1987-108 ORDINANCE NO 87-108
ORDINANCE
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON
CERTIFICATES OF OBLIGATION, SERIES 1987-A, AND APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, Vernon's Article 2368a 1 permits the City to
issue and sell for cash the Certificates of Obllgatlon here~n-
after authorized, and
WHEREAS, the C~ty has duly caused not~ce of ~ts ~ntent~on
to ~ssue the Certificates of Obllgat~on hereinafter authorized
to be publlshed at the t~mes and in the manner required by
Vernon's Article 2368a 1, and no petlt~on has been f~led
protestlng the issuance thereof
THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY
ORDAINS THAT
Section 1 AMOUNT AND PURPOSE OF THE CERTIFICATES The
certificate or certificates of the C~ty of Denton, Texas (the
"Issuer") are hereby authorized to be ~ssued and delivered in
the aggregate principal amount of $1,100,000, FOR THE PURPOSE
OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGA-
TIONS TO BE INCURRED PURSUANT TO CONTRACTS FOR THE PURCHASE OF
MATERIALS AND EQUIPMENT CONSTITUTING A MUNICIPAL RADIO COMMUNI-
CATIONS SYSTEM, AND PAYING ALL OR A PORTION OF THE CONTRACTUAL
OBLIGATIONS FOR PROFESSIONAL SERVICES OF ENGINEERING,
ATTORNEYS, AND FINANCIAL ADVISORS IN CONNECTION WITH SUCH
MUNICIPAL RADIO COMMUNICATIONS SYSTEM AND CERTIFICATES OF
OBLIGATION
Section 2 DESIGNATION OF THE CERTIFICATES Each cert-
Ificate · ssued pursuant to th~s Ordinance shall be designated
"CITY OF DENTON CERTIFICATE OF OBLIGATION, SERIES 1987-A", and
initially there shall be ~ssued, sold, and delivered hereunder
a s~ngle fully registered certificate, w~thout ~nterest cou-
pons, payable ~n ~nstallments of principal (the "Initial
Certificate"), but the Initial Certificate may be assigned and
transferred and/or converted into and exchanged for a l~ke
aggregate principal amount of fully registered certificates,
w~thout ~nterest coupons, having serial maturities, and ~n the
denomination or denominations of $5,000 or any integral mult~-
ple of $5,000, all in the manner herelnafter provided The
term "Certificates" as used ~n th~s Ordinance shall mean and
include collectively the Initial Certificate and all substltute
certificates exchanged therefor, as well as all other
1
substitute certificates and replacement certificates lssued
pursuant hereto, and the term "Cert~flcates" shall mean any of
the Certificates
Sectlon 3 INITIAL DATE, DENOMINATION, NUMBFR, MATURI-
TIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE
INITIAL CERTIFICATE
(a) The In~tlal Certlflcate ~s hereby authorlzed to be
· ssued, sold, and delivered hereunder as a s~nqle fully
registered Certlf~cate, w~thout ~nterest coupons, dated June 1,
1987, in the denomination and aggregate principal amount of
$1,100,000, numbered R-i, payable ~n annual lnstallments of
principal to the ~n~t~al registered owner thereof, to-wit
PRUDENTIAL-BACHE SECURITIES, INC ,
or to the registered assignee or asslgnees of sald Certificate
or any portlon or portions thereof (ln each case, the "regls-
tered owner"), w~th the annual installments of prlnc~pal of the
Initial Certificate to be payable on the dates, respectively,
and ~n the principal amounts, respectively, stated ~n the FORM
OF INITIAL CERTIFICATE set forth in th~s Ordinance
(b) The Inlt~al Certlflcate (~) may be assigned and
transferred, (~) may be converted and exchanged for other
Cert~flcates, (ill) shall have the character~stlcs, and (~v)
shall be s~gned and sealed, and the principal of and ~nterest
on the Initial Certificate shall be payable, all c~s provided,
and in the manner required or ~nd~cated, ~n the FORM OF INITIAL
CERTIFICATE set forth ~n th~s Ordinance
Section 4 INTEREST The unpaid principal balance of the
Inlt~al Certificate shall bear interest from the date of the
In~tlal Certificate to the respectlve scheduled due dates of
the lnstallments of principal of the In~tlal Certlflcate, and
sa~d ~nterest shall be payable, all ~n the manner provided and
at the rates and on the dates stated ~n the FORM OF INITIAL
CERTIFICATE set forth ~n th~s Ordinance
Section 5 FORM OF INITIAL CERTIFICATE The form of the
Initial Certificate, including the form of Reglstratlon Certif-
icate of the Comptroller of Public Accounts of the State of
Texas to be endorsed on the Initial Certificate, shall be
substantially as follows
FORM OF INITIAL CERTIFICATE
NO R-1 $1,100,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 1987-A
THE CITY OF DENTON, in Denton County, Texas (the
"Issuer"), being a pol~t~cal subdlvlslon of the State of Texas,
hereby promises to pay to
PRUDENTIAL-BACHE SECURITIES, INC ,
or to the registered assignee or assignees of th~s Certificate
or any portion or portions hereof (~n each case, the "regis-
tered owner") the aggregate prlnclpal amount of
$1,100,000
(ONE MILLION ONE HUNDRED THOUSAND DOLLARS)
· n annual ~nstallments of principal due and payable on JULY 1
· n each of the years, and in the respective principal amounts,
as set forth ~n the following schedule
PRINCIPAL PRINCIPAL
YEAR AMOUNT YEAR AMOUNT
1989 $120,000 1994 $125,000
1990 120,000 1995 125,000
1991 120,000 1996 125,000
1992 120,000 1997 125,000
1993 120,000
and to pay ~nterest, from the date of this Certificate here~n-
after stated, on the balance of each such ~nstallment of
principal, respectively, from time to time remaining unpaid, at
the rates as follows
8 75% per annum on the above ~nstallment due in 1989
8 75% per annum on the above lnstallment due ~n 1990
6 10% per annum on the above installment due in 1991
6 00% per annum on the above ~nstallment due in 1992
6 20% per annum on the above ~nstallment due ~n 1993
6 40% per annum on the above ~nstallment due ~n 1994
6 50% per annum on the above ~nstallment due in 1995
6 50% per annum on the above ~nstallment due ~n 1996
6 00% per annum on the above ~nstallment due ~n 1997
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with said interest being payable on JANUARY 1, 1988, and semi-
annually on each JULY 1 and JANUARY 1 thereafter while this
Certificate or any portion hereof is outstanding and unpaid
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this
Certificate are payable In lawful money of the United States of
America, without exchange or collection charges The install-
ments of principal and the interest on this Certificate are
payable to the registered owner hereof through the services of
MBANK DALLAS, NATIONAL ASSOCIATION, DALLAS, TEXAS, which is the
"Paying Agent/Registrar" for this Certificate Payment of all
principal of and interest on this Certificate shall be made by
the Paying Agent/Registrar to the registered owner hereof on
each principal and/or interest payment date by check dated as
of such date, drawn by the Paying Agent/Registrar on, and
payable solely from, funds of the Issuer required by the
ordinance authorizing the issuance of this Certificate (the
"Certificate Ordinance") to be on deposit with the Paying
Agent/Registrar for such purpose as hereinafter provided, and
such check shall be sent by the Paying Agent/Registrar by
United States mall, first-class postage prepaid, on each such
principal and/or Interest payment date, to the registered owner
hereof, at the address of the registered owner, as it appeared
on the 15th day of the month next preceding each such date (the
"Record Date") on the Registration Books kept by the Paying
Agent/Registrar, as hereinafter described The Issuer cove-
nants with the registered owner of this Certificate that on or
before each principal and/or interest payment date for this
Certificate ~t will make available to the Paying Agent/Regis-
trar, from the "Interest and Sinking Fund" created by the
Certificate Ordinance, the amounts required to provide for the
payment, in immediately available funds, of all principal of
and Interest on this Certificate, when due
IF THE DATE for the payment of the principal of or Inter-
est on this Certificate shall be a Saturday, Sunday, a legal
holiday, or a day on which banking institutions in the City
where the Paying Agent/Registrar is located are authorized by
law or executive order to close, then the date for such payment
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
sa~e force and effect as if made on the original date payment
was due
THIS CERTIFICATE has been authorized ~n accordance with
the Constitution and laws of the State of Texas FOR THE PURPOSE
OF PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGA-
TIONS TO BE INCURRED PURSUANT TO CONTRACTS FOR THE PURCHASE OF
MATERIALS AND EQUIPMENT CONSTITUTING A MUNICIPAL RADIO
COMMUNICATIONS SYSTEM, AND PAYING ALL OR A PORTION OF THE
CONTRACTUAL OBLIGATIONS FOR PROFESSIONAL SERVICES OF ENGINEER-
ING, ATTORNEYS, AND FINANCIAL ADVISORS IN CONNECTION WITH SUCH
MUNICIPAL RADIO COMMUNICATIONS SYSTEM AND CERTIFICATES OF
OBLIGATION
THIS CERTIFICATE, tO the extent of the unpaid principal
balance hereof, or any unpaid portlon hereof ~n any ~ntegral
multiple of $5,000, may be assigned by the ln~taal registered
owner hereof and shall be transferred only In the Reglstrataon
Books of the Issuer kept by the Paying Agent/Registrar acting
· n the capacity of registrar for the Certafacates, upon the
terms and conditions set forth ~n the Certificate Ordinance
