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1990-073 CERTIFICATE FOR ORDINANCE AUTHORIZING THE ISSUANCE OF PUBLIC PROPERTY FINANCE OBLIGATIONS THE STATE OF TEXAS : COUNTY OF DENTON : CITY OF DENTON : We, the undersigned officers of said City, hereby certify as follows: 1. The City Council of said City convened in REGULARMEETING ON THE 15TH DAY OF MAY, 1990, at the Municipal Building (City Hall), and the roll was called of the duly constituted officers and members of said City Council, to-wit: Bob Castleberry, Mayor Jennifer K. Walters, Jim Alexander City Secretary Linnie McAdams Randall Boyd Jane Hopkins Hugh Ayer Bob Gorton and all of said ~rsQns w~r~ present, except the following absentees: (-~/~.~,~ //~f~.,~/~ , constituting a ~. Wher-eu~on, am?ng other business, thUSthe following was transacted at said Meeting. a written ORDINANCE AUTHORIZING THE ISSUANCE OF PUBLIC PROPERTY FINANCE OBLIGATIONS was duly introduced for the consideration of said City Council and read in full. 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:All members of said City Council shown present above voted "Aye", except NAYS: . ABSTENTIONS: 2. That a true, full and correct copy of the aforesaid Ordinance passed at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; that said Ordinance has been duly recorded in said City Council's minutes of said Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said City Council's minutes of said Meeting pertaining to the passage of said Ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of said City Council as indicated therein; that each of the officers and members of said City Council was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and that said Ordinance would be introduced and considered for passage at said Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting for such purpose, 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. Civ. St. Article 6252-17. 3. That the Mayor of said City has approved, and hereby approves, the aforesaid Ordinance; that the Mayor and the City Secretary of said City have duly signed said Ordinance; and that the Mayor and the City Secretary of said City hereby declare that their signing of this Certificate shall constitute the signing of the attached and following copy of said Ordinance for all purposes. SIGNED AND SEALED the 15th day of May, 1990. ~i~y ~e~re~a~y~ . Mayor / ~ (SEAL) We, the undersigned, being respectively the City Attorney and the Bond Attorneys of the City of Denton, Texas, hereby certify that we prepared and approved as to legality the attached and following Ordinance prior to it~passage ~as ~resaid. Ci y Attorney [ Bond Attorneys ORDINANCE AUTHORIZING THE ISSUANCE OF PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS WHEREAS, the Public Property Finance Act, Section 271.001, et seq., Texas Local Government Code (the "Act") authorizes, among others, cities to execute, perform, and make payments under contracts with any person for the use, acquisition or purchase of personal property as described in the Act; and WHEREAS, the Act permits the governing body of a city to execute contracts in any form deemed appropriate by said governing body in connection with the use, acquisition or purchase of personal property; and WHEREAS, the City Council of the City of Denton, Texas (the "Issuer") desires to acquire or purchase personal property, to- wit: police cars, a water and sewer flusher truck, solid waste compactors, loader and container trucks, street backhoes and an ambulance, or such other personal property, appliances, equipment, facilities, furnishings or interests therein, whether movable or fixed, deemed by the City Council of the Issuer to be necessary, useful and/or appropriate for the purposes of the Issuer (the "Property"); and WHEREAS, the City Council of the Issuer deems it appropriate to adopt this Ordinance and issue the "Contractual Obligations" herein authorized as permitted by the Act. THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS: Section 1. AMOUNT AND PURPOSE OF CONTRACTUAL OBLIGATIONS: That the said Issuer's Public Property Finance Contractual Obligations (hereinafter sometimes called "Contractual Obligations") are hereby authorized to be issued in the aggregate principal amount of $1,250,000, FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE ISSUER'S CONTRACTUAL OBLIGATIONS TO BE INCURRED IN CONNECTION WITH THE ACQUISITION OR PURCHASE OF PERSONAL PROPERTY, IN ACCORDANCE WITH THE PROVISIONS OF THE PUBLIC PROPERTY FINANCE ACT, SECTION 271.001, ET SEQ., TEXAS LOCAL GOVERNMENT CODE. Section 2. DESIGNATION. That said Contractual Obligations shall be designated as the: CITY OF DENTON, TEXAS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS, SERIES 1990. Section 3. DATE, DENOMINATIONS, NUMBERS, AND MATURITIES OF CONTRACTUAL OBLIGATIONS. That initially there shall be issued, sold, and delivered hereunder fully registered contractual obligations dated May l, 1990, in the denomination of $5,000 or any integral multiple thereof, payable to the respective initial registered owners thereof (as designated in Section 19 hereof), or to the registered assignee or assignees of said contractual obliga- tions or any portion or portions thereof (in each case, the "registered owner"), shall be numbered consecutively from R-1 upward, and shall mature on the maturity date, in each of the years, and in the amounts, respectively, as set forth in the following schedule: MATURITY DATE: JULY 1 YEARS AMOUNTS 1991 $400,000 1992 425,000 1993 425,000 The term "Contractual Obligations" as used in this Ordinance shall mean and include collectively the contractual obligations initially issued and delivered pursuant to this Ordinance and all substitute contractual obligations exchanged therefor, as well as all other substitute contractual obligations and replacement certificates issued pursuant hereto, and the term"Contractual Obligation" shall mean any of the Contractual Obligations. Section 4. INTEREST. That the Contractual Obligations shall bear interest from the dates specified in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance to their maturities payable January 1, 1991, and semiannually thereafter on July 1 and January 1 of each year, at the following rates per annum: maturities 1991, % maturities 1992, % maturities 1993, % Said interest shall be payable in the manner provided in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance. Section 5. CHARACTERISTICS OF THE CONTRACTUAL OBLIGATIONS. (a) Registration, Transfer, Conversion and Exchange; Authentica- tion. That the Issuer shall keep or cause to be kept at the principal corporate trust office of NCNB Texas National Bank, Fort Worth, Texas (the "Paying Agent/Registrar") books or records for the registration of the transfer, conversion and exchange of the Contractual Obligations (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 registrations of transfers, conversions and exchanges under such reasonable