1993-102ORDINANCE NO.9.3-Ia9~
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
CITY OF DENTON UTILITY SYSTEM REVENUE REFUNDING BONDS,
SERIES 1993, AND APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING THERETO
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
bonds:
WHEREAS, the City of Denton, Texas, heretofore has duly issued the following revenue
City of Denton Utility System Revenue Refunding Bonds, Series 1983, dated March 1, 1983
scheduled to mature on December 1, 1994 through December 1, 2007, aggregating $7,910,000
(and being all of the outstanding bonds of said Series scheduled to mature on and after
December 1, 1994);
City of Denton Utility System Revenue Refunding Bonds, Series 1987, dated January 1, 1987
scheduled to mature on December 1 of each of the years 1997 through 2009, aggregating
$13,910,000 (and being all of the outstanding bonds of said Series scheduled to mature on and
after December 1, 1997);
City of Denton Utility System Revenue Bonds, Series 1988, dated August 1, 1988 scheduled
to mature on December 1 of each of the years 1999 through 2008, aggregating $1,750,000
(and being all of the outstanding bonds of said Series scheduled to mature on and after
December 1, 1999);
City of Denton Utility System Revenue Bonds, Series 1989, dated October 1, 1989 scheduled
to mature on December 1 of each of the years 2000 through 2005; aggregating $6,600,000,
(and being all of the outstanding bonds of said Series scheduled to mature on and after
December 1, 2000); and
(collectively, the "Outstanding Bonds"), in the aggregate principal amount of $30,170,000).
WHEREAS, the City Council of the City of Denton deems it necessary and advisable to
refund the Outstanding Bonds, and to authorize, issue, and deliver the additional bonds hereinafter
described; and
WHEREAS, the bonds hereinafter authorized are to be issued, sold, and delivered pursuant
to Vernon's Ann. Tex. Civ. St. Article 717k, the City's Home Rule Charter, and other applicable laws.
THAT.
THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
Section 1. AMOUNT AND PURPOSE OF THE BONDS. (a) The bond or bonds of the
City of Denton, Texas (the "Issuer") are hereby authorized to be issued and delivered in the aggregate
principal amount of $27,085,000 FOR THE PURPOSE OF OBTAINING FUNDS REQUIRED TO
REFUND $24,440,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF DENTON
UTII-ITY SYSTEM REVENUE BONDS, AND SHALL BE DESIGNATED "CITY OF DENTON
UTILITY SYSTEM REVENUE REFUNDING BOND, SERIES 1993-A" (THE "SERIES 1993-A
BOND").
(b) The bond or bonds of the City of Denton, Texas (the "Issuer") are hereby authorized to
be issued and delivered in the aggregate principal amount of $6,045,000 FOR THE PURPOSE OF
OBTAINING FUNDS REQUIRED TO REFUND $5,730,000 IN AGGREGATE PRINCIPAL
AMOUNT OF CITY OF DENTON UTILITY SYSTEM REVENUE BONDS, AND SHALL BE
DESIGNATED "CITY OF DENTON UTILITY SYSTEM REVENUE REFUNDING BOND,
TAXABLE SERIFS 1993-B" (THE "TAXABLE SERIES 1993-B BOND").
Section 2. DESCRIPTION OF THE BONDS. (a) With respect to the Series 1993-A Bond,
initially there shall be issued, sold, and delivered hereunder a single fully registered bond, without
interest coupons, payable in installments of principal (the "Initial Series 1993-A Bond"), but the Initial
Series 1993-A Bond may be assigned and transferred and/or converted into and exchanged for a like
aggregate principal amount of fully registered bonds, without interest coupons, having serial
maturities, and in the denomination or denominations of $5,000 or any integral multiple of $5,000,
all in the manner hereinafter provided. The term "Series 1993-A Bonds" as used in this Ordinance
shall mean and include collectively the Initial Series 1993-A Bond and all substitute bonds exchanged
therefor, as well as all other substitute bonds and replacement bonds issued pursuant hereto, and the
term "Series 1993-A Bond" shall mean any of the Series 1993-A Bonds.
(b) With respect to the Taxable Series 1993-B Bond, initially there shall be issued, sold, and
delivered hereunder a single fully registered bond, without interest coupons, payable in installments
of principal (the "Initial Taxable Series 1993-B Bond"), but the Initial Taxable Series 1993-B Bond
may be assigned and transferred and/or converted into and exchanged for a like aggregate principal
amount of fully registered bonds, without interest coupons, having serial maturities, and in the
denomination or denominations of $5,000 or any integral multiple of $5,000, all in the manner herein-
after provided. The term "Taxable Series 1993-B Bonds" as used in this Ordinance shall mean and
include collectively the Initial Taxable Series 1993-B Bond and all substitute bonds exchanged
therefor, as well as all other substitute bonds and replacement bonds issued pursuant hereto, and the
term "Taxable Series 1993-B Bond" shall mean any of the Taxable Series 1993-B Bonds.
(c) the term "Initial Bonds" as used in this Ordinance shall mean and include collectively the
Initial Series 1993-A Bond and the Taxable Series 1993-B Bond, the term "Bonds" as used in this
Ordinance shall mean and include collectively the Initial Bonds and all substitute bonds exchanged
therefor, as well as all other substitute bonds and replacement bonds issued pursuant hereto, and the
term "Bond" shall mean any of the Bonds.
Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL BONDS.
(a) (i) The Initial Series 1993-A Bond is hereby authorized to be issued, sold, and delivered
hereunder as a single fully registered Bond, without interest coupons, dated JUNE 1, 1993, in the
denomination and aggregate principal amount of $27,085,000, numbered R-1, payable in annual
installments of principal to the initial registered owner thereof, to-wit:
RAUSCHER PIERCE REFSNES, INC.,
as representative of the Underwriters
2
or to the registered assignee or assignees of said Series 1993-A Bond or any portion or portions
thereof (in each case, the "registered owner"), with the annual installments of principal of the Initial
Bond to be payable on the dates, respectively, and in the principal amounts, respectively, stated in
the FORM OF INITIAL SERIFS 1993-A BOND set forth in this Ordinance.
(ii) The Initial Taxable Series 1993-B Bond is hereby authorized to be issued, sold, and
delivered hereunder as a single fully registered Bond, without interest coupons, dated JUNE 1, 1993,
in the denomination and aggregate principal amount of $6,045,000, numbered R-1, payable in annual
installments of principal to the initial registered owner thereof, to-wit:
RAUSCHER PIERCE REFSNES, INC.,
as representative of the Underwriters
or to the registered assignee or assignees of said Taxable Series 1993-B Bond or any portion or
portions thereof (in each case, the "registered owner"), with the annual installments of principal of
the Initial Bond to be payable on the dates, respectively, and in the principal amounts, respectively,
stated in the FORM OF INITIAL TAXABLE SERIES 1993-B BOND set forth in this Ordinance.
(b) The Initial Bonds (i) may and shall be prepaid or redeemed prior to the respective
scheduled due dates of installments of principal thereof, (ii) may be assigned and transferred, (iii) may
be converted and exchanged for other Bonds, (iv) shall have the characteristics, and (v) shall be
signed and sealed, and the principal of and interest on the Initial Bonds shall be payable, all as
provided, and in the manner required or indicated, in the FORMS OF INITIAL BONDS set forth
in this Ordinance.
Section 4. INTEREST. The unpaid principal balance of the Initial Bonds shall bear interest
from the date of each Initial Bond to the respective scheduled due dates, or to the respective dates
of prepayment or redemption, of the installments of principal of the Initial Bonds, and said interest
shall be payable, all in the manner provided and at the rates and on the dates stated in the FORMS
OF INITIAL BONDS set forth in this Ordinance.
Section 5. FORMS OF INITIAL BONDS. The forms of the Initial Bonds, including the
form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be
endorsed on the Initial Bonds, shall be substantially as follows:
FORM OF INITIAL SERIES 1993-A BOND
NO. R-1
$27.085.000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON UTU.ITY SYSTEM REVENUE REFUNDING BOND
SERIES 1993-A
THE CITY OF DENTON, in Denton County, Texas (the "Issuer" or the "City"), being a
political subdivision of the State of Texas, hereby promises to pay to
RAUSCHER PIERCE REFSNES, INC.,
as representative of the Underwriters
3
or to the registered assignee or assignees of this Bond or any portion or portions hereof (in each
case, the "registered owner") the aggregate principal amount of
$27,085,000
(TWENTY SEVEN MILLION EIGHTY FIVE THOUSAND DOLLARS)
in annual installments of principal due and payable on DECEMBER 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
1993
$ 350,000
2002
$ 2,600,000
1994
640,000
2003
2,530,000
1995
640,000
2004
2,465,000
1996
615,000
2005
2,355,000
1997
1,760,000
2006
1,195,000
1998
1,720,000
2007
1,230,000
1999
1,770,000
2008
1,020,000
2000
2,730,000
2009
810,000
2001
2,655,000
and to pay interest, from the date of this Bond hereinafter stated, on the balance of each such
installment of principal, respectively, from time to time remaining unpaid, at the rates as follows:
2.500/6 per annum on the above installment due in
1993
3.00% per annum on the above installment due in
1994
3.55% per annum on the above installment due in
1995
3.90% per annum on the above installment due in
1996
4.20% per annum on the above installment due in
1997
4.25% per annum on the above installment due in
1998
4.40% per annum on the above installment due in
1999
4.60% per annum on the above installment due in
2000
4.80% per annum on the above installment due in
2001
5.00% per annum on the above installment due in
2002
5.00% per annum on the above installment due in
2003
5.10% per annum on the above installment due in
2004
5a5% per annum on the above installment due in
2005
5.30% per annum on the above installment due in
2006
5.40% per annum on the above installment due in
2007
5.40% per annum on the above installment due in
2008
5.40% per annum on the above installment due in
2009
with said interest being payable on DECEMBER 1, 1993, and semiannually on each JUNE 1 and
DECEMBER 1 thereafter while this Bond or any portion hereof is outstanding and unpaid. Said
interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months.
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THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Bond are
payable in lawful money of the United States of America, without exchange or collection charges.
The installments of principal and the interest on this Bond are payable to the registered owner hereof
through the services of NATIONSBANK OF TEXAS, N.A., DALLAS, TEXAS, which is the "Paying
Agent/Registrar" for this Bond. Payment of all principal of and interest on this Bond shall be made
by the Paying Agent/Registrar to the registered owner hereof on each principal and/or 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 Bond (the
"Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter
provided; and such check shall be sent by the Paying Agent/Registrar by United States mail, first-class
postage prepaid, on each such principal and/or interest payment date, to the registered owner hereof,
at the address of the registered owner, as it appeared 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 Bond that on or
before each principal and/or interest payment date for this Bond it will make available to the Paying
Agent/Registrar, from the "Interest and Sinking Fund" maintained pursuant to the Bond Ordinance,
the amounts required to provide for the payment, in immediately available funds, of all principal of
and interest on this Bond, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for such
payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day
on which banking institutions are authorized to close; and payment on such date shall have the same
force and effect as if made on the original date payment was due.
THIS BOND has been authorized in accordance with the Constitution and laws of the State
of Texas FOR THE PURPOSE OF OBTAINING FUNDS REQUIRED TO REFUND $24,440,000
IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF DENTON UTILITY SYSTEM
REVENUE BONDS.
ON DECEMBER 1, 2002, or on any date whatsoever thereafter, the unpaid installments of
principal of this Bond may be prepaid or redeemed prior to their scheduled due dates, at the option
of the Issuer, with funds derived from any available source, as a whole, or in part, and, if in part, the
particular portion of this Bond to be prepaid or redeemed shall be selected and designated by the
Paying Agent/Registrar (provided that a portion of this Bond may be redeemed only in an integral
multiple of $5,000), at the prepayment or redemption price of the par or principal amount thereof,
plus accrued interest to the date fixed for prepayment or redemption.
AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a written
notice of such prepayment or redemption shall be mailed by the Paying Agent/Registrar to the
registered owner hereof. By the date fixed for any such prepayment or redemption due provision
shall be made by the Issuer with the Paying Agent/Registrar for the payment of the required prepay-
ment or redemption price for this Bond or the portion hereof which is to be so prepaid or redeemed,
plus accrued interest thereon to the date fixed for prepayment or redemption. If such written notice
of prepayment or redemption is given, and if due provision for such payment is made, all as provided
above, this Bond, or the portion thereof which is to be so prepaid or redeemed, thereby automatically
shall be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear interest
after the date fixed for its prepayment or redemption, and shall not be regarded as being outstanding
except for the right of the registered owner to receive the prepayment or redemption price plus
5
accrued interest to the date fixed for prepayment or redemption from the Paying Agent/Registrar out
of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration
Books all such prepayments or redemptions of principal of this Bond or any portion hereof.
THIS BOND, to the extent of the unpaid or unredeemed principal balance hereof, or any
unpaid and unredeemed portion hereof in any integral multiple of $5,000, may be assigned by the
initial registered owner hereof and shall be transferred only in the Registration Books of the Issuer
kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms
and conditions set forth in the Bond Ordinance. Among other requirements for such transfer, this
Bond must be presented and surrendered to the Paying Agent/Registrar for cancellation, together
with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the
Paying Agent/Registrar, evidencing assignment by the initial registered owner of this Bond, or any
portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees in whose
name or names this Bond or any such portion or portions hereof is or are to be transferred and
registered Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar
may be used to evidence the assignment of this Bond or any such portion or portions hereof by the
initial registered owner hereof A new bond or bonds payable to such assignee or assignees (which
then will be the new registered owner or owners of such new Bond or Bonds) or to the initial
registered owner as to any portion of this Bond which is not being assigned and transferred by the
initial registered owner, shall be delivered by the Paying Agent/Registrar in conversion of and
exchange for this Bond or any portion or portions hereof, but solely in the form and manner as
provided in the next paragraph hereof for the conversion and exchange of this Bond or any portion
hereof. The registered owner of this Bond shall be deemed and treated by the Issuer and the Paying
Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of
liability upon this Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar
shall not be affected by any notice to the contrary.
