2002-091 ORDINANCE NO. 2002- Oq/
AN ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY
OF DENTON CERTIFICATES OF OBLIGATION, SERIES 2002; APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO; AND
PROVIDING AN EFFECTIVE DATE.
THE STATE OF TEXAS :
COUNTY OF DENTON :
CITY OF DENTON :
WHEREAS, the Certificate of Obligation Act of 197 I, as amended and codified (the "Act") permits
the City to issue and sell for cash the Certificates of Obligation hereinafter 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 the Act and no petition has
been filed protesting the issuance thereof, NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
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 $12,590,000, for the purpose of paying all or a portion of the City's contractual obligations
incurred pursuant to contracts for the purchase of certain real and personal property, to-wit: (a) improvements
at the City's airport, (b) equipment for the City's public parks, (c) improvements to the City's solid waste
disposal system, (d) computer and technology equipment and upgrades for the City's information technology
systems, (e) road and street improvements and equipment and (f) miscellaneous renovations and improvements
to City owned facilities; and also for the purpose of paying all or a portion of the City's contractual obligations
for professional services, including engineers, architects, attorneys, map makers, auditors, and financial
advisors, hi connection with said Certificates of Obligation.
Section 2. DESIGNATION OF THE CERTIFICATES. Each certificate issued pursuant to this
Ordinance shall be designated: "CITY OF DENTON CERTIFICATE OF OBLIGATION, SERIES 2002",
and initially there shall be issued, sold, and delivered hereunder a single fully registered certificate, without
interest coupons, 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 multiple 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.
0705.055\CO-Ordinance
April 4, 2002
Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, 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 April 1, 2002, in the denomination and aggregate
principal amount of $12,590,000, numbered R-I, payable in annual installments of principal to the initial
registered owner thereof, to-wit:
UBS PAINEWEBBER, INC.
or to the registered assignee or assignees of said Certificate or any portion or portions thereof (in each case,
the "registered owner"), with the annual installments ofprmcipai 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 Imtial Certificate (i) may be assigned and transferred, (ii) may be converted and exchanged
for other Certificates, (iii) shall have the characteristics, and (iv) 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 indi-
cated, 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 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 Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed
on the Initial Certificate, shall be substantially as follows:
FORM OF INITIAL CERTIFICATE
NO. R-1 $12,590,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 2002
THE CITY OF DENTON, in Denton County, Texas (the "Issuer"), being a political subdivision of
the State of Texas, hereby promises to pay to
UBS PAINEWEBBER, INC.
or to the registered assignee or assignees of this Certificate or any portion or portions hereof (in each case, the
"registered owner") the aggregate principal amount of
$12,590,000
(TWELVE MILLION FIVE HUNDRED NINETY THOUSAND DOLLARS)
0705.055\CO-Ordinance
Apdl 4, 2002 2
m 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, and to pay interest, from the date of this Certificate
hereinafter stated, on the balance of each such installment of principal, respectively, from time to time
remaining unpaid, at the rates per annum as follows:
PRINCIPAL INTEREST PRINCIPAL INTEREST
YEAR AMOUNT RATE(%) YEAR AMOUNT RATE(%)
2003 $520,000 4.500 2013 $420,000 4.700
2004 800,000 4.500 2014 445,000 4.800
2005 845,000 4.500 2015 475,000 5.000
2006 890,000 4.500 2016 495,000 5.000
2007 940,000 4.500 2017 520,000 5.000
2008 625,000 4.500 2018 555,000 5.125
2009 660,000 4.500 2019 580,000 5.200
2010 595,000 4.500 2020 610,000 5.250
2011 625,000 4.600 2021 645,000 5.250
2012 665,000 4.600 2022 680,000 5.250
Interest shall first be due and payable on February 15, 2003, and semiannually on each February 15
and August 15 thereafter while this Bond or any portion hereof is outstanding and unpaid. Said interest shall
be calculated on the basis ora 360-day year composed of twelve 30-day months.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Certificate are payable
in lawful money of the Umted States of America, without exchange or collection charges. The installments of
principal and the interest on this Certificate are payable to the registered owner hereof through the services of
BANK ONE, NATIONAL ASSOCIATION, AUSTIN, TEXAS, which is the "Paying Agent/Registrar" for
this Certificate. Payment of all principal of and interest on this Certificate shall be made by the Paying
Agent/Registrar to the registered owner hereof on each principal and/or interest payment date by check dated
as of such date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required
by the ordinance authorizing the issuance of this Certificate (the "Certificate Ordinance") to be on deposit with
the Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registrar by United States 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 at
the close of business 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 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
bythe Certificate Ordinance, the amounts required to provide for the payment, in mediately available funds,
of all principal of and interest on this Certificate, when due.
IN TIIE EVENT of a nonpayment of interest on a scheduled payment date, and for thirty (30) days
thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer.
Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment
Date", which shall be fifteen (15) days after the Special Record Date) shall be sent at least five (5) business
days prior to the Special Record Date by United States mall, first class postage prepaid, to the address of each
Holder of a Certificate appearing on the registration books of the Paymg Agent/Registrar at the close of
business on the 15th business day next preceding the date of mailing of such notice.
0705.055\CO4~dinance
A~i~ 4, 2002 3
IF THE DATE for the payment of the principal of or interest 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 in the principal amount of $12,590,000 for the purpose of paying all or a portion of the City's
contractual obligations incurred pursuant to contracts for the purchase of certain real and personal property,
to-wit: (a) improvements at the City's airport, (b) equipment for the City's public parks, (c) improvements to
the City's solid waste disposal system, (d) computer and technology equipment and upgrades for the City's
information technology systems, (e) road and street improvements and equipment and (f) miscellaneous
renovations and improvements to City owned facilities; and also for the purpose of paying all or a portion of
the City's contractual obligations for professional services, including engineers, architects, attorneys, map
makers, auditors, and financial advisors, in connection with said Certificates of Obligation.
