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ORDINANCE NO. �'� � �" � � �.
AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO THE
ISSUANCE, SALE AND DELIVERY OF UP TO $265,000,0001N PRINCIPAL AMOUNT OF
"CITY OF DENTON UTILITY SYSTEM REVENUE BONDS, SERIES 2016"; AUTHORIZING
THE ISSUANCE OF THE BONDS; DELEGATING THE AUTHORITY TO CERTAIN CITY
OFFICIALS TO EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE
BONDS; APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES
RELATING TO SAID BONDS; AND ENACTING OTHER PROVISIONS RELATING TO THE
SUBJECT; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, defined terms used in this Ordinance shall have the meaning given said terms in
Section 1 of this Ordinance, unless otherwise indicated herein; and
WHEREAS, the City of Denton (the "City" or the "Issuer") has heretofore issued its City of
Denton Revenue Refunding Bonds, Series 1983 (the "Series 1983 Bonds"); and
WHEREAS, in the ordinance authorizing the issuance of the Series 1983 Bonds (the "1983
Ordinance"), the City reserved the right to issue revenue bonds on a parity with the Series 1983
Bonds; and
WHEREAS, under authority of the right reserved in the 1983 Ordinance, the Issuer issued
and there currently remain outstanding revenue bonds from each series of bonds described in the
definition of "Prior Encumbered Bonds" set forth in Section 1 of this Ordinance; and
WHEREAS, the Issuer has determined to acquire and construct additions and improvements
to the Issuer's electric light and power system including new quick start peak power generation
facilities, including acquisition of land and interests in land, mitigation, engineering and other design
costs and professional fees related to such project (the "Project"); and
WHEREAS, it is further deemed advisable by the City Council of the Issuer to issue the
Bonds authorized by this Ordinance for the purpose financing the Project; and
WHEREAS, the Bonds hereinafter authorized to be issued and are to be issued, sold and
delivered pursuant to the general laws of the State of Texas, including Texas Government Code,
Chapters 1502 and 1371, as amended, and the Issuer's Home Rule Charter; and
WHEREAS, the currently outstanding Prior Encumbered Bonds are secured by, and payable
from, the net revenues of the System; and
WHEREAS, the Issuer shall covenant in this Ordinance to no longer issue bonds or other
obligations on a parity with the Prior Encumbered Bonds under the terms of the 1983 Ordinance or
the ordinances authorizing the issuance of the Prior Encumbered Bonds; and
WHEREAS, it is officially found, determined, and declared that the meeting at which this
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Ordinance has been adopted was open to the public and public notice of the time, place and subj ect
matter of the public business to be considered and acted upon at said meeting, including this
Ordinance, was given, all as required by the applicable provisions of Texas Government Code,
Chapter 551; NOW, THEREFORE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. DEFINITIONS.
"Accountant" means an independent certified public accountant or accountants or a firm of
independent certified public accountants, in either case, with demonstrated expertise and competence
in public accountancy.
"Additional Senior Lien Obligations" means bonds, notes, contractual obligations or other
Debt which the Issuer reserves the right to issue or enter into, as the case may be, in the future under
the terms and conditions provided in Section 17 and which obligations are equally and ratably
secured solely by a first lien on and pledge of the Pledged Revenues on a parity with the Bonds and
other Senior Lien Obligations.
"Amortization Installment" means, with respect to Senior Lien Obligations issued as Term
Bonds, each mandatory sinking fund redemption of such Term Bonds (whether prior to maturity or at
maturity), provided that the total Amortization Installments for such Term Bonds shall be sufficient
to provide for retirement of the aggregate principal amount of such Term Bonds.
"Annual Debt Service Requirements" means, as of the date of calculation, the principal of and
interest on all Senior Lien Obligations coming due at Maturity or Stated Maturity (or that could come
due on demand of the owner thereof or other demand conditioned upon default by the Issuer on such
Debt, or be payable in respect of any required purchase of such Debt by the Issuer) in such Year, and,
for such purposes, any one or more of the following rules shall apply at the election of the Issuer:
(1) ;����]l��c��� I��.��1. If the principal (including the accretion of interest resulting from
original issue discount or compounding of interest) of any series or issue of Funded Debt,
except Term Bonds, due (or payable in respect of any required purchase of such Funded Debt
by the Issuer) in any Year either is equal to at least 25% of the total principal (including the
accretion of interest resulting from original issue discount or compounding of interest) of such
Funded Debt or exceeds by more than 50% the greatest amount of principal of such series or
issue of Funded Debt due in any preceding or succeeding Year (such principal due in such Year
for such series or issue of Funded Debt being referred to herein and throughout this Ordinance
as "Balloon Debt"), the amount of principal of such Balloon Debt taken into account during
any Year shall be equal to the debt service calculated using the original principal amount of
such Balloon Debt amortized over the Term of Issue on a level debt service basis at an
assumed interest rate equal to the rate borne by such Balloon Debt on the date of calculation;
(2) ��'�����;�;��tm_�im���irm�;_m�mm��c��,�. In the case of Balloon Debt, if a Designated Financial
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Officer shall deliver to the Issuer a certificate providing for the retirement of (and the
instrument creating such Balloon Debt shall permit the retirement o�, or for the accumulation
of a sinking fund for (and the instrument creating such Balloon Debt shall permit the
accumulation of a sinking fund for), such Balloon Debt according to a fixed schedule stated in
such certificate ending on or before the Year in which such principal (and premium, if any) is
due, then the principal of (and, in the case of retirement, or to the extent provided for by the
sinking fund accumulation, the premium, if any, and interest and other debt service charges on)
such Balloon Debt shall be computed as if the same were due in accordance with such
schedule, provided that this clause (2) shall apply only to Balloon Debt for which the
installments previously scheduled have been paid or deposited to the sinking fund established
with respect to such Debt on or before the times required by such schedule; and provided
further that this clause (2) shall not apply where the Issuer has elected to apply the rule set forth
in clause (1) above;
(3) 'vd��m��'rmmL���r���;�• The principal of Term Bonds shall be considered as maturing in
accordance with the Amortization Installments set forth in the ordinance authorizing same;
(4) fi�����i�l ���1��,. Principal of and interest on Bonds and Additional Senior Lien
Obligations, or portions thereof, shall not be included in the computation of the Annual Debt
Service Requirements for any Year for which such principal or interest are payable from funds
on deposit or set aside in trust for the payment thereof at the time of such calculations
(including without limitation capitalized interest and accrued interest so deposited or set aside
in trust) with a financial institution acting as fiduciary with respect to the payment of such
Debt;
(5) V������kaG� I��rla�. As to any Senior Lien Obligations that bear interest at a variable
interest rate which cannot be ascertained at the time of calculation of the Annual Debt Service
Requirement then, at the option of the Issuer, either (A) an interest rate equal to the average
rate borne by such Senior Lien Obligations (or by comparable debt in the event that such
Senior Lien Obligations has not been Outstanding during the preceding 24 months) for any 24
month period ending within 30 days prior to the date of calculation, or (B) an interest rate equal
to the 30-year Revenue Bond Index (as most recently published in r1Tl��:. l�c��zc� ������°), shall be
presumed to apply for all future dates, unless such index is no longer published in 1���,_}�r�a��mm�
Bu•�, in which case an index of revenue bonds with maturities of at least 20 years which is
published in a financial� newspaper or journal with national circulation may be used for this
purpose (if two series of Senior Lien Obligations which bear interest at variable interest rate, or
one or more maturities within a series, of equal par amounts, are issued simultaneously with
inverse floating interest rates providing a composite fixed interest rate for such Senior Lien
Obligations taken as a whole, such composite fixed rate shall be used in determining the
Annual Debt Service Requirement with respect to such Senior Lien Obligations);
(6) (..�"���a��mmr��k�c�l��mm'����� (:����. If the Issuer has entered into a Credit Agreement constituting
a binding commitment within normal commercial practice to discharge any of its Funded Debt
at its Maturity or Stated Maturity (or, if due on demand, at any date on which demand may be
made) or to purchase any of its Funded Debt at any date on which such Debt is subject to
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required purchase, all under arrangements whereby the Issuer's obligation to repay the amounts
advanced for such discharge or purchase constitutes Funded Debt, then the portion of the
Funded Debt committed to be discharged or purchased shall be excluded from such calculation
and the principal of and interest on the Funded Debt incurred for such discharging or purchase
that would be due in the Year for which the calculation is being made, if incurred at the Stated
Maturity or purchase date of the Funded Debt to be discharged or purchased, shall be added;
(7) ��•�:�i�t �...�,�wa:��,a�����t ���vi3������. If the Issuer has entered into a Credit Agreement in
connection with an issue of Debt, payments due under the Credit Agreement (other than payments
for fees and expenses), for either the Issuer or the Credit Provider, shall be included in such
calculation, except to the extent that the payments are already taken into account under (1) through
(6) above and any payments otherwise included above under (1) through (6) which are to be replaced
by payments under a Credit Agreement, from either the Issuer or the Credit Provider, shall be
excluded from such calculation; and
(8) �ia�i������i�t���.. In the case of any guarantee, as described in clause (2) of the definition of
Debt, no obligation will be counted if the Issuer does not anticipate in its annual budget that it will
make any payments on the guarantee. If, however, the Issuer is making payments on a guarantee or
anticipates doing so in its annual budget, such obligation shall be treated as Senior Lien Obligations
and calculations of annual debt service requirements with respect to such guarantee shall be made
assuming that the Issuer will make all additional payments due under the guaranteed obligation. If
the entity whose obligation is guaranteed cures all defaults and the Issuer no longer anticipates
making payments under the guarantee, the guaranteed obligations shall not be included in the
calculation of Annual Debt Service Requirements.
With respect to any calculation of historic data, only those payments actually made in the
subject period shall be taken into account in making such calculation and, with respect to prospective
calculations, only those payments reasonably expected to be made in the subject period shall be taken
into account in making the calculation.
"Average Annual Debt Service Requirements" means that average amount which, at the time
of computation, will be required to pay the Annual Debt Service Requirements when due (either at
Stated Maturity or mandatory redemption) and derived by dividing the total of such Annual Debt
Service Requirements by the number of Years then remaining before Stated Maturity of such Senior
Lien Obligations. For the purposes of this definition, a fractional period of a Year shall be treated as
an entire Year.
"Bond," "Bonds" and "Series 2016 Bonds" have the meaning assigned to such terms in
Section 2(c).
"Capital Addition" means the construction or acquisition of improvements or rights that will
increase the capacity of the System, or an interest therein, and which shall become a part of the
System.
"Chapter 1371 " means Chapter 1371, Texas Government Code.
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"City Council" means the City Council of the Issuer.
"Code" means the Internal Revenue Code of 1986, as amended, and the applicable
regulations and rules promulgated in connection therewith.
"Construction Fund" means the fund or account described in Section 31.
"Consulting Engineer" means an independent engineer or firm employed by the Issuer to
perform and carry out the duties imposed on such engineer or firm by this Ordinance and having a
favorable reputation nationally for skill and experience in the engineering of waterworks and sewer
systems, electric utility systems or drainage systems of comparable size and character as those
forming parts of the System.
"Credit Agreement" means, collectively, a loan agreement, revolving credit agreement,
agreement establishing a line of credit, letter of credit, reimbursement agreement, insurance contract,
commitment to purchase Senior Lien Obligations, purchase or sale agreement, Interest Rate
Management Agreement, or commitments or other contracts or agreements authorized, recognized
and approved by the Issuer as a Credit Agreement in connection with the authorization, issuance,
security, or payment of Senior Lien Obligations and on a parity therewith.
"Credit Provider" means any bank, financial institution, insurance company, surety bond
provider, or other entity which provides, executes, issues, or otherwise is a party to or provider of a
Credit Agreement.
"Debt" means:
(1) all indebtedness payable from Pledged Revenues incurred or assumed by the Issuer
for borrowed money (including indebtedness arising under Credit Agreements) and all other
financing obligations of the System payable from Pledged Revenues that, in accordance with
generally accepted accounting principles, are shown on the liability side of a balance sheet; and
(2) all other indebtedness payable from Pledged Revenues for borrowed money or for
the acquisition, construction or improvement of property or capitalized lease obligations
pertaining to the System that is guaranteed, directly or indirectly, in any manner by the Issuer,
or that is in effect guaranteed, directly or indirectly, by the Issuer through an agreement,
contingent or otherwise, to purchase any such indebtedness or to advance or supply funds for
the payment or purchase of any such indebtedness or to purchase property or services primarily
for the purpose of enabling the debtor or seller to make payment of such indebtedness, or to
assure the owner of the indebtedness against loss, or to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property or services irrespective of
whether or not such property is delivered or such services are rendered), or otherwise.
For the purpose of determining Debt, there shall be excluded any particular Debt if, upon or
prior to the Maturity thereof, there shall have been deposited with the proper depository (a) in
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trust the necessary funds (or investments that will provide sufficient funds, if permitted by the
instrument creating such Debt) for the payment, redemption, or satisfaction of such Debt or (b)
evidence of such Debt deposited for cancellation; and thereafter it shall not be considered Debt.
No item shall be considered Debt unless such item constitutes indebtedness under generally
accepted accounting principles applied on a basis consistent with the financial statements of the
System in prior Years.
"Defeasance SecuNities"means any securities and obligations now or hereafter authorized by
the laws of the State of Texas that are eligible to refund, retire or otherwise discharge obligations
such as the Bonds.
"Depository" means one or more official depository banks of the Issuer.
"DTC" means The Depository Trust Company, New York, New York.
"DTC Participant" means securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations on whose behalf DTC was created to hold securities to
facilitate the clearance and settlement of securities transactions among DTC Participants.
"Designated Financial Officer" means the City Manager or the Assistant City Manager/Chief
Financial Officer (including, in each case, the official succeeding to such position after a title
change), or such other official of the Issuer so designated by the Issuer.
"Electric System Fund" means the special fund confirmed, established and maintained by and
pursuant to the provisions of Sections 7 and 8.
"Event of Default" means an event as described in Section 28.
"Funded Debt" means all Senior Lien Obligations created or assumed by the Issuer that
mature by their terms (in the absence of the exercise of any earlier right of demand), or that are
renewable at the option of the Issuer to a date, more than one year after the original creation or
assumption of such Debt by the Issuer.
"Gross Revenues" mean all revenues, income and receipts of every nature derived or received
by the Issuer from the operation and ownership of the System, including the interest income from
investment or deposit of money in any fund or account created by this Ordinance or maintained by
the Issuer in connection with the System.
"Initial Bonds" has the meaning assigned to such term in Section 2(c).
"Interest and Sinking Fund" means the special fund created, established and maintained by
and pursuant to the provisions of Sections 7 and 10.
"Interest Rate ManagementAgreement" means an agreement that provides for an interest rate
transaction, including a swap, basis, forward, option, cap, collar, floor, lock, or hedge transaction, a
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similar transaction, or any combination of those types of transactions, now or hereafter authorized by
the laws of the State of Texas, including, without limitation, Chapter 1371.
"Issuer" means the City of Denton, Texas.
"Maturity" means, when used with respect to any Debt, the date on which the principal of
such Debt or any installment thereof becomes due and payable as therein provided, whether at the
Stated Maturity thereof, or call for redemption, or otherwise.
