23-2241 INCOMPLETEFILE REFERENCE FORM RIC
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ZI- i Sf I1-11-23 e ,
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ORDINANCE NO. 23-2241
AN ORDINANCE CONSIDER[NG ALL MATTERS INCIDENT AND RELATED TO
THE ISSUANCE, SALE AND DELIVERY OF UP TO $300,000,000 rN PRINCIPAL
AMOUNT OF “CITY OF DENTON UTILITY SYSTEM REVENUE REFUNDING
BONDS, SERIES 2024”; AUTHORIZING THE ISSUANCE OF THE BONDS;
DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE
CERTAIN DOCUMENTS RELATING TO THE SALE OF THE BONDS; APPROVING
AND AUTHORIZ[NG INSTRUMENTS AND PROCEDURES RELATING TO SAID
BONDS; ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, defined terms used in this Ordinance shall have the meaning given said terms in
Section 1 of this Ordinance, unless otherwise indicated herein; and
WHEREAS, the City of Denton (the “City" or the “ Issuer”) has heretofore issued its City of Denton
Utility System Revenue Bonds, Series 2017 (the “ Series 201 7 Bonds”) and its City of Denton Utility System
Revenue Refunding Bonds, Taxable Series 2021 (the “ Series 2021 Bonds" and, together with the Series
2017 Bonds, the “Existing Bonds”); and
WHEREAS, in the ordinances adopted by the City Council of the City authorizing the issuance of
the 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
Paper Notes, Series A, adopted on January 12, 2021, as amended by Ordinance No. 21-355 adopted on
February 23, 2021 (the " ECP 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 Extendable Commercial Paper
Notes, Series A (Taxable), in the aggregate original principal amount not to exceed
$300,000,000 at any time (collectively, the “£ECP Series ,4 Notes”)', and
WHEREAS, the Issuer now desires to refund all or part of the ECP Series A Notes (the “ 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 C' Chapter 1207’) authorizes the
Issuer to issue refhnding bonds and to deposit the proceeds from the sale thereof, together with any other
available fbnds 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 of the State of Texas, including Texas Government Code Chapters 1207, 1502
and 1371, as amended, 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 required by the applicable provisions of Texas Government Code, Chapter 551 ; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. DEFINITIONS.
The defined terms in recitals set forth in the preamble hereof are incorporated herein and shall have
the same force and effect as if set forth in this Section.
“Accotmtant” 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 ratab ly secured solely by a
first lien on and pledge of the Pledged Revenues on a parity with the Bonds and other Senior Lien
Obligations.
“Arnortization Installment” means, with respect to Senior Lien Obligations issued as Term Bonds,
each mandatory sinking fund redemption of such Term Bonds (whether prior to maturity or at maturity),
provided that the total Amortization Installments for such Term Bonds shall be sufficient to provide for
retirement of the aggregate principal amount of such Term Bonds.
“/4nn tIa/ 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 and
other debt service charges on) such Balloon Debt shall be computed as if the same were due in
accordance with such schedule, provided that this clause (2) shall apply only to Balloon Debt for
which the installments previously scheduled have been paid or deposited to the sinking fund
established with respect to such Debt on or before the times required by such schedule; and provided
further that this clause (2) shall not apply where the Issuer has elected to apply the rule set forth in
clause (1 ) above;
(3) 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, such composite fixed rate shall be used in determining
the Annual Debt Service Requirement with respect to such Senior Lien Obligations);
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(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 all additional payments due under the guaranteed obligation. If
the entity whose obligation is guaranteed cures all defaults and the Issuer no longer anticipates
making payments under the guarantee, the guaranteed obligations shall not be included in the
calculation of Annual Debt Service Requirements.
With respect to any calculation of historic data, only those payments actually made in the subject
period shall be taken into account in making such calculation and, with respect to prospective calculations,
only those payments reasonably expected to be made in the subject period shall be taken into account in
making the calculation.
“Average z4nn tia/ Debt Service Requirements” means that average amount which, at the time of
computation, will be required to pay the Annual Debt Service Requirements when due (either at Stated
Maturity or mandatory redemption) and derived by dividing the total of such Annual Debt Service
Requirements by the number of Years then remaining before Stated Maturity of such Senior Lien
Obligations. For the purposes of this definition, a fractional period of a Year shall be treated as an entireYear
“Bond,” " Bonds” and “Series 2024 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.
“City Council:’ means the City Council of the Issuer.
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“ Code” means the Internal Revenue Code of 1 986, 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), or otherwise.
For the purpose of determining Debt, there shall be excluded any particular Debt if, upon or prior to the
Maturity thereof, there shall have been deposited with the proper depository (a) in trust the necessary funds
(or investments that will provide sufficient funds, if permitted by the instrument creating such Debt) for the
payment, redemption, or satisfaction of such Debt or (b) evidence of such Debt deposited for cancellation;
and thereafter it shall not be considered Debt. No item shall be considered Debt unless such item constitutes
indebtedness under generally accepted accounting principles applied on a basis consistent with the financial
statements of the System in prior Years.
“Defeasance 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
" Depository” means one or more official depository banks of the Issuer.
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“ 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 Wcw” means the City Manager or the Assistant City Manager/Chief
Financial Officer (including, in each case, the official succeeding to such position after a title change), or
such other official of the Issuer so designated by the Issuer.
“ Electric System Fund' means the special fund confirmed, established and maintained by and
pursuant to the provisions of Sections 7 and 8.
“ Event of Default” means an event as described in Section 28.
“ Funded Debt” means all Senior Lien Obligations created or assumed by the Issuer that mature by
their terms (in the absence of the exercise of any earlier right of demand), or that are renewable at the option
of the Issuer to a date, more than one year after the original creation or assumption of such Debt by the
Issuer
“Gross Revenues” mean all revenues, income and receipts of every nature derived or received by
the Issuer from the operation and ownership of the System, including the interest income from investment
or deposit of money in any fund or account created by this Ordinance or maintained by the Issuer in
connection with the System.