ON FEBRUARY 15, 2012, or on any date whatsoever thereafter, the unpaid instalhnents of principal
of this Certificate of Obligation 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 oft_his Certificate of Obligation to be prepaid or redeemed shall be selected and designated by the Issuer
(provided that a portion of this Certificate of Obligation 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 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 interest 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 principal balance hereof, or any unpaid 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 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 $5,000, to the assignee or
assignees in whose name or names this Certificate or any such portion or portions hereof is or are to be trans-
Apdl 4, 2002
a¥ing
·----e. ut satisfactOrY to the~yL~ hereof bY
~cr' ~. -~ionS hcrcm, ~_. ~ificst~ or ~.v ~ .~t~cgistmr a~ ~,_
coUVe~ston ,°~.a ~catcd by ~c.t.s~.~ of liabiti~ upon ~ w,, ~Y nottCC to u~
u~Os~' ~ thc Pang
Issuer ~u ~-
· cc, ~s CcdtficatC, to ~c ~ent of ~c ~paid
~cip~ ~o~t of
~ ~mcatO 0~ _ ,n.~ soft,gate P . .~atcd~tmg
_ ~ED above ~d ~ ..to ~d cxch~$ .~ o~ asSi~ccs d ~ _c ~s CcKificat
=_.;.~ bal~ .... ut ~tercst o p - :niti~ rcg~Stere , -~ o~Cr, m ~ ~.,~a ~at each
pn~,v a .o~ificates,~mu~ ~cof, or to ~c u- .~ initial regtster~u ~,t hereafter ~'~-, ~,ciual
o~_:~h is not being ~7 ~;rg multiple ox 0~, -~ion of~s ~e~m[, ~n~gi~r~
denOmma~ ~'~cate issuea m ~ ~ ,his ce~ifica~e ~ _ ~ificam ur~ · ' -.c~nge for
substitute ce¢~~ ~n su~euder o~ ~ ~ set fo~ m mo ~ ~mcam issued m
acc°r~ce ~ :- assi~ed ~d tr~ . _;~ mamfi~ ~t. ~imm ce~ificam ~ion
~on ~creoz ,- · ~lo smt~ p~,v scar w~ch ~e suo~ ~ ~c,~cip~ or po~
o~cip~ ox u~o. -ate app¢Cabto w.T- ~+~ but s~1 ~ c:ERT1F1CA~'~
t _~terestat~e" ~e ~ m~em'k~'~CE,'trna ~ oNCE ONEX, ~' ~:~nhereof~Y
-'~-ate s~[l u r -~ICAt~ ~ aK CONW~ . ~ificateOr~'J r _ ~elssuer
r [-~; u~ ASSIGNeu ~ ;~u~ ~d dehve~ --+,., as prOvt*ea~ u} -~ for U~sfe~g' ~ ~,~ion, ~d
oe ~ m.~ ~a~g Agenu,- = .. ~o~iOn mo- eauired to oep . ~r exc~ge u~ o -~e next
exc~ge ~ ~ s~ not be r~m~ _~ ~y gccora
~te
. ~. ' 1 or ~terest Pa~~t ' ~. ce¢ificate
follO~g p~c~pa ~ ~egistrar ~or ~s y~ ce~ficatC Ordm~CC_..fi~en notice ~ercof
~ ~ E~B~n- ~ ~ the Issuer ~= '~ .~efor, ~ prOmF
appO~t a ~mv~[~ registered o~e~ ot ~ ~at ~s C~¢~ er m be pe~O~ ,
. a ;osucd,~aach' ,_ ~,xthofi~ttOB,t~a _. ~ificatCtsag~ . ++~nrovidotoru~ r
- ~be doneprec~e"". -ccord~ce ~'aw' -~ ad valorem mxe~ due ~d such p~C~v~
~a - andb~n done m ~ ..... f: ~d ~at ~u~ _~ ~terest comes
~o ~t~r~st On ~' r
5
~fil 4, 2002
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, together with other parity
obligations, this Certificate additionally is payable from and secured by certain surplus revenues (not to exceed
$10,000 in aggregate amount) derived by the Issuer from the ownership and operation of the City's Utility
System (consisting of the City's combined waterworks system, sanitary sewer system, and electric light and
power system), all as provided in the Certificate Ordinance.
THE ISSUER has reserved the right to issue, in accordance with law, and in accordance with the
Certificate Ordinance, other and additional obhgations, and to enter into contracts, payable from ad valorem
taxes and/or revenues of the City's Utility System, on a parity with, or with respect to said revenues, superior
in lien to, this Certificate.
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 or
facsimile signature of the Mayor of the Issuer and countersigned and attested with the manual or facsimile
signature of the City Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed, or
placed in facsimile, on this Certificate, and has caused this Certificate to be dated April 1, 2002.
ATTEST:
CITY OF DENTON, TEXAS
By: By:
Jennifer Walters
City Secretary, City of Denton, Texas
(CITY SEAL)
Euline Brock
Mayor, City of Denton, Texas
(INSERT BOND INSURANCE LEGEND, IF ANY)
April 4, 2002 6
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate has been exammed, 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
(COMPTROLLERIS SEAL)
Section 6. ADDITIONAL CHARACTERISTICS OF THE CERTIFICATES. Registration and
Transfer. (a) The Issuer shall keep or cause to be kept at the principal corporate trust office of BANK ONE,
NATIONAL ASSOCIATION, AUSTIN, 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 AgenffRegistrar may
prescribe; and the Paying Agent/Ragistrar 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 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 Certificate shall be
in any denomination or denominations of any integral multiple of $5,000 (subject to the requirement hereinafter
statext 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 Imtial Certificate must be
surrendered to the Paying Agent/Registrar for cancellation, and each Certificate issued in exchange for any
portion of the Imtial 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
0705.055\CO-Or,finance
A~ril 4, 2002 7
the installment of principal or portion thereof for which the substitute Certificate is being exchanged; and each
such Certificate shall bear interest at the single rate applicable to and borne by such installment of principal
or portion thereof for which it is being exchanged. If 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 substitute
Certificates in exchange for the unassigned balance of the Initial Certificate in the same manner as if the imtial
registered owner werethe assigneethereof. Ifany 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 Certificate, which shall be
executed by the registered owner or its duly authorized attorney or representative to evidence an 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 Certificate 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 maimer, and with the same effect, as provided in
Section 6(d), below, for the conversion and exchange of Certificates by any registered 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 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.
(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) Payment of Certificates and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and 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
AgenffRegistrar 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. However, in the event of a nonpayment of interest on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a "Special
Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such
interest have been received from the Issuer. Notice of the Special Record Date and of the scheduled payment
date of the past due interest ("Special Payment Date", which shall be fifteen (15) days after the Special Record
Date) shall be sent at least five (5) business days prior to the Special Record Date by United States mail, first
class postage prepaid, to the address of each Holder of a Certificate appearing on the registration books of the
Paying Agent/Registrar at the close of business on the 15th business day next preceding the date of mailing of
such notice.