"Maximum Annual Debt Service Requirements" means the greatest amount of Annual Debt
Service Requirements scheduled to occur in any future Year or in the then current Year for the
particular obligations for which such calculation is made.
"Net Revenues" mean all Gross Revenues remaining after deducting Operating Expenses.
"Operating Expenses" means the reasonable and necessary expenses of operation and
maintenance of the System, including all salaries, labor, materials, repairs and extensions necessary
to render efficient service (but only such repairs and extensions as, in the judgment of the Issuer, are
necessary to keep the System in operation and render adequate service or such as might be necessary
to meet some physical accident or conditions which would otherwise impair the Senior Lien
Obligations), and all payments under contracts for materials and services (including water supply
contracts) provided to the Issuer that are required to enable the Issuer to render efficient service.
Depreciation shall never be considered as an Operating Expense.
"Ordinance" means this ordinance finally adopted by the City Council on June 21, 2016.
"Outstanding" means, when used with respect to Senior Lien Obligations, as of the date of
determination, all Senior Lien Obligations theretofore delivered under this Ordinance and any
ordinance authorizing Additional Senior Lien Obligations, except:
(1) Senior Lien Obligations theretofore cancelled and delivered to the Issuer or
delivered to the paying agent/registrar for the Senior Lien Obligation for cancellation;
(2) Senior Lien Obligations deemed paid pursuant to the provisions of Section 22 or
any comparable section of any ordinance authorizing Additional Senior Lien Obligations;
(3) Senior Lien Obligations upon transfer of or in exchange for and in lieu of which
other Senior Lien Obligations have been authenticated and delivered pursuant to this Ordinance
and any ordinance authorizing Additional Senior Lien Obligations; and
(4) Senior Lien Obligations under which the obligations of the Issuer have been
released, discharged or extinguished in accordance with the terms thereof.
"Paying Agent/Registrar" means the paying agent/registrar for the Bonds, described in
Section 4(a) and any successor thereto.
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"Permitted Investments" means any security or obligation or combination thereof permitted
under the Public Funds Investments Act, Chapter 2256, Texas Government Code, as amended, or
other applicable law.
"Pledged Revenues" means
(1) the Net Revenues, plus
(2) any additional revenues, income, receipts, or other resources, including, without
limitation, any grants, donations or income received or to be received from the United States
Government, or any other public or private source, whether pursuant to an agreement or
otherwise, which hereafter are pledged by the Issuer to the payment of the Senior Lien
Obligations, and excluding those revenues excluded from Gross Revenues or excluded from
Net Revenues.
"Pricing Certificate" means the certificate of the Pricing Officer referenced in Section 3 to be
executed and delivered in connection with the initial issuance of each Series of Bonds.
"Pricing Officer" means any one of the City Manager of the Issuer or an Assistant City
Manager of the Issuer (including any person appointed to such position on an "acting" or "interim"
basis).
"Prior Encumbered Bonds" means the Issuer's outstanding (i) City of Denton Utility System
Revenue Bonds, Series 2006, dated July 15, 2006, (ii) City of Denton Utility System Revenue
Refuriding Bonds, Series 2007, dated February 15, 2007, (iii) City of Denton Utility System Revenue
Bonds, Series 2007, dated July 15, 2007, and (iv) City of Denton Utility System Revenue Bonds,
Series 2008, dated August 15, 2008.
"Prior Encumbered Bonds Defeasance Date" means the first date on which no Prior
Encumbered Bonds remain outstanding within the meaning of the ordinances authorizing the
issuance of the Prior Encumbered Bonds and secured by and entitled to the benefits of such
ordinances or a lien on and pledge of the Pledged Revenues.
"Purchaser" means the initial purchaser or purchasers of the Bonds.
"Rate Stabilization Reserve" means a rate stabilization reserve created, established and
maintained by and pursuant to the provisions of Section 12 in the Electric System Fund, the
Wastewater System Fund or the Water System Fund.
"Rating Agency" means any nationally recognized securities rating agency which has
assigned, at the request of the Issuer, a rating to the Senior Lien Obligations.
"Record Date" means Record Date as defined in the FORM OF BOND.
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"Registered Owner" or "Registered Owners" means the registered owner, whose name
appears in the Registration Books, for any Senior Lien Obligation.
"Registration Books" means the books or records for the registration of the transfer,
conversion and exchange of the Bonds kept by the Paying Agent/Registrar.
"Reserve Credit Facility" means (i) a policy of insurance or a surety bond, issued by an issuer
of policies of insurance insuring the timely payment of debt service on governmental obligations, and
(ii) a letter or line of credit issued by any financial institution, in each case meeting the requirements
for such facility under any ordinance authorizing the issuance of Senior Lien Obligations that are to
be secured by a debt service reserve fund.
"Senior Lien Obligations" means the Bonds and any Additional Senior Lien Obligations
hereafter issued by the Issuer or obligations issued to refund any of the foregoing (as determined
within the sole discretion of the City Council in accordance with applicable law) if issued in a
manner that provides that the refunding bonds are payable from and equally and ratably secured by a
first lien on and pledge of the Pledged Revenues.
"Senior Lien Obligation Reserve Requirement" means the amount or a manner of calculating
the amount established by each ordinance authorizing the issuance of Senior Lien Obligations that
are to be secured by a debt service reserve fund to be held and maintained on deposit therein.
"Series" or "Series of Bonds" means any designated series of Bonds issued pursuant to this
Ordinance.
"Special Project" means any water, sewer, electric, drainage or other facilities of any kind or
other public improvement declared by the Issuer not to be part of the System, for which the costs of
acquisition, construction and installation are paid from proceeds of Special Project Bonds, but only
to the extent that and for so long as all or any part of the revenues or proceeds of which are or will be
pledged to secure the payment or repayment of such costs of acquisition, construction and
installation under such financing transaction.
"Special Project Bonds" means special revenue obligations of the Issuer which are not
secured by the Pledged Revenues, but which are secured by and payable solely from liens on and
pledges of any other revenues, sources, or payments, including, but not limited to, special contract
revenues or payments received from the System, any other legal entity, or any combination thereof,
in connection with a Special Project; and such revenues, sources or payments shall not be considered
as or constitute Gross Revenues of the System, unless and to the extent otherwise provided in the
ordinance or ordinances authorizing the issuance of such Special Project Bonds.
"Special Record Date" has the meaning assigned to such term in Section 4(d),
"Stated Maturity" means the annual principal payments of the Senior Lien Obligations
payable on the respective dates set forth in the ordinances which authorized the issuance of such
Senior Lien Obligations.
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"Subordinate Lien Obligations" means any bonds, notes, contractual obligations or other
Debt issued by the Issuer that are payable from or reasonably expected to be payable in whole from,
and equally and ratably secured by a lien on and pledge of the Pledged Revenues, such pledge being
subordinate and inferior to the lien on and pledge of the Pledged Revenues that are or will be pledged
to the payment of any Senior Lien Obligations issued by the Issuer.
"System" means the Issuer's entire existing waterworks system, the Issuer's entire existing
sewer system, the Issuer's entire existing electric light and power system, and the Issuer's entire
existing drainage system, together with all future extensions, improvements, enlargements, and
additions thereto, and all replacements thereof; provided that, notwithstanding the foregoing, and to
the extent now or hereafter authorized or permitted by law, the term System shall not include any
Special Projects which are hereafter acquired or constructed by the Issuer with the proceeds of
Special Project Bonds.
"System Funds" means, collectively, the Electric System Fund, the Wastewater System Fund
and the Water System Fund.
"Tax-Exempt Bonds" means any Bond, the interest on which is excludable from gross income
for federal income tax purposes.
"Taxable Bonds" means any Bond, the interest on which is includable in gross income for
federal income tax purposes.
"Term Bonds" means those Senior Lien Obligations (if any) so designated pursuant to the
terms of the ordinance authorizing their issuance, which shall be subject to retirement by operation of
mandatory sinking fund redemptions.
"Term oflssue" means with respect to any Balloon Debt, a period of time equal to the greater
of (i) the period of time commencing on the date of issuance of such Balloon Debt and ending on the
final maturity date of such Balloon Debt or (ii) thirty years.
"Wastewater System Fund" means the special fund confirmed, established and maintained by
and pursuant to the provisions of Sections 7 and 8.
"Water System Fund" means the special fund confirmed, established and maintained by and
pursuant to the provisions of Sections 7 and 8.
"Year" means the regular fiscal year used by the Issuer in connection with the operation of
the System, currently ending on September 30 of each year, which may be any twelve consecutive
month period established by the Issuer.
SECTION 2. RECITALS, AMOUNT, PURPOSE AND DESIGNATION OF THE BONDS.
(a) ���;criwi;ca%��. The recitals set forth in the preamble hereof are incorporated herein and shall
have the same force and effect as if set forth in this Section.
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(b) �r��a����al� i����° �c�. The bonds of the Issuer are hereby authorized to be issued and
delivered in one or more Series in the maximum aggregate principal amount (determined without
regard to premium or discount affecting the sale price) of $265,000,000 for the public purpose of
providing funds to acquire and construct additions and improvements to the Issuer's electric light and
power system including new quick start peak power generation facilities, including acquisition of
land and interests in land, mitigation, engineering and other design costs and professional fees related
to such project (the "Project"), and to pay the costs associated with the issuance of the Bonds.
(c) C�������ati���� �1' tk�a.. �i�����i�. Each bond issued pursuant to this Ordinance shall be
designated: "CITY OF DENTON UTILITY SYSTEM REVENUE BOND, SERIES 2016" with each
Series of Bonds having a letter designation following the year, starting with "A", and with such
changes as designated by the Pricing Officer pursuant to Section 3. Initially there shall be issued,
sold, and delivered hereunder fully registered bonds, without interest coupons, payable to the
respective Registered Owners thereof (with the Initial Bond being made payable to the Purchaser as
described in Section 27 hereo�. The terms "Bonds" and "Series 2016 Bonds" as used herein shall
mean and include collectively all bonds initially issued hereunder (the "Initial Bonds") and all
substitute bonds exchanged therefor, as well as all other substitute bonds and replacement bonds
issued pursuant hereto, and the term "Bond" shall mean any of the Bonds. The Bonds shall be in the
respective principal amounts, shall be numbered, shall mature and be payable on the date or dates in
each of the years and in the principal amounts, and shall bear interest to their respective dates of
maturity or redemption prior to maturity at the rates per annum, as set forth in the Pricing Certificate.
SECTION 3. DELEGATION TO PRICING OFFICER.
(a) As authorized by Section 1371.053, Texas Government Code, as amended, a Pricing
Officer is hereby authorized to act on behalf of the Issuer in selling and delivering each Series of the
Bonds, and carrying out the other procedures specified in this Ordinance, including, determining the
date of sale of the Bonds, the date of the Bonds, any additional or different designation or title by
which the Bonds shall be known, the price at which the Bonds will be sold, the years in which the
Bonds will mature, the principal amount to mature in each of such years, the rate of interest to be
borne by each such maturity, the interest payment and record dates, the use of capitalized interest, the
price and terms upon and at which the Bonds shall be subject to redemption prior to maturity at the
option of the Issuer, as well as any mandatory sinking fund redemption provisions, whether a Series
will be issued as Tax-Exempt Bonds or Taxable Bonds, the authorized denominations of and the
method for the calculation of interest for any Taxable Bonds and all other matters relating to the
issuance, sale, and delivery of the Bonds, including without limitation, approving modifications to
this Ordinance and executing such instruments, documents and agreements as may be necessary with
respect to the issuance of the Bonds, and obtaining municipal bond insurance for all or any portion of
the Bonds (including in connection therewith the execution of any commitment agreements,
membership agreements in mutual insurance companies, and other similar agreements) and
providing for the terms and provisions thereof applicable to the Bonds, all of which shall be specified
in the Pricing Certificate; provided that:
(i) the aggregate original principal amount of the Bonds shall not exceed
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$265,000,000;
(ii) the maximum stated maturity of the Bonds shall not exceed 20 years from the
date of issuance;
(iii) the Bonds shall bear interest at a fixed rate, and the net effective interest rate
on the Bonds shall not exceed 4.000%;
(iv) the delegation made hereby shall expire if not exercised by the Pricing
Officer through execution of the Pricing Certificate on or prior to June 21,
2017; and
(v) on or prior to delivery, the Bonds shall be rated by a Rating Agency for
municipal securities in one of the four highest categories for long-term
obligations.
(b) In establishing the aggregate principal amount of the Bonds, the Pricing Offcer shall
establish an amount not exceeding the amount authorized in subsection (a)(i) hereof, which shall be
sufficient in amount to provide for the purposes for which the Bonds are authorized and to pay costs
of issuing the Bonds. The Bonds shall be sold with and subject to such terms as set forth in the
Pricing Certificate.
SECTION 4. CHARACTERISTICS OF THE BONDS.
(a) ,����c�ir�t�����i c�l� I����iM�,�m �,����k�'T��.�%,�����;�:• The Pricing Officer shall designate in the
Pricing Certificate a bank to act as the Paying Agent/Registrar for the Bonds. A Pricing Officer is
authorized and directed to execute and deliver in the name and under the corporate seal and on behalf
of the Issuer a Paying Agent/Registrar Agreement with the Paying Agent/Registrar in substantially
the form presented at this meeting.
(b) ����;�����-�riica���M 1����t��1�r��"�"���,row��z�����a w�����,� 1���uS��rr����. The Issuer shall keep or cause to be
kept Registration Books at the corporate trust office of the Paying Agent/Registrar, and the Issuer
hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or
records and �make such registrations of transfers, conversions and exchanges under such reasonable
regulations as the Issuer and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar
shall make such registrations, transfers, conversions and exchanges as herein provided within three
days of presentation in due and proper form. The Paying Agent/Registrar shall obtain and record in
the Registration Books the address of the registered owner of each Bond to which payments with
respect to the Bonds shall be mailed, as herein provided; but it shall be the duty of each registered
owner to notify the Paying Agent/Registrar in writing of the address to which payments shall be
mailed, and such interest payments shall not be mailed unless such notice has been given. The Issuer
shall have the right to inspect the Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books
confidential and, unless otherwise required by law, shall not permit their inspection by any other
entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for
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making such registration, transfer, conversion, exchange and delivery of a substitute Bond or Bonds.
Registration of assignments, transfers, conversions and exchanges of Bonds shall be made in the
manner provided and with the effect stated in the FORM OF BOND set forth in this Ordinance.
Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond.
(c) 1�t�ta����li�.k�al��a��. Except as provided in subsection (g) of this Section, an authorized
representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date and
manually sign said Bond, and no such Bond shall be deemed to be issued or outstanding unless such
Bond is so executed. The Paying Agent/Registrar promptly shall cancel all paid Bonds and Bonds
surrendered for conversion and exchange. No additional. ordinances, resolutions, orders or other
instruments need be passed or adopted by the governing body of the Issuer or any other body or
person so as to accomplish the foregoing conversion and exchange of any Bond or portion thereof,
and the Paying Agent/Registrar shall provide for the printing, execution and delivery of the substitute
Bonds in the manner prescribed herein. Pursuant to Subchapter D, Chapter 1201, Texas Government
Code, the duty of conversion and exchange of Bonds as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution of said Bond, the converted and exchanged Bond shall be
valid, incontestable, and enforceable in the same manner and with the same effect as the Bonds
which initially were issued and delivered pursuant to this Ordinance, approved by the Attorney
General, and registered by the Comptroller of Public Accounts.
