HomeMy WebLinkAboutOrdinance - 2016-O0051 - Electric Light And Power System Revenue Bonds - 03/24/2016Ordinance No. 2016 - 00051
ORDINANCE
relating to
CITY OF LUBBOCK, TEXAS
ELECTRIC LIGHT AND POWER SYSTEM REVENUE BONDS,
SERIES 2016
Adopted: March 24, 2016
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section1.01
Definitions................................................................................................................2
Section1.02
Findings....................................................................................................................6
Section 1.03
Table of Contents, Titles and Headings...................................................................7
Section1.04
Interpretation............................................................................................................7
ARTICLE II
SECURITY FOR THE BONDS
Section 2.01
Pledge of Security....................................................................................................7
Section 2.02
Limited Obligations.................................................................................................7
Section 2.03
Security Interest.......................................................................................................8
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE BONDS
Section3.01
Authorization...........................................................................................................8
Section 3.02
Date, Denomination, Maturities and Interest...........................................................8
Section 3.03
Medium, Method and Place of Payment..................................................................9
Section 3.04
Execution and Registration of Bonds....................................................................10
Section3.05
Ownership..............................................................................................................10
Section 3.06
Registration, Transfer and Exchange.....................................................................1
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Section3.07
Cancellation...........................................................................................................11
Section 3.08
Temporary Bonds...................................................................................................12
Section 3.09
Replacement Bonds...............................................................................................12
Section 3.10
Book -Entry Only System.......................................................................................13
Section 3.11
Successor Securities Depository; Transfer Outside Book -Entry Only
System....................................................................................................................14
Section 3.12
Payments to Cede & Co.........................................................................................14
ARTICLE IV
REDEMPTION OF BONDS BEFORE MATURITY
Section 4.01
Limitation on Redemption.....................................................................................14
Section 4.02
Optional Redemption.............................................................................................15
Section 4.03
Mandatory Sinking Fund Redemption...................................................................15
Section 4.04
Partial Redemption.................................................................................................15
Section 4.05
Notice of Redemption to Owners..........................................................................15
Section 4.06
Payment Upon Redemption...................................................................................16
Section 4.07
Effect of Redemption.............................................................................................16
Section 4.08
Lapse of Payment...................................................................................................17
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Section 5.01
Section 5.02
Section 5.03
Section 5.04
Section 5.05
Section 5.06
Section 5.07
Section 6.01
Section 6.02
Section 6.03
Section 6.04
Section 7.01
Section 7.02
Section 7.03
Section 7.04
Section 7.05
Section 7.06
ARTICLE V
PAYING AGENT/REGISTRAR
Appointment of Paying Agent/Registrar.............................................
Qualifications.......................................................................................
Maintaining Paying Agent/Registrar...................................................
Termination..........................................................................................
Notice of Change to Owners................................................................
Agreement to Perform Duties and Functions .......................................
Delivery of Records to Successor........................................................
ARTICLE VI
FORM OF THE BONDS
FormGenerally......................................................................................................18
CUSIPRegistration................................................................................................19
LegalOpinion........................................................................................................19
Statementof Insurance...........................................................................................19
ARTICLE VII
FUNDS AND ACCOUNTS
Segregation of Revenues/Fund Designations........................................................19
SystemFund...........................................................................................................19
BondFund..............................................................................................................20
Paymentof Bonds..................................................................................................22
Deficiencies in Funds.............................................................................................22
Securityof Funds...................................................................................................22
ARTICLE VIII
SALE AND DELIVERY OF BONDS; DEPOSIT OF PROCEEDS
Section 8.01 Sale of Bonds; Official Statement..........................................................................23
Section 8.02 Control and Delivery of Bonds..............................................................................25
Section 8.03 Deposit of Proceeds...............................................................................................25
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01
Additional Bonds...................................................................................................25
Section 9.02
Rates and Charges..................................................................................................26
Section 9.03
Maintenance and Operation; Insurance.................................................................27
Section 9.04
Records, Accounts, Accounting Reports...............................................................27
Section 9.05
Further Covenants..................................................................................................28
Section 9.06
Other Representations and Covenants...................................................................29
Section 9.07
Federal Income Tax Exclusion..............................................................................29
Section 9.08
Disposition of Project............................................................................................31
ARTICLE X
DEFAULT AND REMEDIES
Section 10.01
Events of Default...................................................................................................31
Section 10.02
Remedies for Default.............................................................................................31
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Section 10.03 Remedies Not Exclusive........................................................................................32
ARTICLE XI
DISCHARGE
Section11.01 Discharge...............................................................................................................32
ARTICLE XII
CONTINUING DISCLOSURE UNDERTAKING
Section 12.01 Annual Reports......................................................................................................32
Section 12.02 Event Notices.........................................................................................................33
Section 12.03 Identifying Information..........................................................................................34
Section 12.04 Limitations, Disclaimers and Amendments...........................................................34
ARTICLE XIII
AMENDMENTS; ATTORNEY GENERAL MODIFICATION
Section13.01 Amendments..........................................................................................................35
Section 13.02 Attorney General Modification..............................................................................36
ARTICLE XIV
EFFECTIVE IMMEDIATELY
Section 14.01 Effective Immediately............................................................................................36
Exhibit A - Description of Annual Disclosure of Financial Information .................................. A-1
Exhibit B - Sale Parameters........................................................................................................B-1
Exhibit C - Form of the Bonds....................................................................................................0-1
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AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY
OF LUBBOCK, TEXAS, ELECTRIC LIGHT AND POWER
SYSTEM REVENUE BONDS, SERIES 2016; PROVIDING FOR
THE AWARD OF THE SALE THEREOF IN ACCORDANCE
WITH SPECIFIED PARAMETERS; APPROVING THE
OFFICIAL STATEMENT; APPROVING EXECUTION OF A
PURCHASE CONTRACT; AND ENACTING OTHER
PROVISIONS RELATING THERETO
WHEREAS, in accordance with the Constitution and laws of the State of Texas,
specifically Chapter 1502, Texas Government Code, as amended ("Chapter 1502"), the City of
Lubbock, Texas (the "City"), has previously issued its electric light and power system revenue
bonds (such outstanding revenue bonds being the "Previously Issued Bonds"), payable from and
secured by a first lien on and pledge of the net revenues of the City's Electric Light and Power
System (the "System");
WHEREAS, in the ordinances authorizing the issuance of the Previously Issued Bonds
the City reserved the right to issue, under certain conditions, additional bonds ("Additional
Bonds") on a parity as to lien and right with the Previously Issued Bonds;
WHEREAS, the conditions precedent to the issuance of Additional Bonds under the
ordinances authorizing the issuance of the Previously Issued Bonds have occurred and are
existing, and the City intends to issue pursuant to this Ordinance its revenue bonds as additional
bonds on a parity with the Previously Issued Bonds;
WHEREAS, the City Council of the City (the "City Council") hereby finds and
determines that electric light and power system revenue bonds secured by a first lien on and
pledge of the Net Revenues of the System on a parity with the Previously Issued Bonds should
be issued for the purposes of acquiring, purchasing, constructing, improving, renovating,
enlarging, and/or equipping property, buildings, structures, facilities, and/or related infrastructure
for the System (the "Project");
WHEREAS, the revenue bonds hereinafter authorized are to be issued and delivered
pursuant to Chapter 1502 and in accordance with the general laws of the State of Texas;
WHEREAS, the City is an "Issuer" within the meaning of Chapter 1371, Texas
Government Code ("Chapter 1371"), as amended, and the City Council desires to delegate,
pursuant to Chapter 1371 and the parameters of this Ordinance, to the Authorized Officer
(hereinafter defined), the authority to approve the principal amount, the interest rate, the number
of series, the price and the other terms of the bonds authorized hereby and to otherwise take such
actions as are necessary and appropriate to effect the sale of such bonds;
WHEREAS, the meeting at which this Ordinance is considered is open to the public as
required by law, and the public notice of the time, place and purpose of said meeting was given
as required by Chapter 551, Texas Government Code, as amended; therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
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ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section 1.01 Definitions.
Unless otherwise expressly provided or unless the context clearly requires otherwise in
this Ordinance, the following terms shall have the meanings specified below:
"Additional Bonds" means the additional parity obligations the City reserves the right to
issue in accordance with the terms and conditions prescribed in Section 9.01 hereof.
"Authorized Officer" means each of the Mayor, the City Manager and the Executive
Director of Finance, acting individually.
"Average Annual Debt Service" means that amount which, at the time of computation, is
derived by dividing the total amount of Debt Service to be paid over a period of years as the
same is scheduled to become due and payable by the number of years taken into account in
determining the total Debt Service. Capitalized interest payments provided from bond proceeds
shall be excluded in making the aforementioned computation.
"Bond" means any of the Bonds.
"Bond Date" means the date designated as the initial date of the Bonds by Section 3.02(a)
of this Ordinance.
"Bond Purchase Contract" means any bond purchase contract approved in Section
8.01(b) of this Ordinance.
"Bonds" means the City's bonds authorized to be issued by Section 3.01 of this
Ordinance.
"Bonds Similarly Secured" means the Previously Issued Bonds, the Bonds and
Additional Bonds, if any.
"Business Day" means any day other than a Saturday, Sunday or legal holiday or other
day on which banking institutions in the city where the Designated Payment/Transfer Office of
the Paying Agent/Registrar is located are required or authorized by law or executive order to
close.
"City" means the City of Lubbock, Texas.
"Closing Date" means the date of the initial delivery of and payment for Bonds.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
enacted on or before the Issue Date.
"Computation Date" has the meaning stated in Section 1.148-1(b) of the Regulations.
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"Credit Facility" means any agreement of the City entered into with a financial institution
in connection with and for the purpose of (i) enhancing or supporting the creditworthiness of (A)
a series of Bonds Similarly Secured or (B) all of the Bonds Similarly Secured, (ii) providing a
surety policy in order to fund all or a portion of the Required Reserve for the Bonds Similarly
Secured, or (iii) providing liquidity with respect to a series of Bonds Similarly Secured which by
their terms are subject to tender for purchase, and which, by its terms, creates a liability on the
part of the City on a parity with the Bonds Similarly Secured; provided that, on the date any such
credit facility is issued, any rating agency having an outstanding rating on the Bonds Similarly
Secured would not lower the rating on the Bonds Similarly Secured as confirmed in writing by
such rating agency. A determination by the City contained in the ordinance authorizing the
issuance of Bonds Similarly Secured and/or authorizing the execution and delivery of a Credit
Facility that such agreement constitutes a Credit Facility under this definition shall be conclusive
as against all Owners.
"Debt Service" means, as of any particular date of computation, with respect to any series
of obligations and with respect to any period, the aggregate of the amounts to be paid or set aside
by the City as of such date or in such period for the payment of the principal of, premium, if any,
and interest (to the extent not capitalized) on such obligations; assuming in the case of
obligations required to be redeemed or prepaid as to principal prior to maturity, the principal
amounts thereof will be redeemed prior to maturity in accordance with the mandatory
redemption provisions applicable thereto.
"Designated Payment/Transfer Office" means the Designated Payment/Transfer Office,
as designated in the Paying Agent/Registrar Agreement, or such other location designated by the
Paying Agent/Registrar.
"DTC" means The Depository Trust Company of New York, New York, or any
successor securities depository.
"DTC Participant" means brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities transactions among DTC Participants.
"EMMA" means the Electronic Municipal Market Access System.
"Event of Default" means any event of default as defined in Section 10.01 of this
Ordinance.
"Executive Director of Finance" means the Executive Director of Finance of the City or
such other City employee who has assumed the duties of the Executive Director of Finance.
"Fiscal Year" means the twelve (12) month accounting period used by the City in
connection with the operations of the System which may be any twelve (12) consecutive month
period established by the City.
"Fund" means any of the funds, accounts or a portion of a fund or account, confirmed
and/or established pursuant to Article VII hereof.
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"Gross Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Initial Bond" means the initial bond or bonds authorized by Section 3.04 of this
Ordinance.
"Interest Payment Date" means the date or dates on which interest on the Bonds is
scheduled to be paid until their respective dates of maturity or prior redemption, as set forth in
the Pricing Certificate.
"Investment" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Issue Date" for each series of Bonds or other obligations of the City is the respective
date on which such series of Bonds or other obligations of the City is delivered against payment
therefor.
"MSRB" means the Municipal Securities Rulemaking Board.
"Net Revenues" means the gross revenues of the System less expenses of operation and
maintenance. Such expenses of operation and maintenance shall not include depreciation
charges or amounts or Funds pledged for the Bonds Similarly Secured, but shall include all
salaries, labor, materials, repairs, and extensions necessary to render services; provided,
however, that in determining "Net Revenues," only such repairs and extensions as in the
judgment of the City Council, reasonably and fairly exercised, are necessary to keep the System
in operation and render adequate service to the City and inhabitants thereof, or such as might be
necessary to meet some physical accident or condition which otherwise would impair the
security of the Bonds Similarly Secured, shall be deducted.
"Net Sale Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Nonpurpose Investment" has the meaning stated in Section 1.148-1(b) of the
Regulations.
"Official Statement" means a document described in Section 8.01(c) prepared for
dissemination to potential investors in connection with the public offering and sale of Bonds.
"Outstanding" when used in this Ordinance with respect to Bonds Similarly Secured,
means, as of the date of determination, all Bonds Similarly Secured theretofore sold, issued and
delivered by the City, except:
(1) those Bonds Similarly Secured cancelled or delivered to the transfer agent
or registrar for cancellation in connection with the exchange or transfer of such obligations;
(2) those Bonds Similarly Secured paid or deemed to be paid in accordance
with the provisions of Section 11.01 of this Ordinance; and
(3) those Bonds Similarly Secured that have been mutilated, destroyed, lost,
or stolen and replacement bonds have been registered and delivered in lieu thereof.
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"Owner" means the person who is the registered owner of a Bond or Bonds, as shown in
the Register.
"Paying Agent/Registrar" means the bank or trust company identified in the Paying
Agent/Registrar Agreement referred to in Section 5.01 of this Ordinance, or any successor
thereto as provided in this Ordinance.
"Preliminary Official Statement" means a document described in Section 8.01(c)
prepared for dissemination to potential investors prior to the availability of the final Official
Statement.
"Previously Issued Bonds" means the Outstanding and unpaid revenue bonds payable
from and secured by a first lien on and pledge of the Net Revenues of the System, further
identified as follows:
(1) City of Lubbock, Texas, Electric Light and Power System Revenue
Bonds, Series 2010, dated October 15, 2010, issued in the original principal amount of
$73,295,000, currently outstanding in the aggregate principal amount of $39,650,000, and
maturing on April 15 in each of the years 2016 through 2020, inclusive;
(2) City of Lubbock, Texas, Electric Light and Power System Revenue
Refunding and Improvement Bonds, Series 2013, dated April 15, 2013, issued in the original
principal amount of $16,570,000, currently outstanding in the aggregate principal amount of
$13,390,000, and maturing on April 15 in each of the years 2016 through 2024, inclusive; and
(3) City of Lubbock, Texas, Electric Light and Power System Revenue
Bonds, Series 2014, dated May 1, 2014, issued in the original principal amount of $16,245,000,
currently outstanding in the aggregate principal amount of $15,320,000, and maturing on
April 15 in each of the years 2016 through 2034, inclusive; and
(4) City of Lubbock, Texas, Electric Light and Power System Revenue
Bonds, Series 2015, dated April 15, 2015, issued in the original principal amount of
$11,865,000, currently outstanding in the aggregate principal amount of $11,865,000, and
maturing on April 15 in each of the years 2016 through 2035, inclusive.
"Pricing Certificate" means a certificate or certificates signed by an Authorized Officer
establishing the terms and features of each series of Bonds in accordance with Section 8.01
hereof.
"Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Project" has the meaning assigned in the recitals to this Ordinance.
"Rebate Amount" has the meaning stated in Section 1.148-3 of the Regulations.
"Record Date" means the date specified in the Pricing Certificate.
"Register" means the Register specified in Section 3.06(a) of this Ordinance.
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"Regulations" means the final or temporary Income Tax Regulations applicable to the
Bonds issued pursuant to Sections 141 through 150 of the Code. Any reference to a section of
the Regulations shall also refer to any successor provision to such section hereafter promulgated
by the Internal Revenue Service pursuant to Sections 141 through 150 of the Code and
applicable to the Bonds.
"Representation Letter" means the Blanket Letter of Representations between the City
and DTC.
"Representative" means the representative for the Underwriters named in the Bond
Purchase Contract.
"Reserve Fund Obligations" means cash or investment securities of any of the type or
types permitted under Section 7.06 of this Ordinance.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Special Payment Date" means the Special Payment Date prescribed by Section 3.03(b).
"Special Record Date" means the Special Record Date prescribed by Section 3.03(b).
"System" means all properties, real, personal, mixed or otherwise, now owned or
hereafter acquired by the City through purchase, construction or otherwise, and used in
connection with the City's Electric, Light and Power System and in anywise pertaining thereto,
whether situated within or without the limits of the City.
"Term Bonds" has the meaning set forth in Section 4.03 hereof.
"Unclaimed Payments" mean money deposited with the Paying Agent/Registrar for the
payment of principal of, premium, if any, or interest on the Bonds as the same come due and
payable and remaining unclaimed by the Owners of such Bonds after the applicable payment or
redemption date.
"Underwriters" mean the entities named as underwriters in the Bond Purchase Contract.
"Yield of
(i) any Investment shall be computed in accordance with Section 1.148-5 of the
Regulations, and
(ii) the Bonds shall be computed in accordance with Section 1.148-4 of the
Regulations.
Section 1.02 Findinias.
The declarations, determinations and findings declared, made and found in the preamble
to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof.
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Section 1.03 Table of Contents, Titles and Headius.
The table of contents, titles and headings of the Articles and Sections of this Ordinance
have been inserted for convenience of reference only and are not to be considered a part hereof
and shall not in any way modify or restrict any of the terms or provisions hereof and shall never
be considered or given any effect in construing this Ordinance or any provision hereof or in
ascertaining intent, if any question of intent should arise.
Section 1.04 Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall be
construed to include correlative words of the feminine and neuter genders and vice versa, and
words of the singular number shall be construed to include correlative words of the plural
number and vice versa.
(b) Any action required to be taken on a date which is not a Business Day shall be
done on the next succeeding Business Day and have the same effect as if done on the date so
required.
(c) Any duty, responsibility, privilege, power or authority conferred by this
Ordinance upon an officer shall extend to an individual who occupies such office in an interim,
acting or provisional capacity.
(d) This Ordinance and all the terms and provisions hereof shall be liberally
construed to effectuate the purposes set forth herein.
ARTICLE II
SECURITY FOR THE BONDS
Section 2.01 Pledge of Security.
The City hereby covenants and agrees that all of the Net Revenues derived from the
operation of the System, with the exception of those in excess of the amounts required to
establish and maintain the special Funds created for the payment and security of the Bonds
Similarly Secured, are hereby irrevocably pledged for the payment of the Previously Issued
Bonds, the Bonds and Additional Bonds, if issued, and the interest thereon, and it is hereby
ordained that the Previously Issued Bonds, the Bonds and Additional Bonds, if issued, and the
interest thereon, shall constitute a first lien on the Net Revenues of the System and be valid and
binding without any physical delivery thereof or further act by the City as provided in Chapter
1208, Texas Government Code, as amended.
Section 2.02 Limited Obligations.
The Bonds, together with the Previously Issued Bonds and any Additional Bonds, are
special obligations of the City, payable solely from the pledged Net Revenues, and do not
constitute a prohibited indebtedness of the City. Neither the Bonds nor any Additional Bonds
shall ever be payable out of funds raised or to be raised by taxation.
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Section 2.03 Security Interest.
The City represents that, under Chapter 1208, Texas Government Code, as amended
("Chapter 1208"), a security interest in the Net Revenues pledged to the payment of the Bonds
that is created by the City is valid and effective according to the terms of the security agreement
and is perfected from the time the security agreement is entered into or adopted continuously
through the termination of the security interest, without physical delivery or transfer of control of
the property, filing of a document, or another act. The City covenants that, if Chapter 1208 is
amended at any time while the Bonds are outstanding and unpaid, the City shall take all actions
required in order to preserve for the Owners of the Bonds a perfected security interest in the
property in which such security interest is granted pursuant to Section 2.01 hereof.
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE BONDS
Section 3.01 Authorization.
The City's bonds, to be designated "City of Lubbock, Texas, Electric Light and Power
System Revenue Bonds, Series 2016," or such other designation or designations as set forth in
the Pricing Certificate, are hereby authorized to be issued and delivered in accordance with the
Constitution and laws of the State of Texas, including specifically Chapter 1371, Chapter 1502,
and Article VIII of the Charter of the City. The Bonds shall be issued in one or more series,
from time to time, on the dates and in the principal amount designated in the Pricing Certificate
therefor for the purposes of (i) paying the costs of the Project, (ii) funding the reserve fund
requirement for the Bonds, and (iii) paying the costs of issuing the Bonds. The aggregate
principal amount of all Bonds issued pursuant to this Ordinance shall not exceed $9,000,000.
Section 3.02 Date, Denomination, Maturities and Interest.
(a) The Bonds shall be dated the date set forth in the Pricing Certificate. The Bonds
shall be in fully registered form, without coupons, in the denomination of $5,000 or any integral
multiple thereof, and shall be numbered separately from one upward or such other designation
acceptable to the City and the Paying Agent/Registrar, except the Initial Bond, which shall be
numbered T-1, or in such other manner provided in the Pricing Certificate.
(b) The Bonds shall mature on the date or dates, in the years and in the principal
amounts set forth in the Pricing Certificate; provided, that the maximum maturity for the Bonds
shall not exceed the number of years set forth in Exhibit B.
(c) Interest shall accrue and be paid on each Bond respectively until its maturity or
prior redemption, from the later of the date set forth in the Pricing Certificate or the most recent
Interest Payment Date to which interest has been paid or provided for at the rates per annum for
each respective maturity specified in the Pricing Certificate. Such interest shall be payable on
each Interest Payment Date until maturity or prior redemption. Interest on the Bonds shall be
calculated on the basis of a three hundred sixty (360) day year composed of twelve (12) months
of thirty (30) days each, or on such other basis as set forth in the Pricing Certificate.
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Section 3.03 Medium, Method and Place of Payment.
(a) The principal of, premium, if any, and interest on the Bonds shall be paid in
lawful money of the United States of America.
(b) Interest on the Bonds shall be payable to each Owner as shown in the Register at
the close of business on the Record Date; provided, however, in the event of nonpayment of
interest on a scheduled Interest Payment Date and for 30 days thereafter, a new record date for
such interest payment (a "Special Record Date") shall be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the
City. Notice of the Special Record Date and of the scheduled payment date of the past due
interest (the "Special Payment Date," which shall be 15 days after the Special Record Date) shall
be sent at least five Business Days prior to the Special Record Date by first-class United States
mail, postage prepaid, to the address of each Owner of a Bond appearing on the Register at the
close of business on the last Business Day next preceding the date of mailing of such notice.
(c) Interest shall be paid by check, dated as of the Interest Payment Date, and sent by
the Paying Agent/Registrar to each Owner by United States mail, first class postage prepaid, to
the address of each Owner as it appears in the Register, or by such other customary banking
arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, the
Owner shall bear all risk and expense of such other banking arrangement. At the option of an
Owner of at least $1,000,000 principal amount of the Bonds, interest may be paid by wire
transfer to the bank account of such Owner on file with the Paying Agent/Registrar.
(d) The principal of each Bond shall be paid to the Owner thereof on the due date
(whether at the maturity date or the date of prior redemption thereof) upon presentation and
surrender of such Bond at the Designated Payment/Transfer Office.
(e) If the date for the payment of the principal of, premium, if any, or interest on the
Bonds is not a Business Day, then the date for such payment shall be the next succeeding day
that is a Business Day, and payment on such date shall have the same force and effect as if made
on the original date payment was due and no additional interest shall be due by reason of
nonpayment on the date on which such payment is otherwise stated to be due and payable.