'' Initial Bonds” has the meaning assigned to such term in Section 2(c).
“ Interest and Sinking Fund’ means the special fund created, established and maintained by and
pursuant to the provisions of Sections 7 and 10.
“ Interest Rate Management Agreement” 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 obligations
for which such calculation is made.
'We/ Revenues" mean all Gross Revenues remaining after deducting Operating Expenses.
“ Operating Expenses” means the reasonable and necessary expenses of operation and maintenance
of the System, including all salaries, labor, materials, repairs and extensions necessary to render efficient
service (but only such repairs and extensions as, in the judgment of the Issuer, are necessary to keep the
System in operation and render adequate service or such as might be necessary to meet some physical
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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 December 12, 2023 .
"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.
“ Pricing Certi$cate'’ means the certificate of the Pricing Officer referenced in Section 3 to be
executed and delivered in connection with the initial issuance of each Series of Bonds.
“ Pricing Officer” means any one of the City Manager of the Issuer, the Assistant City
Manager/Chief Financial Officer of the Issuer or the Director of Finance of the Issuer (including any person
appointed to such position on an “acting” or “interim” basis).
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' 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 Owrrer” or “ Registered Owners” means the registered owner, whose name appears in
the Registration Books, for any Senior Lien Obligation.
“Registration Books” means the books or records for the registration of the transfer, conversion and
exchange of the Bonds kept by the Paying Agent/Registrar.
“ Reserve Credit Facility” means (i) a policy of insurance or a surety bond, issued by an issuer of
policies of insurance insuring the timely payment of debt service on governmental obligations, and (ii) a
letter or line of credit issued by any financial institution, in each case meeting the requirements for such
facility under any ordinance authorizing the issuance of Senior Lien Obligations that are to be secured by
a debt service reserve fund.
“ Senior Lien Obligations” means the Series 2017 Bonds, the Series 2021 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 201 7 Bond Ordinance” means the ordinance adopted by the City Council of the City on
June 21, 20 16 authorizing the issuance of the Series 20 17 Bonds.
" Special Project'’ means any water, wastewater, electric, drainage or other facilities of any kind or
other public improvement declared by the Issuer not to be part of the System, for which the costs of
acquisition, construction and installation are paid from proceeds of Special Project Bonds, but only to the
extent that and for so long as all or any part of the revenues or proceeds of which are or will be pledged to
secure the payment or repayment of such costs of acquisition, construction and installation under such
financing transaction.
“Special Project Bonds” means special revenue obligations of the Issuer which are not secured by
the Pledged Revenues, but which are secured by and payable solely from liens on and pledges of any other
revenues, sources, or payments, including, but not limited to, special contract revenues or payments
received from the System, any other legal entity, or any combination thereof, in connection with a Special
Project; and such revenues, sources or payments shall not be considered as or constitute Gross Revenues of
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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 of
the 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.
“PKasrewa£er System Fund’ means the special fund confirmed, established and maintained by and
pursuant to the provisions of Sections 7 and 8.
“Water System Fund’ means the special fund confirmed, established and maintained by and
pursuant to the provisions of Sections 7 and 8.
“ Year” means the regular fiscal year used by the Issuer in connection with the operation of the
System, currently ending on September 30 of each year, which may be any twelve consecutive month period
established by the Issuer.
SECTION 2. RECITALS, AMOUNT, PURPOSE AND DESIGNATION OF THE BONDS.
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(a) Recitals. The recitals set forth in the preamble hereof are incorporated herein and shall have
the same force and effect as if set forth in this Section.
(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 of refunding the Refunded Notes
, and to pay the 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 2024” 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 2024 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 “Borrcl' shall mean any
of the Bonds. The Bonds shall be in the respective principal amounts, shall be numbered, shall mature and
be payable on the date or dates in each of the years and in the principal amounts, and shall bear interest to
their respective dates of maturity or redemption prior to maturity at the rates per annum, as set forth in the
Pricing Certificate.
SECTION 3. DELEGATION TO PRICING OFFICER.
(a) As authorized by Section 1371.053 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 in connection therewith the execution of any
commitment agreements, membership agreements in mutual insurance companies, and other similar
agreements) and providing for the terms and provisions thereof applicable to the Bonds, all of which shall
be specified in the Pricing Certificate; provided that:
(i)the aggregate original principal amount of the Bonds shall not exceed $300,000,000;
(ii)the maximum stated maturity of the Bonds shall not exceed 30 years from the date of
issuance :
Page 10
(111)the Bonds shall bear interest at a fixed rate, and the net effective interest rate on the Bonds
shall not exceed the rna\imum 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 December 12, 2024; 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 Issuer shall have the right to inspect the Registration Books during
regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep
the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection
by any other entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and
charges for making such registration, transfer, conversion, exchange and delivery of a substitute Bond or
Bonds. Registration of assignments, transfers, conversions and exchanges of Bonds shall be made in the
manner provided and with the effect stated in the FORM OF BOND set forth in this Ordinance. Each
substitute Bond shall bear a letter and/or number to distinguish it from each other Bond.
(c) 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
Page 11
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 fbrther 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.
(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
Page 12
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 a) 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 of this Ordinance 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 owner at the close of business on the Record date, the words “Cede & Co.” in this
Ordinance shall refer to such new nominee of DTC.
(k) 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 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.
Page 13
(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 or indicated, in the FORM OF BOND set forth in this Ordinance (as modified
in the Pricing Certificate). The Bonds initially issued and delivered pursuant to this Ordinance is not
required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond
issued in conversion of and exchange for any Bond or Bonds issued under this Ordinance the Paying
Agent/Registrar shall execute the Paying Agent/registrar’s Authentication Bond, in the FORM OF BOND
set forth in this Ordinance.
