HomeMy WebLinkAboutR2016-029, , � ;� ' 1 ' • 1 '
A RESOLUTION OF THE CITY OF DENTON, A TEXAS HOME RULE MUNICIPAL
CORPORATION ("CITY99), APPROVING AND AUTHORIZING THE SALES OF CERTAIN
ASSETS SY THE TEXAS MUNICIPAL POWER AGENCY ("AGENCY99) AND THE
REFUNDING OF CERTAIN AGENCY FINANCIAL OBLIGATIONS IN CONNECTION WITH
THE AGENCY'S SALES OF ASSETS; AUTHORIZING THE MAYOR TO ACT ON THE CITY'S
BEHALF IN EXECUTING CERTAIN AMENDMENTS TO AGREEMENTS BY AND BETWEEN,
Al\� A1Vlo1\ V A IlE AGL` 1Vl.Y Al\L 1 AHL` Cl A 1L' �7 oi` B16I L-11`ly LL` 1\ 1 ol\y I.TAHILAI\Ly Li1V L
GREENVILLE ("PARTICIPATING PUBLIC ENTITIES99 [EACH A"PARTICIPATING PUBLIC
El\111199]) 1VL`l.L`SSL'1101 10 L`1`A'L`i.l VCIAL` H1ZL` AGL`1VC1'�l SHLL`S ol' A�7�7L` 1S Lil\� 111E
ASSOCIATED REFUNDING OF ITS FINANCIAL OBLIGATIONS; AND TO TAKE SUCH
OTHER AND FURTHER ACTIONS AS ARE NECESSARY IN ORDER TO EFFECTUATE AND
FINALIZE T�IE CITY'S APPROVAL OF SUCH SALES AND THE REFUNDING OF THE
AGENCY'S RELATED INDEBTEDNESS; AUTHORIZING AND APPROVING OTHER
MATTERS RELATED THERETO; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, pursuant to Chapter 163 of the Texas Utilities Code, Subchapter C-1 ("Act"), the
City is a Participating Public Entity in the Agency and, pursuant to Section 163.080(c) of the Act, and
agreements between the Agency and fhe City, the •Gity's approv�l is required for sales of assets by the
Agency, and
WHEREAS, the Board of Directors of the Agency has determined that the sales of certain
generation and transmission assets is in the best interest of the Agency and its Participating Public Entities
and has adopted a resolution recommending that the Participating Public Entities relinquish all rights to and
approve the sales of those assets as generally described in Attachments A and B, and
WHEREAS, in connection with such sale of assets, the Board of Directors of the Agency may
determine that it is necessary to refund certain outstanding bonds and commercial paper of the Agency to
effectuate such sales, and to adopt new commercial paper programs, and seeks the City's approval of the
issuance of refunding bonds and ofthe new commercial paper programs, according to the terms as described
on Attachment C("Refundings"), subject to and effective upon the closing of the sales, and
WHEREAS, the amendment of certain existing agreements between and among the Agency and
the Participating Public Entities, namely the parties' Global Settlement Agreement and the Joint Operating
Agreement, as shown in Attachments D and E are necessary for the approval of the sales of assets and the
Refundings, and
WHEREAS, the "Effective Date" shall be, assuming the approval and execution of a resolution
by each Participating Public Entity containing the following terms, the date of approval of such resolution
by the last Participating Public Entity to approve the resolution;
NOW, THEREFORE, BE IT RESOLVED 1�Y THE CITY COUNCIL OF THE CITY OF
DL` 1\ 1 ol\y 1 L` AAS:
The recitals in the preamble are true and correct.
2. The City of Denton hereby approves and authorizes the Agency to sell certain Agency
generation assets as generally described in Attachment A, and upon such sale, relinquishes any and all
interest in such assets.
3. The City of Denton hereby approves and authorizes the Agency to sell certain Agency
transmission assets as generally described in Attachment B, and upon such sale, relinquishes any and all
interest in such assets.
4. To effectuate the closing ofthe sale ofthe assets generally described in Attachments A and
B, the City of Denton hereby approves and authorizes the Agency's issuance of refunding bonds and/or
commercial paper as necessary to effect the sale of generation assets, and adoption of a new commercial
paper program, on the terms and in substantially the form described in Attachment C.
5. To effectuate the closing ofthe sale ofthe assets generally described in Attachments A and
B, the City of Denton hereby approves and authorizes the Agency's issuance of refunding bonds and/or
corrrmercial paper as necessary to efiect the sale of certain transmission assets, and adoption of new
commercial paper programs, on the terms and in substantially the form described in Attachment C.
6. The City of Denton hereby approves and authorizes the Mayor to execute amendments to
the Global Settlement Agreement and the Joint Operating Agreement in substantially the form and
substance shown in Attachments D and E.
This Resolution shall be and become effective upon the Effective Date.
PASSED AND APPROVED this the Z 3 day of � , 2016.
� � •
. .. . �u . __ � *:
CORPORATION �'
�
.�^'f �
Chris Watts, Mayor
�
��� �,
w �_ .
� � • , .
, �.. � � , ! �.
.. r ..� � � /,' p ,f°�C �-- _
-�-- - �-- --
� r � : .. R . ty � t ��,-a���,F
ATTACHMENTS
� � . . , � '� � ; � r
,o •, � ..,•� � .;� ; � r
• ,� � � :� � � �, � �• , �
�.� ..
Sabpart A— Terms of refunding of generation debt
Subpart B— Terms of refunding of transmission debt
1 1' � �� '
� � � ;� � � . .
