1988-022ORDINANCE NO 88-022
ORDINANCE
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF
DENTON GENERAL OBLIGATION BONDS, SERIES 1988, LEVYING THE
TAX TO PAY SAME, AND APPROVING AND AUTHORIZING INSTRUMENTS
AND PROCEDURES RELATING THERETO
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the bonds hereinafter authorized were lawfully
and favorably voted at an election duly held in said City on
DECEMBER 13, 1986, and
WHEREAS, out of the bonds aggregating the amount of
$21,637,000 voted at said election, the City has duly issued
$3,500,000 thereof, represented by the City's bonds designated
as SERIES 1987, and
WHEREAS, the Council of said City deems it necessary and
advisable to authorize, issue, and deliver another installment
or series of said bonds, and
WHEREAS, the bonds hereinafter authorized and designated
were Voted and are to be issued, sold, and delivered pursuant
to Vernon's Ann Tex Civ St Articles 823 and 1175, Article
IX of the City's Home Rule Charter, and other applicable laws
, THE COUNCIL OF THE CITY OF DENTON HEREBY
ORDAINS THAT
Section 1 AMOUNT AND PURPOSE OF THE BONDS The bond or
bonds of the City of Denton, Texas (the "Issuer") are hereby
authorized to be issued and delivered in the aggregate princi-
pal amount of $3,600,000, FOR THE PURPOSE OF THE ACQUISITION OF
PROPERTY AND MAKING IMPROVEMENTS FOR PUBLIC PURPOSES IN SAID
CITY, TO-WIT $1,489,000 FOR STREET AND TRAFFIC CONTROL IM-
PROVEMENTS, $786,000 FOR DRAINAGE IMPROVEMENTS, $1,300,000 FOR
PARK IMPROVEMENTS, INCLUDING ATHLETIC FIELDS AND NEIGHBORHOOD
AND SENIOR CITIZENS COMMUNITY CENTERS, and $25,000 FOR
IMPROVEMENTS TO PUBLIC LIBRARIES
Section 2 DESIGNATION OF THE BONDS Each bond issued
pursuant to this Ordinance shall be designated "CITY OF DENTON
GENERAL OBLIGATION BOND, SERIES 198811, and initially there
shall be issued, sold, and delivered hereunder a single fully
registered bond, without interest coupons, payable in install-
ments of principal (the "Initial Bond"), but the Initial Bond
may be assigned and transferred and/or converted into and
exchanged for a like aggregate principal amount of fully
registered bonds, without interest coupons, having serial
maturities, and in the denomination or denominations of $5,000
or any integral multiple of $5,000, all in the manner herein-
after provided The term "Bonds" as used in this ordinance
shall mean and include collectively the initial Bond and all
substitute bonds exchanged therefor, as well as all other
substitute bonds and replacement bonds issued pursuant hereto,
and the term "Bonds" shall mean any of the Bonds
Section 3 INITIAL DATE, DENOMINATION, NUMBER, MATURI-
TIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE
INITIAL BOND
(a) The Initial Bond is hereby authorized to be issued,
sold, and delivered hereunder as a single fully registered
Bond, without interest coupons, dated JANUARY 1, 1988, in the
denomination and aggregate principal amount of $3,600,000,
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 Bond or any
portion or portions thereof (in each case, the "registered
owner"), with the annual installments of principal of the
Initial Bond to be payable on the dates, respectively, and in
the principal amounts, respectively, stated in the FORM OF
INITIAL BOND set forth in this ordinance
(b) The Initial Bond (i) may be prepaid or redeemed prior
to the respective scheduled due dates of installments of
principal thereof, (ii) may be assigned and transferred, (iii)
may be converted and exchanged for other Bonds, (iv) shall have
the characteristics, and (v) shall be signed and sealed, and
the principal of and interest on the Initial Bond shall be
payable, all as provided, and in the manner required or indi-
cated, in the FORM OF INITIAL BOND set forth in this ordinance
section 4 INTEREST The unpaid principal balance of the
Initial Bond shall bear interest from the date of the Initial
Bond to the respective scheduled due dates, or to the respec-
tive dates of prepayment or redemption, of the installments of
principal of the initial Bond, 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 BOND set forth in this
ordinance
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Section 5 FORM OF INITIAL BOND The form of the Initial
Bond, including the form of Registration Bond of the Comptrol-
ler of Public Accounts of the State of Texas to be endorsed on
the Initial Bond, shall be substantially as follows
FORM OF INITIAL BOND
NO R-1 $3,600,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON GENERAL OBLIGATION BOND
SERIES 1988
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 Bond or any
portion or portions hereof (in each case, the "registered
owner") the aggregate principal amount of
$3,600,000
(THREE MILLION SIX HUNDRED 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
$
AMOUNT
1990
$175,000
2000
$200,000
1991
175,000
2001
200,000
1992
175,000
2002
200,000
1993
175,000
2003
200,000
1994
175,000
2004
200,000
1995
175,000
2005
200,000
1996
175,000
2006
200,000
1997
175,000
2007
200,000
1998
200,000
2008
200,000
1999
200,000
and to pay interest, from the date of this Bond hereinafter
stated, on the balance of each such installment of principal,
3
respectively, from time to time remaining unpaid, at the rates
as follows
9 50% per annum on the above installment due in 1990
9 50% per annum on the above installment due in 1991
9 50% per annum on the above installment due in 1992
9 50% per annum on the above installment due in 1993
9 50% per annum on the above installment due in 1994
9 50% per annum on the above installment due in 1995
7 75% per annum on the above installment due in 1996
6 50% per annum on the above installment due in 1997
6 60% per annum on the above installment due in 1998
6 50% per annum on the above installment due in 1999
6 50% per annum on the above installment due in 2000
6 50% per annum on the above installment due in 2001
6 50% per annum on the above installment due in 2002
6 50% per annum on the above installment due in 2003
6 50% per annum on the above installment due in 2004
6 50% per annum on the above installment due in 2005
6 50% per annum on the above installment due in 2006
6 50% per annum on the above installment due in 2007
6 50% per annum on the above installment due in 2008
with said interest being payable on JANUARY 1, 1989, and semi-
annually on each JULY 1 and JANUARY 1 thereafter while this
Bond or any portion hereof is outstanding and unpaid
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this
Bond 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 Bond are payable to
the registered owner hereof through the services of MTRUST
CORP NATIONAL ASSOCIATION, DALLAS, TEXAS, which is the "Paying
Agent/Registrar" for this Bond Payment of all principal of
and interest on this Bond shall be made by the Paying
Agent/Registrar to the registered owner hereof on each princi-
pal 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 Bond (the "Bond Ordinance") tc
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 covenants with the regis-
tered owner of this Bond that on or before each principal
and/or interest payment date for this Bond it will make avail-
able to the Paying Agent/Registrar, from the "Interest and
Sinking Fund" created by the Bond Ordinance, the amounts
required to provide for the payment, in immediately available
funds, of all principal of and interest on this Bond, when due
IF THE DATE for the payment of the principal of or inter-
est on this Bond 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 BOND has been authorized in accordance with the
Constitution and laws of the State of Texas FOR THE PURPOSE OF
THE ACQUISITION OF PROPERTY AND MAKING IMPROVEMENTS FOR PUBLIC
PURPOSES IN SAID CITY, TO-WIT $1,489,000 FOR STREET AND
TRAFFIC CONTROL IMPROVEMENTS, $786,000 FOR DRAINAGE IMPROVE-
