1985-239ORDINANCE NO 85-,2,39
ORDINANCE
AUTHORIZING THE ISSUANCE OF CITY OF DENTON GENERAL OBLI-
GATION REFUNDING BONDS, SERIES 1985, LEVYING THE TAX IN
PAYMENT THEREOF, AND APPROVING AND AUTHORIZING INSTRUMENTS
AND PROCEDURES RELATING THERETO
THh STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the City of Denton, Texas, heretofore has duly
issued, and there are presently outstanding, the following
Series of Tax supported obligations
City of Denton Street Improvement Bonds, Series 1962,
dated March 15, 1962, in the aggregate principal amount of
$40,000,
City of Denton General Obligation Bonds, Series 1963,
dated March 15, 1963, in the aggregate principal amount of
$60,000,
City of Denton General Obligation Bonds, Series 1966,
dated January 15, 1966, in the aggregate principal amount
of $60,000,
City of Denton General Obligation Bonds, Series 1967,
dated November 15, 1967, in the aggregate principal amount
of $120,000,
City of Denton General Obligation Bonds, Series 1968,
dated February 1, 1968, in the aggregate principal amount
of $175,000,
City of Denton General Obligation Bonds, Series 1969,
dated April 15, 1969, in the aggregate principal amount of
$280,000,
City of Denton General Obligation Bonds, Series 1970,
dated September 15, 1970, in the aggregate principal
amount of $300,000,
City of Denton General Obligation Refunding Bonds, Series
1974, dated July 15, 1974, in the aggregate principal
amount of $450,000,
City of Denton General Obligation Street Improvement
Bonds, Series 1974, dated July 15, 1974, in the aggregate
principal amount of $900,000,
City of Denton General Obligation Bonds, Series 1976,
dated April 15, 1976, in the aggregate principal amount of
$1,500,000,
City of Denton General Obligation Bonds, Series 1977,
dated June 1, 1977, in the aggregate principal amount of
$1,950,000,
City of Denton Certificates of Obligation, Series 1978,
dated March 1, 1978, in the aggregate principal amount of
$75,000,
City of Denton General Obligation Bonds, Series 1979,
dated March 15, 1979, in the aggregate principal amount of
$3,375,000;
1
City of Denton Certificates of Obligation, Series 1979,
dated October 1, 1979, in the aggregate principal amount
of $170,000,
City of Denton Certificates of Obligation, Series 1979-A,
dated December 1, 1979, in the aggregate principal amount
of $275,000,
City of Denton Certificates of Obligation, Series 1980,
dated April 15, 1980, in the aggregate principal amount of
$250,000,
City of Denton General Obligation Bonds, Series 1983,
dated March 15, 1983, in the aggregate principal amount of
$4,300,000,
city of Denton Certificates of Obligation, Series 1984,
dated January 15, 1984, in the aggregate principal amount
of $550,000,
City of Denton Certificates of Obligation, Series 1984-A,
dated August 1, 1984, in the aggregate principal amount of
$1,800,000,
City of Denton General Obligation Bond, Series 1985, dated
July 1, 1985, in the aggregate principal amount of
$10,000,000,
(collectively, the "Outstanding Obligations", in the aggregate
principal amount of $26,630,000), and
WHEREAS, the City Council of the City of Denton deems it
necessary and advisable to refund the outstanding Obligations,
and to authorize, issue, and deliver the bonds hereinafter
described; and
WHEREAS, the bonds hereinafter authorized are to be
issued, sold, and delivered pursuant to Vernon's Ann Tex Ci.v
St Article 717k, the City's Home Rule Charter and other
applicable laws
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 FOR THE PURPOSE OF OBTAINING FUNDS
REQUIRED TO REFUND 26,630,000 IN AGGREGATE PRINCIPAL AMOUNT OF
TAX SUPPORTED OBLIGATIONS OF THE CITY OF DENTON, TEXAS
Section 2 DESIGNATION OF THE BONDS Each bond issued
pursuant to this Ordinance shall be designated "CITY OF
DENTON GENERAL OBLIGATION REFUNDING BOND, SERIES 1985", and
initially there shall be issued, sold, and delivered hereunder
two separate fully registered bonds, without interest coupons,
payable in installments (collectively, the "Initial Bonds"),
but the Initial Bonds may be assigned and transferred and/or
converted into and exchanged for other fully registered bonds,
in the denomination of $5,000 or any integral multiple of
$5,000, all in the manner hereinafter provided The term
"Bonds" as used in this Ordinance shall mean and include
collectively both of the Initial Bonds and all substitute bonds
exchanged therefor, as well as all other substitute bonds and
replacement bonds issued pursuant hereto, and the term "Bond"
shall mean any of the Bonds
Section 3 INITIAL DATES, DENOMINATIONS, NUMBERS, MATURI-
TIES, INITIAL REGISTERED OWNERS, AND CHARACTERISTICS OF THE
INITIAL BONDS
(a) One of the Initial Bonds is hereby designated as the
"Current Interest Initial Bond", and is authorized to be
issued, sold, and delivered hereunder as a single fully
registered Bond, without interest coupons, dated NOVEMBER 1,
1985, in the denomination and aggregate principal amount of
$ , numbered R-1, payable in annual installments of
princip`~to the initial registered owner thereof, to-wit
SALOMON BROTHERS INC,
or to the registered assignee or assignees of said Current
Interest Initial Bond or any portion or portions thereof (in
each case, the "registered owner"), with the annual install-
ments of principal of the Current Interest Initial Bond to be
payable on the dates, respectively, and in the principal
amounts, respectively, stated in the FORM OF CURRENT INTEREST
INITIAL BOND set forth in this Ordinance
(b) The Current Interest Initial Bond (i) may be prepaid
or redeemed prior to the respective scheduled due dates of
installments of principal thereof, (11) may be assigned and
transferred, (iii) may be converted and exchanged for other
Bonds, (iv) shall have the characteristics, and (v) shall be
signed and sealed, and the principal of and interest on the
Initial Bond shall be payable, all as provided, and in the
manner required or indicated, in the FORM OF CURRENT INTEREST
INITIAL BOND set forth in this Ordinance
(c) The other Initial Bond is hereby designated as the
"Capital Appreciation Initial Bond", and is hereby authorized
to be issued, sold, and delivered hereunder as a single fully
registered bond, without interest coupons, dated DECEMBER 19,
1985, in the original aggregate principal amount of
$ , numbered CR-1, payable in annual installments
o aggregate maturity amounts (which include accrued and com-
pounded interest as hereinafter provided) to the initial
registered owner thereof, to-wit
SALOMON BROTHER INC,
or to the registered assignee or assignees of said Capital
Appreciation Initial Bond or any portion or portions thereof
(in each case, the "registered owner") with the annual aggre-
gate maturity amounts of the Capital Appreciation Initial Bond
to be payable on the dates, respectively, and in the amounts,
respectively, stated in the FORM OF CAPITAL APPRECIATION BOND
set forth in this Ordinance
(d) The Capital Appreciation Initial Bond (1) is not
subject to prepayment or redemption prior to scheduled matur-
ity, but (ii) may be assigned and transferred, (iii) may be
converted and exchanged for other Bonds, (iv) shall have the
characteristics, and (v) shall be signed and sealed, and the
principal of and interest on the Capital Appreciation Initial
Bond shall be payable, all as provided, and in the manner
required or indicated, in the FORM OF CAPITAL APPRECIATION
INITIAL BOND set forth in this Ordinance
Section 4 INTEREST The unpaid principal balance of the
Initial Bonds shall bear interest from the dates, payable in
the manner, at the rates, and on the dates, respectively, as
provided in the FORM OF CURRENT INTEREST INITIAL BOND, and the
FORM OF CAPITAL APPRECIATION INITIAL BOND, respectively, set
forth in this Ordinance
Section 5 (a) FORM OF CURRENT INTEREST INITIAL BOND
The form of the Current Interest Initial Bond, including the
form of Registration Certificate of the Comptroller of Public
3
Accounts of the State of Texas to be endorsed on the Current
Interest Initial Bond, shall be substantially as follows
FORM OF CURRENT INTEREST INITIAL BOND
NO R-1 $
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON GENERAL OBLIGATION REFUNDING BOND
SERIES 1985
THE CITY OF DENTON, in Denton County, Texas (the
"Issuer"), being a political subdivision of the State of Texas,
hereby promises to pay to
SALOMON BROTHERS INC,
or to the registered assignee or assignees of this Bond or any
portion or portions hereof (in each case, the "registered
owner") the aggregate principal amount of
( DOLLARS)
in annual installments of principal due and payable on FEBRUARY
15 in each of the years, and in the respective principal
amounts, as set forth in the following schedule
PRINCIPAL
YEAR AMOUNT
1987 $
1988
1989
1990
1991
1992
1993
and to pay interest, from the
stated, on the balance of each
respectively, from time to time
as follows
8 per annum on the
8 per annum on the
8 per annum on the
8 per annum on the
% per annum on the
8 per annum on the
8 per annum on the
8 per annum on the
8 per annum on the
% per annum on the
8 per annum on the
8 per annum on the
8 per annum on the
PRINCIPAL
YEAR AMOUNT
1994 $
1995
1996
1997
1998
1999
date of this Bond hereinafter
such installment of principal,
remaining unpaid, at the rates
