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1992-039 ORDIN CE NO ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 1992, AND APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO THE STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON WHEREAS, the Certificate of Obligation Act of 1971, as amended and codified (the "Act") permits the City to issue and sell for cash the Certificates of Obligation hereinafter authorized, and WHEREAS, the City has duly caused notice of its intention to issue the Certificates of Obligation hereinafter authorized to be published at the times and in the manner required by the Act and no petition has been filed protesting the issuance thereof THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS THAT Section i AMOUNT AND PURPOSE OF THE CERTIFICATES The certificate or certificates of the city of Denton, Texas (the "Issuer") are hereby authorized to be issued and delivered in the aggregate principal amount of $1,325,000, FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGA- TIONS INCURRED (1) PURSUANT TO CONTRACTS FOR THE CONSTRUCTION OF PUBLIC WORKS, TO-WIT (a) REPLACING AIR CONDITIONING SYSTEMS IN CITY BUILDINGS, (b) REPLACING ROOFS ON CITY BUILD- INGS, (c) CONSTRUCTING AND REPAIRING PARKING LOTS FOR CITY BUILDINGS, (d) INSTALLING ELECTRICAL EQUIPMENT IN CITY BUILD- INGS, (e) RENOVATING CITY BUILDINGS, (f) CONSTRUCTING NEW SIDEWALKS AT CITY BUILDINGS, (g) RENOVATING THE CITY SWIMMING POOL, (h) INSTALLING SECURITY SYSTEMS IN CITY BUILDINGS, AND (1) INSTALLING SOUND SYSTEMS IN CITY BUILDINGS, AND (2) PURSU- ANT TO CONTRACTS FOR THE PURCHASE OF THE FOLLOWING EQUIPMENT FOR ,CITY USE TWO REFUSE TRUCKS, A DUMP TRUCK, A STREET POTHOLE PATCHER, A TRAFFIC SIGNAL BUCKET TRUCK, A FIRE DEPARTMENT AMBULANCE, FIRE DEPARTMENT EMERGENCY MEDICAL EQUIPMENT, A SUBURBAN AUTOMOBILE, AND TWELVE POLICE CARS, AND ALSO FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS FOR PROFESSIONAL SERVICES OF ENGINEERING, ATTOR- NEYS, AND FINANCIAL ADVISORS IN CONNECTION WITH THE ABOVE CONTRACTS AND SAID CERTIFICATES OF OBLIGATION Section 2 DESIGNATION OF THE CERTIFICATES Each cert- lfioate issued pursuant to this Ordinance shall be designated "CITY OF DENTON CERTIFICATE OF OBLIGATION, SERIES 1992", and Initially there shall be issued, sold, and delivered hereunder a single fully registered certificate, without interest cou- pons, payable in installments of principal (the "Initial Certificate"), but the Initial Certificate may be assigned and transferred and/or converted into and exchanged for a like aggregate principal amount of fully registered certlf~cates, without interest coupons, having serial maturities, and in the denomination or denominations of $5,000 or any integral multi- ple of $5,000, all in the manner hereinafter provided The term "Certificates" as used in this Ordinance shall mean and include collectively the Initial Certificate and all substitute certificates exchanged therefor, as well as all other substi- tute certificates and replacement certificates issued pursuant hereto, and the term ,,Certificates" shall mean any of the Certificates Section 3 INITIAL DATE, DENOMINATION, NUMBER, MATURI- TIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL CERTIFICATE (a) The Initial Certificate is hereby authorized to be · ssued, sold, and delivered hereunder as a single fully registered Certificate, without interest coupons, dated March 1, 1992, in the denomination and aggregate principal amount of $1,325,000, numbered R-l, payable in annual installments of principal to the initial registered owner thereof, to-w~t PAINEWEBBER, INC , or to the registered assignee or assignees of said Certificate or any portion or portions thereof (in each case, the "regis- tered owner"), w~th the annual installments of principal of the Initial Certificate to be payable on the dates, respectively, and in the principal amounts, respectively, stated in the FORM OF INITIAL CERTIFICATE set forth in this Ordinance (b) The Initial Certificate (1) may be assigned and transferred, (il) may be converted and exchanged for other Certificates, (Iii) shall have the characteristics, and (iv) shall be signed and sealed, and the principal of and interest on the Initial Certificate shall be payable, all as provided, and in the manner required or indicated, in the FORM OF INITIAL CERTIFICATE set forth in th~s Ordinance Section 4 INTEREST The unpaid principal balance of the Initial Certificate shall bear interest from the date of the Initial Certificate to the respective scheduled due dates of the installments of principal of the Initial Certificate, and said ~nterest shall be payable, all in the manner provided and at the rates and on the dates stated in the FORM OF INITIAL CERTIFICATE set forth in this Ordinance Section 5 FORM OF INITIAL CERTIFICATE The form of the Initial Certificate, including the form of Registration Certif- icate of the Comptroller of Public Accounts of the State of Texas to be endorsed on the Initial Certificate, shall be substantially as follows F0~M OF INITIAL CERTIFICATE NO R-1 $1,325,000 UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON CERTIFICATE OF OBLIGATION SERIES 1992 THE CITY OF DENTON, in Denton County, Texas (the "Issu- er''), being a political subdivision of the State of Texas, hereby promises to pay to PAINEWEBBER, INC , or to the registered assignee or assignees of this Certificate or any portion or portions hereof (in each case, the "regis- tered owner") the aggregate principal amount of $1,325,000 (ONE MILLION THREE HUNDRED TWENTY FIVE THOUSAND DOLLARS) in annual installments of principal due and payable on JULY 1 in each of the years, and in the respective principal amounts, as set forth in the following schedule PRINCIPAL PRINCIPAL YEAR ~ YEAR ~MOUNT 1993 $230,000 2001 $70,000 1994 245,000 2002 75,000 1995 255,000 2003 30,000 1996 50,000 2004 30,000 1997 55,000 2005 30,000 1998 55,000 2006 35,000 1999 60,000 2007 40,000 2000 65,000 and to pay interest, calculated on the basis of a 360-day year composed of twelve 30-day months, from the date of this Certif- icate hereinafter stated, on the balance of each such 3 installment of principal, respectively, from time to time remaining unpaid, at the rates as follows 7 40% per annum on the above installment due in 1993 6 50% per annum on the above installment due in 1994 4 40% per annum on the above installment due in 1995 4 70% per annum on the above installment due in 1996 4 90% per annum on the above Installment due in 1997 5 10% per annum on the above installment due in 1998 5 30% per annum on the above installment due in 1999 5 50% per annum on the above installment due in 2000 5 75% per annum on the above Installment due in 2001 5 90% per annum on the above installment due in 2002 5 75% per annum on the above installment due in 2003 5 75% per annum on the above installment due in 2004 5 75% per annum on the above installment due in 2005 5 75% per annum on the above installment due in 2006 5 75% per annum on the above installment due in 2007 with said interest being payable on JANUARY 1, 1993, and semi- annually on each JULY i and JANUARY 1 thereafter while this Certificate or any portion hereof is outstanding and unpaid THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Certificate are payable in lawful money of the United States of America, without exchange or collection charges The install- ments of principal and the interest on this Certificate are payable to the registered owner hereof through the services of NATIONSBANK OF TEXAS, N A , FORT WORTH, TEXAS, which is the "Paying Agent/Registrar" for this Certificate Payment of all principal of and interest on this Certificate shall be made by the Paying Agent/Registrar to the registered owner hereof on each principal and/or interest payment date by check dated as of such date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of this Certificate (the ,'Certificate Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided, and such check shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such principal and/or interest payment date, to the registered owner hereof, at the address of the registered owner, as it appeared at the close of business on the 15th day of the month next preceding each such date (the "Record Date") on the Registra- tion Books kept by the Paying Agent/Registrar, as hereinafter described The Issuer covenants with the registered owner of this Certificate that on or before each principal and/or interest payment date for this Certificate it will make avail- able to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate Ordinance, the amounts requlred to provide for the payment, in immediately available funds, of all principal of and interest on this Certificate, when due IF THE DATE for the payment of the principal of or inter- est on this Certificate shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the original date payment was due THIS CERTIFICATE has been authorized in accordance with the Constitution and laws of the State of Texas FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGA- TIONS INCURRED (1) PURSUANT TO CONTRACTS FOR THE CONSTRUCTION OF PUBLIC WORKS, TO-WIT (a) REPLACING AIR CONDITIONING SYSTEMS IN CITY BUILDINGS, (b) REPLACING ROOFS ON CITY BUILD- INGS~ (c) CONSTRUCTING AND REPAIRING PARKING LOTS FOR CITY BUILDINGS, (d) INSTALLING ELECTRICAL EQUIPMENT IN CITY BUILD- INGS, (e) RENOVATING CITY BUILDINGS, (f) CONSTRUCTING NEW SIDEWALKS AT CITY BUILDINGS, (g) RENOVATING THE CITY SWIMMING POOL, (h) INSTALLING SECURITY SYSTEMS IN CITY BUILDINGS, AND (i) INSTALLING SOUND SYSTEMS IN CITY BUILDINGS, AND (2) PURSU- ANT TO CONTRACTS FOR THE PURCHASE OF THE FOLLOWING EQUIPMENT FOR CITY USE TWO REFUSE TRUCKS, A DUMP TRUCK, A STREET POTHOLE PATCHER, A TRAFFIC SIGNAL BUCKET TRUCK, A FIRE DEPARTMENT AMBULANCE, FIRE DEPARTMENT EMERGENCY MEDICAL EQUIPMENT, A SUBURBAN AUTOMOBILE, AND TWELVE POLICE CARS, AND ALSO FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS FOR PROFESSIONAL SERVICES OF ENGINEERING, ATTOR- NEYS, AND FINANCIAL ADVISORS IN CONNECTION WITH THE ABOVE CONTRACTS AND SAID CERTIFICATES OF OBLIGATION ON JULY 1, 1997, or on any date whatsoever thereafter, the unpaid installments of principal of this Certificate may be prepaid or redeemed prior to their scheduled due dates, at the opt~on of the Issuer, with funds derived from any available source, es a whole, or in part, and, if in part, the particular portion of this Certificate to be prepaid or redeemed shall be selected and designated by the Issuer (provided that a portion of this Certificate may be redeemed only in an integral multi- ple 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 prepaymeRt 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 prepayment or redemption price for this Certificate or the port~on 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 ~f due provision for such payment is made, all as provided above, this Certificate, or the portion thereof which is to be so prepaid or redeemed, thereby automatically shall be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear interest after the date fixed for its prepayment or redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the prepayment or redemption price plus accrued inter- est 