(d) �����t�r�� t�'I" l�r��������1„mm�����i�� ���������•c��l:W The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds, all as
provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments
made by the Issuer and the Paying Agent/Registrar with respect to the Bonds, and of all conversions
and exchanges of Bonds, and all replacements of Bonds, as provided in this Ordinance. However, in
the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days
thereafter, a new record date for such interest payment (a "Special Record Date") will be established
by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the Issuer. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5)
business days prior to the Special Record Date by United States mail, first class postage prepaid, to
the address of each registered owner appearing on the Registration Books at the close of business on
the last business day next preceding the date of mailing of such notice.
(e) �����a��n����f��.��,��(w���.c1IT���r����•. NotwithstandinganyotherprovisionofthisOrdinanceto
the contrary, the Issuer and the Paying Agent/Registrar shall be entitled to treat and consider the
person in whose name each Bond is registered in the Registration Books as the absolute owner of
such Bond for the purpose of payment of principal and interest with respect to such Bond, for the
purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever.
The Paying Agent/Registrar shall pay all principal of and interest on the Bonds only to or upon the
order of the registered owners, as shown in the Registration Books as provided in this Ordinance, or
their respective attorneys duly authorized in writing, and all such payments shall be valid and
effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal of
and interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered
owner, as shown in the Registration Books, shall receive a Bond certificate evidencing the obligation
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of the Issuer to make payments of principal and interest pursuant to this Ordinance.
(� 1'aa�+ir���u��tll��s,�.�� �:wm. The Issuer covenants with the registered owners of the Bonds
that at all times while the Bonds are Outstanding the Issuer will provide a competent and legally
qualified bank, trust company, financial institution or other agency to act as and perform the services
of Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying Agent/Registrar
will be one entity. By accepting the position and performing as such, each Paying Agent/Registrar
shall be deemed to have agreed to the provisions of this Ordinance, and a certiiied copy of this
Ordinance shall be delivered to each Paying Agent/Registrar.
(g) �+��������tit�tt� '�'�a�t��,�dt�tll��� ���i����. The Issuer reserves the right to, and may, at its
option, change the Paying Agent/Registrar upon not less than 120 days written notice to the Paying
Agent/Registrar, to be effective not later than 60 days prior to the next principal or interest payment
date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar (or its
successor by merger, acquisition, or other method) should resign or otherwise cease to act as such,
the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust
company, financial institution, or other agency to act as Paying Agent/Registrar under this
Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar
promptly shall transfer and deliver the Registration Books (or a copy thereo fl, along with all other
pertinent books and records relating to the Bonds, to the new Paying Agent/Registrar designated and
appointed by the Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will
cause a written notice thereof to be sent by the new Paying Agent/Registrar to each registered owner
of the Bonds, by United States mail, first-class postage prepaid, which notice also shall give the
address of the new Paying Agent/Registrar.
(h) I�����-� ^.��tr�;�,,^��t�r��. The Bonds issued in exchange for the Bonds initially issued to
the purchaser or purchasers specified herein shall be initially issued in the form of a separate single
fully registered Bond for each of the maturities thereof and the ownership of each such Bond shall be
registered in the name of Cede & Co., as nominee of DTC, and except as provided in subsections (j)
and (k) of this Section, all of the Outstanding Bonds shall be registered in the name of Cede & Co.,
as nominee of DTC.
(i) E�a��t���t �.�t�:��� �al" ��� ���c���rl�ri������. The previous execution and delivery of the Blanket
Letter of Representations with respect to obligations of the Issuer is hereby ratified and confirmed;
and the provisions thereof shall be fully applicable to the Bonds. Notwithstanding anything to the
contrary contained herein, while the Bonds are subject to DTC's Book-Entry Only System and to the
extent permitted by law, the Letter of Representations is hereby incorporated herein and its
provisions shall prevail over any other provisions of this Ordinance in the event of conflict.
(j) f3e�nc�.�� N���,��i��°�c� �i�� ����� ;�I�r��m� ��aN' ('��1��. �� �:"��. With respect to Bonds registered in the
z q s w � �
name of Cede & Co., as nominee of DTC, the Issuer and the Paying Agent/Registrar shall have no
responsibility or obligation to any DTC Participant to hold securities to facilitate the clearance and
settlement of securities transactions among DTC Participants or to any person on behalf of whom
such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding
sentence, the Issuer and the Paying Agent/Registrar shall have no responsibility or obligation with
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respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to
any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person,
other than a registered owner of Bonds, as shown on the Registration Books, of any notice with
respect to the Bonds, or (iii) the payment to any DTC Participant or any other person, other than a
registered owner of Bonds, as shown in the Registration Books of any amount with respect to
principal of or interest on the Bonds. Upon delivery by DTC to the Paying Agent/Registrar of
written notice to the effect that DTC has determined to substitute a new nominee in place of Cede &
Co., and subject to the provisions in this Ordinance with respect to interest checks being mailed to
the registered owner at the close of business on the Record date, the words "Cede & Co." in this
Ordinance shall refer to such new nominee of DTC.
(k) �a�Q�:�:���,�a� ��+�t��mi�t;��� [���ar���tca�� r�,° "�"r�����1c�r��..��u.al�i�l� ��c�cal� [,��t���t�'�������r,. In the
event that the Issuer determines that DTC is incapable of discharging its responsibilities described
herein and in the representation letter of the Issuer to DTC or that it is in the best interest of the
beneficial owners of the Bonds that they be able to obtain certificated Bonds, the Issuer shall (i)
appoint a successor securities depository, qualified to act as such under Section 17A of the Securities
and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of
such successor securities depository and transfer one or more separate Bonds to such successor
securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of
Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their
DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the
Registration Books in the name of Cede & Co., as nominee of DTC, but may be registered in the
name of the successor securities depository, or its nominee, or in whatever name or names registered
owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this
Ordinance.
(1) �'�� p����zt.� �;�� C��,�1�. ��"ca. Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of and interest on such Bond and all notices with respect to such
Bond shall be made and given, respectively, in the manner provided in the representation letter of the
Issuer to DTC.
(m) �►���������� �_�m����m��M�t����t��;� t��"�p�a� l�t���cl^�. The Bonds (i) shall be issued in fully registered
form, without interest coupons, with the principal of and interest on such Bonds to be payable only to
the Registered Owners thereof, (ii) may and shall be redeemed prior to their scheduled maturities,
(iii) may be transferred and assigned, (iv) may be converted and exchanged for other Bonds, (v) shall
have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of
and interest on the Bonds shall be payable, and (viii) shall be administered and the Paying
Agent/Registrar and the Issuer shall have certain duties and responsibilities with respect to the
Bonds, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF
BOND set forth in this Ordinance (as modified in the Pricing Certificate). The Bonds initially issued
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 Bond issued in conversion of and exchange for any
Bond or Bonds issued under this Ordinance the Paying Agent/Registrar shall execute the Paying
Agent/registrar's Authentication Bond, in the FORM OF BOND set forth in this Ordinance.
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(n) ��;���r�m���l����ica�� c��` �o�iii��� �ic�i��C�. On the closing date, one Initial Bond representing the
entire principal amount of a Series of the Bonds, payable in stated installments to the Purchaser or its
designee, executed by manual or facsimile signature of the President and Secretary of the Issuer,
approved by the Attorney General of Texas, and registered and manually signed by the Comptroller
of Public Accounts of the State of Texas, will be delivered to such purchaser or its designee. Upon
payment for such Initial Bond, the Paying Agent/Registrar shall cancel such Initial Bond and deliver
to DTC on behalf of such purchaser one registered definitive Bond for each year of maturity of such
Bonds, in the aggregate principal amount of all of the Bonds for such maturity, registered in the
name of Cede & Co., as nominee of DTC. To the extent that the Paying Agent/Registrar is eligible
to participate in DTC's FAST System, pursuant to an agreement between the Paying Agent/Registrar
and DTC, the Paying Agent/Registrar shall hold the definitive Bonds in safekeeping for DTC.
SECTION 5. FORM OF BONDS. The form of the Bonds, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Registration
Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the Bonds
initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as
follows, with such appropriate variations, omissions or insertions as are permitted or required by this
Ordinance, and with the FORM OF BOND to be modified pursuant to, and completed with
information set forth in, the Pricing Certificate.
(a) 1 ()i�S"w� ��1� �:,3(`�1��).
NO. R-
Interest Rate
REGISTERED OWNER:
PRINCIPAL AMOUNT:
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF DENTON
UTILITY SYSTEM REVENUE BOND
SERIES 2016
Delivery Date Maturity Date
PRINCIPAL
AMOUNT
$
CUSIP No.
DOLLARS
ON THE MATURITY DATE specified above, the City of Denton, Texas (the "Issuer"),
being a political subdivision and municipal corporation of the State of Texas, hereby promises to pay
to the Registered Owner specified above, or registered assigns (hereinafter called the "Registered
Owner"), on the Maturity Date specified above, the Principal Amount specified above. The Issuer
promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-day
year of twelve 30-day months) from �_ __T at the Interest Rate per annum specified
above. Interest is payable on ............................. mm..._.. , and semiannually on each„� .............................s,.,m._._.�. and
Page 16 of 50
......................�
thereafter to the Maturity Date specified above, or the date of redemption prior to
maturity; except, if this Bond is required to be authenticated and the date of its authentication is later
than the first Record Date (hereinafter defined), such principal amount shall bear interest from the
interest payment date next preceding the date of authentication, unless such date of authentication is
after any Record Date but on or before the next following interest payment date, in which case such
principal amount shall bear interest from such next following interest payment date; provided,
however, that if on the date of authentication hereof the interest on the Bond or Bonds, if any, for
which this Bond is being exchanged is due but has not been paid, then this Bond shall bear interest
from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity, or
upon the date fixed for its redemption prior to maturity, at the principal corporate trust office of
,� mmmm_ ��,,, _, ,��_�u� which is the "Paying Agent/Registrar" for this Bond. The
payment of interest on this Bond shall be made by the Paying Agent/Registrar to the Registered
Owner hereof on each interest payment date by check or draft, dated as of such interest payment 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 Bond (the "Bond Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be
sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such
interest payment date, to the Registered Owner hereof, at its address as it appeared on the
........m. .
day of the month preceding each such date (the "Record Date") on the
Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In addition, interest
may be paid by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the
risk and expense of, the Registered Owner. In the event of a non-payment of interest on a scheduled
payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special
Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment
of such interest have been received from the Issuer. Notice of the Special Record Date and of the
scheduled payment date of the past due interest (which shall be 15 days after the Special Record
Date) shall be sent at least five business days prior to the Special Record Date by United States mail,
first-class postage prepaid, to the address of each owner of a Bond appearing on the Registration
Books at the close of business on the last business day next preceding the date of mailing of such
notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Bond prior to
maturity as provided herein shall be paid to the Registered Owner upon presentation and surrender of
this Bond for payment or redemption at the principal corporate trust office of the Paying
Agent/Registrar. The Issuer covenants with the Registered Owner of this Bond that on or before
each principal payment date and interest payment date for this Bond it will make available to the
Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond Ordinance, the
amounts required to provide for the payment, in immediately available funds, of all principal of and
interest on the Bonds, when due.
IF THE DATE for any payment of the principal of or interest on this Bond shall be a
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Saturday, Sunday, a legal holiday or a day on which banking institutions in the city where the
principal corporate trust office of 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 that is not
such a Saturday, Sunday, legal holiday or day on which banking institutions are authorized to close;
and payment on such date shall have the same force and effect as if made on the original date
payment was due.
THIS BOND is one of a series of Bonds dated , , authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
$ ��� w for the public purpose of providing funds to acquire and construct additions and
improvements to the Issuer's electric utility system including new quick start peak power generation
facilities, including acquisition of land and interests in land, mitigation, engineering and other design
costs and professional fees related to such project, and to pay the costs associated with the issuance
of the Bonds.
ON � m �, or on any date thereafter, the Bonds of this series may be
redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived from any
available and lawful source, as a whole, or in part, and, if in part, the particular Bonds, or portions
thereof, to be redeemed shall be selected and designated by the Issuer (provided that a portion of a
Bond may be redeemed only in an integral multiple of $5,000), at a redemption price equal to the
principal amount to be redeemed plus accrued interest to the date fixed for redemption.
[THE BONDS scheduled to mature on � in the years and ( the
"Term Bonds") are subj ect to scheduled mandatory redemption by the Paying Agent/Registrar by lot,
or by any other customary method that results in a random selection, at a price equal to the principal
amount thereof, plus accrued interest to the redemption date, out of moneys available for such
purpose in the interest and sinking fund for the Bonds, on the dates and in the respective principal
amounts, set forth in the following schedule:
Term Bond
Maturity: , 20
Mandatory Redemption Date
February 15,20_
February 15,20_
February 15,20_
February 15,20_ (maturity)
$
Term Bond
Maturity: ,20_
Principal Principal
Amount Mandatory Redemption Date Amount
February 15,20_ �
. ..�......._ . _ � ,..
February 15,20_
. .m..m . m m m .. ....
February 15,20_
February 15,20_ (maturity)
The principal amount of Term Bonds of a stated maturity required to be redeemed on any mandatory
redemption date pursuant to the operation of the mandatory sinking fund redemption provisions shall
be reduced, at the option of the Issuer, by the principal amount of any Term Bonds of the same
maturity which, at least 50 days prior to a mandatory redemption date (1) shall have been acquired by
the Issuer at a price not exceeding the principal amount of such Term Bonds plus accrued interest to
the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, (2) shall
have been purchased and canceled by the Paying Agent/Registrar at the request of the Issuer at a
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price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of
purchase, or (3) shall have been redeemed pursuant to the optional redemption provisions and not
theretofore credited against a mandatory redemption requirement.]
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by
United States mail, first-class postage prepaid, at least 30 days prior to the date fixed for any such
redemption, to the Registered Owner of each Bond to be redeemed at its address as it appeared on
the 45th day prior to such redemption date; provided, however, that the failure of the Registered
Owner to receive such notice, or any defect therein or in the sending or mailing thereof, shall not
affect the validity or effectiveness of the proceedings for the redemption of any Bond. By the date
fixed for any such redemption due provision shall be made with the Paying Agent/Registrar for the
payment of the required redemption price for the Bonds or portions thereof that are to be so
redeemed. If such written notice of redemption is sent and if due provision for such payment is
made, all as provided above, the Bonds or portions thereof that are to be so redeemed thereby
automatically shall be treated as redeemed prior to their scheduled maturities, and they shall not bear
interest after the date fixed for redemption, and they shall not be regarded as being Outstanding
except for the right of the Registered Owner to receive the redemption price from the Paying
Agent/Registrar out of the funds provided for such payment. If a portion of any Bond shall be
redeemed, a substitute Bond or Bonds having the same maturity date, bearing interest at the same
rate, in any denomination or denominations in any integral multiple of $5,000, at the written request
of the Registered Owner, and in aggregate principal amount equal to the unredeemed portion thereof,
will be issued to the Registered Owner upon the surrender thereof for cancellation, at the expense of
the Issuer, all as provided in the Bond Ordinance.
