1988-060~B-oc0o
ORDINANCE AUTHORIZING THE ISSUANCE OF
nr PROPERTY FINANCE CONTRACTUAL OBLIGATIONS
WHEREAS, the Public Property Finance Act, Sec-
tion 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 de-
scribed 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 an ambulance and related safety equip-
ment, fire trucks, fire equipment, garbage trucks, general
purpose trucks, police car equipment and street maintenance
equipment, 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 "Con-
tractual 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 OBLIGA-
TIONS 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 $775,000, 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 AC-
CORDANCE WITH THE PROVISIONS OF THE PUBLIC PROPERTY FINANCE
ACT, SECTION 271 001, ET SEQ , TEXAS LOCAL GOVERNMENT CODE
Section 2 DESIGNATION That said Contractual Obliga-
tions shall be designated as the CITY OF DENTON, TEXAS
PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS, SE-
RIES 1988
Section 3 DATE, DENOMINATIONS, NUMBERS, AND MATURI-
TIES OF CONTRACTUAL OBLIGATIONS That initially there shall
be issued, sold, and delivered hereunder fully registered
contractual obligations dated March 1, 1988, in the denomi-
nation 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 obligations 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
1989 $ 245,000
1990 260,000
1991 270,000
The term "Contractual Obligations" as used in this Ordinance
shall mean and include collectively the contractual obliga-
tions initially issued and delivered pursuant to this
Ordinance and all substitute contractual obligations ex-
changed therefor, as well as all other substitute contrac-
tual obligations and replacement certificates issued pur-
suant 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, 1989, and semiannually there-
after on July 1 and January 1 of each year, at the following
rates per annum
maturities 1989,
maturities 1990, $
maturities 1991,
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 OBLIGA-
TIONS (a) Registration Transfer Conversion and Exchange,
Authentication That the Issuer shall keep or cause to be
kept at the principal corporate trust office of MTrust Corp,
National Association, Dallas, Texas (the "Paying Agent/
Registrar") books or records for the registration of the
transfer, conversion and exchange of the Contractual Obliga-
tions (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
2
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 Contractu-
al obligation to which payments with respect to the Contrac-
tual 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 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 Contrac-
tual 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 Ordi-
nance 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 Obliga-
tion, 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 Obligation or 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 obliga-
tions shall be of type composition printed on paper with
lithographed or steel engraved borders of customary weight
and strength Pursuant to Vernon's Ann Tex Civ St Art
717k-6, and particularly Section 6 thereof, the duty of
conversion and exchange of Contractual Obligations as
aforesaid is hereby imposed upon the Paying Agent/ Regis-
trar, and, upon the execution of said Contractual obliga-
tions, the converted and exchanged Contractual obligations
shall be valid, incontestable, and enforceable in the same
manner and with the same effect as the Contractual Obliga-
tions which initially were issued and delivered pursuant to
this ordinance, approved by the Attorney General, and regis-
tered by the Comptroller of Public Accounts
(b) Pals, t Or COnLraCrudl V01 ,all wlaiam az&a_.a.aa a.oa.
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) In General The Contractual Obligations (1) shall
be issued in fully registered form, without interest cou-
pons, 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, (1v) may
be converted and exchanged for other Contractual obliga-
tions, (v) shall have the characteristics, (v1) 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 1s attached the
Registration Certificate of the Comptroller of Public
Accounts) are not required to be, and shall not be, authen-
ticated by the Paying Agent/Registrar, but on each substi-
tute 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 The Paying Agent/Registrar
shall fill in the date of delivery of the Contractual
obligations under the heading "Original Issue Date" as it
appears on the face of each of the Contractual Obligations
upon the initial delivery of the Contractual Obligations to
the purchaser named in Section 19 of this Ordinance
(d) Substitute Pav~na Agent/Reg s a The Issuer
covenants with the registered owners of the Contractual
obligations that at all times while the Contractual Obliga-
tions are outstanding the Issuer will provide a competent
and legally qualified bank, trust company, financial insti-
tution, or other agency to act as and perform the services
of Paying Agent/Registrar for the Contractual Obligations
4
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 Contractu-
al 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 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 form of the Registration Certifi-
cate of the Comptroller of Public Accounts of the State of
Texas to be attached to the Certificates initially issued
and delivered pursuant to this Ordinar-e, shall be, respec-
tively, 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 1988
ORIGINAL INTEREST
ISSUE DATE RATE
March 1, 1988 %
THE CITY OF DENTON, TEXAS (the "Issuer"), hereby
promises to pay to ,
or the registered ass gnee hereof (either being hereinafter
called the "registered owner") the principal amount of
and to pay interest thereon from the original issue date
specified above, on January 1, 1989 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 authen-
tication is later than January 1, 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 de-
fined) but on or before the next following interest payment
date, in which case such principal amount shall bear inter-
est from such next following interest payment date, pro-
vided, 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 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
6
of this Contractual Obligation at maturity at the principal
corporate trust office of MTrust Corp, National Association,
Dallas, 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 date 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 herein-
after 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
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 institu-
tions 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
March 1, 1988, authorized in accordance with the Constitu-