(f) Unclaimed Payments shall be segregated in a special escrow account and held in
trust, uninvested by the Paying Agent/Registrar, for the accounts of the Owners of the Bonds to
which the Unclaimed Payments pertain. Subject to Title 6 of the Texas Property Code,
Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after
the applicable payment or redemption date shall be applied to the next payment or payments on
the Bonds thereafter coming due and, to the extent any such money remains three (3) years after
the retirement of all outstanding Bonds, shall be paid to the City to be used for any lawful
purpose. Thereafter, neither the City, the Paying Agent/Registrar nor any other person shall be
liable or responsible to any owners of such Bonds for any further payment of such unclaimed
monies or on account of any such Bonds, subject to Title 6 of the Texas Property Code.
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Section 3.04 Execution and Registration of Bonds.
(a) The Bonds shall be executed on behalf of the City by the Mayor and the City
Secretary, by their manual or facsimile signatures, and the official seal of the City shall be
impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the
same effect as if each of the Bonds had been signed manually and in person by each of said
officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of
the City had been manually impressed upon each of the Bonds.
(b) In the event that any officer of the City whose manual or facsimile signature
appears on the Bonds ceases to be such officer before the authentication of such Bonds or before
the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient
for all purposes as if such officer had remained in such office.
(c) Except as provided below, no Bond shall be valid or obligatory for any purpose or
be entitled to any security or benefit of this Ordinance unless and until there appears thereon the
Certificate of Paying Agent/Registrar substantially in the form provided in the form of bond
attached hereto as Exhibit C, duly authenticated by manual execution by an officer or duly
authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer
or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying
Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of Paying
Agent/Registrar described above, the Initial Bond delivered at the Closing Date shall have
attached thereto the Comptroller's Registration Certificate substantially in the form provided in
the form of bond attached hereto as Exhibit C, manually executed by the Comptroller of Public
Accounts of the State of Texas, or by his duly authorized agent, which Certificate shall be
evidence that the Bond has been duly approved by the Attorney General of the State of Texas,
that it is a valid and binding obligation of the City and that it has been registered by the
Comptroller of Public Accounts of the State of Texas.
(d) On the Closing Date, one Initial Bond of each series reflecting the terms set forth
in the Pricing Certificate and representing the entire principal amount of all Bonds of such series,
payable in stated installments to the Representative, or its designee, executed by the Mayor and
City Secretary of the City by their manual or facsimile signatures, approved by the Attorney
General, and registered and manually signed by the Comptroller of Public Accounts, will be
delivered to the Representative or its designee. Upon payment for the Initial Bond, the Paying
Agent/Registrar shall cancel the Initial Bond and deliver a single registered, definitive Bond for
each maturity, in the aggregate principal amount thereof, to DTC on behalf of the Underwriters.
Section 3.05 Ownership.
(a) The City, the Paying Agent/Registrar and any other person may treat the person in
whose name any Bond is registered as the absolute owner of such Bond for the purpose of
making and receiving payment as provided herein (except interest shall be paid to the person in
whose name such Bond is registered on the Record Date or Special Record Date, as applicable),
and for all other purposes, whether or not such Bond is overdue, and neither the City nor the
Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary.
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(b) All payments made to the Owner of a Bond shall be valid and effectual and shall
discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent
of the sums paid.
Section 3.06 Registration, Transfer and Exchange.
(a) So long as any Bonds remain outstanding, the City shall cause the Paying
Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register") in
which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar
shall provide for the registration and transfer of Bonds in accordance with this Ordinance.
(b) The ownership of a Bond may be transferred only upon the presentation and
surrender of the Bond at the Designated Payment/Transfer Office of the Paying Agent/Registrar
with such endorsement or other evidence of transfer as is acceptable to the Paying
Agent/Registrar. No transfer of any Bond shall be effective until entered in the Register.
(c) The Bonds shall be exchangeable upon the presentation and surrender thereof at
the Designated Payment/Transfer Office of the Paying Agent/Registrar for a Bond or Bonds of
the same series, maturity and interest rate and in any denomination or denominations of any
integral multiple of $5,000 and in an aggregate principal amount equal to the unpaid principal
amount of the Bonds presented for exchange. The Paying Agent/Registrar is hereby authorized
to authenticate and deliver Bonds exchanged for other Bonds in accordance with this Section.
(d) Each exchange Bond delivered by the Paying Agent/ Registrar in accordance with
this Section shall constitute an original contractual obligation of the City and shall be entitled to
the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of
which such exchange Bond is delivered.
(e) No service charge shall be made to the Owner for the initial registration,
subsequent transfer, or exchange for any different denomination of any of the Bonds. The
Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any
tax or other governmental charge that is authorized to be imposed in connection with the
registration, transfer or exchange of a Bond.
(f) Neither the City nor the Paying Agent/Registrar shall be required to issue,
transfer, or exchange any Bond called for redemption, in whole or in part, where such
redemption is scheduled to occur within forty-five (45) calendar days after the transfer or
exchange date; provided, however, such limitation shall not be applicable to an exchange by the
Owner of the uncalled principal balance of a Bond.
Section 3.07 Cancellation.
All Bonds paid or redeemed before scheduled maturity in accordance with this
Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are
authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper
records shall be made regarding such payment, redemption, exchange or replacement. The
Paying Agent/Registrar shall then return such cancelled Bonds to the City or may in accordance
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with law destroy such cancelled Bonds and periodically furnish the City with certificates of
destruction of such Bonds.
Section 3.08 Temporary Bonds.
(a) Following the delivery and registration of the Initial Bond and pending the
preparation of definitive Bonds, the proper officers of the City may execute and, upon the City's
request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Bonds
that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive Bonds in lieu of which they are
delivered, without coupons, and with such appropriate insertions, omissions, substitutions and
other variations as the officers of the City executing such temporary Bonds may determine, as
evidenced by their signing of such temporary Bonds.
(b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall
be entitled to the benefit and security of this Ordinance.
(c) The City, without unreasonable delay, shall prepare, execute and deliver to the
Paying Agent/Registrar the Bonds in definitive form; thereupon, upon the presentation and
surrender of the Bonds in temporary form to the Paying Agent/Registrar, the Paying
Agent/Registrar shall cancel the Bonds in temporary form and shall authenticate and deliver in
exchange therefor Bonds of the same maturity and series, in definitive form, in the authorized
denomination, and in the same aggregate principal amount, as the Bonds in temporary form
surrendered. Such exchange shall be made without the making of any charge therefor to any
Owner.
Section 3.09 Replacement Bonds.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated
Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a
replacement Bond of the same series and of like tenor and principal amount, bearing a number
not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the
Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that
is authorized to be imposed in connection therewith and any other expenses connected therewith.
(b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the
Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence
of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall
authenticate and deliver a replacement Bond of the same series and of like tenor and principal
amount, bearing a number not contemporaneously outstanding, provided that the Owner first:
(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her
ownership of and the circumstances of the loss, destruction or theft of such Bond;
(ii) furnishes such security or indemnity as may be required by the Paying
Agent/Registrar to save it and the City harmless;
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(iii) pays all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or
other governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the City and the
Paying Agent/Registrar.
(c) If, after the delivery of such replacement Bond, a bona fide purchaser of the
original Bond in lieu of which such replacement Bond was issued presents for payment such
original Bond, the City and the Paying Agent/Registrar shall be entitled to recover such
replacement Bond from the person to whom it was delivered or any person taking therefrom,
except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the
Paying Agent/Registrar in connection therewith.
(d) In the event that any such mutilated, lost, apparently destroyed or wrongfully
taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its
discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and
payable or may pay such Bond when it becomes due and payable.
(e) Each replacement Bond delivered in accordance with this Section shall constitute
an original additional contractual obligation of the City and shall be entitled to the benefits and
security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such
replacement Bond is delivered.
Section 3.10 Book -Entry OnlySystem.
(a) Notwithstanding any other provision hereof, upon initial issuance of the Bonds,
the ownership of the Bonds shall be registered in the name of Cede & Co., as nominee of DTC.
The definitive Bonds shall be initially issued in the form of a single separate fully registered
certificate for each of the maturities thereof.
(b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC,
the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC
Participant or to any person on behalf of whom such a DTC Participant holds an interest in the
Bonds. Without limiting the immediately preceding sentence, the City and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the
records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in
the Bonds, (ii) the delivery to any DTC Participant or any other person, other than an Owner, as
shown on the Register, of any notice with respect to the Bonds, including any notice of
redemption, or (iii) the payment to any DTC Participant or any other person, other than a
Bondholder, as shown in the Register of any amount with respect to principal of, premium, if
any, or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the
contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the
person in whose name each Bond is registered in the Register as the absolute owner of such
Bond for the purpose of payment of principal of, premium, if any, and interest on such Bonds,
for the purpose of giving notices of redemption and other matters with respect to such Bond, for
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the purpose of registering transfer with respect to such Bond, and for all other purposes
whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest
on the Bonds only to or upon the order of the respective owners, as shown in the Register as
provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such
payments shall be valid and effective to fully satisfy and discharge the City's obligations with
respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the
sum or sums so paid. No person other than an Owner, as shown in the Register, shall receive a
certificate evidencing the obligation of the City to make payments of amounts due pursuant to
this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the
effect that DTC has determined to substitute a new nominee in place of Cede & Co., the word
"Cede & Co." in this Ordinance shall refer to such new nominee of DTC.
(c) The Representation Letter previously executed and delivered by the City, and
applicable to the City's obligations delivered in book -entry only form to DTC as securities
depository, is hereby ratified and approved for the Bonds.
Section 3.11 Successor Securities Depository; Transfer Outside Book -Entry
Only System.
In the event that the City or the Paying Agent/Registrar determines that DTC is incapable
of discharging its responsibilities described herein and in the Representation Letter of the City to
DTC, or in the event DTC discontinues the services described herein, the City or the Paying
Agent/Registrar shall (i) appoint a successor securities depository, qualified to act as such under
Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC
Participants of the appointment of such successor securities depository and transfer one or more
separate Bonds to such successor securities depository or (ii) notify DTC and DTC Participants
of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC
Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no
longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of
DTC, but may be registered in the name of the successor securities depository, or its nominee, or
in whatever name or names Owners transferring or exchanging Bonds shall designate, in
accordance with the provisions of this Ordinance.
Section 3.12 Payments to Cede & Co.
Notwithstanding any other provision of this Ordinance to the contrary, so long as any
Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect
to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such
Bonds, shall be made and given, respectively, in the manner provided in the Representation
Letter.
ARTICLE IV
REDEMPTION OF BONDS BEFORE MATURITY
Section 4.01 Limitation on Redemption.
The Bonds shall be subject to redemption before scheduled maturity only as provided in
this Article IV and in the Pricing Certificate.
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Section 4.02 Optional Redemption.
(a) The City reserves the option to redeem Bonds in the manner provided in the Form
of Bond attached hereto as Exhibit C, with such changes as are required by the Pricing
Certificate.
(b) If less than all of the Bonds are to be redeemed pursuant to an optional
redemption, the City shall determine the maturity or maturities and the amounts thereof to be
redeemed and shall direct the Paying Agent/Registrar to call by lot, or by any other customary
method that results in a random selection, the Bonds, or portions thereof, within such maturity or
maturities and in such principal amounts for redemption.
(c) The City, at least forty-five (45) days before the redemption date, unless a shorter
period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying
Agent/Registrar of such redemption date and of the principal amount of Bonds to be redeemed.
Section 4.03 Mandatory Sinking Fund Redemption.
Bonds designated as "Term Bonds," if any, in the Pricing Certificate are subject to
scheduled mandatory redemption and will be redeemed by the City, out of moneys available for
such purpose in the Interest and Sinking Fund, in the manner provided in the Form of Bond
attached hereto as Exhibit C, with such changes as are required by the Pricing Certificate. Term
Bonds shall be subject to mandatory redemption at the price, on the dates, and in the respective
principal amounts set forth in the Pricing Certificate.
Section 4.04 Partial Redemption.
(a) A portion of a single Bond of a denomination greater than $5,000 may be
redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof. If
such a Bond is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000
portion of the Bond as though it were a single Bond for purposes of selection for redemption.
(b) Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar,
in accordance with Section 3.06 of this Ordinance, shall authenticate and deliver an exchange
Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond so
surrendered, such exchange being without charge.
(c) The Paying Agent/Registrar shall promptly notify the City in writing of the
principal amount to be redeemed of any Bond as to which only a portion thereof is to be
redeemed.
Section 4.05 Notice of Redemption to Owners.
(a) The Paying Agent/Registrar shall give notice of any redemption of Bonds by
sending notice by United States mail, first class postage prepaid, not less than thirty (30) days
before the date fixed for redemption, to the Owner of each Bond (or part thereof) to be
redeemed, at the address shown on the Register at the close of business on the Business Day next
preceding the date of mailing such notice.
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(b) The notice shall state the redemption date, the redemption price, the place at
which the Bonds are to be surrendered for payment, and, if less than all the Bonds outstanding
are to be redeemed, an identification of the Bonds or portions thereof to be redeemed.
(c) The City reserves the right to give notice of its election or direction to redeem
Bonds under Section 4.02 conditioned upon the occurrence of subsequent events. Such notice
may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized
securities, in an amount equal to the amount necessary to effect the redemption, with the Paying
Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption
date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled
redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar
instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and
redemption shall be of no effect if such moneys and/or authorized securities are not so deposited
or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such
rescission of a conditional notice of redemption to the affected Owners. Any Bonds subject to
conditional redemption where redemption has been rescinded shall remain Outstanding, and the
rescission shall not constitute an event of default. Further, in the case of a conditional
redemption, the failure of the City to make moneys and/or authorized securities available in part
or in whole on or before the redemption date shall not constitute an event of default.
(d) Any notice given as provided in this Section shall be conclusively presumed to
have been duly given, whether or not the Owner receives such notice.
Section 4.06 Payment Upon Redemption.
(a) Before or on each redemption date, the City shall deposit with the Paying
Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying
Agent/Registrar shall make provision for the payment of the Bonds to be redeemed on such date
by setting aside and holding in trust such amounts as are received by the Paying Agent/Registrar
from the City and shall use such funds solely for the purpose of paying the principal of and
accrued interest on the Bonds being redeemed.
(b) Upon presentation and surrender of any Bond called for redemption at the
Designated Payment/Transfer Office on or after the date fixed for redemption, the Paying
Agent/Registrar shall pay the principal of and accrued interest on such Bond to the date of
redemption from the money set aside for such purpose.
Section 4.07 Effect of Redemption.
(a) Notice of redemption having been given as provided in Section 4.05 of this
Ordinance and subject to any conditions or rights reserved by the City under Section 4.05(c), the
Bonds or portions thereof called for redemption shall become due and payable on the date fixed
for redemption and, unless the City defaults in its obligation to make provision for the payment
of the principal thereof, or accrued interest thereon, such Bonds or portions thereof shall cease to
bear interest from and after the date fixed for redemption, whether or not such Bonds are
presented and surrendered for payment on such date.
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(b) If the City shall fail to make provision for payment of all sums due on a
redemption date, then any Bond or portion thereof called for redemption shall remain
Outstanding and continue to bear interest at the rate stated on the Bond until due provision is
made for the payment of same by the City.
Section 4.08 Lapse of Payment.
Money set aside for the redemption of Bonds and remaining unclaimed by the Owners of
such Bonds shall be subject to the provisions of Section 3.03(f) hereof.
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01 Appointment of Pang Agent/Registrar.
The form of Paying Agent/Registrar Agreement presented at the meeting at which this
Ordinance was approved and the appointment of the Paying Agent/Registrar identified therein
are hereby approved.
The Mayor is hereby authorized and directed to execute the Paying Agent/Registrar
Agreement with the Paying Agent/Registrar, specifying the duties and responsibilities of the City
and the Paying Agent/Registrar, in substantially the form presented at the meeting at which this
Ordinance was approved with such changes as may be approved by an Authorized Officer. The
signature of the Mayor shall be attested by the City Secretary.
Section 5.02 Qualifications.
Each Paying Agent/Registrar shall be a commercial bank, a trust company organized
under the laws of the State of Texas, or any other entity duly qualified and legally authorized to
serve as and perform the duties and services of paying agent and registrar for the Bonds.
Section 5.03 Maintaining Pang A e� isg tray.
(a) At all times while any Bonds are Outstanding, the City will maintain a Paying
Agent/Registrar that is qualified under Section 5.02 of this Ordinance.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the
City will promptly appoint a replacement.
Section 5.04 Termination.
The City, upon not less than sixty (60) days' notice, reserves the right to terminate the
appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to
be terminated written notice of such termination.
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Section 5.05 Notice of Change to Owners.
Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will
cause notice of the change to be sent to each Owner by United States mail, first class postage
prepaid, at the address in the Register thereof, stating the effective date of the change and the
name and mailing address of the replacement Paying Agent/Registrar.
Section 5.06 Agreement to Perform Duties and Functions.
By accepting the appointment as Paying Agent/Registrar and executing the Paying
Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the
provisions of this Ordinance and that it will perform the duties and functions of Paying
Agent/Registrar prescribed thereby.
Section 5.07 Delivery of Records to Successor.
If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the
appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent
books and records relating to the Bonds to the successor Paying Agent/Registrar.
ARTICLE VI
FORM OF THE BONDS
Section 6.01 Form Generally.
(a) The Bonds, including the Registration Certificate of the Comptroller of Public
Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and the
Assignment form to appear on each of the Bonds, (i) shall be generally in the form set forth in
Exhibit C hereto, with such appropriate insertions, omissions, substitutions, and other variations
as are permitted or required by this Ordinance and the Pricing Certificate, and (ii) may have such
letters, numbers, or other marks of identification (including identifying numbers and letters of
the Committee on Uniform Securities Identification Procedures of the American Bankers
Association) and such legends and endorsements (including any reproduction of an opinion of
counsel) thereon as, consistently herewith, may be determined by the City or by the officers
executing such Bonds, as evidenced by their execution thereof.
(b) Any portion of the text of any Bonds may be set forth on the reverse side thereof,
with an appropriate reference thereto on the face of the Bonds.
(c) The definitive Bonds shall be typewritten, photocopied, printed, lithographed, or
engraved, and may be produced by any combination of these methods or produced in any other
similar manner, all as determined by the officers executing such Bonds, as evidenced by their
execution thereof.
(d) The Initial Bond submitted to the Attorney General of the State of Texas may be
typewritten and photocopied or otherwise reproduced.
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Section 6.02 CUSIP Registration.
The City or the Representative may secure identification numbers through CUSIP Global
Services, managed on behalf of the American Bankers Association by Standard & Poor's
Financial Services LCC, and may authorize the printing of such numbers on the face of the
Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the
Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor
the attorneys approving said Bonds as to legality are to be held responsible for CUSIP numbers
incorrectly printed on the Bonds.
Section 6.03 Le ag 1 Opinion.
The approving legal opinion of Andrews Kurth LLP, Bond Counsel, may be attached to
or printed on the reverse side of each Bond over the certification of the City Secretary of the
City, which may be executed in facsimile.
Section 6.04 Statement of Insurance.
A statement relating to a municipal bond insurance policy, if any, issued for any Bond or
Bonds may be printed on or attached to each such Bond.
ARTICLE VII
FUNDS AND ACCOUNTS
Section 7.01 Segregation of Revenues/Fund Designations.
All receipts, revenues and income derived from the operation and ownership of the
System shall be kept separate from other funds of the City and deposited within twenty-four (24)
hours after collection into the "Electric Light and Power System Fund" (created and established
in connection with the issuance of the Previously Issued Bonds), which Fund (hereinafter
referred to as the "System Fund") is hereby reaffirmed and shall continue to be kept and
maintained at an official depository bank of the City while the Bonds remain Outstanding.
Furthermore, the "Special Electric Light and Power System Revenue Bond Retirement and
Reserve Fund" (hereinafter referred to as the "Bond Fund"), created and established in
connection with the issuance of the Previously Issued Bonds, is hereby reaffirmed and shall
continue to be maintained by the City while the Bonds remain Outstanding. The Bond Fund is
and shall continue to be kept and maintained at the City's official depository bank, and moneys
deposited in the Bond Fund shall be used for no purpose other than for the payment, redemption
and retirement of Bonds Similarly Secured.
Section 7.02 System Fund.
The City hereby reaffirms its covenant to the Owners of the Previously Issued Bonds and
agrees with the owners of the Bonds that the moneys deposited in the System Fund shall be used
first for the payment of the reasonable and proper expenses of operating and maintaining the
System. All moneys deposited in the System Fund in excess of the amounts required to pay
operating and maintenance expenses of the System shall be applied and appropriated, to the
extent required and in the order of priority prescribed, as follows:
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(a) To the payment of the amounts required to be deposited in the Bond Fund for the
payment of principal of and interest on the Bonds Similarly Secured as the same become due and
payable; and
(b) To the payment of the amounts, if any, required to be deposited in the Reserve
Portion of the Bond Fund to accumulate, restore and maintain the Reserve Requirement as
security for the payment of the principal of and interest on the Bonds Similarly Secured.
Section 7.03 Bond Fund.
(a) In addition to the required monthly deposits to the Bond Fund for the payment of
principal of and interest on the Previously Issued Bonds, the City hereby agrees and covenants to
deposit to the Bond Fund an amount equal to one hundred percent (100%) of the amount
required to fully pay the interest on and principal of the Bonds falling due on or before each
maturity date and Interest Payment Date, such payments to be made in substantially equal
monthly installments on or before the first day of each month beginning on or before the first day
of the month next following the month the Bonds are delivered to the Underwriters. The
required monthly deposits to the Bond Fund for the payment of principal of and interest on the
Bonds shall continue to be made as hereinabove provided until such time as (i) the total amount
on deposit in the Bond Fund, including the "Reserve Portion" deposited therein, is equal to the
amount required to fully pay and discharge all Outstanding Bonds Similarly Secured (principal
and interest) or (ii) the Bonds are no longer Outstanding, i.e., the Bonds have been fully paid as
to principal and interest or all the Bonds have been refunded. Accrued interest, if any, received
from the purchasers of the Bonds shall be deposited in the Bond Fund, and shall be taken into
consideration and reduce the amount of the monthly deposits hereinabove required which would
otherwise be required to be deposited in the Bond Fund from the Net Revenues of the System.
(b) In addition to the amounts to be deposited in the Bond Fund to pay current
principal and interest for the Bonds Similarly Secured, the City covenants and agrees to
accumulate and maintain in the Bond Fund a reserve amount (the "Reserve Portion") of Reserve
Fund Obligations equal to not less than the Average Annual Debt Service requirements of all
Outstanding Bonds Similarly Secured (the "Required Reserve") which shall be calculated and
predetermined at the time of issuance of each series of Bonds Similarly Secured. Upon issuance
of Additional Bonds, the Required Reserve shall be increased, if required, to an amount equal to
the lesser of (i) the Average Annual Debt Service (calculated on a Fiscal Year basis) for all
bonds Outstanding, as determined on the date of issuance of each series of Additional Bonds,
and annually following each principal payment date or redemption date for the Bonds, the
Previously Issued Bonds and any Additional Bonds Outstanding, as the case may be, or (ii) the
maximum amount in a reasonably required reserve fund that can be invested without restriction
as to yield pursuant to Subsection (d) of section 148 of the Code and regulations promulgated
thereunder. The Reserve Portion of the Bond Fund shall be made available for and reasonably
employed in meeting the requirements of the Bond Fund if need be, and if any amount thereof is
so employed, and the Reserve Portion in the Bond Fund is less than the Required Reserve, or if
an event of default under any Credit Facility held in the Reserve Portion of the Bond Fund has
occurred and is continuing, the Required Reserve shall be restored from Net Revenues in twenty-
four (24) approximately equal monthly payments from the first available Net Revenues of the
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System in the System Fund subject only to the priority of payments hereinabove prescribed in
Section 7.02.
(c) The City may, at its option, withdraw all surplus on deposit in the Reserve Portion
of the Bond Fund over the Required Reserve and deposit the same in the System Fund; provided,
however, that to the extent such surplus monies constitute bond proceeds, including interest and
income derived therefrom, such amounts shall not be deposited to the System Fund and shall
only be used for the purposes for which bond proceeds may be used.
(d) For the purpose of determining compliance with the requirements of
subsection (b) of this Section 7.03, Reserve Fund Obligations shall be valued each year as of the
last day of the City's fiscal year at their market value, except that any direct obligations of the
United States (State and Local Government Series) held for the benefit of the Reserve Portion of
the Bond Fund in book -entry form shall be continuously valued at their par value or face
principal amount.
