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1987-069ORDINANCE NO 87-069 ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON GENERAL OBLIGATION BONDS, SERIES 1987, LEVYING THE TAX TO PAY SAME, AND APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO THE STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON hereinafter authorized were lawfully said City on WHEREAS, the bonds and favorably voted at an election duly held in DECEMBER 13, 1986; and WHEREAS, it is necessary and advisable to authorize, issue, and deliver part of said bonds, and WHEREAS, the bonds hereinafter authorized and designated were voted and are to be issued, sold, and delivered pursuant to Vernon's Ann Tex Civ St Articles 823 and 1175, and the City's Home Rule Charter THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS THAT Section 1 AMOUNT AND PURPOSE OF THE BONDS The bond or bonds of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and delivered in the aggregate princi- pal amount of $3,500,000, FOR THE PURPOSE OF THE ACQUISITION OF PROPERTY AND MAKING IMPROVEMENTS FOR PUBLIC PURPOSES IN SAID CITY, TO-WIT $1,175,000 FOR STREET AND TRAFFIC CONTROL IM- PROVEMENTS; $890,000 FOR DRAINAGE IMPROVEMENTS, $185,000 FOR EXPANSION OF THE CITY ANIMAL CONTROL CENTER, and $1,250,000 FOR PARK IMPROVEMENTS, INCLUDING ATHLETIC FIELDS AND NEIGHBORHOOD AND SENIOR CITIZENS COMMUNITY CENTERS Section 2 DESIGNATION OF THE BONDS Each bond issued pursuant to this Ordinance shall be designated "CITY OF DENTON GENERAL OBLIGATION BOND, SERIES 1987", and initially there shall be issued, sold, and delivered hereunder a single fully registered bond, without interest coupons, payable in Install- ments of principal (the "Initial Bond"), but the Initial Bond may be assigned and transferred and/or converted into and exchanged for a like aggregate principal amount of fully registered bonds, without interest coupons, having serial maturities, and in the denomination or denominations of $5,000 or any integral multiple of $5,000, all in the manner herein- after provided The term "Bonds" as used in this Ordinance shall mean and include collectively the Initial Bond and all substitute bonds exchanged therefor, as well as all other substitute bonds and replacement bonds ~ssued pursuant hereto, and the term "Bonds" shall mean any of the Bonds Section 3 INITIAL DATE, DENOMINATION, NUMBER, MATURI- TIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL BOND (a) The Inat~al Bond is hereby authorized to be ~ssued, sold, and delivered hereunder as a sangle fully registered Bond, w~thout ~nterest coupons, dated APRIL 1, 1987, an the denomination and aggregate principal amount of $3,500,000, numbered R-i, payable in annual ~nstallments of pr~nclpal to the initial registered owner thereof, to-w~t L M W G &CO , or to the registered assignee or asslgnees of sa~d Bond or any portion or portions thereof (~n each case, the "registered owner"), with the annual ~nstallments of principal of the In~tial Bond to be payable on the dates, respectively, and an the principal amounts, respectively, stated an the FORM OF INITIAL BOND set forth in th~s Ordinance (b) The Initial Bond (~) may be prepaid or redeemed prior to the respective scheduled due dates of ~nstallments of principal thereof, (~) may be assigned and transferred, (~) may be converted and exchanged for other Bonds, (~v) shall have the characteristics, and (v) shall be slgned and sealed, and the principal of and interest on the Initial Bond shall be payable, all as provided, and ~n the manner required or ~nd~- cated, ~n the FORM OF INITIAL BOND set forth ~n this Ordinance Section 4 INTEREST The unpaid principal balance of the Initial Bond shall bear ~nterest from the date of the In~tlal Bond to the respective scheduled due dates, or to the respec- tive dates of prepayment or redemption, of the ~nstallments of principal of the Initial Bond, and sa~d ~nterest shall be payable, all in the manner provided and at the rates and on the dates stated ~n the FORM OF INITIAL BOND set forth ~n th~s Ordinance Section 5 FORM OF INITIAL BOND The form of the Initial Bond, including the form of Registration Bond of the Comptrol- ler of Public Accounts of the State of Texas to be endorsed on the Initial Bond, shall be substantially as follows 2 FORM OF INITIAL BOND NO R-1 $3,500,000 UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON GENERAL OBLIGATION BOND SERIES 1987 THE CITY OF DENTON, in Denton County, Texas (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to L M W G &CO , or to the registered assignee or assignees portion or portions hereof (in each case, owner") the aggregate principal amount of of this Bond or any the "registered $3,500,000 (THREE MILLION FIVE HUNDRED THOUSAND DOLLARS) in annual installments of principal due and payable on JULY 1 in each of the years, and in the respective principal amounts, as set forth in the following schedule PRINCIPAL PRINCIPAL YEAR AMOUNT YEAR AMOUNT 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 $175 000 175 000 175 000 175 000 175,000 175000 175,000 175,000 175,000 175,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 $175000 175 000 175,000 175000 175,000 175,000 175 000 175,000 175 000 175 000 and to pay interest, from the date of this Bond hereinafter stated, on the balance of each such installment of principal, respectively, from time to time remaining unpaid, at the rates as follows 3 9 40% per annum on the above installment due in 1988 9 40% per annum on the above installment due in 1989 9 40% per annum on the above installment due in 1990 9 40% per annum on the above installment due in 1991 9 40% per annum on the above installment due in 1992 9 40% per annum on the above installment due in 1993 9 40% per annum on the above installment due in 1994 9 20% per annum on the above installment due 1n 1995 8 00% per annum on the above installment due in 1996 8 00% per annum on the above installment due ~n 1997 8 00% per annum on the above installment due in 1998 7 60% per annum on the above installment due in 1999 7 70% per annum on the above installment due in 2000 7 80% per annum on the above installment due in 2001 7 90% per annum on the above installment due in 2002 8 00% per annum on the above installment due in 2003 8 00% per annum on the above installment due in 2004 8 00% per annum on the above installment due in 2005 6 40% per annum on the above installment due in 2006 6 40% per annum on the above ~nstallment due ~n 2007 with said lnterest being payable on JANUARY 1, 1988, and semi- annually on each JULY 1 and JANUARY 1 thereafter whale this Bond or any portion hereof is outstanding and unpaid THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Bond are payable in lawful money of the United States of America, without exchange or collection charges The install- ments of principal and the interest on this Bond are payable to the registered owner hereof through the services of MBANK DALLAS, NATIONAL ASSOCIATION, DALLAS, TEXAS, which is the "Paying Agent/Registrar" for this Bond Payment of all princi- pal of and interest on this Bond shall be made by the Paying Agent/Registrar to the registered owner hereof on each princI- pal and/or ~nterest 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 authorizlng the issuance of this Bond (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided, and such check shall be sent by the Paying Agent/Registrar by United States 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 covenants with the regis- tered owner of this Bond that on or before each principal and/or interest payment date for this Bond it will make avail- able to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond Ordlnance, the amounts required to provide for the payment, ~n ~mmed~ately available funds, of all principal of and ~nterest on th~s Bond, when due IF THE DATE for the payment of the principal of or lnter- est on thls Bond shall be a Saturday, Sunday, a legal hollday, or a day on which banking ~nst~tutlons in the C~ty 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 ~nstltut~ons are authorized to close, and payment on such date shall have the same force and effect as ~f made on the original date payment was due THIS BOND has been authorlzed ~n accordance w~th the Constitution and laws of the State of Texas FOR THE PURPOSE OF THE ACQUISITION OF PROPERTY AND MAKING IMPROVEMENTS FOR PUBLIC PURPOSES IN SAID CITY, TO-WIT $1,175,000 FOR STREET AND TRAFFIC CONTROL IMPROVEMENTS, $890,000 FOR DRAINAGE IMPROVE- MENTS, $185,000 FOR EXPANSION OF THE CITY ANIMAL CONTROL CENTER, and $1,250,000 FOR PARK IMPROVEMENTS, INCLUDING ATHLETIC FIELDS AND NEIGHBORHOOD AND SENIOR CITIZENS COMMUNITY CENTERS ON JULY 1, 1997, or on any ~nterest payment date there- after, the unpaid ~nstallments of principal of thls Bond may be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer, with funds derived from