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
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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
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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
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