24-266/
ORDINANCE 24-266
AN ORDINANCE ESTABLISHING THE CITY OF DENTON UTILITY SYSTEM
NODAL MARKET REVENUE FINANCING PROGRAM AND AUTHORIZING
UTILITY SYSTEM NODAL MARKET REVENUE NOTES, TAXABLE SERIES A, IN A
MAXIMUM AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED SIXTY MILLION
FIVE THOUSAND DOLLARS ($60,005,000) TO SATISFY ERCOT FINANCIAL
SECURITY REQUIREMENTS; AND PROVIDING AN EFFECTIVE DATE
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND CONSTRUCTION OF TERMS ............................................. 2
Section 1.01. Definitions ........................................................................................................... 2
Section 1.02. Construction of Terms ......................................................................................... 8
Section 1.03. Interpretation........................................................................................................ 8
ARTICLE II NOTE AUTHORIZATION AND SPECIFICATIONS ............................................ 8
Section 2.01
Section 2.02
Section 2.03
Section 2.04
Section 2.05
Section 2.06
Section 2.07
Section 2.08
Section 2.09
Section 2.10.
Amount, Purposes and Designation of the Notes ................................................ 8
Date, Denominations, Numbers, Maturities, and Terms of the Notes ................. 9
Payment of Notes; Paying Agent/Registrar ....................................................... 1 1
Redemption........................................................................................................ 11
Note Purchase Agreement ................................................................................. 12
Registration and Ownership.............................,................................................. 12
Form ofNotes .................................................................................................... 12
Execution and Registration................................................................................ 13
Control and Custody of Notes ........................................................................... 13
Mutilated, Destroyed, Lost, and Stolen Notes ................................................... 13
ARTICLE III ESTABLISHMENT OF NODAL MARKET REVENUE NOTE PROGRAM
AND SECURITY THEREFOR.................................................................................................... 14
Section 3.01. Establishment of Program.................................................................................. 14
Section 3.02. Security; Subordinate Lien; and Pledge............................................................. 14
ARTICLE IV CREATION OF FUNDS;PAYMENT.................................................................. 15
Section 4.01. Payment Fund .................................................................................................... 15
Section 4.02. Disposition ofNote Proceeds ............................................................................ 15
Section 4.03. Defeasance of Notes .......................................................................................... 15
ARTICLE V COVENANTS OF THE ISSUER........................................................................... 16
Section 5.01
Section 5.02
Section 5.03
Section 5.04
Section 5.05
Section 5.06
Limitation on Issuance
Tax Exemption.............................................................,
Federal Tax Information Reporting ..............................
Performance .................................................................
Legal Authority............................................................,
Operation of System ..
16
16
16
16
16
17
Section 5.07.
Section 5.08
Section 5.09
Section 5.10
Section 5.11
Section 5.12
Section 5.13
Section 5.14
Section 5.15
Section 5.16.
Further Encumbrance .. ,
Sale or Disposal of Property
Insurance . . ,
Rate Covenant
Governmental Agencies .......
Title .....................................,
Liens......................,
No Competition....................
Records ................................
Audits ..................................,
17
17
18
19
19
19
19
19
20
20
ARTICLE VI AMENDMENTS ..............................,................................................. 20
Section 6.01. Amendments or Modifications with Consent of Note Purchaser ...................... 20
Section 6.02. Effect of Amendments ....................................................................................... 20
Section 6.03. Additional Amendments.................................................................................... 20
ARTICLE VII MISCELLANEOUS . ...20
Section 7.01
Section 7.02
Section 7.03
Section 7.04
Section 7.05
Section 7.06
Section 7.07.
Section 7.08.
Ordinance to Constitute a Contract; Equal Security .......................................... 20
Individuals Not Liable ....................................................................................... 21
Additional Actions; Recitals .............................................................................. 21
Severability of Invalid Provisions...................................................................... 21
Performance on Business Days.......................................................................... 22
Limitation of Benefits With Respect to the Ordinance...................................... 22
Approval of Attorney General ........................................................................... 22
Notices ............................................................................................................... 22
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES ......23
Section 8.01. Events of Default
Section 8.02. Remedies for Default ....................
EXHIBIT A – FORM OF NOTES ..
1
AN ORDINANCE ESTABLISHING THE CITY OF DENTON UTILITY SYSTEM
NODAL MARKET REVENUE FINANCING PROGRAM AND AUTHORIZING
UTILITY SYSTEM NODAL MARKET REVENUE NOTES, TAXABLE SERIES A, IN A
MAXIMUM AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED SIXTY MILLION
FIVE THOUSAND DOLLARS ($60,005,000) TO SATISFY ERCOT FINANCIAL
SECURITY REQUIREMENTS; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Denton, Texas (the “City” or the “Issuer”) is a home-rule
municipality, acting as such under the Constitution and laws of the State of Texas, has a population
in excess of 50,000, and has outstanding long-term indebtedness that is rated by a nationally
recognized rating agency for municipal securities in one of the four highest rating categories for
long-term obligations; and
WHEREAS, capitalized terms used herein shall have the meanings given to them in
Section 1.01 hereof; and
WHEREAS, the Outstanding Senior Lien Obligations and the Outstanding Subordinate
Lien Obligations are payable from Pledged Revenues; and
WHEREAS, the Senior Lien Obligation Ordinances for the Outstanding Senior Lien
Obligations and the Subordinate Lien Obligation Ordinance for the Outstanding Subordinate Lien
Obligations permit the Issuer to encumber the Pledged Revenues with additional Senior Lien
Obligations or additional Subordinate Lien Obligations or other bonds or obligations payable from
a subordinate lien on the Pledged Revenues; and
WHEREAS, on December 1, 2010, a nodal wholesale electric market design was
implemented within ERCOT's service area, and various electric market participants, including the
Issuer, are required to comply with the ERCOT Nodal Protocols adopted by ERCOT; and
WHEREAS, pursuant to Section 16.11.1 of such ERCOT Nodal Protocols, the Issuer has
previously provided and currently has in place with ERCOT additional financial security sufficient
to satisfy the requirements of such ERCOT Nodal Protocols; and
WHEREAS, the City Council finds that it is necessary for the Issuer to establish a note
program in an amount not to exceed $60,005,000 to provide financial security to ERCOT and, in
furtherance thereof, the City Council hereby authorizes the Notes and their installment deliveries
to the Note Purchaser, to induce the Note Purchaser to enter into the Note Purchase Agreement
and deliver the Financial Security to ERCOT as is necessary for the Issuer to participate in the
ERCOT electric nodal market at the levels it deems prudent; and
WHEREAS, the City Council finds and determines that it should issue the Notes, in a
principal amount not to exceed $60,005,000, as a series of Subordinate Lien Obligations pursuant
to this Ordinance to finance Project Costs of Eligible Projects, all in accordance with and subject
to Chapter 1371, Texas Government Code, as amended, and the terms, conditions, and limitations
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contained herein; and
WHEREAS, the City Council finds, determines and represents that (i) the proceeds of any
draw upon the Financial Security by ERCOT are for the payment, on behalf or for the benefit of
the Issuer, of Project Costs of Eligible Projects, (ii) such proceeds and the drawing upon such
Financial Security shall constitute and shall be the payment of the purchase price of the
corresponding Authorized Installment pursuant to the provisions of this Ordinance and (iii) the
Note Purchaser's delivery of the Financial Security to ERCOT is additional and sufficient
consideration for the transactions and agreements contemplated in this Ordinance; and
WHEREAS, this Ordinance constitutes an "obligation authorization," as defined in
Chapter 1371; and
WHEREAS, the Notes are issued pursuant to Texas law, including the Acts; and
WHEREAS, the City Council further finds and determines that all terms and conditions for
the issuance of the Notes herein authorized as Subordinate Lien Obligations have been or can be
met and satisfied; and
WHEREAS, the City Council intends to refinance the Notes with refunding bonds issued
under Chapter 1207, Texas Government Code, as amended, on parity with or subordinate to
Issuer’s Outstanding Senior Lien Obligations and, therefore (in accordance with Section
1371.057(c) of Chapter 1371), the Issuer will treat the Notes as having the intended term and
payment schedule of such refunding bonds, as determined by the City Authorized Representative.