AS PROVIDED above and in the Bond Ordinance, this Bond, to the extent of the unpaid
or unredeemed principal balance hereof, may be converted into and exchanged for a like aggregate
principal amount of fully registered bonds, without interest coupons, payable to the assignee or
assignees duly designated in writing by the initial registered owner hereof, or to the initial registered
owner as to any portion of this Bond which is not being assigned and transferred by the initial
registered owner, in any denomination or denominations in any integral multiple of $5,000 (subject
to the requirement hereinafter stated that each substitute bond issued in exchange for any portion
of this Bond shall have a single stated principal maturity date), upon surrender of this Bond to the
Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in
the Bond Ordinance. If this Bond or any portion hereof is assigned and transferred or converted
each bond issued in exchange for any portion hereof shall have a single stated principal maturity date
corresponding to the due date of the installment of principal of this Bond or portion hereof for which
the substitute bond is being exchanged, and shall bear interest at the rate applicable to and borne by
such installment of principal or portion thereof. Such bonds, respectively, shall be subject to
redemption prior to maturity on the same dates and for the same prices as the corresponding
installment of principal of this Bond or portion hereof for which they are being exchanged No such
bond shall be payable in installments, but shall have only one stated principal maturity date. AS
PROVIDED IN THE BOND ORDINANCE, THIS BOND IN ITS PRESENT FORM MAY BE
ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more
assignees, but the bonds issued and delivered in exchange for this Bond or any portion hereof may
be assigned and transferred, and converted, subsequently, as provided in the Bond Ordinance. The
Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring,
converting, and exchanging this Bond or any portion thereof, but the one requesting such transfer,
6
conversion, and exchange shall pay any taxes or governmental charges required to be paid with
respect thereto. The Paying Agent/Registrar shall not be required to make any such assignment,
conversion, or exchange (i) during the period commencing with the close of business on any Record
Date and ending with the opening of business on the next following principal or interest payment
date, or, (ii) with respect to any Bond or portion thereof called for prepayment or redemption prior
to maturity, within 45 days prior to its prepayment or redemption date.
IN THE EVENT any Paying Agent/Registrar for this Bond is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owner of this Bond.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
authorized, issued, sold, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law; that this Bond is a special
obligation of the Issuer, secured by and payable, together with other bonds, from a first lien on and
pledge of the "Pledged Revenues", which include initially the "Net Revenues of the System" as such
terms are defined in the Bond Ordinance, with the System consisting of the City's entire combined
waterworks, sewer, and electric light and power system.
THE ISSUER has reserved the right, subject to the restrictions stated in the Bond Ordinance,
to issue Additional Bonds payable from and secured by a first hen on and pledge of the "Pledged
Revenues" on a parity with this Bond.
THE ISSUER also has reserved the right, subject to the restrictions stated in the Bond
Ordinance, to amend the Bond Ordinance with the approval of the holders or owners of fifty-one
percent in principal amount of all outstanding bonds which are secured by and payable from a fast
hen on and pledge of the Pledged Revenues.
THE REGISTERED OWNER hereof shall never have the right to demand payment of this
Bond or the interest hereon out of any funds raised or to be raised by taxation or from any source
whatsoever other than specified in the Bond Ordinance.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that the
terms and provisions of this Bond and the Bond Ordinance constitute a contract between the
registered owner hereof and the Issuer.
IN Vi/ NESS WHEREOF, the Issuer has caused this Bond to be signed with the manual
signature of the Mayor of the Issuer and countersigned with the manual signature of the City
Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed on this Bond,
and has caused this Bond to be dated JUNE 1, 1993.
City Secretary,
City of Denton, Texas
Mayor,
City of Denton, Texas
7
(CITY SEAL)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
8
FORM OF INITIAL TAXABLE SERIES 1993-B BOND
NO. R-1
$6,045,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON UTILITY SYSTEM REVENUE REFUNDING BOND
TAXABLE SERIES 1993-B
THE CITY OF DENTON, in Denton County, Texas (the "Issuer" or the "City"), being a
political subdivision of the State of Texas, hereby promises to pay to
RAUSCHER PIERCE REFSNES, INC.,
as representative of the Underwriters
or to the registered assignee or assignees of this Bond or any portion or portions hereof (in each
case, the "registered owner") the aggregate principal amount of
$6,045,000
(SIX MILLION FORTY FIVE THOUSAND DOLLARS)
in annual installments of principal due and payable on DECEMBER 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
1993
$ 160,000
2001
$ 150,000
1994
910,000
2002
165,000
1995
885,000
2003
165,000
1996
800,000
2004
165,000
1997
655,000
2005
195,000
1998
635,000
2006
195,000
1999
405,000
2007
385,000
2000
175,000
and to pay interest, from the date of this Bond hereinafter stated, on the balance of each such
installment of principal, respectively, from time to time remaining unpaid, at the rates as follows:
3.55% per annum on the above installment due in
1993
3.90% per annum on the above installment due in
1994
4.50% per annum on the above installment due in
1995
4.90% per annum on the above installment due in
1996
5.30% per annum on the above installment due in
1997
5.70% per annum on the above installment due in
1998
5.90% per annum on the above installment due in
1999
6.20% per annum on the above installment due in
2000
6.40% per annum on the above installment due in
2001
6.50% per annum on the above installment due in
2002
9
6.500/c per annum on the above installment due in 2003
6.50% per annum on the above installment due in 2004
6.75% per annum on the above installment due in 2005
6.75% per annum on the above installment due in 2006
6.75% per annum on the above installment due in 2007
with said interest being payable on DECEMBER 1, 1993, and semiannually on each DECEMBER
1 and JUNE 1 thereafter while this Bond or any portion hereof is outstanding and unpaid. Said
interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Bond are
payable in lawful money of the United States of America, without exchange or collection charges.
The installments of principal and the interest on this Bond are payable to the registered owner hereof
through the services of NATIONSBANK OF TEXAS, N.A., DALLAS, TEXAS, which is the "Paying
Agent/ Registrar" for this Bond. Payment of all principal of and interest on this Bond shall be made
by the Paying Agent/ Registrar to the registered owner hereof on each principal and/or 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 Bond (the
"Bond Ordinance) to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter
provided; and such check shall be sent by the Paying Agent/Registrar by United States mail, first-class
postage prepaid, on each such principal and/or interest payment date, to the registered owner hereof,
at the address of the registered owner, as it appeared 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 Bond that on or
before each principal and/or interest payment date for this Bond it will make available to the Paying
Agent/Registrar, from the "Interest and Sinking Fund" maintained pursuant to the Bond Ordinance,
the amounts required to provide for the payment, in immediately available funds, of all principal of
and interest on this Bond, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for such
payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day
on which banking institutions are authorized to close; and payment on such date shall have the same
force and effect as if made on the original date payment was due.
THIS BOND has been authorized in accordance with the Constitution and laws of the State
of Texas FOR THE PURPOSE OF OBTAINING FUNDS REQUIRED TO REFUND $5,730,000
IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF DENTON UTILITY SYSTEM
REVENUE BONDS.
ON DECEMBER 1, 2002, or on any date whatsoever thereafter, the unpaid installments of
principal of this Bond may be prepaid or redeemed prior to their scheduled due dates, at the option
of the Issuer, with funds derived from any available source, as a whole, or in part, and, if in part, the
particular portion of this Bond to be prepaid or redeemed shall be selected and designated by the
Paying Agent/Registrar (provided that a portion of this Bond may be redeemed only in an integral
multiple of $5,000), at the prepayment or redemption price of the par or principal amount thereof,
plus accrued interest to the date fixed for prepayment or redemption.
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AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a written
notice of such prepayment or redemption shall be mailed by the Paying Agent/Registrar to the
registered owner hereof. By the date fixed for any such prepayment or redemption due provision
shall be made by the Issuer with the Paying Agent/Registrar for the payment of the required prepay-
ment or redemption price for this Bond or the portion hereof which is to be so prepaid or redeemed,
plus accrued interest thereon to the date fixed for prepayment or redemption. If such written notice
of prepayment or redemption is given, and if due provision for such payment is made, all as provided
above, this Bond, or the portion thereof which is to be so prepaid or redeemed, thereby automatically
shall be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear interest
after the date fixed for its prepayment or redemption, and shall not be regarded as being outstanding
except for the right of the registered owner to receive the prepayment or redemption price plus
accrued interest to the date fixed for prepayment or redemption from the Paying Agent/Registrar out
of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration
Books all such prepayments or redemptions of principal of this Bond or any portion hereof.
THIS BOND, to the extent of the unpaid or unredeemed principal balance hereof, or any
unpaid and unredeemed portion hereof in any integral multiple of $5,000, may be assigned by the
initial registered owner hereof and shall be transferred only in the Registration Books of the Issuer
kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms
and conditions set forth in the Bond Ordinance. Among other requirements for such transfer, this
Bond must be presented and surrendered to the Paying Agent/Registrar for cancellation, together
with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the
Paying Agent/Registrar, evidencing assignment by the initial registered owner of this Bond, or any
portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees in whose
name or names this Bond or any such portion or portions hereof is or are to be transferred and
registered Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar
may be used to evidence the assignment of this Bond or any such portion or portions hereof by the
initial registered owner hereof. A new bond or bonds payable to such assignee or assignees (which
then will be the new registered owner or owners of such new Bond or Bonds) or to the initial
registered owner as to any portion of this Bond which is not being assigned and transferred by the
initial registered owner, shall be delivered by the Paying Agent/Registrar in conversion of and
exchange for this Bond or any portion or portions hereof; but solely in the form and manner as
provided in the next paragraph hereof for the conversion and exchange of this Bond or any portion
hereof. The registered owner of this Bond shall be deemed and treated by the Issuer and the Paying
Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of
liability upon this Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar
shall not be affected by any notice to the contrary.
AS PROVIDED above and in the Bond Ordinance, this Bond, to the extent of the unpaid
or unredeemed principal balance hereof, may be converted into and exchanged for a like aggregate
principal amount of fully registered bonds, without interest coupons, payable to the assignee or
assignees duly designated in writing by the initial registered owner hereof; or to the initial registered
owner as to any portion of this Bond which is not being assigned and transferred by the initial
registered owner, in any denomination or denominations in any integral multiple of $5,000 (subject
to the requirement hereinafter stated that each substitute bond issued in exchange for any portion
of this Bond shall have a single stated principal maturity date), upon surrender of this Bond to the
Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in
the Bond Ordinance. If this Bond or any portion hereof is assigned and transferred or converted
each bond issued in exchange for any portion hereof shall have a single stated principal maturity date
corresponding to the due date of the installment of principal of this Bond or portion hereof for which
11
the substitute bond is being exchanged, and shall bear interest at the rate applicable to and borne by
such installment of principal or portion thereof. Such bonds, respectively, shall be subject to
redemption prior to maturity on the same dates and for the same prices as the corresponding
installment of principal of this Bond or portion hereof for which they are being exchanged. No such
bond shall be payable in installments, but shall have only one stated principal maturity date. AS
PROVIDED INJUE BOND ORDINANCE, THIS BOND IN ITS PRESENT FORM MAY BE
ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more
assignees, but the bonds issued and delivered in exchange for this Bond or any portion hereof may
be assigned and transferred, and converted, subsequently, as provided in the Bond Ordinance. The
Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring,
converting, and exchanging this Bond or any portion thereof, but the one requesting such transfer,
conversion, and exchange shall pay any taxes or governmental charges required to be paid with
respect thereto. The Paying Agent/Registrar shall not be required to make any such assignment,
conversion, or exchange (i) during the period commencing with the close of business on any Record
Date and ending with the opening of business on the next following principal or interest payment
date, or, (ii) with respect to any Bond or portion thereof called for prepayment or redemption prior
to maturity, within 45 days prior to its prepayment or redemption date.
IN THE EVENT any Paying Agent/Registrar for this Bond is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owner of this Bond.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
authorized, issued, sold, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law; that this Bond is a special
obligation of the Issuer, secured by and payable, together with other bonds, from a first lien on and
pledge of the "Pledged Revenues", which include initially the "Net Revenues of the System" as such
terms are defined in the Bond Ordinance, with the System consisting of the City's entire combined
waterworks, sewer, and electric light and power system.
THE ISSUER has reserved the right, subject to the restrictions stated in the Bond Ordinance,
to issue Additional Bonds payable from and secured by a first lien on and pledge of the "Pledged
Revenues" on a parity with this Bond.
THE ISSUER also has reserved the right, subject to the restrictions stated in the Bond
Ordinance, to amend the Bond Ordinance with the approval of the holders or owners of fifty-one
percent in principal amount of all outstanding bonds which are secured by and payable from a first
lien on and pledge of the Pledged Revenues.
THE REGISTERED OWNER hereof shall never have the right to demand payment of this
Bond or the interest hereon out of any funds raised or to be raised by taxation or from any source
whatsoever other than specified in the Bond Ordinance.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that the
12
terms and provisions of this Bond and the Bond Ordinance constitute a contract between the
registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual
signature of the Mayor of the Issuer and countersigned with the manual signature of the City
Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed on this Bond,
and has caused this Bond to be dated JUNE 1, 1993.