any available source, as a whole, or in part, and, if ~n part, the particular port~on of th~s Bond to be prepaid or redeemed shall be se- lected and designated by the Issuer (provided that a port~on of th~s Bond may be redeemed only in an ~ntegral multiple of $5,000), at the prepayment or redemption price of the par or principal amount thereof, plus accrued ~nterest to the date f~xed for prepayment or redemption AT LEAST 30 days prior to the date f~xed for any such prepayment or redemption a written not~ce of such prepayment or redemption shall be ma~led by the Paying Agent/Registrar to the registered owner hereof By the date f~xed for any such prepayment or redemption due provision shall be made by the Issuer w~th the Paying Agent/Registrar for the payment of the reqm~red prepayment or redemption price for th~s Bond or the port~on hereof which is to be so prepaid or redeemed, plus accrued ~nterest thereon to the date fixed for prepayment or redemption If such written not~ce of prepayment or redemptlon Ks given, and ~f due provision for such payment ls made, all as provided above, this Bond, or the port~on thereof which ~s to be so prepaid or redeemed, thereby automatically shall be 5 treated as prepaid or redeemed prior to 1ts scheduled due date, and shall not bear ~nterest after the date flxed for lts prepayment or redemption, and shall not be regarded as being outstandlng except for the r~ght of the registered owner to receive the prepayment or redemptlon price plus accrued 1nter- est to the date f~xed for prepayment or redemptlon from the Paying Agent/Reglstrar out of the funds provlded for such payment The Paylng Agent/Reglstrar shall record ~n the Registration Books all such prepayments or redemptions of pr~nclpal of th~s Bond or any port~on hereof THIS BOND, to the extent of the unpaid or unredeemed principal balance hereof, or any unpaid and unredeemed portion hereof in any ~ntegral multiple of $5,000, may be assigned by the 1nltlal registered owner hereof and shall be transferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capaclty of regIstrar for the Bonds, upon the terms and conditions set forth in the Bond Ordinance Among other requirements for such transfer, th~s Bond must be presented and surrendered to the Paying Agent/ Registrar for cancellation, together with proper instruments of assignment, in form and wlth guarantee of signatures satisfac- tory to the Paying Agent/Registrar, evidencing assignment by the ~nltial registered owner of this Bond, or any portlon or portions hereof in any integral multiple of $5,000, to the assignee or assignees in whose name or names th~s Bond or any such portlon or port~ons hereof ls or are to be transferred and registered Any instrument or ~nstruments of assignment satlsfactory to the Paying Agent/Registrar may be used to evidence the assignment of th~s Bond or any such portlon or portions hereof by the initial registered owner hereof A new bond or bonds payable to such assignee or assignees (whlch then will be the new registered owner or owners of such new Bond or Bonds) or to the initial registered owner as to any portion of th~s Bond which 1s not being assigned and transferred by the · nit~al registered owner, shall be delivered by the Paylng Agent/Registrar ~n conversion of and exchange for th~s Bond or any port~on or portlons hereof, but solely ~n the form and manner as provided in the next paragraph hereof for the conver- sion and exchange of this Bond or any port~on hereof The registered owner of this Bond shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notlce to the contrary AS PROVIDED above and in the Bond Ordinance, this Bond, the extent of the unpaid or unredeemed principal balance hereof, may be converted ~nto and exchanged for a l~ke to aggregate pranc~pal amount of fully registered bonds, w~thout interest coupons, payable to the assagnee or assagnees duly desagnated ~n wrat~ng by the anat~al registered owner hereof, or to the ~n~t~al registered owner as to any portaon of thas Bond whach ~s not being assigned and transferred by the lnat~al registered owner, in any denom~nataon or denomanatlons in any integral multaple of $5,000 (subject to the requirement here- lnafter stated that each substatute bond ~ssued ~n exchange for any portion of th~s Bond shall have a single stated principal maturity date), upon surrender of thas Bond to the Paying Agent/Reglstrar for cancellation, all ~n accordance wath the form and procedures set forth in the Bond Ordanance If thas Bond or any portion hereof as assagned and transferred or converted each bond ~ssued ~n exchange for any portlon hereof shall have a s~ngle stated prlncapal maturity date correspond- · ng to the due date of the anstallment of pranc~pal of thls Bond or port~on hereof for which the substitute bond ~s belng exchanged, and shall bear anterest at the rate applicable to and borne by such installment of principal or port~on thereof Such bonds, respectively, shall be subject to redemption prior to maturity on the same dates and for the same prices as the corresponding installment of principal of this Bond or portion hereof for which they are beang exchanged No such bond shall be payable an installments, but shall have only one stated principal maturity date AS PROVIDED IN THE BOND ORDINANCE, THIS BOND IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more assagnees, but the bonds lssued and dellvered in exchange for th~s Bond or any portion hereof may be assigned and transferred, and converted, subsequently, as provided in the Bond Ordinance The Issuer shall pay the Paying Agent/Reglstrar's standard or customary fees and charges for transferring, convertang, and exchanging this Bond or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid wath respect thereto The Paying Agent/Registrar shall not be required to make any such assignment, conversion, or exchange (1) during the peraod commencing w~th the close of business on any Record Date and ending with the opening of business on the next following principal or Interest payment date, or, (la) wath respect to any Bond or portlon thereof called for prepayment or redemptaon prior to maturity, wlthln 45 days prior to 1ts prepayment or redemption date IN THE EVENT any Paying Agent/Registrar for th~s Bond is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that at promptly will appoint a competent and legally qualified sub- stltute therefor, and promptly will cause written notice thereof to be malled to the registered owner of this Bond IT IS HEREBY certified, recited, and covenanted that th~s Bond has been duly and vat~dly voted, authorlzed, lssued, sold, and delivered, that all acts, conditions, and th~ngs required or proper to be performed, ex~st, and be done precedent to or · n the authorization, ~ssuance, and delivery of th~s Bond have been performed, exlsted, and been done ~n accordance wlth law, that th~s Bond ~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 th~s Bond, as such ~nterest comes due and such principal matures, have been lev~ed and ordered to be lev~ed against all taxable property ~n the Issuer, and have been pledged ~rrevocably for such payment, wlth~n the l~m~t pre- scribed by law BY BECOMING the registered owner of th~s Bond, the regis- tered owner thereby acknowledges all of the terms and provi- sions of the Bond 0rdlnance, agrees to be bound by such terms and provisions, acknowledges that the Bond Ordlnance ~s duly recorded and available for ~nspect~on ~n the official minutes and records of the governing body of the Issuer, and agrees that the terms and provisions of th~s Bond and the Bond Ordi- nance constitute a contract between the registered owner hereof and the Issuer IN WITNESS WHEREOF, the Issuer has caused thls Bond to be s~gned w~th the manual s~gnature of the Mayor of the Issuer and countersigned w~th the manual s~gnature of the C~ty Secretary of the Issuer, has caused the official seal of the Issuer to be duly ~mpressed on th~s Bond, and has caused thls Bond to be dated APRIL 1, 1987 C~ty Secretary, C~ty of Denton, Texas (CITY SEAL) fled Mayor, Czty of Denton, Texas FORM OF REGISTRATION CERTIFICATE OF THE COMPTROLLER OF PUBLIC ACCOUNTS COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO I hereby certzfy that th~s Bond has been examined, cert~- as to validity, and approved by the Attorney General of the State of Texas, and that th~s Bond has been regzstered by the Comptroller of Public Accounts of the State of Texas 8 W~tness my signature and seal this Comptroller of Public Accounts of the State of Texas (COMPTROLLER'S SEAL) Section 6 ADDITIONAL CHARACTERISTICS OF THE BONDS Re~stratlon and Transfer (a) The Issuer shall keep or cause to be kept at the principal corporate trust off~ce of MBANK DALLAS, NATIONAL ASSOCIATION, DALLAS, TEXAS (the "Paying Agent/Registrar") books or records of the reglstrat~on and transfer of the Bonds (the "Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as lts 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 here~n provided The Paying Agent/Registrar shall obtain and record ~n the Registration Books the address of the registered owner of each Bond to whlch payments with respect to the Bonds shall be malled, as herein provided, but ~t shall be the duty of each registered owner to not~fy the Paying Agent/Registrar ~n writing of the address to which payments shall be mailed, and such lnterest payments shall not be ma~led unless such not~ce has been g~ven The Issuer shall have the r~ght to ~nspect the Registration Books during regular bus~ness hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Regis- tration Books confidential and, unless otherwise required by law, shall not permlt their ~nspect~on by any other entity Registration of each Bond may be transferred ~n the Registra- tion Books only upon presentation and surrender of such Bond to the Paying Agent/Registrar for transfer of registration and cancellation, together w~th proper written ~nstruments of assignment, in form and w~th guarantee of s~gnatures sat~s- factory to the Paylng Agent/Registrar, (~) ev~denclng the assignment of the Bond, or any port~on thereof in any ~ntegral multiple of $5,000, to the assignee or assignees thereof, and (~l) the r~ght of such assignee or assignees to have the Bond or any such portion thereof registered ~n the name of such assignee or assignees Upon the assignment and transfer of any Bond or any port,on thereof, a new substitute Bond or Bonds shall be ~ssued ~n conversion and exchange therefor in the manner here~n provided The Initial Bond, to the extent of the unpaid or unredeemed principal balance thereof, may be asslgned and transferred by the ~n~t~al registered owner thereof once only, and to one or more assignees designated ~n wr~tlng by the · n~t~al registered owner thereof All Bonds ~ssued and 9 delivered in conversion of and exchange for the Initial Bond shall be in any denomination or denominations of any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Bond shall have a single stated principal maturity date), shall be in the form prescribed in the FORM OF SUBSTITUTE BOND set forth in this Ordinance, and shall have the characteristics, and may be assigned, trans- ferred, and converted as hereinafter provided If the Initial Bond or any portion thereof is assigned and transferred or converted the Initial Bond must be surrendered to the Paying Agent/Registrar for cancellation, and each Bond issued in exchange for any portion of the Initial Bond shall have a single stated principal maturity date, and shall not be payable in installments, and each such Bond shall have a principal maturity date corresponding to the due date of the Installment of principal or portion thereof for which the substitute Bond is being exchanged, and each such Bond shall bear interest at the single rate applicable to and borne by such installment of principal or portion thereof for which at is being exchanged If only a portion of the Initial Bond is assigned and trans- ferred, there shall be delivered to and registered in the name of the initial registered owner substitute Bonds in exchange for the unassigned balance of the Initial Bond in the same manner as if the initial registered owner were the assignee thereof If any Bond or portion thereof other than the Initial Bond is assigned and transferred or converted each Bond issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Bond for which it is exchanged A form of assignment shall be printed or endorsed on each Bond, excepting the Initial Bond, which shall be executed by the registered owner or its duly authorized attorney or representative to evidence an assignment thereof Upon surrender of any Bonds or any portion or portions thereof for transfer of registration, an authorized representative of the Paying Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new fully registered substitute Bond or Bonds, having the characteristics herein described, payable to such assignee or assignees (which then will be the registered owner or owners of such new Bond or Bonds), or to the previous registered owner in case only a portion of a Bond is being assigned and transferred, all an conversion of and exchange for said assigned Bond or Bonds or any portion or portions thereof, in the same form and manner, and with the same effect, as provided in Section 6{d), below, for the conversion and exchange of Bonds by any registered owner of a Bond The Issuer shall pay the Paying Agent/Regls- trar's standard or customary fees and charges for making such transfer and delivery of a substitute Bond or Bonds, but the one requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto 10 The Paying Agent/Registrar shall not be requlred to make transfers of registration of any Bond or any portion thereof (~) during the perlod commencing w~th the close of bus~ness on any Record Date and ending wlth the opening of buslness on the next following principal or ~nterest payment date, or, (~) wlth respect to any Bond or any portion thereof called for redemption prior to maturity, wlthln 45 days prlor to ~ts redemption date (b) Ownership of Bonds The entlty in whose name any Bond shall be registered ~n the Reg~stratlon Books at any t~me shall be deemed and treated as the absolute owner thereof for all purposes of th~s Ordlnance, whether or not such Bond shall be overdue, and the Issuer and the Paying Agent/Registrar shall not be affected by any notlce to the contrary, and payment of, or on account of, the principal of, premium, ~f any, and ~nterest on any such Bond shall be made only to such registered owner Ail such payments shall be valid and effectual to satisfy and d~scharge the liablllty upon such Bond to the extent of the sum or sums so pa~d (c) Payment of Bonds and Interest The Issuer hereby further aPPoints the Paying Agent/Registrar to act as the paying agent for paying the principal of and ~nterest on the Bonds, and to act as ~ts agent to convert and exchange or replace Bonds, all as provided ~n th~s Ordinance The Paylng Agent/Registrar shall keep proper records of all payments made by the Issuer and the Paying Agent/Registrar wlth respect to the Bonds, and of all conversions and exchanges of Bonds, and all replacements of Bonds, as provided ~n th~s Ordinance (d) Conversion and Exchange or Replacement~ Authent~- Each Bond issued and delivered pursuant to this cat~on Ordinance, to the extent of the unpaid or unredeemed principal balance or principal amount thereof, may, upon surrender of such Bond at the principal corporate trust offlce of the Paying Agent/Registrar, together with a written request therefor duly executed by the registered owner or the assignee or assignees thereof, or ~ts or their duly authorized attorneys or represen- tatives, w~th guarantee of signatures satisfactory to the Paying Agent/Registrar, may, at the optlon of the registered owner or such assignee or assignees, as appropriate, be con- verted ~nto and exchanged for fully registered bonds, w~thout ~nterest coupons, in the form prescribed ~n the FORM OF SUBSTI- TUTE BOND set forth in th~s Ordlnance, in the denomination of $5,000, or any integral multlple of $5,000 (subject to the requirement hereinafter stated that each substitute Bond shall have a s~ngle stated maturity date), as requested ~n wr~tlng by such registered owner or such asslgnee or assignees, ~n an aggregate principal amount equal to the unpaid or unredeemed 11 prlncapal balance or pranc~pal amount of any Bond or Bonds so surrendered, and payable to the approprlate regastered owner, assignee, or assagnees, as the case may be If the In~taal Bond as assigned and transferred or converted each substatute Bond lssued in exchange for any portion of the In~taal Bond shall have a s~ngle stated prancapal maturlty date, and shall not be payable ~n ~nstallments, and each such Bond shall have a prlnc~pal maturaty date correspondlng to the due date of the anstallment of prlncapal or portaon thereof for whach the substatute Bond as beang exchanged, and each such Bond shall bear ~nterest at the s~ngle rate applacable to and borne by such ~nstallment of prlnclpal or port~on thereof for whach it as being exchanged If a portion of any Bond (other than the In~taal Bond) shall be redeemed prior to ~ts scheduled maturity as provaded herein, a substltute Bond or Bonds having the same maturaty date, bearlng anterest at the same rate, in the denom~nataon or denominations of any antegral multiple of $5,000 at the request of the registered owner, and ~n aggregate prlncapal amount equal to the unredeemed port~on thereof, w~ll be assued to the regastered owner upon surrender thereof for cancellataon If any Bond or port~on thereof (other than the Initial Bond) ~s assigned and transferred or converted, each Bond ~ssued an exchange therefor shall have the same