WHEREAS, the meeting was open to the public and public notice of the time, place and
purpose of said meeting was given pursuant to Chapter 551, Texas Government Code; NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
ARTICLE I
DEFINITIONS AND CONSTRUCTION OF TERMS
Section 1.01. Definitions.
“Accountant” means an independent certified public accountant or accountants or a firm
of independent certified public accountants, in either case, with demonstrated expertise and
competence in public accountancy.
“Acts” means Chapter 1371 and Chapter 1502, Texas Government Code, as amended.
“Amended Ordinance” means any ordinance amending or amending and restating this
Ordinance entered into as provided in Article VI of this Ordinance.
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“Authorized Installment” means on the Original Issue Date, an amount determined in the
Pricing Certificate and on each Issue Date thereafter, an amount equal to the amount of any draw
upon the Financial Security by ERCOT, reflecting payment by the Note Purchaser of the purchase
price of such Authorized Installment of the Notes to ERCOT on behalf of the Issuer.
“Authorized Installment Draw Period” means the period commencing on the Original Issue
Date and ending immediately following the effective date of the end of the term of the Financial
Security, whether by termination, non-renewal or otherwise.
“Bond Counsel” means McCall, Parkhurst & Horton L.L.P. or an attorney or law firm of
attorneys of national recognition selected or engaged by the Issuer with knowledge and experience
in the field of municipal finance.
“Chapter 1371” means Chapter 1371, Texas Government Code, as amended.
“City Authorized Representative” means one or more of the following officers or
employees of the Issuer: the City Manager, the Chief Financial Officer, the Director of Finance
(or successors to any such positions), or such other officer or employee of the Issuer authorized by
the City Council to act as a City Authorized Representative.
“City Council” means the City Council of the Issuer.
“Defeasance Securities” means (i) direct, noncallable obligations of the United States of
America, including obligations that are unconditionally guaranteed by the United States of
America, (ii) noncallable obligations of an agency or instrumentality of the United States of
America, including obligations that are unconditionally guaranteed or insured by the agency or
instrumentality and that, on the date of the purchase thereof are rated as to investment quality by
a nationally recognized investment rating firm not less than AAA or its equivalent, (iii) noncallable
obligations of a state or an agency or a county, municipality, or other political subdivision of a
state that have been refunded and that, on the date the governing body of the Issuer adopts or
approves the proceedings authorizing the financial arrangements are rated as to investment quality
by a nationally recognized investment rating firm not less than AAA or its equivalent, and (iv) any
other then authorized securities or obligations under applicable state law in existence at the time
of such defeasance that may be used to defease obligations such as the Notes.
“Depository” means such banks or trust companies, or any one of them at any time, selected
by the Issuer for the custody of the special funds to be maintained by the Issuer.
“Eligible Projects” means, as permitted by the Acts, including Chapter 1371, the
acquisition, purchase, sale of any property, including any contractual obligations related thereto,
for which, except with respect to the initial Authorized Installment, ERCOT may draw upon the
Financial Security for the payment thereof, on behalf or for the benefit of the Issuer.
“ERCOT” means The Electric Reliability Council of Texas and any successor thereto.
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“Financial Security” means the letter of credit of the Note Purchaser provided for in the
Note Purchase Agreement (and any extension or amendment of such letter of credit or any
substitute or replacement letter of credit of the Note Purchaser) provided to ERCOT for the benefit
of the Issuer pursuant to Section 16 of the ERCOT Nodal Protocols.
“Fiscal Year” means the 12-month operational period of the Issuer commencing on
October 1 of each year, or such other twelve month period as may in the future be designated as
the Fiscal Year of the Issuer.
“Fitch” means Fitch Ratings, Inc or, if such corporation is dissolved or liquidated or
otherwise ceases to perform securities ratings services, such other nationally recognized securities
rating agency as may be designated in writing by the City Council.
“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 any Senior Lien
Obligation Ordinance or Subordinate Lien Obligation Ordinance or maintained by the Issuer in
connection with the System.
“Initial Note” means the non-interest bearing Note, numbered T-1, delivered to and held
by the Paying Agent/Registrar in accordance with Section 2.02 hereof.
“Issue Date” means the date of delivery of an Authorized Installment of the Notes. .
“Issuer” means the City of Denton, Texas.
“Latest Draw Date” shall mean the last date a draw may be made under the Financial
Security pursuant to the Note Purchase Agreement.
“Maximum Available Amount” means the maximum amount that is available to be drawn
on the Financial Security on any particular day.
“Maximum Maturity Date” means the ninetieth day after the Latest Draw Date, as may be
extended in accordance with the Note Purchase Agreement.
“Maximum Rate” means the lesser of the (i) maximum net effective interest rate (as defined
in and calculated in accordance with the provisions of Chapter 1204, Texas Government Code, as
amended) and (ii) maximum non-usurious lawful rate of interest permitted by applicable law.
“Moody’s” means Moody’s Investors Service, Inc., or, if such corporation is dissolved or
liquidated or otherwise ceases to perform securities rating services, such other nationally
recognized securities rating agency as may be designated in writing by the Issuer.
'Net Revenues” mean all Gross Revenues remaining after deducting Operating Expenses.
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“Note Purchase Agreement” means the Note Purchase Agreement between the Issuer and
the Note Purchaser, including any amendment, supplement. restatement or extension of such Note
Purchase Agreement pursuant to the terms thereof.
“Note Purchaser” means Wells Fargo Bank, National Association, and its successors and
assigns under the Note Purchase Agreement.
“Notes” means the “City of Denton Utility System Nodal Market Revenue Notes, Taxable
Series A”, including any Authorized Installments, issued pursuant to the provisions of this
Ordinance, having the terms and characteristics specified in Section 2.02 and in the form described
in Exhibit A hereto.
“Operating Expenses” means the reasonable and necessary expenses of operation and
maintenance of the System, including all salaries, labor, materials, repairs and extensions
necessary to render efficient service (but only such repairs and extensions as, in the judgment of
the Issuer, are necessary to keep the System in operation and render adequate service or such as
might be necessary to meet some physical accident or conditions which would otherwise impair
the Senior Lien Obligations or Subordinate 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 establishing the City of Denton Utility System Nodal
Protocols Financing Program and Authorizing Utility System Nodal Market Revenue Notes,
Taxable Series A, adopted by the City Council on April 2, 2024 and as it may be amended or
supplemented from time to time by an Amended Ordinance.
“Original Issue Date” means the date of delivery of the initial Authorized Installment, the
Note Purchase Agreement and the Financial Security.
“Outstanding”, when used with respect to Notes, shall mean all Notes which have been
authenticated and delivered under this Ordinance, except: (a) Notes cancelled or purchased by the
Paying Agent/Registrar for cancellation or delivered to or acquired by the Paying Agent/Registrar
for cancellation and, in all cases, with the intent to extinguish the debt represented thereby
(including Notes surrendered pursuant to Section 2.10 hereof); (b) Notes in lieu of which other
Notes have been authenticated; (c) Notes that have become due (at maturity or on redemption or
otherwise) and for the payment of which sufficient moneys, including interest accrued to the due
date, are held by the Paying Agent/Registrar; (d) Notes which, under the terms of this Ordinance,
are deemed to be no longer Outstanding; and (e) for purposes of any consent or other action to be
taken by the Registered Owners of a specified percentage of Notes under this Ordinance, Notes
held by or for the account of the Issuer or by any person controlling, controlled by or under
common control with the Issuer.
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“Outstanding”, when used with reference to Senior Lien Obligations or Subordinate Lien
Obligations other than the Notes, shall mean all such bonds or other obligations theretofore
delivered except: (i) any such obligations canceled by or on behalf of the Issuer at or before said
date; (ii) any such obligations defeased pursuant to the defeasance provisions of the Senior Lien
Obligation Ordinance or Subordinate Lien Obligation Ordinance authorizing their issuance, or
otherwise defeased as permitted by applicable law; and (iii) any such obligations in lieu of or in
substitution for which another obligation shall have been delivered pursuant to the ordinance
authorizing the issuance of such obligations.
“Paying Agent/Registrar” means such entity or entities acting as such which are appointed
by the City Authorized Representative pursuant to Section 2.03 hereof and have executed and
delivered a Paying Agent/Registrar Agreement as approved and executed by a City Authorized
Representative. When there is a co-Paying Agent/Registrar, either may perform the functions and
duties of the Paying Agent/Registrar hereunder and under the Paying Agent/Registrar Agreement.