above
above
above
above
above
above
above
above
above
above
above
above
above
installment due
installment due
installment due
installment due
installment due
installment due
installment due
installment due
installment due
installment due
installment due
installment due
installment due
in 1987
in 1988
in 1989
in 1990
in 1991
in 1992
in 1993
in 1994
in 1995
in 1996
in 1997
in 1998
in 1999
with said interest being payable on FEBRUARY 15, 1987, and
semiannually on each AUGUST 15 and FEBRUARY 15 thereafter while
this Bond or any portion hereof is outstanding and unpaid
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this
Bond are payable in lawful money of the United States of
America, without exchange or collection charges The install-
ments of principal and the interest on this Bond are payable to
the registered owner hereof through the services of MBANK
4
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 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 ordinance
authorizing 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 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 last day of the
month next preceding each such date (the "Record Date") on the
Registration Books kept by the Paying Agent/ Registrar, as
hereinafter described The Issuer covenants with the regis-
tered owner of this Bond that on or before each principal
and/or interest payment date for this Bond it will make avail-
able to the Paying Agent/ Registrar, from the "interest and
Sinking Fund" created by the Bond Ordinance, the amounts
required to provide for the payment, in immediately available
funds, of all principal of and interest on this Bond, when due
IF THE DATE for the payment of the principal of or inter-
est on this Bond shall be a Saturday, Sunday, a legal holiday,
or a day on which banking institutions in the City where the
Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall
be the next succeeding day which is not such a Saturday,
Sunday, legal holiday, or day on which banking institutions are
authorized to close, and payment on such date shall have the
same force and effect as if made on the original date payment
was due
THIS BOND has been authorized in accordance with the
Constitution and laws of the State of Texas FOR THE PURPOSE OF
OBTAINING FUNDS REQUIRED TO REFUND $26,630,000 IN AGGREGATE
PRINCIPAL AMOUNT OF TAX SUPPORTED OBLIGATIONS OF THE CITY OF
DENTON, TEXAS
ON FEBRUARY 15, 1995, or on any interest payment date
thereafter, the unpaid installments of principal of this Bond
may be prepaid or redeemed prior to their scheduled due dates,
at the option of the Issuer, with funds derived from any
available source, as a whole, or in part, and, if in part, the
particular portion of this Bond to be prepaid or redeemed shall
be selected and designated by the Issuer (provided that a
portion of this Bond may be redeemed only in an integral
multiple of $5,000), at the prepayment or redemption price of
the par or principal amount thereof, plus accrued interest to
the date fixed for prepayment or redemption
AT LEAST 30 days prior to the date fixed for any such
prepayment or redemption a written notice of such prepayment or
redemption shall be mailed by the Paying Agent/Registrar to the
registered owner hereof By the date fixed for any such
prepayment or redemption due provision shall be made by the
Issuer with the Paying Agent/Registrar for the payment of the
required prepayment or redemption price for this Bond or the
portion hereof which is to be so prepaid or redeemed, plus
accrued interest thereon to the date fixed for prepayment or
redemption If such written notice of prepayment or redemption
is given, and if due provision for such payment is made, all as
provided above, this Bond, or the portion thereof which is to
be so prepaid or redeemed, thereby automatically shall be
treated as prepaid or redeemed prior to its scheduled due date,
and shall not bear interest after the date fixed for its
5
prepayment or redemption, and shall not be regarded as being
outstanding except for the right of the registered owner to
receive the prepayment or redemption price plus accrued inter-
est to the date fixed for prepayment or redemption from the
Paying Agent/ Registrar out of the funds provided for such
payment The Paying Agent/Registrar shall record in the
Registration Books all such prepayments or redemptions of
principal of this Bond or any portion hereof
THIS BOND, to the extent of the unpaid or unredeemed
principal balance hereof, or any unpaid and unredeemed portion
hereof in any integral multiple of $5,000, may be assigned by
the initial registered owner hereof and shall be transferred
only in the Registration Books of the Issuer kept by the Paying
Agent/Registrar acting in the capacity of registrar for the
Bonds, upon the terms and conditions set forth in the Bond
Ordinance Among other requirements for such transfer, this
Bond must be presented and surrendered to the Paying Agent/
Registrar for cancellation, together with proper instruments of
assignment, in form and with guarantee of signatures satisfac-
tory to the Paying Agent/ Registrar, evidencing assignment by
the initial registered owner of this Bond, or any portion or
portions hereof in any integral multiple of $5,000, to the
assignee or assignees in whose name or names this Bond or any
such portion or portions hereof is or are to be transferred and
registered Any instrument or instruments of assignment
satisfactory to the Paying Agent/Registrar may be used to
evidence the assignment of this Bond or any such portion or
portions hereof by the initial registered owner hereof A new
bond or bonds payable to such assignee or assignees (which then
will be the new registered owner or owners of such new Bond or
Bonds) or to the initial registered owner as to any portion of
this Bond which is not being assigned and transferred by the
initial registered owner, shall be delivered by the Paying
Agent/Registrar in conversion of and exchange for this Bond or
any portion or portions hereof, but solely in the form and
manner as provided in the next paragraph hereof for the conver-
sion and exchange of this Bond or any portion hereof The
registered owner of this Bond shall be deemed and treated by
the Issuer and the Paying Agent/Registrar as the absolute owner
hereof for all purposes, including payment and discharge of
liability upon this Bond to the extent of such payment, and the
Issuer and the Paying Agent/Registrar shall not be affected by
any notice to the contrary
AS PROVIDED above and in the Bond Ordinance, this Bond, to
the extent of the unpaid or unredeemed principal balance
hereof, may be converted into and exchanged for a like aggre-
gate principal amount of fully registered bonds, without
interest coupons, payable to the assignee or assignees duly
designated in writing by the initial registered owner hereof,
or to the initial registered owner as to any portion of this
Bond which is not being assigned and transferred by the initial
registered owner, in any denomination or denominations in any
integral multiple of $5,000 (subject to the requirement here-
inafter stated that each substitute bond issued in exchange for
any portion of this Bond shall have a single stated principal
maturity date), upon surrender of this Bond to the Paying
Agent/Registrar for cancellation, all in accordance with the
form and procedures set forth in the Bond Ordinance If this
Bond or any portion hereof is assigned and transferred or
converted each bond issued in exchange for any portion hereof
shall have a single stated principal maturity date correspond-
ing to the due date of the installment of principal of this
Bond or portion hereof for which the substitute bond is being
exchanged, and shall bear interest at the rate applicable to
and borne by such installment of principal or portion thereof
Such bonds, respectively, shall be subject to redemption prior
6
to maturity on the same dates and for the same prices as the
corresponding installment of principal of this Bond or portion
hereof for which they are being exchanged No such bond shall
be payable in installments, but shall have only one stated
principal maturity date AS PROVIDED IN THE BOND ORDINANCE,
THIS BOND IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED
OR CONVERTED ONCE ONLY, and to one or more assignees, but the
bonds issued and delivered in exchange for this Bond or any
portion hereof may be assigned and transferred, and converted,
subsequently, as provided in the Bond Ordinance The Issuer
shall pay the Paying Agent/Registrar's standard or customary
fees and charges for transferring, converting, and exchanging
this Bond or any portion thereof, but the one requesting such
transfer, conversion, and exchange shall pay any taxes or
governmental charges required to be paid with respect thereto
The Paying Agent/Registrar shall not be required to make any
such assignment, conversion, or exchange (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 prepayment or redemption
prior to maturity, within 45 days prior to its prepayment or
redemption date
IN THE EVENT any Paying Agent/Registrar for this Bond is
changed by the Issuer, resigns, or otherwise ceases to act as