(e) To the extent permitted by, and in accordance with applicable law and upon
approval of the Attorney General of the State of Texas, the City may replace or substitute a
Credit Facility for cash or investment securities on deposit in the Reserve Portion of the Bond
Fund or in substitution or replacement of any existing Credit Facility. Upon such replacement or
substitution, cash or investment securities of any of the types permitted by Section 7.06 hereof,
on deposit in the Reserve Portion of the Bond Fund which, taken together with the face amount
of any existing Credit Facilities, are in excess of the Required Reserve may be withdrawn by the
City, at its option, and transferred to the System Fund; provided that the face amount of any
Credit Facility may be reduced at the option of the City in lieu of such transfer. However, to the
extent such surplus monies constitute bond proceeds, including interest and income derived
therefrom, such amounts shall not be deposited to the System Fund and shall only be used for the
purposes for which bond proceeds may be used. Any interest due on any reimbursement
obligation under the Credit Facility shall not exceed the highest lawful rate of interest which may
be paid by the City.
(f) If the City is required to make a withdrawal from the Reserve Portion of the Bond
Fund, the City shall promptly notify the issuer of any Credit Facility of the necessity for a
withdrawal from the Reserve Portion of the Bond Fund, and shall make such withdrawal first
from available moneys or investment securities then on deposit in the Reserve Portion of the
Bond Fund, and next from a drawing under any Credit Facility to the extent of such deficiency.
(g) In the event of a deficiency in the Reserve Portion of the Bond Fund, or in the
event that on the date of termination or expiration of any Credit Facility or the date of an
occurrence of an event of default under the Credit Facility has occurred and is continuing beyond
any cure period therefor, if any, there is not on deposit in the Reserve Portion of the Bond Fund
sufficient Reserve Fund Obligations, all in an aggregate amount at least equal to the Required
Reserve calculated as of the date of such deficiency, termination, expiration or event of default
of such Credit Facility, then the City shall restore such deficiency from the first available Net
Revenues of the System in the System Fund, subject only to the priority of payments
hereinabove prescribed in Section 7.02, in twenty-four (24) approximately equal monthly
payments.
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(h) In the event of the redemption or defeasance of any of the Outstanding Bonds
Similarly Secured, any Reserve Fund Obligations on deposit in the Reserve Fund in excess of the
Required Reserve may be withdrawn and transferred, at the option of the City and subject to the
last sentence of this subparagraph (h), to the System Fund, as a result of (i) the redemption of the
Outstanding Bonds Similarly Secured, or (ii) funds for the payment of the Outstanding Bonds
Similarly Secured having been deposited irrevocably with the paying agent or place of payment
therefor in the manner described in this Ordinance, the result of such deposit being that such
Outstanding Bonds Similarly Secured no longer are deemed to be Outstanding under the terms of
this Ordinance. However, to the extent such surplus monies constitute bond proceeds, including
interest and income derived therefrom, such amounts shall not be deposited to the System Fund
and shall only be used for the purposes for which bond proceeds may be used.
(i) In the event there is a draw upon the Credit Facility, the City shall reimburse the
issuer of such Credit Facility for such draw in accordance with the terms of any agreement
pursuant to which the Credit Facility is issued from Net Revenues; however, such reimbursement
from Net Revenues (i) shall be subject to the provisions of subparagraph (g) hereof, and (ii) shall
be subordinate and junior in right of payment to the payment of principal of and premium, if any,
and interest on the Bonds Similarly Secured.
Section 7.04 Payment of Bonds.
While any of the Bonds are Outstanding, the proper officers of the City are hereby
authorized to transfer or cause to be transferred to the Paying Agent/Registrar, from funds on
deposit in the Bond Fund, including the Reserve Portion, if necessary, amounts sufficient to fully
pay and discharge promptly as each installment of interest and principal on the Bonds accrues or
matures or comes due by reason of redemption prior to maturity; such transfer of funds to be
made in such manner as will cause immediately available funds to be deposited with the Paying
Agent/Registrar for the Bonds at the close of the Business Day next preceding the date of
payment for the Bonds.
Section 7.05 Deficiencies in Funds.
If in any month the City shall, for any reason, fail to pay into the Bond Fund the full
amounts above stipulated, amounts equivalent to such deficiencies shall be set apart and paid
into the Bond Fund from the first available and unallocated Net Revenues of the System in the
following month or months and such payments shall be in addition to the amounts hereinabove
provided to be otherwise paid into the Bond Fund during such month or months.
Section 7.06 Security of Funds.
Money in any Fund established or affirmed pursuant to this Ordinance or any ordinance
authorizing the issuance of Previously Issued Bonds, and any Additional Bonds, may, at the
option of the City, be invested in time deposits or certificates of deposit secured in the manner
required by law for public funds, or be invested in direct obligations of, including obligations the
principal and interest on which are unconditionally guaranteed by, the United States of America,
in obligations of any agencies or instrumentalities thereof, or in such other investments as are
permitted under the Public Funds Investment Act, Chapter 2256, Texas Government Code, as
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amended, or any successor law, as in effect from time to time, consistent with the City's
investment policy; provided that all such deposits and investments shall be made in such manner
(which may include repurchase agreements for such investment with any primary dealer of such
agreements) that the money required to be expended from any such Fund will be available at the
proper time or times. Such investments shall be valued each year in terms of current market
value as of the last day of the Fiscal Year. For purposes of maximizing investment returns, to the
extent permitted by law, money in such Funds may be invested in common investments of the
kind described above, or in a common pool of such investment which shall be kept and held at an
official depository bank, which shall not be deemed to be or constitute a commingling of such
money or funds provided that safekeeping receipts or certificates of participation clearly
evidencing the investment or investment pool in which such money is invested and the share
thereof purchased with such money or owned by such fund are held by or on behalf of each such
Fund. If necessary, such investments shall be promptly sold to prevent any default. Any
investment made with money deposited to the credit of the Reserve Portion of the Bond Fund
shall not have a maturity in excess of five (5) years.
ARTICLE VIII
SALE AND DELIVERY OF BONDS; DEPOSIT OF PROCEEDS
Section 8.01 Sale of Bonds; Official Statement.
(a) The Bonds shall be sold at negotiated sale to the Underwriters in accordance with
the terms of this Ordinance, including this Section 8.01(a) and Exhibit B hereto, provided that all
of the conditions set forth in Exhibit B can be satisfied. As authorized by Chapter 1371, the
Authorized Officer is authorized to act on behalf of the City upon determining that the conditions
set forth in Exhibit B can be satisfied, in selling and delivering each series of Bonds and carrying
out the other procedures specified in this Ordinance, including determining (i) the total aggregate
principal amount and the number of series of the Bonds, (ii) the date(s) on which the Bonds of
each series will be sold and delivered, (iii) whether to acquire bond insurance for each series of
Bonds, (iv) the amount and manner of funding the reserve fund requirement; (v) the price at
which the Bonds of each series will be sold, (vi) the number and any additional or different title
or designation for each series of Bonds to be issued, (vii) the form in which the Bonds of each
series shall be issued, (viii) the dates on which the Bonds of each series will mature, the principal
amount to mature in each year, the rate of interest to be borne by each such maturity, the interest
payment dates, and the initial date from which interest will accrue, (ix) the dates, prices and
other terms upon and at which the Bonds of each series shall be subject to redemption prior to
maturity (including terms for optional and mandatory sinking fund redemption), and (x) all other
terms and provisions of the Bonds and all other matters relating to the issuance, sale and delivery
thereof, all of which shall be specified in the Pricing Certificate for each series of Bonds.
The Authorized Officer may approve modifications to this Ordinance to conform to the
terms of the Bonds, as approved by the Authorized Officer, and execute any instruments,
agreements and other documents as the Authorized Officer shall deem necessary or appropriate
in connection with the issuance, sale and delivery of Bonds pursuant to this Ordinance.
The authority granted to the Authorized Officer under this Section 8.01(a) shall expire at
11:59 p.m., on the 180th day following the date of this Ordinance (the "Expiration Date"), unless
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otherwise extended by the City Council by separate action. Bonds sold pursuant to a Bond
Purchase Contract executed on or before the Expiration Date may be delivered after such date.
In satisfaction of Section 1201.022(x)(3), Texas Government Code, the City Council
hereby determines that the delegation of the authority to the Authorized Officer to approve the
final terms and conditions of each series of the Bonds as set forth in this Ordinance is, and the
decisions made by the Authorized Officer pursuant to such delegated authority and incorporated
in a Pricing Certificate will be, in the best interests of the City and shall have the same force
and effect as if such determination were made by the City Council, and the Authorized Officer is
hereby authorized to make and include in a Pricing Certificate an appropriate finding to that
effect. Any finding or determination made by the Authorized Officer relating to the issuance and
sale of the Bonds and the execution of the Bond Purchase Contract in connection therewith shall
have the same force and effect as a finding or determination made by the City Council.
(b) The Authorized Officer is hereby authorized and directed to execute and deliver a
purchase contract with respect to each series of Bonds (the "Bond Purchase Contract") in the
form and on the terms approved by the Authorized Officer, and all other officers, agents and
representatives of the City are hereby authorized to do any and all things necessary or desirable
to satisfy the conditions set out therein and to provide for the issuance and delivery of the Bonds.
(c) The form and substance of the Preliminary Official Statement, and any addenda,
supplement or amendment thereto, are hereby in all respects approved and adopted for use in
connection with the public offering and sale of each series of Bonds, with such appropriate
variations as shall be approved by the Authorized Officer, and the Preliminary Official Statement
is hereby deemed final as of its date within the meaning and for the purposes of paragraph (b)(1)
of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The Authorized
Officer is hereby authorized and directed to cause to be prepared a final Official Statement (the
"Official Statement") incorporating applicable pricing information and other terms pertaining to
each series of Bonds, and to execute the same by manual or facsimile signature and deliver
appropriate numbers of executed copies thereof to the Underwriters. The Official Statement as
thus approved, executed and delivered, with such appropriate variations as shall be approved by
the Authorized Officer and the Underwriters, may be used by the Underwriters in the public
offering and sale of the Bonds. The use and distribution of the Preliminary Official Statement,
and the preliminary public offering of the Bonds by the Underwriters, is hereby approved and
confirmed.
(d) All officers of the City are authorized to execute such documents, certificates,
receipts and other instruments as they may deem appropriate in order to consummate the delivery
of the Bonds in accordance with the terms of sale therefor including, without limitation, the
Bond Purchase Contract.
(e) The obligation of the Underwriters to accept delivery of the Bonds is subject to
the closing conditions set forth in the Bond Purchase Contract, including specifically the
Underwriters being furnished with the final, approving opinion of Andrews Kurth LLP, bond
counsel for the City, which opinion shall be dated as of and delivered on the Closing Date.
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Section 8.02 Control and Delivery of Bonds.
(a) The Authorized Officer of the City is hereby authorized to have control of the
Initial Bond and all necessary records and proceedings pertaining thereto pending investigation,
examination, and approval of the Attorney General of the State of Texas, registration by the
Comptroller of Public Accounts of the State of Texas and registration with, and initial exchange
or transfer by, the Paying Agent/Registrar.
(b) After registration by the Comptroller of Public Accounts, delivery of the Bonds
shall be made to the Underwriters under and subject to the general supervision and direction of
the Authorized Officer, against receipt by the City of all amounts due to the City under the terms
of sale.
(c) In the event the Mayor or City Secretary is absent or otherwise unable to execute
any document or take any action authorized herein, the Mayor Pro Tern and the Assistant City
Secretary, respectively, shall be authorized to execute such documents and take such actions, and
the performance of such duties by the Mayor Pro Tern and the Assistant City Secretary shall for
the purposes of this Ordinance have the same force and effect as if such duties were performed
by the Mayor and City Secretary, respectively.
Section 8.03 Deposit of Proceeds.
Proceeds from the sale of the Bonds shall be applied in accordance with the provisions
set forth in the Pricing Certificate for such Bonds, which may provide for the creation of any
special accounts deemed necessary or appropriate by the Authorized Officer.
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01 Additional Bonds.
In addition to the right to issue obligations of inferior lien as authorized by the laws of the
State of Texas, the City hereby reserves the right to issue Additional Bonds which, when duly
authorized and issued in compliance with the terms and conditions hereinafter appearing, shall be
on a parity with the Previously Issued Bonds and the Bonds herein authorized, payable from and
equally and ratably secured by a first lien on and pledge of the Net Revenues of the System. The
Additional Bonds may be issued in one or more installments, provided, however, that none shall
be issued unless and until the following conditions have been met:
(a) The Mayor and Executive Director of Finance have certified that the City is not
then in default as to any covenant, condition or obligation prescribed by any ordinance
authorizing the issuance of Bonds Similarly Secured then Outstanding, including showings that
all interest, sinking and reserve funds then provided for have been fully maintained in
accordance with the provisions of said ordinances;
(b) The applicable laws of the State of Texas in force at the time provide permission
and authority for the issuance of such Additional Bonds and have been fully complied with;
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(c) The Additional Bonds are made to mature on April 15 or October 15, or both, in
each of the years in which they are provided to mature;
(d) The Reserve Portion of the Bond Fund shall be accumulated and supplemented as
necessary to maintain a sum which shall be not less than the Average Annual Debt Service
requirements of all bonds secured by a first lien on and pledge of the Net Revenues of the
System which will be outstanding upon the issuance of any series of Additional Bonds.
Accordingly, each ordinance authorizing the issuance of any series of Additional Bonds shall
provide for any required increase in the Reserve Portion, and if supplementation is necessary to
meet all conditions of said Reserve Portion, said ordinances shall make provision that same be
supplemented by the required amounts in equal monthly installments over a period of not to
exceed sixty (60) calendar months from the dating of such Additional Bonds;
(e) The City has secured a certificate or opinion from an independent certified public
accountant to the effect that, according to the books and records of the City, the Net Revenues of
the System were, during the last completed Fiscal Year, or during any consecutive twelve (12)
months period of the last eighteen (18) consecutive months prior to the month of adoption of the
ordinance authorizing the Additional Bonds, equal to at least 1.25 times the Average Annual
Debt Service requirements of the Bonds Similarly Secured which will be outstanding upon the
issuance of the Additional Bonds; and further demonstrating that for the same period as is
employed in arriving at the aforementioned test said Net Revenues were equal to at least 1.10
times the maximum annual principal and interest requirements of all Bonds Similarly Secured as
will be outstanding upon the issuance of the Additional Bonds. In making a determination of the
Net Revenues, the certified public accountant may take into consideration a change in the
charges for services afforded by the System that became effective at least 60 days prior to the
last day of the period for which Revenues are determined and, for purposes of satisfying the
above Net Revenues test, make a pro -forma determination of the Net Revenues of the System for
the period of time covered by his certification or opinion based on such change in charges being
in effect for the entire period covered by the certificate or opinion of the certified public
accountant.
When thus issued, such Additional Bonds may be secured by a pledge of the Net
Revenues of the System on a parity in all things with the pledge securing the issuance of the
Bonds and the Previously Issued Bonds.
Section 9.02 Rates and Charges.
The City hereby covenants and agrees with the owners of the Bonds that rates and
charges for electric power and energy afforded by the System will be established and maintained
to provide revenues sufficient at all times to pay:
(a) all necessary and reasonable expenses of operating and maintaining the System as
set forth in the definition "Net Revenues" and to recover depreciation;
(b) the amounts required to be deposited to the Bond Fund to pay the principal of and
interest on the Bonds Similarly Secured as the same becomes due and payable and to accumulate
and maintain the reserve amount required to be deposited therein; and
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(c) any other legally incurred indebtedness payable from the revenues of the System
and/or secured by a lien on the System or the revenues thereof.
Section 9.03 Maintenance and Operation; Insurance.
In regard to the operations and properties of the System, the City agrees to carry and
maintain liability and property damage insurance of the kind and in the amounts customarily
carried by municipal corporations in Texas on such kind of properties; provided, however, the
City, in lieu of and/or in combination with carrying such insurance, may self -insure against all
perils and risks by establishing self-insurance reserves.
Section 9.04 Records, Accounts, Accounting Reports.
The City hereby covenants and agrees while any of the Bonds or any interest thereon
remain Outstanding and unpaid, it will keep and maintain a proper and complete system of
records and accounts pertaining to the operation of the System separate and apart from all other
records and accounts of the City in accordance with generally accepted accounting principles
prescribed for municipal corporations, and complete and correct entries shall be made of all
transactions relating to said System, as provided by applicable law. The Owner of any Bonds, or
any duly authorized agent or agents of such Owner, shall have the right at all reasonable times to
inspect all such records, accounts and data relating thereto and to inspect the System and all
properties comprising the same. The City further agrees that as soon as possible following the
close of each Fiscal Year, it will cause an audit of such books and accounts to be made by an
independent firm of certified public accountants. Each such audit, in addition to whatever other
matters may be thought proper by the certified public accountant, shall particularly include the
following:
Year;
(a) A detailed statement of the income and expenditures of the System for such Fiscal
(b) A balance sheet as of the end of such Fiscal Year;
(c) The comments of such accountant regarding the manner in which the City has
complied with the covenants and requirements of this Ordinance and his recommendations for
any changes or improvements in the operation, records and accounts of the System;
(d) A list of the insurance policies in force at the end of the Fiscal Year on the System
properties, setting out as to each policy the amount thereof, the risk covered, the name of the
insurer, and the policy's expiration date;
(e) A list of the securities which have been on deposit as security for the money in the
Bond Fund throughout the Fiscal Year and a list of the securities, if any, in which the Reserve
Portion of the Bond Fund has been invested; and
(f) The total number of metered and unmetered customers, if any, connected with the
System at the end of the Fiscal Year.
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Expenses incurred in making the audits above referred to are to be regarded as
maintenance and operating expenses of the System and paid as such. Copies of the aforesaid
annual audit shall be furnished upon written request to the original purchasers and any
subsequent Owners of the Bonds.
Section 9.05 Further Covenants.
The City hereby further covenants and agrees as follows:
(a) That it has the lawful power to pledge the Net Revenues to the payment of the
Bonds and has lawfully exercised said power under the Constitution and laws of the State of
Texas; that the Previously Issued Bonds, the Bonds and the Additional Bonds, when issued, shall
be ratably secured under said pledge in such manner that one bond shall have no preference over
any other bond of said issues.
(b) That, other than for the payment of the Previously Issued Bonds and the Bonds,
the Net Revenues are not in any manner now pledged to the payment of any debt or obligation of
the City or of the System on a parity with the Previously Issued Bonds and the Bonds.
(c) That, for so long as any of the Bonds or any interest thereon remain Outstanding,
the City will not sell, lease or encumber the System or any substantial part thereof; provided,
however, this covenant shall not be construed to prohibit the sale of such machinery, or other
properties or equipment which has become obsolete or otherwise unsuited to the efficient
operation of the System when other property of equal value has been substituted therefor, and,
also, with the exception of the Additional Bonds expressly permitted by this Ordinance to be
issued, it will not encumber the Net Revenues unless such encumbrance is made junior and
subordinate to all of the provisions of this Ordinance. In the event the City sells the System, the
City will use proceeds of such sale to provide for final payment of the Bonds, the Previously
Issued Bonds, and any Additional Bonds.
(d) That, it will cause to be rendered monthly to each customer receiving electric
services a statement therefor and will not accept payment of less than all of any statement so
rendered, using its power under existing ordinances and under all such ordinances to become
effective in the future to enforce payment, to withhold service from such delinquent customers
and to enforce and authorize reconnection charges.
(e) That it will faithfully and punctually perform all duties with respect to the System
required by the Constitution and laws of the State of Texas, including the making and collecting
of reasonable and sufficient rates for services supplied by the System, and the segregation and
application of the revenues of the System as required by the provisions of this Ordinance.
(f) That no free service shall be provided by the System and to the extent the City or
its departments or agencies utilize the services provided by the System, payment shall be made
therefor at rates charged to others for similar service.
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Section 9.06 Other Representations and Covenants.
(a) The City will faithfully perform at all times any and all covenants, undertakings,
stipulations, and provisions contained in this Ordinance; the City will promptly pay or cause to
be paid the principal of, premium, if any, and interest on each Bond on the dates and at the places
and manner prescribed in such Bond; and the City will, at the times and in the manner prescribed
by this Ordinance, deposit or cause to be deposited the amounts of money specified by this
Ordinance.
(b) The City is duly authorized under the laws of the State of Texas to issue the
Bonds; all action on its part for the creation and issuance of the Bonds has been duly and
effectively taken; and the Bonds in the hands of the Owners thereof are and will be valid and
enforceable obligations of the City in accordance with their terms.
Section 9.07 Federal Income Tax Exclusion.
(a) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which, if made or omitted, respectively, would cause the interest on such
Bond to become includable in the gross income, as defined in Section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City shall have received a written opinion of counsel nationally recognized
in the field of municipal bond law to the effect that failure to comply with such covenant will not
adversely affect the exemption from federal income tax of the interest on any Bond, the City
shall comply with each of the specific covenants in this Section.
(b) No Private Use or Private Payments. Except as permitted by Section 141 of the
Code and the Regulations and rulings thereunder, the City shall, at all times after the Issue Date
of any Bond and prior to the last stated maturity of the Bonds
(i) exclusively own, operate, and possess all property the acquisition,
construction, or improvement of which is to be financed directly or indirectly with Gross
Proceeds of such Bond and not use or permit the use of such Gross Proceeds or any
property acquired, constructed, or improved with such Gross Proceeds in any activity
carried on by any person or entity other than a state or local government, unless such use
is solely as a member of the general public, or
(ii) not directly or indirectly impose or accept any charge or other payment for
use of Gross Proceeds of such Bond or any property the acquisition, construction or
improvement of which is to be financed directly or indirectly with such Gross Proceeds
other than taxes of general application and interest earned on investments acquired with
such Gross Proceeds pending application for their intended purposes.
(c) No Private Loan. Except to the extent permitted by Section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of such Bond to
make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, Gross Proceeds are considered to be "loaned" to a person or
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entity if (1) property acquired, constructed or improved with Gross Proceeds is sold or leased to
such person or entity in a transaction which creates a debt for federal income tax purposes, (2)
capacity in or service from such property is committed to such person or entity under a take -or -
pay, output, or similar contract or arrangement, or (3) indirect benefits, or burdens and benefits
of ownership, of such Gross Proceeds or such property are otherwise transferred in a transaction
which is the economic equivalent of a loan.
(d) Not to Invest at Higher Yield. Except to the extent permitted by Section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the
earlier of the final stated maturity or final payment of such Bond, directly or indirectly invest
Gross Proceeds of such Bond in any Investment (or use such Gross Proceeds to replace money so
invested), if as a result of such investment the Yield of all Investments allocated to such Gross
Proceeds whether then held or previously disposed of, exceeds the Yield on the Bonds.
(e) Not Federally Guaranteed. Except to the extent permitted by Section 149(b) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed within the meaning of Section
149(b) of the Code and the Regulations and rulings thereunder.
(f) Information Report. The City shall timely file with the Secretary of the Treasury
the information required by Section 149(e) of the Code with respect to the Bonds on such forms
and in such place as such Secretary may prescribe.
(g) Payment of Rebate Amount. Except to the extent otherwise provided in Section
148(f) of the Code and the Regulations and rulings thereunder, the City shall:
(i) account for all Gross Proceeds (including all receipts, expenditures and
investments thereof) on its books of account separately and apart from all other funds
(and receipts, expenditures and investments thereof) and shall retain all records of such
accounting for at least six years after the final Computation Date. The City may,
however, to the extent permitted by law, commingle Gross Proceeds of the Bonds with
other money of the City, provided that the City separately accounts for each receipt and
expenditure of such Gross Proceeds and the obligations acquired therewith,
(ii) calculate the Rebate Amount with respect to the Bonds not less frequently
than each Computation Date, in accordance with rules set forth in Section 148(f) of the
Code, Section 1.148-3 of the Regulations, and the rulings thereunder. The City shall
maintain a copy of such calculations for at least six years after the final Computation
Date,
(iii) as additional consideration for the purchase of the Bonds by the initial
purchaser thereof and the loan of the money represented thereby, and in order to induce
such purchase by measures designed to ensure the excludability of the interest thereon
from the gross income of the owners thereof for federal income tax purposes, pay to the
United States the amount described in paragraph (ii) above at the times, in the
installments, to the place, in the manner and accompanied by such forms or other
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information as is or may be required by Section 148(f) of the Code and the Regulations
and rulings thereunder, and
(iv) exercise reasonable diligence to assure that no errors are made in the
calculations required by paragraph (ii) and, if such error is made, to discover and
promptly to correct such error within a reasonable amount of time thereafter, including
payment to the United States of any interest and any penalty required by the Regulations.