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 ~n the Registration Books all such prepayments or redemptions of principal of this Certificate or any portion hereof THIS CERTIFICATE, to the extent of the unpaid principal balance hereof, or any unpaid portlon hereof in any integral multiple of $5,000, may be assigned by the lnltlal registered owner hereof and shall be transferred only in the Registratlon Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Certificates, upon the terms and conditions set forth in the Certificate Ordinance Among other requirements for such transfer, this Certlflcate must be presented and surrendered to the Paying Agent/Registrar for cancellation, together with proper instruments of assign- ment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment by the ~nltial registered owner of this Certificate, or any portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees in whose name or names this Certificate or any such portion or portions hereof is or are to be trans- ferred and registered Any ~nstrument or ~nstruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Certificate or any such portion or portions hereof by the initial registered owner hereof A new certificate or certificates payable to such assignee or assignees (which then will be the new registered owner or owners of such new Certificate or Certiflcates) or to the initial registered owner as to any portion of this Certifi- cate which is not belng assigned and transferred by the initial registered owner, shall be delivered by the Paying 6 Agent/Registrar in conversion of and exchange for this Certifi- cate,or any portion or portions hereof, but solely In the form and manner as provided in the next paragraph hereof for the conversion and exchange of this Certificate or any portion hereof The registered owner of this Certificate shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Certificate to the extent of such payment, and the Issuer and the Paying Agent/- Registrar shall not be affected by any notice to the contrary AS PROVIDED above and in the Certificate Ordinance, this Certificate, to the extent of the unpaid principal balance hereof, may be converted into and exchanged for a like aggre- gate principal amount of fully registered certificates, without interest coupons, payable to the assignee or assignees duly designated in writing by the initial registered owner hereof, or to the initial registered owner as to any portion of this Certificate which is not being assigned and transferred by the initial registered owner, in any denomination or denominations in any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute certificate issued in exchange for any portion of this Certificate shall have a single stated principal maturity date), upon surrender of this Certificate to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the Certificate Ordinance If this Certificate or any portion hereof is assigned and transferred or converted each certifi- cate issued in exchange for any portion hereof shall have a single stated principal maturity date corresponding to the due date of the Installment of principal of this Certificate or portion hereof for which the substitute certificate is being exchanged, and shall bear interest at the rate applicable to and borne by such installment of principal or portion thereof No such certificate shall be payable in installments, but shall have only one stated principal maturity date AS PROVIDED IN THE CERTIFICATE ORDINANCE, THIS CERTIFICATE IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more assignees, but the certificates issued and de- livered in exchange for this Certificate or any portion hereof may be assigned and transferred, and converted, subsequently, as provided in the Certificate Ordinance The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging this Certificate or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto The Paying Agent/Registrar shall not be required to make any such assignment, conversion, or exchange during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following prln¢ipaI or interest payment date IN THE EVENT any Paying Agent/Registrar for this Certifi- cate is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be mailed to the registered owner of this Certificate IT IS HEREBY certified, recited, and covenanted that this Certificate has been duly and validly authorized, issued, and delivered, that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this Certificate have been performed, existed, and been done in accordance with law, that this Certificate is a general obligation of the Issuer, issued on the full faith and credit thereof, and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged irrevocably for such payment, withln the limit prescribed by law, and that, together with other parity obligations, this Certificate additionally is payable from and secured by certain surplus revenues (not to exceed $10,000 in aggregate amount) derived by the Issuer from the ownership and operation of the city's Utility System (consisting of the City's combined waterworks system, sanitary sewer system, and electric light and power system), all as provided in the Certificate Ordinance THE ISSUER has reserved the right to issue, in accordance with law, and in accordance with the Certificate Ordinance, other and additional obligations, and to enter into contracts, payable from ad valorem taxes and/or revenues of the City's Utility System, on a parity with, or with respect to said revenues, superior in lien to, this Certificate BY BECOMING the registered owner of this Certificate, the registered owner thereby acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and available for inspection in the official minutes and records of the governing body of the Issuer, and agrees that the terms and provisions of this Certificate and the Certificate Ordinance constitute a contract between the registered owner hereof and the Issuer IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the manual signature of the Mayor of the Issuer and countersigned with the manual signature of the City Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed on this Certificate, and has caused this Certificate to be dated MARCH 1, 1992 City Secretary, Mayor, city of Denton, Texas C~ty of Denton, Texas (CITY SEAL) FORM OF REGISTRATION CERTIFICATE OF THE COMPTROLLER OF PUBLIC ACCOUNTS COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO I hereby certify that this Certificate has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Certificate has been registered by the Comptroller of Public Accounts of the State of Texas Witness my signature and seal this Comptroller of Public Accounts of the State of Texas (COMPTROLLER'S SEAL) Section 6 ADDITIONAL CHARACTERISTICS OF THE CERTIFI- CATES ~eqSstration and Transfer (a) The Issuer shall keep or cause to be kept at the principal corporate trust office of NATIONSBANK OF TEXAS, N A , FORT WORTH, TEXAS (the "Paying Agent/Registrar") books or records of the registration and transfer of the Certificates (the "Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such transfers and registrations under such reasonable regulations as the Issuer and Paying Agent/Regxstrar may prescribe, and the Paying Agent/Registrar shall make such transfers and registrations as herein provided The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the registered owner of each Certificate to Which payments with respect to the Certificates shall be mal~ed, as herein provided, but it shall be the duty of each registered owner to notify the Paying Agent/Registrar in 9 writing of the address to which payments shall be mailed, and such interest payments shall not be mailed unless such not~ce has been given The Issuer shall have the right to inspect the Registration Books during regular buslness 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 lnspect~on by any other entity Registration of each Certificate may be transferred In the Registration Books only upon presentatlon and surrender of such Certificate to the Paying Agent/Registrar for transfer of registration and cancellation, together w~th proper written instruments of assignment, in form and with guarantee of s~gnatures satisfactory to the Paying Agent/Reglstrar, (~) evldenclng the assignment of the Certificate, or any port~on thereof in any integral multlple of $5,000, to the asslgnee or asslgnees thereof, and (~) the r~ght of such asslgnee or assignees to have the Certificate or any such portion thereof registered in the name of such assignee or assignees Upon the assignment and transfer of any Certificate or any port~on thereof, a new substitute Certificate or Certificates shall be ~ssued ~n conversion and exchange therefor ~n the manner herein provided The Initial Certlflcate, to the extent of the unpald 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 reglstered owner thereof All Certificates issued and delivered ~n conversion of and exchange for the In~tlal Certificate shall be In any denom~natlon or denominatlons of any ~ntegral multiple of $5,000 (subject to the reql/irement hereinafter stated that each substitute Certificate shall have a single stated prlnc~- pal maturity date), shall be in the form prescribed ~n the FORM OF SUBSTITUTE CERTIFICATE set forth In th~s Ordinance, and shall have the characteristics, and may be assigned, trans- ferred, and converted as hereinafter provided If the Initial Certificate or any portion thereof ls assigned and transferred or aonverted the Initial Certificate must be surrendered to the Paying Agent/Registrar for cancellation, and each Certificate · ssued in exchange for any portion of the Initial Certificate shall have a single stated principal maturlty date, and shall not be payable in installments, and each such Cert~flcate shall have a principal maturity date corresponding to the due date of the installment of principal or portion thereof for whlch the substitute Certificate is being exchanged, and each such Certificate shall bear interest at the single rate applicable to and borne by such installment of principal or portion thereof for which it is being exchanged If only a portion of the Initial Certificate is assigned and transferred, there shall be delivered to and registered in the name of the initial registered owner substitute Certificates In exchange for the unassigned balance of the Inltial Certificate in the same 10 manner as if the initial registered owner were the assignee thereof If any Certificate or portion thereof other than the Initial Certificate is assigned and transferred or converted each Certificate issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Certificate for which it is exchanged A form of assignment shall be printed or endorsed on each Certificate, excepting the Initial Certificate, which shall be executed by the registered owner or 1ts duly authorized attorney or repre- sentative to evidence an assignment thereof Upon surrender of any Certificates or any portion or portions thereof for trans- fer of registration, an authorized representative of the Paying Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new fully registered substitute Certificate or Certificates, having the characteristics herein described, payable