HomeMy WebLinkAboutOrdinance - 2021-O0104 - LP&L Note Extension 8.10.21MINUTES AND CERTIFICATION PERTAINING TO
PASSAGE OF AN ORDINANCE
STATE OF TEXAS §
COUNTY OF LUBBOCK §
CITY OF LUBBOCK §
On the 1 Oth day of August, 2021, the City Council of the City of Lubbock, Texas, convened
in a regular meeting at the regular meeting place thereof, the meeting being open to the public and
notice of said meeting, giving the date, place and subject thereof, having been posted as prescribed
by Chapter 551, Texas Government Code, as amended; and the roll was called of the duly
constituted officers and members of the City Council, which officers and members are as follows:
Daniel M. Pope, Mayor Juan A. Chadis )
Steve Massengale, Mayor Pro Tern Shelia Patterson Harris ) Members of
Jeff Griffith ) the Council
Randy Christian )
Latrelle Joy )
and all of said persons were present, except N/A , thus
constituting a quorum. Whereupon, among other business, a written Ordinance bearing the
following caption was introduced:
ORDINANCE APPROVING THE EXTENSION OF THE
COMMITMENT EXPIRATION DATE OF THE NOTE
PURCHASE AGREEMENT FOR CITY OF LUBBOCK, TEXAS,
ELECTRIC LIGHT AND POWER SYSTEM REVENUE
REVOLVING NOTES, A REDUCTION TO THE AVAILABLE
COMMITMENT UNDER SUCH AGREEMENT, PROVIDING A
SUBSTITUTE INDEX FOR FLOATING RATE NOTES, AND
OTHER NECESSARY AND APPROPRIATE AMENDMENTS;
APPROVING AND AUTHORIZING CERTAIN AUTHORIZED
OFFICERS TO ACT ON BEHALF OF THE CITY; AND
PROVIDING FOR OTHER MATTERS INCIDENT AND
RELATED THERETO
The Ordinance, a full, true and correct copy of which is attached hereto, was read and
reviewed by the City Council. Thereupon, it was duly moved and seconded that the Ordinance be
passed and adopted.
The Presiding Officer put the motion to a vote of the members of the City Council, and the
Ordinance was passed and adopted by the following vote:
AYES: 7
NOES: 0
ABSTENTIONS: 0
4163-6108-2672.1
MINUTES APPROVED AND CERTIFIED TO BE TRUE AND CORRECT, and to
correctly reflect the duly constituted officers and members of the City Council of said City, and
the attached and following copy of said Ordinance is hereby certified to be a true and correct copy
of an official copy thereof on file among the official records of the City, all on this the 1 Oth day of
August, 2021.
City jeaetary
City of Lubbock, Texas
[SEAL]
4163-6108-2672.1
Ordinance No. 2021— 8104
ORDINANCE APPROVING THE EXTENSION OF THE COMMITMENT
EXPIRATION DATE OF THE NOTE PURCHASE AGREEMENT FOR
CITY OF LUBBOCK, TEXAS, ELECTRIC LIGHT AND POWER
SYSTEM REVENUE REVOLVING NOTES, A REDUCTION TO THE
AVAILABLE COMMITMENT UNDER SUCH AGREEMENT,
PROVIDING A SUBSTITUTE INDEX FOR FLOATING RATE NOTES,
AND OTHER NECESSARY AND APPROPRIATE AMENDMENTS;
APPROVING AND AUTHORIZING CERTAIN AUTHORIZED
OFFICERS TO ACT ON BEHALF OF THE CITY; AND PROVIDING
FOR OTHER MATTERS INCIDENT AND RELATED THERETO
STATE OF TEXAS §
COUNTY OF LUBBOCK §
CITY OF LUBBOCK §
WHEREAS, the City Council (the "City Council") of the City of Lubbock, Texas (the
"City"), has heretofore authorized the issuance of its City of Lubbock, Texas, Electric Light and
Power System Revenue Revolving Notes (the "Notes") pursuant to an ordinance adopted on
April 23, 2019 ("Note Ordinance");
WHEREAS, the City has entered into that certain Note Purchase Agreement, dated June
5, 2019 (the "Note Purchase Agreement") with Bank of America, N.A. (the "Bank");
WHEREAS, pursuant to the Note Purchase Agreement, the Bank has agreed, upon and
subject to the terms and conditions contained in the Note Purchase Agreement, to purchase from
the City from time to time Notes through the Commitment Expiration Date (unless the Bank's
obligation is terminated prior to such date in accordance with the Note Purchase Agreement),
which is scheduled to occur on or before December 31, 2021;
WHEREAS, pursuant to the Note Purchase Agreement, the Bank has agreed, upon and
subject to the terms and conditions contained in the Note Purchase Agreement, to purchase from
the City from time to time Notes in an aggregate principal amount not to exceed the Available
Commitment, which currently may not exceed $300,000,000;
WHEREAS, the Note Purchase Agreement currently provides that Notes bear interest at
a rate indexed to London Interbank Offered Rate ("LIBOR"), and LIBOR is expected to be
phased -out in the future;
WHEREAS, the City Council has determined that it is in the best interests of the City to:
(a) extend the Commitment Expiration Date provided by the Note Purchase Agreement, (b)
reduce the Available Commitment, (c) amend the Note Purchase Agreement to provide for a
substitute index for LIBOR, (d) make such other amendments to the Note Purchase Agreement
as may be necessary or appropriate in connection with the foregoing, and (e) authorize such
actions as are necessary or appropriate to effect the amendments contemplated by this
Ordinance;
HEII&XII-If4:10IN
WHEREAS, capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed thereto in the Note Ordinance and the Note Purchase Agreement;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF LUBBOCK:
Section 1. Extension of Stated Expiration Date; Amendment of Note Purchase
Agreement. The amendments to the Note Purchase Agreement pursuant to the terms and
conditions contained in the First Amendment to Note Purchase Agreement (the "Note Purchase
Agreement Amendment") between the City and the Bank is hereby approved, and the Mayor or
another Authorized Representative (as defined below) is authorized and directed to execute and
deliver the Note Purchase Agreement Amendment in substantially the form presented with this
Ordinance, subject to such modifications and revisions as shall be approved by one or more of
the following representatives of the City (each, an "Authorized Representative"): the Mayor, the
City Manager, the Chief Financial Officer of the City, the Director of Electric Utilities, and the
Chief Financial Officer of Lubbock Power & Light. The execution of the Note Purchase
Agreement Amendment by an Authorized Representative shall be conclusive evidence of such
Authorized Representative's approval of such modifications and revisions. Each Authorized
Representative is further authorized to execute and deliver such agreements, certificates, notices,
instructions, instruments or other documents as such Authorized Representative determines may
be necessary or appropriate in connection the transactions contemplated by this Ordinance or the
Note Purchase Agreement Amendment. The City Secretary is hereby authorized, where
necessary or appropriate, to attest such signatures and to place the City's seal on all such
documents. Each Authorized Representative is hereby authorized to take such other and further
actions as may be necessary to cause the City to perform its obligations under the Note Purchase
Agreement, as amended.
Section 2. Notice. Each Authorized Representative is hereby authorized and directed
to provide such notice(s) as they shall deem necessary or appropriate in connection herewith,
including, without limitation, any notice(s) required by the Note Ordinance or in connection with
the City's continuing disclosure undertakings related to its outstanding debt obligations. Such
notice(s) shall be provided to such notice parties as an Authorized Representative deem
necessary or appropriate.
Section 3. Confirmation of Delegation of Authority and Other Rights, Duties and
Powers of Authorized Representatives. The delegation of authority to the Authorized
Representatives provided by the Note Ordinance (within Section 2.08 thereof or otherwise) is
hereby ratified, approved and confirmed with respect to the extended and amended Program
contemplated hereby and the Note Purchase Agreement Amendment. The Authorized
Representatives shall have all rights, duties and powers in connection with the extended and
amended Program, the Note Purchase Agreement, the Notes and all matters related thereto as
provided to Authorized Representatives in the Note Ordinance, the Note Purchase Agreement or
any other documents related to the Program.
Section 4. Further Procedures; Authorized Representative. Each Authorized
Representative is hereby authorized, empowered and directed from time to time and at any time
-2-
4141-2248-6832.1
to do and perform all such acts and things and to execute, acknowledge and deliver in the name
and under the seal and on behalf of the City all such instruments, including any agreements,
certificates, notices, consents or other documents, whether or not herein mentioned, as may be
necessary or desirable in order to carry out the terms and provisions of this Ordinance, to cause
the performance of the City's obligations under the Note Purchase Agreement, as amended, and
to protect the interests of the City. Each such Authorized Representative is further authorized to
apply for and obtain such approvals, authorizations and consents as shall be deemed to be
necessary or appropriate, and to direct and oversee the preparation of and to execute,
acknowledge and deliver such other instruments or documents as such official may deem
necessary or appropriate, to effect and to carry out the purposes of this Ordinance.
Section 5. Payment of Costs. Each Authorized Representative is hereby authorized
and directed to authorize payment of any costs or expenses incurred in connection with the
transactions contemplated by this Ordinance, including, but not limited to, fees and expenses of
the City's Financial Advisor, counsel to the Bank and Bond Counsel, as well as any fees and
expenses of the Bank related to the extension and amendments contemplated hereby.
Section 6. Ratification and Approval of Prior Acts. The lawful acts of each
Authorized Representative and other officials of the City, and each of them, prior to the date
hereof in connection with the transactions described in the Note Purchase Agreement
Amendment and in this Ordinance are hereby ratified, approved, adopted and confirmed.
Without limiting the generality of the foregoing, the City's provision to the Bank of a request for
the extension of the Commitment Expiration Date and reduction of the Available Commitment is
hereby ratified, approved, adopted and confirmed.
Section 7. Open Meeting. It is hereby officially found and determined that the
meeting at which this Ordinance was adopted was open to the public, and public notice of the
time, place and purpose of said meeting was given, all as required by the Open Meetings Law,
Chapter 551, Texas Government Code, as amended.
Section 8. Repealer. All ordinances and resolutions, or parts thereof, inconsistent
herewith are hereby repealed to the extent of such inconsistency.
Section 9. Effective Date. This Ordinance shall be in force and effect from and after
its passage on the date shown below.
[Signature Page Follows]
-3-
4141-2248-6832.1
PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the loth
day of August, 2021, at a regular meeting of the City Council of the City of Lubbock, Texas.
L.'-A
DANIEL M. POPE, Mayor
REB CCA GARZA, Cik S retary
APPROVED AS TO CONTENT:
D. BLU K STEI ICH, Chief Financial Officer
APPROVED AS TO FORM:
C-)
JERR V. KYLE, JR., Bond Counsel
Signature Page
4141-2248-6832.1
INCUMBENCY AND SIGNATURE IDENTIFICATION CERTIFICATE
The undersigned, Mayor and City Secretary of the City of Lubbock, Texas (the "City"),
acting in connection with the City's Electric Light and Power System Revenue Revolving Notes
(the "Notes"), hereby certify as follows:
1. Capitalized terms used herein and not otherwise defined have the meaning
assigned in the Ordinance authorizing the issuance of the Notes.
2. The signatures appearing below are our true, genuine and official signatures and
we are the duly chosen, qualified and acting officers of the City indicated beneath our respective
signatures and we are authorized to execute the Notes.
3. The persons named in Exhibit A attached hereto are the duly selected and
qualified officers of the City holding the office and title set forth beside their respective names
and the signature appearing beside each such person's name is such person's true and genuine
signature.
4. The persons named in Exhibit A attached hereto and the Mayor are "Authorized
Representatives" under the Ordinance.
[Signature page follows]
4136-0811-1664.1
EXECUTED 101W1
2021.
Signature
(CITY SEAL)
STATE OF TEXAS §
COUNTY OF LUBBOCK §
Title of Officer
DANIEL M. POPE
Mayor
REBECCA GARZA
City Secretary
Before me, on this day personally appeared the foregoing individuals, known to me to be
the persons whose names were subscribed in my presence to the foregoing instrument.
Given under my hand and seal of , 202 .
JIMMY D. MAYNARD
l Notary Public, State of Texas
Notary lDR 13229477�4
My Commission Expires 12-27-M3
- (NOTARY SEAL)
Notary Public
Typed Name: t f i l MAJ 0. I A"'�y►-e ret
J
(My commission expires 12- Z?'20z3 }
4136-0811-1664.1
Name
W. Jarrett Atkinson
D. Blu Kostelich
David McCalla
'131c0it` Ak4 iNv,ig
Exhibit A
Specimen Signatures
Title Signature
City Manager 4,
Chief Financial Officer
Director of Electric Utilities i '
C!v O Y W i +-h
4136-0811-1664.1
CLOSING REPRESENTATIONS FOR EXTENSION OF THE NOTE PURCHASE AGREEMENT
We, the undersigned officers, acting on behalf of the City of Lubbock, Texas (the
"City "), pursuant to the Note Purchase Agreement, dated as of June 5, 2019, and amended on
August [31], 2021 (the "Amendment Date"), by and between the City and Bank of America,
N.A. (the "Agreement "), defined terms of which are herein incorporated by reference, do
hereby certify as follows:
1. the representations and warranties of the City contained in Article IV
of the Agreement, as amended hereby, and in each of the Program Documents are true
and correct on and as of the Amendment Date as though made on and as of such date
(except to the extent the same expressly relate to an earlier date and except that the
representations contained in Section 4.1(f) of the Agreement shall be deemed to refer
to the most recent financial statements of the City delivered to the Bank pursuant to
Section 6.1(a) of the Agreement);
2. no Default or Event of Default has occurred and is continuing or would
result from the execution of this Amendment;
3. the execution, delivery and performance by the City of this
Amendment and the Agreement, as amended hereby, are within its powers, have been
duly authorized by all necessary action and do not contravene any law, rule or
regulation, any judgment, order or decree or any contractual restriction binding on or
affecting the City;
4. no authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the due execution,
delivery and performance by the City of this Amendment or the Agreement, as
amended hereby; and
5. this Amendment and the Agreement, as amended hereby, constitute
legal, valid and binding obligations of the City enforceable against the City in
accordance with their respective terms, except that (i) the enforcement thereof may be
limited by bankruptcy, reorganization, insolvency, liquidation, moratorium and other
laws relating to or affecting the enforcement of creditors' rights and remedies
generally, as the same may be applied in the event of the bankruptcy, reorganization,
insolvency, liquidation or similar situation of the City, and to the exercise of judicial
discretion in appropriate cases and to the limitations on legal remedies against the
City, and (ii) no representation or warranty is expressed as to the availability of
equitable remedies.
4162-4292-1264.1
EXECUTED as of the Amendment Date set forth above.
City of Lubbock, Texas
�;W!D. BLU KO
Chief Financial Officer
4162-4292-1264.1
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
This FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT (this "Amendment ") is entered
into as of August [31], 2021 (the "Amendment Date"), between CITY OF LUBBOCK, TEXAS, a
Texas home -rule municipality (the "City"), and BANK OF AMERICA, N.A., a national banking
association (the "Bank").
RECITALS
A. The City and the Bank are party to that certain Note Purchase Agreement dated June
5, 2019 (as heretofore modified, amended, restated or supplemented, the "Agreement"). Unless
otherwise defined herein, defined terms used herein shall have the meanings given such terms in
the Agreement.
B. The City has requested that the Agreement be amended to, among other things,
extend the Commitment Expiration Date, and the Bank has agreed to such amendments, subject
to the terms and conditions set forth herein.
Now THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the City and the
Bank agree as follows:
1. Amendments. Upon the satisfaction of the conditions precedent set forth in
Section 2 hereof, the Agreement is hereby amended as set forth in the redline attached hereto as
Exhibit A. In such redline, red strikethrough text constitutes deletions, while blue underlined
text constitutes additions.
2. Conditions Precedent to Amendment. The amendments in Section 1 hereof shall be
effective as of the date hereof when the Bank has duly executed this Amendment and receives:
(a) a counterpart of this Amendment duly executed by the City and the Bank;
(b) a certified copy of the ordinance, resolution or other evidence of
authorization by the appropriate body of the City authorizing this Amendment and the
transactions contemplated hereby;
(c) an opinion of counsel to the City in form and substance satisfactory to the
Bank;
(d) an incumbency certificate with respect to the officer of the City authorized
to execute this Amendment, which may be included in an instrument containing other
customary and appropriate certifications made on behalf of the City;
(e) payment of all expenses, including reasonable legal fees and expenses of
counsel to the Bank, incurred by the Bank in connection with this Amendment; and
Lubbock LPL 2021 Note Program Extension - First Amendment to Note Purchase Agreement NPA 4156-9188-0752 3
1962125
(f) such other agreements, documents, instruments, evidences and items as
the Bank may reasonably request.
3. Representations and Warranties. The City represents and warrants to the Bank that
the following statements are true and correct as of the Amendment Date:
(a) the representations and warranties of the City contained in Article IV of
the Agreement, as amended hereby, and in each of the Program Documents are true and
correct on and as of the Amendment Date as though made on and as of such date (except
to the extent the same expressly relate to an earlier date and except that the
representations contained in Section 4.1(f) of the Agreement shall be deemed to refer to
the most recent financial statements of the City delivered to the Bank pursuant to Section
6.1(a) of the Agreement);
(b) no Default or Event of Default has occurred and is continuing or would
result from the execution of this Amendment;
(c) the execution, delivery and performance by the City of this Amendment
and the Agreement, as amended hereby, are within its powers, have been duly authorized
by all necessary action and do not contravene any law, rule or regulation, any judgment,
order or decree or any contractual restriction binding on or affecting the City;
(d) no authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the due execution,
delivery and performance by the City of this Amendment or the Agreement, as amended
hereby; and
(e) this Amendment and the Agreement, as amended hereby, constitute legal,
valid and binding obligations of the City enforceable against the City in accordance with
their respective terms, except that (i) the enforcement thereof may be limited by
bankruptcy, reorganization, insolvency, liquidation, moratorium and other laws relating
to or affecting the enforcement of creditors' rights and remedies generally, as the same
may be applied in the event of the bankruptcy, reorganization, insolvency, liquidation or
similar situation of the City, and to the exercise of judicial discretion in appropriate cases
and to the limitations on legal remedies against the City, and (ii) no representation or
warranty is expressed as to the availability of equitable remedies.
4. Effect of Amendment. This Amendment is a Program Document. The amendment
effected hereunder is expressly limited to the matters contained herein. Except as amended
hereby, the Agreement and the other Program Documents, are unchanged and are hereby ratified
and confirmed.
5. Counterparts. This Amendment may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall constitute one and the
same instrument. The delivery of a telecopy or PDF signature page to this Amendment shall be
effective as the delivery of a manually executed original counterpart thereof.
6. Governing Law. This Amendment and any claims, controversy, dispute or cause of
action (whether in contract or tort or otherwise) based upon, arising out of or relating to this
Amendment and the transactions contemplated hereby shall be governed by and construed in
accordance with, the law of the State of Texas.
7. Parties. This Amendment binds and inures to the benefit of the City, the Bank, and
their respective successors and permitted assigns.
8. No Israel Boycott. Pursuant to Section 2271.002, Texas Government Code, the
Bank hereby represents and verifies that neither it nor or any wholly owned subsidiary, majority -
owned subsidiary, parent company or affiliate of the Bank, subject to or as otherwise required or
permitted by applicable Federal law, including, without limitation, 50 U.S.C. Section 4607,
Boycotts Israel (as defined in Section 2271.002, Texas Government Code) and, subject to or as
otherwise required or permitted by applicable Federal law, including, without limitation, 50
U.S.C. Section 4607, the Bank agrees that neither it nor or any wholly owned subsidiary,
majority -owned subsidiary, parent company or affiliate of the Bank will Boycott Israel during
the term hereof.
9. Comptroller List. The Bank hereby represents that it is not listed by the Texas
Comptroller as described in Section 2252.152 of the Texas Government Code.
10. Publicly Traded. The Bank hereby represents that it is a publicly traded business
entity (or a wholly owned subsidiary of such an entity), as described in Section 2252.908(c)(4) of
the Texas Government Code.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE TO FOLLOW]
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers hereunto duly authorized as of the date first
set forth above.
CITY OF LUBBOCK, TEXAS
By
Name: Daniel M. Pope
Title: Mayor
BANK OF AMERICA, N.A.
By:
Name:
Title:
Signature Page to First Amendment to Note Purchase Agreement
EXHIBIT A
REDLINE OF AGREEMENT CHANGES
[ATTACHED BEGINNING ON NEXT PAGE]
&7 Fte T-ie?i r^""AMENDMENT REDLINE — FIRST AMENDMENT
DRAFT DATED 7/26/21
NOTE PURCHASE AGREEMENT
dated June 5, 2019
between
CITY OF LUBBOCK, TEXAS
and
BANK OF AMERICA, N.A.
Redline Note Purchase Agreement (T '' ee' Tom` ^ °A' ^'jj " "First Amendment) 4839-8568-1650 v2-54.doc
4289096
TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE I DEFINITIONS................................................................................................. I
Section 1.1. Defined Terms.......................................................................................I
Section 1.2. Other Interpretive Provisions...............................................................16
Section 1.3. Accounting Terms................................................................................16
Section1.4. Rounding..............................................................................................16
Section1.5. Times of Day........................................................................................17
ARTICLE II SALE AND PURCHASE; CLOSING.................................................................17
Section 2.1.
Purchase and Sale of Notes..................................................................17
Section2.2.
Closing.................................................................................................17
Section 2.3.
Method of Purchase.............................................................................18
Section 2.4.
Interest Rate.....................................................................................2018
Section2.5.
Payment............................................................................................2019
Section2.6.
Fees..................................................................................................2420
Section 2.7.
Reduction and Termination..............................................................23-22
Section 2.8.
Taxability.........................................................................................2422
Section 2.9.
Funding Indemnity...........................................................................2-423
Section 2.10.
Extension of Commitment Expiration Date.....................................2423
Section 2.11.
Security of Obligations....................................................................2423
Section 2.12.
Suspension Events...........................................................................2524
Section 2.13.
Increase in Available Commitment.....................................................24
ARTICLE III LIABILITY, INDEMNITY AND PAYMENT.......................................................25
Section 3.1.
Liability of the Agency........................................................................25
Section 3.2.
Indemnification by the Agency........................................................2625
Section 3.3.
Increased Costs................................................................................2726
Section3.4.
Taxes................................................................................................2927
Section 3.5.
Maximum Rate; Default Rate..............................................................28
Section 3.6.