Among other requirements for such transfer, th~s Certificate
must be presented and surrendered to the Paying Agent/Registrar
for cancellation, together w~th proper lnstruments of assign-
ment, ~n form and w~th guarantee of s~gnatures satisfactory to
the Paying Agent/Registrar, evldenc~ng assignment by the
· n~taal registered owner of th~s Certificate, or any portaon or
portions hereof in any ~ntegral multiple of $5,000, to the
assignee or assignees ~n whose name or names th~s Certificate
or any such portion or portions hereof ~s or are to be trans-
ferred and registered Any ~nstrument or ~nstruments of
assignment satisfactory to the Paying Agent/Registrar may be
used to evidence the assignment of this Certificate or any such
port~on or portions hereof by the ~n~t~al registered owner
hereof A new certificate or certlfacates payable to such
assignee or assignees (which then wall be the new registered
owner or owners of such new Certificate or Certificates) or to
the initial registered owner as to any port~on of thls Certafa-
cate which ~s not being assigned and transferred by the ln~t~al
registered owner, shall be delivered by the Paying Agent/Regls-
trar an conversion of and exchange for thas Cert~flcate or any
port,on or portions hereof, but solely ~n the form and manner
as provided in the next paragraph hereof for the conversion and
exchange of th~s Certificate or any port~on hereof The
registered owner of th~s Certificate shall be deemed and
treated by the Issuer and the Paying Agent/Reglstrar as the
absolute owner hereof for all purposes, ~nclud~ng payment and
d~scharge of l~ab~l~ty upon th~s Certificate to the extent of
such payment, and the Issuer and the Paying Agent/Registrar
shall not be affected by any not~ce to the contrary
AS PROVIDED above and ~n the Certificate Ordinance, th~s
Certificate, to the extent of the unpaid prlnc~pal balance
hereof, may be converted ~nto and exchanged for a lake aggre-
gate principal amount of fully registered certificates, w~thout
anterest coupons, payable to the asslgnee or assignees duly
designated in writing by the ~n~t~al registered owner hereof,
or to the initial registered owner as to any port~on of th~s
Certifacate whach as not beang assagned and transferred by the
anatial registered owner, in any denom~natlon or denomanataons
in any antegral multiple of $5,000 (subject to the requirement
hereinafter stated that each substitute certificate ~ssued in
exchange for any port~on of thas Certificate shall have a
sangle stated principal maturity date), upon surrender of thas
Certifacate to the Paying Agent/Regastrar for cancellatlon, all
· n accordance with the form and procedures set forth ~n the
Certificate Ordanance If thas Certificate or any portaon
hereof as assagned and transferred or converted each cert~fa-
cate assued ~n exchange for any portaon hereof shall have a
s~ngle stated pr~ncapal maturaty date corresponding to the due
date of the ~nstallment of principal of thas Certificate or
port~on hereof for which the substitute certificate ~s being
exchanged, and shall bear ~nterest at the rate appllcable to
and borne by such anstallment of principal or portaon thereof
No such certifacate shall be payable an installments, but shall
have only one stated pranc~pal maturlty date AS PROVIDED IN
THE CERTIFICATE ORDINANCE, THIS CERTIFICATE IN ITS PRESENT FORM
MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to
one or more assignees, but the cert~facates ~ssued and de-
livered · n exchange for th~s Cert~facate or any portion hereof
may be assigned and transferred, and converted, subsequently,
as provided in the Certaficate Ordinance The Issuer shall pay
the Paying Agent/Registrar's standard or customary fees and
charges for transferring, convertang, and exchanging th~s
Certificate or any portion thereof, but the one requestang such
transfer, conversion, and exchange shall pay any taxes or
governmental charges required to be paad wlth respect thereto
The Paying Agent/Registrar shall not be required to make any
such assagnment, conversion, or exchange durang the peraod
commencang with the close of business on any Record Date and
ending wath the opening of busaness on the next followang
principal or anterest payment date
IN THE EVENT any Paying Agent/Regastrar for this Cert~fa-
cate ~s changed by the Issuer, resagns, or otherwase ceases to
act as such, the Issuer has covenanted an the Certafacate
Ordanance that at promptly will appoint a competent and legally
qualafaed substitute therefor, and promptly w~ll cause wratten
not~¢e thereof to be maaled to the regastered owner of thas
Certaficate
IT IS HEREBY certafied, recited, and covenanted that th~s
Certafacate has been duly and valadly authorazed, issued, and
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delivered, that all acts, condltaons, and th~ngs requared or
proper to be performed, ex~st, and be done precedent to or an
the authorazat~on, ~ssuance, and delavery of thas Cert~facate
have been performed, existed, and been done an accordance w~th
law; that th~s Certificate as a general obligation of the
Issuer, ~ssued on the full faath and credit thereof, and that
annual ad valorem taxes sufficient to provide for the payment
of the anterest on and principal of thls Certificate, as such
~nterest comes due and such principal matures, have been lev~ed
and ordered to be levied against all taxable property an the
Issuer, and have been pledged ~rrevocably for such payment,
w~th~n the limit prescribed by law, and that th~s Certaficate
additaonally is payable from and secured by certaan surplus
revenues (not to exceed $10,000 in aggregate amount) derived by
the Issuer from the ownership and operatlon of the C~ty's
Utility System (consisting of the C~ty's combined waterworks
system, sanitary sewer system, and electrlc light and power
system), all as provided ~n the Certificate Ordinance
THE ISSUER has reserved the raght to ~ssue, ~n accordance
wlth law, and ~n accordance with the Certificate Ordlnance,
other and add~tlonal obligations, and to enter lnto contracts,
payable from ad valorem taxes and/or revenues of the C~ty's
Utility System, on a paraty wath, or wlth respect to sa~d
revenues, superior an l~en to, th~s Certificate
BY BECOMING the registered owner of th~s Certificate, the
registered owner thereby acknowledges all of the terms and
provisions of the Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate
Ordanance is duly recorded and available for ~nspectaon ~n the
official m~nutes and records of the governing body of the
Issuer, and agrees that the terms and provisions of thas
Certificate and the Certificate Ordinance constitute a contract
between the registered owner hereof and the Issuer
IN WITNESS WHEREOF, the Issuer has caused thls Certlf~cate
to be signed with the manual s~gnature of the Mayor of the
Issuer and countersigned w~th the manual slgnature of the City
Secretary of the Issuer, has caused the off~caal seal of the
Issuer to be duly impressed on this Certaf~cate, and has caused
this Certificate to be dated JUNE 1, 1987
City Secretary, Mayor,
City of Denton, Texas C~ty of Denton, Texas
(CITY SEAL)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS
COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO
I hereby certify that this Certificate has been examlned,
certifled as to validity, and approved by the Attorney General
of the State of Texas, and that this Certificate has been
registered by the Comptroller of Public Accounts of the State
of Texas
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6 ADDITIONAL CHARACTERISTICS OF THE CERTIFI-
CATES Registration and Transfer (a) The Issuer shall keep
or cause to be kept at the principal corporate trust office of
MBANK DALLAS, NATIONAL ASSOCIATION, DALLAS, TEXAS (the "Paying
Agent/Registrar") books or records of the registration and
transfer of the Certificates (the "Registration Books"), and
the Issuer hereby appoints the Paying Agent/Registrar as Its
registrar and transfer agent to keep such books or records and
make such transfers and registrations under such reasonable
regulations as the Issuer and Paying Agent/Registrar may
prescribe, and the Paying Agent/Registrar shall make such
transfers and registrations as herein provided The Paying
Agent/Registrar shall obtain and record in the Registration
Books the address of the registered owner of each Certificate
to which payments with respect to the Certificates shall be
mailed, as herein provided, but ~t 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 not~ce
has been given The Issuer shall have the right to Inspect the
Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall
keep the Registration Books confidential and, unless otherwise
required by law, shall not permit their inspection by any other
entity Registration of each Certificate may be transferred in
the Registration Books only upon presentation and surrender of
such Certificate to the Paying Agent/Registrar for transfer of
registration and cancellation, together with proper written
instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, (1)
evidencing the assignment of the Certificate, or any portlon
thereof ~n any ~ntegral multiple of $5,000, to the assignee or
asszgnees thereof, and (il) the r~ght of such assignee or