IF AT THE TIME OF MAILING of notice of optional redemption there shall not have either
been deposited with the Paying Agent/Registrar or legally authorized escrow agent immediately
available funds sufficient to redeem all the Bonds called for redemption, such notice may state that it
is conditional, and is subject to the deposit of the redemption moneys with the Paying
Agent/Registrar or legally authorized escrow agent at or prior to the redemption date, and such notice
shall be of no effect unless such moneys are so deposited on or prior to the redemption date. If such
redemption is not effectuated, the Paying Agent/Registrar shall, within five days thereafter, give
notice in the manner in which the notice of redemption was given that such moneys were not so
received and shall rescind the redemption.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond
Ordinance, this Bond may, at the request of the Registered Owner or the assignee or assignees
hereof, be assigned, transferred, converted into and exchanged for a like aggregate principal amount
of fully registered Bonds, without interest coupons, payable to the appropriate Registered Owner,
assignee or assignees, as the case may be, having the same denomination or denominations in any
integral multiple of $5,000 as requested in writing by the appropriate Registered Owner, assignee or
assignees, as the case may be, upon surrender of this Bond to the Paying Agent/Registrar for
cancellation, all in accordance with the form and procedures set forth in the Bond Ordinance.
Among other requirements for such assignment and transfer, this Bond must be presented and
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surrendered to the Paying Agent/Registrar, together with proper instruments of assignment, in form
and with guarantee of sigriatures satisfactory to the Paying Agent/Registrar, evidencing assignment
of this Bond or any portion or portions hereof in any integral multiple of $5,000 to the assignee or
assignees in whose name or names this Bond or any such portion or portions hereof is or are to be
registered. The form of Assignment printed or endorsed on this Bond may be executed by the
Registered Owner to evidence the assignment hereof, but such method is not exclusive, and other
instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the
assignment of this Bond or any portion or portions hereof from time to time by the Registered
Owner. The Paying Agent/Registrar's reasonable standard or customary fees and charges for
assigning, transferring, converting and exchanging any Bond or portion thereof will be paid by the
Issuer. In any circumstance, any taxes or governmental charges required to be paid with respect
thereto shall be paid by the one requesting such assignment, transfer, conversion or exchange, as a
condition precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be
required to make any such transfer, conversion, or exchange (i) during the period commencing with
the close of business on any Record Date and ending with the opening of business on the next
following principal or interest payment date, or (ii) with respect to any Bond or any portion thereof
called for redemption prior to maturity, within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to
be mailed to the Registered Owners of the Bonds.
THE BONDS are special obligations of the Issuer payable solely from and equally secured by
a lien on and pledge of the Pledged Revenues of the Issuer's System (as defined in the Ordinance);
such lien on and pledge of the Pledged Revenues, however, being subordinate only to the lien on and
pledge of the Pledged Revenues securing the outstanding Prior Encumbered Bonds (as defined,in the
Ordinance). Reference is hereby made to the Bond Ordinance for a more complete statement of the
covenants and provisions securing the payment of this Bond and the series of which it is one.
THE ISSUER EXPRESSLY RESERVES the right to issue further and additional special
revenue obligations equally secured by a lien on and pledge of the Pledged Revenues of the Issuer's
Utility System on a parity with the Bonds of this issue; provided, however, that any and all such
additional Senior Lien Obligations may be issued only in accordance with and subject to the
covenants, conditions, limitations and restrictions relating thereto which are set out and contained in
the Bond Ordinance, to which reference is hereby made for more complete and full particulars. The
Issuer has further reserved the right in the Bond Ordinance to issue Subordinate Lien Obligations and
to finance Special Projects that are not part of the System and not payable from Pledged Revenues
and for which all maintenance and operation expenses are payable from sources other than Pledged
Revenues.
THE REGISTERED OWNER HEREOF shall never have the right to demand payment of
this obligation out of any funds raised or to be raised by taxation or from any sources whatsoever
other than those described in the Bond Ordinance.
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IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper to be
performed, exist and be done precedent to or in the authorization, issuance and delivery of this Bond
have been performed, existed and been done in accordance with law.
THE ISSUER HAS RESERVED THE RIGHT to amend the Bond Ordinance as provided
therein, and under some (but not all) circumstances amendments thereto must be approved by the
Registered Owners of a majority in aggregate principal amount of the Outstanding Bonds.
BY BECOMING the Registered Owner of this Bond, the Registered Owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that the
terms and provisions of this Bond and the Bond Ordinance constitute a contract between each
Registered Owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the Issuer (or in the Mayor's absence, the Mayor Pro-Tem of the
Issuer) and countersigned with the manual or facsimile signature of the Secretary of said Issuer, and
has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Bond.
(*�� �t'l�tti �rel
�.�_� ......................� Secretary __........_ . _
(SEAL)
��.�..�.. �'r���"rel�
President
(b) � �mam����ma �7�" �'��������r� � ^�`�c°���r�J1��� �����r�����r"� ���.a��t���tt�i�:���1��� � �,� ���i���t�.
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Registration Certificate
of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in the text of this Bond; and that this Bond has been issued in conversion or
replacement of, or in exchange for, a bond, bonds, or a portion of a bond or bonds of a series that
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.
Dated;
Paying Agent/Registrar
:
Authorized Representative
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(c) I ���°���m�aN ��;,��,�,��i�r�����.
ASSIGNMENT
(Please print or type clearly)
For value received, the undersigned hereby sells, assigns and transfers unto:
Transferee's Social Security or Taxpayer ldentification Number:
Transferee's name and address, including zip code:
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney, to register the transfer of the within
Bond on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an
eligible guarantor institution participating in a
securities transfer association recognized
signature guarantee program.
NOTICE: The signature above must correspond
with the name of the Registered Owner as it
appears upon the front of this Bond in every
particular, without alteration or enlargement or
any change whatsoever.
(d) �m��m�m�N��� �s�"�����,t��.�°�r��ire��� �'c��t�ia.,�rt� ��1m9����_�"�s������iroller ofPublic Accounts.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that there is on file and of record in my office a true and correct copy of the
opinion of the Attorney General of the State of Texas approving this Bond and that this Bond has
been registered this day by me.
Witness my signature and seal this
(COMPTROLLER'S SEAL)
Comptroller of Public Accounts of the State of Texas
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(e) �r�iti�tl.�e�N��mIIT_Iz�����°t�c����.
(i) The Initial Bonds shall be in the form set forth is paragraph (a) of this Section,
except that:
A. immediately under the name of the Bond, the headings "Interest Rate" and
"Maturity Date" shall both be completed with the words "As shown below" and
"CUSIP No. " shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"THE CITY OF DENTON, TEXAS (the "Issuer"), being a political subdivision and municipal
corporation of the State of Texas, hereby promises to pay to the Registered Owner specified above,
or registered assigns (hereinafter called the "Registered Owner"), on mm _.�, in each
of the years, in the principal installments and bearing interest at the per annum rates set forth in the
following schedule:
Years Principal Interest
(Information for the Bonds from the Pricing Certificate to be inserted)
The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis of
a 360-day year of twelve 30-day months) from ___w „ at the respective Interest Rate
per annum specified above. Interest is payable on __, , and semiannually on each
and thereafter to the date of payment of the principal
installment s ecified above, or ���
,,,_�,...m.m.m.m.� ...
p' the date of redemption prior to maturity; except, that if this Bond is
required to be authenticated and the date of its authentication is later than the first Record Date
(hereinafter deiined), such Principal Amount shall bear interest from the interest payment date next
preceding the date of authentication, unless such date of authentication is after any Record Date but
on or before the next following interest payment date, in which case such principal amount shall bear
interest from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full."
C. The Initial Bond shall be numbered "T-1."
SECTION 6. PLEDGE OF PLEDGED REVENUES.
(a) The Issuer hereby covenants and agrees that the Pledged Revenues are hereby irrevocably
pledged to the payment and security of the Senior Lien Obligations, including the establishment and
maintenance of the special funds confirmed, created, established and maintained for the payment and
security thereof, subordinate only to the lien on and pledge of the Pledged Revenues securing the
outstanding Prior Encumbered Bonds, all as hereinafter provided; and it is hereby ordered that the
Senior Lien Obligations, and the interest thereon, shall constitute a lien on and pledge of the Pledged
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Revenues and be valid and binding without any physical delivery thereof or further act by the Issuer,
and the lien created hereby on the Pledged Revenues for the payment and security of the Senior Lien
Obligations, including the establishment and maintenance of the special funds created, established
and maintained for the payment and security thereof, shall be superior to the lien on and pledge of
the Pledged Revenues securing payment of any Subordinate Lien Obligations heretofore or hereafter
issued by the Issuer, subordinate only to the lien on and pledge of the Pledged Revenues securing the
outstanding Prior Encumbered Bonds. Once the Prior Encumbered Bonds by their terms are no
longer outstanding, the Parity Obligations, and any interest payable thereon, are and shall secured by
and payable from a first lien on and pledge of the Pledged Revenues. The Senior Lien Obligations
are not and will not be secured by or payable from a mortgage or deed of trust on any real, personal,
or mixed properties constituting the System.
(b) Chapter 1208, Government Code, applies to the issuance of the Bonds and the pledge of
the Pledged Revenues granted by the Issuer under this Section, and is therefore valid, effective, and
perfected. Should Texas law be amended at any time while the Bonds are Outstanding and unpaid,
the result of such amendment being that the pledge of the Pledged Revenues granted by the Issuer
under this Section is to be subject to the filing requirements of Chapter 9, Business & Commerce
Code, in order to preserve to the Registered Owners of the Bonds a security interest in said pledge,
the Issuer agrees to take such measures as it determines are reasonable and necessary under Texas
law to comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a
filing of a security interest in said pledge to occur.
SECTION 7. SPECIAL FUNDS.
(a) There heretofore has been created and is hereby confirmed and ordered to be maintained
on the books of the Issuer, a special fund entitled the "City of Denton Electric System Fund" (the
"Electric System Fund").
(b) There heretofore has been created and is hereby confirmed and ordered to be maintained
on the books of the Issuer, a special fund entitled the "City of Denton Wastewater System Fund" (the
"Wastewater System Fund").
(c) There heretofore has been created and is hereby confirmed and ordered to be maintained
on the books of the Issuer, a special fund entitled the "City of Denton Water System Fund" (the
"Water System Fund").
(d) There is created and established on the books of the Issuer, and is hereby confirmed and
ordered to be maintained on the books of the Issuer so long as Senior Lien Obligations are
Outstanding, a separate fund entitled "City of Denton Utility System Revenue Bonds Interest and
Sinking Fund" (the "Interest and Sinking Fund").
(e) The Issuer may at any time combine any two or more of the Electric System Fund,
Wastewater System Fund or Water System Fund into a single Fund. Any references in this
Ordinance to any of the Funds so combined shall be deemed to refer to the newly combined Fund.
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(� Each such Fund shall be accounted for separate and apart from all other funds of the
Issuer, and shall be maintained in a Depository of the Issuer.
SECTION 8. SYSTEM FLJNDS. The Issuer hereby covenants, agrees and establishes that
the Gross Revenues shall be deposited and credited to the System Funds immediately as collected
and received except as otherwise provided in this Ordinance. All Operating Expenses are and shall
be paid from such Gross Revenues as a first charge against same.
SECTION 9. FLOW OF FUNDS.
(a) All Gross Revenues deposited and credited to the System Funds shall be pledged and
appropriated to the extent required for the following uses and in the order of priority shown:
First: to the payment of all necessary and reasonable Operating Expenses as defined herein,
and the payment of such Operating Expenses shall be a first charge on and claim against the
Gross Revenues.
Second: (i) prior to the Prior Encumbered Bonds Defeasance Date, first to the payment of all
amounts heretofore required to be transferred from the Pledged Revenues and deposited to the
credit of the "Interest and Sinking Fund," the "Reserve Fund" and the "Extension and
Improvement Fund" under the ordinances for the Prior Encumbered Bonds, and second to the
payment of the amounts required to be deposited and credited to the Interest and Sinking Fund,
created and established for the payment of the Bonds and any Additional Senior Lien
Obligations issued by the Issuer as the same become due and payable, and (ii) on and after the
Prior Encumbered Bonds Defeasance Date, to the payment of the amounts required to be
deposited and credited to the Interest and Sinking Fund, created and established for the
payment of the Bonds and any Additional Senior Lien Obligations issued by the Issuer as the
same become due and payable.
Third: pro rata to the payment of the amounts required to be deposited and credited to each
debt service reserve fund (including any payments under any Reserve Credit Facility) as may
be created and established to maintain a reserve with respect to the Additional Senior Lien
Obligations, if any, and in accordance with the provisions of the ordinances relating to the
issuance of any Additional Senior Lien Obligations hereafter issued by the Issuer.
Fourth: to make payment, including payment of amounts required for reserve fund
requirements, of Subordinate Lien Obligations.
(b) Any Pledged Revenues remaining in the System Funds after satisfying the foregoing
payments, or making adequate and sufficient provision for the payment thereof, may be appropriated
and used for any other Issuer purpose now or hereafter permitted by law.
SmECTION 10. 1NTEREST AND SINKING FUND.
(a) For purposes of providing funds to pay the principal of, premium, if any, and interest on
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the Senior Lien Obligations as the same become due and payable, including any Amortization
Installment payments, the Issuer agrees that it shall maintain the Interest and Sinking Fund. The
Issuer covenants to deposit and credit to the Interest and Sinking Fund prior to each principal,
interest payment or redemption date from the available Pledged Revenues an amount equal to one
hundred percent (100%) of the amount required to fully pay the interest on and the principal of the
Senior Lien Obligations then coming due and payable. The Issuer shall deposit to the Interest and
Sinking Fund the amounts required to be deposited therein with respect to Senior Lien Obligations in
accordance with the ordinance authorizing such Senior Lien Obligations. The Issuer shall cause to
be deposited to the credit of the Interest and Sinking Fund accrued interest received from the sale of
the Bonds, and on or before the last business day of each month, the Issuer shall cause to be
deposited to the credit of the Interest and Sinking Fund, in approximately equal monthly payments,
amounts sufficient, together with any other funds on hand therein, to pay all of the interest or
principal and interest coming due, including Amortization Installments, on the Bonds on the next
succeeding interest or principal payment date.
(b) The required deposits and credits to the Interest and Sinking Fund shall continue to be
made as hereinabove provided until such time as (i) the total amount on deposit in and credited to the
Interest and Sinking Fund and in any debt service reserve fund created pursuant to Section 11, taking
into account any Reserve Credit Facility held in or for the benefit of any such debt service reserve
fund, is equal to the amount required to fully pay and discharge all Outstanding Senior Lien
Obligations (principal, premium, if any, and interest) or (ii) the Senior Lien Obligations are no longer
Outstanding.
