22-229ORDINANCE NO.22-229
AN ORDINANCE CONSIDER[NG ALL MATTERS INCIDENT AND RELATED TOTHE ISSUANCE, SALE AND DELIVERY OF UP TO $300,000,000 rN PRrNCIPALAMOUNT OF “CITY OF DENTON UTILITY SYSTEM REVENUE REFUNDING
BONDS, SERIES 2022”; AUTHORIZING THE ISSUANCE OF THE BONDS:DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE
CERTAIN DOCUMENTS RELATING TO THE SALE OF THE BONDS; APPROVINGAND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAIDBONDS; ENACTING OTHER PROVISIONS RELAT[NG TO THE SUBJECT; ANDPROVIDING 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
Utility System Revenue Bonds, Series 20 17 (the “Series 201 7 Bonds”) and its City of Denton Utility System
Revenue Refunding Bonds, Taxable Series 202 1 (the “ Series 202 1 Bonds” and, together with the Series 20 17
Bonds, the “Existing Bonds”); and
WHEREAS, in the ordinances adopted by the City Council of the City authorizing the issuance ofthe
Existing Bonds, the City reserved the right to issue revenue bonds on a parity with the Existing Bonds; and
WHEREAS, pursuant to an Ordinance Establishing the City of Denton Utility System Extendable
Commercial Paper Financing Program and Authorizing Utility System Revenue Extendable Commercial PaperNotes, Series A, adopted on January 12, 202 1, as amended by Ordinance No. 21-355 adopted on February 23,
202 1 (the " E:CP Ordinance“), the Issuer has authorized to be outstanding the following described obligations:
City of Denton Utility System Revenue Extendable Commercial Paper Notes, Series A (Tax-
Exempt) and City of Denton Utility System Revenue Extendabie Commercial Paper Notes,
Series A (Taxable), in the aggregate original principal amount not to exceed $300,000,000 at
any time (collectively, the “ EC P Series I Notes”)', and
WHEREAS, the Issuer now desires to refund all or part of the ECP Series A Notes (the K Eligible
Refunded Notes ," and those Eligible Refunded Notes designated by the Pricing Officer in a Pricing Certificate,
each as defined below, to be refunded are herein referred to as the “ Refunded Notes” ', and
WHEREAS, Chapter 1207, Texas Government Code, as amended (“Chapter 1207”) authorizes the
Issuer to issue refunding bonds and to deposit the proceeds from the sale thereof, together with any other
available funds or resources, directly with a paying agent for the Refunded Notes or a trust company or
commercial bank that does not act as a depository for the Issuer and is named in these proceedings, and such
deposit, if made before the payment dates of the Refunded Notes, shall constitute the making of firm banking
and financial arrangements for the discharge and final payment of the Refunded Notes; and
WHEREAS, Chapter 1207 further authorizes the Issuer to enter into an escrow or similar agreement
with such paying agent for the Refunded Notes or trust company or commercial bank with respect to the
safekeeping, investment, reinvestment, administration and disposition of any such deposit, upon such terms
and conditions as the Issuer and such paying agent or trust company or commercial bank may agree; and
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WHEREAS, the issuance of the Bonds and the application of the proceeds of the Bonds to refund the
Refunded Notes, which consist of extendable commercial paper notes, makes it impracticable to determine the
maximum amount by which the aggregate amount of payments to be made under the Bonds exceeds the
aggregate amount of payments that would have been made under the terms of the Refunded Notes for purposes
of Section 1207.008(a)(2) of Chapter 1207; and
WHEREAS, the City Council hereby finds and declares a public purpose and it is in the best interests
of the Issuer to refund the Refunded Notes in accordance with this Ordinance, with the terms of any series of
Bonds issued to be included in a Pricing Certificate to be executed by the Pricing Officer, all in accordance
with the provisions of Section 1207.007 of Chapter 1207 and Chapter 1371, Texas Government Code, as
amended ('Chapter /37/ ”); and
WHEREAS, all the Refunded Notes mature or are subject to redemption prior to maturity within 20
years of the date of the bonds hereinafter authorized; and
WHEREAS, the bonds hereinafter authorized to be issued are to be issued, sold and delivered pursuant
to the general laws ofthe State of Texas, including Texas Government Code Chapters 1207, 1502 and 1371, asamended, and the Issuer’s Home Rule Charter; and
WHEREAS, it is officially found, determined, and declared that the meeting at which this Ordinance
has been adopted was open to the public and public notice of the time, place and subject matter of the public
business to be considered and acted upon at said meeting, including this Ordinance, was given, all as requiredby the applicable provisions of Texas Government Code, Chapter 551; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. DEFINITIONS.