(h) Not to Divert Arbitrage Profits. Except to the extent permitted by Section 148 of
the Code and the Regulations and rulings thereunder, the City shall not enter into any transaction
that reduces the amount required to be paid to the United States pursuant to Subsection (h) of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Bonds, not been
relevant to either party.
Section 9.08 Disposition of Project. The City covenants that the property financed or
refinanced with the proceeds of the Bonds will not be sold or otherwise disposed in a transaction
resulting in the receipt by the City of cash or other compensation, unless the City obtains an
opinion of a nationally -recognized bond counsel substantially to the effect that such sale or other
disposition will not adversely affect the tax-exempt status of the Bonds. For purposes of this
Section, the portion of the property comprising personal property and disposed of in the ordinary
course of business shall not be treated as a transaction resulting in the receipt of cash or other
compensation. For purposes of this Section, the City shall not be obligated to comply with this
covenant if it obtains an opinion of a nationally -recognized bond counsel to the effect that such
failure to comply will not adversely affect the excludability for federal income tax purposes from
gross income of the interest.
ARTICLE X
DEFAULT AND REMEDIES
Section 10.01 Events of Default.
Each of the following occurrences or events for the purpose of this Ordinance is hereby
declared to be an Event of Default:
(a) defaults in payments to be made to the Bond Fund as required by this Ordinance;
(b) defaults in the observance or performance of any other of the covenants,
conditions or obligations set forth in this Ordinance.
Section 10.02 Remedies for Default.
(a) Upon the happening of any Event of Default, then any Owner or an authorized
representative thereof, including but not limited to, a trustee or trustees therefor, may proceed
against the City for the purpose of protecting and enforcing the rights of the Owners under this
Ordinance and shall be entitled to a writ of mandamus issued by a court of proper jurisdiction
compelling and requiring the City Council and other officers of the City to observe and perform
any covenant, condition or obligation prescribed in this Ordinance.
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(b) It is provided that all such proceedings shall be instituted and maintained for the
equal benefit of all Owners of Bonds then Outstanding.
Section 10.03 Remedies Not Exclusive.
(a) No remedy herein conferred or reserved is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or under the Bonds or now or hereafter
existing at law or in equity; provided, however, that notwithstanding any other provision of this
Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available as a
remedy under this Ordinance.
(b) The exercise of any remedy herein conferred or reserved shall not be deemed a
waiver of any other available remedy.
No delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power, or shall be construed to be a waiver of any such default or
acquiescence therein, and every such right or power may be exercised from time to time and as
often as may be deemed expedient.
ARTICLE XI
DISCHARGE
Section 11.01 Discharge.
Except as otherwise provided in the Pricing Certificate, the Bonds may be defeased,
discharged or refunded in any manner permitted by applicable law.
ARTICLE XII
CONTINUING DISCLOSURE UNDERTAKING
Section 12.01 Annual Reports.
(a) The City shall provide annually to the MSRB, (1) within six (6) months after the
end of each fiscal year of the City, financial information and operating data with respect to the
City of the general type included in the final Official Statement authorized by Section 8.01 of
this Ordinance, being information of the type described in Exhibit A hereto, including financial
statements of the City if audited financial statements of the City are then available, and (2) if not
provided as part such financial information and operating data, audited financial statements of
the City, when and if available. Any financial statements to be provided shall be (i) prepared in
accordance with the accounting principles described in Exhibit A, or such other accounting
principles as the City may be required to employ from time to time pursuant to state law or
regulation, and (ii) audited, if the City commissions an audit of such financial statements and the
audit is completed within the period during which they must be provided. If the audit of such
financial statements is not complete within twelve (12) months after any such fiscal year end,
then the City shall file unaudited financial statements within such 12 -month period and audited
financial statements for the applicable fiscal year, when and if the audit report on such statements
becomes available.
32
HOU:3646023.1
(b) If the City changes its fiscal year, it will notify the MSRB of the change (and of
the date of the new fiscal year end) prior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section.
(c) The financial information and operating data to be provided pursuant to this
Section may be set forth in full in one or more documents or may be included by specific
referenced to any document (including an official statement or other offering document, if it is
available from the MSRB) that theretofore has been provided to the MSRB of filed with the
SEC.
Section 12.02 Event Notices.
(a) The City shall notify the MSRB, in a timely manner (not in excess of ten (10)
Business Days after the occurrence of an event), of any of the following events with respect to
the Bonds:
(i) principal and interest payment delinquencies;
(ii) nonpayment related defaults, if material;
(iii) unscheduled draws on debt service reserves reflecting financial
difficulties;
(iv) unscheduled draws on credit enhancements reflecting financial
difficulties;
(v) substitution of credit or liquidity providers, or their failure to perform;
(vi) adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701-TEB) or other material notices or determinations with respect to the tax status of the
Bonds, or other material events affecting the tax status of the Bonds;
(vii) modifications to rights of Owners, if material;
(viii) redemption calls, if material, and tender offers;
(ix) defeasances;
(x) release, substitution, or sale of property securing repayment of the Bonds,
if material;
(xi) rating changes;
(xii) bankruptcy, insolvency, receivership or similar event of the City;
(xiii) the consummation of a merger, consolidation, or acquisition involving the
City or the sale of all or substantially all of the assets of the City, other than in the
ordinary course of business, the entry into a definitive agreement to undertake such an
33
HOU:3646023. l
action or the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms, if material; and
(xiv) appointment of a successor Paying Agent/Registrar or change in the name
of the Paying Agent/Registrar, if material.
As used in clause (xii) above, the phrase "bankruptcy, insolvency, receivership or
similar event" means the appointment of a receiver, fiscal agent or similar officer for the
City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under
state or federal law in which a court of governmental authority has assumed jurisdiction
over substantially all of the assets or business of the City, or if jurisdiction has been
assumed by leaving the City Council and official or officers of the City in possession but
subject to the supervision and orders of a court or governmental authority, or the entry of
an order confirming a plan of reorganization, arrangement or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the
assets or business of the City.
(b) The City shall notify the MSRB, in a timely manner, of any failure by the City to
provide financial information or operating data in accordance with Section 12.01 of this
Ordinance by the time required by such Section.
Section 12.03 Identifying Information.
All documents provided to the MSRB pursuant to this Article shall be provided in an
electronic format and be accompanied by identifying information as prescribed by the MSRB.
Section 12.04 Limitations, Disclaimers and Amendments.
(a) The City shall be obligated to observe and perform the covenants specified in this
Article for so long as, but only for so long as, the City remains an "obligated person" with
respect to the Bonds within the meaning of the Rule, except that the City in any event will give
notice of any Bond calls and any defeasances that cause the City to be no longer an "obligated
person."
(b) The provisions of this Article are for the sole benefit of the Owners and beneficial
owners of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any
legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to
provide only the financial information, operating data, financial statements, and notices which it
has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide
any other information that may be relevant or material to a complete presentation of the City's
financial results, condition, or prospects or hereby undertake to update any information provided
in accordance with this Article or otherwise, except as expressly provided herein. The City does
not make any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
34
HOU:3646023. l
THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY
COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
(c) No default by the City in observing or performing its obligations under this
Article shall constitute a breach of or default under the Ordinance for purposes of any other
provisions of this Ordinance.
(d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise
limit the duties of the City under federal and state securities laws.
(e) The provisions of this Article may be amended by the City from time to time to
adapt to changed circumstances that arise from a change in legal requirements, a change in law,
or a change in the identity, nature, status, or type of operations of the City, but only if (i) the
provisions of this Article, as so amended, would have permitted an underwriter to purchase or
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule to the date of such amendment, as well as such
changed circumstances, and (ii) either (A) the Owners of a majority in aggregate principal
amount (or any greater amount required by any other provisions of this Ordinance that authorizes
such an amendment) of the Outstanding Bonds consent to such amendment or (B) an entity or
individual person that is unaffiliated with the City (such as nationally recognized bond counsel)
determines that such amendment will not materially impair the interests of the Owners and
beneficial owners of the Bonds. If the City so amends the provisions of this Article, it shall
include with any amended financial information or operating data next provided in accordance
with Section 12.01 an explanation, in narrative form, of the reasons for the amendment and of
the impact of any change in type of financial information or operating data so provided.
ARTICLE XIII
AMENDMENTS; ATTORNEY GENERAL MODIFICATION
Section 13.01 Amendments.
This Ordinance shall constitute a contract with the Owners, be binding on the City, and
shall not be amended or repealed by the City so long as any Bond remains outstanding except as
permitted in this Section. The City may, without consent of or notice to any Owners, from time
to time and at any time, amend this Ordinance in any manner not detrimental to the interests of
the Owners, including the curing of any ambiguity, inconsistency, or formal defect or omission
herein. In addition, the City may, with the written consent of the Owners of the Bonds holding a
majority in aggregate principal amount of the Bonds then outstanding, amend, add to, or rescind
any of the provisions of this Ordinance; provided that, without the consent of all Owners of
outstanding Bonds, no such amendment, addition, or rescission shall (i) extend the time or times
of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal
amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify
the terms of payment of the principal of, premium, if any, or interest on the Bonds, (ii) give any
35
HOU:3646023.1
preference to any Bond over any other Bond, or (iii) reduce the aggregate principal amount of
Bonds required to be held by Owners for consent to any such amendment, addition, or rescission.
Section 13.02 Attorney General Modification.
In order to obtain the approval of the Bonds by the Attorney General of the State of
Texas, any provision of this Ordinance may be modified, altered or amended after the date of its
adoption if required by the Attorney General in connection with the Attorney General's
examination as to the legality of the Bonds and approval thereof in accordance with the
applicable law. Such changes, if any, shall be provided to the City Secretary and the City
Secretary shall insert such changes into this Ordinance as if approved on the date hereof.
ARTICLE XIV
EFFECTIVE IMMEDIATELY
Section 14.01 Effective Immediately.
Notwithstanding the provisions of the City Charter, this Ordinance shall become effective
immediately upon its adoption at this meeting pursuant to Section 1201.028, Texas Government
Code.
[Signature Page Follows.]
36
HOU:3646023.1
PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 24th
day of March, 2016, at a regular meeting of the City Council of the City of Lubbock, Texas.
GLEN P/kb-BEITTSON, Mayor
ATTEST:
CA GARZA, City
[SEAL]
APPROVED AS TO CONTENT:
By: '$�
L DA CUELLAR, Acting Executive Director of Finance
APPROVED AS TO FORM:
By: QL
JERK . KYLE, JR., Bond Counsel
Signature Page for Ordinance
HOU 3646023.1
EXHIBIT A
DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION*
The following information is referred to in Article XII of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or other
headings of the Official Statement referred to) below:
1. Statistical and financial data set forth in the Official Statement in
"APPENDIX A - FINANCIAL INFORMATION REGARDING THE SYSTEM" (Tables 1 -
12).
2. The portions of the financial statements of the City appended to the Official
Statement as APPENDIX B, but for the most recently concluded fiscal year.
3. The portions of the financial statements of Lubbock Power & Light appended to
the Official Statement as APPENDIX C, but for the most recently concluded fiscal year.
Accounting Principles
The accounting principles referred to in such Article XII are the accounting principles
described in the notes to the respective financial statements appended to the Official Statement.
* Subject to any changes prescribed by the Pricing Certificate.
Exhibit A-1
HOU:3646023.1
EXHIBIT B
SALE PARAMETERS
In accordance with Section 8.01(a) of the Ordinance, the following conditions with
respect to the Bonds must be satisfied in order for the Authorized Officer to act on behalf of the
City in selling and delivering the Bonds to the Underwriters:
(a) the price to be paid for the Bonds shall be not less than 90% of the aggregate
principal amount of the Bonds;
(b) the Bonds shall not bear interest at a rate greater than the maximum rate allowed
by Chapter 1204, Texas Government Code, as amended;
(c) the aggregate principal amount of the Bonds shall produce proceeds in an amount
sufficient to fund the purposes described in Section 3.01 and such aggregate principal amount
shall not exceed the maximum amount authorized in Section 3.01;
(d) the maximum maturity for the Bonds shall not exceed thirty-one (3 1) years from
the date of their delivery; and
(e) the Bonds to be issued, prior to delivery, must have been rated by a nationally
recognized rating agency for municipal securities in one of the four highest rating categories for
long term obligations.
Exhibit B-1
HOU:3646023.1
EXHIBIT C
FORM OF THE BONDS
The form of the Bonds shall be generally in the form set forth below, including the form
of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas to
accompany the initially delivered Bonds, the form of Certificate of the Paying Agent/Registrar
and the form of Assignment appearing on the Bonds shall be substantially as follows, provided
however, that the substantially final form of the Bonds shall be set forth in or attached to the
Pricing Certificate and shall incorporate and reflect the final terms of the Bonds set forth in the
Pricing Certificate:
(a) Form of Bond.
REGISTERED
No.
United States of America
State of Texas
REGISTERED
County of Lubbock
CITY OF LUBBOCK, TEXAS
ELECTRIC LIGHT AND POWER SYSTEM REVENUE BOND
SERIES 2016
INTEREST RATE: MATURITY DATE: BOND DATE: CUSIP NUMBER:
The City of Lubbock (the "City"), in the County of Lubbock, State of Texas, for value
received, hereby promises to pay to
or registered assigns, but solely from the sources and in the manner hereinafter provided, on the
Maturity Date specified above, the sum of
DOLLARS
unless this Bond shall have been sooner called for redemption and the payment of the principal
hereof shall have been paid or provided for, and to pay interest on such principal amount from
the later of the Bond Date specified above or the most recent interest payment date to which
interest has been paid or provided for until payment of such principal amount has been paid or
provided for, at the per annum rate of interest specified above, computed on the basis of a 360-
1 Information to be inserted from Pricing Certificate.
Exhibit C-1
HOU:3646023.1
day year of twelve 30 -day months, such interest to be paid semiannually on April 15 and
October 15 of each year, commencing 2 All capitalized terms used
herein but not defined shall have the meaning assigned to them in the Ordinance (defined below).
The principal of this Bond shall be payable without exchange or collection charges in
lawful money of the United States of America upon presentation and surrender of this Bond at
the corporate office in Dallas, Texas (the "Designated Payment/Transfer Office"), of
, the initial Paying Agent/Registrar, or, with respect to a
successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor.
Interest on this Bond is payable by check dated as of the interest payment date, and mailed by the
Paying Agent/Registrar to the registered owner at the address shown on the Register kept by the
Paying Agent/Registrar, or by such other customary banking arrangements acceptable to the
Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall
bear all risk and expense of such other banking arrangement. For the purpose of the payment of
interest on this Bond, the registered owner shall be the person in whose name this Bond is
registered at the close of business on the "Record Date," which shall be the last Business Day of
the month next preceding an Interest Payment Date.
If the date for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, legal holiday or day on which banking institutions in the city where the Paying
Agent/Registrar is located are required or authorized by law or executive order to close, the date
for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday
or day on which banking institutions are required or authorized to close and payment on such
date shall for all purposes be deemed to have been made on the original date payment was due.
This Bond is one of a series of fully registered bonds specified in the title hereof issued in
the aggregate principal amount of $ 3 (herein referred to as the "Bonds"), issued
pursuant to the authority provided by Chapters 1371 and 1502, Texas Government Code, as
amended, and a certain ordinance of the City (the "Ordinance"), for the purposes of (i) acquiring,
purchasing, constructing, improving, renovating, enlarging, and/or equipping property, buildings,
structures, facilities, and/or related infrastructure for the City's Electric Light and Power System,
(ii) funding the reserve fund requirement for the Bonds and (iii) paying the costs of issuing the
Bonds.
The Bonds, together with certain outstanding parity lien revenue bonds of the City, are
secured by and payable solely from a first lien on and pledge of the Net Revenues of the System,
as provided or incorporated by reference in the Ordinance. The Bonds constitute special
obligations of the City payable solely from the sources and in the manner set forth herein and in
the Ordinance and not from any other revenues, funds or assets of the City.
The City has reserved the right, subject to the restrictions stated or incorporated by
reference in the Ordinance, to issue additional parity revenue bonds that may be secured in the
same manner and on a parity with the Bonds and the Previously Issued Bonds.
2 Information to be inserted from Pricing Certificate.
3 Information to be inserted from Pricing Certificate.
Exhibit C-2
HOU:3646023.1
[The City has reserved the option to redeem the Bonds maturing on or after April 15,
20_, before their respective scheduled maturities in whole or in part on April 15, 20_, or on
any date thereafter, at a price equal to the principal amount of the Bonds so called for redemption
plus accrued interest to the date fixed for redemption. If less than all of the Bonds are to be
redeemed, the City shall determine the maturity or maturities and the amounts thereof to be
redeemed and shall direct the Paying Agent/Registrar to call by lot the Bonds, or portion thereof,
within such maturity and in such principal amounts, for redemption. ]4
[Bonds maturing on April 15, 20_ (the "Term Bonds") are subject to mandatory sinking
fund redemption prior to their scheduled maturity, and will be redeemed by the City, in part at a
redemption price equal to the principal amount thereof, without premium, plus interest accrued
to the redemption date, on the dates and in the principal amounts shown in the following
schedule:
Term Bonds Maturing April 15, 20
Redemption Date Principal Amount
April 15, 20_
April 15, 20_
April 15, 20_ (maturity)
The Paying Agent/Registrar will select by lot or by any other customary method that
results in a random selection the specific Term Bonds (or with respect to Term Bonds having a
denomination in excess of $5,000, each $5,000 portion thereof) to be redeemed by mandatory
redemption. The principal amount of Term Bonds required to be redeemed on any redemption
date pursuant to the foregoing mandatory sinking fund redemption provisions hereof shall be
reduced, at the option of the City, by the principal amount of any Term Bonds which, at least 45
days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the
City at a price not exceeding the principal amount of such Term Bonds plus accrued interest to
the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii)
shall have been redeemed pursuant to the optional redemption provisions hereof and not
previously credited to a mandatory sinking fund redemption. ]5
Notice of such redemption or redemptions shall be given by first class mail, postage
prepaid, not less than 30 days before the date fixed for redemption, to the registered owner of
each of the Bonds to be redeemed in whole or in part. Subject to the right of the City to give a
conditional notice of redemption with respect to an optional redemption, as described below,
notice having been so given, the Bonds or portions thereof designated for redemption shall
become due and payable on the redemption date specified in such notice; from and after such
date, notwithstanding that any of the Bonds or portions thereof so called for redemption shall not
4 Insert optional redemption provisions, if any, and revise to conform to the Pricing Certificate.
5 Insert mandatory sinking fund redemption provisions, if any, and revise as necessary to conform to the Pricing
Certificate.
Exhibit C-3
HOU:3646023. I
have been surrendered for payment, interest on such Bonds or portions thereof shall cease to
accrue.
Notice of such redemption or redemptions shall be given by first class mail, postage
prepaid, not less than thirty (30) days before the date fixed for redemption, to the registered
owner of each of the Bonds to be redeemed in whole or in part. In the Ordinance, the City
reserves the right in the case of an optional redemption to give notice of its election or direction
to redeem Bonds conditioned upon the occurrence of subsequent events. Such notice may state
(i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in
an amount equal to the amount necessary to effect the redemption, with the Paying
Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption
date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled
redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar
instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and
redemption shall be of no effect if such moneys and/or authorized securities are not so deposited
or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such
rescission of a conditional notice of redemption to the affected owners. Any Bonds subject to
conditional redemption where redemption has been rescinded shall remain Outstanding, and the
rescission shall not constitute an event of default. Further, in the case of a conditional
redemption, the failure of the City to make moneys and/or authorized securities available in part
or in whole on or before the redemption date shall not constitute an event of default.
As provided in the Ordinance and subject to certain limitations therein set forth, this
Bond is transferable upon surrender of this Bond for transfer at the Designated Payment/Transfer
Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is
acceptable to the Paying Agent/Registrar; thereupon, one or more new fully registered Bonds of
the same stated maturity, of authorized denominations, bearing the same rate of interest, and for
the same aggregate principal amount will be issued to the designated transferee or transferees.
Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or
exchange any Bond called for redemption where such redemption is scheduled to occur within
45 calendar days of the transfer or exchange date; provided, however, such limitation shall not be
applicable to an exchange by the registered owner of the uncalled principal balance of a Bond.
The City, the Paying Agent/Registrar, and any other person may treat the person in whose
name this Bond is registered as the owner hereof for the purpose of receiving payment as herein
provided (except interest shall be paid to the person in whose name this Bond is registered on the
Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the
City nor the Paying Agent/Registrar, nor any such agent shall be affected by notice to the
contrary.
IT IS HEREBY CERTIFIED AND RECITED that this Bond has been duly and validly
issued and delivered; that all acts, conditions, and things required or proper to be performed,
exist, and be done precedent to or in the issuance and delivery of this Bond have been performed,
existed, and been done in accordance with law; that the Bonds do not exceed any constitutional
or statutory limitation; and that provision has been made for the payment of the principal of and
Exhibit C-4
HOU:3646023.1
interest on the Bonds by irrevocably pledging the net revenues of the System, as hereinabove
recited.
The registered owner hereof shall never have the right to demand payment of this Bond
out of any funds raised or to be raised by taxation.
IN WITNESS WHEREOF, the City has caused this Bond to be executed in its name by
the manual or facsimile signature of the Mayor of the City and countersigned by the manual or
facsimile signature of the City Secretary, and the official seal of the City has been duly
impressed or placed in facsimile on this Bond.
Mayor, City of Lubbock, Texas
City Secretary, City of Lubbock, Texas
[SEAL]
(b) Form of Comptroller's Registration Certificate.
The following Comptroller's Registration Certificate may be deleted from the definitive
Bonds if such Certificate on the initial Bond is fully executed.
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § REGISTER NO.
OF THE STATE OF TEXAS
I hereby certify that there is on file and of record in my office a certificate of the Attorney
General of the State of Texas to the effect that this Bond has been examined by him as required
by law, that he finds that it has been issued in conformity with the Constitution and laws of the
State of Texas, and that it is a valid and binding special obligation of the City of Lubbock, Texas,
payable from the revenues pledged to its payment by and in the ordinance authorizing same and
that said bond has this day been registered by me.
Witness my hand and seal of office at Austin, Texas,
Comptroller of Public Accounts
of the State of Texas
[SEAL]
Exhibit C-5
HOU:3646023.1
(c) Form of Certificate of Paying Agent/Registrar.
The following Certificate of Paying Agent/Registrar may be deleted from the Initial Bond
if the Comptroller's Registration Certificate appears thereon.
CERTIFICATE OF PAYING AGENT/REGISTRAR
It is hereby certified that this Bond has been issued under the provisions of the Ordinance
described on this Bond; and that this Bond has been issued in conversion of and exchange for or
replacement of a bond, bonds, or portion of a bond or bonds of an issue which was originally
approved by the Attorney General of the State of Texas and registered by the Comptroller of
Public Accounts of the State of Texas as shown in the records kept by the undersigned.
Dated:
(d) Form of Assignment.
as Paying Agent/Registrar
By:
Authorized Representative
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
(print or typewrite name, address and Zip Code of transferee):
(Social Security or other identifying number: ) the within Bond and all rights
hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration hereof, with full power of
substitution in the premises.
Dated:
Signature Guaranteed By:
Authorized Signatory
NOTICE: The signature on this Assignment
must correspond with the name of the
registered owner as it appears on the face of
the within Bond in every particular and must
be guaranteed in a manner acceptable to the
Paying Agent/Registrar.
(e) The Initial Bond shall be in the form set forth in subsections (a), (b) and (d) of this
Section, except for the following alterations:
Exhibit C-6
HOU:3646023. t
(i) immediately under the name of the Bond (which name shall be set forth in
the Pricing Certificate), the headings "INTEREST RATE" and "MATURITY DATE"
shall be completed with the words "As shown below";
(ii) in the first paragraph of the Bond, the words "on the Maturity Date
specified above" shall be deleted and the following will be inserted: "on April 15 in each
of the years, in the principal installments and bearing interest at the per annum rates in
accordance with the following schedule:
Year Principal Installment Interest Rate
(Information to be inserted from the Pricing Certificate)
(iii) the Initial Bond shall be numbered T-1.
