2001-180ORDINANCE NO 2001-180
AN ORDINANCE AUTHORIZINGTHE ISSUANCE, SALE, AND DELIVERY OF CITY
OF DENTON CERTIFICATES OF OBLIGATION, SERIES 2001, 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 1971, 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 $12,120,000, for the purpose of paying all or a portion ofthe City's contractual obligations
incurred pursuant to contracts for the purchase of certain real and pei sonal property, to-wit (a) improvements
at the City's airport, (b) equipment for the City's public parks, (c) construction and equipping of a new central
fire station located at the comer of Bell Avenue and Hickory Street, Denton, Texas, (d) improvements to the
City's solid waste disposal system, (e) vehicles for the City's motor pool, (f) computer and technology
equipment and upgrades for the City's information technology systems, and (g) 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 the preparation of the City's Comprehensive Development
Plan, Open Space Plan, Downtown Master Plan and Facility Space Study, and in connection with the above
contracts and 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 2001",
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
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 May 1, 2001, in the denomination and aggregate
principal amount of $12,120,000, numbered R-1, 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 of principal of the Initial Certificate to be payable on the
dates, respectively, and in the principal amounts, respectively, stated in the FORM OF INITIAL
CERTIFICATE set forth in this Ordinance
(b) The Initial Certificate (i) may be assigned and transferred, (u) may be converted and exchanged
for other Certificates, (in) 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 it 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
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 2001
$12,120,000
THE CITY OF DENTON, in Denton County, Texas (the "Issuer"), being a political subdivision of
the State of Texas, hereby promises to pay to
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
$12,120,000
(TWELVE MILLION ONE HUNDRED TWENTY THOUSAND DOLLARS)
in annual installments of principal due and payable on February 15 in each of the years, and in the respective
principal amounts, as set forth in the following schedule, 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(%
)
2002
$1,225,000
4 50
2012
$ 265,000
4 75
2003
1,290,000
4 75
2013
265,000
4 875
2004
1,315,000
4 75
2014
265,000
5 00
2005
1,345,000
4 75
2015
260,000
5 10
2006
1,375,000
4 75
2016
260,000
5 20
2007
595,000
4 25
2017
260,000
5 25
2008
590,000
4 30
2018
260,000
5 25
2009
590,000
4 40
2019
260,000
5 25
2010
590,000
4 55
2020
260,000
5 25
2011
590,000
4 65
2021
260,000
5 25
Interest shall first be due and payable on February 15, 2002, 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 of a 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 United 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, NA, 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 by the Certificate Ordinance, the
amounts required to provide for the payment, in immediately available funds, of all principal of and interest
on this Certificate, when due
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
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 $12,120,000 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) construction and
equipping of a new central fire station located at the comer of Bell Avenue and Hickory Street, Denton, Texas,
(d) improvements to the City's solid waste disposal system, (e) vehicles for the City's motor pool, (f) computer
and technology equipment and upgrades for the City's information technology systems, and (g) 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 the preparation of the City's Comprehensive
Development Plan, Open Space Plan, Downtown Master Plan and Facility Space Study, and in connection with
the above contracts and said Certificates of Obligation
ON FEBRUARY 15, 2011, or on any date whatsoever thereafter, the unpaid installments 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 of this 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 AgenURegistrar 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-
ferred and registered Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar
may be used to evidence the assignment of this Certificate or any such portion or portions hereof by the initial
registered owner hereof A new certificate or certificates payable to such assignee or assignees (which then
will be the new registered owner or owners of such new Certificate or Certificates) or to the initial registered
owner as to any portion of this Certificate which is not being assigned and transferred by the initial registered
owner, shall be delivered by the Paying Agent/Registrar in conversion of and exchange for this Certificate or
any portion or portions hereof, but solely in the form and manner as provided in the next paragraph hereof for
the conversion and exchange of this Certificate or any portion hereof The registered owner of this Certificate
shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all
purposes, including payment and discharge of liability upon this Certificate to the extent of such payment, and
the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary
AS PROVIDED above and in the Certificate Ordinance, this Certificate, to the extent of the unpaid
principal balance hereof, may be converted into and exchanged for a like aggregate principal amount of fully
registered certificates, without interest coupons, payable to the assignee or assignees duly designated in writing
by the initial registered owner hereof, or to the initial registered owner as to any portion of this Certificate
which is not being assigned and transferred by the initial registered owner, in any denomination or