0705.055\CO-Ordinance 8
April 4, 2002
(d) Conversion and Exchange or Replacement; Authenti¢at_io,, Each Certificate issued and delivered
pursuant to this Ordinance, to the extent of the unpaid 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 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 registered certificates, without interest coupons, in the form prescribed
in the I~ORM OF SUBSTITUTE CERTIFICATE set forth in this Ordinance, in the denomination of $5,000,
or any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Certificate
shall have a single stated maturity date), as requested in writing by such registered owner or such assignee or
assignees, in an aggregate principal amount equal to the unpaid principal balance or principal amount of any
Certificate or Certificates so surrendered, and payable to the appropriate registered owner, assignee, or assign-
ees, as the case may be. If the Imfial Certificate is assigned and transferred or converted each substitute
Certificate issued in exchange for any portion of the Imtial Certificate shall have a single stated pnncipal
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
b°rne by such installment ofprincipal or portion thereoffor which it is being exchanged Iran Certificate
portion thereof (other than the Initial Certificate~ is ~: ..... ' Y ' or
· ~ ,~gneu ana trans~errco 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 substitute
to distinguish it fi.om each other Certificate. Certificate shall bear a letter and/or number
The Paying Agent/Registrar shall convert and exchange or replace
Certificates as provided herein, and each fully registered certificate delivered in conversion of and exchange
for or replacement of any Certificate or portion thereof as permitted or required by any provision of this
Ordinance shall constitute one of the Certificates for all purposes of this Ordinance, and may again be
converted and exchanged or replaced. It is specifically provided that any Certificate authenticated in
conversion of and exchange for or replacement of another Certificate on or prior to the first scheduled Record
Dat~ for the Imtial C. ertificate shall bear interest fi.om the date of the Initial Certificate, but each substitute
Cemficate so authenticated after such first scheduled Record Date shall bear interest fi.om 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 fi.om such next following interest payment date; provided, however, that if at the time of
delivery of any substitute Certificate the interest on the Certificate for which it is being exchanged is due but
has not been paid, then such Certificate shall bear interest from the date to which such interest has been paid
in fall. 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:
0705.055\CO-Ordinance
April 4, 2002 9
"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.
BANK ONE, NATIONAL ASSOCIATION
Austin, Texas
Paying Agent/Registrar
Dated
Authorized Representative"
An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Certificate,
date and manually sign the above Certificate, and no such Certificate shall be deemed to be issued or out-
standing unless such Certificate 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 govermng body of the Issuer or any other body or person so as
to accomplish the foregoing conversion and exchange or replacement of any Certificate 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 Chapter 1201, Texas
Government Code, the duty of conversion 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
Authentication 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 Certificate 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
Certificates or any portion thereof 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.
(e) In General. All Certificates issued in conversion and exchange or replacement 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
transferred and assigned, (iii) may be converted and exchanged for other Certificates, (iv) shall have the
characteristics, (v) shall be signed and sealed, and (vi) the principal of and tnterest on the Certificates shall be
payable, all as provided, and in the manner required or indicated, in the FORM OF SUBSTITUTE
CERTIFICATE set forth in this Ordinance.
April 4, 2002 10
(0 Payment of Fees and Charges. The Issuer hereby covenants with the registered owners of the
Certificates that it will {i) 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 conversion and exchange of Certificates solely to the extent above
provided in this Ordinance.
(g) Substitute Paving Agent/Registrar. The Issuer covenants with the registered owners of the
Certificates that at all times while the Certificates am 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 Certificates 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 it will promptly 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 Agnnt/Registrar, the previous Paying Agent/Registrar shall promptly transfer
and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating
to the Certificates, to the new Paying AgenffRegistrar designated and appointed by the Issuer. Upon any
change in the Paying AgentJRegistrar, 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 performing as such, each Paying Agent/Registrar 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 CERTIFICATES. The form of all Certificates issued in
conversion and exchange or 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
(Book-Entry Only Legend, if appropriate)
NO.
UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 2002
_INTEREST RATE
MATURITY DATE
DATED DATE
CUSIP NO.
0705.055\CO-Ordinance 1 1
April 4, 2002
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 hereofteithe ~ ' · -'
of ~ roemg heremafter called the "registered owner") the principal amount
April 1, 2002, to the maturity date specified above, at the interest rate per annum specified above; with interest
and to pay interest thereon, calculated on the basis ufa 360-day year composed of twelve 30-day months, from
being first due and payable on February 15, 2003, and semiannually on each August
thereafter, except that if the date of authentication of this Certificate is later than the first Record Date
(hereinafter defined), such principal amount shall bear interest from the interest payment date next preceding
the date of authentication, U~/es~ such date of authentication is after any Record Date
on or before the next following interest Payment date, in which (hereinafter defined) but
from such next following interest Payment date. case such principal amOunt shall bear interest
· THE PRINCIPAL OF AND INTEREST ON this Certificate are payable m lawful money of the
..... ~`erea~wnerne~e~tup~npresentati~nandsurrende~fthis~erti~¢at~Ca~a:ua~ety~h~bthee
principal corporate trust office of BANK ONE,
the "Paying Agent/Registrar, for this Certificate.NATIONAL ASSOCIATION, AUSTIN, TEXAs, which is
· The Payment of interest on this Certifinate shall be made by
the Paying Agent/Registrar to the registered OWner hereof on each interest Payment date by check dated as of
such interest Payment date, drawn by the Paying Agent/Registrar on, and
Issuer required by the ordinance ' ' · payable solely from, funds of the
authorizing the issuance of the Certificates (the "Certificate
be on deposit with the Paying Agent/Re istrar fl
be sent by the Pa ' . g . . or such purpose as herei . Ordinance") to
~,,,~,age prepma, on each such interest
Payment date, to the registered Owner hereof, at the address of the registered Owner, as it appeared at the close
of business 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. However, the Payment of such interest
may be made by any other method acceptable to the Paying Agent/Re ' - ·
g~strar aun requested by, and at the risk
and expense of, the registered OWner hereof The Issuer COvenants with the registered OWner of this Certificate
that on or before each principal Payment dat~, interest Payment date, and accrued interest Payment date for this
Certificate it will make available to the Paying Agent/Registrar, from the "/nterest 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.
IN THE EVENT of a nonpayment of'
therea~er, a new record date for such interco- interest On, a scheduled payment date ~,,~
Paying Agent/Reg:strar, if and when funds for the payment of such interest have been received from the Issuer.