MENTS, $1,300,000 FOR PARK IMPROVEMENTS, INCLUDING ATHLETIC
FIELDS AND NEIGHBORHOOD AND SENIOR CITIZENS COMMUNITY CENTERS,
and $25,000 FOR IMPROVEMENTS TO PUBLIC LIBRARIES
ON JULY 1, 1998, or on any interest payment date there-
after, the unpaid installments of principal of this Bond may be
prepaid or redeemed prior to their scheduled due dates, at the
option of the Issuer, with funds derived from any available
source, as a whole, or in part, and, if in part, the particular
portion of this Bond to be prepaid or redeemed shall be se-
lected and designated by the Issuer (provided that a portion of
this Bond may be redeemed only in an integral multiple of
$5,000), at the prepayment or redemption price of the par or
principal amount thereof, plus accrued interest to the date
fixed for prepayment or redemption
AT LEAST 30 days prior to the date fixed for any such
prepayment or redemption a written notice of such prepayment or
redemption shall be mailed by the Paying Agent/Registrar to the
registered owner hereof By the date fixed for any such
prepayment or redemption due provision shall be made by the
Issuer with the Paying Agent/Registrar for the payment of the
required prepayment or redemption price for this Bond or the
portion hereof which is to be so prepaid or redeemed, plus
accrued interest thereon to the date fixed for prepayment or
redemption If such written notice of prepayment or redemption
is given, and if due provision for such payment is made, all as
5
provided above, this Bond, or the portion thereof which is to
be so prepaid or redeemed, thereby automatically shall be
treated as prepaid or redeemed prior to its scheduled due date,
and shall not bear interest after the date fixed for its
prepayment or redemption, and shall not be regarded as being
outstanding except for the right of the registered owner to
receive the prepayment or redemption price plus accrued inter-
est to the date fixed for prepayment or redemption from the
Paying Agent/Registrar out of the funds provided for such
payment The Paying Agent/Registrar shall record in the
Registration Books all such prepayments or redemptions of
principal of this Bond or any portion hereof
THIS BOND, to the extent of the unpaid or unredeemed
principal balance hereof, or any unpaid and unredeemed 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
Bonds, upon the terms and conditions set forth in the Bond
Ordinance Among other requirements for such transfer, this
Bond must be presented and surrendered to the Paying Agent/
Registrar for cancellation, together with proper instruments of
assignment, in form and with guarantee of signatures satisfac-
tory to the Paying Agent/Registrar, evidencing assignment by
the initial registered owner of this Bond, or any portion or
portions hereof in any integral multiple of $5,000, to the
assignee or assignees in whose name or names this Bond or any
such portion or portions hereof is or are to be transferred and
registered Any instrument or instruments of assignment
satisfactory to the Paying Agent/Registrar may be used to
evidence the assignment of this Bond or any such portion or
portions hereof by the initial registered owner hereof A new
bond or bonds payable to such assignee or assignees (which then
will be the new registered owner or owners of such new Bond or
Bonds) or to the initial registered owner as to any portion of
this Bond which is not being assigned and transferred by the
initial registered owner, shall be delivered by the Paying
Agent/Registrar in conversion of and exchange for this Bond or
any portion or portions hereof, but solely in the form and
manner as provided in the next paragraph hereof for the conver-
sion and exchange of this Bond or any portion hereof The
registered owner of this Bond 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 Bond to the extent of such payment, and the
Issuer and the Paying Agent/Registrar shall not be affected by
any notice to the contrary
6
AS PROVIDED above and in the Bond Ordinance, this Bond, to
the extent of the unpaid or unredeemed principal balance
hereof, may be converted into and exchanged for a like aggre-
gate principal amount of fully registered bonds, 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
Bond 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 here-
inafter stated that each substitute bond issued in exchange for
any portion of this Bond shall have a single stated principal
maturity date), upon surrender of this Bond to the Paying
Agent/Registrar for cancellation, all in accordance with the
form and procedures set forth in the Bond Ordinance If this
Bond or any portion hereof is assigned and transferred or
converted each bond issued in exchange for any portion hereof
shall have a single stated principal maturity date correspond-
ing to the due date of the installment of principal of this
Bond or portion hereof for which the substitute bond is being
exchanged, and shall bear interest at the rate applicable to
and borne by such installment of principal or portion thereof
such bonds, respectively, shall be subject to redemption prior
to maturity on the same dates and for the same prices as the
corresponding installment of principal of this Bond or portion
hereof for which they are being exchanged No such bond shall
be payable in installments, but shall have only one stated
principal maturity date AS PROVIDED IN THE BOND ORDINANCE,
THIS BOND IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED
OR CONVERTED ONCE ONLY, and to one or more assignees, but the
bonds issued and delivered in exchange for this Bond or any
portion hereof may be assigned and transferred, and converted,
subsequently, as provided in the Bond Ordinance The Issuer
shall pay the Paying Agent/Registrar's standard or customary
fees and charges for transferring, converting, and exchanging
this Bond or any portion thereof, but the one requesting such
transfer, conversion, and exchange shall pay any taxes or
governmental charges required to be paid with respect thereto
The Paying Agent/Registrar shall not be required to make any
such assignment, conversion, or exchange (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 Bond or portion thereof called for prepayment or redemption
prior to maturity, within 45 days prior to its prepayment or
redemption date
IN THE EVENT any Paying Agent/Registrar for this Bond is
changed by the Issuer, resigns, or otherwise ceases to act as
such, the Issuer has covenanted in the Bond Ordinance that it
promptly will appoint a competent and legally qualified sub-
stitute therefor, and promptly will cause written notice
thereof to be mailed to the registered owner of this Bond
IT IS HEREBY certified, recited, and covenanted that this
Bond has been duly and validly voted, authorized, issued, sold,
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 Bond have
been performed, existed, and been done in accordance with law,
that this Bond 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 Bond, 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 pre-
scribed by law
BY BECOMING the registered owner of this Bond, the regis-
tered owner thereby acknowledges all of the terms and provi-
sions of the Bond Ordinance, agrees to be bound by such terms
and provisions, acknowledges that the Bond 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 Bond and the Bond Ordi-
nance constitute a contract between the registered owner hereof
and the Issuer
IN WITNESS WHEREOF, the Issuer has caused this Bond 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 Bond, and has caused this Bond to be
dated JANUARY 1, 1988
City Secretary, Mayor,
City of Denton, Texas City of Denton, Texas
(CITY
SEAL)
8
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS
COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO
I hereby certify that this Bond has been examined, certi-