tion and laws of the State of Texas in the principal amount
of $775,000, 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
7
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/Regis-
trar for transfer of registration and cancellation, together
with proper instruments of assignment, in form 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 assign-
ment hereof Upon surrender of this Contractual Obligation
or any portion or portions hereof for transfer of registra-
tion, an authorized representative of the Paying Agent/Reg-
istrar 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 Obliga-
tion, in exchange for this Contractual obligation, all in
the form and manner as provided in the next 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 pur-
poses, 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
8
multiple of $5,000 as requested, with appropriate changes in
the schedule of principal installments payable on the due
dates to reflect the different denominations thereof, 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 re-
quired 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 Con-
tractual 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, condi-
tions, 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 HIS ACCEPTANCE 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 Contrac-
tual 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
9
IN WITNESS WHEREOF, the Issuer has caused this Contrac-
tual 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)
City secretary
(signature)
Mayor
(SEAL)
-ORS. OF PAYING AGENT/REGISTRAR'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 conver-
sion 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
MTrust Corp, National
Association, Dallas, Texas
Paying Agent/Registrar
By
Authorized Representative
10
FORM OF ASSIGNMENT
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells,
and transfers unto
assigns
Please insert Social Security or Taxpayer
Identification Number of Transferee
(Please print or typewrite name and address, including zip
code of Transferee)
the within Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints
attorney to register the transfer of the within Bond on the
books kept for registration thereof,
substitution in the premises
Dated
Signature Guaranteed
NOTICE Signature(s) must
be guaranteed by a member
firm of the New York Stock
Exchange or a commercial
bank or trust company
with full power of
NOTICE The signature above
must correspond with the
name of the Registered Owner
as it appears upon the front
of this Bond in every parti-
cular, without alteration or
enlargement or any change
whatsoever
11
FORM OF REGISTRATION CERTIFICATE OF
THE 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 Comptrol-
ler 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 Contrac-
tual Obligations, Series 1988 authorized to be issued and
delivered by this Ordinance
(c) The term "Paying Agent/Registrar" shall mean
initially MTrust Corp, National Association, Dallas, 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 1988 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
before the 25th day of December,
25th day of each June and January
of the Contractual Obligations
AND SINKING FUND On or
1988, and on or before the
thereafter so long as any
remain outstanding, there
12
shall be deposited in the Interest and Sinking Fund an
amount, together with other amounts in the Interest and
Sinking Fund, not less than the amount of the installment of
principal and interest coming due on the Contractual Obliga-
tions 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 All 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 allow-
ance 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 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 All 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 outstand-
ing (a "Defeased Contractual Obligation") within the meaning
of this ordinance, except to the extent provided in sub-
section (d) of this Section 12, when payment of the princi-
pal 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
13
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 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 Contrac-
tual 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 Trea-
sury 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 re-
quired by this Ordinance
Section 13 DAMAGED, MUTILATED, LOST, STOLEN, OR
DESTROYED CONTRACTUAL OBLIGATIONS (a) ReRlacement Con-
+tggtii9 Oblige ions In the event any outstanding Contrac-
tual bligation is damaged, mutilated, lost, stolen, or
destroyed, the Paying Agent/Registrar shall cause to be
printed, executed, and delivered, a new contractual obliga-
tion of the same principal amount, maturity, and interest
rate, as the damaged, mutilated, lost, stolen, or destroyed
14
Contractual Obligation, in replacement for such Contractual
Obligation in the manner hereinafter provided
(b) Application for Replacement Contractual uoilaa-
tions 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 de-
struction of a Contractual obligation, 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 forego-
ing 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 provid-
ed in this Section 13
*ar Tseuina xepiacemenc --un..caa:a.ua.. .s-
(d) ae or
ons 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 tor issuinCZ~~81avGannaa~
Obligations In accordance with Section 6 of Vernon's Ann
Tex. Civ St Art 717k-6, this Section 13 of this Ordinance
shall constitute authority for the issuance of any such
15
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
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 Certifi-
cate attached to such Contractual obligations, and the seal
of said Comptroller shall be impressed, or placed in facsim-
ile, on such certificate
Section 15 CONTRACTUAL UNDERTAKING WITH REGISTERED
OWNER The Issuer hereby, and by the acceptance of each of
the Contractual Obligations, 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 there-
for
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 Juris-
diction compelling and requiring the Issuer and
the officials thereof to observe and perform the
contracts, covenants, obligations or conditions
prescribed in this Ordinance, and
16
(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 there-
in, and every such right and power may be ex-
ercised 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 cove-
nants to take any action to assure, or refrain from any ac-
tion which would adversely affect, the treatment of the
Contractual Obligations as obligations described in sec-
tion 103 of the Code, the interest on which is not .includ-
able in the "gross income" of the holder for purposes of
federal income taxation In furtherance thereof, the Issuer
covenants as follows.
