1993-006ORDINANCE NO. 93-0i,
ORDINANCE
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON
CERTIFICATES OF OBLIGATION, SERIES 19931 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 $1,450,000, FOR THE PURPOSE
OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGA-
TIONS INCURRED (1) PURSUANT TO CONTRACTS FOR THE CONSTRUCTION
OF PUBLIC WORKS, TO-WIT: RENOVATING A CITY SWIMMING POOL; AND
(2) PURSUANT TO CONTRACTS FOR THE PURCHASE OF THE FOLLOWING
EQUIPMENT FOR CITY USE: THREE REFUSE COLLECTION TRUCKS, A
BRUSH COLLECTION TRUCK, A STAKE BED TRUCK, THREE FIRE FIGHTING
TRUCKS, AN AMBULANCE, A FOUR DOOR SEDAN, AND TWELVE POLICE
CARS; 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 cert-
ificate issued pursuant to this Ordinance shall be designated:
"CITY OF DENTON CERTIFICATE OF OBLIGATION, SERIES 199311, and
initially there shall be issued, sold, and delivered hereunder
a single fully registered certificate, without interest cou-
pons, 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
1
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, MATURI-
TIES, 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 Febru-
ary 1, 1993, in the denomination and aggregate principal amount
of $1,450,000, numbered R-1, payable in annual installments of
principal to the initial registered owner thereof, to-wit:
A. G. EDWARDS & SONS, INC.,
or to the registered assignee or assignees of said Certificate
or any portion or portions thereof (in each case, the "regis-
tered 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 Certif-
icate of the Comptroller of Public Accounts of the State of
Texas to be endorsed on the initial Certificate, shall be
substantially as follows:
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FORM OF INITIAL CERTIFICATE
NO. R-1 $1,450,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 1993
THE CITY OF DENTON, in Denton County, Texas (the "Issu-
er"), being a political subdivision of the State of Texas,
hereby promises to pay to
A. G. EDWARDS & SONS, INC.,
or to the registered assignee or assignees of this Certificate
or any portion or portions hereof (in each case, the "regis-
tered owner") the aggregate principal amount of
$1,450,000
(ONE MILLION FOUR HUNDRED FIFTY 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
1994
$280,000
1999
$80,000
1995
285,000
2000
80,000
1996
285,000
2001
801000
1997
100,000
2002
801000
1998
1000000
2003
80,000
and to pay interest, calculated on the basis of a 360-day year
composed of twelve 30-day months, from the date of this Certif-
icate hereinafter stated, on the balance of each such install-
ment of principal, respectively, from time to time remaining
unpaid, at the rates as follows:
5.00% per annum
4.80% per annum
4.20% per annum
4.50% per annum
4.70% per annum
4.90% per annum
5.00% per annum
5.10% per annum
5.20% per annum
5.30% per annum
on
on
on
on
on
on
on
on
on
on
the
the
the
the
the
the
the
the
the
the
above installment
above installment
above installment
above installment
above installment
above installment
above installment
above installment
above installment
above installment
due
due
due
due
due
due
due
due
due
due
in 1994
in 1995
in 1996
in 1997
in 1998
in 1999
in 2000
in 2001
in 2002
in 2003
3
with said interest being payable on JANUARY 1, 1994, and semi-
annually on each JULY 1 and JANUARY 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 install-
ments of principal and the interest on this Certificate are
payable to the registered owner hereof through the services of
NATIONSBANK OF TEXAS, N.A., FORT WORTH, 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 Registra-
tion 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 avail-
able 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 inter-
est 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
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OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGA-
TIONS INCURRED (1) PURSUANT TO CONTRACTS FOR THE CONSTRUCTION
OF PUBLIC WORKS, TO-WIT: RENOVATING A CITY SWIMMING POOL; AND
(2) PURSUANT TO CONTRACTS FOR THE PURCHASE OF THE FOLLOWING
EQUIPMENT FOR CITY USE: THREE REFUSE COLLECTION TRUCKS, A
BRUSH COLLECTION TRUCK, A STAKE BED TRUCK, THREE FIRE FIGHTING
TRUCKS, AN AMBULANCE, A FOUR DOOR SEDAN, AND TWELVE POLICE
CARS; 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.
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 assign-
ment, 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 trans-
ferred 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 Certifi-
cate 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 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.
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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 aggre-
gate 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 certifi-
cate 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 de-
livered 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 Certifi-
cate 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.
6
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 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 FEBRUARY 1, 1993.
City Secretary,
City of Denton, Texas
Mayor,
City of Denton, Texas
(CITY SEAL)
7
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 CERTIFI-
CATES. 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., FORT WORTH, 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 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
8
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 princi-
pal 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, trans-
ferred, 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 repre-
sentative to evidence an assignment thereof. Upon surrender of
any Certificates or any portion or portions thereof for trans-
fer of registration, an authorized representative of the Paying
9
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 trans-
ferred, 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 ex-
change of Certificates by any registered owner of a Certifi-
cate. 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; Authenti-
cation. 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
10
Certificate at the principal corporate trust office of the
Paying Agent/Registrar, together with a written request there-
for 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
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 as-
signed 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
11
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 conver-
sion 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.
NATIONSBANK OF TEXAS, N.A
FORT WORTH, 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 Certif-
icate 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 Certif-
icate 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
12
and strength. Pursuant to Vernon's Ann. Tex. Civ. St. Art.
717k-6, and particularly Section 6 thereof, the duty of conver-
sion 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 Authentica-
tion 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 Certif-
icate which originally was issued pursuant to this Ordinance,
approved by the Attorney General, and registered by the Comp-
troller 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 Certif-
icates 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 pay-
able, all as provided, and in the manner required or indicated,
in the FORM OF SUBSTITUTE CERTIFICATE set forth in this Ordi-
nance.