fied as to validity, and approved by the Attorney General of
the State of Texas, and that this Bond 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 BONDS
Registration and Transfer (a) 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 of the registration and
transfer of the Bonds (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 Bond to which
payments with respect to the Bonds 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 Regis-
tration Books confidential and, unless otherwise required by
law, shall not permit their inspection by any other entity
Registration of each Bond may be transferred in the Registra-
tion Books only upon presentation and surrender of such Bond 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 satis-
factory to the Paying Agent/Registrar, (i) evidencing the
assignment of the Bond, or any portion thereof in any integral
multiple of $5,000, to the assignee or assignees thereof, and
(11) the right of such assignee or assignees to have the Bond
or any such portion thereof registered in the name of such
assignee or assignees Upon the assignment and transfer of any
Bond or any portion thereof, a new substitute Bond or Bonds
shall be issued in conversion and exchange therefor in the
manner herein provided The Initial Bond, to the extent of the
unpaid or unredeemed 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 Bonds issued and de-
livered in conversion of and exchange for the Initial Bond
shall be in any denomination or denominations of any integral
multiple of $5,000 (subject to the requirement hereinafter
stated that each substitute Bond shall have a single stated
principal maturity date), shall be in the form prescribed in
the FORM OF SUBSTITUTE BOND set forth in this ordinance, and
shall have the characteristics, and may be assigned, trans-
ferred, and converted as hereinafter provided If the Initial
Bond or any portion thereof is assigned and transferred or
converted the Initial Bond must be surrendered to the Paying
Agent/Registrar for cancellation, and each Bond issued in
exchange for any portion of the Initial Bond shall have a
single stated principal maturity date, and shall not be payable
in installments, and each such Bond shall have a principal
maturity date corresponding to the due date of the installment
of principal or portion thereof for which the substitute Bond
is being exchanged, and each such Bond 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 Bond is assigned and trans-
ferred, there shall be delivered to and registered in the name
of the initial registered owner substitute Bonds in exchange
for the unassigned balance of the Initial Bond in the same
manner as if the initial registered owner were the assignee
thereof If any Bond or portion thereof other than the Initial
Bond is assigned and transferred or converted each Bond issued
in exchange therefor shall have the same principal maturity
date and bear interest at the same rate as the Bond for which
it is exchanged A form of assignment shall be printed or
endorsed on each Bond, excepting the Initial Bond, which shall
be executed by the registered owner or its duly authorized
attorney or representative to evidence an assignment thereof
Upon surrender of any Bonds or any portion or portions thereof
for transfer of registration, an authorized representative of
the Paying Agent/Registrar shall make such transfer in the
Registration Books, and shall deliver a new fully registered
substitute Bond or Bonds, having the characteristics herein
described, payable to such assignee or assignees (which then
will be the registered owner or owners of such new Bond or
10
Bonds), or to the previous registered owner in case only a
portion of a Bond is being assigned and transferred, all in
conversion of and exchange for said assigned Bond or Bonds 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 exchange of Bonds by any registered
owner of a Bond The Issuer shall pay the Paying Agent/Rpgis-
trar's standard or customary fees and charges for making such
transfer and delivery of a substitute Bond or Bonds, 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 Bond or any portion thereof
(1) 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, (11)
with respect to any Bond or any portion thereof called for
redemption prior to maturity, within 45 days prior to its
redemption date
(b) Ownership of Bonds The entity in whose name any
Bond 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 Bond 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 Bond shall be made only to such registered
owner All such payments shall be valid and effectual to
satisfy and discharge the liability upon such Bond to the
extent of the sum or sums so paid
(c) Payment of Bonds 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
Bonds, and to act as its agent to convert and exchange or
replace Bonds, 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 Bonds, and of all conversions and exchanges of Bonds, and
all replacements of Bonds, as provided in this ordinance
(d) Conversion and Exchange or Replacement. Authent17
cation Each Bond issued and delivered pursuant to this
ordinance, to the extent of the unpaid or unredeemed principal
balance or principal amount thereof, may, upon surrender of
such Bond 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
11
representatives, with guarantee of signatures satisfactory to
the Paying Agent/Registrar, may, at the option of the regis-
tered owner or such assignee or assignees, as appropriate, be
converted into and exchanged for fully registered bonds,
without interest coupons, in the form prescribed in the FORM OF
SUBSTITUTE BOND set forth in this Ordinance, in the denomina-
tion of $5,000, or any integral multiple of $5,000 (subject to
the requirement hereinafter stated that each substitute Bond
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 or unre-
deemed principal balance or principal amount of any Bond or
Bonds so surrendered, and payable to the appropriate registered
owner, assignee, or assignees, as the case may be If the
Initial Bond is assigned and transferred or converted each
substitute Bond issued in exchange for any portion of the
Initial Bond shall have a single stated principal maturity
date, and shall not be payable in installments, and each such
Bond shall have a principal maturity date corresponding to the
due date of the installment of principal or portion thereof for
which the substitute Bond is being exchanged, and each such
Bond 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 a portion of any Bond (other
than the Initial Bond) shall be redeemed prior to its scheduled
maturity as provided herein, a substitute Bond or Bonds having
the same maturity date, bearing interest at the same rate, in
the denomination or denominations of any integral multiple of
$5,000 at the request of the registered owner, and in aggregate
principal amount equal to the unredeemed portion thereof, will
be issued to the registered owner upon surrender thereof for
cancellation If any Bond or portion thereof (other than the
Initial Bond) is assigned and transferred or converted, each
Bond issued in exchange therefor shall have the same principal
maturity date and bear interest at the same rate as the Bond
for which it is being exchanged Each substitute Bond shall
bear a letter and/or number to distinguish it from each other
Bond The Paying Agent/Registrar shall convert and exchange or
replace Bonds as provided herein, and each fully registered
bond delivered in conversion of and exchange for or replacement
of any Bond or portion thereof as permitted or required by any
provision of this Ordinance shall constitute one of the Bonds
for all purposes of this Ordinance, and may again be converted
and exchanged or replaced It is specifically provided that