regulations as the Issuer and the Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations, transfers, conversions and exchanges as herein provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the registered owner of each Contractual Obligation to which payments with respect to the Contractual Obligations shall be mailed, as herein provided; but it shall be the duty of each registered owner to notify the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and such interest payments shall not be mailed unless 2 such notice has been given. The Issuer shall have the right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/ Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such registration, transfer, conversion, exchange and delivery of a substitute Contractual Obligation or Contractual Obligations. Registration of assignments, transfers, conversions and exchanges of Contractual Obligations shall be made in the manner provided and with the effect stated in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance. Each substitute Contractual Obligation shall bear a letter and/or number to distinguish it from each other Contractual Obligation. Except as provided in Section 5(c) of this Ordinance, an authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Contractual Obligation, date and manually sign said Contractual Obligation, and no such Contractual Obligation shall be deemed to be issued or outstanding unless such Contractual Obligation is so executed. The Paying Agent/Registrar promptly shall cancel all paid Contractual Obligations surrendered for conversion and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the Issuer or any other body or person so as to accomplish the foregoing conversion and exchange of any Contractual Obligation or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Contractual Obligations in the manner prescribed herein, and said Contractual Obligations shall be of type composition printed on paper with lithographed or steel engraved borders of customary weight and strength, unless otherwise directed by the City. Pursuant to Vernon's Ann. Tex. Civ. St. Art. 717k-6, and particularly Section 6 thereof, the duty of conversion and exchange of Contractual Obligations as aforesaid is hereby imposed upon the Paying Agent/ Registrar, and, upon the execution of said Contractual Obligations, the converted and exchanged Contractual Obligations shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Contractual Obligations which initially were issued and delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. (b) Payment of Contractual Obligations and Interest. The Issuer hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the Contractual Obligations, 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 Contractual Obligations. (c) G~. The Contractual Obligations (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Contractual Obligations to be payable only to the registered owners thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be converted and exchanged for other Contractual Obligations, (v) shall have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Contractual Obligations shall be payable, and (viii) shall be administered and the Paying Agent/Registrar and the Issuer shall have certain duties and responsibilities with respect to the Contractual Obligations, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance. The Contractual Obligations initially issued and delivered pursuant to this Ordinance (to which Contractual Obligations is attached the Registration Certificate of the Comptroller of Public Accounts) are not required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Contractual Obligation issued in conversion of and exchange for any Contractual Obligation or Contractual Obligations issued under this Ordinance the Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF CONTRACTUAL OBLIGATION. (d) Substitute Payinq Aqent/Reaistrar. The Issuer covenants with the registered owners of the Contractual Obligations that at all times while the Contractual Obligations 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 Contractual Obligations under this Ordinance, and that the Paying Agent/Registrar will be one entity. The Issuer reserves the right to, and may, at its option, change the Paying Agent/ Registrar upon not less than 120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days prior to the next principal or interest payment date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the Issuer covenants that promptly it will appoint a' competent and legally qualified bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to the Contractual Obligations, 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 Certificate, by United States Mail, first- class postage prepaid, which notice also shall give the address of 4 the new Paying/Agent Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar. Section 6. FORM OF CONTRACTUAL OBLIGATIONS. The form of the Contractual Obligations, including the form of the Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the fo£m of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the Certificates initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance. FORM OF CONTRACTUAL OBLIGATION NO. R- UNITED STATES OF AMERICA PRINCIPAL STATE OF TEXAS AMOUNT CITY OF DENTON, TEXAS $ PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATION SERIES 1990 ORIGINAL INTEREST ISSUE DATE MATURITY DATE RATE CUSIP May 1, 1990 % THE CITY OF DENTON, TEXAS (the "Issuer"), hereby promises to pay to , or the registered assignee hereof (either being hereinafter called the "registered owner") on the maturity date specified above, the principal amount of and to pay interest thereon from the original issue date specified above, on January 1, 1991 and on the first day of each July and January thereafter while this Contractual Obligation is outstanding at the interest rate per annum specified above; except that if this Contractual Obligation is required to be authenticated and the date of its authentication is later than January 1, 1991, such principal amount shall bear interest from the interest payment date next preceding the date of authentication, unless such date of authentication is after any Record Date (hereinafter defined) but on or before the next following interest payment date, in which case such principal amount shall bear interest from such next following interest payment date; provided, however, that if on the date of authentication hereof the interest on the Contractual Obligation or Contractual Obligations, if any, for which this Contractual Obligation is being exchanged or converted from is due but has not been paid, then this Contractual Obligation shall bear 5 interest from the date to which such interest has been paid in full. IN CONSIDERATION of the registered owner's acceptance hereof, which acceptance shall constitute the registered owner's assent hereto and to the terms and conditions of the ordinance