“Paying Agent/Registrar Agreement” means any paying agent and registrar agreement
authorized to be entered into by Section 2.03 hereof, and any and all modifications, alterations,
amendments and supplements thereto, or any other Paying Agent/Registrar Agreement entered
into by the Issuer and the Paying Agent/Registrar with respect to the Notes.
“Payment Fund” means that fund created pursuant to Section 4.01 hereof.
“Permitted Investments” means any investment permitted by the Public Funds Investment
Act, Chapter 2256, Texas Government Code, and the investment policy of the Issuer.
“Pledged Revenues” means
(a) the Net Revenues, plus
(b) 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 Subordinate Lien Obligations,
and excluding those revenues excluded from Gross Revenues or excluded from Net Revenues.
“Project Costs” means all costs and expenses defined as "project costs" under Chapter 1371
incurred in relation to Eligible Projects and permitted by law to be paid with the proceeds of the
Notes
“Rating Agency” means, any of the following: (i) Moody’s, (ii) Standard & Poor’s, (iii)
Fitch or (iv) any other nationally recognized credit rating agency specified in an Amended
Ordinance that maintains a rating on the Notes at the request of the Issuer.
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“Registered Owner” means the person or entity in whose name any Note is registered in
the Security Register.
“Security Register” means the books and records kept and maintained by the Paying
Agent/Registrar relating to the registration and payment of the Notes and the interest thereon.
“Senior Lien Obligations” means any Outstanding “City of Denton Utility System Revenue
Bonds, Series 2017” and “City of Denton Utility System Revenue Refunding Bonds, Taxable
Series 2021 ” of the Issuer, and any other obligations issued or incurred by the Issuer from time to
time that are specified to be on parity with such Senior Lien Obligations pursuant to any ordinance
authorizing Senior Lien Obligations. The Senior Lien Obligations, and the interest thereon, are
payable from and secured by a first lien on and pledge of Pledged Revenues.
“Senior Lien Obligation Ordinance” or “Senior Lien Obligation Ordinances” shall mean,
individually or collectively, as appropriate, the Issuer’s Ordinance adopted June 21, 2016
authorizing the issuance of the “City of Denton Utility System Revenue Bonds, Series 2017”, as
may be amended, the Issuer’s Ordinance adopted January 12, 2021 authorizing the issuance of the
“City of Denton Utility System Revenue Refunding Bonds, Taxable Series 2021”, as amended to
date and as may be further amended, and all other ordinances, as amended, authorizing the issuance
of the Senior Lien Obligations.
“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 the System, unless and to the extent otherwise
provided in the ordinance or ordinances authorizing the issuance of such Special Project Bonds.
“Standard & Poor’s” means S&P Global Ratings, a division of Standard & Poor’s Financial
Services LLC, or, if such corporation is dissolved or liquidated or otherwise ceases to perform
securities rating services, such other nationally recognized securities rating agency as may be
designated in writing by the Issuer.
“State” means the State of Texas.
“Subordinate Lien Obligations” means any Outstanding “City of Denton Utility System
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Revenue Extendable Commercial Paper Notes, Series A“ and “City of Denton Utility System
Nodal Market Revenue Notes, Taxable Series A“ of the Issuer, and any other bonds, notes,
contractual obligations or other debt issued or incurred 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.
“Subordinate Lien Obligation Ordinance” or “Subordinate Lien Obligation Ordinances”
shall mean, individually or collectively, as appropriate, the Issuer’s Ordinance adopted January
12, 2021 authorizing the issuance of the “City of Denton Utility System Revenue Extendable
Commercial Paper Notes, Series A”, as may be amended, this Ordinance authorizing the issuance
of the “City of Denton Utility System Nodal Market Revenue Notes, Taxable Series A“, as may
be amended, and all other ordinances, as amended, authorizing the issuance of the Subordinate
Lien Obligations.
“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.
Section 1.02. Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural number
shall be considered to include the singular, and words of the masculine, feminine, or neuter gender
shall be considered to include the other genders.
Section 1.03. Interpretation. All references herein to “Articles,” “Sections” and other
subdivisions are to the corresponding Articles, Sections or subdivisions of this Ordinance, and the
words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Ordinance
as a whole and not to any particular Article, Section or subdivision hereof
ARTICLE II
NOTE AUTHORIZATION AND SPECIFICATIONS
Section 2.01. Amount, Purposes and Designation of the Notes. Under and pursuant to
the authority granted hereby and subject to the limitations contained herein, the City Council
hereby authorizes the issuance of a series of notes designated "CITY OF DENTON UTILITY
SYSTEM NODAL MARKET REVENUE NOTES, TAXABLE SERIES A" (the "Notes") in a
maximum aggregate principal amount not to exceed SIXTY MILLION FIVE THOUSAND
DOLLARS ($60,005,000) for the purpose to finance Project Costs of Eligible Projects, all in
accordance with the Acts and the terms, conditions, and limitations contained in this Ordinance.
The authority to issue Notes from time to time under the provisions of this Ordinance and the Note
Page 8
Purchase Agreement shall exist until the end of the Authorized Installment Draw Period regardless
of whether at any time prior to the end of the Authorized Installment Draw Period there are any
Notes outstanding.
Section 2.02. Date, Denominations, Numbers, Maturities, and Terms of the Notes.
(a) Terms of Notes . There initially shall be issued, sold and delivered fully registered notes
reflecting Authorized Installments (except for the Initial Note), without interest coupons,
numbered consecutively from R-1 upward (except the Initial Note provided to the Attorney
General of the State of Texas which shall be numbered T-1), payable to the Note Purchaser,
maturing not later than the Maximum Maturity Date, in the manner, on the dates, in the years and
in the principal amounts, respectively, and dated, all as set forth in this Ordinance, the Pricing
Certificate to be executed and delivered by the City Authorized Representative pursuant to
subsection (b) of this Section and the Note Purchase Agreement. The Pricing Certificate is hereby
incorporated in and made a part of this Ordinance.
An Initial Note bearing interest at zero percent (0%) in the aggregate principal amount
determined in the Pricing Certificate will be issued on the Original Issue Date and will be dated as
set forth in the Pricing Certificate. The Initial Note shall, after approval by the Attorney General
of the State of Texas and registration by the Comptroller of Public Account of the State of Texas,
be provided to the Paying Agent/Registrar, and concurrently with the delivery of the Initial Note,
the initial Authorized Installment of the Notes, in the aggregate principal amount determined in
the Pricing Certificate, will be issued, in accordance with the terms of the Note Purchase
Agreement executed by the Issuer and Wells Fargo Bank, National Association, as the Note
Purchaser.
The initial Authorized Installment of the Notes delivered on the Original Issue Date shall
be dated as determined in the Pricing Certificate. An Authorized Installment of the Notes delivered
after the Original Issue Date shall be dated as of its Issue Date. The Authorized Installments of the
Notes shall bear interest as determined in the Pricing Certificate and the Note Purchase Agreement
from the Issue Date of an Authorized Installment of the Notes until payment of the principal
amount thereof at maturity or prior redemption or prepayment.
Subject to applicable terms, limitations, and procedures contained herein, after the delivery
of the initial Authorized Installment, Authorized Installments of the Notes may be sold and
delivered pursuant to the terms of the Note Purchase Agreement in consideration of and in the
amount of, any draw upon the Financial Security by ERCOT, reflecting payment by the Note
Purchaser of the purchase price of such Notes concurrently upon payment to ERCOT, on behalf
of the Issuer, pursuant to such draw upon the Financial Security. No Authorized Installments may
be issued and delivered after the end of the Authorized Installment Draw Period, and no Authorized
Installment may be issued and delivered in an amount that exceeds the Maximum Available
Amount in effect as of the date of the applicable draw on the Financial Security; provided that the
aggregate principal amount of all Authorized Installments issued and delivered under this
Ordinance may at times exceed the then applicable Maximum Available Amount due to a
reduction in such amount subsequent to the issuance of Authorized Installments pursuant to the
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terms of the Financial Security, if provided for by the Financial Security, but in no case may the
aggregate principal amount of all Authorized Installments issued and delivered under this
Ordinance exceed the amount of Notes authorized by the Pricing Certificate. The Issuer shall
promptly notify the Paying Agent/Registrar of any changes to the Maximum Available Amount
made pursuant to the Note Purchase Agreement and of the end of the Authorized Installment Draw
Period, provided that the Paying Agent/Registrar may alternatively receive actual notice of such
events from the Note Purchaser.