any Bond authenticated in conversion of and exchange for or
replacement of another Bond on or prior to the first scheduled
Record Date for the Initial Bond shall bear interest from the
date of the Initial Bond, but each substitute Bond so authenti-
cated after such first scheduled Record Date shall bear inter-
est from the interest payment date next preceding the date on
12
which such substitute Bond was so authenticated, unless such
Bond 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 Bond the interest on the Bond for which it is being
exchanged is due but has not been paid, then such Bond shall
bear interest from the date to which such interest has been
paid in full THE INITIAL BOND 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 Bond issued in conversion of and exchange for or
replacement of any Bond or Bonds issued under this Ordinance
there shall be printed a bond, in the form substantially as
follows
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued
under the provisions of the Bond Ordinance described in this
Bond, and that this Bond has been issued in conversion of and
exchange for or replacement of a bond, bonds, or a portion of a
bond or bonds 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
MTRUST CORP NATIONAL ASSOCIATION,
DALLAS, TEXAS
Paying Agent/Registrar
Dated
By
Authorized Representative"
An authorized representative of the Paying Agent/Registrar
shall, before the delivery of any such Bond, date and manually
sign the above Bond, and no such Bond shall be deemed to be
issued or outstanding unless such Bond is so executed The
Paying Agent/Registrar promptly shall cancel all Bonds surren-
dered for conversion and exchange or replacement No addition-
al 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 Bond or portion thereof, and the Paying
Agent/Registrar shall provide for the printing, execution, and
delivery of the substitute Bonds in the manner prescribed
herein, and said Bonds 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 or replacement of Bonds as aforesaid is
13
hereby imposed upon the Paying Agent/Registrar, and, upon the
execution of the above Paying Agent/Registrar's Authentication
Certificate, the converted and exchanged or replaced Bond shall
be valid, incontestable, and enforceable in the same manner and
with the same effect as the Initial Bond which originally was
issued pursuant to this Ordinance, approved by the Attorney
General, and registered by the Comptroller of Public Accounts
The Issuer shall pay the Paying Agent/Registrar's standard or
customary fees and charges for transferring, converting, and
exchanging any Bond or any portion thereof, but the one re-
questing 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 Bonds or any portion thereof (1)
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 Bond or portion thereof called for redemption
prior to maturity, within 45 days prior to its redemption date
(e) In General. All Bonds issued in conversion and
exchange or replacement of any other Bond or portion thereof,
(i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be
payable only to the registered owners thereof, (ii) may be
redeemed prior to their scheduled maturities, (iii) may be
transferred and assigned, (iv) may be converted and exchanged
for other Bonds, (v) shall have the characteristics, (vi) shall
be signed and sealed, and (vii) the principal of and interest
on the Bonds shall be payable, all as provided, and in the
manner required or indicated, in the FORM OF SUBSTITUTE BOND
set forth in this Ordinance
(f) Paymi t 4g Fees and Charges The Issuer hereby
covenants with the stered owners of the Bonds that it will
(1) 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 Bonds, when
due, and (ii) pay the fees and charges of the Paying Agent/
Registrar for services with respect to the transfer of regis-
tration of Bonds, and with respect to the conversion and
exchange of Bonds solely to the extent above provided in this
Ordinance
(g) hjubstitute Paying_ Agent/Registrar The Issuer
covenants with the registered owners of the Bonds that at all
times while the Bonds are outstanding the Issuer will provide a
competent and legally qualified bank, trust company, financial
14
institution, or other agency to act as and perform the services
of Paying Agent/Registrar for the Bonds 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 other-
wise 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/Regis-
trar promptly shall transfer and deliver the Registration Books
(or a copy thereof), along with all other pertinent books and
records relating to the Bonds, to the new Paying Agent/Regis-
trar 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 Bonds, 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 provi-
sions of this Ordinance, and a certified copy of this Ordinance
shall be delivered to each Paying Agent/Registrar
Section 7 FORM OF SUBSTITUTE BONDS The form of all
Bonds issued in conversion and exchange or replacement of any
other Bond or portion thereof, including the form of Paying
Agent/Registrar's Bond to be printed on each of such Bonds, and
the Form of Assignment to be printed on each of the Bonds,
shall be, respectively, substantially as follows, with such
appropriate variations, omissions, or insertions as are per-
mitted or required by this Ordinance
NO UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON GENERAL OBLIGATION
SERIES 1988
INTEREST RATE MATURITY DATE
PRINCIPAL AMOUNT
BOND
CUSIP NO
15
ON THE MATURITY DATE specified above the CITY OF DENTON,
in Denton County, Texas (the "Issuer"), being a political
subdivision of the State of Texas, hereby promises to pay to
or to the registered assignee hereof (either being hereinafter
called the "registered owner") the principal amount of
and to pay interest thereon from JANUARY 1, 1988, to the
maturity date specified above, or the date of redemption prior
to maturity, at the interest rate per annum specified above,
with interest being payable on JANUARY 1, 1989, and semiannual-
ly on each JULY 1 and JANUARY 1 thereafter, except that if the
date of authentication of this Bond is later than DECEMBER 15,
1988, such principal amount shall bear interest from the
interest payment date next preceding the date of authentica-
tion, unless such date of authentication is after any Record
Date (hereinafter defined) but on or before the next following
interest payment date, in which case such principal amount
shall bear interest from such next following interest payment
date
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in
lawful money of the United States of America, without exchange
or collection charges The principal of this Bond shall be
paid to the registered owner hereof upon presentation and
surrender of this Bond at maturity or upon the date fixed for
its redemption prior to maturity, at the principal corporate
trust office of MTRUST CORP NATIONAL ASSOCIATION, DALLAS,
TEXAS, which is the "Paying Agent/Registrar" for this Bond
The payment of interest on this Bond shall be made by the
Paying Agent/Registrar to the registered 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 Bonds (the "Bond
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 interest payment
date, to the registered owner hereof, at the address of the
registered owner, as it appeared on the 15th of the month next
preceding each such date (the "Record Date") on the Registra-
tion Books kept by the Paying Agent/Registrar, as hereinafter
described Any accrued interest due upon the redemption of
this Bond prior to maturity as provided herein shall be paid to
the registered owner at the principal corporate trust office of
the Paying Agent/Registrar upon presentation and surrender of
this Bond for redemption and payment at the principal corporate
