1999-100 ORDINANCE NO 99-/(~O
ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF
DENTON CERTIFICATES OF OBLIGATION, SERIES 1999, AND APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO, AND
PROVIDING AN EFFECTIVE DATE
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the Certificate of Obligation Act of 1971, as amended and codified (the "Act")
perrmts the City to issue and sell for cash the Certificates of Obligation hereinafter authorized, and
WHEREAS, the City has duly caused notice of as intention to issue the Certificates of
Obligation hereinafter authorized to be published at the times and in the manner required by the Act
and no petition has been filed protesting the issuance thereof, NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
Section 1 AMOUNT AND PURPOSE OF THE CERTIFICATES The certificate or
certificates of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and
delivered in the aggregate pnnclpal amount of $6,935,000, for the purpose of paying all or a portion
of the City's Contractual Obligations incurred pursuant to contracts for the purchase of certmn real
and personal property, to-wit (a) fuel facilities at the City's airport, (b) upgrades to the City's
communication system, (c) renovation to fire stations and acquisition of fire equipment, (d) fuel and
maintenance facilities for the City's vetucles and (e) various equipment for the City's landfill, and also
for the purpose of paying all or a portion of the City's Contractual Obligations for professional
services of Engineering, Attorneys, and Financial Adxasors in connection w~th the above contracts
and smd Certificates of Obligation
Section 2 DESIGNATION OF THE CERTIFICATES Each certificate issued pursuant to
this Ordinance shall be designated "CITY OF DENTON CERTIFICATE OF OBLIGATION,
SERIES 1999", and lmtially there shall be issued, sold, and delivered hereunder a single fully
registered certificate, without interest coupons, payable in installments of pnncipal (the "Imtial
Certificate"), but the Imml Certificate may be assigned and transferred and/or converted into and
exchanged for a like aggregate principal amount of fully registered certificates, without interest
coupons, having serial maturmes, and in the denormnatIon or denonnnations of $5,000 or any integral
multiple of $5,000, all m the manner hereinafter provided The term "Certificates" as used In this
Ordinance shall mean and include collectively the Imtial Certificate and all substitute certificates ex-
changed therefor, as well as all other substitute certificates and replacement certificates issued
pursuant hereto, and the term "Certificates" shall mean any of the Certificates
Section 3 INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL CERTIFICATE
(a) The Imt~al Cemficate ~s hereby authorized to be ~ssued, sold, and dehvered hereunder
as a single fully registered Certificate, without interest coupons, dated March 15, 1999, ~n the
denormnat~on and aggregate pnn¢~pal amount of $6,935,000, numbered R-l, payable m annual
mstallments ofpnnc~pal to the ~mtial registered owner thereof, to-w~t
DEAN WITTER REYNOLDS
or to the registered assignee or assignees of said Certificate or any port,on or portions thereof (m
each case, the "registered owner"), w~th the annual installments ofpnnc~pal of the Imt~al Certificate
to be payable on the dates, respectively, and ~n the pnnc~pal amounts, respectively, stated m the
FORM OF INITIAL CERTIFICATE set forth ~n tl~s Ordinance
(b) The Imtml Certificate 0) may be assigned and transferred, (n) may be converted and
exchanged for other Certificates, (m) shall have the characteristics, and (iv) shall be s~gned and sealed,
and the principal of and interest on the Imtial Certificate shall be payable, all as provided, and m the
manner required or indicated, m the FORM OF INITIAL CERTIFICATE set forth m this Ordinance
Section 4 INTEREST The unpaid pnnc~pal balance of the Imt~al Certificate shall bear
interest from the date of the Imtial Certificate to the respective scheduled due dates of the ~nstallments
of principal of the Inmal Certificate, and said ~nterest shall be payable, all in the manner provided and
at the rates and on the dates stated m the FORM OF INITIAL CERTIFICATE set forth m tbas
Ordinance
Section5 FORM OF INITIAL CERTIFICATE TheformoftheImt~alCert~ficate, mcluding
the form of Registration Certificate of the Comptroller of Pubhc Accounts of the State of Texas to
be endorsed on the Imttal Certificate, shall be substantially as follows
FORM OF INITIAL CERTIFICATE
NO R-1 $6,935,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIGATION
SERIES 1999
THE CITY OF DENTON, m Denton County, Texas (the "Issuer"), being a polmcal
subdivision of the State of Texas, hereby prormses to pay to
DEAN WITTER REYNOLDS
or to the registered assignee or assignees of this Certificate or any pomon or pomons hereof0n each
case, the 'registered owner") the aggregate pnnc~pal amount of
$6,935,000
(SIX MII,LION NINE HUNDRED THIRTY FIVE THOUSAND DOLLARS)
m annual installments of pnnc~pal due and payable on February 15 ~n each of the years, and in the
respective pnnc~pal amounts, as set forth m the following schedule
PRINCIPAL PRINCIPAL
YEAR AMOUNT YEAR AMOUNT
2000 500 000 2010 295,000
2001 500 000 2011 295,000
2002 500 000 2012 295 000
2003 500 000 2013 295 000
2004 500 000 2014 295 000
2005 300 000 2015 295 000
2006 300 000 2016 295 000
2007 295 000 2017 295 000
2008 295 000 2018 295 000
2009 295 000 2019 295 000
and to pay ~nterest, calculated on the bas~s of a 360-day year composed of twelve 30-day months,
from the date of th~s Certificate hereinafter stated, on the balance of each such installment of
pnnc~pal, respectively, from t~me to t~me rema~mng unpaid, at the rates as follows
5 10% per annum on the above installment due m 2000
5 10% per annum on the above installment due m 2001
5 10% per annum on the above ~nstallment due m 2002
5 10% per annum on the above ~nstallment due ~n 2003
5 10% per annum on the above installment due m 2004
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4 10% per annum on the above installment due in 2005
4 10% per annum on the above installment due in 2006
4 20% per annum on the above installment due in 2007
4 20% per annum on the above mstallmant due in 2008
4 30% per annum on the above installment due in 2009
4 40% per annum on the above installment due in 2010
4 50% per annum on the above installment due m 2011
4 60% per annum on the above installment due in 2012
4 70% per annum on the above installment due in 2013
4 75% per annum on the above installment due in 2014
4 80% per annum on the above installment due m 2015
4 85% per annum on the above installment due in 2016
4 85% per annum on the above installment due in 2017
4 85% per annum on the above installment due in 2018
4 85% per annum on the above installment due in 2019
with smd interest being first due and payable on February 15, 2000, and semiannually on each August
15 and February 15 thereafter while this Certificate or any portion hereof is outstanding and unpaid
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Certificate are
payable m lawful money of the Umted States of America, without exchange or collection charges
The installments of pnnclpal and the interest on this Certificate are payable to the registered owner
hereof through the services of CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
DALLAS, TEXAS, which is the "Paying Agent/Registrar" for this Certificate Payment ofall pnncl-
pal of and interest on this Certificate shall be made by the Paying Agent/Registrar to the registered
owner hereof on each principal and/or interest payment date by check dated as of such date, drawn
by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the
ordinance authorizing the issuance of this Certificate (the "Certificate Ordinance") to be on deposit
with the Paying Agent/Registrar for such purpose as hereinafter provided, and such check shall be
sent by the Paying Agent/Registrar by Umted States mall, first-class postage prepaid, on each such
pnnclpal and/or interest payment date, to the registered owner hereof, at the address of the registered
owner, as it appeared at the close of business on the last day of the month next preceding each such
date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as
hereinafter described The Issuer covenants with the registered owner of this Certificate that on or
before each principal and/or interest payment date for this Certificate it will make available to the
Paying Agent/Registrar, from the "Interest and Staling Fund" created by the Certificate Ordinance,
the amounts required to provide for the payment, in immediately available funds, of all pnnclpal of
and interest on this Certificate, when due
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, a legal hohday, or a day on which banlang institutions in the City where the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for such
payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day
on which banking restitutions are authorized to close, and payment on such date shall have the same
force and effect as if made on the original date payment was due
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THIS CERTIFICATE has been authorized in accordance w~th the Constitution and laws of
the State of Texas in the principal amount of $6,935,000 for the purpose of paying all or a portion
of the City's Contractual Obligations incurred pursuant to contracts for the purchase of certain real
and personal property, to-wit (a) fuel facilities at the City's airport, (b) upgrades to the City's