The defined terms in recitals set forth in the preamble hereof are incorporated herein and shall have thesame force and effect as if set forth in this Section.
“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 ofthe
aggregate principal amount of such Term Bonds.
“Hanna/ 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:
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( 1) Balloon Debt. 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) Consent Sinking Fund. In the case of Balloon Debt, if a Designated Financial Officer
shall deliver to the Issuer a certificate providing for the retirement of (and the instrument creating such
Balloon Debt shall permit the retirement of), 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 andother 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) Term Bonds. The principal of Term Bonds shall be considered as maturing in accordance
with the Amortization Installments set forth in the ordinance authorizing same;
(4) Prepaid Debt. Principal of and interest on 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) Variable Rate. 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 The Bond Buyer), shall be presumed to apply for all future dates, unless such index is no
longer published in The Bond Buyer, 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,
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such composite fixed rate shall be used in determining the Annual Debt Service Requirement with
respect to such Senior Lien Obligations);
(6) Committed Take Out. 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 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) Credit Agreement Payments. 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) Guarantee. 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 an 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 ofcomputation, 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 2022 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.
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“Ciry 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.
“ 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 systems, wastewater 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), orotherwise.
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 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; andthereafter 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 Securities” 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.
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“ 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 C)ffrcer” 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 Fun(P 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 Management Agreemen£” means an agreement that provides for an interest rate
transaction, including a swap, basis, forward, option, cap, collar, floor, lock, or hedge transaction, a 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 obligationsfor which such calculation is made.
“Net Revenues” mean all Gross Revenues remaining after deducting Operating Expenses.
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“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. The following shall never be considered as an Operating Expense:
( 1) depreciation, (2) franchise fees paid to the Issuer or transferred to the general fund or other fund of the
Issuer, and (3) return on investment payments made to the Issuer or transferred to the general fund or other
fund of the Issuer.
" Ordinance” means this ordinance finally adopted by the City Council on March 1, 2022.
“ 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 other 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.
“ 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.
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“ Pricing CertifIcate” means the certificate of the Pricing Officer referenced in Section 3 to be executedand delivered in connection with the initial issuance of each Series of Bonds.
“ Pricing OffIcer” means any one of the City Manager of the Issuer, the Assistant City Manager/ChiefFinancial Officer ofthe Issuer or the Director of Finance of the Issuer (including any person appointed to such
position on an “acting” or “interim” basis).
“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.
“ 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 debtservice reserve fund.
“Senior Lien Obligations” means the Series 20 17 Bonds, the Series 202 1 Bonds, 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.
“Series 2017 Bond Ordinance” means the ordinance adopted by the City Council of the City on
June 21, 20 16 authorizing the issuance of the Series 2017 Bonds.
“Special Project” means any water, wastewater, electric, drainage or other facilities of any kind orother 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
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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.
"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 wastewater
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 ofthe
ordinance authorizing their issuance, which shall be subject to retirement by operation of mandatory sinking
fund redemptions.
“Term of Issue” 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.
“ PYasfewarer System Fund’ means the special fund confirmed, established and maintained by and
pursuant to the provisions of Sections 7 and 8.
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“ Wafer 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) Recitals. The recitals set forth in the preamble hereof are incorporated herein and shall have thesame force and effect as if set forth in this Section.
(b) Amount; Purpose. 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 $300,000,000 for the public purpose ofrefunding the Refunded Notes , and to paythe costs associated with the issuance of the Bonds.