trust office of the Paying Agent/Registrar The Issuer
16
covenants with the registered owner of this Bond that on or
before each principal payment date, interest payment date, and
accrued interest payment date for this Bond it will make
available to the Paying Agent/Registrar, from the "Interest and
Sinking Fund" created by the Bond Ordinance, the amounts
required to provide for the payment, in immediately available
funds, of all principal of and interest on the Bonds, when due
IF THE DATE for the payment of the principal of or .inter-
est on this Bond 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 BOND is one of an issue of Bonds initially dated
JANUARY 1, 1988, authorized in accordance with the Constitution
and laws of the State of Texas in the principal amount of
$3,600,000, FOR THE PURPOSE OF THE ACQUISITION OF PROPERTY AND
MAKING IMPROVEMENTS FOR PUBLIC PURPOSES IN SAID CITY, TO-WIT
$1,489,000 FOR STREET AND TRAFFIC CONTROL IMPROVEMENTS,
$786,000 FOR DRAINAGE IMPROVEMENTS, $1,300,000 FOR PARK IM-
PROVEMENTS, INCLUDING ATHLETIC FIELDS AND NEIGHBORHOOD AND
SENIOR CITIZENS COMMUNITY CENTERS, and $25,000 FOR IMPROVEMENTS
TO PUBLIC LIBRARIES
ON JULY 1, 1998, or on any interest payment date there-
after, the Bonds of this Series may be redeemed prior to their
scheduled maturities, at the option of the Issuer, with funds
derived from any available and lawful source, as a whole, or in
part, and, if in part, the particular Bonds, or portions
thereof, to be redeemed shall be selected and designated by the
Issuer (provided that a portion of a Bond may be redeemed only
in an integral multiple of $5,000), at the redemption price of
the par or principal amount thereof, plus accrued interest to
the date fixed for redemption
AT LEAST 30 days prior to the date fixed for any redemp-
tion of Bonds or portions thereof prior to maturity a written
notice of such redemption shall be published once in a finan-
cial publication, journal, or reporter of general circulation
among securities dealers in The City of New York, New York
(including, but not limited to, The Bond Buyer and The Wall
Street Journal), or in the State of Texas (including, but not
limited to, The Texas Bond Reporter) Such notice also shall
be sent by the Paying Agent/Registrar by United States mail,
17
first-class postage prepaid, not less than 30 days prior to the
date fixed for any such redemption, to the registered owner of
each Bond to be redeemed at its address as it appeared on the
45th day prior to such redemption date, provided, however, that
the failure to send, mail, or receive such notice, or any
defect therein or in the sending or mailing thereof, shall not
affect the validity or effectiveness of the proceedings for the
redemption of any Bond, and it is hereby specifically provided
that the publication of such notice as required above shall be
the only notice actually required in connection with or as a
prerequisite to the redemption of any Bonds or portions there-
of By the date fixed for any such redemption due provision
shall be made with the Paying Agent/Registrar for the payment
of the required redemption price for the Bonds or portions
thereof which are to be so redeemed, plus accrued interest
thereon to the date fixed for redemption If such written
notice of redemption is published and if due provision for such
payment is made, all as provided above, the Bonds or portions
thereof which are to be so redeemed thereby automatically shall
be treated as redeemed prior to their scheduled maturities, and
they shall not bear interest after the date fixed for redemp-
tion, and they shall not be regarded as being outstanding
except for the right of the registered owner to receive the
redemption price plus accrued interest from the Paying Agent/
Registrar out of the funds provided for such payment If a
portion of any Bond shall be redeemed a substitute Bond or
Bonds having the same maturity date, bearing interest at the
same rate, in any denomination or denominations in any integral
multiple of $5,000, at the written request of the registered
owner, and in aggregate principal amount equal to the unre-
deemed portion thereof, will be issued to the registered owner
upon the surrender thereof for cancellation, at the expense of
the Issuer, all as provided in the Bond Ordinance
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTE-
GRAL 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 Bonds, upon the terms and conditions set forth in the Bond
Ordinance Among other requirements for such assignment and
transfer, this Bond must be presented and surrendered to the
Paying Agent/Registrar, together with proper instruments of
assignment, in form and with guarantee of signatures satisfac-
tory to the Paying Agent/Registrar, evidencing assignment of
this Bond or any portion or portions hereof in any integral
multiple of $5,000 to the assignee or assignees in whose name
or names this Bond or any such portion or portions hereof is or
are to be transferred and registered The form of Assignment
printed or endorsed on this Bond shall be executed by the
registered owner or its duly authorized attorney or
18
representative,to evidence the assignment hereof A new Bond
or Bonds payable to such assignee or assignees (which then will
be the new registered owner or owners of such new Bond or
Bonds), or to the previous registered owner in the case of the
assignment and transfer of only a portion of this Bond, may be
delivered by the Paying Agent/Registrar in conversion of and
exchange for this Bond, all in the form and manner as provided
in the next paragraph hereof for the conversion and exchange of
other Bonds The Issuer shall pay the Paying Agent/Registrar's
standard or customary fees and charges for making such trans-
fer, 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 Bond or any portion
hereof (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 Bond or any portion thereof
called for redemption prior to maturity, within 45 days prior
to its redemption date The registered owner of this Bond
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 Bond 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 BONDS OF THIS SERIES are issuable solely as fully
registered bonds, without interest coupons, in the denomination
of any integral multiple of $5,000 As provided in the Bond
Ordinance, this Bond, or any unredeemed portion hereof, may, at
the request of the registered owner or the assignee or as-
signees hereof, be converted into and exchanged for a like
aggregate principal amount of fully registered bonds, 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 Bond to the Paying Agent/Registrar for cancella-
tion, all in accordance with the form and procedures set forth
in the Bond Ordinance The issuer shall pay the Paying Agent/
Registrar's standard or customary fees and charges for trans-
ferring, converting, and exchanging any Bond 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
19
conversion and exchange (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 Bond or portion
thereof called for redemption prior to maturity, within 45 days
prior to its redemption date
IN THE EVENT any Paying Agent/Registrar for the Bonds 1s
changed by the Issuer, resigns, or otherwise ceases to act as
such, the Issuer has covenanted in the Bond ordinance that it
promptly will appoint a competent and legally qualified substi-
tute therefor, and promptly will cause written notice thereof
to be mailed to the registered owners of the Bonds
IT IS HEREBY certified, recited, and covenanted that this
Bond has been duly and validly voted, authorized, issued, sold,
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 Bond have
been performed, existed, and been done in accordance with law,
that this Bond 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 Bond, 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 pre-
