1989-008ORDINANCE NO. 89-~~
ORDINANCE
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON
CERTIFICATES OF OBLIGATION, SERIES 1989, AND APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the Certificate of Obligation Act of 1971, as
amended and codified (the "Act") permits the City to issue and
sell for cash the Certificates of Obligation hereinafter
authorized; and
WHEREAS, the City has duly caused notice of its intention
to issue the certificates of obligation hereinafter authorized
to be published at the times and in the manner required by the
Act and no petition has been filed protesting the issuance
thereof.
THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY
ORDAINS THAT:
Section 1. AMOUNT AND PURPOSE OF THE CERTIFICATES. The
certificate or certificates of the City of Denton, Texas (the
"Issuer") are hereby authorized to be issued and delivered in
the aggregate principal amount of $1,155,000, FOR THE PURPOSE
OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGA-
TIONS TO BE INCURRED (1) PURSUANT TO CONTRACTS FOR THE CON-
STRUCTION OF IMPROVEMENTS TO THE MUNICIPAL BUILDING (CITY HALL)
AND THE PURCHASE OF MATERIALS, EQUIPMENT, AND MACHINERY IN
CONNECTION THEREWITH, AND (2) PURSUANT TO CONTRACTS FOR THE
CONSTRUCTION OF IMPROVEMENTS TO THE CITY'S CIVIC CENTER AND THE
PURCHASE OF MATERIALS, EQUIPMENT, AND MACHINERY IN CONNECTION
THEREWITH, AND (3) PURSUANT TO CONTRACTS FOR THE PURCHASE OF
THE FOLLOWING EQUIPMENT AND MACHINERY: A TRACK LOADER, A MOTOR
GRADER, SOLID WASTE DISPOSAL EQUIPMENT, POLICE VEHICLES,
AMBULANCES, A REFUSE TRUCK, AND A TREE SPADE; AND ALSO FOR THE
PURPOSE OF PAYING ALL OR A PORTION OF THE CONTRACTUAL OBLIGA-
TIONS FOR PROFESSIONAL SERVICES OF ENGINEERING, ATTORNEYS, AND
FINANCIAL ADVISORS IN CONNECTION WITH SUCH IMPROVEMENTS,
PURCHASES, AND CERTIFICATES OF OBLIGATION.
Section 2. DESIGNATION OF THE CERTIFICATES. Each cert-
ificate issued pursuant to this Ordinance shall be designated:
"CITY OF DENTON CERTIFICATE OF OBLIGATION, SERIES 198911, and
initially there shall be issued, sold, and delivered hereunder
a single fully registered certificate, without interest cou-
pons, payable in installments of principal (the "Initial
Certificate"), but the Initial Certificate may be assigned and
1
transferred and/or converted into and exchanged for a like
aggregate principal amount of fully registered certificates,
without interest coupons, having serial maturities, and in the
denomination or denominations of $5,000 or any integral multi-
ple of $5,000, all in the manner hereinafter provided. The
term "Certificates" as used in this Ordinance shall mean and
include collectively the Initial Certificate and all substitute
certificates exchanged therefor, as well as all other substi-
tute certificates and replacement certificates issued pursuant
hereto, and the term "Certificates" shall mean any of the
Certificates.
Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURI-
TIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE
INITIAL CERTIFICATE.
(a) The Initial Certificate is hereby authorized to be
issued, sold, and delivered hereunder as a single fully
registered Certificate, without interest coupons, dated January
11 1989, in the denomination and aggregate principal amount of
$1,155,000, numbered R-1, payable in annual installments of
principal to the initial registered owner thereof, to-wit:
MERCANSAFE CO,
or to the registered assignee or assignees of said Certificate
or any portion or portions thereof (in each case, the "regis-
tered owner"), with the annual installments of principal of the
Initial Certificate to be payable on the dates, respectively,
and in the principal amounts, respectively, stated in the FORM
OF INITIAL CERTIFICATE set forth in this Ordinance.
(b) The Initial Certificate (i) may be assigned and
transferred, (ii) may be converted and exchanged for other
certificates, (iii) shall have the characteristics, and (iv)
shall be signed and sealed, and the principal of and interest
on the Initial Certificate shall be payable, all as provided,
and in the manner required or indicated, in the FORM OF INITIAL
CERTIFICATE set forth in this Ordinance.
Section 4. INTEREST. The unpaid principal balance of the
Initial Certificate shall bear interest from the date of the
Initial Certificate to the respective scheduled due dates of
the installments of principal of the Initial Certificate, and
said interest shall be payable, all in the manner provided and
at the rates and on the dates stated in the FORM OF INITIAL
CERTIFICATE set forth in this Ordinance.
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Section 5. FORM OF INITIAL CERTIFICATE. The form of the
Initial certificate, including the form of Registration Certif-
icate of the Comptroller of Public Accounts of the State of
Texas to be endorsed on the Initial Certificate, shall be
substantially as follows:
FORM OF INITIAL CERTIFICATE
NO. R-1 $1,155,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 1989
THE CITY OF DENTON, in Denton County, Texas (the "Issu-
er"), being a political subdivision of the State of Texas,
hereby promises to pay to
MERCANSAFE CO,
or to the registered assignee or assignees of this Certificate
or any portion or portions hereof (in each case, the "regis-
tered owner") the aggregate principal amount of
$1,155,000
(ONE MILLION ONE HUNDRED FIFTY FIVE THOUSAND DOLLARS)
in annual installments of principal due and payable on JULY 1
in each of the years, and in the respective principal amounts,
as set forth in the following schedule:
PRINCIPAL
PRINCIPAL
YEAR
AMOUNT
YEAR
AMOUNT
1990
$245,000
1995
$50,000
1991
270,000
1996
50,000
1992
290,000
1997
50,000
1993
50,000
1998
50,000
1994
50,000
1999
50,000
and to pay interest, from the date of this Certificate herein-
after stated, on the balance of each such installment of
principal, respectively, from time to time remaining unpaid, at
the rates as follows:
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9.60% per annum
6.60% per annum
6.60% per annum
6.70% per annum
6.80% per annum
6.90% per annum
6.90% per annum
7.00% per annum
7.00% per annum
7.00% per annum
on
on
on
on
on
on
on
on
on
on
the
the
the
the
the
the
the
the
the
the
above installment
above installment
above installment
above installment
above installment
above installment
above installment
above installment
above installment
above installment
due
due
due
due
due
due
due
due
due
due
in 1990
in 1991
in 1992
in 1993
in 1994
in 1995
in 1996
in 1997
in 1998
in 1999
with said interest being payable on JANUARY 1, 1990, and semi-
annually on each JULY 1 and JANUARY 1 thereafter while this
Certificate or any portion hereof is outstanding and unpaid.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this
Certificate are payable in lawful money of the United States of
America, without exchange or collection charges. The install-
ments of principal and the interest on this Certificate are
payable to the registered owner hereof through the services of
NCNB TEXAS NATIONAL BANK, FORT WORTH, TEXAS, which is the
"Paying Agent/Registrar" for this Certificate. Payment of all
principal of and interest on this Certificate shall be made by
the Paying Agent/Registrar to the registered owner hereof on
each principal and/or interest payment date by check dated as
of such date, drawn by the Paying Agent/Registrar on, and
payable solely from, funds of the Issuer required by the
ordinance authorizing the issuance of this Certificate (the
"Certificate Ordinance") to be on deposit with the Paying
Agent/Registrar for such purpose as hereinafter provided; and
such check shall be sent by the Paying Agent/Registrar by
United States mail, first-class postage prepaid, on each such
principal and/or interest payment date, to the registered owner
hereof, at the address of the registered owner, as it appeared
on the 15th day of the month next preceding each such date (the
"Record Date") on the Registration Books kept by the Paying
Agent/Registrar, as hereinafter described. The Issuer cove-
nants with the registered owner of this Certificate that on or
before each principal and/or interest payment date for this
Certificate it will make available to the Paying Agent/Regis-
trar, from the "Interest and Sinking Fund" created by the
Certificate ordinance, the amounts required to provide for the
payment, in immediately available funds, of all principal of
and interest on this Certificate, when due.
IF THE DATE for the payment of the principal of or inter-
est on this Certificate shall be a Saturday, Sunday, a legal
holiday, or a day on which banking institutions in the city
where the Paying Agent/Registrar is located are authorized by
law or executive order to close, then the date for such payment
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shall be the next succeeding day which is not such a Saturday,
Sunday, legal holiday, or day on which banking institutions are
authorized to close; and payment on such date shall have the
same force and effect as if made on the original date payment
was due.