~ w~li oe estabhshed by the
Notice of the Special Record Date and of the scheduled Payment date of the past due interest ("Special Payment
Date", which shall be fifteen (15) days after the Special Record Date) shall be sent at least five
days prior to the Special Record Date by United States marl, first class postage prepaid, to the address of each
(5) business
Holder of a Certificate appearing on the registration books of the Paying Agent/Registrar at the close of
business on the 15th business day next preceding the date of mailing of such notice.
0705.05$\CO-O~dinance
April 4, 2002
12
..... * of the principal of or interest on this Certificate shall be a Saturday,
....... *~ PaVing Agent/Registrar
IF THE DATE for me paying,,, date for such payment shall be the next
Sunday, a legal holidaY, or a day on which banking institutions in the ~jtty wn~,~ ....
is located are authorized by law or executive order to close, then the.· · ' '
succeeding day which is not such a SaturdaY, SundaY, legal hohdaY, or day on which banlang mstttutlons are
· ~.~ ~o,,n~nt on such date shall have the same force and effect as if made on thc original
authOrized to close; m~u p,-2
date payment was due. authorized in
THIS CERTIFICATE is one of an issue of Certificates initially dated April 1, 2002,
- -- with the ConstituUon and la.w.s ,-:,..,~ on ~ractual obhgaUons mc P
acCOrClall~ .,- . _aI ~ ~ ~o1~Oll o~ tile ~,lty ~ ,,on and
the purchase of certain real and personal property, to-Wit: (a) improvements at the City's airport, (b) equipment
the purpose of paying a~ ~- ~ ~
for the City's public parks, (c) improvementS to the City's solid waste disposal system, (d) computer
information technology systemS, (e) road and street
technology equipment and upgrades for the City's . ~. ......~raentstoCityownedfacilities;.and
improvements and equipment and (f) nuscellaneous renovations anu m,~ ....... . . . .
_ .a;.~ and financial advisors, m connection with said
also for the purpose of paying all or a portion of the City's contraCtUal obligations for professional services,
· ttorncys, map nl~ers,
including engineerS, architectS, a
Certificates of ObligaUon. Certificates of this Series may
15, 2012, or on any date whatsoever thereafrer, the any
ON FEBRUARY at the option of the Issuer, with funds derived from.
be redeemed prior to their scheduled maturities,
avadable and lawful source as a whole, or in part, and, if in part, the particular Certificates, or portions
· be redeemed shall be selected and designated by the Issuer (proxaded that a portion of a Certificate
thereof, to ' ' ' '
....... ~_ ~a~mu ion ~rice of the par or principal amount
may be redeemed only in an integral multiple of $5,o~0), a~ m~ ....... ~t _
thereof, plus accrued interest to the date fixed for redemption·
~ ~ ..... , ~em~tion of Certidentes °r p°rti°ns there°f pn°r
AT LEAST 30 days prior to the date nxe~ ~, '~¥ ..... ' .
to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by united States
it appeared on the 45th day priOr to such redemption date, provided, however, that the failure to send, mail,
mall, first class postage prepaid, to the registered owner of each CerUficate to be redeemed at its address as
· ' ' shall not affect the validity
defect therein or in the sending or mailing thereof,the date fixed for any such
or receive such notice, or any ~ent/Re~ietrar for the payment of the required
or effectiveness of the proceedings for the redemption of any Certificate. By
.... *;on nrice for the Certinc . ,~ ~.,~a written notice of rede P
r~mF-, r ~ ~ for redempUon- ~ =~ ....... thereof which are to be so redeemed
· _ , the Certificates or portions . ... ....a they shallnot bear
thereon to the date nx~- -. ed as being outstanding except for the
· made all as promded above, - - -a~r to their scheduled mamnU~,
such payment is .ma~, '-all be treated as redcemea P~'~ ·
thereby automaUCmiY sna .... *inn and they shall not b~ rega~rd .... ed interest from the Paying
· -~or the date fixed for rea~mv"T" ,ue redemption price pm~ ~*ru
mterest arm . ~ ~..~r to receive u~ ·
such payment. If a portion of any Certificate shall be redeemed
right of the registereo u ..... . maturity date, bearing interest at the same rate, m any
AgentJRegistrar out of the funds provided for
of $5,000, at the written request of the registered
a substitute Certificate or Certificates having ~e same
denomination or denominations in any integral multiple unredeemed portion thereof, will be issued to the
owner, and in aggregate principal amount equal to theall as provided in the
registered owner uponthe surrender thereof for cancellation, at the expense of the Issuer, ANY INTEGRAL
Bond Ordinance.
THIS cERTIFICATE OR ANY poRTION OR PORTIONS HEREOF IN
MULTIPLE OF $5,000 may be assigned 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 Certificates, upon the terms and
0705.055\co-Ordinance
April 4, 2002
13
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 instru-
ments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar,
evidencing 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 (winch then will be the new
registered owner or owners of such new Certificate or Certificates), 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 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. 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 discharge of liainlity 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, 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 AgentJRegistrar'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
exemise of such privilege of conversion and exchange. The Paying Agent/Registrar shall not be required to
make any such conversion and exchange 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.
IN THE EVENT any Paying AgenffRegistrar for the Certificates is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordmaneo that it promptly will
appoint a competent and legally qualified substitute therefor, and will promptly 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 Issuer, issued
on the full faith and credit thereof; and that annual ad valorem taxes sufficient to provide for the payment of
0705.055 \CO-Ch-dinance
Apri! 4, 2002 14
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, together with other panty.
obligations, this Certificate, and the other Certificates of this Series, additionally are payable from and secured
by certain surplus revenues (not to exceed $10,000 in aggregate amount) derived by the Issuer from the
ownership and operation of the City's Utility System (consisting of the City's combined waterworks system,
sanitary sewer system, and electric light and power system), all as provided in the Certificate Ordinance.
THE ISSUER has reserved the right to issue, in accordance with law, and in accordance with the
Certificate Ordinance, other and additional obligations, and to enter into contracts, payable from ad valorem
taxes and/or revenues of the City's Utility System, on a parity with, or with respect to said revenues, superior
in hen to, this Certificate.
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 manual or
facsimile signature of the Mayor of the Issuer and countersigned and attested with the manual or 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.
A'ITEST:
CITY OF DENTON, TEXAS
By: By:
Jenmfer Walters
City Secretary, City of Denton, Texas
(CITY SEAL)
Euline Brock
Mayor, City of Denton, Texas
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 ora 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.