commumcation system, (c) renovation to fire stations and acqmsmon of fire equipment, (d) fuel and
maintenance facilities for the City's vetueles and (e) various equipment for the City's landfill, and also
for the purpose of paying all or a portion of the City's Contractual Obligations for professional
services of Engmeenng, Attorneys, and Financial Advisors in connection with the above contracts
and said Certificates of Obligation
ON FEBRUARY 15, 2009, or on any date whatsoever thereafter, the unpaid installments of
pnncipal oftbas Certificate of Obligation may be prepaid or redeemed pnor to their scheduled due
dates, at the option of the Issuer, with funds derived fi.om any available source, as a whole, or in part,
and, lfm part, the particular portion ofttus Certificate of Obbgation to be prepaid or redeemed shall
be selected and designated by the Issuer (prowded that a portion of this Certificate of Obhgation may
be redeemed only in an integral multiple of $5,000), at the prepayment or redemption price of the par
or principal amount thereof, plus accrued interest to the date fixed for prepaymem or redemption
AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a written
notice of such prepayment or redemption shall be mailed by the Paying Agent/Registrar to the
registered owner hereof By the date fixed for any such prepayment or redemption due proxasion
shall be made by the Issuer w~th the Paying Agem/Registrar for the payment of the required prepay-
mere or redemption price for flus Certificate or the portion hereof which is to be so prepaid or re-
deemed, plus accrued interest thereon to the date fixed for prepaymem or redemption Ifsuch written
notice of prepayment or redemption is given, and if due provis~on for such payment is made, all as
provided above, this Certificate, or the portion thereofwbach is to be so prepaid or redeemed, thereby
automatically shall be treated as prep~ud or redeemed prior to its scheduled due date, and shall not
bear lmerest after the date fixed for its prepayment or redemption, and shall not be regarded as being
outstanding except for the right of the registered owner to receive the prepayment or redemption
price plus accrued interest to the date fixed for prepayment or redemption fi.om the Paying
AgentYRegistrar out ofthe funds proxnded for such paymem The Paying Agent/Registrar shall record
in the Registration Books all such prepaymems or redemptions ofpnnclpal of flus Certificate or any
portion hereof
THIS CERTIFICATE, to the extent of the unpmd pnnc~pal balance hereof, or any unp~ud
portion hereof in any integral multiple of $5,000, may be assigned by the initial registered owner
hereof and shall be transferred only in the Registration Books of the Issuer kept by the Paymg
Agent/Registrar acting in the capacity of registrar for the Certificates, upon the terms and conditions
set forth in the Certificate Ordinance Among other requirements for such transfer, this Certificate
must be presented and surrendered to the Paying Agent/Registrar for cancellation, together w~th
proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, evidencing assignment by the lmtial registered owner of flus Certificate, or any
portion or portions hereof m any integral multiple of $5,000, to the assignee or assignees in whose
name or names th~s Certificate or any such portion or portions hereof is or are to be transferred and
registered Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar
may be used to evidence the assignment oftbas Certificate or any such portion or portions hereof by
the mmtial registered owner hereof A new certificate or certificates payable to such assmgnee or
assignees (winch then wll be the new registered owner or owners of such new Certificate or
Certificates) or to the lmt~al registered owner as to any port~on of tins Certificate winch is not being
assigned and transferred by the lmtial registered owner, shall be delivered by the Paying Agent/Regis-
trar mn conversion of and exchange for tins Certificate or any portion or portions hereof, but solely
m the form and manner as prowded m the next paragraph hereof for the conversmon and exchange of
flus Certificate or any portion hereof The registered owner of tins Certificate shall be deemed and
treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes,
including payment and discharge of hainhty upon ttus Certificate to the extent of such payment, and
the Issuer and the Paying Agant/Regxstrar shall not be affected by any notice to the contrary
AS PROVIDED above and m the Certificate Ordinance, tins Certificate, to the extent of the
unpamd pnnc~pal balance hereof, may be converted into and exchanged for a hke aggregate pnnclpal
amount of fully registered certificates, w~thout interest coupons, payable to the assignee or assignees
duly designated m writing by the imt~al registered owner hereof, or to the lmtial registered owner as
to any port~on ofth~s Certificate winch is not being assigned and transferred by the ~mtial registered
owner, ~n any denormnatlon or denonunat~ons m any integral multiple of $$,000 (subject to the
requmrement hereinafter stated that each substitute certificate issued in exchange for any port~on of
tins Certificate shall have a single stated pnncipal maturity date), upon surrender of tins Certificate
to the Paying Agent/Registrar for cancellation, all m accordance wroth the form and procedures set
forth mn the Certificate Ordinance If tins Certificate or any portmon hereof is assigned and transferred
or converted each certificate issued m exchange for any portion hereof shall have a single stated
prmncmpal maturity date corresponding to the due date of the installment ofpnncmpal of thins Certificate
or port~on hereof for winch the substitute certificate ~s bemng exchanged, and shall bear interest at the
rate apphcable to and borne by such installment of principal or portion thereof No such certmficate
shall be payable m xnstallments, but shall have only one stated principal maturity date AS
PROVIDED IN THE CERTIFICATE ORDINANCE, THIS CERTIFICATE IN ITS PRESENT
FORM MAY BE ASSIGNED AND TRANS~D OR CONVERTED ONCE ONLY, and to
one or more assignees, but the certxficates xssued and delivered mn exchange for tins Certificate or any
portmon hereof may be assigned and transferred, and converted, subsequently, as provided m the
Certificate Ordinance The Issuer shall pay the Paying Agent/Reg~strar's standard or customary fees
and charges for transfernng, converting, and exchanging this Certificate or any portmon thereof, but
the one requesting such transfer, conversmon, and exchange shall pay any taxes or governmental
charges reqmred to be paid with respect thereto The Paying AgentJKegmstrar shall not be required
to make any such asslgnmant, conversion, or exchange dunng the period commencing unth the close
of business on any Record Date and ending with the opemng of business on the next following
pnnclpal or interest payment date
IN THE EVENT any Paymg Agent/l~.eglstrar for tins Certxficate is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted mn the Certificate Ordinance that
mt promptly w~ll appomt a competent and legally quahfied substitute therefor, and promptly w~ll cause
wrmtten not~ce thereof to be mmled to the regmstered owner of this Certificate
IT IS HEREBY certmfied, recited, and covenanted that tins Certificate has been duly and
vahdly authorized, issued, and dehvered, that all acts, conditions, and tinngs required or proper to be
performed, eyast, and be done precedent to or m the authorization, issuance, and delivery of tins
6
Certificate have been performed, existed, and been done in accordance with law, that this Certificate
is a general obligation of the Issuer, issued on the full faith and credit thereof, and that annual ad
valorem taxes sufficient to prowde for the payment of the interest on and pnnclpal ofttns Certificate,
as such interest comes due and such pnnapal matures, have been levied and ordered to be lewed
against all taxable property m the Issuer, and have been pledged irrevocably for such payment, within
the hrmt prescribed by law, and that, together with other panty obligations, this Certificate
additionally is payable from and secured by certain surplus revenues (not to exceed $10,000 m
aggregate amount) danved by the Issuer from the ownership and operation of the City's Utility
System (consisting of the City's combined waterworks system, sanitary sewer system, and electric
light and power system), all as provided m the Certificate Ordinance
THE ISSUER has reserved the right to issue, m accordance with law, and in accordance with
the Certificate Ordinance, other and addmonal obligations, and to enter into contracts, payable from
ad valorem taxes and/or revenues oftha City's Utility System, on a panty with, or with respect to said
revenues, superior In lien to, this Certificate
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and prov~sions of the Certificate Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and available for
inspection m the official rmnutes and records of the governing body of the Issuer, and agrees that the
terms and provisions of this Certificate and the Certificate Ordinance constitute a contract between
the registered owner hereof and the Issuer
1N WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the manual
signature of the Mayor of the Issuer and countersigned and attested with the manual signature of the
City Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed on this
Certificate, and has caused this Certificate to be dated March 15, 1999
ATTEST CITY OF DENTON, TEXAS
By By.