such, the Issuer has covenanted in the Bond Ordinance that it
promptly will appoint a competent and legally qualified sub-
stitute therefor, and promptly will cause written notice
thereof to be mailed to the registered owner of this Bond
IT IS HEREBY certified, recited, and covenanted that this
Bond has been duly and validly voted, authorized, issued, sold,
and delivered, that all acts, conditions, and things required
or proper to be performed, exist, and be done precedent to or
in the authorization, issuance, and delivery of this Bond have
been performed, existed, and been done in accordance with law,
that this Bond is a general obligation of the Issuer, issued on
the full faith and credit thereof, and that annual ad valorem
taxes sufficient to provide for the payment of the interest on
and principal of this Bond, as such interest comes due and such
principal matures, have been levied and ordered to be levied
against all taxable property in the Issuer, and have been
pledged irrevocably for such payment, within the limit pre-
scribed by law
BY BECOMING the registered owner of this Bond, the regis-
tered owner thereby acknowledges all of the terms and provi-
sions of the Bond Ordinance, agrees to be bound by such terms
and provisions, acknowledges that the Bond Ordinance is duly
recorded and available for inspection in the official minutes
and records of the governing body of the Issuer, and agrees
that the terms and provisions of this Bond and the Bond Ordi-
nance constitute a contract between the registered owner hereof
and the Issuer
IN WITNESS WHEREOF, the Issuer has caused this Bond to be
signed with the manual signature of the Mayor of the issuer and
countersigned with the manual signature of the City Secretary
of the Issuer, has caused the official seal of the Issuer to be
duly impressed on this Bond, and has caused this Bond to be
dated NOVEMBER 1, 1995
City Secretary,
City of Denton, Texas
Mayor,
City of Denton, Texas
(CITY SEAL)
7
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS
COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO
I hereby certify that this Bond has been examined, certi-
fied as to validity, and approved by the Attorney General of
the State of Texas, and that this Bond has been registered by
the Comptroller of Public Accounts of the State of Texas
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 5 (b) FORM OF CAPITAL APPRECIATION INITIAL
BOND The form of the Capital Appreciation Initial Bond,
including the form of Registration Certificate of the
Comptroller of Public Accounts of the State of Texas to be
endorsed on the Capital Appreciation Initial Bond, shall be
substantially as follows
FORM OF CAPITAL APPRECIATION INITIAL BOND
MATURITY AMOUNT
NO CR-1
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON GENERAL OBLIGATION REFUNDING BOND,
SERIES 1985
THE CITY OF DENTON, in Denton County, Texas (the
"Issuer"), being a political subdivision of the State of Texas,
hereby promises to pay to
SALOMON BROTHERS INC,
or to the registered assignee or assignees of this Bond or any
portion or portions hereof (in each case, the "registered
owner") the aggregate Maturity Amount of
( DOLLARS)
in annual installments due and payable on FEBRUARY 15 in each
of the years, and in the respective amounts ("MATURITY
AMOUNTS"), as set forth in the following schedule
MATURITY
YEAR AMOUNT
2000 $
2001
2002
2003
2004
Said Maturity Amounts set forth above represent, consti-
tute, and include
(1) original aggregate
$ ,
ments o principal
15 in each of the
principal amounts,
schedule
principal amounts of
payable in annual install-
due and payable on FEBRUARY
fears, and in the respective
as set forth in the following
PRINCIPAL
YEAR AMOUNT
2000 $
2001
2002
2003
2004 , plus
(2) interest on the unpaid balance of such install-
ments of original principal amounts, respectively,
from DECEMBER 19, 1985, at the rates, respectively,
as follows
$ per annum on the above installment of principal due in 2000
$ per annum on the above installment of principal due in 2001
8 per annum on the above installment of principal due in 2002
8 per annum on the above installment of principal due in 2003
% per annum on the above installment of principal due in 2004
with said interest borne by said installments of principal to
accrue and be calculated on the basis of a 360-day year com-
posed of twelve 30-day months (subject to rounding to the
Appreciated Amounts (hereinafter defined) thereof), compounded
semiannually on FEBRUARY 15 and AUGUST 15 of each year commenc-
ing FEBRUARY 15, 1986 Reference is hereby made to Schedule I,
attached to the Bond Ordinance and which shall be attached to
this Bond, which sets forth as of each FEBRUARY 15 and AUGUST
15, commencing FEBRUARY 15, 1986, and continuing until the
stated due date, the accreted value per $5,000 of each such
installment of Maturity Amount, which value includes the
proportionate rounded original principal amount, plus all
interest accrued and compounded to the particular date of
calculation (the "Appreciated Amount") The Appreciated Amount
with respect to any date other than FEBRUARY 15 or AUGUST 15 is
the amount set forth on Schedule I with respect to the last
preceding FEBRUARY 15 or AUGUST 15, as the case may be, plus
the portion of the difference between such amount and the
amount set forth on Schedule I with respect to the next suc-
ceeding FEBRUARY 15 or AUGUST 15, as the case may be, that the
number of days (based on 30-day months) from such last preced-
ing FEBRUARY 15 or AUGUST 15, as the case may be, to the date
for which such determination is being calculated bears to the
total number of days (based on 30-day months) from such last
preceding FEBRUARY 15 or AUGUST 15, as the case may be, to the
next succeeding FEBRUARY 15 or AUGUST 15, as the case may be
THE INSTALLMENTS OF MATURITY AMOUNTS of this Bond speci-
fied above, representing original principal amounts and accrued
and compounded interest as specified above, are payable in
lawful money of the United States of America, without exchange
or collection charges, to the registered owner hereof through
the services of MBANK DALLAS, NATIONAL ASSOCIATION, DALLAS,
TEW, which is the "Paying Agent/ Registrar" for this Bond
Payment of said Maturity Amounts shall be made by the Paying
Agent/Registrar to the registered owner hereof on each date
upon which each such Maturity Amount is due, 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
ordinance authorizing 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 or
draft shall be sent by the Paying Agent/Registrar by United
States mail, first-class postage prepaid, on each such date
upon which a Maturity Amount is due, to the registered owner
hereof, at the address of the registered owner, as it appeared
on the last day of the month next preceding each such date (the
"Record Date") on the Registration Books kept by the Paying
Agent/ Registrar, as hereinafter described The Issuer cove-
nants with the registered owner of this Bond that on or before
each such date it will make available to the Paying Agent/-
Registrar, from the "Interest and Redemption Fund" created by
the Bond Ordinance, the amounts required to provide for the
payment, in immediately available funds, of each Maturity
Amount of this Bond, when due
IF THE DATE for making payments with respect to this Bond
shall be a Saturday, Sunday, a legal holiday, or a day on which
banking institutions in the City where the Paying Agent/Regis-
trar is located are authorized by law or executive order to
close, then the date for such payment shall be the next suc-
ceeding day which is not such a Saturday, Sunday, legal holi-
day, or day on which banking institutions are authorized to
close, and payment on such date shall have the same force and
effect as if made on the original date payment was due
THIS BOND has been authorized in accordance with the
Constitution and laws of the State of Texas in the aggregate
principal amount of $ , FOR THE PURPOSE OF OBTAINING
FUNDS REQUIRED TO REFUND $260630,000 IN AGGREGATE PRINCIPAL
AMOUNT OF TAX SUPPORTED OBLIGATIONS OF THE CITY OF DENTON,
TEXAS
THIS BOND, to the extent of the unpaid Maturity Amounts
hereof, or any unpaid portion thereof in any integral multiple
of $5,000 of Maturity Amount hereof, may be assigned by the
initial registered owner hereof and shall be transferred only
in the Registration Books of the Issuer kept by the Paying
Agent/Registrar acting in the capacity of registrar for the
Bonds, upon the terms and conditions set forth in the Bond
Ordinance Among other requirements for such transfer, this
Bond must be presented and surrendered to the Paying Agent/-
Registrar for cancellation, together with proper instruments of
assignment, in form and with guarantee of signatures satisfac-
tory to the Paying Agent/ Registrar, evidencing assignment by
the initial registered owner of this Bond, or any portion or
portions hereof in any integral multiple of $5,000, to the
assignee or assignees in whose name or names this Bond or any
such portion or portions hereof is or are to be transferred and
registered Any instrument or instruments of assignment
satisfactory to the Paying Agent/Registrar may be used to
evidence the assignment of this Bond or any such portion or
