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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 3 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 6 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 11 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 '