(c) Designation of the Bonds. Each bond issued pursuant to this Ordinance shall be designated:“CITY OF DENTON UTILITY SYSTEM REVENUE REFUNDING BOND, SERIES 2022” 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 hereof). The terms “ Bonds” and
“Series 2022 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 137 1.053 of Chapter 1371, a Pricing Officer is hereby authorized to act
on behalf of the Issuer in selling and delivering each Series of the Bonds, determining which of the Eligible
Refunded Notes shall be refunded, 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 any Series of Bonds will be secured by
a debt service reserve fund and the amount of any Senior Lien Obligation Reserve Requirement, 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 and the refunding of the Refunded Notes, including without limitation establishing the
redemption date for and effecting the redemption of Refunded Notes, 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
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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:
(1)the aggregate original principal amount of the Bonds shall not exceed $300,000,000;
(ii)the maximum stated maturity of the Bonds shall not exceed 30 years from the date of
lssuarlce;
(lil)the Bonds shall bear interest at a fixed rate, and the net effective interest rate on the Bonds
shall not exceed the maximum net effective interest rate permitted by law to be paid on
obligations issued or incurred by the Issuer in the exercise of its borrowing powers (prescribed
by Chapter 1204, Texas Government Code, as amended);
(iv)the delegation made hereby shall expire if not exercised by the Pricing Officer through
execution of the Pricing Certificate on or prior to February 15, 2023; 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 a Series of Bonds, the Pricing Officer shall
establish an amount not exceeding, in aggregate with any other Series of Bonds, the amount authorized in
Subsection (a)(i) hereof, which shall be sufficient in amount to provide for the purposes for which the Series of
Bonds are authorized and to pay costs of issuing the Bonds. Each Series of Bonds shall be sold with and
subject to such terms as set forth in the Pricing Certificate for such Series.
SECTION 4. CHARACTERISTICS OF THE BONDS.
(a) Appointment of Paying Agent/Registrar. 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) Registration, Transfer, Conversion and Exchange. 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 Issuershall 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 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
Page 11
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) Authentication. 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) Payment of Principal and Interest. 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) Payment to Registered Owner. Notwithstanding any other provision of this Ordinance to 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 of the Issuer to make payments of principal and interest pursuant to this Ordinance.
(f) Paying Agent/Registrar. 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 certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar.
Page 12
(g) Substitute Paying Agent/Registrar. 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 thereof), 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) Book-Entry Only System. 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 G) and (k) of this Section, all of the
Outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC.
(i) Blanket Letter of Representations. 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 ofthisOrdinance in the event of conflict.
a) Bonds Registered in the Name of Cede & Co. With respect to Bonds registered in the 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 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 ownerat the close of business on the Record date, the words “Cede & Co.” in this Ordinance shall refer to such newnominee of DTC.
(k) Successor Securities Depository; Transfers Outside Book-Entry Only System. 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
Page 13
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) Payments to Cede & Co. 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) General Characteristics of the Bonds. 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 orindicated, 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.
(n) Cancellation of Initial Bonds. 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 safekeepingfor 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.
Page 14
(a) FORM OF BOND.
NO. R-UNITED STATES OF AMERICASTATE OF TEXAS
PRINCIPALAMOUNT
$CITY OF DENTON
UTILITY SYSTEM REVENUE REFUNDING BONDSERIES 2022
Interest Rate Delivery Date Maturity Date CUSIP No.
REGISTERED OWNER:
PR[NCIPAL AMOUNT: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 unpaidprincipal amount hereof (calculated on the basis of a 360-day year of twelve 30-day months) from
at the Interest Rate per annum specified above. Interest is payable on
and semiannually on each and 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
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 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
Page 15
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 SpecialRecord 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 theclose 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 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 $ m
the public purpose ofrefunding the Refunded Notes, and to pay the costs associated with the issuance of theBonds
ON , 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 subject 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 BondMaturity: , 20 Term Bond
Maturity: ,20
PrincipalAmount
$
PrincipalAmount
$
Mandatory Redemption Date
February 15,20_
February 15,20_
February 15,20_
Mandatory Redemption Date
February 15,20
February 15,20_
February 15,20
Page 16
February 15,20 (maturity)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 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
85,000, 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 85,000. 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 thePaying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the Bond
Page 17
Ordinance. Among other requirements for such assignment and transfer, this Bond must be presented and
surrendered to the Paying Agent/Registrar, together with proper instruments of assignment, in form and with
guarantee of signatures 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 ofthe Issuer’s System (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 thosedescribed in the Bond Ordinance.