(a) to take any action to assure that no more
than 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 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 sub-
section (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 deposited into a reserve fund, if any) is
directly or indirectly used to finance loans to per-
sons, 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,
17
(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 pro-
ceeds of the Contractual Obligations, 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 Contractual obligations, other than investment
property acquired with
(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 re-
quired reserve or replacement fund to the extent
such amounts do not exceed ten percent of the pro-
ceeds 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 Obliga-
tions 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 pay-
ment of principal and interest on the Contractual
Obligations
18
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 inter-
est on the Contractual Obligations under section 103 of the
Code In the event that regulations or rulings are hereaf-
ter promulgated which impose additional requirements which
are applicable to the Contractual Obligations, the Issuer
agrees to comply with the additional requirements to the
extent necessary, in the opinion of nationally-recognized
bond counsel, to preserve the exemption from federal income
taxation of interest on the Contractual obligations under
section 103 of the Code
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 Obliga-
tions are issued, the Issuer (including 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 antici-
pates that the amount of tax-exempt obligations issued
during the calendar year in which the Contractual obliga-
tions are issued, by the Issuer (or any subordinate enti-
ties) will not exceed $10,000,000, and, (c) that the Issuer
will take such action or refrain from such action as neces-
sary, and as more particularly set forth in Section 10 of
this order, 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 Contrac-
tual obligations are hereby sold and shall be delivered
to First Southwest Company, as placement agent, 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 Contractual Obligations
initially shall be registered in the name of First Southwest
Company As Escrow Agreement substantially in the form
attached hereto as Exhibit A, between the Issuer and First
State Bank, Denton, Texas, is hereby approved, and shall be
executed by the City Manager and City Secretary of the
19
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 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 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 re-
quired 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 March, 1988, at which
meeting a quorum was present
Mayor,
City of Denton, Texas
ATTEST
City secretary,
City of Denton, Texas
20
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of March 15, 1988
(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 First
State 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
W I T N E S S E T H
WHEREAS, the Public Property Finance Act, Sec-
tion 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, acquisi-
tion or purchase of personal property, and
WHEREAS, the governing body of the Issuer desires to
acquire or purchase personal property, to-wit an ambulance
and related safety equipment, fire trucks, fire equipment,
garbage trucks, general purpose trucks, police car equipment
and street maintenance equipment, 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 $775,000 of City of Denton, Texas
Public Property Finance Contractual Obligations, Series 1988
(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 under-
takings, 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 representa-
tives and successors, as follows
ARTICLE 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 invest-
ment then authorized by law for the investment of the
general funds of the Issuer
SECTION 1 02 Other Definitions The terms "Agree-
ment", "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 head-
ings 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 acquisi-
tion or purchase of the Property and the payment of the
costs of issuance with respect to the Contractual obliga-
tions
2
ARTICLE II
DEPOSIT OF FUNDS
SECTION 2 01 Deposits in the Escrow Fund Concur-
rently with the sale and delivery of the Contractual Obliga-
tions 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 interest, if any, which
is to be deposited to the Interest and Sinking Fund estab-
lished 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 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 consid-
ered 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
3
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 Corpora-
tion 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 All
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 Author-
ized 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
All 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
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 submis-
sion of any Payment Request Form and the disbursement of
funds pursuant to any such submission, and such books shall
4
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 Escrow Fund during the preceding year,
together with a detailed statement of all Permitted Invest-
ments and the cash balance on deposit in the Escrow Fund as
of the end of such period
ARTICLE V
CONCERNING 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 carry out 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 conse-
quences 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
5
accordance with this Agreement 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 determina-
tion, 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 negli-
gence 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 deter-
mine 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 Agents 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 bank-
ruptcy 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 suc-
cessor 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 Obliga-
tions 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 com-
bined 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 instrument transferring to such
successor Escrow Agent, subject to the terms of this
6
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 instru-
ments in writing for more fully and certainly vesting in and
confirming to such successor Escrow Agent all such rights,
powers and duties
ARTICLE VI
MISCELLANEOUS
SECTION 6 01 Notice Any notice, authorization, re-
quest, 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 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 are to 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 obliga-
tions 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 Agreement 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 respec-
tive 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
7
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
EXECUTED as of the date first written above
CITY OF DENTON, TEXAS
By
City Manager
ATTEST
City Secretary
(SEAL) FIRST STATE BANK
By
Title
ATTEST
Title
(SEAL)
8
INDEX TO ATTACHMENTS
Attachment "A" Addresses of the Issuer and the Escrow
Agent
Attachment "B" Payment Request Form
ATTACHMENT "A"
ADDRESSES OF THE ISSUER AND ESCROW AGENT
City of Denton, Texas
215 E McKinney Street
Denton, Texas 76201
Attention City Manager
First State Bank
P 0 Box 100
Denton, Texas 76201
Attention President
ATTACHMENT "B"
Payment Request Form No
To First State Bank
P O Box 100
Denton, Texas 76201
Attention President
As Escrow Agent, you are hereby requested to pay from
the Escrow Fund established by the Escrow Agreement, dated
as of March 15, 1988 between the City of Denton (the "Issu-
er") and the Escrow Agent (the "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
, 198
City of Denton
Authorized Representative