denominations in any integral multiple of $5,000 (subject to the requirement hereinafter stated that each
substitute certificate issued in exchange for any portion of this Certificate shall have a single stated principal
maturity date), upon surrender of this Certificate to the Paying Agent/Registrar for cancellation, all in
accordance with the form and procedures set forth in the Certificate Ordinance If this Certificate or any
portion hereof is assigned and transferred or converted each certificate issued in exchange for any portion
hereof shall have a single stated principal maturity date corresponding to the due date of the installment of
principal of this Certificate or portion hereof for which the substitute certificate is being exchanged, and shall
bear interest at the rate applicable to and borne by such installment of principal or portion thereof No such
certificate shall be payable in installments, but shall have only one stated principal maturity date AS
PROVIDED IN THE CERTIFICATE ORDINANCE, THIS CERTIFICATE IN ITS PRESENT FORM
MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more
assignees, but the certificates issued and delivered in exchange for this Certificate or any portion hereof may
be assigned and transferred, and converted, subsequently, as provided in the Certificate Ordinance The Issuer
shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and
exchanging this Certificate or any portion thereof, but the one requesting such transfer, conversion, and
exchange shall pay any taxes or governmental charges required to be paid with respect thereto The Paying
Agent/Registrar shall not be required to make any such assignment, conversion, or exchange 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 Agent/Registrar for this Certificate is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereof
to be mailed to the registered owner of this Certificate
IT IS HEREBY certified, recited, and covenanted that tlus Certificate has been duly and validly
authorized, issued, and delivered, that all acts, conditions, and things required or proper to be performed, exist,
and be done precedent to or in the authorization, issuance, and delivery of this Certificate have been performed,
existed, and been done in accordance with law, that this Certificate is a general obligation of the Issuer, issued
on the full faith and credit thereof, and that annual ad valorem taxes sufficient to provide for the payment of
the interest on and principal of this Certificate, as such interest comes due and such principal matures, have
been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged
irrevocably for such payment, within the limit prescribed by law, and that, 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 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 lien to, this Certificate
BY BECOMING the registered owner of this Certificate, the registered owner thereby acknowledges
all of the terns 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 May 1, 2001
ATTEST
By
Jennifer Walters
City Secretary, City of Denton, Texas
CITY OF DENTON. TEXAS
By
Euline Brock
Mayor, City of Denton, Texas
(CITY SEAL)
(INSERT BOND INSURANCE LEGEND, IF ANY)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS
COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO
I hereby certify that this Certificate has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this Certificate has been registered by the Comptroller of
Public Accounts of the State of Texas
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6 ADDITIONAL CHARACTERISTICS OF THE CERTIFICATES Registration and
Transfer (a) The Issuer shall keep or cause to be kept at the principal corporate trust office of BANK ONE,
NA, 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 Agent/Registrar may prescribe, and the Paying
Agent/Registrar shall make such transfers and registrations as herein provided The Paying Agent/Registrar
shall obtain and record in the Registration Books the address of the registered owner of each Certificate to
which payments with respect to the Certificates shall be mailed, as herein provided, but it shall be the duty of
each registered owner to notify the Paying Agent/Registrar in writing of the address to which payments shall
be mailed, and such interest payments shall not be mailed unless such notice has been given The Issuer shall
have the right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar,
but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise
required by law, shall not penrut 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 (n) 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 de-
livered 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 stated that each substitute Certificate
shall have a single stated principal maturity date), shall be in the form prescribed in the FORM OF
SUBSTITUTE CERTIFICATE set forth in this Ordinance, and shall have the characteristics, and may be
assigned, transferred, and converted as hereinafter provided If the Initial Certificate or any portion thereof
is assigned and transferred or converted the Initial Certificate must be surrendered to the Paying
Agent/Registrar for cancellation, and each Certificate issued in exchange for any portion of the Initial
Certificate shall have a single stated principal maturity date, and shall not be payable in installments, and each
such Certificate shall have a principal maturity date corresponding to the due date of the installment of
principal or portion thereof for which the substitute Certificate is being exchanged, and each such Certificate
shall bear interest at the single rate applicable to and borne by such installment of principal or portion thereof
for which it is being 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 initial registered owner were
the assignee thereof If any Certificate or portion thereof other than the Initial Certificate is assigned and