City Secretary,
City of Denton, Texas
Mayor,
City of Denton, Texas
(CITY SEAL)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6. ADDITIONAL CHARACTERISTICS OF THE BONDS. Registration and
Transfer. (a) The Issuer shall keep or cause to be kept at the principal corporate trust office of
NATIONSBANK OF TEXAS, N.A., DALLAS, TEXAS (the "Paying Agent/Registrar") books or
records of the registration and transfer of the Bonds (the "Registration Books"), and the Issuer
hereby 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 Bond to which payments with respect
to the Bonds shall be mailed, as herein provided; but it shall be the duty of each registered owner
to notify the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and
such interest payments shall not be mailed unless such notice has been given. The Issuer shall have
the right to inspect the Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books
confidential and, unless otherwise required by law, shall not permit their inspection by any other
entity. Registration of each Bond may be transferred in the Registration Books only upon
presentation and surrender of such Bond to the Paying Agent/Registrar for transfer of registration
13
and cancellation, together with proper written instruments of assignment, in form and with guarantee
of signatures satisfactory to the Paying Agent/Registrar, evidencing (i) the assignment of the Bond,
or any portion thereof in any integral multiple of $5,000, to the assignee or assignees thereof, and
(ii) the right of such assignee or assignees to have the Bond or any such portion thereof registered
in the name of such assignee or assignees. Upon the assignment and transfer of any Bond or any
portion thereof, a new substitute Bond or Bonds of the same Series shall be issued in conversion and
exchange therefor in the manner herein provided. The Initial Bonds, to the extent of the unpaid or
unredeemed principal balance thereof, may be assigned and transferred by the initial registered owner
thereof once only, and to one or more assignees designated in writing by the initial registered owner
thereof. All Bonds issued and delivered in conversion of and exchange for the Initial Bond shall be
in any denomination or denominations of any integral multiple of $5,000 (subject to the requirement
hereinafter stated that each substitute Bond shall have a single stated principal maturity date), shall
be in the form prescribed for such Series in the FORMS OF SUBSTITUTE BONDS set forth in this
Ordinance, and shall have the characteristics, and may be assigned, transferred, and converted as
hereinafter provided. If the Initial Bond or any portion thereof is assigned and transferred or
converted the Initial Bond must be surrendered to the Paying Agent/Registrar for cancellation, and
each Bond issued in exchange for any portion of the Initial Bond shall have a single stated principal
maturity date, and shall not be payable in installments; and each such Bond shall have a principal
maturity date corresponding to the due date of the installment of principal or portion thereof for
which the substitute Bond is being exchanged; each such Bond shall bear interest at the single rate
applicable to and borne by such installment of principal or portion thereof for which it is being ex-
changed and each such Bond shall be of the same Series. If only a portion of the Initial Bond is
assigned and transferred, there shall be delivered to and registered in the name of the initial
registered owner substitute Bonds of the same Series in exchange for the unassigned balance of the
Initial Bond in the same manner as if the initial registered owner were the assignee thereof. If any
Bond or portion thereof other than the Initial Bond is assigned and transferred or converted each
Bond issued in exchange therefor shall be of the same Series, have the same principal maturity date
and bear interest at the same rate as the Bond for which it is exchanged A form of assignment shall
be printed or endorsed on each Bond, excepting the Initial Bonds, which shall be executed by the
registered owner or its duly authorized attorney or representative to evidence an assignment thereof.
Upon surrender of any Bonds or any portion or portions thereof for transfer of registration, an
authorized representative of the Paying Agent/Registrar shall make such transfer in the Registration
Books, and shall deliver a new fully registered substitute Bond or Bonds of the same Series, having
the characteristics herein descnbed, payable to such assignee or assignees (which then will be the
registered owner or owners of such new Bond or Bonds), or to the previous registered owner in case
only a portion of a Bond is being assigned and transferred, all in conversion of and exchange for said
assigned Bond or Bonds or any portion or portions thereof, in the same fora and manner, and with
the same effect, as provided in Section 6(d), below, for the conversion and exchange of Bonds by any
registered owner of a Bond The Issuer shall pay the Paying Agent/Registrar's standard or customary
fees and charges for making such transfer and delivery of a substitute Bond or Bonds, but the one
requesting such transfer shall pay any taxes or other governmental charges required to be paid with
respect thereto. The Paying Agent/Registrar shall not be required to make transfers of registration
of any Bond or any portion thereof (i) during the period commencing with the close of business on
any Record Date and ending with the opening of business on the next following principal or interest
payment date, or, (ii) with respect to any Bond or any portion thereof called for redemption prior
to maturity, within 45 days prior to its redemption date.
(b) Ownership of Bonds. The entity in whose name any Bond shall be registered in the
Registration Books at any time shall be deemed and treated as the absolute owner thereof for all
purposes of this Ordinance, whether or not such Bond shall be overdue, and the Issuer and the
14
Paying Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on
account of; the principal of, premium, if any, and interest on any such Bond shall be made only to
such registered owner. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid.
(c) Payment of Bonds and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds, and
to act as its agent to convert and exchange or replace Bonds, all as provided in this Ordinance. The
Paying Agent/Registrar shall keep proper records of all payments made by the Issuer and the Paying
Agent/Registrar with respect to the Bonds, and of all conversions and exchanges of Bonds, and all
replacements of Bonds, as provided in this Ordinance.
(d) Conversion and Exchange or Replacement: Authentication. Each Bond issued and
delivered pursuant to this Ordinance, to the extent of the unpaid or unredeemed principal balance
or principal amount thereof, may, upon surrender of such Bond at the principal corporate trust office
of the Paying Agent/Registrar, together with a written request therefor duly executed by the
registered owner or the assignee or assignees thereof, or its or their duly authorized attorneys or
representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, may, at the
option of the registered owner or such assignee or assignees, as appropriate, be converted into and
exchanged for fully registered bonds of the same Series, without interest coupons, in the form
prescribed in the FORMS OF SUBSTITUTE BONDS set forth in this Ordinance, in the denomina-
tion of $5,000, or any integral multiple of $5,000 (subject to the requirement hereinafter stated that
each substitute Bond shall have a single stated maturity date), as requested in writing by such
registered owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid
or unredeemed principal balance or principal amount of any Bond or Bonds so surrendered, and
payable to the appropriate registered owner, assignee, or assignees, as the case may be. If the Initial
Bond is assigned and transferred or converted each substitute Bond issued in exchange for any
portion of the Initial Bond be of the same Series, shall have a single stated principal maturity date,
and shall not be payable in installments; and each such Bond shall have a principal maturity date
corresponding to the due date of the installment of principal or portion thereof for which the
substitute Bond is being exchanged; and each such Bond shall bear interest at the single rate
applicable to and borne by such installment of principal or portion thereof for which it is being
exchanged. If a portion of any Bond (other than the Initial Bond) shall be redeemed prior to its
scheduled maturity as provided herein, a substitute Bond or Bonds of the same Series having the
same maturity date, bearing interest at the same rate, in the denomination or denominations of any
integral multiple of $5,000 at the request of the registered owner, and in aggregate principal amount
equal to the unredeemed portion thereof, will be issued to the registered owner upon surrender
thereof for cancellation. If any Bond or portion thereof (other than the Initial Bond) is assigned and
transferred or converted, each Bond issued in exchange therefor shall be of the same Series, have the
same principal maturity date and bear interest at the same rate as the Bond for which it is being
exchanged Each substitute Bond shall bear a letter and/or number to distinguish it from each other
Bond The Paying Agent/Registrar shall convert and exchange or replace Bonds as provided herein,
and each fully registered bond delivered in conversion of and exchange for or replacement of any
Bond or portion thereof as permitted or required by any provision of this Ordinance shall constitute
one of the Bonds for all purposes of this Ordinance, and may again be converted and exchanged or
replaced. It is specifically provided that any Bond authenticated in conversion of and exchange for
or replacement of another Bond on or prior to the first scheduled Record Date for the Initial Bond
shall bear interest from the date of the Initial Bond, but each substitute Bond so authenticated after
such first scheduled Record Date shall bear interest from the interest payment date next preceding
the date on which such substitute Bond was so authenticated, unless such Bond is authenticated after
15
any Record Date but on or before the next following interest payment date, in which case it shall
bear interest from such next following interest payment date; provided, however, that if at the time
of delivery of any substitute Bond the interest on the Bond for which it is being exchanged is due but
has not been paid, then such Bond shall bear interest from the date to which such interest has been
paid in full. THE INITIAL BONDS issued and delivered pursuant to this Ordinance are not
required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute
Bond issued in conversion of and exchange for or replacement of any Bond or Bonds issued under
this Ordinance there shall be printed a certificate, in the form substantially as follows:
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in this Bond; and that this Bond has been issued in conversion of and exchange
for or replacement of a bond, bonds, or a portion of a bond or bonds of an issue which originally was
approved by the Attorney General of the State of Texas and registered by the Comptroller of Public
Accounts of the State of Texas.
NATIONSBANK OF TEXAS, N.A.,
DALLAS, TEXAS
Paying Agent/Registrar
Dated
By
Authorized Representative"
An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such
Bond, date and manually sign the above Certificate, and no such Bond shall be deemed to be issued
or outstanding unless such Certificate is so executed The Paying Agent/Registrar promptly shall
cancel all Bonds surrendered for conversion and exchange or replacement. No additional ordinances,
orders, or resolutions need be passed or adopted by the governing body of the Issuer or any other
body or person so as to accomplish the foregoing conversion and exchange or replacement of any
Bond or portion thereof; and the Paying Agent/Registrar shall provide for the printing, execution,
and delivery of the substitute Bonds in the manner prescribed herein, and said Bonds shall be of type
composition printed on paper with lithographed or steel engraved borders of customary weight and
strength. Pursuant to Vernon's Ann. Tex. Civ. St. Art. 717k-6, and particularly Section 6 thereof, the
duty of conversion and exchange or replacement of Bonds as aforesaid is hereby imposed upon the
Paying Agent/Registrar, and, upon the execution of the above Paying Agent/Registrar's
Authentication Certificate, the converted and exchanged or replaced Bond shall be valid,
incontestable, and enforceable in the same manner and with the same effect as the Initial Bond which
originally was issued pursuant to this Ordinance, approved by the Attorney General, and registered
by the Comptroller of Public Accounts. The Issuer shall pay the Paying Agent/Registrar's standard
or customary fees and charges for transferring, converting, and exchanging any Bond or any portion
thereof, but the one requesting any such transfer, conversion, and exchange shall pay any taxes or
governmental charges required to be paid with respect thereto as a condition precedent to the
exercise of such privilege of conversion and exchange. The Paying Agent/Registrar shall not be
required to make any such conversion and exchange or replacement of Bonds or any portion thereof
(i) during the period commencing with the close of business on any Record Date and ending with
the opening of business on the next following principal or interest payment date, or, (ii) with respect
to any Bond or portion thereof called for redemption prior to maturity, within 45 days prior to its
redemption date.
16
(e) In General. All Bonds issued in conversion and exchange or replacement of any other
Bond or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with
the principal of and interest on such Bonds to be payable only to the registered owners thereof, (ii)
may and shall be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned,
(iv) may be converted and exchanged for other Bonds of the same Series, (v) shall have the
characteristics, (vi) shall be signed and sealed, and (vii) the principal of and interest on the Bonds
shall be payable, all as provided, and in the manner required or indicated, in the FORMS OF
SUBSTITUTE BONDS set forth in this Ordinance.
(f) Payment of Fees and Charges. The Issuer hereby covenants with the registered owners
of the Bonds that it will (i) pay the standard or customary fees and charges of the Paying
Agent/Registrar for its services with respect to the payment of the principal of and interest on the
Bonds, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with
respect to the transfer of registration of Bonds, and with respect to the conversion and exchange of
Bonds solely to the extent above provided in this Ordinance.
(g) Substitute Paying Agent/Registrar. The Issuer covenants with the registered owners of
the Bonds that at all times while the Bonds 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 Bonds 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 Bonds, to the new Paying Agent/Registrar designated and appointed by the
Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a written
notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Bonds,
by United States mail, first-class postage prepaid, which notice also shall give the address of the new
Paying Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Regis-
trar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this
Ordinance shall be delivered to each Paying Agent/Registrar.
Section 7. FORMS OF SUBSTITUTE BONDS. The form of all Bonds issued in conversion
and exchange or replacement of any other Bond or portion thereof, including the form of Paying
Agent/Registrar's Certificate to be printed on each of such Bonds, and the Form of Assignment to
be printed on each of the Bonds, shall be, respectively, substantially as follows, with such appropriate
variations, omissions, or insertions as are permitted or required by this Ordinance.
17
FORM OF SUBSTITUTE SERIES 1993-A BOND
NO. UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON UTILITY SYSTEM REVENUE REFUNDING BOND
SERIFS 1993-A
ORIGINAL DATE
INTEREST RATE MATURITY DATE OF ISSUE CUSIP NO.