(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 safekeeping for DTC.
SECTION 5. FORM OF BONDS. The form of the Bonds (“FORM OF BOND”), including the
form of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of
Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the
Bonds initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as
follows, with such appropriate variations, omissions or insertions as are permitted or required by this
Ordinance, and with the FORM OF BOND to be modified pursuant to, and completed with information set
forth in, the Pricing Certificate.
(a) FORM OF BOND.
NO. R-UNITED STATES OF AMERICA
STATE OF TEXAS
PRINCIPAL
AMOUNT
S
CITY OF DENTON
UTILITY SYSTEM REVENUE REFUNDrNG BOND
SERIES 2024
Interest Rate Delivery Date Maturity Date CUSIP No.
REGISTERED OWNER:
PRINCIPAL AMOUNT:DOLLARS
Page 14
ON THE MATURITY DATE specified above, the City of Denton, Texas (the “Issuer”), being a
political subdivision and municipal corporation of the State of Texas, hereby promises to pay to the
Registered Owner specified above, or registered assigns (hereinafter called the “Registered Owner”), on
the Maturity Date specified above, the Principal Amount specified above. The Issuer promises to pay
interest on the unpaid principal amount hereof (calculated on the basis of a 360-day year of twelve 30-day
months) from , 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 such interest payment (a “Special Record Date”) will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been
received from the Issuer. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (which shall be 15 days after the Special Record Date) shall be sent at least five business days
prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of each
owner of a Bond appearing on the Registration Books at the close of business on the last business day next
preceding the date of mailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Bond prior to maturity
as provided herein shall be paid to the Registered Owner upon presentation and surrender of this Bond for
payment or redemption at the principal corporate trust office of the Paying Agent/Registrar. The Issuer
covenants with the Registered Owner of this Bond that on or before each principal payment date and interest
payment date for this Bond it will make available to the Paying Agent/Registrar, from the “Interest and
Sinking Fund” created by the Bond Ordinance, the amounts required to provide for the payment, in
immediately available funds, of all principal of and interest on the Bonds, when due.
IF THE DATE for any payment of the principal of or interest on this Bond shall be a 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
Page 15
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 $
for the public purpose of refunding the Refunded Notes, and to pay the costs associated with the issuance
of the Bonds.
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 Bond
Maturity: , 20_
Term Bond
Maturity : ,20_
Principal
Amount
S
Principal
Amount
$
Mandatory Redemption Date
February 15,20_
February 15,20_
February 15,20_
February 15,20 (maturity)
Mandatory Redemption Date
February 15,20_
February 15,20
February 15,20
February 15,20 (maturity)
The principal amount of Term Bonds of a stated maturity required to be redeemed on any mandatory
redemption date pursuant to the operation of the mandatory sinking fund redemption provisions shall be
reduced, at the option of the Issuer, by the principal amount of any Term Bonds of the same maturity which,
at least 50 days prior to a mandatory redemption date (1) shall have been acquired by the Issuer at a price
not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof,
and delivered to the Paying Agent/Registrar for cancellation, (2) shall have been purchased and canceled
by the Paying Agent/Registrar at the request of the Issuer at a 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
Page 16
be made with the Paying Agent/Registrar for the payment of the required redemption price for the Bonds
or portions thereof that are to be so redeemed. If such written notice of redemption is sent and if due
provision for such payment is made, all as provided above, the Bonds or portions thereof that are to be so
redeemed thereby automatically shall be treated as redeemed prior to their scheduled maturities, and they
shall not bear interest after the date fixed for redemption, and they shall not be regarded as being
Outstanding except for the right of the Registered Owner to receive the redemption price from the Paying
Agent/Registrar out of the funds provided for such payment. If a portion of any Bond shall be redeemed,
a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in any
denomination or denominations in any integral multiple of $5,000, at the written request of the Registered
Owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the
Registered Owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as provided
in the Bond Ordinance.
IF AT THE TIME OF MAILING of notice of optional redemption there shall not have either been
deposited with the Paying Agent/Registrar or legally authorized escrow agent immediately available funds
sufficient to redeem all the Bonds called for redemption, such notice may state that it is conditional, and is
subject to the deposit of the redemption moneys with the Paying Agent/Registrar or legally authorized
escrow agent at or prior to the redemption date, and such notice shall be of no effect unless such moneys
are so deposited on or prior to the redemption date. If such redemption is not effectuated, the Paying
Agent/Registrar shall, within five days thereafter, give notice in the manner in which the notice of
redemption was given that such moneys were not so received and shall rescind the redemption.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond Ordinance, this
Bond may, at the request of the Registered Owner or the assignee or assignees hereof, be assigned,
transferred, converted into and exchanged for a like aggregate principal amount of fully registered Bonds,
without interest coupons, payable to the appropriate Registered Owner, assignee or assignees, as the case
may be, having the same denomination or denominations in any integral multiple of $5,000 as requested in
writing by the appropriate Registered Owner, assignee or assignees, as the case may be, upon surrender of
this Bond to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures
set forth in the Bond Ordinance. Among other requirements for such assignment and transfer, this Bond
must be presented and 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
Page 17
appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed
to the Registered Owners of the Bonds.
THE BONDS are special obligations of the Issuer payable solely from and equally secured by a
lien on and pledge of the Pledged Revenues of the Issuer’s System (as defined in the Ordinance). Reference
is hereby made to the Bond Ordinance for a more complete statement of the covenants and provisions
securing the payment of this Bond and the series of which it is one.