. � .., • 1 � : �' 1
The Purchased Assets consist of real property, buildings, structures and fixtures, the personal property
generally described as follows:
l�e�l I�3•t����rt�.: That certain tract of land referred to as the plant site, to be more particularly described at
closing by metes and bounds, together the following buildings, structures and fixtures, and associated
easements, rights of way, privileges, other rights appurtenant:
a. Gibbons Creek Steam Electric Station (including all buildings, structures, equipment,
tools, piping, tanks, systems, wells, power cables, and related equipment and systems that
comprise the Station)
b. Gibbons Creek Reservoir and associated water rights.
c. Ash handling complex.
d. Ash Ponds.
e. . Scrubber Sludge Pond.
f. Gypsum pile.
g. Coal pile.
h. Fly Ash Loading Area.
i. Production Area.
j. Maintenance Area.
k. Facility Administrative and Technical Office Building.
1. Warehouses, Laydown Storage Area.
m. Switch Yard.
n. Rail Spur to BNSF Line.
o. Spur right of way and easernents from Gibbons Creek Station suitable for construction of
rail spur to UP Line.
p. Hog Creek Substation.
q. All generation-related on-road and off-road vehicles, equipment, and boats.
r. Ash Disposal Landfills on properties being acquired in tl�is Transaction. -
s. Main Transformer outside the Gibbons Creek Substation.
t. Navasota River Pump Station.
1��cl���ii���mm
Other than the Hog Creek Substation, all transmission facilities and lines within the defined
real property, including all easements, rights of way, and licenses associated with such
facilities and lines.
2. In the Hog Creek Substation, the 138kV motor operated switch off the 138 kV Bryan-East
Line (138 kV Motor Operated Load Break Switch 1200 A 138 kV GCHC -8019 at Hog
Creek).
3. The Gibbons Creek Substation.
4. Existing Atmos gas pipeline and third party electric facility easements.
All other reservations and exclusions or limitations necessary to operate the above
excluded items.
ATTACHMENT B— AGENCY TRANSMISSION ASSETS APPROVED TO BE SOLD
_ __
A. Substations to be conveyed:
1. The Gibbons Creek Substation except for the 138kV facilities within the substation.
2. The Jack Creek Substation except for the 138kV facilities owned by the City of Bryan.
B. Transmission lines to be conveyed, together with those easements and crossing agreements
identified herein:
Gibbons Creek to Singleton 345kV double-circuit transmission line.
2. Gibbons Creek to Jack Creek 345kV double-circuit transmission line.
Jack Creek to Twin Oak 345kV double-circuit transmission line.
C. Transmission Construction Projects
Certain planned capital investments (and related contract rights) in the Gibbons Creek Substation, including
(i) the Reactive Support Unit consisting of two 345 kV, 100 MVA reactor banks, (ii) the replacement of the
existing 300 MVA auto-transformer with a 600 MVA auto-transformer, including the Gibbons Creek
Substation Expansion which will be transferred separately post-closing following the transfer of the
Gibbons Creek Substation Expansion from Cross Texas to the City of Garland, and subsequently to TMPA,
and (iii) the increase in capacity of the Singleton 345 kV transmission line at the time it is relocated out of
the Gibbons Creek Substation.
ATTACHMENT C— TERMS OF REFUNDING BONDS
AND NEW COMMERCIAL PAPER PROGRAMS
Subpart A— Terms of refunding of generation debt and commercial paper:
Maximum principal amount: $225 Million Dollars
Maximum interest rate - bonds: 7%
Maximum interest rate — commercial paper: Maximum interest rate permitted by
state law
Maturity date of bonds and commercial paper: On or before September 1, 2018
Subpart B— Terms of refunding of transmission debt and commercial paper:
Maximum principal amount: $275 Million Dollars
Maximum interest rate - bonds: 7%
Maximum interest rate — commercial paper: Maximum interest rate permitted by
state law
Maturity date of bonds and commercial paper: On or before Septembor 1, 2040
�. € 11���E"��lf�.,�l�[rl �,� �" �IY�A�s.l i'.A7kY,AR�.rd°rrR 6�'f���a A A�,�# L7'�.a^5,.11A�Le i7����e.l 1�-.+'�lYP.F.'�� ! tT��tiA.�1ae0.'alV�.l�.rl'� is
AMENDMENT NO. 1 TO THE
GLOBAL COMPROMISE SETTLEMENT AGREEMENT
BETWEEN
TEXAS MUNICIPAL POWER AGENCY
AND
CITY OF BRYAN, TEXAS
CITY OF DENTON, TEXAS
CITY OF GARLAND, TEXAS
CITY OF GREENVILLE, TEXAS
This Amendment No. 1 to the Global Compromise Settlement Agreement effective
December 17, 2009, (the "Amendment") is made and entered into by and between the Texas
Municipal Power Agency (the "Agency"), a municipal corporation and political subdivision of the
State of Texas established pursuant to the provisions of Chapter 163 of the Texas Utilities Code,
and the City of Bryan, the City of Denton, the City of Garland, and the City of Greenville, Texas,
each of which cities is a municipal corporation of the State of Texas and a home rule city (herein
collectively "Cities" or individually "City") (collectively, the "Parties"), to be effective as of the
Effective Date set forth in the recitals below. Capitalized terms used in this Amendment not
otherwise defined herein shall have the definition set forth in the Global Compromise Settlement
Agreement.