authorizing the issuance of this Contractual Obligation (the "Ordinance"), the Issuer hereby unilaterally contracts with such registered owner that it will utilize the net available proceeds of the Contractual Obligations, after payment of the costs of issuance related thereto, to acquire or purchase personal property in accordance with the ordinance and the Issuer's plan of acquisition therefor. THE PRINCIPAL OF AND INTEREST ON this Contractual Obligation are payable in lawful money of the United States of America, without exchange or collection charges. The principal of this Contractual Obligation shall be paid to the registered owner hereof upon presentation and surrender of this Contractual Obligation at maturity at the principal corporate trust office of NCNB Texas National Bank, Fort Worth, Texas, which is the "Paying Agent/Registrar" for this Contractual Obligation. The payment of interest on this Contractual Obligation shall be made by the Paying Agent/Registrar to the registered owner hereof as shown by the Registration Books kept by the Paying Agent/Registrar at the close of business on the fifteenth day of the month next preceding such payment date (the "Record Date") by check drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States Mail, first- class postage prepaid, on each such payment date, to the regis- tered owner hereof, at its address as it appeared at the close of business on the Record Date on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. The Issuer covenants with the registered owner of this Contractual Obligation that on or before each principal payment date and interest payment date for this Contractual Obligation it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Contractual Obligations, when due. In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer. Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of each registered owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. IF THE DATE for the payment of the principal of or interest on this Contractual Obligation shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the principal corporate trust office of the Paying Agent/Registrar is located are authorized by law or executive order to close, or the United States Postal Service is not open for business, 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, or the United States Postal Service is not open for business; and payment on such date shall have the same force and effect as if made on the original date payment was due. THIS CONTRACTUAL OBLIGATION is one of a Series of PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS dated as of May 1, 1990, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $1,250,000, FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE ISSUER'S CONTRACTUAL OBLIGATIONS TO BE INCURRED IN CONNECTION WITH THE ACQUISITION OR PURCHASE OF PERSONAL PROPERTY, IN ACCORDANCE WITH THE PROVISIONS OF THE PUBLIC PROPERTY FINANCE ACT, SECTION 271.001, ET SEQ., TEXAS LOCAL GOVERNMENT CODE. THIS CONTRACTUAL OBLIGATION OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books kept by the Paying Agent/Registrar acting in the capacity of registrar for the Contractual Obligations, upon the terms and conditions set forth herein and in the Ordinance. This Contractual Obligation may only be assigned and transferred upon presentation and surrender to the Paying Agent/Registrar for transfer of registration and cancellation, together with proper instruments of assignment, in fo~m and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Contractual Obliga- tion or any portion or portions hereof to the assignee or assignees in whose name or names this Contractual Obligation or any such portion or portions hereof is or are to be transferred and registered. The form of Assignment printed or endorsed on this Contractual Obligation shall be executed by the registered owner, or its duly authorized attorney or representative, and shall conclusively evidence the assignment hereof. Upon surrender of this Contractual Obligation or any portion or portions hereof for transfer of registration, an authorized representative of the Paying Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new Contractual Obligation or Contrac- tual Obligations payable to such assignee or assignees, or to the registered owner hereof in the case of the assignment and transfer of only a portion of this Contractual Obligation, in exchange for this Contractual Obligation, all in the form and manner as provided 7 in the nex~ paragraph hereof for the conversion and exchange of Contractual Obligations. The registered owner of this Contractual Obligation 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 Contractual Obligation 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 CONTRACTUAL OBLIGATIONS OF THIS SERIES issued as a result of a transfer, conversion or exchange are issuable solely as fully registered certificates, without interest coupons, in the denomination of any integral multiple of $5,000. In accordance with the form and procedures set forth in the Ordinance, this contractual Obligation, or any unpaid portion hereof, may, at the written request of the registered owner or the assignee or assignees hereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, be converted into and exchanged for a Contractual Obligation or Contractual Obligations of like aggregate principal amount, payable to the appropriate registered owner, assignee, or assignees, as the case may be, having the same due dates, and bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000 as requested, upon surrender of this Contractual Obligation to the Paying Agent/Registrar at its principal corporate trust office for cancellation. The one requesting a transfer, conversion, or 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 transfer, conversion or exchange. The Paying Agent/Registrar shall not be required to make any such transfer, conversion, or exchange during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date. IN THE EVENT any Paying Agent/Registrar for the Contractual Obligations is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed to the registered owners of the Contractual Obligations. IT IS HEREBY certified, recited and covenanted that this Contractual Obligation 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 Contractual Obligation have been performed, existed, and been done in accordance with law; that this Contractual Obligation 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 Contractual Obligation, 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 pledged for such payment, within the limit prescribed by law. BY THE ACCEPTANCE of this -Contractual Obligation, the registered owner assents to the terms and provisions of the Ordinance, a copy of which is on file in the official records of the Issuer, and the Contractual Obligation, agrees to be bound by such terms and provisions, and agrees that the terms and provisions of this