THE ISSUER EXPRESSLY RESERVES the right to issue further and additional special revenue
obligations equally secured by a lien on and pledge of the Pledged Revenues of the Issuer's Utility System
on a parity with the Bonds of this issue; provided, however, that any and all such additional Senior Lien
Obligations may be issued only in accordance with and subject to the covenants, conditions, limitations and
restrictions relating thereto which are set out and contained in the Bond Ordinance, to which reference is
hereby made for more complete and full particulars. The Issuer has further reserved the right in the Bond
Ordinance to issue Subordinate Lien Obligations and to finance Special Projects that are not part of the
System and not payable from Pledged Revenues and for which all maintenance and operation expenses are
payable from sources other than Pledged Revenues.
THE REGISTERED OWNER HEREOF shall never have the right to demand payment of this
obligation out of any funds raised or to be raised by taxation or from any sources whatsoever other than
those described in the Bond Ordinance.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper to be performed,
exist and be done precedent to or in the authorization, issuance and delivery of this Bond have been
performed, existed and been done in accordance with law.
THE ISSUER HAS RESERVED THE RIGHT to amend the Bond Ordinance as provided therein,
and under some (but not all) circumstances amendments thereto must be approved by the Registered
Owners of a majority in aggregate principal amount of the Outstanding Bonds.
BY BECOMING the Registered Owner of this Bond, the Registered Owner thereby acknowledges
all of the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions,
acknowledges that the Bond Ordinance is duly recorded and available for inspection in the official minutes
and records of the governing body of the Issuer, and agrees that the terms and provisions of this Bond and
the Bond Ordinance constitute a contract between each Registered Owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the Issuer (or in the Mayor’s absence, the Mayor Pro-Tem of the Issuer)
and countersigned with the manual or facsimile signature of the Secretary of said Issuer, and has caused the
official seal of the Issuer to be duly impressed, or placed in facsimile, on this Bond.
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)
Page 18
It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance
described in the text of this Bond; and that this Bond has been issued in conversion or replacement of, or
in exchange for, a bond, bonds, or a portion of a bond or bonds of a series that originally was approved by
the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the
State of Texas.
Dated:
Paying Agent/Registrar
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:
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney, to register the transfer of the within
Bond on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an
eligible guarantor institution participating in a
securities transfer association recognized signature
guarantee program
NOTICE: The signature above must correspond
with the name of the Registered Owner as it appears
upon the front of this Bond in every particular,
without alteration or enlargement or any change
whatsoever.
(d) Form of Registration 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
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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)
The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360-
day year of twelve 30-day months) from , at the respective Interest Rate per annum
specified above. Interest is payable on , , and semiannually on each
and thereafter to the date of payment of the principal installment
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
2017 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
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maintenance of the 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 hInds 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 of the
Pledged Revenues. The Senior Lien Obligations are not and will not be secured by or payable from a
mortgage or deed of trust on any real, personal, or mixed properties constituting the System
(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.
SECTION 7. SPECIAL FUNDS.
(a) There heretofore has been created and is hereby confirmed and ordered to be maintained on the
books of the Issuer, a special fund entitled the “City of Denton Electric System Fund” (the “ Electric System
Fund’)
(b) There heretofore has been created and is hereby confirmed and ordered to be maintained on
the books of the Issuer, a special fund entitled the “City of Denton Wastewater System Fund” (the
“Wastewater System Fund:’) .
(c) There heretofore has been created and is hereby confirmed and ordered to be maintained on the
books of the Issuer, a special fund entitled the “City of Denton Water System Fund” (the “ Water System
Fund’)
(d) There 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, and
shall 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 as otherwise provided in this Ordinance. All Operating Expenses are and shall be paid from such
Gross Revenues as a first charge against same.
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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 and
Sinking 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.
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 SINKrNG 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.
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(c) Accrued interest, if any, received from the purchaser of any Senior Lien Obligation and
capitalized interest shall be taken into consideration and reduce the amount of the deposits and credits
hereinabove required into the Interest and Sinking Fund.
(d) in allocating moneys on deposit in the Interest and Sinking Fund to pay the principal of,
premium, if any, and interest on the Senior Lien Obligations as the same become due and payable among
Senior Lien Obligations that are secured by a debt service reserve fund created pursuant to Section 11 and
Senior Lien Obligations that are not secured by a debt service reserve fund, the Issuer shall not take amounts
on deposit (including moneys or Reserve Credit Facilities) in the debt service reserve funds into account
when making such allocations.
SECTION 1 1. DEBT SERVICE RESERVE FUNDS.
(a) The Issuer may create and establish a debt service reserve fund pursuant to the provisions of
any ordinance or other instrument authorizing the issuance of Senior Lien Obligations for the purpose of
securing that particular issue or series of Senior Lien Obligations or any specific group of issues or series
of Senior Lien Obligations (including the combining of debt service reserve funds for Senior Lien
Obligations so long as the requirements of each ordinance authorizing such Senior Lien Obligations are
satisfied). A debt service reserve fund may be funded from Pledged Revenues, proceeds from the sale of
Additional Senior Lien Obligations, Reserve Credit Facilities, or any other available source or combination
of sources. The amounts once deposited or credited to said debt service reserve funds shall no longer
constitute Pledged Revenues and shall be held solely for the benefit of the owners of the particular Senior
Lien Obligations for which such debt service reserve fund was established. Each debt service reserve fund
shall receive a pro rata amount of the Pledged Revenues after the requirements of the Interest and Sinking
Fund, which secures all Senior Lien Obligations, have first been met. Each such debt service reserve fund
shall be designated in such manner as is necessary to identify the Senior Lien Obligations it secures and to
distinguish such debt service reserve fund from the debt service reserve funds created for the benefit of
other Senior Lien Obligations. Each ordinance authorizing the issuance of Senior Lien Obligations that are
to be secured by a debt service reserve fund shall specify the amount or a manner of calculating the amount
to be held and maintained on deposit therein.
(b) The Issuer may issue Additional Senior Lien Obligations not secured by any debt service
reserve fund.
