2000-164 ORDINANCE NO 2000-164
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF
DENTON CERTIFICATES OF OBLIGATION, SERIES 2000, AND APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO, AND
PROVIDING AN EFFECTIVE DATE
TI-IE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the CerUficate of Obhganon Act of 1971, as araeoded and codified (the "Act") and
Chapters 1207 and 1501 of the Texas Government Code, as amended, penmt the City to ~ssue and sell for cash
the Cernfieates of Obhganon hereinafter anthonzed, and
WHEREAS, the City has duly caused nonce of ~ts mtennon to ~ssue the Ceruficates of Obhgat~on
hereinafter anthonzed to be pubhshed atthe tunes and ua the manner reqmred by the Act and no petmon has
been filed protesting the ~ssuance thereof, NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
Seenen 1 AMOUNT AND PURPOSE OF THE CERTIFICATES The certificate or certificates
of the C~ty of Denton, Texas (the "Issuer") are hereby anthonzed to be ~ssued and delivered m the aggregate
pnne~pal amount of $3,125,000, for the purpose of paying all or a portren of the C~ty's contractual obllgataons
recurred pursuant to contracts for the purchase of certain real and personal property, to-wxt (a) renovation to
C~ty Hall East (located at 501 Fhckory), Co) enmmamcanons eqmpment for C~ty Hall (located at 215 E
Mcganney) and C~ty Hall West (located at 221 N Elm), and (c) fuel and mamtenanco facfl~nes for the C~ty's
vehicles, and also for the purpose of paying all or a port,on of the C~ty's contractual obhganons for professional
serv~cos of engineers, architects, attorneys, map makers, auchtors, and financial advisors tn conne, ct~on wxth
the preparanon of the C~ty's Comprehensive Development Plan and w~th the above contracts and smd
Cernficates of Obhganon
Section 2 DESIGNATION OF THE CERTIFICATES Each certificate issued pursuant to th~s
Ordinance shall be designated "CITY OF DENTON CERTIFICATE OF OBLIGATION, SERIES 2000",
and annally there shall be msued, sold, and dehvered hereunder a single fully regastered certificate, vnthout
interest coupons, payable tn installments of principal (the "Imtml CerUfieate"), but the lmual Certificate may
be assigned and transferred and/or converted into and exchanged for a hke aggregate pnnc~pal amount of fully
registered cerUficates, vathout interest coupons, having serial matunnes, and m the denommaUon or deoonu-
nanons of $5,000 or any integral mulnple of $5,000, all m the manner hereinafter provided The term
"Cemficates" as used m flus Ordinance shall mean and include collecnvely the Imnal Cernficate and all
subsmute certificates exchanged therefor, as well as all other subsUtute certificates and replacement comficates
~ssued pursuant hereto, and the term "Cemficates" shall mean any of the Cemflcates
Sectmn 3 INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL CERTIFICATE
(a) The Imtaal Cemficate ~s hereby anthonzed to be ~ssued, sold, and dehvered hereunder as a single
fully registered Certaficate, w~thout interest coupons, dated May 1, 2000, m the denonunanon and aggregate
FIRST SOUTHWEST COMPANY
or to the registered assignee or assignees of smd Certificate or any portion or portions thereof (m each case,
the "registered owner"), with the annual installments of principal of the Initial Certificate to be payable on the
dates, respectavely, and in the principal amounts, respectively, stated m the FORM OF INITIAL
CERTIFICATE set forth m this Ordinance
(b) The Imtlal Certificate 0) may be assigned and transferred, (ii) may be converted and exchanged
for other CerUfieates, (m) 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 mch-
cated, in the FORM OF INITIAL CERTIFICATE set forth m this Ordinance
SceUon4 INTEREST TheunpaidprmelpalbalanceofthelmtmlCcrtlficateshallbearmterestfrom
the date of the lmual Cerufieate to the respeeUve scheduled due dates of the ~nstallments of principal of the
Imtml Certificate, and said interest shall be payable, all m the manner prowded and at the rates and on the dates
stated m the FORM OF INITIAL CERTIFICATE set forth m flus Ordinance
Section 5 FORM OF INITIAL CERTIFICATE Thc form of the Imnal Certificate, including the
form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed
on thc Imtaal Certificate, shall be substantially as follows
FORM OF INITIAL CERTIFICATE
NO R-1 $3,125,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 2000
THE CITY OF DENTON, m Denton County, Texas (the "Issuer"), being a pohUcal subdivision of
the State of Texas, hereby pronuses to pay to
FIRST SOUTHWEST COMPANY
or to thc registered assignee or assignees of flus Certificate or any portion or portions hereof (m each case, the
"registered owner**) the aggregate prmctpal amount of
$3,125,000
(THREE MILLION ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS)
in annual installments of principal due and payable on February 15 m each of the years, and m the respective
principal amounts, as set forth m the following schedule, and to pay interest, from the date of flus Ce~ficate
hereinafter slated, on the balance of each such installment of principal, respectively, from tune to time
remaimng unpmd, at the rates per annum as follows
PRINCIPAL INTEREST PRINCIPAL INTEREST
YEAR AMOUNT RATE(%) YEAR AMOUNT RATE(%)
2001 160,000 6 125 2011 155,000 5 300
2002 160,000 6 125 2012 155,000 5 400
2003 160,000 6 125 2013 155,000 5 500
2004 160,000 6 125 2014 155,000 5 600
2005 160,000 6 125 2015 155,000 5 650
2006 155,000 6 125 2016 155,000 5 700
2007 155,000 6 000 2017 155,000 5 750
2008 155,000 6 000 2018 155,000 5 800
2009 155,000 6 000 **** ******* *****
2010 155,000 5 250 2020 310,000 5 875
Interest shall first be due and payable on February 15, 2001, and senuannually on each February 15
andAugust 15thereafierwluleflusBondoranypomonhereof~soutstandmgandunpaid Sa~dmterestshall
be calculated on the bas~s ora 360-day year composed of twelve 30-day months
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON flus Certificate are payable
tn lawful money of the Umted States of America, w~thout exchange or collectxon charges The installments of
principal and the interest on flus Certificate are payable to the regmered owner hereof through the servtces of
BANK ONE, TEXAS, N A, FORT WORTH, TEXAS, winch is the "Paying Agent/Registrar" for flus
Certificate Payment of all prmcxpal of and interest on flus Certxficate shall be made by the Paying
AgenffRes~strar 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 reqmred
by the ordinance authorizing the xssuance of flus Certificate (the "Certificate Ordinance") to be on deposxt w~th
the Paying Agent/Regmtrar for such purpose as hereinafter prowded, and such check shall be sent by the
Paytng Ageat/Reg~strar by Umted States mall, first-class postage prepaid, on each such principal and/or
interest payment date, to the registered owner hereof, at the address of the registered owner, as it appeared at
the close of business on the last day of tho month next preceding each such date (the "Record Date") on the
Reg~stratl0n Books kept by the Paying Agent/Regqstrar, as herema~er described The Issuer covenants with
the registered owner of flus Cemfieate that on or before each pnncipal and/or interest payment date for this
Certificate it wall make available to the Paying Ageat/Reg~strar, from the "Interest and Stoking Fund" created
bythe Certificate Ordinance, the mounts reqmred to prowde for the payment, m mune&ately avmlable funds,
of all pnnc~pal of and interest on flus Cemflcate, when due
IN THE EVENT of a nonpayment of interest on a scheduled payment date, and for flurry (30) days
thereafter, a new record date for such interest payment (a "Special Record Date") will be estabhshed by the
Paying Aslent/Reglstrar, ffand when funds for the payment of such interest have been received from the Issuer
NoUco of the Spccxal Record Date and of the scheduled payment date of the past due interest ("Specxal Payment
Date", winch shall be fifteen (15) days after thc Special Record Date) shall be sent at least five (5) business
days prior to the Special Record Date by Umted States mall, first class postage prepaxd, to the address of each
Holder of a Certtficate appearing on the rcglstratmn books of the Paying Agent/Registrar at the close of
business on the 15th business day next prexw,,dmg the date of madmg of such notice
IF THE DATE for thc payment of the pnne~pal of or interest on thxs Cemfieate shall be a Saturday,
Sunday, a legal hohday, or a day on winch banking mstauuons in the C~ty where the Paying Agent/Regmrar
is located are authorized by law or executive order to close, then the date for such payment shall bc the next
succeeding day wluch xs not such a Saturday, Sunday, legal holiday, or day on wtuch banking mstamt~ons are
authonzed 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 anthonzed m accordance w~th the Constitution and laws of the State
of Texas m the pnnc~pal amount of $3,125,000 for the purpose of paying all or a portion of the Oty's
contractual obhgat~ons incurred pursuant to contracts for the purchase of certain real and personal property,
to-war (a) renovation to C~ty Hall East (located at 5011-hckory), (b) commumcataons equipment for C~ty Hall
(located at 215 E McKmney) and Oty Hall West (located at 221 N Elm), and (c) fuel and maintenance
faohtles for the C~ty's vebacles, and also for the purpose of paying all or a pomon &the City's contractual
obligations for professmnal serwces of engineers, arcbateets, attorneys, map makers, auditors, and financial
adwsors m connection ~th the preparaUon of the C~ty's Comprehensive Development Plan and w~th the above
contracts and smd Certificates of Obhganon
ON FEBRUARY 15, 2010, or on any date whatsoever thereafter, the unpaid installments of pnnc~pal
of tins Certificate of Obhgatloo may be prepaid or redeemed prior to their scheduled due dates, at the optmn
of the Issuer, w~th funds derived from any avadable source, as a whole, or m part, and, ifm part, the particular
portion of flus Cemficate of Obhgatlon to be prepaid or redeemed shall be selected and designated by the Issuer
(prowded that a portaon of tins Certificate of Obhgat~on may be redeemed only m an mtegral multiple of
$5,000), at the prepayment or redemption price of the par or principal amount thereof, plus accrued mterest
to the date fixed for prepayment or redemption
THE CERTIFICATES ofthas Senee scheduled to mature on FEBRUARY 15, 2020 are subject to
mandatory redemptaoo prior to their scheduled matuntaes, and shall be redeemed by the Issuer, m part, prior
to their scheduled matuntaes, w~th money from the Mandatory Redemption Account of the Interest and Sinking
Fund, with the pamcular Certificates or portmn thereof to be redeemed to be selected by the Paying
Agent/Registrar, by lot or other customary method (provxded that a portaon cfa Cemficate may be redeemed
only in an integral multiple of $5,000), at a redemption price equal to the par or pnnc~pal amount thereof and
accrued interest to the date of redemption, on the dates, and m the principal amounts, respeetavely, as shown
m the following schedule
February 15, 2020 M~ntY
Mandatory Pnnclpal
Redemotlon D~$ Amounts
February 15, 2019 155,000
February 15, 2020 (maturity) 155,000
The pnn¢lpal amount of the Certificates rcqmred to be redeemed on the Mandatory Redemptmn Dates pursuant
to the foregoing shall be reduced, at the optmn of the Issuer by the pnnopal amount of any Certificates out of