THIS CERTIFICATE has been authorized in accordance with
the Constitution and laws of the State of Texas FOR THE PURPOSE
OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGA-
TIONS TO BE INCURRED (1) PURSUANT TO CONTRACTS FOR THE CON-
STRUCTION OF IMPROVEMENTS TO THE MUNICIPAL BUILDING (CITY HALL)
AND THE PURCHASE OF MATERIALS, EQUIPMENT, AND MACHINERY IN
CONNECTION THEREWITH, AND (2) PURSUANT TO CONTRACTS FOR THE
CONSTRUCTION OF IMPROVEMENTS TO THE CITY'S CIVIC CENTER AND THE
PURCHASE OF MATERIALS, EQUIPMENT, AND MACHINERY IN CONNECTION
THEREWITH, AND (3) PURSUANT TO CONTRACTS FOR THE PURCHASE OF
THE FOLLOWING EQUIPMENT AND MACHINERY: A TRACK LOADER, A MOTOR
GRADER, SOLID WASTE DISPOSAL EQUIPMENT, POLICE VEHICLES,
AMBULANCES, A REFUSE TRUCK, AND A TREE SPADE; AND ALSO FOR THE
PURPOSE OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL
OBLIGATIONS FOR PROFESSIONAL SERVICES OF ENGINEERING, ATTOR-
NEYS, AND FINANCIAL ADVISORS IN CONNECTION WITH SUCH IMPROVE-
MENTS, PURCHASES, AND CERTIFICATES OF OBLIGATION.
THIS CERTIFICATE, to the extent of the unpaid principal
balance hereof, or any unpaid portion hereof in any integral
multiple of $5,000, may be assigned by the initial registered
owner hereof and shall be transferred only in the Registration
Books of the Issuer kept by the Paying Agent/Registrar acting
in the capacity of registrar for the Certificates, upon the
terms and conditions set forth in the Certificate Ordinance.
Among other requirements for such transfer, this Certificate
must be presented and surrendered to the Paying Agent/Registrar
for cancellation, together with proper instruments of assign-
ment, in form and with guarantee of signatures satisfactory to
the Paying Agent/Registrar, evidencing assignment by the
initial registered owner of this Certificate, or any portion or
portions hereof in any integral multiple of $5,000, to the
assignee or assignees in whose name or names this Certificate
or any such portion or portions hereof is or are to be trans-
ferred and registered. Any instrument or instruments of
assignment satisfactory to the Paying Agent/Registrar may be
used to evidence the assignment of this Certificate or any such
portion or portions hereof by the initial registered owner
hereof. A new certificate or certificates payable to such
assignee or assignees (which then will be the new registered
owner or owners of such new Certificate or Certificates) or to
the initial registered owner as to any portion of this Certifi-
cate which is not being assigned and transferred by the initial
5
registered owner, shall be delivered by the Paying Agent/Regis-
trar in conversion of and exchange for this Certificate or any
portion or portions hereof, but solely in the form and manner
as provided in the next paragraph hereof for the conversion and
exchange of this Certificate or any portion hereof. The
registered owner of this Certificate shall be deemed and
treated by the Issuer and the Paying Agent/Registrar as the
absolute owner hereof for all purposes, including payment and
discharge of liability upon this Certificate to the extent of
such payment, and the Issuer and the Paying Agent/Registrar
shall not be affected by any notice to the contrary.
AS PROVIDED above and in the Certificate Ordinance, this
Certificate, to the extent of the unpaid principal balance
hereof, may be converted into and exchanged for a like aggre-
gate principal amount of fully registered certificates, without
interest coupons, payable to the assignee or assignees duly
designated in writing by the initial registered owner hereof,
or to the initial registered owner as to any portion of this
Certificate which is not being assigned and transferred by the
initial registered owner, in any denomination or denominations
in any integral multiple of $5,000 (subject to the requirement
hereinafter stated that each substitute certificate issued in
exchange for any portion of this Certificate shall have a
single stated principal maturity date), upon surrender of this
Certificate to the Paying Agent/Registrar for cancellation, all
in accordance with the form and procedures set forth in the
Certificate Ordinance. If this Certificate or any portion
hereof is assigned and transferred or converted each certifi-
cate issued in exchange for any portion hereof shall have a
single stated principal maturity date corresponding to the due
date of the installment of principal of this Certificate or
portion hereof for which the substitute certificate is being
exchanged, and shall bear interest at the rate applicable to
and borne by such installment of principal or portion thereof.
No such certificate shall be payable in installments, but shall
have only one stated principal maturity date. AS PROVIDED IN
THE CERTIFICATE ORDINANCE, THIS CERTIFICATE IN ITS PRESENT FORM
MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to
one or more assignees, but the certificates issued and de-
livered in exchange for this Certificate or any portion hereof
may be assigned and transferred, and converted, subsequently,
as provided in the Certificate Ordinance. The Issuer shall pay
the Paying Agent/Registrar's standard or customary fees and
charges for transferring, converting, and exchanging this
Certificate or any portion thereof, but the one requesting such
transfer, conversion, and exchange shall pay any taxes or
governmental charges required to be paid with respect thereto.
The Paying Agent/Registrar shall not be required to make any
6
such assignment, conversion, or exchange during the period
commencing with the close of business on any Record Date and
ending with the opening of business on the next following
principal or interest payment date.
IN THE EVENT any Paying Agent/Registrar for this Certifi-
cate is changed by the Issuer, resigns, or otherwise ceases to
act as such, the Issuer has covenanted in the Certificate
ordinance that it promptly will appoint a competent and legally
qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owner of this
Certificate.
IT IS HEREBY certified, recited, and covenanted that this
Certificate has been duly and validly authorized, issued, and
delivered; that all acts, conditions, and things required or
proper to be performed, exist, and be done precedent to or in
the authorization, issuance, and delivery of this Certificate
have been performed, existed, and been done in accordance with
law; that this Certificate is a general obligation of the
Issuer, issued on the full faith and credit thereof; and that
annual ad valorem taxes sufficient to provide for the payment
of the interest on and principal of this Certificate, as such
interest comes due and such principal matures, have been levied
and ordered to be levied against all taxable property in the
Issuer, and have been pledged irrevocably for such payment,
within the limit prescribed by law; and that, together with
other parity obligations, this Certificate additionally is
payable from and secured by certain surplus revenues (not to
exceed $10,000 in aggregate amount) derived by the Issuer from
the ownership and operation of the City's Utility System
(consisting of the City's combined waterworks system, sanitary
sewer system, and electric light and power system), all as
provided in the Certificate Ordinance.
THE ISSUER has reserved the right to issue, in accordance
with law, and in accordance with the Certificate Ordinance,
other and additional obligations, and to enter into contracts,
payable from ad valorem taxes and/or revenues of the City's
Utility System, on a parity with, or with respect to said
revenues, superior in lien to, this Certificate.
BY BECOMING the registered owner of this Certificate, the
registered owner thereby acknowledges all of the terms and
provisions of the Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate
ordinance is duly recorded and available for inspection in the
official minutes and records of the governing body of the
Issuer, and agrees that the terms and provisions of this
7
Certificate and the Certificate Ordinance constitute a contract
between the registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate
to be signed with the manual signature of the Mayor of the
Issuer and countersigned with the manual signature of the City
Secretary of the Issuer, has caused the official seal of the
Issuer to be duly impressed on this Certificate, and has caused
this Certificate to be dated JANUARY 1, 1989.