pr~ncapal maturity date and bear ~nterest at the same rate as the Bond for which it ~s beang exchanged Each substitute Bond shall bear a letter and/or number to d~st~nguash at from each other Bond The Paying Agent/Registrar shall convert and exchange or replace Bonds as provided herean, and each fully registered bond delivered in conversaon of and exchange for or replacement of any Bond or portaon thereof as permatted or requlred by any provas~on of th~s Ordanance shall constitute one of the Bonds for all purposes of th~s Ordinance, and may agaln be converted and exchanged or replaced It as specafacally provaded that any Bond authenticated an conversion of and exchange for or replacement of another Bond on or prlor to the f~rst scheduled Record Date for the In~taal Bond shall bear ~nterest from the date of the In~taal Bond, but each substatute Bond so authenti- cated after such farst scheduled Record Date shall bear ~nter- est from the interest payment date next precedlng the date on whlch such substitute Bond was so authentacated, unless such Bond ~s authentlcated after any Record Date but on or before the next following interest payment date, an whlch case ~t shall bear anterest from such next followang ~nterest payment date, provaded, however, that ~f at the t~me of delivery of any substitute Bond the interest on the Bond for whach ~t ~s being exchanged as due but has not been pald, then such Bond shall bear lnterest from the date to whach such ~nterest has been paad ~n full THE INITIAL BOND ~ssued and delavered pursuant to thas Ordanance ~s not required to be, and shall not be, authentacated by the Paying Agent/Registrar, but on each 12 substitute Bond Issued in conversion of and exchange for or replacement of any Bond or Bonds issued under this Ordinance there shall be printed a bond, in the form substantially as follows "PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE It ls hereby certified that this Bond has been issued under the provisions of the Bond Ordinance described in this Bond, and that this Bond has been issued in conversion of and exchange for or replacement of a bond, bonds, or a portion of a bond or bonds of an issue which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas 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 Bond, date and manually sign the above Bond, and no such Bond shall be deemed to be issued or outstanding unless such Bond is so executed The Paying Agent/Registrar promptly shall cancel all Bonds surren- dered for conversion and exchange or replacement No addition- al ordinances, orders, or resolutions need be passed or adopted by the governing body of the Issuer or any other body or person so as to accomplish the foregoing conversion and exchange or replacement of any Bond or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Bonds in the manner prescribed herein, and said Bonds shall be of type composition printed on paper with llthographed or steel engraved borders of customary weight and strength Pursuant to Vernon's Ann Tex Clv St Art 717k-6, and particularly Section 6 thereof, the duty of conversion and exchange or replacement of Bonds as aforesaid ~s hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the above Paying Agent/Reglstrar's Authentication Certificate, the converted and exchanged or replaced Bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Initial Bond which originally was issued pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts The Issuer shall pay the Paying Agent/Reglstrar's standard or customary fees and charges for transferring, converting, and exchanging any Bond or any portion thereof, but the one re- questing any such transfer, conversion, and exchange shall pay 13 any taxes or governmental charges required to be paid w~th respect thereto as a condat~on precedent to the exercase of such prlv~lege of conversion and exchange The Paying Agent/ Registrar shall not be required to make any such conversion and exchange or replacement of Bonds or any portion thereof (~) during the per~od commencing with the close of bus~ness on any Record Date and ending wath the opening of bus~ness on the next followang pranclpal or anterest payment date, or, (~) wlth respect to any Bond or portlon thereof called for redemption prior to maturity, w~thin 45 days prior to ats redemptaon date (e) In General Ail Bonds issued ~n converslon and exchange or replacement of any other Bond or port~on thereof, (~) shall be issued an fully registered form, without ~nterest coupons, w~th the principal of and ~nterest on such Bonds to be payable only to the registered owners thereof, (~) may be redeemed prior to their scheduled maturataes, (l~a) may be transferred and assagned, (iv) may be converted and exchanged for other Bonds, (v) shall have the characterastlcs, (v~) shall be sagned and sealed, and (v~) the principal of and interest on the Bonds shall be payable, all as provided, and ~n the manner required or indicated, ~n the FORM OF SUBSTITUTE BOND set forth ~n th~s Ordinance (f) Payment of Fees and Charges The Issuer hereby covenants w~th the registered owners of the Bonds that It will (~) pay the standard or customary fees and charges of the Paying Agent/Regastrar for ars services w~th respect to the payment of the prancapal of and interest on the Bonds, when due, and (aa) pay the fees and charges of the Paylng Agent/ Registrar for services w~th respect to the transfer of regls- trataon of Bonds, and w~th respect to the conversion and exchange of Bonds solely to the extent above provlded ~n thls Ordanance (g) Substatute Pa~ang A~ent/Re~astrar The Issuer covenants with the registered owners of the Bonds that at all times while the Bonds are outstanding the Issuer w~ll provide a competent and legally qualafaed bank, trust company, fananc~al · nstitut~on, or other agency to act as and perform the services of Paying Agent/Registrar for the Bonds under th~s Ordinance, and that the Payang Agent/Registrar w~ll be one entity The Issuer reserves the right to, and may, at lts option, change the Payang Agent/Regastrar upon not less than 120 days wratten not~ce to the Paying Agent/Regastrar, to be effectave not later than 60 days prior to the next princapal or interest payment date after such notice In the event that the entity at any tame acting as Paying Agent/Registrar (or ~ts successor by merger, acquasition, or other method) should resagn or other- w~se cease to act as such, the Issuer covenants that promptly 14 it will appoint a competent and legally qualified bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar under this Ordinance Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Regis- trar promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to the Bonds, to the new Paying Agent/Regis- trar designated and appointed by the Issuer Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new Paying Agent/Regi- strar to each registered owner of the Bonds, by United States mall, first-class postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar By accepting the position and performing as such, each Paying Agent/Regis- trar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar Section 7 FORM OF SUBSTITUTE BONDS The form of all Bonds issued in conversion and exchange or replacement of any other Bond or portion thereof, including the form of Paying Agent/Reglstrar's Bond to be printed on each of such Bonds, and the Form of Assignment to be printed on each of the Bonds, shall be, respectively, substantially as follows, with such appropriate variations, omissions, or insertions as are per- mltted or required by this Ordinance FORM OF SUBSTITUTE BOND NO UNITED STATES OF AMERICA PRINCIPAL AMOUNT STATE OF TEXAS $ COUNTY OF DENTON CITY OF DENTON GENERAL OBLIGATION BOND SERIES 1987 INTEREST RATE MATURITY DATE CUSIP NO ON THE MATURITY DATE specified above the CITY OF DENTON, · n Denton County, Texas (the "Issuer"), being a a political subdivision of the State of Texas, hereby promises to pay to or to the registered assignee hereof (either being hereinafter called the "registered owner") the principal amount of and to pay interest thereon from APRIL 1, 1987, to the maturity date specified above, or the date of redemption prior to 15 maturity, at the interest rate per annum specified above, with ~nterest being payable on JANUARY 1, 1988, and semlannually on each JULY 1 and JANUARY 1 thereafter, except that if the date of authentication of th~s Bond is later than DECEMBER 15, 1987, such principal amount shall bear ~nterest from the interest payment date next preceding the date of authentication, unless such date of authentlcatlon is after any Record Date (herein- after defined) but on or before the next following interest payment date, in which case such principal amount shall bear ~nterest from such next following interest payment date THE PRINCIPAL OF AND INTEREST ON thls Bond are payable in lawful money