Exhibit C-7
HOU:3646023.1
MINUTES AND CERTIFICATION PERTAINING TO
PASSAGE OF AN ORDINANCE
STATE OF TEXAS §
COUNTY OF LUBBOCK §
CITY OF LUBBOCK §
On the 24th day of March, 2016, 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
Glen C. Robertson, Mayor Victor Hernandez )
Jim Gerlt, Mayor Pro Tem Floyd Price ) Members of
Jeff Griffith ) the Council
Karen Gibson )
Latrelle Joy )
James Loomis, City Manager
Linda Cuellar, Acting Executive Director of Finance
Rebecca Garza, City Secretary
as follows:
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:
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY
OF LUBBOCK, TEXAS, ELECTRIC LIGHT AND POWER
SYSTEM REVENUE BONDS, SERIES 2016; PROVIDING FOR
THE AWARD OF THE SALE THEREOF IN ACCORDANCE
WITH SPECIFIED PARAMETERS; APPROVING THE
OFFICIAL STATEMENT; APPROVING EXECUTION OF A
PURCHASE CONTRACT; AND ENACTING OTHER
PROVISIONS RELATING 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.
HOU:3649262.1
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
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 24th
day of March, 2016.
City kecretary
City of Lubbock, Texas
[SEAL]
HOU 3649262.1
PRICING CERTIFICATE
City of Lubbock, Texas
Electric Light and Power System Revenue Bonds, Series 2016
Re: $ City of Lubbock, Texas Electric Light and Power System Revenue
Bonds, Series 2016 (the "Bonds")
I, the undersigned officer of the City of Lubbock, Texas (the "City"), do hereby make and
execute this Pricing Certificate pursuant to an ordinance adopted by the City Council of the City
on March 24, 2016 (the "Ordinance") authorizing the issuance of the Bonds. Capitalized terms
used in this Pricing Certificate shall have the meanings given such terms in the Ordinance.
1. As authorized by Section 8.01 of the Ordinance, I have acted on behalf of the City in
selling the Bonds to the Underwriters pursuant to the terms of a purchase contract authorized
pursuant to Section 8.01 of the Ordinance, for the sum of $ (representing the
principal amount of $ , plus an original issue premium of $ and less
an underwriters' discount of $ ), and having the following terms, conditions and
provisions, all as authorized pursuant to Section 8.01 of the Ordinance:
A. The Bonds shall be issued in the aggregate principal amount of $ ,
shall be dated April 15, 2016 (the "Bond Date"), and bear interest from their date of delivery,
shall mature on April 15 in the years and in the principal amounts and shall bear interest payable
on April 15 and October 15 of each year, commencing October 15, 2016, at the rates set forth in
the following schedule:
Principal
Principal
Years Installments
Interest Rates
Years Installments
Interest Rates
2017 $
%
2032 $
%
2018
%
2033
%
2019
%
2034
%
2020
%
2035
%
2021
%
2036
%
2022
%
2037
%
2023
%
2038
%
2024
%
2039
%
2025
%
2040
%
2026
%
2041
%
2027
%
2042
%
2028
%
2043
%
2029
%
2044
%
2030
%
2045
%
2031
%
2046
%
B. The Bonds maturing on and after April 15, 2027, are subject to optional
redemption, in whole or in part, on April 15, 2026, or on any date thereafter, at a price equal to
HOU:3649801.1
the principal amount of the Bonds so called for redemption plus accrued interest to the date fixed
for redemption.
C. In accordance with the parameters contained in Section 8.01 and Exhibit B of the
Ordinance, the undersigned does hereby find, certify and represent that the foregoing terms of
the Bonds satisfy the following requirements and parameters contained within such Section 8.01
and Exhibit B:
(i) the price to be paid for the Bonds is not less than 90% of the aggregate
principal amount of the Bonds;
(ii) the Bonds do not bear interest at a rate greater than the maximum rate
allowed by Chapter 1204, Texas Government Code, as amended;
(iii) the aggregate principal amount of the Bonds produces proceeds in an
amount sufficient to fund the purposes described in Section 3.01 of the Ordinance and
such aggregate principal amount does not exceed the maximum amount authorized in
Section 3.01 of the Ordinance;
(iv) the final maturity for the Bonds is April 15, 2046 which does not exceed
the maximum maturity of thirty-one (3 1) years; and
(v) the Bonds have been rated by a nationally recognized rating agency for
municipal securities in one of the four highest rating categories for long term obligations.
2. Proceeds of the Bonds shall be applied as follows: (i) proceeds in the amount of
$ shall be deposited to special accounts of the City for the purpose of funding the
Project, as set forth in Section 3.01 of the Ordinance; and (ii) proceeds in the amount of
$ shall be deposited to a special account of the City and used to pay costs of
issuance of the Bonds.
3. After giving effect to the issuance of the Bonds, the Required Reserve is
$ , which is equal to the lesser of (i) the Average Annual Debt Service for all
bonds Outstanding and (ii) the maximum amount in a reasonably required reserve fund that can
be invested without restriction as to yield pursuant to Subsection (d) of section 148 of the Code
and regulations promulgated thereunder. Such amount is currently on deposit in the Reserve
Portion of the Bond Fund and no additional deposit is required by virtue of the issuance of the
Bonds.
4. The Bonds shall be issued substantially in the form attached hereto as Exhibit A.
5. The undersigned hereby finds that the terms and conditions of the sale of the Bonds are in
the best interest of the City and are the most advantageous reasonably available to the City.
2
HOU:3649801.1
Executed a,
Linda Cuellar
Acting Executive Director of Finance
City of Lubbock, Texas
[Signature Page for Pricing Certificate for Electric Light and Power System Bonds]
HOU:3649801.1
EXHIBIT A
FORM OF THE BONDS
The form of the Bond, including the form of the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying
Agent/Registrar and the form of Assignment appearing on the Bonds, shall be generally as
follows:
(a) Form of Bond.
REGISTERED REGISTERED
No. $
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
ELECTRIC LIGHT AND POWER SYSTEM REVENUE BOND
SERIES 2016
INTEREST RATE: MATURITY DATE: BOND DATE: CUSIP NUMBER:
April 15, 2016
The City of Lubbock (the "City"), in the County of Lubbock, State of Texas, for value
received, hereby promises to pay to
or registered assigns, but solely from the sources and in the manner hereinafter provided, on the
Maturity Date specified above, the sum of
DOLLARS
unless this Bond shall have been sooner called for redemption and the payment of the principal
hereof shall have been paid or provided for, and to pay interest on such principal amount from
the later of their date of delivery or the most recent interest payment date to which interest has
been paid or provided for until payment of such principal amount has been paid or provided for,
at the per annum rate of interest specified above, computed on the basis of a 360 -day year of
twelve 30 -day months, such interest to be paid semiannually on April 15 and October 15 of each
year, commencing October 15, 2016. All capitalized terms used herein but not defined shall
have the meaning assigned to them in the Ordinance (defined below).
A-1
HOU:3649801.1
The principal of this Bond shall be payable without exchange or collection charges in
lawful money of the United States of America upon presentation and surrender of this Bond at
the corporate office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank
of New York Mellon Trust Company, N.A., the initial Paying Agent/Registrar, or, with respect
to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such
successor. Interest on this Bond is payable by check dated as of the interest payment date, and
mailed by the Paying Agent/Registrar to the registered owner at the address shown on the
Register kept by the Paying Agent/Registrar, or by such other customary banking arrangements
acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such
registered owner shall bear all risk and expense of such other banking arrangement. For the
purpose of the payment of interest on this Bond, the registered owner shall be the person in
whose name this Bond is registered at the close of business on the "Record Date," which shall be
the last Business Day of the month next preceding an Interest Payment Date.
If the date for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, legal holiday or day on which banking institutions in the city where the Paying
Agent/Registrar is located are required or authorized by law or executive order to close, the date
for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday
or day on which banking institutions are required or authorized to close and payment on such
date shall for all purposes be deemed to have been made on the original date payment was due.
This Bond is one of a series of fully registered bonds specified in the title hereof issued in
the aggregate principal amount of $ (herein referred to as the "Bonds"), issued
pursuant to the authority provided by Chapters 1371 and 1502, Texas Government Code, as
amended, and a certain ordinance of the City (the "Ordinance"), for the purposes of (i) acquiring,
purchasing, constructing, improving, renovating, enlarging, and/or equipping property, buildings,
structures, facilities, and/or related infrastructure for the City's Electric Light and Power System
and (ii) paying the costs of issuing the Bonds.
The Bonds, together with certain outstanding parity lien revenue bonds of the City, are
secured by and payable solely from a first lien on and pledge of the Net Revenues of the System,
as provided or incorporated by reference in the Ordinance. The Bonds constitute special
obligations of the City payable solely from the sources and in the manner set forth herein and in
the Ordinance and not from any other revenues, funds or assets of the City.
The City has reserved the right, subject to the restrictions stated or incorporated by
reference in the Ordinance, to issue additional parity revenue bonds that may be secured in the
same manner and on a parity with the Bonds and the Previously Issued Bonds.
The City has reserved the option to redeem the Bonds maturing on or after April 15,
2027, before their respective scheduled maturities in whole or in part on April 15, 2026, or on
any date thereafter, at a price equal to the principal amount of the Bonds so called for redemption
plus accrued interest to the date fixed for redemption. If less than all of the Bonds are to be
redeemed, the City shall determine the maturity or maturities and the amounts thereof to be
redeemed and shall direct the Paying Agent/Registrar to call by lot the Bonds, or portion thereof,
within such maturity and in such principal amounts, for redemption.
A-2
HOU:3649801.1
Notice of such redemption or redemptions shall be given by first class mail, postage
prepaid, not less than thirty (30) days before the date fixed for redemption, to the registered
owner of each of the Bonds to be redeemed in whole or in part. In the Ordinance, the City
reserves the right in the case of an optional redemption to give notice of its election or direction
to redeem Bonds conditioned upon the occurrence of subsequent events. Such notice may state
(i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in
an amount equal to the amount necessary to effect the redemption, with the Paying
Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption
date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled
redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar
instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and
redemption shall be of no effect if such moneys and/or authorized securities are not so deposited
or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such
rescission of a conditional notice of redemption to the affected owners. Any Bonds subject to
conditional redemption where redemption has been rescinded shall remain Outstanding, and the
rescission shall not constitute an event of default. Further, in the case of a conditional
redemption, the failure of the City to make moneys and/or authorized securities available in part
or in whole on or before the redemption date shall not constitute an event of default.
As provided in the Ordinance and subject to certain limitations therein set forth, this
Bond is transferable upon surrender of this Bond for transfer at the Designated Payment/Transfer
Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is
acceptable to the Paying Agent/Registrar; thereupon, one or more new fully registered Bonds of
the same stated maturity, of authorized denominations, bearing the same rate of interest, and for
the same aggregate principal amount will be issued to the designated transferee or transferees.
Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or
exchange any Bond called for redemption where such redemption is scheduled to occur within
45 calendar days of the transfer or exchange date; provided, however, such limitation shall not be
applicable to an exchange by the registered owner of the uncalled principal balance of a Bond.
The City, the Paying Agent/Registrar, and any other person may treat the person in whose
name this Bond is registered as the owner hereof for the purpose of receiving payment as herein
provided (except interest shall be paid to the person in whose name this Bond is registered on the
Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the
City nor the Paying Agent/Registrar, nor any such agent shall be affected by notice to the
contrary.
IT IS HEREBY CERTIFIED AND RECITED that this Bond has been duly and validly
issued and delivered; that all acts, conditions, and things required or proper to be performed,
exist, and be done precedent to or in the issuance and delivery of this Bond have been performed,
existed, and been done in accordance with law; that the Bonds do not exceed any constitutional
or statutory limitation; and that provision has been made for the payment of the principal of and
interest on the Bonds by irrevocably pledging the net revenues of the System, as hereinabove
recited.
A-3
HOU:3649801.1
The registered owner hereof shall never have the right to demand payment of this Bond
out of any funds raised or to be raised by taxation.
IN WITNESS WHEREOF, the City has caused this Bond to be executed in its name by
the manual or facsimile signature of the Mayor of the City and countersigned by the manual or
facsimile signature of the City Secretary, and the official seal of the City has been duly
impressed or placed in facsimile on this Bond.
Mayor, City of Lubbock, Texas
City Secretary, City of Lubbock, Texas
[SEAL]
(b) Form of Comptroller's Registration Certificate.
The following Comptroller's Registration Certificate may be deleted from the definitive
Bonds if such Certificate on the initial Bond is fully executed.
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS & REGISTER NO.
OF THE STATE OF TEXAS
I hereby certify that there is on file and of record in my office a certificate of the Attorney
General of the State of Texas to the effect that this Bond has been examined by him as required
by law, that he finds that it has been issued in conformity with the Constitution and laws of the
State of Texas, and that it is a valid and binding special obligation of the City of Lubbock, Texas,
payable from the revenues pledged to its payment by and in the ordinance authorizing same and
that said bond has this day been registered by me.
Witness my hand and seal of office at Austin, Texas,
Comptroller of Public Accounts
of the State of Texas
[SEAL]
A-4
HOU:3649801.1
(c) Form of Certificate of Paving Agent/Registrar.
The following Certificate of Paying Agent/Registrar may be deleted from the Initial Bond
if the Comptroller's Registration Certificate appears thereon.
CERTIFICATE OF PAYING AGENT/REGISTRAR
It is hereby certified that this Bond has been issued under the provisions of the Ordinance
described on this Bond; and that this Bond has been issued in conversion of and exchange for or
replacement of a bond, bonds, or portion of a bond or bonds of an issue which was originally
approved by the Attorney General of the State of Texas and registered by the Comptroller of
Public Accounts of the State of Texas as shown in the records kept by the undersigned.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.,
as Paying Agent/Registrar
wo
Dated: Authorized Representative
(d) Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
(print or typewrite name, address and Zip Code of transferee):
(Social Security or other identifying number: ) the within Bond and all rights
hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration hereof, with full power of
substitution in the premises.
Dated:
Signature Guaranteed By:
Authorized Signatory
HOU:3649801.1
NOTICE: The signature on this Assignment
must correspond with the name of the
registered owner as it appears on the face of
the within Bond in every particular and must
be guaranteed in a manner acceptable to the
Paying Agent/Registrar.
IN
(e) The Initial Bond shall be in the form set forth in subsections (a), (b) and (d) of this
Section, except for the following alterations:
(i) immediately under the name of the Bond (which name shall be set forth in
the Pricing Certificate), the headings "INTEREST RATE" and "MATURITY DATE"
shall be completed with the words "As shown below" and the heading "CUSIP
NUMBER" shall be deleted;
(ii) in the first paragraph of the Bond, the words "on the Maturity Date
specified above, the sum of DOLLARS" shall be deleted and the
following will be inserted: "on April 15 in each of the years, in the principal installments
and bearing interest at the per annum rates in accordance with the following schedule:
Years Principal Installments Interest Rates
(Information to be inserted from the Pricing Certificate)
(iii) the Initial Bond shall be numbered T-1.
A-6
HOU:3649801.1
PURCHASE CONTRACT
RELATING TO
CITY OF LUBBOCK, TEXAS
ELECTRIC LIGHT AND POWER SYSTEM REVENUE BONDS,
SERIES 2016
April _, 2016
The Honorable Mayor and Members of the City Council
City of Lubbock
P.O. Box 2000
Lubbock, Texas 79457
Dear Mayor and Members of the City Council:
CITIGROUP GLOBAL MARKETS INC. (the "Representative") GEORGE K. BAUM &
COMPANY, HUTCHINSON SHOCKEY ERLEY & CO. AND WELLS FARGO BANK, N.A. (collectively,
the "Underwriters"), offer to enter into this Purchase Contract (the "Purchase Contract") with the
CITY OF LUBBOCK, TExAs (the "City") for the purchase by the Underwriters of the City's Electric
Light and Power System Revenue Bonds, Series 2016 (the "Securities"). This offer is made
subject to the City's acceptance of this Purchase Contract on or before 7:00 p.m. Central Time on
April _, 2016.
1. Purchase and Sale of the Securities. (a) Upon the terms and conditions and
upon the basis of the representations set forth herein, the Underwriters, jointly and severally,
hereby agree to purchase from the City, and the City hereby agrees to sell and deliver the
Securities to the Underwriters in an aggregate principal amount of $ (representing
the original aggregate principal amount of the Securities). The Securities shall have the
maturities, interest rates and be subject to redemption in accordance with the provisions of
Exhibit A hereto and shall be issued and secured under the provisions of the Ordinance (as
defined below).
(b) The purchase price for the Securities shall be $ (representing the
principal amount of the Securities, plus [an] [a net] original issue premium on the Securities in
the amount of $ and less an Underwriters' discount on the Securities of
(c) CiTwROUP GLOBAL MARKETS INC., as the Representative, represents that it has been
duly authorized to execute this Purchase Contract and has been duly authorized to act hereunder
as the Representative. All actions that may be taken by the Underwriters hereunder may be
taken by the Representative alone.
2. Ordinance. The Securities shall be as described in and shall be issued and
secured under the provisions of an ordinance adopted by the City on March 24, 2016, authorizing
the issuance and sale of the Securities (the "Ordinance"). In the Ordinance, the City Council of
the City delegated the authority to the Mayor, the City Manager and the Executive Director of
Finance (each, an "Authorized Officer") to establish the pricing terms for the Securities through
the execution of a Pricing Certificate dated the date hereof (the "Pricing Certificate"), within the
parameters set forth in the Ordinance. The Securities shall be secured and payable as provided in
the Ordinance and the Pricing Certificate.
3. Public Offering. It shall be a condition of the obligations of the City to sell and
deliver the Securities to the Underwriters, and of the obligations of the Underwriters to purchase
and accept delivery of the Securities, that the entire principal amount of the Securities authorized
by the Ordinance and as set forth in the Pricing Certificate shall be sold and delivered by the City
and accepted and paid for by the Underwriters at the Closing (as hereinafter defined). The
Underwriters agree to make a bona fide public offering of all of the Securities, at not in excess of
the initial public offering prices, as set forth in the Official Statement. On or before the Closing,
the Representative shall execute and deliver to Bond Counsel an issue price certificate for the
Securities prepared by Bond Counsel verifying the initial offering prices to the public at which
the Underwriters reasonably expected to sell or in fact sold a substantial amount of each stated
maturity of the Securities to the public.
4. Security Deposit. Delivered to the City herewith is a corporate check of the
Representative payable to the order of the City in the amount of $ . Such check is a
"Good Faith" check for the Securities, and such check may be applied toward any obligation of
the Underwriters owing as a result of the failure of the Underwriters to accept delivery of the
Securities as provided herein. The City agrees to hold such check uncashed until the Closing to
ensure the performance by the Underwriters of their obligation to purchase, accept delivery of
and pay for the Securities at the Closing. Concurrently with the payment by the Underwriters of
the purchase price of the Securities, the City shall return such check to the Representative as
provided in Sections 7 and 8 hereof. Should the City fail to deliver the Securities at the Closing,
or should the City be unable to satisfy the conditions of the obligations of the Underwriters to
purchase, accept delivery of and pay for the Securities, as set forth in this Purchase Contract
(unless waived by the Representative), or should such obligations of the Underwriters be
terminated for any reason permitted by this Purchase Contract, such check shall immediately be
returned to the Representative. In the event the Underwriters fail (other than for a reason
permitted hereunder) to purchase, accept delivery of and pay for the Securities at the Closing as
herein provided, such check shall be retained by the City as and for full liquidated damages for
such failure of the Underwriters and for any defaults hereunder on the part of the Underwriters.
The Representative hereby agrees not to stop payment on said check, or cause payment on said
2
check to be stopped, unless the City has breached any of the terms of this Purchase Contract. The
Underwriters and the City understand that in such event the City's actual damages may be
greater or may be less than such amount. Accordingly, the Underwriters hereby waive any
right to claim that the City's actual damages are less than such amount, and the City's
acceptance of this offer shall constitute a waiver of any right the City may have to additional
damages from the Underwriters.
5. Official Statement. The Official Statement, including the cover pages and
Appendices thereto, of the City, dated April _, 2016, with respect to the Securities, as further
amended only in the manner herein provided, is hereinafter called the "Official Statement". The
City hereby authorizes the Ordinance and the Official Statement and the information therein
contained to be used by the Underwriters in connection with the public offering and sale of the
Securities. The City confirms its consent to the use by the Underwriters prior to the date hereof
of the Preliminary Official Statement, relative to the Securities, dated March _, 2016 (the
"Preliminary Official Statement"), in connection with the preliminary public offering and sale of
the Securities, and it is "deemed final" as of its date, within the meaning, and for the purposes, of
Rule 15c2-12 promulgated under authority granted by the federal Securities and Exchange Act of
1934 (the "Rule"). The City agrees to cooperate with the Underwriters to provide the Official
Statement, within seven business days of the date hereof, in a "designated electronic format", as
defined in and specified by Rule G-32 of the Municipal Securities Rulemaking Board (the
"MSRB") and in sufficient quantities for the Underwriters to satisfy the requirements of MSRB
Rule G-32 obligating the Underwriters to deliver a copy of the Official Statement to a purchaser
of the Securities not later than the date of Closing, as defined herein, upon an Underwriters'
receipt from the purchaser of a request therefor. The Underwriters will use their best efforts to
assist the City in the preparation of the final Official Statement in order to ensure compliance
with the aforementioned rules.
If at any time after the date of this Purchase Contract but before the first to occur of (i)
the date on which the Official Statement is available to any person from the MSRB, but in no
case less than twenty-five (25) days after the "end of the underwriting period" (as defined in the
Rule) for the Securities or (ii) the date that is 90 days after the "end of the underwriting period",
any event shall occur that might or would cause the Official Statement to contain any untrue
statement of a material fact or to omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading, the City shall notify the Representative, and if, in the opinion of the
Representative, such event requires the preparation and publication of a supplement or
amendment to the Official Statement, the City will at its expense supplement or amend the
Official Statement (in a manner approved by the Representative) and furnish to the Underwriters
such supplement or amendment, in a "designated electronic format", so that the statements in the
Official Statement as so amended and supplemented will not, in light of the circumstances when
the Official Statement is delivered to a purchaser, be misleading or so that the Official Statement
will comply with law. Unless otherwise notified in writing by the Representative, the City can
assume that the "end of the underwriting period" for purposes of the Rule is the date of the
Closing. In the event that the City has been given notice pursuant to the preceding sentence that
3
the "end of the underwriting period" will not occur on the date of the Closing, the Representative
agrees to provide prompt written notice to the City upon the occurrence of the "end of the
underwriting period".
To the best knowledge and belief of the City, the Preliminary Official Statement and the
Official Statement each contains information, including financial information or operating data,
as required by the Rule.