to such assignee or assignees (which then will be the registered owner or owners of such new Certificate or Certificates), or to the previous registered owner in case only a portion of a Certificate is being assigned and trans- ferred, all in conversion of and exchange for said assigned Certificate or Certificates or any portion or portions thereof, in the same form and manner, and with the same effect, as provided in Section 6(d), below, for the conversion and ex- change of Certificates by any registered owner of a Certifi- cate. The Issuer shall pay the Paying Agent/Reglstrar's standard or customary fees and charges for making such transfer and delivery of a substitute Certificate or Certificates, but the one requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto The Paying Agent/Registrar shall not be required to make transfers of registration of any Certificate or any portion thereof during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date (b) Ownership of Certificates The entity in whose name any Certificate shall be registered in the Registration Books at any time shall be deemed and treated as the absolute owner thereof for all purposes of this Ordinance, whether or not such Certificate shall be overdue, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary, and payment of, or on account of, the principal of, premium, if any, and interest on any such Certificate shall be madeI only to such registered owner Ail such payments shall be valid and effectual to satisfy and discharge the liability upon such Certificate to the extent of the sum or sums so paid (c) Payment of Certificates and Interest The Issuer hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on 11 the Certificates, and to act as Its agent to convert and exchange or replace Certificates, all as provided in this Ordinance The Paying Agent/Registrar shall keep proper records of all payments made by the Issuer and the Paying Agent/Registrar with respect to the Certificates, and of all conversions and exchanges of Certificates, and all replacements of Certificates, as provided in this Ordinance (d) Conversion and Exchange or Replacement, Authenti- cation Each Certificate issued and delivered pursuant to this Ordinance, to the extent of the unpaid principal balance or principal amount thereof, may, upon surrender of such Certifi- cate 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 represen- tatives, 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 con- verted into and exchanged for fully registered certificates, without interest coupons, in the form prescribed in the FORM OF SUBSTITUTE CERTIFICATE set forth In this Ordinance, in the denomination of $5,000, or any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Certificate shall have a single stated maturity date), as requested in writing by such registered owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid principal balance or principal amount of any Certificate or Certificates so surrendered, and payable to the appropriate registered owner, assignee, or assignees, as the case may be If the Initial Certificate is assigned and transferred or converted each substitute Certificate issued in exchange for any portion of the Initial Certificate shall have a single stated principal maturity date, and shall not be payable in installments, and each such Certificate shall have a principal maturity date corresponding to the due date of the Installment of principal or portion thereof for which the substitute Certificate is being exchanged, and each such Certificate shall bear interest at the single rate applicable to and borne by such installment of principal or portion thereof for which it is being exchanged If any Certificate or portion thereof (other than the Initial Certificate) Ks as- signed and transferred or converted, each Certificate issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Certificate for which it is being exchanged Each substitute Certificate shall bear a letter and/or number to distinguish at from each other Certificate The Paying Agent/Registrar shall convert and exchange or replace Certificates as provided herein, and each fully registered certificate delivered an conversion of and 12 exchange for or replacement of any Certificate or portion thereof as permitted or required by any provision of this Ordinance shall constitute one of the Certificates for all purposes of this Ordinance, and may again be converted and exchanged or replaced It is specifically provided that any Certificate authenticated in conversion of and exchange for or replacement of another Certificate on or prior to the first scheduled Record Date for the Initial Certificate shall bear interest from the date of the Initial Certificate, but each substitute Certificate so authenticated after such first scheduled Record Date shall bear interest from the interest payment date next preceding the date on which such substitute Certificate was so authenticated, unless such Certificate is authenticated after any Record Date but on or before the next following interest payment date, in which case it shall bear interest from such next following interest payment date, provided, however, that if at the time of delivery of any substitute Certificate the interest on the Certificate for which it is being exchanged is due but has not been paid, then such Certificate shall bear interest from the date to which such interest has been paid in full THE INITIAL CERTIFICATE Issued and delivered pursuant to this Ordinance ~s not required to be, and shall not be, authenticated by the Paying Agent/- Registrar, but on each substitute Certificate issued in conver- sion of and exchange for or replacement of any Certificate or Certificates issued under this Ordinance there shall be printed a certificate, in the form substantially as follows "PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE It is hereby certified that this Certificate has been issued under the provisions of the Certificate Ordinance described on the face of this Certificate, and that this Certificate has been issued in conversion of and exchange for or replacement of a certificate, certificates, or a portion of a certificate or certificates of an issue which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas NATIONSB~tNK OF TEXAS, N A , FORT WORTH, TEXAS Paying Agent/Registrar Dated By Authorized Representative" An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Certificate, date and manually sign the above Certificate, and no such Certificate 13 shall be deemed to be issued or outstanding unless such Certif- icate is so executed The Paying Agent/Registrar promptly shall cancel all Certificates surrendered for conversion and exchange or replacement No additional ordinances, orders, or resolutions need be passed or adopted by the governing body of the Issuer or any other body or person so as to accomplish the foregoing conversion and exchange or replacement of any Certif- icate or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Certificates in the manner prescribed herein, and said Certificates shall be of type composition printed on paper with lithographed or steel engraved borders of customary weight and strength Pursuant to Vernon's Ann Tex Clv St Art 717k-6, and particularly Section 6 thereof, the duty of conver- sion and exchange or replacement of Certificates as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the above Paying Agent/Reglstrar's Authentica- tion Certificate, the converted and exchanged or replaced Certificate shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Initial Certif- icate which originally was issued pursuant to this Ordinance, approved by the Attorney General, and registered by the Comp- troller of Public Accounts The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging any Certificate or any portion thereof, but the one requesting any such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the exercise of such privilege of conversion and exchange The Paying Agent/Registrar shall not be required to make any such conversion and exchange or replacement of Certif- icates or any portion thereof (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, (il) with respect to any Certificate or portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date (e) ~ General Ail Certificates issued in conversion and exchange or replacement of any other Certificate or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Certificates to be payable only to the registered owners thereof, (ii) may be transferred and assigned, (iii) may be converted and exchanged for other Certificates, (iv) shall have the characteristics, (v) shall be signed and sealed, and (vi) the principal of and interest on the Certificates shall be pay- able, all as provided, and in the manner required or indicated, 14 in the FORM OF SUBSTITUTE CERTIFICATE set forth in this Ordi- nance (f) Payment of Fees and Char~es The Issuer hereby covenants with the registered owners of the Certificates that it will (i) pay the standard or customary fees and charges of the Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on the Certificates, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect to the transfer of registration of Certificates, and with respect to the conver- sion and exchange of Certificates solely to the extent above provided in this Ordinance (g) Sgbstitute Pavina Aaent/Re~lstrar The Issuer covenants with the registered owners of the Certificates that at all times while the Certificates are outstanding the Issuer will provide a competent and legally qualified bank, trust company, financial Institution, or other agency to act as and perform the services of Paying Agent/Registrar for the Certifi- cates under this Ordinance, and that the Paying Agent/Registrar will be one entity The Issuer reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not less than 120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days prior to the next principal or interest payment date after such notice In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar under this Ordinance Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the Regis- tratlon Books (or a copy thereof), along with all other perti- nent books and records relating to the Certificates, to the new Paying Agent/Registrar designated and appointed by the Issuer Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Certificates, by United States mail, first-class postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar By accepting the position and perform- lng as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a cer- tified copy of this Ordinance shall be delivered to each Paying Agent/Registrar 15 Section 7 FORM OF SUBSTITUTE CERTIFICATES The form of all Certificates issued in conversion and exchange or replace- ment of any other Certificate or portlon thereof, including the form of Paying Agent/Registrar's Certificate to be printed on each of such Certificates, and the Form of Asslgnment to be printed on each of the Certlficates, shall be, respectlvely, substantially as follows, with such appropriate varlatlons, omissions, or insertions as are permitted or required by th~s Ordinance FORM OF SUBSTITUTE CERTIFICATE NO UNITED STATES OF AMERICA PRINCIPAL AMOUNT STATE