The Note Purchaser shall give written notice to the Issuer and the Paying Agent/Registrar
of any draw upon the Financial Security by ERCOT, provided such notice is not required for the
delivery of an Authorized Installment. The Paying Agent/Registrar shall issue and deliver an
Authorized Installment in the principal amount of any draw on the Financial Security to the Note
Purchaser pursuant to the terms of this Ordinance and the Note Purchase Agreement; provided,
however, in consideration of the delivery of the Financial Security and the unconditional obligation
of the Note Purchaser thereunder, any particular Authorized Installment corresponding to the
related draw on the Financial Security is deemed issued and delivered to the Note Purchaser on
the date of any such drawing.
In the event the Pricing Certificate and the Note Purchase Agreement as provided in
Section 2.05 shall not be executed on or before 5:00 p.m. on October 2, 2024, the delegation to the
City Authorized Representatives pursuant to this Ordinance shall cease to be effective unless the
City Council shall act to extend such delegation.
(b) Selling and Delivering Notes. As authorized by Chapter 1371, Texas Government
Code, as amended and this Ordinance, a City Authorized Representative is hereby authorized to
act on behalf of the Issuer in selling and delivering the Notes, including the Authorized
Installments, and carrying out the other procedures specified in this Ordinance, including
determining and fixing (i) the Original Issue Date of the Notes, (ii) the principal amount of the
initial Authorized Installment, (iii) the price at which the Notes will be sold, (iv) the date or dates
in which the Notes will mature, (v) the aggregate principal amount to mature on any such date or
dates, (vi) the aggregate principal amount of Notes, (vii) the fixed or variable rate of interest to be
borne by the Notes, (viii) the interest payment periods, (ix) the dates, price, and terms, if any, upon
and at which the Notes shall be subject to redemption or prepayment prior to maturity at the option
of the Issuer, (x) the dated dates of the Initial Note and the initial Authorized Installment of the
Notes delivered on the Original Issue Date and (xi) all other matters relating to the issuance, sale,
and delivery of the Notes and the delivery of the Note Purchase Agreement (as provided in Section
2.05 hereof), all of which shall be specified in the Pricing Certificate; provided that (A) the price
to be paid for the Notes shall not be less than 100% of the aggregate original principal amount
thereof plus accrued interest thereon from their date to their delivery and (B) none of the Notes
shall bear interest at a rate greater than the Maximum Rate. It is further provided, however, that,
notwithstanding the foregoing provisions, the Initial Note shall not be delivered unless prior to
delivery, the Notes have been rated by a nationally recognized rating agency for municipal
securities (1) in one of the four highest rating categories for long-term obligations or (I1) in one of
the three highest rating categories for short-term obligations, as required by Chapter 1371.
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(c) General . The Notes (i) may be redeemed or prepaid prior to the respective scheduled
maturity dates, (ii) shall have the characteristics, and (iii) shall be signed and sealed and the
principal of and interest on the Notes shall be payable, all as provided, and in the manner required
or indicated, in this Ordinance, including the FORM OF NOTES set forth in Exhibit A to this
Ordinance, as may be modified in the Pricing Certificate, and in the Note Purchase Agreement.
(d) Payments on Holidays . In the event that any date for payment of the principal of or
interest on the Notes is a Saturday, Sunday, legal holiday, or day on which banking institutions in
the city where the Paying Agent/Registrar is located are authorized by law or executive order to
close, then the date for such payment will be the next succeeding day that is not a Saturday,
Sunday, legal holiday, or day on which such banking institutions are authorized to close, and such
extended period of time shall be included in the computation of interest; provided, however, that
the payment of interest on the Notes on such extended date shall have the same force and effect as
if made on the original payment date.
Section 2.03. Payment of Notes; Paying Agent/Registrar. The principal of, premium,
if any, and the interest on the Notes shall be payable in immediately available funds, without
exchange or collection charges to the Note Purchaser, in any coin or currency of the United States
of America that at the time of payment is legal tender for the payment of public and private debts.
Payments of principal of and interest on the Notes may be made by wire transfer of immediately
available funds at no cost to the Note Purchaser.
The City Authorized Representative shall designate in the Pricing Certificate a bank to act
as the Paying Agent/Registrar for the Notes. In the Note Purchase Agreement, the Note Purchaser,
by accepting the appointment as Paying Agent/Registrar, will acknowledge receipt of copies of
this Ordinance, and is deemed to have agreed to the provisions hereof The Issuer agrees and
covenants to cause to be kept and maintained at the office of the Paying Agent/Registrar a Security
Register, all as provided herein, in accordance with the terms and provisions of the Paying
Agent/Registrar Agreement and such reasonable rules and regulations as the Paying
Agent/Registrar and the Issuer may prescribe. In addition, to the extent required by law, the Issuer
covenants to cause to be kept and maintained the Security Register or a copy thereof in the State
of Texas. The Issuer covenants to maintain and provide a Paying Agent/Registrar at all times until
the Notes are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust
company, financial institution, or other entity duly qualified and legally authorized to serve as and
perform the duties and services of Paying Agent/Registrar for the Notes. The Issuer will not,
without the prior written consent of the Note Purchaser (such consent not to be unreasonably
withheld), appoint or permit the appointment of a successor Paying Agent/Registrar.
The principal of, premium, if any, and interest on the Notes due and payable by reason of
maturity, redemption, or otherwise, shall be payable only to the owner thereof appearing on the
Security Register, and, to the extent permitted by law, neither the Issuer nor the Paying
Agent/Registrar, nor any agent of either, shall be affected by notice to the contrary.
Section 2.04. Redemption. The Notes shall be subject to redemption or prepayment prior
to scheduled maturity at such times and with such provisions as provided in the Pricing Certificate
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and the Note Purchase Agreement.
Section 2.05. Note Purchase Agreement. The draft of the Note Purchase Agreement
relating to the Notes, in substantially the form presented to the City Council, is hereby approved
pursuant to the terms of this Ordinance, including the prepayment, redemption, term and interest
rates applicable to any Notes purchased thereunder. Subject to the provisions of this Ordinance,
the City Authorized Representative may determine the final terms of the Note Purchase Agreement
consistent with Section 1371.056(c) of Chapter 1371. The Note Purchase Agreement shall
constitute a "credit agreement" under Chapter 1371. Any City Authorized Representative and the
Issuer’s Bond Counsel are each hereby authorized to complete, amend and modify the Note
Purchase Agreement and the Mayor and Mayor Pro Tem, and any City Authorized Representative
are each hereby authorized to execute and deliver such Note Purchase Agreement, in the form so
amended, completed and modified, and to take such other actions as shall be required under the
Note Purchase Agreement in connection with the issuance of the Financial Security. The Note
Purchase Agreement and the obligation of the Issuer to make certain payments thereunder,
including certain fees, will constitute a Subordinate Lien Obligation. Any City Authorized
Representative may enter into transactions under the Note Purchase Agreement and execute any
instruments in connection therewith, including requesting any increases or decreases to the stated
amount of the Financial Security in accordance with the provisions of the Note Purchase
Agreement but in no case may the stated amount of the Financial Security exceed (i) the amount
of Notes authorized by the Pricing Certificate minus (ii) the amount of the initial Authorized
Installment of the Notes delivered on the Original Issue Date.
Section 2.06. Registration and Ownership.
(a) Registration of Notes . The Paying Agent/Registrar shall obtain, record, and maintain
in the Security Register the name and address of each owner of any Note issued under and pursuant
to the provisions of this Ordinance.
(b) Ownership of Notes. The entity in whose name any Note shall be registered in the
Security Register at any time shall be deemed and treated as the absolute owner thereof for all
purposes of this Ordinance, whether or not such Note shall be overdue, and, to the extent permitted
by law, the City Council and the Paying Agent/Registrar shall not be affected by any notice to the
contrary; and payment of, or on account of, the principal of, premium, if any, and interest on any
such Note shall be made only to such Registered Owner. All such payments shall be valid and
effectual to satisfy and discharge the liability upon such Note to the extent of the sum or sums so
paid
Section 2.07. Form of Notes. The Notes and the Authentication Certificate of the Paying
Agent/Registrar to appear on each of the Notes, shall be substantially in the form set forth in
Exhibit A to this Ordinance with such appropriate insertions, omissions, substitutions, and other
variations as are permitted or required by this Ordinance and may have such letters, numbers or
other marks of identification and such legends and endorsements (including any reproduction of
an opinion of counsel) thereon as may be established by the Issuer or determined by the officers
executing such Notes as evidenced by their execution thereof. Any portion of the text of any Notes
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may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the
Note
The Notes shall be typewritten, photocopied, printed, lithographed, engraved, or produced
in any other similar manner, all as determined by the officers executing such Notes as evidenced
by their execution thereof.