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 beendone in accordance with law.
Page 18
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 allof 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.
Secretary President
(SEAL)
(b) Form of Paying Agent/Registrar’s Authentication Certificate.
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 ofTexas
Dated:
Paying Agent/Registrar
By:
Authorized Representative
(c) Form of Assignment.
ASSIGNMENT
(Please print or type clearly)
For value received, the undersigned hereby sells, assigns and transfers unto:
Transferee's Social Security or Taxpayer Identification Number:
Transferee's name and address, including zip code:
Page 19
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 uponthe front of this Bond in every particular, without
alteration or enlargement or any change whatsoever.
(d) Form of ReRistration Certificate of the Comptroller of Public 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 of Public Accounts of the State of Texas
(COMPTROLLER’S SEAL)
(e) Initial Bond Insertions.
(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 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 Installments ( S)Interest Rates (%)
(Information for the Bonds from the Pricing Certificate to be inserted)
Page 20
The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-dayyear of twelve 30-day months) from , at the respective Interest Rate per annum specified
above. Interest is payable on , , and semiarmually on each and
thereafter to the date of payment of the principal installment specified above, or 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 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.”
C. The Initial Bond shall be numbered “T- 1.”
SECTION 6. PLEDGE OF PLEDGED REVENUES.
(a) The Bonds are “Additional Senior Lien Obligations” as permitted by Section 17 of the Series 20 17
Bond Ordinance; and it is hereby determined, declared and resolved that Sections 1 , 6 through 17, 19, 20, 21,
28 and 30 of this Ordinance are supplemental to and cumulative of such sections in the Series 2017 Bond
Ordinance.
(b) 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 ofthe
special funds confirmed, created, established and maintained for the payment and security thereof, 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 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, confirmed, 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. The Senior Lien Obligations, and any interest payable thereon, are and shall
secured by and payable from a first lien on and pledge ofthe 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.
(c) 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.
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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 SystemFund’)
(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 “ Was lew ater
System FItncP).
(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 “ Wafer SystemFund’)
(d) There heretofore has been created 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.
(f) Each such Fund shall be accounted for separate and apart from all other funds of the Issuer, andshall be maintained in a Depository of the Issuer.
SECTION 8. SYSTEM FUNDS. 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 asotherwise 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: to the payment of the amounts required to be deposited and credited to the Interest andSinking Fund, created and established for the payment of the Bonds and any other Senior Lien
Obligations 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,
Page 22
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.
SECTION 10. INTEREST AND SINKING FUND.
(a) For purposes of providing funds to pay the principal of, premium, if any, and interest on 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 1 1 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 makingsuch 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
Page 23
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 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 reservefund
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 1 1 (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).
SECTION 13. DEFICIENCIES; EXCESS PLEDGED REVENUES.
(a) Deficiencies. 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) Excess Pledged Revenues. 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 Revenues may be used for any lawful purpose.
SECTION 14. INVESTMENT OF FUNDS; VALUATION; FUNDS SECURED; TRANSFER OFINVESTMENT INCOME.
(a) Moneys in any hInd established or maintained pursuant to this Ordinance may, at the option ofthe
Issuer, be invested in Permitted Investments, provided that all such deposits and investments shall be made in
Page 24
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 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 GrossRevenues.
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 applicablepayment 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) Performance. 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) Issuer's Legal Authority. 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 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
terrns
(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
Page 25
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) Operation of System; No Free Service. 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 orany 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).
(f) Further Encumbrance. 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) Sale or Disposal of Property. 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 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 8500,000 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 Obligations, (ii) otherwise be used to provide for the payment of
Senior Lien Obligations, or (iii) be used for any other lawful purpose; and
Page 26
(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 ofthe Senior Lien Obligations 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) Insurance. (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
property damaged or replacing 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. TheInsurance 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) Governmental Agencies. 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.
Page 27
a) No Competition. 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) Records. 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 allreasonable 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 provisionsof 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 RegisteredOwners of Senior Lien Obligations and their agents and representatives at all reasonable times.