(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 conver-
sion 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
13
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 Certifi-
cates 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 Regis-
tration Books (or a copy thereof), along with all other perti-
nent 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 perform-
ing as such, each Paying Agent/Registrar shall be deemed to
have agreed to the provisions of this Ordinance, and a cer-
tified 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 replace-
ment 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
NO. UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 1993
14
ORIGINAL ISSUE
INTEREST RATE MATURITY DATE DATE CUSIP NO.
February 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 FEBRUARY 1,
1993, to the maturity date specified above, at the interest
rate per annum specified above; with interest being payable on
JANUARY 11 1994, and semiannually on each JULY 1 and JANUARY 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 authentica-
tion, 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., FORT WORTH, TEXAS, which is the "Paying Agent/Registrar"
for this Certificate. The payment of interest on this Certifi-
cate shall be made by the Paying Agent/Registrar to the regis-
tered 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
15
at the close of business on the 15th day of the month next
preceding each such date (the "Record Date") on the Registra-
tion 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 regis-
tered 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 inter-
est 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 FEBRUARY 1, 1993, authorized in accordance with
the Constitution and laws of the State of Texas in the princ-
ipal amount of $1,450,000, FOR THE PURPOSE OF PAYING ALL OR A
PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS INCURRED (1)
PURSUANT TO CONTRACTS FOR THE CONSTRUCTION OF PUBLIC WORKS,
TO-WIT: RENOVATING A CITY SWIMMING POOL; AND (2) PURSUANT TO
CONTRACTS FOR THE PURCHASE OF THE FOLLOWING EQUIPMENT FOR CITY
USE: THREE REFUSE COLLECTION TRUCKS, A BRUSH COLLECTION TRUCK,
A STAKE BED TRUCK, THREE FIRE FIGHTING TRUCKS, AN AMBULANCE, A
FOUR DOOR SEDAN, AND TWELVE POLICE CARS; 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.
THIS CERTIFICATE OR ANY PORTION OR PORTIONS HEREOF IN ANY
INTEGRAL MULTIPLE OF $5,000 may be assigned and shall be trans-
ferred 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
16
signatures satisfactory to the Paying Agent/Registrar, evidenc-
ing 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 Certifi-
cates), 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 Certifi-
cate 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 Certifi-
cate 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 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 Agent/Registrar's standard or customary fees and
17
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 Certifi-
cates 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.
18
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 facsimile signature of the Mayor of the
Issuer and countersigned with the 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.
(facsimile signature)
City Secretary,
City of Denton, Texas
(facsimile signature)
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.,
FORT WORTH, 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
19
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 based on the latest approved tax rolls of the Issuer, with
20
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 January
11 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 neces-
sary or convenient to accomplish said appropriation and depos-
it.
Section 9. SURPLUS REVENUES. The Certificates addi-
tionally 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 main-
tenance 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 here-
after 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 depos-
ited 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
21
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 Reve-
nues 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, and
Series 1992, 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 princi-
pal and/or interest on said City of Denton Certificates of
obligation, series 1987-A, Series 1989, Series 1989-A, Series
1991, or Series 1992.
Section 10. DEFEASANCE OF CERTIFICATES. (a) Any Certif-
icate 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 deposit-
ing 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 rein-
vestment, 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
22
principal and interest shall be payable solely from such money
or Government Obligations.
(b) Any moneys so deposited with the Paying Agent/Regis-
trar may at the written direction of the Issuer also be in-
vested 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, 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 Certifi-
cates 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 DE-
STROYED 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. Applica-
tion 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,
23
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 Certifi-
cate 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 proportion-
ately 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 author-
ity 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 inves-
tigation, examination, and approval by the Attorney General of
the State of Texas, and its registration by the Comptroller of
24
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 Certifi-
cates 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 includ-
able 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 "disproportion-
ate", within the meaning of section 141(b)(3) of the Code,
to the governmental use;
25
(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 pro-
ceeds 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
(3) amounts deposited in any reasonably re-
quired 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 Certifi-
cates 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 (relat-
ing to advance refundings);
26
(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 princi-
pal 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 Certifi-
cates, 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
A. G. Edwards & Sons, Inc., for cash for the par value thereof
and accrued interest thereon to date of delivery, plus a
premium of $ - 0 - . It is hereby officially found, deter-
mined, 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
January 7, 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
27
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 re-
spects, 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 earn-
ings 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 incorpo-
rated 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 "clear-
ing agency" registered under Section 17A of the federal Securi-
ties 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 Certif-
icate 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
28
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 pursu-
ant 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 Certif-
icates 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 Partic-
ipants, 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 termi-
nate 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 deliv-
ered 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
29
City shall cause the expenses of issuance of the Certificates
to be paid from the proceeds of sale of the Initial Certifi-
cate. 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.
30
CERTIFICATE FOR
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 1993,
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
REGULAR MEETING
at the Municipal Building
of the duly constituted
Council, to-wit:
Jennifer K. Walters,
City Secretary
Harold Perry
Margaret Smith
Mark Chew
of said City convened in
ON THE 19TH DAY OF JANUARY, 1993,
g (City Hall), and the roll was called
officers and members of said City
Bob Castleberry, Mayor
Jane Hopkins, Mayor Pro Tem
Euline Brock
Jack Miller
and all of said ersonent, except the following
absentees: Vwre zes ,
thus constitut' 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,
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: O
ABSTENTIONS: O
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 Certifi-
cate; 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
Vernon's Ann. Tex. Civ. St. Article 6252-17.
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 Ordi-
nance for all purposes.
SIGNED AND EAL D the 19th day o~/~uary~3.
-Ojn,r,/ vnl)~6m -r-
ty 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 A orney
CAS,-sue q~;
Bond Attorneys