Section 2.08. Execution and Registration. Notes shall be executed on behalf of the
Issuer by the Mayor and City Secretary under its seal reproduced or impressed thereon. The
signature of said officers on the Notes may be manual or facsimile. Notes bearing the manual or
facsimile signatures of individuals who are or were the proper officers of the Issuer as of their
authorization shall be deemed to be duly executed on behalf of the Issuer, notwithstanding that
such individuals or either of them shall cease to hold such offices at the time of delivery of the
Notes to the Note Purchaser, all as authorized and provided in Chapter 1201, Texas Government
Code
Subject to Section 2.02(a) hereof, no Note shall be entitled to any right or benefit under
this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Note the
Authentication Certificate of the Paying Agent/Registrar substantially in the form provided in
Exhibit A to this Ordinance, executed by the manual signature of an authorized officer or employee
of the Paying Agent/Registrar, and either such certificate duly signed upon any Note shall be
conclusive evidence that such Note has been duly certified, registered, and delivered.
Section 2.09. Control and Custody of Notes. The City Authorized Representative shall
be and is hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, including the printing and supply of
printed Notes.
Furthermore, any one or more of the Mayor and Mayor Pro Tem, and the City Authorized
Representative are each hereby authorized and directed to furnish and execute such documents
relating to the Issuer and its financial affairs as may be necessary for the issuance of Notes, the
approval of the Attorney General of the State of Texas of Notes and, together with the Issuer's
bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery
of Notes to the Note Purchaser thereof.
Section 2.10. Mutilated, Destroyed, Lost, and Stolen Notes. If (1) any mutilated Note
is surrendered to the Paying Agent/Registrar, or the Issuer and the Paying Agent/Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any Note, and (2) there is delivered
to the Issuer and the Paying Agent/Registrar such security or indemnity as may be required to save
each of them harmless, then, in the absence of notice to the Issuer or the Paying Agent/Registrar
that such Note has been acquired by a bona fide purchaser, the Issuer shall execute and, upon its
request, the Paying Agent/Registrar shall register and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Note, a new Note of the same maturity date and of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost, or stolen Note has become or is about to become
due and payable, the Issuer in its discretion may, instead of issuing a new Note, pay such Note and
the interest due thereon to the date of payment.
Upon the issuance of any new Note under this Section, the Issuer may require payment by
the Note Purchaser of a sum sufficient to cover any tax or other governmental charge imposed in
relation thereto and any other expenses (including the fees and expenses of the Paying
Agent/Registrar) connected therewith.
Every new Note issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or
stolen Note shall constitute a replacement of the prior obligation of the Issuer, whether or not the
mutilated, destroyed, lost, or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Ordinance equally and ratably with all other outstanding Notes.
ARTICLE III
ESTABLISHMENT OF NODAL MARKET REVENUE NOTE PROGRAM AND
SECURITY THEREFOR
Section 3.01. Establishment of Program. This Ordinance is intended to establish a
master plan for the authorization, issuance, sale, delivery, form, characteristics, provisions of
payment and redemption, and security of the Notes.
Section 3.02. Security; Subordinate Lien; and Pledge.
(a) The Notes and the other obligations under the Note Purchase Agreement are special
obligations of the Issuer, and the payment of the principal of and interest on the Notes and the
other obligations under the Note Purchase Agreement are and shall be secured by and payable only
from a lien on and pledge of (i) the Pledged Revenues, and the Pledged Revenues are further
pledged to the establishment and maintenance of the Payment Fund; provided that the pledge of
Pledged Revenues securing the Notes and the other obligations under the Note Purchase
Agreement is expressly made subordinate and inferior to the lien on and pledge of Pledged
Revenues securing Senior Lien Obligations, and the Notes and the other obligations under the Note
Purchase Agreement shall constitute Subordinate Lien Obligations, as provided in the Senior Lien
Obligation Ordinances, payable on a parity with all Subordinate Lien Obligations, and (ii) all
amounts in the Payment Fund created and maintained pursuant to this Ordinance, and such
amounts constitute funds held for that purpose, subject only to the provisions of this Ordinance
permitting the application thereof for the purposes and on the terms and conditions set forth herein.
The pledge herein made shall be irrevocable until the Notes and the other obligations under the
Note Purchase Agreement have been paid and retired. The granting of this pledge by the Issuer
does not limit in any manner the rights of the Issuer to issue any additional debt or incur any other
obligations, except as otherwise set forth in the Note Purchase Agreement. The Notes are not
secured by or payable from any funds raised or to be raised by the levy of taxes by the Issuer nor
a mortgage or deed of trust on any properties, whether real, personal, or mixed, constituting the
System or otherwise, nor from any source other than as specified in this Ordinance.
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(b) The Issuer shall not issue Notes on a parity with the Senior Lien Obligations.
(c) The Issuer covenants to pay the principal of, premium, if any, and the interest on the
Notes when due, whether by reason of maturity or redemption.
(d) Chapter 1208, Texas Government Code, applies to the issuance of the Notes and the
pledge of the proceeds of the sale of Notes and the Pledged Revenues granted by the Issuer under
this section, and such pledge is therefore valid, effective, and perfected. If State law is amended
at any time while the Notes are outstanding such that the pledge granted by the Issuer under this
section is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code,
then in order to preserve to the Note Purchaser the perfection of the security interest in said pledge,
the Issuer agrees to take such measures as it determines are reasonable and necessary under State
law to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code
and enable a filing to perfect the security interest in said pledge to occur.
ARTICLE IV
CREATION OF FUNDS; PAYMENT
Section 4.01. Payment Fund. (a) A City Authorized Representative may create and
establish a separate and special fund to be designated as the "City of Denton Utility System Nodal
Market Revenue Notes, Taxable Series A Payment Fund" (the "Payment Fund"). Moneys on
deposit in the Payment Fund shall be used to pay principal of and interest on Notes hereafter issued
at the respective interest payment, maturity or redemption dates (if any) of each issue of such Notes
as provided herein and the repayment of any amounts owing under a Note Purchase Agreement.
(b) Pending the expenditure of moneys in the Payment Fund, if created and established,
for authorized purposes, moneys deposited in said fund may be invested and reinvested by a City
Authorized Representative in Permitted Investments, as directed in writing by a City Authorized
Representative. Funds in the Payment Fund shall be held by a Depository.
Section 4.02. Disposition of Note Proceeds. Proceeds from the initial Authorized
Installment of the Notes shall, as determined in the Pricing Certificate, promptly upon receipt
thereof, be applied by the City Authorized Representative to pay a portion of the costs of issuance
of the Notes.
Proceeds relating to any other Authorized Installments of the Notes corresponding to a
drawing upon the Financial Security by ERCOT will be for the payment, on behalf or for the
benefit of the Issuer, of Project Costs of Eligible Projects.
Section 4.03. Defeasance of Notes. Notes shall not be deemed to have been paid in full
unless payment of the principal of and interest on the Notes either (a) shall have been made or
caused to be made in accordance with the terms of the Notes, the Note Purchase Agreement and
this Ordinance, or (b) shall have been provided for on or before such due date by irrevocably
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depositing with or making available to the Paying Agent/Registrar in accordance with an escrow
agreement or other instrument for such payment (i) lawful money of the United States of America
sufficient to make such payment or (ii) Defeasance Securities that mature as to principal and
interest in such amounts and at such times as will insure the availability of sufficient money to
provide for such payment.
ARTICLE V
COVENANTS OF THE ISSUER
Section 5.01. Limitation on Issuance. Unless this Ordinance is amended and modified
by the Issuer in accordance with the provisions of Article VI, the Issuer covenants that there will
not be issued and Outstanding at any time more than the maximum aggregate principal amount of
Notes as provided in Section 2.01 of this Ordinance. The Issuer, however, does reserve the right
to increase said amount by an amendment to this Ordinance duly adopted by the City Council.