(c) Accrued interest, if any, received from the purchaser of any Senior Lien Obligation and
capitalized interest shall be taken into consideration and reduce the amount of the deposits and
credits hereinabove required into the Interest and Sinking Fund.
(d) In allocating moneys on deposit in the Interest and Sinking Fund to pay the principal of,
premium, if any, and interest on the Senior Lien Obligations as the same become due and payable
among Senior Lien Obligations that are secured by a debt service reserve fund created pursuant to
Section 11 and Senior Lien Obligations that are not secured by a debt service reserve fund, the Issuer
shall not take amounts on deposit (including moneys or Reserve Credit Facilities) in the debt service
reserve funds into account when making such allocations.
SECTION 11. DEBT SERVICE RESERVE FUNDS.
(a) The Issuer may create and establish a debt service reserve fund pursuant to the provisions
of any ordinance or other instrument authorizing the issuance of Senior Lien Obligations for the
purpose of securing that particular issue or series of Senior Lien Obligations or any specific group of
issues or series of Senior Lien Obligations (including the combining of debt service reserve funds for
Senior Lien Obligations so long as the requirements of each ordinance authorizing such Senior Lien
Obligations are satisfied). A debt service reserve fund may be funded from Pledged Revenues,
proceeds from the sale of Additional Senior Lien Obligations, Reserve Credit Facilities, or any other
available source or combination of sources. The amounts once deposited or credited to said debt
service reserve funds shall no longer constitute Pledged Revenues and shall be held solely for the
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benefit of the owners of the particular Senior Lien Obligations for which such debt service reserve
fund was established. Each debt service reserve fund shall receive a pro rata amount of the Pledged
Revenues after the requirements of the Interest and Sinking Fund, which secures all Senior Lien
Obligations, have first been met. Each such debt service reserve fund shall be designated in such
manner as is necessary to identify the Senior Lien Obligations it secures and to distinguish such debt
service reserve fund from the debt service reserve funds created for the benefit of other Senior Lien
Obligations. Each ordinance authorizing the issuance of Senior Lien Obligations that are to be
secured by a debt service reserve fund shall specify the amount or a manner of calculating the
amount to be held and maintained on deposit therein.
(b) The Issuer may issue Additional Senior Lien Obligations not secured by any debt service
reserve fund.
SECTION 12. RATE STABILIZATION RESERVES. The Issuer may from time to time
�.���� ......................._�...
establish and maintain a Rate Stabilization Reserve in any one or more of the Electric System Fund,
the Wastewater System Fund and the Water System Fund for so long as any Senior Lien Obligations
remain outstanding and unpaid, The Issuer may at any time deposit to the credit of any Rate
Stabilization Reserve any excess Net Revenues, after making required deposits hereinabove
described to the Interest and Sinking Fund and any debt service reserve fund created in accordance
with Section 11(a), and any other money received by the Issuer and available to be used therefor.
Funds on deposit in a Rate Stabilization Reserve may be used, at the discretion of the Issuer, for
capital additions and improvements to the System or any other lawful purpose, or to enable the Issuer
to satisfy its covenant set forth in Section 16(m). All interest or other earnings derived from the
investment of money in a Rate Stabilization Reserve shall be credited to that Rate Stabilization
Reserve. Money on deposit to the credit of a Rate Stabilization Reserve shall not be included as a
revenue for purposes of satisfying the covenant set forth in Section 16(m), unless the Issuer transfers
money from the Rate Stabilization Reserve to the System Funds for the sole purpose of enabling the
Issuer to be in compliance with its covenant set forth in Section 16(m).
�;F��u�""��I"9f��1� ] ��. DEFICIENCIES; EXCESS PLEDGED REVENUES.
(a) 1.��.I ��mi�r��.���. If on any occasion there shall not be sufficient Pledged Revenues (after
making all payments pertaining to all Senior Lien Obligations) to make the required deposits and
credits to the Interest and Sinking Fund and any debt service reserve fund for Senior Lien
Obligations, then such deficiency shall be cured as soon as possible from the next available
unallocated Pledged Revenues, and such deposits and credits shall be in addition to the amounts
otherwise required to be deposited and credited to such funds.
(b) I�u���� 1�9s����c��i �.��v���t���• Subject to making the deposits and credits required by this
Ordinance or any ordinances authorizing the issuance of Additional Senior Lien Obligations, or the
payments and credits required by the provisions of the ordinances authorizing the issuance of
Subordinate Lien Obligations heretofore or hereafter issued by the Issuer, the excess Pledged
Revenue� may be used for any lawful purpose.
SECTION 14. 1NVESTMENT OF FUNDS; VALUATION; FUNDS SECURED;
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TRANSFER OF INVESTMENT INCOME.
(a) Moneys in any fund established pursuant to this Ordinance may, at the option of the
Issuer, be invested in Permitted Investments, provided that all such deposits and investments shall be
made in such manner that the money required to be expended from any Fund will be available at the
proper time or times. Moneys in a debt service reserve fund for Senior Lien Obligations shall not be
invested in securities maturing later than the final maturity of the Senior Lien Obligations secured by
such debt service reserve fund. Such investments shall be valued in terms of current market value as
of the last day of each Year, except that direct obligations of the United States (State and Local
Government Series) in book-entry form shall be continuously valued at their par or face principal
amount. Such investments shall be sold promptly when necessary to prevent any default in
connection with the Bonds or any Additional Senior Lien Obligations issued. To the extent not
invested, moneys in any fund established pursuant to this Ordinance shall be secured in the manner
prescribed by law for securing funds of the Issuer.
(b) All interest and income derived from such investments (other than interest and income
derived from amounts credited to the Rate Stabilization Reserves, the Construction Fund or any debt
service reserve fund created in accordance with Section 11, if the debt service reserve fund does not
contain the Senior Lien Obligation Reserve Requirement) shall be credited to the System Funds
semi-annually and shall constitute Gross Revenues.
SECTION 15. PAYMENT OF SENIOR LIEN OBLIGATIONS. While any of the Senior
Lien Obligations are Outstanding, the Issuer shall transfer to the respective paying agent/registrar
therefor, from funds on deposit in and credited to the Interest and Sinking Fund, amounts sufficient
to fully pay and discharge promptly the interest on and principal of the Senior Lien Obligations as
shall become due on each interest or principal payment date, or date of redemption of the Senior Lien
Obligations; such transfer of funds must be made in such manner as will cause immediately available
funds to be deposited with each respective paying agent/registrar for the Senior Lien Obligations by
not later than 11:00 a.m. Central Time on the applicable payment date for the Senior Lien
Obligations. The paying agent/registrar shall destroy all paid Senior Lien Obligations and furnish the
Issuer with an appropriate certificate of cancellation or destruction.
SECTION 16. ISSUER COVENANTS. The Issuer further covenants and agrees that in
accordance with and to the extent required or permitted by law:
(a) 1��r'� �a� �7���a�c�� . It will faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions contained in any ordinance authorizing the issuance of Senior Lien
Obligations, including this Ordinance, and in each and every Senior Lien Obligation; it will promptly
pay or cause to be paid the principal of and interest on every Senior Lien Obligation on the dates and
in the places and manner prescribed in such ordinances and obligations; and it will, at the times and
in the manner prescribed, deposit and credit or cause to be deposited and credited the amounts
required to be deposited and credited to the Interest and Sinking Fund.
(b) 1��,�.r���"� �,����1 r�������������.�,�. It is a duly created and existing home rule city of the State of
Texas, and is duly authorized under the laws of the State of Texas to issue the Bonds; that all action
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on its part for the issuance of the Bonds has been duly and effectively taken, and that the Bonds in
the hands of the Registered Owners thereof are and will be valid and enforceable special obligations
of the Issuer in accordance with their terms.
(c) Title. It has or will obtain lawful title to the lands, buildings, structures and facilities
constituting the System, that it warrants that it will defend the title to all the aforesaid lands,
buildings, structures and facilities, and every part thereof, for the benefit of the Registered Owners of
the Senior Lien Obligations, against the claims and demands of all persons whomsoever, that it is
lawfully qualified to pledge the Pledged Revenues to the payment of the Senior Lien Obligations in
the manner prescribed herein, and has lawfully exercised such rights.
(d) Liens. It will from time to time and before the same become delinquent pay and
discharge all taxes, assessments and governmental charges, if any, which shall be lawfully imposed
upon it, or the System; it will pay all lawful claims for rents, royalties, labor, materials and supplies
which if unpaid might by law become a lien or charge thereon, the lien of which would be prior to or
interfere with the liens hereof, so that the priority of the liens granted hereunder shall be fully
preserved in the manner provided herein, and it will not create or suffer to be created any mechanic's,
laborer's, materialman's or other lien or charge which might or could be prior to the liens hereof, or
do or suffer any matter or thing whereby the liens hereof might or could be impaired; provided,
however, that no such tax, assessment or charge, and that no such claims which might be used as the
basis of a mechanic's, laborer's, materialman's or other lien or charge, shall be required to be paid so
long as the validity of the same shall be contested in good faith by the Issuer.
(e) (������������� c��" ����������; �'��� �� a•�.`�� �c�� v�i.���. It will, while any Senior Lien Obligations are
Outstanding, continuously and efficiently operate the System, and shall maintain the System in good
condition, repair and working order, all at reasonable cost. No free service of the System shall be
allowed, and should the Issuer or any of its agencies, instrumentalities, lessors, or concessionaires
make use of the services and facilities of the System, payment monthly of the standard retail price of
the services provided shall be made by the Issuer or any of its agencies, instrumentalities, lessors, or
concessionaires out of funds from sources other than the revenues of the System, unless made from
surplus Pledged Revenues as permitted by Section 13(b).
(� �����°�.&��r I��„�m�������°��.�����. While any Senior Lien Obligations are Outstanding, it will not
additionally encumber the Pledged Revenues in any manner, except as permitted in this Ordinance in
connection with Additional Senior Lien Obligations, unless said encumbrance is made junior and
subordinate in all respects to the liens, pledges, covenants and agreements of this Ordinance; but the
right of the Issuer to issue or incur obligations, including Subordinate Lien Obligations, payable from
a subordinate lien on the Pledged Revenues is specifically recognized and retained.
(g) ���1� �i f`�� ��x���r���l ��a;�:� 1�� ���;�°t�; ��. While any Senior Lien Obligations are Outstanding, it will
not sell, convey, mortgage, encumber, lease or in any manner transfer title to, or otherwise dispose
of, the System, or any significant or substantial part thereof, except as follows:
(1) To the extent permitted by law, the Issuer may sell, exchange or otherwise dispose of
at any time and from time to time any property or facilities constituting part of the System
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only if (i) it shall determine such property or facilities are not useful in the operation of the
System, (ii) the proceeds of such sale are $500,000 or less, or it shall have received a
certificate of a Designated Financial Officer stating in the opinion of the signer, that the fair
market value of the property or facilities exchanged is $500,000 or less, or (iii) if such
proceeds or fair market value exceeds $500,000 it shall have received a certificate of a
Designated Financial Officer stating, in the opinion of the signer, that the sale or exchange of
such property or facilities will not impair the ability of the Issuer to comply during the
current or any future year with the provisions of clause (m) of this Section. The proceeds of
any such sale or exchange not used to acquire other property necessary or desirable for the
safe or efficient operation of the System shall forthwith, at the option of the Issuer (i) be used
to redeem or purchase Senior Lien Bonds, (ii) otherwise be used to provide for the payment
of Senior Lien Bonds, or (iii) be used for any other lawful purpose; and
(2) To the extent permitted by law, the Issuer may lease or make contracts or grant
licenses for the operation of or make arrangements for the use of or grant easements or other
rights with respect to, any part of the System, provided that any such lease, contract, license,
arrangement, easement or right (i) does not impede the operation by the Issuer of the System
and (ii) does not in any manner impair or adversely affect the rights or security of the owners
of the Senior Lien Bonds under this Ordinance; and provided, further, that if the depreciated
cost of the property to be covered by any such lease, contract, license, arrangement, easement
or other right is in excess of $1,000,000, the Issuer shall have received a certificate of a
Designated Financial Officer that the action of the Issuer with respect thereto does not result
in a breach of the conditions under this clause (2). Any payments received by the Issuer under
or in connection with any such lease, contract, license, arrangement, easement or right in
respect of the System or any part thereof shall constitute Gross Revenues.
(h) I��:��i�•�����e�.
(1) The Issuer shall insure such parts of the System as would usually be insured by
corporations operating like properties, with responsible insurance companies, or through self-
insurance with adequate stop-loss reinsurance, against loss to the extent insurance is usually
carried by corporations operating like properties, including, to the extent reasonably
obtainable, insurance against the perils of fire, extended coverage and flooding and use and
occupancy insurance. Public liability and property damage insurance shall also be carried
unless the Issuer's attorney gives a written opinion to the effect that the Issuer is not liable for
claims which would be protected by such insurance. At any time while any contractor
engaged in construction work shall be fully responsible therefor, the Issuer shall not be
required to carry insurance on the work being constructed if the contractor is required to
carry appropriate insurance. All such policies shall be open to the inspection of the
Registered Owners and their agents and representatives at all reasonable times. Upon the
happening of any loss or damage covered by insurance from one or more of said causes, the
Issuer shall make due proof of loss and shall do all things necessary or desirable to cause the
insuring companies to make payment in full directly to the Issuer. The proceeds of insurance
covering such property, together with any other funds necessary and available for such
purpose, shall be used forthwith by the Issuer for repairing the properly damaged or replacing
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the property destroyed; provided, however, that if said insurance proceeds and other funds
are insufficient for such purpose, then said insurance proceeds pertaining to the System shall
be deposited in a special and separate trust fund, at a Depository, to be designated the
Insurance Account. The Insurance Account shall be held until such time as other funds
become available which, together with the Insurance Account, will be sufficient to make the
repairs or replacements originally required, whichever of said events occurs first; provided
that the Issuer may, in its discretion, use funds in the Insurance Account for the redemption
or purchase of Senior Lien Obligations.
(2) The foregoing provisions of clause (1) above notwithstanding, the Issuer shall have
authority to enter into coinsurance or similar plans where risk of loss is shared in whole or in
part by the Issuer.
(3) The annual audit hereinafter required may contain a section commenting on whether
or not the Issuer has complied with the requirements of this Section with respect to the
maintenance of insurance, and listing all policies carried, and whether or not all insurance
premiums upon the insurance policies to which reference is hereinbefore made have been
paid.
(i) �r������������rm����.�� ,� ����rt������. It will comply with all of the terms and conditions of any and
all franchises, permits and authorizations applicable to or necessary with respect to the System, and
which have been obtained from any governmental agency; and the Issuer has or will obtain and keep
in full force and effect all franchises, permits, authorization and other requirements applicable to or
necessary with respect to the acquisition, construction, equipment, operation and maintenance of the
System.
(j) ��� C"c�7�1���i�i���. That so far as it legally may, it will not grant any franchise or permit for
the acquisition, construction or operation of any competing facilities which might be used as a
substitute for the System's facilities and, to the extent that it legally may, the Issuer will prohibit any
such competing facilities.