of the Un,ted States of America, without exchange or collection charges The principal of this Bond shall be paid to the registered owner hereof upon presentation and surrender of thls Bond at maturity or upon the date f~xed for its redemption prior to maturity, at the principal corporate trust office of MBANK DALLAS, NATIONAL ASSOCIATION, DALLAS, TEXAS, which is the "Paying Agent/Registrar" for this Bond The payment of ~nterest on this Bond shall be made by the Paying Agent/Registrar to the registered owner hereof on each interest paymer~t date by check, dated as of such ~nterest payment date, drawn by the Paying Agent/Reglstrar on, and payable solely from, funds of the Issuer required by the resolution author~zlng the ~ssuance of the Bonds (the "Bond Ordinance") to be on deposit wlth 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, f~rst-class postage prepaid, on each such ~nterest payment date, to the registered owner hereof, at the address of the registered owner, as it appeared on the 15th of the month next preceding each such date (the "Record Date") on the Reglstra- tlon Books kept by the Paying Agent/Reglstrar, as hereinafter described Any accrued interest due upon the redemption of this Bond prior to maturity as provided herein shall be paid to the registered owner at the principal corporate trust office of the Paying Agent/Registrar upon presentation and surrender of th~s Bond for redemption and payment at the principal corporate trust off~ce of the Paying Agent/Registrar The Issuer cove- nants with the registered owner of th~s Bond that on or before each principal payment date, interest payment date, and accrued lnterest payment date for th~s Bond ~t w~ll make available to the Paying Agent/Registrar, from the "Interest and S~nklng Fund" created by the Bond Ordinance, the amounts required to provide for the payment, in immediately avallable funds, of all principal of and interest on the Bonds, when due IF THE DATE for the payment of the principal of or inter~ est on th~s Bond shall be a Saturday, Sunday, a legal holiday, 16 or a day on which banking institutions in the City where the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the original date payment was due THIS BOND is one of an issue of Bonds initially dated APRIL 1, 1987, authorized an accordance w~th the Constitution and laws of the State of Texas in the principal amount of $3,500,000, FOR THE PURPOSE OF THE ACQUISITION OF PROPERTY AND MAKING IMPROVEMENTS FOR PUBLIC PURPOSES IN SAID CITY, TO-WIT $1,175,000 FOR STREET AND TRAFFIC CONTROL IMPROVEMENTS, $890,000 FOR DRAINAGE IMPROVEMENTS, $185,000 FOR EXPANSION OF THE CITY ANIMAL CONTROL CENTER, and $1,250,000 FOR PARK IM- PROVEMENTS, INCLUDING ATHLETIC FIELDS AND NEIGHBORHOOD AND SENIOR CITIZENS COMMUNITY CENTERS ON JULY 1, 1997, or on any interest payment date there- after, the Bonds of this Series may be redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived from any available and lawful source, as a whole, or in part, and, if in part, the particular Bonds, or portions thereof, to be redeemed shall be selected and designated by the Issuer (provided that a portion of a Bond may be redeemed only in an Integral multiple of $5,000), at the redemption price of the par or principal amount thereof, plus accrued interest to the date fixed for redemption AT LEAST 30 days prior to the date fixed for any redemp- tion of Bonds or portions thereof prior to maturity a written notice of such redemption shall be published once in a finan- cial publication, journal, or reporter of general circulation among securities dealers in The City of New York, New York (including, but not limited to, The Bond Buyer and The Wall Street Journal), or in the State of Texas (including, but not limited to, The Texas Bond Reporter) Such notice also shall be sent by the Paying Agent/Registrar by United States mall, first-class postage prepaid, not less than 30 days prior to the date fixed for any such redemption, to the registered owner of each Bond to be redeemed at its address as it appeared on the 45th day prior to such redemption date, provided, however, that the failure to send, mall, or receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond, and it is hereby specifically provided that the publication of such notice as required above shall be the only notice actually required in connection with or as a 17 prerequisite to the redemption of any Bonds or portions there- of By the date fixed for any such redemption due provision shall be made with the Paying Agent/Registrar for the payment of the required redemption price for the Bonds or portions thereof which are to be so redeemed, plus accrued interest thereon to the date flxed for redemption If such written notice of redemption is published and if due provision for such payment is made, all as provided above, the Bonds or portions thereof which are to be so redeemed thereby automatically shall be treated as redeemed prlor to their scheduled maturities, and they shall not bear Interest after the date fixed for redemp- tion, and they shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption price plus accrued interest from the Paying Agent/ Registrar out of the funds provided for such payment If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, and in aggregate prlnclpal amount equal to the unre- deemed portion thereof, wall be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as provided in the Bond Ordinance THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTE- GRAL MULTIPLE OF $5,000 may be assigned and shall be trans- ferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms and conditions set forth in the Bond Ordinance Among other requirements for such assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar, together with proper instruments of asslgnment, in form and with guarantee of signatures satisfac- tory to the Paying Agent/Reglstrar, evidencing assignment of thls Bond or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Bond or any such portion or portions hereof is or are to be transferred and registered The form of Assignment printed or endorsed on this Bond shall be executed by the reglstered owner or lts duly authorized attorney or representa- tive,to evidence the assignment hereof A new Bond or Bonds payable to such assignee or assignees (which then will be the new registered owner or owners of such new Bond or Bonds), or to the previous registered owner in the case of the assignment and transfer of only a portion of this Bond, may be delivered by the Paying Agent/Registrar in conversion of and exchange for this Bond, all in the form and manner as provided in the next paragraph hereof for the conversion and exchange of other Bonds The Issuer shall pay the Paying Agent/Reglstrar's standard or customary fees and charges for making such 18 transfer, but the one requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto The Paying Agent/Registrar shall not be required to make transfers of registration of this Bond or any portion hereof (1) during the period commencing with the close of business on any Record Date and ending w~th the opening of business on the next following principal or interest payment date, or, (il) with respect to any Bond or any portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date The registered owner of this Bond shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, Including payment and discharge of liability upon this Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary ALL BONDS OF THIS SERIES are ~ssuable solely as fully registered bonds, without interest coupons, in the denomination of any integral multiple of $5,000 As provided in the Bond Ordinance, this Bond, or any unredeemed portion hereof, may, at the request of the registered owner or the assignee or as- signees hereof, be converted into and exchanged for a like aggregate principal amount of fully registered bonds, without interest coupons, payable to the appropriate regIstered owner, assignee, or assignees, as the case may be, having the same maturity date, and bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000 as requested in writing by the appropriate registered owner, assignee, or assignees, as the case may be, upon sur- render of this Bond to the Paying Agent/Registrar for cancella- tion, all in accordance with the form and procedures set forth in the Bond Ordinance The Issuer shall pay the Paying Agent/ Reglstrar's standard or customary fees and charges for trans- ferring, converting, and exchanging any Bond or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the exercise of such privilege of conversion and exchange The Paying Agent/Registrar shall not be required to make any such conversion and exchange (1) during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date, or, (ii) with respect to any Bond or portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it 