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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 3 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 4 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) 7 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 21 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 23 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