BANK ONE, NATIONAL ASSOCIATION
AUSTIN, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative
0705.055\CO-Ordinance
April 4, 2002 15
(INSERT BOND INSURANCE LEGEND, IF ANY)
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
Security or Taxpayer
Identification Number
(print or typewrite Assignee's name and
address, including zip code)
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: Signature(s) must be guaranteed by
an eligible guarantor institution participating in
a securities transfer association recognized
signature guarantee program.
Registered Owner
NOTICE: This signature must correspond with
the name of the Registered Owner appearing on
the face of this Certificate in every particular
without alteration or enlargement or any change
whatsoever.
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 bythe Issuer at an official 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 Certificates. All ad valorem taxes levied and collected for and on account
of the Certificates, together with any premium and accrued interest received upon sale 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 2% of the
original principal amount of the Certificates as a sinking fund each year). Said tax shall be based on the latest
0705.055\CO-Ordinance
April 4, 2002 16
approval 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. SURPLUS REVENUES. The Certificates additionally shall be payable from and secured
by surplus revenues, to the extent hereinafter permitted, derived by the Issuer from the ownership and operation
of the Issuer's Utility System (consistmg of its combined waterworks system, sanitary sewer system, and
electric light and power system) remaining after (a) payment of all amounts constituting operation and main-
tenance expenses of said Utility. System, and (b) payment of all debt service, reserve, and other requirements
and amounts required to be paid under all ordinances heretofore or hereafter authorizing (i) all bonds and (ii)
all other obligations not on a parity with the Certificates, which are payable from and secured by any Utility
System revenues, and (c) payment of all amounts payable from any Utility System revenues pursuant to
contracts heretofore or hereafter entered into by the Issuer in accordance with law (the "Surplus Revenues").
If, for any reason, the Issuer fails to deposit ad valorem taxes levied pursuant to Section 8 hereof to the credit
of the Interest and Sinking Fund in an amount sufficient to pay, when due, the principal of and interest on the
Certificates, then Surplus Revenues, to the extent hereinafter permitted, shall be deposited to the credit of the
Interest and Sinking Fund and used to pay such principal and/or interest. A maximum aggregate of $10,000
of Surplus Revenues may be used to pay principal and/or interest on the Certificates and any obligations on
a parity therewith. The Certificates and any obligations on a parity therewith are not, and shall not be deemed
to be, payable from or secured by any Surplus Revenues in excess of an aggregate of $10,000. Until and
unless an aggregate of $10,000 of Surplus Revenues actually is used to pay any such principal and/or interest,
additional obligations, payable from and secured by all or any remaining unused part of said aggregate of
$10,000 of Surplus Revenues, may be issued by the Issuer on a parity with the Certificates and any other then
outstanding parity obligations, with the Certificates and all such additional parity obligations to be payable
from and secured equally and ratably by all or any remaining unused part of said aggregate. The Issuer
reserves, and shall have, the right to issue bonds, and other obligations not on a parity with the Certificates,
and to enter into contracts, in accordance with applicable laws, to be payable from and secured by any Utility
System revenues other than the aggregate of $10,000 of Surplus Revenues as described above. The
Certificates are on a parity with those issues of City of Denton Certificates of Obhgation, Series 1993, Series
1993-A, Series 1994, Series 1995, Series 1996, Series 1998, Series 1999, Series 2000 and Series 2001 (the
"Outstanding Certificates"), as permitted in the Ordinances authorizing same; and it is hereby found and deter-
mined that none of the above defined Surplus Revenues have ever been used to pay any principal and/or interest
on the Outstanding Certificates.
Section 10. DEFEASANCE OF CERTIFICATES. (a) Any Certificate and the Interest thereon shall
be deemed to be paid, retired, and no longer outstanding (a "Defeased Certificate") 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 either (i) shall have been made or caused to be made in
accordance with the terms thereof, 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 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
0705.055\C043~dinance 17
April 4, 2002
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 heroin 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 AgenffRegistrar may at the written direction of the
Issuer also be invested 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 bythe 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 Defcased Certificates the same as if they had not
been defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required
by this Ordinance.
Section 11. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED 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. Application for replacement of damaged, mutilatex[
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 ora Certificate, the registered owner
shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the event
of any such Certificate shall have matured, and no default has occurred which is then continuing in the payment
of the principal of, or interest on the Certificate, the Issuer may authorize the payment of the same (without
surrender thereof except in the case of a damaged or mutilated Certificate) instead of issuing a replacement
Certificate, provided security or indemmty is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Certificates. Prior to the issuance of any replacement
certificate, the Paying Agent/Registrar shall charge the registered owner of such Certificate with all legal,
printing, and other expenses in connection therewith. Every replacement certificate issued pursuant to the
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
0705.055\CO-Ordinance
April 4, 2002 18
any time, or be enfomeable by anyone, and shall be entitled to all the benefits of this Ordinance equally and
proportionately with any and all other Certificates duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates. In accordance with Chapter 1201, Texas
Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such
replacement certificate without necessity of farther action by the gnvemmg 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, CUSIP NUMBERS, PREAMBLE AND INSURANCE 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 Imtial Certificate, 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 delivered 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. The preamble to this Ordinance is hereby adopted and made a part hereof for all
purposes. If insurance is obtained on any of the Certificates, the Initial Certificate and all other Certificates
shall bear an appropriate legend concerning insurance as provided by the insurer.
Section 13. COVENANTS REGARDING TAX-EXEMPTION OF INTEREST ON THE
CERTIFICATES BONDS. (a) Covenants. The Issuer covenants to take any action necessary to assure, or
refrain from any action which would adversely affect, the treatment of the Bonds as obligations described in
section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which is not
includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof,
the Issuer covenants as follows:
( 1 ) to take any action to assure that no more than 10 percent of the proceeds of the Bonds or
the projects financed therewith (less mounts deposited to a reserve fund, if any) are used for any
"private business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the
proceeds or the projects financed therewith are so used, such amounts, whether or not received by the
Issuer, with respect to such private business use, do not, under the terms of this Order or any
underlying arrangement, directly or indirectly, secure or provide for the payment of more than I0
percent of the debt service on the Bonds, in contravention of section 141 (b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use" described in
subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the projects financed therewith
(less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for
a "private business use" which is "related" and not "disproportionate," within the meaning of section
141 (b)(3) of the Code, to the governmental use;
0705.055\CO.Ordinane¢
April 4, 2002 19
(3) to take any action to assure that no amount which is greater than the lesser of $5,000,000,
or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly
or indirectly used to finance loans to persons, other than state or local governmental units, in
contravention of section 141(c) of the Code;
(4) to refrain from taking any action which would otherwise result in the Bonds being treated
as "private activity bonds" within the meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to
acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as
defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the
Bonds, other than investment property acquired with --
(A) proceeds of the Bonds invested for a reasonable temporary period of 3 years or
less or, in the case of a refunding bond, for a period of 30 days or less until such proceeds are
needed for the purpose for which the bonds are issued,
(B) amounts invested in a bona fide debt service fired, within the meaning of section
1.148-1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or replacement fund to the
extent such amounts do not exceed I0 percent of the proceeds of the Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds
of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of
section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code
(relating to advance refundings); and
(8) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the
"Excess Earnings," within the meaning of section 148(0 of the Code and to pay to the United States
of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount
then required to be paid as a result of Excess Earnings under section 148(0 of the Code.