City Secretary, Mayor,
City of Denton, Texas City of Denton, Texas
(CITY SEAL)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate has been examined,
certified as to validity, and approved by the Attorney General
of the State of Texas, and that this Certificate has been
registered by the Comptroller of Public Accounts of the State
of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6. ADDITIONAL CHARACTERISTICS OF THE CERTIFI-
CATES. Registration and Transfer. (a) The Issuer shall keep
or cause to be kept at the principal corporate trust office of
NCNB TEXAS NATIONAL BANK, FORT WORTH, TEXAS (the "Paying
Agent/Registrar") books or records of the registration and
transfer of the Certificates (the "Registration Books"), and
the Issuer hereby appoints the Paying Agent/Registrar as its
registrar and transfer agent to keep such books or records and
make such transfers and registrations under such reasonable
regulations as the Issuer and Paying Agent/Registrar may
prescribe; and the Paying Agent/Registrar shall make such
transfers and registrations as herein provided. The Paying
Agent/Registrar shall obtain and record in the Registration
Books the address of the registered owner of each Certificate
8
to which payments with respect to the Certificates shall be
mailed, as herein provided; but it shall be the duty of each
registered owner to notify the Paying Agent/Registrar in
writing of the address to which payments shall be mailed, and
such interest payments shall not be mailed unless such notice
has been given. The Issuer shall have the right to inspect the
Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall
keep the Registration Books confidential and, unless otherwise
required by law, shall not permit their inspection by any other
entity. Registration of each Certificate may be transferred in
the Registration Books only upon presentation and surrender of
such Certificate to the Paying Agent/Registrar for transfer of
registration and cancellation, together with proper written
instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, (i)
evidencing the assignment of the Certificate, or any portion
thereof in any integral multiple of $5,000, to the assignee or
assignees thereof, and (ii) the right of such assignee or
assignees to have the Certificate or any such portion thereof
registered in the name of such assignee or assignees. Upon
the assignment and transfer of any Certificate or any portion
thereof, a new substitute Certificate or Certificates shall be
issued in conversion and exchange therefor in the manner herein
provided. The Initial Certificate, to the extent of the unpaid
principal balance thereof, may be assigned and transferred by
the initial registered owner thereof once only, and to one or
more assignees designated in writing by the initial registered
owner thereof. All Certificates issued and delivered in
conversion of and exchange for the Initial Certificate shall be
in any denomination or denominations of any integral multiple
of $5,000 (subject to the requirement hereinafter stated that
each substitute Certificate shall have a single stated princi-
pal maturity date), shall be in the form prescribed in the FORM
OF SUBSTITUTE CERTIFICATE set forth in this ordinance, and
shall have the characteristics, and may be assigned, trans-
ferred, and converted as hereinafter provided. If the Initial
Certificate or any portion thereof is assigned and transferred
or converted the Initial Certificate must be surrendered to the
Paying Agent/Registrar for cancellation, and each Certificate
issued in exchange for any portion of the Initial Certificate
shall have a single stated principal maturity date, and shall
not be payable in installments; and each such Certificate shall
have a principal maturity date corresponding to the due date of
the installment of principal or portion thereof for which the
substitute Certificate is being exchanged; and each such
Certificate shall bear interest at the single rate applicable
to and borne by such installment of principal or portion
thereof for which it is being exchanged. If only a portion of
the Initial Certificate is assigned and transferred, there
9
shall be delivered to and registered in the name of the initial
registered owner substitute Certificates in exchange for the
unassigned balance of the Initial Certificate in the same
manner as if the initial registered owner were the assignee
thereof. If any Certificate or portion thereof other than the
Initial Certificate is assigned and transferred or converted
each Certificate issued in exchange therefor shall have the
same principal maturity date and bear interest at the same rate
as the Certificate for which it is exchanged. A form of
assignment shall be printed or endorsed on each Certificate,
excepting the Initial Certificate, which shall be executed by
the registered owner or its duly authorized attorney or repre-
sentative to evidence an assignment thereof. Upon surrender of
any Certificates or any portion or portions thereof for trans-
fer of registration, an authorized representative of the Paying
Agent/Registrar shall make such transfer in the Registration
Books, and shall deliver a new fully registered substitute
Certificate or Certificates, having the characteristics herein
described, payable to such assignee or assignees (which then
will be the registered owner or owners of such new Certificate
or Certificates), or to the previous registered owner in case
only a portion of a Certificate is being assigned and trans-
ferred, all in conversion of and exchange for said assigned
Certificate or Certificates or any portion or portions thereof,
in the same form and manner, and with the same effect, as
provided in Section 6(d), below, for the conversion and ex-
change of Certificates by any registered owner of a Certifi-
cate. The Issuer shall pay the Paying Agent/Registrar's
standard or customary fees and charges for making such transfer
and delivery of a substitute Certificate or certificates, but
the one requesting such transfer shall pay any taxes or other
governmental charges required to be paid with respect thereto.
The Paying Agent/Registrar shall not be required to make
transfers of registration of any Certificate or any portion
thereof during the period commencing with the close of business
on any Record Date and ending with the opening of business on
the next following principal or interest payment date.
(b) Ownership of Certificates. The entity in whose name
any Certificate shall be registered in the Registration Books
at any time shall be deemed and treated as the absolute owner
thereof for all purposes of this Ordinance, whether or not such
Certificate shall be overdue, and the Issuer and the Paying
Agent/Registrar shall not be affected by any notice to the
contrary; and payment of, or on account of, the principal of,
premium, if any, and interest on any such Certificate shall be
made only to such registered owner. All such payments shall be
valid and effectual to satisfy and discharge the liability upon
such Certificate to the extent of the sum or sums so paid.
10
(c) Payment of Certificates and Interest. The Issuer
hereby further appoints the Paying Agent/Registrar to act as
the paying agent for paying the principal of and interest on
the Certificates, and to act as its agent to convert and
exchange or replace Certificates, all as provided in this
ordinance. The Paying Agent/Registrar shall keep proper
records of all payments made by the Issuer and the Paying
Agent/Registrar with respect to the Certificates, and of all
conversions and exchanges of Certificates, and all replacements
of Certificates, as provided in this ordinance.
(d) Conversion and Exchange or Replacement; Authenti-
cation. Each Certificate issued and delivered pursuant to this
ordinance, to the extent of the unpaid principal balance or
principal amount thereof, may, upon surrender of such Certifi-
cate at the principal corporate trust office of the Paying
Agent/Registrar, together with a written request therefor duly
executed by the registered owner or the assignee or assignees
thereof, or its or their duly authorized attorneys or represen-
tatives, with guarantee of signatures satisfactory to the
Paying Agent/Registrar, may, at the option of the registered
owner or such assignee or assignees, as appropriate, be con-
verted into and exchanged for fully registered certificates,
without interest coupons, in the form prescribed in the FORM OF
SUBSTITUTE CERTIFICATE set forth in this ordinance, in the
denomination of $5,000, or any integral multiple of $5,000
(subject to the requirement hereinafter stated that each
substitute Certificate shall have a single stated maturity
date), as requested in writing by such registered owner or such
assignee or assignees, in an aggregate principal amount equal
to the unpaid principal balance or principal amount of any
Certificate or Certificates so surrendered, and payable to the
appropriate registered owner, assignee, or assignees, as the
case may be. If the Initial Certificate is assigned and
transferred or converted each substitute Certificate issued in
exchange for any portion of the Initial Certificate shall have
a single stated principal maturity date, and shall not be
payable in installments; and each such Certificate shall have a
principal maturity date corresponding to the due date of the
installment of principal or portion thereof for which the
substitute Certificate is being exchanged; and each such
Certificate shall bear interest at the single rate applicable
to and borne by such installment of principal or portion
thereof for which it is being exchanged. If any Certificate or
portion thereof (other than the Initial Certificate) is as-
signed and transferred or converted, each Certificate issued in
exchange therefor shall have the same principal maturity date
and bear interest at the same rate as the Certificate for which
it is being exchanged. Each substitute Certificate shall bear
a letter and/or number to distinguish it from each other
11
Certificate. The Paying Agent/Registrar shall convert and
exchange or replace Certificates as provided herein, and each
fully registered certificate delivered in conversion of and
exchange for or replacement of any Certificate or portion
thereof as permitted or required by any provision of this
ordinance shall constitute one of the Certificates for all
purposes of this Ordinance, and may again be converted and
exchanged or replaced. It is specifically provided that any
Certificate authenticated in conversion of and exchange for or
replacement of another Certificate on or prior to the first
scheduled Record Date for the Initial Certificate shall bear
interest from the date of the Initial Certificate, but each
substitute Certificate so authenticated after such first
scheduled Record Date shall bear interest from the interest
payment date next preceding the date on which such substitute
Certificate was so authenticated, unless such Certificate is
authenticated after any Record Date but on or before the next
following interest payment date, in which case it shall bear
interest from such next following interest payment date;
provided, however, that if at the time of delivery of any
substitute Certificate the interest on the Certificate for
which it is being exchanged is due but has not been paid, then
such Certificate shall bear interest from the date to which
such interest has been paid in full. THE INITIAL CERTIFICATE
issued and delivered pursuant to this ordinance is not required
to be, and shall not be, authenticated by the Paying Agent/-
Registrar, but on each substitute Certificate issued in conver-
sion of and exchange for or replacement of any Certificate or
Certificates issued under this ordinance there shall be printed
a certificate, in the form substantially as follows:
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate has been
issued under the provisions of the Certificate ordinance
described on the face of this Certificate; and that this
Certificate has been issued in conversion of and exchange for
or replacement of a certificate, certificates, or a portion of
a certificate or certificates of an issue which originally was
approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts of the State
of Texas.