assignees to have the Certificate or any such port~on thereof
regzstered in the name of such asslgnee or assignees Upon
the assignment and transfer of any Certlf~cate or any port~on
thereof, a new substltute Certificate or Cert~flcates shall be
~ssued ~n conversion and exchange therefor ~n the manner herein
provided The Initial Certificate, to the extent of the unpaid
prlncipal balance thereof, may be assigned and transferred by
the ~n~t~al registered owner thereof once only, and to one or
more assignees designated ~n writing by the ~n~tlal registered
owner thereof Ail Certificates ~ssued and dellvered ~n
conversion of and exchange for the Initial Certificate shall be
· n any denomination or denominations of any ~ntegral multiple
of $5,000 (subject to the requirement herelnafter stated that
each substitute Certificate shall have a slngle stated prlnc~-
pal maturity date), shall be ~n the form prescribed ~n the FORM
OF SUBSTITUTE CERTIFICATE set forth in th~s Ordinance, and
shall have the characteristics, and may be assigned, trans-
ferred, and converted as hereinafter provided If the Initial
Certificate or any portion thereof ~s assigned and transferred
or converted the Initial Certificate must be surrendered to the
Paying Agent/Registrar for cancellation, and each Certificate
~ssued ~n exchange for any port~on of the Initial Certificate
shall have a s~ngle stated principal maturity date, and shall
not be payable ~n ~nstallments, and each such Certificate shall
have a principal maturity date corresponding to the due date of
the ~nstallment of principal or port~on thereof for which the
substitute Certificate ~s being exchanged, and each such
Certificate shall bear ~nterest at the s~ngle rate applicable
to and borne by such ~nstallment of principal or port~on
thereof for which it ~s being exchanged If only a port~on of
the Initial Certificate is assigned and transferred, there
shall be delivered to and registered ~n the name of the ~n~t~al
registered owner substitute Certificates ~n exchange for the
unassigned balance of the Initial Certificate ~n the same
manner as ~f the ~nitial registered owner were the assignee
thereof If any Certificate or port~on thereof other than the
Initial Certificate is assigned and transferred or converted
each Certificate ~ssued in exchange therefor shall have the
sa~e principal maturity date and bear ~nterest at the same rate
as the Certificate for which ~t ~s exchanged A form of
assignment shall be printed or endorsed on each Certificate,
exoepting the Initial Certificate, which shall be executed by
the registered owner or ~ts duly authorized attorney or repre-
sentative to evidence an assignment thereof Upon surrender of
any Certificates or any port~on or portions thereof for trans-
fer of registration, an authorized representative of the Paying
Agent/Registrar shall make such transfer ~n the Registration
9
Books, and shall deliver a new fully registered substitute
Certificate or Certificates, having the characteristics here~n
described, payable to such assignee or asslgnees (which then
w~ll be the registered owner or owners of such new Certificate
or Certificates), or to the previous reglstered owner in case
only a port,on of a Cert~flcate ls being assigned and trans-
ferred, all in conversion of and exchange for sald assigned
Certificate or Certifxcates or any port~on or portions thereof,
· n the same form and manner, and w~th the same effect, as
provided ~n Section 6(d), below, for the conversion and ex-
change of Certlf~cates by any registered owner of a Certlf~-
cate The Issuer shall pay the Paying Agent/Reg~strar's
standard or customary fees and charges for making such transfer
and delivery of a substitute Certificate or Certificates, but
the one requesting such transfer shall pay any taxes or other
governmental charges required to be pa~d w~th respect thereto
The Paylng Agent/Registrar shall not be requlred to make
transfers of registration of any Certificate or any port~on
thereof during the per~od commencing w~th the close of business
on any Record Date and ending w~th the opening of bus~ness on
the next following principal or ~nterest payment date
(b) Ownership of Certificates The entity in whose name
any Certificate shall be registered in the Registration Books
at any t~me shall be deemed and treated as the absolute owner
thereof for all purposes of this Ordinance, whether or not such
Certificate shall be overdue, and the Issuer and the Paying
Agent/Registrar shall not be affected by any not~ce to the
contrary, and payment of, or on account of, the principal of,
premium, ~f any, and interest on any such Certificate shall be
made only to such registered owner All such payments shall be
valid and effectual to satisfy and d~scharge the l~ab~l~ty upon
such Certificate to the extent of the sum or sums so pa~d
(c) Payment of Certificates and Interest The Issuer
hereby further appoints the Paying Agent/Registrar to act as
the paying agent for paying the principal of and ~nterest on
the Certificates, and to act as ~ts agent to convert and
exchange or replace Certificates, all as provided in this
Ord~nance The Paying Agent/Registrar shall keep proper
records of all payments made by the Issuer and the Paying
Agent/Registrar with respect to the Certificates, and of all
conversions and exchanges of Certificates, and all replacements
of Certificates, as provided ~n th~s Ordinance
(d) Conversion and Exchange or Replacement~ Authenti-
cation Each Certificate issued and delivered pursuant to th~s
10
Ordinance, to the extent of the unpaid principal balance or
principal amount thereof, may, upon surrender of such Certlf~-
cate at the principal corporate trust office of the Paying
Agent/Registrar, together with a written request therefor duly
executed by the registered owner or the assignee or asslgnees
thereof, or its or their duly authorized attorneys or represen-
tatives, with guarantee of signatures satisfactory to the
Paying Agent/Registrar, may, at the optlon of the reglstered
owner or such assignee or assignees, as appropriate, be con-
verted into and exchanged for fully registered certificates,
without interest coupons, in the form prescribed in the FORM OF
SUBSTITUTE CERTIFICATE set forth in this Ordinance, in the
denomination of $5,000, or any integral multiple of $5,000
(subject to the requirement hereinafter stated that each
substitute Certificate shall have a single stated maturity
date), as requested in writing by such registered owner or such
assignee or assignees, in an aggregate principal amount equal
to the unpaid principal balance or principal amount of any
Certificate or Certificates so surrendered, and payable to the
appropriate registered owner, asslgnee, or assignees, as the
case may be If the Initial Certificate is assigned and
transferred or converted each substitute Certificate issued in
exchange for any portion of the Initial Certificate shall have
a single stated principal maturity date, and shall not be
payable in Installments; and each such Certificate shall have a
principal maturity date corresponding to the due date of the
installment of principal or portion thereof for which the
substitute Certificate is being exchanged, and each such
Certificate shall bear interest at the single rate applicable
to and borne by such Installment of principal or portion
thereof for which it is being exchanged If any Certificate or
portion thereof (other than the Initial Certificate) is as-
signed and transferred or converted, each Certificate ~ssued ~n
exchange therefor shall have the same principal maturity date
and bear interest at the same rate as the Certificate for which
it is being exchanged Each substitute Certificate shall bear
a letter and/or number to distinguish it from each other
Certificate The Paying Agent/Registrar shall convert and
exchange or replace Certificates as provided herein, and each
fully registered certificate delivered in conversion of and
exchange for or replacement of any Certificate or portion
thereof as permitted or required by any provision of this
Ordinance shall constitute one of the Certificates for all
purposes of this Ordinance, and may again be converted and
exchanged or replaced It is specifically provided that any
Certificate authenticated in conversion of and exchange for or
replacement of another Certificate on or prior to the first
scheduled Record Date for the Initial Certificate shall bear
interest from the date of the Initial Certificate, but each
substitute Certificate so authenticated after such first
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scheduled Record Date shall bear interest from the interest
payment date next preceding the date on which such substitute
Certificate was so authenticated, unless such Certificate is
authenticated after any Record Date but on or before the next
following interest payment date, in which case it shall bear
interest from such next following interest payment date,
provided, however, that if at the time of delivery of any
substitute Certificate the interest on the Certificate for
which it is being exchanged is due but has not been paid, then
such Certificate shall bear Interest from the date to which
such Interest has been paid in full THE INITIAL CERTIFICATE