(b) Proceeds. The Issuer understands that the term "proceeds" includes "disposition proceeds" as
defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and
proceeds of the refunded bonds expended prior to the date of issuance of the Bonds. It is the understanding of
the Issuer that the covenants contained herein are intended to assure compliance with the Code and any
regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that
regulations or rulings are hereafter promulgated winch modify or expand provisions of the Code, as applicable
to the Bonds, the Issuer will not be required to comply with any covenant contained herein to the extent that
such failure to comply, in the opinion of nationally recognized bond counsel, will not adversely affect the
exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In the event
that regulations or rulings are herea~er promulgated which impose additional requirements which are
applicable to the Bonds, the Issuer agrees to comply with the additional requirements to the extent necessary,
0705,055\CO-Ordinance
April 4, 2002 20
in the opimon of nationally recognized bond counsel, to preserve the exemption from federal income taxation
of interest on the Bonds under section 103 of the Code. In furtherance of such intention, the Issuer hereby
authorizes and directs the Mayor to execute any documents, certificates or reports required by the Code and
to make such elections, on behalf of the Issuer, which may be permitted by the Code as are consistent with the
purpose for the issuance of the Bonds.
Section 14. SALE OF 1NITIAL CERTIFICATE. The Initial Certificate is hereby sold and shall be
delivered to UBS PAINEWEBBER, INC. for cash for 99.374% of the par value thereof and accrued interest
thereon to date of delivery, plus a cash premium of $-0-. Such premium shall, upon receipt, be deposited into
the Interest and Sinking Fund. It is hereby officially found, determined, 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 Preliminary Official Statement dated March 28,
2002 prepared and distributed in connection with the sale of the Imtial Certificate. Said Official Notice of Sale
and Bidding Instructions, Preliminary Official Statement and the Official Statement dated April 2, 2002, 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, Preliminary Official
Statement and Official Statement are tree and correct in all material respects, to the best knowledge and belief
of the City Council and the Issuer.
Section 15. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE PROJECT.
The Issuer covenants to account for the expenditure of sale proceeds and investment earnings to be used for
the purposes described in Section 1 of this Ordinance (the "Project") on its books and records in accordance
with the requirements of the Internal Revenue Code. The Issuer recognizes that in order for the proceeds to
be considered used for the reimbursement of costs, the proceeds must be allocated to expenditures within 18
months of the later of the date that (1) the expenditure is made, or (2) the Project is completed; but in no event
later than three years after the date on which the original expenditure is paid. The foregoing notwithstanding,
the Issuer recognizes that in order for proceeds to be expended under the Internal Revenue Code, the sale
proceeds or investment earnings must be expended no more than 60 days after the earlier of (1) the fifth
anmversary of the delivery of the Certificates, or (2) the date the Certificates are retired. The Issuer agrees
to obtain the advice of nationally-recognized bond counsel if such expenditure falls to comply with the
foregoing to assure that such expenditure will not adversely affect the tax-exempt status of the Certificates.
For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains an opinion that
such failure to comply will not adversely affect the excludability for federal income tax purposes from gross
income of the interest.
Section 16. DISPOSITION OF PROJECT. The Issuer covenants that the property constituting the
Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or
other compensation, unless the Issuer obtains an opinion of nationally-recognized bond counsel that such sale
or other disposition will not adversely affect the tax-exempt status of the Certificates. For purposes hereof,
the Issuer shall not be obligated to comply with this covenant if it obtains a legal opinion that such failure to
comply will not adversely affect the excludability for federal income tax purposes from gross income of the
interest.
Section 17. INTEREST EARNINGS ON CERTIFICATE PROCEEDS. Interest earnings derived
from the investment of proceeds from the sale of the Initial Certificate shall be used along with other proceeds
for the purposes for which the Certificates are issued; provided that after completion of such purposes, if any
of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinking
0705.055\CO-Ordinance
April 4, 2002 21
FUnd. It is further nr '
? reb.ted to the, ?V:ded, however
~rom bein~ ,, L ,~,utea States ~ - ' ,,,at any inter
earnine, e ~o_ ar. oitrage bonds', ,,..o[.,~ner/ca PUts est earn/rigs on ·
~o for the nu,.~A -,uun the~ . uant to Sec*;A · CertifiCate
· - 'roses ofth/s Se--' "~eanmg°fthe r, ~ -on 13 hereof;, v~'oceeds Which
caon. ,-Oue Shall be s,~ - f' Order to prey .... ,are required to
~ reoated and not e~'si)~me Certificates
oluercd as interest
Section 18. DT
m~ armer that no ~- · . C REGISTR a
represented ,~ '~' ~, New York .~,u Otthe Certi~cato~'u~!Cates initiall .
a rnemho_~mat~t~salimi~.~ '" ~ew York, i~;,;~,7'~W~llbemad Yshallbe~ssued
Uni~ -~ ot the Fede- , ~ PUrpose true, '~"'~Y will act ~ ~ e to the Public .~ ~and dehvered ;~ _ .