portions hereof by the initial registered owner hereof A new
bond or bonds payable to such assignee or assignees (which then
will be the new registered owner or owners of such new bond or
bonds) or to the initial registered owner as to any portion of
this Bond which is not being assigned and transferred by the
initial registered owner, shall be delivered by the Paying
Agent/Registrar in conversion of and exchange for this Bond or
any portion or portions hereof, but solely in the form and
manner as provided in the next paragraph hereof for the conver-
sion and exchange of this Bond or any portion hereof The
registered owner of this Bond shall be deemed and treated by
the Issuer and the Paying Agent/Registrar as the absolute owner
hereof for all purposes, including payment and discharge of
liability upon this Bond to the extent of such payment, and the
10
Issuer and the Paying Agent/Registrar shall not be affected by
any notice to the contrary
AS PROVIDED above and in the Bond Ordinance, this Bond, to
the extent of any unpaid Maturity Amount hereof, may be con-
verted into and exchanged for a like aggregate Maturity Amount
of fully registered bonds, without interest coupons, payable to
the assignee or assignees duly designated in writing by the
initial registered owner hereof, or to the initial registered
owner as to any portion of this Bond which is not being as-
signed and transferred by the initial registered owner, in any
denomination or denominations in any integral multiple of
$5,000 (subject to the requirement hereinafter stated that each
substitute bond issued in exchange for any portion of this Bond
shall have a single stated maturity date), upon surrender of
this Bond to the Paying Agent/Registrar for cancellation, all
in accordance with the form and procedures set forth in the
Bond Ordinance If this Bond or any portion hereof is assigned
and transferred or converted each bond issued in exchange for
any portion hereof shall have a single stated maturity date
corresponding to the due date of the installment of Maturity
Amount of this Bond or portion hereof for which the substitute
bond is being exchanged, and shall bear interest at the rate
and payable in the same manner applicable to and borne by such
installment of Maturity Amount or portion thereof No such
bond shall be payable in .installments, but shall have only one
stated maturity date AS PROVIDED IN THE BOND ORDINANCE, THIS
BOND IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED OR
CONVERTED ONCE ONLY, and to one or more assignees, but the
bonds issued and delivered in exchange for this Bond or any
portion hereof may be assigned and transferred, and converted,
subsequently, as provided in the Bond Ordinance The Issuer
shall pay the Paying Agent/ Registrar's standard or customary
fees and charges for transferring, converting, and exchanging
this Bond or any portion thereof, but the one requesting such
transfer, conversion, and exchange shall pay any taxes or
governmental charges required to be paid with respect thereto
IN THE EVENT any Paying Agent/Registrar for this Bond is
changed by the Issuer, resigns, or otherwise ceases to act as
such, the Issuer has covenanted in the Bond Ordinance that it
promptly will appoint a competent and legally qualified sub-
stitute therefor, and promptly will cause written notice
thereof to be mailed to the registered owner of this Bond
IT IS HEREBY certified, recited, and covenanted that this
Bond has been duly and validly voted, authorized, issued, sold,
and delivered; that all acts, conditions, and things required
or proper to be performed, exist, and be done precedent to or
in the authorization, issuance, and delivery of this Bond have
been performed, existed, and been done in accordance with law,
that this Bond is a general obligation of the Issuer, issued on
the full faith and credit thereof, and that annual ad valorem
taxes sufficient to provide for the payment of the interest on
and principal of this Bond, as such interest comes due and such
principal matures, have been levied and ordered to be levied
against all taxable property in the Issuer, and have been
pledged irrevocably for such payment, within the limit pre-
scribed by law
BY BECOMING the registered owner of this Bond, the regis-
tered owner thereby acknowledges all of the terms and provi-
sions of the Bond Ordinance, agrees to be bound by such terms
and provisions, acknowledges that the Bond Ordinance is duly
recorded and available for inspection in the official minutes
and records of the governing body of the Issuer, and agrees
that the terms and provisions of this Bond and the Bond
11
Ordinance constitute a contract between the registered owner
hereof and the Issuer
IN WITNESS WHEREOF, the Issuer has caused this Bond to be
signed with the manual signature of the mayor of the Issuer and
countersigned with the manual signature of the City Secretary
of the Issuer, has caused the official seal of the Issuer to be
duly impressed on this Bond, and has caused this Bond to be
datied NOVEMBER 1, 1985
City Secretary, Mayor,
City of Denton, Texas 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 Bond has been examined, certi-
fied as to validity, and approved by the Attorney General of
the State of Texas, and that this Bond has been registered by
the Comptroller of Public Accounts of the State of Texas
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6 ADDITIONAL CHARACTERISTICS OF THE BONDS
Re tent ration and Transfer (a) The Issuer shall keep or cause
to kept at the pr nclpal corporate trust office of MBANK
DALLAS, NATIONAL ASSOCIATION, DALLAS, TEXAS (the "Paying
Agent/ Registrar") books or records of the registration and
transfer of the Bonds (the "Registration Books"), and the
Issuer hereby appoints the Paying Agent/Registrar as its
registrar and transfer agent to keep such books or records and
make such transfers and registrations under such reasonable
regulations as the Issuer and Paying Agent/Registrar may
prescribe= and the Paying Agent/ Registrar shall make such
transfers and registrations as herein provided The Paying
Agent/Registrar shall obtain and record in the Registration
Books the address of the registered owner of each Bond to which
payments with respect to the Bonds shall be mailed, as herein
provided, but it shall be the duty of each registered owner to
notify the Paying Agent/Registrar in writing of the address to
which payments shall be mailed, and such interest payments
shall not be mailed unless such notice has been given The
Issuer shall have the right to inspect the Registration Books
during regular business hours of the Paying Agent/ Registrar,
but otherwise the Paying Agent/Registrar shall keep the Regis-
tration Books confidential and, unless otherwise required by
law, shall not permit their inspection by any other entity
Registration of each Band may be transferred in the Registra-
tion Books only upon presentation and surrender of such Bond to
the Paying Agent/Registrar for transfer of registration and
cancellation, together with proper written instruments of
12
assignment, in form and with guarantee of signatures satis-
factory to the Paying Agent/Registrar, (1) evidencing the
assignment of the Bond, 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 Bond
or any such portion thereof registered in the name of such
assignee or assignees Upon the assignment and transfer of any
Bond or any portion thereof, a new substitute Bond or Bonds
shall be issued in conversion and exchange therefor in the
manner herein provided The Initial Bonds, to the extent of
the unpaid or unredeemed principal or maturity amounts thereof,
respectively, may be assigned and transferred by the initial
registered owner thereof once only, and to one or more
assignees designated in writing by the initial registered owner
thereof All Bonds issued and delivered in conversion of and
exchange for the Initial Bonds 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 maturity date), shall be in the
appropriate form prescribed in this ordinance, and shall have
the characteristics, and may be assigned, transferred, and
converted as hereinafter provided If an 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 such Initial Bond shall have a single stated matur-
ity date, and shall not be payable in installments, and each
such Bond shall have a maturity date corresponding to the due
date of the installment of principal or maturity amount or
portion thereof for which the substitute Bond is being ex-
changed, and each such Bond shall bear interest payable in the
same manner and at the single rate applicable to and borne by
such installment of principal or maturity amount or portion
thereof for which it is being exchanged If only a portion of
an Initial Bond is assigned and transferred, there shall be
delivered to and registered in the name of the initial regis-
tered 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 Bonds is
assigned and transferred or converted each Bond issued in
exchange therefor shall have the same maturity date and bear
interest at the same rate and payable in the same manner as the
Bond for which it is exchanged A form of assignment shall be