Jennifer Walters Jack Miller
City Secretary, City of Denton, Texas Mayor, City of Denton, Texas
(CITY SEAL)
(INSERT BOND INSURANCE LEGEND, IF ANY)
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FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS
COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO
I hereby certify that this Certificate has been exanuned, certified as to vahdity, and approved
by the Attorney General of the State of Texas, and that this Certificate has been registered by the
Comptroller of Public Accounts of the State of Texas
Witness my signature and seal this
Comptroller of Pubhc Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6 ADDITIONAL CHARACTERISTICS OF THE CERTIFICATES Reolstration
and Transfer (a) The Issuer shall keep or cause to be kept at the pnncipal corporate trust office of
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, DALLAS, TEXAS (the "Paying
Agem/Registrar") books or records of the registration and transfer of the Certificates (the
"Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and
transfer agent to keep such books or records and make such transfers and registrations under such
reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe, and the Paying
Agent/Registrar shall make such transfers and registrations as herein provided The Paying
Agem/Registrar shall obtiun and record in the Registration Books the address of the registered owner
of each Certificate to which payments w~th respect to the Certificates shall be mailed, as herein
provided, but It shall be the duty of each registered owner to notify the Paying Agent/Registrar in
wnnng of the address to which payments shall be mailed, and such interest payments shall not be
mailed unless such notice has been given The Issuer shall have the right to inspect the Registration
Books during regular business hours of the Paying Agent/Registrar, but otherv~se the Paying
Agent/Registrar shall keep the RegistrationBooks confidential and, unless otherwise required by law,
shall not permit their inspection by any other entity Registration of each Certificate may be
transferred in the Registration Books only upon presentation and surrender of such Certificate to the
Paying Agent/Registrar for transfer of registration and cancellation, together with proper written
instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, (1) evidencing the assignment of the Certificate, or any portion thereofm any integral
multiple of $5,000, to the assignee or assignees thereof, and (ii) the right of such assignee or
assignees to have the Certificate or any such portion thereof registered In the name of such assignee
or assignees Upon the assignment and transfer of any Certificate or any portion thereof, a new
substitute Certificate or Certificates shall be issued in conversion and exchange therefor in the manner
herein provided The Imtial Certificate, to the extant of the unpmd pnncipal balance thereof, may be
assigned and transferred by the lmtial registered owner thereof once only, and to one or more
assignees designated in writing by the imtlal registered owner thereof All Certificates issued and de-
hvered in conversion of and exchange for the Initial Certificate shall be in any denomination or
denominations of any integral multiple of $5,000 (subject to the requirement hereinafter stated that
each substitute Certificate shall have a single stated principal maturity date), shall be in the form
prescribed In the FORM OF SUBSTITUTE CERTIFICATE set forth ~n tins Ordtnance, and shall
have the characteristics, and may be assigned, transferred, and converted as hereinafter prowded If
the Imt~al CerUficate or any porUon thereof ~s assigned and transferred or converted the Imtlal
Cemfieate must be surrendered to the Paying Agent/Relgstrar for cancellation, and each Certificate
issued m exchange for any portmn of the Imtxal Certafieate shall have a single stated pnnclpal maturity
date, and shall not be payable m installments, and each such Certificate shall have a prmctpal maturity
date corresponding to the due date of the installment of pnnc~pal or portton thereof for winch the
substttute CerUfieateas being exchanged, and each such Cemficate shall bear interest at the smgle rate
applicable to and borne by such installment ofpnncapal or porUon thereof for winch tt as beang ex-
changed If only a portton of the Imtaal Certaficate as assagned and transferred, there shall be dehvered
to and regastered m the name of the amtaal registered owner subsUtute Certificates tn exchange for the
unassigned balance of the Imtaal Certaficate an the same manner as ffthe nnUal registered owner were
the assagnee thereof IfanyCertafieateorportaonthereofotherthantheImualCentfieatetsasstgned
and transferred or converted each Certaficate assued m exchange therefor shall have the same prmctpal
maturity date and bear tnterest at the same rate as the Certificate for winch tt ~s exchanged A form
ofasstgnment shall be prmted or endorsed on each Certificate, excepting the Imual Certtfieate, winch
shall be executed by the registered owner or its duly authorized attorney or representative to exadence
an assignment thereof Upon surrender of any Certificates or any porUon or porttons thereof for
transfer ofregtstratlon, an authorized representattve of the Paying Agent/Regastrar shall make such
transfer m the Registration Books, and shall dehver a new fully regtstered subsutute Certtficate or
Certtficates, hawng the charactenstacs herean described, payable to such assagnee or assagnees (winch
then will be the regastered owner or owners of such new Centficate or Certaficates), or to the
prevaous rcgtstered owner m case only a portion ofa Certtficate as being asstgned and transferred, all
in conversaon of and exchange for saad asstgned Certtficate or Cemficates or any porUon or porttons
thereof, tn the same form and manner, and wtth the same effect, as provaded tn Sectaon 6(d), below,
for the conversion and exchange of Certtficates by any regtstered owner of a Certificate The Issuer
shall pay the Paying Agent/Regtstrafs standard or customary fees and charges for malang such
transfer and dehvery ora substitute Cemficate or Certificates, but the one requesting such transfer
shall pay any taxes or other governmental charges requtred to be pa~d wtth respect thereto The
Paying Agent/Regastrar shall not be reqmred to make transfers of regtstrat~on of any Certtfieate or
any portton thereof during the period commencing wtth the close of business on any Record Date and
endtng wtth the opemng of business on the next following pnnctpal or interest payment date
(b) Ownersbap of CerUfic~tes The entity tn whose name any Certtflcate shall be registered
tn the Regastrat~on Books at any tame shall be deemed and treated as the absolute owner thereof for
all purposes of tins Ordinance, whether or not such Cemficate shall be overdue, and the Issuer and
the Paymg AgentfReg~strar shall not be affected by any not,ce to the contrary, and payment of, or on
account of, the prmctpal of, prermum, ~f any, and interest on any such Certificate shall be made only
to such registered owner All such payments shall be valid and effectual to sausfy and dtscharge the
habfltty upon such Certtficate to the extent of the sum or sums so pard
(c) Payment of Certaficates and Interest The Issuer hereby further appoints the Paying
Agent/Regastrar to act as the paying agent for paying the prmcapal of and interest on the Certtficates,
and to act as ars agent to convert and exchange or replace Certaficates, all as prowded tn tins
Ordinance The Paymg Agent/Registrar shall keep proper records ofall payments made by the Issuer
and the Paying Agent/Regastrar wath respect to the Certaficates, and of all conversions and exchanges
9
of Certificates, and all replacements of Certificates, as prowded in tins Ordinance However, in the
event ora nonpayment of interest on a scheduled payment date, and for tinrty (30) days thereafter,
a new record date for such interest payment (a "Special Record Date") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received ~rom
the Issuer Notice of the Special Reoord Date and of the scheduled payment date of the past due
interest (" Special Payment Date", winch shall be fifteen (15) days after the Special Record Date) shall
be sent at least five (5) business days prior to the Special Record Date by Umted States marl, first
class postage prepiud, to the address of each Holder of a Cemfieate appearing on the registration
books of the Paying Agent/Registrar at the close ofbusmess on the 15th business day next preceding
the date of mmhng of such notice
(d) Conversion and Exchan,,e or Renla~ment, Authentication Each Certificate issued and
delivered pursuant to tins Ordinance, to the extent of the unpmd pnnclpal balance or pnnclpal amount
thereof, may, upon surrender of such Certificate at the pnnclpal corporate trust office of the Paymg
Agent/Registrar, together w~th a written request therefor duly executed by the registered owner or
the assignee or assignees thereof, or its or their duly authorized attorneys or representatives, with
guarantee of signatures satisfactory to the Paying Agent/Registrar, may, at the option of the regis-
tered owner or such assignee or assignees, as appropriate, be converted into and exchanged for fully
registered certificates, without interest coupons, in the form prescribed in the FORM OF
SUBSTITUTE CERTIFICATE set forth In tins Ordinance, in the denomination of $5,000, or any
integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute
Certificate shall have a single stated maturity date), as requested in writing by such registered owner
or such assignee or assignees, in an aggregate pnncipal amount equal to the unpaid pnnclpal balance
or pnncipal amount of any Certificate or Certificates so surrendered, and payable to the appropriate
registered owner, assignee, or assignees, as the case may be If the Initial Certificate is assigned and
transferred or converted each substitute Certificate issued in exchange for any portion of the Imtlal
Certificate shall have a single stated pnnclpal maturity date, and shall not be payable in installments,
and each such Certificate shall have a principal maturity date corresponding to the due date of the
installment ofpnncipal or portion thereof for winch the substitute Certificate is being exchanged, and
each such Certificate shall bear interest at the single rate applicable to and borne by such installment
ofpnncipal or portion thereof for winch it is being exchanged If any Certificate or portion thereof
(other than the Imtlal Certificate) is assigned and transferred or converted, each Certificate issued in
exchange therefor shall have the same pnnclpal maturity date and bear interest at the same rate as the
Certificate for winch a is being exchanged Each substitute Certificate shall bear a letter and/or
number to distinguish it from each other Certificate The Paying Agent/Registrar shall convert and
exchange or replace Certificates as proxqded herein, and each fully registered certificate delivered ,n
conversion of and exchange for or replacement of any Certxficate or portion thereof as penmtted or
required by any provision of tins Ordinance shall constitute one of the Certificates for all purposes
of tins Ordinance, and may agam be converted and exchanged or replaced It is specifically prowded
that any Certificate authenticated in conversion of and exchange for or replacement of another
Certificate on or prior to the first scheduled Record Date for the Imtial Certificate shall bear interest