· u/Orm Corem . ~ra~ *(eserw ~ ot COmpan~ ;~ ~s ueposito.., ~ , ,-,u ida D~ · u, ~ucn
Exchan~, ,~ *"mercml C,~,~o ~ aYStem, a "~, f '"~°rporatea ~ ~'~ ~or the ~,~ ~,os~tory
· .. -*~e,~ct of 1 o~. ~"", and a "c~ · ,-~eann~ ,.~_ - Unuer the ~,., ~ '~l~cates
smt~al Cert:,~ '""'~, as ~,,, .... -~rmg aden,...,, ° ~"pOration,, ,,~.~. -,-ws o~ the e,-- ' --' '~ has
ts '"~cateamh · ---~uuea, and *~. . '~ ~ registere~ .,,wan ~e ~ . ~e of N.,,,
aowever i~ ;o 7/Onzed bv t~; ~ . ~'e ~ssuer ~oo *~u ~der S~.' 'ue~mg of~ . ~- ~ork,
· e Pa~ ~ a eon~tion ofa~ ?~s ~r~ee sh~. ['c~P~s' but ~ no .... ~U~n 17A of ~ ~L~'e New York
excha~'~ ~gen~egistra. ~,We~ ~d S~e t~j~°?ehvered to ~aY. venfies, Such ~ federal Securi~e
~ge~erefora~,,~ . "~providea ~ · -'~'~ePUrc~ .... ~d reg~sterea ;~ .~ represen~tion~ ~ s
~mCate to be re~°st~mte Cenifie~Z~r m ~s Or~er, ~e~atelv ~"' ~e n~e Of~e p,~2 ~ ne
~a~g A~o~,~ 7s,~tered ~ t~ _ ~,~ ~or each m~. ,--,~e, to C~ce~ ~ .j.~"er Such del;,,~ ~re~Ser.
?eg s ar to or orsuc lmtial Ce~;~ "~' shall ~Use
appro,,~'. ~wOr ~e DTC ~f ~Ueaaction lt ;~ ~ u~., ~e nom;~"~e~ifiCate, ~;~"eate ~d deliver ;~
· ~u ~ S~.· ~ci~ ' ~ eX~ec~., ~,~ otDT~ -. ,u~ ~ach
Were t~ - ,, me Pa~ - ~u Pa~;- uese~bed ;_ _. ~ ~e Ceni~ ~ au~ oft~
~11 iden~'e. ~ ~,u oenefici~ ~'~eg~str~ s~u -, ~o ~Ong ~ ~ ~ ~ .,~lal S~tem ~-mr of~e
· _ -.u,y Oenefic; , a, O~er Eer~ "~, treat ~ ~ -~c,~ ~eni~.~.. .-ent refe~e~
g~Sfers Ofo,.- ~'~ O~ers~n ~.~ '~t. It is exne., ~ ~ ueal ~ D*- , ~te is register~ ·
re · ~,,ers~ · ~ ~-me C · ~ ~teu ~at * ~ m ~ ~u m ~e
. ~la~o~ e~*~,. · p being effeo,~ emficates b,,~ DTC will~:_.. I respects tho - n~e
~obili.~ "~ousa~ by t~- ~,~u on ~e record- ~ ~ c' P~ci~.-. T~"~mm a book ~..
iSnot~dnOtbea,~'~"', ~d ~at t~ ~°z~TC~dt~ f~mmtegml._
~ resneo,, , ~' uable for ~ , ~'a~ mrsub~m~ ~ ~en~Cates ;.:.. ,~"c~p~ts nu.~.
records ~ ~ sts se~ices ,,~,~'Y '~Cfions of ~te ~enifiCate~ ~.. ~-Uauy deposite~ Tu~t to mles
DTC .- -~. a s~l be *,~ ~ ~mc~P~a, or - ,e or liable fur - ~oasible ~Or.a.~_ Fr°~ded- ~e lss- -
.. ~o esab~s. +~. _ ~,~ uu~ of~ - pmtec~ .... ~nama~ ~ lag ~y f~s .
~e fees -~ ', ~s Oook .... ~'~ rurcha~. 2~ ~'Y mterest~ ~. · . s, SUpemsi~ ~ or c~ar e
h~,. ~,u ch~ges ~ ~,,t~ system ,~ ~ ~' ~a ~e DT~ n ~ ~' n~ts oft~ ~ ~-~, or review' g s
opfio. -:': o~tem eS~bli.A ~ '"e ~SSuer d~.~. '~ O~ers~n ~.~ ~ts to m~. -,, "~' °~ers of
· eg~s~a~_ - -, ~e ~.,.~ . ~ ~11 be ~ · - ~"~, nor do~. '. · '.~tes, ~d t~ o~.-ents wi~
Such te~i~,:'~uer exercises it~ ~, ~aOVe, ~d to ~'~ te~m ~e D~ ~ ~e ISSUer rese-~' ~t ~e ~tial
Upon ~.~[~-oa to ~e Pa-,: T ~t ~d ont;~- f~,,mt ~e Ce~;~ '~ (CEDE ~. ~ ~ yes ~e dght
~ ~'~sen~ti~ ymg A~en,~ ~ ,un to te~: '",~Cates to ~ ~ ~u ) b~L
No~,~ . on ~d nro~ ~ "~ ~egistrar - '"~te SUch _ ~ ue registero~ · ' ~nt~
'" 'usS~dln~ .~ , ~ ~p~r rem~. . ~ ~ t~ ~ '~ reO~irem .-- --~u ~ *~-
of ~e o~-' ~.s ~e ~ti~ a~..~]?'~, register a... ~ ~ ~lc, ~d ~.~i ~ ~,uent, ~t shall ~' "'~ n~e of ~v
UCllV~red ~ -' ~u su~.:- , ~U~Cate~; ~ o ~OK-en~.. ~rO~ded c~_ · _ ~,o~rar shall
~... ~ ~8 Prodded · _ ~auta~o~ ~ _ . -~ ~ uaw ~l~a . ~ ~ysth~ ~ ~ '~ 1~ ~8 ~.
or representaSo ~ates will be dul
n mat ~y book~n~
SCion 19
~ually to eae~ ~C- CONT~ ~r~ ~
zoot:' ?Cg SC os
0 ' ~ ~0 ' ~ o~ ' ' ~'
~ ay SeC~on M ~srespectto~, ~ enu of each ~ff*~ ~SSuer Shall
- ~' ~s Ordi- ~SSUerof~ o~a~Yearena;~ . ~,oVSae
~14, 2002 "'~ ~e ~O~atl y~pe included in ~
22 hoed ~ ~
hereto, which Exhibit is attached to and incorporated in this Ordinance as if written word for word heroin. Any
financial statements so to be provided shall be (1) prepared in accordance with the accounting principles
described in Exhibit A hereto, or such other accounting principles as the Issuer may be required to employ from
time to time pursuant to state law or regulation, and (2) audited, if the Issuer commissions an audit of such
statements and the audit is completed within the period during which they must be provided. If the audit of
such financial statements is not complete within such period, then the Issuer shall provide unaudited financial
statements by the required time and will provide audited financial statements for the applicable fiscal year to
each NRMSIR and any SID, when and if the audit report on such statements become available.