SECTION 12. RATE STABILIZATION RESERVES. The Issuer may from time to time establish
and maintain a Rate Stabilization Reserve in any one or more of the Electric System Fund, the Wastewater
System Fund and the Water System Fund for so long as any Senior Lien Obligations remain outstanding
and unpaid. The Issuer may at any time deposit to the credit of any Rate Stabilization Reserve any excess
Net Revenues, after making required deposits hereinabove described to the Interest and Sinking Fund and
any debt service reserve fund created in accordance with Section 11(a), and any other money received by
the Issuer and available to be used therefor. Funds on deposit in a Rate Stabilization Reserve may be used,
at the discretion of the Issuer, for capital additions and improvements to the System or any other lawful
purpose, or to enable the Issuer to satisfy its covenant set forth in Section 16(m). All interest or other
earnings derived from the investment of money in a Rate Stabilization Reserve shall be credited to that Rate
Stabilization Reserve. Money on deposit to the credit of a Rate Stabilization Reserve shall not be included
as a revenue for purposes of satisfying the covenant set forth in Section 16(m), unless the Issuer transfers
money from the Rate Stabilization Reserve to the System Funds for the sole purpose of enabling the Issuer
to be in compliance with its covenant set forth in Section 16(m).
SECTION 13. DEFICIENCIES; EXCESS PLEDGED REVENUES.
Page 23
(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
OF INVESTMENT INCOME.
(a) Moneys in any fund established or maintained pursuant to this Ordinance may, at the option of
the Issuer, be invested in Permitted Investments, provided that all such deposits and investments shall be
made in such manner that the money required to be expended from any Fund will be available at the proper
time or times. Moneys in a debt service reserve fund for Senior Lien Obligations shall not be invested in
securities maturing later than the final maturity of the Senior Lien Obligations secured by such debt service
reserve fund. Such investments shall be valued in terms of current market value as of the last day of each
Year, except that direct obligations of the United States (State and Local Government Series) in book-entry
form shall be continuously valued at their par or face principal amount. Such investments shall be sold
promptly when necessary to prevent any default in connection with the Bonds or any Additional Senior
Lien Obligations issued. To the extent not invested, moneys in any fund established pursuant to this
Ordinance shall be secured in the manner prescribed by law for securing funds of the Issuer.
(b) All interest and income derived from such investments (other than interest and income derived
from amounts credited to the Rate Stabilization Reserves or any debt service reserve fund created in
accordance with Section 11, if the debt service reserve fund does not contain the Senior Lien Obligation
Reserve Requirement) shall be credited to the System Funds semi-annually and shall constitute Gross
Revenues
SECTION 15. PAYMENT OF SENIOR LIEN OBLIGATIONS. While any of the Senior Lien
Obligations are Outstanding, the Issuer shall transfer to the respective paying agent/registrar therefor, from
funds on deposit in and credited to the Interest and Sinking Fund, amounts sufficient to fully pay and
discharge promptly the interest on and principal of the Senior Lien Obligations as shall become due on each
interest or principal payment date, or date of redemption of the Senior Lien Obligations; such transfer of
funds must be made in such manner as will cause immediately available funds to be deposited with each
respective paying agent/registrar for the Senior Lien Obligations by not later than 1 1 :00 a.m. Central Time
on the applicable payment date for the Senior Lien Obligations. The paying agent/registrar shall destroy
all paid Senior Lien Obligations and furnish the Issuer with an appropriate certificate of cancellation or
destruction.
SECTION 16. ISSUER COVENANTS. The Issuer further covenants and agrees that in
accordance with and to the extent required or permitted by law:
(a) 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
Page 24
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 terms.
(c) Title. It has or will obtain lawful title to the lands, buildings, structures and facilities
constituting the System, that it warrants that it will defend the title to all the aforesaid lands, buildings,
structures and facilities, and every part thereof, for the benefit of the Registered Owners of the Senior Lien
Obligations, against the claims and demands of all persons whomsoever, that it is lawfully qualified to
pledge the Pledged Revenues to the payment of the Senior Lien Obligations in the manner prescribed herein,
and has lawfully exercised such rights.
(d) Liens. It will from time to time and before the same become delinquent pay and discharge all
taxes, assessments and governmental charges, if any, which shall be lawfully imposed upon it, or the
System; it will pay all lawful claims for rents, royalties, labor, materials and supplies which if unpaid might
by law become a lien or charge thereon, the lien of which would be prior to or interfere with the liens hereof,
so that the priority of the liens granted hereunder shall be fully preserved in the manner provided herein,
and it will not create or suffer to be created any mechanic’s, laborer’s, materialman's or other lien or charge
which might or could be prior to the liens hereof, or do or suffer any matter or thing whereby the liens
hereof might or could be impaired; provided, however, that no such tax, assessment or charge, and that no
such claims which might be used as the basis of a mechanic's, laborer's, materialman's or other lien or
charge, shall be required to be paid so long as the validity of the same shall be contested in good faith by
the Issuer
(e) 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 or any of its agencies, instrumentalities, lessors, or concessionaires out of funds
from sources other than the revenues of the System, unless made from surplus Pledged Revenues as
permitted by Section 13(b).
(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:
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(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 $500,000 or less, or it shall have received a certificate of a
Designated Financial Officer stating in the opinion of the signer, that the fair market value of the
property or facilities exchanged is $500,000 or less, or (iii) if such proceeds or fair market value
exceeds $500,000 it shall have received a certificate of a Designated Financial Officer stating, in
the opinion of the signer, that the sale or exchange of such property or facilities will not impair the
ability of the Issuer to comply during the current or any future year with the provisions of clause
(m) of this Section. The proceeds of any such sale or exchange not used to acquire other property
necessary or desirable for the safe or efficient operation of the System shall forthwith, at the option
of the Issuer (i) be used to redeem or purchase Senior Lien Obligations, (ii) otherwise be used to
provide for the payment of Senior Lien Obligations, or (iii) be used for any other lawful purpose;
and
(2) To the extent permitted by law, the Issuer may lease or make contracts or grant
licenses for the operation of or make arrangements for the use of or grant easements or other rights
with respect to, any part of the System, provided that any such lease, contract, license, arrangement,
easement or right (i) does not impede the operation by the Issuer of the System and (ii) does not in
any manner impair or adversely affect the rights or security of the owners of the Senior Lien
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. The Insurance Account shall be held until such time
as other funds become available which, together with the Insurance Account, will be sufficient to make the
repairs or replacements originally required, whichever of said events occurs first; provided that the Issuer
may, in its discretion, use funds in the Insurance Account for the redemption or purchase of Senior Lien
Obligations.