% JUNE 1, 1993
ON THE MATURITY DATE specified above the CITY OF DENTON, in Denton County,
Texas (the "Issuer" or the "City"), 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 from JUNE 1, 1993, to the maturity date specified above, or the date of
redemption prior to maturity, at the interest rate per annum specified above; with interest being
payable on DECEMBER 1, 1993, and semiannually on each DECEMBER 1 and JUNE 1 thereafter,
except that if the date of authentication of this Bond is later than the first Record Date (hereinafter
defined), such principal amount shall bear interest from the interest payment date next preceding the
date of authentication, unless such date of authentication is 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. Said interest shall be
calculated on the basis of a 360-day year composed of twelve 30-day months.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the registered owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for its redemption prior to maturity, at the principal corporate trust office of
NATIONSBANK OF TEXAS, NA, DALLAS, TEXAS, which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
registered owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required
by the ordinance authorizing the issuance of the Bonds (the "Bond Ordinance") to be on deposit with
the Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent
by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the registered owner hereof, at the address of the registered owner, as it appeared
at the close of business on the 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. Any
accrued interest due upon the redemption of this Bond prior to maturity as provided herein shall be
paid to the registered owner at the principal corporate trust office of the Paying Agent/Registrar
upon presentation and surrender of this Bond for redemption and payment at the principal corporate
trust office of the Paying Agent/Registrar. The Issuer covenants with the registered owner of this
18
Bond that on or before each principal payment date, interest payment date, and accrued interest
payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest
and Sinking Fund" created by the Bond Ordinance, the amounts required to provide for the payment,
in immediately available funds, of all principal of and interest on the Bonds, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for such
payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day
on which banking institutions are authorized to close; and payment on such date shall have the same
force and effect as if made on the original date payment was due.
THIS BOND is one of an issue of Bonds initially dated JUNE 1, 1993, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
$27,085,000, FOR THE PURPOSE OF OBTAINING FUNDS REQUIRED TO REFUND
$24,440,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF DENTON UTILITY
SYSTEM REVENUE BONDS.
ON DECEMBER 1, 2002, or on any date whatsoever thereafter, the Bonds of this Series may
be redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived from
any available and lawful source, as a whole, or in part, and, if in part, the particular Bonds, or
portions thereof, to be redeemed shall be selected and designated by the Paying Agent/Registrar
(provided that a portion of a Bond may be redeemed only in an integral multiple of $5,000), at the
redemption price of the par or principal amount thereof, plus accrued interest to the date fixed for
redemption.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity a written notice of such redemption shall be published once in a financial 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 Bond to be
redeemed at its address as it appeared on the 45th day prior to such redemption date; provided,
however, that the failure to send, mail, or receive such notice, or any defect therein or in the sending
or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption
of any Bond, and it is hereby specifically provided that the publication of such notice as required
above shall be the only notice actually required in connection with or as a prerequisite to the
redemption of any Bonds or portions thereof. By the date fixed for any such redemption due
provision shalt be made with the Paying Agent/Registrar for the payment of the required redemption
price for the Bonds or portions thereof which are to be so redeemed, plus accrued interest thereon
to the date fixed for redemption. H such written notice of redemption is published and if due
provision for such payment is made, all as provided above, the Bonds or portions thereof which are
to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled
maturities, and they shall not bear interest after the date fixed for redemption, and they shall not be
regarded as being outstanding except for the right of the registered owner to receive the redemption
price plus accrued interest from the Paying Agent/Registrar out of the funds provided for such
payment. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same
maturity date, bearing interest at the same rate, in any denomination or denominations in any integral
multiple of $5,000, at the written request of the registered owner, and in aggregate principal amount
19
equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender
thereof for cancellation, at the expense of the Issuer, all as provided in the Bond Ordinance.
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL
MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books of
the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon
the terms and conditions set forth in the Bond Ordinance. Among other requirements for such
assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar,
together with proper instruments of assignment, in form and with guarantee of signatures satisfactory
to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof
in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Bond or
any such portion or portions hereof is or are to be transferred and registered. The form of
Assignment printed or endorsed on this Bond shall be executed by the registered owner or its duly
authorized attorney or representative, to evidence the assignment hereof. A new Bond or Bonds
payable to such assignee or assignees (which then will be the new registered owner or owner, of such
new Bond or Bonds), or to the previous registered owner in the case of the assignment and transfer
of only a portion of this Bond, may be delivered by the Paying Agent/Registrar in conversion of and
exchange for this Bond, all in the form and manner as provided in the next paragraph hereof for the
conversion and exchange of other Bonds. The Issuer shall pay the Paying Agent/Registrar's standard
or customary fees and charges for making such transfer, but the one requesting such transfer shall
pay any taxes or other governmental charges required to be paid with respect thereto. The Paying
Agent/Registrar shall not be required to make transfers of registration of this Bond or any portion
hereof (i) during the period commencing with the close of business on any Record Date and ending
with the opening of business on the next following principal or interest payment date, or, (ii) with
respect to any Bond or any portion thereof called for redemption prior to maturity, within 45 days
prior to its redemption date. The registered owner of this Bond shall be deemed and treated by the
Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including
payment and discharge of liability upon this Bond to the extent of such payment, and the Issuer and
the Paying Agent/Registrar shall not be affected by any notice to the contrary.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond
Ordinance, this Bond, or any unredeemed portion hereof; may, at the request of the registered owner
or the assignee or assignees hereof, be converted into and exchanged for a like aggregate principal
amount of fully registered bonds, without interest coupons, payable to the appropriate registered
owner, assignee, or assignees, as the case may be, having the same maturity date, and 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 Bond to the Paying Agent/Registrar for cancellation, all in accordance with
the form and procedures set forth in the Bond Ordinance. The Issuer shall pay the Paying Agent/-
Registrar's standard or customary fees and charges for transferring, converting, and exchanging any
Bond or any portion thereof; but the one requesting such transfer, conversion, and exchange shall
pay any taxes or governmental charges required to be paid with respect thereto as a condition prece-
dent 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 (i) during the period commencing with
the close of business on any Record Date and ending with the opening of business on the next
following principal or interest payment date, or, (ii) with respect to any Bond or portion thereof
called for redemption prior to maturity, within 45 days prior to its redemption date.
20
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owners of the Bonds.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
authorized, issued, sold,and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law; that this Bond is a special
obligation of the Issuer, secured by and payable, together with other bonds, from a first lien on and
pledge of the "Pledged Revenues", which include initially the "Net Revenues of the System", as such
terms are defined in the Bond Ordinance, with the System consisting of the City's entire combined
waterworks, sewer, and electric light and power system
THE ISSUER has reserved the right, subject to the restrictions stated in the Bond Ordinance,
to issue Additional Bonds payable from and secured by a first lien on and pledge of the "Pledged
Revenues" on a parity with this Bond and series of which it is a part.
THE ISSUER also has reserved the right, subject to the restrictions stated in the Bond
Ordinance, to amend the Bond Ordinance with the approval of the holders or owner; of fifty-one
percent in principal amount of all outstanding bonds which are secured by and payable from a first
Gen on and pledge of the Pledged Revenues.
THE REGISTERED OWNER hereof shall never have the right to demand payment of this
Bond or the interest hereon out of any funds raised or to be raised by taxation or from any source
whatsoever other than specified in the Bond Ordinance.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that the
terms and provisions of this Bond and the Bond Ordinance constitute a contract between each
registered owner hereof and the Issuer.
IN WITNESS WIMREOF, the Issuer has caused this Bond 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 Bond
(facsimile signature)
City Secretary,
City of Denton, Texas
_ (facsimile signature)
Mayor,
City of Denton, Texas
(CITY SEAL)
21
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby cert'if'ied that this Bond has been issued under the provisions of the Bond
Ordinance described in this Bond; and that this Bond has been issued in conversion of and exchange
for or replacement of a bond, bonds, or a portion of a bond or bonds of an issue which originally was
approved by the Attorney General of the State of Texas and registered by the Comptroller of Public
Accounts of the State of Texas.
NATIONSBANK OF TEXAS, MA.,
DALLAS, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly
authorized representative or attorney thereof, hereby assigns this Bond to
(Assignee's Social (print or typewrite Assignee's name and
Security or Taxpayer address, including alp code)
Identification Number
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books
with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: The signature must be
guaranteed by a member of the
New York Stock Exchange or a
commercial bank or trust
company.
Registered Owner
NOTICE: The signature above
must correspond with the name
of the Registered Owner ap-
pearing on the face of this
Bond.
22
FORM OF SUBSTITUTE TAXABLE SERIES 1993-B BOND
NO. UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON UTILITY SYSTEM REVENUE REFUNDING BOND
TAXABLE SERIES 1993-B
INTEREST RATE
ORIGINAL DATE
MATURITY DATE OF ISSUE
CUSIP NO.
NNE 1, 1993
ON THE MATURITY DATE specified above the CITY OF DENTON, in Denton County,
Texas (the "Issuer" or the "City"), 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 from JUNE 1, 1993, to the maturity date specified above, or the date of
redemption prior to maturity, at the interest rate per annum specified above; with interest being
payable on DECEMBER 1, 1993, and semiannually on each DECEMBER 1 and JUNE 1 thereafter,
except that if the date of authentication of this Bond is later than the fast 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. Said interest shall be
calculated on the basis of a 360-day year composed of twelve 30-day months.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the registered owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for its redemption prior to maturity, at the principal corporate trust office of
NATIONSBANK OF TEXAS, N.A., DALLAS, TEXAS, which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
registered owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required
by the ordinance authorizing the issuance of the Bonds (the "Bond Ordinance") to be on deposit with
the Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent
by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the registered owner hereof, at the address of the registered owner, as it appeared
at the close of business on the 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. Any
accrued interest due upon the redemption of this Bond prior to maturity as provided herein shall be
paid to the registered owner at the principal corporate trust office of the Paying Agent/Registrar
upon presentation and surrender of this Bond for redemption and payment at the principal corporate
trust office of the Paying Agent/Registrar. The Issuer covenants with the registered owner of this
23
Bond that on or before each principal payment date, interest payment date, and accrued interest
payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest
and Sinking Fund" created by the Bond Ordinance, the amounts required to provide for the payment,
in immediately available funds, of all principal of and interest on the Bonds, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for such
payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day
on which banking institutions are authorized to close; and payment on such date shall have the same
force and effect as if made on the original date payment was due.
THIS BOND is one of an issue of Bonds initially dated JUNE 1, 1993, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
$6,045,000, FOR THE PURPOSE OF OBTAINING FUNDS REQUIRED TO REFUND
$5,730,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF DENTON UTILITY
SYSTEM REVENUE BONDS.
ON DECEMBER 1, 2002, or on any date whatsoever thereafter, the Bonds of this Series may
be redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived from
any available and lawful source, as a whole, or in part, and, if in part, the particular Bonds, or
portions thereof, to be redeemed shall be selected and designated by the Paying Agent/Registrar
(provided that a portion of a Bond may be redeemed only in an integral multiple of $5,000), at the
redemption price of the par or principal amount thereo& plus accrued interest to the date fixed for
redemption.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity a written notice of such redemption shall be published once in a financial 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 Bond to be
redeemed at its address as it appeared on the 45th day prior to such redemption date; provided,
however, that the failure to send, mail, or receive such notice, or any defect therein or in the sending
or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption
of any Bond, and it is hereby specifically provided that the publication of such notice as required
above shall be the only notice actually required in connection with or as a prerequisite to the
redemption of any Bonds or portions thereof; By the date fixed for any such redemption due
provision shall be made with the Paying Agent/Registrar for the payment of the required redemption
price for the Bonds or portions thereof which are to be so redeemed, plus accrued interest thereon
to the date fixed for redemption. If such written notice of redemption is published and if due
provision for such payment is made, all as provided above, the Bonds or portions thereof which are
to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled
maturities, and they shall not bear interest after the date fixed for redemption, and they shall not be
regarded as being outstanding except for the right of the registered owner to receive the redemption
price plus accrued interest from the Paying Agent/Registrar out of the funds provided for such
payment. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same
maturity date, bearing interest at the same rate, in any denomination or denominations in any integral
multiple of $5,000, at the written request of the registered owner, and in aggregate principal amount
24
equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender
thereof for cancellation, at the expense of the Issuer, all as provided in the Bond Ordinance.
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL
MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books of
the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon
the terms and conditions set forth in the Bond Ordinance. Among other requirements for such
assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar,
together with proper instruments of assignment, in form and with guarantee of signatures satisfactory
to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof
in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Bond or
any such portion or portions hereof is or are to be transferred and registered The form of
Assignment printed or endorsed on this Bond shall be executed by the registered owner or its duly
authorized attorney or representative, to evidence the assignment hereof. A new Bond or Bonds
payable to such assignee or assignees (which then will be the new registered owner or owners of such
new Bond or Bonds), or to the previous registered owner in the case of the assignment and transfer
of only a portion of this Bond, may be delivered by the Paying Agent/Registrar in conversion of and
exchange for this Bond, all in the form and manner as provided in the next paragraph hereof for the
conversion and exchange of other Bonds. The Issuer shall pay the Paying Agent/Registrar's standard
or customary fees and charges for making such transfer, but the one requesting such transfer shall
pay any taxes or other governmental charges required to be paid with respect thereto. The Paying
Agent/Registrar shall not be required to make transfers of registration of this Bond or any portion
hereof (i) during the period commencing with the close of business on any Record Date and ending
with the opening of business on the next following principal or interest payment date, or, (ii) with
respect to any Bond or any portion thereof called for redemption prior to maturity, within 45 days
prior to its redemption date. The registered owner of this Bond shall be deemed and treated by the
Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including
payment and discharge of liability upon this Bond to the extent of such payment, and the Issuer and
the Paying Agent/Registrar shall not be affected by any notice to the contrary.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond
Ordinance, this Bond, or any unredeemed portion hereof, may, at the request of the registered owner
or the assignee or assignees hereof, be converted into and exchanged for a like aggregate principal
amount of fully registered bonds, without interest coupons, payable to the appropriate registered
owner, assignee, or assignees, as the case may be, having the same maturity date, and 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 Bond to the Paying Agent/Registrar for cancellation, all in accordance with
the form and procedures set forth in the Bond Ordinance. The Issuer shall pay the Paying
Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging
any Bond or any portion thereof, but the one requesting such transfer, conversion, and exchange shall
pay any taxes or governmental charges required to be paid with respect thereto as a condition prece-
dent 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 (i) during the period commencing with
the close of business on any Record Date and ending with the opening of business on the next
following principal or interest payment date, or, (ii) with respect to any Bond or portion thereof
called for redemption prior to maturity, within 45 days prior to its redemption date.