(k) �L��c�:r����. It will keep proper books of record and account in which full, true and correct
entries will be made of all dealings, activities and transactions relating to the System, the Pledged
Revenues, and the funds created pursuant to this Ordinance, and all books, documents and vouchers
relating thereto shall at all reasonable times be made available for inspection upon request of a
Registered Owner of Senior Lien Obligations; provided, that all books, documents, and vouchers
relating to the City's electric system shall be made available for inspection only to the extent required
by law, including, without limitation, the provisions of Section 552.133 of the Texas Government
Code.
(1) Audits. After the close of each Year while any Senior Lien Obligation is Outstanding, it
will cause an audit to be made of the books and accounts relating to the Issuer, including the System
and the Pledged Revenues by an Accountant. Such annual audit reports shall be open to the
inspection of the Registered Owners of Senior Lien Obligations and their agents and representatives
at all reasonable times.
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(m) ������:� C"���������r�t. It will fix, establish, maintain and collect such rates, charges and fees
for the use and availability of the System at all times as are necessary to produce Gross Revenues
sufficient (1) to pay all current Operating Expenses, and (2) to produce Net Revenues for each Year
at least equal to 1.00 times the Annual Debt Service Requirements of all then Outstanding Senior
Lien Obligations for that Year, and (3) amounts required to pay all other obligations of the System
reasonably anticipated to be paid from Gross Revenues during the current Year.
(n) 1'x ��aa° ��a��������l�s��•� � 1������fl��. It will comply with all of the terms and conditions of the Prior
Encumbered Bonds of any series and the ordinances authorizing their issuance for so long as the
Prior Encumbered Bonds of any series are outstanding in accordance with their terms.
SECTION 17. ISSUANCE OF ADDITIONAL SENIOR LIEN OBLIGATIONS.
(a) The Issuer shall have the right and power at any time and from time to time and in one or
more series or issues, to authorize, issue and deliver Additional Senior Lien Obligations for any
purpose authorized by law, including for purposes of extending, improving or repairing the System
and for the purpose of refunding of any Senior Lien Obligations, Subordinate Lien Obligations or
other obligations of the Issuer incurred in connection with the ownership or operation of the System.
Such Additional Senior Lien Obligations, if and when authorized, issued and delivered in
accordance with this Ordinance and any ordinance hereafter adopted authorizing the issuance or
incurrence of Additional Senior Lien Obligation, shall be secured by and made payable equally and
ratably on a parity with all other Senior Lien Obligations at the time Outstanding and unpaid, from a
first lien on and pledge of the Pledged Revenues herein granted.
(b) The Interest and Sinking Fund shall secure and be used to pay all Senior Lien
Obligations. Each ordinance under which Additional Senior Lien Obligations are issued shall
provide and require that, in addition to the amounts required by the provisions of this Ordinance and
the provisions of any other ordinance or ordinances authorizing Additional Senior Lien Obligations
to be deposited to the credit of the Interest and Sinking Fund, the Issuer shall deposit to the credit of
the Interest and Sinking Fund at least such amounts as are required for the payment of all principal of
and interest on said Additional Senior Lien Obligations then being issued, as the same come due.
(c) Additional Senior Lien Obligations shall be issued only in accordance with this
Ordinance, but notwithstanding any provisions of this Ordinance to the contrary, no installment,
series or issue of Additional Senior Lien Obligations shall be issued or delivered unless:
(1) A Designated Financial Officer shall have executed a certificate stating (A) that, to
the best of such person's knowledge and belief, the Issuer is not then in default as to any
covenant or requirement contained in any ordinance authorizing the issuance of
Outstanding Senior Lien Obligations, and (B)(i) payments into all special funds or
accounts created and established for the payment and security of all Outstanding Senior
Lien Obligations have been made and that the amounts on deposit in such special funds
or accounts are the amounts then required to be on deposit therein or (ii) the application
of the proceeds of sale of such obligations then being issued will cure any such
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deficiency; and
(2) A Designated Financial Officer shall have executed a certificate stating that based on
the books and records of the Issuer, during either the preceding Year, or any twelve (12)
consecutive months out of the fifteen (15) months immediately preceding the month in
which the then proposed Additional Senior Lien Obligations are to be issued, the Net
Revenues are equal to the lesser of (A) at least 1.25 times the Average Annual Debt
Service Requirements, or (B) at least 1.10 times the Maximum Annual Debt Service
Requirements, of, in either case, the Senior Lien Obligations to be Outstanding after the
issuance of the then proposed Additional Senior Lien Obligations.
(d) If the proceeds of the Additional Senior Lien Obligations are to be used to construct or
acquire a Capital Addition, the certificate required by clause (c)(2) above shall not be required, and
the following two certificates shall be required:
(1) A Designated Financial Officer shall have executed a certificate stating that based on
the books and records of the Issuer, during either the preceding Year, or any twelve (12)
consecutive months out of the fifteen (15) months immediately preceding the month in
which the then proposed Additional Senior Lien Obligations are to be issued, the Net
Revenues are equal to the lesser of (A) at least 1.25 times the Average Annual Debt
Service Requirements, or (B) at least 1.10 times the Maximum Annual Debt Service
Requirements, of, in either case, the Senior Lien Obligations to be Outstanding at the
time of the issuance of the then proposed Additional Senior Lien Obligations (but
excluding the Additional Senior Lien Obligations then being issued); and
(2) An Accountant or a Consulting Engineer shall have executed a certificate to the effect
that the proj ected Net Revenues will be, in the person's or its opinion, for each of the five
(5) Years subsequent to the date the Capital Addition becomes commercially operative
(as estimated in the engineering report pertaining thereto) equal to the lesser of (A) at
least 1.25 times the Average Annual Debt Service Requirements, or (B) at least 1.10 the
Maximum Annual Debt Service Requirements, of, in either case, Senior Lien Obligations
then Outstanding and all Additional Senior Lien Obligations then estimated to be issued,
if any, for all improvements to the System and for all Capital Additions then in progress
or then being initiated during the period from the date the first series of obligations for
the Capital Addition is to be delivered through the fifth Year subsequent to the date the
Capital Addition is estimated to become commercially operative.
(e) Payments to be made under a Credit Agreement may be treated as a payment in respect of
a Senior Lien Obligation and secured by Pledged Revenues if the City Council makes a finding in the
ordinance authorizing the execution and delivery of a Credit Agreement as a Senior Lien Obligation
that, based upon the findings contained in a certificate executed and delivered by a Designated
Financial Officer, the Issuer will have sufficient funds to meet the financial obligations of the
System, including sufficient Pledged Revenues to satisfy the Annual Debt Service Requirements of
the System and the financial obligations of the Issuer relating to the System after giving effect to the
treatment of the Credit Agreement as a Senior Lien Obligation. The payment obligations incurred by
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the Issuer under a Credit Agreement shall not be treated as a Senior Lien Obligation unless the form
of such Credit Agreement is approved by ordinance or resolution adopted by the City Council.
(� In making a determination of Net Revenues for any of the purposes described in this
Section, the Designated Financial Officer, Accountant or Consulting Engineer may take into
consideration a change in the rates and charges for services and facilities afforded by the System that
has been adopted by the Issuer or became effective at least sixty (60) days prior to the issuance date
of the Additional Senior Lien Obligations and, for purposes of satisfying the Net Revenues tests
described above, make a pro forma determination of the Net Revenues of the System for the period
of time covered by said Designated Financial Officer's, Accountant's or Consulting Engineer's
certification or opinion based on such change in rates and charges being in effect for the entire period
covered by said Designated Financial Officer's, Accountant's or Consulting Engineer's certificate or
opinion.
(g) Senior Lien Obligations may be refunded (pursuant to any law then available) upon such
terms and conditions as the Issuer may deem to be in the best interest of the Issuer and its
inhabitants, and if less than all such Outstanding Senior Lien Obligations are refunded, the proposed
refunding bonds shall be considered as "Additional Senior Lien Obligations" under the provisions of
this Section and the certificate required in clause (c)(2) shall give effect to the issuance of the
proposed refunding bonds (and shall not give effect to the bonds being refunded following their
cancellation or provision being made for their payment).
(h) All calculations of Average Annual Debt Service Requirements and Maximum Annual
Debt Service Requirements made pursuant to this Section shall be made as of and from the date of
the Additional Senior Lien Obligations then proposed to be issued.
SECTION 18. NO FURTHER ISSUANCE OF OBLIGATIONS ON A PARITY WITH
PRIOR ENCUMBERED BONDS. The Issuer covenants and agrees that it will not issue any
additional obligations on a parity with the Prior Encumbered Bonds, it being the intent of the Issuer
that upon the issuance of the Bonds, the Issuer will finance improvements and extensions of the
System and refinance revenue obligations issued for the purpose of improving and extending the
System with Senior Lien Obligations, Subordinate Lien Obligations or other obligations not issued
on a parity with the Prior Encumbered Bonds. The Issuer covenants and agrees to, on or after the
Prior Encumbered Bonds Defeasance Date, take such actions it determines to be necessary, if any, to
release the lien on and pledge of the Pledged Revenues securing the Prior Encumbered Bonds.
�;k::C"°T'([:�1� 19. NO ISSUANCE OF OBLIGATIONS SENIOR TO THE SENIOR LIEN
OBLIGATIONS. The Issuer covenants and agrees that it will not issue any obligations payable from
and secured, in whole or in part, by a lien on and pledge of the Pledged Revenues, senior in rank and
dignity to the lien on and pledge of such Pledged Revenues securing the payment of the Senior Lien
Obligations, it being the intent of the Issuer that upon the issuance of the Bonds, the Issuer will
finance improvements and extensions of the System and refinance revenue obligations issued for the
purpose of improving and extending the System with Senior Lien Obligations, Subordinate Lien
Obligations or other obligations not issued on a parity with Senior Lien Obligations.
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SECTION 20. ISSUANCE OF SUBORDINATE OBLIGATIONS. The Issuer hereby
reserves the ri Wht mo�
g t issue, at any time, obligations including, but not limited to, Subordinate Lien
Obligations, payable from and equally and ratably secured, in whole or in part, by a lien on and
pledge of the Pledged Revenues, subordinate and inferior in rank and dignity to the lien on and
pledge of such Pledged Revenues securing the payment of the Senior Lien Obligations, as may be
authorized by the laws of the State of Texas.
�f�i��;:°"I�I��I'wV 21. ISSUANCE OF SPECIAL PROJECT BONDS. Nothing in this Ordinance
shall be construed to deny the Issuer the right and it shall retain, and hereby reserves unto itself, the
right to issue Special Project Bonds secured by liens on and pledges of revenues and proceeds
derived from Special Projects.
SECTION 22. DEFEASANCE OF BONDS.
(a) Any Bond and the interest thereon shall be deemed to be paid, retired and no longer
outstanding (a "Defeased Bond") within the meaning of this Ordinance, except to the extent provided
in subsection (c) of this Section, when payment of the principal of such Bond, plus interest thereon to
the due date (whether such due date be by reason of maturity or otherwise) either (i) shall have been
made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for
on or before such due date by irrevocably depositing with or making available to the Paying
Agent/Registrar in accordance with an escrow agreement or other instrument (the "Future Escrow
Agreement") for such payment (1) lawful money of the United States of America sufficient to make
such payment or (2) Defeasance Securities that mature as to principal and interest in such amounts
and at such times as will insure the availability, without reinvestment, of sufficient money to provide
for such payment, and when proper arrangements have been made by the Issuer with the Paying
Agent/Registrar for the payment of its services until all Defeased Bonds shall have become due and
payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid,
such Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the
benefits of, the funds created and the revenues herein pledged as provided in this Ordinance, and
such principal and interest shall be payable solely from such money or Defeasance Securities.
Notwithstanding any other provision of this Ordinance to the contrary, it is hereby provided that any
determination not to redeem Defeased Bonds that is made in conjunction with the payment
arrangements specified in subsection (a)(i) or (ii) of this Section shall not be irrevocable, provided
that: (1) in the proceedings providing for such payment arrangements, the Issuer expressly reserves
the right to call the Defeased Bonds for redemption; (2) gives notice of the reservation of that right to
the owners of the Defeased Bonds immediately following the making of the payment arrangements;
and (3) directs that notice of the reservation be included in any redemption notices that it authorizes.
(b) Any moneys so deposited with the escrow agent under a Future Escrow Agreement may
at the written direction of the Issuer be invested in Defeasance Securities, maturing in the amounts
and times as hereinbefore set forth, and all income from such Defeasance Securities received by the
Paying Agent/Registrar that is not required for the payment of the Defeased Bonds and interest
thereon, with respect to which such money has been so deposited, shall be turned over to the Issuer,
or deposited as directed in writing by the Issuer. Any Future Escrow Agreement pursuant to which
the money and/or Defeasance Securities are held for the payment of Defeased Bonds may contain
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provisions permitting the investment or reinvestment of such moneys in Defeasance Securities or the
substitution of other Defeasance Securities upon the satisfaction of the requirements specified in
subsection (a)(i) or (ii) of this Section. All income from such Defeasance Securities received by the
Paying Agent/Registrar which is not required for the payment of the Defeased Bonds, with respect to
which such money has been so deposited, shall be remitted to the Issuer or deposited as directed in
writing by the Issuer.
(c) Until all Defeased Borids shall have become due and payable, the Paying Agent/Registrar
shall perform the services of Paying Agent/Registrar for such Defeased Bonds the same as if they
had not been defeased, and the Issuer shall make proper arrangements to provide and pay for such
services as required by this Ordinance.
(d) In the event that the Issuer elects to defease less than all of the principal amount of Bonds
of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Bonds
by such random method as it deems fair and appropriate.
`���;�:""1"�C��1 ��. DAMAGED, MUTILATED, LOST, STOLEN, ORDESTROYED BONDS.
(a) l��.���1�.7a�a�r�3����rl l��ra:���,�;�. In the event any Outstanding Bond is damaged, mutilated, lost,
stolen or destroyed, the Paying Agent/Registrar shall cause to be printed, executed and delivered, a
new Bond of the same principal amount, maturity and interest rate, as the damaged, mutilated, lost,
stolen or destroyed Bond, in replacement for such Bond in the manner hereinafter provided.
(b) ���i��,�� ica� ���� ]�.e�N��������r�t [������.��. Application for replacement of damaged, mutilated,
lost, stolen or destroyed Bonds shall be made by the registered owner thereof to the Paying
Agent/Registrar. In every case of loss, theft or destruction of a Bond, the registered owner applying
for a replacement Bond shall furnish to the Issuer and to the Paying Agent/Registrar such security or
indemnity as may be required by them to save each of them harmless from any loss or damage with
respect thereto. Also, in every case of loss, theft or destruction of a Bond, the registered owner shall
furnish to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft
or destruction of such Bond, as the case may be. In every case of damage or mutilation of a Bond,
the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so
damaged or mutilated.
(c) ��� 1��r�����l�w_!�)�c���s:��'�c�. Notwithstanding the foregoing provisions of this Section, in the
event any such Bond shall have matured, and no default has occurred that is then continuing in the
payment of the principal of, redemption premium, if any, or interest on the Bond, the Issuer may
authorize the payment of the same (without surrender thereof except in the case of a damaged or
mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished
as above provided in this Section.