scribed by law
BY BECOMING the registered owner of this Bond, the regis-
tered owner thereby acknowledges all of the terms and provi-
sions of the Bond Ordinance, agrees to be bound by such terms
and provisions, acknowledges that the Bond 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 Bond and the Bond Ordi-
nance constitute a contract between each registered owner
hereof and the Issuer
IN WITNESS WHEREOF, the Issuer has caused this Bond 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 on
this Bond
(facsimile signature) (facsimile sicnaturel
City of Denton, Texas City of Denton, Texas
(CITY SEAL)
20
FORM OF PAY! GENT REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued
under the provisions of the Bond Ordinance described in this
Bond, and that this Bond has been issued in conversion of and
exchange for or replacement of a bond, bonds, or a portion of a
bond or bonds 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
MTRUST CORP NATIONAL ASSOCIATION,
DALLAS, TEXAS
Paying Agent/Registrar
Dated BY
Authorized Representative
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of
this Bond, or duly authorized representative or attorney
thereof, hereby assigns this Bond 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 Bond on the
Paying Agent/Registrar's Registration Books with full power of
substitution in the premises
Dated
Signature Guaranteed
NOTICE This signature must be Registered Owner
guaranteed by a member of the NOTICE This signature must
New York Stock Exchange or a correspond with the name of
commercial bank or trust the Registered Owner appear-
company ing on the face of this Bond
21
Section 8 TAX LEVY A special interest and Sinking Fund
(the "Interest and Sinking Fund") is hereby created solely for
the benefit of the Bonds, and the Interest and Sinking Fund
shall be established and maintained by the Issuer at an offi-
cial depository bank of the Issuer The Interest and Sinking
Fund shall be kept separate and apart from all other funds and
accounts of the Issuer, and shall be used only for paying the
interest on and principal of the Bonds All ad valorem taxes
levied and collected for and on account of the Bonds shall be
deposited, as collected, to the credit of the Interest and
Sinking Fund During each year while any of the Bonds 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 Bonds as
such interest becomes due, and to provide and maintain a
sinking fund adequate to pay the principal of its Bonds as such
principal matures (but never less than 2% of the original
principal amount of the Bonds 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 Bonds 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 Bonds,
as such interest comes due and such principal matures, are
hereby pledged for such payment, within the limit prescribed by
law
Section 10 DEFEASANCE OF BONDS (a) Any Bond and the
interest thereon shall be deemed to be paid, retired, and no
longer outstanding (a "Defeased Bond") within the meaning of
this ordinance, except to the extent provided in subsection (d)
of this Section, when payment of the principal of such Bond,
plus interest thereon to the due date (whether such due date be
by reason of maturity, upon redemption, or otherwise) either
(i) shall have been made or caused to be made in accordance
with the terms thereof (including the giving of any required
notice of redemption), or (ii) shall have been provided for on
or before such due date by irrevocably 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
22
will insure the availability, without reinvestment, of suffi-
cient 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 Bonds shall have become due and payable At such time
as a Bond shall be deemed to be a Defeased Bond hereunder, as
aforesaid, such Bond and the interest thereon shall no longer
be secured by, payable from, or entitled to the benefits of,
the ad valorem taxes herein levied and pledged as provided in
this ordinance, and such principal and interest shall be
payable solely from such money or Government obligations
(b) Any moneys so deposited with the Paying Agent/Regis-
trar may at the written direction of the Issuer also be 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 Bonds and interest
thereon, with respect to which such money has been so de-
posited, 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 Bonds shall have become due and
payable, the Paying Agent/Registrar shall perform the services
of Paying Agent/Registrar for such Defeased Bonds 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 BONDS (a) Replacement Bonds In the event any
outstanding Bond is damaged, mutilated, lost, stolen, or
destroyed, the Paying Agent/Registrar shall cause to be print-
ed, executed, and delivered, a new bond of the same principal
amount, maturity, and interest rate, as the damaged, mutilated,
lost, stolen, or destroyed Bond, in replacement for such Bond
in the manner hereinafter provided
(b) Application for Replacement Bonds Application for
replacement of damaged, mutilated, lost, stolen, or destroyed
Bonds shall be made by the registered owner thereof to the
Paying Agent/Registrar In every case of loss, theft, or
23
destruction of a Bond, the registered owner applying for a
replacement bond 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 Bond, 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 Bond,
as the case may be In every case of damage or mutilation of a
Bond, the registered owner shall surrender to the Paying
Agent/Registrar for cancellation the Bond so damaged or muti-
lated
(c) No Default Occurred Notwithstanding the foregoing
provisions of this Section, in the event of any such Bond shall
have matured, and no default has occurred which is then con-
tinuing in the payment of the principal of, redemption premium,
if any, or interest on the Bond, the Issuer may authorize the
payment of the same (without surrender thereof except in the
case of a damaged or mutilated Bond) instead of issuing a
replacement Bond, provided security or indemnity is furnished
as above provided in this Section
(d) Charge for Issuing Replacement Bonds Prior to the
issuance of any replacement bond, the Paying Agent/Registrar
shall charge the registered owner of such Bond with all legal,
printing, and other expenses in connection therewith Every
replacement bond issued pursuant to the provisions of this
section by virtue of the fact that any Bond is lost, stolen, or
destroyed shall constitute a contractual obligation of the
Issuer whether or not the lost, stolen, or destroyed Bond 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 Bonds duly issued under
this Ordinance
(e) Authority for Issuing Replacement Bonds In accor-
dance 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 bond 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 bonds is hereby authorized and imposed upon the Paying
Agent/Registrar, and the Paying Agent/Registrar shall authen-
ticate and deliver such Bonds in the form and manner and with
the effect, as provided in Section 6(d) of this Ordinance for
Bonds issued in conversion and exchange for other Bonds
Section 12 COVENANTS REGARDING TAX-EXEMPT STATUS OF
BONDS The Issuer hereby covenants to take such action or
24
refrain from such action necessary to ensure the status of the
Bonds as obligations described in section 103 of the Internal
Revenue Code of 1986 or any predecessor thereof In particu-
lar, but not by way of limitation, the Issuer covenants as
follows
(a) None of the proceeds of the Bonds (including
investment earnings thereon) will be used, directly or
indirectly, in the trade or business of a person, other
than the Issuer For purposes of the foregoing, any use
of such proceeds in any manner contrary to the guidelines