25
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owners of the Bonds.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
authorized, issued, sold,and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law; that this Bond is a special
obligation of the Issuer, secured by and payable, together with other bonds, from a first lien on and
pledge of the "Pledged Revenues", which include initially the "Net Revenues of the System", as such
terms are defined in the Bond Ordinance, with the System consisting of the City's entire combined
waterworks, sewer, and electric light and power system.
THE ISSUER has reserved the right, subject to the restrictions stated in the Bond Ordinance,
to issue Additional Bonds payable from and secured by a fast lien on and pledge of the "Pledged
Revenues" on a parity with this Bond and series of which it is a part.
THE ISSUER also has reserved the right, subject to the restrictions stated in the Bond
Ordinance, to amend the Bond Ordinance with the approval of the holders or owners of fifty-one
percent in principal amount of all outstanding bonds which are secured by and payable from a first
lien on and pledge of the Pledged Revenues.
THE REGISTERED OWNER hereof shall never have the right to demand payment of this
Bond or the interest hereon out of any funds raised or to be raised by taxation or from any source
whatsoever other than specified in the Bond Ordinance.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that the
terms and provisions of this Bond and the Bond Ordinance constitute a contract between each
registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the 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 Bond
(facsimile signature)
City Secretary,
City of Denton, Texas
(facsimile signature)
Mayor,
City of Denton, Texas
(CITY SEAL)
26
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in this Bond; and that this Bond has been issued in conversion of and exchange
for or replacement of a bond, bonds, or a portion of a bond or bonds of an issue which originally was
approved by the Attorney General of the State of Texas and registered by the Comptroller of Public
Accounts of the State of Texas.
NATIONSBANK OF TEXAS, N.A.,
DALLAS, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly
authorized representative or attorney thereof, hereby assigns this Bond to
(Assignee's Social (print or typewrite Assignee's name and
Security or Taxpayer address, including zip code)
Identification Number
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books
with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: The signature must be
guaranteed by a member of the
New York. Stock Exchange or a
commercial bank or trust
company.
Registered Owner
NOTICE. The signature above
must correspond with the name
of the Registered Owner ap-
pearing on the face of this
Bond.
27
Section 8. DEFINITIONS. As used in this Ordinance the following terms shall have the
meanings set forth below, unless the text hereof specifically indicates otherwise:
(a) The terms "City" and "Issuer" shall mean the City of Denton, in Denton County, Texas.
(b) The term "City Council" or "Council" shall mean the governing body of the City.
(c) The term "Bonds" shall mean collectively the Initial Bonds as defined and described in
Section 2 of this Ordinance and all substitute bonds exchanged therefor, and all other substitute
bonds and replacement bonds, issued pursuant to and as provided in this Ordinance.
(d) The term "Parity Bonds" shall mean collectively (i) the outstanding City of Denton Utility
System Refunding Revenue Bonds, Series 1983, authorized by ordinance passed on March 10, 1983
(the "Series 1983 Bonds"), (ii) the outstanding City of Denton Utility System Revenue Bonds, Series
1984, authorized by ordinance passed on February 21, 1984 (the "Series 1984 Bonds"), (iii) the
outstanding City of Denton Utility System Revenue Bonds, Series 1984-A, authorized by ordinance
passed on September 25, 1984 (the Series 1984-A Bonds), (iv) the outstanding City of Denton Utility
System Revenue Refunding Bonds, Series 1987, authorized by ordinance passed on January 27, 1987
(the "Series 1987 Bonds"), (v) the outstanding City of Denton Utility System Revenue Bonds, Series
1988, authorized by ordinance passed on August 2, 1988 (the "Series 1988 Bonds"), (vi) the
outstanding City of Denton Utility System Revenue Bonds, Series 1989, authorized by ordinance
passed on October 24, 1989 (the "Series 1989 Bonds"), (vii) the outstanding City of Denton Utility
System Revenue Bonds, Series 1992, authorized by ordinance passed on March 3, 1992 (the "Series
1992 Bonds*), (viii) the outstanding City of Denton Utility System Revenue Bonds, Series 1993,
authorized by ordinance passed March 16, 1993, and (ix) the Bonds.
(e) The term "Additional Bonds" shall mean the additional parity revenue bonds which the
City reserves the right to issue in the future, in accordance with Section 25 of this Ordinance.
(f) The term "System" shall mean (1) the City's entire existing waterworks and sewer system
and the City's entire existing electric light and power system, together with all future extensions,
improvements, enlargements, and additions thereto, and all replacements thereof, and (2) any other
related facilities, all or any part of the revenues or income from which do, in the future, at the option
of the City, and in accordance with law, become "Pledged Revenues" as hereinafter defined; provided
that, notwithstanding the foregoing, and to the extent now or hereafter authorized or permitted by
law, the term System shall not mean any water, sewer, electric, or other facilities of any kind which
are declared not to be a part of the System, and which are acquired or constructed by the City with
the proceeds from the issuance of "Special Facilities Bonds", which are hereby defined as being
special revenue obligations of the City which are not payable from or secured by any Pledged
Revenues, but which are secured by and payable from liens on and pledges of any other revenues,
sources, or payments, including, but not limited to, special contract revenues or payments received
from any other legal entity in connection with such facilities; and such revenues, sources, or payments
shall not be considered as or constitute Gross Revenues of the System, unless and to the extent
otherwise provided in the ordinance or ordinances authorizing the issuance of such "Special Facilities
Bonds".
(g) The terms "Gross Revenues of the System" and "Gross Revenues" shall mean all revenues
and income of every nature derived or received by the City from the operation and ownership of the
System, including the interest income from the investment or deposit of money in any Fund created
by this Ordinance.
28
(h) The terms "Net Revenues of the System", and "Net Revenues" shall mean all Gross
Revenues after deducting therefrom an amount equal to the current expenses of operation and
maintenance of the System, including all salaries, labor, materials, repairs, and extensions necessary
to render efficient service, provided, however, that only such repairs and extensions, as in the
judgment of the City Council, reasonably and fairly exercised by the adoption of appropriate resolu-
tions, are necessary to keep the System in operation and render adequate service to said City and the
inhabitants thereof, or such as might be necessary to meet some physical accident or condition which
would otherwise impair the Bonds or Additional Bonds, shall be deducted in determining "Net Reve-
nues". Payments required to be made by the City for water supply or water facilities, sewer services
or sewer facilities, fuel supply, and for the purchase of electric power, which payments under law
constitute operation and maintenance expenses of any part of the System, shall constitute and be
regarded as expenses of operation and maintenance of the System under this Ordinance.
Depreciation and amortization shall not constitute or be regarded as expenses of operation and
maintenance of the System.
(i) The term "Pledged Revenues" shall mean
(1) the Net Revenues, plus
(2) any additional revenues, income, or other resources which are expected to be
available to the City on a regular periodic basis, including, without limitation, any grants,
donations, or income received or to be received from the United States Government, or any
other public or private source, whether pursuant to an agreement or otherwise, which in the
future may, at the option of the City, be pledged to the payment of the Parity Bonds or
Additional Bonds.
0) The term "year" or "fiscal year" shall mean the fiscal year used by the City in connection
with the operation of the System.
(k) The term "Government Obligations" 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, and which may be in book-entry form.
Section 9. PLEDGE (a) The Bonds are "Additional Bonds" as permitted by Sections 24
and 25 of the ordinance passed on March 10, 1983, authorizing the Series 1983 Bonds; and it is
hereby determined, declared, and resolved that all of the Parity Bonds (including the Bonds) are
secured and payable equally and ratably on a parity, and that Sections 8 through 28, of this Ordinance
are supplemental to and cumulative of Sections 7 through 27 of the aforesaid ordinance passed on
March 10, 1983, with Sections 8 through 28 of this Ordinance being applicable to all of the Parity
Bonds.
(b) The Parity Bonds and any Additional Bonds, and the interest thereon, including any
interest coupons appertaining thereto, are and shall be secured by and payable from a first lien on
and pledge of the Pledged Revenues, and the Pledged Revenues are further pledged to the
establishment and maintenance of the Funds created by this Ordinance, and any Funds created by
any ordinance authorizing the issuance of any Additional Bonds. The Parity Bonds and any
Additional Bonds are not and will not be secured by or payable from a mortgage or deed of trust on
any real, personal, or mixed properties constituting the System.
29
Section 10. SYSTEM FUND. There heretofore has been and is hereby created and there
shall be established and maintained on the books of the City, and accounted for separate and apart
from all other funds of the City, a special fund to be entitled the "City of Denton Utility System
Fund" (the "System Fund"). All Gross Revenues shall be credited to the System Fund immediately
upon receipt, unless otherwise provided in this Ordinance. All current expenses of operation and
maintenance of the System shall be paid from such Gross Revenues credited to the System Fund as
a first charge against same. Before making any deposits hereinafter required to be made from the
System Fund, the City shall retain in the System Fund at all times an amount at least equal to one-
sixth of the amount budgeted for the then current fiscal year for the current operation and
maintenance expenses of the System.
Section 11. INTEREST AND SINKING FUND. For the sole purpose of paying the
principal of and interest on all Parity Bonds and Additional Bonds, there heretofore has been and
is hereby created and there shall be established and maintained on the books of the City, and
accounted for separate and apart from all other funds of the City, a separate fund to be entitled the
"City of Denton Utility System Revenue Bonds Interest and Sinking Fund" (the "Interest and Sinking
Fund").
Section 12. RESERVE FUND. There heretofore has been, and is hereby, created, and there
shall be established and maintained at NationsBank of Texas, N.A., and hereafter, at the option of
the City, established and maintained at any time at any national bank having a capital and surplus in
excess of $25,000,000, a separate fund to be entitled the "City of Denton Utility System Bonds and
Additional Bonds Reserve Fund" (the "Reserve Fund"). The Reserve Fund shall be used to pay the
principal of and interest on any Parity Bonds or Additional Bonds when and to the extent the
amounts in the Interest and Sinking Fund available for such payment are insufficient for such
purpose, and may be used for the purpose of finally retiring the last of any Parity Bonds or Additional
Bonds.
Section 13. EXTENSION AND IMPROVEMENT FUND. There heretofore has been and
is hereby created and there shall be established and maintained on the books of the City, and
accounted for separate and apart from all other funds of the City, a separate fund to be entitled the
"City of Denton Utility System Extension and Improvement Fund" (the "Extension and Improvement
Fund"). The Extension and Improvement Fund shall be used for the purpose of paying the costs of
improvements, enlargements, extensions, additions, replacements, or other capital expenditures related
to the System, or for paying the costs of unexpected or extraordinary repairs or replacements of the
System for which System funds are not available, or for paying unexpected or extraordinary expenses
of operation and maintenance of the System for which System funds are not otherwise available, or
for any other lawful purpose.
Section 14. EMERGENCY FUND. There is hereby created and there shall be established
and maintained on the books of the City, and accounted for separate and apart from all other funds
of the City, a separate fund to be entitled the "City of Denton Utility System Emergency Fund" (the
"Emergency Fund'). The Emergency Fund shall be used for the purpose of paying unexpected or
extraordinary expenses of repair, replacement, operation, and maintenance of the System for which
neither System funds nor the moneys in the Extension and Improvement Fund are available. There
was deposited in the Emergency Fund simultaneously with the delivery of the Series 1983 Bonds to
the initial purchasers thereof from lawfully available funds of the City the amount of $250,000. All
investment interest income from the Emergency Fund shall be transferred to the System Fund as
received
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Section 15. DEPOSITS OF PLEDGED REVENUES. Pledged Revenues shall be credited
to or deposited in the Interest and Sinking Fund, the Reserve Fund, the Extension and Improvement
Fund, and other funds when and as required by this Ordinance and any ordinance authorizing the
issuance of Additional Bonds.
Section 16. INVESTMENTS. Money in any Fund established pursuant to this Ordinance
or any ordinance authorizing the issuance of Additional Bonds, may, at the option of the City, be
placed in time deposits or certificates of deposit secured by obligations of the type hereinafter
described, or be invested in Government Obligations (as defined in Section 8 hereof) or obligations
guaranteed or insured by the United States of America, which, in the opinion of the Attorney
General of the United States, are backed by its full faith and credit or represent its general
obligations, or invested in obligations of instrumentalities of the United States of America, including,
but not limited to, evidences of indebtedness issued, insured, or guaranteed by such governmental
agencies as the Federal Land Banks, Federal Intermediate Credit Banks, Banks for Cooperatives,
Federal Home Loan Banks, Government National Mortgage Association, United States Postal
Service, Farmers Home Administration, Federal Home Loan Mortgage Association, Small Business
Administration, Federal Housing Association, or Participation Certificates in the Federal Assets
Financing Trust; provided that all such deposits and investments shall be made in such manner as will,
in the opinion of the City, permit the money required to be expended from any Fund to be available
at the proper time or times as expected to be needed Such investments (except United States
Treasury Obligations--State and Local Government Series investments held in book entry form, which
shall at all times be valued at cost) shall be valued in terms of current market value as of the last day
of each fiscal year. Unless otherwise set forth herein, all interest and income derived from such
deposits and investments immediately shall be credited to, and any losses debited to, the Fund from
which the deposit or investment was made, and surpluses in any Fund shall or may be disposed of as
hereinafter provided Such investments shall be sold promptly when necessary to prevent any default
in connection with the Parity Bonds or Additional Bonds consistent with the ordinances, respectively,
authorizing their issuance.