the maturity scheduled for February 15, 2020 wbach, at least 45 days prior to the aforesaid appropriate
redempuon date (1) shall have been acquired by the Issuer at a price not exceedmg the pnnc~pal amount of such
Certificates plus accrued interest to the date of purchase thereof, and dehvered to the Paying Agent/Registrar
for cancellatmn, or (2) as shall have been redeemed pursuant to the optmnal redemptmn prows~ons hereof and
not prewously erediWxt to the mandatory stoking fund redemption During any period m wluch ownerslup of
the Certafi~ates as determined by a book entry at a seeuntaes depository for the Ce~flcates, if fewer than all
of the Ce~flcates of the same matanty and beanng such interest rate shall be selected m accordance w~th the
arrangements between the Issuer and the seeunt~es depository
4
AT LEAST 30 days prior to the date fixed for any such prepayment or redempt,on a written not,ce
of such prepayment or redemption shall be mailed by the Paying Agent/Reg,strar to the reg, stered owner hereof
By the date fixed for any such prepayment or redempt,on due prov,sion shall be made by the Issuer w,th the
Paying Agent/Registrar for the payment of the requ,red prepayment or redempt,on pr,ce for flus Certificate or
the port,on hereof wh,ch is to be so prepa,d or redeemed, plus accrued interest thereon to the date fixed for
prepayment or redemption If such written notice of prepayment or redemption ,s gtven, and ffdue prov,slon
for such payment ,s made, all as prowded above, flus Certificate, or the pon,on thereof wh, ch ,s to be so
prepmd or redeemed, thereby automat,cally shall be treated as prepaid or redeemed prior to ,ts scheduled due
date, and shall not bear interest aider the date fixed for ,ts prepayment or redemption, and shall not be regarded
as being outstanding except for the right of the registered owner to receive the prepayment or redempt,on price
plus accrued interest to the date fixed for prepayment or redempt,on fi.om the Paying AgentYReg,strar out of
the funds provided for such payment The Paying Agent/Regtstrar shall record m the Reg,straUon Books all
such prepayments or redempt,ons ofprmexpal of flus Cert,ficate or any port~on hereof
THIS CERTIFICATE, to the extent of the unpa,d prme,pal balance hereof, or any unpa,d pon,on
hereof,n any integral mnlt,ple of $5,000, may be ass,gned by the ,mt,al reg,stered owner hereof and shall be
transferred only m the Regxstrat,on Books of the Issuer kept by the Paying Agent/Registrar acting m the
capac,ty of registrar for the Certxfieates, upon the terms and ooncht,ons set forth m the Certificate Ordinance
Among other reqmr~raents for such transfer, this Certificate must be presented and surrendered to the Paying
Agent/Registrar for cancellation, together w~th proper mstrnments of ass,gnment, ,n form and w,th guarantee
of s,guatores sat,sfaetory to the Paying Agent/Registrar, ev,dencmg assxgnment by the matml registered owner
of this CerUficate, or any portion or portions hereof m any integral mult,ple of $5,000, to the assxguee or
ass~guees m whose name or names tins CerUflcate or any such pomon or poruons hereof~s or are to be trans-
ferred and regustered Any instrument or instruments ofass,gmnent sat,sfaetory to the Pay,ng AgentYReg~strar
may be used to e~dence the assignment of flus Cemficate or any such pon,on or porUons hereof by the ant,al
reg,stered owner hereof A new cerUficate or cert,ficates payable to such ass,guee or assxgnees (wh,ch then
will be the new regxstered owner or owners of such new Cemficate or Cert,ficates) or to the nuUal registered
owner as to any pomon of flus CerUfieate wtueh ,s not being ass,gued and transferred by the anual reg,stered
owner, shall be dehvered by the Paying Agent/Registrar m oonvers,on of and exchange for flus CerUficate or
any pon,on or porUons hereof, but solely m the form and manner as provsded m the next paragraph hereof for
the convemen and exchange of flus CerUficate or any poruon hereof The reg,stered owner of flus Cert,ficate
shall be deemed and treated by the Issuer and the Paymg AgenffReg~strar as the absolute owner hereof for all
purposes, including payment and d,scharge ofhabfixty upon flus Certificate to the extent of such payment, and
the Issuer and the Paymg Agent/Reg,strar shall not be affected by any not,ce to the contrary
AS PROVIDED above and m the Certificate Ordinance, flus Ceruficate, to the extent of the unpatd
print,pal balance hereof, may be converted into and exchanged for a hke aggregate prmc,pal amount of fully
regxstered cerUfieates, w~thout mU:rest coupons, payable to the ass,guee or assxgnces duly designated m writing
by the n'ut,al registered owner hereof, or to the untml registered owner as to any poruon of flus Cert,ficate
wh,ch ,s not being assxgned and transferred by the nut, al registered owner, m any denommat,on or
denominations m any integral mulUple of $5,000 (subject to the requxrement heremai~er stated that each
subsutute cerUficate issued m exchange for any port~on of flus Cert,ficate shall have a single stated prmc,pal
maturity date), upon surrender of tins CerUficate to the Paying Agent/Reg,strar for cancellat,on, all m
accordance with the form and procedures set forth m the Ceruficate Ordinance If flus Ceruficate or any
pon,on hereof is assigned and transferred or converted each cert,ficate issued m exchange for any portion
hereof shall have a single stated principal matonty date corresponding to the due date of the installment of
prme,pal 0fflus Ceruficate or porUon hereof for wh,eh the subst,tute cert,ficate ,s being exchanged, and shall
bear ,nter~st at the rate apphcable to and borne by such installment of pnncxpal or pon,on thereof No such
cert,flcate shall be payable m installments, but shall have only one stated prmcxpal 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
asstgnees, but the cerUficates tssued and dehvered m exchange for flus Certificate or any portton hereof may
be asstgned and transferred, and converted, subsequently, as provtded tn the Certtficate Ordinance The Issuer
shall pay the Paying Agent/R~g~strar's standard or customary fees and charges for transferring, converting, and
exchangtn8 flus Certxflcate or any port,on thereof, but the one requestmg such transfer, conversion, and
exchange s~ll pay any taxes or governmental charges reqmred to be pard wah respect thereto The Paying
Agent/Registrar shall not be required to make any such asstgnment, convemon, or exchange during the period
commencing w~th the close ofbusmess on any Record Date and ending wtth the opening of business on the next
following pnnc~pal or interest payment date
IN THE EVENT any Paying Agent/Regxstrar for flus Certificate ts changed by the Issuer, restgas, or
otherwise ceases to act as such, the Issuer has covenanted m the Certtficate Ordinance that ~t promptly
appoint a competent and legally quahfied substaute therefor, and promptly will cause written not,ce thereof
to be marled to the registered owner ofth~s Cert~ficat~
IT IS HEREBY certified, recxted, and covenanted that tlus Certificate has been duly and vahdly
authorized, tssued, and dehvered, that all acts, cond~ttons, and things requtred or proper to be performed, erast,
and be done precedent to or m the authonzatton, ~ssuance, and dehvery oftlus Certxficate have been performed,
created, and been done m accordance with law, that flus Certtficate xs a general obhgatmn of the Issuer, tssued
on the full faith and credit thereof, and that asmual ad valorem taxes sufficient to provide for the payment of
the mterest on and pnnctpal of tins Certificate, as such interest comes due and such principal matures, have
been lev~od and ordered to be lev~ed against all taxable property m the Issuer, and have been pledged
trrevocably for such payment, w~thm the lmut prescribed by law, and that, together wah other panty
obhgattons, flus Comflcate addmonally xs payable from and secured by certain surplus revenues (not to exceed
$10,000 m a~gregate amount) derived by the Issuer from the ownerslup and operatmn of the Ctty's Ut~hty
System (consisting of the Cay's combmed waterworks system, samtary sewer system, and eleetnc hght and
power system), all as provxded m the Cemficate Ordinance
THE ISSUER has reserved the right to ~ssue, m accordance vath law, and m accordance wxth the
Cemficate Ordinance, other and a~khtaonal obhgataons, and to enter rote contracts, payable from ad valorem
taxes and/or revenues of the Cay's Utlhty System, on a panty vath, or w~th respect to smd revenues, superior
tn hen to, this Certlficat~
BY BECOMING the registered owner of flus Certxflcate, the regtstered owner thereby acknowledges
all of the terms and provmons of the Certificate Ordinance, agrees to be bound by such terms and prows~ons,
acknowledges that the Certificate Ordinance ~s duly recorded and available for inspection m the offictal minutes
and records of the governing body of the Issuer, and agrees that the terms and provmons oftlus Certificate and
the CerUfieate Ordinance consUtot~ a contract between the regxstered owner hercof and the Issuer
6
IN WITNESS WHEREOF, the Issuer has caused flus Certificate to be signed w~th the manual or
facsumle signature of the Mayor of the Issuer and ceunterslgned and attested w~th the manual or facsimile
slgnatare of the City Secretary of the Issuer, has caused the official seal of the Issuer to be duly anpressed, or
placed m facsmule, on flus Certificate, and has caused this Certificate to be dated May 1, 2000
ATTEST CITY OF DENTON, TEXAS
By By
Jenmfer Walters Jack Miller
City Secretary, City of Denton, Texas 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 flus Certificate has been examined, certtfied as to vahchty, and approved by the
Attorney General oftha State of Texas, and that flus Certificate has been regxstcred by the Comptroller of
Public Accounts of the State of Texas
Waness my s~gnatare and seal flus
Comptroller of Pubhc Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Soct~on 6 ADDITIONAL CHARACTERISTICS OF THE CERTIFICATES RemstraUon and
Transfer (a) The Issuer shall keep or cause to be kept at the principal corporate trust office of BANK ONE,
TEXAS, N A, FORT WORTH, TEXAS (the "Paym8 Agent/Registrar") books or records of the reglstraUon
and transfer of the Cemficates (the "Registration Books"), and the Issuer hereby appomts the Paying
Agent/Re~strar as ~ts registrar and transfer agent to keep such books or records and make such transfers and
reg~strauona under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe, and
the Paym8 Agent/Registrar shall make such transfers and reglstrattons as hereto provided The Paying
Agent/Registrar shall obtain and record m the Reg~strataon Books the address of the registered owner of each
Certificate to wluch payments w~th respect to the Certaficates shall be mmled, as hereto prowded, but it shall
be the duty of each registered owner to notify the Paying Agent/Regxstrar m writing of the address to wluch
payments shall be mailed, and such mterest payments shall not be marled unless such notaee has been given
The Issuer shall have the right to respect the Reg~strataon Books durm8 regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Reggstrar shall keep the Registration Books confidential and,
unless otherwise rexlulred by law, shall not pernut their inspection by any other enuty RegistraUon of each
7
CertificateI may be transferred m the Regl~tration Books only upon presentation and surrender of such