WITNESSETH:
WHEREAS, the Parties have previously entered into the Global Compromise Settlement
Agreement; and
WHEREAS, TMPA has issued a request for proposals related to the sales of certain assets
of the Agency, as authorized by the TMPA Board by Resolution No. 2016-1-5; and
WHEREAS, TMPA received responses to such request that it wishes to accept, such
responses being in the form of a proposed purchase of generation assets of the Agency and a
proposed purchase of certain transmission assets of the Agency, pursuant to TMPA Board
Resolution 2016-1-5; and '
Page 1 of 5
WHEREAS, the Parties desire to amend the Global Compromise Settlement Agreement
to permit (i) these two sales of assets and (ii) to permit the issuance of certain refunding bonds
and/or commercial paper and adoption of new commercial paper programs, by the Agency on
terms agreed to by the Parties pursuant to the Joint Operating Agreement (as amended) between
the Parties; and
WHEREAS, TMPA and the Cities have agreed to this Amendment of the Global
Compromise Settlement Agreement to accomplish these purposes; and
WHEREAS, the "Effective Date" of this Amendment shall be, assuming the approval and
execution of ident�cal resolutions by each of the Parties, the date that this Amendment is approved
and executed by the last Party to approve the Amendment;
NOW, THEREFORE, in consideration of the recitals set forth above, the mutual
covenants, benefits, agreements and obligations of the Parties, as set forth herein, the Agency and
each City, each intending to be legally bound, agree as follows:
Section 1. Section 2(B) of the Global Compromise Settlement Agreement is amended
by adding the following subsections (11) and (12):
"(11) To effectuate the closing of the sale of Generation Assets as contemplated by
TMPA Boaxd by Resolution No. 2016-1-5, and to adopt a new commercial paper program, the
Parties agree that, notwithstanding subsection (5), TMPA's existing generation-related debt and/or
commercial paper may be refunded on terms set forth in Amendment No. 1 to the Joint Operating
Agreement between the Parties.
"(12) In the event of the closing of the sale of Generation Assets as contemplated
by TMPA Board by Resolution No. 2016-1-5, and to effectuate the sale of Transmission Assets as
contemplated by TMPA Board by Resolution No. 2016-1-5 and to adopt new commercial paper
programs, the Parties agree that, notwithstanding subsection (5), TMPA's existing transmission-
related debt and/or commercial paper may be refunded on terms set forth in Amendment No. 1 to
the Joint Operating Agreement between the Parties.
Section 2. OTHER AGREEMENTS.
(a) All other terms and conditions of the Global Compromise Settlement Agreement shall
remain in full force and effect except as modified herein.
(b) This Amendment shall terminate on the same date the Global Compromise Settlement
Agreement terminates.
(c) Each Party warrants that all necessary actions have been taken to make this a binding
amendment, including Board or Council action, as applicable.
Page 2 of 5
(d) This Amendment may be executed in multiple counterparts, each of which shall
constitute an original but both or all of which, when taken together, shall constitute but one
instrument. This Amendment may be delivered by the exchange of signed signature pages by
facsimile transmission or by attaching a pdf copy to an email, and any printed or copied version
of any signature page so delivered shall have the same force and effect as an originally signed
version of such signature page.
Section 3. OTHER EVENTS. In the event that the proposed asset agreement for the sale
of Generation Assets as authorized by the TMPA Board by Resolution No. 2016-1-5 is terminated
or for any reason does not occur, this Amendment shall terminate and be of no force or effect.
IN WITNESS WHEREOF, the Parties have executed this Amendment Number One to the
Global Compromise Settlement Agreement, to be effective on the Effective Date set forth in the
Recitals.
TEXAS MUNICIPAL POWER AGENCY
BY= r_._....
Name:
Title:.
Date;
Attest:
Approved as to form:
Counsel for Texas Municipal Power A� ���������� ���
gency
CITY OF BRYAN, TEXAS
BY� .� .—
Name;
Title:
Date:
Attest;
Page 3 of 5
Approved as to form: . . ... _..
Counsel for the Ciiy of Bryan,�Texas
CITY OF DENTON�
� ,;
By: ... �
Name
�°_���' .....
Title: ' �"� � �. ..
Date:. � � �
Attest: � ,� �^��� �
� ���a����v� :� to �"��� �
Counsel for the City +��" �� �r�t����, Texas
CITY OF GARLAND, TEXAS
By: ...�_.
Name:
Title:
Date:
Attest:
CITY OF GREENVILLE, TEXAS
By: ....�._.
Name:
Title:
Date:
Attest:
Page 4 of 5
GEUS, acting on behalf of the City of Greenville pursuant to its Charter
:
Name:
Title: Chair of the Board of Trustees of the I;lectric Utility Board
Date:
Attest:
Page 5 of 5
� ,:. t : * , ! � � t:: R '�.
AMENDMENT NO.1 TO THE
JOINT OPERATING AGREEMENT
$ETWEEN
TEXAS MUNICIPAL POWER AGENCY
AND
CITY Ok' BRYAN, TEXAS
CITY OF DENTON, TEXAS
CITY OF GARLAND, TEXAS
CITY OF GREEN'�'ILLE, TEXAS
This Amendment No. 1(the "Amendment") to the Joint Operating Agreement effective
September 1, 2016 (the "JOA"), is made and entered into between the Texas Municipal Power
Agency ("TMPA'�, a municipal corporation and political subdivision of the State of Texas
established pursuant to the provisions of Chapter 163 of the Texas Utilities Code, and the City of
_.
Bryan, the City of Denton, the City of Garland, and the City of Greenville, Texas (herein
collectively "Cities" or individuaily "City"), each of which cities is a municipal corporahon o e
State of Texas, a home rule city, and a Participating Public Entity in TMPA (collectively, the
"Parkies"}. Capitalized terms used in this Amendment not othervvise defined herein shall have the
defmition set forth in the JOA.