19 promptly will appoint a competent and legally qualified substi- tute therefor, and promptly w~ll cause written notlce thereof to be mailed to the registered owners of the Bonds against all taxable pledged irrevocably scribed by law IT IS HEREBY certified, recited, and covenanted that thls Bond has been duly and validly voted, authorized, ~ssued, sold, and delivered, that all acts, conditions, and th~ngs required or proper to be performed, ex~st, and be done precedent to or ~n the authorization, issuance, and delivery of this Bond have been performed, existed, and been done ~n accordance w~th law, that th~s Bond lsa general obl~gatlon of the Issuer, issued on the full faith and credit thereof, and that annual ad valorem taxes sufficient to provide for the payment of the ~nterest on and principal of th~s Bond, as such ~nterest comes due and such prlnc~pal matures, have been lev~ed and ordered to be lev~ed property an the Issuer, and have been for such payment, within the l~m~t pre- BY BECOMING the registered owner of th~s Bond, the regis- tered owner thereby acknowledges all of the terms and provi- sions of the Bond Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Bond Ordinance ~s duly recorded and available for inspection ~n the official m~nutes and records of the governing body of the Issuer, and agrees that the terms and provisions of this Bond and the Bond Ordi- nance constitute a contract between each registered owner hereof and the Issuer IN WITNESS WHEREOF, the Issuer has caused th~s Bond to be s~gned with the facsimile slgnature of the Mayor of the Issuer and countersigned with the facsimile s~gnature of the Clty Secretary of the Issuer, and has caused the official seal of the Issuer to be duly ~mpressed, or placed ~n facsimile, on th~s Bond (facsimile signature) City Secretary, C~ty of Denton, Texas (facsimile s~nature) Mayor, Clty of Denton, Texas (CITY SEAL) FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE It ~s hereby certified that th~s Bond has been issued under the provisions of the Bond Ordinance described in thls Bond, and that this Bond has been ~ssued ~n conversion of and exchange for or replacement of a bond, bonds, or a port~on of a 20 bond or bonds of an assue whach oraganally was approved by the Attorney General of the State of Texas and regastered by the Comptroller of Publac Accounts of the State of Texas MBANK DALLAS, NATIONAL ASSOCIATION, DALLAS, TEXAS Payang Agent/Regastrar Dated By Authorized Representative FORM OF ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED, the undersagned regastered owner of thas Bond, or duly authorazed representatave or attorney thereof, hereby assagns this Bond to ! ! (Assignee's Social (prant or typewrate Assagnee's name and Security or Taxpayer address, lncludang zap code) Identaflcataon Number) and hereby irrevocably constitutes and appoints attorney to transfer the registration of this Bond on the Payang Agent/Regastrar's Registration Books wath full power of substltutaon an the premises Dated Sagnature Guaranteed NOTICE Thas sagnature must bu guaranteed by a member of the New York Stock Exchange or a commercaal bank or trust company Regastered Owner NOTICE Thas sagnature must correspond with the name of the Regastered Owner appear- lng on the face of thas Bond Section 8 TAX LEVY A specaal Interest and S~nkang Fund (the "Interest and Sinkang Fund") as hereby created solely for the beneflt of the Bonds, and the Interest and Sanklng Fund shall be established and maintaaned by the Issuer at an offi- cial deposltory bank of the Issuer The Interest and Slnkang Fund shall be kept separate and apart from all other funds and 21 accounts of the Issuer, and shall be used only for paying the interest on and principal of the Bonds All ad valorem taxes levied and collected for and on account of the Bonds shall be deposited, as collected, to the credit of the Interest and Sinking Fund During each year while any of the Bonds or interest thereon are outstanding and unpaid, the governing body of the Issuer shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on the Bonds as such interest becomes due, and to provide and maintain a sinking fund adequate to pay the principal of its Bonds as such principal matures (but never less than 2% of the original principal amount of the Bonds as a sinking fund each year), and said tax shall be based on the latest approved tax rolls of the Issuer, with full allowance being made for tax delinquencies and the cost of tax collection Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied, against all taxable property in the Issuer for each year while any of the Bonds or interest thereon are outstanding and unpaid, and said tax shall be assessed and collected each such year and deposited to the credit of the aforesaid Interest and Sinking Fund Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of the Bonds, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law Section 10 DEFEASANCE OF BONDS (a) Any Bond and the interest thereon shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") within the meaning of this Ordinance, except to the extent provided in subsection (d) of this Section, when payment of the principal of such Bond, plus interest thereon to the due date (whether such due date be by reason of maturity, upon redemption, or otherwise) either (1) shall have been made or caused to be made in accordance with the terms thereof (including the giving of any required notice of redemption), or (11) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Government Obligations which mature as to principal and Interest in such amounts and at such times as will insure the availability, without relnvestment, of suffi- cient money to provide for such payment, and when proper arrangements have been made by the Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased Bonds shall have become due and payable At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, 22 the ad valorem taxes herein levied and pledged as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Government Obligations (b) Any moneys so deposited with the Paying Agent/Regis- trar may at the written direction of the Issuer also be in- vested in Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from such Government Obligations received by the Paying Agent/Registrar which is not required for the payment of the Bonds and interest thereon, with respect to which such money has been so de- posited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer (c) The term "Government Obligations" as used in this Section shall mean direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, which may be United States Treasury obligations such as its State and Local Government Series, which may be in book-entry form (d) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Bonds the same as if they had not been defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required by this Ordinance Section 11 DAMAGED, MUTILATED, LOST, STOLEN, OR DE- STROYED BONDS (a) Replacement Bonds In the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, ~n replacement for such Bond in the manner hereinafter provided (b) Application for R~placement Bonds Application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying Agent/Registrar In every case of loss, theft, or destruction of a Bond, the registered owner applying for a replacement bond shall furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto Also, in every case of loss, theft, or destruction of a Bond, the registered owner shall furnish to the Issuer and the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Bond, 23 as the case may be In every case of damage or mutilation of a Bond, the registered owner shall surrender to the Paying Agent/Registrar for cancellatlon the Bond so damaged or muti- lated (c) No Default Occurred Notwithstanding the foregoing prov~slons of th~s Section, in the event of any such Bond shall have matured, and no default has occurred whlch ls then con- t~nu~ng in the payment of the prlnclpal of, redemption premlum, ~f any, or ~nterest on the Bond, the Issuer may authorlze the payment of the same (w~thout surrender thereof except ~n the case of a damaged or mutilated Bond) ~nstead of ~ssu~ng a replacement Bond, provided security or ~ndemnlty ~s furnished as above provided ~n th~s Section (d) Charge for Issuing Replacement Bonds Prlor to the ~ssuance of any replacement bond, the Paying Agent/Registrar shall charge the registered owner of such Bond w~th all legal, printing, and other expenses ~n connection therewith Every replacement bond ~ssued pursuant to the provisions of th~s Section by v~rtue of the fact that any Bond ls lost, stolen, or destroyed shall constitute a contractual obllgat~on of the Issuer whether or not the lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the beneflts of thls Ordinance equally and proportionately