transferred or converted each Certificate issued in exchange therefor shall have the same principal maturity date
and bear interest at the same rate as the Certificate for which it is exchanged A form of assignment shall be
printed or endorsed on each Certificate, excepting the Initial 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 manner, 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
Agent/Registrar shall keep proper records of all payments made by the Issuer and the Paying Agent/Registrar
with respect to the Certificates, and of all conversions and exchanges of Certificates, and all replacements of
Certificates, as provided in this Ordinance However, in the event of a nonpayment of interest on a scheduled
payment date, and for tlurty (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
(d) Conversion and Exchange or Replacement. Authentication Each Certificate issued and delivered
pursuant to thus Ordinance, to the extent ofthe 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 FORM OF SUBSTITUTE CERTIFICATE set forth in this Ordinance, in the denomination of $5,000,
or any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Certificate
shall have a single stated maturity date), as requested in writing by such registered owner or such assignee or
assignees, in an aggregate principal amount equal to the unpaid principal balance or principal amount of any
Certificate or Certificates so surrendered, and payable to the appropriate registered owner, assignee, or assign-
ees, as the case may be If the hutial Certificate is assigned and transferred or converted each substitute
Certificate issued in exchange for any portion of the Initial Certificate shall have a single stated principal
maturity date, and shall not be payable in installments, and each such Certificate shall have a principal maturity
date corresponding to the due date of the installment of principal or portion thereof for which the substitute
Certificate is being exchanged, and each such Certificate shall bear interest at the single rate applicable to and
borne by such installment of principal or portion thereof for which it is being exchanged If any Certificate or
portion thereof (other than the Initial Certificate) is assigned and transferred or converted, each Certificate
issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as
the Certificate for which it is being exchanged Each substitute Certificate shall bear a letter and/or number
to distinguish it from each other Certificate The Paying Agent/Registrar shall convert and exchange or replace
Certificates as provided herein, and each fully registered certificate delivered in conversion of and exchange
for or replacement of any Certificate or portion thereof as permitted or required by any provision of this
Ordinance shall constitute one of the Certificates for all purposes of this Ordinance, and may again be
converted and exchanged or replaced It is specifically provided that any Certificate authenticated in
conversion of and exchange for or replacement of another Certificate on or prior to the first scheduled Record
Date for the Initial Certificate shall bear interest from the date of the Initial Certificate, but each substitute
Certificate so authenticated after such first scheduled Record Date shall bear interest from the interest payment
date next preceding the date on which such substitute Certificate was so authenticated, unless such Certificate
is authenticated after any Record Date but on or before the next following interest payment date, in which case
it shall bear interest from such next following interest payment date, provided, however, that if at the time of
delivery of any substitute Certificate the interest on the Certificate for which it is being exchanged is due but
has not been paid, then such Certificate shall bear interest from the date to which such interest has been paid
infull THE INITIAL CERTIFICATE issued and delivered pursuant to dus Ordinance is not required to be,
and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Certificate issued in
conversion of and exchange for or replacement of any Certificate or Certificates issued under this Ordinance
there shall be printed a certificate, in the form substantially as follows
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate has been issued under the provisions of the Certificate
Ordmance 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, NA, Austin, Texas
Paying Agent/Registrar
Dated
By
Authorized Representative"
An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Certificate,
date and manually sign the above Certificate, and no such Certificate shall be deemed to be issued or 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 governing 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 commencmg 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, (u) may be
transferred and assigned, (ill) may be converted and exchanged for other Certificates, (rv) shall have the
characteristics, (v) shall be signed and sealed, and (vi) the principal of and interest 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
(f) 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 (u)
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 Paying Agent/Re istrar The Issuer covenants with the registered owners of the
Certificates that at all tunes while the Certificates are outstanding the Issuer will provide a competent and
legally qualified bank, trust company, financial institution, or other agency to act as and perform the services
of Paying Agent/Registrar for the 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 Agent/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 Agent/Registrar designated and appointed by the Issuer Upon any
change in the Paying Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the