from the date of the Initial Certificate, but each substitute Certificate so authenticated after such first
scheduled Record Date shall bear interest from the interest payment date next preceding the date on
winch such substitute Certificate was so authenticated, unless such Certificate is authenticated after
any Record Date but on or before the next following interest payment date, in wluch case it shall bear
interest from such next following interest payment date, provided, however, that if at the time of de-
l0
livery of any substitute Certificate the interest on the Certificate for which ~t is being exchanged is due
but has not been paid, then such Certtficate shall bear mterest from the date to which such interest
has been prod in full THE INITIAL CERTIFICATE mssued and delivered pursuant to this Ordinance
is not required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each
substitute Certtflcate issued in conversion of and exchange for or replacement of any Certificate or
Certificates issued under this Ordinance there shall be pnnted a certificate, m the form substantially
as follows
"PAYING AGENT/R.EGISTRAR'S AUTHENTICATION CERTIFICATE
It Is hereby certified that this Certificate has been issued under the prowslons of the Certificate
Ordinance described on the face of this Certificate, and that this Certificate has been issued m
conversion of and exchange for or replacement of a certificate, certificates, or a portion of a
certificate or certificates of an issue which originally was approved by the Attorney General of the
State of Texas and registered by the Comptroller of Pubhc Accounts of the State of Texas
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, DALLAS, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative"
An authorized representative of the Paying AgentJReglstrar shall, before the delivery of any such
Certificate, date and manually sign the above Certificate, and no such Certificate shall be deemed to
be ~ssued or outstanding unless such Certificate is so executed The Paying Agent/Registrar promptly
shall cancel all Certificates surrendered for conversion and exchange or replacement No additional
ordinances, orders, or resolutions need be passed or adopted by the govermng body of the Issuer or
any other body or person so as to aceomphsh the foregoing conversion and exchange or replacement
of any Certificate or portion thereof, and the Paying AgentJReglstrar shall provade for the pnnting,
execution, and delivery of the substitute Certificates m the manner prescribed herein, and said
Certificates shallbe of type composition pnnted on paper with hthographed or steel engraved borders
of customary weight and strength Pursuant to Vernon's Ann Tex Clv St Art 717k-6, and
particularly Section 6 thereof, the duty of conversion and exchange or replacement of Cemficates as
aforesaid ls hereby ~mposed upon the Paying Agent/Registrar, and, upon the execution of the above
Paying Agant/Reglstrar's Authentication Certificate, the converted and exchanged or replaced
Certificate shall be valid, incontestable, and enforceable m the same manner and with the same effect
as the Imt~al Certificate which originally was issued pursuant to this Ordinance, approved by the
Attorney General, and registered by the Comptroller of Pubhc Accounts The Issuer shall pay the
Paying Agent/Registrar's standard or customary fees and charges for transfemng, convening, and
exchanging any Certificate or any portion thereof, but the one requesting any such transfer,
conversion, and exchange shall pay any taxes or governmental charges required to be paid with
respect thereto as a condmon precedent to the exercise of such privilege of conversion and exchange
The Paying Agent/Registrar shall not be reqmred to make any such conversion and exchange or
replacement of Certificates or any portion thereof dunng the period commencing with the close of
ll
business on any Record Date and endmg wth the opemng of business on the next following pnnc~pal
or interest payment date
(e) In General All Certificates xssued ~n conversion and exchange or replacement of any
other Cemficate or pomon thereof, 0) shall be issued m fully registered form, w~thout interest
coupons, w~th the pnnc~pal of and interest on such Certificates to be payable only to the registered
owners thereof, 00 may be transferred and assigned, 0~0 may be converted and exchanged for other
Certificates, 0v) shall have the characteristics, (v) shall be s~gned and sealed, and (w) the pnnc~pal
of and interest on the Certificates shall be payable, all as prowded, and ~n the manner required or
indicated, ~n the FORIVl OF SUBSTITUTE CERTIFICATE set forth m this Ordinance
(f) P~vmen'~ of Fees and Char~es The Issuer hereby covenants with the registered owners
of the Certificates that ~t roll 0) pay the standard or customary fees and charges of the Paying
Agent/Registrar for ~ts services w~th respect to the payment of the pnnc~pal of and interest on the
Certificates, when due, and (n) pay the fees and charges of the Paying Agent/Registrar for serwces
w~th respect to the transfer of registration of Certificates, and with respect to the conversion and
exchange of Certificates solely to the extent above prowded m this Ordinance
(g) Substitute Pavm~ A~,ent/Remstrar The Issuer covenants with the registered owners of
the Certificates that at all t~mes while the Certificates are outstanding the Issuer w~ll prowde a
competent and legally qualified bank, trust company, financial restitution, or other agency to act as
and perform the serwces of Paying AgentYReg~strar for the Certificates under this Ordinance, and that
the Paying Agent/Registrar w~ll be one entity The Issuer reserves the r~ght to, and may, at ~ts option,
change the Paying Agent/Registrar upon not less than 120 days written not~ce to the Paying
Agent/Registrar, to be effective not later than 60 days prior to the next principal or ~nterest payment
date aider such not~ce In the event that the entity at any t~me acting as Paying Agent/Keg~strar (or
~ts successor by merger, acqmsmon, or other method) should resign or otherwise cease to act as such,
the Issuer covenants that ~t w~ll promptly appoint a competent and legally qualified bank, trust
company, financial mst~tut~on, or other agency to act as Paying Agent/Registrar under this Ordinance
Upon any change in the Paying Agent/Registrar, the prewous Paying Agent/Registrar shall promptly
transfer and dehver the Registration Books (or a copy thereof), along w~th all other pertinent books
and records relating to the Certificates, to the new Paying Agent/Registrar designated and appointed
by the Issuer Upon any change ~n the Paying Agent/Registrar, the Issuer promptly w~ll cause a
written not~ce thereof to be sent by the new Paying Agent/Registrar to each registered owner of the
Certificates, by Umted States ma~l, first-class postage prepaid, which notice also shall g~ve the address
of the new Paying Agent/Regxstrar By accepting the posmon and perfornung as such, each Paying
Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified
copy of th~s Ordinance shall be delivered to each Paying Agent/Registrar
Section ? FORM OF SUBSTITUTE CERTIFICATES The form of all Certificates ~ssued
m conversion and exchange or replacement of any other Certificate or port,on thereof, ~ncludmg the
form of Paying Agent/Reg~strar's Certificate to be printed on each of such Certificates, and the Form
of Assignment to be pnnted on each of the Certificates, shall be, respectively, substantially as follows,
w~th such appropriate variations, onuss~ons, or insertions as are pernutted or required by this
Ordinance
12
FORM OF SUBSTITUTE CERTIFICATE
(Book-Entry Only Legend, if appropriate)
NO UNITED STATES OF AMERICA PRINCIPAL AMOUNT
STATE OF TEXAS $
COUNTY OF DENTON
CITY OF DENTON CERTIFICATE OF OBLIOATION
SERIES 1999
ORIGINAL DATE
INTEREST RATE MATURITY DATE OF ISSUE CUSIP NO
%
ON THE MATURITY DATE spec,fled above the CITY OF DENTON, m Denton County,
Texas (the "Issuer"), being a political subdwlsion of the State of Texas, hereby prormses to pay to
or to the registered assignee hereof (either being hereinafter called the "registered owner") the
pnmpal amount of
and to pay interest thereon, calculated on the basis of a 360-day year composed of twelve 30-day
months, from March 15, 1999, to the maturity date specified above, at the interest rate per annum
specified above, with interest being first due and payable on February 15, 2000, and sermannually on
each August 15 and February 15 thereafter, except that if the date of authentication of tins Certificate
is later than the first Record Date (hereinafter defined), such pnnclpal amount shall bear interest from
the interest payment date next preceding the date of authentication, unless such date of authentication
is after any Record Date (hereinafter defined) but on or before the next following interest payment
date, in which case such pnncipal amount shall bear interest from such next following interest
payment date
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable m lawful money of
the United States of America, without exchange or collection charges The principal of tins
Cemficat¢ shall be paid to the registered owner hereof upon presentation and surrender of ttus
Certificate at maturity, at the pnncipal corporate trust office of CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, DALLAS, TEXAS, which is the "Paying Agent/Registrar" for ttus
Certificate The payment of mterest on th~s Certificate shall be made by the Paying Agent/Reg, strar
to the registered owner hereof on each interest payment date by check dated as of such interest
payment date, drawn by the Pa!ong Agent/Registrar on, and payable solely from, funds of the Issuer
required by the ordinance authorizing the issuance of the Certificates (the "Certificate Ordinance")
to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter proxaded, and such
13
check shall be sent by the Paying Agent/Registrar by Umted States mall, first-class postage prepaid,
on each such interest payment date, to the registered owner hereof, at the address of the rel0stered
owner, as it appeared at the close of business on the last day of the month next preceding each such
date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as
hereinafter described However, the payment of such interest may be made by any other method
acceptable to the Paying Agent/Registrar and requested by, and at the risk and expense of, the regis-
tered owner hereof The Issuer covenants w~th the registered owner oftlus Certificate that on or
before each pnnclpal payment date, interest payment date, and accrued interest payment date for tbas
Certificate ~t will make available to the Paying Agant/Reglstrar, from the "Interest and Sinking Fund"
created by the Certificate Ordinance, the amounts required to provide for the payment, in immediately
available funds, of all pnnc~pal of and interest on the Certificates, when due
IF THE DATE for the payment of the pnnclpal of or interest on this Certificate shall be a
Saturday, Sunday, a legal hohday, or a day on wbach banl~ng institutions m the City where the Paying
Agent/Registrar ~s located are anthonzed by law or execuuve order to close, then the date for such
payment shall be the next succeeding day wl,ach ~s not such a Saturday, Sunday, legal holiday, or day
on wtuch banlang restitutions are anthonzed to close, and payment on such date shall have the same
force and effect as if made on the original date payment was due
THIS CERTIFICATE is one of an issue of Certificates ~mually dated March 15, 1999,