6. Representations, Warranties and Agreements of the City. On the date hereof,
the City represents, warrants and agrees as follows:
(a) The City is a home rule municipality and a political subdivision of the
State of Texas and a body politic and corporate, and has full legal right, power and
authority to enter into this Purchase Contract, to adopt the Ordinance, to sell the
Securities, and to issue and deliver the Securities to the Underwriters as provided herein
and to carry out and consummate all other transactions contemplated by the Ordinance
(including the Undertaking defined below in Section 8(e)(2)), the Pricing Certificate, and
this Purchase Contract and all documents required hereunder and thereunder to be
executed and delivered by the City (this Purchase Contract, the Ordinance, the
Undertaking and the Pricing Certificate and the other documents referred to in this clause
are hereinafter referred to as the "City Documents");
(b) By official action of the City prior to or concurrently with the acceptance
hereof, the City has duly adopted the Ordinance, has duly authorized and approved the
execution and delivery of, and the performance by the City of the obligations contained
in the Securities, the Pricing Certificate and this Purchase Contract and has duly
authorized and approved the performance by the City of its obligations contained in the
Ordinance, including, without limitation, the submission of a transcript of proceedings to
the Public Finance Division of the Office of the Attorney General of Texas (the
"Attorney General") for the approval of the Securities; and the City Documents each
constitute legal, valid and binding agreements of the City, enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and
other similar laws and principles of equity relating to or affecting the enforcement of
creditors' rights or by general principles of equity which permit the exercise of judicial
discretion;
(c) The City is not in breach of or default under any law or administrative
regulation of the State of Texas or the United States (including regulations of their
respective agencies) applicable to the issuance of the Securities or any applicable
judgment or decree or any loan agreement, note, order, agreement or other instrument,
except as may be disclosed in the Preliminary Official Statement and the Official
Statement, to which the City is a party or to the knowledge of the City is otherwise
subject, that would have a material and adverse effect upon the business or financial
condition of the City; and the execution and delivery of the Securities and this Purchase
Contract by the City and the adoption of the Ordinance by the City and compliance with
the provisions thereof will not violate or constitute a breach of or default under any
existing law or administrative regulation, or any judgment, decree or agreement or other
instrument to which the City is a party or, to the knowledge of the City, is otherwise
subject;
(d) All approvals, consents and orders of any governmental authority or
agency having jurisdiction of any matter that would constitute a condition precedent to
the performance by the City of its obligations to sell and deliver the Securities hereunder
will have been obtained prior to the Closing, except for the approval of the Securities by
the Attorney General and registration of the Securities by the Office of the Comptroller of
Public Accounts of the State (the "Comptroller"). The City represents that a transcript of
proceedings heretofore has been or will be filed with the Attorney General in form and
substance consistent with the administrative rules of the Public Finance Division of the
Attorney General, which will permit the review of such transcript and the approval of the
Securities by the Attorney General, and the registration of the Securities by the
Comptroller on or before the Closing, as required by Section 8(e)(6) hereof, but subject to
the discretion of the Attorney General with respect to the issuance of his approving
opinion;
(e) As of its date the Preliminary Official Statement did not contain any
untrue statement or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were
made, not misleading;
(f) At the time of the City's acceptance hereof and at the time of the Closing,
and at all times subsequent hereto during the period up to and including 25 days
subsequent to the "end of the underwriting period", the Official Statement does not and
will not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(g) Between the date of this Purchase Contract and the Closing, the City will
not, without the prior written consent of the Underwriters, sell or issue any additional
bonds, notes or other obligations for borrowed money payable in whole or in part from
the Pledged Revenues, as defined below, and the City will not incur any material
liabilities, direct or contingent, nor will there be any adverse change of a material nature
in the financial position of the City;
(h) Except as described in the Official Statement, no litigation is pending or,
to the knowledge of the City, threatened in any court affecting the corporate existence of
the City, the title of its officers to their respective offices, or seeking to restrain or enjoin
the issuance or delivery of the Securities, collection or application of the net revenues
(the "Pledged Revenues") of the City's Electric Light and Power System (the "System")
s
pledged or to be pledged to pay the principal of and interest on the Securities, or in any
way contesting or affecting the issuance, execution, delivery, payment, security or
validity of the Securities, or in any way contesting or affecting the validity or
enforceability of the Ordinance, or contesting the powers of the City, or any authority for
the Securities or the City Documents or contesting in any way the completeness, accuracy
or fairness of the Preliminary Official Statement or the Official Statement;
(i) The City will cooperate with the Underwriters in arranging for the
qualification of the Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Representative designates, and will
use its best efforts to continue such qualifications in effect so long as required for
distribution of the Securities; provided, however, that the City will not be required to
execute a consent to service of process or to qualify to do business in connection with any
such qualification in any jurisdiction;
0) The descriptions of the Securities and the Ordinance contained in the
Official Statement accurately summarize certain provisions of such instruments, and the
Securities, when validly executed, authenticated and delivered in accordance with the
Ordinance and sold to the Underwriters as provided herein, will be validly issued and
outstanding obligations of the City entitled to the benefits of, and subject to the
limitations contained in, the Ordinance;
(k) If prior to the Closing an event occurs affecting the City that is materially
adverse for the purpose for which the Official Statement is to be used and is not disclosed
in the Official Statement, the City shall notify the Representative, and if in the opinion of
the City and the Representative such event requires a supplement or amendment to the
Official Statement, the City will supplement or amend the Official Statement in a form
and in a manner approved by the Representative;
(1) The financial statements contained in the Official Statement present fairly
the financial position of the City and the System, respectively, as of the date and for the
period covered thereby and are stated on a basis substantially consistent with that of the
prior year's audited financial statements;
(m) Any certificate signed by any official of the City and delivered to the
Underwriters shall be deemed a representation and warranty by the City to the
Underwriters as to the truth of the statements therein contained;
(n) The City will not knowingly take or omit to take any action, which action
or omission will in any way cause the proceeds from the sale of the Securities to be
applied in a manner other than as provided in the Ordinance or that would cause the
interest on the Securities to be includable in gross income of the holders thereof for
federal income tax purposes;
31
(o) The City maintains internal controls and procedures designed to ensure
that material information relating to the City is made known to the appropriate officials of
the City responsible for the City's compliance with the disclosure obligations of the City
under federal securities laws, including, without limitation, the City's compliance with
the Undertaking; and
(p) The City has complied with all of its previous continuing disclosure
obligations under the Rule (or disclosed its non-compliance in the Preliminary Official
Statement and the Official Statement) during the previous five years.
7. Closing. By 10:00 A.M., Central Time, on April _, 2016 (the "Closing"), the
City will deliver the initial securities certificates of the Securities (as provided for in the
Ordinance) to the Underwriters and the City shall take appropriate steps to provide The
Depository Trust Company ("DTC") with one definite securities certificate for each year of
maturity of the Securities, and to provide the Underwriters with the other documents hereinafter
mentioned. On or prior to the date of Closing, the Underwriters shall make arrangements with
DTC for the Securities to be immobilized and thereafter traded as book -entry only securities and
on the date of Closing, the Underwriters will accept such delivery and pay the purchase price of
the Securities, as set forth in Section 1 hereof in immediately available funds. Concurrently with
the payment for the Securities by the Underwriters, the City shall return to the Representative the
check referred to in Section 4 hereof. Delivery and payment as aforesaid shall be made at the
office of the paying agent/registrar for the Securities, as identified in the Official Statement, or
such other place as shall have been mutually agreed upon by the City and the Representative.
In addition, the City and the Underwriters agree that there shall be a preliminary closing
held at such place as the City and the Underwriters shall mutually agree, commencing at least 24
hours prior to the Closing; provided, however, in lieu of this preliminary closing, Bond Counsel,
as defined below, may provide the counsel to the Underwriters with a complete Transcript of
Proceedings no later than the business day preceding the Closing. Drafts of all documents to be
delivered at the Closing shall be prepared and distributed to all parties and their counsel for
review at least three business days prior to the Closing.
Delivery of the Securities shall be made to the paying agent/registrar on behalf of DTC
pursuant to DTC's FAST system. The Securities shall be delivered in definitive fully registered
form, bearing CUSIP numbers without coupons, with one Security for each maturity of the
Securities registered in the name of Cede & Co., all as provided in the Ordinance and shall be
made available to the Representative at least one business day before Closing for purposes of
inspection.
8. Conditions. The Underwriters have entered into this Purchase Contract 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 upon the performance by
the City of its obligations hereunder, both as of the date hereof and as of the date of Closing.
Accordingly, the Underwriters' obligations under this Purchase Contract to purchase and pay for
7
the Securities shall be subject to the performance by the City of its obligations to be performed
hereunder and under such documents and instruments at or prior to the Closing, and shall also be
subject to the following conditions:
(a) The representations and warranties of the City contained herein shall be
true, complete and correct in all material respects on the date hereof and on and as of the
date of Closing, as if made on the date of Closing;
(b) At the time of the Closing, (i) the Ordinance shall be in full force and
effect, and the Ordinance shall not have been amended, modified or supplemented and
the Official Statement shall not have been amended, modified or supplemented, except as
may have been agreed to by the Representative; and (ii) the net proceeds of the sale of the
Securities shall be deposited and applied as described in the Official Statement and in the
Ordinance;
(c) At the time of the Closing, all official action of the City related to the
Ordinance shall be in full force and effect and shall not have been amended, modified or
supplemented;
(d) The City shall not have failed to pay principal or interest when due on any
of its outstanding obligations for borrowed money;
(e) At or prior to the Closing, the Underwriters shall have received each of the
following documents:
(1) The Official Statement of the City executed on behalf of the City
by the Mayor and City Secretary, or a conformed copy thereof,
(2) The Ordinance, certified by the City Secretary under the seal of the
City as having been duly adopted by the City and as being in effect, with such
changes or amendments as may have been agreed to by the Underwriters. The
Ordinance shall contain the agreement of the City, in form satisfactory to the
Underwriters, that is described under the caption "CONTINUING DISCLOSURE
OF INFORMATION" in the Preliminary Official Statement (the "Undertaking");
(3) The Pricing Certificate, having been duly executed on behalf of the
City by an Authorized Officer;
(4) The Paying Agent/Registrar Agreement having been duly executed
on behalf of the City and The Bank of New York Mellon Trust Company,
National Association, as Paying Agent/Registrar;
s
(5) The opinion pertaining to the issuance of the Securities, dated the
date of Closing, of Andrews Kurth L.L.P. ("Bond Counsel") in substantially the
form and substance set forth in Appendix D to the Official Statement;
(6) With respect to the Securities, the opinion dated on or prior to the
date of Closing of the Attorney General, approving the Securities as required by
law and the related registration certificate of the Comptroller;
(7) The supplemental opinion, dated the date of Closing, of Bond
Counsel, addressed to the City and the Underwriters, which provides that the
Underwriters may rely upon the opinion of Bond Counsel delivered in accordance
with the provisions of Section 8(e)(5) hereof, and opining to the effect that: (a) the
Purchase Contract has been duly authorized, executed and delivered by the City
and (assuming due authorization by the Underwriters) constitutes a binding and
enforceable agreement of the City in accordance with its terms; (b) in its capacity
as Bond Counsel, such firm has reviewed the information in the Preliminary
Official Statement and the Official Statement under the captions or subcaptions
"THE BONDS", "SUMMARY OF SELECTED PROVISIONS OF THE
ORDINANCE", "TAX MATTERS", "REGISTRATION AND
QUALIFICATION OF BONDS FOR SALE", "LEGAL INVESTMENTS AND
ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS", "CONTINUING
DISCLOSURE OF INFORMATION" (exclusive of the information under the
subcaption "Compliance with Prior Undertakings"), and "APPENDIX D - FORM
OF BOND COUNSEL OPINION" in the Official Statement, and such firm is of
the opinion that such descriptions present a fair and accurate summary of the
provisions of the laws and instruments therein described and, with respect to the
Securities, such information conforms to the Ordinance; and (c) the Securities are
exempt from registration pursuant to the Securities Act of 1933, as amended, and
the Ordinance is exempt from qualification as an indenture pursuant to the Trust
Indenture Act of 1939, as amended;
(8) The opinion of McCall, Parkhurst & Horton L.L.P., Underwriters'
Counsel, addressed to the Underwriters, and dated the date of Closing in
substantially the form attached hereto as Exhibit B;
(9) A certificate, dated the date of Closing, signed by an appropriate
officer of the City, to the effect that: (i) the representations and warranties of the
City contained herein are true and correct in all material respects on and as of the
date of Closing as if made on the date of Closing; (ii) except to the extent
disclosed in the Official Statement, no litigation is pending or, to the knowledge
of such person, threatened in any court to restrain or enjoin the issuance or
delivery of the Securities, or the collection or application of Pledged Revenues
pledged or to be pledged to pay the principal of and interest on the Securities, or
the pledge thereof, or in any way contesting or affecting the validity of the
9
Securities or the City Documents, or contesting the powers of the City or the
authorization of the Securities or the City Documents, or contesting in any way
the accuracy, completeness or fairness of the Official Statement (but in lieu of or
in conjunction with such certificate, the Underwriters may, in their sole discretion,
accept certificates or opinions of the City Attorney that, in the opinion thereof, the
issues raised in any such pending or threatened litigation are without substance or
that the contentions of all plaintiffs therein are without merit); (iii) to the best of
his or her knowledge, no event affecting the City has occurred since the date of
the Official Statement that should be disclosed in the Official Statement for the
purpose for which it is to be used or that it is necessary to disclose therein in order
to make the statements and information therein not misleading in any material
respect; and (iv) that there has not been any material and adverse change in the
affairs or financial condition of the City since September 30, 2015, the latest date
as to which audited financial information is available;
(10) The opinion of the City Attorney addressed to the Underwriters
and dated the date of Closing, substantially in the form and substance of Exhibit C
hereto;
(11) A certificate, dated the date of the Closing, of an appropriate
officer of the City to the effect that, on the basis of the facts, estimates and
circumstances in effect on the date of delivery of the Securities, it is not expected
that the proceeds of the Securities will be used in a manner that would cause such
Securities to be "arbitrage bonds" within the meaning of section 148 of the
Internal Revenue Code of 1986, as amended;
(12) Evidence of the rating on the Securities, which shall be "" by
Moody's Investors Service, Inc. ("Moody's"), "_" by Standard and Poor's
Corporation, a Standard & Poor's Financial Services LLC business ("S&P"), and
"_" by Fitch Ratings ("Fitch"), shall be delivered in a form acceptable to the
Underwriters; and
(13) Such additional legal opinions, certificates, instruments and other
documents as Bond Counsel or the Underwriters may reasonably request to
evidence the truth, accuracy and completeness, as of the date hereof and as of the
date of Closing, of the City's representations and warranties contained herein and
of the statements and information contained in the Official Statement and the due
performance and satisfaction by the City at or prior to the date of Closing of all
agreements then to be performed and all conditions then to be satisfied by the
City.
All of the opinions, letters, certificates, instruments and other documents mentioned
above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the
provisions hereof if, but only if, they are satisfactory to the Underwriters.
H
If the City shall be unable to satisfy the conditions to the obligations of the Underwriters
to purchase, to accept delivery of and to pay for the Securities as set forth in this Purchase
Contract, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay
for the Securities shall be terminated for any reason permitted by this Purchase Contract, this
Purchase Contract shall terminate, the security deposit referred to in Section 4 of this Purchase
Contract shall be returned to the Representative and neither the Underwriters nor the City shall
be under further obligation hereunder, except that the respective obligations of the City and the
Underwriters set forth in Sections 11 and 13 hereof shall continue in full force and effect.
9. Termination. The Underwriters may terminate their obligation to purchase at
any time before the Closing if any of the following should occur:
(a) An event shall occur which makes untrue or incorrect in any material
respect, as of the time of such event, any statement contained in the Official Statement or
which is not reflected in the Official Statement but should be reflected therein in order to
make the statements contained therein not misleading in any material respect and in
either such event the City refuses to permit the Official Statement to be supplemented to
supply such information or the effect of which is, in the judgment of the Underwriters, to
materially adversely affect the market price or marketability of the Securities or the
ability to enforce contracts for the sale, at the contemplated offering prices, by the
Underwriters of the Securities.
(b) (i) Legislation shall have been enacted by the Congress of the United
States, or recommended to the Congress for passage by the President of the United States
or favorably reported for passage to either House of the Congress by any Committee of
such House; or (ii) a decision shall have been rendered by a court established under
Article III of the Constitution of the United States or by the United States Tax Court; or
(iii) an order, ruling or regulation shall have been issued or proposed by or on behalf of
the Treasury Department of the United States or the Internal Revenue Service or any
other agency of the United States; or (iv) a release or official statement shall have been
issued by the President of the United States or by the Treasury Department of the United
States or by the Internal Revenue Service, the effect of which, in any such case described
in clause (i), (ii), (iii), or (iv), would be to impose, directly or indirectly, federal income
taxation upon interest received on obligations of the general character of the Securities or
upon income of the general character to be derived by the City, other than any imposition
of federal income taxes upon interest received on obligations of the general character as
the Securities on the date hereof and other than as disclosed in the Official Statement, in
such a manner as in the judgment of the Underwriters would materially adversely affect
the marketability or the sale, at the contemplated offering prices, by the Underwriters of
the Securities.
(c) (i) Legislation shall have been introduced in or enacted (or resolution passed)
by the Congress of the United States; (ii) an order, decree, ruling, regulation (final,
temporary, or proposed), press release, or other form of notice issued or made by or on
behalf of the United States Securities and Exchange Commission (the "SEC"); or (iii) an
order or injunction issued by any court of competent jurisdiction; the effect of which, in
any such case described in clause (i), (ii), or (iii) would be to require registration of any
security under the Securities Act, or qualification of any document under the Trust
Indenture Act, in connection with the public offering of the Securities, or that the
issuance, offering, or sale of obligations of the general character of the Securities,
including any or all underlying arrangements, as contemplated by this Purchase Contract
or by the Official Statement or otherwise, is or would be in violation of the federal
securities laws as amended and then in effect, or any proceeding for that purpose shall
have been initiated or threatened in any such court or by any such authority.
(d) (i) The Constitution of the State of Texas shall be amended or an
amendment shall be proposed, or (ii) legislation shall be enacted, or (iii) a decision shall
have been rendered as to matters of Texas law, or (iv) any order, ruling or regulation shall
have been issued or proposed by or on behalf of the State of Texas by an official, agency
or department thereof, affecting the tax status of the City, its property or income, its
securities (including the Securities) or the interest thereon, that in the judgment of the
Underwriters would materially adversely affect the market price or marketability of the
Securities or the ability to enforce contracts for the sale, at the contemplated offering
prices, by the Underwriters of the Securities.
(e) There shall have occurred any (i) outbreak of hostilities (including,
without limitation, a material escalation of hostilities that existed prior to the date hereof
or a material act of terrorism) or (ii) material other national or international calamity or
crisis, or any material adverse change in the financial, political or economic conditions
affecting the United States, the effect of which on U.S. financial markets would, in the
reasonable judgment of the Underwriters, materially adversely affect the market price or
marketability of the Securities or the ability to enforce contracts for the sale, at the
contemplated offering prices, by the Underwriters of the Securities.
(f) There shall have occurred a general suspension of trading, minimum or
maximum prices for trading shall have been fixed and be in force or maximum ranges or
prices for securities shall have been required on the New York Stock Exchange or other
national stock exchange whether by virtue of a determination by that Exchange or by
order of the SEC or any other governmental agency having jurisdiction or any national
securities exchange shall have: (i) imposed additional material restrictions not in force as
of the date hereof with respect to trading in securities generally, or to the Securities or
similar obligations; or (ii) materially increased restrictions now in force with respect to
the extension of credit by or the charge to the net capital requirements of underwriters or
broker-dealers such as to, in the judgment of the Underwriters, materially adversely affect
the market price or marketability of the Securities or the ability to enforce contracts for
the sale, at the contemplated offering prices, by the Underwriters of the Securities.
12
(g) An event described in Section 60) hereof occurs that, in the reasonable
judgment of the Underwriters, requires a supplement or amendment to the Official
Statement that is deemed by them, in their discretion, to materially adversely affect the
market price or marketability of the Securities or the ability to enforce contracts for the
sale, at the contemplated offering prices, by the Underwriters of the Securities.
(h) A general banking moratorium shall have been declared by authorities of
the United States, the State of New York or the State of Texas, or a major financial crisis
or a material disruption in commercial banking or securities settlement or clearances
services shall have occurred such as to, in the judgment of the Underwriters materially
adversely affect the market price or marketability of the Securities or the ability to
enforce contracts for the sale, at the contemplated offering prices, by the Underwriters of
the Securities.
(i) (i) A lowering of the ratings (without regard to credit enhancement)
initially assigned to the Securities by Moody's, S&P and Fitch, respectively, set forth in
Section 8(e)(12) hereof or on any debt securities issued by the City and secured in a like
manner as the Securities shall occur prior to the Closing, or (ii) there shall have been any
official declaration as to a possible downgrading (such as being placed on "credit watch"
or "negative outlook" or any similar qualification) of any rating by Moody's, S&P or
Fitch on any debt securities issued by the City and secured in a like manner as the
Securities, including the Securities.
10. Interested Party Disclosure Forms. Each of the Underwriters has delivered to
the City notarized disclosure forms and certification of filing generated by the Texas Ethics
Commission's (the "TEC") electronic portal (the "Disclosure Forms"), signed by an authorized
agent of each respective entity, prior to the execution of this Purchase Contract by the City and
the Representative. The City hereby confirms receipt of the Disclosure Forms from each
Underwriter and agrees to acknowledge such forms with the TEC through its electronic filing
application within thirty (30) days of the date of this Purchase Contract.
11. Expenses. (a) The City shall pay all expenses incident to the issuance of the
Securities, including but not limited to: (i) the cost of the preparation, printing and distribution of
the Preliminary Official Statement and the Official Statement; (ii) the cost of the preparation and
printing of the Securities; (iii) the fees and expenses of Bond Counsel to the City; (iv) the fees
and disbursements of the City's accountants, advisors, and of any other experts or consultants
retained by the City; (v) the fees for the bond ratings and any travel or other expenses incurred
incident thereto; and (vi) the premium, if any, for municipal bond insurance policy pertaining to
the Securities.
(b) The Underwriters shall pay from the expense component of the Underwriters'
discount (i) all advertising expenses in connection with the offering of the Securities; (ii) the cost
of the preparation and printing of all the underwriting documents; and (iii) the fee of McCall,
13
Parkhurst & Horton L.L.P., Underwriters' Counsel, for such firm's opinion required by Section
8(e)(8) hereof.
(c) The City acknowledges that the Underwriters are required to pay fees to the
Municipal Advisory Council of Texas (the "MAC"), a non-profit corporation whose purpose is
to collect, maintain and distribute information relating to issuing entities of municipal securities,
in connection with the offering of the Securities. The City acknowledges that the Underwriters
will pay from the Underwriters' expense allocation of the underwriting discount the applicable
per bond assessment charged by the MAC. The City acknowledges that it has had an
opportunity, in consultation with such advisors as it may deem appropriate, if any, to evaluate
and consider such fees and expenses.
12. Notices. Any notice or other communication to be given to the City under this
Purchase Contract may be given by delivering the same in writing at the address for the City set
forth above, and any notice or other communication to be given to the Underwriters under this
Purchase Contract may be given by delivering the same in writing to CWGROUP GLOBAL
MARKETS INC., 300 Crescent Court, Suite 940, Dallas, Texas 75201, Attention: Mr. Mario
Carrasco.
13. Parties in Interest. This Purchase Contract is made solely for the benefit of the
City and the Underwriters (including the successors or assigns of any Underwriter) and no other
person shall acquire or have any right under this contract. The City's representations, warranties
and agreements contained in this Purchase Contract that exist as of the Closing, and without
regard to any change in fact or circumstance occurring subsequent to the Closing, shall remain
operative and in full force and effect, regardless of (i) any investigations made by or on behalf of
the Underwriters, and (ii) delivery of any payment for the Securities hereunder; and the City's
representations and warranties contained in Section 6 of this Purchase Contract shall remain
operative and in full force and effect, regardless of any termination of this Purchase Contract.
14. Status of the Underwriters. The City acknowledges and agrees that (i) the
purchase and sale of the Securities pursuant to this Purchase Contract is an arms' length
commercial transaction between the City and the Underwriters, (ii) the Underwriters have
financial and other interests that differ from those of the City, (iii) the Underwriters are acting solely
as principals and are not acting as municipal advisors, financial advisors or fiduciaries to the City,
(iv) the Underwriters have not assumed any advisory or fiduciary responsibility to the City with
respect to the transaction contemplated hereby and the discussions, undertakings, and procedures
leading thereto irrespective of whether the Underwriters have provided or are currently providing
other services to the City on other matters and (v) the only obligations the Underwriters have to the
City with respect to the transaction contemplated hereby expressly are set forth in this Agreement.
The Underwriters have provided to the City prior disclosures under MSRB Rule G-17, which the
City hereby acknowledges the receipt of prior to the adoption of the Ordinance.
15. Choice of Law. This Purchase Contract shall be governed by and construed in
accordance with the laws of the State of Texas.
14
16. Execution in Counterparts. This Purchase Contract may be executed in any
number of counterparts, all of which taken together shall constitute one and the same instrument,
and any of the parties hereto may execute this Purchase Contract by signing any such
counterpart. This Agreement may be delivered by the exchange of signed signature pages by
facsimile transmission or by electronic mail with a copy in portable document format or other
replicating image attached, and any printed or copied version of any signature page so delivered
shall have the same force and effect as an originally signed version of such signature page.