new Paying Agent/Registrar to each registered owner of the Certificates, by United States matt, first-class
postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar By accepting the
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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
INTEREST RATE
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
PRINCIPAL AMOUNT
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 2001
MATURITY DATE DATED DATE
CUSIP NO
ON THE MATURITY DATE specified above the CITY OF DENTON, in Denton County, Texas
(the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to
or to the registered assignee hereof (either being hereinafter called the "registered owner") the principal amount
of
and to pay mterest thereon, calculated on the basis of a 360-day year composed of twelve 30-day months, from
May 1, 2001, to the matunty date specified above, at the interest rate per annum specified above, with interest
being first due and payable on February 15, 2002, and semiannually on each August 15 and February 15
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, unless such date of authentication is after any Record Date (hereinafter defined) but
on or before the next following interest payment date, in which case such principal amount shall bear interest
from such next following interest payment date
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money of the
United States of America, without exchange or collection charges The principal of this Certificate shall be
paid to the registered owner hereof upon presentation and surrender of this Certificate at maturity, at the
principal corporate trust office of BANK ONE, NA, AUSTIN, TEXAS, which is the "Paying Agent/Registrar"
for this Certificate The payment of interest on this Certificate shall be made by the Paying Agent/Registrar
to the registered owner hereof on each interest payment date by check dated as of such interest payment date,
drawn by the Paying Agent/Registrar on, and payable solely from, fiends of the Issuer required by the ordinance
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authorizing the issuance of the Certificates (the "Certificate Ordinance'") to be on deposit with the Paying
Agent/Registrar for such purpose as hereinafter provided, and such check shall be sent by the Paying
Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment date, to the
registered owner hereof, at the address of the registered owner, as it appeared 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/Registrar and 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 date, interest payment date, and accrued interest payment date for this Certificate it wil l
make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate
Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal
of and interest on the Certificates, when due
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
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 is one of an issue of Certificates initially dated May 1, 2001, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of $12,120,000, 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) construction and equipping of a new central fire station located at
the comer of Bell Avenue and Hickory Street, Denton, Texas, (d) improvements to the City's solid waste
disposal system, (e) vehicles for the City's motor pool, (f) computer and technology equipment and upgrades
for the City's information technology systems, and (g) 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 the preparation of the City's Comprehensive Development Plan, Open Space Plan,
Downtown Master Plan and Facility Space Study, and in connection with the above contracts and said
Certificates of Obligation
ON FEBRUARY 15, 2011, or on any date whatsoever thereafter, the Certificates of this Series may
be redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived from any
available and lawful source, as a whole, or in part, and, if in part, the particular Certificates, or portions
thereof, to be redeemed shall be selected and designated by the Issuer (provided that a portion of a Certificate
may be redeemed only in an integral multiple of $5,000), at the redemption price of the par or principal amount
thereof, plus accrued interest to the date fixed for redemption
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AT LEAST 30 days prior to the date fixed for any redemption of Certificates or portions thereof prior
to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by United States
mail, first-class postage prepaid, to the registered owner of each Certificate to be redeemed at its address as
it appeared on the 45th day prior to such redemption date, provided, however, that the failure to send, mail,
or receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity
or effectiveness of the proceedings for the redemption of any Certificate By the date fixed for any such
redemption due provision shall be made with the Paying Agent/Registrar for the payment of the required
redemption price for the Certificates or portions thereof which are to be so redeemed, plus accrued interest
thereon to the date fixed for redemption If such written notice of redemption is given and if due provision for
such payment is made, all as provided above, the Certificates or portions thereof which are to be so redeemed
thereby automatically shall be treated as redeemed prior to their scheduled maturities, and they shall not bear
interest after the date fixed for redemption, and they shall not be regarded as being outstanding except for the
right of the registered owner to receive the redemption price plus accrued interest from the Paying
Agent/Registrar out of the funds provided for such payment If a portion of any Certificate shall be redeemed
a substitute Certificate or Certificates having the same maturity date, bearing interest at the same rate, in any