(m) Rate Covenant. 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, together with any other
Pledged Revenues, sufficient ( 1) to pay all current Operating Expenses, and (2) to produce Pledged 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) to produce amounts required to pay all other obligations of the Systemreasonably anticipated to be paid from Pledged Revenues during the current Year.
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 Issuerincurred 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 orordinances 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 beingissued, 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:
Page 28
( 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 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
projected 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 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.
(f) 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 ofthe
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. [RESERVED].
SECTION 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.
SECTION 20. ISSUANCE OF SUBORDINATE OBLIGATIONS. The Issuer hereby reserves the
right to 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.
SECTION 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 hens 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 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 Bonds 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 bythis 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.
SECTION 23. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) Replacement Bonds. 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) Application for Replacement Bonds. 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) No Default Occurred. 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) Charge for Issuing Replacement Bonds. 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 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 dulyissued under this Ordinance.
(e) Authority for Issuing Replacement Bonds. 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’SOPINION; 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., bondcounsel 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.
SECTION 25. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE BONDS.
(a) Covenants. 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 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 theCode
(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 projects
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, or5 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 of3 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
C' 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 Bonds do not
otherwise contravene the requirements of section 148 of the Code (relating to arbitrage);
(8) to refrain from using the proceeds of the Bonds or proceeds of any prior bonds to pay debt
service on another issue more than 90 days after the date of issue of the Bonds in contravention of the
requirements of section 149(d) of the Code (relating to advance refundings); and
(9) 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(f) of the Code and to pay to the
United States of America, not later than 60 days after the Tax-Exempt Bonds have been paid in full,
1 00 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f)of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (a)(9), 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) Use of Proceeds. 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 tocomply, 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) Disposition of Project. The Issuer covenants that the property constituting the projects refinanced
with the Bonds 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.
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 ofthe 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, withthe Internal Revenue Service.
SECTION 27. SALE OF BONDS; OFFICIAL STATEMENT: BOND INSURANCE; FURTHER
PROCEDURES .
(a) Sale of Bonds. 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 “PPurchase
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 “PPurchaser”) 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.
(b) Official Statement. 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 offering document in the offering ofthe
Bonds by the Purchaser in final 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) Bond Insurance. 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 Officer 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) Further Procedures. 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) Events of Default. 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 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) Remedies for Default.
(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 anycombination 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) Remedies Not Exclusive.
(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 officer, 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) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms
below:
“ Financial Obligation” means a (i) debt obligation, (ii) derivative instrument entered into in
connection with or pledged as security or a source of payment for, an existing or planned debt
obligation, or (iii) a guarantee of (i) or (ii); provided however, that a “financial obligation” shall not
include municipal securities as to which a final official statement (as defined in the Rule) has been
provided to the MSRB consistent with the Rule.
" 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) Annual Reports.
(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 2020. 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 ofthe 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.
(c) Event Notices.
(i) The Issuer shall notify the MSRB in an electronic format as prescribed by the MISRB, in a
timely manner (but not in excess often 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:
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;
6. Appointment of a successor or additional trustee or the change of name of a
trustee; and
7. Incurrence of a Financial Obligation of the Issuer or agreement to covenants,
events of default, remedies, priority rights, or other similar terms of a Financial Obligation of
the Issuer, any of which affect security holders.
(ii) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a
timely manner (but not in excess often 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 financial difficulties;
3. Unscheduled draws on credit enhancements reflecting financial difficulties;
4. Substitution of credit or liquidity providers, or their failure to perform;
5. Adverse tax opinions or the issuance by the Internal Revenue Service of proposedor final determinations of taxability, Notices of Proposed Issue (1RS Form 5701BTEB) or
other material notices or determinations with respect to the tax-exempt status of the Bonds, or
other material events affecting the tax-exempt status of the Bonds;
6. Tender offers;
7. Defeasances;
8. Rating changes;
9. Bankruptcy, insolvency, receivership or similar event of an obligated person; and
10. Default, event of acceleration, termination event, modification of terms, or other
similar events under the terms of a Financial Obligation of the Issuer, any of which reflect
financial difficulties.
(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) Limitations, Disclaimers, and Amendments.