issued and delivered pursuant to this Ordinance is not required
to be, and shall not be, authenticated by the Paying Agent/-
Registrar, but on each substitute Certificate issued in conver-
sion of and exchange for or replacement of any Certificate or
Certificates issued under this Ordinance there shall be printed
a certificate, in the form substantially as follows
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate has been
issued under the provisions of the Certificate Ordinance
described on the face of this Certificate, and that this
Certificate has been issued in conversion of and exchange for
or replacement of a certificate, certificates, or a portion of
a certificate or certificates of an issue which originally was
approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts of the State
of Texas
MBANK DALLAS, 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 Certificate, date and
manually sign the above Certificate, and no such Certificate
shall be deemed to be issued or outstanding unless such Certif-
icate lS SO executed The Paying Agent/Registrar promptly
shall cancel all Certificates surrendered for conversion and
exchange or replacement No additional ordinances, orders, or
resolutions need be passed or adopted by the governing body of
the Issuer or any other body or person so as to accomplish the
foregoing conversion and exchange or replacement of any Certif-
icate or portion thereof, and the Paying Agent/Registrar shall
provide for the printing, execution, and delivery of the
substitute Certificates an the manner prescribed herein, and
12
saad Certafacates shall be of type composataon pranted on paper
w~th lathographed or steel engraved borders of customary weaght
and strength Pursuant to Vernon's Ann Tex Cav St Art
717k-6, and partacularly Sectaon 6 thereof, the duty of conver-
saon and exchange or replacement of Certafacates as aforesaad
as hereby amposed upon the Payang Agent/Regastrar, and, upon
the execution of the above Paying Agent/Regastrar's Authentaca-
taon Cert~facate, the converted and exchanged or replaced
Certificate shall be valid, ~ncontestable, and enforceable an
the same manner and with the same effect as the Inataal Certaf-
acate which originally was ~ssued pursuant to thas Ordinance,
approved by the Attorney General, and reglstered by the
Comptroller of Public Accounts The Issuer shall pay the
Paying Agent/Reg~strar's standard or customary fees and charges
for transferring, convertang, and exchanging any Certlfacate or
any port~on thereof, but the one requestang any such transfer,
conversion, and exchange shall pay any taxes or governmental
charges requared to be pa~d with respect thereto as a condition
precedent to the exercise of such prav~lege of conversaon and
exchange The Payang Agent/Registrar shall not be required to
make any such conversion and exchange or replacement of Certif-
icates or any port~on thereof (~) during the peraod commencang
wath the close of bus~ness on any Record Date and ending wath
the openlng of busaness on the next followlng prancapal or
anterest payment date, or, (~a) wath respect to any Certaflcate
or portion thereof called for redemptaon prior to maturlty,
wlth~n 45 days prior to ~ts redemptlon date
(e) In General All Cert~facates assued in conversaon
and exchange or replacement of any other Certificate or port~on
thereof, (a) shall be ~ssued an fully regastered form, wathout
anterest coupons, w~th the princlpal of and ~nterest on such
Certificates to be payable only to the registered owners
thereof, (~) may be transferred and assigned, (all) may be
converted and exchanged for other Certaflcates, (~v) shall have
the characterast~cs, (v) shall be s~gned and sealed, and (va)
the principal of and ~nterest on the Certaflcates shall be pay-
able, all as provided, and an the manner requlred or lndacated,
an the FORM OF SUBSTITUTE CERTIFICATE set forth an thas Ordi-
nance
(f) Payment of Fees and Charges The Issuer hereby
covenants with the registered owners of the Cert~facates that
at w~ll (~) pay the standard or customary fees and charges of
the Paying Agent/Registrar for ars services w~th respect to the
payment of the principal of and ~nterest on the Certaf~cates,
when due, and (~a) pay the fees and charges of the Payang
Agent/Registrar for services wlth respect to the transfer of
registration of Certificates, and w~th respect to the
13
conversaon and exchange of Certafacates solely to the extent
above provaded an thas Ordinance
(g) Substitute Pay~n~ Agent/Registrar The Issuer
covenants w~th the registered owners of the Cert~facates that
at all times while the Certaf~cates are outstandang the Issuer
will provide a competent and legally qual~faed bank, trust
company, f~nancaal anst~tutaon, or other agency to act as and
perform the services of Paying Agent/Registrar for the Certaf~-
cares under th~s Ordinance, and that the Payang Agent/Regastrar
wall be one entity The Issuer reserves the raght to, and may,
at ~ts option, change the Paying Agent/Registrar upon not less
than 120 days written notice to the Payang Agent/Registrar, to
be effective not later than 60 days prior to the next prancapal
or ~nterest payment date after such notace In the event that
the entity at any tame acting as Paying Agent/Regastrar (or ats
successor by merger, acqu~sataon, or other method) should
resxgn or otherwise cease to act as such, the Issuer covenants
that promptly at w~ll appoint a competent and legally quallfaed
bank, trust company, f~nancaal ~nst~tut~on, or other agency to
act as Paying Agent/Registrar under thas Ordanance Upon any
change in the Paying Agent/Regastrar, the prevaous Paying
Agent/Registrar promptly shall transfer and dellver the Regls-
trat~on Books (or a copy thereof), along wath all other perti-
nent books and records relating to the Certaf~cates, to the new
Paying Agent/Regastrar desagnated and appoanted by the Issuer
Upon any change an the Paying Agent/Registrar, the Issuer
promptly w~ll cause a written notace thereof to be sent by the
new Paying Agent/Regastrar to each regastered owner of the
Certafacates, by Unated States maal, f~rst-class postage
prepaad, which notice also shall g~ve the address of the new
Paying Agent/Registrar By accepting the posltaon and perform-
ang as such, each Paying Agent/Regastrar shall be deemed to
have agreed to the provasaons of thas Ordinance, and a cer-
taf~ed copy of this Ordinance shall be delivered to each Paying
Agent/Registrar
Section 7 FORM OF SUBSTITUTE CERTIFICATES The form of
all Certaf~cates issued in conversion and exchange or replace-
ment of any other Certif~cate or portaon thereof, anclud~ng the
form of Paying Agent/Registrar's Certificate to be printed on
each of such Certificates, and the Form of Assignment to be
printed on each of the Certificates, shall be, respectavely,
substantially as follows, wath such appropraate varaatlons,
om~ssaons, or ansertaons as are permitted or required by thas
Ordinance
14
FORM OF SUBSTITUTE CERTIFICATE
NO UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 1987-A
INTEREST RATE MATURITY DATE CUSIP NO
%
ON THE MATURITY DATE specified above the CITY OF DENTON,
in Denton County, Texas (the "Issuer"), being a a polltzcal
subdivision of the State of Texas, hereby promises to pay to
or to the regzstered assignee hereof (e~ther bezng hereinafter
called the "registered owner") the principal amount of
and to pay interest thereon from JUNE 1, 1987, to the maturzty
date specified above, at the interest rate per annum specified
above, with interest being payable on JANUARY 1, 1988, and
semiannually on each JULY i and JANUARY 1 thereafter, except
that if the date of authentication of this Certzf~cate zs later
than DECEMBER 15, 1987, such principal amount shall bear
znterest from the ~nterest payment date next preceding the date
of authentication, unless such date of authentication ls 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 followzng znterest
payment date
TEE PRINCIPAL OF AND INTEREST ON this Certzflcate are
payable in lawful money of the United States of America,
w~thout exchange or collection charges The principal of thzs
Certificate shall be paid to the registered owner hereof upon
presentation and surrender of thzs Certificate at maturity, at
the principal corporate trust office of MBANK DALLAS, NATIONAL
ASSOCIATION, DALLAS, TEXAS, which zs the "Paying Agent/Reg~s-
tr&r" for this Certificate The payment of ~nterest on this
Certificate 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 Certificates (the "Certificate Ordinance") to be on deposzt
with the Paying Agent/Registrar for such purpose as hereinafter
provided, and such check shall be sent by the Paying Agent/-
15
Registrar by Unated States maal, farst-class postage prepaad,
on each such anterest payment date, to the regastered owner
hereof, at the address of the regastered owner, as at appeared
on the 15th day of the month next precedang each such date (the
"Record Date") on the Regastrataon Books kept by the Payang
Agent/Regastrar, as hereanafter descrabed The Issuer cove-
nants wath the regastered owner of thas Certafacate that on or
before each princapal payment date, interest payment date, and
accrued anterest payment date for thas Certaflcate at wall make