set forth in Revenue Procedures 82-14 and 82-15, 1982-1
C B 459, 460, or any amendments, revisions or supplements
thereto, shall constitute the use of such proceeds in the
trade or business of such person,
(b) None of the proceeds of the Bonds (including
investment earnings thereon) will be used, directly or
indirectly, to finance loans to any persons,
(c) Not by way of limitation, the Issuer will take
such action or will refrain from any action which would
adversely affect the exemption from federal income taxa-
tion of the interest paid on the Bonds, including without
limitation any action that would permit any of the Bonds
to be treated as "private activity bonds" within the
meaning of section 141 of the Code or as "federally
guaranteed" within the meaning of section 149(b) of the
Code, and will take, or require to be taken, such acts as
may be reasonably within its ability and as may from time
to time be required under applicable law or regulation to
continue to cause interest on the Bonds to be excludable
from gross income of the holder, including the preparation
and filing of any statements or information reports
required to be filed by the Issuer in order to maintain
the tax-exempt status of the interest on the Bonds, and
(d) The Issuer has not taken, has no present inten-
tion of taking any action and knows of no action taken or
intended which would cause interest on the Bonds to be
includable in the gross income of any bondholders for
federal income tax purposes
Section 13 COVENANTS REGARDING ARBITRAGE (a) A Rebate
Fund is hereby established by the Issuer Such Fund shall be
for the benefit of the United States of America The Rebate
Fund is established for the purpose of compliance with section
148 of the Internal Revenue Code of 1986 (the Code")
25
(b) At the close of each "Bond Year," the Issuer shall
compute the amount of "Excess Earnings," if any, for the period
beginning on the date of delivery of the Initial Bond and
ending at the close of such "Bond Year" and transfer to the
Rebate Fund an amount equal to the difference, if any, between
the amount then in the Rebate Fund and the Excess Earnings so
computed The term "Bond Year" means with respect to the Bonds
each one-year period ending on the anniversary of the date of
delivery of the Initial Bond If, at the close of any Bond
Year, the amount in the Rebate Fund exceeds the amount that
would be required to be paid to the United States of America
under paragraph (d) below if the Bonds had been paid in full,
such excess may be transferred from the Rebate Fund and paid to
the Issuer
(c) In general, "Excess Earnings" for any period of time
means the sum of
(i) the excess of
(A) the aggregate amount earned during such
period of time on all "Nonpurpose Obligations"
(including gains on the disposition of such Obli-
gations) in which "Gross Proceeds" of the issue are
invested (other than amounts attributable to an
excess described in this subparagraph (c)(i)), over
(B) the amount that would have been earned
during such period of time if the "Yield" on such
Nonpurpose Obligations (other than amounts attrib-
utable to an excess described in this subparagraph
(c) (i)) had been equal to the yield on the issue,
plus
(ii) any income during such period of time attrib-
utable to the excess described in subparagraph (c) (i)
above
"Excess Earnings" will not include amounts, if any, which need
not be taken into account under the special rules of section
148(f) (4) (A) and (B) of the Code relating to bona fide debt
service funds and the six-month temporary investment period
The terms "NOnpurpose Obligations," "Gross Proceeds" and
"Yield" shall have the meanings prescribed by section 148 of
the Code and shall be applied in the manner prescribed in such
section
(d) The Issuer shall pay to the United States of America
at least once every five-years an amount that ensures that at
least 90 percent of the Excess Earnings from the date of
26
delivery of the Bonds to the close of the period for which the
payment is being made will have been paid The Issuer shall
pay to the United States of America not later than 60 days
after the Bonds have been paid in full 100 percent of the
amount then required to be paid under section 148(f) of the
Code as a result of Excess Earnings
(e) The Issuer shall keep such records as will enable the
Issuer to fulfill its responsibilities under this section and
section 148(f) of the Code and shall retain such records for at
least six years following the final payment of principal and
interest on the Bonds
(f) The Issuer will not use any portion of the proceeds
of the Bonds directly or indirectly to acquire "higher yielding
investments," or to replace funds which were used directly or
indirectly to acquire "higher yielding investments " The term
higher yielding investments means any investment property (as
defined in section 148(b) (2) of the Code) which produces a
yield over the term of the issue which is materially higher
than the yield on the issue (as defined above) The foregoing
limitation on higher yielding investments shall not apply to
(1) proceeds of the Bonds invested for a reasonable
temporary period of 3 years or less until such proceeds
are needed for the purpose for which the bonds are issued,
or
(2) amounts invested
fund if the gross earnings
$100,000 in any bond year
in a bona fide debt service
on such fund are less than
(g) The Issuer covenants to restrict the use of Initial
Bond proceeds in such manner and to such extent, as may be
necessary, so that the Bonds will not constitute arbitrage
bonds under section 148 of the Code Any authorized represen-
tative of the Issuer having responsibility with respect to the
issuance of the Bonds is authorized and directed, alone or in
conjunction with any other official, employee or consultant of
the Issuer to give an appropriate certificate on behalf of the
Issuer, for inclusion in the transcript of proceedings for the
Bonds, setting forth the facts, estimates and circumstances and
reasonable expectations pertaining to section 148 of the Code
and, to the extent applicable, section 149(d) of the Code
(h) The requirements of this Section are subject to, and
shall be interpreted in accordance with section 148 of the
Code
27
Section 14 DESIGNATION AS QUALIFIED TAX-EXEMPT BONDS
The Issuer hereby designates the Bonds as "qualified tax-exempt
bonds" as defined in section 265(b)(3) of the Internal Revenue
Code of 1986 (the "Code") In furtherance of such designation,
the Issuer represents, covenants, and warrants the following
(a) that during the calendar year in which the Bonds are isued,
the Issuer (including any subordinate entities) has not desig-
nated nor will designate bonds, which when aggregated with the
Bonds will result in more than $10,000,000 of "qualified
tax-exempt bonds" being issued; (b) that the Issuer reasonably
anticipates that the amount of tax-exempt obligations issued
during the calendar year in which the Bonds are isued, by the
Issuer (or any subordinate entities) will not exceed
$10,000,000, and, (c) that the Issuer will take such action or
refrain from such action as necessary, and as more particularly
set forth in Section 12, hereof, in order that the Bonds will
not be considered "private activity bonds" within the meaning
of section 141 of the Code
Section 15 CUSTODY, APPROVAL, AND REGISTRATION OF BONDS,
BOND COUNSEL'S OPINION, CUSIP NUMBERS, AND INSURANCE The
Mayor of the Issuer is hereby authorized to have control of the
Initial Bond issued hereunder and all necessary records and
proceedings pertaining to the Initial Bond pending its delivery
and its investigation, examination, and approval by the Attor-
ney 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 Bond 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 Bond, and the seal of said Comptrol-