authorized m accordance with the Constitution and laws of the State of Texas m the pnncipal amount
of $6,935,000, for the purpose of paying all or a portion of the City's Contractual Obhgatlons
incurred pursuant to contracts for the purchase of certain real and personal property, to-mt (a) fuel
faclhtles at the City's atrport, (b) upgrades to the City's commumcatlon system, (c) renovation to fire
stations and acqulsmon of fire equipment, (d) fuel and maintenance facilities for the City's velucles
and (e) various equipment for the C~ty's landfill, and also for the purpose of paying all or a poruon
of the Cny's Contractual Obhgatlons for professional services of Engmeenng, Attorneys, and
F~nanclal Advtsors In connection with the above contracts and said Certificates of ObhgaUon
ON FEBRUARY 15, 2009, or on any date whatsoever thereafter, the Certificates of fins
Series may be redeemed prior to their scheduled maturities, at the opuon of the Issuer, w~th funds
derived from any avtulable and lawful source, as a whole, or in part, and, if In part, the particular
Certificates, or port~ons thereof, to be redeemed shall be selected and designated by the Issuer
(prowded that a portmn ora Certtficate may be redeemed only m an ~ntegral multiple of $5,000), at
the redemption price of the par or pnnclpal amount thereof, plus accrued interest to the date fixed
for redemption
AT LEAST 30 days prior to the date fixed for any such prepayment or redempuon a written
notice of such prepayment or redemption shall be marled by the Paying Agent/Registrar to the
registered owner hereof By the date fixed for any such prepayment or redemption due provision
shall be made by the Issuer with the Paying Agent/Registrar for the payment of the required prepay-
ment or redemptton price for tbas Certificate or the portion hereof which is to be so prepaid or re-
deemed, plus accrued interest thereon to the date fixed for prepayment or redemption If such written
notice of prepayment or redemption is given, and if due prows~on for such payment is made, all as
prowded above, this Certificate, or the port~on thereofwtuch is to be so prepaid or redeemed, thereby
automatically shall be treated as prep~ud or redeemed prior to its scheduled due date, and shall not
14
bear interest after the date fixed for its prepayment or redemption, and shall not be regarded as being
outstanding except for the right of the registered owner to receive the prepayment or redemption
price plus accrued interest to the date fixed for prepayment or redemption from the Paying
Agent/P..egistrar out ofthe funds provided for such payment The paling AgentJRegistrar shall record
in the Registration Books all such prepayments or redemptions of principal of tins Certificate or any
portion hereof
TI-IlS CERTIFICATE OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL
MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books of
the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Certificates,
upon the terms and conditions set forth m the Certificate Ordinance Among other requirements for
such assignment and transfer, tins Certificate must be presented and surrendered to the Paying
Agent/Registrar, together w~th proper instruments of assignment, in form and w~th guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of tins Certificate or any
portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose
name or names tins Certificate or any such port,on or portions hereof is or are to be transferred and
registered The form of Assigument pnnted or endorsed on tins Cemflcate shall be executed by the
registered owner or its duly anthonzed attorney or representatxve, to evidence the assignment hereof
A new Certificate or Certificates payable to such assignee or assignees (winch then will be the new
registered owner or owners of such new Certificate or Cemficates), or to the prewous registered
owner in the case of the assignment and transfer of only a portion of tins Certificate, may be delivered
by the Paying Agent/Registrar in conversion of and exchange for tins Certxficate, all in the form and
manner as provided xn the next paragraph hereof for the conversion and exchange of other
Certificates The Issuer shall pay the Paying Agant/Reglstrar's standard or customary fees and
charges for malong such transfer, but the one requesting such transfer shall pay any taxes or other
governmental charges required to be paid w~th respect thereto The Paying Agent/Registrar shall not
be required to make transfers of registration of tins Certificate or any portion hereofdunng the period
commencing with the close of business on any Record Date and ending with the opening of business
on the next following principal or interest payment date The registered owner of tins Certificate
shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner
hereof for all purposes, including payment and discharge ofhablhty upon tins Certificate to the extent
of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice
to the contrary
ALL CERTIFICATES OF THIS SERIES are lssuable solely as fully registered cemficates,
without interest coupons, in the denonunation of any integral multiple of $5,000 As provided m the
Certificate Ordinance, tins Cemficate, may, at the request of the registered owner or the assignee or
ass~guees hereof, be converted ~nto and exchanged for a like aggregate prmclpal amount of fully
registered certificates, xanthout interest coupons, payable to the appropriate registered owner,
assignee, or assignees, as the case may be, having the same maturity date, and bearmg interest at the
same rate, in any denonunatlon or denominations in any integral multiple of $5,000 as requested in
writing by the appropriate registered owner, assignee, or assignees, as the case may be, upon sur-
render of tins Certificate to the Paying Agent/Registrar for cancellation, all in accordance with the
form and procedures set forth in the Certificate Ordinance The Issuer shall pay the Paying
Agent/Reg~strar's standard or customary fees and charges for transfernng, converting, and exchanging
any Certificate or any portion thereof, but the one requesting such transfer, conversion, and exchange
15
shall pay any taxes or governmental charges required to be pa~d w~th respect thereto as a condition
precedent to the exercise of such privilege of conversion and exchange The Paying Agent/Registrar
shall not be reqmred to make any such conversion and exchange dunng the period commencing vath
the close of business on any Record Date and ending with the opemng of business on the next follow-
mg principal or interest payment date
IN TI~ EVENT any Paying Agent/Res~strar for the Certificates ~s changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted m the Certificate Ordinance that
it promptly w~11 appoint a competent and legally qualified substitute therefor, and w~ll promptly cause
written notice thereof to be mailed to the registered owners of the Certificates
IT IS HEREBY certified, recited, and covenanted that tls Certificate has been duly and
vahdly authorized, issued, and dehvered, that all acts, cond~Uons, and things required or proper to be
performed, ex~st, and be done precedent to or ~n the authorization, issuance, and delivery of th~s
Certificate have been performed, existed, and been done m accordance w~th law, that ttus Certxficate
is a general obhgatlon of the Issuer, ~ssued on the full faith and credit thereof, and that annual ad
valorem taxes sufficient to provide for the payment of the interest on and pnnclpal of tins Certificate,
as such ~nterest comes due and such pnnclpal matures, have been lewed and ordered to be levied
agmnst all taxable property ~n the Issuer, and have been pledged irrevocably for such payment, vatlun
the limit prescribed by law, and that, together with other panty obligations, th~s Certificate, and the
other Certificates oftbas Series, additionally are payable from and secured by certain surplus revenues
(not to exceed $10,000 in aggregate amount) derived by the Issuer from the ownership and operation
of the City's Utility System (consisting of the City's combined waterworks system, sanitary sewer
system, and electric light and power system), all as provided in the Certificate Ordinance
THE ISSUER has reserved the right to ~ssue, m accordance with law, and in accordance with
the Certificate Ordinance, other and additional obhgatlons, and to enter into contracts, payable from
ad valorem taxes and/or revenues of the City's Utlhty System, on a parity vath, or with respect to said
revenues, superior ~n hen to, ttus Certificate
BY BECOMING the registered owner of ttus Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by such
terms and prowsxons, acknowledges that the Certificate Ordxnance is duly recorded and available for
inspection m the official minutes and records of the govermng body of the Issuer, and agrees that the
terms and provisions ofth~s Certificate and the Certificate Ordinance constitute a contract between
each registered owner hereof and the Issuer
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the manual
or facsmule signature of the Mayor of the Issuer and countersigned and attested with the manual or
facsmule signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer
to be duly impressed, or placed in facsmule, on this Certificate
ATTEST CITY OF DENTON, TEXAS
By By
Jenmfer Walters Jack Mailer
City Secretary, City of Denton, Texas Mayor, City of Demon, Texas
(CITY SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate has been issued under the provisions of the Certificate
Ordinance described on the face of this Certificate, and that this Certificate has been issued m
conversion of and exchange for or replacement of a certificate, certificates, or a portion of a
certificate or certificates of an issue which originally was approved by the Attorney General of the
State of Texas and registered by the Comptroller of Public Accounts of the State of Texas
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, DALLAS, TEXAS
Paying Agent/Registrar
Dated By
Authorized Representative
(INSERT BOND INSURANCE LEGEND, IF ANY)
17
FORM OF ASSIGNMENT
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Certificate, or duly
anthonzed representative or attorney
thereof, hereby assigns ttus Certificate to
/ /
(Assigneo's Social (pnnt or typewrite Asslgnee's name and
Security or Taxpayer address, including zip code)
Identification Number
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of th~s Certificate on the Paying Agent/Registrar's Registration
Books with full power of substitution tn the prermses
Dated
Signature Guaranteed
NOTICE Signature(s) must be Registered Owner
guaranteed by an eligible guarantor NOTICE This signature must
institution participating in a correspond w~th the name of the
securities transfer association Registered Owner appearing on
recogmzed signature guarantee the face ofttus Certificate
program
Section 8 TAX LEVY A special Interest and Sinking Fund (the "Interest and Smk~ng
Fund") is hereby created solely for the benefit of the Certificates, and the Interest and Staling Fund
shall be established and maintained by the Issuer at an official depository bank of the Issuer A
Mandatory Redemption Account is hereby estabhshed wlttun the Interest and Sinking Fund The
Interest and Smkdng 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 pnnclpal of the Certificates All ad
valorem taxes lewed and collected for and on account of the Certificates shall be deposited, as
collected, to the credit of the Interest and Sinking Fund Dunng each year while any of the