(d) � I����a�;� ��r��� I�su��r� ��� ����q;�i��wc,cr�m�,r��� ����G���. Prior to the issuance of any replacement Bond,
the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal, printing,
and other expenses in connection therewith. Every replacement Bond issued pursuant to the
provisions of this Section by virtue of the fact that any Bond is lost, stolen or destroyed shall
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constitute a contractual obligation of the Issuer whether or not the lost, stolen or destroyed Bond
shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this
Ordinance equally and proportionately with any and all other Bonds duly issued under this
Ordinance. �
(e) 11���1�a�aN�i��v I���a� ����tir�� 1���I��a��,��w��rtml��a��e��. In accordance with Section 1206.022, Texas
Government Code, this Section 23 shall constitute authority for the issuance of any such replacement
Bond without necessity of further action by the governing body of the Issuer or any other body or
person, and the duty of the replacement of such Bonds is hereby authorized and imposed upon the
Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Bonds in
the form and manner and with the effect, as provided in Section 4(a) for Bonds issued in conversion
and exchange for other Bonds.
SECTION 24. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION; CUSIP NUMBERS.
(a) The Mayor of the Issuer and each Designated Financial Officer are hereby authorized to
have control of the Bonds initially issued and delivered hereunder and all necessary records and
proceedings pertaining to the Bonds pending their delivery and their investigation, examination, and
approval by the Attorney General of the State of Texas, and their registration by the Comptroller of
Public Accounts of the State of Texas. Upon registration of the Bonds said Comptroller of Public
Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate attached to such Bonds, and the seal of said Comptroller shall
be impressed, or placed in facsimile, on such Bond. The approving legal opinion of the Issuer's
Bond Counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the
Bonds issued and delivered under this Ordinance, but neither shall have any legal effect, and shall be
solely for the convenience and information of the registered owners of the Bonds. In addition, if
bond insurance is obtained, the Bonds may bear an appropriate legend as provided by the insurer.
(b) The obligation of the initial purchaser to accept delivery of the Bonds is subject to the
initial purchaser being furnished with the final, approving opinion of McCall, Parkhurst & Horton
L.L.P., bond counsel to the Issuer, which opinion shall be dated as of and delivered on the date of
initial delivery of the Bonds to the initial purchaser.
SECTIONmm25. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
BONDS.
(a) �"����t���i���. The Issuer covenants to take any action necessary to assure, or refrain from
any action that would adversely affect, the treatment of the Tax-Exempt Bonds as obligations
described in section 103 of the Code, the interest on which is not includable in the "gross income" of
the holder for purposes of federal income taxation. In furtherance thereof, the Issuer covenants as
follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the Tax-
Exempt Bonds (less amounts deposited to a reserve fund, if any) are used for any "private
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business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the
proceeds or the projects financed or refinanced 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 provide for the
payment of more than 10 percent of the debt service on the Tax-Exempt Bonds, in
contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use" described
in subsection (1) hereof exceeds 5 percent of the proceeds of the Tax-Exempt Bonds or the
proj ects 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" that is "related" and not
"disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental
use; �
(3) to take any action to assure that no amount that is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Tax-Exempt Bonds (less amounts deposited
into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action that would otherwise result in the Tax-Exempt
Bonds being treated as "private activity bonds" within the meaning of section 141(b) of the
Code;
(5) to refrain from taking any action that would result in the Tax-Exempt Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Tax-Exempt Bonds, directly
or indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) that produces a materially
higher yield over the term of the Tax-Exempt Bonds, other than investment property acquired
with:
(A) proceeds of the Tax-Exempt Bonds invested for a reasonable temporary period of 3
years or less or, in the case of a refunding bond, for a period of 30 days or less until such
proceeds are needed for the purpose for which the bonds are issued,
(B) amounts invested in a bona fide debt service fund, within the meaning of section
1.148-1(b) of the rules and regulations of the United States Department of the Treasury
("Treasury Regulations"), and
(C) amounts deposited in any reasonably required reserve or replacement fund to the
extent such amounts do not exceed 10 percent of the proceeds of the Tax-Exempt Bonds;
(7) to otherwise restrict the use of the proceeds of the Tax-Exempt Bonds or amounts
treated as proceeds of the Tax-Exempt Bonds, as may be necessary, so that the Tax-Exempt
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Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to
arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance
refundings); and
(8) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Tax-Exempt Bonds) an amount that is at least equal to
90 percent of the "Excess Earnings," within the meaning of section 148(� of the Code and to
pay to the United States ofAmerica, not later than 60 days after the Tax-Exempt Bonds have
been paid in full, 100 percent of the amount then required to be paid as a result of Excess
Earnings under section 148(� of the Code.
(b) l��la�,��� I'�J����. In order to facilitate compliance with the above covenant (a)(8), a"Rebate
Fund" is hereby established by the Issuer for the sole benefit of the United States of America, and
such Rebate Fund shall not be subject to the claim of any other person, including without limitation
the Bondholders. The Rebate Fund is established for the additional purpose of compliance with
section 148 of the Code.
(c) Z���mmm�rk I��•�a�ab��:��. For purposes of the foregoing covenants (a)(1) and (a)(2), the Issuer
understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury
Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the
refunded bonds expended prior to the date of issuance of the Tax-Exempt Bonds. It is the
understanding of the Issuer that the covenants contained herein are intended to assure compliance
with the Code and any regulations or rulings promulgated by the United States Department of the
Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated that
modify or expand provisions of the Code, as applicable to the Tax-Exempt Bonds, the Issuer will not
be required to comply with any covenant contained herein to the extent that such failure to comply, in
the opinion of nationally recognized bond counsel, will not adversely affect the exemption from
federal income taxation of interest on the Tax-Exempt Bonds under section 103 of the Code. In the
event that regulations or rulings are hereafter promulgated that impose additional requirements
applicable to the Tax-Exempt Bonds, the Issuer agrees to comply with the additional requirements to
the extent necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption
from federal income taxation of interest on the Tax-Exempt Bonds under section 103 of the Code. In
furtherance of such intention, the Issuer hereby authorizes and directs the Mayor or Pricing Officer to
execute any documents, certificates or reports required by the Code and to make such elections, on
behalf of the Issuer, that may be permitted by the Code as are consistent with the purpose for the
issuance of the Tax-Exempt Bonds.
(d) ���r���si��a� �:���E; ���c� C.�����it��ti���� a:��r�� L����������ir:►�r�� ��y��°t��� f�r��r��c���:�. The Issuer covenants to
account for the expenditure of sale proceeds and investment earnings to be used for the construction
and acquisition of the Project on its books and records by allocating proceeds to expenditures within
18 months of the later of the date that (1) the expenditure is made, or (2) the Project is completed.
The foregoing notwithstanding, the Issuer shall not expend proceeds of the sale of the Tax-Exempt
Bonds or investment earnings thereon more than 60 days after the earlier of (1) the fifth anniversary
of the delivery of the Tax-Exempt Bonds, or (2) the date the Tax-Exempt Bonds are retired, unless
the Issuer obtains an opinion of nationally-recognized bond counsel that such expenditure will not
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adversely affect the status, for federal income tax purposes, of the Tax-Exempt Bonds or the interest
thereon. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it
obtains an opinion that such failure to comply will not adversely affect the excludability for federal
income tax purposes from gross income of the interest.
(e) 1������>�it ia�� ��J 1'�°�w�����d�. The Issuer covenants that the Project will not be sold or otherwise
disposed in a transaction resulting in the receipt by the Issuer of cash or other compensation, unless
the Issuer obtains an opinion of nationally-recognized bond counsel that such sale or other
disposition will not adversely affect the tax-exempt status of the Tax-Exempt Bonds. For purposes
of the foregoing, the portion of the property comprising personal property and disposed in the
ordinary course shall not be treated as a transaction resulting in the receipt of cash or other
compensation. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if
it obtains a legal opinion that such failure to comply will not adversely affect the excludability for
federal income tax proposes from gross income of the interest.
(� I�c����a�a�.aa•��»�c��nt. This Ordinance is intended to satisfy the official intent requirements set
forth in section 1.150-2 of the Treasury Regulations.
SECTION 26. COVENANTS REGARDING TAXABLE BONDS,
(a) To the extent required by the Code, and the rules and regulations of the United States
Department of the Treasury, it shall be the duty of the Paying Agent/Registrar to report to the owners
of the Taxable Bonds and the Internal Revenue Service (i) the amount of "reportable payments," if
any, subject to back up withholding during each year and the amount of tax withheld, if any, with
respect to the payments on the Taxable Bonds and (ii) the amount of interest or amount treated as
interest, such as original issue discount, on the Taxable Bonds required to be included in the gross
income of the owners thereof for federal income tax purposes.
(b) It is the intention of the Issuer that the Taxable Bonds not be obligations described in
section 103 of the Code interest on which is excludable from the gross income of the holders and in
that regard the Issuer agrees not to file a form 8038 G, or any comparable information return relating
to tax-exempt obligations, with the Internal Revenue Service.
SECTION 27. SALE OF BONDS; OFFICIAL STATEMENT; BOND 1NSURANCE;
FURTHER PROCEDURES.
(a) ��1� �,�lmmmim�mc�rmrIT����• Each Series of Bonds shall be sold and delivered subject to the provisions
of Section 2 and Section 3 through a negotiated sale, competitive sale or private placement and
pursuant to the terms and provisions of a purchase contract or a notice of sale and official bid form
(in each case, a"Purchase Agreement"), the terms and provisions of which are to be determined by
the Pricing Officer in accordance with Section 3, and in which the purchaser or purchasers of the
Bonds (the "Purchaser") shall be designated. The Pricing Officer is hereby authorized to execute
and deliver one or more Purchase Agreements for and on behalf of the Issuer. The Bonds shall
initially be registered in the name of the Purchaser or its designee.
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(b) (71����<�� ���t��r�r�a�t. The Pricing Officer is hereby authorized, in the name and on behalf
of the Issuer, to approve, distribute, and deliver one or more preliminary official statements or other
preliminary offering document relating to the Bonds and any addenda, supplement or amendment
thereto, and approves the distribution of such preliminary official statement or other preliminary
offerir�g document in the offering of the Bonds by the Purchaser in iinal form, with such changes
therein or additions thereto as the Pricing Officer may deem advisable. The Pricing Officer is hereby
authorized, in the name and on behalf of the Issuer, to approve, distribute, and deliver one or more
final official statement or other a final offering document relating to the Bonds to be used by the
Purchaser in the marketing of the Bonds.
(c) I3<ar���.�1 Irs��iA°����:�. The Pricing Officer is authorized, in connection with effecting the sale
of the Bonds, to obtain from a municipal bond insurance company so designated in the Pricing
Certificate (the "Insurer") a municipal bond insurance policy (the "Insurance Policy") in support of
the Bonds. To that end, should the Pricing Ofiicer exercise such authority and commit the Issuer to
obtain a municipal bond insurance policy, for so long as the Insurance Policy is in effect, the
requirements of the Insurer relating to the issuance of the Insurance Policy as set forth in the Pricing
Certificate are incorporated by reference into this Ordinance and made a part hereof for all purposes,
notwithstanding any other provision of this Ordinance to the contrary. The Pricing Officer shall have
the authority to execute any documents to effect the issuance of the Insurance Policy by the Insurer,
including commitment agreements, membership agreements in mutual insurance companies and
other similar agreements.
(d) �°'�r�-tN���y I'�°c���c1�a�°��. The Mayor and Mayor Pro Tem, the City Manager, Pricing Officer
and City Secretary and all other officers, employees and agents of the Issuer, and each of them, shall
be and they are hereby expressly authorized, empowered and directed from time to 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 a Paying Agent/Registrar Agreement with the
Paying Agent/Registrar and all other instruments, whether or not herein mentioned, as may be
necessary or desirable in order to carry out the terms and provisions of this Ordinance, the Pricing
Certificate, the Bonds, the sale of the Bonds, any Purchase Agreement and any official statement or
other offering document. In case any officer whose signature shall appear on any Bond shall cease to
be such officer before the delivery of such Bond, such signature shall nevertheless be valid and
sufficient for all purposes the same as if such officer had remained in office until such delivery.
SECTION 28. DEFAULT AND REMEDIES
(a) }^�v���:t� �r[" I�afault. Each of the following occurrences or events for the purpose of this
Ordinance is hereby declared to be an Event of Default:
(i) the failure to make payment of the principal of or interest on any of the Bonds
when the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or
obligation of the Issuer, the failure to perform which materially, adversely affects the rights
of the registered owners of the Bonds, including, but not limited to, their prospect or ability
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to be repaid in accordance with this Ordinance, and the continuation thereof for a period of
60 days after notice of such default is given by any Registered Owner to the Issuer.
(b) ��������1���_r��r �7�,���ult,.
(i) Upon the happening of any Event of Default, then and in every case, any
Registered Owner or an authorized representative thereof, including, but not limited to, a
trustee or trustees therefor, may proceed against the Issuer for the purpose of protecting and
enforcing the rights of the Registered Owners under this Ordinance, by mandamus or other
suit, action or special proceeding in equity or at law, in any court of competent jurisdiction,
for any relief permitted by law, including the specific performance of any covenant or
agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in
violation of any right of the Registered Owners hereunder or any combination of such
remedies.
(ii) It is provided that all such proceedings shall be instituted and maintained for the
equal benefit of all Registered Owners of Bonds then Outstanding.
(c) C��°����,cii�� 1�c�i 1?��I�r�%�c:.
(i) No remedy herein conferred or reserved is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given hereunder or under the Bonds or now or hereafter
existing at law or in equity; provided, however, that notwithstanding any other provision of
this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available
as a remedy under this Ordinance.
(ii) The exercise of any remedy herein conferred or reserved shall not be deemed a
waiver of any other available remedy.
(iii) By accepting the delivery of a Bond authorized under this Ordinance, such
Registered Owner agrees that the certifications required to effectuate any covenants or
representations contained in this Ordinance do not and shall never constitute or give rise to a
personal or pecuniary liability or charge against the officers, employees or council members
of the Issuer.
(iv) None of the members of the City Council, nor any other official or ofiicer, agent,
or employee of the Issuer, shall be charged personally by the registered owners with any
liability, or be held personally liable to the registered owners under any term or provision of
this Ordinance, or because of any Event of Default or alleged Event of Default under this
Ordinance.
SECTION 29. COMPLIANCE WITH RULE 15c2-12.
(a) N.��di�tit�c����;. As used in this Section, the following terms have the meanings ascribed to
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such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) �t�����.���1 f����c��-��.
(i) The Issuer shall provide annually to the MSRB, in the electronic format
prescribed by the MSRB, financial information and operating data (the "Annual Operating
Report") with respect to the Issuer of the general type included in the final official statement
or other offering document authorized by this Ordinance, being the information described in
the Pricing Certificate. The Issuer will additionally provide financial statements of the Issuer
(the "Financial Statements"), that will be (i) prepared in accordance with the accounting
principles described in the Pricing Certificate or such other accounting principles as the
Issuer may be required to employ from time to time pursuant to State law or regulation and
shall be in substantially the form included in the final official statement or other offering
document and (ii) audited, if the Issuer commissions an audit of such Financial Statements
and the audit is completed within the period during which they must be provided. The Issuer
will update and provide the Annual Operating Report within six months after the end of each
Year and the Financial Statements within 12 months of the end of each Year, in each case
beginning with the Year ending in and after 2016. The Issuer may provide the Financial
Statements earlier, including at the time it provides its Annual Operating Report, but if the
audit of such Financial Statements is not complete within 12 months after any such Year end,
then the Issuer shall file unaudited Financial Statements within such 12-month period and
audited Financial Statements for the applicable Year, when and if the audit report on such
Financial Statements becomes available.