Contractual Obligation and the Ordinance constitute a contract between each registered owner hereof and the Issuer. IN WITNESS WHEREOF, the Issuer has caused this Contractual Obligation to be signed with the manual or facsimile signature of the Mayor of the Issuer and countersigned with the manual or facsimile signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Contractual Obligation. (signature) (signature) City Secretary Mayor (SEAL) FORM OF PAYING AGENT/R~GISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE (To be executed if this Contractual Obligation is not accompanied by an executed Registration Certificate of the Comptroller of Public Accounts of the State of Texas) It is hereby certified that this Contractual Obligation has been issued under the provisions of the Ordinance described on the face of this Contractual Obligation; and that this Contractual Obligation has been issued in conversion or replacement of, or in exchange for, a contractual obligation, contractual obligations, or a portion of a contractual obligation or contractual obligations of a Series 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. Dated: Paying Agent/Registrar By Authorized Representative 10 FORM OF ASSIGNMENT: ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Please insert Social Security or Taxpayer Identification Number of Transferee / / (Please print or typewrite name and address, including zip code of Transferee) the within Contractual Obligation and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to register the ~ransfer of the within Contractual Obligation on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must NOTICE: The signature above be guaranteed by a member must correspond with the firm of the New York Stoc name of the Registered Owner Exchange or a commercial as it appears upon the front bank or trust company, of this Contractual Obligation in every particular, without alteration or enlargement or any change whatsoever. 11 FORM OF REGISTRATION CERTIFICATE OF T~E COMPTROLLER OF PUBLIC ACCOUNTS: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Contractual Obligation has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Contractual Obligation 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 7. DEFINITIONS. That the terms defined in this Section for all purposes of this Ordinance, except where the context by clear implication shall otherwise require, shall have the respective meanings as follows, to-wit: (a) The term "Code" shall mean the Internal Revenue Code of 1986, as amended. (b) The terms "Contractual Obligation", "Contractual Obligations" shall mean the Public Property Finance Contractual Obligations, Series 1990 authorized to be issued and delivered by this Ordinance. (c) The term "Paying Agent/Registrar" shall mean initially NCNB Texas National Bank, Fort Worth, Texas or any successor named by the Issuer in accordance with the provisions of Section 5 of this Ordinance. Section 8. INTEREST AND SINKING FUND. The City of Denton, Texas, Series 1990 Contractual Obligation Interest and Sinking Fund, hereinafter called the "Interest and Sinking Fund" is hereby authorized and shall be established and maintained in a depository bank of the Issuer, so long as the Contractual Obligations, or interest thereon, are outstanding and unpaid. Section 9. USE OF INTEREST AND SINKING FUND. On or before the 25th day of December, 1990, and on or before the 25th day of each June and December thereafter so long as any of the Contractual Obligations remain outstanding, there shall be deposited in the Interest and Sinking Fund an amount, together with other amounts 12 in the Interest and Sinking Fund, not less than the amount of the installment of principal and interest coming due on the Contractual Obligations on the next succeeding payment date. The Interest and Sinking Fund shall be used to pay the principal of and interest on the Contractual Obligations as such principal and interest come due. Section 10. TAX LEVY. Ail ad valorem taxes levied and collected for and on account of said Contractual Obligations shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of said Contractual Obligations are outstanding and unpaid, the City Council of said 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 said Contractual Obligations as such interest comes due, and to provide and maintain a sinking fund adequate to pay the principal of such Contractual Obligations as such principal matures (but never less than 2% of the original principal amount of said Contractual Obligations as a sinking fund each year); and said tax shall be based on the latest approved tax rolls of said Issuer, with full allowance being made for tax delin- quencies 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 said Issuer for each year while any of said Contractual Obligations 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 said Contractual Obligations, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. Section 11. SECURITY FOR FUNDS. Ail Funds created by this Ordinance shall be secured in the manner and to the fullest extent permitted or required by law for the security of public funds, and such Funds shall be used only for the purposes and in the manner permitted or required by this Ordinance. Section 12. DEFEASANCE OF CONTRACTUAL OBLIGATIONS. (a) Any Contractual Obligation and the interest thereon shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Contractual Obligation") within the meaning of this Ordinance, except to the extent provided in subsection (d) of this Section 12, when payment of the principal of such Contractual Obligation, plus interest thereon to the due date (whether such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for on or before such due date by irrevo- cably depositing with or making available to the Paying Agent/Registrar for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Government Obligations which mature as to principal and interest in such 13 amounts and at such times as will insure the availability, without reinvestment, or 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 Contractual Obligations shall have become due and payable. At such time as a Contractual Obligation shall be deemed to be a Defeased Contractual Obligation hereunder, as aforesaid, such Contractual Obligation and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Government Obligations. (b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer also be invested in Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from such Government Obligations received by the Paying Agent/Registrar which is not required for the payment of the Contractual Obligations 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 12, 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 Contractual Obligations shall have become due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Contractual Obligations the same as if they had not been defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required by this Ordinance. Section 13. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED CONTRACTUAL OBLIGATIONS. (a) Replacement Contractual Obligations. In the event any outstanding Contractual Obligation is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new contractual obligation of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Contractual Obligation, in replacement for such Contractual Obligation in the manner hereinafter provided. (b) Application for Replacement Contractual Obligations. Application for replacement of damaged, mutilated, lost, stolen, or destroyed Contractual Obligations shall be made by the registered owner thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Contractual Obligation, 14 the registered owner applying for a replacement contractual obligation shall furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Issuer, the registered owner shall furnish to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Contractual Obligation, as the case may be. In every case of damage or mutilation of a Contractual Obligation, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Contractual Obligation so damaged or mutilated. (c) No Default Occurred. Notwithstanding the foregoing provisions of this Section 13, in the event any such Contractual Obligation shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, or interest on this Contractual Obligation, the Issuer may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Contractual Obligation) instead of issuing a replacement contractual obligation, provided security or indemnity is furnished as above provided in this Section 13. (d) Charae for Issuinq Replacement Contractual Obliqations. Prior to the issuance of any replacement contractual obligation, the Paying Agent/Registrar shall charge the registered owner of such Contractual Obligation with all legal, printing, and other expenses in connection therewith. Every replacement contractual obligation issued pursuant to the provisions of this Section 13 by virtue of the fact that any Contractual Obligation is lost, stolen, or destroyed shall constitute an obligation of the Issuer whether or not the lost, stolen, or destroyed Contractual Obligation shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Contractual Obligations duly issued under this Ordinance. (e) Authority for Issuinq Replacement Contractual Obliqations. In accordance with Section 6 of Vernon's Ann. Tex. Civ. St. Art. 717k-6, this Section 13 of this Ordinance shall con- stitute authority for the issuance of any such replacement certificate without necessity of further action by the Issuer or any other body or person, and the duty of the replacement of such contractual obligations is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Contractual Obligations in the form and manner and with the effect, as provided in Section 5(a) of this Ordinance for Contractual Obligations issued in conversion and ex- change of other Contractual Obligations. 15 Section 14. CUSTODY, APPROVAL, AND REGISTRATION OF CONTRACTUAL OBLIGATIONS. The Mayor of the Issuer is hereby authorized to have control of the Contractual Obligations initially issued and delivered hereunder and all necessary records and proceedings pertaining to the Contractual Obligations pending their delivery and their investigation, examination, and approval by the Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Certificates said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate attached to such Contractual Obligations, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such Certificate. Section 15. CONTRACTUAL UNDERTAKING WITH REGISTERED OWNER. The Issuer hereby contractually obligates and commits itself to utilize the net proceeds available from the issuance and delivery of the Contractual Obligations, after payment of costs of issuance related thereto, for the acquisition or purchase of the Property in accordance with this Ordinance and the Issuer's plan of acquisition therefor. Section 16. REMEDIES IN EVENT OF DEFAULT. In addition to all of the rights and remedies provided by the laws of the State of Texas, the Issuer covenants and agrees that in the event of default in payment of principal or interest on any of the Contractual Obligations when due, or, in the event it fails to make the payments required to be made into the Interest and Sinking Fund or defaults in the observance of performance of any other of the contracts, covenants, conditions or obligations set forth in this Ordinance or in the Contractual Obligations, the following remedies shall be available: (a) the registered owners shall be entitled to a writ of mandamus issued by a court of competent jurisdiction compelling and requiring the Issuer and the officials thereof to observe and perform the contracts, covenants, obligations or conditions prescribed in this Ordinance; and (b) any delay or omission to exercise any right or power accruing upon any default shall not impair any such right or power nor be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. Section 17. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE CONTRACTUAL OBLIGATIONS. The Issuer covenants to take any action to assure, or refrain from any action which would adversely affect, the treatment of the Contractual Obligations as obligations 16 described in section 103 of the Code, the interest on which is not includable in the "gross income" of the holder for 9urposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows: (a) to take any action to assure that no more than ten percent of the proceeds of the Contractual Obligations (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 ten percent of the proceeds are so used, that amounts, whether received by the Issuer, with respect to such private business use, do not, under the terms of this Order or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than ten percent of the debt service on the Contractual Obligations, in contraven- tion 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 five percent of the proceeds of the Contractual Obligations (less amounts deposited into a reserve fund, if any) then the amount in excess of five 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 five percent of the proceeds of the Contractual Obligations (less amounts de- posited 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 Contractual Obligations 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 Contractual Obligations being "federally guaranteed" within the meaning of section 149(b) of the Code; (f) to refrain from using any portion of the proceeds of the Contractual Obligations, directly or indirectly, to acquire or to replace funds which were used, directly or indi- rectly, 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 Contractual Obligations, other than investment property acquired with -- 17 (1) proceeds of the Contractual Obligations invested for a reasonable temporary period of three years or less until such