Certlficatelto the Paying Agent/Registrar fei' transfer of registration and cancellation, together vath proper
wnttea instruments of assignment, m fermi and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, (0 evtdencmg the assignmet~t of the Certificate, or any portion thereofin any integral multiple
of $5,000, to the assignee or assignees theroof, and (n) the right of such assignee or assignees to have the
Certificate,or any such port,on thereof registered m the name of such assignee or ass~gneas Upon the
assignment and transfer of any Cemficate or any portion thereof, a new substitute Cemficate or Certificates
shall be issued m convomon and exchange therefor in the manner hereto prowded The Initial Certificate, to
the extent ,of the unpmd pnncipal balance thereof, may bo assigned and transferred by the antml registered
owner thereof once only, and to one or mor~ assignees designated m writing by the lmtial registered owner
thereof All Certificates issued and delivered m conversion of and exchange for the Initial Certificate shall be
m any den0nanataon or denominations of any integral multiple of $5,000 (subject to the requirement hereinafter
stated that each substitute Cemficate shall l~ve a single stated pnncipal maturity date), shall be m the form
prescnbed,m the FORM OF SUBSTITUTE CERTIFICATE set forth m tins Ordinance, and shall have the
characterizes, and may be assigned, transferred, and converted as hereinafter provided If the Imtial
Certificate or any portion thereof is assign~l and transferred or converted the Imt~al Cemficate must be
surrendered to the Paying Agent/Registrar for eancellataon, and each Certificate issued m exchange for any
portion of the Imtial Certificate shall have a single stated principal maturity date, and shall not be payable m
installments, and caoh such Cemficato shalllhavo a pnnclpal maturity date corresponding to the due date of
the installment of principal or pomon thereof, for winch the substitute Certificate is being exchanged, and each
such Certificate shall bear interest at the single rate apphcable to and borne by such installment of principal
or portion thereof for winch it ~s being exchanged If only a portion of the Initial Cemfieate is assigned and
transferred, there shall be delivered to and registered m the name of the nutial registered owner substitute
Certificates m exchange for the unassigned balance of the Imtial Cemficate m the same manner as if the lmtial
registered 0wner were the assignee thereof Ifany Certificate or port~on thereofother than the Imtial Certificate
is assigned and transferred or converted each Certificate issued m exchange therefor shall have the same
print,pal maturity date and bear interest at tile same rate as the Certificate for winch it is exchanged A form
of assignment shall be printed or endorsed os each Certificate, excepting the Imtlal Cemficate, which shall be
executed by the registered owner or its duly luthonzed attorney or representative to evidence an assignment
thereof Upon surrender of any Cemficates or any pomon or portions thereof for transfer of reg, stratlon, an
anthonzed, reprosentatave of the Paying Agent/Registrar shall make such transfer m the R~glstrataon Books,
and shall d011ver a now fully registered substitute Certaficate or Certificates, having the charactenstacs hereto
described, payable to such assignee or assignees (winch then vall be the registered owner or owners of such
new Cemflcate or Cemficatos), or to the prowous registered owner m case only a portion cfa Cemfieate is
being assigned and transferred, all m converalon of and exchange for smd assigned Certificate or Certificates
or any porUon or pomons thereof, m the sa~ne form and manner, and with the same effect, as provided m
Section 6(ti), below, for the conversion and exchange of Certificates by any registered owner of a Cemfieate
The Issuer~ shall pay the Paying Agent/Rogl~trar's standard or customary fees and charges for making such
transfer and delivery cfa substitute Cemfloato or Certificates, but the one requesting such transfer shal pay
any taxes or other governmental charges required to bo paid w~th respect thereto The Paying Agent/Registrar
shall not b~ required to make transfers ofregl~tratmn of any Cert,fieate or any portion thereof during the period
commencing w~th the close of business on an~ Record Date and ending w~th the opening of business on the next
following pnn¢lpal or interest payment date,
(b) e f C s Thq entity m whose name any Certificate shall be registered m thc
Registratidn Books at any ttmc shall be deemed and treated as thc absolute owner thereof for all purposes of
tins Ordinance, whether or not such Ccmficate shall be overdue, and the Issuer and thc Paying Agent/Registrar
shall not be affected by any notate to the contrary, and payment of, or on account of, the principal of, prermum,
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
Ageat/Reg~strar to act as the paying agent for paying the principal of and interest on the Certificates, and to
act as its ageat to convert and exchange or r~place Certificates, all as provided m flus 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 prowded m tlus Ordinance However, m 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 Ageat/Registrar, if and when funds for the payment of such
interest have been received from the Issuer Notace of the Special Record Date and of the scheduled payment
date of the,past duo mtercet ("Special Payment Date", wbach shall be fii~eea (15) days after the Special Record
Date) shall be seat at least five (5) business days prior to the Special Record Date by United States marl, first
class postage prepaid, to the address of each Holder ora Certificate appeanng on the registration books of the
Paymg Agant/Registrar at the close of business on the 15th business day next preceding the date of reading of
such notlc~
(d) Conversion and Exchange or Reolacemeat, Autheatlcatlon Each Certificate issued and dehvered
pursuant tO th~s Ordinance, to the exteat of the unpmd pnncipal balance or pnnclpal amount thereof, may, upon
surrender of such Certificate at the pnncipal 0orporate trust offic~ of the Paying Agent/l~gistrar, together w~th
a wnttea request therefor duly executed by the registered owner or the asslgne~ or assignees thereof, or its or
their duly anthonzed attorneys or representatives, w~th guarantee of signatures satisfactory to the Paying
Agent/Registrar, may, at the op/aon of the registered owner or such assignee or assignccs, as appropriate, be
converted rote and exchanged for fully registered cc~flcates, w~thout interest coupons, m the form prcscnbed
in the FORM OF SUBSTITUTE CERTIFICATE set forth m tins Ordinance, m the deaommatlon of $5,000,
or any integral multiple of $5,000 (subject to thc requirement hcremai~cr stated that each substitute Certificate
shall have a single stated maturity date), as requested m writing by such registered owner or such assignee or
assignees, m an aggregate principal amount equal to the unpaid principal balance or pnnclpal amount of any
Certificate or Certificates so surrendcred, and payable to the appropriate reglstercd owner, assignee, or assign-
ees, as tho case may be If the lmtlal Certaficate is assigned and transferred or converted each substitute
Certificate issued m ~change for any portion of the Imtaal Certificate shall have a single stated pnnclpal
maturity date, and shall not be payable m mstallmeats, and each such Cert~ficatc shall have a principal maturity
date corrcspondmg to the due date of the mgtallmeat of principal or portion thereof for wluch the substitute
Certificate is bemg exchanged, and each such Cert~ficata shall bear mtercst at thc single rate apphcablc to and
borne by such installment of principal or pomon thereof for winch It Is being cxchangcd Ifany Cemficate or
port,on thereof (other than the lmt~al Certificate) is assigned and transferred or converted, each Ccrtaficate
issued m exchange therefor shall have the same pnncipal maturity date and bear mtcrcst at thc samc rate as
thc Certificate for wluch it is being exchanged Each substatute Certificate shall bear a lctter and/or number
to chstmgnish it from each other Cemficatc The Paying Agent/Registrar shall convcrt and cxchangc or rcplacc
Certificates as provaded hereto, and each fully registered earuflcate dehvcred m conversion of and exchange
for or replacement of any Certificate or port, on thereof as pcrnutted or rcqmred by any prowsion of flus
Orchnancc shall constatute one of the Comficates for all purposes of this Ordinance, and may again be
converted land exchanged or replaced Itl is specifically provided that any Certificate authenticated m
conversion of and exchange for or replacom0nt of another Cemficatc on or pnor to thc first scheduled Record
Date for t.he Imtaal Cemficatc shall bear interest from the date of thc Imtial Certificate, but each substitute
Certificata so authenticated after such first scheduled Record Date shall bear interest from the interest payment
date next prccedmg the date on wluch such substatutc Certificate was so authenticated, unlcss such Certificate
ns autheatlcated after any Record Date but on or bcforc the ncxt following interest payment date, m which case
9
tt shall bear tnterest from such next following tmerest payment date, pmvtded, however, that ~fat the ttme of
delivery of any substttote Certtficate the interest on the Certtficate for whmh ~t ts being exchanged ts due but
has not be,n pard, then such Cemficate shall bear interest from the date to winch such mterest has been pa~d
mfull THE INITIAL CERTIFICATE issued and dehvcmd pursuant to thts Ordinance ts not requtred to be,
and shall not be, authenttcated by the Paying Agent/Registrar, but on each substtmte Cemficate tssued tn
converston of and exchange for or replacement of any Certtficate or Cemficates tssued under flus Ordinance
there shall be printed a certtficate, m the form substantially as follows
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It la hereby cemfiod that tlus Comficate has been tssued under the provtstons of the Cemficate
Ordinance described on the face of flus Cemficate, and that th~s Cemficate has been tssued tn convemon of
and exchange for or replacement of a certificate, ecrttficates, or a portton of a cemficate or certtficates of an
tssue wtuch originally was approved by the Attorney General of the State of Texas and regtstered by the
Comptroller of Pubhc Accounts of tho State of Texas
BANK ONE, TEXAS, N A
FORT WORTH, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative"
An authorized ropresentaUve of the Paying AgenffReg~strar shall, before the delivery of any such Certificate,
date and manually stgn the above Cemficate, and no such Certificate shall be deemed to be ~ssued or out-
stanchng unless such Cemficate xs so executed The Paying Agent/Registrar promptly shall cancel all
Certificates surrendered for convemon and exchange or replacement No adcht~onal 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 aecomphsh the forebore8 conversion and exchange or replacement of any Cemficate or pomon thereof, and
the Paying Agent/RoSlStrar shall promde for the printing, execution, and dehvery of the substttute Certificates
tn the manner prescribed harem, and smd Cemficates shall be of type composlUon printed on paper with
hthographed or stcel engraved borders of enstomary we~ght and strength Pursuant to Chaptsr 1201, Texas
Government Coda, the duty of conversion and exchange or replacement of Certificates as aforesaid ts hereby