wlth any and all other Bonds duly ~ssued under th~s Ordinance (e) Authority for Issulng Replacement Bonds In accor- dance with Section 6 of Vernon's Ann Tex C~v St Art 717k-6, thls Section of th~s Ordinance shall constitute author- ~ty for the ~ssuance of any such replacement bond w~thout necessity of further action by the governing body of the Issuer or any other body or person, and the duty of the replacement of such bonds ~s hereby authorized and ~mposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authen- ticate and deliver such Bonds in the form and manner and w~th the effect, as provided in Sectlon 6(d) of th~s Ordinance for Bonds ~ssued ~n conversion and exchange for other Bonds Section 12 COVENANTS REGARDING TAX-EXEMPT STATUS OF BONDS The Issuer hereby covenants to take such action o£ re~a~n from such action necessary to ensure the status of the Bonds as obligations described ~n section 103 of the Internal Revenue Code of 1986 or any predecessor thereof In partlcu- lar, but not by way of l~m~tatlon, the Issuer covenants as follows (a) None of the proceeds of the Bonds (lnclud~ng ~nvestment earnings thereon) w~ll be used, d~rectly or 24 ~nd~rectly, ~n the trade or buslness of a person, other than the Issuer For purposes of the foregoing, any use of such proceeds in any manner contrary to the guldel~nes set forth ~n Revenue Procedures 82-14 and 82-15, 1982-1 C B 459, 460, or any amendments, revls~ons or supplements thereto, shall constltute the use of such proceeds ~n the trade or bus~ness of such person, (b) None of the proceeds of the Bonds (~nclud~ng ~nvestment earnings thereon) w~ll be used, d~rectly or ~nd~rectly, to f~nance loans to any persons, (c) Not by way of l~m~tatlon, the Issuer w~ll take such action or will refraln from any actlon which would adversely affect the exemption from federal lncome taxa- t~on of the ~nterest pa~d on the Bonds, ~nclud~ng without l~m~tat~on any action that would permit any of the Bonds to be treated as "private actlv~ty bonds" w~thin the meaning of section 141 of the Code or as "federally guaranteed" within the meaning of sectlon 149(b) of the Code, and w~ll take, or require to be taken, such acts as may be reasonably w~thln ~ts ability and as may from t~me to t~me be required under applicable law or regulation to continue to cause ~nterest on the Bonds to be excludable from gross ~ncome of the holder, ~nclud~ng the preparation and f~l~ng of any statements or ~nformat~on reports required to be filed by the Issuer ~n order to maintain the tax-exempt status of the ~nterest on the Bonds, and (d) The Issuer has not taken, has no present ~nten- t~on of taking any action and knows of no action taken or ~ntended which would cause interest on the Bonds to be ~ncludable ~n the gross ~ncome of any bondholders for federal ~ncome tax purposes Section 13 COVENANTS REGARDING ARBITRAGE (a) A Rebate Fund ~s hereby established by the Issuer Such Fund shall be for the benefit of the United States of America The Rebate Fund Ks established for the purpose of compliance w~th section 148 of the Internal Revenue Code of 1986 (the Code") (b) At the close of each "Bond Year," the Issuer shall compute the amount of "Excess Earnings," ~f any, for the per~od beginning on the date of delivery of the Initial Bond and end,lng at the close of such "Bond Year" and transfer to the Rebete Fund an amount equal to the d~fference, ~f any, between the amount then in the Rebate Fund and the Excess Earnings so computed The term "Bond Year" means w~th respect to the Bonds each one-year period ending on the annlversary of the date of delivery of the Initial Bond If, at the close of any Bond 25 Year, the amount in the Rebate Fund exceeds the amount that would be required to be paid to the United States of America under paragraph (d) below ~f the Bonds had been paid ~n full, such excess may be transferred from the Rebate Fund and paid to the Issuer (c) In general, "Excess Earnings" for any per~od of time means the sum of (1) the excess of -- (A) the aggregate amount earned during such period of time on all "Nonpurpose Oblzgatlons" (including gains on the dzsposltzon of such Obll- gatlons) in whzch "Gross Proceeds" of the issue are invested (other than amounts attrmbutable to an excess descrlbed in this subparagraph (c) (1)), over (B) the amount that would have been earned during such period of t~me if the "Yield" on such Nonpurpose Obligations (other than amounts attrib- utable to an excess described ~n this subparagraph (c) (1)) had been equal to the yield on the issue, plus (1~) any zncome during such period of time attrib- utable to the excess described in subparagraph (c) (1) above "Excess Earnings" will not include amounts, if any, which need not be taken into account under the speczal rules of section 148(f) (4) (A) and (B) of the Code relating to bona fide debt service funds and the slx-month temporary investment perzod The terms "Nonpurpose Obligations," "Gross Proceeds" and "Yield" shall have the meanings prescrzbed by section 148 of the Code and shall be applied in the manner prescrlbed in such section (d) The Issuer shall pay to the Un~ted States of America at least once every five-years an amount that ensures that at least 90 percent of the Excess Earnings from the date of delivery of the Bonds to the close of the period for which the payment ls being made w~ll have been pald The Issuer shall pay to the United States of America not later than 60 days after the Bonds have been pa~d in full 100 percent of the amount then required to be paid under section 148(f) of the Code as a result of Excess Earnings (e) The Issuer shall keep such records as will enable the Issuer to fulfill zts responslbll~tzes under this section and 26 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 Bonds (f) The Issuer will not use any portion of the proceeds of the Bonds directly or indirectly to acquire "higher y~eldlng investmentS," or to replace funds which were used directly or ~ndlrectly to acquire "higher yielding investments" The term higher y~eldlng investments means any investment property (as defzned in section 148(b) (2) of the Code) which produces a yield over the term of the issue which is materially higher than the yield on the issue (as defined above) The foregoing limitation on higher yielding investments shall not apply to -- (1) proceeds of the Bonds invested for a reasonable temporary period of 3 years or less until such proceeds are needed for the purpose for which the bonds are issued, or (2) amounts invested in a bona fide debt service fund if the gross earnings on such fund are less than $100,000 in any bond year (g) The Issuer covenants to restrict the use of Initial Bond proceeds in such manner and to such extent, as may be necessary, so that the Bonds will not constitute arbitrage bonds under section 148 of the Code Any authorized represen- tative of the Issuer having responsibility with respect to the issuance of the Bonds is authorized and directed, alone or in 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 Bonds, setting forth the facts, estimates and circumstances and reasonable expectations pertaining to section 148 of the Code and, to the extent applicable, section 149(d) of the Code (h) The requirements of this Section are subject to, and shall be interpreted in accordance with section 148 of the Code Section 14 CUSTODY, APPROVAL, AND REGISTRATION OF BONDS, BOND COUNSEL'S OPINION, AND CUSIP NUMBERS The Mayor of the Issuer is hereby authorized to have control of the Initial Bond issued hereunder and all necessary records and proceedings pertaining to the Initial Bond pending its delivery and lts investigation, examination, and approval by the Attorney General of the State of Texas, and 1ts registration by the Comptroller of Public Accounts of the State of Texas Upon registration of the Initial Bond said Comptroller of Public Accounts (or a deputy designated in writing to act for said 27 Comptroller) shall manually sagn the Comptroller's Registration Certificate on the InKtlal Bond, and the seal of said Comptroller shall be impressed, or placed Kn facsKmKle, on the InltKal Bond The approvKng legal oplnKon of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the optKon of the Issuer, be printed on the Inltaal Bond or on any Bonds assued and delivered Kn conversion of and exchange or replace- ment of any Bond, but neither shall have any legal effect, and shall be solely for the convenience and Knformatlon of the registered owners of the Bonds SectKon 15 SALE OF INITIAL BOND hereby sold and shall be delKvered to GarrKson, for cash for the par value The Initial Bond Lovett M~tchell Webb thereof and accrued ~nterest thereon to date of delavery It is hereby offKc~ally found, determKned, and declared that the Inltlal Bond has been sold at public sale to the b~dder offering the lowest lnterest cost, after receiving sealed bKds