NCNB TEXAS NATIONAL BANK,
FORT WORTH, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative"
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An authorized representative of the Paying Agent/Registrar
shall, before the delivery of any such Certificate, date and
manually sign the above Certificate, and no such Certificate
shall be deemed to be issued or outstanding unless such Certif-
icate is so executed. The Paying Agent/Registrar promptly
shall cancel all Certificates surrendered for conversion and
exchange or replacement. No additional ordinances, orders, or
resolutions need be passed or adopted by the governing body of
the Issuer or any other body or person so as to accomplish the
foregoing conversion and exchange or replacement of any Certif-
icate or portion thereof, and the Paying Agent/Registrar shall
provide for the printing, execution, and delivery of the
substitute Certificates in the manner prescribed herein, and
said Certificates shall be of type composition printed on paper
with lithographed or steel engraved borders of customary weight
and strength. Pursuant to Vernon's Ann. Tex. Civ. St. Art.
717k-6, and particularly Section 6 thereof, the duty of conver-
sion and exchange or replacement of Certificates as aforesaid
is hereby imposed upon the Paying Agent/Registrar, and, upon
the execution of the above Paying Agent/Registrar's Authentica-
tion Certificate, the converted and exchanged or replaced
Certificate shall be valid, incontestable, and enforceable in
the same manner and with the same effect as the Initial Certif-
icate which originally was issued pursuant to this ordinance,
approved by the Attorney General, and registered by the Comp-
troller of Public Accounts. The Issuer shall pay the Paying
Agent/Registrar's standard or customary fees and charges for
transferring, converting, and exchanging any Certificate or any
portion thereof, but the one requesting any such transfer,
conversion, and exchange shall pay any taxes or governmental
charges required to be paid with respect thereto as a condition
precedent to the exercise of such privilege of conversion and
exchange. The Paying Agent/Registrar shall not be required to
make any such conversion and exchange or replacement of Certif-
icates or any portion thereof (i) during the period commencing
with the close of business on any Record Date and ending with
the opening of business on the next following principal or
interest payment date, or, (ii) with respect to any Certificate
or portion thereof called for redemption prior to maturity,
within 45 days prior to its redemption date.
(e) In General. All Certificates issued in conversion
and exchange or replacement of any other Certificate or portion
thereof, (i) shall be issued in fully registered form, without
interest coupons, with the principal of and interest on such
Certificates to be payable only to the registered owners
thereof, (ii) may be transferred and assigned, (iii) may be
converted and exchanged for other Certificates, (iv) shall have
the characteristics, (v) shall be signed and sealed, and (vi)
the principal of and interest on the Certificates shall be
13
payable, all as provided, and in the manner required or indi-
cated, in the FORM OF SUBSTITUTE CERTIFICATE set forth in this
ordinance.
(f) Payment of Fees and Charges. The Issuer hereby
covenants with the registered owners of the Certificates that
it will (i) pay the standard or customary fees and charges of
the Paying Agent/Registrar for its services with respect to the
payment of the principal of and interest on the Certificates,
when due, and (ii) pay the fees and charges of the Paying
Agent/Registrar for services with respect to the transfer of
registration of Certificates, and with respect to the conver-
sion and exchange of Certificates solely to the extent above
provided in this Ordinance.
(g) Substitute Paying Agent/Registrar. The Issuer
covenants with the registered owners of the Certificates that
at all times while the Certificates are outstanding the Issuer
will provide a competent and legally qualified bank, trust
company, financial institution, or other agency to act as and
perform the services of Paying Agent/Registrar for the Certifi-
cates under this ordinance, and that the Paying Agent/Registrar
will be one entity. The Issuer reserves the right to, and may,
at its option, change the Paying Agent/Registrar upon not less
than 120 days written notice to the Paying Agent/Registrar, to
be effective not later than 60 days prior to the next principal
or interest payment date after such notice. In the event that
the entity at any time acting as Paying Agent/Registrar (or its
successor by merger, acquisition, or other method) should
resign or otherwise cease to act as such, the Issuer covenants
that promptly it will appoint a competent and legally qualified
bank, trust company, financial institution, or other agency to
act as Paying Agent/Registrar under this Ordinance. Upon any
change in the Paying Agent/Registrar, the previous Paying
Agent/Registrar promptly shall transfer and deliver the Regis-
tration Books (or a copy thereof), along with all other perti-
nent books and records relating to the Certificates, to the new
Paying Agent/Registrar designated and appointed by the Issuer.
Upon any change in the Paying Agent/Registrar, the Issuer
promptly will cause a written notice thereof to be sent by the
new Paying Agent/Registrar to each registered owner of the
Certificates, by United States mail, first-class postage
prepaid, which notice also shall give the address of the new
Paying Agent/Registrar. By accepting the position and perform-
ing as such, each Paying Agent/Registrar shall be deemed to
have agreed to the provisions of this ordinance, and a cer-
tified copy of this ordinance shall be delivered to each Paying
Agent/Registrar.
14
Section 7. FORM OF SUBSTITUTE CERTIFICATES. The form of
all Certificates issued in conversion and exchange or replace-
ment of any other Certificate or portion thereof, including the
form of Paying Agent/Registrar's Certificate to be printed on
each of such Certificates, and the Form of Assignment to be
printed on each of the Certificates, shall be, respectively,
substantially as follows, with such appropriate variations,
omissions, or insertions as are permitted or required by this
ordinance.
FORM OF SUBSTITUTE CERTIFICATE
NO. UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
PRINCIPAL AMOUNT
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 1989
INTEREST RATE
MATURITY DATE
CUSIP NO.
ON THE MATURITY DATE specified above the CITY OF DENTON,
in Denton County, Texas (the "Issuer"), being a a political
subdivision of the State of Texas, hereby promises to pay to
or to the registered assignee hereof (either being hereinafter
called the "registered owner") the principal amount of
and to pay interest thereon from JANUARY 1, 1989, to the
maturity date specified above, at the interest rate per annum
specified above; with interest being payable on JANUARY 1,
1990, and semiannually on each JULY 1 and JANUARY 1 thereafter,
except that if the date of authentication of this Certificate
is later than DECEMBER 15, 1989, 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.
THE PRINCIPAL OF AND INTEREST ON this Certificate are
payable in lawful money of the United States of America,
without exchange or collection charges. The principal of this
Certificate shall be paid to the registered owner hereof upon
presentation and surrender of this Certificate at maturity, at
the principal corporate trust office of NCNB TEXAS NATIONAL
15
BANK, FORT WORTH, TEXAS, which is the "Paying Agent/Registrar"
for this Certificate. The payment of interest on this Certifi-
cate shall be made by the Paying Agent/Registrar to the regis-
tered owner hereof on each interest payment date by check dated
as of such interest payment date, drawn by the Paying
Agent/Registrar on, and payable solely from, funds of the
Issuer required by the ordinance authorizing the issuance of
the Certificates (the "Certificate Ordinance") to be on deposit
with the Paying Agent/Registrar for such purpose as hereinafter
provided; and such check shall be sent by the Paying Agent/-
Registrar by United States mail, first-class postage prepaid,
on each such Anterest payment date, to the registered owner
hereof, at the address of the registered owner, as it appeared
on the 15th day of the month next preceding each such date (the
"Record Date") on the Registration Books kept by the Paying
Agent/Registrar, as hereinafter described. The Issuer cove-
nants with the registered owner of this Certificate that on or
before each principal payment date, interest payment date, and
accrued interest payment date for this Certificate it will make
available to the Paying Agent/Registrar, from the "Interest and
Sinking Fund" created by the Certificate Ordinance, the amounts
required to provide for the payment, in immediately available
funds, of all principal of and interest on the Certificates,
when due.
IF THE DATE for the payment of the principal of or inter-
est on this Certificate shall be a Saturday, Sunday, a legal
holiday, or a day on which banking institutions in the City
where the Paying Agent/Registrar is located are authorized by
law or executive order to close, then the date for such payment
shall be the next succeeding day which is not such a Saturday,
Sunday, legal holiday, or day on which banking institutions are
authorized to close; and payment on such date shall have the
same force and effect as if made on the original date payment
was due.