17. Section Headings. Section headings have been inserted in this Purchase Contract
as a matter of convenience of reference only, and it is agreed that such section headings are not a
part of this Purchase Contract and will not be used in the interpretation of any provisions of this
Purchase Contract.
18. Severability. If any provision of this Purchase Contract 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 circumstances, or of rendering any other provision inoperative or unenforceable to
any extent whatever.
[Execution Page Follows]
15
If you agree with the foregoing, please sign the enclosed counterpart of this Purchase
Contract and return it to the Representative. This Purchase Contract shall become a binding
agreement between you and the Underwriters when at least the counterpart of this Purchase
Contract shall have been signed by or on behalf of each of the parties hereto.
ACCEPTED at [
By: _'6" - -.' C' & Q rt
Authorized Officer
City of Lubbock, Texas
Very truly yours,
Citigroup Global Markets Inc.
George K. Baum & Company
Hutchinson Shockey Erley & Co.
Wells Fargo Bank, N.A.
By: Citigroup Global Markets Inc.
Representative
By:
Name:
Title:
_ day of , 2016.
[Signature Page to the Series 2016 LP&L Bond Purchase Contract]
16
EXHIBIT A
Schedule of Maturities, Interest Rates, Yields and Redemption Provisions
Maturity (4/15)
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
$
City of Lubbock, Texas
Electric Light and Power System
Revenue Bonds, Series 2016
Principal Amount ($) Interest Rate (%) Yield (%)(a)
(a) Yield on maturities on and after 2027 is shown to first call date, April 15, 2026.
Optional Redemption. The City reserves the right, at its option, to redeem Bonds having stated
maturities on and after April 15, 2027, in whole or in part in principal amounts of $5,000 or any integral
multiple thereof, on April 15, 2026, or on any date thereafter, at par plus accrued interest to the date of
redemption.
No Text
EXHIBIT B
Proposed Form of Underwriters' Counsel Opinion of
McCall, Parkhurst & Horton L.L.P.
April _, 2016
Citigroup Global Markets Inc.
George K. Baum & Company
Hutchinson Shockey Erley & Co.
Wells Fargo Bank, N.A.
c/o Citigroup Global Markets Inc.
300 Crescent Court, Suite 940
Dallas, Texas 75201
Re: S City of Lubbock, Texas Electric Light and Power System
Revenue Bonds, Series 2016
Ladies and Gentlemen:
We have acted as counsel for you as the underwriters of the securities described above
(the "Securities"), issued under and pursuant to an ordinance (the "Ordinance") of the City of
Lubbock, Texas (the "Issuer"), authorizing the issuance of the Securities, which Securities you
are purchasing pursuant to a Purchase Contract, dated April _, 2016. All capitalized undefined
terms used herein shall have the meaning set forth in the Purchase Contract.
In connection with this opinion letter, we have considered such matters of law and of
fact, and have relied upon such certificates and other information furnished to us, as we have
deemed appropriate as a basis for our opinion set forth below. We are not expressing any
opinion or views herein on the authorization, issuance, delivery, validity of the Securities and we
have assumed, but not independently verified, that the signatures on all documents and Securities
that we have examined are genuine.
Based on and subject to the foregoing, we are of the opinion that, under existing laws, the
Securities are not subject to the registration requirements of the Securities Act of 1933, as
amended, and the Ordinance is not required to be qualified under the Trust Indenture Act of
1939, as amended.
Because the primary purpose of our professional engagement as your counsel was not to
establish factual matters, and because of the wholly or partially non -legal character of many of
the determinations involved in the preparation of the Official Statement dated April 30, 2016 (the
"Official Statement") and because the information in the Official Statement under the headings
"BOOK -ENTRY -ONLY SYSTEM", "TAX MATTERS", "OTHER INFORMATION -
Continuing Disclosure of Information — Compliance with Prior Undertakings" and Appendices
A, B and C thereto were prepared by others who have been engaged to review or provide such
information, we are not passing on and do not assume any responsibility for, except as set forth
in the last sentence of this paragraph, the accuracy, completeness or fairness of the statements
contained in the Official Statement (including any appendices, schedules and exhibits thereto)
and we make no representation that we have independently verified the accuracy, completeness
or fairness of such statements. In the course of our review of the Official Statement, we had
discussions with representatives of the City regarding the contents of the Official Statement. In
the course of our participation in the preparation of the Official Statement as your counsel, we
had discussions with representatives of the Issuer, including its City Attorney, Bond Counsel and
Financial Advisor, regarding the contents of the Official Statement. In the course of such
activities, no facts came to our attention that would lead us to believe that the Official Statement
(except for the financial statements and other financial and statistical data contained therein, the
information set forth under the headings "BOOK -ENTRY -ONLY SYSTEM", "TAX
MATTERS", "OTHER INFORMATION - Continuing Disclosure of Information — Compliance
with Prior Undertakings" and Appendices A, B and C thereto, as to which we express no
opinion), as of its date contained any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
This opinion letter may be relied upon by only you and only in connection with the
transaction to which reference is made above and may not be used or relied upon by any other
person for any purposes whatsoever without our prior written consent.
Respectfully,
EXHIBIT C
Opinion of the City Attorney
April _, 2016
Citigroup Global Markets Inc.
Barclays Capital Inc.
c/o Citigroup Global Markets Inc.
300 Crescent Court, Suite 940
Dallas, Texas 75201
Re: $ City of Lubbock, Texas Electric Light and Power System
Revenue Bonds, Series 2016
Ladies and Gentlemen:
I am the City Attorney for the City of Lubbock, Texas (the "City") at the time of the
issuance of the above referenced securities (the "Securities"), pursuant to the provisions of an
ordinance (the "Ordinance") duly adopted by the City Council of the City on March 24, 2016.
Capitalized terms not otherwise defined in this opinion have the meanings assigned in the
Purchase Contract between the City and the addressees on April _, 2016 (the "Purchase
Contract").
In my capacity as City Attorney to the City, I have reviewed such agreements,
documents, certificates, opinions, letters, and other papers as I have deemed necessary or
appropriate in rendering the opinions set forth below.
In making my review, I have assumed the authenticity of all documents and agreements
submitted to me as originals, conformity to the originals of all documents and agreements
submitted to me as certified or photostatic copies, the authenticity of the originals of such latter
documents and agreements, and the accuracy of the statement contained in such documents.
Based upon the foregoing, and subject to the qualifications and exceptions hereinafter set
forth, I am of the opinion that under the applicable laws of the United States of America and the
State of Texas in force and effect on the date hereof:
1. Based on reasonable inquiry made of the responsible City employees and public officials,
the City is not, to the best of my knowledge, in breach of or in default under any
applicable law or administrative regulation of the State of Texas or the United States, or
any applicable judgment or decree or any trust agreement, loan agreement, bond, note,
resolution, ordinance, agreement or other instrument to which the City is party or is
otherwise subject and, to the best of my knowledge after due inquiry, no event has
occurred and is continuing that, with the passage of time or the giving of notice, or both,
would constitute such a default by the City under any of the foregoing; and the execution
and delivery of the Purchase Contract, the Securities and the adoption of the Ordinance
and compliance with the provisions of each of such agreements or instruments does not
constitute a breach of or default under any applicable law or administrative regulation of
the State of Texas or the United States or any applicable judgment or decree or, to the
best of my knowledge, any trust agreement, loan agreement, bond, note, resolution,
ordinance, agreement or other instrument to which the City is a party or is otherwise
subject; and
2. Except as disclosed in the Official Statement, no litigation is pending, or, to my
knowledge, threatened, in any court in any way (a) challenging the titles of the Mayor or
any of the other members of the City Council to their respective offices; (b) seeking to
restrain or enjoin the issuance, sale or delivery of any of the Securities, or the collection
or application of the Pledged Revenues pledged or to be pledged to pay the principal of
and interest on the Securities; (c) contesting or affecting the validity or enforceability of
the Securities, the Ordinance, the Pricing Certificate or the Purchase Contract; (d)
contesting the powers of the City or any authority for the issuance of the Securities, or the
adoption of the Ordinance; or (e) that would have a material and adverse effect on the
financial condition of the City.
3. I have reviewed the information in the Official Statement contained under the caption
"LITIGATION" and such information in all material respects accurately and fairly
summarizes the matters described therein.
This opinion is furnished solely for your benefit and may be relied upon only by the
addresses hereof or anyone to whom specific permission is given in writing by me.
Very truly yours,
PAYING AGENT/REGISTRAR AGREEMENT
between
CITY OF LUBBOCK, TEXAS
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
Pertaining to
City of Lubbock, Texas
Electric Light and Power System Revenue Bonds
Series 2016
Dated as of March 24, 2016
HOU:3649806.1
TABLE OF CONTENTS
Page
ARTICLE I APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR.................1
Section1.01. Appointment......................................................................................................1
Section1.02. Compensation....................................................................................................1
ARTICLEII DEFINITIONS...........................................................................................................2
Section2.01. Definitions..........................................................................................................2
ARTICLEIII PAYING AGENT.....................................................................................................3
Section 3.01. Duties of Paying Agent......................................................................................3
Section 3.02. Payment Dates...................................................................................................4
Section 3.03. Merger, Conversion, Consolidation, or Succession...........................................4
ARTICLEIV REGISTRAR............................................................................................................4
Section 4.01.
Transfer and Exchange......................................................................................4
Section4.02.
The Bonds..........................................................................................................4
Section 4.03.
Form of Register................................................................................................5
Section 4.04.
List of Owners....................................................................................................5
Section 4.05.
Cancellation of Bonds........................................................................................5
Section 4.06.
Mutilated, Destroyed, Lost, or Stolen Bonds.....................................................5
Section 4.07.
Transaction Information to Issuer......................................................................6
ARTICLEV THE BANK................................................................................................................6
Section5.01.
Duties of Bank...................................................................................................6
Section 5.02.
Reliance on Documents, Etc..............................................................................7
Section 5.03.
Recitals of Issuer................................................................................................7
Section5.04.
May Hold Bonds................................................................................................8
Section 5.05.
Money Held by Bank.........................................................................................8
Section5.06.
Indemnification..................................................................................................8
Section5.07.
Interpleader........................................................................................................8
ARTICLE VI MISCELLANEOUS PROVISIONS........................................................................9
Section6.01.
Amendment........................................................................................................9
Section6.02.
Assignment........................................................................................................9
Section6.03.
Notices...............................................................................................................9
Section 6.04.
Effect of Headings.............................................................................................9
Section 6.05.
Successors and Assigns......................................................................................9
Section6.06.
Separability........................................................................................................9
Section 6.07.
Benefits of Agreement.......................................................................................9
Section 6.08.
Entire Agreement...............................................................................................9
Section6.09.
Counterparts.....................................................................................................10
Section6.10.
Termination......................................................................................................10
Section6.11.
Governing Law................................................................................................10
(i)
HOU:3649806.1
PAYING AGENT/REGISTRAR AGREEMENT
THIS PAYING AGENT/REGISTRAR AGREEMENT (the or this "Agreement"), dated
as of March 24, 2016, is by and between CITY OF LUBBOCK, TEXAS (the "Issuer"), and The
Bank of New York Mellon Trust Company, N.A. (the "Bank"), a national banking association.
WHEREAS, the Issuer has duly authorized and provided for the issuance of its Electric
Light and Power System Revenue Bonds, Series 2016 (the "Bonds"), dated April 15, 2016, to be
issued as registered securities without coupons; and
WHEREAS, all things necessary to make the Bonds the valid obligations of the Issuer, in
accordance with their terms, will be taken upon the issuance and delivery thereof, and
WHEREAS, the Issuer is desirous that the Bank act as the Paying Agent of the Issuer in
paying the principal, redemption premium, if any, and interest on the Bonds, in accordance with
the terms thereof, and that the Bank act as Registrar for the Bonds; and
WHEREAS, the Issuer has duly authorized the execution and delivery of this Agreement,
and all things necessary to make this Agreement the valid agreement of the Issuer, in accordance
with its terms, have been done;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I
APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR
Section 1.01. Appointment.
(a) The Issuer hereby appoints the Bank to act as Paying Agent with respect to the
Bonds in paying to the Owners of the Bonds the principal, redemption premium, if any, and
interest on all or any of the Bonds.
(b) The Issuer hereby appoints the Bank as Registrar with respect to the Bonds.
(c) The Bank hereby accepts its appointment, and agrees to act as, the Paying Agent
and Registrar.
Section 1.02. Compensation.
(a) As compensation for the Bank's services as Paying Agent/Registrar, the Issuer
hereby agrees to pay the Bank the fees and amounts set forth in Annex A attached hereto for the
first year of this Agreement, or such part thereof as this Agreement shall be in effect, and
thereafter while this Agreement is in effect, the fees and amounts set forth in the Bank's current
fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall
be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer,
and shall be effective upon the first day of the following Fiscal Year.
HOU:3649806. t
(b) In addition, the Issuer agrees to reimburse the Bank upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Bank in accordance
with any of the provisions hereof, including the reasonable compensation and the expenses and
disbursements of its agents and counsel.
ARTICLE II
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, the following terms have the
following meanings when used in this Agreement:
"Bank" means The Bank of New York Mellon Trust Company, N.A.
"Bank Office" means the Bank's office in Dallas, Texas. The Bank will notify the Issuer
in writing of any change in location of the Bank Office.
"Bond" or "Bonds" means, collectively, any or all of the Issuer's Electric Light and
Power System Revenue Bonds, Series 2016, dated April 15, 2016.
"Bond Ordinance" means the ordinance of the City Council of the Issuer authorizing the
issuance and delivery of the Bonds.
"Business Day" means any day which is not a Saturday, Sunday or legal holiday or day
on which banking institutions in New York, New York are required or authorized by law or
executive order to close.
"Financial Advisor" means RBC Capital Markets, LLC.
"Fiscal Year" means the 12 month period ending September 30th of each year.
"Issuer" means the City of Lubbock, Texas.
"Issuer Request" and "Issuer Order" means a written request or order signed in the name
of the Issuer by the Mayor of the Issuer, or any other authorized representative of the Issuer and
delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized by applicable
law to be closed.
"Owner" means the Person in whose name a Bond is registered in the Register.
"Paying Agent" means the Bank when it is performing the functions associated with the
terms in this Agreement.
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HOU:3649806.1
"Person" means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization, or government or any agency or political
subdivision of a government.
"Predecessor Bonds" of any particular Bond means every previous Bond evidencing all
or a portion of the same obligation as that evidenced by such particular Bond (and, for the
purposes of this definition, any Bond registered and delivered under Section 4.06 in lieu of a
mutilated, lost, destroyed or stolen Bond shall be deemed to evidence the same obligation as the
mutilated, lost, destroyed or stolen Bond).
"Record Date" means the last Business Day of the month next preceding an interest
payment date established by the Bond Ordinance.
"Register" means a register in which the Issuer shall provide for the registration and
transfer of Bonds.
"Responsible Officer" when used with respect to the Bank means the Chairman or Vice
Chairman of the Board of Directors, the Chairman or Vice Chairman of the Executive
Committee of the Board of Directors, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier,
any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily
performing functions similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to whom such matter
is referred because of his knowledge of and familiarity with the particular subject.
"Stated Maturity" means the date or dates specified in the Bond Ordinance as the fixed
date on which the principal of the Bonds is due and payable or the date fixed in accordance with
the terms of the Bond Ordinance for redemption of the Bonds, or any portion thereof, prior to the
fixed maturity date.
ARTICLE III
PAYING AGENT
Section 3.01. Duties of Paving Agent.
(a) The Bank, as Paying Agent and on behalf of the Issuer, shall pay to the Owner, at
the Stated Maturity and upon the surrender of the Bond or Bonds so maturing at the Bank Office,
the principal amount of the Bond or Bonds then maturing, and redemption premium, if any,
provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to
make such payment.
(b) The Bank, as Paying Agent and on behalf of the Issuer, shall pay interest when
due on the Bonds to each Owner of the Bonds (or their Predecessor Bonds) as shown in the
Register at the close of business on the Record Date, provided that the Bank shall have been
provided by or on behalf of the Issuer adequate funds to make such payments; such payments
shall be made by computing the amount of interest to be paid each Owner, preparing the checks,
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HOU:3649806.1
and mailing the checks on each interest payment date addressed to each Owner's address as it
appears in the Register on the Record Date.
Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal
of, redemption premium, if any, and interest on the Bonds at the dates specified in the Bond
Ordinance.
Section 3.03. Merger, Conversion, Consolidation, or Succession. Any corporation into
which the Paying Agent may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion, or consolidation to which the Paying
Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate
trust business of the Paying Agent shall be the successor of the Paying Agent hereunder without
the execution or filing of any paper or any further act on the part of either of the parties hereto.
ARTICLE IV
IWIM" '
Section 4.01. Transfer and Exchanize.
(a) The Issuer shall keep the Register at the Bank Office, and subject to such
reasonable written regulations as the Issuer may prescribe, which regulations shall be furnished
to the Bank herewith or subsequent hereto by Issuer Order, the Issuer shall provide for the
registration and transfer of the Bonds. The Bank is hereby appointed "Registrar" for the purpose
of registering and transferring the Bonds as herein provided. The Bank agrees to maintain the
Register while it is Registrar. The Bank agrees to at all times maintain a copy of the Register at
its office located in the State of Texas.
(b) The Bank as Registrar hereby agrees that at any time while any Bond is
outstanding, the Owner may deliver such Bond to the Registrar for transfer or exchange,
accompanied by instructions from the Owner, or the duly authorized designee of the Owner,
designating the persons, the maturities, and the principal amounts to and in which such Bond is
to be transferred and the addresses of such persons; the Registrar shall thereupon, within not
more than three (3) business days, register and deliver such Bond or Bonds as provided in such
instructions. The provisions of the Bond Ordinance shall control the procedures for transfer or
exchange set forth herein to the extent such procedures are in conflict with the provisions of the
Bond Ordinance.
(c) Every Bond surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed in a
manner satisfactory to the Bank, duly executed by the Owner thereof or his attorney duly
authorized in writing.
(d) The Bank may request any supporting documentation it feels necessary to effect a
re -registration.
Section 4.02. The Bonds. The Issuer shall provide an adequate inventory of
unregistered Bonds to facilitate transfers. The Bank covenants that it will maintain the
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HOU:3649806.1
unregistered Bonds in safekeeping and will use reasonable care in maintaining such unregistered
Bonds in safekeeping, which shall be not less than the care it maintains for debt securities of
other governments or corporations for which it serves as registrar, or which it maintains for its
own securities.
Section 4.03. Form of Re ister.
(a) The Bank as Registrar will maintain the records of the Register in accordance
with the Bank's general practices and procedures in effect from time to time. The Bank shall not
be obligated to maintain such Register in any form other than a form which the Bank has
currently available and currently utilizes at the time.
(b) The Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Owners.
(a) The Bank will provide the Issuer at any time requested by the Issuer, upon
payment of the cost, if any, of reproduction, a copy of the information contained in the Register.
The Issuer may also inspect the information in the Register at any time the Bank is customarily
open for business, provided that reasonable time is allowed the Bank to provide an up-to-date
listing or to convert the information into written form.
(b) The Bank will not release or disclose the content of the Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a subpoena or court order or as otherwise required by law. Upon receipt of a
subpoena or court order the Bank will notify the Issuer so that the Issuer may contest the
subpoena or court order.
Section 4.05. Cancellation of Bonds. All Bonds surrendered for payment, redemption,
transfer, exchange, or replacement, if surrendered to the Bank, shall be promptly cancelled by it
and, if surrendered to the Issuer, shall be delivered to the Bank and, if not already cancelled,
shall be promptly cancelled by the Bank. The Issuer may at any time deliver to the Bank for
cancellation any Bonds previously certified or registered and delivered which the Issuer may
have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled
by the Bank. All cancelled Bonds held by the Bank shall be disposed of pursuant to the
Securities Exchange Act of 1934, as amended.
Section 4.06. Mutilated, Destroyed, Lost, or Stolen Bonds.
(a) Subject to the provisions of this Section 4.06, the Issuer hereby instructs the Bank
to deliver fully registered Bonds in exchange for or in lieu of mutilated, destroyed, lost, or stolen
Bonds as long as the same does not result in an over -issuance.
(b) If (i) any mutilated Bond is surrendered to the Bank, or the Issuer and the Bank
receives evidence to their satisfaction of the destruction, loss, or theft of any Bond, and (ii) there
is delivered to the Issuer and the Bank such security or indemnity as may be required by the
Bank to save and hold each of them harmless, then in the absence of notice to the Issuer or the
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HOU:3649806.1
Bank that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute, and
upon its request the Bank shall register and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost, or stolen Bond, a new Bond of the same stated maturity and of like
tenor and principal amount bearing a number not contemporaneously outstanding.
(c) Every new Bond issued pursuant to this Section in lieu of any mutilated,
destroyed, lost, or stolen Bond shall constitute a replacement of the prior obligation of the Issuer,
whether or not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of the Bond Ordinance equally and ratably with
all other outstanding Bonds.
(d) Upon the satisfaction of the Bank and the Issuer that a Bond has been mutilated,
destroyed, lost, or stolen, and upon receipt by the Bank and the Issuer of such indemnity or
security as they may require, the Bank shall cancel the Bond number on the Bond registered with
a notation in the Register that said Bond has been mutilated, destroyed, lost, or stolen; and a new
Bond shall be issued of the same series and of like tenor and principal amount bearing a number,
according to the Register, not contemporaneously outstanding.
(e) The Bank may charge the Owner the Bank's fees and expenses in connection with
issuing a new Bond in lieu of or exchange for a mutilated, destroyed, lost, or stolen Bond.
(f) The Issuer hereby accepts the Bank's current blanket bond for lost, stolen, or
destroyed Bonds and any future substitute blanket bond for lost, stolen, or destroyed Bonds that
the Bank may arrange, and agrees that the coverage under any such blanket bond is acceptable to
it and meets the Issuer's requirements as to security or indemnity. The Bank need not notify the
Issuer of any changes in the security or other company giving such bond or the terms of any such
bond, provided that the amount of such bond is not reduced below the amount of the bond on the
date of execution of this Agreement. The blanket bond then utilized by the Bank for lost, stolen,
or destroyed Bonds by the Bank is available for inspection by the Issuer on request.
Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable
time after receipt of written request from the Issuer, furnish the Issuer information as to the
Bonds it has paid pursuant to Section 3.01; Bonds it has delivered upon the transfer or exchange
of any Bonds pursuant to Section 4.01; and Bonds it has delivered in exchange for or in lieu of
mutilated, destroyed, lost, or stolen Bonds pursuant to Section 4.06 of this Agreement.
ARTICLE V
THE BANK
Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth
herein and in accordance with the Bond Ordinance and agrees to use reasonable care in the
performance thereof. The Bank hereby agrees to use the funds deposited with it for payment of
the principal of, redemption premium, if any, and interest on the Bonds to pay the Bonds as the
same shall become due and further agrees to establish and maintain all accounts and funds as
may be required for the Bank to function as Paying Agent.
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HOU:3649806.1
Section 5.02. Reliance on Documents, Etc.
(a) The Bank may conclusively rely, as to the truth of the statements and correctness
of the opinions expressed therein, on certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is
not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, certificate, note, security, or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or parties. Without limiting
the generality of the foregoing statement, the Bank need not examine the ownership of any
Bonds, but is protected in acting upon receipt of Bonds containing an endorsement or instruction
of transfer or power of transfer which appears on its face to be signed by the Owner or an
attorney-in-fact of the Owner. The Bank shall not be bound to make any investigation into the
facts or matters stated in an ordinance, resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, certificate, note, security, or other paper or
document supplied by Issuer.
(e) The Bank is also authorized to transfer funds relating to the closing and initial
delivery of the Bonds in the manner disclosed in the closing memorandum as prepared by the
Issuer's Financial Advisor or other agent. The Bank may act on a facsimile or e-mail
transmission of the closing memorandum acknowledged by the Financial Advisor or the Issuer
as the final closing memorandum. The Bank shall not be liable for any losses, costs or expenses
arising directly or indirectly from the Bank's reliance upon. and compliance with such
instructions.
(f) The Bank may consult with counsel, and the written advice of such counsel or any
opinion of counsel shall be full and complete authorization and protection with respect to any
action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(g) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer.
(a) The recitals contained herein and in the Bonds shall be taken as the statements of
the Issuer, and the Bank assumes no responsibility for their correctness.