Liability of the Bank........................................................................2928
Section 3.7.
Obligations Unconditional...................................................................29
Section3.8.
Illegality...............................................................................................29
Section 3.9.
i Milt. to note v *Reserved.............................................2929
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................30
Section 4.1. Representations of the Agency............................................................30
ARTICLE V CONDITIONS............................................................................................�35
Section 5.1. Closing Conditions..........................................................................�35
Section 5.2. Certain Conditions to Bank's Obligations.......................................�38
Section 5.3. Satisfaction or Waiver of Conditions...............................................4039
-I-
ARTICLE VI
COVENANTS............................................................................................4039
Section 6.1.
Covenants of the Agency.................................................................4039
ARTICLE VII
DEFAULTS AND REMEDIES..........................................................................46
Section 7.1.
Events of Default.................................................................................46
Section7.2.
Remedies..........................................................................................4948
Section 7.3.
Suits at Law or in Equity and Mandamus........................................-5-049
Section 7.4.
No Waiver.........................................................................................5049
Section 7.5.
Discontinuance of Proceedings............................................................50
ARTICLE VIII
GENERAL................................................................................................-5-�50
Section8.1.
Notices.............................................................................................�50
Section 8.2.
Successors and Assigns....................................................................-5-150
Section 8.3.
Amendments....................................................................................-5-352
Section 8.4.
Governing Law; Jurisdiction; Etc . ...................................................
-5-352
Section 8.5.
Waiver of Jury Trial..........................................................................5453
Section 8.6.
Counterparts......................................................................................5453
Section8.7.
Severability..........................................................................................54
Section 8.8.
Survival of this Agreement..............................................................-5-554
Section 8.9.
Effectiveness....................................................................................-5-554
Section 8.10.
No Personal Liability.......................................................................�54
Section 8.11.
USA Patriot Act...............................................................................-5-554
Section 8.12.
Notice of Final Agreement...................................................................55
Section 8.13.
No Advisory or Fiduciary Relationship...............................................55
Section 8.14.
Israel Boycott...................................................................................�55
Section 8.15.
Texas Government Code Section 2252.152.....................................�55
EXHIBIT A —
Form of Request for Purchase
EXHIBIT B —
Form of Notice of Continuation/Conversion
EXHIBIT C
Form of Request for Extension
EXHIBIT D —
Form of Notice of Termination
EXHIBIT E —
Form of Notice of Termination or Reduction
EXHIBIT F
Form of Notice of Reduction
EXHIBIT G —
Form of Notice of Extension
EXHIBIT H —
Form of Investor Letter
EXHIBIT I
Form of Compliance Certificate
NOTE PURCHASE AGREEMENT
June 5, 2019
City of Lubbock, Texas
16 IS 3`
1314 Avenue K
Lubbock, Texas 7945779401
Attention: City Council
Ladies and Gentlemen:
The undersigned Bank of America, N.A. (the "Bank") offers to enter into this Note
Purchase Agreement (as amended, supplemented or otherwise modified from time to time, the
"Agreement") with the City (as hereinafter defined), for the purchase by the Bank and sale by the
City of the Notes specified below. This offer is made subject to the City's written acceptance on
the Closing Date, and upon such acceptance this Agreement shall be in full force and effect in
accordance with its terms and shall be binding upon the City and the Bank.
ARTICLE I
DEFINITIONS
Section 1.1. Defined Terms. Capitalized terms not otherwise defined herein shall have the
same meanings as are set forth in the Ordinance (as defined herein). In addition to the terms
defined elsewhere in this Agreement, the following terms shall have the indicated meanings:
"1933 Act" means the Securities Act of 1933, as the same shall from time to time be
supplemented or amended.
"Affiliate " means, with respect to any Person, any Person that directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under common control with,
such first Person. A Person shall be deemed to control another Person for the purposes of this
definition if such first Person possesses, directly or indirectly, the power to direct, or cause the
direction of, the management and policies of the second Person, whether through the ownership of
voting securities, common directors, trustees or officers, by contract or otherwise.
"Alternate Rate" means a fluctuating rate of interest per annum (rounded to the fifth
decimal place) determined daily, equal to the Prime Rate plus the Applicable Spread TAR
(Tax -Exempt) or the Applicable Spread TAR (Taxable), as applicable; provided, that subject
to Section 3.5 hereof, at no time shall the Alternate Rate exceed the Maximum Rate; provided,
however, that immediately and upon the occurrence of an Event of Default (and without any notice
given with respect thereto) and during the continuation of such Event of Default, "Alternate Rate "
shall mean the Default Rate.
"4r ieable 1��A mendment Date" means 8"' 1 ]. 2021.
"Applicable Spread —Op (Tax -Exempt) " means, initially -3438 basis points
(0440.38%), which is subject to maintenance of the current Rating. In the event of a change in the
Rating, the Applicable Spread -MOOR (Tax -Exempt) shall equal the number of basis points set
forth in the Level associated with the lowest Rating as set forth in the schedule below:
Level I
Level II
Level III
Level IV
Level V
Level VI
Level VII
Level VIII
RATING
MOODY'S S&P FITCH
AI or higher A+ or higher A+ or higher
APPLICABLE
SPREAD-LIBO
(TAX-EXEMPT)
BASIS POINTS (%)
0.340%0.38%
A2
A
A
0.44,;0.48%
A3
A-
A-
0.54;0.58%
Baal
BBB+
BBB+
0.640,;0.68%
Baa2
BBB
BBB
0.74°�a0.78%
Baa3
BBB-
BBB-
0.84,0;0.88%
Below Investment Grade
+1.50%
Rating withdrawn or suspended
for
+1.50%
credit -related reasons
Any change in the Applicable Spread-DIBOR (Tax -Exempt) resulting from a change in the Rating
shall be and become effective as of and on the date of the public announcement of the change in the
Rating. References to the Rating above are references to rating categories as presently determined
by the Rating Agencies and in the event of adoption of any new or changed rating system by any
such Rating Agency, including, without limitation, any recalibration of the Rating in connection
with the adoption of a "global" rating scale, each Rating from the Rating Agency in question
referred to above shall be deemed to refer to the rating category under the new rating system which
most closely approximates the applicable rating category as currently in effect. In the event that
any Rating is suspended, withdrawn, or otherwise unavailable for credit -related reasons from any
Rating Agency, or upon the occurrence of and during the continuance of an Event of Default, in
each such case, the interest rate on the Notes shall increase automatically to the Default Rate. The
City acknowledges that as of the Closing Date the Applicable Spread-L4BBR (Tax -Exempt) is that
specified above for Level I.
"Applicable Spread TAR (Taxable) " means, initially 4-359 basis points (44J0.59%),
which is subject to maintenance of the current Rating. In the event of a change in the Rating, the
-2-
Applicable Spread-L4130R (Taxable) shall equal the number of basis points set forth in the Level
associated with the lowest Rating as set forth in the schedule below:
Level I
Level II
Level III
Level IV
Level V
Level VI
Level VII
Level VIII
RATING
MOODY'S S&P FITC14
Al or higher A+ or higher A+ or higher
APPLICABLE
SPREAD-LIBO
(TAXABLE) BASIS
POINTS (%)
no 43%0.59%
A2
A
A
0.530%0.69%
A3
A-
A-
0.630%0.79%
Baal
BBB+
BBB+
0.730%'0.89%
Baa2
BBB
BBB
0.83 a0.990
Baa3
BBB-
BBB-
no-930%1.09%
Below Investment Grade
+1.50%
Rating withdrawn or suspended
for
+1.50%
credit -related reasons
Any change in the Applicable Spread-LBOR (Taxable) resulting from a change in the Rating
shall be and become effective as of and on the date of the public announcement of the change in the
Rating. References to the Rating above are references to rating categories as presently determined
by the Rating Agencies and in the event of adoption of any new or changed rating system by any
such Rating Agency, including, without limitation, any recalibration of the Rating in connection
with the adoption of a "global" rating scale, each Rating from the Rating Agency in question
referred to above shall be deemed to refer to the rating category under the new rating system which
most closely approximates the applicable rating category as currently in effect. In the event that
any Rating is suspended, withdrawn, or otherwise unavailable for credit -related reasons from any
Rating Agency, or upon the occurrence of and during the continuance of an Event of Default, in
each such case, the interest rate on the Notes shall increase automatically to the Default Rate. The
City acknowledge that as of the Closing Date the Applicable Spread-UB8R (Taxable) is that
specified above for Level I.
"Authorized Representative" has the meaning set forth in the Ordinance.
"Available Commitment" means, on any date, an initial amount equal to
for the period commencina on the Amendment Date and continuing until the Commitment
Step -Down Date. $300.000.000. and (ii) for the period commencing on the Commitment
Step -Down Date and continuing thereafter. $f60.000.0001, and thereafter such initial amount
adjusted from time to time as follows: (a) downward in an amount equal to the principal amount of
any Note purchased by the Bank pursuant to the terms hereof; (b) upward in an amount equal to the
-3-
principal amount of any Note paid by the City pursuant to the terms of Section 2.5 hereof; and (c)
downward to zero upon the expiration or termination of the Available Commitment in accordance
with the terms hereof, provided, that, except as otherwise permitted in accordance with the terms
of Section 2.13 hereof, after giving effect to any of the foregoing adjustments the Available
Commitment shall never exceed $3 00,000,0 )0f 60.000.0001 at any one time after the Commitment
Step -Down Date.
"Bank" has the meaning specified in the introductory paragraph hereof.
"Bank Agreement" means any credit agreement, liquidity agreement, standby bond
purchase agreement, reimbursement agreement, direct purchase agreement (such as a continuing
covenant agreement or supplemental bondholder's agreement), bond purchase agreement, or other
agreement or instrument (or any amendment, supplement or other modification thereof) under
which, directly or indirectly, any Person or Persons undertake(s) (i) to make or provide funds to
make, payment of, (ii) to purchase or (iii) to provide credit enhancement for bonds, notes or other
obligations of the City secured by or payable from Net Revenues on an equal basis with the owners
of Subordinate Lien Obligations.
"Bankruptcy Code" means the federal Bankruptcy Code of 1978, as it may be amended
from time to time (Title 11 of the United States Code), and any successor statute thereto.
"Bond Counsel" means the law firm of Orrick, Herrington & Sutcliffe LLP, or any
nationally recognized bond counsel selected by the City and reasonably acceptable to the Bank.
"Bond Issuance Date " means the date on which the City, has sold its Electric Light
Power System Revenue Bonds, Series 2021.
"Bonds Similarly Secured" has the meaning set forth in the Ordinance.
"Business Day" means any day (i) when banks are not required or authorized by law or
executive order to be closed in Dallas, Texas, New York, New York, the city in which the office of
the Bank at which Requests for Purchase are to be honored is located or the city in which the
Paying Agent/Registrar is located, (ii) when the New York Stock Exchange is not required or
authorized by law or executive order to be closed and (iii) with respect to all notices and
determinations in connection with, and payments of principal and interest on, any Note, any day
that is a Business Day described in clauses (i) and (ii) and that is also a lling by an
between 1.apiks i Dollar- deposits i the London ifite -Lank m.,r4e
"Change in Law" means the occurrence, after the Closing Date, of any of the following:
(a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law,
rule, regulation or treaty or in the administration, interpretation, implementation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any Governmental Authority;
provided that notwithstanding anything herein to the contrary, (i) the Dodd -Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by
M
the Bank for International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be a "Change in Law ", regardless of the date
enacted, adopted or issued.
thereto.
"City" means the City of Lubbock, Texas.
"City Council " means the City Council, the governing body of the City, and any successor
"Closing" has the meaning specified in Section 2.2 hereof.
"Closing Date " means June 5, 2019.
"Code" means the Internal Revenue Code of 1986, as amended, and when reference is
made to a particular section thereof, the applicable Treasury Regulations from time to time
promulgated or proposed thereunder.
"Commitment" means the agreement of the Bank pursuant to Section 2.1 hereof to make
purchases of Notes under the terms hereof for the account of the City the proceeds of which shall
be used for the purposes set forth in the Ordinance.
"Commitment Expiration Date " means DeeembeF 344 1, 2424-2024 unless
extended as provided herein.
"Commitment Fee" has the meaning set forth in Section 2.6(a) hereof.
"Commitment Fee Rate " has the meaning set forth in Section 2.6(a) hereof.
"Commitment Step -Down Date" means the earlier to occur of (i) [September 15, 2021].
and (ii) the Bond Issuance Date.
"Compliance Certificate " means a certificate substantially in form of Exhibit I hereto.
"Computation Date" means Wednesday of each week, or if any Wednesday is not a
Business Day, the next succeeding Business Day.
"Daily SOFR Rate" means the rate per annum equal to SOFR determined for any day
pursuant to the definition thereof.
"Default" means any condition or event which with the giving of notice or lapse of time or
both would, unless cured or waived, become an Event of Default.
"Default Rate" means, (i) for the Floating Rat-eTax-Exempt Notes, the Fixed RateTaxable
Notes and the other Obligations, a rate of interest equal to ten percent (10%) per annum, and (ii) for
the Commitment Fee, a rate equal to the Commitment Fee Rate in effect on the date of an Event of
-5-
Default plus and one and one half of one percent (1.50%).
"Designated Jurisdiction " means any country or territory to the extent that such country or
territory itself is the subject of any Sanction.
"Determination of Taxability" means and shall be deemed to have occurred on the first to
occur of the following:
(i) on the date when the City files any statement, supplemental statement or
other tax schedule, return or document which discloses that an Event of Taxability shall
have in fact occurred;
(ii) on the date when a Noteholder or any former Noteholder notifies the City
that it has received a written opinion by a nationally recognized firm of attorneys of
substantial expertise on the subject of tax-exempt municipal finance to the effect that an
Event of Taxability shall have occurred unless, within one hundred eighty (180) days after
receipt by the City of such notification from such Noteholder or such former Noteholder,
the City shall deliver to such Noteholder or such former Noteholder, as applicable, a ruling
or determination letter issued to or on behalf of the City by the Commissioner of the
Internal Revenue Service or the Director of Tax -Exempt Bonds of the Tax -Exempt and
Government Entities Division of the Internal Revenue Service (or any other government
official exercising the same or a substantially similar function from time to time) to the
effect that, after taking into consideration such facts as form the basis for the opinion that
an Event of Taxability has occurred, an Event of Taxability shall not have occurred;
(iii) on the date when the City shall be advised in writing by the Commissioner
of the Internal Revenue Service or the Director of Tax -Exempt Bonds of the Tax -Exempt
and Government Entities Division of the Internal Revenue Service (or any other
government official exercising the same or a substantially similar function from time to
time, including an employee subordinate to one of these officers who has been authorized
to provide such advice) that, based upon filings of the City, or upon any review or audit of
the City or upon any other ground whatsoever, an Event of Taxability shall have occurred;
or
(iv) on the date when the City shall receive notice from a Noteholder or any
former Noteholder that the Internal Revenue Service (or any other government official or
agency exercising the same or a substantially similar function from time to time) has
assessed as includable in the gross income of such Noteholder or such former Noteholder
the interest on any Tax -Exempt Note due to the occurrence of an Event of Taxability;
provided, however, no Determination of Taxability shall occur under subparagraph (iii) or (iv)
hereunder unless the City has been afforded the reasonable opportunity, at its expense, to contest
any such assessment, and, further, no Determination of Taxability shall occur until such contest, if
made, has been finally determined; provided further, however, that upon written demand from a
Noteholder or former Noteholder, the City shall promptly reimburse such Noteholder or former
Noteholder for any payments, including any taxes, interest, penalties or other charges, such
Sel
Noteholder (or former Noteholder) shall be obligated to make as a result of the Determination of
Taxability.
"Direction Letter" means the direction letter dated June 5, 2019 from the City to the Bank,
as the same may be amended, modified, supplemented or restated.
"Dollar" and "$" mean lawful money of the United States.
"ERISA " means the Employee Retirement Income Security Act of 1974, as amended, and
any successor statute of similar import, and regulations thereunder, in each case as in effect from
time to time. References to Sections of ERISA shall be construed also to refer to any successor
Sections.
"ERISA Affiliate " means any trade or business (whether or not incorporated) under
common control with the City within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the
Code).
"Event of Default" with respect to this Agreement has the meaning set forth in Section 7.1
of this Agreement and, with respect to any Program Document, has the meaning assigned therein.
"Event of Taxability " means (i) a change in Law or fact or the interpretation thereof, or the
occurrence or existence of any fact, event or circumstance (including, without limitation, the
taking of any action by the City, or the failure to take any action by the City, or the making by the
City of any misrepresentation herein or in any certificate required to be given in connection with
this Agreement or the issuance, sale or delivery of the Notes) which has the effect of causing
interest paid or payable on any Tax -Exempt Note to become includable, in whole or in part, in the
gross income of a Noteholder or any former Noteholder for federal income tax purposes or (ii) the
entry of any decree or judgment by a court of competent jurisdiction, or the taking of any official
action by the Internal Revenue Service or the Department of the Treasury, which decree, judgment
or action shall be final under applicable procedural Law, in either case, which has the effect of
causing interest paid or payable on any Tax -Exempt Note to become includable, in whole or in
part, in the gross income of such Noteholder or such former Noteholder for federal income tax
purposes with respect to any Tax -Exempt Note.
"Excess Interest Amount" has the meaning set forth in Section 3.5(b) hereof.
"Federal Funds Rate" means, for any day, the rate per annum equal to the weighted
average of the rates on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America, N.A. on such day on such transactions as determined by Bank of
-7-
America, N.A.
"Fiscal Year" has the meaning set forth in the Ordinance.
"Fitch " means Fitch, Inc., and its successors and assigns.
•
"GAAP" means generally accepted accounting principles in effect from time to time in the
United States and applicable to entities such as the City, including, without limitation, those
principles set forth in the statements and pronouncement of the Government Accounting Standards
Board.
"Governmental Approval" means an authorization, consent, approval, permit, license,
certificate of occupancy or an exemption of, a registration or filing with, or a report to any
Governmental Authority.
"Governmental Authority " means the government of the United States or any other nation,
or of any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government (including, without limitation, the Financial Conduct Agency, the Prudential
Regulation Authority and any supra -national bodies such as the European Union or the European
Central Bank).
"Gross -Up Rate" means, for each day that the Gross -Up Rate is determined, the quotient
of (i) one divided by (ii) one minus the Maximum Federal Corporate Tax Rate in effect as of such
day.
"Guarantee" means, for any Person, all guarantees, endorsements (other than for
collection or deposit in the ordinary course of business) and other contingent obligations of such
Person to purchase, to provide funds for payment, to supply funds to invest in any other Person or
otherwise to assure a creditor of another Person against loss.
"Indebtedness" means for any Person (without duplication) (i) all indebtedness created,
assumed or incurred in any manner by such Person representing money borrowed (including by
the issuance of debt securities), (ii) all obligations for the deferred purchase price of property or
services (other than trade accounts payable arising in the ordinary course of business), (iii) all
obligations secured by any Lien upon property of such Person, whether or not such Person has
assumed or become liable for the payment of such indebtedness, (iv) all Capitalized Lease
Obligations of such Person, (v) all obligations, contingent or otherwise, of such Person on or with
respect to letters of credit, banker's acceptances and other evidences of indebtedness representing
10
extensions of credit whether or not representing obligations for borrowed money, (vi) all
Guarantees and (vii) obligations of such Person under any Swap Contract.
"Indemnitee " has the meaning set forth in Section 3.2(a) hereof.
"Interconnection Agreement" means the Interconnection Agreement to be entered into
between Sharyland Utilities, L.P. and the City, as the same may be amended, modified,
supplemented or restated.
"Interconnection Agreement Event of Default" means an "event of default" as set forth in
Section 11.1 of the Interconnection Agreement.
"Interest Payment Date" means, a) for- any Fixed RateNote, gufter-l5, in aFFe-ar-s on the
related Note Maturity Bate; an (b) as to any Floating ate Note, quarterly in arrears on the first
Business Day of each January, April, July and October of each calendar year and on the related
Note Maturity Date.
._
NORM
M-i
._
1 15 r� �; ---
■ msp�
WiL
HIM
..
"Investment Policy" means the investment policy of the City, delivered to the Bank
pursuant to Section 5.1 hereof.
In
"Laws " means, collectively, all international, foreign, federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents
or authorities, including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses, authorizations and permits of,
and agreements with, any Governmental Authority, in each case whether or not having the force of
law.
\
..
..
-
�NO
11011
• •
Rate" y
•
-
•
11 .•. \
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or
preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any easement, right of way or
other encumbrance on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).
-10-
"Majority Noteholder" means the Noteholders with a majority of the aggregate principal
amount of Notes from time to time. As of the Closing Date, the Bank shall be the Majority
Noteholder.
"Margin Stock" has the meaning ascribed to such term in Regulation U promulgated by
the FRB, as now and hereafter from time to time in effect.
"Material Adverse Change" means the occurrence of any event or change, which
separately or in the aggregate with the occurrence of other events, results or could reasonably be
expected to result in a Material Adverse Effect.
"Material Adverse Effect" means any material adverse change in or effect on (i) the
business, operations, assets, liabilities, condition (financial or otherwise) or results of operations of
the City, (ii) the ability of the City to consummate the transactions contemplated by this
Agreement or any of the Program Documents to which the City is a party, (iii) the ability of the
City to perform any of its obligations under any of the Program Documents to which the City is or
will be a party or (iv) the legality, validity, binding effect or enforceability against the City of any
Program Document to which the City is a party or the rights, security, interests or remedies of the
Bank hereunder or under any of the other Program Documents.
"Maximum Federal Corporate Tax Rate " means, for any day, the maximum rate of
income taxation imposed on corporations pursuant to Section I I(b) of the Code, as in effect as of
such day (or, if as a result of a change in the Code, the rate of income taxation imposed on
corporations generally shall not be applicable to the Bank, the maximum statutory rate of federal
income taxation which could apply to the Bank as of such day). As of the Closing Date, the
Maximum Federal Corporate Tax Rate is 21 %.
"Maximum Rate" means the maximum net effective interest rate permitted by State law to
be paid on obligations issued or incurred by the City in the exercise of its borrowing powers.
`Moody's" means Moody's Investors Service, Inc. and any successor rating agency.
"Multiemployer Plan " means any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which the City or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been obligated to make
contributions.
"Multiple Employer Plan " means a Plan which has two or more contributing sponsors
(including the City or any ERISA Affiliate) at least two of whom are not under common control, as
such a plan is described in Section 4064 of ERISA.