Certificates or interest thereon are outstanding and unp~ud, the govermng body of the Issuer shall
compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and
produce the money required to pay the interest on the Certificates as such interest becomes due, and
to provide and maintain a sinking fund adequate to pay the pnnclpal of its Certificates as such
pnncipal matures (but never less than 2% of the onglnal principal amount of the Certificates as a
18
smkang fund each year) Said tax shall be based on the latest approval tax rolls of the Issuer, w~th
full allowance being made for tax delinquencies and the cost of tax collection Sand rate and amount
of ad valorem tax IS hereby lev~ed, and ~s hereby ordered to be lewed, agannst all taxable property m
the Issuen for each year wlule any of the Certificates or interest thereon are outstanding and unpaid,
and said tax shall be assessed and collected each such year and deposited to the credit of the aforesmd
Interest and Smlang Fund Sand ad valorem taxes sufficient to provide for the payment ofthe Interest
on and pnncipal of the Certificates, as such interest comes due and such principal matures, are hereby
pledged for such payment, w~th~n the Iirmt prescnbed by law
Section 9 SURPLUS REVENUES The Certificates additionally shall be payable from and
secured by surplus revenues, to the extent hereinafter penmtted, derived by the Issuer from the
ownerslup and operation of the Issuer's Utlhty System (consisting of its combined waterworks
system, sarntary sewer system, and electric light and power system) remanmng after (a) payment of
all amounts constituting operation and manntenance 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 (0 all bonds and (ii) all other obhgations not on a
parity with the Certificates, wtuch are payable from and secured by any Utility System revenues, and
(c) payment of all amounts payable from any Utility System revenues pursuant to contracts heretofore
or hereafter entered into by the Issuer in accordance w~th law (the "Surplus Revenues") If, for any
reason, the Issuer fails to deposit ad valorem taxes lexaed pursuant to Section 8 hereof to the credit
of the Interest and Sinking Fund m an amount sufficient to pay, when due, the pnnc~pal of and interest
on the Certificates, then Surplus Revenues, to the extent hereinafter permitted, shall be deposited to
the credit of the Interest and Sinking Fund and used to pay such principal and/or interest A
maxamum aggregate of $10,000 of Surplus Revenues may be used to pay principal and/or Interest on
the Certificates and any obligations on a panty therewith The Certificates and any obligations on a
parity therewith are not, and shall not be deemed to be, payable from or secured by any Surplus
Revenues In excess ofan aggregate ors 10,000 Until and unless an aggregate of $10,000 of Surplus
Revenues actually is used to pay any such principal and/or interest, additional obligations, payable
from and secured by all or any remanmng unused pan of sand aggregate of $10,000 of Surplus
Revenues, may be issued by the Issuer on a parity w~th the Canificates and any other then outstanding
panty obligations, with the Certificates and all such additional panty obligations to be payable from
and secured equally and ratably by all or any remanmng unused part of sand aggregate The Issuer
reserves, and shall have, the right to issue bonds, and other obligations not on a parity w~th the
Certificates, and to enter into 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 parity with those Issues of City of Denton Certificates of
Obligation, Series 1987, Series 1989, Series 1989-A, Series 1991, Series 1992, Series 1993, Senes
1993-A, Series 1994, Series 1995, Series 1996 and Series 1998 (the "Outstanding Certificates"), as
pemutted in the Ordinances authorizing same, and it is hereby found and deterrmned that none of the
above defined Surplus Revenues have ever been used to pay any pnncipal and/or interest on the
Outstanding Certificates
Section 10 DEFEASANCE OF CERTIFICATES (a) Any Certificate and the interest
thereon shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Certificate")
witlun the rnearnng of this Ordinance, except to the extent provided in subsection (d) ofttus Section,
when payment of the pnncipal of such Certificate, plus interest thereon to the due date either (0 shall
19
have been made or caused to be made m accordance path the terms thereof, or (il) shall have been
prowded for on or before such due date by irrevocably depositing with or making av~ulable to the
Paying Agent/Registrar for such payment ( 1 ) lawful money of the Umted States of America suffic~em
to make such payment or (2) Government Obligations wluch mature as to pnnclpal and interest In
such amounts and at such times as will insure the avadablhty, pathout remvestment, of sufficient
money to pro,nde for such payment, and when proper arrangements have been made by the Issuer
path the Paying Agent/Registrar for the payment of its services until all Defeased Certificates shall
have become due and payable At such time as a Certificate shall be deemed to be a Defeased
Certificate hereunder, as aforesmd, such Certificate and the interest thereon shall no longer be secured
by, payable from, or entitled to the benefits of, the ad valorem taxes herein lexaed and pledged as
provided in flus Ordinance, and such pnnclpal and interest shall be payable solely from such money
or Government Obligations
(b) Any moneys so deposited path the Paying Agent/Registrar may at the written direction
of the Issuer also be Invested in Government Obligations, maturing in the amounts and times as
hereinbefore set forth, and all income from such Government Obligations received by the Paying
Agent/Registrar wtuch is not required for the payment of the Certificates and interest thereon, path
respect to wluch such money has been so deposited, shall be turned over to the Issuer, or deposited
as directed in writing by the Issuer
(c) The term "Government Obligations" as used in ttus Section shall mean direct
obligations of the Umted States of America, including obhgatlons the principal of and imerest on
wbach are unconditionally guaranteed by the United States of America, wtuch may be Umted States
Treasury obligations such as its State and Local Governmem Series, which may be in book-entry
form
(d) Until all Defeased Certificates shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Certificates
the same as if they had not been defeased, and the Issuer shall make proper arrangements to provide
and pay for such semces as required by ttus Ordinance
Section 11 DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES (a) Replacement Certificates In the event any outstanding Certificate is
damaged~ mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be pnnted,
executed, and delivered, a new certificate of the same principal amount, maturity, and interest rate,
as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement for such Certificate
in the manner hereinafter prowded
(b) .Annl!¢at!,'m for Renlacement Certificates Application for replacement of damaged,
mutilated, lost, stolen, or destroyed Certificates shall be made by the registered owner thereof to the
Paying Agent/Registrar In every case of loss, theft, or destruction of a Certificate, the registered
owner applying for a replacement certificate shall furmsh to the Issuer and to the Paying
Agent/Registrar such security or mdemmty as may be required by them to save each of them harmless
from any loss or damage with respect thereto Also, in every case of loss, theft, or destruction of a
Cemficate, the registered owner shall furmsh to the Issuer and the Paying Agent/Registrar evidence
to their satisfaction of the loss, theft, or destruction of such Certificate, as the case may be In every
2O
case of damage or mutilation of a Certificate, the registered owner shall surrender to the Paying
Agent/Registrar for cancellation the Certificate so damaged or mutilated
(c) ~[9~]]L.Q~,~I~ Notwithstanding the foregoing prows~ons oftbas Section, In
the event of any such Certificate shall have matured, and no default has occurred wl~ch ~s then
continuing m the payment of the pnn¢lpal of, or interest on the Certificate, the Issuer may authorize
the payment of the same (vathout surrender thereof except ~n the case ora damaged or mutilated
Certificate) instead of~ssumg a replacement Certificate, provided security or mdemmty ~s furnished
as above prowded m tbas Section
(d) Charge for Issume Replacement Certificates Prior to the issuance of any replacement
certificate, the Paying Agent/Registrar shall charge the registered owner of such Certificate vath all
legal, pnntmg, and other expenses m connection therewith Every replacement certificate ~ssued
pursuant to the prov~sions of tbas Section by virtue of the fact that any Certificate is lost, stolen, or
destroyed shall constitute a contractual obhgatlon of the Issuer whether or not the lost, stolen, or
destroyed Certificate shall be found at any t~me, or be enforceable by anyone, and shall be entitled to
all the benefits oftbas Ordinance equally and proportionately with any and all other Certificates duly
issued under flus Ordinance
(e) Authority for Issum,, Replacement Certificates In accordance w~th Section 6 of
Vernon% Ann Tex Civ St Art 717k-6, fins Section oftbas Ordinance shall constitute authority for
the issuance of any such replacement cemficate w~thout necessny of further acuon by the govermng
body of the Issuer or any other body or person, and the duty of the replacement of such certificates
is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar
shall authenticate and dehver such Certificates m the form and manner and w~th the effect, as
provided ~n Secuon 6(d) of tl~s Ordinance for Certificates issued m conversion and exchange for
other Certificates
Section 12 CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES,
CERTIFICATE COUNSEL'S OPINION, CUSIP NUMBERS, PREAMBLE AND INSURANCE
The Mayor of the Issuer ~s hereby authorized to have control of the Imt~al Certificate issued
hereunder and all necessary records and proceedings pertalmng to the Imtial Certificate pending its
dehvery and ~ts investigation, exarmnat~on, and approval by the Attorney General of the State of
Texas, and ~ts registration by the Comptroller of Pubhc Accounts of the State of Texas Upon
registration of the Imtlal Certificate smd Comptroller of Pubhc Accounts (or a deputy designated ~n
writing to act for sa~d Comptroller) shall manually s~gn the Comptroller's Registration Certificate on
the Initial Certificate, and the seal of smd Comptroller shall be impressed, or placed m facsmule, on
the Inn~al Certificate The approwng legal op~mon of the Issuer's Bond Counsel and the assigned
CUSIP numbers may, at the option of the Issuer, be printed on the Imt~al Certificate or on any
Certificates ~ssued and dehvered In conversion of and exchange or replacement of any Certificate, but
neither shall have any legal effect, and shall be solely for the convemence and mformauon of the
registered owners of the Cemfieates The preamble to th~s Ordinance ~s hereby adopted and made
a part hereoffor all purposes Ifmsuranee ~s obtained on any ofthe Certificates, the Inmal Certificate
and all other Cemficates shall bear an appropriate legend concerning insurance as prowded by the
insurer
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Section 13 COVENANTS REGARDING TAX-EXEMPTION The Issuer covenants to
refrain from taking any action which would adversely affect, and to take any action required to