Page 26
(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.
G) 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 all reasonable times be made available for inspection upon request of a Registered Owner of Senior Lien
Obligations; provided, that all books, documents, and vouchers relating to the City's electric system shall
be made available for inspection only to the extent required by law, including, without limitation, the
provisions of Section 552.133 of the Texas Government Code.
(1) Audits. After the close of each Year while any Senior Lien Obligation is Outstanding, it will
cause an audit to be made of the books and accounts relating to the Issuer, including the System and the
Pledged Revenues by an Accountant. Such annual audit reports shall be open to the inspection of the
Registered Owners of Senior Lien Obligations and their agents and representatives at all reasonable times.
(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 System reasonably 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 ofrefunding of any Senior Lien Obligations, Subordinate Lien Obligations or other obligations of
the Issuer incurred in connection with the ownership or operation of the System. Such Additional Senior
Lien Obligations, if and when authorized, issued and delivered in accordance with this Ordinance and any
ordinance hereafter adopted authorizing the issuance or incurrence of Additional Senior Lien Obligation,
shall be secured by and made payable equally and ratably on a parity with all other Senior Lien Obligations
at the time Outstanding and unpaid, from a first lien on and pledge of the Pledged Revenues herein granted.
Page 27
(b) The Interest and Sinking Fund shall secure and be used to pay all Senior Lien Obligations.
Each ordinance under which Additional Senior Lien Obligations are issued shall provide and require that,
in addition to the amounts required by the provisions of this Ordinance and the provisions of any other
ordinance or ordinances authorizing Additional Senior Lien Obligations to be deposited to the credit of the
Interest and Sinking Fund, the Issuer shall deposit to the credit of the Interest and Sinking Fund at least
such amounts as are required for the payment of all principal of and interest on said Additional Senior Lien
Obligations then being issued, as the same come due.
(c) Additional Senior Lien Obligations shall be issued only in accordance with this Ordinance, but
notwithstanding any provisions of this Ordinance to the contrary, no installment, series or issue of
Additional Senior Lien Obligations shall be issued or delivered unless:
( 1) A Designated Financial Officer shall have executed a certificate stating (A) that, to the best of
such person's knowledge and belief, the Issuer is not then in default as to any covenant or
requirement contained in any ordinance authorizing the issuance of Outstanding Senior Lien
Obligations, and (B)(i) payments into all special funds or accounts created and established for the
payment and security of all Outstanding Senior Lien Obligations have been made and that the
amounts on deposit in such special funds or accounts are the amounts then required to be on deposit
therein or (ii) the application of the proceeds of sale of such obligations then being issued will cure
any such 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
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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 of the Net Revenues of the System for the period of time covered by said Designated
Financial Officer's, Accountant’s or Consulting Engineer’s certification or opinion based on such change in
rates and charges being in effect for the entire period covered by said Designated Financial Officer's,
Accountant's or Consulting Engineer's certificate or opinion.
(g) Senior Lien Obligations may be refunded (pursuant to any law then available) upon such terms
and conditions as the Issuer may deem to be in the best interest of the Issuer and its inhabitants, and if less
than all such Outstanding Senior Lien Obligations are refunded, the proposed refunding bonds shall be
considered as “Additional Senior Lien Obligations” under the provisions of this Section and the certificate
required in clause (c)(2) shall give effect to the issuance of the proposed refunding bonds (and shall not
give effect to the bonds being refunded following their cancellation or provision being made for their
payment).
(h) All calculations of Average Annual Debt Service Requirements and Maximum Annual Debt
Service Requirements made pursuant to this Section shall be made as of and from the date of the Additional
Senior Lien Obligations then proposed to be issued.
SECTION 18. [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
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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 2 1. ISSUANCE OF SPECIAL PROJECT BONDS. Nothing in this Ordinance shall be
construed to deny the Issuer the right and it shall retain, and hereby reserves unto itself, the right to issue
Special Project Bonds secured by liens on and pledges of revenues and proceeds derived from Special
Projects
SECTION 22. DEFEASANCE OF BONDS.
(a) Any Bond and the interest thereon shall be deemed to be paid, retired and no longer outstanding
(a “ Defeased Bond’) within the meaning of this Ordinance, except to the extent provided in subsection (c)
of this Section, when payment of the principal of such Bond, plus interest thereon to the due date (whether
such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to be made
in accordance with the terms thereof, or (ii) shall have been provided for on or before such due date by
irrevocably depositing with or making available to the Paying Agent/Registrar in accordance with an
escrow agreement or other instrument (the “ Future Escrow Agreement”) for such payment ( 1 ) lawful money
of the United States of America sufficient to make such payment or (2) Defeasance Securities that mature
as to principal and interest in such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money to provide for such payment, and when proper arrangements have been
made by the Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased Bonds
shall have become due and payable. At such time as a Bond shall be deemed to be a Defeased Bond
hereunder, as aforesaid, such Bond and the interest thereon shall no longer be secured by, payable from, or
entitled to the benefits of, the funds created and the revenues herein pledged as provided in this Ordinance,
and such principal and interest shall be payable solely from such money or Defeasance Securities.