Section 5.02. Tax Exemption. The Issuer does not intend to issue the Notes in a manner
such that the Notes would constitute obligations described in section 103(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and all applicable temporary, proposed, and
final regulations and procedures promulgated thereunder (the "Regulations"). The Issuer
covenants that it will not file an Internal Revenue Form 8038 or an Internal Revenue Form 8038-
G with respect to the Notes.
Section 5.03. Federal Tax Information Reporting. To the extent required by the Code
and the Regulations it shall be the duty of the Paying Agent/Registrar to report to the Registered
Owners 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 Notes and (ii) the amount of interest or amount treated as interest, such as
original issue discount, on the Notes required to be included in the gross income of the owners
thereof for federal income tax purposes.
Section 5.04. Performance. The Issuer will faithfully perform at all times any and all
covenants, undertakings, stipulations, and provisions authorizing the issuance of the Notes, and in
each and every Note; promptly pay or cause to be paid the principal of and interest on every Note,
on the dates and in the places and manner prescribed, and will, at the times and in the manner
prescribed, deposit or cause to be deposited the amounts required to be deposited into the Payment
Fund, and any Registered Owner of Notes may require the Issuer, its City Council, and its officials
and employees, to carry out, respect, or enforce the covenants and obligations of this Ordinance,
by all legal and equitable means, including specifically, but without limitation, the use and filing
of mandamus proceedings, in any court of competent jurisdiction, against the Issuer, its City
Council, and its officials and employees.
Section 5.05. Legal Authority. The Issuer represents that it is a municipal corporation, a
political subdivision of the State and a body politic and corporate, duly created, organized, and
existing, under the Constitution and general laws of the State, and is duly authorized under the
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laws of the State to create and issue the Notes; that all action on its part for the creation and issuance
of the Notes has been duly and effectively taken, and that the Notes 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.
Section 5.06. Operation of System. The Issuer will, while any Notes 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.
Section 5.07. Further Encumbrance. While the Notes are Outstanding, the Issuer shall
not, except with respect to the issuance of Senior Lien Obligations, additionally encumber the
Pledged Revenues, unless said encumbrance is made on a parity with, or junior and subordinate in
all respects to the liens, pledges, covenants and agreements hereof; but the right of the Issuer to
issue obligations subordinate to the Notes for any lawful purpose payable from a lien on the
Pledged Revenues that is subordinate to the Notes is specifically recognized and retained. This
Ordinance does not and is not intended to affect, limit, or prohibit the issuance of bonds payable
wholly or in part from ad valorem taxes.
Section 5.08. Sale or Disposal of Property. While any Notes 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:
(a) 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 City Authorized Representative 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 City Authorized Representative 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 Section 5.10 of this
Ordinance. 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
(b) 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
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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 Registered Owners 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 City Authorized Representative that the action of the Issuer with
respect thereto does not result in a breach of the conditions under this clause (b). 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.
Section 5.09. Insurance. (a) 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.
(b) The foregoing provisions of clause (a) 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.
(c) 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.
Page 18
Section 5.10. Rate Covenant. The Issuer 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 Fiscal Year at least
equal to 1.00 times the Annual Debt Service Requirements (as defined and determined in
accordance with the Senior Lien Obligation Ordinances) of all then Outstanding Senior Lien
Obligations for that Fiscal Year, and (3) to make all payments and deposits required to be made
into the Payment Fund for the Notes (including any obligations due and owning under a Note
Purchase Agreement) and produce amounts required to pay all other obligations of the System
reasonably anticipated to be paid from Pledged Revenues during the current Fiscal Year. For
purposes of calculating Annual Debt Service Requirements on the Notes, the City shall assume
the Maximum Available Amount is fully drawn and amoaized over a period of up to thirty (30)
years at the Assumed Rate (as defined in the Note Purchase Agreement).
Section 5.11. Governmental Agencies. The Issuer 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.
Section 5.12. Title. The Issuer 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
holders and owners of the Senior Lien Obligations and Notes, 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 and the Notes in the manner prescribed herein, and has
lawfully exercised such rights.
Section 5.13. Liens. The Issuer 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.
Section 5.14. No Competition. So far as it legally may, the Issuer will not grant any
franchise or permit for the acquisition, construction or operation of any competing facilities which
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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.
Section 5.15. Records. The Issuer 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 Senior Lien
Ordinances, and all books, documents and vouchers relating thereto shall at all reasonable times
be made available for inspection upon request of a Registered Owner; provided, that all books,
documents, and vouchers relating to the Issuer’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.
Section 5.16. Audits. After the close of each Fiscal Year while any Note 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 and their agents and representatives at all reasonable
times
ARTICLE VI
AMENDMENTS
Section 6.01. Amendments or Modifications with Consent of Note Purchaser. Any
amendment to this Ordinance shall be subject to the prior written approval of the Note Purchaser
as provided in the Note Purchase Agreement.
Section 6.02. Effect of Amendments. Upon the adoption by the City Council of any
ordinance to amend this Ordinance pursuant to the provisions of this Article VI, this Ordinance
shall be deemed to be amended in accordance with the Amended Ordinance, and the respective
rights, duties, and obligations of the Issuer and all the owners of then Outstanding Notes and all
future Notes shall thereafter be determined, exercised, and enforced under this Ordinance.
Section 6.03. Additional Amendments. Subject to the provisions of Section 6.01 hereof,
the Issuer may, from time to time and at any time, adopt an Amended Ordinance which amends
the provisions of an earlier Amended Ordinance.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Ordinance to Constitute a Contract; Equal Security. In consideration of
the acceptance of the Notes by those who shall hold the same from time to time, this Ordinance
shall be deemed to be and shall constitute a contract between the Issuer and the Registered Owners
and the Note Purchaser and the pledge made in this Ordinance by the Issuer and the covenants and
agreements set forth in this Ordinance to be performed by the Issuer shall be for the equal and
Page 20
proportionate benefit, security, and protection of all owners of the Notes and the Note Purchaser,
without preference, priority, or distinction as to security or otherwise of any of the Notes over any
of the others by reason of time of issuance, sale, or maturity thereof or otherwise for any cause
whatsoever, except as expressly provided in or permitted by this Ordinance or with respect to the
Notes, the Note Purchase Agreement.
Section 7.02. Individuals Not Liable. All covenants, stipulations, obligations, and
agreements of the Issuer contained in this Ordinance shall be deemed to be covenants, stipulations,
obligations, and agreements of the Issuer and the City Council to the full extent authorized or
permitted by the Constitution and laws of the State of Texas. No covenant, stipulation, obligation,
or agreement herein contained shall be deemed to be a covenant, stipulation, obligation, or
agreement of any member of the City Council or agent or employee of the Issuer in his or her
individual capacity and neither the members of the City Council nor any officer of the Issuer shall
be liable personally on the Notes or be subject to any personal liability or accountability by reason
of the issuance thereof.
Section 7.03. Additional Actions; Recitals.
(a) The Mayor and Mayor Pro Tem, the City Authorized Representatives and the City
Secretary, and all other officers, employees and agents of the Issuer are hereby authorized and
directed, jointly and severally, to do any and all things and to execute and deliver any and all
documents which they may deem necessary or advisable in order to consummate the issuance,
sale, and delivery of the Notes and otherwise to effectuate the purposes of this Ordinance, the Note
Purchase Agreement, and the Paying Agent/Registrar Agreement. In addition, the Mayor and
Mayor Pro Tem, the City Secretary, the City Authorized Representatives, and Bond Counsel are
hereby authorized to approve, subsequent to the date of adoption of this Ordinance, any
amendments or supplements to the above named documents, and any technical amendments to this
Ordinance as may be required by a Rating Agency as a condition to the granting or maintaining of
a rating on the Notes acceptable to a City Authorized Representative, or as may be required by the
Office of the Attorney General of the State in connection with the approval of this Ordinance or to
correct any ambiguity or mistake or properly or more completely document the transactions
contemplated and approved by this Ordinance. In addition, the statements, findings,
representations, and determinations set forth in the recitals to this Ordinance are hereby
incorporated into and made a part of this Ordinance for all purposes.
