1986-256ORDINANCE NO 86-256
ORDINANCE
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON
CERTIFICATES OF OBLIGATION, SERIES 1987, 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 Obligation herein-
after authorized, and
WHEREAS, the City has duly caused notice of its intention
to issue the Certificates of Obligation hereinafter authorized
to be published at the times and in the manner required by
Vernon's Article 2368a 1, and no petition has been filed
protesting 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 City of Denton, Texas (the
"Issuer") are hereby authorized to be issued and delivered in
the aggregate principal amount of $500,000, FOR THE PURPOSE OF
PAYING ALL OR A PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS
TO BE INCURRED PURSUANT TO CONTRACTS FOR THE CONSTRUCTION OF
IMPROVEMENTS TO THE CITY OF DENTON MUNICIPAL AIRPORT, TO-WIT
ADDITIONAL ACCESS ROADS AND UTILITIES, AND PAYING ALL OR A
PORTION OF THE CONTRACTUAL OBLIGATIONS FOR PROFESSIONAL SER-
VICES OF ENGINEERING, ARCHITECTS, ATTORNEYS, AND FINANCIAL
ADVISORS IN CONNECTION WITH SUCH IMPROVEMENTS AND CERTIFICATES
OF OBLIGATION
Section 2 DESIGNATION OF THE CERTIFICATES Each cert-
ificate issued pursuant to this Ordinance shall be designated
"CITY OF DENTON CERTIFICATE OF OBLIGATION, SERIES 1987", and
initially there shall be issued, sold, and delivered hereunder
a single fully registered certificate, without interest cou-
pons, payable in installments of principal (the "Initial
Certificate"), but the Initial Certificate may be assigned and
transferred and/or converted into and exchanged for a like
aggregate principal amount of fully registered certificates,
without interest coupons, having serial maturities, and in the
denomination or denominations of $5,000 or any integral multi-
ple of $5,000, all in the manner hereinafter provided The
term "Certificates" as used in this Ordinance shall mean and
include collectively the Initial Certificate and all substitute
certificates exchanged therefor, as well as all other
substitute certificates and replacement certificates issued
pursuant hereto, and the term "Certificates" shall mean any of
the Certificates
Section 3 INITIAL DATE, DENOMINATION, NUMBER, MATURI-
TIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE
INITIAL CERTIFICATE
(a) The Initial Certificate is hereby authorized to be
issued, sold, and delivered hereunder as a single fully
registered Certificate, without interest coupons, dated JANUARY
1, 1987, in the denomination and aggregate principal amount of
$500,000, numbered R-1, payable in annual installments of
principal to the initial registered owner thereof, to-wit
RAUSCHER PIERCE REFSNES, INC ,
or to the registered assignee or assignees of said Certificate
or any portion or portions thereof (in each case, the "regis-
tered owner"), with the annual installments of principal of the
Initial Certificate to be payable on the dates, respectively,
and in the principal amounts, respectively, stated in the FORM
OF INITIAL CERTIFICATE set forth in this Ordinance
(b) The Initial Certificate (1) may be prepaid or re-
deemed prior to the respective scheduled due dates of install-
ments of principal thereof, (ii) may be assigned and trans-
ferred, (iii) may be converted and exchanged for other Certifi-
cates, (iv) shall have the characteristics, and (v) shall be
signed and sealed, and the principal of and interest on the
Initial Certificate shall be payable, all as provided, and in
the manner required or indicated, in the FORM OF INITIAL
CERTIFICATE set forth in this Ordinance
Section 4 INTEREST The unpaid principal balance of the
Initial Certificate shall bear interest from the date of the
Initial Certificate to the respective scheduled due dates, or
to the respective dates of prepayment or redemption, of the
installments of principal of the Initial Certificate, and said
interest shall be payable, all in the manner provided and at
the rates and on the dates stated in the FORM OF INITIAL
CERTIFICATE set forth in this Ordinance
Section 5 FORM OF INITIAL CERTIFICATE The form of the
Initial Certificate, including the form of Registration 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
2
FORM OF INITIAL CERTIFICATE
NO R-1
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 1987
$500,000
THE CITY OF DENTON, in Denton County, Texas (the
"Issuer"), being a political subdivision of the State of Texas,
hereby promises to pay to
RAUSCHER PIERCE REFSNES, INC ,
or to the registered assignee or assignees of this Certificate
or any portion or portions hereof (in each case, the "regis-
tered owner") the aggregate principal amount of
$500,000
(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
$25,000
1998
$25,000
1989
25,000
1999
25,000
1990
25,000
2000
25,000
1991
25,000
2001
25,000
1992
25,000
2002
25,000
1993
25,000
2003
25,000
1994
25,000
2004
25,000
1995
25,000
2005
25,000
1996
25,000
2006
25,000
1997
25,000
2007
25,000
and to pay interest, from the date
after stated, on the balance of
principal, respectively, from time
the rates as follows
of this Certificate herein-
each such installment of
to time remaining unpaid, at
3
9 008 per annum on
9 008 per annum on
9 008 per annum on
9 008 per annum on
9 008 per annum on
8 008 per annum on
6 208 per annum on
6 308 per annum on
6 408 per annum on
6 508 per annum on
6 608 per annum on
6 708 per annum on
6 808 per annum on
6 908 per annum on
7 008 per annum on
7 008 per annum on
7 008 per annum on
7 008 per annum on
7 008 per annum on
6 008 per annum on
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in 1988
in 1989
in 1990
in 1991
in 1992
in 1993
in 1994
in 1995
in 1996
in 1997
in 1998
in 1999
in 2000
in 2001
in 2002
in 2003
in 2004
in 2005
in 2006
in 2007
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 or draft,
dated as of such date, drawn by the Paying Agent/Registrar on,
and payable solely from, funds of the Issuer required by the
resolution 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 or draft shall be sent by the Paying Agent/Registrar
by United States mail, first-class postage prepaid, on each
such principal and/or interest payment date, to the registered
owner hereof, at the address of the registered owner, as it
appeared on the 15th day of the month next preceding each such
date (the "Record Date") on the Registration Books kept by the
Paying Agent/ Registrar, as hereinafter described The Issuer
covenants with the registered owner of this Certificate that on
or before each principal and/or interest payment date for this
Certificate it will make available to the Paying
Agent/ Registrar, 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 princi-
pal 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
same force and effect as if made on the original date payment
was due
THIS CERTIFICATE has been authorized in 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 CONSTRUCTION
OF IMPROVEMENTS TO THE CITY OF DENTON MUNICIPAL AIRPORT,
TO-WIT ADDITIONAL ACCESS ROADS AND UTILITIES, AND PAYING ALL
OR A PORTION OF THE CONTRACTUAL OBLIGATIONS FOR PROFESSIONAL
SERVICES OF ENGINEERING, ARCHITECTS, ATTORNEYS, AND FINANCIAL
ADVISORS IN CONNECTION WITH SUCH IMPROVEMENTS AND CERTIFICATES
OF OBLIGATION