"Net Revenues" has the meaning set forth in the Ordinance.
"Note " or "Notes " has the meaning specified in Section 2.1(a) hereof.
"Note Maturity Date" means, for each Note, the maturity date designated in such Note at
-11-
the time of issuance pursuant to the terms of Section 2.1(c) hereof.
"Note Payment Fund" has the meaning set forth in the Ordinance.
"Noteholder" or "Holder" means the Bank and each Bank Transferee or Non -Bank
Transferee pursuant to Section 8.2 hereof so long as such Bank Transferee or Non -Bank
Transferee is an owner of Notes.
"Obligations " means the obligations of the City under this Agreement to pay and repay all
fees, expenses and charges payable or reimbursable hereunder to the Bank (including, without
limitation, any amounts to reimburse the Bank for any advances or expenditures by it under any of
such documents) and all other payment obligations of the City to the Bank arising under this
Agreement or the other Program Documents, in each, case whether now existing or hereafter
arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced,
held or acquired.
"OFAC" means the Office of Foreign Assets Control of the United States Department of
the Treasury.
"Ordinance" means Ordinance No. 2019-00046 relating to the City of Lubbock, Texas
Electric Light and Power System Revenue Revolving Note Program, as the same may be amended,
modified, supplemented or restated in accordance with the terms thereof and hereof.
"Outstanding" has the meaning set forth in the Ordinance.
"Participation Agreement" means the Participation Agreement dated as of August 21,
2018, by and between Sharyland Utilities, L.P. and the City, as the same may be amended,
modified, supplemented or restated.
"Participation Agreement Event of Default" means any "event of default" as set forth in
Article VI of the Participation Agreement.
"Patriot Act" means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. 107-56
(signed into law October 26, 2001).
"Paying Agent/Registrar" means the entity chosen as paying agent/registrar under the
Paying Agent/Registrar Agreement and its successors and assigns.
"Paying Agent/Registrar Agreement" means that certain Paying Agent/Registrar
Agreement dated as of June 1, 2019, between the City and the Paying Agent/Registrar, as the same
may be amended, modified or supplemented from time to time in accordance with its terms and the
terms hereof.
-12-
"Pension Plan " means any employee pension benefit plan (including a Multiple Employer
Plan or a Multiemployer Plan) that is maintained or is contributed to by the City and any ERISA
Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding
standards under Section 412 of the Code
"Person " means an individual, a corporation, a partnership, an association, a limited
liability company, a trust or any other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
"Plan" means any employee benefit plan within the meaning of Section 3(3) of ERISA
(including a Pension Plan), maintained for employees of the City or any ERISA Affiliate or any
such Plan to which the City or any ERISA Affiliate is required to contribute on behalf of any of its
employees.
"Prime Rate" means on any day, the rate of interest in effect for such day as publicly
announced from time to time by Bank of America, N.A. as its "prime rate." The `prime rate" is a
rate set by Bank of America, N.A. based upon various factors including Bank of America, N.A.'s
costs and desired return, general economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above, or below such announced rate. Any
change in such rate announced by Bank of America, N.A. shall take effect at the opening of
business on the day specified in the public announcement of such change.
"Program Documents " means this Agreement, the Ordinance, the Paying Agent/Registrar
Agreement, the Notes, the Tax Certificate (with respect to the Tax -Exempt Notes), and any
exhibits, schedules, instruments or agreements relating thereto, as the same may be amended,
modified or supplemented in accordance with their terms and the terms hereof.
"Project Costs " has the meaning set forth in the Ordinance.
"Purchase" means each Purchase described in Section 2.3 hereof.
"Purchase Date " means each date on which a Purchase occurs.
"Rating" means the long-term unenhanced ratings (without regard to any bond insurance
policy or credit enhancement) assigned by each Rating Agency to the Bonds Similarly Secured.
S&P.
"Rating Agency" means, individually or collectively, as applicable, Fitch, Moody's and
"Rating Documentation" has the meaning set forth in Section 5.1 hereof.
"Reduction Fee " means an amount equal to the product of (A) the Commitment Fee Rate
in effect on the date of the permanent reduction of the Commitment pursuant to Section 2.7(a)
hereof, (B) the difference between (x) the lnitialAvailable Commitment Ame timmediately prior
to such reduction and (y) the sum of the Available Commitment after the reduction and the
aggregate principal amount of the Notes outstanding after the reduction and (C) a fraction, the
-13-
numerator of which is equal to the number of days from and including the date of such reduction to
and including the first anniversary of the Closi igA-.mendment Date, and the denominator of which
is 360.
"Related Parties" means, with respect to any Person, such Person's Affiliates and the
partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and
representatives of such Person and of such Person's Affiliates.
"Request for Purchase" means the request for a purchase of a Note by the Bank, in the
form of Exhibit A hereto.
"Revenues Secured Debt" means Indebtedness of the City secured by or payable from a
lien on Net Revenues.
"S&P" means S&P Global Ratings, and any successor rating agency.
"Sanction(s) " means any international economic sanction administered or enforced by the
United States Government (including, without limitation, OFAC), the United Nations Security
Council, the European Union, Her Majesty's Treasury or other relevant sanctions authority.
"Security" has the meaning set forth in Section 2.11 hereof.
"SIFMA " means the Securities Industry & Financial Markets Association (formerly the
Bond Market Association).
"SIFMA Index" means, for any Computation Date, the level of the index which is issued
weekly and which is compiled from the weekly interest rate resets of tax-exempt variable rate
issues included in a database maintained by Municipal Market Data which meet specific criteria
established from time to time by the Securities Industry and Financial Markets Association and
issued on Wednesday of each week, or if any Wednesday is not a Business Day. the next
succeeding Business Day. If the SIFMA Index is no longer published, then "SIFMA Index" shall
mean the S&P Municipal Bond 7-Day High Grade Index. If the S&P Municipal Bond 7-Day High
Grade Index is no longer published, "SIFMA Index" shall mean a comparable or successor index
reasonably selected and approved by the Bank: provided that, to the extent a comparable or
successor index is approved by the Bank in connection herewith, the approved index shall be
applied in a manner consistent with market practice: Provided, further that, to the extent such
market practice is not administratively feasible for the Bank, such approved index shall be applied
in a manner as otherwise reasonably determined by the Bank. If the SIFMA Index shall be less
than zero basis points (0.00%), such rate shall be deemed zero basis points (0.00% for purposes
hereof.
"SIFMA Index Interest Period" means, while any Note bears interest at the Tax -Exempt
Rate, the period from (and including) the Purchase Date of such Note to and including, the day
prior to the next succeeding SIFMA Rate Reset Date, and thereafter shall mean the period from
(and including) the applicable SIFMA Rate Reset Date through and includingthe day prior to the
next succeeding SIFMA Rate Reset Date.
-14-
"SIFMA Index Rate Period" means, with respect to any Note, each period from and
including the Purchase Date with respect to such Note to but excluding the earlier of (A) three
hundred sixty-four (364) day_ s following the related Purchase Date. and (B) the Commitment
Expiration Date.
"SIFMA Rate Reset Date " means Thursday of each week.
"SOFR" means, with respect to any applicable determination date, the Secured Overnight
Financingpublished on such date by the SOFR Administrator on the Federal Reserve Bank of
New York's website (or any successor source): provided however that if such determination date
is not a U.S. Government Securities Business Day, then SOFR means such rate that applied on the
first U.S. Government Securities Business Day immediately prior thereto. Any change in the
Daily SOFR Rate shall be effective from and including the date of such change without further
notice. If SOFR is not available at such time for any reason or the Bank makes the determination
to incorporate or adopt a new interest rate to replace SOFR or the Daily SOFR Rate in credit
agreements, then the Bank may replace SOFR or the Daily SOFR Rate with an alternate interest
rate and adjustment, if applicable, as reasonably selected by the Bank, giving due consideration to
any evolving or then existing conventions for such interest rate and adjustment (and
successor interest rate, as adjusted, the "Successor Rate'). In connection with the implementation
of the Successor Rate, the Bank will have the right, from time to time, in good faith to make any
conforming, technical, administrative or operational changes to this Agreement as may be
appropriate to reflect the adoption and administration thereof and, notwithstanding anythingto the
contrary herein or in any other related document, any amendments to this Agreement
implementing such conforming changes will become effective upon notice to the City without any
further action or consent of the other parties hereto. If at any time the Daily SOFR Rate is less than
zero, such rate shall be deemed to be zero for the purposes of this Agreement.
"SOFR Administrator" means the Federal Reserve Bank of New York, as the
administrator of SOFR. or any successor administrator of SOFR designated by the Federal
Reserve Bank of New York or other person acting as the SOFR Administrator at such time.
"State " means the State of Texas.
"State Legislature " means the legislative branch of the government of the State of Texas.
"Subordinate Lien Obligations " has the meaning set forth in the Ordinance.
"Suspension Event" means the occurrence of a Participation Agreement Event of Default
or Interconnection Agreement Event of Default.
"Swap Contract" means only in connection with Revenues Secured Debt (a) any and all
rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions, currency swap transactions,
-15-
cross -currency rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to any master
agreement, and (b) any and all transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of master agreement published by
the International Swaps and Derivatives Association, Inc., any International Foreign Exchange
Master Agreement, or any other master agreement (any such master agreement, together with any
related schedules, a "Master Agreement"), including any such obligations or liabilities under any
Master Agreement.
"System " has the meaning set forth in the Ordinance.
"Tax Certificate" means that certain Federal Tax Certificate dated no later than the first
Purchase Date to occur hereunder, by the City, relating to any Tax -Exempt Notes initially sold and
delivered hereunder, as the same may be amended or supplemented from time to time.
..
• . •
■
"Tax -Exempt Note " means a Note bearing interest at the Tax -Exempt Rate.
"Tax-ExemntRateor- 'T t Floating Date LIBOR, ^ lie »
�x-�e��xt��x � means a rate
per annum of interest established on each Computation Date equal to the sum of (a) the Applicable
Spread (Tax -Exempt) plus b) the SIFMA Index.
"Taxable Date " means the date on which interest on any Tax -Exempt Note is first
includable in gross income of any Noteholder thereof (including the Bank) as a result of an Event
of Taxability as such a date is established pursuant to a Determination of Taxability.
"TaxableF4xed Rate " means an annualized fixed rate-, for the—applieable inteFest Period,
Asa floatingper annum equal to the sum of (a) LIBOR applieable lateFest
-Per-iodDaily SOFR Rate and (b) the Applicable Spread-L4BOR (Taxable); provided, however, that
immediately and upon the occurrence of an Event of Default (and without any notice given with
respect thereto) and during the continuation of such Event of Default, "Taxable F4K-edRa " shall
mean the Default Ra4e
-16-
•ate LIBOR means !SE
\ D
Default,rvie-
given with r-espeet thereto) and during the eentifmation of siieh Event of
•LIBOR" meanDefault Rate.
"Taxable Note" means Notes bearing interest at the Taxable Fixed Ra4e o the Taxable
Floating Rate -LIBOR, plieable
"Taxable Period" has the meaning set forth in Section 2.8(a) hereof.
"Termination Date" means the earliest of (i) the Commitment Expiration Date, as such
date may be extended pursuant to Section 2.10 hereof, (ii) the date on which the Commitment and
Available Commitment are otherwise terminated or reduced to zero in accordance with Section 2.7
hereof, and (iii) the date the Commitment terminates by its terms in accordance with Section 7.2
hereof.
"Termination Fee" means an amount equal to the product of (A) the Commitment Fee
Rate in effect on the date of termination of the Commitment pursuant to Section 2.7(b) hereof, (B)
the difference between (x) the ht4ia4Available Commitment Amour immediately prior to such
termination and (y) the principal amount of any permanent reduction to the Commitment pursuant
to Section 2.7(a) hereof for which a Reduction Fee has been paid to the Bank and (C) a fraction, the
numerator of which is equal to the number of days from and including the date of termination to
and including the first anniversary of the Clesi W_Amendment Date, and the denominator of which
is 360.
"U.S. Government Securities Business Dav" means anv business day. except anv business
day on which any of the Securities Industry and Financial Markets Association, the New York
Stock Exchange or the Federal Reserve Bank of New York is not open for business because such
day is a leeal holidav under the federal laws of the United States or the laws of the State of New
York, as applicable.
Section 1.2. Other Interpretive Provisions. With reference to this Agreement and each
other Program Document, unless otherwise specified herein or in such other Program Document:
(a) The definitions of terms herein shall apply equally to the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall." Unless the context
requires otherwise, (i) any definition of or reference to any agreement, instrument or other
document shall be construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Program Document),
(ii) any reference herein to any Person shall be construed to include such Person's successors and
assigns, (iii) the words "hereto," "herein," "hereof' and "hereunder," and words of similar import
-17-
when used in this Agreement, shall be construed to refer to this Agreement in its entirety and not to
any particular provision thereof, (iv) all references in this Agreement to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to this Agreement in which such references appear, (v) any reference to any law shall
include all statutory and regulatory provisions consolidating, amending, replacing or interpreting
such law and any reference to any law or regulation shall, unless otherwise specified, refer to such
law or regulation as amended, modified or supplemented from time to time, and (vi) the words
"asset" and "property" shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights.
(b) In the computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including;" the words "to" and "until" each mean "to but
excluding;" and the word "through" means "to and including."
(c) Section headings herein are included for convenience of reference only and shall not
affect the interpretation of this Agreement.
Section 1.3. Accounting Terms. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data (including financial
ratios and other financial calculations) required to be submitted pursuant to this Agreement shall
be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time,
applied in a manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.
Section 1.4. Rounding. Any financial ratios required to be maintained by the City
pursuant to this Agreement shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by which such ratio is
expressed herein and rounding the result up or down to the nearest number (with a rounding -up if
there is no nearest number).
Section 1.5. Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Central time (daylight or standard, as applicable).
ARTICLE II
SALE AND PURCHASE; CLOSING
Section 2.1. Purchase and Sale of Notes. (a) From the Closing Date through the
Termination Date, and upon and subject to the terms and conditions and on the basis of the
representations, warranties and agreements contained herein, the Bank hereby agrees, when
requested by the City pursuant to this Agreement, to purchase from the City from time to time (but
in no event more than three (3) purchases per calendar month and no more than fifteen (15) Notes
outstanding at any one time) in an aggregate principal amount not to exceed the Available
Commitment, and the City hereby agrees to sell and deliver to the Bank from time to time the "City
of Lubbock, Texas Electric Light and Power System Revenue Tax -Exempt Revolving Notes" and
"City of Lubbock, Texas Electric Light and Power System Revenue Taxable Revolving Notes,"
each in the form attached as Exhibit A to the Ordinance (the "Notes"), upon issuance thereof
under the terms and conditions of the Ordinance, in one or more installments on each Purchase
Date. The Notes are authorized pursuant to the provisions of Chapters 1371 and 1502, Texas
Government Code, as amended, and the Ordinance, and are to be issued only for the purposes
authorized under the Ordinance. Pursuant to the Ordinance, the principal of and interest on the
Notes are payable from and secured by a subordinate lien on and pledge of Net Revenues, subject
to the terms and conditions of the Ordinance, as applicable.
(b) Pursuant to and subject to the terms of this Agreement, each Note shall be sold to the
Bank at a purchase price equal to the principal amount of each Note and no accrued interest and the
Bank shall pay such purchase price to the City upon delivery of such Note to the Bank on the
related Purchase Date.
(c) Each Note shall (i) be dated the date such Note is delivered to the Bank, (ii) be
secured by the Net Revenues in the manner described in Section 2.1(a) hereof, (iii) mature not later
than the earlier of (A) three hundred sixty-four (364) days following the related Purchase Date, and
(B) the Commitment Expiration Date and (iv) be in a minimum principal amount of $2,000,000 or
an integral multiple of $100,000 in excess thereof. Interest on Tax -Exempt Notes and Taxable
Notes shall be calculated on the basis of a year of 360 days and actual days elapsed from the
Purchase Date.
Section 2.2. Closing. At such date and time as shall have been mutually agreed upon by
the City and the Bank, the certificates, opinions and other documents required by Section 5.1
below shall be executed and delivered (all of the foregoing actions are herein referred to
collectively as the "Closing"). Assuming the Closing is completed in accordance with the
provisions of this Agreement then, subject to the provisions of this Agreement and the conditions
set forth in Section 5.2 hereof, the Bank shall purchase each Note and pay the purchase price
therefor specified in Section 2.1(b) hereof (and the City shall issue and deliver such Note) at each
Purchase.
Section 2.3. Method of Purchase. (a) Each purchase of a Note shall be made upon the
City's irrevocable notice to the Bank and the Paying Agent/Registrar in the form of a Request for
Purchase with blanks appropriately completed. Each Request for Purchase shall be signed by an
-19-
Authorized Representative and shall specify: (1) the Purchase Date which shall be a Business Day
and shall be at least three (3) Business Days afteF the date of the Request for Purchase in the ea
a Fixed Rate Note and at least one (1) Business Day after the date of the Request for Purchase4n
the ease of a Flea4 „g Date Note; (2) the principal amount of the Note to be purchased, which shall
not exceed the Available Commitment as of the proposed Purchase Date; and (3) whether the
requested Note shall be a Fixed Rate Note and whether- sueh rate shall the Taxable Fixed Rate
or- he Tax -Exempt Fixed Rate) or a Floating Rate Note (and whether- sueh rate shall be the Tax
Floating Rate LIBOR or the Tax Exempt Floating Rate LIBOR, as applicable); (4) if ,
the dufmien of the latefest Period with -respeet theFeto, and that the last day of the proposed lateF
-Period will not be later- than the earlier- of the Note Matuf:it-y Date or- the Commitmefft E*pir-atiofi
Date; (5) whether- absent a different eleetion by the City (i) at the end of an inteFest Period the City
des4es that the Felated Fixed Ra4e Note (A) automatieally eonver-t to a Floating Rate Note (
designated whether- stieh eotwer-sion will be to the Tax Exempt Floating Ra4e LIBOR or- t
Taxable Floating Rate LIBOR), until other -wise direeted by the City oF (B) continue as a Fixed
Rate Note in the same h4er-est 12er-iod until othe ise difteted by the City or- (4) the City desifts
tha4 the rvla4ed Note automatieally eon4ifme as a Floating Rate Note until other -wise difeeted by the
Ci4yNote or a Taxable Note. Each Request for Purchase must be received by the Bank not later
than 10:00 a.m. three Business Days immedia4ely prior- to the -requested Pur-ehase Date in the e
f a Fi*ed Rate Note an y) than 10:00 a.m. one Business Day immediately prior to the requested
Purchase Date i the ease of a Floating Rate N *o
_
Z.._
. ■
■
■
■
upon receipt of a Request for Purchase for a Tax -Exempt Note or a Taxable Note by
the Bank, subject to the terms and conditions of this Agreement, the Bank shall be required to
make a purchase for a Flea4 Hg R such Note by 3:00 p.m. on the proposed Purchase Date for the
account of the City in an amount equal to the amount of the requested purchase. Notwithstanding
the foregoing, in the event such Request for Purchase for- a Floating Rate Note is received by the
Bank after 10:00 a.m. on the Business Day which is one (1) Business Day immediately prior to the
day of the proposed Purchase, the Bank shall be required to make the related Purchase for a
Floating P, Note by 3:00 p.m. on the second Business Day immediately following receipt of the
related Request for Purchase.
-20-
• !�7����EL4��: � � !T�lRR!lLT.�E�!lR'lf.T.f .
\ ■
I.
• .
QUA
10
11wr IN
Imp
• _
•
(f) If, after examination, the Bank shall have determined that a Request for Purchase;
N tiee f Continuation or N tiee f C nvers does not conform to the terms and conditions
hereof, then the Bank shall use its best efforts to give notice to the City and the Paying
Agent/Registrar to the effect that documentation was not in accordance with the terms and
conditions hereof and stating the reasons therefor. The City may attempt to correct any such
nonconforming Request for Purchase,'` otiee of Continuation or- N tiee of r,,. ver-sio , if, and to
the extent that, the City is entitled (without regard to the provisions of this sentence) and able to do
so. If the City fails to specify a type of Note or the applicable interest Period in a Request for
Purchase, Notiee of Continuation or- Notiee of Conversion or- if the City fails to give a timely flotiee
, then the applicable Notes shall be issued and bear interest
as, ,
Floating Rate Notes. The Bank shall promptly notify the City an
the Paying Agef44egistr-ar- of the intettst r-a4e appheable to any 1fAe-rest -Period for- Fixed R
Notes upon detefmiamion ofsue>, interest rate Taxable Notes. During the existence of a Default or
-21-
an Event of Default, no Notes may be requested as, eonvei4ed to or- eentinued as Fixed Rate Notes
without the prior written consent of the Bank in its sole discretion.
NOW
Section 2.4. Interest Rate. (a) Each Note shall bear interest at a rate per annum equal to
the lesser of (1) the Maximum Rate, (2) if a Floating RateTax-Exempt Note, at the Tax -Exempt
Floating Rate T Tuneor- the Taxable FloatingRate LIBOR, as app4eable&ate, or (3) if a Fed
Rate -Taxable Note, the Tax E*e V. t Fixed Rate or the Taxable Fixed Rate. The FloatiagiaxaW
Rate or FixedTax-Exempt Rate, as applicable, shall be rounded to the fifth decimal place. The
Bank shall determine the Tax -Exempt Rate on each Computation Date during each SIFMA Index
Rate Period, and such rate shall become effective on the SIFMA Index Reset Date next succeeding
such Computation Date, commencing on and including the first day of the applicable SIFMA
Index Interest Period to and including the last day of such SIFMA Index Interest Period. The Bank
shall determine the Taxable Rate as of each day as set forth in the definition of "Daily SOFR
Rate".
(b) Any principal of, and to the extent permitted by State law, any interest on the Notes
and any other sum payable hereunder, which is not paid when due shall bear interest, from the date
due and payable until paid, payable on written demand, at a rate per annum equal to the lesser of (i)
the Default Rate and (ii) subject to Section 3.5 hereof, Maximum Rate.
(c) The Bank shall promptly notify the City and the Paying Agent/Registrar of the
interest rate applicable to any interest -Pori ,a for- Fixed Rate Notes upon determination of such
interest rate; provided, however, that the failure by the Bank to provide notice of the applicable
interest rate shall not relieve the City of its obligation to make payment of amounts as and when
due hereunder. Each determination by the Bank of an interest rate shall be conclusive and binding
for all purposes, absent manifest error. If the Bank shall fail for any reason to determine the
Tax -Exempt Rate on any Computation Date. the Tax -Exempt Rate shall be the rate established for
the immediately prior SIFMA Index Interest Period.