avaalable to the Payang Agent/Regastrar, from the "Interest and
Sanking Fund" created by the Certifacate Ordanance, the amounts
requared to provide for the payment, an lmmedaately avaalable
funds, of all princapal of and interest on the Certaf~cates,
when due
IF THE DATE for the payment of the prancapal of or anter-
est on this Certaficate shall be a Saturday, Sunday, a legal
holaday, or a day on which bankang anstatutions in the Caty
where the Payang Agent/Regastrar as located are authorazed by
law or executive order to close, then the date for such payment
shall be the next succeeding day which as not such a Saturday,
Sunday, legal holiday, or day on whach bankang lnstltutaons are
authorazed to close; and payment on such date shall have the
same force and effect as af made on the original date payment
was due
THIS CERTIFICATE Ks one of an assue of Certificates
anltaally dated JUNE 1, 1987, authorazed an accordance wath the
Constatutaon and laws of the State of Texas an the pr~ncapal
amount of $1,100,000, FOR THE PURPOSE OF PAYING ALL OR A
PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS TO BE INCURRED
PURSUANT TO CONTRACTS FOR THE PURCHASE OF MATERIALS AND EQUIP-
MENT CONSTITUTING A MUNICIPAL RADIO COMMUNICATIONS SYSTEM, AND
PAYING ALL OR A PORTION OF THE CONTRACTUAL OBLIGATIONS FOR
PROFESSIONAL SERVICES OF ENGINEERING, ATTORNEYS, AND FINANCIAL
ADVISORS IN CONNECTION WITH SUCH MUNICIPAL RADIO COMMUNICATIONS
SYSTEM AND CERTIFICATES OF OBLIGATION
THIS CERTIFICATE OR ANY PORTION OR PORTIONS HEREOF IN ANY
INTEGRAL MULTIPLE OF $5,000 may be assagned and shall be trans-
ferred only an the Registration Books of the Issuer kept by the
Payang Agent/Regastrar actang an the capacity of registrar for
the Certificates, upon the terms and condataons set forth an
the Certificate Ordinance Among other requarements for such
assignment and transfer, this Certafacate must be presented and
surrendered to the Paying Agent/Registrar, together wath proper
anstruments of assignment, in form and wath guarantee of
sagnatures satasfactory to the Paying Agent/Registrar, evadenc-
lng assignment of this Certificate or any portion or portaons
hereof in any integral multiple of $5,000 to the assignee or
16
assignees ~n whose name or names th~s Certificate or any such
port~on or portions hereof as or are to be transferred and
registered The form of Assignment pranted or endorsed on th~s
Certificate shall be executed by the registered owner or ~ts
duly authorized attorney or representative, to evidence the
assignment hereof A new Certlflcate or Certlflcates payable
to such assignee or assignees (which then w~ll be the new
registered owner or owners of such new Certificate or Certifi-
cates), or to the previous registered owner ~n the case of the
assignment and transfer of only a port~on of th~s Certificate,
may be delivered by the Paying Agent/Registrar in conversion of
and exchange for th~s Certlf~cate, all ~n the form and manner
as provided ~n the next paragraph hereof for the conversion and
exchange of other Certificates The Issuer shall pay the
Paying Agent/Reg~strar's standard or customary fees and charges
for making such transfer, but the one requesting such transfer
shall pay any taxes or other governmental charges required to
be paid with respect thereto The Paying Agent/Registrar shall
not be required to make transfers of registration of th~s
Certificate or any portion hereof during the per~od commencing
wlth the close of business on any Record Date and ending w~th
the opening of bus~ness on the next followang prlnclpal or
lnterest payment date The reglstered owner of th~s Certlfa-
cate shall be deemed and treated by the Issuer and the Paying
Agent/Registrar as the absolute owner hereof for all purposes,
~nclud~ng payment and d~scharge of l~ab~llty upon thas Certlf~-
cate to the extent of such payment, and the Issuer and the
Paying Agent/Registrar shall not be affected by any not~ce to
the contrary
ALL CERTIFICATES OF THIS SERIES are ~ssuable solely as
fully registered certificates, w~thout lnterest coupons, an the
denomination of any integral multlple of $5,000 As provided
in the Certificate Ordinance, th~s Certificate, may, at the
request of the registered owner or the assignee or assignees
hereof, be converted into and exchanged for a l~ke aggregate
principal amount of fully reglstered certificates, wlthout
· nterest coupons, payable to the appropraate registered owner,
assignee, or assignees, as the case may be, having the same
maturity date, and bearing interest at the same rate, ~n any
denomination or denominations ~n any ~ntegral multiple of
$5,000 as requested in wr~tlng by the appropriate registered
owner, asslgnee, or assignees, as the case may be, upon sur-
render of this Certificate to the Paying Agent/Registrar for
cancellation, all an accordance w~th the form and procedures
set forth ~n the Certificate Ordinance The Issuer shall pay
the Paying Agent/Reg~strar's standard or customary fees and
charges for transferring, converting, and exchanglng any
Certificate or any portlon thereof, but the one requesting such
transfer, conversion, and exchange shall pay any taxes or
17
governmental charges required to be pald w~th respect thereto
as a condition precedent to the exercise of such privilege of
conversion and exchange The Paylng Agent/Registrar shall not
be required to make any such conversion and exchange during the
per~od commencing with the close of bus~ness on any Record Date
and ending with the opening of bus~ness on the next followlng
principal or ~nterest payment date
IN THE EVENT any Paying Agent/Registrar for the Certifi-
cates is changed by the Issuer, resigns, or otherwlse ceases to
act as such, the Issuer has covenanted ~n the Certificate
Ordinance that ~t promptly will appoint a competent and legally
qualified substitute therefor, and promptly wlll cause written
not~ce thereof to be ma~led to the reglstered owners of the
Certificates
IT IS HEREBY certified, recited, and covenanted that this
Certificate has been duly and validly authorized, lssued, and
delivered, that all acts, condlt~ons, and th~ngs requlred or
proper to be performed, ex~st, and be done precedent to or ~n
the authorization, ~ssuance, and delivery of th~s Certificate
have been performed, existed, and been done ~n accordance w~th
law; that thls Certificate ~s a general obllgatlon of the
Issuer, ~ssued on the full faith and credit thereof, and that
annual ad valorem taxes sufficient to provide for the payment
of the ~nterest on and principal of thls Certificate, as such
lnterest comes due and such principal matures, have been lev~ed
and ordered to be lev~ed against all taxable property in the
Issuer, and have been pledged ~rrevocably for such payment,
w~th~n the l~m~t prescribed by law, and that th~s Certificate,
and the other Certificates of th~s Ser~es, additionally are
payable from and secured by certain surplus revenues (not to
exceed $10,000 ~n aggregate amount) derived by the Issuer from
the ownership and operation of the C~ty's Utility System
(consisting of the City's combined waterworks system, sanitary
sewer system, and electric light and power system), all as
provided ~n the Certificate Ordinance
TNE ISSUER has reserved the r~ght to ~ssue, ~n accordance
w~th law, and ~n accordance w~th the Certificate Ordinance,
other and additional obligations, and to enter into contracts,
payable from ad valorem taxes and/or revenues of the C~ty's
Utility System, on a parity with, or w~th respect to sa~d
revenues, superior ~n l~en to, thls Certificate
BY BECOMING the registered owner of th~s Certificate, the
registered owner thereby acknowledges all of the terms and
provisions of the Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate
Ordinance ~s duly recorded and available for ~nspect~on ~n the
official m~nutes and records of the governlng body of the
18
Issuer, and agrees that the terms and provisions of this
Certificate and the Certificate Ordinance constitute a contract
between each registered owner hereof and the Issuer
IN WITNESS WHEREOF, the Issuer has caused this Certificate
to be signed with the facsimile signature of the Mayor of the
Issuer and countersigned with the facsimile signature of the
City Secretary of the Issuer, and has caused the official seal
of the Issuer to be duly impressed, or placed in facsimile, on
this Certificate
(facsimile signature) (facsimile signature)
City Secretary, Mayor,
City of Denton, Texas City of Denton, Texas
(CITY SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate has been
issued under the provisions of the Certificate Ordinance
described on the face of this Certificate, and that this
Certificate has been issued in conversion of and exchange for
or replacement of a certificate, certificates, or a portion of
a certificate or certificates of an issue which originally was
approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts of the State
of Texas
MBANK DALLAS, NATIONAL ASSOCIATION,
DALLAS, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative
FORM OF ASSIGNMENT
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of
this Certificate, or duly authorized representative or attorney
thereof, hereby assigns this Certificate to
! !