Notwithstanding any other provision of this Ordinance to the contrary, it is hereby provided that any
determination not to redeem Defeased Bonds that is made in conjunction with the payment arrangements
specified in subsection (a)(i) or (ii) of this Section shall not be irrevocable, provided that: (1) in the
proceedings providing for such payment arrangements, the Issuer expressly reserves the right to call the
Defeased Bonds for redemption; (2) gives notice of the reservation of that right to the owners of the
Defeased Bonds immediately following the making of the payment arrangements; and (3) directs that notice
of the reservation be included in any redemption notices that it authorizes.
(b) Any moneys so deposited with the escrow agent under a Future Escrow Agreement may at the
written direction of the Issuer be invested in Defeasance Securities, maturing in the amounts and times as
hereinbefore set forth, and all income from such Defeasance Securities received by the Paying
Agent/Registrar that is not required for the payment of the Defeased Bonds and interest thereon, with
respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited as
directed in writing by the Issuer. Any Future Escrow Agreement pursuant to which the money and/or
Defeasance Securities are held for the payment of Defeased Bonds may contain 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
by this Ordinance.
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(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 duly issued 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'S OPINION; CUSIP NUMBERS.
(a) The Mayor of the Issuer and each Designated Financial Officer are hereby authorized to have
control of the Bonds initially issued and delivered hereunder and all necessary records and proceedings
pertaining to the Bonds pending their delivery and their investigation, examination, and approval by the
Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts of the
State of Texas. Upon registration of the Bonds said Comptroller of Public Accounts (or a deputy designated
in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate
attached to such Bonds, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such
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Bond. The approving legal opinion of the Issuer’s Bond Counsel and the assigned CUSIP numbers may, at
the option of the Issuer, be printed on the Bonds issued and delivered under this Ordinance, but neither shall
have any legal effect, and shall be solely for the convenience and information of the registered owners of
the Bonds. In addition, if bond insurance is obtained, the Bonds may bear an appropriate legend as provided
by the insurer.
(b) The obligation of the initial purchaser to accept delivery of the Bonds is subject to the initial
purchaser being furnished with the final, approving opinion of McCall, Parkhurst & Horton L.L.P., bond
counsel to the Issuer, which opinion shall be dated as of and delivered on the date of initial delivery of the
Bonds to the initial purchaser.
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
the Code
(2) to take any action to assure that in the event that the “private business use” described
in subsection (1) hereof exceeds 5 percent of the proceeds of the Tax-Exempt Bonds or the 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,
or 5 percent of the proceeds of the Tax-Exempt Bonds (less amounts deposited into a reserve fund,
if any) is directly or indirectly used to finance loans to persons, other than state or local
governmental units, in contravention of section 141 (c) of the Code;
(4) to refrain from taking any action that would otherwise result in the Tax-Exempt Bonds
being treated as “private activity bonds” within the meaning of section 141 (b) of the Code;
(5) to refrain from taking any action that would result in the Tax-Exempt Bonds being
“federally guaranteed” within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Tax-Exempt Bonds, directly or
indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire investment
property (as defined in section 148(b)(2) of the Code) that produces a materially higher yield over
the term of the Tax-Exempt Bonds, other than investment property acquired with:
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(A) proceeds of the Tax-Exempt Bonds invested for a reasonable temporary period
of 3 years or less or, in the case of a refunding bond, for a period of 30 days or less until
such proceeds are needed for the purpose for which the bonds are issued,
(B) amounts invested in a bona fide debt service fund, within the meaning of
section 1.148-1(b) of the rules and regulations of the United States Department of the
Treasury (“ Treasury Regulations”), and
(C) amounts deposited in any reasonably required reserve or replacement fund to
the extent such amounts do not exceed 10 percent of the proceeds of the Tax-Exempt
Bonds;
(7) to otherwise restrict the use of the proceeds of the Tax-Exempt Bonds or amounts
treated as proceeds of the Tax-Exempt Bonds, as may be necessary, so that the Tax-Exempt 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, 100 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 to comply, in the opinion of nationally recognized bond counsel, will not
adversely affect the exemption from federal income taxation of interest on the Tax-Exempt Bonds under
section 103 of the Code. In the event that regulations or rulings are hereafter promulgated that impose
additional requirements applicable to the Tax-Exempt Bonds, the Issuer agrees to comply with the
additional requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to
preserve the exemption from federal income taxation of interest on the Tax-Exempt Bonds under section
103 of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs the Mayor or
Pricing Officer to execute any documents, certificates or reports required by the Code and to make such
elections, on behalf of the Issuer, that may be permitted by the Code as are consistent with the purpose for
the issuance of the Tax-Exempt Bonds.
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(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 REGARD[NG TAXABLE BONDS.
(a) To the extent required by the Code, and the rules and regulations of the United States
Department of the Treasury, it shall be the duty of the Paying Agent/Registrar to report to the owners of the
Taxable Bonds and the Internal Revenue Service (i) the amount of “reportable payments,” if any, subject
to back up withholding during each year and the amount of tax withheld, if any, with respect to the payments
on the Taxable Bonds and (ii) the amount of interest or amount treated as interest, such as original issue
discount, on the Taxable Bonds required to be included in the gross income of the owners thereof for federal
income tax purposes.
(b) it is the intention of the Issuer that the Taxable Bonds not be obligations described in section
103 of the Code interest on which is excludable from the gross income of the holders and in that regard the
Issuer agrees not to file a form 8038 G, or any comparable information return relating to tax-exempt
obligations, with the Internal Revenue Service.
SECTION 27. SALE OF BONDS; OFFICIAL STATEMENT; BOND 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
“ Purchase Agreement“), the terms and provisions of which are to be determined by the Pricing Officer in
accordance with Section 3, and in which the purchaser or purchasers of the Bonds (the “ Purchaser”) shall
be designated. The Pricing Officer is hereby authorized to execute and deliver one or more Purchase
Agreements for and on behalf of the Issuer. The Bonds shall initially be registered in the name of the
Purchaser or its designee.