proceeds are needed for the purpose for which the bonds are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1.103-13(b)(12) of the Treasury Regulations, and (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed ten percent of the proceeds of the Contractual Obligations; (g) to otherwise restrict the use of the proceeds of the Contractual Obligations or amounts treated as proceeds of the Contractual Obligations, as may be necessary, so that the Contractual Obligations do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); (h) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Contractual Obligations) an amount that is at least equal to 90 percent of the "Excess Earnings", within the meaning of section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Contractual Obligations have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code; and (i) to maintain such records as will enable the Issuer to fulfill its responsibilities hereunder and under section 148 of the Code and to retain such records for at least six years following the final payment of principal and interest on the Contractual Obligations. 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 Contractual Obligations, 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 in=erest on the Contractual Obligations 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 Contractual Obligations, the Issuer agrees to comply with the 18 additional requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Contractual Obligations under section 103 of the Code. In addition, the City Manager and the Director of Finance are hereby authorized to execute any instruments with regard to matters concerning the tax-exempt status of the Contractual Obligations. Section 18. DESIGNATION AS QUALIFIED TAX-EXEMPT BONDS. The Issuer hereby designates the Contractual Obligations as "qualified tax-exempt bonds" as defined in section 265(b)(3) of the Code. In furtherance of such designation, the Issuer represents, covenants and warrants the following: (a) that during the calendar year in which the Contractual Obligations are issued, the Issuer (in- cluding any subordinate entities) has not designated nor will designate bonds, which when aggregated with the Contractual Obligations, will result in more than $10,000,000 of "qualified tax-exempt bonds" being issued; (b) that the Issuer reasonably anticipates that the amount of tax-exempt obligations issued during the calendar year in which the Contractual Obligations 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 10 of this Ordinance, in order that the Contractual Obligations will not be considered "private activity bonds" within the meaning of section 142 of the Code. Section 19. SALE OF CONTRACTUAL OBLIGATIONS AND AUTHORIZATION OF AN ESCROW AGREEMENT. That said Contractual Obligations are hereby sold and shall be delivered to , for the par value thereof and any accrued interest to date of delivery, and any such accrued interest shall be deposited into the Interest and Sinking Fund. The Official Statement, the Notice of Sale and Bidding Instructions and the Official Bid Form prepared in connection with the sale of the Contractual Obligations, as attached hereto, each are hereb~ approved. The Contractual Obligations initially shall be./registered in the name. of A~ Escrow Agreement substantially in the form attached hereto, between the Issuer and , , Texas, is hereby approved, and shall be executed by the City Manager and City Secretary of the Issuer, on behalf of the City Council of Denton, and the proceeds from the sale of the Contractual Obligations shall be deposited in the Contractual Obligation Escrow Fund established pursuant to the Escrow Agreement. Section 20. EMERGENCY. That is hereby officially found and determined and declared: that a case of emergency or urgent public necessity exists which requires the holding of the meeting at which this Ordinance is passed, such emergency or urgent public necessity being that the proceeds from the sale of said Contractual Obligations are required as soon as possible and without delay for 19 necessary and urgently needed public improvements; 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. Civ. St. Article 6252-17. Section 21. EFFECTIVE DATE. That this Ordinance shall take effect and be in full force and effect from and after the date of its passage, and it is so ordained. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, this 15th day of May, 1990, at which meeting a quorum was present. C~y ~c~etary, ity 'of Denton, Texas 20 ESCROW AGREEMENT THIS ESCROW AGREEMENT, dated as of May 15, 1990 (herein, together with any amendments or supplements hereto, called the "Agreement") is entered into by and between the City of Denton, Texas (herein called the "Issuer") and NCNB Texas National Bank, as escrow agent (herein, together with any successor in such capacity, called the "Escrow Agent"). The addresses of the Issuer and the Escrow Agent are shown on Attachment "A" attached hereto and made a part hereof. WITNE S SETH: WHEREAS, the Public Property Finance Act, Section 271.001, et seq., Texas Local Government Code (the "Act") authorizes the Issuer to execute, perform, and make payments under contracts with any person for the use, acquisition or purchase of personal property as described in the Act; and WHEREAS, the Act permits the governing body of the Issuer to execute contracts in any form deemed appropriate by said governing body in connection with the use, acquisition or purchase of personal property; and WHEREAS, the governing body of the Issuer desires to acquire or purchase personal property, to-wit: police cars, a water and sewer flusher truck, solid waste compactors, loader and container trucks, street backhoes and an ambulance, or such other personal property, appliances, equipment, facilities, furnishings or interests therein, whether movable or fixed, deemed by the governing body of the Issuer to be necessary, useful and/or appropriate for the purposes of the Issuer (the "Property"); and WHEREAS, the governing body of the Issuer has adopted an ordinance (the "Ordinance") authorizing the issuance, sale and delivery of $1,250,000 of City of Denton, Texas Public Property Finance Contractual Obligations, Series 1990 (the "Contractual Obligations"); and WHEREAS, the Ordinance authorized the execution of an Escrow Agreement in substantially the form hereof and the deposit of the proceeds of the sale of the Contractual Obligations in the Escrow Fund (hereinafter defined); and WHEREAS, the Escrow Agent is a party to this Agreement to acknowledge its acceptance of the terms and provisions hereof. NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein contained and in consideration of Ten Dollars ($10.00) duly paid by the Issuer to the Escrow Agent concurrently herewith, the receipt of which is hereby acknowledged, provide a source of paying the costs of acquisition and purchase of the Property and the costs of issuance of the