ON JULY 1, 1997, or on any interest payment date there-
after, the unpaid installments of principal of this Certificate
may be prepaid or redeemed prior to their scheduled due dates,
at the option of the Issuer, with funds derived from any
available source, as a whole, or in part, and, if in part, the
particular portion of this Certificate to be prepaid or re-
deemed shall be selected and designated by the Issuer (provided
that a portion of this Certificate may be redeemed only in an
integral multiple of $5,000), at the prepayment or redemption
price of the par or principal amount thereof, plus accrued
interest to the date fixed for prepayment or redemption
AT LEAST 30 days prior to the date fixed for any such
prepayment or redemption a written notice of such prepayment or
redemption shall be mailed by the Paying Agent/Registrar to the
registered owner hereof By the date fixed for any such
prepayment or redemption due provision shall be made by the
Issuer with the Paying Agent/Registrar for the payment of the
required prepayment or redemption price for this Certificate or
the portion hereof which is to be so prepaid or redeemed, plus
accrued interest thereon to the date fixed for prepayment or
redemption If such written notice of prepayment or redemption
is given, and if due provision for such payment is made, all as
5
provided above, this Certificate, or the portion thereof which
is to be so prepaid or redeemed, thereby automatically shall be
treated as prepaid or redeemed prior to its scheduled due date,
and shall not bear interest after the date fixed for its
prepayment or redemption, and shall not be regarded as being
outstanding except for the right of the registered owner to
receive the prepayment or redemption price plus accrued inter-
est to the date fixed for prepayment or redemption from the
Paying Agent/Registrar out of the funds provided for such
payment The Paying Agent/Registrar shall record in the
Registration Books all such prepayments or redemptions of
principal of this Certificate or any portion hereof
THIS CERTIFICATE, to the extent of the unpaid or unre-
deemed principal balance hereof, or any unpaid and unredeemed
portion hereof in any integral multiple of $5,000, may be
assigned by the initial registered owner hereof and shall be
transferred only in the Registration Books of the Issuer kept
by the Paying Agent/Registrar acting in the capacity of regis-
trar for the Certificates, upon the terms and conditions set
forth in the Certificate ordinance Among other requirements
for such transfer, this Certificate must be presented and
surrendered to the Paying Agent/ Registrar for cancellation,
together with proper instruments of assignment, in form and
with guarantee of signatures satisfactory to the Paying Agent/-
Registrar, evidencing assignment by the initial registered
owner of this Certificate, or any portion or portions hereof in
any integral multiple of $5,000, to the assignee or assignees
in whose name or names this Certificate or any such portion or
portions hereof is or are to be transferred and registered
Any instrument or instruments of assignment satisfactory to the
Paying Agent/Registrar may be used to evidence the assignment
of this Certificate or any such portion or portions hereof by
the initial registered owner hereof A new certificate or
certificates payable to such assignee or assignees (which then
will be the new registered owner or owners of such new Certifi-
cate or Certificates) or to the initial registered owner as to
any portion of this Certificate which is not being assigned and
transferred by the initial registered owner, shall be delivered
by the Paying Agent/Registrar in conversion of and exchange for
this Certificate or any portion or portions hereof, but solely
in the form and manner as provided in the next paragraph hereof
for the conversion and exchange of this Certificate or any
portion hereof The registered owner of this Certificate shall
be deemed and treated by the Issuer and the Paying Agent/Regis-
trar as the absolute owner hereof for all purposes, including
payment and discharge of liability upon this Certificate to the
extent of such payment, and the Issuer and the Paying Agent/-
Registrar shall not be affected by any notice to the contrary
6
AS PROVIDED above and in the Certificate Ordinance, this
Certificate, to the extent of the unpaid or unredeemed princi-
pal balance hereof, may be converted into and exchanged for a
like aggregate principal amount of fully registered certifi-
cates, without interest coupons, payable to the assignee or
assignees duly designated in writing by the initial registered
owner hereof, or to the initial registered owner as to any
portion of this Certificate which is not being assigned and
transferred by the initial registered owner, in any denomina-
tion or denominations in any integral multiple of $5,000
(subject to the requirement hereinafter stated that each
substitute certificate issued in exchange for any portion of
this Certificate shall have a single stated principal maturity
date), upon surrender of this Certificate to the Paying Agent/-
Registrar for cancellation, all in accordance with the form and
procedures set forth in the Certificate Ordinance If this
Certificate or any portion hereof is assigned and transferred
or converted each certificate issued in exchange for any
portion hereof shall have a single stated principal maturity
date corresponding to the due date of the installment of
principal of this Certificate or portion hereof for which the
substitute certificate is being exchanged, and shall bear
interest at the rate applicable to and borne by such install-
ment of principal or portion thereof Such certificates,
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 Certificate or portion hereof
for which they are being exchanged No such certificate shall
be payable in installments, but shall have only one stated
principal maturity 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 certificates issued and delivered in ex-
change for this Certificate or any portion hereof may be
assigned and transferred, and converted, subsequently, as
provided in the Certificate Ordinance The Issuer shall pay
the Paying Agent/Registrar's standard or customary fees and
charges for transferring, converting, and exchanging this
Certificate or any portion thereof, but the one requesting such
transfer, conversion, and exchange shall pay any taxes or
governmental charges required to be paid with respect thereto
The Paying Agent/Registrar shall not be required to make any
such assignment, conversion, or exchange (i) during the period
commencing with the close of business on any Record Date and
ending with the opening of business on the next following
principal or interest payment date, or, (ii) with respect to
any Certificate or portion thereof called for prepayment or
redemption prior to maturity, within 45 days prior to its
prepayment or redemption date
IN THE EVENT any Paying Agent/Registrar for this Certifi-
cate is changed by the Issuer, resigns, or otherwise ceases to
act as such, the Issuer has covenanted in the Certificate
Ordinance that it promptly will appoint a competent and legally
qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owner of this
Certificate
IT IS HEREBY certified, recited, and covenanted that this
Certificate has been duly and validly authorized, issued, and
delivered, that all acts, conditions, and things required or
proper to be performed, exist, and be done precedent to or in
the authorization, issuance, and delivery of this Certificate
have been performed, existed, and been done in accordance with
law, that this Certificate is a general obligation of the
Issuer, issued on the full faith and credit thereof, and that
annual ad valorem taxes sufficient to provide for the payment
of the interest on and principal of this Certificate, as such
interest comes due and such principal matures, have been levied
and ordered to be levied against all taxable property in the
Issuer, and have been pledged irrevocably for such payment,
within the limit prescribed by law, and that this Certificate
is additionally secured by and payable from the revenues
derived by the Issuer from the operation of the City of Denton
Municipal Airport
THE ISSUER has reserved the right to issue other and
additional obligations payable from taxes and/or the airport
revenues described in the paragraph immediately above
BY BECOMING the registered owner of this 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 is duly recorded and available for inspection in the
official minutes and records of the governing body of the
Issuer, and agrees that the terms and provisions of this
Certificate and the Certificate Ordinance constitute a contract
between the registered owner hereof and the Issuer
IN WITNESS WHEREOF, the Issuer has caused this Certificate
to be signed with the manual signature of the Mayor of the
Issuer and countersigned with the manual signature of the City
Secretary of the Issuer, has caused the official seal of the
Issuer to be duly impressed on this Certificate, and has caused
this Certificate to be dated JANUARY 1, 1987
City Secretary,
City of Denton, Texas
Mayor,
City 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 examined,
certified 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 it shall be the duty of each
registered owner to notify the Paying Agent/Registrar in
writing of the address to which payments shall be mailed, and
such interest payments shall not be mailed unless such notice
has been given The Issuer shall have the right to inspect the
Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall
keep the Registration Books confidential and, unless otherwise
required by law, shall not permit their inspection by any other
entity 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, (i)
evidencing the assignment of the Certificate, or any portion
thereof in any integral multiple of $5,000, to the assignee or
assignees thereof, and (ii) the right of such assignee or
assignees to have the Certificate or any such portion thereof
registered in the name of such assignee or assignees Upon
the assignment and transfer of any Certificate or any portion
thereof, a new substitute Certificate or Certificates shall be
issued in conversion and exchange therefor in the manner herein
provided The Initial Certificate, to the extent of the unpaid
or unredeemed principal balance thereof, may be assigned and
transferred by the initial registered owner thereof once only,
and to one or more assignees designated in writing by the
initial registered owner thereof All Certificates issued and
delivered in conversion of and exchange for the Initial Certif-
icate shall be in any denomination or denominations of any
integral multiple of $5,000 (subject to the requirement herein-
after stated that each substitute Certificate shall have a
single stated principal maturity date), shall be in the form
prescribed in the FORM OF SUBSTITUTE CERTIFICATE set forth in
this Ordinance, and shall have the characteristics, and may be
assigned, transferred, and converted as hereinafter provided
If the Initial Certificate or any portion thereof is assigned
and transferred or converted the Initial Certificate must be
surrendered to the Paying Agent/Registrar for cancellation, and
each 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 ex-
changed If only a portion of the Initial Certificate is
assigned and transferred, there shall be delivered to and
registered in the name of the initial registered owner subs-
titute Certificates in exchange for the unassigned balance of
the Initial Certificate in the same manner as if the initial
registered owner were the assignee thereof If any Certificate
or portion thereof other than the Initial Certificate is
assigned and transferred or converted each Certificate issued
in exchange therefor shall have the same principal maturity
date and bear interest at the same rate as the Certificate for
which it is exchanged A form of assignment shall be printed
or endorsed on each Certificate, excepting the Initial Cert-
ificate, which shall be executed by the registered owner or its
duly authorized attorney or representative to evidence an
10
assignment thereof Upon surrender of any Certificates 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 Certificate or Certificates,
having the characteristics herein described, payable to such
assignee or assignees (which then will be the registered owner
or owners of such new Certificate or Certificates), or to the
previous registered owner in case only a portion of a Cert-
ificate is being assigned and transferred, all in conversion of
and exchange for said assigned Certificate or Certificates 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 Certificates by any regis-
tered owner of a Certificate The Issuer shall pay the Paying
Agent/Registrar'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 paid
with respect thereto The Paying Agent/Registrar shall not be
required to make transfers of registration of any Certificate
or any portion thereof (i) during the period commencing with
the close of business on any Record Date and ending with the
opening of business on the next following principal or interest
payment date, or, (ii) with respect to any Certificate or any
portion thereof called for redemption prior to maturity, within
45 days prior to its redemption date
(b) Ownership of Certificates The entity in whose name
any Certificate shall be registered in the Registration Books
at any time shall be deemed and treated as the absolute owner
thereof for all purposes of this Ordinance, whether or not such
Certificate shall be overdue, and the Issuer and the Paying
Agent/Registrar shall not be affected by any notice to the
contrary, and payment of, or on account of, the principal of,
premium, if any, and interest on any such Certificate shall be
made only to such registered owner All such payments shall be
valid and effectual to satisfy and discharge the liability upon
such Certificate to the extent of the sum or sums so paid
(c) Pa ment 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 interest on
the Certificates, and to act as its agent to convert and
exchange or replace Certificates, all as provided in this
Ordinance The Paying Agent/Registrar shall keep proper
records of all payments made by the Issuer and the Paying