(b) The obligation of the Note Purchaser to accept delivery of the Initial Note is subject to
the Note Purchaser being furnished with the final, approving opinion of Bond Counsel, which
opinion shall be dated as of and delivered on the date of initial delivery of the Initial Note.
(c) A City Authorized Representative shall promptly give written notice to each Rating
Agency then rating the Notes, as appropriate, of any changes or amendments to this Ordinance, or
any other operative document used in connection with the issuance from time to time of the Notes.
Section 7.04. Severability of Invalid Provisions. If any one or more of the covenants,
agreements, or provisions herein contained shall be held contrary to any express provisions of law
Page 21
or contrary to the policy of express law, though not expressly prohibited, or against public policy,
or shall for any reason whatsoever be held invalid, then such covenants, agreements, or provisions
shall be null and void and shall be deemed separable from the remaining covenants, agreements or
provisions and shall in no way affect the validity of any of the other provisions hereof or of the
Notes issued hereunder.
Section 7.05. Performance on Business Days. Except as set forth in Section 2.02(d)
hereof, whenever under the terms of this Ordinance or the Notes, the performance date of any
provision hereof or thereof shall occur on a day other than a business day, then the performance
thereof need not be made on such day but may be performed on the next succeeding business day
with the same force and effect as if made on the date of performance is scheduled.
Section 7.06. Limitation of Benefits With Respect to the Ordinance. With the
exception of the rights or benefits herein expressly conferred, nothing expressed or contained
herein or implied from the provisions of this Ordinance or the Notes is intended or should be
construed to confer upon or give to any person other than the Issuer, the Note Purchaser, and the
Paying Agent/Registrar, any legal or equitable right, remedy, or claim under or by reason of or in
respect to this Ordinance or any covenant, condition, stipulation, promise, agreement, or provision
herein contained. This Ordinance and all of the covenants, conditions, stipulations, promises,
agreements, and provisions hereof are intended to be and shall be for and inure to the sole and
exclusive benefit of the Issuer, the Note Purchaser, and the Paying Agent/Registrar as herein and
in the Paying Agent/Registrar Agreement and the Note Purchase Agreement provided.
Section 7.07. Approval of Attorney General. No Notes herein authorized to be issued
shall be sold or delivered by a City Authorized Representative until the Attorney General of the
State shall have approved the Notes authorized by this Ordinance and the proceedings related
thereto and the Note Purchase Agreement, and other agreements and proceedings as may be
required in connection therewith, and the Comptroller of Public Accounts of the State of Texas
has registered the record of proceedings relating to this Ordinance and the Notes, all as is required
by the Acts.
Section 7.08. Notices. (a) The City Authorized Representative shall provide the Rating
Agencies with written notice of the occurrence of the following events: (i) the appointment of a
successor Paying Agent/Registrar, (ii) amendments or supplements to the Ordinance or the Paying
Agent/Registrar Agreement, (iii) the defeasance of all Outstanding Notes and (iv) the termination
of the Note program. Any notice under this paragraph (a) shall be sent to the Rating Agencies at
the following addresses, as applicable:
Standard & Poor’s:Attention: Muni Structured Finance
55 Water Street, 38th Floor
New York, New York 10041
phone: 212-438-2000
fax: 212-438-2 157
email: pubfin structured@sandp.com
Page 22
Moody’s:Attention: Public Finance Department – Rating Desk/CP
Moody’s Investors Service, Inc.
99 Church Street
New York, New York 10007
phone: 212-553-0300
fax: 212-964-5082
Fitch Ratings:Fitch Ratings - U.S. Public Finance
33 Whitehall Street
New York, New York 10004
phone: 212-908-0889
(b) Except as otherwise required herein, all notices required or authorized to be given to
the Issuer or the Paying Agent/Registrar pursuant to this Ordinance shall be in writing and shall
be sent by registered or certified mail, postage prepaid, to the following addresses or otherwise
given in a manner deemed, in writing, acceptable to the party to receive the notice:
1.to the Issuer, to:
215 E. McKinney Street.
Denton, Texas 76201
Ann: Jessica Williams, Chief Financial Officer
Telephone: (940) 349-8244
2.to the Paying Agent/Registrar, to:
(as provided in the Paying Agent/Registrar Agreement)
3.to the Note Purchaser, to:
(as provided in the Note Purchase Agreement)
or to such other addresses as may from time to time be furnished to the parties, effective upon the
receipt of notice thereof given as set forth above.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01. Events of Default. Each of the following events shall constitute and is
referred to in this Ordinance as an “Event of Default”:
(a) a failure by the Issuer to pay principal of or interest on any Note when the same shall
have become due and payable;
(b) a failure by the Issuer to observe and perform any covenant, condition, agreement or
provision contained in the Notes or in this Ordinance on the part of the Issuer to be observed or
performed, which materially, adversely affects the rights of the owners of the Notes, including,
Page 23
but not limited to, their prospect or ability to be repaid in accordance with this Ordinance and
which failure shall continue for a period of 30 days after written notice, specifying such failure
and requesting that it be remedied, shall have been given to the Issuer by the Paying
Agent/Registrar or any owner of the Notes;
(c) bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
including, without limitation, proceedings under the United States Bankruptcy Code (as the same
may from time to time be hereafter amended), or other proceedings for relief under any federal or
State bankruptcy law or similar law for the relief of debtors are instituted by the Issuer;
(d) an “Event of Default” shall have occurred and be continuing under the Note Purchase
Agreement; or
(e) the occurrence of any other Event of Default as is provided in an Amended Ordinance.
If any Event of Default has occurred, but is subsequently cured or waived, then such Event
of Default shall no longer constitute an Event of Default hereunder.
Section 8.02. Remedies for Default.
(a) Upon the happening of any Event of Default, any Registered Owner or an authorized
representative thereof, including, but not limited to, a trustee or trustees therefore, may proceed
against the Issuer or the City Council, as appropriate, for the purpose of protecting and enforcing
the rights of the owners ofNotes 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 owners of Notes
hereunder or any combination of such remedies. It is provided that all such proceedings shall be
instituted and maintained for the equal benefit of all owners of Notes then Outstanding.
(b) 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 Notes or now or hereafter existing at
law or in equity; provided, however, that notwithstanding any other provision of this Ordinance,
the right to accelerate the debt evidenced by the Notes shall not be available as a remedy under
this Ordinance.
(c) By accepting the delivery of an Note authorized under this Ordinance, a 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 or employees of the Issuer or the City Council.
The motion to approve this Ordinance was made by FF. rI,I +ar 1 and seconded by
[ B.Be,h 1. This Ordinance was passed and approved by the following vote a –0]:
Page 24
Aye
,ZZ
J
,Z
V/
IL
,Z
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:
[REMA[NDER OF PAGE INTENTIONALLY LEFT BLANK.]
Page 25
PASSED, APPROVED AND EFFECTIVE this 2nd day of April, 2024.
ATTEST:
JESUS SALAZAR. CITY SECRETARY
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
Digitally signed by Susan Keller
Susan Keller giRl:'i!,ZX!!$£U=;-"
_ _ mlail=Susan.Keller@cityofdenton.com
BY: Date: 2024.03.25 ]ss7:364s'oo'
EXHIBIT A
FORM OF NOTES
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF DENTON
UTILITY SYSTEM NODAL MARKET REVENUE NOTE
SERIES A
Issue Date:
Principal Amount: $_Maturity Date :
Dated Date:
Interest Rate or Interest Rate Formula (%):
THE CITY OF DENTON, IN DENTON COUNTY, TEXAS (the “ Issuer”) being a
political subdivision of the State of Texas, hereby promises to pay, solely from the sources
hereinafter identified and as hereinafter stated, to the order of
WELLS FARGO BANK, NATIONAL ASSOCIATION (the "Bank")
on the Maturity Date specified above [or date of prior redemption]2, the Principal Amount set forth
above, and to pay interest on said Principal Amount, if any, on the dates provided in the Note
Purchase Agreement at said Maturity Date [or date of prior redemption]2, from the above specified
Issue Date to said Maturity Date [or date of prior redemption]2 at the rate of interest calculated as
shown above (computed on the basis of actual days elapsed and a 360 day year) and as provided
for in the Note Purchase Agreement (as defined herein); both principal and interest on this Note
being payable in lawful money of the United States of America in freely transferable and
immediately available funds at the principal corporate office of the Paying Agent/Registrar
executing the "Certificate of Authentication" endorsed hereon and appearing below.