(d) From and after the Taxable Date, each Tax -Exempt Note shall bear interest at the
applicable Gross -Up Rate.
Section 2.5. Payment. (a) Accrued but unpaid interest on each Note shall be due and
payable on the applicable Interest Payment Date. All outstanding principal of a Note shall be due
and payable on the related Note Maturity Date; provided, however, that upon the occurrence of the
Commitment Step -Down Date. the City shall be required to pay the outstandingprincipal amount
of Notes in an amount equal to the amount by which the aggregate principal amount of all Notes
exceeds the Available Commitment as of such date. plus interest accrued thereon to such date.
Interest due and payable on a Note shall be equal to the amount accrued to, but excluding the
related payment date. If the payment date for the principal of or interest on a Note is a day other
than a Business Day, the date for payment thereof shall be extended, without penalty, to the next
succeeding Business Day, and such extended period of time shall be included in the computation
of interest; provided, however, the payment of interest on a Note on such extended date shall have
-22-
the same force and effect as if made on the original payment date.
(b) Subject to Section 2.9 hereof, the City may prepay or redeem any Note, in whole or
in part, provided at least two (2) Business Days' prior written notice is given by the City to the
Bank and the Paying Agent/Registrar. Each such notice shall specify the date and amount of such
prepayment and the Notes to be prepaid and the Tr *rest Per-i d(s) f sueh N Each such notice
of optional prepayment shall be irrevocable and shall bind the City to make such prepayment in
accordance with such notice. Any prepayment of a Note shall be in a principal amount of
$2,000,000 or a whole multiple of $100,000 in excess thereof or, if less, the entire principal
amount of the particular Note then outstanding. All prepayments of principal shall include accrued
interest to the date of prepayment and all other amounts due and payable at such time pursuant to
this Agreement.
Section 2.6. Fees.
(a) Commitment Fees. The City agrees to pay to the Bank a nonrefundable annual fee
(the "Commitment Fee"), (i) from and including the Closing Date to the first anniversary of the
Closing Date, initially at a rate of 25 basis points (0.25%) per annum multiplied by the daily
Available Commitment, which is subject to the maintenance of the current Rating and subject to
adjustment based on the number of basis points set forth in the Level associated with the lowest
Rating as set forth in the schedule (the "Commitment Fee Rate ") and (ii) from and after the first
anniversary of the Closing Date, the Commitment Fee shall be calculated based on the number of
basis points set forth in the Level associated with the lowest Rating as set forth in the schedule
below multiplied by the daily Available Commitment:
COMMITMENT FEE
RATE BASIS
RATING POINTS (%)
MOODY'S
S&P
FITCH
AVAILABLE
AVAILABLE
COMMITMENT
COMMITMENT
< 50%
> 50%
UTILIZED
UTILIZED
Level I
Al or
A+ or
A+ or
0.25%
0.00%
higher
higher
higher
Level II
A2
A
A
0.35%
0.00%
Level III
A3
A-
A-
0.45%
0.00%
Level IV
Baal
BBB+
BBB+
0.55%
0.00%
Level V
Baa2
BBB
BBB
0.65%
0.00%
Level VI
Baa3
BBB-
BBB-
0.75%
0.00%
Level VII
Below
Investment Grade
+1.50%
+1.50%
-23-
Level VIII Rating withdrawn or suspended for +1.50% +1.50%
credit -related reasons
In determining the applicable Commitment Fee Rate based on the percentage of usage of the
Commitment, (i) for any downgrade to the Rating that occurs during the period from and including
the Closing Date to but excluding the first anniversary of the Closing Date, the percentage of usage
shall be determined based on the percentage of usage on the date of such downgrade and (ii) for
any downgrade to the Rating that occurs at any time after the first anniversary of the Closing Date,
the percentage of usage shall be determined based on the daily average amount of Notes
Outstanding during the most recently completed four fiscal quarters. Any change in the
Commitment Fee resulting from a change in the Rating shall be and become effective as of and on
the date of the public announcement of the change in the Rating. The Commitment Fee shall be
payable quarterly in arrears on the first Business Day of each January, April, July and October of
each calendar year (beginning on the first such date to occur after the Closing Date) and on the
Commitment Expiration Date, or such earlier date on which the Commitment may be terminated
in accordance with the terms of this Agreement. References to the Rating above are references to
rating categories as presently determined by the Rating Agencies and in the event of adoption of
any new or changed rating system by any such Rating Agency, including, without limitation, any
recalibration of the Rating in connection with the adoption of a "global" rating scale, each Rating
from the Rating Agency in question referred to above shall be deemed to refer to the rating
category under the new rating system which most closely approximates the applicable rating
category as currently in effect. In the event that any Rating is suspended, withdrawn, or otherwise
unavailable for credit -related reasons from any Rating Agency, or upon the occurrence of and
during the continuance of an Event of Default, in each such case the Commitment Fee Rate shall
increase automatically to the Default Rate, without prior notice to the City. The City acknowledges
that as of the Closing Date the Commitment Fee Rate is that specified above for Level I.
(b) Termination or Reduction Fee. The City shall pay to the Bank a Reduction Fee or
Termination Fee, as applicable, in connection with each permanent reduction or termination of the
Available Commitment or Commitment pursuant to Section 2.7 hereof prior to the first
anniversary of the Closing Date, in an amount equal to the Reduction Fee or Termination Fee, as
applicable, payable on the date of such termination or each such reduction.
(c) Amendment, Consent or Waiver Fee. Upon each amendment hereof, consent or
waiver hereunder or under any Program Document, the City shall pay or cause to be paid
reasonable attorneys' fees and expenses, if any, incurred by the Bank in processing such
amendment, consent or waiver and a fee in an amount of $2,500.
(d) Costs, Expenses and Taxes. The City will promptly pay on written demand (i) the
reasonable fees, costs and expenses of the Bank incurred in connection with the preparation,
negotiation, execution and delivery of this Agreement, the Notes and the other Program
Documents, (ii) the reasonable fees and disbursements (not to exceed $55,000) of Chapman and
Cutler LLP, special counsel to the Bank, incurred in connection with the preparation, execution,
filing and administration and delivery of this Agreement and the other Program Documents, (iii)
the reasonable fees and disbursements of counsel or other reasonably required consultants to the
-24-
Bank with respect to advising the Bank as to the rights and responsibilities under this Agreement
and the other Program Documents after the occurrence of any Default hereunder, or an Event of
Default, (iv) all reasonable costs and expenses, if any, in connection with any waiver or
amendment of, or the giving of any approval or consent under, or any response thereto or the
enforcement of this Agreement, the Program Documents and any other documents which may be
delivered in connection herewith or therewith, including in each case the reasonable fees and
disbursements of counsel to the Bank or other reasonably required consultants and (v) any
reasonable amounts advanced by or on behalf of the Bank to the extent required to cure any
Default, Event of Default or event of nonperformance hereunder or any Program Document,
together with interest at the Default Rate. In addition, the City shall pay any and all stamp taxes,
transfer taxes, documentary taxes, and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing, and recording of this Agreement and the security
contemplated by the Program Documents (other than taxes based on the net income of the Bank)
and, to the extent permitted by State law, agrees to indemnify and hold the Bank harmless from
and against any and all liabilities with respect to or resulting from any delay in paying, or omission
to pay, such taxes and fees, including interest and penalties thereon; provided, however, that the
City may reasonably contest any such taxes or fees with the prior written consent of the Bank,
which consent, if an Event of Default does not then exist, shall not be unreasonably withheld. In
addition, the City agrees to pay, after the occurrence of a Default or an Event of Default, all
reasonable costs and expenses (including reasonable attorneys' fees and costs of settlement)
incurred by the Bank in enforcing any obligations or in collecting any payments due from the City
hereunder by reason of such Default or Event of Default or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the nature of a
"workout" or of any collection, insolvency, bankruptcy proceedings or other enforcement
proceedings resulting therefrom.
(e) Default Rate. If the City shall fail to pay any amount payable under this Section 2.6
as and when due, each such unpaid amount shall bear interest for each day from and including the
date it was due until paid in full at the applicable Default Rate. The obligations of the City under
Sections 2.6(d) and (e) shall survive the termination of this Agreement.
Section 2.7. Reduction and Termination. (a) Subject to the provisions of Section 2.6(b)
hereof, the Available Commitment shall be reduced from time to time as requested by the City
within fifteen (15) Business Days of the City's written notice to the Bank requesting such
reduction in the form of Exhibit E hereto; provided, that (i) each such reduction amount shall be in
an amount equal to $2,000,000 or an integral multiple thereof, and (ii) any reduction in the
Available Commitment shall not be effective until the Bank delivers to the City and the Paying
Agent/Registrar a notice in the form attached hereto as Exhibit F reflecting such reduction.
(b) Subject to the provisions of Section 2.6(b) hereof, the City may at any time and at its
sole option terminate the Commitment upon ten (10) Business Days' prior written notice to the
Bank in the form of Exhibit E hereto. As a condition to any such termination, the City shall pay or
cause to be paid all Obligations due and owing to the Bank at such time (for the avoidance of
doubt, any outstanding Note at such time may remain outstanding until the applicable Note
Maturity Date).
-25-
Section 2.8. Taxability. In the event a Taxable Date occurs, the City hereby agrees to pay
to the Bank or any Noteholder on written demand therefor (1) an amount equal to the difference
between (A) the amount of interest that would have been paid to the Bank or any Noteholder, as
applicable, on any Tax -Exempt Note during the period for which interest on such Tax -Exempt
Note is includable in the gross income of the Bank or any Noteholder, if such Tax -Exempt Note
had borne interest at the Gross -Up Rate, beginning on the Taxable Date (the "Taxable Period"),
and (B) the amount of interest actually paid to the Bank or any Noteholder, as applicable, during
the Taxable Period, and (2) an amount equal to any interest, penalties or charges owed by the Bank
or any Noteholder, as applicable, as a result of interest on the Tax -Exempt Notes becoming
includable in the gross income of the Bank or any Noteholder, as applicable, together with any and
all reasonable attorneys' fees, court costs, or other out-of-pocket costs incurred by the Bank or any
Noteholder, as applicable, in connection therewith.
(b) The obligations of the City under this Section 2.8 shall survive the termination of the
Commitment and this Agreement.
Section 2.9. Funding Indemnity. allTo the extent permitted by State law, up en
dem ,,a f the Bank rrom time to 4imewith respect to any Tax -Exempt Note, in the Ot-yevent the
Bank shall promptly eompensate the Bank r^' and hold the Bank b..,,.,, iess f o incur any loss,
cost, or expense includin but not limited to, any loss, cost, or expense incurred by it as a Fes It
of -.reason of the liquidation or reemployment of deposits or other funds acquired or contracted to
be acquired by the Bank to make a purchase or hold such Notes or any interest therein or the
relending or reinvesting of such deposits or other funds or amounts paid or prepaid to the Bank) as
a result of any prepayment, redemption or conversion of such Notes on a date other than a SIFMA
Rate Reset Date for any reason, whether before or after default, and whether or not such payment
is required by any provision of this Agreement, then upon the demand of the Bank, the City shall
pay to the Bank or such Noteholder a prepayment or redemption premium in such amount as will
reimburse the Bank for such loss, cost, or expense.
. �errs•�e+r�:
•
. -
• ,
Me.
.. . ... . .........
-26-
ftThe amount of the compensation owing to the Bank in accordance with this Section
shall be determined and calculated by the Bank and provided to the City as soon as practicable
following a request for the calculation of such amount. A certificate of the Bank setting forth the
amount of such compensation and delivered to the City shall be conclusive absent manifest error.
The City shall pay the Bank the amount shown as due on any such certificate within thirty (30)
days after receipt thereof.
Section 2.10. Extension of Commitment Expiration Date. The City may request an
extension of the Commitment Expiration Date in writing in the form of Exhibit C hereto not more
than one hundred eighty (180) days prior to the then current Commitment Expiration Date and not
less than one hundred twenty (120) days prior to the then current Commitment Expiration Date.
The Bank will make reasonable efforts to respond to such request within thirty (30) days after
receipt of all information necessary, in the Bank's judgment, to permit the Bank to make an
informed credit decision. If the Bank fails to definitively respond to such request within such
thirty (30) day period, the Bank shall be deemed to have refused to grant the extension requested.
The Bank may, in its sole and absolute discretion, decide to accept or reject any such proposed
extension and no extension shall become effective unless the Bank shall have consented thereto in
writing in the form of Exhibit G hereto or otherwise. The Bank's consent, if granted, shall be
conditioned upon the preparation, execution and delivery of documentation in form and substance
satisfactory to the Bank (which may include, but shall not be limited to the delivery of a "no
adverse effect opinion " of Bond Counsel to the Bank with respect to the tax-exempt status of the
Tax -Exempt Notes).
Section 2.11. Security of Obligations.
(a) Pledge. The City hereby pledges and grants to the Bank, on an equal and ratable basis
with the owners of Subordinate Lien Obligations and as collateral security for the payment by the
City, when due, of all Obligations, the due and punctual observance and performance of all other
obligations of the City under this Agreement, and the due and punctual observance and
performance of the City's obligations to the owners of the Notes arising under the Notes, an
irrevocable lien on, pledge of and security interest in the amounts held in the Note Payment Fund
until the amounts deposited therein are used for authorized purposes.
(b) Security. The Ordinance creates a valid irrevocable lien on, pledge of, and security
interest in the Net Revenues as security for all of the Notes and all action necessary to perfect the
lien on, pledge of, and security interest of the Bank in such Net Revenues has been duly and
validly taken. The City hereby pledges and grants to the Bank, on an equal and ratable basis with
the owners of Subordinate Lien Obligations, as security for the payment by the City, when due, of
all Obligations now or at any time hereafter owing to the Bank under this Agreement a lien on and
security interest in the Net Revenues and the right to enforce certain remedies under the Ordinance
as described therein. The collateral security described in this Section 2.1 l (a) and (b) is referred to
as the "Security. "
-27-
(c) Acknowledgement. The Bank acknowledges that this Agreement and the Obligations
of the City hereunder are special obligations of the City, secured and payable solely from the
Security and that the Obligations constitute Subordinate Lien Obligations.
Section 2.12. Suspension Events. Upon the occurrence of a Suspension Event the Bank
shall have the right to suspend the Commitment upon delivery of written or electronic notice to the
City of the same.
Section 2.13. Increase in Available Commitment.
(a) Request for Increase. Provided there exists no Default or Event of Default, upon
notice to the Bank, the City may from time to time, request an increase in the Available
Commitment by an amount (for all such requests) not exceeding $15,000,000 (an "Incremental
Facility "
(b) Bank Election to Increase. The Bank shall notify the City, within ten (10) Business
Days from the date of delivery of the notice described in subsection (a) above, regarding whether
or not it agrees, in its sole discretion_ to increase the Available Commitment and, if so, whether by
an amount equal to, greater than, or less than the amount of such requested increase. If the Bank
does not respond within such time period it shall be deemed to have declined to increase the
Available Commitment.
cc)Effective Date. If the Available Commitment is increased in accordance with this
Section 2.13, the Bank and the City shall determine the effective date of such increase in the
Available Commitment (the "Increase Effective Date " 1.
(d) Conditions to Effectiveness of Increase. As a condition precedent to such increase
the City shall deliver to the Bank a certificate dated as of the Increase Effective Date si n
Authorized Representative i) certifying and attaching the ordinance(s), resolutions(s) and/or other
actions taken by the City approving or consenting to such increase. and (ii) certifying that, before
and after giving effect to such increase, (A) the representations and warranties contained in Article
IV and the other Program Documents are true and correct, on and as of the Increase Effective Date.
and except that for purposes of this Section 2.13, the representations and warranties contained in
Section 4.1(f) shall be deemed to refer to the most recent statements furnished pursuant to Section
6.1 a), and (B) both before and after giving effect to the Incremental Facility, no Default or Event
of Default exists. The City shall deliver or cause to be delivered any other customary documents
(including, without limitation, legal opinions) as reasonably requested by the Bank in connection
with any Incremental Facility.
(e) Conflicting Provisions. This Section 2.13 shall supersede any provisions in Section
8.3 to the contrary.
(f) Incremental Facility. Except as otherwise specifically set forth herein, all of the other
terms and conditions applicable to such Incremental Facility shall be identical to the terms and
conditions set forth in this Agreement.
ARTICLE III
LIABILITY, INDEMNITY AND PAYMENT
Section 3.1. Liability of the City. The City and the Bank agree that the obligation of the
City to pay the Notes and the Obligations are contractual obligations of the City payable solely
from the Net Revenues and shall not be affected by, and the Bank shall not be responsible for,
among other things, (i) the validity, genuineness or enforceability of this Agreement, the Notes or
documents, notices or endorsements relating thereto (even if this Agreement or any documents,
notices endorsements relating thereto should in fact prove to be in any and all respects invalid,
fraudulent or forged), (ii) the use to which the amounts disbursed by the Bank may be put, or (iii)
any other circumstances or happenings whatsoever, whether or not similar to any of the foregoing.
Section 3.2. Indemnification by the City. (a) To the extent permitted by State law, the City
shall indemnify the Bank and each Related Party of the Bank (each such Person being called an
"Indemnitee ") against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against
any Indemnitee by any Person (including the City) other than such Indemnitee and its Related
Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Program Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations hereunder or
thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case
of the Bank (and any sub -agent thereof) and its Related Parties only, the administration of this
Agreement and the other Program Documents (including in respect of any matters addressed in
Section 3.1), (ii) the purchase of the Notes or the use or proposed use of the proceeds therefrom, or
(iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought by a third parry or
by the City, and regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the negligence or willful misconduct of
such Indemnitee.
(b) To the fullest extent permitted by applicable State law, the City shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Program Document or any agreement
or instrument contemplated hereby, the transactions contemplated hereby or thereby, or the use of
the proceeds thereof. No Indemnitee referred to in subsection (a) above shall be liable for any
damages arising from the use by unintended recipients of any information or other materials
distributed to such unintended recipients by such Indemnitee through telecommunications,
electronic or other information transmission systems in connection with this Agreement or the
other Program Documents or the transactions contemplated hereby or thereby other than for direct
or actual damages resulting from the negligence or willful misconduct of such Indemnitee as
determined by a final and nonappealable judgment of a court of competent jurisdiction.
-29-
(c) All amounts due under this Section shall be payable not later than thirty (30) days
after receipt of an invoice.
Section 3.3. Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, liquidity ratio, special
deposit, compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by a Noteholder;
(ii) subject any Noteholder to any taxes on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other liabilities or
capital attributable thereto; or
(iii) impose on any Noteholder or the London inter-bankffiarket. any other
condition, cost or expense affecting this Agreement or the Notes;
and the result of any of the foregoing shall be to increase the cost to any Noteholder with respect to
this Agreement, the Notes, or the making, maintenance or funding of the purchase price of the
Notes, or to reduce the amount of any sum received or receivable by such Noteholder hereunder
(whether of principal, interest or any other amount) then, upon request of such Noteholder, to the
extent permitted by State law, the City will, pursuant to Section 3.3(c) hereof, pay to the such
Noteholder such additional amount or amounts as will compensate such Noteholder for such
additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Noteholder determines that any Change in Law
affecting such Noteholder or any of its parent or holding companies, if any, regarding capital or
liquidity requirements has or would have the effect of reducing the rate of return on such
Noteholder's capital or liquidity or on the capital or liquidity of such Noteholder's holding
company, if any, as a consequence of this Agreement or the purchase of any Note hereunder, to a
level below that which such Noteholder or such Noteholder's holding company could have
achieved but for such Change in Law (taking into consideration such Noteholder's policies and the
policies of its parent or holding company with respect to capital adequacy), then from time to time,
to the extent permitted by law, the City will, pursuant to Section 3.3(c) hereof, pay to such
Noteholder such additional amount or amounts as will compensate such Noteholder or its parent or
holding companies, as applicable, for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of any Noteholder setting forth the
amount or amounts necessary to compensate such Noteholder or its parent or its holding
companies, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to
the City shall be conclusive absent manifest error. The City shall pay to the Bank (and if
applicable, to the Bank on behalf of a Noteholder) the amount shown as due on any such certificate
within thirty (30) days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Noteholder to demand
-30-
compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of
such Noteholder's right to demand such compensation; provided that the City shall not be required
to compensate any Noteholder pursuant to the foregoing provisions of this Section for any
increased costs incurred or reductions suffered more than nine (9) months prior to the date that
such Noteholder notifies the City of the Change in Law giving rise to such increased costs or
reductions and of the Noteholder's intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive, then the nine (9)
months period referred to above shall be extended to include the period of retroactive effect
thereof).
Section 3.4. Taxes. If any payments to the Bank under this Agreement are made from
outside the United States, the City will not deduct any foreign taxes from any payments it makes to
the Bank. If any such taxes are imposed on any payments made by the City (including payments
under this paragraph), the City will pay the taxes and will also pay to the Bank, at the time interest
is paid, any additional amount which the Bank specifies as necessary to preserve the after-tax yield
the Bank would have received if such taxes had not been imposed. The City will confirm that it
has paid the taxes by giving the Bank official tax receipts (or notarized copies) within thirty (30)
days after the due date.
Section 3.5. Maximum Rate; Default Rate. (a) Any and all amounts remaining unpaid
when due under this Agreement shall bear interest at the Default Rate until repaid and shall be
payable upon written demand. To the extent permitted by State law, any such amounts which
constitute interest remaining unpaid when due shall bear interest at the Default Rate until repaid
and shall be payable upon written demand. Upon the occurrence and during the continuance of an
Event of Default, the Obligations and the Notes shall bear interest at the Default Rate, which shall
be payable by the City to the Bank pursuant to the terms of Section 2.5 hereof.