Agent/Registrar with respect to the Certificates, and of all
conversions and exchanges of Certificates, and all replacements
of Certificates, as provided in this Ordinance
11
(d) Conversion and Exchange or xeplacement, eutnenu-
cation Each Certificate issued and delivered pursuant to this
Ord nance, to the extent of the unpaid or unredeemed principal
balance or principal amount thereof, may, upon surrender of
such Certificate at the principal corporate trust office of the
Paying Agent/Registrar, together with a written request there-
for duly executed by the registered owner or the assignee or
assignees thereof, or its or their duly authorized attorneys or
representatives, with guarantee of signatures satisfactory to
the Paying Agent/ Registrar, may, at the option of the regis-
tered owner or such assignee or assignees, as appropriate, be
converted into and exchanged for fully registered certificates,
without interest coupons, in the form prescribed in the FORM OF
SUBSTITUTE CERTIFICATE set forth in this Orai.nance, 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 or unredeemed principal balance or principal
amount of any Certificate or Certificates so surrendered, and
payable to the appropriate registered owner, assignee, or
assignees, as the case may be If the Initial Certificate is
assigned and transferred or converted each substitute Certifi-
cate issued in exchange for any portion of the Initial Certifi-
cate 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 appli-
cable to and borne by such installment of principal or portion
thereof for which it is being exchanged If a portion of any
Certificate (other than the Initial Certificate) shall be
redeemed prior to its scheduled maturity as provided herein, a
substitute Certificate or Certificates having the same maturity
date, bearing interest at the same rate, in the denomination or
denominations of any integral multiple of $5,000 at the request
of the registered owner, and in aggregate principal amount
equal to the unredeemed portion thereof, will be issued to the
registered owner upon surrender thereof for cancellation if
any Certificate or portion thereof (other than the Initial
Certificate) is assigned and transferred or converted, each
Certificate issued in 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 substi-
tute Certificate shall bear a letter and/or number to distin-
guish it from each other Certificate The Paying Agent/Regis-
trar shall convert and exchange or replace Certificates as
provided herein, and each fully registered certificate
12
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 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 de-
livery 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 conversion 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
13
manually sign the above Certificate, and no such Certificate
shall be deemed to be issued or outstanding unless such Certif-
icate is 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 in the manner prescribed herein, and
said Certificates shall be of type composition printed on paper
with lithographed or steel engraved borders of customary weight
and strength Pursuant to Vernon's Ann Tex Civ St Art
717k-6, and particularly Section 6 thereof, the duty of conver-
sion and exchange or replacement of Certificates as aforesaid
is hereby imposed upon the Paying Agent/ Registrar, and, upon
the execution of the above Paying Agent/Registrar's Authentica-
tion Certificate, the converted and exchanged or replaced
Certificate shall be valid, incontestable, and enforceable in
the same manner and with the same effect as the Initial Certif-
icate which originally was issued pursuant to this Ordinance,
approved by the Attorney General, and registered by the
Comptroller of Public Accounts The Issuer shall pay the
Paying Agent/Registrar's standard or customary fees and charges
for transferring, converting, and exchanging any Certificate or
any portion thereof, but the one requesting any such transfer,
conversion, and exchange shall pay any taxes or governmental
charges required to be paid with respect thereto as a condition
precedent to the exercise of such privilege of conversion and
exchange The Paying Agent/Registrar shall not be required to
make any such conversion and exchange or replacement of Certif-
icates or any portion thereof (i) during the period commencing
with the close of business on any Record Date and ending with
the opening of business on the next following principal or
interest payment date, or, (ii) with respect to any Certificate
or portion thereof called for redemption prior to maturity,
within 45 days prior to its redemption date
(e) In General All Certificates issued in conversion
and exchange or repacement of any other Certificate or portion
thereof, (i) shall be issued in fully registered form, without
interest coupons, with the principal of and interest on such
Certificates to be payable only to the registered owners
thereof, (ii) may be redeemed prior to their scheduled maturi-
ties, (iii) may be transferred and assigned, (iv) may be
converted and exchanged for other Certificates, (v) shall have
the characteristics, (vi) shall be signed and sealed, and (vii)
the principal of and interest on the Certificates shall be pay-
able, all as provided, and in the manner required or indicated,
14
in the FORM OF SUBSTITUTE CERTIFICATE set forth in this Ordi-
nance
(f) Payment of Fees and Charges The Issuer hereby
covenants with the registered owners of the Certificates that
it will W pay the standard or customary fees and charges of
the Paying Agent/Registrar for its services with respect to the
payment of the principal of and interest on the Certificates,
when due, and (ii) pay the fees and charges of the Paying
Agent/Registrar for services with respect to the transfer of
registration of Certificates, and with respect to the conver-
sion and exchange of Certificates solely to the extent above
provided in this Ordinance
(g) Substitute Paying A ent/Re istrar The Issuer
covenants with the registered owners of the Certificates that
at all times while the Certificates are outstanding the Issuer
will provide a competent and legally qualified bank, trust
company, financial institution, or other agency to act as and
perform the services of Paying Agent/Registrar for the Certifi-
cates under this Ordinance, and that the Paying Agent/Registrar
will be one entity The Issuer reserves the right to, and may,
at its option, change the Paying Agent/Registrar upon not less
than 120 days written notice to the Paying Agent/Registrar, to
be effective not later than 60 days prior to the next principal
or interest payment date after such notice In the event that
the entity at any time acting as Paying Agent/Registrar (or its
successor by merger, acquisition, or other method) should
resign or otherwise cease to act as such, the Issuer covenants
that promptly it will appoint a competent and legally qualified
bank, trust company, financial institution, or other agency to
act as Paying Agent/Registrar under this Ordinance Upon any
change in the Paying Agent /Registrar, the previous Paying
Agent/Registrar promptly shall transfer and deliver the Regis-
tration Books (or a copy thereof), along with all other perti-