OF TEXAS $ COUNTY OF DENTON CITY OF DENTON CERTIFICATE OF OBLIGATION SERIES 1992 ORIGINAL ISSUE L~ ~ DATE CUSIP NO % March 1, 1992 ON THE MATURITY DATE speclfied above the CITY OF DENTON, in Denton County, Texas (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to or to the registered assignee hereof (either being hereinafter called the "registered owner") the principal amount of and to pay interest thereon, calculated on the basis of a 360-day year composed of twelve 30-day months, from MARCH 1, 1992, to the maturity date specified above, at the interest rate per annum specified above, with ~nterest being payable on JANUARY 1, 1993, and semiannually on each JULY 1 and JANUARY 1 thereafter, except that if the date of authent~catlon of thls Certificate is later than the first Record Date (hereinafter defined), such principal amount shall bear interest from the interest payment date next preceding the date of authentica- tion, unless such date of authentication is after any Record Date (hereinafter defined) but on or before the next following interest payment date, in which case such principal amount shall bear interest from such next following ~nterest payment date THE PRINCIPAL OF AND INTEREST ON this Certificate are payable ~n lawful money of the United States of America, without exchange or collection charges The principal of this 16 Certificate shall be paid to the registered owner hereof upon presentation and surrender of this Certificate at maturity, at the principal corporate trust office of NATIONS BANK OF TEXAS, N A , FORT WORTH, TEXAS, which is the "Paying Agent/Registrar" for this Certificate The payment of interest on this Certifi- cate shall be made by the Paying Agent/Registrar to the regis- tered owner hereof on each interest payment date by check dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of the Certificates (the "Certificate Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided, and such check shall be sent by the Paying Agent/- Registrar by United States mall, 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 Registra- tion Books kept by the Paying Agent/Registrar, as hereinafter described However, the payment of such interest may be made by any other method acceptable to the Paying Agent/Registrar and requested by, and at the risk and expense of, the regis- tered owner hereof Any accrued interest due upon the redemp- tion of this Certificate prior to maturity as provided herein shall be paid to the registered owner at the principal corpo- rate trust office of the Paying Agent/Registrar upon presenta- tion and surrender of this Certificate for redemption and payment at the principal corporate trust office of the Paying Agent/Registrar The Issuer covenants with the registered owner of this Certificate that on or before each principal payment date, interest payment date, and accrued interest payment date for this Certificate it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Certificates, when due IF THE DATE for the payment of the principal of or inter- est on this Certificate shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the original date payment was due THIS CERTIFICATE is one of an issue of Certificates initially dated MARCH 1, 1992, authorized in accordance with 17 the Constitution and laws of the State of Texas in the princ- ipal amount of $1,325,000, FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS INCURRED (1) PURSUANT TO CONTRACTS FOR THE CONSTRUCTION OF PUBLIC WORKS, TO-WIT (a) REPLACING AIR CONDITIONING SYSTEMS IN CITY BUILD- INGS, (b) REPLACING ROOFS ON CITY BUILDINGS, (c) CONSTRUCTING AND REPAIRING PARKING LOTS FOR CITY BUILDINGS, (d) INSTALLING ELECTRICAL EQUIPMENT IN CITY BUILDINGS, (e) RENOVATING CITY BUILDINGS, (f) CONSTRUCTING NEW SIDEWALKS AT CITY BUILDINGS, (g) RENOVATING THE CITY SWIMMING POOL, (h) INSTALLING SECURITY SYSTEMS IN CITY BUILDINGS, AND (1) INSTALLING SOUND SYSTEMS IN CITY BUILDINGS, AND (2) PURSUANT TO CONTRACTS FOR THE PURCHASE OF THE FOLLOWING EQUIPMENT FOR CITY USE TWO REFUSE TRUCKS, A DUMP TRUCK, A STREET POTHOLE PATCHER, A TRAFFIC SIGNAL BUCKET TRUCK, A FIRE DEPARTMENT AMBULANCE, FIRE DEPARTMENT EMERGENCY MEDICAL EQUIPMENT, A SUBURBAN AUTOMOBILE, AND TWELVE POLICE CARS, AND ALSO FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS FOR PROFESSIONAL SERVICES OF ENGINEERING, ATTORNEYS, AND FINANCIAL ADVISORS IN CONNECTION WITH THE ABOVE CONTRACTS AND SAID CERTIFICATES OF OBLIGATION ON JULY 1, 1997, or on any date whatsoever thereafter, the Certificates of this Series may be redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived from any available and lawful source, as a whole, or in part, and, if in part, the particular Certificates, or portions thereof, to be redeemed shall be selected and designated by the Issuer (provided that a portion of a Certificate may be re- deemed only in an integral multiple of $5,000), at the redemp- tion 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 redemp- tion of Certificates or portions thereof prior to maturity a written notice of such redemption shall be published once in a financial publication, journal, or reporter of general circula- tion 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 mall, first-class postage prepaid, not less than 30 days prior to the date fixed for any such redemption, to the registered owner of each Certificate to be redeemed at Its address as it appeared on the 45th day prior to such redemption date, provided, however, that the failure to send, mail, or receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Certificate, and it ls 18 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 redemp- tion of any Certificates or portions thereof By the date f~xed for any such redemption due provision shall be made with the Paying Agent/Registrar for the payment of the required redemption price for the Certificates or portions thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption If such written notice of redemp- tion is published and if due provision for such payment is made, all as provided above, the Certificates or portions thereof which are to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled maturities, and they shall not bear interest after the date fixed for redemp- tion, and they shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption price plus accrued interest from the Paying Agent/ Registrar out of the funds provided for such payment If a portion of any Certificate shall be redeemed a substitute Certificate or Certificates having the same maturity date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as provided in the certificate Ordinance THIS CERTIFICATE OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE OF $5,000 may be assigned and shall be trans- ferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Certificates, upon the terms and conditions set forth in the Certificate Ordinance Among other requirements for such assignment and transfer, this Certificate must be presented and surrendered to the Paying Agent/Registrar, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidenc- ing assignment of thls Certificate or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Certificate or any such portion or portions hereof is or are to be transferred and registered The form of Assignment printed or endorsed on th~s Certificate shall be executed by the registered owner or its duly authorized attorney or representative, to evidence the assignment hereof A new Certificate or Certificates payable to such assignee or assignees (which then will be the new registered owner or owners of such new Certificate or Certifi- cates), or to the previous registered owner in the case of the asslgnment and transfer of only a port~on of this Certificate, 19 may be delivered by the Paying Agent/Registrar in conversion of and exchange for this Certificate, all in the form and manner as provlded in the next paragraph hereof for the conversion and exchange of other Certificates The Issuer shall pay the Paying Agent/Reglstrar'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 thls Certlficate or any portion hereof during the period commenclng w~th the close of business on any Record Date and ending with the opening of buslness on the next following principal or interest payment date The registered owner of this Certifi- cate shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Certifi- cate to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary ALL CERTIFICATES OF THIS SERIES are ~ssuable solely as fully registered certificates, without ~nterest coupons, ~n the denomination of any integral multiple of $5,000 As provided in the Certificate Ordinance, this Certificate, may, at the request of the registered owner or the assignee or assignees hereof, be converted into and exchanged for a llke aggregate principal amount of fully registered certlf~cates, without lnterest 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 ~n any ~ntegral multlple of $5,000 as requested in writing by the appropriate registered owner, assignee, or assignees, as the case may be, upon sur- render of this Certificate to the Paying Agent/Registrar for cancellation, all in accordance wlth the form and procedures set forth in the Certificate Ordinance The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging any Certificate or any portion thereof, but the one requesting 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 prlvilege of conversion and exchange The Paying Agent/Registrar shall not be required to make any such conversion and exchange during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date IN THE EVENT any Paying Agent/Registrar for the Certifi- cates is changed by the Issuer, resigns, or otherwise ceases to 2O act as such, the Issuer has covenanted in the Certificate Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be mailed to the registered owners of the Certificates IT IS HEREBY certified, recited, and covenanted that this Certificate has been duly and validly authorized, issued, and delivered, that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this Certificate have been performed, existed, and been done in accordance with law, that this Certificate is a general obligation of the Issuer, issued on the full faith and credit thereof, and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged irrevocably for such payment, within the limit prescribed by law, and that, together with other parity obligations, this Certificate, and the other Certificates of this Series, additionally are payable from and secured by certain surplus revenues (not to exceed $10,000 in aggregate amount) derived by the Issuer from the ownership and operation of the City's Utility System (consisting of the City's combined waterworks system, sanitary sewer system, and electric light and power system), all as provided in the Certificate Ordinance THE ISSUER has reserved the right to issue, in accordance wxth law, and in accordance wxth the Certificate Ordinance, other and additional obligations, and to enter into contracts, payable from ad valorem taxes and/or revenues of the City's Utility System, on a parity with, or with respect to said revenues, superior in lien to, this Certificate BY BECOMING the registered owner of this Certificate, the