pursuant to an Off~cKal NotKce of Sale and BKddKng InstructKons and Offlcaal Statement dated March 31, 1987, prepared and dKstributed an connectaon wKth the sale of the InKtKal Bond Sa~d OffKclal Notace of Sale and B~dding InstructKons and OffKcKal 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 Bonds Ks hereby approved It Ks further offKc~ally found, determKned, and declared that the statements and repre- sentations contained Kn saKd Official Not~ce of Sale and OffKcial Statement are true and correct Kn all materKal re- spects, to the best knowledge and belief of the C~ty Council and the Issuer SectKon 14 FURTHER PROCEDURES The Mayor of the Issuer, the CKty Secretary Secretary of the Issuer, and all other offKcers, employees, and agents of the Issuer, and each of them, shall be and they are hereby expressly authorized, empowered, and directed from t~me to t~me and at any t~me to do and perform all such acts and things and to execute, acknowl- edge, and deliver in the na~e and under the corporate seal and on behalf of the Issuer all such ~nstruments, whether or not hereKn mentKoned, as may be necessary or desirable ~n order to carry out the terms and provisKons of thKs Bond OrdKnance, the Bonds, the sale of the Bonds, and the NotKce of Sale and Official Statement In case any officer whose sKgnature shall appear on any Bond shall cease to be such officer before the delKvery of such Bond, such s~gnature shall nevertheless be valKd and sufficKent for all purposes the same as Kf such officer had remained in offKce untK1 such delivery 28 GENERAL CERTIFICATE THE STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON We, the undersigned officers of the C~ty of Denton, Texas (the "Issuer") hereby certify as follows 1 That th~s certificate ~s executed for and on behalf of sa~d Issuer w~th reference to the ~ssuance of the proposed Clty of Denton General Obligation Bonds, Ser~es 1987, dated April 1, 1987, in the aggregate principal amount of $3,500,000, author- ~zed by ordinance of the C~ty Councll on April 21, 1987, ln~t~ally ~ssued and delivered as a s~ngle fully registered bond payable ~n lnstallments to the reglstered owner, but convertible into fully registered bonds ~n any multiple of $5,000 (the "Bonds") 2 That sa~d Issuer ~s a duly ~ncorporated Home Rule C~ty, having more than 5000 ~nhab~tants, operating and ex~st~ng under the Constitution and laws of the State of Texas and the duly adopted Home Rule Charter of sa~d C~ty, which Charter has not been changed or amended s~nce the passage of the ordinance authorizing the ~ssuance of the Certificates of obligation, Ser~es 1987, dated January 1, 1987 3 That no l~t~gat~on of any nature has ever been f~led pertaining to, affecting, questioning, or contestlng (a) the elect~on which authorized the Bonds described ~n paragraph 1 of this certificate, (b) the ~ssuance, execution, dellvery, payment, security, or validity of the Bonds, (c) the authorlty of the governing body and the officers of sa~d Issuer to ~ssue, execute, and deliver the Bonds, (d) the validity of the corpor- ate existence of sa~d Issuer, (e) the current Tax Rolls of sa~d Issuer, or (f) the Home Rule Charter of sa~d Issuer, and that no l~tlgat~on ~s pending pertaining to, affecting, questioning, or contesting the current boundaries of sald Issuer 4 That ~n all matters relating to ordering, glv~ng not~ce, and holding the elect~on at whlch the proposed bonds were authorized, the City compiled w~th the Federal Voting R~ghts Act of 1975 and the applicable parts of the Texas Elect~on code, including particularly Section 1 0Sa of the Texas Elect~on Code pertaining to b~l~ngual requirements 5 That attached to th~s certificate and marked "Exhibit A" ~s a true, full, and correct schedule and statement of the aforesaid proposed Bonds, and of all presently outstanding tax ~ndebtedness of sa~d Issuer 6 That the currently effective ad valorem tax appraisal roll of said Issuer (the "Tax Roll") ~s the Tax Roll prepared and approved during the calendar year 1986, being the most recently approved Tax Roll of said Issuer, that the taxable property ~n said Issuer has been appraised, assessed, and valued as requlred and provlded by the Texas Const~tutlon and Property Tax Code (collectively, "Texas law"), that the Tax Roll for sa~d year has been submitted to the C~ty Council of sa~d Issuer as requlred by Texas law, and has been approved and recorded by said C~ty Councll, and accordlng to the Tax Roll for sa~d year the net aggregate taxable value of taxable property ~n said Issuer (after deducting the amount of all applicable exemptions required or authorized under Texas law), upon which the annual ad valorem tax of sald Issuer has been ~mposed and levied, ~s $1,820,463,940 7 That statements and dated March 31, to the best of our knowledge and belief the ~nformation set forth in the Official Statement 1987, pertaining to the Bonds and the Clty, are true and correct SIGNED AND SEALED the ~i~y ~ec~etary (SEAL) day of , 1987 "EXHIBIT A" General Obligation Bonds, Series 1987, dated 4/1/87, bearang anterest, and maturang as set forth an the Ordanance authoraz- ang said Bonds General Oblagatlon Refundang Bonds, Seraes 1985, dated 11/1/85, now outstandang an the prancapal amount of $22,866,730, bearang anterest, and maturang 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% t 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 Certaflcates of Oblagation, Seraes 1987, dated January 1, 1987, now outstandang In the prancapal amount of $500,000, bearang anterest, and maturlng ~n the amounts on July 1 of the years, as follows 9 8 6 6 6 6 6 6 6 6 7 6 00% 25M-88/92, 00% 25M-93 20% 25M-94 30% 25M-95 40% 25M-96 50% 25M-97 60% 25M-98 70% 25M-99 80% 25M-2000, 90% 25M-01, 00% 25M-02/06, 00% 25M-07 Total outstandlng General Oblagataon Indebtedness - $23,366,730 25 CERTIFICATE FOR ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON GENERAL OBLIGATION BONDS, SERIES 1987, LEVYING TEE TAX TO PAY SANE, AND APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO THE STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON We, the undersigned officers of said City, hereby certify as follows 1 The City Council of sa~d C~ty convened ~n REGULAR MEETING ON THE 21ST DAY OF APRIL, 1987, at the Municipal Building (City Hall), and the roll was called of the duly constituted officers and members of said City Council, to-wit Jennifer K Walters, J~m Alexander Llnnie McAdams Jane Hopkins City Secretary Ray Stephens, Mayor Bob Gorton Randall Boyd Hugh Ayer and all of said persons were present, except the following absentees , thus constI- tuting a quorum Whereupon, among other business, the follow- lng was transacted at said Meeting a written ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON GENERAL OBLIGATION BONDS, SERIES 1987, LEVYING THE TAX TO PAY SANE, AND APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO was duly introduced for the consideration of sald City Council and duly read It was then duly moved and seconded that sald Ordinance be passed; and, after due dIscussion, said motlon, carrying with it the passage of said Ordinance, prevailed and carrled by the following vote AYES Ail members of said City Council shown present above voted "Aye" NOES None 2 That a true, full, and correct copy of the aforesaid Ordinance passed at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; that said Ordlnance has been duly recorded in said Clty Council's minutes of said Meetlng, that the above and foregoing paragraph lsa true, full, and correct excerpt from sald City Council's m~nutes of sa~d Meeting pertaining to the passage of sa~d Ordlnance, that the persons named an the above and foregoing paragraph are the duly chosen, quallf~ed, and acting officers and members of sald City Council as lnd~cated there~n, that each of the officers and members of sald City Council was duly and sufficiently notlfled offlclally and personally, ~n advance, of the t~me, place, and purpose of the aforesaid Meetlng, and that sa~d Ordinance would be ~ntroduced and considered for passage at sa~d Meeting, and that sa~d Meeting was open to the public, and public not~ce of the t~me, place, and purpose of sa~d meeting was given, all as required by Vernon's Ann Civ 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 C~ty Secretary of said City have duly s~gned sa~d Ordinance, and that the Mayor and the Clty Secretary of sa~d C~ty hereby de- clare that their slgning of th~s Certificate shall constitute the signing of the attached and following copy of sa~d Ordinance for all purposes SIGNED AND SEALED the 21st day of April, 1987 -~ity Secretary ~ (SEAL) We, the undersigned, being respectlvely the C~ty Attorney and the Bond Attorneys of the C~ty of Denton, Texas, hereby certify that we prepared and approved as to legality the attached and following Ordinance prlor to ~ts passage as aforesaid Clty Attor~y Bond Attorneys