are hereby authorized and directed to do
any and all things necessary or convenient to accomplish said
appropriation and deposit.
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 from 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
21
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-A, Series 1989,
Series 1989-A, Series 1991, Series 1992, and Series 1993, 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-A,
Series 1989, Series 1989-A, Series 1991, Series 1992, or series
1993.
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 from 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,
22
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, theft, 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
23
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 Issuina 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 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
24
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;
(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 141(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(b)(2)
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 of a 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 1.103-13(b)(12) of
the Treasury Regulations, and
25
(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
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 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 Certificates) an amount that is at least equal
to 90 percent of the "Excess Earnings", within the meaning of
section 148(f) 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) 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 Certificates.
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.
Section 14. SALE OF INITIAL CERTIFICATE. The Initial
Certificate is hereby sold and shall be delivered to FIRST
SOUTHWEST COMPANY, 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
26
Official Statement dated October 19, 1993, 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 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 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" 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
hereof (the "DTC Participants"). So long as each Certificate 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
27
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
hereinafter 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 rights
of the beneficial 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
requirement described above, and to permit the Certificates to be
registered in the name of any owner. If the Issuer exercises its
right 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
initial establishment of the foregoing book-entry system with DTC,
if for any reason any of the originally 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 Official 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 1993-A,
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 2ND DAY
OF NOVEMBER, 1993, 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 Margaret Smith, Mayor Pro Tern
Harold Perry Euline Brock
Jack Miller Mark Chew
Jerry Cott
and all of said persons were present, except the following absentees: None, 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 1993-A,
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:
NOES: 1
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 2nd day of November, 1993.
City Secretary Mayor
(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
Bond Attorneys