unposed upon the Paying Agent/R~glstrar, and, upon the executmn of the above Paying Agent/Reglstrar's
Authentication Certfficato, the converted and exchanged or replaced Cemficate shall be valid, incontestable,
and enforceable m the same manner and w~th the same effect as the Imtlal Certfficate wluch originally was
tssued pursuant to flus Ordinance, approved by the Attorney General, and registered by the Comptroller of
Pubhc Accounts The Issuer shall pay the Paying Asent/Reglstrar's standard or customary fees and charges
for transferring, convertlnS, and excha~mg any Certificate or any pomon thereof, but the one requesting any
such transfer, convemon, and exchange shall pay any taxes or governmental charges reqmred to be prod vath
respect thereto as a condition precedent to the exercise of such pnwlege of conversion and exchange The
Paying Agent/Regtstrar shall not be reqmred to make any such convemon and exchange or replacement of
Cemficates or any pomon thereof during tho period commencing with the close of business on any Record Date
and ending vath the opemng of business on the next following prmctpal or interest payment date
(e) In General All Cemficates issued mconverston and exchange or replacement of any other
Cemficate or portton thereof, (i) shall be issued m fully regtstemd form, wtthout interest coupons, wtth the
prmctpal of and interest on such Cemficates to be payable only to the registered owners thereof, (n) may be
transferred and assigned, (m) may be converted and exchanged for other Certificates, 0v) 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 m the manner required or tndicated, in the FORM OF SUBSTITUTE
CERTIFICATE set forth m tins Ordinance
(0 P~.yment of Fees and Char, cs The Issuer hereby covenants with the registered owners of the
Certificates that ~t will 0) pay the standard or customary fees and charges of the Paying Agent/Registrar for
its services w~th 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 m this Ordinance
(g) Sgbstatute Pawn,, A,,ent/Remstrar The Issuer covenants with the registered owners of the
Certificates that at all times whde the Certificates are outstanding the Issuer will provide a competent and
legally qualified bank, trust company, finaneml institution, or other agency to act as and perform the services
of Paying Agent/Regmtrar for the Certificates under tins Ordinance, and that the Paying Agent/Registrar will
be one entity The Issuer reeerves the right to, and may, at its option, change the Paying Agent/Registrar upon
not less than 120 days wnttan notice to the Paying Agent/Registrar, to be effective not later than 60 days prior
to the nex~ pnneipal or interest payment date after such notice In the event that the entity at any tune acting
as Paying Agent/Registrar (or its successor by merger, aeqmsitton, or other method) should resign or otherwise
cease to act as such, the Issuer covenants that ~t v~ll promptly appoint a competent and legally qualified bank,
trust company, financml mst~tut~on, or other agency to act as Paymg Agent/Registrar under this Ordinance
Upon any change m the Paying Ageat/Reg~strar, the prewous Paying Agent/Registrar shall promptly transfer
and deliver the Registrat~on Books (or a copy thereof), along w~th all other perUnent books and records relating
to the Certificates, to the new Paymg Agent/Registrar designated and appointed by the Issuer Upon any
change m the 1)aymg Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the
new Paying AganffReglstrar to each registered owner of the Certificates, by Umted States mini, first-class
postage prepaid, which oottee also shall g~ve the address of the new Payang Agent/Registrar By accepting the
position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the prov~sions
of tbas Ordinance, and a eertafied copy of this Ordinance shall be delivered to each Paying Agent/Registrar
Section 7 FORM OF SUBSTITUTE CERTIFICATES The form of all Certificates issued m
conversion and exchange or replacement of any other Certificate or po~on thereof, mcludmg the form of
Paying Agent/Reg~strar's Certificate to be printed on each of such Certificates, and the Form of Assignment
to be printed on each of the Certafieates, shall be, respectavely, substantially as follows, with such appropriate
vananons, onussmns, or msemons as are penmtted or reqmred by tins Ordinance
FORM OF SUBSTITUTE CERTIFICATE
(Book-Entry Only Legend, if appropnate)
NO UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 2OOO
11
ORIGINAL DATE
INTEREST RATE MATURITY DATE OF ISSUE CUSIP NO
%
ON THE MATURITY DATE specified above the CITY OF DENTON, an Denton County, Texas
(the "Issuer"), being a pohtacal subdawslon of the State of Texas, hereby promises to pay to
or to the registered assignee hereof(e~ther being hereinafter called the "regastered owner") the prmcapal amount
of
and to pay interest thereon, calculated on the basis ofa 360-day year composed of twelve 30-day months, from
May 1, 2000, to the maturity date specified above, at the interest rate per annum specified above, w~th interest
being first duo and payable on February 15, 2001, and senuannually on each August 15 and February 15
thereafter, except that if the date of anthent~cat~un of flus Certaficate as later than the first Record Date
(hereinafter defined), such principal amount shall bear interest from the interest payment date next preceding
the date ofantheaticaUon, unless such date of authent~catton ~s after any Record Date (hereinafter defined) but
on or before the next following interest payment date, m winch case such pnnclpal amount shall bear interest
from such next following interest payment date
THE PRINCIPAL OF AND INTEREST ON flus Certificate are payable m lawful money of the
Umted States of America, without exchange or collectian charges The pnnc~pal of flus Cernficate shall be
paid to the registered owner hereof upon presentataon and surrender of flus Certaficate at maturity, at the
prmcapal corporate trust office of BANK ONE, TEXAS, N A, FORT WORTH, TEXAS, which as the "Paying
Agent/Registrar" for flus Certificate The payment of interest on flus 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 bythe Paying Agent/Registrar on, and payable solely from, funds of the Issuer required
by the ordinance authorizing the ~ssuanee of the CerUficates (the "Certaficate Or(finance") to be on deposit w~th
the Paying AgenffRe$~strar for such purpose as hereinafter provided, and such check shall be sent by the
Paying Agent/Registrar by Umted States marl, first-class postage prepmd, on each such mterest payment date,
to the regastered owner hereof, at the address of the registered owner, as at appeared at the close of business
on the last,day of the month next preceding each such date (the "Record Date") on the Reg~strataon 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/Regastrar and requested by, and at the risk and expense
of, the registered owner hereof The Issuer covenants v~th the registered owner of flus Certificate that on or
before each pnnclpal payment date, interest payment date, and accrued interest payment date for flus
Certificate it will make available to the Paying Agent/Registrar, from the "Interest and Stoking Fund" created
by the Cemficate Ordinance, the amounts required tn provade for the payment, m unmethately avmlable 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 flurry (30) days
thereafter, a new record date for such interest payment (a "Special Record Date") wall be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been receaved from the Issuer
Notace of the Special Record Date and of the scheduled payment date of the past due interest ("Specml Payment
Date", which shall be fifteen 05) days after the Special Record Date) shall be sent at least five (5) business
days prior to the Specml Record Date by Umted States mml, first class postage prepmd, to the address of each
12
Holder of a Certificate appearing on the reglstrauon books of the Paying Agent/Registrar at the close of
business on the 15th business day next pr~.ethng the date of totaling of such notice
IF THE DATE/'or the payment of the pnnclpal of or interest on flus Certificate shall be a Saturday,
Sunday, a legal holiday, or a day on wtuch banlang mst~tuuons m the Ctty where the Paying Agent/Regtstrar
ns located are authorized by law or executive order to close, then thc date for such payment shall bc the next
suoeeedmg day wluch is not such a Saturday, Sunday, legal hohday, or day on wtuch banking mstttuUons are
authorized to close, and payment on such date shall have thc same force and effect as tf made on the original
date payment was due
TI~S CERTIFICATE is one of an tssue of Cemficates unually dated May 1, 2000, anthonzed m
accordance w~th the ConsUtuUon and laws of the State of Texas m the pnnctpal amount of $3,125,000, for the
purpose of paying all or a portion of the CIW's contractual obhgaUons mcurred pursuant to contracts for the
purchase of certain real and personal property, to-w~t (a) renovaUon to City Hall East (located at 501
l-hckory), (b) communications equipment for City Hall (located at 215 E McKmney) and City Hall West
(located at 221 N Elm), and (c) fuel and mamtenanee facdtUes for the City's vetucles, and also for the purpose
of paying all or a portaon of the City's contractual obligations for professional serwces of engineers, arclmects,
attorneys, map makers, auditors, and financtal adwsors m connec~on w~th the preparaUon of the Ctty's
Comprehenstve Development Plan and wtth the above contracts and smd Certaficates of Obligation
ON FEBRUARY 15, 2010, or on any date whatsoever thereafter, the Certtficates of flus Sones may
be redeemed prior to their scheduled maturities, at the option of the Issuer, w~th funds derived from any
avadable and lawful source, as a whole, or m part, and, tf tn part, the parucular CerUficates, or porUoas
thereof, to be redeemed shall be selected and designated by the Issuer (provided that a pomon ora Cerhficate
may be redeemed only m an integral muluple of $5,000), at the redempUon price of the par or prmctpal amount
thereof, plus accrued interest to the date fixed for redempUon
THE CERTIFICATES of flus Sones scheduled to mature on FEBRUARY 15, 2020 are subject to
mandatory redempUon prior to their scheduled matunttes, and shall be redeemed by the Issuer, m part, pr~or
to their scheduled matuntaes, v~th money from thc Mandatory Redemption Account of the Interest and Stoking
Fund, w~th the particular Ceruficates or portion thereof to be redeemed to be selected by the Paying
Agent/Registrar, by lot or other customary method (prowded that a portion of a Certaficate may be redeemed
only tn an integral mulUple of $5,000), at a redemption price equal to the par or prmctpal amount thereof and
accrued interest to the date of redemptton, on the dates, and m the principal amounts, respecttvely, as shown
m the following schedule
February 15.2020 Maturity
Mandatory Prmctpal
Red~m~tion Dates Amounts
February 15, 2019 155,000
February 15, 2020 (maturity) 155,000
The principal amount of the Certificates required to be redeemed on thc Mandatory Redemptaon Dates pursuant
to the foregoing shall be reduced, at the option of the Issuer by the pnnclpal amount of any Cemficates out of
the maturity scheduled for February 15, 2020 whtch, at least 45 days prior to the aforesaid appropriate
redempuon date (1) shall have been acqmred by the Issuer at a price not exceethng the principal amount of such