WITNESSETH:
WHEREAS, the Parties have previously entered into the JOA effective September 1,
2016; and
WHEREAS, TMPA has issued a request for proposals related to the sales of certain assets
of TMPA, as authorized by TMPA Board by Resolution No. 2016-1-5; and
WHEREAS, TMPA received responses to such request that it wishes to accept, such
responses being in the form of a proposed purchase of generation assets of TMPA and a proposed
purchase of certain transmission assets of TMPA, pursuant to TMPA Board Resolution 2016-1-5;
and
WHEREAS, the Parties desire to amend the JOA to permit (i) these two sales of assets by
TMPA, (ii) to permit the issuance of certain refunding bonds and/or commercial paper by TMPA
on terms agreed to by the Parties pursuant to JOA, as amended by this Amendment, and (iii) to
provide for the security of Mine Reclamarion Bonds; and
,�....ry�
WHEREAS, the Farties have agreed to this Amendment of the JOA to accomplish these
purposes; and
Page 1 of 13
��.a,��;�
WHEREAS, this Amendment shall be deemed delivered and effective, assuming the
approval and execution of an identical resolutions by each of the Parties, on the date that this
Amendment is executed by the last Party to do so, being the "EfFective Date" of this Amendment;
NOW, THEREFORE, in consideration of the recitals set forth above, the mutual
covenants, benefits, agreements and obligations of the Parties, as set forth herein, the Parties, each
intending to be legally bound, agree as follows:
Sectian 1. In the event the Generation Asset Sa1e is terminated, or for any reason does
not close, this Amendment shall terminate and be af no force or effect.
Section 2. Article I of the JOA is hereby amended by adding the following definitions
to be inserted alphabetically into their respective locations within the definitions contained in
Section 1.2 of the JOA:
"Final Working Capital Proceeds" shall mean that portion of the proceeds of the sale of Generation
Assets received for the sale of Working Capital as defined in the transaction documents associated
with the Generation Asset Sale. '
"Generation Asset Sale" shall mean and refer to sale of Generation Assets resulting from a request
for proposal process authorized by TMPA Boazd by Resolution No. 2015-1-5:
"Generation Asset Sale Closing" shall mean the closing of the transaction selling the Generation
Assets and transfer of certain Generation Assets pursuant to the Generation Asset Sale.
"Mine Reclamation Bonds" shall mean any Debt issued for the purpose of mine remediation or
any obligations related thereto, including any "credit agreements" as defined in Section
1371.001(1), Texas Government Code.
"Refunding Debt" shall mean both the Refunding Generation Debt and the Refunding
Transmission Debt.
"Refunding Generation Debt" shall mean Debt issued for the purpose of the refunding of TMPA's
outstanding bonds and commercial paper as required to effectuate the Generation Asset Sale.
"Refunding Transmission Debt" shall mean (i) Debt issued for the purpose of refunding of
T�+iPA's outstanding bonds and commercial paper as required to effectuate the Transmission Asset
Sale, (ii) Debt issued for the purpose of long-term refinancing of a portion of TNIl'A's outstanding
commercial paper notes under its commercial paper program established prior to September 1,
2016 and related to Transmission System assets not subject to the Transmission Asset Sale, and
(iii) new commercial paper programs (A) to refund of TMPA's outstanding bonds and commercial
Page 2 of 13
paper as required to effectuate the Transmission Asset Sale and (B) to support of the ongoing
operations of the Transmission System.
"Total Proceeds" shall mean a11 proceeds received from the sale of Generation Assets including
the Final Working Capital proceeds.
"Transmission Asset Sale" shall mean and refer to the sale of certain Transmission Assets resulting
from a request for proposal process authorized by TMPA $oard by Resolution No. 2016-1-5.
Section 3. The definitions of "Bond Resolution," "Transmission Debt" and
"Transmission Revenues" contained in Section 1.2(g), (t) and (v), respectively, of the JOA are
deleted in their entirety and are hereby amended to read in their entirety:
"(g) "Bond Resolution" shall mean the following resolutions of TMPA adopted prior
to the Effective Date of this Agreement authorizing an issue of Bonds or subordinated
indehtedness: (i) the "Texas Municipal Power Agency Subordinate Lien Revenue Refunding
Bonds, Series 2008," (ii) "Texas Municipal Power Agency Junior Subordinate Lien Revenue
Refunding Bonds, Series 2013," (iii) the "Texas Municipal Power Agency Commercial Paper
Notes, Series 2005," (iv) the "Texas Iti►�unicipal Power Agency Subordinate Lien
�,�' Revenue/Transmission Revenue Converting Security Re�nding Bonds, Series 2010," (v) any
commercial paper notes issued after the Effective Date of this Agreement to refund all or a portion
of the commercial paper notes referenced in clause {iii), (vi) any resolution adopted after the
Effective Date of this Agreement pursuant to which Refunding Generation Debt or Refunding
Transmission Debt may be issued, and (vii) any resolution adopted after the Effective Date of this
Agreement pvrsuant to which Transmission Debt or New Debt, each as defined herein, may be
issued."
"(t) "Transmission Debt" shall have the same meaning as the term "Transmission Debt"
as stated in the Series 2010 Bond Resolution and, upon the defeasarice of such debt, the
substantially similar definition of such term in the Bond Resolution authorizing the Refunding
Transmission Debt."
"(v) "Transmission Revenues" shall have the same meaning as "Transmission Net
Revenues" as defined in the Series 2010 Bond Resolution and, upon the defeasance of such debt,
the substantially similar definition of such term in the Bond Resolution authorizing the Refunding
Transmission Debt", and shall include revenues from the charge pemutted by Section 4.2 in
connection with the Transmission Business category.