(ASsignee's Social (print or typewrite Asslgnee's name and
Security or Taxpayer address, including zip code)
Identification Number)
19
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of th~s Certificate on
the Paying Agent/Reglstrar's Reglstratlon 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 s~gnature must
New York Stock Exchange or a correspond with the name of
commercial bank or trust the Registered Owner appear-
company lng on the face of this Cer-
tificate
Section 8 TAX LEVY A special Interest and S~nklng Fund
(the "Interest and Sinking Fund") is hereby created solely for
the benefit of the Certificates, and the Interest and Sinking
Fund shall be established and maintaIned by the Issuer at an
official depository bank of the Issuer The Interest and
S1nklng Fund shall be kept separate and apart from all other
funds and accounts of the Issuer, and shall be used only for
paying the interest on and principal of the Certificates All
ad valorem taxes levied and collected for and on account of the
Certificates shall be deposited, as collected, to the credit of
the Interest and Sinking Fund During each year wh~le any of
the Certificates or interest thereon are outstanding and
unpaid, the governing body of the Issuer shall compute and
ascertain a rate and amount of ad valorem tax which w~ll be
sufficient to raise and produce the money required to pay the
interest on the Certificates as such interest becomes due, and
to provide and maintain a sinking fund adequate to pay the
principal of its Certificates as such prlnc~pal matures (but
never less than 2% of the original principal amount of the
Certificates as a sinking fund each year), and said tax shall
be based on the latest approved tax rolls of the Issuer, wlth
full allowance being made for tax delinquencies and the cost of
tax collection Said rate and amount of ad valorem tax is
hereby levied, and is hereby ordered to be levied, against all
taxable property in the Issuer for each year while any of the
Certificates or interest thereon are outstanding and unpaid,
and said tax shall be assessed and collected each such year and
deposited to the credit of the aforesaid Interest and Sinking
20
Fund Said ad valorem taxes sufficient to provide for the
payment of the interest on and principal of the Certificates,
as such interest comes due and such principal matures, are
hereby pledged for such payment, within the limit prescribed by
law
Section 9 SURPLUS REVENUES The Certificates addi-
tionally shall be payable from and secured by surplus revenues,
to the extent hereinafter permitted, derived by the Issuer from
the ownership and operation of the Issuer's Utility System
(consisting of Its combined waterworks system, sanitary sewer
system, and electric light and power system) remaining after
(a) payment of all amounts constituting operation and main-
tenance expenses of said Utility System, and (b) payment of all
debt service, reserve, and other requirements and amounts
required to be paid under all ordinances heretofore or here-
after authorizing (1) all bonds and (11) all other obligations
not on a parity with the Certificates, which are payable from
and secured by any Utlllty System revenues, and (c) payment of
all amounts payable from any Utility System revenues pursuant
to contracts heretofore or hereafter entered into by the Issuer
an accordance with law (the "Surplus Revenues") If, for any
reason, the Issuer falls to deposit ad valorem taxes levied
pursuant to Section 8 hereof to the credit of the Interest and
Slnklng Fund in an amount sufficient to pay, when due, the
principal of and interest on the Certificates, then Surplus
Revenues, to the extent hereinafter permitted, shall be depos-
ited to the credit of the Interest and Sinking Fund and used to
pay such principal and/or interest A maximum aggregate of
$10,000 of Surplus Revenues may be used to pay principal and/or
interest on the Certificates and any obligations on a parity
therewith The Certificates and any obligations on a parity
therewith are not, and shall not be deemed to be, payable from
or secured by any Surplus Revenues an excess of an aggregate of
$10,000 Until and unless an aggregate of $10,000 of Surplus
Revenues actually is used to pay any such principal and/or
interest, additional obligations, payable from and secured by
all or any remaining unused part of said aggregate of $10,000
of Surplus Revenues, may be issued by the Issuer on a parity
with the Certificates and any other then outstanding parity
obligations, with the Certificates and all such additional
parity obligations to be payable from and secured equally and
ratably by all or any remaining unused part of said aggregate
The Issuer reserves, and shall have, the right to ~ssue bonds,
and other obligations not on a parity with the Certificates,
and to enter into contracts, in accordance with applicable
laws, to be payable from and secured by any Utility System
revenues other than the aggregate of $10,000 of Surplus Reve-
nues as described above
21
Section 10 DEFEASANCE OF CERTIFICATES (a) Any Certif-
icate and the lnterest thereon shall be deemed to be pa~d,
retired, and no longer outstandang (a "Defeased Certlf~cate")
wlthan the meaning of th~s Ordinance, except to the extent
provided in subsection (d) of this Sectaon, when payment of the
prancipal of such Certificate, plus anterest thereon to the due
date either (a) shall have been made or caused to be made an
accordance w~th the terms thereof, or (l~) shall have been
provided for on or before such due date by ~rrevocably deposlt-
ang w~th or making available to the Paying Agent/Regastrar for
such payment (1) lawful money of the Unlted States of Ameraca
suffloient to make such payment or (2) Government Obligations
which mature as to princapal and interest in such amounts and
at such times as will insure the ava~labalaty, wathout re~n-
vestment, of sufficient money to provade for such payment, and
when proper arrangements have been made by the Issuer with the
Paying Agent/Registrar for the payment of ~ts servace$ until
all Defeased Cert~facates shall have become due and payable
At such time as a Certificate shall be deemed to be a Defeased
Certificate hereunder, as aforesaad, such Certificate and the
~nterest thereon shall no longer be secured by, payable from,
or entitled to the benefits of, the ad valorem taxes herein
levied and pledged as provaded an th~s Ordinance, and such
principal and ~nterest shall be payable solely from such money
or Government Obligations
(b) Any moneys so deposited wlth the Paying Agent/Regas-
trar may at the written directaon of the Issuer also be ~n-
vested ~n Government Obligations, maturing ~n the amounts and
tames as hereinbefore set forth, and all ~ncome from such
Government Obligations received by the Paying Agent/Regastrar
which ls not required for the payment of the Certificates and
~nterest thereon, w~th respect to which such money has been so
deposited, shall be turned over to the Issuer, or deposited as
darected in writing by the Issuer
(c) The term "Government Obligations" as used ~n th~s
Section shall mean direct obligations of the Un,ted States of
America, ~ncluding obligations the pranclpal of and lnterest on
which are unconditionally guaranteed by the United States of
Ameraca, which may be United States Treasury oblagataons such
as its State and Local Government Seraes, which may be ~n
book-entry form
(d) Until all Defeased Cert~flcates shall have become due
and payable, the Paying Agent/Registrar shall perform the
services of Paying Agent/Reglstrar for such Defeased Certafa-
cares the same as af they had not been defeased, and the Issuer
22
shall make proper arrangements to provlde and pay for such
services as requlred by this Ordinance
Section 11 DAMAGED, MUTILATED, LOST, STOLEN, OR DE-
STROYED CERTIFICATES (a) Replacement Certlf~cates In the
event any outstanding Certificate is damaged, mutilated, lost,
stolen, or destroyed, the Paying Agent/Registrar shall cause to
be printed, executed, and delivered, a new certificate of the
same principal amount, maturity, and interest rate, as the
damaged, mutilated, lost, stolen, or destroyed Certificate, in
replacement for such Certificate in the manner hereinafter
provided
(b) A~pl~cation for Replacement Certlflcates Applica-
tion for replacement of damaged, mutilated, lost, stolen, or
destroyed Certificates shall be made by the registered owner
thereof to the Paying Agent/Registrar In every case of loss,
theft, or destruction of a Certificate, the registered owner
applying for a replacement certificate shall furnish to the
Issuer and to the Paying Agent/Registrar such security or
indemnity as may be required by them to save each of them
harmless from any loss or damage with respect thereto Also,
in every case of loss, theft, or destruction of a Certificate,
the registered owner shall furnish to the Issuer and the Paying
Agent/Registrar evidence to their satisfaction of the loss,
theft, or destruction of such Certificate, as the case may be
In every case of damage or mutilation of a Certificate, the
registered owner shall surrender to the Paying Agent/Registrar
for cancellation the Certificate so damaged or mutilated
(c) No Default Occurred Notwithstanding the foregoing
provisions of this Section, in the event of any such Certifi-
cate shall have matured, and no default has occurred which is
then continuing in the payment of the principal of, or interest
on the Certificate, the Issuer may authorize the payment of the
same (without surrender thereof except ~n the case of a damaged
or mutilated Certificate) instead of issuing a replacement
Certificate, provided security or indemnity is furnished as
above provlded in this Section