(b) In the event that the rate of interest payable hereunder or under the Notes shall exceed
the Maximum Rate for any period for which interest is payable, then (i) interest at the Maximum
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 or
the Notes, as applicable and (B) the Maximum Rate (the "Excess Interest Amount"), shall be
deferred until such date as the rate of interest calculated in accordance with the terms hereof or the
Notes, as applicable ceases to exceed the Maximum Rate, at which time the City shall pay to the
Bank, with respect to amounts then payable to the Bank that are required to accrue interest
hereunder or under the Notes, such portion of the deferred Excess Interest Amount as will cause
the rate of interest then paid to the Bank, to equal the Maximum Rate, which payments of deferred
Excess Interest Amount shall continue to apply to such unpaid amounts hereunder or under the
Notes until all deferred Excess Interest Amount is fully paid to the Bank. Notwithstanding the
foregoing and to the extent permitted by State law, on the date on which no principal amount with
respect to the Notes remains unpaid, the City shall pay to the Bank a fee equal to any accrued and
unpaid Excess Interest Amount on such date; provided that such payment shall not cause interest
to exceed the maximum net effective interest rate authorized under Chapter 1204, Texas
Government Code, as amended; provided further that in no event shall interest accrue and be
payable after such date.
-31-
(c) All amounts paid pursuant to this Agreement shall be non-refundable and shall be
paid in immediately available funds.
Section 3.6. Liability of the Bank. To the extent permitted by State law, the City assumes
all risks of the acts or omissions of the Paying Agent/Registrar with respect to the use of the
Commitment and the purchase of Notes made pursuant thereto; provided that this assumption with
respect to the Bank is not intended to and shall not preclude the City from pursuing such rights and
remedies as it may have against the Paying Agent/Registrar under any other agreements. The
Bank shall not be liable or responsible for (i) the use of the proceeds of the Notes or the
transactions contemplated hereby and by the Program Documents or for any acts or omissions of
the Paying Agent/Registrar, (ii) the validity, sufficiency, or genuineness of any documents
determined in good faith by the Bank to be valid, sufficient or genuine, even if such documents
shall, in fact, prove to be in any or all respects invalid, fraudulent, forged or insufficient, (iii)
purchase of Notes by the Bank against presentation of Requests for Purchase for which the Bank in
good faith has determined to be valid, sufficient or genuine and which subsequently are found not
to comply with the terms of this Agreement, or (iv) any other circumstances whatsoever in making
or failing to make payment hereunder; provided that the City shall not be required to indemnify the
Bank for any claims, losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by the negligence or willful misconduct of the Bank, respectively, as determined by a court
of competent jurisdiction in a final and nonappealable judgment.
Section 3.7. Obligations Unconditional. The City's obligation to repay the Notes and all
of its respective Obligations under this Agreement shall be absolute and unconditional under any
and all circumstances, including without limitation: (a) any lack of validity or enforceability of this
Agreement, the Notes or any of the other Program Documents; (b) any amendment or waiver of or
any consent to departure from all or any of the Program Documents; (c) the existence of any claim,
set-off, defense or other right which the City may have at any time against the Bank or any other
person or entity, whether in connection with this Agreement, the other Program Documents, the
transactions contemplated herein or therein or any unrelated transaction; or (d) any other
circumstance or happening whatsoever, whether or not similar to any of the foregoing; and
irrespective of any setoff, counterclaim or defense to payment which the City may have against
any Noteholder or any other Person, including, without limitation, any defense based on the failure
of any nonapplication or misapplication of the proceeds of Notes hereunder, and irrespective of the
legality, validity, regularity or enforceability of this Agreement, the Notes or any or all other
Program Documents, and notwithstanding any amendment or waiver of (other than an amendment
or waiver signed by the Bank explicitly reciting the release or discharge of any such obligation), or
any consent to, or departure from, this Agreement, the Notes or any or all other Program
Documents or any exchange, release, or nonperfection of any collateral securing the obligations of
the City hereunder; provided, however, that nothing contained in this Section 3.7 shall abrogate or
otherwise affect the rights of the City under this Agreement.
Section 3.8. Illegality. If the Bank determines that any law has made it unlawful, or that
any Governmental Authority has asserted that it is unlawful, for the Bank to make, maintain or
fund Notes whose interest is determined by reference to LIBOR erSOFR, theLIBOR Daily
Fleati-agSOFR Rate. SIFMA or the SIFMA Index, or to determine or charge interest rates based
upon LIBOR erSOFR. theme Daily FleatiagSM Rate, o r-1,...0,-,,.-. efft ' Authority has
-32-
imposed fnater-ial r-estr-iletions on the auffier-ity of the Bank to pur-ehase of sell, or- to take deposits--ef-,
Dollars in the London interbank ma SIFMA or the SIFMA Index, then, on notice thereof by the
Bank to the City, any obligation of the Bank to make ^r eon4inue Fixed n ateTaxable Notes or
Floating D Tax -Exempt Notes t , eA Fixed v e Notes t Floa4ing v e Notes an .
versa. as applicable_ shall be suspended until the Bank notifies the City that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice, the City shall, upon
written demand from the Bank convert the interest on all Fixed Rate '`Totes and Floating Rate
Notes to Notes that bear interest at the Alternate Rate, either on the last day of the SIFMA Index
Interest Period therefor in the case of Fixed Tax -Exempt Notes, if the Bank may lawfully
continue to maintain such FixTax-Exempt Notes to such day, or on the next Business Day,
in the case of Floating RateTaxable Notes and if the Bank may not lawfully continue to maintain
Fixed Tax -Exempt Notes through the last day of the SIFMA Index Interest Period therefor,
then immediately upon written demand. F etes-of thisAgr-element-and the Notes, �
bear-ing interest at the Alternate Rate shall eonstitute Floating Rate Note Upon any such
conversion, the City shall also pay accrued interest on the amount so converted on the date of such
conversion.
• :�.:r�•rrrsr�:es�!�es�:rsrs�e�.es.
• ■.rZ
..No. • .
._ ••• ■ •
.s. ONE I LbWIN!. ,
D WIN
•
■
., ,d
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations of the City. In order to induce the Bank to enter into this
Agreement, the City represents and warrants to the Bank as follows:
(a) Organization and Powers. The City (a) is duly established and validly existing under
-33-
the Constitution and laws of the State; (b) has all corporate powers and all material governmental
licenses, authorizations, consents, and approvals required to carry on its business as now
conducted; (c) has full legal right, power and authority to pledge the Net Revenues as security for
its obligations under this Agreement; (d) had full legal right, power and authority to adopt the
Ordinance; (e) has full legal right, power and authority to execute, deliver, and perform this
Agreement and the other Program Documents; (f) has full legal right, power and authority to
borrow and obtain extensions of credit hereunder, and to execute, deliver, and perform the Notes;
and (g) has full power and authority to operate the System.
(b) Authorization; Contravention. The City has the corporate power, and has taken all
necessary corporate action to authorize the Program Documents to which it is a party, and to
execute, deliver and perform its obligations under this Agreement and each of the other Program
Documents to which it is a party in accordance with their respective terms. The City has approved
the form of the Program Documents to which it is not a party. The City is duly authorized and
licensed to own its Property and to operate its business under the Laws, rulings, regulations and
ordinances of all Governmental Authorities having the jurisdiction to license or regulate such
Property or business activity and the departments, agencies and political subdivisions thereof, and
the City has obtained all requisite approvals of all such governing bodies required to be obtained
for such purposes. All Governmental Approvals necessary for the City to enter into this
Agreement and the other Program Documents and to perform the transactions contemplated
hereby and thereby and to conduct its business activities and own its property have been obtained
and remain in full force and effect and are subject to no further administrative or judicial review.
No other Governmental Approval or other action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery and performance by the City of
this Agreement or the due execution, delivery or performance by the City of the Program
Documents.
(c) Governmental Consent or Approval. No consent of any Person and no license,
approval or authorization of, or notice to or registration, filing or declaration with, any applicable
Governmental Authority (other than any action that may be required under any state securities or
blue sky laws) is required in connection with the adoption, performance, validity or enforceability
of the Ordinance, the issuance, validity or enforceability of the Notes, or the execution, delivery,
performance, validity or enforceability of this Agreement or the other Program Documents or, if
required, the same has been obtained and is in full force and effect or, if not yet obtained, will be
obtained on or before the Closing Date and will be in full force and effect on such date, and true
copies thereof have been, or will be, delivered to the Bank on or before the Closing Date.
(d) Litigation. There is no action, suit or proceeding pending in any court, any other
Governmental Authority with jurisdiction over the City or any arbitration in which service of
process has been completed against the City or, to the knowledge of the City, any other action, suit
or proceeding pending or threatened in any court, any other Governmental Authority with
jurisdiction over the City or any arbitrator, in either case against the City or any of its properties or
revenues, or any of the Program Documents to which it is a party, which is reasonably likely to
result in a Material Adverse Effect, except any action, suit or proceeding which has been brought
prior to the Closing Date as to which the Bank has received an opinion of counsel satisfactory to
the Bank, in form and substance satisfactory to the Bank and the Bank's legal counsel, to the effect
-34-
that such action, suit or proceeding is without substantial merit.
(e) No Default. No default by the City has occurred and is continuing in the payment of
the principal of or premium, if any, or interest on any Revenues Secured Debt including, without
limitation, regularly scheduled payments on Swap Contracts which constitute Revenues Secured
Debt. No bankruptcy, insolvency or other similar proceedings pertaining to the City or any agency
or instrumentality of the City are pending or presently contemplated. No Default or Event of
Default has occurred and is continuing hereunder. No "default" or "event of default" under,
and as defined in, any of the other Program Documents has occurred and is continuing. The City
is not presently in default under any material agreement to which it is a party which could
reasonably be expected to have a Material Adverse Effect. The City is not in violation of any
material term of the organizational documents or authorizing legislation applicable to the City or
any material term of any bond indenture or agreement to which it is a party or by which any of its
Property is bound which could reasonably be expected to result in a Material Adverse Effect.
(f) Financial Statements. The Audited Financial Statements, which financial statements,
accompanied by the audit report of Weaver and Tidwell, L.L.P., nationally recognized
independent public accountants, heretofore furnished to the Bank, which are consistent in all
material respects with the audited financial statements of the City for the Fiscal Year ended
September 30, 2018, fairly present the financial condition of the City in all material respects as of
such dates and the results of its operations for the periods then ended in conformity with GAAP.
Since the date of the Audited Financial Statements, there has been no material adverse change in
the financial condition or operations of the City that could reasonably be expected to result in a
Material Adverse Effect.
(g) Margin Regulations. The City will not use the proceeds from the issuance of any of
the Notes in contravention of any Law or of any Program Document. The City is not engaged in
the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no
part of the proceeds from the issuance of any of the Notes will be used to purchase or carry any
such Margin Stock or extend credit to others for the purpose of purchasing or carrying any such
Margin Stock.
(h) Complete and Correct Information. All information, reports and other papers and
data with respect to the City furnished by the City to the Bank were, at the time the same were so
furnished, correct in all material respects. Any financial, budget and other projections furnished
by the City to the Bank were prepared in good faith on the basis of the assumptions stated therein,
which assumptions were fair and reasonable in light of conditions existing at the time of delivery
of such financial, budget or other projections, and represented, and as of the date of this
representation, represent (subject to the updating or supplementation of any such financial, budget
or other projections by any additional information provided to the Bank in writing, the
representations contained in this Agreement being limited to financial, budget or other projections
as so updated or supplemented), in the judgment of the City, a reasonable, good faith estimate of
the information purported to be set forth, it being understood that uncertainty is inherent in any
projections and that no assurance can be given that the results set forth in the projections will
actually be obtained. No fact is known to the City that materially and adversely affects or in the
future may (as far as it can reasonably foresee) materially and adversely affect the security for any
-35-
of the Notes or any of the other Obligations, or the ability of the City to repay when due the
Obligations, that has not been set forth in the financial statements and other documents referred to
in this Section 4.1(h) or in such information, reports, papers and data or otherwise disclosed in
writing to the Bank. The documents furnished and statements made by the City in connection with
the negotiation, preparation or execution of this Agreement and the other Program Documents do
not contain untrue statements of material facts or omit to state material facts necessary to make the
statements contained therein, in light of the circumstances under which they were made, not
misleading.
(i) Taxes. The City has filed or caused to be filed, if any, all material tax returns required
by law to be filed and has paid or caused to be paid all material taxes, assessments and other
governmental charges levied upon or in respect of any of its properties, assets or franchises, other
than taxes the validity or amount of which are being contested in good faith by the City by
appropriate proceedings and for which the City shall have set aside on its books adequate reserves
in accordance with GAAP.
0) Legal, Valid, and Binding Obligations. This Agreement has been duly executed and
delivered by one or more duly authorized officers of the City, and each of the Program Documents
to which the City is a party, when executed and delivered by the City will be, a legal, valid and
binding obligation of the City enforceable in accordance with its terms, except as such
enforceability may be limited by (a) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar Law affecting creditors' rights generally, and (b) general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(k) No Further Consent or Approval. The execution, delivery and performance of this
Agreement and each of the other Program Documents in accordance with their respective terms do
not and will not (i) contravene the City's Charter, (ii) require any consent or approval of any
creditor of the City, (iii) violate any Laws (including, without limitation, Regulations T, U or X of
the FRB, or any successor regulations), (iv) conflict with, result in a breach of or constitute a
default under any contract to which the City is a party or by which it or any of its Property may be
bound or (v) result in or require the creation or imposition of any Lien upon or with respect to any
Property now owned or hereafter acquired by the City or any Affiliate thereof except such Liens, if
any, expressly created by a Program Document.
(1) Incorporation by Reference. The representations and warranties of the City
contained in the other Program Documents to which the City is a party, together with the related
definitions of terms contained therein, are hereby incorporated by reference in this Agreement as if
each and every such representation and warranty and definition were set forth herein in its entirety,
and the representations and warranties made by the City in such Sections are hereby made for the
benefit of the Bank. No amendment to or waiver of such representations and warranties or
definitions made pursuant to the relevant Program Document or incorporated by reference shall be
effective to amend such representations and warranties and definitions as incorporated by
reference herein without the prior written consent of the Bank.
(m) Security. (i) The Ordinance creates a valid lien on, pledge of, and security interest in
-36-
the Net Revenues and applicable funds created in the Ordinance as security for the Notes and all
action necessary to perfect the lien on, pledge of, and security interest of the owners of the Notes in
such security has been duly and validly taken;
(ii) The Ordinance creates a valid lien on, pledge of, and security interest in the
Security as security for the repayment of the Obligations and all action necessary to perfect
the lien on, pledge of, and security interest of the Bank in the Security has been duly and
validly taken;
(iii) Except in regards to Bonds Similarly Secured and other obligations
permitted to be issued or incurred by the ordinances authorizing Bonds Similarly Secured,
the Ordinance does not permit the issuance of any debt secured by the Security to rank
senior to the Notes and all Obligations due and owing the Bank hereunder. No filing,
registering, recording or publication of the Ordinance, this Agreement or any other
instrument is required to establish the pledge under the Ordinance or this Agreement or to
perfect, protect or maintain the lien created hereby or thereby on the Security;
(n) No Proposed Legal Changes. There is no amendment, or to the knowledge of the
City, proposed amendment to the Constitution of the State or any State Law or any administrative
interpretation of the Constitution of the State or any State Law, or any legislation that has passed
either house of the legislature of the State, or any judicial decision interpreting any of the
foregoing, the effect of which could reasonably be expected to result in a Material Adverse Effect.
(o) Proceeds. The proceeds of the Notes will be applied by the City, for deposit into the
Note Payment Fund to the payment or prepayment of the Notes or otherwise to the Note
Construction Fund and none of the funds borrowed by virtue of this Agreement will be used in any
manner or for any purpose except in the manner and for the purposes authorized by State law and
the Ordinance.
(p) ERISA. The City is not subject to ERISA and maintains no Plans.
(q) Environmental Compliance. The operations of the System are in material
compliance with all of the requirements of applicable federal, state and local environmental, health
and safety statutes and regulations and are not the subject of any governmental investigation
evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous
waste or substance into the environment, where a failure to comply with any such requirement or
the need for any such remedial action could reasonably be expected to result in a Material Adverse
Effect.
(r) Solvency. The City is, and upon the incurrence of any Note or any Obligation by the
City on any date on which this representation and warranty is made will be, solvent and able to pay
its debts as they become due.
(s) Tax Exempt Status. The City has not taken any action or omitted to take any action,
and knows of no action taken by any Governmental Authority, which action, if taken or omitted,
would adversely affect the exclusion of interest on the Tax -Exempt Notes from gross income for
-37-
purposes of federal income taxation.
(w) Usury. The terms of this Agreement and the other Program Documents regarding the
calculation and payment of interest and fees do not violate any applicable usury laws.
(x) Sanctions Concerns. (i) Neither the City, nor, to the knowledge of the City, any
director, officer, employee, agent, affiliate or representative thereof, is an individual or entity that
is, or is owned or controlled by any individual or entity that is (A) currently the subject or target of
any Sanctions, (B) included on OFAC's List of Specially Designated Nationals, HMT's
Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list
enforced by any other relevant sanctions authority or (C) located, organized or resident in a
Designated Jurisdiction.
(ii) Anti -Corruption Laws. The City has conducted its business in compliance with the
United States Foreign Corrupt Practices Act of 1977 and other similar anti -corruption legislation
in other jurisdictions, and have instituted and maintained policies and procedures designed to
promote and achieve compliance with such laws.
(bb) Compliance with Laws. The City is in compliance with all Laws, except for such
noncompliance that, singly or in the aggregate, has not caused or is not reasonably expected to
cause a Material Adverse Effect.
(cc) Title; Licenses. Except as disclosed in writing to the Bank prior to execution of this
Agreement, the City has good title to all of the facilities, plants and other property which constitute
the System, except to the extent failure to do so could not reasonably be expected to result in a
Material Adverse Effect. Except as disclosed in writing to the Bank prior to execution of this
Agreement, the City has all rights, permits, easements, servitudes, rights -of -way and licenses
necessary to carry on its business as presently conducted.
(dd) Insurance. The City currently maintains a system of self-insurance or insurance
coverage with insurance companies believed by the City to be capable of performing their
obligations under the respective insurance policies issued by such insurance companies to the City
(as determined in its reasonable discretion) and in full compliance with Section 5.08 of the
Ordinance.
(ee) Paying Agent/Registrar. The Bank of New York Mellon Trust Company, N.A. is the
duly appointed and acting Paying Agent/Registrar for the Notes.
(ff) Immunity. The City is not entitled to claim immunity on the grounds of sovereignty
or other similar grounds (including, without limitation, governmental immunity) with respect to
itself or its revenues (irrespective of their use or intended use) to the extent waived pursuant to
Section 1371.059, Texas Government Code, as amended.
(gg) No Public Vote or Referendum. There is no public vote or referendum pending,
proposed or concluded, the results of which could reasonably be expected to result in a Material
Adverse Effect.
(hh) Swap Contracts. The City has not entered into any Swap Contract relating to
Revenues Secured Debt (a) wherein any termination payment thereunder is senior to or on a parity
with the payment of the Notes or the other Obligations or (b) which requires the City to post cash
collateral to secure its obligations thereunder.
ARTICLE V
CONDITIONS
Section 5.1. Closing Conditions. The Bank's obligations under this Agreement shall be
conditioned upon the performance by the City of its obligations to be performed hereunder and the
tender by the City of its performance at the Closing as described in this Section, which Closing
shall not be completed unless the Bank shall receive at the time of the Closing the following:
(i) The Bank shall have received the following documents, each dated and in
form and substance as is satisfactory to the Bank:
(A) executed originals or certified copies of all approvals,
authorizations and consents of any trustee, or holder of any indebtedness or
obligation of the City necessary for the City to enter into each of the Program
Documents and the transactions contemplated herein and therein;
(B) the approving opinion of the Attorney General of Texas with respect
to the proceedings authorizing issuance of the Notes and execution of this
Agreement and matters related thereto;
(C) a counterpart of this Agreement, duly executed by the City and the
Bank;
(D) a certificate of an Authorized Representative, certifying that all
conditions precedent set forth in the Ordinance with respect to issuance of the
Notes shall have been satisfied;
(E) certified copies of all approvals or authorizations by, or consents of,
or notices to or registrations with, any Governmental Authority required for the
City to enter into this Agreement and the other Program Documents;
(F) a certificate of an Authorized Representative, certifying the names
and true signatures of the officers of the City authorized to sign this Agreement, the
Notes and the other Program Documents;
(G) such financial information, budgets, projections, investment
policies and guidelines for permitted investments of the City provided to the Bank
as the Bank has requested;
(H) the audited annual financial statements of the City for the Fiscal
-39-
Year ended September 30, 2018 and a copy of the most recent budget of the City;
(I) an executed original or certified copy, as applicable, of each of the
Program Documents;
(J) a copy of the City's Investment Policy in effect on the Closing Date;
(K) an IRS Form W-9 duly completed by the City.
(ii) The Bank shall have received a written description of all actions, suits or
proceedings pending or threatened against the City in any court or before any arbitrator of
any kind or before or by any governmental or non -governmental body which could
reasonably be expected to result in a Material Adverse Effect with respect to the City, and
such other statements, certificates, agreements, documents and information with respect
thereto as the Bank may reasonably request. No law, regulation, ruling or other action of
the United States, the State of Texas or any political subdivision or authority therein or
thereof shall be in effect or shall have occurred, the effect of which would be to prevent the
City from fulfilling its obligations under this Agreement and the other Program
Documents.
(iii) The Bank shall have received an opinion addressed to the Bank and dated
the Closing Date from the City's Counsel, in form and substance reasonably satisfactory to
the Bank and its counsel, which provides for, among other opinions, the following: (1) the
execution, delivery and performance by the City of this Agreement, the Notes and the other
Program Documents are within the City's powers, have been duly authorized by all
necessary action, and require no action by or in respect of, or filing with, any governmental
body, agency or official that has not been accomplished, and (2) such other matters as the
Bank may reasonably request, in form and substance satisfactory to the Bank and its
counsel.