THIS CERTIFICATE is one of an issue of Certificates
initially dated JANUARY 1, 1989, authorized in accordance with
the Constitution and laws of the State of Texas in the princ-
ipal amount of $1,155,000, FOR THE PURPOSE OF PAYING ALL OR A
PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS TO BE INCURRED
(1) PURSUANT TO CONTRACTS FOR THE CONSTRUCTION OF IMPROVEMENTS
TO THE MUNICIPAL BUILDING (CITY HALL) AND THE PURCHASE OF
MATERIALS, EQUIPMENT, AND MACHINERY IN CONNECTION THEREWITH,
AND (2) PURSUANT TO CONTRACTS FOR THE CONSTRUCTION OF IMPROVE-
MENTS TO THE CITY'S CIVIC CENTER AND THE PURCHASE OF MATERIALS,
EQUIPMENT, AND MACHINERY IN CONNECTION THEREWITH, AND (3)
PURSUANT TO CONTRACTS FOR THE PURCHASE OF THE FOLLOWING EQUIP-
MENT AND MACHINERY: A TRACK LOADER, A MOTOR GRADER, SOLID WASTE
DISPOSAL EQUIPMENT, POLICE VEHICLES, AMBULANCES, A REFUSE
16
TRUCK, AND A TREE SPADE; AND ALSO FOR THE PURPOSE OF PAYING ALL
OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS FOR PROFES-
SIONAL SERVICES OF ENGINEERING, ATTORNEYS, AND FINANCIAL
ADVISORS IN CONNECTION WITH SUCH IMPROVEMENTS, PURCHASES, AND
CERTIFICATES OF OBLIGATION.
THIS CERTIFICATE OR ANY PORTION OR PORTIONS HEREOF IN ANY
INTEGRAL MULTIPLE OF $5,000 may be assigned and shall be trans-
ferred only in the Registration Books of the Issuer kept by the
Paying Agent/Registrar acting in the capacity of registrar for
the Certificates, upon the terms and conditions set forth in
the Certificate Ordinance. Among other requirements for such
assignment and transfer, this Certificate must be presented and
surrendered to the Paying Agent/Registrar, together with proper
instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidenc-
ing assignment of this Certificate or any portion or portions
hereof in any integral multiple of $5,000 to the assignee or
assignees in whose name or names this Certificate or any such
portion or portions hereof is or are to be transferred and
registered. The form of Assignment printed or endorsed on this
Certificate shall be executed by the registered owner or its
duly authorized attorney or representative, to evidence the
assignment hereof. A new Certificate or Certificates payable
to such assignee or assignees (which then will be the new
registered owner or owners of such new Certificate or certifi-
cates), or to the previous registered owner in the case of the
assignment and transfer of only a portion of this Certificate,
may be delivered by the Paying Agent/Registrar in conversion of
and exchange for this Certificate, all in the form and manner
as provided in the next paragraph hereof for the conversion and
exchange of other Certificates. The Issuer shall pay the
Paying Agent/Registrar's standard or customary fees and charges
for making such transfer, but the one requesting such transfer
shall pay any taxes or other governmental charges required to
be paid with respect thereto. The Paying Agent/Registrar shall
not be required to make transfers of registration of this
Certificate or any portion hereof during the period commencing
with the close of business on any Record Date and ending with
the opening of business on the next following principal or
interest payment date. The registered owner of this Certifi-
cate shall be deemed and treated by the Issuer and the Paying
Agent/Registrar as the absolute owner hereof for all purposes,
including payment and discharge of liability upon this Certifi-
cate to the extent of such payment, and the Issuer and the
Paying Agent/Registrar shall not be affected by any notice to
the contrary.
ALL CERTIFICATES OF THIS SERIES are issuable solely as
fully registered certificates, without interest coupons, in the
17
denomination of any integral multiple of $5,000. As provided
in the Certificate Ordinance, this Certificate, may, at the
request of the registered owner or the assignee or assignees
hereof, be converted into and exchanged for a like aggregate
principal amount of fully registered certificates, without
interest coupons, payable to the appropriate registered owner,
assignee, or assignees, as the case may be, having the same
maturity date, and bearing interest at the same rate, in any
denomination or denominations in any integral multiple of
$5,000 as requested in writing by the appropriate registered
owner, assignee, or assignees, as the case may be, upon sur-
render of this Certificate to the Paying Agent/Registrar for
cancellation, all in accordance with the form and procedures
set forth in the Certificate Ordinance. The Issuer shall pay
the Paying Agent/Registrar's standard or customary fees and
charges for transferring, converting, and exchanging any
Certificate or any portion thereof, but the one requesting such
transfer, conversion, and exchange shall pay any taxes or
governmental charges required to be paid with respect thereto
as a condition precedent to the exercise of such privilege of
conversion and exchange. The Paying Agent/Registrar shall not
be required to make any such conversion and exchange during the
period commencing with the close of business on any Record Date
and ending with the opening of business on the next following
principal or interest payment date.
IN THE EVENT any Paying Agent/Registrar for the Certifi-
cates is changed by the Issuer, resigns, or otherwise ceases to
act as such, the Issuer has covenanted in the Certificate
Ordinance that it promptly will appoint a competent and legally
qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owners of the
Certificates.
IT IS HEREBY certified, recited, and covenanted that this
Certificate has been duly and validly authorized, issued, and
delivered; that all acts, conditions, and things required or
proper to be performed, exist, and be done precedent to or in
the authorization, issuance, and delivery of this Certificate
have been performed, existed, and been done in accordance with
law; that this Certificate is a general obligation of the
Issuer, issued on the full faith and credit thereof; and that
annual ad valorem taxes sufficient to provide for the payment
of the interest on and principal of this Certificate, as such
interest comes due and such principal matures, have been levied
and ordered to be levied against all taxable property in the
Issuer, and have been pledged irrevocably for such payment,
within the limit prescribed by law; and that, together with
other parity obligations, this Certificate, and the other
Certificates of this Series, additionally are payable from and
18
secured by certain surplus revenues (not to exceed $10,000 in
aggregate amount) derived by the Issuer from the ownership and
operation of the City's Utility System (consisting of the
City's combined waterworks system, sanitary sewer system, and
electric light and power system), all as provided in the
Certificate Ordinance.
THE ISSUER has reserved the right to issue, in accordance
with law, and in accordance with the Certificate Ordinance,
other and additional obligations, and to enter into contracts,
payable from ad valorem taxes and/or revenues of the City's
Utility System, on a parity with, or with respect to said
revenues, superior in lien to, this Certificate.
BY BECOMING the registered owner of this Certificate, the
registered owner thereby acknowledges all of the terms and
provisions of the Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate
Ordinance is duly recorded and available for inspection in the
official minutes and records of the governing body of the
Issuer, and agrees that the terms and provisions of this
Certificate and the Certificate Ordinance constitute a contract
between each registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate
to be signed with the facsimile signature of the Mayor of the
Issuer and countersigned with the facsimile signature of the
City Secretary of the Issuer, and has caused the official seal
of the Issuer to be duly impressed, or placed in facsimile, on
this Certificate.
(facsimile signature)
City Secretary,
City of Denton, Texas
(facsimile signature)
Mayor,
City of Denton, Texas
(CITY SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate has been
issued under the provisions of the Certificate Ordinance
described on the face of this Certificate; and that this
Certificate has been issued in conversion of and exchange for
or replacement of a certificate, certificates, or a portion of
a certificate or certificates of an issue which originally was
approved by the Attorney General of the State of Texas and
19
registered by the Comptroller of Public Accounts of the State
of Texas.
NCNB TEXAS NATIONAL BANK,
FORT WORTH, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of
this Certificate, or duly authorized representative or attorney
thereof, hereby assigns this Certificate to
(Assignee's Social (print or typewrite Assignee's name and
Security or Taxpayer address, including zip code)
Identification Number
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Certificate on
the Paying Agent/Registrar's Registration Books with full power
of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: This signature must be
guaranteed by a member of the
New York Stock Exchange or a
commercial bank or trust
company.
Registered Owner
NOTICE: This signature must
correspond with the name of
the Registered owner appear-
ing on the face of this Cer-
tificate.