registered owner thereby acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and available for ~nspection ~n the official minutes and records of the governing body of the Issuer, and agrees that the terms and provisions of this Certificate and the Certificate Ordinance constitute a contract between each registered owner hereof and the Issuer IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the facsimile signature of the Mayor of the Issuer and countersigned with the facsimile signature of the city Secretary of the Issuer, and has caused the official seal 21 of the Issuer to be duly impressed, or placed in facslmlle, on thls Certificate (facsimile slanature) (facsimile slanature) city Secretary, Mayor, City of Denton, Texas City of Denton, Texas (CITY SEAL) F0~ OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE It ~s hereby certified that thls Certificate has been issued under the provisions of the Certificate Ordinance descrlbed on the face of th~s Certificate, and that th~s Certificate has been issued ~n conversion of and exchange for or replacement of a certificate, certlflcates, or a portlon of a certificate or certificates of an issue which or~glnally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas NATIONSBANK OF TEXAS, N A , FORT WORTH, TEXAS Paying Agent/Registrar Dated By Authorized Representative FORM OF ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED, the undersigned registered owner of this Certificate, or duly authorized representative or attorney thereof, hereby assigns this Certificate to ! (Assignee's Social (print or typewrite Asslgnee's name and Security or Taxpayer address, including zip code) Identification Number andhereby Irrevocably constitutes and appoints 22 attorney to transfer the registration of this Certificate on the Paying Agent/Registrar's Registration Books with full power of substitution in the premises Dated Signature Guaranteed NOTICE This signature must be Registered Owner guaranteed by a member of the NOTICE This signature must New York Stock Exchange or a correspond with the name of commercial bank or trust the Registered Owner appear- lng on the face of th~s Cer- company tificate Section 8 TAX LEVY A special Interest and Sinking Fund (the "Interest and Sinking Fund") is hereby created solely for the benefit of the Certificates, and the Interest and sinking Fund shall be established and ma~ntalned by the Issuer at an official depository bank of the Issuer The Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the Issuer, and shall be used only for paying the interest on and principal of the Certificates Ail ad valorem taxes levied and collected for and on account of the Certificates shall be deposited, as collected, to the credit of the Interest and Sinking Fund During each year while any of the Certificates or interest thereon are outstanding and unpaid, the governing body of the Issuer shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the Interest on the Certificates as such interest becomes due, and to provide and maintain a sinking fund adequate to pay the principal of its Certificates as such principal matures (but never less than 2% of the original principal amount of the Certificates as a sinking fund each year), and said tax shall be based on the latest approved tax rolls of the Issuer, with full allowance being made for tax delinquencies and the cost of tax collection Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied, against all taxable property in the Issuer for each year while any of the Certificates or interest thereon are outstanding and unpaid, and said tax shall be assessed and collected each such year and deposited to the credit of the aforesaid Interest and Sinking Fund Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of the Certificates, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law 23 Section 9 SURPLUS REVENUES The Certificates addi- tionally shall be payable from and secured by surplus revenues, to the extent hereinafter permitted, derived by the Issuer from the ownership and operation of the Issuer's Utility System (consisting of its combined waterworks system, sanitary sewer system, and electric light and power system) remaining after (a) payment of all amounts constituting operation and main- tenance expenses of said Utility System, and (b) payment of all debt service, reserve, and other requirements and amounts required to be paid under all ordinances heretofore or here- after authorizing (i) all bonds and (il) all other obligations not on a parity with the Certificates, which are payable from and secured by any Utility System revenues, and (c) payment of all amounts payable from any Utility System revenues pursuant to contracts heretofore or hereafter entered Into by the Issuer in accordance with law (the "Surplus Revenues") If, for any reason, the Issuer fails to deposit ad valorem taxes levied pursuant to Section 8 hereof to the credit of the Interest and Sinking Fund in an amount sufficient to pay, when due, the principal of and interest on the Certificates, then Surplus Revenues, to the extent hereinafter permitted, shall be depos- ited to the credit of the Interest and Sinking Fund and used to pay such principal and/or interest A maximum aggregate of $10,000 of Surplus Revenues may be used to pay principal and/or interest On the Certificates and any obligations on a parity therewith The Certificates and any obligations on a parity therewith are not, and shall not be deemed to be, payable from or secured by any Surplus Revenues in excess of an aggregate of $10,000 Until and unless an aggregate of $10,000 of Surplus Revenues actually is used to pay any such principal and/or interest, additional obligations, payable from and secured by all or any remaining unused part of said aggregate of $10,000 of Surplus Revenues, may be issued by the Issuer on a parity with the Certificates and any other then outstanding parity obligations, with the Certificates and all such additional parity obligations to be payable from and secured equally and ratably by all or any remaining unused part of said aggregate The Issuer reserves, and shall have, the right to issue bonds, and other obligations not on a parity with the Certificates, and to enter into contracts, in accordance w~th applicable laws, to be payable from and secured by any Utility System revenues other than the aggregate of $10,000 of Surplus Reve- nues as described above The Certificates are on a parity with those issues of City of Denton Certificates of Obligation, Series 1987-A, Series 1989, Series 1989-A, and Series 1991, as permitted in the Ordinances authorizing same, and it is hereby found and determined that none of the above defined Surplus Revenues have ever been used to pay any principal and/or interest on said city of Denton Certificates of Obligation, Series 1987-A, Series 1989, Series 1989-A, or Series 1991 24 Section l0 DEFEASANCE OF CERTIFICATES (a) Any Certif- icate and the interest thereon shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Certificate") within the meaning of this Ordinance, except to the extent provided in subsection (d) of this Section, when payment of the principal of such Certificate, plus interest thereon to the due date either (1) shall have been made or caused to be made accordance with the terms thereof, or (Il) shall have been provided for on or before such due date by irrevocably deposit- ing With or making available to the Paying Agent/Registrar for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Government Obligations which mature as to principal and interest in such amounts and at such times as will insure the availability, without rein- vestment, of sufficient money to provide for such payment, and when proper arrangements have been made by the Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased Certificates shall have become due and payable At such time as a Certificate shall be deemed to be a Defeased Certificate hereunder, as aforesaid, such Certificate and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and pledged as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Government Obligations (b) Any moneys so deposited with the Paying Agent/Regis- trar may at the written direction of the Issuer also be vested in Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all Income from such Government Obligations received by the Paying Agent/Registrar which is not required for the payment of the Certificates and interest thereon, with respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer (c) The term "Government Obligations" as used in this Section shall mean direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, which may be United States Treasury obligations such as its State and Local Government Series, which may be in book-entry form (d) Until all Defeased Certificates shall have become due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Certifi- cates the same as if they had not been defeased, and the Issuer 25 shall make proper arrangements to provide and pay for such services as required by this ordinance Section 11 DAMAGED, MUTILATED, LOST, STOLEN, OR DE- STROYED CERTIFICATES (a) ~eplacement Certificates In the event any outstanding Certificate is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new certificate of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement for such Certificate in the manner hereinafter provided (b) ADDllCatlon for Replacement Certificates Applica- tion for replacement of damaged, mutilated, lost, stolen, or destroyed Certificates shall be made by the registered owner thereof to the Paying Agent/Registrar In every case of loss, theft, or destruction of a Certificate, the registered owner applying for a replacement certificate shall furnish to the Issuer and to the Paying Agent/Registrar such security or Indemnity as may be req~/ired by them to save each of them harmless from any loss or damage with respect thereto Also, in every case of loss, theft, or destruction of a Certificate, the registered owner shall furnish to the Issuer and the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Certificate, as the case may be In every case of damage or mutilation of a Certificate, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or mutilated (c) NO Default occurred Notwithstanding the foregoing provisions of this Section, in the event of any such Certifi- cate shall have matured, and no default has occurred which is then continuing in the payment of the prlnclpal of, or interest on the Certificate, the Issuer may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Certificate) instead of issuing a replacement Certificate, provided security or indemnity is furnished as above provided in this Sectlon (d) Charae for Issuina Replacement Certificates Prior to the issuance of any replacement certificate, the Paying Agent/Registrar shall charge the registered owner of such Certificate with all legal, printing, and other expenses in connection therewith Every replacement certificate issued pursuant to the provisions of this Section by virtue of the fact that any Certificate ls lost, stolen, or destroyed shall constitute a contractual obligation of the Issuer whether or not the lost, stolen, or destroyed Certificate shall be found at any time, or be