nent books and records relating to the Certificates, to the new
Paying Agent/Registrar designated and appointed by the Issuer
Upon any change in the Paying Agent/ Registrar, the Issuer
promptly will cause a written notice thereof to be sent by the
new Paying Agent/Registrar to each registered owner of the
Certificates, by United States mail, first-class postage
prepaid, which notice also shall give the address of the new
Paying Agent/Registrar By accepting the position and perform-
ing as such, each Paying Agent/Registrar shall be deemed to
have agreed to the provisions of this Ordinance, and a cer-
tified copy of this Ordinance shall be delivered to each Paying
Agent/Registrar
Section 7 FORM OF SUBSTITUTE CERTIFICATES The form of
all Certificates issued in conversion and exchange or
15
replacement of any other Certificate or portion thereof,
including 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,
respectively, substantially as follows, with such appropriate
variations, omissions, or insertions as are permitted or
required by this Ordinance
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
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 political
subdivision of the State of Texas, hereby promises to pay to
or to the registered assignee hereof (either being hereinafter
called the "registered owner") the principal amount of
and to pay interest thereon from JANUARY 1, 1987, to the
maturity date specified above, or the date of redemption prior
to maturity, at the interest rate per annum specified above,
with interest being payable on JANUARY 1, 1988, and semiannual-
ly on each JULY 1 and JANUARY 1 thereafter, except that if the
date of authentication of this Certificate is later than
DECEMBER 15, 1987, such principal amount shall bear interest
from the interest payment date next preceding the date of
authentication, unless such date of authentication is after any
Record Date (hereinafter defined) but on or before the next
following interest payment date, in which case such principal
amount shall bear interest from such next following interest
payment date
THE PRINCIPAL OF AND INTEREST ON this Certificate are
payable in lawful money of the United States of America,
without exchange or collection charges The principal of this
Certificate shall be paid to the registered owner hereof upon
presentation and surrender of this Certificate at maturity or
upon the date fixed for its redemption prior to maturity, at
the principal corporate trust office of MBANK DALLAS, NATIONAL
16
ASSOCIATION, DALLAS, TEXAS, which is the "Paying Agent/Regis-
trar" for this Certificate The payment of interest on this
Certificate shall be made by the Paying Agent/Registrar to the
registered owner hereof on each interest payment date by check
or draft, 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 resolution authorizing the issuance
of the Certificates (the "Certificate Ordinance") to be on
deposit with the Paying Agent/Registrar for such purpose as
hereinafter provided, and such check or draft shall be sent by
the Paying Agent/Registrar by United States Mail, first-class
postage prepaid, on each such interest payment date, to the
registered owner hereof, at the address of the registered
owner, as it appeared on the 15th of the month next preceding
each such date (the "Record Date") on the Registration Books
kept by the Paying Agent/ Registrar, as hereinafter described
Any accrued interest due upon the redemption of this Certifi-
cate prior to maturity as provided herein shall be paid to the
registered owner at the principal corporate trust office of the
Paying Agent/Registrar upon presentation and surrender of this
Certificate for redemption and payment at the principal corpo-
rate trust office of the Paying Agent/Registrar The Issuer
covenants with the registered owner of this Certificate that on
or before each principal payment date, interest payment date,
and accrued interest payment date for this Certificate it will
make available to the Paying Agent/Registrar, from the "Inter-
est 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 the
Certificates, 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
same force and effect as if made on the original date payment
was due
THIS CERTIFICATE is one of an issue of Certificates
initially dated JANUARY 1, 1987, authorized in accordance with
the Constitution and laws of the State of Texas in the princ-
ipal amount of $500,000, FOR THE PURPOSE OF PAYING ALL OR A
PORTION OF THE CITY'S CONTRACTUAL OBLIGATIONS TO BE INCURRED
PURSUANT TO CONTRACTS FOR THE CONSTRUCTION OF IMPROVEMENTS TO
THE CITY OF DENTON MUNICIPAL AIRPORT, TO-WIT ADDITIONAL
ACCESS ROADS AND UTILITIES, AND PAYING ALL OR A PORTION OF THE
17
CONTRACTUAL OBLIGATIONS FOR PROFESSIONAL SERVICES OF ENGINEER-
ING, ARCHITECTS, ATTORNEYS, AND FINANCIAL ADVISORS IN CONNEC-
TION WITH SUCH IMPROVEMENTS AND CERTIFICATES OF OBLIGATION
ON JULY 1, 1997, or on any interest payment date there-
after, the Certificates 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 Certificates, or
portions thereof, to be redeemed shall be selected and desig-
nated by the Issuer (provided that a portion of a Certificate
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 Certificates or portions thereof prior to maturity a
written notice of such redemption shall be published once in a
financial publication, journal, or reporter of general circu-
lation among securities dealers in The City of New York, New
York (including, but not limited to, The Certificate Buyer and
The Wall Street Journal), or in the State of Texas (including,
but not limited to, The Texas Certificate Reporter) Such
notice also shall be sent by the Paying Agent/Registrar by
United States mail, first-class postage prepaid, not less than
30 days prior to the date fixed for any such redemption, to the
registered owner of each Certificate to be redeemed at its
address as it appeared on the 45th day prior to such redemption
date, provided, however, that the failure to send, mail, or
receive such notice, or any defect therein or in the sending or
mailing thereof, shall not affect the validity or effectiveness
of the proceedings for the redemption of any Certificate, and
it is hereby specifically provided that the publication of such
notice as required above shall be the only notice actually
required in connection with or as a prerequisite to the redemp-
tion of any Certificates or portions thereof 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 Certificates or portions thereof which
are to be so redeemed, plus accrued interest thereon to the
date fixed for redemption If such written notice of redemp-
tion is published and if due provision for such payment is
made, all as provided above, the Certificates or portions
thereof which are to be so redeemed thereby automatically shall
be treated as redeemed prior to their scheduled maturities, and
they shall not bear interest after the date fixed for redemp-
tion, and they shall not be regarded as being outstanding
except for the right of the registered owner to receive the
redemption price plus accrued interest from the Paying Agent/-
Registrar out of the funds provided for such payment If a