Section 17. FUNDS SECURED. That money in all Funds created by this Ordinance, to the
extent not invested, shall be secured in the manner prescribed by law.
Section 18. PRIORITY OF DEPOSITS AND PAYMENTS FROM SYSTEM FUND. That
the City shall make the deposits and payments from Pledged Revenues in the System Fund when and
as required by this Ordinance and any ordinance authorizing any Additional Bonds, and such deposits
shall be made in the following manner and with the following irrevocable priorities, respectively:
Fast, to the Interest and Sinking Fund, when and in the amounts required by this
Ordinance and any ordinance authorizing any Additional Bonds;
Second, to the Reserve Fund, when and in the amounts required by this Ordinance and any
ordinance authorizing any Additional Bonds; and
Third, to the Extension and Improvement Fund, when and as required by Section 21 of this
Ordinance.
Section 19. INTEREST AND SINKING FUND REQUIREMENTS. The City shall cause
to be deposited to the credit of the Interest and Sinking Fund the accrued interest and any premium
received from the sale of the Initial Bond, and on or before the 25th day of each month, the City
shall cause to be deposited to the credit of the Interest and Sinking Fund, in approximately equal
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monthly payments, amounts sufficient, together with any other funds on hand therein, to pay all of
the interest or principal and interest coming due, including the principal amount of any Parity Bonds
required to be redeemed prior to maturity pursuant to any mandatory redemption requirements, on
the Parity Bonds and any Additional Bonds on the next succeeding interest payment date. Any
moneys so deposited in the Interest and Sinking Fund with respect to a mandatory redemption
requirement, together with other lawfully available funds of the City, may be used by the City, to
purchase, in advance of a mandatory redemption date and at a price not exceeding the principal
amount thereof plus accrued interest thereon to the date of purchase, Parity Bonds which would be
subject to being chosen for mandatory redemption on such mandatory redemption date. The Paying
Agent shall cancel any Parity Bonds so purchased
Section 20. RESERVE FUND REQUIREMENTS. There is now on hand in the Reserve
Fund an amount of money and Government Obligations which is in excess of $3,000,000 and which
is at least equal to the average annual principal and interest requirements of all Parity Bonds and
Additional Bonds to be outstanding immediately after the issuance and delivery of the Initial Bonds
hereunder (the "Required Reserve Amount"); provided, however, that the Required Reserve Amount
shall never be less than $3,000,000 if the maximum annual principal and interest requirements on all
outstanding Parity Bonds and Additional Bonds exceeds $3,000,000. After the delivery of any future
Additional Bonds the City shall cause the Reserve Fund to be increased, if and to the extent
necessary, so that such Fund will contain an amount of money and investments equal to the Required
Reserve Amount. Any increase in the Required Reserve Amount may be funded from Pledged
Revenues, or from proceeds from the sale of any Additional Bonds, or any other available source or
combination of sources. All or any part of the Required Reserve Amount not funded initially and
immediately after the delivery of any installment or issue of Additional Bonds shall be funded, within
not more than five years from the date of such delivery, by deposits of Pledged Revenues in
approximately equal monthly installments on or before the 25th day of each month. Principal
amounts of the Parity Bonds and any Additional Bonds which must be redeemed pursuant to any
applicable mandatory redemption requirements shall be deemed to be maturing amounts of principal
for the purpose of calculating principal and interest requirements on such bonds. When and so long
as the amount in the Reserve Fund is not less than the Required Reserve Amount no deposits shall
be made to the credit of the Reserve Fund; but when and if the Reserve Fund at any time contains
less than the Required Reserve Amount, then the City shall transfer from Pledged Revenues in the
System Fund, and deposit to the credit of the Reserve Fund, monthly on or before the 25th day of
each month, a sum equal to 1/60th of the Required Reserve Amount, until the Reserve Fund is
restored to the Required Reserve Amount. The City specifically covenants that when and so long
as the Reserve Fund contains the Required Reserve Amount, the City shall cause all amounts in
excess of the Required Reserve Amount to be deposited to the credit of the Interest and Sinking
Fund.
Section 21. EXTENSION AND IMPROVEMENT FUND REQUIREMENTS. During each
year, subject and subordinate to making the required deposits to the credit of the Interest and Sinking
Fund and the Reserve Fund, the City shall be required to deposit to the credit of the Extension and
Improvement Fund, from Pledged Revenues in the System Fund, an amount equal to 8% of the
"Adjusted Gross Revenues of the System", which term is hereby defined to mean the following:
the Gross Revenues of the System for such year after deducting from such Gross
Revenues an amount equal to the current expenses of operation and maintenance of
the System for such year which are directly attributable to (i) all fuel costs related to
the production of electric energy by the City and/or (ii) the purchase of electric
energy by the City.
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Additional excess Pledged Revenues may, at the option of the City Council, be deposited to the
credit of the Improvement Fund as permitted by Section 22 (b) hereof, but no such additional deposit
is required. All investment interest income from the Extension and Improvement Fund shall be
retained in and remain a part of such Fund.
Section 22. DEFICIENCIES; EXCESS PLEDGED REVENUES. (a) If on any occasion
there shall not be sufficient Pledged Revenues to make the required deposits into the Interest and
Sinking Fund or the Reserve Fund, such deficiency shall be made up as soon as possible from the
next available Pledged Revenues.
(b) Subject to making the required deposits to the credit of the various Funds when and as
required by this Ordinance or any ordinance authorizing the issuance of Additional Bonds, any
surplus Pledged Revenues may be used by the City for any lawful purpose.
Section 23. PAYMENT OF PARITY BONDS AND ADDITIONAL BONDS. On or before
December 1, 1993, and semiannually on or before each June i and December 1 thereafter while any
of the Parity Bonds or Additional Bonds are outstanding and unpaid the City shall make available
to the Paying Agents therefor, out of the Interest and Sinking Fund, or if necessary, out of the
Reserve Fund, money sufficient to pay, on each of such dates, the principal of and interest on the
Parity Bonds and Additional Bonds as the same matures and comes due, or to redeem the Parity
Bonds or Additional Bonds prior to maturity, either upon mandatory redemption or at the option of
the City. At the direction of the City the Paying Agents shall either deliver paid Parity Bonds and
Additional Bonds, and any interest coupons appertaining thereto, to the City or destroy all paid Parity
Bonds and Additional Bonds, and any coupons appertaining thereto, and furnish the City with an
appropriate certificate of cancellation or destruction.
Section 24. FINAL DEPOSITS. (a) Any Parity Bond or Additional Bond shall be deemed
to be paid, retired, and no longer outstanding within the meaning of this Ordinance when payment
of the principal of, redemption premium, if any, on such Parity Bond or Additional Bond, plus
interest thereon to the due date thereof (whether such due date be by reason of maturity, upon
redemption, or otherwise) either (i) shall have been made or caused to be made in accordance with
the terms thereof (including the giving of any required notice of redemption or provision for the
proper giving of such notice having been made), or (ii) shall have been provided by irrevocably
depositing with or making available to a Paying Agent therefor, in trust and irrevocably set aside
exclusively for such payment, (1) money 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 make such payment, and all necessary
and proper fees, compensation, and expenses of such Paying Agent pertaining to the Parity Bonds
and Additional Bonds with respect to which such deposit is made shall have been paid or the payment
thereof provided for to the satisfaction of such paying agent. At such time as a Bond or Additional
Bond shall be deemed to be paid hereunder, as aforesaid, it shall no longer be secured by or entitled
to the benefits of this Ordinance or alien on and pledge of the Pledged Revenues, and shall be
entitled to payment solely from such money or Government Obligations.
(b) Any moneys so deposited with a paying agent may at the direction of the City also be
invested in Government Obligations, maturing in the amounts and times as hereinbefore set forth,
and all income from all Goverment Obligations in the hands of the paying agent pursuant to this
Section which is not required for the payment of the Parity Bonds and Additional Bonds, the
redemption premium, if any, and interest thereon, with respect to which such money has been so
deposited, shall be turned over to the City or deposited as directed by the City.
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Section 25. ADDITIONAL BONDS. (a) The City shall have the right and power at any
time and from time to time, and in one or more series or issues, to authorize, issue, and deliver
additional parity revenue bonds (herein called "Additional Bonds"), in accordance with law, in any
amounts, for any lawful purpose, including the refunding of any Parity Bonds or Additional Bonds,
or other obligations. Such Additional Bonds, if and when authorized, issued, and delivered in
accordance with this Ordinance, shall be payable from and secured by an irrevocable first lien on and
pledge of the Pledged Revenues, equally and ratably on a parity in all respects with the Parity Bonds
and any other outstanding Additional Bonds.
(b) The principal of all Additional Bonds must be scheduled to be paid or mature on
December 1 of the years in which such principal is scheduled to be paid or mature.
Section 26. FURTHER REQUIREMENTS FOR ADDMONAL BONDS. Additional
Bonds shall be issued only in accordance with this Ordinance, and no installment, Series, or issue of
Additional Bonds shall be issued or delivered unless:
(a) The Mayor of the City and the City Secretary sign a written certificate to the effect that
the City is not in default as to any covenant, condition, or obligation in connection with all then
outstanding Parity Bonds and Additional Bonds, and the ordinances authorizing same, and that the
Interest and Sinlong Fund and the Reserve Fund each contains the amount then required to be
therein.
(b) An independent certified public accountant, or independent firm of certified public
accountants, acting by and through a certified public accountant, signs a written certificate to the
effect that, in his or its opinion, during either the next preceding fiscal year, or any twelve consecutive
calendar month period out of the 18-month period immediately preceding the month in which the
ordinance authorizing the issuance of the then proposed Additional Bonds is passed, the Pledged
Revenues were at least (i) 1.25 times an amount equal to the average annual principal and interest
requirements, and (ii) 1.10 times an amount equal to the principal and interest requirements during
the fiscal year during which such requirements are scheduled to be the greatest, of all Parity Bonds
and Additional Bonds which are scheduled to be outstanding after the delivery of the then proposed
Additional Bonds. It is specifically provided, however, that in calculating the amount of Pledged
Revenues for the purposes of this subsection (b), if there has been any increase in the rates or
charges for services of tkte System which is then in effect, but which was not in effect during all or
any part of the entire period for which the Pledged Revenues are being calculated (hereinafter
referred to as the "entire period') then the certified public accountant, or in lieu of the certified
public accountant a firm of consulting engineers, shall determine and certify the amount of Pledged
Revenues as being the total of (i) the actual Pledged Revenues for the entire period, plus (ii) a sum
equal to the aggregate amount by which the actual billings to customers of the System during the
entire period would have been increased if such increased rates or charges had been in effect during
the entire period
(c) Provision shall be made in the ordinance authorizing their issuance for increasing the
Reserve Fund to the Required Reserve Amount as required by Section 20 hereof;
(d) All calculations of average annual principal and interest requirements of any bonds
made in connection with the issuance of any then proposed Additional Bonds shall be made as of the
date of such Additional Bonds; and also in making calculations for such purpose, and for any other
purpose under this Ordinance, principal amounts of any bonds which must be redeemed prior to
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maturity pursuant to any applicable mandatory redemption requirements shall be deemed to be
maturing amounts of principal of such bonds.
Section 27. GENERAL COVENANTS. The City further covenants and agrees that in
accordance with and to the extent required or permitted by law:
(a) Performance. It will faithfully perform at all times any and all covenants, undertakings,
stipulations, and provisions contained in this Ordinance, and each ordinance authorizing the issuance
of Additional Bonds, and in each and every Parity Bond and Additional Bond; that it will promptly
pay or cause to be paid the principal of and interest on every Parity Bond and Additional Bond, on
the dates and in the places and manner prescribed in such ordinances and Parity Bonds or Additional
Bonds; and that it will, at the times and in the manner prescribed, deposit or cause to be deposited
the amounts required to be deposited into the Interest and Sinking Fund and the Reserve Fund; and
any holder of the Parity Bonds or Additional Bonds may require the City, its officials, and employees,
to carry out, respect, or enforce the covenants and obligations of this Ordinance, or any ordinance
authorizing the issuance of Additional Bonds, by all legal and equitable means, including specifically,
but without limitation, the use and filing of mandamus proceedings, in any court of competent
jurisdiction, against the City, its officials, and employees.
(b) City's Legal Authority. The City is a duly created and existing home rule city of the State
of Texas, and is duly authorized under the laws of the State of Texas to create and issue the Parity
Bonds and Additional Bonds; that all action on its part for the creation and issuance of the said
obligations has been or will be duly and effectively taken, and that said obligations in the hands of
the holders and owners thereof are and will be valid and enforceable special obligations of the City
in accordance with their terms.
(c) Title. The City has or will obtain lawful title to the lands, buildings, structures, and
facilities constituting the System, that it warrants that it will defend the title to all the aforesaid lands,
buildings, structures, and facilities, and every part thereof, for the benefit of the holders and owners
of the Parity Bonds and Additional Bonds, against the claims and demands of all persons whomsoever,
that it is lawfully qualified to pledge the Pledged Revenues to the payment of the Parity Bonds and
Additional Bonds in the manner prescribed herein, and has lawfully exercised such rights.