Cemficates plus accrued interest to the date of purchase thereof, and delivered to the Paying AgentJReglstrar
13
not premously credited to the mandatory stoking fund redemption Dunng any period in which ownership of
the Cemfi~ates is detenmned by a book entry at a securities depository for the Certfficates, if fewer than all
of the Certificates of the same maturity and bearing such interest rate shall be selected m accordance wath the
arrangements between the Issuer and the securities depository
AT LEAST 30 days prior to the date fixed for any redemption of Certificates or port~ons thereof prior
to maturity a written notme of such redemptton shall be sent by the Paying Agent/Registrar by Umted States
mall, first-class postage prep~ud, to the registered owner of each Certfficate to be redeemed at its address as
it appeared on the 45th day prior to such mdemptmn date, provtded, however, that the failure to send, mall,
or receive such notme, or any defect ther~m or m the seadmg or mailing thereof, shall not affect the vahchty
or effectiveness of the proceedings for the redemption of any Cemficate By the date fixed for any such
redemption due prows~on shall be made w~th the Paying Agent/Registrar for the payment of the reqmred
redemption price for the Certificates or port~ons thereof wtuch are to be so redeemed, plus accrued interest
thereon to tho date fixed for redemptmn Ifsuch written not,ce of redemption ts g~ven and if due provlston for
such payment ~s made, all as prowded above, the Cemficates or pomons thereof which are to be so redeemed
thereby automatically shall be treated as redeemed prior to their scheduled matont~es, and they shall not bear
interest after the date fixed for redemptmn, and they shall not be regarded as being outstanding except for the
right of the registered owner to receive the redemption price plus acemed interest from the Paying
Agent/Registrar out of the funds provided for such payment If a pomon of any Certificate shall be redeemed
a submmte Certificate or Certificates hamg the same maturity date, bearing interest at the same rate, m any
danommatton or denommatmns m any integral multiple of $5,000, at the written request of the registered
owner, and m a~regute pnncipal amount equal to the unredeemed portxon thereof, will be tssued to the
registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as pmwded m the
BoM Ordinance
THIS CERTIFICATE OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL
MULTIPLE OF $5,000 my be asstgued and shall be transferred only m the Registration Books of the Issuer
kept by the Paying Agent/Registrar acting m the eapamty of registrar for the Certificates, upon the terms and
concht~ons,set forth m the Cemficate Ordinance Among other reqmrements for such asslgument and transfer,
this Certificate must be presented and surrendered to the Paying Agent/Registrar, together w~th proper tnstm-
ments of assl~nent, m form and w~th guarantee of sxgnatnres satisfactory to the Paying Asent/Reg~strar,
evidencing assignment ofttus Certificate or any portion or pomons hereof m any tntegral multiple of $5,000
to the assignee or ass~guees m whose name or names flus CerUficate or any such porUon or portions hereof is
or are to be transferred and registered The form of Assxgument pnnted or endorsed on tlus Certificate shall
be executed by the registered owner or ~ts duly anthonzed attorney or representative, to ewdence the ass~gument
hereof A new Cemficate or Cemfieates payable to such assignee or ass~guees (wluch then will be the new
registered owner or owners of such new Certtfieate or Certificates), or to the premous registered owner m the
case of the ass~gument and transfer of only a portion of th~s Certificate, may be delivered by the Paying
Agent/Registrar m conversion of and exchange for flus Cemfieate, all m the form and manner as prowded tn
the next paragraph hereof for the conversion and exchange of other Cemfieates The Issuer shall pay the
Paying Agtent/Reg~strar's standard or customary fees and charges for making such transfer, but the one request-
mg such transfer shall pay any taxes or other governmental charges reqmmd to be prod w~th respect thereto
The Paying Agent/Registrar shall not be reqmmd to make transfers of mgistraUon of flus Certificate or any
posen hereof dunng th~ period commencing w~th the close of business on any Record Date and ending wath
the opemng ofbustness on the next following principal or interest payment date The registered owner oftlus
Cemfieatc shall be daemed and treated by the Issuer and the Paying AgentYReglstrar as the absolute owner
hereof for all purposes, including payment and d~scharge of habfllty upon tlus Cemfieate to the extent of such
payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary
14
ALL CERTIFICATES OF THIS SERIES are ~ssuable solely as fully registered certificates, w~thout
interest coupons, m the denommatmn of any integral mulUple of $5,000 As provided m the Certificate
Orthnanee,l flus Cemficate, may, at the request o£the registered owner or the assignee or ass~gnces hereof, be
converted ~nto and exchanged for a hke aggregate pnnc~pal amount of fully registered certificates, vothout
interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case may be,
hawng the ~ame maturity date, and bearing interest at the same rate, m any denommaUon or denominations m
any integral multiple of $5,000 as requested m writing by the appropriate registered owner, assignee, or
assignees, as the case may be, upon surrender of flus Certaficate to the Paymg Agent/Registrar for cancellation,
all m accordance w~th the form and proeeflures set forth m the Certificate Ordinance The Issuer shall pay the
Paying Agont/Reg~strar's standard or customary fees and charges for transferring, converting, and exchanging
any Certificate or any port,un thereof, but the one requesting such transfer, cunvers~on, and exchange shall pay
any taxes or governmental charges reqmrext to be paid wnh respect thereto as a condmon precedent to the
exercise o£ such pnwlege of convers~un and exchange The Paying Agent/Registrar shall not be required to
make any such conversmn and exchange daring the period commencing vath the close of busmess on any
Record Date and ending w~th the opening of business on the next following principal or interest payment date
~ THE EVENT any Paying Agent/Registrar for the Certificates ~s changed by the Issuer, res~gas, or
otherwise Ceases to act as such, the Issuer has covenanted m the Cemfieate Ordinance that ~t promptly will
appoint a oompetent and legally qualified substatute therefor, and will promptly cause written noUce thereof
to be totaled to the registered owners of the Cemfieates
IT IS HEREBY certified, recited, and covenanted that flus Cemficate has been duly and vahdly
authorized, ~ssuad, and dehvered, that all acts, con&tmns, and flungs reqmred or proper to be performed, eyast,
and be done precedent to or m the authorization, ~ssuance, and dehvery of flus Cemficate have been performed,
ex~sted, and been done m accordance w~th law, that flus Certificate is a general obhgataun of the Issuer, ~ssued
on the full faith and credit thereof, and that annual ad valorem taxes sufficient to prowde for the payment of
the mteres~ on and prmc~pal of flus Ceruficate, as such interest comes due and such principal matures, have
been levted and ordered to be lewed against all taxable property m the Issuer, and have been pledged
~rrevoeabl~ for such payment, w~flun the hm~t prescribed by law, and that, together with other panty
obhgauonS, flus Certaficate, and the other Certificates of flus Series, addatmnally are payable from and secured
by certain ,surplus revenues (not to exceed $10,000 m aggregate amount) derived by the Issuer from the
ownership and operataon of the C~ty's Utlhty System (consisting of the City's combined waterworks system,
samtary sewer system, and electric h~t and power system), all as provided m the Cemficate Ordinance
TI~ ISSUER has reserved the right to issue, m accordance wath law, and m accordance voth the
CemficatelOrdmanco, other and additional obhgat~ons, and to enter rotc contracts, payable fi.om ad valorem
taxes and/or revenues of the C~ty's Utahty System, on a panty w~th, or wath respect to smd revenues, superior
In hen to, flus Certificate
BY BECOMING the re~stered owner of flus Certaflcate, the registered owner thereby acknowledges
all of the terms and prows~ans of the Certaficate Ordinance, agrees to be bound by such terms and prows~ons,
acknowledges that the Certificate Ordinance Is duly recorded and available for inspection m the officml minutes
and records of the governing body of the Issuer, and agrees that the terms and prov~s~ons of flus Certificate and
the CertafiCate Ordinance constatute a contract between each registered owner hereof and the Issuer
15
IN WITNESS WHEREOF, the Issuer has caused tbas Certificate to be signed with the manual or
facsimile signature o£the Mayor of the Issuer and countersigned and attested w~th 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 m facsumle, on ttus Certificate
ATTEST CITY OF DENTON, TEXAS
By By
Jenmfer Walters Jack Miller
City Se0r~ary, City of Denton, Texas Mayor, City of Demon, Texas
(CITY SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTI-IENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It Is hereby certafied that t.has Certificate has been issued under the provisions of the Certificate
Ordinance described on the face of flus Cemficate, and that tlus Certificate has been ~ssued m conversion of
and exchange for or replacement ofa eemficate, cemficates, or a pomon ora certificate or eemficates of an
~ssue wluch 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, TEXAS, N A
FORT WORTH, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative
(INSERT BOND INSURANCE LEGEND, IF ANY)
16
FORM OF ASSIGNMENT
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner ofthas Certificate, or duly authorized
representaave or attorney
thereof, hereby assigns flus Certificate to
/ /
(Asslgnee's Social (pnnt or typewrite Asslgnee's name and
Security or Taxpayer address, mchadmg zip code)
Identlfieataon Number
and hereby irrevocably constatotes and appomts
attorney to transfer the registration ofthas Ceruficate on the Paying Agent/Registrar's Registration Books ~th
full power of substituUon in the prermses
Dated
S~gnature Guaranteed
NOTICE S~8nature(s) must be guaranteed by Registered Owner
an ehglble~guarantor mst~tuUon partmpatmg m NOTICE Th~s s~gnatore must correspond w~th
a secunUes transfer association recogmzed the name of the Registered Owner appeanng on
signature guarantee program the face of this Certificate m every particular
without alteration or enlargement or any change
whatsoever
Section 8 TAX LEVY A speeual Interest and Sinking Fund (the "Interest and Stoking Fund") is
hereby created solely for the benefit oft.he Cemficates, and the Interest and Stoking Fund shall be established
and mamtamed by tho Issuer at an official flepos~tory bank of the Issuer The Interest and Stoking 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 pnnc~pal of the Certificates All ad valorem taxes lev~ed and oollected for and on account
of the Cer/aficates shall be deposited, as collected, to the crecht of the Interest and Stoking Fund Dunng each
year whale any of the cemfieates or interest thereon are outstanding and unpaid, the govermng body of the