(d) Charge for Issuln~ Replacement Certificates Prior
to the issuance of any replacement certificate, the Paying
Agent/Registrar shall charge the registered owner of such
Certificate with all legal, printing, and other expenses in
connection therewith Every replacement certificate issued
pursuant to the provlsions of this Section by virtue of the
fact that any Certificate is lost, stolen, or destroyed shall
conStltute a contractual obligation of the Issuer whether or
not the lost, stolen, or destroyed Certificate shall be found
at any time, or be enforceable by anyone, and shall be entitled
23
to all the benefits of this Ordinance equally and proportion-
ately with any and all other Certificates duly issued under
this Ordinance
(e) Authority for Issuln~ Replacement CertIficates In
accordance with Section 6 of Vernon's Ann Tex Civ St Art
717k-6, this Section of this Ordinance shall constitute author-
lty for the issuance of any such replacement certificate
without necessity of further action by the governing body of
the Issuer or any other body or person, and the duty of the
replacement of such certificates is hereby authorized and
imposed upon the Paying Agent/Registrar, and the Paying Agent/-
Registrar shall authenticate and deliver such Certificates in
the form and manner and with the effect, as provided in Section
6(d) of this Ordinance for Certificates issued in conversion
and exchange for other Certificates
Section 12 CUSTODY, APPROVAL, AND REGISTRATION OF
CERTIFICATES, CERTIFICATE COUNSEL'S OPINION, AND CUSIP NUMBERS
The Mayor of the Issuer is hereby authorized to have control of
the Initial Certificate issued hereunder and all necessary
records and proceedings pertaining to the Initial Certificate
pending its delivery and its investigation, examination, and
approval by the Attorney General of the State of Texas, and its
registration by the Comptroller of Public Accounts of the State
of Texas Upon registration of the Initial Certificate said
Comptroller of Public Accounts (or a deputy designated in
writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate on the Initial Certifi-
cate, and the seal of said Comptroller shall be Impressed, or
placed in facsimile, on the Initial Certificate The approving
legal opinion of the Issuer's Bond Counsel and the assigned
CUSIP numbers may, at the option of the Issuer, be printed on
the Initial Certificate or on any Certificates issued and de-
livered in conversion of and exchange or replacement of any
Certificate, but neither shall have any legal effect, and shall
be solely for the convenience and information of the registered
owners of the Certificates
Section 13 COVENANTS REGARDING TAX-EXEMPT STATUS OF
CERTIFICATES The Issuer hereby covenants to take such action
or refrain from such action necessary to ensure the status of
the Certificates as obligations described in section 103 of the
Internal Revenue Code of 1986 or any predecessor thereof In
particular, but not by way of limitation, the Issuer covenants
as follows
(a) None of the proceeds of the Certificates (in-
cluding investment earnings thereon) or of the facilities
financed with the proceeds of the Certificates will be
24
used, directly or indirectly, in the trade or business of
any person or entity other than the Issuer For purposes
of the foregoing, any use of such proceeds or facilities
in any manner contrary to the guidelines set forth in
Revenue Procedures 82-14 and 82-15, 1982-1C B 459, 460,
or any amendments, revisions or supplements thereto, shall
constitute the use of such proceeds or facilities in the
trade or business of such person or entity,
(b) None of the proceeds of the Certificates (in-
cluding investment earnings thereon) will be used, direct-
ly or Indirectly, to finance loans to any persons or other
entities,
(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-
tlon of the interest paid on the Certificates, including
without limitation any action that would permit any of the
Certificates to be treated as "private activity bonds"
within the meaning of section 141 of the Code, and will
take, or require to be taken, such acts as may be reason-
ably within its ability and as may from time to time be
required under applicable law or regulation to continue to
cause interest on the Certificates 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 Certificates, 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 Certificates to
be includable in the gross income of any certlflcatehol-
ders for federal income tax purposes
Section 14 COVENANTS REGARDING ARBITRAGE (a) A Rebate
Fund ls hereby established by the Issuer Such Fund shall be
for the sole benefit of the United States of America and shall
not be subject to the claim of any other person, ~ncludlng
without limitation the owners of the Certificates The Rebate
Fund is established for the purpose of compliance with section
148 of the Internal Revenue Code of 1986 (the "Code")
(b) At the close of each "Certificate Year," the Issuer
shall compute the amount of "Excess Earnings," if any, for the
period beginning on the date of delivery of the Initial Certif-
icate and ending at the close of such "Certificate 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
25
Excess Earnings so computed The term "Certlfacate Year" means
with respect to the Certafacates each one-year per~od endang on
the anniversary of the date of delivery of the Inltaal Certafa-
cate If, at the close of any Certifacate Year, the amount
the Rebate Fund exceeds the amount that would be requared to be
paad to the Unated States of Ameraca under paragraph (d) below
af the Certafacates had been paad an full, such excess may be
transferred from the Rebate Fund and paad to the Issuer, to be
used for such purposes for which, or to be redeposited to such
fund from whach, such amounts were oraganally deraved
(c) In general, "Excess Earnings" for any per~od of time
means the sum of
the excess of --
(A) the aggregate amount earned durang such
per~od of tame on all "Nonpurpose Obl~gataons"
(includang gains on the dispositaon of such Obla-
gat~ons) an which "Gross Proceeds" of the ~ssue are
~nvested (other than amounts attrabutable to an
excess described ~n thas subparagraph (c) (~)), over
(B) the amount that would have been earned
during such per~od of t~me if the "Y~eld" on such
Nonpurpose Obligations (other than amounts attrlb-
utable to an excess descrabed in th~s subparagraph
(c) (~)) had been equal to the yaeld on the assue,
plus
(~) any income during such per~od of t~me attrib-
utable to the excess described an subparagraph
above
"Excess Earnings" will not anclude amounts, af any, whlch need
not be taken into account under the specaal rules of section
148(f) (4) (A) and (B) of the Code relating to bona fade debt
servace funds and the six-month temporary anvestment peraod
The terms "Nonpurpose Obligations," "Gross Proceeds" and
"Yield" shall have the meanings prescribed by section 148 of
the Code and shall be applaed ~n the manner prescrabed ~n such
section
(d) The Issuer shall pay to the United States of Ameraca
at least once every five-years an amount that ensures that at
least 90 percent of the Excess Earnings from the date of
delivery of the Certafacates to the close of the peraod for
which the payment is being made w~ll have been pa~d The
Issuer shall pay to the United States of America not later than
60 days after the Certificates have been paid in full 100
26
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 slx years following the final payment of principal and
interest on the Certificates
(f) The Issuer will not use any port~on of the proceeds
of the Certificates directly or indirectly to acquire "higher
yielding investments," or to replace funds which were used
directly or indirectly to acquire "higher yielding invest-
ments" The term higher yielding investments means any invest-
ment 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 invest-
ments shall not apply to --
(1) proceeds of the Certificates invested for a
reasonable temporary period of 3 years or less until such
proceeds are needed for the purpose for which the certifi-
cates are issued, or
(2) amounts invested in a bona fide debt service
fund if the gross earnings on such fund are less than
$100,000 in any certificate year
(g) The Issuer covenants to restrict the use of Initial
Certificate proceeds in such manner and to such extent, as may
be necessary, so that the Certificates will not constitute
arbitrage bonds under section 148 of the Code Any authorized
representative of the Issuer having responsibility with respect
to the issuance of the Certificates is authorized and directed,
alone or in con]unction 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 Certificates, setting forth the facts,
estimates and circumstances and reasonable expectations per-
talnlng to section 148 of the Code and, to the extent appli-
cable, 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
Section 15 SALE OF INITIAL CERTIFICATE The Initial
Certificate is hereby sold and shall be delivered to
Prudential-Bache Securities, Inc and Associates, for cash for
27
the par value thereof and accrued interest thereon to date of
dellvery It is hereby officially found, determlned, and
declared that the Initial Certificate has been sold at public
sale to the b~dder offering the lowest lnterest cost, after
receiving sealed bids pursuant to an Official Notice of Sale
and B~dd~ng Instructlons and Official Statement dated June 2,
1987, prepared and dlstrlbuted ~n connection w~th the sale of
the Initial Certificate Sa~d Offlclal Not~ce of Sale and
Bldd~ng Instructions and Official Statement, and any addenda,
supplement, or amendment thereto have been and are hereby