printed or endorsed on each Bond, excepting the Initial Bonds,
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 por-
tions 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 charac-
teristics herein described, payable to such assignee or assign-
ees (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
in conversion of and exchange for said assigned Bond or Bonds
or any portion or portions thereof, in the same form and
manner, and with the same effect, as provided in Section 6(d),
below, for the conversion and exchange of Bonds by any regis-
tered owner of a Bond The Issuer shall pay the Paying Agent/-
Registrar's standard or customary fees and charges for making
such transfer and delivery of a substitute Bond or Bonds, but
the one requesting such transfer shall pay any taxes or other
governmental charges required to be paid with respect thereto
The Paying Agent/Registrar shall not be required to make
transfers of registration of any Bond or any portion thereof
(i) during the period commencing with the close of business on
13
any Record Date and ending with the opening of business on the
next following principal or interest payment date, or, (ii)
with respect to any Bond or any portion thereof called for
redemption prior to maturity, within 45 days prior to its
redemption date
(b) Ownershi of Bonds The entity in whose name any
Bond shall a reg stered-i'n the Registration Books at any time
shall be deemed and treated as the absolute owner thereof for
all purposes of this Ordinance, whether or not such Bond shall
be overdue, and the issuer and the Paying Agent/Registrar shall
not be affected by any notice to the contrary, and payment of,
or on account of, the principal of, premium, if any, and
interest on any such Bond shall be made only to such registered
owner All such payments shall be valid and effectual to
satisfy and discharge the liability upon such Bond to the
extent of the sum or sums so paid
(c) Pa ment of Bonds and Interest The Issuer hereby
further appoints t e Paying Agent Req strar to act as the
paying agent for paying the principal of and interest on the
Bonds, and to act as its agent to convert and exchange or
replace Bonds, all as provided in this Ordinance The Paying
Agent/Registrar shall keep proper records of all payments made
by the Issuer and the Paying Agent/Registrar with respect to
the Bonds, and of all conversions and exchanges of Bonds, and
all replacements of Bonds, as provided in this Ordinance
(d) Conversion and Exchange or Replacement, Authenti-
cation Each Bond issued and delivered pursuant to this
or=dnance, to the extent of the unpaid or unredeemed principal
balance, principal amount, or maturity amount thereof, may,
upon surrender of such Bond at the principal corporate trust
office of the Paying Agent/ Registrar, together with a written
request therefor duly executed by the registered owner or the
assignee or assignees thereof, or its or their duly authorized
attorneys or representatives, with guarantee of signatures
satisfactory to the Paying Agent/Registrar, may, at the option
of the registered owner or such assignee or assignees, as
appropriate, be converted into and exchanged for fully regis-
tered bonds, without interest coupons, in the form prescribed
in the applicable form of substitute bond set forth in this
Ordinance, in the denomination of $5,000, or any integral
multiple of $5,000 (subject to the requirement hereinafter
stated that each substitute Bond shall have a single stated
maturity date), as requested in writing by such registered
owner or such assignee or assignees, in an aggregate principal
amount equal to the unpaid or unredeemed principal balance,
principal amount, or maturity amount of any Bond or Bonds so
surrendered, and payable to the appropriate registered owner,
assignee, or assignees, as the case may be If an Initial Bond
is assigned and transferred or converted each substitute Bond
issued in exchange for any portion of such Initial Bond shall
have a single stated maturity date, and shall not be payable in
installments, and each such Bond shall have a maturity date
corresponding to the due date of the installment of principal
or maturity amount or portion thereof for which the substitute
Bond is being exchanged, and each such Bond shall bear interest
payable in the same manner and at the single rate applicable to
and borne by such installment of principal or maturity amount
or portion thereof for which it is being exchanged If a
portion of any Bond (other than the Initial Bonds) shall be
redeemed prior to its scheduled maturity as provided herein, a
substitute Bond or Bonds having the same maturity date, bearing
interest payable in the same manner and 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 or maturity amount equal to the unredeemed portion
14
thereof, will be issued to the registered owner upon surrender
thereof for cancellation If any Bond or portion thereof
(other than the Initial Bonds) is assigned and transferred or
converted, each Bond issued in exchange therefor shall have the
same maturity date and bear interest at the same rate as the
Bond for which it is being exchanged Each substitute Bond
shall bear a letter and/or number to distinguish it from each
other Bond The Paying Agent/Registrar shall convert and
exchange or replace Bonds as provided herein, and each fully
registered bond delivered in conversion of and exchange for or
replacement of any Bond or portion thereof as permitted or
required by any provision of this Ordinance shall constitute
one of the Bonds for all purposes of this Ordinance, and may
again be converted and exchanged or replaced THE INITIAL
BONDS issued and delivered pursuant to this Ordinance are not
required to be, and shall not be, authenticated by the Paying
Agent/Registrar, but on each substitute Bond issued in conver-
sion of and exchange for or replacement of any Bond or Bonds
issued under this Ordinance there shall be printed a bond, in
the form substantially as follows
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued
under the provisions of the Bond Ordinance described in this
Bond, and that this Bond has been issued in conversion of and
exchange for or replacement of a bond, bonds, or a portion of a
bond or bonds of an issue which originally was approved by the
Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas
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 an the manner prescribed
herein, and said Bonds shall be of type composition printed on
paper with lithographed or steel engraved borders of customary
weight and strength Pursuant to Vernon's Ann Tex Civ St
Art 717k-6, and particularly Section 6 thereof, the duty of
conversion and exchange or replacement of Bonds as aforesaid is
hereby imposed upon the Paying Agent/Registrar, and, upon the
execution of the above Paying Agent/Registrar's Authentication
Certificate, the converted and exchanged or replaced Bond shall
be valid, incontestable, and enforceable in the same manner and
with the same effect as the Initial Bond which originally was
issued pursuant to this Ordinance, approved by the Attorney
General, and registered by the Comptroller of Public Accounts
The Issuer shall pay the Paying Agent/Registrar's standard or
customary fees and charges for transferring, converting, and
exchanging any Bond or any portion thereof, but the one re-
questing any such transfer, conversion, and exchange shall pay
any taxes or governmental charges required to be paid with
respect thereto as a condition precedent to the exercise of
15
such privilege of conversion and exchange The Paying Agent/
Registrar shall not be required to make any such conversion and
exchange or replacement of Bonds or any portion thereof (1)
during the period commencing with the close of business on any
Record Date and ending with the opening of business on the next
following principal or interest payment date, or, (ii) with
respect to any Bond or portion thereof called for redemption
prior to maturity, within 45 days prior to its redemption date
(e) In General All Bonds issued in conversion and
exchange or replacement of any other Bond or portion thereof,
(i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be
payable only to the registered owners thereof, (ii) may be
redeemed prior to their scheduled maturities, (iii) may be
transferred and assigned, (iv) may be converted and exchanged
for other Bonds, (v) shall have the characteristics, (vi) shall
be signed and sealed, and (vii) the principal of and interest
on the Bonds shall be payable, all as provided, and in the
manner required or indicated, in the FORM OF SUBSTITUTE BOND
set forth in this ordinance
(f) Pa ment of Fees and Charges The Issuer hereby
covenants w th the registered owners of the Bonds that it will
(1) pay the standard or customary fees and charges of the
Paying Agent/Registrar for its services with respect to the
payment of the principal of and interest on the Bonds, when
due, and (ii) pay the fees and charges of the Paying Agent/
Registrar for services with respect to the transfer of regis-
tration of Bonds, and with respect to the conversion and
exchange of Bonds solely to the extent above provided in this
ordinance
(g) Substitute Pa in A ent/Re istrar The Issuer