Issuer shall compute and ascertain a rate and amount of ad valorem tax which vail 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 stoking fund adequate to pay the pnne~pal of its Certlfieates as such pnn¢lpal matures (but
never less than 2% of the original pnnclpal amount of the Certificates as a stoking fund each year) Smd tax
shall be based on the latest approval tax rolls of the Issuer, vath full allowance being made for tax
delinquencies and the cost of tax collection Smd rate and amount of ad valorem tax is hereby levied, and is
hereby ordered to be levied, agamst all taxable property m the Issuer for each year whale any of the Certificates
or interest, thereon are outstanding and anpmd, and smd tax shall be assessed and collected each such year and
17
deposited to the crecht of the aforesaid Interest and Stoking 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 lunlt prescribed by law
Section 9 SURPLUS REVENUES The Certificates adchtionally shall be payable from and secured
by surplus,revenues, to the extent hereinafter perrmtted, derived by the Issuer from the ownersbap and operation
of the Issuer's Utility System (consisting of its combined waterworks system, samtary sewer system, and
electric light and power system) remamang 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 (l) all bonds and (ii)
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 rote 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 Stoking Fund m an amount sufficient to pay, when due, the principal of and interest on the
CerUficates, then Surplus Revenues, to the extent hereinafter pernutted, shall be deposited to the crecht of the
Interest and Smlmag Fund and used to pay such prmmpal and/or interest A maxunum aggregate of $10,000
of Surplus Revenues may be used to pay pnnclpal and/or interest on the Certificates and any obligations on
a panty therewith The Cemfinates and any obhgations on a parity therewith are not, and shall not be deemed
to be, payable from or secured by any Surplus Revenues m excess of an aggregate orS10,000 Until and
unless an aggregate ors 10,000 of Surplus Revenues actually is used to pay any such principal and/or interest,
adchtional obligations, payable from and secured by all or any remaining unused part of sad 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 obhgations, with the Certificates and all such adchUonal panty obligations to be payable
from and Secured equally and ratably by all or any remaining unused part of smd aggregate The Issuer
reserves, and shall have, the right to issue bonds, and other obligations not on a panty vath the Certificates,
and to enter rote contracts, m 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 wath those issues of City of Denton Cemficates of Obhgatlon, Series 1993, Series
1993-A, Sones 1994, Series 1995, Series 1996, Series 1998 and Series 1999 (the "Outstanding Certificates"),
as pemuttod 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 pnncipal and/or interest on the Outstanding
Certificates
Sectionl0 DEFEASANCE OF CERTIFICATES (a) Any Certlficate and the lnterest thereon shall
be deemed to bo paid, retired, and no longer outstanding (a "Defeased Certificate") within the meaning oftlus
Ordinance, except to the extent prowded m subsection (d) of tlus Section, when payment of the principal of
such Certificate, plus interest thereon to the due date either 0) shall have been made or caused to be made tn
accorrlanc~ with the terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably
depositing,with or m_~tkmg available to the Paying Agent/Registrar for such payment (1) lawful money of the
Umted States of America sufficient to make such payment or (2) Government Obligations wtuch mature as to
principal and interest m such amounts and at such times as will insure the availability, without remvestment,
of sufficient money to prowda for such payment, and when proper arrangements have been made by the Issuer
w~th the Paying Agent/Registrar for thc payment of its services until all Dcfcased Certificates shall have
become due and payable At such time as a Certificate shall bo deemed to be a Dcfeased Certificate hereunder,
as aforesaid, such Certificate and the interest thereon shall no longer be secured by, payable from, or entitled
to the benefits of, tho ad valorem taxes harem lowed and pledged as provided mttus Ordinance, and such
principal and interest shall bc payable solely from such money or Government Obligations
18
(b) Any moneys so deposited vath the Paying AgentJRegistrar may at the written direction of the
Issuer also be invested m Government Obligations, maturing m the amounts and times as hereinbefore set forth,
and all mcome from such Government Obhgatmns received by the Paying Agent/Registrar which is not
required for the payment of the Certificates and interest thereon, vath respect to wbach such money has been
so deposited, shall be turned over to the Issuer, or deposited as directed m writing by the Issuer
(c) The term "Government Obhgataons" as used in this Sectaon shall mean direct obligations of
the Umted States of America, including obligations the principal of and interest on which are unconchtlonally
guaranteed by the Umted States of America, wbach may be United States Treasury obligations such as its State
and Local Government Series, wbach may be m book-entry form
(d) Untal all Defeased Certificates shall have become due and payable, the Paying AgentdReg~strar
shall perform the services of Paying Agent/Registrar for such Defeased Cemficates 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 tbas Ordinance
Section 11 DAMA(JED, MUTILATED, LOST, STOLEN, OR DESTROYED CERTIFICATES
(a) Renlaeement Certificates In the event any outstanding Certificate Is damaged, mutalated, 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, m replacement for such Certificate m the manner hereinafter prowded
(b) APl~l~catmn for Renlacement Certaficates 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 ofloss, theft, or destructaon of a Certificate, the registered owner applying for
a replacement certificate shall furmsh to the Issuer and to the Paying Agent/Registrar such security or
lndemmty as may be required by them to save eanh of them harmless from any loss or damage vath respect
thereto Also, m every case ofloss, theft, or destruction of a Ceruficate, the registered owner shall furmsh to
the Issuer and the Paying Agent/Registrar evidence to their satasfaction of the loss, theft, or destruction of such
Certificate, as the ease may be In every case of damage or mutilation ora Certificate, the registered owner
shall surrender to the Paying Agent/Registrar for cancellataon the Certificate so damaged or mutalated
(c) ~ Notwithstanding the foregoing prov~sions of tins Sectaon, m the event
of any such Certificate shall have matured, and no default has oocurred wbach is then continuing m the payment
of the prmcapal of, or interest on the Certaficate, the Issuer may authorize the payment of the same (vathout
surrender thereof except m the case of a damaged or mutilated Certaficate) instead of lssumg a replacement
Certificate, provided security or mdemmty is furmshed as above proxaded m tins Section
(d) Charee for Issume Reolacement Certificates Prior to the issuance of any replacement
certificate, the Paying Agent/Registrar shall charge the registered owner of such Certaficate vnth all legal,
printing, and other expenses m coune~on therevath Every replacement certificate issued pursuant to the
provisions ofttus Section by v~rtue of the fact that any Certaficate is lost, stolen, or destroyed shall constitute
a contractual obhgataon of the Issuer whether or not the lost, stolen, or destroyed Ceruficate shall be found at
any tune, or be enforceable by anyone, and shall be entitled to all the benefits of tins Ordinance equally and
propomonately vnth any and all other Ceraficates duly issued under ttus Ordinance
(e) 3,,th~nW for Issume Reolacement Certaficates In accordance w~th Chapter 1201, Texas
Government Code, tins Section of flus Ordinance shall constitute authority for the issuance of any such
replacement ceraficate without necessity of further action by the governing body of the Issuer or any other body
19
or person, and the duty of the replacement of such certificates is hereby authorized and ~mposed upon the
Paying AgentFReglstrar, and the Paying Agent/Registrar shall authenticate and deliver such Certificates ~n the
form and manner and voth the effect, as provided m Section 6(d) of this Ordmance for Certificates ,ssued in
conversion and exchange for other Certificates
Sectmn 12 CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES,
CERTIFICATE COUNSEL'S OPINION, CUSIP NUMBERS, PREAMBLE AND INSURANCE The
Mayor of the Issuer is hereby anthonzed to have control of the Initial Certificate issued hereunder and all
necessary records and proceedings pertaining to the Imtial Certificate pending ns delivery and its mvestigat~on,
exanunatlon, and approval by the Attorney General of the State of Texas, and ~ts registration by the
Comptroller of Public Accounts of the State of Texas Upon registration of the Imtial Certificate said
Comptroller of Pubhc Accounts (or a deputy designated m writing to act for said Comptroller) shall manually
sign the Comptroller's Registrataon Certificate on the Imtaal Certificate, and the seal of said Comptroller shall
be impressed, or placed m facsmule, on the Imtlal Certificate The approving legal opimon ofthe Issuer's Bond
Counsel and the assigned CUSIP numbers may, at the option of the Issuer, be pnnted on the Initial Certificate
or on any Cert,ficates issued and delivered m conversion of and exchange or replacement of any Ceruficate,
but nelthe~ shall have any legal effect, and shall be solely for the ennvemence and mf'ormatlon of the registered
owners of,the Cert,ficates The preamble to flus Ordinance is hereby adopted and made a part hereof for all
purposes If insurance Is obtamed un any of the Certificates, the Imtlal Ceruflcate and all other Certificates
shall bear an appropnate legend coneermng insurance as provided by the insurer
Sectiunl3 COVENANTSREGARDINGTAX-EXEMPTION TheIssuercovenantstoreframfrom
takang any action wtuch would adversely afl. t, and to take any action required to ensure, the treatment of the
Cert, ficates as obligations described m section 103 of the Internal Revenue Code of 1986, as amended (the
"Code"), the interest on which is not mcludable m the "gross mcome" of the holder for purposes of federal
income taxation In furtherance thereof, the Issuer covenants as follows ,
(a) to take any aeUon to assure that no more than l0 percent of the proceeds of the
Certificates or the project financed therewth (less amounts deposited to a reserve fund, If any) are used
for any "private busmess use", as defined m secUon 141(b)(6) of the Code or, if more than l0 percent
of the proceeds or the project financed therevoth are so used, such amounts, whether or not received
by the Issuer, w~th respect to such private business use, do not, under the terms of flus Ordinance or
any underlying arrangement, directly or mdirectly, secure or provide for the payment of more than l0
percent of the debt senace un the Cemficates, m contraventmn of section 141 (b)(2) of the Code,
(b) to take any action to assure that m the event that the "private business use" descnbed
m subsectmn (a) hereof exceeds 5 percent of the proceeds of the Cemficates or the project financed