18
portion of any Certificate shall be redeemed a substitute
Certificate or Certificates having the same maturity date,
bearing interest at the same rate, in any denomination or
denominations in any integral multiple of $5,000, at the
written request of the registered owner, and in aggregate
principal amount equal to the unredeemed portion thereof, will
be issued to the registered owner upon the surrender thereof
for cancellation, at the expense of the Issuer, all as provided
in the Certificate Ordinance
THIS CERTIFICATE OR ANY PORTION OR PORTIONS HEREOF IN ANY
INTEGRAL 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 Certificates, upon the terms and conditions set forth in
the Certificate Ordinance Among other requirements for such
assignment and transfer, this Certificate must be presented and
surrendered to the Paying Agent/Registrar, together with proper
instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidenc-
ing assignment of this Certificate or any portion or portions
hereof in any integral multiple of $5,000 to the assignee or
assignees in whose name or names this Certificate or any such
portion or portions hereof is or are to be transferred and
registered The form of Assignment printed or endorsed on this
Certificate shall be executed by the registered owner or its
duly authorized attorney or representative, to evidence the
assignment hereof A new Certificate or Certificates payable
to such assignee or assignees (which then will be the new
registered owner or owners of such new Certificate or Certifi-
cates), or to the previous registered owner in the case of the
assignment and transfer of only a portion of this Certificate,
may be delivered by the Paying Agent/Registrar in conversion of
and exchange for this Certificate, all in the form and manner
as provided in the next paragraph hereof for the conversion and
exchange of other Certificates The Issuer shall pay the
Paying Agent/Registrar'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 this
Certificate or any portion hereof (i) during the period com-
mencing 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 Certificate or any portion thereof called for redemption
prior to maturity, within 45 days prior to its redemption date
The registered owner of this Certificate shall be deemed and
treated by the Issuer and the Paying Agent/Registrar as the
absolute owner hereof for all purposes, including payment and
19
discharge of liability upon this Certificate 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 CERTIFICATES OF THIS SERIES are issuable solely as
fully registered certificates, without interest coupons, in the
denomination of any integral multiple of $5,000 As provided
in the Certificate Ordinance, this Certificate, or any unre-
deemed portion hereof, may, at the request of the registered
owner or the assignee or assignees hereof, be converted into
and exchanged for a like aggregate principal amount of fully
registered certificates, 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 surrender of this Certificate to the
Paying Agent/Registrar for cancellation, all in accordance with
the form and procedures set forth in the Certificate Ordinance
The issuer shall pay the Paying Agent/Registrar's standard or
customary fees and charges for transferring, converting, and
exchanging any Certificate 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 (i) during the period commencing with the close of
business on any Record Date and ending with the opening of
business on the next following principal or interest payment
date, or, (ii) with respect to any Certificate 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 Certifi-
cates is changed by the Issuer, resigns, or otherwise ceases to
act as such, the Issuer has covenanted in the Certificate
Ordinance that it promptly will appoint a competent and legally
qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owners of the
Certificates
IT IS HEREBY certified, recited, and covenanted that this
Certificate has been duly and validly authorized, issued, and
delivered, that all acts, conditions, and things required or
proper to be performed, exist, and be done precedent to or in
the authorization, issuance, and delivery of this Certificate
have been performed, existed, and been done in accordance with
law, that this Certificate is a general obligation of the
20
Issuer, issued on the full faith and credit thereof, and that
annual ad valorem taxes sufficient to provide for the payment
of the interest on and principal of this Certificate, as such
interest comes due and such principal matures, have been levied
and ordered to be levied against all taxable property in the
Issuer, and have been pledged irrevocably for such payment,
within the limit prescribed by law, and that this Certificate
is additionally secured by and payable from the revenues
aerived by the Issuer from the operation of the City of Denton
Municipal Airport
THE ISSUER has reserved the right to issue other and
additional obligations payable from taxes and/or the airport
revenues described in the paragraph immediately above
BY BECOMING the registered owner of this 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 is duly recorded and available for inspection in the
official minutes and records of the governing body of the
Issuer, and agrees that the terms and provisions of this
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)
C ty 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
21
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 Assignee's name and
Security or Taxpayer address, including zip code)
Identification Number)
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Certificate on
the Paying Agent/Registrar's Registration Books with full power
Of substitution in the premises
Dated
Signature Guaranteed
NOTICE This signature must be Registered Owner
guaranteed by a member of the NOTICE This signature must
New York Stock Exchange or a correspond with the name of
commercial bank or trust the Registered owner appear-
company ing on the face of this Cer-
tificate
Section 8 TAX LEVY A special Interest and Sinking 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
Sinking Fund shall be kept separate and apart from all other
22
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 while 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 will 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 principal matures (but
never less than 28 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, 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
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
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 PLEDGE OF ADDITIONAL REVENUES The Certifi-
cates additionally shall be payable from and secured by the
revenues derived by the Issuer from the operation of the City
of Denton Municipal Airport The Issuer shall deposit to the
credit of the Interest and Sinking Fund from the aforesaid
revenues and the ad valorem taxes collected pursuant to Section
8 of this Ordinance, the amounts that will be sufficient to pay
the principal of and interest on the Certificates when due To
the extent that said revenues actually are on deposit in the