enforceable by anyone, and shall be entitled 26 to all the benefits of this Ordinance equally and proportion- ately with any and all other Certificates duly issued under this Ordinance (e) Authority for Issulna Replacement Certificates In accordance with Section 6 of Vernon's Ann Tex civ St Art 717k~6, this Section of this Ordinance shall constitute author- lty for the issuance of any such replacement certlflcate without necessity of further action by the governing body of the Issuer or any other body or person, and the duty of the replacement of such certificates is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/- Registrar shall authenticate and deliver such Certificates in the form and manner and with the effect, as provided in Section 6(d) of this Ordinance for Certificates issued in conversion and exchange for other Certificates Section 12 CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES, CERTIFICATE COUNSEL'S OPINION, CUSIP NUMBERS, PREAMBLE AND INSURANCE The Mayor of the Issuer is hereby authorized to have control of the Initial Certificate issued hereunder and all necessary records and proceedings pertaining to the Initial Certificate pending its delivery and its inves- tigation, examination, and approval by the Attorney General of the State of Texas, and its registration by the Comptroller of Public Accounts of the State of Texas Upon registration of the Initial Certificate said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate on the Initial Certificate, and the seal of said Comptroller shall be impressed, or placed in facsimile, on the Initial Certificate The approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Initial Certificate or on any Certificates issued and delivered in conversion of and exchange or replacement of any Certificate, but neither shall have any legal effect, and shall be solely for the convenience and information of the registered owners of the Certificates The preamble to this Ordinance is hereby adopted and made a part hereof for all purposes If insurance is obtained on any of the Certificates, the Initial Certificate and all other Certifi- cates shall bear an appropriate legend concerning insurance as provided by the insurer Section 13 COVENANTS REGARDING TAX-EXEMPTION The Issuer covenants to refrain from taking any action which would adversely affect, and to take any action required to ensure, the treatment of the Certificates as obligations described 1n section 103 of the Code, the interest on which is not lnclud- 27 able in the "gross income" of the holder for purposes of federal income taxation In furtherance thereof, the Issuer covenants as follows (a) to take any action to assure that no more than 10 percent of the proceeds of the Certificates (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 re- ceived by the Issuer, with respect to such private busi- ness use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the Certificates, in contravention of section 141(b)(2) of the Code, (b) to take any action to assure that in the event that the "private business use" described in subsection (a) hereof exceeds 5 percent of the proceeds of the Certificates (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a "private business use" which is "related" and not "disproportionate", within the meaning of section 141(b) (3) of the Code, to the governmental use, (c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or 5 percent of the proceeds of the Certificates (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code, (d) to refrain from taking any action which would otherwise result in the Certificates being treated as "private activity bonds" within the meaning of section 141(b) of the Code, (e) to refrain from taking any action that would result in the Certificates being "federally guaranteed" within the meaning of section 149(b) of the Code, (f) to refrain from using any portion of the pro- ceeds of the Certificates, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b) (2) of the Code) which produces a materially higher yield over the term of the Certificates, other than investment property acquired with -- 28 (1) proceeds of the Certificates invested for a reasonable temporary period of 3 years or less until such proceeds are needed for the purpose for which the Certificates are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1 103-13(b)(12) of the Treasury Regulations, and (3) amounts deposited in any reasonably re- quired reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Certificates, (g) to otherwise restrict the use of the proceeds of the Certificates or amounts treated as proceeds of the Certificates, as may be necessary, so that the Certifi- cates do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relat- ing to advance refundings), (h) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Certificates) an amount that is at least equal to 90 percent of the "Excess Earnings", within the meaning of section 148(f) of the Code and to pay to the United States of A~erica, not later that 60 days after the Certificates have been paid in full, 100 percent of the amount then required to be pa~d 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 slx years following the f~nal payment of princi- pal and interest on the Certificates It is the understanding of the Issuer that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U S Department of the Treasury pursuant thereto In the event that regulations or rulings are hereafter promulgated which modify, or expand provisions of the Code, as applicable to the Certifi- cates, the Issuer will not be required to comply with any covenant contained herein to the extent that such modification or expansion, in the opinion of nationally-recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Certificates 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 Certificates, the Issuer agrees to comply with the additional requirements to the extent neces- sary, in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Certificates under section 103 of the Code Section 14 SALE OF INITIAL CERTIFICATE The Initial Certificate is hereby sold and shall be delivered to PaineWebber, Inc and Associates, for cash for the par value thereof and accrued interest thereon to date of delIvery, plus a premium of $ - 0 - It is hereby officially found, deter- mined, and declared that the Initial Certificate has been sold at public sale to the bidder offering the lowest interest cost, after receiving sealed bids pursuant to an Official Notice of Sale and Bidding Instructions and Official Statement dated February 18, 1992, prepared and distributed in connection with the sale of the Initial Certificate Said Official Notice of Sale and Eidding Instructions and Official Statement, and any addenda, supplement, or amendment thereto have been and are hereby approved by the Issuer, and their use in the offer and sale of the Certificates is hereby approved It is further officially found, deter~ined, and declared that the statements and representations contained in sa~d official Notice of Sale and officlal Statement are true and correct in all material re- spects, to the best knowledge and belief of the City Council and the Issuer Section 15 INTEREST EARNINGS ON CERTIFICATE PROCEEDS Interest earnings derived from the investment of proceeds from the sale of the Initial Certificate shall be used along with other proceeds for the purposes for which the Certificates are issued, provided that after completion of such purposes, if any of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinking Fund It is further provided, however, that any interest earnings on certificate proceeds which are required to be rebated to the United States of America pursuant to Section 13 hereof ~n order to prevent the Certificates from being "arbitrage bonds" within the meaning of the Code shall be so rebated and not considered as interest earnings for the purposes of this Section Section 16 DESIGNATION AS QUALIFIED TAX-EXEMPT OBLIGATIONS The Issuer hereby designates the Certificates as "qualified tax-exempt obligations" as defined in Section 26§(b)(3) of the Internal Revenue Code of 1986 (the "Code") In furtherance of such designation, the Issuer represents, covenants, and warrants the following (a) that during the calendar year in which the Certificates are issued, the Issuer (including any subordinate entitles) has not designated nor 30 will designate any bonds, certificates, or other obligations, which when aggregated with the Certificates will result in more than $10,000,000 of "qualified tax-exempt obligations" being issued, (b) that the Issuer reasonably anticipates that the amount of tax-exempt obligations issued during the calendar year in which the Certificates are issued, by the Issuer (or any subordinate entities) will not exceed $10,000,000, and, (c) that the Issuer will take such action or refrain from such action as necessary, and as more particularly set forth in Section 13, hereof, in order that the Certificates will not be considered "private activity bonds" within the meaning of section 141 of the Code Section 17 DTC REGISTRATION The Certificates Initially shall be issued and delivered in such manner that no physical distribution of the Certificates will be made to the public, and the Depository Trust Company ("DTC"), New York, New York, Initially will act as depository for the Certificates DTC has represented that it is a limited purpose trust company incorpo- rated under the laws of the State of New York, a member of the Federal Reserve System, a ,'clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clear- lng agency" registered under Section 17A of the federal Securi- ties Exchange Act of 1934, as amended, and the Issuer accepts, but in no way verifies, such representations The Initial Certificate authorized by this Ordinance shall be delivered to and registered in the name of the Purchaser However, it is a condition of delivery and sale that the Purchaser, immediately after such delivery, shall cause the Paying Agent/Registrar, as provided for in this Ordinance, to cancel said In~tial Certif- Icate and deliver in exchange therefor a substitute Certificate for each maturity of such Initial Certificate, with each such substitute Certificate to be registered in the name of CEDE & CO , the nominee of DTC, and it shall be the duty of the Paying Agent/Registrar to take such action It is expected that DTC will hold the Certificates on behalf of the Purchaser and/or the DTC Participants, as defined and described in the Official Statement referred to and approved in Section 14 hereof (the "DTC Participants") So long as each Certificate is registered · n 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 Certificates by DTC Participants in integral amounts of $5,000, with transfers of ownership being effected on the records of DTC and the DTC Participants pursu- ant to rules and regulations established by them, and that the substitute Certificates initially deposited with DTC shall be immobilized and not be further exchanged for substitute Certif- icates except as hereinafter provided The Issuer is not 31 responsible or liable for any functions of DTC, will not be responsible for paying any fees or charges with respect to 1ts services, will not be