(ii) If the Issuer changes its fiscal year, it will notify each NRMSIR and any SID of the change (and
of the date of the new fiscal year end) prior to the next date by which the Issuer otherwise would be required
to provide financial information and operating data pursuant to this Section. The financial information and
operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may
be included by specific reference to any document (including an official statement or other offering document,
if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed
with the SEC.
(b) Material Event Notices. The Issuer shall notify any SID and either each NRMSIR or the MSRB,
in a timely manner, of any of the following events with respect to the Certificates, if such event is material
within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements refiecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opimons or events affecting the tax-exempt status of the Certificates;
7. Modifications to rights of holders of the Certificates;
8. Certificate calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Certificates; and
11. Rating changes.
The Issuer shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by
the Issuer to provide financial information or operating data in accordance with subsection (a) of this Section
by the time required by such subsection.
0705.055\CO-Ordimmce
april 4, 2002 23
(c) Limitations, Disclaimers, and Amendments. (i) The Issuer shall be obligated to observe and
perform the covenants specified in this Section for so long as, but only for so long as, the Issuer remains an
"obligated person" with respect to the Certificates within the meaning of the Rule, except that the Issuer in any
event will give the notice required by Subsection (b) hereof of any Certificate calls and defeasance that cause
the Issuer to no longer be such an "obligated person".
(ii) The provisions of this Section are for the sole benefit of the registered owners and beneficial
owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit or any legal
or equitable fight, remedy, or claim hereunder to any other person. The Issuer undertakes to provide only the
financial information, operating data, financial statements, and notices which it has expressly agreed to provide
pursuant to this Section and does not hereby undertake to provide any other information that may be relevant
or material to a complete presentation of the Issuer's financial results, condition, or prospects or hereby
undertake to update any information provided in accordance with this Section or otherwise, except as expressly
provided herein. The Issuer does not make any representation or warranty concerning such information or its
usefulness to a decision to invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER, ITS OFFICERS, AGENTS AND
EMPLOYEES, BE LIABLE TO THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY
CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING
IN WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR
WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY
RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT
OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
(iv) No default by the Issuer in observing or performing its obligations under this Section shall
comprise a breach of or default under the Ordinance for purposes of any other provision of this Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the Issuer
under federal and state securities laws.
(v) The provisions of this Section may be mended by the Issuer from time to time to adapt to changed
circumstances that arise from a change in legal requirements, a change in law, or a change in the identity,
nature, status, or type of operations of the Issuer, but only if(l) the provisions of this Section, as so amended,
would have permitted an underwriter to purchase or sell Certificates in the primary offering of the Cerhficates
in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such
offering as well as such changed circumstances and (2) either (a) the registered owners of a majority in
aggregate principal amount (or any greater amount required by any other provision of this Ordinance that
authorizes such an amendment) of the outstanding Certificates consent to such amendment or (b) a person that
is unaffiliated with the Issuer (such as nationally recognized bond counsel) determined that such amendment
will not materially impair the interest of the registered owners and beneficial owners of the Certificates. If the
Issuer so amends the provisions of this Section, it shall include with any amended financial information or
operating data next provided in accordance with subsection (a) of this Section an explanation, in narrative
form, of the reason for the amendment and of the impact of any change in the type of financial information or
operating data so provided. The Issuer may also amend or repeal the provisions of this continuing disclosure
agreement if the SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction
enters judgment that such provisions of the Rule are invalid, but only if and to the extent that the provisions
of this sentence would not prevent an underwriter from lawfully purchasing or selling Certificates hi the
primary offering of the Certificates.
0705.055\CO-Ordinance
April 4, 2002 24
(d) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms
below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staffhas determined to be a nationally recognized
municipal securities information repository within the meaning of the Rule from time to time.
"Rule" means SEC Rule 15c2-12, as amended from thne to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department, officer, or
agency thereof as, and determined by the SEC or its staff to be, a state information depository within the
meaning of the Rule from time to time.
Section 20. PROTECTION OF PLEDGE. Chapter 1208, Government Code, applies to the issuance
of the Certificates and the pledge of the taxes and surplus revenues granted by the Issuer under Sections 8 and
9 of this Ordinance, and is therefore valid, effective, and perfected. If Texas law is amended at any time while
the Certificates are outstanding and unpaid such that the pledge of the taxes and surplus revenues granted by
the Issuer under Sections 8 and 9 oft-his Ordinance is to be subject to the filing requirements of Chapter 9,
Texas Business & Commerce Code, then in order to preserve to the registered owners of the Certificates the
perfection of the security interest in said pledge, the Issuer agrees to take such measures as it determines are
reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas
Business & Commerce Code and enable a filing to perfect the security interest in said pledge to occur.
Section 21. FURTHER PROCEDURES. The Mayor of the Issuer, the 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 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 Ordinance, the Certificates, the sale of the Certificates,
and the Notice of Sale and Official Statement; and the Assistant City Manager/Fiscal and Municipal Services
of the City shall cause the expenses of issuance of the Certificates to be paid from the proceeds of sale of the
Initial Certificate or from other lawfully available funds of the Issuer. In case uny officer whose signature shall
appear on uny 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.
Section 22. OPEN MEETINGS. The City Council has found and detenmned that the meeting at
which this Ordinance is considered is open to the public and that notice thereof was given in accordance with
the provisions of the Texas Open Meetings, Law, Tex. Gov't. Code, Chapter 551, as amended.
Section 23. EFFECTIVE DATE. This Ordinance shall become effective immediately upon its passage
and approval.
0705.055\CO-Ordinance
Apdl 4, 2002 25
PASSED AND APPROVED this the 2nd day of April, 2002.
Eulme Brock, Mayor
A'I'I'EST:
$~/nifar Walprs, City Secretary
APPROVED AS TO LEGAL FORM:
Herbert L. Prouty, City Attomey
/ .... V~ /
0705.055\CO-Ordinance
&,rn 4, 2oo2 26
EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 19 of this Ordinance:
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the Issuer to be provided annually m
accordance with such Section are as specified (and included in the Appendix or under the tables of the Official
Statement referred to) below:
Tables numbered 1 through 15, inclusive, under the captions "Tax Information", "Debt Service
Requirements" and "Financial Information" in the Official Statement.
Appendix B in the Official Statement.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described in the
notes to the financial statements referred to in the paragraph above.
0705.055\CO-Ordinance
April 4, 2002