interest and Sinking Fund in advance of the time when ad
valorem taxes are scheduled to be levied for any year, then the
amount of such taxes which otherwise would have been required
to be levied pursuant to Section 8 may be reduced to the extent
and by the amount of the revenues then on deposit in the
Interest and Sinking Fund The Issuer reserves the right to
issue other and additional obligations payable from taxes
and/or the aforesaid airport revenues
Section 10 DEFEASANCE OF CERTIFICATES (a) Any Certif-
icate and the interest thereon shall be deemed to be paid,
retired, and no longer outstanding (a "Defeased Certificate")
23
within the meaning of this Ordinance, except to the extent
provided in subsection (d) of this Section, when payment of the
principal of such Certificate, plus interest thereon to the due
date (whether such due date be by reason of maturity, upon
redemption, or otherwise) either (i) shall have been made or
caused to be made in accordance with the terms thereof (inc-
luding the giving of any required notice of redemption), or
(ii) shall have been provided for on or before such due date by
irrevocably depositing with or making available to the Paying
Agent/Registrar for such payment (l) lawful money of the United
States of America sufficient to make such payment or (2)
Government Obligations which mature as to principal and inter-
est in such amounts and at such times as will insure the
availability, without reinvestment, of sufficient money to
provide for such payment, and when proper arrangements have
been made by the Issuer with the Paying Agent/Registrar for the
payment of its services until all Defeased Certificates shall
have become due and payable At such time as a Certificate
shall be deemed to be a Defeased Certificate hereunder, as
aforesaid, such Certificate and the interest thereon shall no
longer be secured by, payable from, or entitled to the benefits
of, the ad valorem taxes herein levied and pledged as provided
in this Ordinance, and such principal and interest shall be
payable solely from such money or Government Obligations
(b) Any moneys so deposited with the Paying Agent/Regis-
trar may at the written direction of the Issuer also be in-
vested in Government Obligations, maturing in the amounts and
times as hereinbefore set forth, and all income from such
Government Obligations received by the Paying Agent/Registrar
which is not required for the payment of the Certificates and
interest thereon, with respect to which such money has been so
deposited, shall be turned over to the Issuer, or deposited as
directed in writing by the Issuer
(c) The term "Government Obligations" as used in this
Section 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 Certificates shall have become due
and payable, the Paying Agent/Registrar shall perform the
services of Paying Agent/Registrar for such Defeased Certifi-
cates 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
24
Section 11 DAMAGED, MUTILATED, LOST, STOLEN, OR DE-
STROYED CERTIFICATES (a) Replacement Certificates 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) Application for Replacement Certificates 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 o this Section, n 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, redemption
premium, if any, or interest on the Certificate, the Issuer may
authorize the payment of the same (without surrender thereof
except in the case of a damaged or mutilated Certificate)
instead of issuing a replacement Certificate, provided security
or indemnity is furnished as above provided in this Section
(d) Charge for Is %Racemen Re lacement Certificates Prior
to the issuance o any replt cert cate, 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 provisions of this Section by virtue of the
fact that any Certificate is lost, stolen, or destroyed shall
constitute 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
to all the benefits of this Ordinance equally and proportion-
ately with any and all other Certificates duly issued under
this Ordinance
25
(e) Authority for Iasuing 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-
ity 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-LALMeT bTATUD UC
BONDS The Issuer here y covenants to take such action or
re rain from such action necessary to ensure the status of the
Bonds as obligations described in section 103 of the Internal
Revenue Code of 1986 or any predecessor thereof In particu-
lar, but not by way of limitation, the Issuer covenants as
follows
(a) None of the proceeds of the Bonds (including
investment earnings thereon) or of the facilities financed
with the proceeds of the Bonds will be used, directly or
indirectly, in the trade or business of any person or
entity other than the Issuer For purposes of the fore-
going, any use of such proceeds or facilities in any
manner contrary to the guidelines set forth in Revenue
26
Procedures 82-14 and 82-15, 1982-1 C B 459, 460, or any
amendments, revisions or supplements thereto, shall
constitute the use of such proceeds or facilities in the
trade or business of such person or entity,
(b) None of the proceeds of the Bonds (including
investment earnings thereon) will be used, directly 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
taxation of the interest paid on the Bonds, including
without limitation any action that would permit any of the
Bonds to be treated as "private activity bonds" within the
meaning of section 141 of the Code, and will take, or
require to be taken, such acts as may be reasonably within
its ability and as may from time to time be required under
applicable law or regulation to continue to cause interest
on the Bonds to be excludable from gross income of the
holder, including the preparation and filing of any
statements or information reports required to be filed by
the Issuer in order to maintain the tax-exempt status of
the interest on the Bonds, and
(d) The Issuer has not taken, has no present inten-
tion of taking any action and knows of no action taken or
intended which would cause interest on the Bonds to be
includable in the gross income of any bondholders for
federal income tax purposes
Section 14 COVENANTS REGARDING ARBITRAGE (a) A Rebate
Fund is 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, including
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
Excess Earnings so computed The term "Certificate Year" means
with respect to the Certificates each one-year period ending on
the anniversary of the date of delivery of the Initial Certifi-
cate If, at the close of any Certificate Year, the amount in
27
the Rebate Fund exceeds the amount that would be required to be
paid to the United States of America under paragraph (d) below
if the Certificates had been paid in full, such excess may be
transferred from the Rebate Fund and paid to the Issuer
(c) In general, "Excess Earnings" for any period of time
means the sum of
(1) the excess of
(A) the aggregate amount earned during such
period of time on all "Nonpurpose Obligations"
(including gains on the disposition of such Obli-
gations) in which "Gross Proceeds" of the issue are
invested (other than amounts attributable to an
excess described in this subparagraph (c)(1)), over