Section 4. Section 1.3 of the JOA is deleted in its entirety and is hereby amended to
read in its entirety:
"SECTION 1.3. SCOPE OF THIS AGREEMENT. This Agreement is intended to provide
terms of agreement for (1) TMPA operations outside the scope of the Power Sales Contract, (2)
Page 3 of 13
matters relating to decommissionin.g of the power plant at such time as it may be removed from
service, (3) disposirion of TMPA assets, (4) matters related to the Generation Assets Sale, the
Trans�mission Asset Sale and the issuance of related Refunding Debt, and (5) matters relating to
dissolution of TMPA, at such time as it may be dissolved. This Agreement is not intended to
require a Participating Public Entity to hold an election in order to exercise any right or to carry
out any obligation under this Agreement."
Section 5. Section 2.6.1.1 of the JOA is deleted in its entirety and is hereby amended
to read in its entirety:
"2.6.1.1. FOR THE PERIOD FROM THE EFFECTIVE DATE AND ENDING
SEFTEMBER 30, 2018. Except as provided by Section 2.6.1.4, for the period effective October
1, 2016, and annually thereafter to September 30, 2018, the TMPA Board shall adopt annual
budgets, by business category. For periods prior to September 30, 2018, such Annual Budgets
shall be for informational purposes only. Recovery of the costs of TMPA operations for this period
shall be through the (i) Annual Systern Costs under the Power Sales Contract of the TMPA and
(ii) Transmission Revenues. From the Effective Date through September 30, 2018, funds
otherwise available to be returned to the Cities under Section 7(a)(3) of the Power Sales Contract
shall be applied to the following uses: (i) first, to fund the Decommissioning Reserve Account up
to the cap for that account as stated in Section 5.5, and (ii) then, to fund the Indemnity Reserve
� Account up to the cap for that account as stated in Section 6.5. Any net proceeds remaining after
the obligations described in (i)-(ii) shall be apportioned to each Participating Public Entity based
on the following percenta.ges: $ryan - 21.7%; Denton - 21.3%; Garland - 47%; Crreenville -10%."
Section 6. Section 2.6.i.2 of the JOA is deleted in its entirety and is hereby amended
to read in its entirety:
"2.6.1.2. FOR PERIODS COMMENCING FROM AND AFTER OCTOBER 1, 2018.
Except as provided by Section 2.6.1.4, for the fiscal yeaz commencing October 1, 2018, and
annually thereafter, the TMPA Boazd shall adopt annual budgets, by business category, and adopt
charges for the recovery of the costs of operations by business category, accflrding to the specific
requirements in Articles III, IV, and V, respectively."
Section 7. Article II of the JOA is hereby amended by adding the following Section
2.6.1.4 after Section 2.6.1.3:
"2.6.1.4 FOR PERIODS FOLLOWING GENERATION ASSET SALE:
Noiwithstanding anything to the contrary contained in Section 2.6.1.1 or 2.6.1.2, immediately upon
the Generation Asset Sale Closing, and annually thereafter, the TMPA Board shall adopt annual
budgets, by business category, and adopt charges for the recovery of the costs of operations by
business category, according to the specific requirements in Articles III, IV, and V, respectively."
Page 4 of 13
Section 8. Section 2.6.2.5 of the JOA is deleted in its entirety and is hereby amended
to read in its entirety:
"2.6.2.5. LIMITATIONS ON DEBT. From and after September 1, 2016, the Agency shall
not incur any form of Debt other than Transmission Debt, whether bonds, notes, a new commerciai
paper program or increase in an existing commercial paper program, or obligation for borrowed
money af any kind, unless such Debt is: (1) attributed to a single business category, (2) approved
by a Super Majority Vote of the TMPA Boazd and by concurrent resolutions of each Participating
Public Entity in the business category to which the debt is attributed, and (3) secured solely by
assets or revenues ar operations of the business category to which it is attributed. From and after
September 1, 2Q16, the Agency shall not incur any form of Transmission Debt, whether bonds,
notes, commercial paper or obligations of any kind, unless: (1) prior notice of at least 60 days has
been given to each Participating Public Entity in the Transmission Business category of the
pmposed issuance of such Transmission Debt, which notice shall include the principal terms on
which such Debt is proposed to be issued, and (2) such proposed Transmission Debt is: (i) after
September 1, 2018, payable solely from Transmission Revenues, and (ii) approved by a Super
Majority Vote of the TMPA Board . The restrictions in this Section relating to Debt shall not apply
to Mine Reclamation Bonds, surety bonds, banking agreements, letters of credit, or other financial
commitment related to providing financial security or assurance for the TMPA's mine remediation
responsibilities. For clarification, Approval of the Participating Public Entities shall not be
°"� � required for (1) the issuance by TMPA of Transmission Debt or (2) the issuance by TMPA of
commercial paper notes under a commercial paper program established prior to September 1, 2016,
that is: (A) payable in full on or before September 1, 2018 or (B) by its terms, to be converted to
Transmission Debt on or before October 1, 2018.
Section 9. Section 2.6.2.6 of the JOA is deleted in its entirety and is hereby amended
to read in its entirety:
"2.6.2.6. LIMITATIONS ON OTHER NEW LONG-TERM OR SIGI�IIFICANT
OBLIGATIONS. In addition to the limitations on incurrence of Debt provided in Section 2.6.2.5,
from and after September 1, 2016, the Agency shall not incur any other form af long-term
obligation unless such obligation is: (1) attributed to a single business category, (2) approved by a
Super Majority Vote of the TMPA Boazd and by concurrent resolutions of each Participating
Public Entity in the business category to which the obligation is attributed, and (3) secured solely
by assets and/or revenues of the business category to which it is ariributed. For purposes of this
paragraph 2.6.2.6, "long-term or sigttificant obligatian" shall mean any contract or other form of
obligation (i) having a term in excess of twenty-four (24) months unless the contract may be
cancelled by the Agency for convenience without penalty at any time after the giving of notice and
the expiration of a contractual notice period not to exceed one hundred twenty (120) days, or (ii)
in an amount in excess of ten million ($14,400,000.00) dollars. The restrictions in this Section
relating to long-term or significant obligations shall not apply to Mine Reclamation Bonds, surety
bonds, ,banking agreements, letters of credit, or other financial commitment related to providing
financial security or assurance for the TMPA's mine remediation responsibilities."