responsible or liable for maintaining, supervising, or reviewing the records of DTC or the DTC Partic- Ipants, Or protecting any interests or rights of the beneficial owners of the Certificates It shall be the duty of the Purchaser and the DTC Participants to make all arrangements with DTC to establish this book-entry system, the beneficial ownership of the Certificates, and the method of paying the fees and charges of DTC The Issuer does not represent, nor does it in any way covenant that the ~nltlal book-entry system established with DTC will be maintained ~n the future The Issuer reserves the right and option at any time in the future, in 1ts sole discretion, to terminate the DTC (CEDE & CO ) book-entry only registration requirement described above, and to permit the Certificates to be registered in the name of any owner If the Issuer exercises its r~ght and option to termi- nate such requirement, it shall give written notice of such termination to the Paying Agent/Registrar and to DTC, and thereafter the Paying Agent/Registrar shall, upon presentation and proper request, register any Certificate in any name as provided for in th~s 0rd~nance Notwithstanding the initial establishment of the foregoing book-entry system with DTC, if for any reason any of the originally delivered substitute Certificates is duly filed with the Paying Agent/Registrar with proper request for transfer and subst~tutlon, as provided for in this Ordinance, substitute Certificates will be duly deliv- ered as provided in this Ordinance, and there wlll be no assurance or representation that any book-entry system will be maintained for such Certificates Section 18 FURTHER PROCEDURES The Mayor of the Issuer, the City Secretary of the Issuer, and all other officers, employees, and agents of the Issuer, and each of them, shall be and they are hereby expressly authorized, empowered, and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge, and deliver in the name and under the corporate seal and on behalf of the Issuer all such instruments, whether or not here~n mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Certificate Ordinance, the Certificates, the sale of the Certificates, and the Notice of Sale and Official Statement, and the Director of Finance of the city shall cause the expenses of issuance of the Certificates to be paid from the proceeds of sale of the Initial Certifi- cate In case any officer whose signature shall appear on any Cer~lficate shall cease to be such officer before the delivery of such Certificate, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained ~n office until such delivery CERTIFICATE FOR ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 1992, AND APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES ~LATING THERETO THE STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON We, the undersigned officers of said City, hereby certify as follows i The City Council of said city convened in REGULAR MEETING ON THE 3RD DAY OF MARCH, 1992, 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, City Secretary Bob Castleberry, Mayor Mark Chew John Trent Jane Hopkins Jim Alexander Harold Perry Margaret Smith and all of said persons were present, except the following absentees Jane Hopkins , thus constituting a quorum Whereupon, among other business, the following was transacted at said Meeting a written ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 1992, 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 Q 2 That a true, full, and correct copy of the aforesaid Ordinance passed at the Meeting described in the above and foregoing paragraph is attached to and follows this Certifi- cate, that said Ordinance has been duly recorded in said City council's minutes of said Meeting, that the above and foregoing paragraph is a true, full, and correct excerpt from said City Council's minutes of said Meeting pertaining to the passage of sald 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 there~n, and that each of the officers and members of sa~d City Council was duly and sufficiently notified off~clally 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 C~ty hereby declare that their signing of this Certificate shall constitute the signing of the attached and following copy of said Ordi- nance for all purposes SIGN~D AN~ ~E}L~D the 3rd day of March, 1992 . (SEAL) We, the undersigned, being respectively the City Attorney and the Bond Attorneys of the City of Denton, Texas, hereby certify that we prepared and approved as to legality the attached and following Ordinance prior to ~ts passage as City Attorney PAYING AGENT/REGISTRAR AGREEMENT entered into as of March 24, 1992 (this "Agreement") by and between city of Denton (the "Issuer"), and NatlonsBank of Texas, N A , duly organized and existing under the laws of the United States of America (the "Bank") at 1ts office located in Fort Worth, Texas RECITALS OF THE ISSUER The Issuer has duly authorized and provided for the issuance of Certificates of Obligation, Series 1992 (the "Securities") in an aggregate principal amount of $1,325,000 to be Issued as registered securities without coupons, All things necessary to make the Securities the valid obligations of the Issuer, in accordance with their terms, will be taken upon the issuance and delivery thereof, The Issuer is desirous that the Bank acts as the Paying Agent of the Issuer in paying the principal, premium (~f any) and interest on the Securities, in accordance with the terms thereof, and that the Bank act as Registrar for the Securities, The Issuer has duly authorized the execution and delivery of this Agreement, and all things necessary to make this Agreement the valid agreement of the Issuer, in accordance with its terms, have been done ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT/REGISTRAR section i 01 Appointment The Issuer hereby appoints the Bank to act as Paying Agent wlth respect to the Securities, in paying to the holders of the Securities the principal, premium (if any) and interest on all or any of the Securities The Issuer hereby appoints the Bank as Registrar with respect to the Securities Section 1 02 Compensation AS compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in the Annex A hereto for the first year of this Agreement and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the f~scal year of the Issuer, and shall be effective upon the first day of the following fiscal year In addition, the Issuer agrees to reimburse the Bank upon request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its agents and counsel) ARTICLE TWO DEFINITIONS Section 2 01 Definitions For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires "Acceleration Date" on any security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which as become accelerated pursuant to the terms of the Security "Bank Office" means the principal corporate trust office of the Bank as indicated on Page 10 The Bank will notify the Issuer in writing of any change in location of the Bank office "Bond Resolution" means the resolution, order or ordinance of the governing body of the Issuer pursuant to which the Securities are issued certified by the Security or any other officer of the Issuer and delivered to the Bank "Fiscal Year" means the period ending September 30 of each year "Holder" and "Security Holder" each means a Person In whose name a Security is registered in the Security Register "Issuer Request" and "Issue Order" means a written request or order signed in the name of the Issuer by the Chief Financial Officer of the Issuer, and delivered to the Bank "Legal Holiday" means a day on which the Bank is required or authorized to be closed "Person" means any individual, corporation, partnership, ]olnt venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdlvls~on of a government "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purpose of this definition, any Security registered and delivered under Section 5 06 in lieu of a mutilated, lost, destroyed or stolen Security shall be deemed to evidence the same obligation as the mutilated, lost, destroyed or stolen Security) "Redemption Date" when used with respect to any Bond to be redeemed means the date fixed for such redemption pursuant to the terms of the Bond Resolution "Responsible Officer" when used with respect to the bank means the Chairman or Vice Chairman of the Board of Directors, the Chairman or Vice Chairman of the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above-designated officers and means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfer of Securities "Stated Maturity" means the date specified in the Bond Resolution as the fixed date on which the principal of the Security is due and payable Section 2 02 Other Definitions The terms "Bank," "Issuer" and "Security" have the meanings assigned to them in the openlng paragraph of this Agreement or in the Recitals of the Issuer The term "Paying Agent/Registrar" refers to the Bank when it is performing the functions associated with such terms 1n this Agreement ARTICLE THREE PAYING AGENT Section 3 01 Duties of Pavln~ AGent As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of the Security at its Stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the Bank Office As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on the Security when due, by computing the amount of interest to be paid each Holder, preparing the checks and mailing the checks on the payment date, to the Holders of the Secur~tles (or their Predecessor Securities) on the Record Date, addressed to their address appearing on the Security Register Section 3 02 Payment Dates The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities at the dates specified in the order authorizing issuance or bond resolution ARTICLE FOUR REGISTRAR Section 4 01 Transfer and ExchanGe The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank office books and records (herein sometimes referred to as the "Security Register") for recording the names and addresses of the Holders of the Securities, the transfer, exchange, and replacement of the Securities and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer and the Bank may prescribe The Bank is hereby appointed "Registrar" for the purpose of registering Securities and transfers of Securities as herein provided The Bank agrees to maintain the Security Register while it is Registrar Ail transfers, exchanges, and replacements of Securities shall be noted in the Security Register Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, such written Instrument to be in a form satisfactory to the Bank, duly executed by the Holder thereof or his attorney duly authorized in writing Registrar may request any supporting documentation if he feels necessary to effect a re-registration, transfer or exchange of the Securities Section 4 02 Certificates The Issuer shall provide an adequate inventory of Securities certificates to facilitate transfers The Bank covenants that it will maintain Securities certificates in safekeeping and will use reasonable care in maintaining such Securities in safekeeping, which shall be not less than the care it maintains for debt securities of other governments or corporations for which it serves as registrar, or which it maintains for its own Securities