(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
of the Bonds by the Purchaser in final form, with such changes therein or additions thereto as the Pricing
Oftlcer 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
“IInsurer”) 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
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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 any combination of such remedies.
(ii) it is provided that all such proceedings shall be instituted and maintained for the equal
benefit of all Registered Owners of Bonds then Outstanding.
(c) 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,
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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 “/Innual 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
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Statements for the applicable Year, when and if the audit report on such Financial Statements
becomes available.
(ii) if the Issuer changes its fiscal year, it will notify the MSRB of the change (and of the
date of the new fiscal year end) prior to the next date by which the Issuer otherwise would be
required to provide financial information and operating data pursuant to this Section. The financial
information and operating data to be provided pursuant to this Section may be set forth in full in
one or more documents or may be included by specific reference to any document that is available
to the public on the MSRB’s internet website or filed with the SEC. All documents provided to the
MSRB pursuant to this Section shall be accompanied by identifying information as prescribed by
the MSRB.
(c) Event Notices.
(i) 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, 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;
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5. Adverse tax opinions or the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (1RS Form
5701-TEB) 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 THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING rN WHOLE OR IN PART
FROM ANY BREACH BY THE ISSUER WHETHER NEGLIGENT OR WITHOUT FAULT
ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT
AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON
ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR
MANDAMUS OR SPECIFIC PERFORMANCE.
(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
Page 38
this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise
limit the duties of the Issuer under federal and state securities laws.
(v) Should the Rule be amended to obligate the Issuer to make filings with or provide
notices to entities other than the MSRB, the Issuer hereby agrees to 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 the Issuer, but only if (1) the provisions of this Section, as so amended, would have
permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in
compliance with the Rule, taking into account any amendments or interpretations of the Rule since
such offering as well as such changed circumstances and (2) either (a) the registered owners of a
majority in aggregate principal amount (or any greater amount required by any other provision of
this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such
amendment or (b) a person that is unaffiliated with the Issuer (such as nationally recognized bond
counsel) 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 of this 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 of the aggregate principal
amount of then Outstanding Senior Lien Obligations thereby affected (for purposes of this sentence only,
100% of the aggregate principal amount of Senior Lien Obligations which are insured by a bond insurance
provider at the time that the Issuer seeks approval of an amendment shall be deemed to be owned by such
bond insurance provider) shall have the right from time to time to approve any amendment to this Ordinance
which may be deemed necessary or desirable by the Issuer; provided, however, that without the consent of
the Registered Owners of all of the Senior Lien Obligations at the time Outstanding thereby affected,
nothing herein contained shall permit or be construed to permit the amendment of the terms and conditions
in this Ordinance or in the Senior Lien Obligations so as to:
( 1) 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;
Page 39
(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 the amendment.
(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
Page 40
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 the Issuer;
(2) To make such provisions for the purpose of curing any ambiguity, or curing, correcting
or supplementing any defective provision contained in this Ordinance, or in regard to clarifying
matters or questions arising under this Ordinance, including, without limitation, those matters
described in Section 29(d)(v), or those matters necessary to obtain a rating on the Bonds or to obtain
the approving opinion of the Attorney General of Texas as required by law, as are necessary or
desirable and not contrary to or inconsistent with this Ordinance and which shall not adversely
affect the interests of the Registered Owners of the Senior Lien Obligations;
(3) To make such changes, modifications and amendments as may be necessary or
desirable, which shall not adversely affect the interests of the Registered Owners of Outstanding
Senior Lien Obligations, in order to obtain or maintain a Credit Agreement or a Credit Facility;
(4) To modify any of the provisions of this Ordinance in any other respect whatever,
provided that (i) such modification shall be, and be expressed to be, effective only after all Senior
Lien Obligations Outstanding at the date of the adoption of such modification shall cease to be
Outstanding, and (ii) such modification shall be specifically referred to in the text of all Senior Lien
Obligations issued after the date of the adoption of such modification.
SECTION 31. 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
Page 41
to make appropriate arrangements so that the Refunded Notes may be redeemed on their respective
redemption dates. 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
and other subdivisions of this Ordinance. The words “herein”, “hereof ’ and “hereunder” and other words
of similar import refer to this Ordinance as a whole and not to any particular Section or other subdivision.
Except where the context otherwise requires, terms defined in this Ordinance to impart the singular number
shall be considered to include the plural number and vice versa. References to any named person means
that party and its successors and assigns. References to any constitutional, statutory or regulatory provision
means such provision as it exists on the date this Ordinance is adopted by the Issuer and any future
amendments thereto or successor provisions thereof. Any reference to the payment of principal in this
Ordinance shall be deemed to include the payment 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 of the 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 MA and seconded by
Page 42
g .C\nbsc hbc This Ordinance was passed and approved by the following vote [£ – A
Aye
\/
./
Ja
,Z
P/
Nay Abstain Absent
Mayor Gerard Hudspeth :
Vicki Byrd, District 1 :
Brian Beck. District 2:
Paul Meltzer, District 3 :
Joe Holland. District 4:
Brandon Chase McGee, At Large Place 5:
Chris Watts, At Large Place 6:1/
[REMAINDER OF PAGE [NTENTIONALLY LEFT BLANK.]
Page 43
PASSED, APPROVED AND EFFECTIVE this December 12, 2023.
GERARD HUDSPETH, MAYOR
ATTEST:
JESUS SALAZAR, CITY SECRETARY hI III////E&r
APPROVED AS TO LEGAL FORM:
MACK REINWAND. CITY ATTORNEY
Digitally signed by Susan Keller
I
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Susan Ke g DN: dcacom, dc=cityofdenton. dcxodadler !: isiI'll:iiBla=?;""