covenants wit t e reg stered owners o the Bonds that at all
times while the Bonds 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 Bonds under this Ordinance,
and that the Paying Agent/Registrar will be one entity The
Issuer reserves the right to, and may, at its option, change
the Paying Agent/Registrar upon not less than 120 days written
notice to the Paying Agent/Registrar, to be effective not later
than 60 days prior to the next principal or interest payment
date after such notice In the event that the entity at any
time acting as Paying Agent/Registrar (or its successor by
merger, acquisition, or other method) should resign or other-
wise cease to act as such, the Issuer covenants that promptly
it will appoint a competent and legally qualified bank, trust
company, financial institution, or other agency to act as
Paying Agent/Registrar under this Ordinance Upon any change
in the Paying Agent/Registrar, the previous Paying Agent/Regis-
trar promptly shall transfer and deliver the Registration Books
(or a copy thereof), along with all other pertinent books and
records relating to the Bonds, to the new Paying Agent/Regis-
trar designated and appointed by the Issuer Upon any change
in the Paying Agent/Registrar, the Issuer promptly will cause a
written notice thereof to be sent by the new Paying Agent/Regi-
strar to each registered owner of the Bonds, by United States
mail, first-class postage prepaid, which notice also shall give
the address of the new Paying Agent/Registrar By accepting
the position and performing as such, each Paying Agent/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
16
other Bond or portion thereof, including the form of Paying
Agent/Registrar's Certificate 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
permitted or required by this Ordinance The form of all Bonds
issued in conversion and exchange or replacement of the Current
Interest Initial Bond and bonds subsequently substituted
therefor shall differ from those issued in conversion and
exchange or replacement of the Capital Improvement Initial Bond
and bonds subsequently substituted therefor, all as hereinafter
described Bonds having a scheduled maturity date prior to
FEBRUARY 15, 2000, are hereafter designated as "Current Inter-
est Bonds", and Bonds having a scheduled maturity date on or
after FEBRUARY 15, 2000, are hereafter designated as "Capital
Appreciation Bonds"
FORM OF SUBSTITUTE BONDS
(FORM OF FIRST FOUR PARAGRAPHS OF CURRENT INTEREST BONDS]
NO UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
PRINCIPAL AMOUNT
CITY OF DENTON GENERAL OBLIGATION REFUNDING BOND,
SERIES 1985
INTEREST RATE MATURITY DATE CUSIP NO
ON THE MATURITY DATE specified above the CITY OF DENTON,
in Denton County, Texas (the "Issuer"), being a political
subdivision of the State of Texas, hereby promises to pay to
or to the registered assignee hereof (either being hereinafter
called the "registered owner") the principal amount of
and to pay interest thereon from NOVEMBER 1, 1985, 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 FEBRUARY 15, 1987, and semi-
annually on each AUGUST 15 and FEBRUARY 15 thereafter, except
that if the date of authentication of this Bond is later than
JANUARY 31, 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 Bond are payable in
lawful money of the United States of America, without exchange
or collection charges. The principal of this Bond shall be
paid to the registered owner hereof upon presentation and
surrender of this Bond at maturity or upon the date fixed for
its redemption prior to maturity, at the principal corporate
trust office of MBANK DALLAS, NATIONAL ASSOCIATION, DALLAS,
TEXAS, which is the "Paying Agent/ Registrar" for this Bond
The payment of interest on this Bond shall be made by the
Paying Agent/Registrar to the registered owner hereof on each
interest payment date by check 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
ordinance authorizing the issuance of the Bonds (the "Bond
17
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 last 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 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 corpor-
ate trust office of the Paying Agent/Registrar upon presen-
tation and surrender of this Bond for redemption and payment at
the principal corporate trust office of the Paying Agent/Regis-
trar The Issuer covenants with the registered owner of this
Bond that on or before each principal payment date, interest
payment date, and accrued interest payment date for this Bond
it will make available to the Paying Agent/Registrar, from the
"Interest and Sinking Fund" created by the Bond ordinance, the
amounts required to provide for the payment, in immediately
available funds, of all principal of and interest on the Bonds,
when due
ON FEBRUARY 15, 1995, or on any interest payment date
thereafter, this Bond may be redeemed prior to its scheduled
maturity, 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 portion hereof, to be redeemed shall
be selected and designated by the Issuer (provided that a
portion of this Bond may be redeemed only in an integral
multiple of $5,000), at the redemption price of the par or
principal amount thereof and accrued interest to the date fixed
for redemption At least 30 days prior to the date fixed for
any redemption of this Bond or portion hereof prior to maturity
a written notice of such redemption shall be published once in
a financial publication, journal, or reporter of general
circulation among securities dealers in The City of New York,
New York (including, but not limited to, The Bond Buyer and The
Wall Street Journal), or in the State of Texas (including, but
not limited to, The Texas Bond Reporter) Such notice also
shall be sent by the Paying Agent/Registrar by United States
mail, first-class postage prepaid, not less than 30 days prior
to the date fixed for any such redemption, to the registered
owner of this Bond or portion thereof to be redeemed, at its
address as it appeared on the 45th day prior to such redemption
date, provided, however, that the failure to send, mail, or
receive such notice, or any defect therein or in the sending or
mailing thereof, shall not affect the validity or effectiveness
of the proceedings for the redemption of any Bond, and it is
hereby specifically provided that the publication of such
notice as required above shall be the only notice actually
required in connection with or as a prerequisite to the redemp-
tion of any Bonds 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 this Bond or portion hereof which is to be so re-
deemed If such written notice of redemption is published and
if due provision for such payment is made, all as provided
above, this Bonds or portion hereof which is to be so redeemed
thereby automatically shall be treated as redeemed prior to its
scheduled maturity, and it shall not bear interest after the
date fixed for redemption, and it 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 this Bond shall be redeemed a substi-
tute Bond or Bonds having the same maturity date, bearing
interest at the same rate, in any denomination or denominations
18
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 Bond
Ordinance
THE Paying Agent/Registrar shall not be required to make
transfers of registration of this Bond or any portion hereof
W during the period commencing with the close of business on
any Record Date and ending with the opening of business on the
next following principal or interest payment date, or, (ii)
with respect to any Bond or any portion thereof called for
redemption prior to maturity, within 45 days prior to its
redemption date
[FORM OF FIRST TWO PARAGRAPHS OF CAPITAL APPRECIATION BOND]
NO CR- UNITED STATES OF AMERICA MATURITY AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON GENERAL OBLIGATION REFUNDING BOND,
SERIES 1985
INTEREST RATE MATURITY DATE CUSIP NO
8
ON THE MATURITY DATE SPECIFIED ABOVE, the CITY OF DENTON,
in Denton County, Texas (the "Issuer"), being a political
subdivision of the State of Texas, hereby promises to pay to
or the registered assignee hereof (either being hereafter
called the "registered owner") the Maturity Amount of
representing the original principal amount hereof and accrued
and compounded interest thereon Interest accrues on the
original principal amount hereof from DECEMBER 19, 1985, at the
interest rate per annum specified above, compounded semiannual-
ly on FEBRUARY 15 and AUGUST 15 of each year, commencing
FEBRUARY 15, 1986 A table of "Appreciated Amounts" (as
defined in the Bond Ordinance) showing the accreted value per
$5,000 of the above Maturity Amount on the dates shown therein
is printed on the reverse side of this Bond
THE MATURITY AMOUNT of this Bond is payable in lawful
money of the United States of America, without exchange or
collection charges, and this Bond is not subject to redemption
prior to its Maturity Date The Maturity Amount of this Bond
shall be paid to the registered owner hereof upon presentation
and surrender of this Bond on the above Maturity Date, at the
principal corporate trust office of MBANK DALLAS, NATIONAL
ASSOCIATION, DALLAS, TEXAS, which is the "Paying Agent/Regis-
trar" for this Bond, and shall be paid by the Paying Agent/-