(B) the amount that would have been earned
during such period of time if the "Yield" on such
Nonpurpose Obligations (other than amounts attrib-
utable to an excess described in this subparagraph
(c)(1)) had been equal to the yield on the issue,
plus
(ii) any income during such period of time attrib-
utable to the excess described in subparagraph (c) (i)
above
"Excess Earnings" will not include amounts, if any, which need
not be taken into account under the special rules of section
148 (f) (4) (A) and (B) of the Code relating to bona fide debt
service funds and the six-month temporary investment period
The terms "Nonpurpose Obligations," "Gross Proceeds" and
"Yield" shall have the meanings prescribed by section 148 of
the Code and shall be applied in the manner prescribed in such
section
(d) The Issuer shall pay to the United States of America
at least once every five-years an amount that ensures that at
least 90 percent of the Excess Earnings from the date of
delivery of the Certificates to the close of the period for
which the payment is being made will have been paid The
Issuer shall pay to the United States of America not later than
60 days after the Certificates have been paid in full 100
percent of the amount then required to be paid under section
148(f) of the Code as a result of Excess Earnings
(e) The Issuer shall keep such records as will enable the
Issuer to fulfill its responsibilities under this section and
section 148(f) of the Code and shall retain such records for at
28
least six years following the final payment of principal and
interest on the Certificates
(f) The Issuer will not use any portion 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 issuer (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 conjunction with any other official, employee or
consultant of the Issuer to give an appropriate certificate on
behalf of the Issuer, for inclusion in the transcript of
proceedings for the Certificates, setting forth the facts,
estimates and circumstances and reasonable expectations per-
taining 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
Rauscher Pierce Refsnes, Inc , for cash for the par value
thereof and accrued interest thereon to date of delivery, plus
a premium of $219 75 It is hereby officially found, deter-
mined, and declared that the Initial Certificate has been sold
at public sale to the bidder offering the lowest interest cost,
after receiving sealed bids pursuant to an Official Notice of
Sale and Bidding Instructions and Official Statement dated
29
December 2, 1986, prepared and distributed in connection with
the sale of the Initial Certificate Said Official Notice of
Sale and Bidding Instructions and Official Statement, and any
addenda, supplement, or amendment thereto have been and are
hereby approved by the Issuer, and their use in the offer and
sale of the Certificates is hereby approved It is further
officially found, determined, and declared that the statements
and representations contained in said Official Notice of Sale
and Official Statement are true and correct in all material re-
spects, to the best knowledge and belief of the City Council
and the Issuer
Section 16 FURTHER PROCEDURES The Mayor of the Issuer,
the City Secretary Secretary of the Issuer, and all other
officers, employees, and agents of the Issuer, and each of
them, shall be and they are hereby expressly authorized,
empowered, and directed from time to time and at any time to do
and perform all such acts and things and to execute, acknowl-
edge, and deliver in the name and under the corporate seal and
on behalf of the Issuer all such instruments, whether or not
herein mentioned, as may be necessary or desirable in order to
carry out the terms and provisions of this Certificate Ordi-
nance, the Certificates, the sale of the Certificates, and the
Notice of Sale and Official Statement In case any officer
whose signature shall appear on any Certificate shall cease to
be such officer before the delivery of such Certificate, such
signature shall nevertheless be valid and sufficient for all
purposes the same as if such officer had remained in office
until such delivery
30
CERTIFICATE FOR
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY
OF DENTON CERTIFICATES OF OBLIGATION, SERIES 1987, AND APPROV-
ING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
We, the undersigned officers of said City, hereby certify
as follows
1 The City Council of said City convened in
REGULAR MEETING ON THE 16TH DAY OF DECEMBER, 1986,
at the Municipal Building (City Hall), and the roll was called
of the duly constituted officers and members of said City
Council, to-wit
Charlotte Allen, City Secretary Ray Stephens, Mayor
Mark Chew Linnie McAdams
Jane Hopkins Jim Alexander
Jim Riddlesperger Joe Alford
r
and all of the members of the City Council were present, except
the following absentee Riddlesperger, thus constituting a
quorum Whereupon, among other business, the following was
transacted at said Meeting a written
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY
OF DENTON CERTIFICATES OF OBLIGATION, SERIES 1987, AND APPROV-
ING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO
was duly introduced for the consideration of said City Council
and duly read It was then duly moved and seconded that said
ordinance be passed, and, after due discussion, said motion,
carrying with it the passage of said Ordinance, prevailed and
carried by the following vote
AYES All members of said City Council
shown present above voted "Aye"
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 Certifi-
cate, that said Ordinance has been duly recorded in said City
Council's minutes of said Meeting, that the above and foregoing
paragraph is a true, full, and correct excerpt from said City
Council's minutes of said Meeting pertaining to the passage of
said Ordinance, that the persons named in the above and fore-
going paragraph are the duly chosen, qualified, and acting
officers and members of said City Council as indicated therein,
and that each of the officers and members of said City Council
was duly and sufficiently notified officially and personally,
in advance, of the time, place, and purpose of the aforesaid
Meeting, and that said Ordinance would be introduced and
considered for passage at said Meeting, and that said Meeting
was open to the public, and public notice of the time, place,
and purpose of said meeting was given, all as required by
Vernon's Ann Tex Civ St Article 6252-17
3 That the mayor of said City has approved, and hereby
approves, the aforesaid Ordinance, that the Mayor and the City
Secretary of said City have duly signed said Ordinance, and
that the Mayor and the City Secretary of said City hereby
declare that their signing of this Certificate shall constitute
the signing of the attached and following copy of said Ordi-
nance for all purposes
SIGNED AND SEALED the 16th day of December, 1986
ity Secretary M yor
(SEAL)
We, the undersigned, being respectively the City Attorney
and the Bond Attorneys of the City of Denton, Texas, hereby
certify that we prepared and approved as to legality the
attached and following Ordinance prior to its passage as
aforesaid
City Attorn
Bond Attorneys