Page 5 of 13
Section 10. Article II of the JOA is hereby amended by adding the following Section
2.6.2.7 after Section 2.6.2.6:
"Section 2.6.2.7: APPRC}VALS OF REFUNDING DEBT AND CONCURRENT
COMMERCIAL PAPER PROGRAMS
(1) Upon approval of the Generation Asset Sale by TMPA, notwithstanding any provision
in Sections 2.6.1.1, 2.6.2.5 or 2.6.2.6 to the contrary, TMPA may refinance its outstanding
indebtedness secured by revenues related to the Generation Assets being sold and defease any
portion of such outstanding indebtedness with Refunding Generarion Debt on terms that permit
the consummarion of the Generation Asset Sale, so long as the Refunding Generation Debt is
approved by a Super Majority of the TMPA Board. Such Refunding Generation Debt shall mature
on or before September 1, 2018, and shall not exceed the amount necessary, after application of
the proceeds of the sale as provided in Section 2.13 to existing Debt, to consummate the Generation
Asset Sale, but in no case shall the Refunding Generation Debt exceed a maximum aggregate
principal amount of $225,000,000. The maximum interest rate on such bonds shall not exceed
seven percent (7%}. The maximum interest rate on such commercial paper shall not exceed the
maximum interest rate permitted by state law. Such Refunding Generation Debt shall be an
obligation of TMPA, payable from payments from the Participa.ting Public Entities under this
Agreement, and each Participating Public Entiry hereby agrees to be unconditionally obligated to
pay TMPA, and in accordance with the covenants in Section 2.7, without ofFset or counterclaim
and without regard to whether Power and/or Energy is delivered by TMPA to the respective
Participating Public Entity or Entities, that percentage of the annual debt service requirements of
such Refunding Generation Debt as shown in the following table, which payments shall be
included in the Annual Budget of the TMPA for the Generation Business, and billed to each
Pazticipating Public Entity on a monthly basis:
City of Bryan, Texas: 21.7%
City of Denton, Texas: 21.3%
City of Garland, Texas: 47.0% and
City of Greenville, Texas: 10.0%.
(2) Upon approval of the Transmission Asset Sale by a Super Majority of the TMPA,
notwithstanding any provision in Sections 2.6.1.1, 2.6.2.5 or 2.6.2.6 to the contrary, TMPA may
issue Refunding Transmission Debt. Bonds and the commercial paper programs issued in
connection with such Refunding Transmission Debt shall mature on or before September 1, 2040,
and shall not exceed a maximum aggregate principal amount of $275,400,000. The maximum
�""'� interest rate on such bonds shall not exceed seven percent (7%). The maximum interest rate on
such commercial paper shall not exceed the maximum interest rate permitted by state law. Such
Page 6 of 13
Refunding Transmission Debt shall constitute Transmission Debt of TMPA payable from
Transmission Revenues. In the event that Transmission Revenues are insufficient to pay the annual
debt service on the Refunding Transrnission Debt, each Participating Pub�ic Entity hereby agrees
ta be unconditionally obligated to pay TNII'A, without offset or counterclaim and without regard
to whether Power and/or Energy is delivered by TMPA to the respective Participating Public Entity
or Entities, and in accordance with the covenants in Section 2.7, that percentage of the remaining
annual debt service requirements of such Refunding Transmission Debt as shown in the followi.ng
table, which payments shall be included in the Annual Budget of TMPA for the Transmission
Business, and billed to each Participating Public Entity on a monthly basis:
City of Bryan, Texas: 21.7%
City of Denton, Texas: 21.3%
City of Garland, Texas: 47.0%
City of Greenville, Texas: l 0.U%: '
Section 11. Article II of the JOA is hereby amended by adding the following Section
2.13 after Section 2.12:
"Secrion 2.13: PROCEEDS OF SALES OF CERTAIN ASSETS: Notwithstanding Sections
2.12, 4.4 and 5.4, the procceds from the' Generation Asset Sale and Transmission Asset Sale, shall
be applied as may be determined by TMPA to meet the Internal Revenue Service ("IRS")
regulations governing use of such proceeds. Total Proceeds, excluding Final Working Capital
Proceeds, from the Generation Asset SaIe shall be allocated in accordance with IRS regulations
("IRS Allocation Amounts"). To the extent that such IRS Allocation Amounts vary from an
allocation pursuant to the percentages shown below for each Participating Public Entity, the
variance shall be reconciled through the allocation of the Final Working Capital proceeds such
that, after the reconciliatian, each Participating Public Entity shall have received an allocation of
the Total Proceeds equal to the percentages below. For the purposes of determining the variance,
it shall be assumed that the IRS Allocated Amounts allocated to TMPA's generation debt are
allocated based on the percentages below:
City of Bryan, Texas: 21.7%
City of Denton, Texas: 21.3%
City of Garland, Texas: 47.0%
��-.��
City of Greenville, Texas: 10.0%.
Page7of13
TMPA shall establish an escrow account for each Participating Public Entity and deposit to or
withdraw from that account that portion of each Participating Public Entity's allocation of Final
Working Capital pr s as allocated to it pursuant to the reconciliation process described above.