therevath (less amounts deposited rote a reserve fund, if any) then the amount m excess of 5 percent
is used for a "private busmees use" which is "related" and not "disproportionate", w~flun the meaning
of section 141 (b)(3) of the Code, to the governmental use,
(c) to take any acUon to assure that no amount which is greater than the lesser of
$~,000,000, or 5 percent of the proceeds of the Certificates (less amounts deposited into a reserve
fund, if any) is directly or mdirectly used to finance loans to persons, other than state or local
governmental umts, m contraventton of sectton 14 l(c) of the Code,
(d) to refrain from talong any action which would otherwise result m the Certificates
being treated as "private activity bonds" within the meaning of section 141(b) of the Code,
2O
(e) to reft'am from taking any action that would result in the Certificates being "federally
guaranteed" within the meaning of section 149(b) of the Code,
(f) to reft.am fi.om using any portion of the proceeds of the Certificates, directly or
indirectly, to acquire or to replace funds which were used, chrectly or indirectly, to acquire investment
property (as defined m section 145Co)(2) of the Code) which produces a materially tugher yield over
the term of the Certificates, other than investment property acquired with --
(1) proceeds of the Certificates invested for a reasonable temporary period of 3
years or less, or m the case ora refunding certificate for a period of 30 days or less, until such
proceeds are needed for the purpose for which the certificates are ,ssued,
(2) amounts invested m a bona fide debt service fund, within the meaning of
section 1 148-1(b) of the Treasury Regulations, and
(3) amounts deposited m any reasonably required reserve or replacement fund
to the extent such amounts do not exceed 10 percent of the stated pnnclpal amount (or, m the
case of a discount, the issue price) of the Certificates,
(g) to othervase restrict the use of the proceeds of the Certificates or amounts treated as
proceeds of the Certificates, as may be necessary, so that the Certificates do not othenvlse contravene
the requirements ofsectmn 148 of the Code (relating to arbitrage), Semen 149(g) of the Code (relating
to hedge bonds), and, to the extent applicable, semen 149(d) of the Code (relating to advance
refundmgs), and
(h) to pay to the Umted States of America at least once durmg each five-year period
(beginning on the date ofdehvery of the Cemficates) an amount that is at least equal to 90 percent of
the "Excess Earnings", vathm the meaning of sectaon 148(0 of the Code and to pay to the Umted
States of America, not later that 60 days after the Certificates have been paid m full, 100 percent of
the amount then required to be prod as a result of Excess Earnings under sectaon 148(f) of the Code
For purposes of the foregoing (a) and (b), the Issuer understands that the term "proceeds" mchides
"d~sposltlon proceeds" as defined m the Treasury Regulations and, in the case of refunding bonds, transferred
proceeds (~f any) and proceeds ~f th~ refunded b~ods ~xpended pn~r t~ the date ~f issuance ~f the B~nds It
is the understanding of the Issuer that the covenants contained hereto are intended to assure compliance w~th
the Code and any regulat~ons or rulmgs promulgated by the U S Department ofthe Treasury pursuant thereto
In the event that regulations or ruhags are hereafter promulgated which modify, or expand provisions of the
Code, as applicable to the Ce~ficates, the Issuer ~nll not be required to comply with any covenant contained
herein to tho e~ent that such failure to comply, m the oplmon of nationally-recogmzed bond counsel, will not
adversely affect the exemption from federal raceme taxation of interest on the Certificates under section 103
of the Code In the event that regulations or rulings are herea~er promulgated wluch unpose adchtional
requirements which are applicable to the Certificates, the Issuer agrees to comply w~th the add~tional
requirements to the extent n~essary and reasonably possible, m the opuuon of nationally-recogmzed bond
counsel, to preserve the exemption fi.om federal raceme taxation of interest on the Certificates under section
103 of the Code In furtherance of such retention, the Issuer hereby anthorlzes and directs the Mayor to
execute any documents, certificates or reports required by the Code and to make such elect~ons, on behalf of
the Issuer, which may be permitted by the Code as are consistent v~th the purpose for the issuance of the
Certificate The Issuer covenants to comply w~th the covenants m flus section after defeasance of the
Certificates
21
In order to facilitate compliance with the above covenant (h), a "Rebate Fund" ,s hereby established
by the IssRer 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 v, uthout hnutatlon, the owners of the Certificates The Rehate Fund ~s
estabhshed for the additional purpose ofcomphance with Secttnn 145 of the Code
Seetmn 14 SALE OF INITIAL CERTIFICATE The Imual Certificate is hereby sold and shall be
dehvered tO F~rst Southwest Company, for cash for the par value thereof and accrued interest thereon to date
ofdehvery, plus a cash prenuum of $-0- Such prenuum shall, uponrece~pt, be deposlted ~nto the Interest and
Smk~ng Fund It ,s hereby officmlly found, determined, and declared that the ImUal Certificate has been sold
at public sale to the bidder offenng the lowest interest cost, after rece~wng sealed b~ds pursuant to an Official
Not,ce of Sale and Bidding Instructions and Officsal Statement dated April 18, 2000, prepared and d~stnbuted
in connection with the sale of the Imt~al Cemficate Sa~d Official Nouce of Sale and B~ddtng Instructmns and
Official Statement, and any addenda, supplement, or amendment thereto have been and are hereby approved
by the Issuer, and thezr use m the offer and sale of the Certaficates ~s hereby approved It is further officially
found, determined, and declared that the statements and representations contained m said Officsal Notice of
Sale and Ot:ficlal Statement are true and oorreet m all material respects, to the best knowledge and behefofthe
City Council and the Issuer
Section 15 ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE PROJECT
The Issuer covenants to account for the expenditure of sale proceeds and investment earnings to be used for
the purposes described m Section 1 of this Ordinance (the "Prejeot") on ~ts books and records m accordance
with the requirements of the Internal Revenue Code The Issuer reoogmzes that m order for the preoeeds to
be considered used for the reimbursement of costs, the proceeds must be allocated to expenchtores within lg
months of the later of the date that (1) the expend~tore ~s made, or (2) the Project is completed, but m no event
later than three years afar the date on which the original expenditure is paid The foregoing notwithstanding,
the Issuer recogmzes that m order for proceeds to be expended under the Internal Revenue Code, the sale
proceeds or investment earnings must be expended no more than 60 days after the earlier of (l) the fifth
anmversary of the delivery of the Cemficates, or (2) the date the Cemficates are retired The Issuer agrees
to obtain the advise of nationally-recognized bond oounsel if such expenditure fags to comply with the
foregoing to assure that such expenchture 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 flit obtains an opuuon that
such failure to comply will not adversely affect the exchidabthty for federal raceme tax purposes from gross
raceme of the interest
S¢cttonlfi DISPOSITION OF PROSECT The lssuer covenants that the property const~tutmg the
Project will not be sold or otherwise chsposed m a transacuon resulting m the receipt by the Issuer of cash or
other compensation, unless the Issuer obtains an opimon of natlonally-recogmzed bond counsel that such sale
or other (hsposmon will not adversely atTeot the tax-exempt status of the Certificates For purposes hereof,
the Issuer shall not be obligated to comply voth this covenant flit obtains a legal optmon that such fmlure to
comply will not adversely affect the excludability for federal raceme tax purposes from gross tnoome of the
interest
Section 17 INTEREST EARNINGS ON CERTIFICATE PROCEEDS Interest earnings derived
from the mvestment of proceeds from the sale of the huttal CerUficate shall be used along with other proceeds
for thc purposes for which the Certificates are issued, prowded that after completion of such purposes, if any
of such interest eanungs remain on hand, such interest earnings shall be deposited m thc Interest and Stoking
Fund It ~$ further provided, however, that any interest earnings on certificate proceeds which are rcqmred to
be rebated to the Umted States of America pursuant to Section 13 hereof tn order to prevent the Certificates
22
from being "arbitrage bonds" waflun the meamng of the Code shall be so rebated and not considered as ~nterest
earmngs for the purposes of tlus Section
Sectmn 18 DTC REGISTRATION The Certtficates uut~ally shall be tssued and dehvered m such
manner that no physical chstnbut~on of the Certificates wall be made to the pubhc, and The Depository Trust
Company ("DTC"), New York, New York, antmlly wall act as depository for the Certfficates DTC has
represented that tt as a lumted purpose trust company incorporated under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporatton" waflun the meaning of the New York
Utnform Commercml Code, and a "clearing agency" regxstered under Sectxon 17A of the federal Securities
Exchange Act of 1934, as amended, and the Issuer accepts, but ~n no way ver~fies, such representations The
Imtxal Ce~ficate authorized by flus Ordinance shall be dehvered to and registered m the name of the Pumhaser
However, ~t ~s a conchtxon of dehvery and sale that the Purchaser, munechately after such dehvery, shall cause
the Paying Agent/Registrar, as prowded for m flus Ordinance, to cancel smd Imt~al Certificate and dehver m
exchange therefor a substitute Certfficate for each maturity of such Itntxal Certificate, wath each such substitute
Certaficate to be registered m the name of CEDE & CO, the nominee of DTC, and tt shall be the duty of the
Paying Agent/Registrar to take such action It ts expected that DTC wall hold the Certaficates on behalf of the
Purchaser and/or the DTC Partmxpants, as defined and described m the Official Statement referred to and
approved m Sectaon 14 hereof (the "DTC Pamc~pants") So long as each Certificate ~s registered m the name
of CEDE & CO, the Paying AgentJRegxstrar shall treat and deal wath DTC m all respects the same as ~f tt
were the actual and beneficial owoer thereof It ~s expected that DTC will maintain a book entry system wbach
wdl xdent~fy beneficxal ownersbap oft.he Cemficates by DTC Pamc~pants m integral amounts of $5,000, wath
transfers of ownerslup being effected on the records of DTC and the DTC Partm~pants pursuant to rules and
regulataons established by them, and that the substitute Certmficates antaally deposaed wath DTC shall be
~mmobfl~zed and not be further exchanged for substitute Cemficates except as hereinafter provided The Issuer
~s not responsible or hable for any functaons of DTC, wall not be responsible for paying any fees or charges
wath respect to xts servaces, wall not be responsable or hable for maintaining, supervising, or reviewing the
records o~ DTC or the DTC Participants, or protecting any interests or rights of the beaefic~al owners of the