ensure, the treatment of the Certificates as obligations described in section 103 of the Internal
Revenue Code of 1986, as amended (the "Code"), the interest on which is not includable in the "gross
income" of the holder for purposes of federal income taxation In furtherance thereof, the Issuer
covenants as follows
(a) to take any action to assure that no more than 10 percent of the proceeds of
the Certificates or the project financed therewith (less amounts deposited to a reserve fund,
if any) are used for any "private business use", as defined in section 141 (b)(6) of the Code or,
ffmore than 10 percent of the proceeds or the project financed therewith are so used, such
amounts, whether or not received by the Issuer, with respect to such private business use, do
not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly,
secure or prowde for the payment of more than 10 percent of the debt sermce on the
Certificates, in contravention of section 141 (b)(2) of the Code,
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds 5 percent of the proceeds of the Certificates or the
project financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a "private business use" which is "related" and not
"disproportionate", within the meaning of section 141 (b)(3) of the Code, to the governmental
use,
(c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Certificates (less amounts deposited into a
reserve fund, If any) is directly or indirectly used to finance loans to persons, other than state
or local governmental umts, ~n contravention of section 141(c) of the Code,
(d) to refrain from takang any action which would otherwise result ~n the
Certificates being treated as "private activity bonds" within the meamng of section 141 (b) of
the Code,
(e) to refrain from taking any action that would result in the Certificates being
"federally guaranteed" within the meamng of section 149(b) of the Code,
(f) to refr~un from using any portion of the proceeds of the Cemficates, directly
or indirectly, to acquire or to replace funds which were used, directly or ~ndlrectly, to aeqmre
investment property (as defined in section 148(b)(2) of the Code) which produces a materially
higher yield over the term of the Certificates, other than investment property acquired w~th --
( 1 ) proceeds of the Certificates invested for a reasonable tempora~ period
of 3 years or less, or in the case of a refunding certificate for a period of 30 days or
less, until such proceeds are needed for the purpose for which the certificates are
ISSued,
22
(2) mounts invested an a bona fide debt senace fund, w~tlun the meamng
of sectaon 1 148-1 (b) of the Treasury Regulataons, and
(3) amounts depomed m any reasonably reqmred reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the stated pnnclpal
amount (or, m the case ofa dascount, the assue price) of the Cemficates,
(g) to otherwase restrict the use of the proceeds of the Certaficates or amounts
treated as proceeds of the Certaficates, as may be necessary, so that the Certaficates do not
otherwtse contravene the reqmrements of sectaon 148 of the Code (relating to arbttrage),
Seetaon 149(8) of the Code (relating to hedge bonds), and, to the extent apphcable, sectaon
149(d) of the Code (relatmg to advance refundings), and
(h) to pay to the Umted States of America at least once dunng each five-year
period (begmmng on the date of dehvery of the Cemficates) an amount that as at least equal
to 90 percent of the "Excess Earmngs", watban the meaning of section 148(f) of the Code and
to pay to the Umted States of America, not later that 60 days after the Certaficates have been
prod m full, 100 percent of the amount then reqmred to be pard as a result of Excess Earmngs
under sectmn 148(0 of the Code
The Issuer understands that the term "proceeds" includes "dasposttton proceeds" as defined
tn the Treasury Regulattons and, an the case of refunding bonds, transferred proceeds 0f any) and
proceeds of the refunded bonds expended prior to the date of Issuance of the Bonds It ts the
understanding of the Issuer that the covenants contmned hereto are intended to assure comphance
w~th the Code and any regulattons or ruhngs promulgated by the U S Department of the Treasury
pursuant thereto In the event that regulattons or rulings are hereafter promulgated whtch modtfy,
or expand provlsaons of the Code, as apphcable to the Certaficates, the Issuer wdl not be required to
comply wah any covenant contmned hereto to the extent that such modtficatlon or expansaon, m the
oplmon of natlonally-recogmzed bond counsel, will not adversely affect the exemptton from federal
tncome taxataon of anterest on the Certificates under sectton 103 of the Code In the event that
regulations or rulings are hereafter promulgated wluch xmpose addataonal reqmrements wbach are
applicable to the Certaficates, the Issuer agrees to comply with the addmonal reqmrements to the
extent necessary and reasonably possable, m the opamon of nataonally-recogmzed bond counsel, to
preserve the exemption from federal income taxataon ofanterest on the Certaficates under sectaon 103
ofthe Code In furtherance of such mtantlon, the Issuer hereby authorizes and d~rects the Mayor °f
the Issuer to execute any documents, certaficates or reports reqmred by the Code and to make such
electxons, on behalf of the Issuer, wluch may be penmtted by the Code as are consastent w~th the
purpose for the assuance of the Certaficate
In order to facd~tate comphance wtth the above covenant (h), a "Rebate Fund" is hereby
estabhshed by the Issuer for the sole benefit of the Umted States of America, and such fund shall not
be sublect to the clmm of any other person, mcludmg wathout hnutatton, the owners of the
Cemficates The Rebate Fund ~s estabhshed for the addtuonal purpose ofcomphance wtth Secuon
148 of the Code
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Section 14 SALE OF INITIAL CERTI~'ICATE The Imtlal Certificate is hereby sold and
shall be delivered to Dean Witter Reynolds, for cash for the par value thereof and accrued interest
thereon to date of delivery, plus a cash prermum of $-0- Such prermum shall, upon receipt, be
deposited into the Interest and Smlong Fund It is hereby officially found, deterrmned, and declared
that the Imtial Certificate has been sold at public sale to the bidder offenng the lowest interest cost,
after receixang sealed bids pursuant to an Official Notice of Sale and Bidding Instructions and Official
Statement dated March 6, 1999, prepared and distributed in connection w~th the sale of the Initial
Certificate Smd Official Notice of Sale and Bidding Instructions and Official Statement, and any
addenda, supplement, or amendment thereto have been and are hereby approved by the Issuer, and
their use in the offer and sale of the Certificates is hereby approved It is further officially found,
deternuned, and declared that the statements and representations contmned in said Official Notice of
Sale and Official Statement are true and correct in all material respects, to the best knowledge and
belief of the City Council and the Issuer
Section 15 ALLOCATION OF, AND LIMITATION ON, EXPENDITURES 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 ofttus Ordinance (the "Project") on its
books and records by allocating proceeds to expenditures w~thm 18 months of the later of the date
that (1) the expenditure is made, or (2) the ProJect Is completed The foregmng notwlthstandmg, the
Issuer shall not expend sale proceeds or investment earmngs thereon more than 60 days after the
earlier of (1) the fifth anmversary of the delivery of the Certificates, or (2) the date the Certificates
are retired, unless the Issuer obtains an opinion of nationally-recogmzed bond counsel that such
expenditure will not adversely affect the tax-exempt status of the Certificates For purposes hereof,
the Issuer shall not be obligated to comply with ttus covenant if it obtmns an opinion that such fmlure
to comply will not adversely affect the excludability for federal income tax purposes from gross
income of the interest
Section 16 DISPOSITION OF PROJECT The Issuer covenants that the property
constituting the Project will not be sold or otherv~se disposed in a transaction resulting in the receipt
by the Issuer of cash or other compensation, unless the Issuer obtains an opimon of nationally-
recogmzed bond counsel that such sale or other disposition will not adversely affect the tax-exempt
status of the Certificates For purposes hereof, the Issuer shall not be obligated to comply with tbas
covenant if it obtains a legal opinion that such fmlure to comply will not adversely affect the
excludablhty for federal income tax purposes from gross income of the interest
Section 17 INTEREST EARNINGS ON CERTIFICATE PROCEEDS Interest earmngs
derived from the investment of proceeds from the sale of the Initial Certificate shall be used along
w~th other proceeds for the purposes for wbach the Certificates are issued, provided that after
completion of such purposes, if any of such interest earmngs remmn on hand, such interest earmngs
shall be deposited in the Interest and Smkdng Fund It is further provided, however, that any interest
earnings on certificate proceeds wluch are required to be rebated to the United States of America
pursuant to Section 13 hereofm order to prevent the Certificates from being "arbitrage bonds" w~thin
the meamng of the Code shall be so rebated and not considered as interest earmngs for the purposes
of this Section
24
Section 18 DTC REGISTRATION The Certmficates nntially shall be Issued and dehvered
tn such manner that no physical distribution of the Certificates will be made to the public, and The
Depository Trust Company ("DTC"), New York, New York, lmtlally will act as depository for the
Certificates DTC has represented that it is a hrmted purpose trust company incorporated under the
laws of the State of New York, a member of the Federal Reserve System, a "cleanng corporation"
w~tlun the meamng of the New York Uniform Commercial Code, and a "cleanng agency" registered
under Section 17A of the federal Securities Exchange Act of 1934, as amended, and the Issuer
accepts, but in no way verifies, such representations The Initial Certificate authorized by ttus
Ordinance shall be delivered to and registered in the name of the Purchaser However, it is a
condition of delivery and sale that the Purchaser, immediately after such delivery, shall cause the
Paying Agent/Registrar, as provided for in ttus Ordinance, to cancel smd Imtlal Certificate and deliver
in exchange therefor a substitute Certificate for each maturity of such Imtlal Certificate, w~th each
such substitute Certificate to be registered in the name of CEDE & CO, the nonunee of DTC, and
it shall be the duty of the Paying Agent/Registrar to take such action It is expected that DTC will
hold the Certificates on behalf of the Purchaser and/or the DTC Participants, as defined and described
in the Official Statement referred to and approved m Section 14 hereof(the "DTC Participants") So
long as each Certificate is registered in the name of CEDE & CO, the Paying Agent/Registrar shall
treat and deal with DTC in all respects the same as if it were the actual and beneficial owner thereof
It is expected that DTC will maintain a book entry system wtuch will identify beneficial ownerslup
of the Certificates by DTC Participants in integral amounts of $5,000, with transfers of ownerstup
being effected on the records of DTC and the DTC Participants pursuant to rules and regulations
established by them, and that the substitute Certificates lmtlally deposited w~th DTC shall be