denomination or denominations in any integral multiple of $5,000, at the written request of the registered
owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the
registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as provided in the
Bond Ordinance
THIS CERTIFICATE OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL
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
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 (which 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 liability upon this Certificate to the extent
of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the
contrary
ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered certificates, without
interest coupons, in the denomination of any integral multiple of $5,000 As provided in the Certificate
Ordinance, this Certificate, 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
13
interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case may be,
having the same maturity date, and bearing interest at the same rate, in any denomination or denominations in
any integral multiple of $5,000 as requested in writing by the appropriate registered owner, assignee, or
assignees, as the case may be, upon surrender of this Certificate to the Paying Agent/Registrar for cancellation,
all in accordance with the form and procedures set forth in the Certificate Ordinance The Issuer shall pay the
Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging
any Certificate or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay
any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the
exercise of such privilege of conversion and exchange The Paying Agent/Registrar shall not be required to
make any such conversion and exchange 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 Agent/Registrar for the Certificates is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and 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
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 linut prescribed by law, and that, together with other parity
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
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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
ATTEST
By
Jennifer Walters
City Secretary, City of Denton, Texas
CITY OF DENTON, TEXAS
By
Eulme Brock
Mayor, City of Denton, Texas
(CITY SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate has been issued under the provisions of the Certificate
Ordinance described on the face of this Certificate, and that this Certificate has been issued in conversion of
and exchange for or replacement of a certificate, certificates, or a portion of a certificate or certificates of an
issue which originally was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas
BANK ONE, NA, AUSTIN, TEXAS
Paying Agent/Registrar
Dated
Authorized Representative
(INSERT BOND INSURANCE LEGEND, IF ANY)
By.
15
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 by the Issuer at an official depository bank of the Issuer The Interest and Sinking Fund shall
be kept separate and apart from all other 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
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 taxis 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
16
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 (consisting of its combined waterworks system, sanitary sewer system, and
electric light and power system) remaining after (a) payment of all amounts constituting operation and main-
tenance expenses of said Utility System, and (b) payment of all debt service, reserve, and other requirements
and amounts required to be paid under all ordinances heretofore or hereafter authorizing (1) all bonds and (u)
all other obligations not on a panty 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 panty 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 panty with the Certificates and any other then
outstanding panty 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 panty with those issues of City of Denton Certificates of Obligation, Series 1993, Series
1993-A, Series 1994, Series 1995, Series 1996, Series 1998, Series 1999 and Series 2000 (the "Outstanding
Certificates"), as permitted m the Ordinances authorizing same, and it is hereby found and determined 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 (n) shall have been made or caused to be made in
accordance with the terms thereof, or (u) 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
become due and payable At such time as a Certificate shall be deemed to be a Defeased Certificate hereunder,
as aforesaid, such Certificate and the interest thereon shall no longer be secured by, payable from, or entitled
to the benefits of, the ad valorem taxes herein levied and pledged as provided in this Ordinance, and such
principal and interest shall be payable solely from such money or Government Obligations
17
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the
Issuer also be invested in Government Obligations, maturing in the amounts and times as herembefore set forth,
and all income from such Government Obligations received by the Paying Agent/Registrar which is not
required for the payment of the Certificates and interest thereon, with respect to which such money has been
so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer
(c) The term "Government Obligations" as used in this Section shall mean direct obligations of
the United States of America, including obligations the principal of and interest on which are unconditionally
guaranteed by the United States of America, which may be United States Treasury obligations such as its State
and Local Government Series, which may be in book-entry form
(d) Until all Defeased Certificates shall have become due and payable, the Paying Agent/Registrar