(iv) The following statement shall be true and correct on the Closing Date, and
the Bank shall have received a certificate signed by an Authorized Representative dated the
Closing Date, certifying that: (A) the representations and warranties of the City contained
in each of the Program Documents and each certificate, letter, other writing or instrument
delivered by the City to the Bank pursuant hereto or thereto are true and correct on and as
of the Closing Date as though made on and as of such date; (B) no Default or Event of
Default has occurred and is continuing or would result from the City's execution and
delivery of this Agreement, or the acceptance of the Commitment by the City; (C) the
audited annual financial statements of the City for the Fiscal Year ended September 30,
2018, including the balance sheet as of such date of said period, all examined and reported
on by Weaver and Tidwell, L.L.P., as heretofore delivered to the Bank correctly and fairly
present the financial condition of the City as of said date and the results of the operations of
the City for such period, have been prepared in accordance with GAAP consistently
applied except as stated in the notes thereto; (D) since the release of the audited annual
financial statements of the City for the Fiscal Year ended September 30, 2018, no Material
Adverse Change with respect to the City has occurred prior to the Closing Date; (E) the
acceptance of the Commitment by the City pursuant to this Agreement is an arm's length
commercial transaction between the City and the Bank; (F) the City has consulted with its
own respective legal and financial advisors in connection with the acceptance of the
Commitment by the City pursuant to this Agreement; (G) the Bank has not acted as a
fiduciary in favor of the City with respect to the Notes or the acceptance of the
Commitment by the City; (H) to the best knowledge of the City, the underlying
unenhanced long-term ratings assigned to any Revenues Secured Debt by Fitch, Moody's
and S&P have not been reduced, withdrawn or suspended since the date of the Rating
Documentation and (I) that all conditions in this Section 5.1 (other than (viii), (xi) and (xii)
(to the extent of any law, regulation, ruling or other action of the State of New York or any
political subdivision or authority therein) for which the City has no knowledge) have been
satisfied.
(v) The Bank shall have received an opinion addressed to the Bank and dated
the Closing Date of Bond Counsel as to the exclusion of interest on the Tax -Exempt Notes
from gross income for federal income tax purposes of the Bank, the pledge of Net
Revenues securing the Notes and the Obligations constituting a valid pledge, and such
other matters as the Bank may reasonably request, in form and substance satisfactory to the
Bank and its counsel.
(vi) All necessary action on the part of the City shall have been taken as required
for the assignment and pledge of a lien on the Net Revenues for the benefit of the Bank as
described in Section 2.11 hereof.
(vii) All other legal matters pertaining to the execution and delivery of this
Agreement, the Notes and the Ordinance shall be reasonably satisfactory to the Bank and
its counsel.
(viii) The Bank shall have received evidence from Fitch, Moody's and S&P
confirming that the underlying unenhanced long-term rating assigned to the Bonds
Similarly Secured is at least "A+" (or its equivalent), "A I" (or its equivalent) and "AA-"
(or its equivalent), respectively, (referred to herein as the "Rating Documentation ").
(ix) No Note shall be registered with The Depository Trust Company or any
other securities depository. No offering document or official statement shall be prepared
with respect to the Notes.
(x) The Bank shall have received such other documents, certificates, opinions,
approvals and filings with respect to this Agreement, the Notes and the other Program
Documents as the Bank has requested of the City.
(xi) No law, regulation, ruling or other action of the United States, the State of
New York or the State of Texas or any political subdivision or authority therein or thereof
shall be in effect or shall have occurred, the effect of which would be to prevent the Bank
from fulfilling its obligations under this Agreement.
-41-
(xii) The City shall have received an opinion addressed to the City and dated the
Closing Date of counsel to the Bank that this Agreement constitutes a valid binding and
enforceable obligation against the Bank, in form and substance reasonably satisfactory to
the City and its Bond Counsel.
Section 5.2. Certain Conditions to Bank's Obligations. The Bank has entered into this
Agreement in reliance upon the representations and warranties of the City contained herein and to
be contained in the documents and instruments to be delivered at the Closing and at each Purchase,
and upon the performance by the City of its obligations hereunder, as of the date hereof and as of
the Closing Date and each Purchase Date. Accordingly, the Bank's obligations under this
Agreement to purchase, to accept delivery of and to pay for the Notes shall be subject to
performance by the City of its obligations to be performed hereunder and the delivery of the
documents and instruments required to be delivered hereby at or prior to each Purchase, and shall
also be subject to the following additional conditions:
(a) delivery to the Bank of a Request for Purchase executed by an Authorized
Representative;
(b) the representations and warranties of the City contained herein shall be true,
complete and correct on the date hereof, on the Closing Date and on each Purchase Date;
(c) at the time of each Purchase, this Agreement and the Ordinance shall be in
full force and effect in accordance with their respective terms and shall not have been
amended, modified or supplemented in any manner which will adversely affect (i) the
ability of the City to issue the Notes or perform its obligations thereunder or under this
Agreement or (ii) the security for the Notes;
(d) both at the time of the Closing and at the time of each Purchase, all official
action of the City relating to this Agreement, the Notes and the Ordinance shall have been
taken and shall be in full force and effect in accordance with their respective terms and
shall not have been amended, modified or supplemented in any material adverse respect;
(e) each Note requested to be purchased by the Bank shall be delivered to the
Bank on the related Purchase Date purchased by the Bank pursuant to the terms hereof and
shall be in an amount not less than $2,000,000 and in an integral multiple of $100,000 in
excess thereof,
(f) the Bank will have no obligation to purchase any Note if, because of a
Change in Law, such request to purchase Notes made by the City would be illegal. In such
event, the City will have no liability whatsoever with respect to such request for purchase
and the Bank will have no liability for its failure to so purchase if such failure is due to a
Change in Law;
(g) at the time of each Purchase, no Default or Event of Default shall have
occurred and be continuing;
-42-
(h) on the initial issuance date of a Tax -Exempt Note, delivery of an opinion
dated such issuance date of Bond Counsel as to the exclusion of interest on the
Tax -Exempt Notes from gross income for federal income tax purposes of the Noteholder,
the pledge of Net Revenues securing the Tax -Exempt Notes and the Obligations
constituting a valid pledge, and such other matters as the Bank may reasonably request, in
form and substance satisfactory to the Bank and its counsel;
(i) on the initial issuance date of a Tax -Exempt Note, delivery of an executed
Tax Certificate, which shall include an Issue Price Certificate executed by the Bank; and
0) on the initial issuance date of a Tax -Exempt Note, delivery of a copy of the
related IRS Form 8038-G duly executed by the City to be filed with the Internal Revenue
Service.
The submission by an Authorized Representative of a Request for Purchase in connection with
each Purchase shall be deemed to be a representation and warranty by the City on the date of each
such Purchase that the conditions specified in clauses (b) and (g) of this Section 5.2 have been
satisfied on and as of such date.
Section 5.3. Satisfaction or Waiver of Conditions. All the opinions, letters, certificates,
instruments and other documents mentioned above or elsewhere in this Agreement shall be
deemed to be in compliance with the provisions hereof if, but only if, they are in form and
substance satisfactory to the Bank, and the Bank shall have the right to waive any condition set
forth in this Article V.
ARTICLE VI
COVENANTS
Section 6.1. Covenants of the City. The City covenants and agrees, from the date hereof
and until the Termination Date and the payment in full of all Notes and Obligations, unless the
Bank shall otherwise consent in writing:
(a) Information. The City will deliver to the Bank:
(i) Annual Report. As soon as available, and in any event within 270 days after
the end of the Fiscal Year, the annual audited financial statements of the City together with
the opinion of the City's independent accountants.
(ii) Unaudited Quarterly Financials. As soon as available, and in any event
within 45 days after each of the first three quarters of each Fiscal Year, the unaudited
financial statements of the City, including the balance sheet as of the end of such quarter
and a statement of income and expenses, all in reasonable detail and certified, subject to
year-end adjustment, by an Authorized Representative.
(c) Compliance Certificate. In connection with the financial statements
-43-
required to be delivered by the City pursuant to Sections 6.1(a)(i) and 6.1(a)(ii) hereof, a
Compliance Certificate signed by an Authorized Representative (x) stating that no Event of
Default or Default has occurred, or if such Event of Default or Default has occurred,
specifying the nature of such Event of Default or Default, the period of its existence, the
nature and status thereof and any remedial steps taken or proposed to correct such Event of
Default or Default and (y) demonstrating compliance with the financial covenants set forth
in Section 5.07 of the Ordinance.
(d) Budget. As soon as available, and in any event within 60 days following the
end of each Fiscal Year, the operating budget of the City.
(e) Notices of Resignation of the Paying Agent/Registrar. As promptly as
practicable, written notice to the Bank of any resignation of the Paying Agent/Registrar
immediately upon receiving notice of the same.
(f) Offering Memorandum and Material Event Notices. (A) Within ten (10)
days after the issuance of any Revenues Secured Debt with respect to which a final official
statement or other offering or disclosure document has been prepared by the City, (1) a
copy of such official statement or offering circular or (2) notice that such information has
been filed with EMMA and is publicly available; and (B) during any period of time the
City is subject to continuing disclosure requirements under Rule 15c2-12 promulgated
pursuant to the Securities Exchange Act of 1934, as amended (17 C.F.R. Sec.
240-15c2-12), or any successor or similar legal requirement, immediately following any
dissemination, distribution or provision thereof to any Person, (1) a copy of any reportable
event notice (as described in b(5)(i)(C) of Rule 15c2-12) disseminated, distributed or
provided in satisfaction of or as may be required pursuant to such requirements or (2)
notice that such event notice has been filed with EMMA and is publicly available.
(g) Notice of Default; Event of Default; Participant Agreement Event of
Default; Interconnection Agreement Event of Default. (i) Promptly upon obtaining
knowledge of any Default, Event of Default, Participation Agreement Event of Default or
Interconnection Agreement Event of Default, or notice thereof, and in any event within
five (5) days thereafter, a certificate signed by an Authorized Representative specifying in
reasonable detail the nature and period of existence thereof and what action the City has
taken or proposes to take with respect thereto; and (ii) promptly following a written request
of the Bank, a certificate of an Authorized Representative as to the existence or absence, as
the case may be, of a Default or an Event of Default under this Agreement.
(h) Litigation. As promptly as practicable, written notice to the Bank of all
actions, suits or proceedings pending or threatened against the City before any arbitrator of
any kind or before any court or any other Governmental Authority which could reasonably
be expected to result in a Material Adverse Effect.
(i) Amendments. Promptly after the adoption thereof and to the extent is not
required to receive and make notice of the same, copies of any amendments to the Program
Documents.
(j) Participation Agreement Budget. A copy of the annual Budget (as defined
in the Participation Agreement) or any changes to the Budget.
(k) Other Information. Such other information regarding the business affairs,
financial condition and/or operations of the City as the Bank may from time to time
reasonably request.
(b) Access to Records. The City will keep adequate records and books of account, in
which complete entries will be made, reflecting all financial transactions of the City, and furnish
to the Bank such information regarding the financial condition, results of operations, or business of
the City as the Bank may reasonably request and will permit any officers, employees, or agents of
the Bank to visit and inspect any of the properties of the City and to discuss matters reasonably
pertinent to an evaluation of the credit of the City, all at such reasonable times as the Bank may
reasonably request. All information received by or provided to the Bank pursuant to this
Agreement, unless otherwise made public by the City, will be held as confidential information by
such party.
(c) Proceeds of the Notes. None of the proceeds of the Notes will be used in any manner
or for any purpose except in the manner and for the purposes authorized by Texas law, this
Agreement and the Ordinance. The City shall not use the proceeds of the Notes, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin
stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve
System) or to extend credit to others for the purpose of purchasing or carrying margin stock or to
refund indebtedness originally incurred for such purpose, in each case in violation of, or for a
purpose which violates, or would be inconsistent with, Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
(d) No Amendment of Program Documents. The City shall not modify, amend or consent
to any modification, amendment or waiver in any material respect of any Program Document
without the prior written consent of the Bank.
(e) Additional Indebtedness. It will use its best efforts and with due diligence endeavor
to sell a sufficient amount of additional Indebtedness in order to have funds available, together
with other moneys available for such purpose, to pay all amounts owed to the Bank under this
Agreement. Other than to repay the Obligations in full, the City shall not issue any (x) Subordinate
Lien Obligations (other than the Obligations) (y) Indebtedness issued pursuant to Section 5.09 of
the Ordinance, or (z) any Senior Lien Obligations without the prior written consent of the Bank;
provided that the consent of the Bank shall not be required for (i) the issuance of Senior Lien
Obligations in a cumulative amount not to exceed $50,000,000 and (ii) the issuance of Senior Lien
Obligations issued for the purpose of refunding previously issued Senior Lien Obligations.
(f) Taxes and Liabilities. The City will pay all of its indebtedness and obligations
promptly and in accordance with its terms and pay and discharge or cause to be paid and
discharged promptly all taxes, assessments, and governmental charges or levies imposed upon it or
upon its income and profits, or upon any of its property, real, personal, or mixed, or upon any part
thereof, before the same shall become in default except for those matters which are reasonably
-45-
being contested in good faith by appropriate action or proceedings or for which the City has
established adequate reserves in accordance with GAAP.
(g) Supplemental Ordinances and Further Assurances. The City will at any and all
times, insofar as it may be authorized so to do by law, pass, make, do execute, acknowledge, and
deliver all and every such further resolutions, acts, assignments, recordings, filings, transfers, and
assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning,
and confirming all and singular the rights, revenues, and other funds and the Security pledged or
assigned to the payment of the Notes, or intended so to be, of which the City may become bound to
pledge or assign.
(h) Performance and Compliance with Other Covenants. The City agrees that it will
perform and comply with each and every covenant and agreement required to be performed or
observed by it in the Ordinance and each of the other Program Documents to which it is a party,
which provisions, as well as related defined terms contained therein, are hereby incorporated by
reference herein with the same effect as if each and every such provision were set forth herein in its
entirety all of which shall be deemed to be made for the benefit of the Bank and shall be
enforceable against the City. To the extent that any such incorporated provision permits the City
or any other party to waive compliance with such provision or requires that a document, opinion or
other instrument or any event or condition be acceptable or satisfactory to the City or any other
party, for purposes of this Agreement, such provision shall be complied with unless it is
specifically waived by the Bank in writing and such document, opinion or other instrument and
such event or condition shall be acceptable or satisfactory only if it is acceptable or satisfactory to
the Bank which shall only be evidenced by the written approval by the Bank of the same. Except
as permitted by Section 6.1(d) hereof, no termination or amendment to such covenants and
agreements or defined terms or release of the City with respect thereto made pursuant to the
Ordinance or any of the other Program Documents to which the City is a party, shall be effective to
terminate or amend such covenants and agreements and defined terms or release the City with
respect thereto in each case as incorporated by reference herein without the prior written consent
of the Bank. Notwithstanding any termination or expiration of the Ordinance or any such other
Program Document to which the City is a party, the City shall continue to observe the covenants
therein contained for the benefit of the Bank until the termination of this Agreement and the
payment in full of the Notes and all other Obligations. All such incorporated covenants shall be in
addition to the express covenants contained herein and shall not be limited by the express
covenants contained herein nor shall such incorporated covenants be a limitation on the express
covenants contained herein.
(i) Compliance with Rules and Regulations. The City shall comply with all laws,
ordinances, orders, rules, and regulations of duly constituted public authorities which if not
complied with would have a Material Adverse Effect with respect to the City.
0) Investment Policy. The City will comply with the City's Investment Policy and State
law with respect to investments.
(k) Preservation of Existence, Etc. The City shall maintain its existence and preserve and
keep in force and effect all licenses, permits, franchises and qualifications necessary to the proper
.o
conduct of its operations. The City will not (i) terminate, wind up, liquidate or dissolve its affairs
or consolidate or merge with or into any Person except to the extent that the City repays to the
Bank all Obligations in full prior to the date such event takes effect or (ii) sell, transfer, convey or
lease (whether in a single transaction or a series of transactions) all or any substantial part of the
System. The City will not amend any constituting document or any agreement governing its
operations or management in a manner that could have a Material Adverse Effect with respect to
the City.
(m) Exempt Status. The City shall not take any action or omit to take any action that, if
taken or omitted, would adversely affect the excludability of interest on the Tax -Exempt Notes
from the gross income of the holders thereof for purposes of federal income taxation.
(n) Other Agreements. In the event that the City shall, directly or indirectly, enter into or
otherwise consent to any Bank Agreement which such Bank Agreement provides such Person with
different or more restrictive covenants, different or additional events of default and/or greater
rights and remedies than are provided to the Bank in this Agreement, the City shall provide the
Bank with a copy of each such Bank Agreement and such different or more restrictive covenants,
different or additional events of default and/or greater rights and remedies shall automatically be
deemed to be incorporated into this Agreement and the Bank shall have the benefits of such
different or more restrictive covenants, different or additional events of default and/or greater
rights and remedies as if specifically set forth herein. The City shall promptly enter into an
amendment to this Agreement to include different or more restrictive covenants, different or
additional events of default and/or greater rights and remedies; provided that the Bank shall have
and maintain the benefit of such different or more restrictive covenants, different or additional
events of default and/or greater rights and remedies even if the City fails to provide such
amendment.
(o) Swap Contracts. The City shall at all times require that any termination fees payable
in connection with any Swap Contract entered into by the City and payable from and secured by
Net Revenues, shall be subordinate to the payment of the Notes and the Obligations hereunder.
The City shall not provide any collateral to support the obligations of the City under any Swap
Contract entered into by the City and payable from and secured by Net Revenues, other than a Lien
on Net Revenues. Except as set forth in the first sentence of this Section, the City shall at all times
require that any Lien on Net Revenues securing any Swap Contract entered into by the City and
payable from and secured by Net Revenues, be on a parity with the Lien securing the Indebtedness
to which such Swap Contract relates.
(p) Sovereign Immunity. Pursuant to Section 1371.059, Texas Government Code, as
amended, the City agrees to waive sovereign immunity from suit and liability for the purposes of
adjudicating a claim to enforce its duties and obligations under this Agreement or for damages for
breach of this Agreement.
(q) Bonding Capacity. The City shall at all times maintain the ability under the
Ordinance to issue Subordinate Lien Obligations in an amount at least equal to the sum of (i) the
aggregate principal amount of the Notes, plus (ii) the aggregate amount of accrued interest to
maturity on all Notes, plus (iii) any Obligations.
-47-
(r) ERISA. The City will comply in all material respects with Title IV of ERISA, if,
when and to the extent applicable.
(s) Further Assurances. The City shall promptly upon request by the Bank, execute and
deliver such further documents and do such other acts and things as the Bank may reasonably
request in order to effect fully the purposes of this Agreement and the other Program Documents,
and to provide for payment of the Notes and the Obligations and for granting the pledge of the
Security in accordance with the terms of this Agreement and the other Program Documents.
(t) Offering Document. The City shall not refer to the Bank in any offering document or
make any changes in reference to the Bank in any offering document without the Bank's prior
written consent thereto, such consent not to be unreasonably withheld.
(u) Accuracy of Information. All data, certificates, reports, documents and other
information furnished to the Bank, whether pursuant to this Agreement, or in connection with or
pursuant to an amendment or modification of, or waiver under, this Agreement shall, at the time
the same are so furnished, (i) be complete and correct in all material respects to the extent
necessary to give the Bank true and accurate knowledge of the subject matter thereof, and (ii) not
contain any untrue statements of a material fact or omit to state a material fact necessary in order to
make the statements contained therein not misleading, and the furnishing of the same to the Bank
shall constitute a representation and warranty by the City to that effect. Each financial statement
furnished to the Bank, whether pursuant to this Agreement, or in connection with or pursuant to an
amendment or modification of, or waiver under, this Agreement, shall, at the time the same is so
furnished, fairly present the financial condition and results of operations of the City.
(w) Liens. The City will not create, incur, assume or suffer to exist any pledge of, lien on
or other security interest in the Security except as provided in the Program Documents.
(x) Paying Agent/Registrar. No substitution of the Paying Agent/Registrar shall occur
without the prior written consent of the Bank.
(y) Total Outstanding. At no time shall the City permit the aggregate principal amount of
all Notes outstanding and unpaid to exceed the Commitment.
(z) Underlying Rating. The City shall at all times maintain a rating on the Bonds
Similarly Secured from at least one Rating Agency. The City covenants and agrees that it shall not
at any time withdraw any long-term unenhanced rating on the Bonds Similarly Secured from any
of Fitch, Moody's or S&P if the effect of such withdrawal would be to cure a Default or an Event
of Default under this Agreement or reduce the Applicable Spread TAR (Tax -Exempt) or
Applicable Spread TAR (Taxable), as applicable.
(aa) Maintenance of Property. The City shall (a) maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in good working order
and condition, ordinary wear and tear excepted except to the extent the failure to do so could not
reasonably be expected to result in a Material Adverse Effect; (b) make all necessary repairs
thereto and renewals and replacements thereof except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical
in the industry in the operation and maintenance of its facilities.
(bb) Maintenance of Insurance. The City shall maintain a system of self-insurance or
insurance coverage with insurance companies believed by the City to be capable of performing
their obligations under the respective insurance policies issued by such insurance companies to the
City (as determined in its reasonable discretion) and in full compliance with Section 5.08 of the
Ordinance.
(cc) Sanctions. The City will not directly or indirectly, use any proceeds from the issuance
of any of the Notes, or lend, contribute or otherwise make available such proceeds to any Person,
to fund any activities of or business with any Person, or in any Designated Jurisdiction, that, at the
time of such funding, is the subject of Sanctions, or in any other manner that will result in a
violation by any Person of Sanctions.
(dd) Anti -Corruption. The City will not directly or indirectly, use any proceeds from the
issuance of the Notes for any purpose which would breach the United States Foreign Corrupt
Practices Act of 1977 and other similar anti -corruption legislation in other jurisdictions.
(ee) Participation Agreement. Upon the occurrence of a change of ownership of
Sharyland Utilities, L.P., the City shall cause the successor entity to become a party to the
Participation Agreement or accept an assignment of all of the obligations of Sharyland Utilities,
L.P. under the Participation Agreement.