This Note is one of a duly authorized issue of notes of the Issuer (the "Notes") issued in
the aggregate principal amount of $ ,000, pursuant to the laws of the State of Texas,
including specifically Chapter 1371 and Chapter 1502, Texas Government Code, as amended (the
"Acts"), and under and pursuant to an ordinance of the City Council of the Issuer adopted April 2,
1 As provided for in the Pricing Certificate.
2 if the Notes are subject to redemption as provided in the Pricing Certificate.
A-1
2024 (the "Ordinance") for the purpose of financing Project Costs of Eligible Projects. The Notes
are secured by the Ordinance, on a parity with all other Subordinate Lien Obligations and subject
only to the payment of Senior Lien Obligations, if any. Terms used herein and not otherwise
defined shall have the meanings given in the Ordinance and in the Note Purchase Agreement dated
, 2024 between the Issuer and the Bank relating to the Notes (the "Note Purchase
Agreement").
The initial Authorized Installment of the Notes issued on the Original Issue Date is in the
principal amount of $ ,000. Thereafter, additional Authorized Installments of the Notes in a
principal amount not to exceed $ ,000 may be issued on any date so long as the total
aggregate principal amount of Notes issued does not exceed $ ,000, as reflected in the
Schedule of Authorized Installment Deliveries attached to the Initial Note. The foregoing
notwithstanding, in no event shall an Authorized Installment of the Notes be issued after the end
of the Authorized Installment Draw Period, and in no event shall an Authorized Installment be
issued and delivered in an amount that exceeds the Maximum Available Amount in effect as of
the date of the applicable draw on the Financial Security; provided that the aggregate principal
amount of all Authorized Installments issued and delivered under the Ordinance may at times
exceed the then applicable Maximum Available Amount due to a reduction in such amount
subsequent to the issuance of Authorized Installments pursuant to the terms of the Financial
Security but in no case shall the aggregate principal amount of all Authorized Installments issued
and delivered under the Ordinance exceed $ .000.
Anything contained herein to the contrary notwithstanding, if the rate of interest payable
under any Authorized Installment shall exceed the Maximum Interest Rate (as defined in the Note
Purchase Agreement) for any period for which interest is payable, then (i) interest at the Maximum
Interest Rate shall be due and payable with respect to such interest period and (ii) interest at the
rate equal to the difference between (A) the rate of interest calculated in accordance with the terms
hereof without regard to the Maximum Interest Rate and (B) the Maximum Interest Rate (the
“Excess Interest”), shall be deferred until such date as the rate of interest calculated in accordance
with the terms hereof ceases to exceed the Maximum Interest Rate, at which time the Issuer shall
pay to the Bank, with respect to amounts then payable to the Bank that are required to accrue
interest hereunder, such portion of the deferred Excess Interest as will cause the rate of interest
then paid to the Bank to equal the Maximum Interest Rate, which payments of deferred Excess
Interest shall continue to apply to such unpaid amounts hereunder until all deferred Excess Interest
is fully paid to the Bank, not to exceed the Maturity Date.
The Notes are special obligations of the Issuer, and the payment of the principal of and
interest on the Notes is and shall be secured by and payable only from a lien on and pledge of the
Pledged Revenues; provided that the pledge of Pledged Revenues securing the Notes is expressly
made subordinate and inferior to the lien on and pledge of Pledged Revenues securing Senior Lien
Obligations, and the Notes shall constitute Subordinate Lien Obligations, payable, together with
all Outstanding Subordinate Lien Obligations and any additional Subordinate Lien Obligations
hereafter, solely from and equally secured by a lien on and pledge of the Pledged Revenues. The
Notes are not secured by or payable from any funds raised or to be raised by the levy of taxes by
A-2
the Issuer nor a mortgage or deed of trust on any properties, whether real, personal, or mixed,
constituting the System or otherwise, nor from any source other than as specified in the Ordinance.
[INSERT ADDITIONAL PROVISIONS, IF ANY, PROVIDED FOR IN THE PRICING
CERTIFICATE AND THE NOTE PURCHASE AGREEMENT DEEMED NECESSARY BY
THE AUTHORIZED REPRESENTATIVE, INCLUDING ANY PREPAYMENT AND/OR
REDEMPTION PROVISIONS, ALL PURSUANT TO SECTIONS 2.02 AND 2.04 OF THE
ORDINANCE. I
The pledge of Pledged Revenues under the Ordinance may be discharged at or prior to the
maturity of the Notes upon the making of provision for their payment on the terms and conditions
set forth in the Ordinance.
Subject to satisfying the terms and conditions stated in the Ordinance, the Issuer has
reserved the right to issue additional Subordinate Lien Obligations payable solely from and equally
and ratably secured by a parity lien on and pledge of the Pledged Revenues and other moneys and
securities pledged under the Ordinance to the payment of the Notes.
Reference is hereby made to the Ordinance, copies of which may be obtained upon request
to the issuer, and to all of the provisions of which any owner of this Note by its acceptance hereof
hereby assents, for definitions of terms; the description of and the nature and extent of the security
for the Notes; the Pledged Revenues; the nature and extent and manner of enforcement of the
pledge; the terms and conditions for the issuance of additional Subordinate Lien Obligations; the
conditions upon which the Ordinance may be amended or supplemented with or without the
consent of the Registered Owners; the rights and remedies of the owner hereof with respect hereto
and thereto; the rights, duties and obligations of the Issuer; the terms and provisions upon which
the liens, pledges, charges, and covenants made therein may be discharged at or prior to the
maturity or redemption of this Note and this Note thereafter no longer to be secured by the
Ordinance or be deemed to be outstanding thereunder; and for the other terms and provisions
thereof
It is hereby certified, recited, represented, and declared that the Issuer is a duly organized
and legally existing political subdivision of the State of Texas, organized under and by virtue of
the Constitution and laws of the State of Texas; that the issuance of this Note and the series of
which it is a part are duly authorized by law; that all acts, conditions, and things required to exist
and be done precedent to and in the issuance of this Note to render the same lawful and valid have
been properly done, have happened and have been performed in regular and due time, form, and
manner as required by the Constitution and laws of the State of Texas and the Ordinance; that this
series of Notes does not exceed any Constitutional or statutory limitation; and that due provision
has been made for the payment of the principal of and interest on this Note and the series of which
it is a part as aforestated. In case any provision in this Note shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby. The terms and provisions of this Note and the Ordinance
shall be construed in accordance with and shall be governed by the laws of the State of Texas.
A-3
This Note has been issued pursuant to proceedings approved by the Attorney General of
the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
Except as provided in Section 2.02(a) of the Ordinance, this Note shall not be entitled to
any benefit under the Ordinance or be valid or become obligatory for any purpose until this Note
shall have been authenticated by the execution by the Paying Agent/Registrar or the Comptroller
of Public Accounts, as applicable, of the Certificate of Authentication hereon.
IN WITNESS WHEREOF, the Issuer has authorized and caused this Note to be executed
and attested on its behalf by the manual or facsimile signatures of the Mayor of the Issuer (or in
the Mayor’s absence, of the Mayor Pro-Tem) and countersigned with the manual or facsimile
signature of the City Secretary of said Issuer and its official seal impressed or a facsimile thereof
to be printed hereon.
City Secretary Mayor
(SEAL)
Form of Registration Certificate of Comptroller of Public Accounts to Appear on Initial Note only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
THE STATE OF TEXAS REGISTER NO.
I HEREBY CERTIFY that this Note has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of
public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
A-4
(SEAL)
Form of Authentication Certificate of Paying Agent/Registrar.
AUTHENTICATION CERTIFICATE OF
PAYING AGENT/REGISTRAR
This Note has been duly issued and registered under the provisions of the within-mentioned
Resolution; the note or notes of the above titled and designated series originally delivered having
been approved by the Attorney General of the State of Texas and registered by the Comptroller of
Public Accounts, as shown by the records of the Paying Agent/Registrar.
[
as Paying Agent/Registrar
J
Registered this date:
By:
Authorized Signature
Form of Schedule of Authorized Installments Deliveries to appear on Initial Note only.
SCHEDULE OF AUTHORIZED INSTALLMENT DELIVERIES
Remaining
Available
Principal
Balance
Issue Date No' t==::Tt
Extended
Maturity
Date
Date Paid Principal and
Interest Paid
A-5