Section 8. TAX LEVY. A special Interest and Sinking Fund
(the "Interest and Sinking Fund") is hereby created solely for
the benefit of the Certificates, and the Interest and Sinking
Fund shall be established and maintained by the Issuer at an
official depository bank of the Issuer. The Interest and
20
Sinking Fund shall be kept separate and apart from all other
funds and accounts of the Issuer, and shall be used only for
paying the interest on and principal of the Certificates. All
ad valorem taxes levied and collected for and on account of the
Certificates shall be deposited, as collected, to the credit of
the Interest and Sinking Fund. During each year while any of
the Certificates or interest thereon are outstanding and
unpaid, the governing body of the Issuer shall compute and
ascertain a rate and amount of ad valorem tax which will be
sufficient to raise and produce the money required to pay the
interest on the Certificates as such interest becomes due, and
to provide and maintain a sinking fund adequate to pay the
principal of its Certificates as such principal matures (but
never less than 2% of the original principal amount of the
Certificates as a sinking fund each year); and said tax shall
be based on the latest approved tax rolls of the Issuer, with
full allowance being made for tax delinquencies and the cost of
tax collection. Said rate and amount of ad valorem tax is
hereby levied, and is hereby ordered to be levied, against all
taxable property in the Issuer for each year while any of the
Certificates or interest thereon are outstanding and unpaid;
and said tax shall be assessed and collected each such year and
deposited to the credit of the aforesaid Interest and Sinking
Fund. Said ad valorem taxes sufficient to provide for the
payment of the interest on and principal of the Certificates,
as such interest comes due and such principal matures, are
hereby pledged for such payment, within the limit prescribed by
law.
Section 9. SURPLUS REVENUES. The Certificates addi-
tionally shall be payable from and secured by surplus revenues,
to the extent hereinafter permitted, derived by the Issuer from
the ownership and operation of the Issuer's Utility System
(consisting of its combined waterworks system, sanitary sewer
system, and electric light and power system) remaining after
(a) payment of all amounts constituting operation and main-
tenance expenses of said Utility System, and (b) payment of all
debt service, reserve, and other requirements and amounts
required to be paid under all ordinances heretofore or here-
after authorizing (i) all bonds and (ii) all other obligations
not on a parity with the Certificates, which are payable from
and secured by any Utility System revenues, and (c) payment of
all amounts payable from any Utility System revenues pursuant
to contracts heretofore or hereafter entered into by the Issuer
in accordance with law (the "Surplus Revenues"). If, for any
reason, the Issuer fails to deposit ad valorem taxes levied
pursuant to Section 8 hereof to the credit of the Interest and
Sinking Fund in an amount sufficient to pay, when due, the
principal of and interest on the Certificates, then Surplus
Revenues, to the extent hereinafter permitted, shall be
21
deposited to the credit of the Interest and Sinking Fund and
used to pay such principal and/or interest. A maximum aggre-
gate of $10,000 of Surplus Revenues may be used to pay princi-
pal and/or interest on the Certificates and any obligations on
a parity therewith. The Certificates and any obligations on a
parity therewith are not, and shall not be deemed to be,
payable from or secured by any Surplus Revenues in excess of an
aggregate of $10,000. Until and unless an aggregate of $10,000
of Surplus Revenues actually is used to pay any such principal
and/or interest, additional obligations, payable from and
secured by all or any remaining unused part of said aggregate
of $10,000 of Surplus Revenues, may be issued by the Issuer on
a parity with the Certificates and any other then outstanding
parity obligations, with the Certificates and all such addi-
tional parity obligations to be payable from and secured
equally and ratably by all or any remaining unused part of said
aggregate. The Issuer reserves, and shall have, the right to
issue bonds, and other obligations not on a parity with the
certificates, and to enter into contracts, in accordance with
applicable laws, to be payable from and secured by any Utility
System revenues other than the aggregate of $10,000 of Surplus
Revenues as described above. The Certificates are on a parity
with that issue of City of Denton Certificates of Obligation,
Series 1987-A, as permitted in Ordinance No. 87-108, passed on
June 16, 1987, authorizing same; and it is hereby found and
determined that none of the above defined Surplus Revenues have
been used to pay any principal and/or interest on said City of
Denton Certificates of Obligation, Series 1987-A.
Section 10. DEFEASANCE OF CERTIFICATES. (a) Any Certif-
icate and the interest thereon shall be deemed to be paid,
retired, and no longer outstanding (a "Defeased Certificate")
within the meaning of this Ordinance, except to the extent
provided in subsection (d) of this Section, when payment of the
principal of such Certificate, plus interest thereon to the due
date either (i) shall have been made or caused to be made in
accordance with the terms thereof, or (ii) shall have been
provided for on or before such due date by irrevocably deposit-
ing with or making available to the Paying Agent/Registrar for
such payment (1) lawful money of the United States of America
sufficient to make such payment or (2) Government Obligations
which mature as to principal and interest in such amounts and
at such times as will insure the availability, without rein-
vestment, of sufficient money to provide for such payment, and
when proper arrangements have been made by the Issuer with the
Paying Agent/Registrar for the payment of its services until
all Defeased Certificates shall have become due and payable.
At such time as a Certificate shall be deemed to be a Defeased
Certificate hereunder, as aforesaid, such Certificate and the
interest thereon shall no longer be secured by, payable from,
22
or entitled to the benefits of, the ad valorem taxes herein
levied and pledged as provided in this Ordinance, and such
principal and interest shall be payable solely from such money
or Government Obligations.
(b) Any moneys so deposited with the Paying Agent/Regis-
trar may at the written direction of the Issuer also be in-
vested in Government Obligations, maturing in the amounts and
times as hereinbefore set forth, and all income from such
Government Obligations received by the Paying Agent/Registrar
which is not required for the payment of the Certificates and
interest thereon, with respect to which such money has been so
deposited, shall be turned over to the Issuer, or deposited as
directed in writing by the Issuer.
(c) The term "Government obligations" as used in this
Section shall mean direct obligations of the United States of
America, including obligations the principal of and interest on
which are unconditionally guaranteed by the United States of
America, which may be United States Treasury obligations such
as its State and Local Government Series, which may be in
book-entry form.
(d) Until all Defeased Certificates shall have become due
and payable, the Paying Agent/Registrar shall perform the
services of Paying Agent/Registrar for such Defeased Certifi-
cates the same as if they had not been defeased, and the Issuer
shall make proper arrangements to provide and pay for such
services as required by this Ordinance.
Section 11. DAMAGED, MUTILATED, LOST, STOLEN, OR DE-
STROYED CERTIFICATES. (a) Replacement Certificates. In the
event any outstanding Certificate is damaged, mutilated, lost,
stolen, or destroyed, the Paying Agent/Registrar shall cause to
be printed, executed, and delivered, a new certificate of the
same principal amount, maturity, and interest rate, as the
damaged, mutilated, lost, stolen, or destroyed Certificate, in
replacement for such Certificate in the manner hereinafter
provided.
(b) Application for Replacement Certificates. Applica-
tion for replacement of damaged, mutilated, lost, stolen, or
destroyed Certificates shall be made by the registered owner
thereof to the Paying Agent/Registrar. In every case of loss,
theft, or destruction of a Certificate, the registered owner
applying for a replacement certificate shall furnish to the
Issuer and to the Paying Agent/Registrar such security or
indemnity as may be required by them to save each of them
harmless from any loss or damage with respect thereto. Also,
in every case of loss, theft, or destruction of a Certificate,
23
the registered owner shall furnish to the Issuer and the Paying
Agent/Registrar evidence to their satisfaction of the loss,
theft, or destruction of such Certificate, as the case may be.
In every case of damage or mutilation of a Certificate, the
registered owner shall surrender to the Paying Agent/Registrar
for cancellation the Certificate so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing
provisions of this Section, in the event of any such Certifi-
cate shall have matured, and no default has occurred which is
then continuing in the payment of the principal of, or interest
on the Certificate, the Issuer may authorize the payment of the
same (without surrender thereof except in the case of a damaged
or mutilated Certificate) instead of issuing a replacement
Certificate, provided security or indemnity is furnished as
above provided in this Section.
(d) Charge for Issuing Replacement Certificates. Prior
to the issuance of any replacement certificate, the Paying
Agent/Registrar shall charge the registered owner of such
Certificate with all legal, printing, and other expenses in
connection therewith. Every replacement certificate issued
pursuant to the provisions of this Section by virtue of the
fact that any Certificate is lost, stolen, or destroyed shall
constitute a contractual obligation of the Issuer whether or
not the lost, stolen, or destroyed Certificate shall be found
at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Ordinance equally and proportion-
ately with any and all other Certificates duly issued under
this Ordinance.