(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 THEREGISTERED OWNER OR BENEFICLAL OWNER OF ANY BOND OR ANY OTHER PERSON,IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROMANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITSPART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT ANDREMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OFANY 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 theduties 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 undertake 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 theIssuer, 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) determined that such
amendment will not materially impair the interest of the registered owners and beneficial 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) Amendment of the Rule. 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. The provisions ofthis Section may also be revised by the Pricing Officer
prior to the delivery of the Bonds if the Pricing Officer determines such revisions are necessary or desirable.
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 ofthe aggregate principal amount
of then Outstanding Senior Lien Obligations thereby affected (for purposes of this sentence only, 100% ofthe
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) Make any change in the maturity of any of the Outstanding Senior Lien Obligations;
(2) Reduce the rate of interest borne by any of the Outstanding Senior Lien Obligations;
(3) Reduce the amount of the principal payable on the Outstanding Senior Lien Obligations;
(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 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 theamendment.
(f) 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 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 theIssuer;
(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, providedthat (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. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS. In
furtherance of authority granted by Section 1207.007(b), Texas Government Code, the Mayor or a Pricing
Officer are further authorized to enter into and execute on behalf of the Issuer with the escrow agent named
therein, an escrow agreement, deposit agreement or other similar agreement, in the form and substance as shall
be approved by the Pricing Officer, which agreement will provide for the payment in full of the Refunded
Notes. In addition, the Mayor, Pricing Officer or other officer of the Issuer is authorized to purchase such
securities, to execute such subscriptions for the purchase of the Escrowed Securities, (as defined in the
agreement), if any, and to authorize such contributions to the escrow fund as provided in the agreement.
SECTION 32. REDEMPTION OF REFUNDED NOTES.
(a) The Refunded Notes shall be paid upon the earlier of their stated maturity dates or the earliest
redemption dates for which notice of redemption can be given pursuant to the ECP Ordinance, in each case at a
price of par plus accrued interest to the date of payment. As soon as practicable after sale of a Series of Bonds,
appropriate notices of redemption shall be delivered to the paying agent/registrar for the Refunded Notes to
notify, in accordance with the requirements of the ECP Ordinance, the owners of the Refunded Notes of the
call for redemption thereof.
(b) in addition, the paying agent/registrar for the Refunded Notes is hereby directed to provide the
appropriate notices of redemption and defeasance as specified by the ECP Ordinance and is hereby directed to
make appropriate arrangements so that the Refunded Notes may be redeemed on their respective redemptiondates. The Refunded Notes shall be presented for redemption at the paying agent/registrar therefore, and shall
not bear interest after the date fixed for redemption.
(c) Concurrently with the delivery of a Series of Bonds, the Issuer shall cause to be deposited an
amount from the proceeds from the sale of the Bonds, together with, to the extent necessary, available funds of
the Issuer, with the paying agent/registrar for the Refunded Notes or placed in escrow with the escrow agent,
pursuant to an escrow agreement approved in Section 31 of this Ordinance, sufficient to provide for the
payment at maturity or the refunding and redemption, on the date or dates fixed for redemption, of all of the
Refunded Notes, in accordance with Subchapter C of Chapter 1207.
SECTION 33. 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 34. NO PERSONAL LIABILITY. No recourse shall be had for payment of the principal
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 35. 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 andother 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 ofAmortization 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 36. 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 ofthe time, place and purpose
of said meeting was given, all as required by Chapter 551, Texas Government Code.
SECTION 37. 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.
The motion to approve this Ordinance was made by J,ss, 0 h .:is and seconded by Br = n Bcc I(
This Ordinance was passed and approved by the following vote U– a
Aye./
//
L/iZ&
Nay Abstain Absent
Mayor Gerard Hudspeth:
Vicki Byrd, District 1 :
Brian Beck. District 2:
Jesse Davis, District 3 :
Alison Maguire, District 4:
Deb Armintor, At Large Place 5 :
Paul Meltzer, At Large Place 6:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
PASSED, APPROVED AND EFFECTIVE this March 1, 2022.
GERARD HUDSPETH, MAYOR
ATTEST:
ROSA RIOS, CITY SECRETARY L\\\\tIll I // IOFa
ada d?dg
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
Digitally signed by MackReinwand
,kwh„U Date: 2022.02.10 10:29:40 -06'oa