shall perform the services of Paying Agent/Registrar for such Defeased 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 1 I 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, mutilated,
lost, stolen, or destroyed Certificates shall be made by the registered owner thereof to the Paying
Agent/Registrar In every case of loss, theft, or destruction of a Certificate, the registered owner applying for
a replacement certificate shall furnsh to the Issuer and to the Paying Agent/Registrar such security or
indemnity as may be required by them to save each of them harmless from any loss or damage with respect
thereto Also, in every case of loss, theft, or destruction of a Certificate, the registered owner shall furnish to
the Issuer and the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such
Certificate, as the case may be In every case of damage or mutilation of a Certificate, the registered owner
shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or mutilated
(c) No Default Occurred Notwithstanding the foregoing provisions of this Section, in the event
of any such 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 authonze the payment of the same (without
surrender thereof except in the case of a damaged or mutilated Certificate) instead of issuing a replacement
Certificate, provided security or indemnity is furmshed as above provided in ttus Section
(d) Charge for Issumg 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
any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and
proportionately with any and all other 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 authonty for the issuance of any such
replacement certificate without necessity of further action by the governing body of the Issuer or any other body
18
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 Initial 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 amounts 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 10
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,
(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,
19
(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 fund, within the meamng 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 10 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(f) 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(f) of the Code
(b) Rebate Fund In order to facilitate compliance with the above covenant (a) (8), a "Rebate Fund"
is hereby established by the Issuer for the sole benefit of the United States of America, and such fund shall not
be subject to the claim of any other person, including without limitation the bondholders The Rebate Fund
is established for the additional purpose of compliance with section 148 of the Code
(c) 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 herem 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 which modify or expand provisions of the Code, as applicable
to the Bonds, the Issuer will not be required to comply with any covenant contained herem 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 hereafter promulgated wluch impose additional requirements which are
applicable to the Bonds, the Issuer agrees to comply with the additional requirements to the extent necessary,
in the opinion 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
20
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
(d) Allocation Of and Limitation On, Exoendtures 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 Order (the "Project") on its books and records in accordance with the requirements of the 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 Code, the sale proceeds or investment earnings must be expended no more than 60
days after the earlier of (1) the fifth anniversary of the delivery of the Bonds, or (2) the date the Bonds are
retired The Issuer agrees to obtain the advice of nationally-recognized bond counsel if such expenditure fails
to comply with the foregoing to assure that such expenditure will not adversely affect the tax-exempt status
of the Bonds 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
(e) 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-recogmzed bond counsel that such sale or other disposition
will not adversely affect the tax-exempt status of the Bonds For purposes of the foregoing, the portion of the
property comprising personal property and disposed in the ordinary course shall not be treated as a transaction
resulting in the receipt of cash or other compensation 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 14 SALE OF INITIAL CERTIFICATE The Initial Certificate is hereby sold and shall be
delivered to UBS PaineWebber, Inc for cash for the par value thereof and accrued interest thereon to date of
delivery, plus a cash premium of $3,030 00 Such premium shall, upon receipt, be deposited into the Interest
and Sinking Fund It is hereby officially found, determmed, 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 April 20, 2001,
prepared and distributed in connection with the sale of the Initial Certificate Said Official Notice of Sale and
Bidding Instructions, Preliminary Official Statement and the Official Statement dated May 1, 2001, 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 true 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 FORTHE 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
21
proceeds or investment earnings must be expended no more than 60 days after the earlier of (l) the fifth
anniversary 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 fads 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 Sulking
Fund It is further provided, however, that any interest earnings on certificate proceeds which are required to
be rebated to the United States of America pursuant to Section 13 hereof in order to prevent the Certificates
from being "arbitrage bonds" within the meaning of the Code shall be so rebated and not considered as interest
earnings for the purposes of this Section