(ii) If the Issuer changes its fiscal year, it will notify the MSRB of the change (and of
the date of the new fiscal year end) prior to the next date by which the Issuer otherwise would
be required to provide financial information and operating data pursuant to this Section. The
financial information and operating data to be provided pursuant to this Section may be set
forth in full in one or more documents or may be included by specific reference to any
document that is available to the public on the MSRB's internet website or filed with the
SEC. All documents provided to the MSRB pursuant to this Section shall be accompanied
by identifying information as prescribed by the MSRB.
��j 1;�����!: �Ic��i�:s�:�.
(i) The Issuer shall notify the MSRB in an electronic format as prescribed by the
MSRB, in a timely manner (but not in excess of ten business days after the occurrence of the
event) of any of the following events with respect to the Bonds, if such event is material
within the meaning of the federal securities laws:
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1. Non-payment related defaults;
2. Modifications to rights of Registered Owners;
3. Bond calls;
4. Release, substitution, or sale of property securing repayment of the Bonds;
5. The consummation of a merger, consolidation, or acquisition involving an
obligated person or the sale of all or substantially all of the assets of the obligated
person, other than in the ordinary course of business, the entry into a definitive
agreement to undertake such an action or the termination of a definitive agreement
relating to any such actions, other than pursuant to its terms; and
6. Appointment of a successor or additional trustee or the change of name of
a trustee.
(ii) The Issuer shall notify the MSRB in an electronic format as prescribed by the
MSRB, in a timely manner (but not in excess of ten business days after the occurrence of the
event) of any of the following events with respect to the Bonds, without regard to whether
such event is considered material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Unscheduled draws on debt service reserves reflecting iinancial difficulties;
3. Unscheduled draws on credit enhancements reflecting financial difficulties;
4. Substitution of credit or liquidity providers, or their failure to perform;
5. Tender offers;
6. Defeasances;
7. Rating changes; and
8. Bankruptcy, insolvency, receivership or similar event of an obligated person.
(iii) The Issuer shall notify the MSRB, in a timely manner, of any failure by the
Issuer to provide financial information or operating data in accordance with subsection (b) of
this Section by the time required by such subsection.
(d) � ��������Cr_��o�^� 1)r��I,�N�������� ��a��i �1,����r�c�����,��t,�.
.�.__._�__._. . m��. _�.�_..m._..�
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(i) The Issuer shall be obligated to observe and perform the covenants specified in
this Section for so long as, but only for so long as, the Issuer remains an "obligated person"
with respect to the Bonds within the meaning of the Rule, except that the Issuer in any event
will give notice of any deposit made in accordance with this Ordinance or applicable law that
causes Bonds no longer to be Outstanding.
(ii) The provisions of this Section are for the sole benefit of the registered owners
and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall
give any benefit or any legal or equitable right, remedy, or claim hereunder to any other
person. The Issuer undertakes to provide only the financial information, operating data,
financial statements, and notices which it has expressly agreed to provide pursuant to this
Section and does not hereby undertake to provide any other information that may be relevant
or material to a complete presentation of the Issuer's financial results, condition, or prospects
or hereby undertake to update any information provided in accordance with this Section or
otherwise, except as expressly provided herein. The Issuer does not make any representation
or warranty concerning such information or its usefulness to a decision to invest in or sell
Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND 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 1N THIS
SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN
CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
(iv) No default by the Issuer in observing or performing its obligations under this
Section shall comprise a breach of or default under this Ordinance for purposes of any other
provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim,
waive, or otherwise limit the duties of the Issuer under federal and state securities laws.
(v) Should the Rule be amended to obligate the Issuer to make filings with or provide
notices to entities other than the MSRB, the Issuer hereby agrees to unclertake such obligation
with respect to the Bonds in accordance with the Rule as amended. The provisions of this
Section may be amended by the Issuer from time to time to adapt to changed circumstances
that arise from a change in legal requirements, a change in law, or a change in the identity,
nature, status, or type of operations of the Issuer, but only if (1) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in
the primary offering of the Bonds in compliance with the Rule, taking into account any
amendments or interpretations of the Rule since such offering as well as such changed
circumstances and (2) either (a) the registered owners of a majority in aggregate principal
amount (or any greater amount required by any other provision of this Ordinance that
authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b)
a person that is unaffiliated with the Issuer (such as nationally recognized bond counsel)
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determined that such amendment will not materially impair the interest of the registered
owners and beneiicial owners of the Bonds. 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 Bonds in the
primary offering of the Bonds. If the Issuer so amends the provisions of this Section, it shall
include with any amended financial information or operating data next provided in
accordance with subsection (b) 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.
(e) ,���z+�-�������i�� ��f"���� 1���,1�. The provisions of this Section shall be revised by the Pricing
Officer to reflect the requirements of the Rule if the Rule is amended after the adoption of this
Ordinance but prior to the delivery of the Bonds so as to permit an underwriter to purchase or sell
Bonds in the primary offering of the Bonds in compliance with the Rule. Any such revisions shall be
set forth in the Pricing Certificate and are incorporated by reference into this Ordinance and made a
part hereof for all purposes, notwithstanding any other provision of this Ordinance to the contrary,
SECTION 30. METHOD OF AMENDMENT.
(a) The Registered Owners of Senior Lien Obligations of a majority of the aggregate
principal amount of then Outstanding Senior Lien Obligations thereby affected (for purposes of this
sentence only, 100% of the aggregate principal amount of Senior Lien Obligations which are insured
by a bond insurance provider at the time that the Issuer seeks approval of an amendment shall be
deemed to be owned by such bond insurance provider) shall have the right from time to time to
approve any amendment to this Ordinance which may be deemed necessary or desirable by the
Issuer; provided, however, that without the consent of the Registered Owners of all of the Senior
Lien Obligations at the time Outstanding thereby affected, nothing herein contained shall permit or
be construed to permit the amendment of the terms and conditions in this Ordinance or in the Senior
Lien Obligations so as to:
(1)
Obligations;
�2)
Obligations;
(3)
Obligations;
Make any change in the maturity of any of the Outstanding Senior Lien
Reduce the rate of interest borne by any of the Outstanding Senior Lien
Reduce the amount of the principal payable on the Outstanding Senior Lien
(4) Modify the terms of payment of principal of or interest.on the Outstanding
Senior Lien Obligations or impose any conditions with respect to such payment;
(5) Affect the rights of the Registered Owners of less than all of the Senior Lien
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Obligations then Outstanding;
(6) Change the minimum percentage of the principal amount of Senior Lien
Obligations necessary for consent to such amendment; or
(7) Amend this subsection (a) of this Section.
(b) If at any time the Issuer shall desire to amend the Ordinance under this Section, the Issuer
shall cause notice of the proposed amendment to be published in a financial newspaper or journal
published in the City of New York, New York, once during each calendar week for at least two (2)
successive calendar weeks. Such notice shall briefly set forth the nature of the proposed amendment
and shall state that a copy thereof is on file at the principal office of the Paying Agent/Registrar for
inspection by all Registered Owners of Senior Lien Obligations. Such publication is not required,
however, if notice in writing is given to each Registered Owner of Senior Lien Obligations.
(c) Whenever at any time the Issuer shall receive an instrument or instruments executed by
the Registered Owners of at least a majority in the aggregate principal amount of all Senior Lien
Obligations then Outstanding thereby affected, which instrument or instruments shall refer to the
proposed amendment described in said notice and which specifically consent to and approve such
amendment in substantially the form of the copy thereof on file with the Paying Agent/Registrar, the
City Council may pass the amendatory ordinance in substantially the same form.
(d) Upon the passage of any amendatory ordinance pursuant to the provisions of this Section,
this Ordinance shall be deemed to be amended in accordance with such amendatory ordinance, and
the respective rights, duties and obligations under this Ordinance of the Issuer and all the Registered
Owners of then Outstanding Senior Lien Obligations and all future Senior Lien Obligations shall
thereafter be determined, exercised and enforced hereunder, subject in all respects to such
amendments.
(e) Any consent given by the Registered Owner of a Senior Lien Obligation pursuant to the
provisions of this Section shall be irrevocable for a period of twelve (12) months from the date of the
first publication of the notice or other service of written notice provided for in this Section, and shall
be conclusive and binding upon all future Registered Owners of the same Senior Lien Obligation
during such period. Such consent may be revoked at any time after twelve (12) months from the date
of the first publication of such notice or other service of written notice by the Registered Owner who
gave such consent, or by a successor in title, by filing notice thereof with the Paying Agent/Registrar
and the Issuer, but such revocation shall not be effective if the Registered Owners of a majority in
aggregate principal amount of the then Outstanding Senior Lien Obligations as in this Section
defined have, prior to the attempted revocation, consented to and approve the amendment.
(� The fact of the owning of Senior Lien Obligations issued in registered form without
coupons and the amounts and numbers of such Senior Lien Obligations and the date of their holding
same shall be proved by the Registration Books of the Paying Agent/Registrar. The Issuer may
conclusively assume that such ownership continues until such ownership is changed on the
Registration Books. For purposes of this Section, the notional amount attributable to a Credit
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Agreement that is treated as a Senior Lien Obligation shall be deemed to be the principal amount of
such Senior Lien Obligation.
(g) The foregoing provisions of this Section notwithstanding, the Issuer by action of the City
Council may amend this Ordinance without the consent or approval of any Registered Owners of
Senior Lien Obligations for any one or more of the following purposes:
(1) To add to the covenants and agreements of the Issuer in this Ordinance
contained, other covenants and agreements thereafter to be observed, grant additional rights
or remedies to Registered Owners or to surrender, restrict or limit any right or power herein
reserved to or conferred upon the Issuer;
(2) To make such provisions for the purpose of curing any ambiguity, or curing,
correcting or supplementing any defective provision contained in this Ordinance, or in regard
to clarifying matters or questions arising under this Ordinance, including, without limitation,
those matters described in Section 29(d)(v), or those matters necessary to obtain a rating on
the Bonds or to obtain the approving opinion of the Attorney General of Texas as required by
law, as are necessary or desirable and not contrary to or inconsistent with this Ordinance and
which shall not adversely affect the interests of the Registered Owners of the Senior Lien
Obligations;
(3) To make such changes, modifications and amendments as may be necessary
or desirable, which shall not adversely affect the interests of the Registered Owners of
Outstanding Senior Lien Obligations, in order to obtain or maintain a Credit Agreement or a
Credit Facility;
(4) To modify any of the provisions of this Ordinance in any other respect
whatever, provided that (i) such modification shall be, and be expressed to be, effective only
after all Senior Lien Obligations Outstanding at the date of the adoption of such modification
shall cease to be Outstanding, and (ii) such modification shall be specifically referred to in
the text of all Senior Lien Obligations issued after the date of the adoption of such
modification,
SECTION 31. CONSTRUCTION FUND; SECURITY FOR DEPOSITS.
� ....................................._�
(a) (�"���a��������i��a�r� l�"���a�. The proceeds of sale of the Bonds, excluding any accrued interest
received from the initial purchaser of the Bonds and any other amounts to be deposited into the
Interest and Sinking Fund, and amounts to pay costs of issuance of the Bonds, shall be deposited in
one or more construction funds or accounts (the "Construction Fund") for use, along with any
investment earnings thereon, by the Issuer for payment of all lawful costs associated with the
acquisition and construction of the Project as hereinbefore provided. Upon payment of all such
costs, any moneys remaining on deposit in the Construction Fund, including investment earnings,
shall be transferred to the Interest and Sinking Fund. Amounts so deposited to the Interest and
Sinking Fund shall be used in the manner described in Section 10.
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(b) C�r�r��tr�������� �al" �"��i��l�•���lr����mmm;�"�rr�.�l. The Issuer may place proceeds of the Bonds
(including investment earnings thereon) in Permitted Investments; provided, however, that the Issuer
hereby covenants that the proceeds of the sale of the Bonds will be used as soon as practicable for the
purposes for which the Bonds are issued.
SECTION 32. SEVERABILITY. If any section, article, paragraph, sentence, clause, phrase
or word in this Ordinance, or application thereof to any persons or circumstances is held invalid or
unconstitutional by a court of competent jurisdiction, such holding shall not affect the validity of the
remaining portion of this Ordinance, despite such invalidity, which remaining portions shall remain
in full force and effect.
SECTION 33. NO PERSONAL LIABILITY. No recourse shall be had for payment of the
Pp � ...............
rinci al of or interest on any Bonds or for any claim based thereon, or on this Ordinance, against
any official or employee of the Issuer or any person executing any Bond.
SECTION 34. RULES OF CONSTRUCTION. That for all purposes of this Ordinance,
unless the context requires otherwise, all references to designated Sections and other subdivisions are
to the Sections and other subdivisions of this Ordinance. The words "herein", "hereof' and
"hereunder" and other words of similar import refer to this Ordinance as a whole and not to any
particular Section or other subdivision. Except where the context otherwise requires, terms defined
in this Ordinance to impart the singular number shall be considered to include the plural number and
vice versa. References to any named person means that party and its successors and assigns.
References to any constitutional, statutory or regulatory provision means such provision as it exists
on the date this Ordinance is adopted by the Issuer and any future amendments thereto or successor
provisions thereof. Any reference to the payment of principal in this Ordinance shall be deemed to
include the payment of Amortization Installments (if any). Any reference to "FORM OF BOND"
shall refer to the form of the Bonds set forth in Section 5, as modified in a Pricing Certificate. The
calculation of Average Annual Debt Service Requirements as may be required by this Ordinance
shall be made at the beginning of each Year and shall be the sum of the Annual Debt Service
Requirements due for the current and each subsequent Year in which the Senior Lien Obligations are
outstanding divided by the number of such Years, or partial Years, if applicable. The words "owner"
and "holder" and "bondholder", as used in this Ordinance, shall mean the registered or beneficial
owner of a Bond.
SECTION_3IT5. OPEN MEETING. It is hereby officially found and determined that the
meeting at which this Ordinance was adopted was open to the public, and that public notice of the
time, place and purpose of said meeting was given, all as required by Chapter 551, Texas
Government Code.
SECTION 36. IMMEDIATE EFFECTIVE DATE. This Ordinance shall take effect and be
in force immediately upon and after its adoption by the City Council in accordance with the
provisions of Section 1201.028, Texas Government Code, and it is accordingly so resolved.
PASSED AND APPROVED this the , ;�;,_ day of ���"�, �'� � mmm mmmm� 2016.
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�����
y ��� ,�,,�
��� � �
t�"� � �
� „, ...�
...�_.m ..�� �;.._....� �_. �._ ���.�..�.�_
CHRIS WATTS, MA� OR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY: � � m
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,�l'� � �VED ';' TO LEGAL FORM;
,��I1� A BURGESS, .CITY ATTORNEY
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