ler shall be impressed, or placed in facsimile, on the Initial
Bond 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 Bond or on any Bonds issued
and delivered in conversion of and exchange or replacement of
any Bond, but neither shall have any legal effect, and shall be
solely for the convenience and information of the registered
owners of the Bonds If the purchaser of the Initial Bond
exercises its option to obtain insurance on the Bonds, as
permitted in the Notice of Sale and Bidding Instructions and
Official Statement hereinafter described, the Initial Bond and
all other Bonds shall bear an appropriate legend concerning
insurance as provided by the insurer
Section 16 SALE OF INITIAL BOND The Initial Bond is
hereby sold and shall be delivered to MBank Capital Markets and
Associates, for cash for the par value thereof and accrued
interest thereon to date of delivery It is hereby officially
found, determined, and declared that the Initial Bond has been
28
sold at public sale to the bidder offering the lowest interest
cost, after receiving sealed bids pursuant to an Official
Notice of Sale and Bidding Instructions and official statement
dated January 19, 1988, prepared and distributed in connection
with the sale of the Initial Bond Said Official Notice of
Sale and Bidding Instructions and Official Statement, and any
addenda, supplement, or amendment thereto have been and are
hereby approved by the Issuer, and their use in the offer and
sale of the Bonds is hereby approved It is further officially
found, determined, and declared that the statements and repre-
sentations contained in said official Notice of Sale and
Official Statement are true and correct in all material re-
spects, to the best knowledge and belief of the City Council
Section 17 FURTHER PROCEDURES The Mayor of the Issuer,
the City Secretary 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, acknowl-
edge, 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 Bond Ordinance, the
Bonds, the sale of the Bonds, and the Notice of Sale and
official Statement, and the Director of Finance of the City
shall cause the expenses of issuance of the Bonds to be paid
from the proceeds of sale of the Initial Bond In case any
officer whose signature shall appear on any Bond shall cease to
be such officer before the delivery of such Bond, such signa-
ture shall nevertheless be valid and sufficient for all purpos-
es the same as if such officer had remained in office until
such delivery
29
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 General Obligation Bonds, Series 1988, dated January
1, 1988, in the aggregate principal amount of $3,600,000,
authorized by ordinance of the City Council on February 2,
1988, initially issued and delivered as a single fully regis-
tered bond payable in installments to the registered owner, but
convertible into fully registered bonds in any multiple of
$5,000 (the "Bonds")
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 General Obligation Bonds,
Series 1987, dated April 1, 1987
3 That no litigation of any nature has ever been filed
pertaining to, affecting, questioning, or contesting (a) the
election which authorized the Bonds described in paragraph 1 of
this certificate, (b) the issuance, execution, delivery,
payment, security, or validity of the Bonds, (c) the authority
of the governing body and the officers of said Issuer to issue,
execute, and deliver the Bonds, (d) the validity of the corpor-
ate existence of said Issuer, (e) the current Tax Rolls of said
Issuer, or (f) the Home Rule Charter of said Issuer, and that
no litigation is pending pertaining to, affecting, questioning,
or contesting the current boundaries of said Issuer
4 That in all matters relating to ordering, giving
notice, and holding the election at which the proposed bonds
were authorized, the City complied with the Federal Voting
Rights Act of 1975 and the applicable parts of the Texas
Election Code, including particularly Section 1 08a of the
Texas Election code pertaining to bilingual requirements
5 That attached to this certificate and marked "Exhibit
All is a true, full, and correct schedule and statement of the
aforesaid proposed Bonds, and of all presently outstanding tax
indebtedness of said Issuer
6 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 1987, 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 $2,050,294,577
7 That to the best of our knowledge and belief the
statements and information set forth in the Official Statement
dated January 19, 1988, pertaining to the Bonds and the City,
are true and correct ty►
SIGNED AND SEALED the 4 day of 1988
~ty Secretary -
(SEAL)
"EXHIBIT A"
General Obligation Bonds, Series 1988, dated 1/1/88, bearing
interest, and maturing as set forth in the Ordinance authoriz-
ing said Bonds
General Obligation Refunding Bonds, Series 1985, dated 11/1/85,
now outstanding in the principal amount of $22,866,730, bearing
interest, and maturing in the amounts on February 15 of the
years, as follows
(CURRENT INTEREST BONDS, $21,430,000)
6
30%
1,910M-88,
6
60%
2,365M-89,
6
90$
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 $500,000, bearing
interest, and maturing in the amounts on July 1 of the years,
as follows
9
00%
25X-88/92,
8
00%
25M-93,
6
20%
25M-94,
6
30$
25M-95,
6
40$.
25M-96,
6
50%
25M-97,
6
60$
25M-98,
6
70%
25M-99,
6
80%
25M-20001
6
90%
25M-O1,
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 $3,500,000, bearing
interest, and maturing in the amounts on July 1 of the yeas, as
follows
9
40%
175M-88/94,
9
20%
175M-95,
8
00$
175M-96/981
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
Total outstanding General Obligation Indebtedness
$26,866,730 25
CERTIFICATE FOR
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
CITY OF DENTON GENERAL OBLIGATION BONDS, SERIES 1988,
LEVYING THE TAX TO PAY SAME, 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
REGULAR MEETING ON THE 2ND DAY
at the Municipal Building (City Hall),
of the duly constituted officers and
Council, to-wit
Jennifer K Walters, City Secretary
Jim Alexander
Linnie McAdams
Jane Hopkins
convened in
OF FEBRUARY, 1988,
and the roll was called
members of said City
Ray Stephens, Mayor
Bob Gorton
Randall Boyd
Hugh Ayer
and all of saidA Persons were present, except the following
absentees { ge , thus consti-
tuting a quorum Whereupon, among other business, the follow-
ing was transacted at said Meeting a written
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
CITY OF DENTON GENERAL OBLIGATION BONDS, SERIES 1988,
LEVYING THE TAX TO PAY SAME, 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 All members of said City Council
shown present above voted "Aye",
except Jane Hopkins
NOES None
ABSTENTIONS Jane Hopkins
2 That a true, full, and correct copy of the aforesaid
Ordinance passed at the Meeting described in the above and
foregoing paragraph is attached to and follows this
Certificate, that said ordinance has been duly recorded in said
City Council's minutes of said Meeting, that the above and
foregoing paragraph is a true, full, and correct excerpt from
said City Council's minutes of said Meeting pertaining to the
passage of said ordinance, that the persons named in the above
and foregoing paragraph are the duly chosen, qualified, and
acting officers and members of said City Council as indicated
therein, that each of the officers and members of said City
Council was duly and sufficiently notified officially and
personally, in advance, of the time, place, and purpose of the
aforesaid Meeting, and that said Ordinance would be introduced
and considered for passage at said Meeting, and 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
ordinance for all purposes
SIGNED AND SEALED the 2nd day
' ity Secretary
of February, 1988
May
(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
lei
City Atto ey
-fond Attorneys