immobilized and not be further exchanged for substitute Certificates except as hereinafter prowded
The Issuer is not responsible or liable for any functions of DTC, will not be responsible for paying
any fees or charges w~th respect to its serwces, will not be responsible or liable for m~unta~mng,
supervising, or reviewing the records of DTC or the DTC Participants, or protecting any interests or
rights of the beneficial owners ofthe Certificates It shall be the duty ofthe Purchaser and the DTC
Participants to make all arrangements w~th DTC to establish this book-entry system, the beneficial
ownership of the Certificates, and the method of paying the fees and charges of DTC The Issuer
does not represent, nor does it in any way covenant that the lmtlal book-entry system established w~th
DTC will be mmntained in the future The Issuer reserves the right and option at any time in the
future, in its sole discretion, to terminate the DTC (CEDE & CO ) book-entry only registration
requirement described above, and to perrmt the Certificates to be registered in the name of any owner
If the Issuer exercises its right and option to ternunate such requirement, it shall give written notice
of such ternnnation to the Paying Agent/Registrar and to DTC, and thereafter the Paying
Agent/Registrar shall, upon presentation and proper request, register any Certificate in any name as
provided for in this Ordmance Notwithstanding the imtlal estabhshment ofthe foregoing book-entry
system with DTC, fffor any reason any of the originally delivered substitute Certificates is duly filed
with the Paying Agent/Registrar with proper request for transfer and substitution, as prowded for in
th~s Ordinance, substitute Certificates roll be duly delivered as provided in flus Ordinance, and there
will be no assurance or representation that any book-entry system will be mmntmned for such
Certificates
25
Section 19 COMPLIANCE WITH RULE 15c2-12 (a) AnnualRe__~_9._~ (l) The Issuer
shall provide annually to each NRMSIR and any SID, vatlun six months after the end of each fiscal
year ending m or after 1999, financial information and operating data vath respect to the Issuer of the
general type included m the final Official Statement authorized by Section 14 of flus Ordinance, being
the information described m Exbablt A hereto, wbach Extublt is attached to and incorporated in th~s
Ordinance as lfwntten word for word hereto Any financial statements so to be provided shall be (1)
prepared m accordance with the accounting pnnciples described m Exhibit A hereto, or such other
accounting pnnclples as the Issuer may be required to employ from time to time pursuant to state law
or regulation, and (2) audited, If the Issuer commasslons an audit of such statements and the audit is
completed w~ttun the period durmg wluch they must be provided If the audit of such financial
statements is not complete wltlun such period, then the Issuer shall provide unaudited financial
statements by the required time and will provide audited financial statements for the applicable fiscal
year to each NRMSIR and any SID, when and if the audit report on such statements become
available
(u) If the Issuer changes its fiscal year, it will notify each NRMSIR and any SID of the
change (and of the date of the new fiscal year end) prior to the next date by wbach the Issuer
othervase would be required to provide financial reformation and operating data pursuant to flus
Section The financial information and operating data to be provided pursuant to th~s Section may
be set forth m full m one or more documents or may be included by specific reference to any
document (including an official statement or other offenng document, if it is available from the
MSRB) that theretofore has been provaded to each NRMSIR and any SID or filed with the SEC
(b) Material Event Notices The Issuer shall nout~ any SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Certificates, if such
event is material wlttun the meaning of the federal secuntles laws
1 Pnnclpal and interest payment delinquencies,
2 Non-payment related defaults,
3 Unscheduled draws on debt service reserves reflecting financial difficulties,
4 Unscheduled draws on credit enhancements reflecting financial difficulties,
5 Substitution of credit or liquidity providers, or their failure to perform,
6 Adverse tax opimons or events affecting the tax-exempt status of the
Certificates,
7 Modifications to rights of holders of the Certificates,
8 Certificate calls,
9 Defeasances,
26
10 Release, substltutton, or sale of property secunng repayment of the
Certificates, and
11 lhtmg changes
The Issuer shall notlSy any SID and either each NRMSIR or the MSRB, m a timely manner, of any
failure by the Issuer to provide financtal information or operating data m accordance with subsecuon
(a) ofth~$ Section by the time required by such subsection
(c) l~mltp, tlOnS, Dtsc;a~mers, and Amendments (0 The Issuer shall be obhgated to observe
and perform the covenants specified m this Section for so long as, but only for so long as, the Issuer
remains an "obligated person" w~th respect to the Certificates Wlflun the meamng of the Rule, except
that the Issuer m any event will ~uve the notice reqmred by Subsection (b) hereof of any Certificate
calls and defeasance that cause the Issuer to no longer be such an "obligated person"
(n) The prov~smns of th~s Sectton are for the sole benefit of the regtstered owners and
benefictal owners of the Certificates, and notlung m tbas Sectton, express or lmphed, shall give any
benefit or any legal or eqmtable right, remedy, or clmm hereunder to any other person The Issuer
undertakes to provtde only the financial reformation, operating data, financial statements, and notices
which n has expressly agreed to prowde pursuant to this Secuon and does not hereby undertake to
provide any other mfonnauon that may be relevant or material to a complete presentation of the
Issuer's financtal results, condition, or prospects or hereby undertake to update any lnformatton
provided m accordance with this Section or otherwtse, except as expressly prowded hereto The
Issuer does not make any representation or warranty concermng such mfonnauon or tts usefulness
to a decision to tnvest m or sell Cemficates at any future date
(m) LrNDER 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
(lv) No default by the Issuer in observing or perfornung tts obligations under flus Section
shall comprise a breach of or default under the Ordinance for purposes of any other provlston of flus
Ordinance Notbang m tbas Seeuon Is intended or shall act to dtsclaim, wmve, or otherwise hrmt the
duties of the Issuer under federal and state securities laws
(v) The provisions of this Section may be amended by the Issuer from ttme to ume to adapt
to changed circumstances that arise from a change ~n legal reqmrements, a change in law, or a change
tn the identity, nature, status, or type of operattons of the Issuer, but only if(l) the provtstons of this
Section, as so amended, would have penmtted an underwriter to purchase or sell Cemficates ~n the
primary offenng of the Certificates m compliance with the Rule, taking mto account any amendments
27
or interpretations of the Rule since such offenng as well as such changed circumstances and (2) either
(a) the registered owners ora majority in aggregate pnnclpal amount (or any greater amount required
by any other provision of this Ordinance that authorizes such an amendment) of the outstanding
Certificates consent to such amendment or (b) a person that is unaffiliated with the Issuer (such as
nationally recogmzed bond counsel) detemuned that such amendment will not materially impair the
interest of the registered owners and beneficial owners of the Certificates If the Issuer so amends
the provisions of this Section, it shall include vath any amended financial information or operating
data next provided in accordance with subsection (a) of this Section an explanation, in narrative form,
of the reason for the amendment and of the impact of any change in the type of financial information
or operating data so provided The Issuer may also amend or repeal the provisions of this continuing
disclosure agreement if the SEC amends or repeals the applicable provision of the Rule or a court of
final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the
extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing
or selling Certificates in the primary oiTenng of the Certificates
(d) Defimtlons As used in this Section, the following terms have the meamngs ascribed to
such terms below
"MSRB" means the Mumclpal Securities Rulemalong Board
"NRMSIR" means each person whom the SEC or its staff has detern~ned to be a nationally
recognized mumcipal securities information repository within the meaning of the Rule from time to
time
"Rule" means SEC Rule 15c2-12, as amended from time to time
"SEC" means the United States Securities and Exchange Comrmssion
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and detemuned by the SEC or its staff to be, a state information
depository w~thin the meaning of the Rule from time to time
Section 20 FURTHERPROCEDURES The Mayor of the Issuer, the City Secretary of the
Issuer, and all other offcers, employees, and agents of the Issuer, and each of them, shall be and they
are hereby expressly authorized, empowered, and directed from time to time and at any time to do
and perform all such acts and things and to execute, acknowledge, and deliver in the name and under
the corporate seal and on behalf of the Issuer all such instruments, whether or not hereto mentioned,
as may be necessary or desirable in order to carry out the terms and provisions of this Certificate
Ordinance, the Certificates, the sale of the Certificates, and the Notice of Sale and Offclal Statement,
and the Assistant City Manager/Finance of the City shall cause the expenses of issuance of the
Certificates to be paid from the proceeds of sale of the Initial Certificate or from other lawfully
avmlable funds of the Issuer In case any offcer whose signature shall appear on any Certificate shall
cease to be such officer before the dehvery of such Certificate, such signature shall nevertheless be
valid and sufficient for all purposes the same as if such officer had remained in office until such
delivery
28
Section 21 OPEN MEETINGS The C~ty Council has found and deternuned that the
meeting at wtuch ttus Ordinance ~s considered ~s open to the pubhc and that not~ce thereof was g~ven
m accordance w~th the prov~sions of the Texas Open Meetings, Law, Tex Gov't Code, Chapter 551,
as amended
Section 22 EFFECTIVE DATE Tlus Ordinance shall become effective immediately upon
ns passage and approval
29
PASSED AND APPROVED fins the 23rd day of March, 1999
ATTEST
/~f~e'r ~alters~'Ctty SeCretary
APPROVED AS TO LEGAL FORM
30
EXI~I~____~
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following mfonnat~on is referred to m Section 19 oftbas Ordinance
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the Issuer to be proxaded annually
in accordance with such Section are as specified (and included m the Appendix or under the tables
of the Official Statement referred to) below
Tables numbered 1 through 14, reclusive, under the captions "Tax Information", "Debt
Servtce Requirements" and "Financial Information" m the Official Statement
Appendix B m the Official Statement
Accounting Princaples
The accounting pnnciples referred to in such Section are the accounting pnnclples described
m the notes to the financial statements referred to in the paragraph above