(e) Authority for Issuing Replacement Certificates. In
accordance with Section 6 of Vernon's Ann. Tex. Civ. St. Art.
717k-6, this Section of this Ordinance shall constitute author-
ity for the issuance of any such replacement certificate
without necessity of further action by the governing body of
the Issuer or any other body or person, and the duty of the
replacement of such certificates is hereby authorized and
imposed upon the Paying Agent/Registrar, and the Paying Agent/-
Registrar shall authenticate and deliver such Certificates in
the form and manner and with the effect, as provided in Section
6(d) of this Ordinance for Certificates issued in conversion
and exchange for other Certificates.
Section 12. CUSTODY, APPROVAL, AND REGISTRATION OF
CERTIFICATES; CERTIFICATE COUNSEL'S OPINION, CUSIP NUMBERS, AND
INSURANCE. The Mayor of the Issuer is hereby authorized to
have control of the Initial Certificate issued hereunder and
all necessary records and proceedings pertaining to the Initial
Certificate pending its delivery and its investigation,
24
examination, and approval by the Attorney General of the State
of Texas, and its registration by the Comptroller of Public
Accounts of the State of Texas. Upon registration of the
Initial Certificate said Comptroller of Public Accounts (or a
deputy designated in writing to act for said Comptroller) shall
manually sign the Comptroller's Registration Certificate on the
Initial Certificate, and the seal of said Comptroller shall be
impressed, or placed in facsimile, on the Initial Certificate.
The approving legal opinion of the Issuer's Bond Counsel and
the assigned CUSIP numbers may, at the option of the Issuer, be
printed on the Initial Certificate or on any Certificates
issued and delivered in conversion of and exchange or replace-
ment of any Certificate, but neither shall have any legal
effect, and shall be solely for the convenience and information
of the registered owners of the Certificates. If insurance is
obtained on the Certificates as provided in the Notice of Sale
and Bidding Instructions and Official Statement hereinafter
described, the Initial Certificate and all other Certificates
shall bear an appropriate legend concerning insurance as
provided by the insurer.
Section 13. COVENANTS REGARDING TAX-EXEMPTION. The
Issuer covenants to take any action or refrain from any action
which would adversely affect the treatment of the Certificates
as obligations described in section 103 of the Code, the
interest on which is not includable in the "gross income" of
the holder for purposes of federal income taxation. In fur-
therance thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more than
10 percent of the proceeds of the Certificates (less
amounts deposited to a reserve fund, if any) are used for
any "private business use", as defined in section
141(b)(6) of the Code or, if more than 10 percent of the
proceeds are so used, that amounts, whether or not re-
ceived by the Issuer, with respect to such private busi-
ness use, do not, under the terms of this Resolution or
any underlying arrangement, directly or indirectly, secure
or provide for the payment of more than 10 percent of the
debt service on the certificates, in contravention of
section 141(b)(2) of the Code;
(b) to take any action to assure that in the event
that the "private business use" described in subsection
(a) hereof exceeds 5 percent of the proceeds of the
Certificates (less amounts deposited into a reserve fund,
if any) then the amount in excess of 5 percent is used for
a "private business use" which is "related" and not
"disproportionate", within the meaning of section
141(b)(3) of the Code, to the governmental use;
25
(c) to take any action to assure that no amount
which is greater than the lesser of $5,000,000, or 5
percent of the proceeds of the Certificates (less amounts
deposited into a reserve fund, if any) is directly or
indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of
section 141(c) of the Code;
(d) to refrain from taking any action which would
otherwise result in the Certificates being treated as
"private activity bonds" within the meaning of section
141(b) of the Code;
(e) to refrain from taking any action that would
result in the Certificates being federally guaranteed"
within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the pro-
ceeds of the Certificates, directly or indirectly, to
acquire or to replace funds which were used, directly or
indirectly, to acquire investment property (as defined in
section 148(b)(2) of the Code) which produces a materially
higher yield over the term of the Certificates, other than
investment property acquired with
(1) proceeds of the Certificates invested for a
reasonable temporary period of 3 years or less until
such proceeds are needed for the purpose for which
the Certificates are issued,
(2) amounts invested in a bona fide debt
service fund, within the meaning of section
1.103-13(b)(12) of the Treasury Regulations, and
(3) amounts deposited in any reasonably re-
quired reserve or replacement fund to the extent such
amounts do not exceed 10 percent of the proceeds of
the Certificates;
(g) to otherwise restrict the use of the proceeds of
the Certificates or amounts treated as proceeds of the
Certificates, as may be necessary, so that the Certifi-
cates do not otherwise contravene the requirements of
section 148 of the Code (relating to arbitrage) and, to
the extent applicable, section 149(d) of the Code (relat-
ing to advance refundings);
(h) to pay to the United States of America at least
once during each five-year period (beginning on the date
of delivery of the Certificates) an amount that is at
26
and correct in all material respects, to the best knowledge and
belief of the City Council and the Issuer.
Section 15. INTEREST EARNINGS ON CERTIFICATE PROCEEDS.
Interest earnings derived from the investment of proceeds from
the sale of the Initial Certificate shall be used along with
other proceeds for the construction of the improvements and
purchases for which the Certificates are issued; provided that
after completion of such improvements and purchases, if any of
such interest earnings remain on hand, such interest earnings
shall be deposited in the Interest and Sinking Fund. It is
further provided, however, that any interest earnings on
certificate proceeds which are required to be rebated to the
United States of America pursuant to Section 13 hereof in order
to prevent the Certificates from being "arbitrage bonds" within
the meaning of the Code shall be so rebated and not considered
as interest earnings for the purposes of this Section.
Section 16. FURTHER PROCEDURES. The Mayor of the Issuer,
the City Secretary of the Issuer, and all other officers,
employees, and agents of the Issuer, and each of them, shall be
and they are hereby expressly authorized, empowered, and
directed from time to time and at any time to do and perform
all such acts and things and to execute, acknowledge, and
deliver in the name and under the corporate seal and on behalf
of the Issuer all such instruments, whether or not herein
mentioned, as may be necessary or desirable in order to carry
out the terms and provisions of this Certificate Ordinance, the
Certificates, the sale of the Certificates, and the Notice of
Sale and Official Statement; and the Director of Finance of the
City shall cause the expenses of issuance of the Certificates
to be paid from the proceeds of sale of the Initial Certifi-
cate. In case any officer whose signature shall appear on any
Certificate shall cease to be such officer before the delivery
of such Certificate, such signature shall nevertheless be valid
and sufficient for all purposes the same as if such officer had
remained in office until such delivery.
28
CERTIFICATE FOR
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 1989,
AND APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES
RELATING THERETO
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
We, the undersigned officers of said City, hereby certify
as follows:
1. The City Council of said City convened in
REGULAR MEETING ON THE 17TH DAY OF JANUARY, 1989,
at the Municipal Building (City Hall), and the roll was called
of the duly constituted officers and members of said City
Council, to-wit:
Jennifer K. Walters, City Secretary Ray Stephens, Mayor
Jim Alexander Bob Gorton
Linnie McAdams Randall Boyd
Jane Hopkins Hugh Ayer
and all of said persons were present, except the following
absentees: None, thus constituting a quorum. Whereupon, among
other business, the following was transacted at said Meeting:
a written
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 1989,
AND APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES
RELATING THERETO
was duly introduced for the consideration of said City Council
and duly read. It was then duly moved and seconded that said
ordinance be passed; and, after due discussion, said motion,
carrying with it the passage of said Ordinance, prevailed and
carried by the following vote:
AYES: /~(J"
NOES:
ABSTENTIONS: " Le
2. That a tr e, 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 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 de-
clare that their signing of this Certificate shall constitute
the signing of the attached and following copy of said Ordi-
nance for all purposes.
SIGNED AND SEALED the 17th day of January, 1989.
A A0
y Secretary Mayo
I? _
(SEAL)
- - - - - - - - - - - - - - - - - - - - - - - -
We, the undersigned, being respectively the City Attorney
and the Bond Attorneys of the City of Denton, Texas, hereby
certify that we prepared and approved as to legality the
attached and following Ordinance prior to its passage as
aforesaid.
City Attorney
Bond Attorneys
GENERAL CERTIFICATE
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
We, the undersigned officers of the City of Denton, Texas
(the "Issuer") hereby certify as follows:
1. That this certificate is executed for and on behalf of
said Issuer with reference to the issuance of the proposed City
of Denton Certificates of Obligation, Series 1989, dated
January 1, 1989, in the aggregate principal amount of
$1,155,000, authorized by ordinance of the City Council on
January 17, 1989 (the "Ordinance"), initially issued and
delivered as a single fully registered certificate payable in
installments to the registered owner, but convertible into
fully registered certificates in any multiple of $5,000
(collectively, the "Certificates").