approved by the Issuer, and their use ~n the offer and sale of
the Certificates ~s hereby approved It ~s further officially
found, determined, and declared that the statements and repre-
sentations contained in said Offlc~al Not~ce of Sale and
Official Statement are true and correct ~n all mater~al re-
spects, to the best knowledge and belief of the C~ty Council
and the Issuer
Section 16 FURTHER PROCEDURES The Mayor of the Issuer,
the C~ty 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 d~rected from time to t~me and at any t~me to do
and perform all such acts and th~ngs and to execute, acknowl-
edge, and deliver ~n the name and under the corporate seal and
on behalf of the Issuer all such ~nstruments, whether or not
herein mentioned, as may be necessary or desirable in order to
carry out the terms and provls~ons of th~s Certificate Ordi-
nance, the Certificates, the sale of the Certlf~cates, and the
Notice of Sale and Official Statement In case any offlcer
whose s~gnature shall appear on any Certificate shall cease to
be such officer before the delivery of such Certlflcate, such
s~gnature shall nevertheless be valld and sufficient for all
purposes the same as ~f such officer had remained ~n off~ce
until such delivery
28
GENERAL CERTIFICATE
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
We, the undersagned offacers of the Caty of Denton, Texas
(the "Issuer") hereby certafy as follows
1 That thas certifacate as executed for and on behalf of
saad Issuer w~th reference to the ~ssuance of the proposed Caty
of Denton Certificates of Obl~gataon, Seraes 1987-A, dated June
1, 1987, an the aggregate principal amount of $1,100,000,
authorized by ordinance of the Caty Council on June 16, 1987
(the "Ordanance"), anatially issued and dellvered as a s~ngle
fully registered certificate payable an ~nstallments to the
registered owner, but convertible ~nto fully registered certl-
f~cates in any multiple of $5,000 (collectlvely, the "Certaf~-
cates")
2 That said Issuer as a duly ~ncorporated Home Rule
C~ty, having more than 5000 ~nhab~tants, operating and existing
under the Constatution and laws of the State of Texas and the
duly adopted Home Rule Charter of saad City, whach Charter has
not been changed or amended sance the passage of the ordanance
author~zang the ~ssuance of the General Obl~gatlon Bonds,
Series 1987, dated April 1, 1987
3 That no l~tagation of any nature has ever been faled
pertaining to, affecting, questaon~ng, or contesting (a) the
Ordinance whach authorized sa~d Issuer's proposed Certafacates
described ~n paragraph 1 of th~s certlf~cate, (b) the ~ssuance,
execution, delivery, payment, securlty, or val~dlty of saad
proposed Certafacates, (c) the authoraty of the governing body
and the officers of said Issuer to assue, execute, and deliver
sa~d Certificates, (d) the valadaty of the corporate existence
of saad Issuer, (e) the current Tax Rolls of sa~d Issuer, or
(f) the Home Rule Charter of sa~d Issuer, and that no lit~ga-
taon ~s pending pertaining to, affecting, questaon~ng, or
contesting the current boundaries of sa~d Issuer
4 That attac~ned to th~s cert~facate and marked "Exhibit
A" ~s a true, full, and correct schedule and statement of the
aforesaid proposed Certificates, and of all presently outstand-
ang tax ~ndebtedness of said Issuer
5 That the currently effective ad valorem tax appraasal
roll of sa~d Issuer (the "Tax Roll") ~s the Tax Roll prepared
and approved during the calendar year 1986, being the most
recently approved Tax Roll of saad Issuer, that the taxable
property ~n sa~d Issuer has been appraised, assessed, and
valued as required and provided by the Texas Constitution and
Property Tax Code (collectavely, "Texas law"), that the Tax
Roll for said year has been submitted to the Caty Councal of
sa~d Issuer as required by Texas law, and has been approved and
recorded by sa~d Caty Council, and accordang to the Tax Roll
for sa~d year the net aggregate taxable value of taxable
property an saad Issuer (after deductang the amount of all
applicable exemptions required or authorized under Texas law),
upon whach the annual ad valorem tax of saad Issuer has been
· mposed and lev~ed, ~s $1,820,463,940
6 That the Certificates additionally are payable from
and secured by certain surplus revenues (not to exceed $10,000
an aggregate amount) derived by the C~ty from the ownershap and
operation of the City's utility System (consasting of the
Caty's combined waterworks system, sanitary sewer system, and
electric l~ght and power system), whlch revenues are desagnated
or defined as the "Surplus Revenues" ~n the Ordinance, and
except for the Certificates, saad Surplus Revenues are not
pledged to the payment of any obllgataons of the Issuer
7 That no petition has been f~led protestlng the ~ssu-
ance of the aforesaid Certificates
8 That no default exists ~n connection w~th any bonds or
other obligations ~ssued by the Issuer or the ordinances
authorazang same
9 That to the best of our knowledge and belief the
statements and anformation set forth in the Official Statement
dated June 2, 1987, pertaining to the Certificates and the
City, and partacularly (i) the Utility System operating state-
ments, rates for services, and revenues and expenditures, (la)
debt service requirements for both tax and revenue bonds, and
(aai) all other ~nformation set forth therean, are true and
correct in all material respects
SIGNED AND SEALED the day of , 1987
(SEAL)
"EXHIBIT A"
Certificates of Obllgataon, Seraes 1987-A, dated 6/1/87,
bearing anterest, and maturing as set forth an the Ordanance
authorizang saad Certafacates
General Oblagataon Refundang Bonds, Seraes 1985, dated November
1, 1985, now outstandang an the prancapal amount of
$22,866,730 25, bearang anterest, and maturing an 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
Certifacates of Obligation, Series 1987, dated January 1, 1987,
now outstandang an the prancapal amount of $500,000, bearing
anterest, and maturang in the amounts on July 1 of the years,
as follows
9 00% 25M-88/92,
8 00% 25M-~3,
6 20% 25M-94,
6 30% 25M-95;
6 40% 25M-96;
6 50% 25M-97,
6 60% 25M-98;
6 70% 25M-99,
6 80% 25M-2000;
6 90% 25M-01,
7 00% 25M-02/06,
6 00% 25M-07
General Obllgatlon Bonds, Series 1987, dated April 1, 1987, now
outstanding in the princlpal amount of $3,500,000, bearing
interest, and maturlng in the amounts on July 1 of the years,
as follows
9 40% 175M-88/94,
9 20% 175M-95,
8 00% 175M-96/98,
7 60% 175M-99,
7 70% 175M-2000,
7 80% 175M-01,
7 90% 175M-02,
$ 00% 175M-03/05,
6 40% 175M-06/07
Total outstandlng General Obligation Indebtedness
$26,866,730 25
CERTIFICATE FOR
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 1987-A,
AND APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES
RELATING THERETO
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
We, the undersagned offacers of saad Caty, hereby certify
as follows
1 The Caty Council of saad Caty convened an
REGULAR MEETING ON THE 16TH DAY OF JUNE, 1987,
at the Munacipal Bualding (Caty Hall), and the roll was called
of the duly constatuted offacers and members of saad Caty
Councal, to-war
Jennafer K Walters, City Secretary Ray Stephens, Mayor
Jam Alexander Bob Gorton
Lannie McAdams Randall Boyd
Jane Hopkins Hugh Ayer
and all of said persons were present, except the followang
absentees , thus consta-
tutang a quorum Whereupon, among other business, the follow-
lng was transacted at said Meetang a written
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF
CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 1987-A,
AND APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES
RELATING THERETO
was duly introduced for the consideration of saad Caty Councal
and duly read It was then duly moved and seconded that saad
Ordinance be passed, and, after due d~scuss~on, saad motion,
carryang wath it the passage of saad Ordinance, prevailed and
carried by the following vote
AYES Ail members of saad Caty Councal
shown present above voted "Aye"
NOES None
2 That a true, full, and correct copy of the aforesaid
Ordinance passed at the Meeting described ~n the above and
foregoing paragraph ~s attached to and follows thas Cert~fa-
cate, that said Ordanance has been duly recorded ~n saad C~ty
Council's m~nutes of said Meeting, that the above and foregoang
paragraph is a true, full, and correct excerpt from saad Caty
Councal's manures of saad Meetang perta~nang to the passage of
sald Ordinance, that the persons named an the above and forego-
ang paragraph are the duly chosen, qualafaed, and actang
officers and members of saad Caty Councal as and~cated therean,
that each of the offacers and members of ~aad Caty Councal was
duly and suff~caently notafled offacaally and personally, an
advance, of the tame, place, and purpose of the aforesaad
Meeting, and that saad Ordinance would be antroduced and
considered for passage at sald Meetang, and that saad Meeting
was open to the publac, and publac notlce of the tame, place,
and purpose of saad meeting was glven, all as required by
Vernon's Ann Cav St Article 6252-17
3 That the Mayor of sa~d C~ty has approved, and hereby
approves, the aforesaid Ordinance, that the Mayor and the Caty
Secretary of saad Caty have duly slgned sald Ordlnance, and
that the Mayor and the Caty Secretary of sald Caty hereby de-
clare that their s~gnang of thas Certafacate shall constatute
the s~gnang of the attached and followang copy of saad Orda-
nance for all purposes
SIGNED AND SEALED the 16th day of June, 1987
(SEAL)
We, the undersigned, being respectively the Caty Attorney
and the Bond Attorneys of the Caty of Denton, Texas, hereby
certify that we prepared and approved as to legality the
attached and following Ordanance prior to ats passage as
aforesaid
Caty Att~ney --
~ond Attorneys '