Section 18 DTC REGISTRATION The Certificates initially shall be issued and delivered in such
manner that no physical distribution of the Certificates will be made to the public, and The Depository Trust
Company ('DTC"), New York, New York, initially will act as depository for the Certificates DTC has
represented that it is a limited purpose trust company incorporated under the laws of the State of New York,
a member of the Federal Reserve System, a "blearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "blearing agency" registered under Section 17A of the federal Securities
Exchange Act of 1934, as amended, and the Issuer accepts, but in no way verifies, such representations The
Initial Certificate authorized by this Ordinance shall be delivered to and registered in the name of the Purchaser
However, it is a condition of delivery and sale that the Purchaser, immediately after such delivery, shall cause
the Paying Agent/Registrar, as provided for in this Ordinance, to cancel said Initial Certificate and deliver in
exchange therefor a substitute Certificate for each maturity of such Initial Certificate, with each such substitute
Certificate to be registered in the name of CEDE & CO , the nominee of DTC, and it shall be the duty of the
Paying Agent/Registrar to take such action It is expected that DTC will hold the Certificates on behalf of the
Purchaser and/or the DTC Participants, as defined and described in the Official Statement referred to and
approved in Section 14 hereof (the "DTC Participants") So long as each Certificate is registered in the name
of CEDE & CO , the Paying Agent/Registrar shall treat and deal with DTC in all respects the same as if it
were the actual and beneficial owner thereof It is expected that DTC will maintain a book entry system which
will identify beneficial ownership of the Certificates by DTC Participants in integral amounts of $5,000, with
transfers of ownership being effected on the records of DTC and the DTC Participants pursuant to rules and
regulations established by them, and that the substitute Certificates initially deposited with DTC shall be
immobilized and not be further exchanged for substitute Certificates except as hereinafter provided The Issuer
is not responsible or liable for any functions of DTC, will not be responsible for paying any fees or charges
with respect to its services, will not be responsible or liable for maintaining, supervising, or reviewing the
records of DTC or the DTC Participants, or protecting any interests or rights of the beneficial owners of the
22
Certificates It shall be the duty of the Purchaser and the DTC Participants to make all arrangements with
DTC to establish this book-entry system, the beneficial ownership of the Certificates, and the method of paying
the fees and charges of DTC The Issuer does not represent, nor does it in any way covenant that the initial
book-entry system established with DTC will be maintained in the future The Issuer reserves the right and
option at any time in the future, in its sole discretion, to terminate the DTC (CEDE & CO ) book-entry only
registration requirement described above, and to permit the Certificates to be registered in the name of any
owner If the Issuer exercises its right and option to terminate such requirement, it shall give written notice of
such termination to the Paying Agent/Registrar and to DTC, and thereafter the Paying Agent/Registrar shall,
upon presentation and proper request, register any Certificate in any name as provided for in this Ordinance
Notwithstanding the initial establishment of the foregoing book-entry system with DTC, if for any reason any
of the originally delivered substitute Certificates is duly filed with the Paying Agent/Registrar with proper
request for transfer and substitution, as provided for in this Ordinance, substitute Certificates will be duly
delivered as provided in this Ordinance, and there will be no assurance or representation that any book-entry
system will be maintained for such Certificates
Section 19 CONTINUING DISCLOSURE (a) Annual Reports (i) The Issuer shall provide
annually to each NRMSIR and any SID, within six months after the end of each fiscal year ending in or after
2000, financial information and operating data with respect to the Issuer ofthe general type included in the final
Official Statement authorized by Section 14 of this Ordinance, being the information described in Exhibit A
hereto, which Exhibit is attached to and incorporated in this Ordinance as if written word for word herem 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 maybe 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
(u) 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
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 reflecting financial difficulties,
5 Substitution of credit or liquidity providers, or their failure to perform,
23
6 Adverse tax opinions 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
(c) Limitations. Disclaimers. and Amendments (t) 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"
(u) 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 right, 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 herem 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
(m) 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 INTHIS SECTION, BUT EVERY
RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACTOR 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 amended 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 (1) the provisions of this Section, as so amended,
24
would have permitted an underwriter to purchase or sell Certificates in the primary offering of the Certificates
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 in the
primary offering of the Certificates
(d) Definitions As used in this Section, the following terms have the meanings ascribed to such terms
below
"MSRB" means the Municipal Securities Rulemak rig Board