ARTICLE VII
DEFAULTS AND REMEDIES
Section 7.1. Events of Default. The occurrence of any of the following events (whatever
the reason for such event and whether voluntary, involuntary, or effected by operation of Law)
shall be an "Event of Default" hereunder, unless waived in writing by Bank:
(a) the City shall fail to pay the principal of or interest on any Note when due
(whether by scheduled maturity, required prepayment, redemption or otherwise);
(b) the City shall fail to pay any Obligation (other than the obligation to pay the
principal of or interest on the Notes or) when due and such failure shall continue for three
(3) Business Days;
(c) any representation or warranty made by or on behalf of the City in this
Agreement or in any other Program Document or in any certificate or statement delivered
hereunder or thereunder shall be incorrect or untrue in any material respect when made or
deemed to have been made or delivered;
(d) the City shall default in the due performance or observance of any of the
covenants set forth in Sections 6.1(a), (b), (e), (k), (o), (p), (w), (x) or (y) hereof,
US
(e) the City shall default in the due performance or observance of any other
term, covenant or agreement contained in this Agreement or any other Program Document
and such default shall remain unremedied for a period of thirty (30) days after the
occurrence thereof;
(f) the City shall (i) have entered involuntarily against it an order for relief
under the United States Bankruptcy Code, as amended, (ii) become insolvent or shall not
pay, or be unable to pay, or admit in writing its inability to pay, its debts generally as they
become due, (iii) make an assignment for the benefit of creditors, (iv) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any substantial part of its Property, (v) institute any
proceeding seeking to have entered against it an order for relief under the United States
Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or
composition of it or its debts under any Law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding fled against it, (vi) take any corporate action in
furtherance of any matter described in parts (i) through (v) above, or (vii) fail to contest in
good faith any appointment or proceeding described in Section 7.1(g) of this Agreement;
(g) a custodian, receiver, trustee, examiner, liquidator or similar official shall
be appointed for the City or any substantial part of its Property, or a proceeding described
in Section 7.1(f)(v) shall be instituted against the City and such proceeding continues
undischarged or any such proceeding continues undismissed or unstayed for a period of
sixty (60) or more days;
(h) (i) a debt moratorium, debt adjustment or comparable restriction is imposed
on the repayment when due and payable of the principal of or interest on any Debt of the
City by the City or any Governmental Authority with appropriate jurisdiction or (ii) a debt
restructuring is imposed on the repayment when due and payable of the principal of or
interest on any Debt of the City by any Governmental Authority with appropriate
jurisdiction;
(i) (i) any provision of this Agreement or any other Program Document related
to (A) payment of principal of or interest on the Notes or any other Revenues Secured Debt
or (B) the validity or enforceability of the pledge of the Security or any other pledge or
security interest created by the Ordinance shall at any time for any reason cease to be valid
and binding on the City as a result of any legislative or administrative action by a
Governmental Authority with competent jurisdiction, or shall be declared, in a final
nonappealable judgment by any court of competent jurisdiction, to be null and void, invalid
or unenforceable; or
(ii) the validity or enforceability of any material provision of this
Agreement or any other Program Document related to (A) payment of principal of
or interest on the Notes or any other Revenues Secured Debt, or (B) the validity or
enforceability of the pledge of the Security or any other pledge or security interest
-50-
created by the Ordinance shall be publicly contested by the City; or
(iii) any other material provision of this Agreement or any other
Program Document, other than a provision described in clause (i) above, shall at
any time for any reason cease to be valid and binding on the City or shall be
declared in a final non -appealable judgment by any court with competent
jurisdiction to be null and void, invalid, or unenforceable, or the validity or
enforceability thereof shall be publicly contested by the City;
0) dissolution or termination of the existence of the City;
(k) the City shall (i) default on the payment of the principal of or interest on any
Revenues Secured Debt beyond the period of grace, if any, provided in the instrument or
agreement under which such Revenues Secured Debt was created or incurred; or (ii)
default in the observance or performance of any agreement or condition relating to any
Revenues Secured Debt or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other default, event of default or similar event shall occur or
condition exist, the effect of which default, event of default or similar event or condition is
to permit (determined without regard to whether any notice is required) any such Revenues
Secured Debt to become immediately due and payable in full as the result of the
acceleration, mandatory redemption or mandatory tender of such Revenues Secured Debt;
(1) Reserved;
(m) any final, unappealable judgment or judgments, writ or writs or warrant or
warrants of attachment, or any similar process or processes, , in an aggregate amount in
excess of $10,000,000 (after taking into account the amount of any available insurance
coverage with written acknowledgement of such coverage having been provided by the
provider of such insurance coverage to the Bank) shall be entered or filed against the City
or against any of its Property and remain unpaid, unvacated, unbonded or unstayed for a
period of ninety (90) days;
(n) any "event of default" under any Program Document (as defined
respectively therein) shall have occurred; or
(o) (i) S&P shall have downgraded its rating of any long-term unenhanced
Bonds Similarly Secured of the City to below "BBB-" (or its equivalent), or suspended or
withdrawn its rating of the same due to credit related reasons; or (ii)] any of Fitch, Moody's
and S&P shall have downgraded its rating of any long-term unenhanced Bonds Similarly
Secured of the City to below "BBB-" (or its equivalent), "BaaY (or its equivalent), or
"BBB-" (or its equivalent) respectively, or suspended or withdrawn its rating of the same
due to credit related reasons; or
-51-
Section 7.2. Remedies. If an Event of Default specified in Section 7.1 hereof shall occur
and be continuing, the Bank may take one or more of the following actions at any time and from
time to time (regardless of whether the actions are taken at the same or different times):
(a) (i) by written notice to the Paying Agent/Registrar and the City, terminate
the Available Commitment (with notice of termination provided in the form of Exhibit D
hereto) and declare the outstanding amount of the Obligations under this Agreement to be
immediately due and payable without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived, and an action therefor shall
immediately accrue;
(ii) deliver a written notice to the Paying Agent / Registrar and the City
that an Event of Default has occurred and is continuing and direct the Paying Agent
/ Registrar and the City, as applicable, to cause an acceleration of the Notes or take
such other remedial action as is provided for in the Ordinance;
(iii) either personally or by attorney or agent without bringing any action
or proceeding, or by a receiver to be appointed by a court in any appropriate action
or proceeding, take whatever action at law or in equity may appear necessary or
desirable to collect the amounts due and payable under the Program Documents or
to enforce performance or observance of any obligation, agreement or covenant of
the City under the Program Documents, whether for specific performance of any
agreement or covenant of the City or in aid of the execution of any power granted to
the Bank in the Program Documents;
(iv) at the expense of the City, cure any Default, Event of Default or
event of nonperformance hereunder or under any Program Document; provided,
however, that the Bank shall have no obligation to effect such a cure; and
(v) exercise, or cause to be exercised, any and all remedies as it may
have under the Program Documents (other than as provided for in clause (ii) of this
Section 7.2(a)) and as otherwise available at law and at equity.
(b) Notwithstanding the provisions of Section 7.2(a)(i) or 7.2(a)(ii), (x) the
Bank shall not cause an acceleration of the Notes as described in Section 7.2(a)(i) or
7.2(a)(ii) until seven (7) days after the occurrence of an Event of Default specified in
Section 7.1(a), 7.1(h), 7.1(i)(i), 7.1(i)(ii), 7.10), 7.1(k), 7.1(m) or 7.1(o)(i) and (y) the Bank
shall notify the City of an acceleration at least one hundred eighty (180) days prior thereto
in the case of any Event of Default not specified in the immediately preceding clause (x).
Notwithstanding the foregoing sentence of this Section 7.2(b), if (i) (x) an Event of Default
under Section 7.1(f) or 7.1(g) hereof occurs or (y) any other holder or credit enhancer of
Revenues Secured Debt or any counterparty under any Swap Contract related thereto
causes any such Revenues Secured Debt or other obligations of the City to become
immediately due and payable (whether by repurchase, mandatory tender, mandatory
redemption, acceleration or otherwise), the Bank may immediately, without notice, avail
itself of the remedies set forth in Section 7.2(a)(i) or 7.2(a)(ii) hereof and/or declare or
-52-
cause to be declared the unpaid principal amount of all outstanding Notes, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder to be
immediately due and payable and (ii) any other holder or credit enhancer of Revenues
Secured Debt or any counterparty under any Swap Contract related thereto has the right to
cause such Revenues Secured Debt to be immediately due and payable (whether by
repurchase, mandatory tender, mandatory redemption, acceleration or otherwise) on a date
earlier than, or pursuant to a notice period which is shorter than what is set forth in the first
sentence of this Section 7.2(b) in connection with a default related to such Revenues
Secured Debt, then the Bank shall automatically have such right or shorter notice period, as
applicable.
Section 7.3. Suits at Law or in Equity and Mandamus. If any Event of Default shall occur,
then and in every such case the Bank shall be entitled to proceed to protect and enforce its rights by
such appropriate judicial proceeding as it may deem most effectual to protect and enforce any such
right, either by suit, in equity, or by action at law, whether for the specific performance of any
covenant or agreement contained in this Agreement, in aid of the exercise of any power granted in
this Agreement, or to enforce any other legal or equitable right vested in the Bank by this
Agreement, the Notes or by law. The provisions of this Agreement shall be a contract with each
and every Noteholder and the duties of the City shall be enforceable by any Noteholder by
mandamus or other appropriate suit, action, or proceeding in any court of competent jurisdiction.
Section 7.4. No Waiver. No failure on the part of Bank to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any remedies provided by
law. No delay or omission by the Bank in the exercise of any right, remedy or power or in the
pursuit of any remedy shall impair any such right remedy or power or be construed to be a waiver
of any default on the part of the Bank or to be acquiescence therein. No express or implied waiver
by the Bank of any Event of Default shall in any way be a waiver of any future or subsequent Event
of Default.
Section 7.5. Discontinuance of Proceedings. In case the Bank shall proceed to invoke
any right, remedy or recourse permitted hereunder or under the Program Documents and shall
thereafter elect to discontinue or abandon the same for any reason, the Bank shall have the
unqualified right so to do and, in such event, the City and the Bank shall be restored to their former
positions with respect to the Obligations, the Program Documents and otherwise, and the rights,
remedies, recourse and powers of the Bank hereunder shall continue as if the same had never been
invoked.
ARTICLE VIII
GENERAL
Section 8.1. Notices. Any notice or other communication to be given to the Bank under
this Agreement may be given by delivering the same in writing to Bank of America, N.A., 211 N.
Robinson, 2nd Floor, Oklahoma City, Oklahoma 73102; attention: Brent Riley, or to such different
-53-
address for the Bank as the Bank shall have notified the City as aforesaid. Any notice or other
communication to be given to the City under this Agreement may be given by delivering the same
in writing to Lubbock Power & Light, 13 01 Broadway St 1314 Avenue K. Lubbock, Texas 79401;
attention: Assistant Director of Electric Utilities/CFO, or to such different address for the City as
the City shall have notified the Bank as aforesaid. The approval or other action or exercise of
judgment by the Bank shall be evidenced by a writing signed on behalf of the Bank and delivered
to the City.
Section 8.2. Successors and Assigns.
(a) Successors and Assigns Generally. This Agreement is a continuing obligation and
shall be binding upon the City, its successors, transferees and assigns and shall inure to the benefit
of the Noteholders and their respective permitted successors, transferees and assigns. The City
may not assign or otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Bank. Each Noteholder may, in its sole discretion and in accordance with
applicable law, from time to time assign, sell or transfer in whole or in part, this Agreement, its
interest in the Notes and the other Program Documents in accordance with the provisions of
paragraph (b) or (c) of this Section. Each Noteholder may at any time and from time to time enter
into participation agreements in accordance with the provisions of paragraph (d) of this Section.
Each Noteholder may at any time pledge or assign a security interest subject to the restrictions of
paragraph (e) of this Section. Bank of America, N.A. shall be the Bank hereunder until such time
as the Majority Noteholder designates an alternate Person to serve as the Bank hereunder by
delivery of written notice to the City and the Paying Agent/Registrar and such Person accepts and
agrees to act as the Bank hereunder and under the Program Documents. The Majority Noteholder
may so designate an alternate Person to act as the Bank from time to time. Upon acceptance and
notification thereof to the City and the Paying Agent/Registrar, the successor to the Bank for such
purposes shall thereupon succeed to and become vested with all of the rights, powers, privileges
and responsibilities of the Bank, and Bank of America, N.A. or any other Person being replaced as
the Bank shall be discharged from its duties and obligations as the Bank hereunder.
(b) Sales and Transfers by Noteholder to a Bank Transferee. Without limitation of the
foregoing generality, a Noteholder may at any time sell or otherwise transfer to one or more
transferees all or a portion of the Notes to a Person that is (i) an Affiliate of the Bank or (ii) a trust
or other custodial arrangement established by the Bank or an Affiliate of the Bank, the owners of
any beneficial interest in which are limited to "qualified institutional buyers" as defined in Rule
144A promulgated under the 1933 Act, or "accredited investors" as defined in Rule 501 of
Regulation D under the 1933 Act (each, a "Bank Transferee"). From and after the date of such
sale or transfer, Bank of America, N.A. (and its successors) shall continue to have all of the rights
of the Bank hereunder and under the other Program Documents as if no such transfer or sale had
occurred; provided, however, that (A) no such sale or transfer referred to in clause (b)(i) or (b)(ii)
hereof shall in any way affect the obligations of the Bank hereunder, (B) the City and the Paying
Agent/Registrar shall be required to deal only with the Bank with respect to any matters under this
Agreement and (C) in the case of a sale or transfer referred to in clause (b)(i) or (b)(ii) hereof, only
the Bank shall be entitled to enforce the provisions of this Agreement against the City.
(c) Sales and Transfers by Noteholder to a Non -Bank Transferee. Without limitation of
-54-
the foregoing generality, a Noteholder may at any time sell or otherwise transfer to one or more
transferees which are not Bank Transferees but each of which constitutes a "qualified institutional
buyer" as defined in Rule 144A promulgated under the 1933 Act or an "accredited investor" as
defined in Rule 501 of Regulation D under the 1933 Act (each a "Non -Bank Transferee") all or a
portion of the Notes if (A) written notice of such sale or transfer, including that such sale or
transfer is to a Non -Bank Transferee, together with addresses and related information with respect
to the Non -Bank Transferee, shall have been given to the City, the Paying Agent/Registrar and the
Bank (if different than the Noteholder) by such selling Noteholder and Non -Bank Transferee, and
(B) the Non -Bank Transferee shall have delivered to the City, the Paying Agent/Registrar and the
selling Noteholder, an investment letter in substantially the form attached as Exhibit H to this
Agreement (the "Investor Letter").
From and after the date the City, the Paying Agent/Registrar and the selling Noteholder
have received written notice and an executed Investor Letter, (A) the Non -Bank Transferee
thereunder shall be a party hereto and shall have the rights and obligations of a Noteholder
hereunder and under the other Program Documents, and this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to effect the addition of the Non -Bank
Transferee, and any reference to the assigning Noteholder hereunder and under the other Program
Documents shall thereafter refer to such transferring Noteholder and to the Non -Bank Transferee
to the extent of their respective interests, and (B) if the transferring Noteholder no longer owns any
Notes, then it shall relinquish its rights and be released from its obligations hereunder and under
the Program Documents.
(d) Participations. Each Noteholder shall have the right to grant participations in all or a
portion of such Noteholder's interest in the Notes, this Agreement and the other Program
Documents to one or more other banking institutions; provided, however, that (i) no such
participation by any such participant shall in any way affect the obligations of the Bank hereunder
and (ii) the City and the Paying Agent/Registrar shall be required to deal only with the Bank, with
respect to any matters under this Agreement, the Notes and the other Program Documents and no
such participant shall be entitled to enforce any provision hereunder against the City. The City
agrees that each participant shall be entitled to the benefits of Sections 3.2, 3.3 and 3.4 hereof to the
same extent as if it were a Noteholder hereunder; provided, however, that a participant shall not be
entitled to receive any greater payment under Sections 3.3 and 3.4 than such Noteholder would
have been entitled to receive with respect to the participation sold to such participant, unless the
sale of the participation to such participant is made with the City's prior written consent.
(e) Certain Pledges. In addition to the rights of the Bank set forth above, the Bank may
at any time pledge or grant a security interest in all or any portion of its rights or interests under the
Notes, this Agreement and/or the Program Documents to secure obligations of the Bank or an
Affiliate of the Bank, including any pledge or assignment to secure obligations to a Federal
Reserve Bank or to any state or local governmental entity or with respect to public deposits;
provided that no such pledge or assignment shall release the Bank from any of its obligations
hereunder or substitute any such pledgee or assignee for the Bank as a party hereto.
Section 8.3. Amendments. Any provision of this Agreement may be amended or modified
if, but only if, such amendment or modification is in writing and is signed by the City and the
-55-
.1 I
Section 8.4. Governing Law; Jurisdiction; Etc. (a) THIS AGREEMENT AND THE OTHER
PROGRAM DOCUMENTS AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER
IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER PROGRAM DOCUMENT (EXCEPT, AS TO ANY OTHER PROGRAM
DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF TEXAS.
(b) Submission to Jurisdiction. EACH OF THE BANK AND THE CITY IRREVOCABLY AND
UNCONDITIONALLY AGREE THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING
OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR
OTHERWISE, AGAINST A PARTY IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER
PROGRAM DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM
OTHER THAN THE COURTS OF THE STATE OF TEXAS SITTING IN LUBBOCK COUNTY AND OF THE
UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF TEXAS, AND ANY APPELLATE
COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH TEXAS STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
(c) Waiver of Venue. EACH OF THIS PARTIES HEREAFTER IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER PROGRAM
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.
(d) Service of Process. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 8.1. NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW.
Section 8.5. Waiver of .fury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER PROGRAM DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT
-56-
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND
THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
PROGRAM DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION.
Section 8.6. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same
instrument. The parties agree that the electronic signature of a party to this Agreement shall be as
valid as an original signature of such party and shall be effective to bind such party to this
Agreement. The parties agree that any electronically signed document (including this Agreement)
shall be deemed (i) to be "written" or "in writing," (ii) to have been signed and (iii) to constitute a
record established and maintained in the ordinary course of business and an original written record
when printed from electronic files. Such paper copies or "printouts," if introduced as evidence in
any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the
parties to the same extent and under the same conditions as other original business records created
and maintained in documentary form. Neither party shall contest the admissibility of true and
accurate copies of electronically signed documents on the basis of the best evidence rule or as not
satisfying the business records exception to the hearsay rule. For purposes hereof, "electronic
signature" means a manually -signed original signature that is then transmitted by electronic
means; "transmitted by electronic means" means sent in the form of a facsimile or sent via the
internet as a "pdf' (portable document format) or other replicating image attached to an e-mail
message; and, "electronically signed document" means a document transmitted by electronic
means and containing, or to which there is affixed, an electronic signature.
Section 8.7. Severability. If any provision of this Agreement shall be held or deemed to
be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any
constitution, statute, rule of public policy, or any other reason, such circumstances shall not have
the effect of rendering the provision in question invalid, inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions of this Agreement invalid,
inoperative or unenforceable to any extent whatever.
Section 8.8. Survival of this Agreement. All covenants, agreements, representations and
warranties made in this Agreement shall survive the extension by the Bank of the Commitment
and shall continue in full force and effect so long as the Commitment shall be unexpired or any
sums drawn or due thereunder or any other obligations shall be outstanding and unpaid, regardless
of any investigation made by any Person and so long as any amount payable hereunder remains
unpaid. The agreement of the City to indemnify the Bank and each Indemnitee under Section 3.2
hereof shall continue in full force and effect notwithstanding a termination of the Commitment or
the fulfillment of all Obligations. The obligations of the City under Sections 3.3 and 2.6(d) hereof
shall also continue in full force and effect notwithstanding a termination of the Commitment or the
fulfillment of all Obligations. Whenever in this Agreement the Bank is referred to, such reference
shall be deemed to include the successors and assigns of the Bank and all covenants, promises and
agreements by or on behalf of the City which are contained in this Agreement shall inure to the
benefit of the successors and assigns of the Bank.
-57-
Section 8.9. Effectiveness. This Agreement shall become effective upon the execution by
the Bank and the acceptance hereof by the City.
Section 8.10. No Personal Liability. None of the City's governing body members, officers,
employees, or agents (including, without limitation, any person executing this Agreement) shall be
liable personally for any Obligation or be subject to any personal liability or accountability by
reason of the City's issuance of any Note or for the City entering into this Agreement.
Section 8.11. USA Patriot Act. The Bank is subject to the Patriot Act and hereby notifies
the City that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and
record information that identifies the City, which information includes the name and address of the
City and other information that will allow the Bank to identify the City in accordance with the
Patriot Act. The City shall, promptly following a request by the Bank, provide all documentation
and other information that the Bank requests in order to comply with its ongoing obligations under
applicable "know your customer" and anti -money laundering rules and regulations, including the
Patriot Act.
Section 8.12. Notice of Final Agreement. THIS IS THE FINAL EXPRESSION OF THE
AGREEMENT BETWEEN THE BANK AND THE CITY AND SUCH WRITTEN AGREEMENT MAY NOT BE
CONTRADICTED BY EVIDENCE OF ANY PRIOR ORAL AGREEMENT OR OF A CONTEMPORANEOUS ORAL
AGREEMENT BETWEEN THE BANK AND THE CITY.
Section 8.13. No Advisory or Fiduciary Relationship. In connection with all aspects of
each transaction contemplated hereby (including in connection with any amendment, waiver or
other modification hereof or of any other Program Document), the City acknowledges and agrees,
and acknowledges its Affiliates' understanding, that: (a) (i) the services regarding this Agreement
provided by the Bank and any Affiliate thereof are arm's-length commercial transactions between
the City, on the one hand, and the Bank and its Affiliates, on the other hand, (ii) the City has
consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed
appropriate, and (iii) the City is capable of evaluating, and understands and accepts, the terms,
risks and conditions of the transactions contemplated hereby and by the other Program
Documents; (b) (i) the Bank and its Affiliates each is and has been acting solely as a principal and,
except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be
acting as an advisor, agent or fiduciary, for the City, or any other Person and (ii) neither the Bank
nor any of its Affiliates has any obligation to the City with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other Program Documents;
and (c) the Bank and its Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the City, and neither the Bank nor any of its Affiliates has any
obligation to disclose any of such interests to the City. To the fullest extent permitted by law, the
City, hereby waives and releases any claims that it may have against the Bank or any of its
Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection
with any aspect of any transactions contemplated hereby.
Section 8.14. Israel Boycott. Pursuant to Section 2270.002, Texas Government Code, the
Bank hereby represents that neither it nor or any wholly owned subsidiary, majority -owned
subsidiary, parent company or affiliate of the Bank, subject to or as otherwise required or
permitted by applicable Federal law, including, without limitation, 50 U.S.C. Section 4607,
Boycotts Israel (as defined in Section 2270.002, Texas Government Code) and, subject to or as
otherwise required or permitted by applicable Federal law, including, without limitation, 50
U.S.C. Section 4607, the Bank agrees that neither it nor or any wholly owned subsidiary,
majority -owned subsidiary, parent company or affiliate of the Bank will Boycott Israel during the
term of this Agreement.
Section 8.15. Texas Government Code Section 2252.152. The Bank hereby acknowledges
to its best knowledge that (a) the Bank does not engage in business with Iran, Sudan or any foreign
terrorist organization except to the extent required or otherwise permitted by applicable Federal
law and (b) the Bank is not listed by the Texas Comptroller as described in Section 2252.152 of the
Texas Government Code. The term "foreign terrorist organization" as used in this Section has the
meaning assigned to such term in Section 2251.152 of the Texas Government Code.