Section 4 03 Form of Security Re~lster The Bank as Registrar will maintain the records of the Security Register in accordance with the Bank's general practices and procedures in effect from time to time The Bank shall not be obligated to maintain such Register in any form other than those which the Bank has currently available and currently utilizes at the time 4 The Securities Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time Section 4 04 List of Security Holders The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the informatlon contained in the Security Register The Issuer may also inspect the information in the Security Register at any time the Bank is customarily open for business, provided that reasonable t~me is allowed the Bank to provide an up-to-date listing or to convert the information into written form Except as otherwise required by law, the Bank will not release or disclose the content of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a subpoena or court order Upon receipt of a subpoena or court order, the Bank will notify the Issuer so that the Issuer may contest the subpoena or court order Section 4 05 Return of Cancelled Certificates The Bank w~ll, at such reasonable intervals as it determines, surrender to the Issuer, Securities certificates in lieu of which or in exchange for which other Securlties have been issued, or which have been paid Section 4 06 Mutilated. Destroyed. Lost or Stolen Securities The Issuer hereby instructs the Bank to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost or stolen Securities as long as the same does not result in an overissuance The Bank will issue and deliver a new Security in exchange for a mutilated Security surrendered to it The Bank will issue a new Security in lieu of a Security for which it received written representation from the Holder that the Certificate representing such Security is destroyed, lost or stolen, without the surrender or production of the original Certificate The Bank will pay on behalf of the Issuer the principal and premium, if any, of a Security for which it receives written representation such Security is destroyed, lost or stolen following the Stated Maturity or Redemption of the Security, without the surrender or production of the original Certificate The Bank will not issue a replacement Security or pay such replacement Security unless there is delivered to the Bank such security or indemnity as it may require (which may be by the Bank's blanke~ bond) to save both the Bank and the Issuer harmless 5 on satisfaction of the Bank and the Issuer, the Certificate number on the Security registered will be cancelled with a notation that it has been mutilated, destroyed, lost or stolen and a new Security will be issued of the same series and of like tenor and principal amount bearing a number (according to the Security Register) not contemporaneously outstanding The Bank may charge the Holder the Bank's fees and expenses in connection with issuing a new Security in lieu of or exchange for a mutilated, destroyed, lost or stolen Security The Issuer hereby accepts the Bank's current blanket bond for lost, stolen or destroyed Certificates and any future substitute blanket bond for lost, stolen or destroyed Certificates that the Bank may arrange, and agrees that the coverage under any such blanket bond is acceptable to it and meets the Issuer's requirements as to security or indemnity The Bank need not notify the Issuer of any changes in the security or other company giving such bond or the terms of any such bond The blanket bond then utilized for the purpose of lost, stolen or destroyed Certificates by the Bank is available for inspection by the Issuer on request Section 4 07 Transaction Information to Issuer The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to 3 01, Securities it has delivered upon the transfer or exchange of any Securities pursuant to Section 4 01 and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost or stolen Securities pursuant to Section 4 06 ARTICLE FIVE THE BANK Section 5 01 Duties of Bank The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof Section 5 02 Reliance on Documents. etc (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proven that the Bank was negligent in ascertaining the pertinent facts 6 (c) NO provisions of this Agreement shall require the Bank to eMpend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it (d) The Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Securities, but is protected in acting upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an attorney-in-fact of the Holder The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document supplied by Issuer (e) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys and the Bank Section 5 03 Recitals of Issuer The recitals contained herein and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security or any other Person for any amount due on any Security from its own funds Section 5 04 May Hold Securities The Bank, in 1ts Individual or any other capacity, may become the owner of pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent 7 Section § 05 Moneys Held bv Bank Money held by the Bank hereunder need not be segregated from any other funds provided appropriate accounts are maintained The Bank shall be under no liability for interest on any money received by it hereunder The Bank shall deposit any moneys received from the Issuer into a trust account to be held in a fiduciary capacity for the payment of the Securities, with such moneys in the account that exceed the deposit insurance available to the Issuer by the Federal Deposit Insurance Corporation, to be fully collateralized with securities or obligations that are eligible under the laws of the State Of Texas to secure and be pledged as collateral for trust accounts until the principal and interest on such securities have been presented for payment and paid to the owner thereof Payments made from such trust account shall be made by check drawn on such trust account unless the owner of such Securities shall, at its own expense and risk, request such other medium of payment Subject to the Unclaimed Property Law of the State of Texas, any money deposited with the Bank for the payment of the principal, premium (if any), or interest on any Security and remaining unclaimed for three years after the final maturity of the Security has beoome due and payable will be paid by the Bank to the Issuer if the Issuer so elects, and the Holder of such Security shall hereafter look only to the Issuer for payment thereof, and all l~abllity of the Bank with respect to such moneys shall thereupon cease If the Issuer does not elect, the Bank is directed to report and dispose of the funds in compliance with Title 6 of the Texas Property Code, as amended Any money deposited with the Bank for the payment of the principal, premium (if any) or interest on any Security and remaining unclaimed for four years after f~nal maturity of the Security has become due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to such moneys shall thereupon cease, provided that the bank shall comply with Title 6, Tax Property Code, where applicable Section 5 06 Indemnification The Issuer agrees to indemnify the Bank for and hold it harmless against, any loss, liability or expense incurred without negligpnce or bad faith on its part, arising out of or in connection with its acceptance or admln~strat~on of its duties hereunder' including the cost and expenses (including its counsel fees) or defending itself against any claim or liability ~n connection with the exercise or performance of any of its powers or duties under this Agreement, provided that such indemnification shall be to the extent permitted by law 8 section § 07 Interpleader The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demands or controversy over its persons as well as funds on deposit, in either the District Court of Tarrant County, Texas, or the United States Federal District Court for the Northern District of Texas, waive personal service of any process, and agree that service of process by certified or registered mail, return receipt requested, to the address set forth · n Section 6 03 of this Agreement shall constitute adequate service The Issuer and the Bank further agree that the Eank has the right to file a Bill of Interpleader in any court of competent ]urisd~ction to determine the rights of any Person claiming any interest herein ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6 01 Amendment This Agreement may be amended only by an agreement in writing signed by both of the parties hereof Section 6 02 Ass~anment This Agreement may not be assigned by e~ther party w~thout the prior written consent of the other Section 6 03 Notices Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be ma~led or delivered to the Issuer or the Bank, respectively, at the addresses shown on Page 11 Section 6 04 Effect of Headln~s The Article and Section headings herein are for convenience only and shall not effect the construction hereof Section 6 05 Successors and Assians Ail covenants and agreements herein by the Issuer shall b~nd · ts successors and assigns, whether so expressed or not 9 section 6 06 Separability In case any provision herein shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby Section 6 07 Benefits of Aoreement Nothing herein, express or implied, shall give to any Person, other khan the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim hereunder Section 6 08 Entire AGreement This Agreement and the Bond Resolution constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the Bond Resolution shall govern section 6 09 Counterparts This Agreement may be executed in any number of counterparts, each which shall be deemed an original and all of which constitute one and the same Agreement Section 6 10 Termination This Agreement will terminate on the date of final payment by the Bank issuing its checks for the final payment of principal and interest of the Securities This Agreement may be earlier terminated upon 60 days written notice by either party The provisions of Section i 02 and Article Five shall survive and remain in full force and effect following the termination of this Agreement Section 6 11 Governing Law This Agreement shall be construed ~n accordance with and governed by the laws of the State of Texas 10 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written Issuer ~ ~xTeiC~lt~ve D, me~tom of F, uance Address 215 E McKlnney Mailing Address Denton, lx 76201 City, State, Zip Attn Executive Director of Finance ATTEST Paying Agent/Registrar NationsBank of Texas, N A Title Vice President (SEAL) Address 500 West 7th St , llth F1 Fort Worth, Texas 76113 ~t 1~~/~/ Attn Corp Trust Dept 11 Nat~onsBank of Texas N A Tel $17 ~90 6%1 Corporate Trust #0497 11 Telefax 817 390 6968 500 West Seventh Street Fort Worth TX 76102 4733 NaflonsBank City of Denton, Texas Certxfxcates of Oblxgat~on, Ser~es 1992 $1,325,000 Annual Fee (Book-Entry-Only) $200 00 Includes the following services - ~aun~strat~on Fee - Acceptance Fee - Annual Renewal Fee - Fee for Payment of Principal - Fee for Payment of Interest - Fee for Reducing Bonds - ~rrespondence - Other Paying ~ent/Reg~strar Special Services Member FDIC