(d) Lien. The City will from time to time and before the same become delinquent pay and
discharge all taxes, assessments, and governmental charges, if any, which shall be lawfully imposed
upon it, or the System, that it will pay all lawful claims for rents, royalties, labor, materials, and
supplies which if unpaid might by law become alien or charge thereon, the lien of which would be
prior to or interfere with the liens hereo& so that the priority of the Hens granted hereunder shall
be fully preserved in the manner provided herein, and that it will not create or suffer to be created
any mechanic's, laborer's, materialman's, or other lien or charge which might or could be prior to the
liens hereof, or do or suffer any matter or thing whereby the liens hereof might or could be impaired;
provided, however, that no such tax, assessment, or charge, and that no such claims which might be
used as the basis of a mechanic's, laborer's, materialman's, or other lien or charge, shall be required
to be paid so long as the validity of the same shall be contested in good faith by the City.
(e) Operation of System: No Free Service. While the Parity Bonds or any Additional Bonds
are outstanding and unpaid the City shall continuously and efficiently operate the System, and shall
maintain the System in good condition, repair, and working order, all at reasonable cost. No free
service of the System shall be allowed, and should the City or any of its agencies, instrumentalities,
lessors, or concessionaires make use of the services and facilities of the System, payment monthly of
35
the standard retail price of the services provided shall be made by the City or any of its agencies,
instrumentalities, lessors, or concessionaires out of funds from sources other than the revenues of the
System, unless made from surplus Pledged Revenues as permitted by Section 22(b) hereof.
(f) Further Encumbrance. While the Parity Bonds or any Additional Bonds are outstanding
and unpaid, the City shall not additionally encumber the Pledged Revenues in any manner, except
as permitted in this Ordinance in connection with Additional Bonds, unless said encumbrance is made
junior and subordinate in all respects to the liens, pledges, covenants, and agreements of this
Ordinance and any ordinance authorizing the issuance of Additional Bonds; but the right of the City
to issue revenue bonds payable from a subordinate lien on surplus Pledged Revenues is specifically
recognized and retained, as permitted under Section 22(b) hereof).
(g) Sale or Disposal of Property. While the Parity Bonds or any Additional Bonds are
outstanding and unpaid, the City shall not sell, convey, mortgage, encumber, lease, or in any manner
transfer title to, or dedicate to other use, or otherwise dispose of, the System, or any significant or
substantial part thereof; provided that whenever the City deems it necessary to dispose of any
property, machinery, fixtures, or equipment, or dedicate such property to other use, it may do so
either when it has made arrangements to replace the same or provide substitutes therefor, or it is
determined by resolution of the City Council that no such replacement or substitute is necessary.
(h) Insurance . (1) The City shall cause to be insured such parts of the System as would
usually be insured by corporations operating like properties, with a responsible insurance company
or companies, against risks, accidents, or casualties against which and to the extent insurance is
usually carried by corporations operating like properties, including, to the extent reasonably
obtainable, fire and extended coverage insurance, insurance against damage by floods, and use and
occupancy insurance. Public liability and property damage insurance also shall be carried unless the
City Attorney gives a written opinion to the effect that the City is not liable for claims which would
be protected by such insurance. All insurance premiums shall be paid as an expense of operation of
the System. At any time while any contractor engaged in construction work shall be fully responsible
therefor, the City shall not be required to carry insurance on the work being constructed if the
contractor is required to carry appropriate insurance. All such policies shall be open to the
inspection of the Bondholders and their representatives at all reasonable times. Upon the happening
of any loss or damage covered by insurance from one or more of said causes, the City shall make due
proof of loss and shall do all things necessary or desirable to cause the insuring companies to make
payment in full directly to the City. The proceeds of insurance covering such property, together with
any other funds necessary and available for such purpose, shall be used forthwith by the City for
repairing the property damaged or replacing the property destroyed; provided, however, that if said
insurance proceeds and other funds are insufficient for such purpose, then said insurance proceeds
pertaining to the System shall be deposited in a special and separate trust fund, at an official
depository of the City, to be designated the Insurance Account. The Insurance Account shall be held
until such time as other funds become available which, together with the Insurance Account, will be
sufficient to make the repairs or replacements originally required
(2) The annual audit hereinafter required may contain a section commenting on whether or
not the City has complied with the requirements of this Section with respect to the maintenance of
insurance, and shall state whether or not all insurance premiums upon the insurance policies to which
reference is made have been paid
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(i) Annual Budget and Rate Covenant. The City shall prepare, prior to the beginning of
each fiscal year, an annual budget, in accordance with law, reflecting an estimate of cash receipts and
disbursements for the ensuing fiscal year in sufficient detail to indicate the probable Gross Revenues
and Pledged Revenues for such fiscal year. The City shall fix, establish, maintain, and collect, such
rates, charges, and fees for the use and availability of the System at all times as are necessary (1) to
produce Gross Revenues sufficient, together with any other Pledged Revenues, to pay all current
operation and maintenance expenses of the System, and (2) to produce an amount of Pledged
Revenues during each fiscal year at least equal to the greater of 1.25 times the average annual
principal and interest requirements of all then outstanding Parity Bonds and Additional Bonds or 1.25
times the succeeding fiscal year's principal and interest requirements of all then outstanding Parity
Bonds and Additional Bonds.
0) Records. The City shall keep proper books of record and account in which full, true,
proper, and correct entries will be made of all dealings, activities, and transactions relating to the
System, the Pledged Revenues, and the Funds created pursuant to this Ordinance, and all books,
documents, and vouchers relating thereto shall at all reasonable times be made available for
inspection upon request of any Bondholder or citizen of the City. To the extent consistent with the
provisions of this Ordinance, the City shall keep its books and records in a manner conforming to
standard accounting practices as usually would be followed by private corporations owning and
operating a similar System, with appropriate recognition being given to essential differences between
municipal and corporate accounting practices.
(k) Audits. After the close of each fiscal year while any of the Parity Bonds or any
Additional Bonds are outstanding, an audit will be made of the books and accounts relating to the
System and the Pledged Revenues by an independent certified public accountant or an independent
firm of certified public accountants. As soon as practicable after the close of each such year, and
when said audit has been completed and made available to the City, a copy of such audit for the
preceding year shall be mailed to the Municipal Advisory Council of Texas, to each paying agent for
any bonds payable from Pledged Revenues, and to any Bondholders who shall so request in writing.
The annual audit reports shall be open to the inspection of the Bondholders and their agents and
representatives at all reasonable times.
(1) Governmental Agencies. It will comply with all of the terms and conditions of any and
all franchises, permits, and authorizations applicable to or necessary with respect to the System, and
which have been obtained from any governmental agency; and the City has or will obtain and keep
in full force and effect all franchises, permits, authorization, and other requirements applicable to or
necessary with respect to the acquisition, construction, equipment, operation, and maintenance of the
System.
(m) No Competition. It will not operate, or grant any franchise or, to the extent it legally
may, permit the acquisition, construction, or operation of, any facilities which would be in competition
with the System, and to the extent that it legally may, the City will prohibit any such competing facili-
ties.
(n) No Arbitrage. The City covenants to and with the purchasers of the Parity Bonds and
any Additional Bonds that no use will be made of the proceeds of any of such bonds at any time
throughout the term of any of such bonds which, if such use had been reasonably expected on the
date of delivery of any of such bonds to and payment therefor by the purchasers, would have caused
any of such bonds to be arbitrage bonds within the meaning of Section 103(c) of the Internal
Revenue Code of 1954, as amended, or the Internal Revenue Code of 1986, or any regulations or
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rulings pertaining thereto; and by this covenant the City is obligated to comply with the requirements
of the aforesaid Codes and all applicable and pertinent Department of the Treasury regulations
relating to arbitrage bonds. The City further covenants that the proceeds of all such bonds will not
otherwise be used directly or indirectly so as to cause all or any part of such bonds to be or become
arbitrage bonds within the meaning of the aforesaid Codes, or any regulations pertaining thereto.
Section 28. AMENDMENT OF ORDINANCE (a) The holders or owners of Parity Bonds
and Additional Bonds aggregating in principal amount 51% of the aggregate principal amount of then
outstanding Parity Bonds and Additional Bonds shall have the right from time to time to approve any
amendment to this Ordinance which may be deemed necessary or desirable by the City, provided,
however, that nothing herein contained shall permit or be construed to permit the amendment of the
terms and conditions in this Ordinance or in the Parity Bonds or Additional Bonds so as to:
(1) Make any change in the maturity of the outstanding Parity Bonds or Additional
Bonds;
(2) Reduce the rate of interest borne by any of the outstanding Parity Bonds or
Additional Bonds;
(3) Reduce the amount of the principal payable on the outstanding Parity Bonds or
Additional Bonds;
(4) Modify the terms of payment of principal of or interest on the outstanding Parity
Bonds or Additional Bonds, or impose any conditions with respect to such payment;
(5) Affect the rights of the holders or owners of less than all of the Parity Bonds and
Additional Bonds then outstanding;
(6) Change the minimum percentage of the principal amount of Parity Bonds and
Additional Bonds necessary for consent to such amendment.
(b) If at any time the City shall desire to amend the Ordinance under this Section,
the City shall cause notice of the proposed amendment to be published in a financial publication of
general circulation in The City of New York, New York, once during each calendar week for at least
two successive calendar weeks. Such notice shall briefly set forth the nature of the proposed
amendment and shall state that a copy thereof is on file at the principal office of the Paying Agents
for inspection by all holders or owners of Parity Bonds and Additional Bonds. Such publication is
not required, however, if notice in writing is given to each holder or owner of Parity Bonds and
Additional Bonds.
(c) Whenever at any time not less than thirty days, and within one year, from the date of the
first publication of said notice or other service of written notice the City shall receive an instrument
or instruments executed by the holders or owners of at least 51% in aggregate principal amount of
all Parity Bonds and Additional Bonds then outstanding, which instrument or instruments shall refer
to the proposed amendment described in said notice and which specifically consent to and approve
such amendment in substantially the form of the copy thereof on file with the Paying Agents, the City
Council may pass the amendatory ordinance in substantially the same form.
(d) Upon the passage of any amendatory ordinance pursuant to the provisions of this Section,
this Ordinance shall be deemed to be amended in accordance with such amendatory ordinance, and
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the respective rights, duties, and obligations under this Ordinance of the City, and all the holders or
owners of then outstanding Parity Bonds and Additional Bonds and all future Parity Bonds and
Additional Bonds shall thereafter be determined, exercised, and enforced hereunder, subject in all
respects to such amendments.
(e) Any consent given by the holder or owner of a Parity Bond or Additional Bond pursuant
to the provisions of this Section shall be irrevocable for a period of six months from the date of the
fast publication of the notice provided for in this Section, and shall be conclusive and binding upon
all future holders or owners of the same Parity Bond or Additional Bond during such period Such
consent may be revoked at any time after six months from the date of the fast publication of such
notice by the holder or owner who gave such consent, or by a successor in title, by filing notice
thereof with the paying agents and the City, but such revocation shall not be effective if the holders
or owners of 51% in aggregate principal amount of the then outstanding Parity Bonds and Additional
Bonds as in this Section defined have, prior to the attempted revocation, consented to, and approved
the amendment.
(f) For the purpose of this Section, the fact of the holding of Parity Bonds or Additional
Bonds which are in bearer, coupon form, by any bondholder and the amount and numbers of such
bearer Parity Bonds or Additional Bonds and the date of their holding same, may be proved by the
affidavit of the person claiming to be such holder or owner, or by a certificate executed by any trust
company, bank, banker, or any other depository wherever situated showing that at the date therein
mentioned such person had on deposit with such trust company, bank, banker, or other depository,
the Parity Bonds and Additional Bonds described in such certificate. The City may conclusively
assume that such ownership continues until written notice to the contrary is served upon the City.
The ownership of all registered Parity Bonds and Additional Bonds shall be determined from the
registration books kept by the registrar therefor.
Section 29. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen, or
destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond
of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or
destroyed Bond, in replacement for such Bond in the manner hereinafter provided
(b) Application for Replacement Bonds. Application for replacement of damaged, mutilated,
lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying
Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the registered owner applying
for a replacement bond shall furnish to the Issuer and to the Paying Agent/Registrar such security
or indemnity as may be required by them to save each of them harmless from any loss or damage with
respect thereto. Also, in every case of loss, theft, or destruction of a Bond, the registered owner shall
furnish to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft,
or destruction of such Bond, as the case may be. In every case of damage or mutilation of a Bond,
the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so
damaged or mutilated
(c) No Default Occurred Notwithstanding the foregoing provisions of this Section, in the
event any such Bond shall have matured, and no default has occurred which is then continuing in the
payment of the principal of; redemption premium, if any, or interest on the Bond, the Issuer may
authorize the payment of the same (without surrender thereof except in the case of a damaged or
mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished
as above provided in this Section.
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(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond,
the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal, printing,
and other expenses in connection therewith. Every replacement bond issued pursuant to the
provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall
constitute a contractual obligation of the Issuer whether or not the lost, stolen, or destroyed Bond
shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Ordinance equally and proportionately with any and all other Bonds duly issued under this
Ordinance.
(e) Authority for Issuing Replacement Bonds. In accordance with Section 6 of Vernon's
Ann. Tex. Civ. St. Art. 717k-6, this Section of this Ordinance shall constitute authority for the
issuance of any such replacement bond without necessity of further action by the governing body of
the Issuer or any other body or person, and the duty of the replacement of such bonds is hereby
authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall
authenticate and deliver such Bonds in the form and manner and with the effect, as provided in
Section 6(d) of this Ordinance for Bonds issued in conversion and exchange for other Bonds.