The funds in each Participating Public Entity's escrow account shall be applied to charges assessed
by TMPA at the direction of the Participating Public Entity. In the event that the allocation of Final
Working Capital proceeds is not sufficient for each Participating Public Entity to receive an
allocation of the Total Proceeds equal to its percentage above, TMPA shall assess a charge to each
Participating Public Entity whose }�ercentage of Total Proceeds exceeds its percentage above.
Receipts frorn such charge shall be allocated to each Participating Public Entity such that, after the
allocation, each Participating Public Entity shall have received an allocation of Total Proceeds
equal to the percentages above."
Section 12. Section 3.2.1 of the JOA is deleted in its entirety and is hereby amended to
read in its entirety:
"3.2.1. BUDGETING AND OPERATIONS. From and after October 1, 201 S, or
immediately upon the Generation Asset Sale Closing if the Generation Asset Sale Closing occurs
prior to October 1, 2018, charges for recoupment of such costs as are included in the Annual
Budget for the Mining Business category, including any debt service on any Mine Remediation
Bonds and any other costs related to surety bonds, banking agreements, letters of credit, or other
''�W��" fittancial commitrnent related to providing financial security or assurance for the TMPA's mine
remediation responsibilities, shall be assessed to each Participating Public Entity according to the
following percentages: Bryan - 21.7%; Denton - 21.3%; Garland - 47%, Greenville - lU%, and
billed to each Participating Public Entity on a monthly basis, unless a different schedule of charges
shall be adopted by the unanimous approval of all of the Participating Public Entities in the Mining
Business category. In the event a Participating Public Entity exits the Mining Business as
permitted under Section 2.11.1, it shall remain responsible for the sarne percentage share of costs
incurred after its exit as set forth above, such that the same percentages shall apply to each exited
and remaining Participating Public Entity for any costs of the Mining Business category until all
Mining Assets are sold."
Section 13. Section 4.2 of the JOA is deleted in its entirety and is hereby amended to
read in its entirety:
"SECTION 4.2. APPLICATION OF PROCEEDS FROM ANNUAL OPERATIONS OF
THE TRANSMISSION BUSINESS. From and after October l, 2018, or unmediately upon the
Generation Asset Sale Closing if the Generarion Asset Sale Closing occurs prior to October I,
2018, all net proceeds from the annual operations of the Transmission Business category (after
payment of the annual costs of the Transmission System and debt service on Transmission Debt)
shall be used: (i) first, to fund the Decomnussioning Reserve Account up to the cap for that account
as stated in Section 5.5, and (ii) then, to the Indemnity Reserve Account up to the cap for that
��'""'� account as stated in Section 6.5. Any net proceeds remaining after the obligations described in (i)-
(ii} shall be apportioned to each Participating Public Entity based on the following percentages:
Page 8 of 13
Bryan - 21.7%; Denton - 21.3%; Garland - 47%; Greenville - 10%. In the event that Transmissian
Revenues are insufficient to pay the annual costs (including debt service on Transmission Debt, or
Refunding Transmission Debt, including credit enhancement costs related to applicable
commercial paper programs) of the Transmission Business category, then each Participating
Public Entity having an interest in Transmission Assets shall fund the shortfall in the percentages
stated above. From and after October 1, 241$, in the event that a Participatin,g Public Entity exits
the Transrnission Business category, the percentage of net proceeds from the annual operations of
the Transmission Business category held by the exiting entity shall be apportioned among the
remaining Participating Public Entities in proportion to the percentages stated above for
apportionment of net proceeds effective October 1, 2018."
Section 14. Article N of the JOA is hereby amended by adding the following
Subsections 4.4.1(9) and 4.4.1(10) after Subsection 4.4.1(8):
"(9) EXCEPTIONS FOR SALE OF ASSETS PURSUANT TO THE GENERATION
ASSET SALE AND TRANSMISSION ASSETS SALE: "Notwithstanding the pmvisions of this
Section 4.4.1, the Parties agree that the Transmission Assets as identified in the Transmission
Assets Saie may be sold upon the approvals and consents as required according to the terms of
such transaction without the prior payment or defeasance of all outstanding Transmission Debt,
provided that all proceeds of such a sale shall be applied to reduce the outstanding Transmission
Debt or to pay costs of issuance associated with Refunding Transmission Debt. Upon closing of
the sale contemplated by such transaction, TMPA shall amend Schedule C to remove all assets
sold.
(10) A Participating Public Entity that has consented to the Transmission Asset Sale and
thereafter fails to provide a required consent or takes any action causing its consent to be revoked,
reversed, repealed, stayed, enjoined, set aside, annulled, suspended or no longer in full force and
effect such that TMPA is required to pay a termination payment as a result, shall pay to TMPA
within five (5) business days of the obligation becoming due and payable, an amount equal to the
termination payment TMPA is required to pay. If more than one Participating Public Entity fails
to provide a required consent ar takes any action causing its consent to be revoked, reversed,
repealed, stayed, enjoined, set aside, annulled, suspended or no longer in full force and effect, the
Participating Public Entities having caused its consent to be revoked, reversed, repealed, stayed,
enjoined, set aside, annulled, suspended or no longer in full force and effect shall together in shazes
proportionate to their percentage interest in transmission assets pay to TMPA within five (5)
business days of the obligation becoming due and payable a termination payment amount equal to
the temunation payment TMPA is required to pay."
Section 15. Article V of the JOA is hereby amended by adding the following Secrion
5.1.3 after Subsection 5.1.2:
"SECTION 5.1.3. TERMINATION UPON GENERATION ASSET SALE CLOSING.
Notwithstanding anything to the contrary in Section 5.1 or 5.2, nothing in this JOA shall preclude
Page 9 of 13
TMPA and each Participating Public Entity from terminating their Power Sales Contracts. Upon
such termination, TMPA shall cease production of power and energy immediately, regardless of
any action taken by a Participating Public Entity under Subsection S.1 or 5.2 prior to such
termination to extend the term of its Power Sales Contract."