Cemfieates It shall be the duty of the Purchaser and the DTC Participants to make all arrangements wath
DTC to establish flus book-entry system, the beneficial ownerslup of the Certxficates, and the method of paying
the fees and charges of DTC The Issuer does not represent, nor does ~t m any way covenant that the antml
book-entry system established wath DTC wall be maintained m the future The Issuer reserves the right and
optmon at any tune m the future, m ~ts sole d~scret~on, to terminate the DTC (CEDE & CO ) book-entry only
registration requirement described above, and to pertmt the Certxficates to be registered m the name of any
owner If the Issuer exercises ~ts right and optton to temunate such requtrement, xt shall give written nottce of
such termmataon to the Paying Agent/Registrar and to DTC, and thereafter the Paying AgentJRegistrar shall,
upon presentataon and proper request, register any Certafieate m any name as prowded for m flus Ordinance
Notwithstanding tho tint,al estabhshraent of the foregoing book-entry system wath DTC, tffor any reason any
of the originally dehvered substitute Cemficates ~s duly filed with the Paying Agent/Registrar wath proper
request for transfer and substitution, as provided for m this Ordmanea, submtute Cemficates wall be duly
delivered as provaded m flus Ordinance, and there wall be no assurance or representauon that any book-entry
system wall be maintained for such Certificates
Section 19 CONTINUING DISCLOSURE (a) Annual Reoorts (0 The Issuer shall provide
annually tO each NRMSIR and any SID, waflun slx months after the end of each fiscal year ending m or after
1999, financial mformat~on and operating data wath respect to the Issuer of the general type included m the final
Offictal Statement authorized by Section 14 of flus Ordinance, being the mformat~on described m Exlab~t A
hereto, wbach Exhxbit xs attached to and incorporated m flus Ordinance as ffwntXen word for word hereto Any
finanmal statements so to be prowded shall be (1) prepared tn accordance wath the accounting pnnc~ples
23
described m Exlubit A hereto, or such other accounting pnnclples as the Issuer may be required to employ from
Ume to t~me pursuant to state law or regulation, and (2) audited, ffthe Issuer conumssmns an aucht of such
statements, and the aucht is completed w~thm the period durmg wtnch they must be prowded If the audit of
such financial statements ~s not complete w~flun such period, then the Issuer shall prowde unandlted finanaal
statements~by the required Ume and yell provide audited financial statements for the apphcable fiscal year to
each NRMSIR and any SID, when and ~fthe audit report on such statements become available
(u) If the Issuer changes its fiscal year, ~t will not~fy each NRMSIR and any SID of the change (and
of the date of the new fiscal year end) prmr to the next date by winch the Issuer otherwise would be reqmred
to prowde financial mformauon and operating data pursuant to thts Section The finanaal mformaUon and
operating data to be provided pursuant to this Section may be set forth m full m one or more documents or may
be included by specific reference to any document (mcludmg an offictal statement or other offering document,
if it ~s available from the MSRB) that theretofore has been prowded to each NRMSIR and any SID or filed
wth the SEC
(b) Material Event Notices The Issuer shall notary any SID and e~ther each NRMSIR or the MSRB,
m a Uraely manner, of any of the following events w~th respect to the Certificates, ffsuch event ~s material
w~thm the meaning of the federal securities laws
1 Prmapal and interest payment delinquencies,
2 Non-payment related defaults,
3 Unscheduled draws on debt service reserves reflecting finanaal d~fficnlUes,
4 Unscheduled draws on crecht enhancements reflecting financml d~fficulues,
5 Subst~tution of credat or hqmchty prowders, or their failure to perform,
6 Adverse tax opunons or events affectmg the tax-exempt status of tho Certificates,
7 Mod~flcaUons to rights of holders of the Cemficates,
8 Ceruficate calls,
9 Defeasanees,
10 Release, substatut~on, or sale of property securing repayment of the Cert~ficatas, and
11 Rating changes
The Issuer shall notify any SID and either each NRMSIR or the MSRB, m a tunely manner, of any failure by
the Issuer to prowde financial mformatmn or operatmg data m accordance w~th subsecUon (a) of tins Section
by the tune required by such subsection
(e) Lmutauons. Disclaimers. and Amendmen'~s. (0 The Issuer shall be obhgat~l to observe and
perform the covenants specified m flus Se~taon for so long as, but only for so long as, the Issuer remains an
'obhgated~person' w~th respect to the Certafieates w~thln the meaning of the Rule, except that the Issuer m any
24
event will give the notice required by Subsection (b) hereof of any Certificate calls and defeasance that cause
the Issuer to no longer be such an "obligated person"
(ii) The provisions of flus Section are for the sole benefit of the registered owners and beneficial
owners of rise Certificates, and nottung in flus Section, express or implied, shall give any benefit or any legal
or equitable right, remedy, or clann hereunder to any other person The Issuer undertakes to prowde only the
financial information, operating data, financial statements, and notices which it has expressly agreed to provide
pursuant to flus 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, cond~tion, or prospects or hereby
undertake to update any mfurmat~on provided m accordance vath flus Section or otherwise, except as expressly
provided hereto The Issuer does not make any representation or warranty concerning such information or its
usefulness to a decision to invest m or sell Certificates at any future date
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER, ITS OFFICERS, AGENTS AND
EMPLOYEES, BE LIABLE TO THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY
CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING
IN WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR
WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY
RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT
OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE
(iv) No default by the Issuer m observing or perfornung its obligations under flus Section shall
comprise a breach of or default under the Orclmance for purposes of any other prowslon of ti'us Ordinance
Nothing m flus Section is intended or shall act to &sclarm, waive, or otherwise hmlt the duties of the Issuer
under federal and state securities laws
(v) The provisions of flus Section may be amended by the Issuer from ttme to tune to adapt to changed
circumstances that arise from a change m legal requirements, a change m law, or a change m the identity,
nature, status, or type ofoperatlens of the Issuer, but only if(l) the provisions of flus Section, as so amended,
would have penmtted an underwriter to purchase or sell Certificates in the primary offenng of the Certificates
in compliance vath the Rule, tiling mU) account any amendments or interpretations of the Rule since such
offenng a~ well as such changed circumstances and (2) either (a) the registered owners of a majority m
aggregate principal amount (or any greater amount required by any other provision of flus Ordmance that
anthonzes such an amendment) of the outstanchag Certlfinates consent to such amendment or (b) a person that
is unaffihated w~th the Issuer (such a~ natmnally recogmzed bond counsel) determined that such amendment
will not materially unpmr the interest of the registered owners and beneficial owners ofthe Certificates Ifthe
Issuer so amends the provismns of flus Section, it shall include vath any amended financial information or
operating data next provided m acenrdance vath subsection (a) of this Section an explanation, in narrative
form, of the reason for the amendment and of the unpact of any change in the type of financial mformanon or
operating data so provided The Issuer may also amend or repeal the provisions of flus continuing chsclosure
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 tho Rule are mvahd, but only if and to the extent that the provisions
of flus sentence would not prevent an underwriter from lawfully purchasing or selling Certificates m the
primary offering of the Certificates
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(d) D~finlttons As used m this Section, the following terms have the meanings ascribed to such terms
below
"MSRB' means the Mumclpal Securities R. ulemakmg Board
"NRMSII~' means each person whom the SEC or tis staffhas dcterrmned to be a nationally recogmzed
mumc~pal securities lILFormatlon repository within the meamng of the Rule from time to tune
"l~.ule" means SEC R. ule 15c2-12, as amended from tm~e to tune
"SEC" means the Umted States Securities and Exchange Commission
"SID" means any person designated by the State o£ Texas or an authorized deparlment, officer, or
agency thereof as, and determined by the SEC or ~ts staff to be, a state m£orma*aon depository w~thm the
meaning of thc 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 Ituthonzed, empowered, and directed from time to tune and at any tune to do and perform all such
acts and things and to execute, acknowledge, and deliver m the name and under the corporate seal and on behalf
of the Issuer all such instruments, whether or not hereto mentioned, as may be necessary or desirable m order
to carry out the terms and proxasloas oftius Certaficato Ordinance, thc Cerfaficates, the sale of the Cemficates,
and the Notice of Sale and Official Statement, and thc Assistant City Manager/Finance of the City shall cause
the expenses of issuance of the Certificates to be pa~d from the proceeds of sale of the Imtlal Certificate or fi.om
other lawfully avadable funds ofthe Issuer In case any officer whose signature shall appear on any Certificate
shall cease to be such officer before the dehvery of such Cemfieate, such signature shall nevertheless be valid
and sufficient for all purposes the same as if such officer had remained m office until such dehvery
Section 21 OPEN MEETINGS The City Council has found and determined that the meeting at
which tins Ordinance is considered is open to thc pubhc and that notice thereof was given m accordance with
the prowslons of the T~xas Open M~angs, Law, Tex Gov't Code, Chapter 551, as amended
Section22 EFFECTIVEDATE Tb. xsOrdmanceshallbecomceffectlveunmedlatelyuponitspassage
and approval
26
PASSED AND APPROVED tbas the 2nd day of May, 2000
Jack ~
ATTEST
]mfer Wa~rs, City Secretary --
APPROVED AS TO LEGAL FORM
Herber~ L Prouty, City Attorney
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EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following mformauon is referred to m Section 19 of this Ordinance
Annual Financial Statements and Operating Data
The financial lnfonnaUon and operating data w~th respect to the Issuer to be provided annually
accordance with such Section are as specified (and included in the Appendtx or under the tables of the Official
Statement referred to) below
Tables numbered 1 through 14, reclusive, under the captions "Tax Information", "Debt Serwce
Requirements" and "Financial Information" m the Official Statement
Appendix B m the Officml Statement
Accounting Principles
The accounting principles referred to m such Section are the accounting prmc:ples described m the
notes to the financial statements referred to m the paragraph above