Section 30. COVENANTS REGARDING TAX-EXENUMON. The Issuer covenants to
refrain from any action which would adversely affect, and to take such action to ensure, the treatment
of the Series 1993-A Bonds as obligations described in section 103 of the Code, the interest on which
is not includable in the "gross income" of the holder for purposes of federal income taxation. In
furtherance thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of the
Series 1993-A Bonds (less amounts deposited to a reserve fund, if any) are used for any "private
business use", as defined in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds
are so used, that amounts, whether or not received by the Issuer, with respect to such private business
use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly,
secure or provide for the payment of more than 10 percent of the debt service on the Series 1993-A
Bonds, in contravention of section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use" described
in subsection (a) hereof exceeds 5 percent of the proceeds of the Series 1993-A Bonds (less amounts
deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a "private
business use" which is "related" and not "disproportionate", within the meaning of section 141(b)(3)
of the Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Series 1993-A Bonds (less amounts deposited into
a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or
local governmental units, in contravention of section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Series 1993-A
Bonds 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 Series 1993-A Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Series 1993-A Bonds, directly
or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
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investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher
yield over the term of the Series 1993-A Bonds, other than investment property acquired with
(1) proceeds of the Series 1993-A Bonds invested for a reasonable temporary
period of 3 years or less until such proceeds are needed for the purpose for which the Series
1993-A Bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning of
section 1.103-13(b)(12) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement fund to
the extent such amounts do not exceed 10 percent of the proceeds of the Series 1993-A
Bonds;
(g) to otherwise restrict the use of the proceeds of the Series 1993-A Bonds or amounts
treated as proceeds of the Series 1993-A Bonds, as may be necessary, so that the Series 1993-A
Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to
arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings);
(h) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Series 1993-A Bonds) 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 Series 1993-A Bonds have been paid
in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under
section 148(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 Series 1993-A Bonds.
It is the understanding of the Issuer that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the
Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which
modify, or expand provisions of the Code, as applicable to the Series 1993-A Bonds, 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 Series 1993-A Bonds under section 103 of the Code.
In the event that regulations or rulings are hereafter promulgated which impose additional
requirements which are applicable to the Series 1993-A Bonds, the Issuer agrees to comply with the
additional requirements to the extent necessary, in the opinion of nationally-recognized bond counsel,
to preserve the exemption from federal income taxation of interest on the Series 1993-A Bonds under
section 103 of the Code.
Section 31. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION, CUSIP NUMBERS, PREAMBLE, AND INSURANCE. The Mayor of
the Issuer is hereby authorized to have control of the Initial Bonds issued hereunder and all necessary
records and proceedings pertaining to the Initial Bonds pending their delivery and their investigation,
examination, and approval by the Attorney General of the State of Texas, and their registration by
the Comptroller of Public Accounts of the State of Texas. Upon registration of the Initial Bonds said
Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall
41
manually sign the Comptroller's Registration Certificate on the Initial Bonds, and the seal of said
Comptroller shall be impressed, or placed in facsimile, on the Initial Bonds. 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 Bonds or on any Bonds issued and delivered in conversion of and
exchange or replacement of any Bonds, but neither shall have any legal effect, and shall be solely for
the convenience- and information of the registered owners of the Bonds. The preamble to this
Ordinance is hereby adopted and made a part hereof for all purposes. If insurance is obtained on
any of the Bonds, the Initial Bonds and all other Bonds shall bear an appropriate legend concerning
insurance as provided by the insurer.
Section 32. SALE OF INITIAL BONDS. The Initial Bonds are hereby sold and shall be
delivered to RAUSCHER PIERCE REFSNES, INC., as representative of the underwriters, in
accordance with the Bond Purchase Agreement dated the date of this meeting and presented to the
City Council of the City at this meeting. The Mayor of the Issuer is authorized and directed to
execute, on behalf of the Issuer, said Bond Purchase Agreement in the form and substance submitted
at this meeting.
Section 33. OFFICIAL STATEMENT. An Official Statement dated as of the date of this
meeting has been prepared in connection with the sale of the Initial Bonds and the Bonds, in the
form and substance submitted at this meeting. Said Official Statement and any supplement or
addenda thereto have been and are hereby approved, and their use in the offer and sale of the Bonds
is hereby approved It is further officially found, determined, and declared that the statements and
representations contained in said Official Statement are true and correct in all material respects, to
the best knowledge and belief of the Issuer. The distribution and use of the Preliminary Official
Statement dated May 25, 1993, prior to the date hereof is hereby ratified and approved
Section 34. REFUNDING OF OUTSTANDING BONDS. That concurrently with the
delivery of the Initial Bonds the Issuer shall deposit an amount from the proceeds from the sale of
the Initial Bonds, with NationsBank of Texas, N.A., as Escrow Agent, sufficient, together with other
available amounts, to refund all of the Outstanding Bonds in accordance with Section 7A of Vernon's
Ann. Tex. Civ. St. Article 717k, as amended The Issuer hereby authorizes the execution of the
Escrow Agreement dated as of June 1, 1993 between the Escrow Agent and the Issuer. The Mayor
of the Issuer is authorized and directed to execute, on behalf of the Issuer, said Escrow Agreement
in the form and substance presented to this meeting. It is hereby found and determined that the
refunding of the Outstanding Bonds is advisable and necessary in order to restructure the debt service
requirements and procedures of the Issuer, and that the debt service requirements on the Bonds will
be less than those on the Outstanding Bonds, resulting in a reduction in the amount of principal and
interest which otherwise would be payable both on an actual and a present value basis.
Section 35. REDEMPTION OF OUTSTANDING BONDS. There is attached hereto and
made a part hereof for all purposes a list and description of certain City of Denton Utility System
Revenue Bonds, and notice provisions relating thereto, which bonds are hereby called for redemp-
tion, and shall be redeemed, prior to their scheduled maturities, on the date, at the place, and at the
price, set forth therein; the Issuer shall cause the appropriate notices of such redemption to be given
in accordance with the requirements of the respective proceedings authorizing the issuance of such
bonds; and due provision shall be made by the Issuer in accordance with law for the payment of the
redemption price of said bonds by the place of payment (paying agent) for such bonds.
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Section 36. DTC REGISTRATION. The Bonds initially shall be issued and delivered in such
manner that no physical distribution of the Bonds will be made to the public, and the Depository
Trust Company ("DTC"), New York, New York, initially will act as depository for the Bonds. DTC
has represented that it is a limited purpose trust company incorporated under the laws of the State
of New York, a member of the Federal Reserve System, a "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 Bonds authorized by this Ordinance shall be delivered to
and registered in the name of the Rauscher Pierce Refsnes, Inc., as representative of the
Underwriters (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 Bonds and deliver in exchange therefor a substitute Bond of the
same Series for each maturity of such Initial Bond, with each such substitute Bond to be registered
in the name of CEDE & CO., the nominee of DTC, and it shall be the duty of the Paying
Agent/Registrar to take such action. It is expected that DTC will hold the Bonds on behalf of the
Purchaser and/or the Direct Participants, as defined and described in the Official Statement referred
to and approved in Section 14 hereof (the "DTC Participants"). So long as each Bond is registered
in the name of CEDE & CO., the Paying Agent/Registrar shall treat and deal with DTC in all
respects the same as if it were the actual and beneficial owner thereof. It is expected that DTC will
maintain a book entry system which will identify beneficial ownership of the Bonds by DTC Partici-
pants in integral amounts of $5,000, with transfers of ownership being effected on the records of DTC
and the DTC Participants pursuant to rules and regulations established by them, and that the
substitute Bonds initially deposited with DTC shall be immobilized and not be further exchanged for
substitute Bonds except as 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 Bonds. It shall
be the duty of the Purchaser and the DTC Participants to make all arrangements with DTC to
establish this book-entry system, the beneficial ownership of the Bonds, and the method of paying
the fees and charges of DTC. The Issuer does not represent, nor does it in any way covenant that
the initial book-entry system established with DTC will be maintained in the future. The Issuer
reserves the 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 Bonds
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 Bond in any name as provided for in this Ordinance. Notwithstanding the initial
establishment of the foregoing book-entry system with DTC, if for any reason any of the originally
delivered substitute Bonds is duly filed with the Paying Agent/Registrar with proper request for
transfer and substitution, as provided for in this Ordinance, substitute Bonds will be duly delivered
as provided in this Ordinance, and there will be no assurance or representation that any book-entry
system will be maintained for such Bonds.
Section 37. FURTHER PROCEDURES. The Mayor of the Issuer, the City Secretary, and
all other officers, employees, and agents of the Issuer, and each of them, shall be and they are hereby
expressly authorized, empowered, and directed from time to time and at any time to do and perform
all such acts and things and to execute, acknowledge, and deliver in the name and under the
corporate seal and on behalf of the Issuer all such instruments, whether or not herein mentioned, as
may be necessary or desirable in order to carry out the terms and provisions of this Bond Ordinance,
the Bonds, the sale of the Bonds, the Bond Purchase Agreement, the Escrow Agreement and the
43
Official Statement; and the Director of Finance of the City shall cause the expenses of issuance of
the Bonds to be paid from the proceeds of sale of the Initial Bonds. In case any officer whose
signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond,
such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer
had remained in office until such delivery.
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NOTICE OF REDEMPTION
THE CITY OF DENTON (TEXAS) UTUJT Y SYSTEM REVENUE REFUNDING
BONDS, SERIES 1983, dated as of March 1, 1983, scheduled to mature on December 1, 1994
through December 1, 2007, being fully registered bonds payable to the registered owners thereof, in
denominations in.multiples of $5,000, aggregating $7,910,000 in principal amount (and being all of
the outstanding bonds of said Series scheduled to mature on and after December 1, 2001), have been
duly called for redemption prior to their scheduled maturities, and will be redeemed on December
1, 1993, at Bank One, Texas, N.A., Fort Worth, Texas, for the principal amount thereof and accrued
interest thereon to said date fixed for redemption. Due provision will be made by the City of
Denton, Texas, in accordance with law, for the payment of the redemption price of said bonds. Said
bonds shall not bear interest after December 1, 1993.
NOTICE OF REDEMPTION
THE CITY OF DENTON (TEXAS) UTILITY SYSTEM REVENUE REFUNDING
BONDS, SERIES 1987, dated as of January 1, 1987, scheduled to mature on December 1 in each
of the years 1997 through 2009, being fully registered Bonds payable to the registered owners thereof,
in denominations.in multiples of $5,000, aggregating $13,910,000 in principal amount (and being all
of the outstanding bonds of said Series scheduled to mature on and after December 1, 1997), have
been duly called for redemption prior to their scheduled maturities, and will be redeemed, on
December 1, 1996, at NationsBank of Texas, N. A., Dallas, Texas, for the principal amount thereof
and accrued interest thereon to said date fixed for redemption. Due provision will be made by the
City of Denton, Texas, in accordance with law, for the payment of the redemption price of said
bonds. Said bonds shall not bear interest after December 1, 1996.
NOTICE OF REDEMPTION
THE CITY OF DENTON (TEXAS) UTILITY SYSTEM REVENUE BONDS, SERIES
1988, dated as of August 1, 1988, scheduled to mature on December 1 in each of the years 1999
through 2008, being fully registered Bonds payable to the registered owners thereof, in denominations
in multiples of $5;000, aggregating $1,750,000 in principal amount (and being all of the outstanding
bonds of said Series scheduled to mature on and after December 1, 1999), have been duly called for
redemption prior to their scheduled maturities, and will be redeemed, on December 1, 1998, at
NationsBank of Texas, N. A., Dallas, Texas, for the principal amount thereof and accrued interest
thereon to said date fixed for redemption. Due provision will be made by the City of Denton, Texas,
in accordance with law, for the payment of the redemption price of said bonds. Said bonds shall not
bear interest after December 1, 1998.
NOTICE OF REDEMPTION
THE CITY OF DENTON (TEXAS) UTMM SYSTEM REVENUE BONDS, SERIES
1989, dated as of October 1, 1989, scheduled to mature on December 1 in each of the years 2000
through 2005, being fully registered Bonds payable to the registered owners thereof, in denominations
in multiples of $5,000, aggregating $6,600,000 in principal amount (and being all of the outstanding
bonds of said Series scheduled to mature on and after December 1, 2000), have been duly called for
redemption prior to their scheduled maturities, and will be redeemed, on December 1, 1999, at
NationsBank of Texas, N. A., Dallas, Texas, for the principal amount thereof and accrued interest
thereon to said date fixed for redemption. Due provision will be made by the City of Denton, Texas,
in accordance with law, for the payment of the redemption price of said bonds. Said bonds shall not
bear interest after December 1, 1999.
CERTIFICATE FOR
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
CITY OF DENTON UTILITY SYSTEM REVENUE REFUNDING BONDS,
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 of said City convened in SPECIAL MEETING ON THE 8TH DAY OF
JUNE, 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 Tem
Harold Perry
Euline Brock
Jerry Cott
Jack Miller
Mark Chew
and all of said persons were present, except the following absentees:
. 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 UTILITY SYSTEM REVENUE REFUNDING BONDS,
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: CJ
ABSTENTIONS:
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 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 Ordinance for all purposes.
SIGNED AND SEALED the 8th day of June, 1993.
ity Secretary
(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-a. ~ as to legality the attached and
following Ordinance prior to its passage as aforesaid
r _
Cites ttorney
Bond Attorneys