"NRMSIR" means each person whom the SEC or its staff has 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 time 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 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 tune 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 trstniments, 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/Finance of the City shall cause
the expenses of issuance of the Certificates to be paid from the proceeds of sale ofthe Initial Certificate or from
other lawfully available funds of the Issuer In case any officer whose signature shall appear on any Certificate
shall cease to be such officer before the delivery of such Certificate, such signature shall nevertheless be valid
and sufficient for all purposes the same as if such officer had remained in office until such delivery
Section 21 OPEN MEETINGS The City Council has found and determined 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
25
Section 22 EFFECTIVE DATE This Ordinance shall become effective immediately upon its passage
and approval
26
PASSED AND APPROVED this the lst day of May, 2001
Euhne Brock, Mayor
ATTEST
J fifer Wafers, City Secretary
APPROVED AS TO LEGAL FORM
Herbert L Prouty, City Attorney IIWAC~j
By
27
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 in
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
A bank cashier's check orcemfied check ofthfrost National Bank,San Anton l p the amount of $242,400 00,
which represents our Good Faith Deposit (is a mehedaterere) a (has been made available to you prior to the opening of this bid), and
is submitted in accordance with the terms as set forth in the preliminary Official Statement and Notice of Sale and Bidding
Instmcdons
We agree to accept delivery of the Certificates utilizing the Book-Entry-Only System through DTC and make payment for the Imnal
Certificate in immediately available funds in the Corporate Trust Division, Bank One NA Dallas Texas, not later than 10 00 AM,
CDT on June 5, 2001, or thereafter on the date the Certificates are tendered for delivery pursuant to the terms set forth in the Notice
of Sale and Bidding Instructions It will be the obligation of the purchaser of the Certificates to complete the DTC Eligibility
Questionnaire
The undersigned agrees to complete, execute, and deliver to the City at least sot business days pnor to delivery of the Cemficates, a
cemficatte relating to the "issue price" of the Certificates in the form and to the effect accompanying the Notice of Sale and Bidding
Instructions, with such changes thereto as may be acceptable to the City
We agree to provide in writing the initial reoffering pnces and other terms, if any, to the Financial Advisor by the close of the
next business day after the award
Respectfully submitted,
UBS PaIneWebber,Inc
Name of Underwriter or Manager
lewis W. Pollok.III Vice President
Authorized Representative
214 p7q-0400
Ph umber
04~~ uk~
Signature /
Syndicate Members
UBS PalneWebber,Inc
Coastal Securities
Chase Securities of Texas
ACCEPTANCE CLAUSE
The above and foregoing bid is hereby in all things accepted by the City of Denton
Notice of Sale and Bidding Instructions, this theist day of May, 2001
ATTEST
City Secretary
Texas subject to and in accordance with the
CCifif.L(u,(i
Mayor
City of Menton, Texas
OFFICIAL BID FORM
Honorable Mayor and City Council
City of Denton Texas
Honorable Mayor and Members of the City Council
May 1 2001
Reference is made to your Preliminary Official Statement and Nonce of Sale and Bidding instructions, dated April 20, 2001 of
$12 120 000 CITY OF DENTON TEXAS CERTIFICATES OF OBLIGATION SERIES 2001, both of which constitute a part
hereof
For your legally issued Certificates, as descnbed in said Notice of Sale and Bidding Instructions and Preliminary Official Statement,
we will pay you par and accrued interest from date of issue to date of delivery to us plus a cash prenuum of S -4 a3 or
Certificates maturing and bearing interest as follows
Principal Interest Principal Interest
Principal Interest
Mature Amount Rate Maturity Amount Rare Maturity
2/15/15
4
l
Amount Rate
000 5
$260
fb %
(
2/15/02 $1225000 4 % 2/15/09 $590000
,
2115/03 1290000 It, '75 % 2/15/10 590000 k'5% 2/15/16
260000 $i1O %
2/15/04 1315000 Lf, 7 % 2/15/11 590000 65% 2/15/17
260000 Jr. a~.5 %
2/15/05 1345000 °7 % 2115112 265000 LA 7 % 2/15/18
260,000 a5 %
2/15/06 1375000 7 % 2/15/13 265000 7S% 2/15/19
260000 %
2/15/07 595 000 14A S % 2115/14 265 000 5", co % 2/15/20
260 000 r Q1.5
% 2/15/21
260,000 3 'R
2/15108 590 000
Of the principal maturities set forth in the table above term certificates have been created as indicated
in the following table (which
include multiple tern cemficates, one term cemficate or no term certificate if none is indicated)
ma
For those years which have
y
been combined into a term certificate, the principal amount shown in the table above shall be the manda
tory sinlang fund redemption
amounts in such years except that the amount shown in the year of the term certificate maturity date shall mature in such year The
term certificates created are as follows
Year of
Maturity Date First Mandatory Principal
Interest
February 15 Redemonon Amount
Rate
$
%
$
%
$
%
%
$
%
Our calculation (which is not a part of this bid) of the true interest cost from the above is
TRUE INTEREST COST
We are having the Certificates of the following maturities r, ) - cl insured by VA 6 14~(- at
a premium of $ a o+3 9t 9v said Premium to be Paid by the Initial Purchaser. Any fees to be paid to the rating agencies as a
result of said insurance will be paid by the City
Cede & CO which will upon
The Initial Certificates shall be registered in the name of
payment for the Certificates be canceled by the Paying Agent/Registrar The Certificates will then be registered in the name of Cede
& Co (DTC s partnership normnee) under the Book Entry Only System