Registrar solely from funds of the Issuer required to be on
deposit with the Paying Agent/Registrar for such purpose as
hereinafter provided, and shall be paid to the registered owner
hereof appearing on the Registration Books kept by the Paying
Agent/ Registrar, as hereinafter described The Issuer cove-
nants with the registered owner of this Bond that on or before
the' Maturity Date for this Bond it will make available to the
Paying Agent/Registrar, from the Interest and Sinking Fund as
defined by the ordinance authorizing the Bonds (the "Bond
Ordinance"), the amounts required to provide for the payment,
19
in immediately available funds, of the Maturity Amount, when
due
[ALL OF THE FOLLOWING SHALL BE PRINTED IN ALL BONDS]
IF THE DATE for making payments with respect to this Bond
shall be a Saturday, Sunday, a legal holiday, or a day on which
banking institutions in the City where the Paying Agent/Regis-
trar is located are authorized by law or executive order to
close, then the date for such payment shall be the next suc-
ceeding day which is not such a Saturday, Sunday, legal holi-
day, 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 dated NOVEMBER 1,
1985, authorized in accordance with the Constitution and laws
of the State of Texas in the aggregate principal amount of
$ , FOR THE PURPOSE OF OBTAINING FUNDS REQUIRED TO
REFUND ,630,000 IN AGGREGATE PRINCIPAL AMOUNT OF TAX
SUPPORTED OBLIGATIONS OF THE CITY OF DENTON, TEXAS
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTE-
GRAL MULTIPLE OF $5,000 may be assigned and shall be trans-
ferred only in the Registration Books of the Issuer kept by the
Paying Agent/Registrar acting in the capacity of registrar for
the Bonds, upon the terms and conditions set forth in the Bond
Ordinance Among other requirements for such assignment and
transfer, this Bond must be presented and surrendered to the
Paying Agent/ Registrar, together with proper instruments of
assignment, in form and with guarantee of signatures satisfac-
tory to the Paying Agent/ Registrar, evidencing assignment of
this Bond or any portion or portions hereof in any integral
multiple of $5,000 to the assignee or assignees in whose name
or names this Bond or any such portion or portions hereof is or
are to be transferred and registered The form of Assignment
printed or endorsed on this Bond shall be executed by the
registered owner or its duly authorized attorney or 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/Registrar's
standard or customary fees and charges for making such trans-
fer, but the one requesting such transfer shall pay any taxes
or other governmental charges required to be paid with respect
thereto The registered owner of this Bond shall be deemed and
treated by the Issuer and the Paying Agent/Registrar as the
absolute owner hereof for all purposes, including payment and
discharge of liability upon this Bond to the extent of such
payment, and the Issuer and the Paying Agent/Registrar shall
not be affected by any notice to the contrary
ALL BONDS OF THIS SERIES are issuable solely as fully
registered bonds, without interest coupons, in the denomination
of any integral multiple of $5,000 of the maturing amount
hereof As provided in the Bond Ordinance, this Bond, or any
unpaid maturing amount hereof, may, at the request of the
registered owner or the assignee or assignees hereof, be con-
verted into and exchanged for a like aggregate maturing 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 and payable in the same manner, in
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any denomination or denominations in any integral multiple of
$5,000 such maturing amount as requested in writing by the
appropriate registered owner, assignee, or assignees, as the
case may be, upon surrender of this Bond to the Paying Agent/-
Registrar for cancellation, all in accordance with the form and
procedures set forth in the Bond Ordinance The Issuer shall
pay the Paying Agent/Registrar's standard or customary fees and
charges for transferring, converting, and exchanging any Bond
or any portion thereof, but the one 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
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
promptly will appoint a competent and legally qualified substi-
tute therefor, and promptly will cause written notice thereof
to be mailed to the registered owners of the Bonds
IT IS HEREBY certified, recited, and covenanted that this
Bond has been duly and validly voted, authorized, issued, sold,
and delivered, that all acts, conditions, and things required
or proper to be performed, exist, and be done precedent to or
in the authorization, issuance, and delivery of this Bond have
been performed, existed, and been done in accordance with law,
that this Bond is a general obligation of the Issuer, issued on
the full faith and credit thereof, and that annual ad valorem
taxes sufficient to provide for the payment of the interest on
and principal of this Bond, as such interest comes due and such
principal matures, have been levied and ordered to be levied
against all taxable property in the Issuer, and have been
pledged irrevocably for such payment, within the limit pre-
scribed by law
BY BECOMING the registered owner of this Bond, the regis-
tered owner thereby acknowledges all of the terms and provi-
sions of the Bond Ordinance, agrees to be bound by such terms
and provisions, acknowledges that the Bond Ordinance is duly
recorded and available for inspection in the official minutes
and records of the governing body of the Issuer, and agrees
that the terms and provisions of this Bond and the Bond Ordi-
nance constitute a contract between each registered owner
hereof and the Issuer
IN WITNESS WHEREOF, the Issuer has caused this Bond to be
signed with the facsimile signature of the Mayor of the Issuer
and countersigned with the facsimile signature of the City
Secretary of the Issuer, and has caused the official seal of
the Issuer to be duly impressed, or placed in facsimile, on
this Bond
(facsimile signature) (facsimile signature)
C ty Secretary, Mayor,
City of Denton, Texas City of Denton, Texas
(CITY SEAL)
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FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued
under the provisions of the Bond Ordinance described in this
Bond, and that this Bond has been issued in conversion of and
exchange for or replacement of a bond, bonds, or a portion of a
bond or bonds of an issue which originally was approved by the
Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas
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 Bond, or duly authorized representative or attorney
thereof, hereby assigns this Bond to
(Assignee's Social (print or typewrite Assignee's name and
Security or Taxpayer address, including zip code)
Identification Number)
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the
Paying Agent/Registrar's Registration Books with full power of
substitution in the premises
Dated
Signature Guaranteed
NOTICE This signature must be Registered Owner
guaranteed by a member of the NOTICE This signature must
New York Stock Exchange or a correspond with the name of
commercial bank or trust the Registered Owner appear-
company ing on the face of this Bond
Section 8 TAX LEVY A special Interest and Sinking Fund
(the "Interest and Sinking Fund") is hereby created solely for
the benefit of the Bonds, and the Interest and Sinking Fund
shall be established and maintained by the Issuer at an offi-
cial depository bank of the Issuer The Interest and Sinking
Fund shall be kept separate and apart from all other funds and
accounts of the Issuer, and shall be used only for paying the
interest on and principal of the Bonds All ad valorem taxes
levied and collected for and on account of the Bonds shall be
deposited, as collected, to the credit of the Interest and
Sinking Fund During each year while any of the Bonds or
interest thereon are outstanding and unpaid, the governing
body of the Issuer shall compute and ascertain a rate and
amount of ad valorem tax which will be sufficient to raise and
produce the money required to pay the interest on the Bonds as
such interest becomes due, and to provide and maintain a
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sinking fund adequate to pay the principal of its Bonds as such
principal matures (but never less than 2% of the original
principal amount of the Bonds as a sinking fund each year), and
said tax shall be based on the latest approved tax rolls of the
Issuer, with full allowance being made for tax delinquencies
and the cost of tax collection Said rate and amount of ad
valorem tax is hereby levied, and is hereby ordered to be
levied, against all taxable property in the Issuer for each
year while any of the Bonds or interest thereon are outstanding
and unpaid, and said tax shall be assessed and collected each
such year and deposited to the credit of the aforesaid Interest
and Sinking Fund Said ad valorem taxes sufficient to provide
for the payment of the interest on and principal of the Bonds,
as such interest comes due and such principal matures, are
hereby pledged for such payment, within the limit prescribed by
law.