�
Section 16. Article V of the JOA is hereby amended by adding the following Section
5.3.4 after Subsection 5.3.3:
"SECTION 5.3.4. EXCEPTIONS IN THE EVENT OF THE SALE OF ASSETS
PURSUANT TO THE GENERATION ASSET SALE: Notwithstanding the provisions of Section
5.3, within six months of the Generation Asset Sale Closing, the TMPA Board shall amend the
Decommissioning Plan as might be deemed necessary and prudent in light of the sale and any
remaining Generation Assets held by TMPA."
Section 17. Article V of the JOA is hereby amended by adding the following Section
5.4.1 after Section 5.4:
"SECTION 5.4.1. EXCEPTIONS IN THE EVENT OF THE GENERATION ASSET
SALE: In the event of the Generadon Asset Sale Closing, TMPA shall amend Schedule A to
remove all assets sold. Notwithstanding Section 5.4, in the event of such sale, the proceeds of
°"������� such sale shall be applied in the manner provided in Section 2.13."
Section 18. Article I of the JOA is hereby amended by adding the following Section
5.5.7 after Section S.S.b:
"SECTION 5.5.7: EXCEPTIONS IN THE EVENT OF THE SALE OF ASSETS
PURSUANT TO THE GENERATION ASSET SALE: In the event of the Generation Asset Sale
Closing, the TMPA Boazd shall consider and determine the maximum account balance of the
Decommissioning Reserve Account, and necessity for such an account, in light of the sale and
attendant environmental agreements."
Section 19. OTHER AGREEMENTS.
(a) All other terms and conditions of the Joint Operating Agreement shall remain
in full force and effect except as modified herein.
(b) Except as provided in Section 1, this Amendment shall ternunate on the same
date the Joint Operating Agreement terminates.
(c) Each Party warrants that all necessary actions have been taken to make this a
binding amendment, including TMPA Boazd or city council action, as applicable.
Page 10 of 13
(d) 's Amendment may be executed in ultiple cownte s, each of which sha.11
constitute an ori ° 1 but both or all of w'c , when taken to e er, shall constitute but one
instrument. 's Amendment may be delivered y the exc ge of si ed si e pages by
facsimile ission or by attaching a pdf copy to an email, and any p' ted or copi v ion
of any si ture page so delivered shall have the same farce and effect as an ori ' ly si ed
version of such si page.
IN WITNESS WHEREOF, the Parties have executed this Amendment Number One to
Joint erating A ent, to be effective upon the Effective Date as set forth in the Recitals.
TEXAS MUNICIPAL POWER AGENCY
Y � _ ��� w..��'� ���'..�� �,�,�°��w��.�m.
N �e ��.ww�,� � �°"�� �� .�..�.�,_�.�.�
Titl�: ��,. �� �"� �_.�.�..��,�.�w,..___.,..,�..,,,�.„��.�..�.�„��.�,�
Data�: �� � �.._ ...�.�_�. �,,��.
Att��t ,����`�� ,��^ �"�� � ���"�, �..�,����°�"� �.�....�.
�. � �,� ..��
Ap�rc���d �s � �t�rrs�� ..��_ �m,�°° ., _.m..._�.._._
Co s��, �`c�r "�."�� ��r���ip�� �r��° ������ ..�
CITY OF BRYAN, TEXAS
Y`
Name:
Titie: .
Date:
Attest:
���� -�. • • ,
� • - . : . ,,
Page 11 of 13
A���.,,G�
CI'I
By:
Nan
TidE
Date:
Appro�fie as to torm:
Cou�sel for the City c
CTTY OF GARLAND, TEXAS
By:
,,���1� Name:
Title:
Date:
Attest:
CITY OF GREENVILLE, TEXAS
By:
Name:
Title: m
Date:
Attest:
Page 12
C[TY OF` UENTON, TE7{A5
By, �
Name: '
. Title:
Date•
Attest: '
Appro�red As to form: .
Counsel for thc Ciry oiDentan, Ttxas
�:��"� �� ���,���i�'1"°���
�
��^�� ���� �"�.
�w��
�TM" � M�,
� �� � �w" �� ..� �,� H�,��� � ��
� �^ � �, � �
� ��I3�V�*� �,��"'��,� � o��.,� �,,���.���, ��;x.
��
�,
� �����« F:���A„w.�a�,.����H�.� � , �m �.�� �, . �� � �� �, � �. ,
� ����: �� � �� � ������ �I�
.� �� r����������.
���
� •
� �
���""��". � ������� � ��^�
CiTY OF GREENVZLLE, TEXA�
. By: � �
N�me;
Title:
Date: _
Aaest:
Page 12 of 13
CITY OF DENTON, TEXAS
By:
Name:
°� Title: �
Date:
Attest:
t+►p��dd as ta form•
Co�n�el for the City of- D�nton,; Texas
:a
CTI'Y UF GA�i LA�VD, TEXAS
. B.y:
p.,w,.�.�vniq Y �. L.�fYi�V.
. Title�
�.
Attest:
� �i� `a�
/ , � �- �
� ! .- , � _ ___�
' �Rv � _ �r, .
� _. �
I / '' •M►
$ . . a� e�
' �, _ , . .' _ ... _
,
' ^ '�.� ' �.r���►�i� � � _ ,�
Page•12;cf 13;
�
GEUS, f iij+ of �'ircenville pursuani to its Charter
d
ay:
_,,, �► � � � �r . �.'
Tit1e: Chair of the Board 'of Trustees of the Elextric U61ity Boazd
i: � � s
F� I.�v. I �� 1; � �
��