Section 8.16. Electronic Execution of Certain Documents. This Agreement and anv
document, amendment, approval, consent, information, notice, certificate, request, statement.
disclosure or authorization related to this Agreement each a "Communication'), including
Communications required to be in writing, may, rely the Bank. be in the form of an
Electronic Record and may be executed using Electronic Signatures, including, without limitation.
facsimile and/or .pdf. The City grees that any Electronic Signature including, without limitation,
facsimile or .pdf) on or associated with any Communication shall be valid and binding on the City
to the same extent as a manual, original signature, and that any Communication entered into by
Electronic Signature, will constitute the legal, valid and binding obligation of the City enforceable
against the City in accordance with the terms thereof to the same extent as if a manually executed
originalgnature was delivered to the Bank. Any Communication may be executed in as many
counterparts as necessary or convenient, includingpaper and electronic counterparts, but all
such counterparts are one and the same Communication. For the avoidance of doubt, the
authorization under this paragraph may include, without limitation, use or acceptance by the Bank
of a manually signed led paper Communication which has been converted into electronic form (such
as scanned into PDF format), or an electronically signed Communication converted into another
format, for transmission, delivery and/or retention. The Bank may, at its option, create one or more
copies of any Communication in the form of an imaged Electronic Record ('Electronic CoRya
which shall be deemed created in the ordinary course of the Bank's business, and destroy the
original paper document. All Communications in the form of an Electronic Record, including an
Electronic Copy, shall be considered an original for all purposes, and shall have the same legal
effect, validity and enforceability as a paper record. Notwithstanding anything contained herein to
the contrary, the Bank is under no obligation to accept an Electronic Signature in any form or in
any format unless expressly greed to by the Bank pursuant to procedures approved by it:
provided, further, without limiting the foregoing. (a) to the extent the Bank has agreed to accept
such Electronic Signature, the Bank shall be entitled to rely on any such Electronic Signature
without further verification and (b) upon the request of the Bank any Electronic Signature shall be
promptly followed by a manually executed, original counterpart. For purposes hereof. `Electronic
Record" and `Electronic Signature" shall have the meanings assigned to them, respectively,by
15 USC §7006, as it may be amended from time to time.
Section 8.17. US QFC Stav Rules.
-59-
(a) Recognition of U.S. Resolution Regimes. In the event that any party that is a Covered
Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of
this Agreement (and any interest and obligation in or under this Agreement and any prone rt -
securingtgreement) from such Covered Entity will be effective to the same extent as the
transfer would be effective under the U.S. Special Resolution Regime if this Agreement (and any
such interest, obligation and grope ) were governed by the laws of the United States or a state of
the United States. In the event that any party that is a Covered Entity or a BHC Act Affiliate of
such party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default
Rights against such party with respect to this Agreement are permitted to be exercised to no greater
extent than such Default Rights could be exercised under the U.S. Special Resolution Regime
this Agreement were governed by the laws of the United States or a state of the United States. The
requirements of this paragraph (a) apply notwithstanding the provisions of paragrap�b�
(b) Limitation on the Exercise of Certain Rights Related to Affiliate Insolvency
Proceedings. Notwithstanding anything to the contrary in this Agreement or any related
agreement, but subject to the requirements of paragraph (a), no party to this Agreement shall be
permitted to exercise any Default Right against partv that is a Covered Entity with respect to this
Agreement that is related, directly or indirectly, to a BHC Act Affiliate of such Covered Entity
becoming subject to Insolvency Proceedings, except to the extent the exercise of such Default
Right would be permitted under 12 C.F.R. & 252.84, 12 C.F.R. & 47.5, or 12 C.F.R. § 382.4, as
applicable. After a BHC Act Affiliate of a party that is a Covered Entity has become subject to
Insolvency Proceedings, any party that seeks to exercise a Default Right against such Covered
Entity with respect to this Agreement shall have the burden of proof, by clear and convincing
evidence, that the exercise of such Default Ri hg t is permitted hereunder.
"BHC Act Affiliate " of a party means an "affiliate" (as such term is defined under, and interpreted
in accordance with. 12 U.S.C. 1841(k)l of such party.
"Covered Entity" means any of the following:
(a) a "covered entity" as that term is defined in, and interpreted in accordance with, 12 C.F.R. §
252.82 b
(b) a "covered bank" as that term is defined in, and interpreted in accordance with, 12 C.F.R. §
47.3 b • or
(c) a "covered FSI" as that term is defined in, and interpreted in accordance with, 12 C.F.R. &
382.2 b .
"Default Right" has the meaning assigned to that term in, and shall be interpreted in accordance
with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
"Insolvency Proceeding" means a receivership, insolvency, liquidation, resolution, or similar
proceeding
"U.S. Special Resolution Regime" means each of (i) the Federal Deposit Insurance Act and the
regulations Promulgated thereunder and (ii) Title II of the Dodd -Frank Wall Street Reform and
Consumer Protection Act and the regulations Promulgated thereunder.
[Signature Pages Follow]
-61-
Respectfully submitted,
BANK OF AMERICA, N.A.
I3
Brent Riley
Senior Vice President
[Signature Page to Note Purchase Agreement]
CITY OF LUBBOCK, TEXAS
LIM
Name:
Title:
[Signature Page to Note Purchase Agreement]
Exhibit A
[Form of Request for Purchase]
Bank of America, N.A., as Bank
211 N. Robinson, 2nd Floor
OK1-100-02-30
Oklahoma City, Oklahoma 73102
Telephone: (405) 230-1717
Attention: Brent Riley
Email: brent.riley@baml.com
Ladies and Gentlemen:
Request for Purchase
The Bank of New York Mellon Trust Company,
N.A.
as Paying Agent/Registrar
601 Travis Street, Floor 16
Houston, Texas 77002
Telephone: (713) 483-6764
Attention: Patty Barbarino
Email: patty.barbarino@bnymellon.com
The undersigned, an Authorized Representative, refers to the Note Purchase Agreement
dated June 5, 2019 (together with any amendments or supplements thereto, the `Agreement"),
between the City of Lubbock, Texas (the "City") and Bank of America, N.A. (the "Bank") (the
terms defined therein being used herein as therein defined) and hereby requests, pursuant to
Section 2.3 of the Agreement, that the Bank make a Purchase of Notes under the Agreement, and
in that connection sets forth below the following information relating to such Purchase (the
"Proposed Purchase "):
1. The Business Day of the Proposed Purchase is , 20_ (the
"Purchase Date"), which is at {least three Business Daysl lone Business Day} after the
date hereof.
2. The principal amount of the Proposed Purchase of a Note is
$ , which is not greater than the Available Commitment as of the Purchase
Date set forth in 1 above.
3. The City requests that the following existing notes be combined into one
Note with principal amount of the Proposed Purchase Note in # 2 above. [Note R - ] [Note
R -]
4 The aggregate amount of the Proposed Purchase shall be used solely for the
purposes permitted in the Ordinance and the Agreement.
5. The Note Maturity Date shall be (such date shall not be later than the
earlier of (i) the Commitment Expiration Date and (ii) three hundred sixty-four (364) days
from the Purchase Date).
6. The interest rate with respect to the Proposed Purchase of a Note shall be
FEW
[the Fixed Rate'Fixed Ratel the Taxable Fixed Rate -or —the Tax -Exempt Fixed
Rate] [the Floating Ratel [if Floating Rate: the Tax Exempt Floating Rate LIBOR or
the Taxable Floating Rate LIBOR4-.
(B) At the end of the interest Period ele tea by the City i (A) she City ,ays;,v�
that the r-ela ed Fixed Rate Note [automatically convert to a Floating Rate N
(Tax Exempt Floating Rate or the Taxable Floating Rate ,
otheFWise diFeeted by the Cityl or- [eonflnue as a Fixed Rate Note in the same inte
Period until otherwise directed by the Cityl or (B) the City desiFes that the related N
atAofnatieally eontinue as a Floating Ra4e Note !st at [Floating Rate LIPANZ4
until other -wise dir-eeted by the Gityl.
7. After giving effect to the Proposed Purchase, the aggregate principal
amount of all Notes outstanding under the Agreement will not exceed the Available
Commitment.
8. The Paying Agent/Registrar is directed to issue and hold the authenticated
Note for the benefit of the Bank, consistent with the instructions herein pursuant to the
Ordinance, the Agreement and the Paying Agent/Registrar Agreement. An electronic copy
of the authenticated Note will be attached to this Request for Purchase.
9. The City makes the representations set forth in the Ordinance as if set forth
in this request. Further, the City certifies that it has identified the specific projects to be
financed or refinanced with the Notes contemplated by this request in other documentation
of the City and the City has been generally advised by Bond Counsel that projects similar
to such projects constitute Project Costs.
The submission of this Request for Purchase constitutes a representation and warranty that
the conditions specified in Section 5.2 of the Agreement have been satisfied on and as of the date
hereof.
A-2
The Proposed Purchase shall be made by the Bank by wire transfer of immediately
available funds to the undersigned in accordance with the instructions set forth in the Direction
Letter.
Very truly yours,
CITY OF LUBBOCK, TEXAS
RIM
Name:
Title:
A-3
EXHIBIT B
yr rmeFio ', N.A.,
[FoR 4 of NoT-ic-E OF CONTINU A TION/CONNTTi]RW14
NoTic-E OF i' ONTINt A TION/C/lArVERSION
as B ,mil The Bank of New York Mello Tfust (`.,,Y„ an) ,
RIMMATAWITUMis
a
1
m
C�7 Sfor
M�AIFIITITN
. A .
�.
W
pjii
Illill, !I !I
M.
worms
M".., mm
Title-l-RESERVEDI
IM
EXHIBIT C
[FORM OF REQUEST FOR EXTENSION]
Bank of America, N.A., as Bank
211 N. Robinson, 2nd Floor
OK1-100-02-30
Oklahoma City, Oklahoma 73102
Telephone: (405) 230-1717
Attention: Brent Riley
Email: brent.riley@baml.com
Ladies and Gentlemen:
REQUEST FOR EXTENSION
The Bank of New York Mellon Trust Company,
N.A.
as Paying Agent/Registrar
601 Travis Street, Floor 16
Houston, Texas 77002
Telephone: (713) 483-6764
Attention: Patty Barbarino
Email: patty.barbarino@bnymellon.com
Reference is made to the Note Purchase Agreement dated June 5, 2019 (together with any
amendments or supplements thereto, the "Agreement") between the undersigned, the City of
Lubbock, Texas (the "City") and Bank of America, N.A. (the "Bank"). All terms defined in the
Agreement are used herein as defined therein.
The City hereby requests, pursuant to Section 2.10 of the Agreement, that the Commitment
Expiration Date with respect to the Available Commitment as of the date hereof be extended by
to . Pursuant to such Section 2.10, we have enclosed with this
request the following information:
1. a reasonably detailed description of any and all Defaults that have occurred
and are continuing;
2. confirmation that all representations and warranties of the City as set forth
in Article IV of the Agreement and each Program Document are true and correct as though
made on the date hereof and that no Default or Event of Default has occurred and is
continuing on the date hereof, and
3. any other pertinent information previously requested by the Bank.
The Bank is asked to notify the City of its decision with respect to this request within 30
days of the date of receipt hereof. If the Bank fails to notify the City of the Bank's decision within
such 30-day period, the Bank shall be deemed to have rejected such request.
C-1
Very truly yours,
CITY OF LUBBOCK, TEXAS
Lb -A
Name:
Title:
C-2
EXHIBIT D
[FORM OF NOTICE OF TERMINATION]
NOTICE OF TERMINATION
Lubbock Power & Light
1314 Avenue K
Lubbock, Texas 79401
Attention: Assistant Director of Electric Utilities/CFO
The Bank of New York Mellon Trust Company, N.A.
as Paying Agent/Registrar
601 Travis Street, Floor 16
Houston, Texas 77002
Telephone: (713) 483-6764
Attention: Patty Barbarino
Email: patty.barbarino@bnymellon.com
Ladies and Gentlemen:
We refer to the Note Purchase Agreement dated June 5, 2019 (together with any
amendments or supplements thereto, the "Agreement"), between the City of Lubbock, Texas (the
"City") and the undersigned, Bank of America, N.A. Any term below that is defined in the
Agreement shall have the same meaning when used herein.
We hereby notify you that an Event of Default has occurred under Section 7.1 of the
Agreement. As a result, unless and until you have been advised otherwise by us:
1. The Available Commitment [has been automatically]/[is hereby] reduced
to $0.00 and the Bank has no further obligation to purchase Notes under the Agreement;
and
2. The Commitment [has been automatically]/[is] terminated and will no
longer be reinstated.
IN WITNESS WHEREOF, we have executed and delivered this Notice as of the day of
, 20 .
Very truly yours,
BANK OF AMERICA, N.A.
By
Name:
Title:
D-1
EXHIBIT E
[FORM OF NOTICE OF TERMINATION OR REDUCTION]
NOTICE OF TERMINATION OR REDUCTION
Bank of America, N.A., as Bank
211 N. Robinson, 2nd Floor
OK1-100-02-30
Oklahoma City, Oklahoma 73102
Telephone: (405) 230-1717
Attention: Brent Riley
Email: brent.riley@baml.com
Ladies and Gentlemen:
[Date]
The Bank of New York Mellon Trust Company,
N.A.
as Paying Agent/Registrar
601 Travis Street, Floor 16
Houston, Texas 77002
Telephone: (713) 483-6764
Attention: Patty Barbarino
Email: patty.barbarino@bnymellon.com
Re: Note Purchase Agreement dated June 5, 2019
The City of Lubbock, Texas sEP,(the "City"), through its undersigned, an Authorized
Representative, hereby certifies to Bank of America, N.A. (the "Bank"), with reference to the
Note Purchase Agreement dated June 5, 2019: 'E ' (together with any amendments or supplements
thereto, the "Agreement"), between the City and the Bank (the terms defined therein and not
otherwise defined herein being used herein as therein defined):
[(1) The City hereby informs you that the Commitment is terminated in
accordance with the Agreement.]
An
[(1) The City hereby informs you that the Available Commitment is
reduced from [insert amount as of the date of Certificate] to [insert new amount],
such reduction to be effective on .]
E-1
IN WITNESS WHEREOF, the City has executed and delivered this Notice this day of
CITY OF LUBBOCK, TEXAS
LOW
Name:
Title:
E-2
EXHIBIT F
[FORM OF NOTICE OF REDUCTION]
NOTICE OF REDUCTION
[Date]
Lubbock Power & Light
1314 Avenue K
Lubbock, Texas 79401
Attention: Assistant Director of Electric Utilities/CFO
The Bank of New York Mellon Trust Company, N.A.
as Paying Agent/Registrar
601 Travis Street, Floor 16
Houston, Texas 77002
Telephone: (713) 483-6764
Attention: Patty Barbarino
Email: patty.barbarino@bnymellon.com
Ladies and Gentlemen:
We hereby notify you that pursuant to Section 2.7(a) of the Note Purchase Agreement
dated June 5, 2019, between the City of Lubbock, Texas (the "City") and Bank of America, N.A.
(the "Bank"), the Available Commitment is reduced from [insert amount as of the date of
Certificate] to [insert new amount], such reduction to be effective on
F-1
Very truly yours,
BANK OF AMERICA, N.A.
LOW
Name:
Title:
F-2
EXHIBIT G
[FORM OF NOTICE OF EXTENSION]
NOTICE OF EXTENSION
[Date]
Lubbock Power & Light
1314 Avenue K
Lubbock, Texas 79401
Attention: Assistant Director of Electric Utilities/CFO
The Bank of New York Mellon Trust Company, N.A.
as Paying Agent/Registrar
601 Travis Street, Floor 16
Houston, Texas 77002
Telephone: (713) 483-6764
Attention: Patty Barbarino
Email: patty.barbarino@bnymellon.com
Ladies and Gentlemen:
We hereby notify you that pursuant to Section 2.10(b) of the Note Purchase Agreement
dated June 5, 2019, between the City of Lubbock, Texas (the "City ") and the undersigned, Bank of
America, N.A. (the "Bank"), the Commitment Expiration Date with respect to the Commitment as
of the date hereof shall be extended to I . Your acknowledgment hereof
shall be deemed to be your representation and warranty that all your representations and warranties
contained in Article IV of the Agreement and each other Program Document are true and correct
and will be true and correct as of the date hereof and that no Default or Event of Default has
occurred and is continuing.
G-1
Very truly yours,
BANK OF AMERICA, N.A.
LOW
Name:
Title:
G-2
Acknowledged as of by
CITY OF LUBBOCK, TEXAS
LI-A
Name:
Title:
G-3
EXHIBIT H
FORM OF INVESTOR LETTER
City of Lubbock, Texas
Re:
Ladies and Gentlemen:
This letter is to provide you with certain representations and agreements with respect to our
purchase of the above -referenced notes (the "Notes"). The Notes were issued by the City of
Lubbock, Texas (the "City ") pursuant to City ordinance adopted by the City
Council on April 9, 2019 (the "Ordinance"). Bank of America, N.A. (the "Bank, " the
"undersigned, " "us " or "we, " as applicable) is purchasing the Notes pursuant a Note Purchase
Agreement dated June 5, 2019, between the City and the Bank. We hereby represent and warrant
to you and agree with you as follows:
1. We understand that the Notes have not been registered pursuant to the Securities Act
of 1933, as amended (the "1933 Act"), the securities laws of any state nor has the Ordinance been
qualified pursuant to the Trust Indenture Act of 1939, as amended, in reliance upon certain
exemptions set forth therein. We acknowledge that the Notes (i) are not being registered or
otherwise qualified for sale under the "blue sky" laws and regulations of any state and (ii) will not
be listed on any securities exchange.
2. We have not offered, offered to sell, offered for sale or sold any of the Notes by
means of any form of general solicitation or general advertising, and we are not an underwriter of
the Notes within the meaning of Section 2(11) of the 1933 Act.
3. We have sufficient knowledge and experience in financial and business matters,
including purchase and ownership of municipal and other tax-exempt obligations, to be able to
evaluate the risks and merits of the investment represented by the purchase of the Notes.
4. The Bank is either a "qualified institutional buyer" as defined in Rule 144A
promulgated under the 1933 Act, or an "accredited investor" as defined in Rule 501 of Regulation
D under the 1933 Act and is able to bear the economic risks of such investment.
The Bank understands that no official statement, prospectus, offering circular, or
other comprehensive offering statement is being provided with respect to the Notes. The Bank has
made its own inquiry and analysis with respect to the City, the Notes and the security therefor, and
other material factors affecting the security for and payment of the Notes.
6. The Bank acknowledges that it has either been supplied with or been given access to
information, including financial statements and other financial information, regarding the City, to
which a reasonable investor would attach significance in making investment decisions, and has
had the opportunity to ask questions and receive answers from knowledgeable individuals
concerning the City, the Notes and the security therefor, so that as a reasonable investor, it has
been able to make its decision to purchase the Notes.
7. The Notes are being acquired by the Bank for investment for its own account and not
with a present view toward resale or distribution; provided, however, that the Bank reserves the
right to sell, transfer or redistribute the Notes, but agrees that any such sale, transfer or distribution
by the Bank shall be to a Person:
(a) that is an affiliate of the Bank;
(b) that is a trust or other custodial arrangement established by the Bank or one
of its affiliates, the owners of any beneficial interest in which are limited to qualified
institutional buyers or accredited investors;
(c) that is a secured party, custodian or other entity in connection with a pledge
by the Bank to secure public deposits or other obligations of the Bank or one of its affiliates
to state or local governmental entities; or
(d) that the Bank reasonably believes to be a qualified institutional buyer or
accredited investor and who executes an investor letter substantially in the form of this
letter which is delivered to the City (as an addressee).
H-2
Very truly yours,
BANK OF AMERICA, N.A.
LIZ
Brent Riley
Senior Vice President
[Signature Page to Investor Letter]
EXHIBIT I
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ,
To: Bank of America, N.A.,
Ladies and Gentlemen:
Reference is made to that certain Note Purchase Agreement dated as of June 5, 2019 (the
"Agreement"), between the City of Lubbock, Texas (the "City") and Bank of America, N.A. (the
"Bank"). Unless otherwise defined herein, the terms used in this Certificate shall have
the meanings assigned thereto in the Agreement.
The undersigned Authorized Representative hereby certifies as of the date hereof that
he/she is the of the City, and that, as such, he/she is
authorized to execute and deliver this Certificate to the Bank on the behalf of the City, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
1. Attached hereto as Schedule 1 are the year-end audited financial statements required
by Section 6.1(a)(i) of the Agreement for the fiscal year of the City ended as of the above date,
together with the report and opinion of an independent certified public accountant required by such
section.
[Use following paragraph I for fiscal quarter -end financial statements]
1. Attached hereto as Schedule 1 are the quarter -end unaudited financial statements
required by Section 6.1(a)(ii) of the Agreement for the fiscal quarter of the City ended as of the
above date, which includes the balance sheet as of the end of the quarter and a statement of income
and expenses.
2. The undersigned has reviewed and is familiar with the terms of the Agreement and
has made, or has caused to be made under his/her supervision, a review of the transactions and
condition (financial or otherwise) of the City during the accounting period covered by the attached
financial statements.
3. A review of the activities of the City during such fiscal period has been made under
the supervision of the undersigned with a view to determining whether during such fiscal period
the City performed and observed all its Obligations under the Program Documents, and
[Signature Page to Compliance Certificate]
[select one:]
[to the best knowledge of the undersigned during such fiscal period, the City
performed and observed each covenant and condition of the Program Documents applicable
to it, and no Default or Event of Default has occurred and is continuing.]
--or--
[the following covenants or conditions have not been performed or observed and the
following is a list of each such Default or Event of Default and its nature and status:]
4. The representations and warranties of the City contained in Article IV of the
Agreement are true and correct on and as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they are true and
correct as of such earlier date, and except that for purposes of this Certificate, the representations
and warranties contained in Section 4.1(f) of the Agreement shall be deemed to refer to the most
recent statements furnished pursuant to Section 6.1 of the Agreement, including the statements in
connection with which this Certificate is delivered.
Delivery of an executed counterpart of a signature page of this Certificate by fax
transmission or other electronic mail transmission (e.g. "pdf'or "tif') shall be effective as delivery
of a manually executed counterpart of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
CITY OF LUBBOCK, TEXAS
By:
Name:
Title:
[Signature Page to Compliance Certificate]