Section 10 DEFEASANCE OF BONDS (a) Any Bond and the
interest thereon shall be deemed to be paid, retired, and no
longer outstanding (a "Defeased Bond") within the meaning of
this Ordinance, except to the extent provided in subsection (d)
of this Section, when payment of the principal of such Bond,
plus interest thereon to the due date (whether such due date be
by reason of maturity, upon redemption, or otherwise) either
(i) shall have been made or caused to be made in accordance
with the terms thereof (including the giving of any required
notice of redemption), or (ii) shall have been provided for on
or before such due date by irrevocably depositing with or
making available to the Paying Agent/Registrar for such payment
(1) lawful money of the United States of America sufficient to
make such payment or (2) Government Obligations which mature as
to principal and interest in such amounts and at such times as
will insure the availability, without reinvestment, of suffi-
cient money to provide for such payment, and when proper
arrangements have been made by the Issuer with the Paying
Agent/Registrar for the payment of its services until all
Defeased Bonds shall have become due and payable At such time
as a Bond shall be deemed to be a Defeased Bond hereunder, as
aforesaid, such Bond and the interest thereon shall no longer
be secured by, payable from, or entitled to the benefits of,
the ad valorem taxes herein levied and pledged as provided in
this Ordinance, and such principal and interest shall be
payable solely from such money or Government Obligations
(b) Any moneys so deposited with the Paying Agent/Regis-
trar may at the written direction of the Issuer also be in-
vested in Government Obligations, maturing in the amounts and
times as hereinbefore set forth, and all income from such
Government Obligations received by the Paying Agent/Registrar
which is not required for the payment of the Bonds and interest
thereon, with respect to which such money has been so de-
posited, shall be turned over to the Issuer, or deposited as
directed in writing by the Issuer
(c) The term "Government Obligations" as used in this
Section shall mean direct obligations of the United States of
America, including obligations the principal of and interest on
which are unconditionally guaranteed by the United States of
America, which may be United States Treasury obligations such
as its State and Local Government Series, which may be in
book-entry form
(d) Until all Defeased Bonds shall have become due and
payable, the Paying Agent/Registrar shall perform the services
of Paying Agent/Registrar for such Defeased Bonds the same as
if they had not been defeased, and the issuer shall make proper
arrangements to provide and pay for such services as required
by this Ordinance
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Section 11 DAMAGED, MUTILATED, LOST, STOLEN, OR DE-
STROYED BONDS (a) Re lacemetnt 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, in replacement for
such Bond in the manner hereinafter provided
(b) A ion for Re lacement Bonds Application for
replacement olicatdamage , mute ated, 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,
as the case may be In every case of damage or mutilation of a
Bond, the registered owner shall surrender to the Paying
Agent/Registrar for cancellation the Bond so damaged or muti-
lated
(c) No Default Occurred Notwithstanding the foregoing
provisions of this Section, in the event of any such Bond shall
have matured, and no default has occurred which is then con-
tinuing in the payment of the principal of, redemption premium,
if any, or interest on the Bond, the Issuer may authorize the
payment of the same (without surrender thereof except in the
case of a damaged or mutilated Bond) instead of issuing a
replacement Bond, provided security or indemnity is furnished
as above provided in this Section
(d) Charge for Issuing Replacement Bonds Prior to the
issuance of any replacement bond, the Paying Agent/Registrar
shall charge the registered owner of such Bond with all legal,
printing, and other expenses in connection therewith Every
replacement bond issued pursuant to the provisions of this
Section by virtue of the fact that any Bond is lost, stolen, or
destroyed shall constitute a contractual obligation of the
Issuer whether or not the lost, stolen, or destroyed Bond shall
be found at any time, or be enforceable by anyone, and shall be
entitled to all the benefits of this Ordinance equally and
proportionately with any and all other Bonds duly issued under
this Ordinance
(e) Authorit for f Re lacement Bonds In accor-
dance with Sect on 6 of Vernon s Ann Tex C v St Art
717k-6, this Section of this Ordinance shall constitute author-
ity for the issuance of any such replacement bond without
necessity of further action by the governing body of the Issuer
or any other body or person, and the duty of the replacement of
such bonds is hereby authorized and imposed upon the Paying
Agent/ Registrar, and the Paying Agent/Registrar shall authen-
ticate and deliver such Bonds in the form and manner and with
the effect, as provided in Section 6(d) of this Ordinance for
Bonds issued in conversion and exchange for other Bonds
Section 12 CUSTODY, APPROVAL, AND REGISTRATION OF
INITIAL BONDS, BOND COUNSEL'S OPINION, AND CUSIP NUMBERS The
Mayor of the Issuer is hereby authorized to have control of the
Initial Bonds issued hereunder and all necessary records and
proceedings pertaining to the Initial Bonds pending their de-
livery and their investigation, examination, and approval by
the Attorney General of the State of Texas, and their
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registration by the Comptroller of Public Accounts of the State
of Texas Upon registration of the initial Bonds 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 Bonds,
and the seal of said Comptroller shall be impressed, or placed
in facsimile, on the Initial Bonds 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 Bonds or on any Bonds issued and delivered in
conversion of and exchange or replacement of any Bond, but
neither shall have any legal effect, and shall be solely for
the convenience and information of the registered owners of the
Bonds
Section 13 NO ARBITRAGE The Issuer covenants to and
with the registered owners of the Bonds that it will make no
use of the proceeds of the Bonds at any time throughout the
term of this issue of Bonds which, if such use had been reason-
ably expected on the date of delivery of the Bonds to and
payment for the Bonds by the purchasers, would have caused the
Bonds to be arbitrage bonds within the meaning of Section
103(c) of the Internal Revenue Code of 1954, as amended, or any
regulations or rulings pertaining thereto, and by this covenant
the Issuer is obligated to comply with the requirements of the
aforesaid Section 103(c) and all applicable and pertinent
Department of the Treasury regulations relating to arbitrage
bonds The Issuer further covenants that the proceeds of the
Bonds will not otherwise be used directly or indirectly so as
to cause all or any part of the Bonds to be or become arbitrage
bonds within the meaning of the aforesaid Section 103(c), or
any regulations or rulings pertaining thereto
Section 14 SALE OF INITIAL BONDS The Initial Bonds are
hereby sold and shall be delivered to Salomon Brothers Inc, as
representative of the underwriters, in accordance with the Bond
Purchase Contract dated the date of this meeting and presented
to the City Council of the City at this meeting The Mayor of
the Issuer is authorized and directed to execute, on behalf of
the Issuer, said Bond Purchase Agreement in the form and
substance submitted at this meeting
Section 15 OFFICIAL STATEMENT An Official Statement
dated as of the date of this meeting has been prepared in
connection with the sale of the Initial Bond and the Bonds, in
the form and substance submitted at this meeting Said Offi-
cial Statement and any supplement or addenda thereto have been
and are hereby approved, and their use in the offer and sale of
the Bonds is hereby approved It is further officially found,
determined, and declared that the statements and representa-
tions contained in said Official Statement are true and correct
in all material respects, to the best knowledge and belief of
the Issuer The distribution and use of the Preliminary
Official Statement dated November 13, 1985, prior to the date
hereof is hereby ratified and approved
Section 16 REFUNDING OF OUTSTANDING OBLIGATIONS That
concurrently with the delivery of the initial Bonds the Issuer
shall deposit an amount from the proceeds from the sale of the
Initial Bonds, with InterFirst Bank Dallas, N A , Dallas,
Texas, as Escrow Agent, sufficient, together with other avail-
able amounts, to refund all of the Outstanding Obligations in
accordance with Section 7A of Vernon's Ann Tex Civ St
Article 717k, as amended By resolution of the Issuer of even
date herewith the Issuer has authorized the execution of an
appropriate Escrow Agreement to accomplish such purpose It is
hereby found and determined that the refunding of the Outstand-
ing Obligations is advisable and necessary in order to
25
r
restructure the debt service requirements and procedures of the
Issuer, and that the debt service requirements on the Bonds
will be less than those on the Outstanding Bonds, resulting in
a reduction in the amount of principal and interest which
otherwise would be payable, and causing a reduction in the
amount of bond taxes required in the Issuer
Section 17 FURTHER PROCEDURES The Mayor and City
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, acknowledge, and deliver in the name and
on behalf of the Issuer all such instruments and agreements,
whether or not herein mentioned, as may be necessary or desir-
able in order to carry out the terms and provisions of this
Bond Ordinance, the Bonds, the sale and delivery of the Initial
Bonds and the other Bonds, the Official Statement, and the
Escrow Agreement In case any officer whose signature shall
appear on any Bond shall cease to be such officer before the
delivery of such Bond, such signature shall nevertheless be
valid and sufficient for all purposes the same as if such
officer had remained in office until such delivery
26