2. That said Issuer is a duly incorporated Home Rule
City, having more than 5000 inhabitants, operating and existing
under the Constitution and laws of the State of Texas and the
duly adopted Home Rule Charter of said City, which Charter has
not been changed or amended since the passage of the ordinance
authorizing the issuance of the City of Denton General
Obligation Bonds, Series 1988, dated January 1, 1988.
3. That no litigation of any nature has ever been filed
pertaining to, affecting, questioning, or contesting: (a) the
ordinance which authorized said Issuer's proposed Certificates
described in paragraph 1 of this certificate; (b) the issuance,
execution, delivery, payment, security, or validity of said
proposed Certificates, (c) the authority of the governing body
and the officers of said Issuer to issue, execute, and deliver
said Certificates, (d) the validity of the corporate existence
of said Issuer, (e) the current Tax Rolls of said Issuer, or
(f) the Home Rule Charter of said Issuer; and that no litiga-
tion is pending pertaining to, affecting, questioning, or
contesting the current boundaries of said Issuer.
4. That attached to this certificate and marked "Exhibit
All is a true, full, and correct schedule and statement of the
aforesaid proposed Certificates, and of all presently outstand-
ing tax indebtedness of said Issuer.
5. That the currently effective ad valorem tax appraisal
roll of said Issuer (the "Tax Roll") is the Tax Roll prepared
and approved during the calendar year 1988, being the most
recently approved Tax Roll of said Issuer; that the taxable
property in said Issuer has been appraised, assessed, and
valued as required and provided by the Texas Constitution and
Property Tax Code (collectively, "Texas law") ; that the Tax
Roll for said year has been submitted to the City Council of
said Issuer as required by Texas law, and has been approved and
recorded by said City Council; and according to the Tax Roll
for said year the net aggregate taxable value of taxable
property in said Issuer (after deducting the amount of all
applicable exemptions required or authorized under Texas law),
upon which the annual ad valorem tax of said Issuer has been
imposed and levied, is $2,136,420,302.
6. That the Certificates additionally are payable from
and secured by certain surplus revenues (not to exceed $10,000
in aggregate amount) derived by the City from the ownership and
operation of the City's Utility System (consisting of the
City's combined waterworks system, sanitary sewer system, and
electric light and power system), which revenues are designated
or defined as the "Surplus Revenues" in the ordinance; and
except for the Certificates and that issue of City of Denton
Certificates of Obligation, Series 1987-A, said Surplus
Revenues are not pledged to the payment of any obligations of
the Issuer, and none of said Surplus Revenues have ever been
used to pay any principal and/or interest on the City of Denton
Certificates of Obligations, Series 1987-A.
7. That no petition has been filed protesting the issu-
ance of the aforesaid Certificates.
8. That no default exists in connection with any bonds or
other obligations issued by the Issuer or the ordinances
authorizing same.
9. That to the best of our knowledge and belief the
statements and information set forth in the Official Statement
dated January 3, 1989, pertaining to the Certificates and the
City, and particularly (i) the Utility System operating
statements, rates for services, and revenues and expenditures,
(ii) debt service requirements for both tax and revenue bonds,
and (iii) all other information set forth therein, are true and
correct in all material respects.
SIGNED AND SEALED the ZIL41day of~ -04-1 1989.
AAA If I jw.
ity Secretary
(SEAL)
"EXHIBIT A"
General Obligation Bonds, Series 1989, dated 1/1/89, bearing
interest, and maturing as set forth in the Ordinance authoriz-
ing said Bonds.
Certificates of Obligation, Series 1989, dated 1/1/89, bearing
interest, and maturing as set forth in the Ordinance authoriz-
ing said Certificates.
General Obligation Refunding Bonds, Series 1985, dated 11/1/85,
now outstanding in the principal amount of $19,520,000.25,
bearing interest, and maturing in the amounts on February 15 of
the years, as follows:
(CURRENT INTEREST BONDS, $19,520,000)
6.60%:
2,365M-89;
6.90%:
1,760M-90;
7.10%:
1,755M-91;
7.30%:
1,745M-92;
7.50%:
1,765M-93;
7.70%:
1,820M-94;
7.90%:
1,740M-95;
8.00%:
1,825M-96;
8.10%:
1,745M-97;
8.20%:
1,480M-98;
8.30%:
1,520M-99.
(CAPITAL APPRECIATION BONDS, $1,436,730.25)
8.70%:
$450,807.70 -
2000
8.80%:
326,699.60 -
2001
9.00%:
273,727.95 -
2002
9.10%:
232,457.50 -
2003
9.10%:
153,037.50 -
2004
Certificates of Obligation, series 1987, dated January 1, 1987,
now outstanding in the principal amount of $475,000, bearing
interest, and maturing in the amounts on July 1 of the years,
as follows:
9.00%:
25M-89/92;
8.00%:
25M-93;
6.20%:
25M-94;
6.30%:
25M-95;
6.40%:
25M-96;
6.50%:
25M-97;
6.60%:
25M-98;
6.70%:
25M-99;
6.80%:
25M-2000;
6.90%:
25M-01;
7.00%:
25M-02/06;
6.00%:
25M-07.
General Obligation Bonds, Series 1987, dated April 1, 1987, now
outstanding in the principal amount of $3,325,000, bearing
interest, and maturing in the amounts on July 1 of the yeas, as
follows:
9.40%:
175M-89/94;
9.20%:
175M-95;
8.00%:
175M-96/98;
7.60%:
175M-99;
7.70%:
175M-2000;
7.80%:
175M-01;
7.90%:
175M-02;
8.00%:
175M-03/05;
6.40%:
175M-06/07.
Certificates of Obligation, Series 1987-A, dated June 1, 1987,
now outstanding in the principal amount of $1,100,000, bearing
interest, and maturing in the amounts on July 1 of the years,
as follows:
8.75%:
120M-89/90;
6.10%:
120M-91;
6.00%:
120M-92;
6.20%:
120M-93;
6.40%:
125M-94;
6.50%:
125M-95/96;
6.00%:
125M-97.
General Obligation Bonds, Series 1988, dated January 1, 1988,
now outstanding in the principal amount of $3,600,000, bearing
interest, and maturing in the amounts on July 1 of the years,
as follows:
9.50%: 175M-90/95;
7.75%: 175M-96;
6.50%: 175M-97;
6.60%: 200M-98;
6.50%: 200M-99/08.
Public Property Finance Contractual Obligations, Series 1988,
now outstanding in the principal amount of $775,000, bearing
interest, and maturing in the amounts on July 1 of the years,
as follows:
5.375%: 245M-89;
6.30%: 260M-90;
5.75%: 270M-91.
Total outstanding General Obligation Indebtedness -
$30,231,730.25.
FIRST OOMMWE4t COMPANY
INVESTMENT BANKERS
500 FIRST CITY CENTER
1700 PACIFIC AVENUE
DALLAS, TEXAS 75201
January 17, 1989
Honorable Mayor and City Council
City of Denton
Denton, Texas
Gentlemen:
(214) 953-4000
A rule of the Municipal Securities Rulemaking Board, under which we operate,
requires that we advise you in writing of our intention to bid for our own account or
with others for your $3,615,000 General Obligation Bonds, Series 1989, and $1,155,000
Certificates of Obligation, Series 1989, and that we have your written consent to do
so.
Our Financial Advisory Agreement, the Notice of Sale and the Official Statement to
be mailed to prospective bidders and purchasers of your Bonds and Certificates shall
state:
"First Southwest Company is employed as Financial Advisor to the City in
connection with the issuance of the Bonds and the Certificates. The Financial
Advisor's fee for services rendered with respect to the sale of the Bonds and
the Certificates is contingent upon the issuance and delivery of the Bonds and
the Certificates. First Southwest Company may submit a bid for the Bonds
and the Certificates, either independently or as a member of a syndicate
organized to submit a bid for the Bonds and the Certificates."
It would be appreciated if you would indicate your approval by signing this letter in
the space provided below:
Very truly yours,
FIRST SOUTHWEST COMPANY
By
Frank . edanich
The above is understood and agreed to, and we hereby give our consent.
CITY OF DENTON, TEXAS
B y -r-y
May r
ATTEST:
City Secretary