Contractual Obligations, the Issuer and the Escrow Agent mutually undertake, promise, and agree for themselves and their respective representatives and successors, as follows: ARTICT.F. I DEFINITIONS AND INTERPRETATIONS SECTION 1.01. Definitions. Unless the context clearly indicates otherwise, the following terms shall have the meanings assigned to them below when they are used in this Agreement: "Authorized Representative" shall mean with respect to the Issuer, the City Manager, Director of Finance or such other party hereafter designated by the governing body of the Issuer. "Escrow Fund" means the fund created by this Agreement to be administered by the Escrow Agent pursuant to the provisions of this Agreement. "Permitted Investments" shall mean all forms of investment then authorized by law for the investment of the general funds of the Issuer. SECTION 1.02. Other Definitions. The terms "Agreement", "Issuer", "Escrow Agent", "Contractual Obligations", "Ordinance" and "Property", when they are used in this Agreement, shall have the meanings assigned to them in the preamble to this Agreement. SECTION 1.03. Interpretations. The titles and headings of the articles and sections of this Agreement have been inserted for convenience and reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the acquisition or purchase of the Property and the payment of the costs of issuance with respect to the Contractual Obligations. ARTICLE II DEPOSIT OF FUNDS SECTION 2.01. Deposits in the Escrow Fund. Concurrently with the sale and delivery of the Contractual Obligations the Issuer shall deposit, or cause to be deposited, with the Escrow Agent, for deposit in the Escrow Fund, the proceeds of the sale of the Contractual Obligations other than proceeds representing accrued 2 interest, if any, which is to be deposited to the Interest and Sinking Fund established by the Ordinance, and the Escrow Agent shall, upon the receipt thereof, acknowledge such receipt to the Issuer in writing. ARTICLE III CREATION AND OPERATION OF ESCROW FUND SECTION 3.01. Escrow Fund. The Escrow Agent has created on its books a special trust fund and irrevocable escrow to be known as the Series 1990 Contractual Obligations Escrow Fund (the "Escrow Fund"). The Escrow Agent hereby agrees that upon receipt thereof it will deposit to the credit of the Escrow Fund the funds described in Section 2.01 hereof. Such deposit, all proceeds therefrom, and all cash balances from time to time on deposit therein (a) shall be the property of the Escrow Fund, and (b) shall be applied only in strict conformity with the terms and conditions of this Agreement. SECTION 3.02. Trust Fund. The Escrow Agent shall hold at all times the Escrow Fund and all assets of the Escrow Fund, wholly segregated from all other funds and securities on deposit with the Escrow Agent; it shall never allow any other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The assets of the Escrow Fund shall always be maintained by the Escrow Agent as trust funds and a special account thereof shall at all times be maintained on the books of the Escrow Agent. The amounts received by the Escrow Agent under this Agreement shall not be considered as a banking deposit by the Issuer, and the Escrow Agent shall have no right to title with respect thereto except as a constructive trustee and Escrow Agent under the terms of this Agreement. The amounts received by the Escrow Agent under this Agreement shall not be subject to warrants, drafts or checks drawn by the Issuer but shall be disbursed or withdrawn, in connection with the costs paid or incurred by the Issuer with respect to the use, acquisition or purchase of Property, solely upon the receipt of written direction from an Authorized Representative in the form of the "Payment Request Form" attached hereto as Attachment B. The Escrow Agent shall retain on file copies of each Payment Request Form. SECTION 3.03. Moneys Secured. All moneys deposited with the Escrow Agent and not invested in securities by the Escrow Agent pursuant to the provisions hereof or to the extent not insured by the Federal Deposit Insurance Corporation or other federal agency, shall continuously be secured, for the benefit of Issuer and the holders of the Bonds, to the extent and as required by law for security of Issuer's funds. Such securities shall be deposited with the Escrow Agent. SECTION 3.04. No Unauthorized Transfers. No money shall be withdrawn or transferred from or paid out of the Escrow Fund except as herein expressly provided in Section 3.02. SECTION 3.05. Investment of Money in Escrow Fund. Ail money held by the Escrow Agent pursuant to this Escrow Agreement shall be deposited or invested only in Permitted Investments and only at the written direction of the Authorized Representative. The Issuer intends that such funds shall be invested in Permitted Investments so as to obtain the highest yield practicable, having due regard for the maintenance of the exclusion of interest on the Contractual Obligations from the gross income of the owners thereof, for the safety of such funds and for the date upon which such funds will be required for uses and purposes specified in this Escrow Agreement. Ail interest and other income received by the Escrow Agent from investment of the Escrow Fund shall be retained in the Escrow Fund. The Escrow Agent shall not be liable for any loss resulting from the making or disposition of any investment pursuant to this Section, and any such losses shall be charged to the Escrow Fund. ARTICLE IV RECORDS AND REPORTS SECTION 4.01. Records. The Escrow Agent will keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocations and application of the money and Permitted Investments deposited to the Escrow Fund and all proceeds thereof, including specifically the submission of any Payment Request Form and the disbursement of funds pursuant to any such submission, and such books shall be available for inspection at reasonable hours and under reasonable conditions by the Issuer and the owners of the Contractual Obligations. SECTION 4.02. RePorts. While this Agreement remains in effect, the Escrow Agent annually shall prepare and send to the Issuer a written report summarizing all transactions relating to the EscrowFund during the preceding year, together with a detailed statement of all Permitted Investments and the cash balance on deposit in the Escrow Fund as of the end of such period. 4 ¢0~CERNING THE ESCROW AGENT SECTION 5.01. Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Agreement and undertake the obligations and responsibilities imposed upon it herein, and that it will carryout all of its obligations hereunder. SECTION 5.02. Limitation on Liability. The Escrow Agent makes no representations as to the value, conditions or sufficiency of the Escrow Fund, or any part thereof, or as to the title of the Issuer thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in respect to any of such matters. It is the intention of the parties hereto that the Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in good faith in any exercise of reasonable care and believed by it to be within the discretion or power conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the consequences of any error of judgment; and the Escrow Agent shall not be answerable except for its own action, neglect or default, nor for any loss unless the same shall have been through its negligence or want of good faith. Unless it is specifically otherwise provided herein, the Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency or the performance or failure of performance of the Issuer with respect to arrangements or contracts with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund, to dispose of and deliver the same in accordance with thisAgreement. If, however, the Escrow Agent is called upon by the terms of this Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise reasonable care and diligence, and in event of error in making such determination the Escrow Agent shall be liable only for its own misconduct or its negligence. In determining the occurrence of any such event or contingency the Escrow Agent may request from the Issuer or any other person such reasonable additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency, and in this connection may make inquiries of, and consult with, among others, the Issuer at any time. SECTION 5.03. Successor Escrow Aoents. If at any time the Escrow Agent or its legal successor or successors should become unable, through operation or law or otherwise, to act as escrow agent hereunder, or if its property and affairs shall be taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy or for any other reason, a vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event the Issuer, by appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy. If no successor Escrow Agent shall have been appointed by the Issuer within 60 days, a successor may be appointed by the owners of a majority in principal amount of the Contractual Obligations then outstanding by an instrument or instruments in writing filed with the Issuer, signed by such owners or by their duly authorized attorneys-in-fact. If, in a proper case, no appointment of a successor Escrow Agent shall be made pursuant to the foregoing provisions of this section within three months after a vacancy shall have occurred, the owner of any Contractual Obligation may apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if any, as it may deem proper, prescribe and appoint a successor Escrow Agent. Any successor Escrow Agent shall be a corporation organized and doing business under the laws of the united States or the State of Texas, authorized under such laws to exercise corporate trust powers, having its principal office and place of business in the State of Texas, having a combined capital and surplus of at least $5,000,000 and subject to the supervision or examination by Federal or State authority. Any successor Escrow Agent shall execute, acknowledge and deliver to the Issuer and the Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall execute and deliver an inst~ment transferring to such successor Escrow Agent, subject to the terms of this Agreement, all the rights, powers and trusts of the Escrow Agent hereunder. Upon the request of any such successor Escrow Agent, the Issuer shall execute any and all inst~ments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such rights, powers and duties. ARTICr.R VI MISCEL~EOUS SECTION 6.01. Notice. Any notice, authorization, request, or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed to the Issuer or the Escrow Agent at the address shown on Attachment A 6 attached hereto. The United States Post Office registered .or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices areto be delivered by giving to the other parties not less than ten (10) days prior notice thereof. SECTION 6.02. Termination of Responsibilities. Upon the taking of all the actions as described herein by the Escrow Agent, the Escrow Agent shall have no further obligations or responsibilities hereunder to the Issuer, the owners of the Contractual Obligations or to any other person or persons in connection with this Agreement. SECTION 6.03. Binding Aqreement. This Agreement shall be binding upon the Issuer and the Escrow Agent and their respective successors and legal representatives, and shall inure solely to the benefit of the owners of the Contractual Obligations, the Issuer, the Escrow Agent and their respective successors and legal representatives. SECTION 6.04. Severability. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. SECTION 6.05. Texas Law Governs. This Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Texas. SECTION 6.06. Time of the Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Agreement. SECTION 6.07. Amendments. This Agreement shall not be amended except to cure any ambiguity or formal defect or omission in this Agreement. No amendment shall be effective unless the same shall be in writing and signed by the parties thereto. No such amendment shall adversely affect the rights of the holders of the Contractual Obligations. ATTACHMENT "A" ADDRESSES OF THE ISSUER AND ESCROW AGENT ISSUER City of Denton, Texas 215 E. McKinney Street Denton, Texas 76201 Attention: City Manager ESCROW AGENT NCNB Texas National Bank 500 West Seventh Street Fort Worth, Texas 76102 Attention: Corporate Trust Department 10 ATTACHMENT "B" Payment Request Form No. To: NCNB Texas National Bank 500 West Seventh Street Fort Worth, Texas 76102 Attention: Corporate Trust Department As Escrow Agent under that certain Escrow Agreement, dated as of May 15, 1990 between you and the City of Denton (the "Issuer"), you are hereby requested to pay, from the Escrow Fund established by said Escrow Agent, to the person, corporation or other entity designated below as Payee, being someone other than an employee or officer of the Issuer, the sum set forth below such designation. The Issuer, acting by and through its Authorized Representative, hereby certified that [check one or more as appropriate]: [ ] such amount represents [full] [partial] payment for an item of "Property" (as defined in the Escrow Agreement) being and such item of Property [has not been] [has been] the subject of prior Payment Request Forms [Nos. ]. Attached hereto, unless supplied with a previous Payment Request, is a copy of the invoice, winning bid form or contract relating to the purchase or acquisition of such Property. [ ] such amount represents a cost of issuance of the Contractual Obligations (as defined in the Escrow Agreement). [ ] such amount represents the unexpended balance of the funds held in the Escrow Fund not needed for the payment of the costs of acquiring or purchas- ing Property and should be transferred to the Interest and Sinking Fund established by the Ordinance. Payee: Address: Amount: Dated , 1990 City of Denton Authorized Representative 11