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HOU:3649806.1
(b) The Bank shall in no event be liable to the Issuer, any Owner or Owners, or any
other Person for any amount due on any Bond except as otherwise expressly provided herein
with respect to the liability of the Bank for its duties under this Agreement.
Section 5.04. May Hold Bonds. The Bank, in its individual or any other capacity, may
become the Owner or pledgee of Bonds and may otherwise deal with the Issuer with the same
rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05. Money Held by Bank.
(a) Money held by the Bank hereunder need not be segregated from any other funds
provided appropriate accounts are maintained.
(b) The Bank shall be under no liability for interest on any money received by it
hereunder.
(c) Subject to the provisions of Title 6, Texas Property Code, as amended, any money
deposited with the Bank for the payment of the principal, redemption premium, if any, or interest
on any Bond and remaining unclaimed for three years after final maturity of the Bond has
become due and payable will be paid by the Bank to the Issuer, and the Owner of such Bond
shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank with
respect to such monies shall thereupon cease.
(d) The Bank will comply with the reporting requirements of Chapter 74 of the Texas
Property Code, as amended.
(e) The Bank shall deposit any moneys received from the Issuer into a trust account
to be held in a paying agent capacity for the payment of the Bonds, with such moneys in the
account that exceed the deposit insurance, available to the Issuer, provided by the Federal
Deposit Insurance Corporation to be fully collateralized with securities or obligations that are
eligible under the laws of the State of Texas and to the extent practicable under the laws of the
United States of America to secure and be pledged as collateral for trust accounts until the
principal and interest on the Bonds have been presented for payment and paid to the owner
thereof. Payments made from such trust account shall be made by check drawn on such trust
account unless the owner of such Bonds shall, at its own expense and risk, request such other
medium of payment.
Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank, its officers, directors, employees, and agents for, and hold them harmless
against, any loss, liability, or expense incurred without negligence or bad faith on their part
arising out of or in connection with its acceptance or administration of the Bank's duties
hereunder, and under Article V of the Bond Ordinance, including the cost and expense (including
its counsel fees) of defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties under this Agreement.
Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demands or controversy over its persons as well as funds on
deposit in a court of competent jurisdiction within the State of Texas; waive personal service of
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HOU:3649806.1
any process; and agree that service of process by certified or registered mail, return receipt
requested, to the address set forth in this Agreement shall constitute adequate service. The Issuer
and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of
competent jurisdiction within the State of Texas to determine the rights of any person claiming
any interest herein.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereof.
Section 6.02. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other.
Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown below:
(a) if to the Issuer: City of Lubbock, Texas
1625 13th Street
Lubbock, Texas 79457
Attention: Executive Director of Finance
if to the Bank: The Bank of New York Mellon Trust Company, N.A.
2001 Bryan Street, 11 `" Floor
Dallas, Texas 75201
Section 6.04. Effect of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 6.05. Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
Section 6.06. SeparabilitX. If any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 6.07. Benefits of Agreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any legal
or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement. This Agreement and the Bond Ordinance constitute
the entire agreement between the parties hereto relative to the Bank acting as Paying
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HOU:3649806.1
Agent/Registrar, and if any conflict exists between this Agreement and the Bond Ordinance, the
Bond Ordinance shall govern.
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one and
the same Agreement.
Section 6.10. Termination.
(a) This Agreement will terminate on the date of final payment by the Bank issuing
its checks for the final payment of principal, redemption premium, if any, and interest of the
Bonds.
(b) This Agreement may be earlier terminated upon sixty (60) days written notice by
either party; provided, that, no termination shall be effective until a successor has been appointed
by the Issuer and has accepted the duties imposed by this Agreement. A resigning Paying
Agent/Registrar may petition any court of competent jurisdiction for the appointment of a
successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying
Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixty (60)
days after the giving of notice of resignation.
(c) The provisions of Section 1.02 and of Article Five shall survive and remain in full
force and effect following the termination of this Agreement.
Section 6.11. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
[Signature Page to Follow]
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HOU:3649806.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first written above.
CITY OF LUBBOCK, TEXAS
By:
Glen el(obertCsldn, Mayor
ATTEST:
5<
Reb ca Garza, City Secret y
[Signature page for Paying Agent/Registrar Agreement for Electric Light and Power System Bonds]
HOU 3649806 l
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
By:
Title:
[Signature page for Paying Agent/Registrar Agreement for Electric Light and Power System Bonds]
HOU:3649806.1
FEWI a *047. i
SCHEDULE OF FEES FOR SERVICE AS PAYING AGENT/REGISTRAR
HOU:3649806.1
GENERAL CERTIFICATE
We, the undersigned, Mayor, City Manager and City Secretary, respectively, of the City
of Lubbock, Texas (the "City"), do hereby certify the following information:
1. This certificate relates to the City of Lubbock, Texas, Electric Light and Power
System Revenue Bonds, Series 2016 (the "Bonds"), dated April 15, 2016. Capitalized terms
used herein and not otherwise defined shall have the meaning assigned thereto in the Ordinance
(the "Ordinance"), adopted by the City Council of the City, authorizing the issuance of the
Bonds.
2. The City of Lubbock, Texas, is a duly incorporated Home Rule City with a
population greater than 50,000, and is operating and existing under the Constitution and laws of
the State of Texas and the duly adopted Home Rule Charter of the City. The Home Rule Charter
was last amended at an election held in the City on November 2, 2004.
3. The following are duly qualified and acting, elected or appointed officials of the
City of Lubbock, Texas:
Glen C. Robertson, Mayor Victor Hernandez )
Jim Gerlt, Mayor Pro Tem Floyd Price ) Members of
Jeff Griffith ) the Council
Karen Gibson )
Latrelle Joy )
James Loomis, City Manager
Linda Cuellar, Acting Executive Director of Finance
Rebecca Garza, City Secretary
4. The Net Revenues of the System are not pledged or encumbered to the payment
of any debt or obligation of the City or the System except the Bonds, the Outstanding Previously
Issued Bonds (consisting of the City's Electric Light and Power System Revenue Bonds, Series
2010, Electric Light and Power System Revenue Refunding and Improvement Bonds, Series
2013, Electric Light and Power System Revenue Bonds, Series 2014 and Electric Light and
Power System Revenue Bonds, Series 2015).
5. The debt service requirements for the Bonds and the Previously Issued Bonds are
set forth under "Table 7 - Revenue Bond Debt Service Requirements" included in
"APPENDIX A - FINANCIAL INFORMATION REGARDING THE SYSTEM" to the City's
Official Statement prepared in connection with the issuance of the Bonds (the "Official
Statement"), and such table is incorporated herein by reference and is true and correct as of the
date hereof.
6. The rates charged by the System for services provided are set forth under
"Table 11 - Monthly Electric Rates" included in "APPENDIX A - FINANCIAL INFORMATION
REGARDING THE SYSTEM" to the Official Statement, and such table is incorporated herein
by reference and is true and correct as of the date hereof.
HOU:3649808.1
7. The revenues and expenses of the System are set forth under "Table 8 -
Condensed Statement of Operations" included in "APPENDIX A - FINANCIAL
INFORMATION REGARDING THE SYSTEM" to the Official Statement, and such table is
incorporated herein by reference and is true and correct as of the date hereof.
8. The City's Executive Director of Finance has assumed the duties of Chief
Financial Officer.
9. No litigation of any nature has been filed or is now pending or, to our knowledge,
threatened in any court to restrain the issuance or delivery of said Bonds, the collection of Net
Revenues to pay the principal of and interest on the Bonds or the pledge thereof or otherwise
affecting the provisions made for their payment or security, or in any manner questioning the
proceedings or authority concerning the issuance of said Bonds.
10. Neither the corporate existence nor the boundaries of the City, nor the title of its
present officers to their respective offices is being contested, and no authority or proceedings for
the issuance of said proposed Bonds have been repealed, revoked or rescinded.
11. The City is not in default in connection with any of the covenants, conditions or
obligations contained in the ordinance authorizing the Outstanding Previously Issued Bonds and
all interest, sinking and reserve funds for such bonds have been fully maintained in accordance
with the provisions of said ordinances.
12. The descriptions and statements of or pertaining to the City contained in the
Official Statement, and any addenda, supplement or amendment with respect to such descriptions
or statements thereto, on the date of such Official Statement, on the date of sale of the Bonds and
on the date of the delivery, were and are true and correct in all material respects.
13. Insofar as the City and its affairs, including its financial affairs, are concerned,
such Official Statement did not and does not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
14. Insofar as the descriptions and statements, including financial data, of or
pertaining to entities, other than the City, and their activities contained in such Official Statement
are concerned, such statements and data have been obtained from sources which the City
believes to be reliable and the City has no reason to believe that they are untrue in any material
respect.
15. There has been no material adverse change in the financial condition and affairs
of the City since the date of the Official Statement.
16. With respect to the contracts executed in connection with the authorization and
issuance of the Bonds, all disclosure filings and acknowledgements required by Section
2252.908, Texas Government Code, and the rules of the Texas Ethics Commission related to said
provision, have been made.
2
HOU:3649808.1
17. The undersigned Mayor and City Secretary officially executed and signed the
Bonds, including the Initial Bond delivered to the Underwriters (the "Initial Bond"), by manual
signature or by causing facsimiles of our manual signatures to be imprinted or lithographed on
each of the Bonds, and we hereby adopt said facsimile signatures as our own, respectively, and
declare that said facsimile signatures constitute our signatures the same as if we had manually
signed each of the Bonds.
18. The Bonds, including the Initial Bond, are substantially in the form, and have
been duly executed and signed in the manner, prescribed in the Ordinance.
19. At the time the undersigned Mayor and City Secretary so executed and signed the
Bonds, we were, and at the time of executing this certificate we are, the duly chosen, qualified,
and acting officers indicated therein and authorized to execute the same.
20. We have caused the official seal of the City to be impressed, or printed, or copied
on each of the Bonds; and said seal on the Bonds has been duly adopted as, and is hereby
declared to be, the official seal of the City.
[EXECUTION PAGE FOLLOWS]
3
HOU:3649808. I
EXECUTED AND DELIVERED thi
MANUAL SIGNATURE
STATE OF TEXAS
COUNTY OF LUBBOCK
OFFICIAL TITLE
Mayor, City of Lubbock, Texas
Before me, the undersigned authority, on this day personally appeared Glen C.
Robertson, Mayor of the City of Lubbock, Texas, known to me to be such person who signed the
above and foregoing certificate in my presence and acknowledged to me that such person
executed the above and foregoing certificate for the purposes therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS
[SEAL]
Notary Pu ic,
In and for the Sta of T xas
Signature Page 1 for General Certificate
HOU:3649808.1
EXECUTED AND DELIVERED this
--4000-
STATE OF TEXAS §
COUNTY OF LUBBOCK §
OFFICIAL TITLE
City Manager, City of Lubbock, Texas
Before me, the undersigned authority, on this day personally appeared James Loomis,
City Manager of the City of Lubbock, Texas, known to me to be such person who signed the
above and foregoing certificate in my presence and acknowledged to me that such person
executed the above and foregoing certificate for the purposes therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS AOI&A X� -
GCA �•
PRY
C) �� Notary P blic
In and for the St a Texas
�> ..........
Eyp
Signature Page 2 for General Certificate
HOU:3649808.1
EXECUTED AND DELIVERED this
MANUAL SIGNATURE
STATE OF TEXAS
COUNTY OF LUBBOCK
OFFICIAL TITLE
City Secretary, City of Lubbock, Texas
Before me, the undersigned authority, on this day personally appeared Rebecca Garza,
City Secretary of the City of Lubbock, Texas, known to me to be such person who signed the
above and foregoing certificate in my presence and acknowledged to me that such person
executed the above and foregoing certificate for the purposes therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS
..�o\NDE
`" 1q°�'°
� Notary ublic,
..........R'� F;,, In and for the State of Texas
[SQc>:
OF
°•.06-28-2��
°°•�/1/1111!1 ti t1, ti5i �'
Signature Page 3 for General Certificate
HOU:3649808 1
ADDITIONAL BONDS CERTIFICATE
This certificate relates to the City of Lubbock, Texas, Electric Light and Power System
Revenue Bonds, Series 2016 (the "Bonds"), dated April 15, 2016. Capitalized terms used herein
and not otherwise defined shall have the meaning assigned thereto in the Ordinance (the
"Ordinance"), adopted by the City Council of the City, authorizing the issuance of the Bonds.
Pursuant to Section 9.01(a) of the Ordinance, I, the undersigned Acting Executive
Director of Finance of the City of Lubbock, Texas (the "City"), do hereby certify that the City is
not in default in connection with any of the covenants, conditions or obligations contained in the
ordinance authorizing the Outstandin usly Issued Bonds and all interest, sinking and
reserve funds for such bonds hav aintained in accordance with the provisions of
said ordinances.
DATED: u 16.
dt.
Acting Executive Director o Finance
City of Lubbock, Texas
HOU73649810-1
CERTIFICATE PURSUANT TO PURCHASE CONTRACT
We, the undersigned officials of the City of Lubbock, Texas (the "City"), acting in our
official capacity, in connection with the issuance and delivery by the City of Lubbock, Texas, of
its Electric Light and Power System Revenue Bonds, Series 2016 (the "Bonds"), hereby certify
that:
1. This certificate is delivered pursuant to the Purchase Contract relating to the
Bonds, dated April _, 2016 (the "Purchase Contract"), between the City and Citigroup Global
Markets, Inc., Wells Fargo Securities, Hutchinson, Shockey, Erley & Co. and George K. Baum
(collectively, the "Underwriters"). Capitalized words used herein as defined terms and not
otherwise defined herein have the respective meanings assigned to them in the Purchase
Contract.
2. The representations and warranties of the City contained in the Purchase Contract
are true and correct in all material respects on and as of the date hereof as though made on and as
of the date hereof.
3. Except to the extent disclosed in the Official Statement, no litigation is pending
or, to our knowledge, threatened in any court to restrain or enjoin the issuance or delivery of the
Bonds, or collection or application of Pledged Revenues pledged or to be pledged to pay the
principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or
affecting the validity of the Bonds or the City Documents, or contesting the powers of the City or
the authorization of the Bonds or the City Documents, or contesting in any way the accuracy,
completeness or fairness of the Official Statement.
4. To the best of our knowledge, no event affecting the City has occurred since the
date of the Official Statement that should be disclosed in the Official Statement for the purpose
for which it is to be used or that it is necessary to disclose therein in order to make the statements
and information therein not misleading in any material respect.
5. There has not been any material and adverse change in the affairs or financial
condition of the City since September 30, 2015, the latest date as to which audited financial
information is available.
[Execution Page Follows.]
HOU:3649816.1
DATED:
HOU 3649816 1
Cit Manager lk
Cifi of Lubbock, Texas
Signature Page for Certificate Pursuant to Purchase Contract
The Attorney General of Texas
Public Finance Section
William P. Clements Building, 7`h Floor
300 West 15th Street
Austin, Texas 78701
March 24, 2016
The Comptroller of Public Accounts
Public Finance Division
111 East 17th Street
Austin, Texas 78701
Re: City of Lubbock, Texas Electric Light and Power System Revenue Bonds, Series
2016 (the "Bonds")
Ladies and Gentlemen:
The captioned Bonds are being sent to the Office of the Attorney General, and it is
requested that such office examine and approve the Bonds in accordance with law. After such
approval, it is requested that the Attorney General deliver the Bonds to the Comptroller of Public
Accounts for registration.
Enclosed with the Bonds is a signed but undated copy of the GENERAL CERTIFICATE
(the "Certificate") relating to the Bonds. The Attorney General is hereby authorized and directed
to date the Certificate concurrently with the date of approval of the Bonds. If any litigation or
contest should develop pertaining to the Bonds or any other matters covered by said Certificate,
the undersigned will notify the Attorney General thereof immediately by telephone. With this
assurance the Attorney General can rely on the absence of any such litigation or contest, and on
the veracity and currency of said Certificate, at the time the Attorney General approves the
Bonds unless the Attorney General is notified otherwise as aforesaid.
The Comptroller is hereby requested to register the Bonds as required by law and the
proceedings authorizing the Bonds. After such registration, the Comptroller is hereby authorized
and directed to deliver the Bonds, together with three copies of each of the Attorney General's
Approving Opinion and Comptroller's Certificate for the Bonds, to Jerry V. Kyle, Jr.. Andrews
Kurth LLP, 111 Congress Avenue, Austin, Texas 78 70 1.
CITY OF LUBBOCK
By:
Mayor
HOU:3649295 l
CITY OF LUBBOCK
Note: PLEASE USE BLACK INK. PLEASE DO NOT LET YOUR SIGNATURE TOUCH
THE PRINT ON THIS PAGE. DO NOT PUT THE SEAL OVER ANY PRINT ON THIS
PAGE.
SIGNATURES:
Mayor —>
City Secretary —>
HOU:3649301.1
SEAL
ImYo:ZeltmNITO7:3;1uv1Q1 I
Between
CITY OF LUBBOCK, TEXAS
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
Pertaining to
CITY OF LUBBOCK, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2016
DATED AS OF March 24, 2016
HOU:3649841.1
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section1.01 Definitions....................................................................................................2
Section 1.02 Other Definitions.........................................................................................3
Section1.03 Interpretations..............................................................................................3
ARTICLE II
DEPOSIT OF FUNDS AND ESCROW SECURITIES
Section 2.01 Deposits in the Escrow Fund.......................................................................3
ARTICLE III
CREATION AND OPERATION OF ESCROW FUND
Section3.01
Escrow Fund................................................................................................3
Section 3.02
Payment of Principal and Interest
................................................................4
Section 3.03
Sufficiency of Escrow Fund.........................................................................4
Section3.04
Trust Funds..................................................................................................4
Section 3.05
Security for Cash Balances..........................................................................4
ARTICLE IV
SUBSTITUTION OF ESCROW SECURITIES
Section4.01 In General.....................................................................................................5
Section 4.02 Substitution of Escrow Securities at Bond Closing.....................................5
Section 4.03 Substitution of Escrow Securities following Bond Closing ........................5
Section 4.04 Allocation of Certain Escrow Securities......................................................6
Section4.05 Arbitrage......................................................................................................6
ARTICLE V
APPLICATION OF CASH BALANCES
Section5.01 In General.....................................................................................................6
Section 5.02 Reinvestment in SLGS.................................................................................6
Section 5.03 Reinvestment of Cash Balances...................................................................6
ARTICLE VI
RECORDS, REPORTS AND NOTICES
Section6.01 Records........................................................................................................7
Section6.02 Reports.........................................................................................................7
1
HOU:3649841.1
ARTICLE VII
CONCERNING THE PAYING AGENTS AND ESCROW AGENT
Section 7.01 Representations............................................................................................7
Section 7.02 Limitation on Liability.................................................................................7
Section7.03 Compensation..............................................................................................8
Section 7.04 Successor Escrow Agents............................................................................9
ARTICLE VIII
MISCELLANEOUS
Section8.01
Notice.........................................................................................................10
Section 8.02
Termination of Responsibilities.................................................................1
I
Section 8.03
Binding Agreement....................................................................................1
I
Section 8.04
Severability................................................................................................11
Section 8.05
Texas Law Governs...................................................................................11
Section 8.06
Time of the Essence...................................................................................11
Section 8.07
Effective Date of Agreement.....................................................................11
Section 8.08
Modification of Agreement........................................................................1
l
ARTICLE IX
ACKNOWLEDGMENT OF RECEIPT OF NOTICE
Section 9.01 Acknowledgment of Receipt of Notice of Defeasance and
Redemption................................................................................................12
ii
HOU:3649841. I
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of March 24, 2016 (herein, together with any
amendments or supplements hereto, called the "Agreement"), entered into by and between CITY
OF LUBBOCK, TEXAS (the "Issuer"), and The Bank of New York Mellon Trust Company,
N.A., a national banking association, as escrow agent (herein, together with any successor in
such capacity, called the "Escrow Agent").
WITNESSETH:
WHEREAS, the Issuer has heretofore issued and there presently remain outstanding the
obligations (the "Refunded Obligations") of the Issuer listed and described on Exhibit A attached
hereto, and the Refunded Obligations are scheduled to mature or have been called for early
redemption in such years, bear interest at such rates, and are payable at such times and in such
amounts as are set forth in Exhibit A attached hereto and incorporated by reference herein for all
purposes;
WHEREAS, when firm banking arrangements have been made for the payment of
principal and interest to the maturity dates or redemption dates of the Refunded Obligations, then
the Refunded Obligations shall no longer be regarded as outstanding except for the purpose of
receiving payment from the funds provided for such purpose;
WHEREAS, Chapter 1207, Texas Government Code, as amended ("Chapter 1207"),
authorizes the Issuer to issue refunding bonds and to deposit the proceeds from the sale thereof,
and any other available funds or resources, directly with the paying agent for any of the
Refunded Obligations, and such deposit, if made before the payment dates of the Refunded
Obligations and in sufficient amounts, shall constitute the making of firm banking and financial
arrangements for the discharge and final payment of the Refunded Obligations;
WHEREAS, Chapter 1207 further authorizes the Issuer to enter into an escrow agreement
with the paying agent for any of the Refunded Obligations with respect to the safekeeping,
investment, administration and disposition of any such deposit, upon such terms and conditions
as the Issuer and such paying agent may agree, provided that such deposits may be invested only
in direct noncallable obligations of the United States of America, including obligations the
principal of and interest on which are unconditionally guaranteed by the United States of
America, and which may be in book entry form, and which shall mature and bear interest
payable at times and in amounts sufficient to provide for the scheduled payment or redemption
of principal and interest on the Refunded Obligations when due;
WHEREAS, the Escrow Agent, is the paying agent for all of the Refunded Obligations
and this Agreement constitutes an escrow agreement of the kind authorized and required by
Chapter 1207;
WHEREAS, Chapter 1207 makes it the duty of the Escrow Agent to comply with the
terms of this Agreement and timely make available to the other places of payment, if any, for the
Refunded Obligations the amounts required to provide for the payment or redemption of the
principal of and interest on such obligations when due, and in accordance with their terms, but
solely from the funds, in the manner, and to the extent provided in this Agreement;
HOU:3649841.1
WHEREAS, the issuance, sale, and delivery of the City of Lubbock, Texas, General
Obligation Refunding Bonds, Series 2016 (the "Refunding Bonds"), have been duly authorized
for the purpose, among others, of obtaining the funds required to provide for the payment of the
principal of the Refunded Obligations at their respective maturity or redemption dates and the
interest thereon to such maturity or redemption dates;
WHEREAS, the Issuer desires that, concurrently with the delivery of the Refunding
Bonds to the purchasers thereof, a portion of the proceeds of the Refunding Bonds shall be
applied to purchase certain "Escrow Securities" (as herein defined) for deposit to the credit of the
Escrow Fund created pursuant to the terms of this Agreement and to establish a beginning cash
balance (if needed) in such Escrow Fund;
WHEREAS, the Escrow Securities shall mature and the interest thereon shall be payable
at times and in amounts sufficient to provide moneys which, together with cash balances from
time to time on deposit in the Escrow Fund, will be sufficient to pay the interest on the Refunded
Obligations as it accrues and becomes payable and to pay the principal of the Refunded
Obligations on their maturity dates or redemption dates;
WHEREAS, to facilitate the receipt and transfer of proceeds of the Escrow Securities the
Issuer desires to establish the Escrow Fund at the designated office of the Escrow Agent; and
WHEREAS, the Escrow Agent is a party to this Agreement and hereby acknowledges its
acceptance of the terms and provisions hereof,
NOW. THEREFORE, in consideration of the mutual undertakings, promises and
agreements herein contained, the sufficiency of which hereby is acknowledged, and to secure the
hill and timely payment of principal of and the interest on the Refunded Obligations, the Issuer
and the Escrow Agent mutually undertake, promise, and agree for themselves and their
respective representatives and successors, as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01 Definitions. Unless the context clearly indicates otherwise, the following
terms shall have the meanings assigned to them below when they are used in this Agreement:
"Beginning Cash Balance" means the funds described in Exhibit C attached to this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, including applicable
regulations, published rulings and court decisions thereunder.
"Escrow Fund" means the escrow created in Section 3.01 of this Agreement to be
administered by the Escrow Agent pursuant to the provisions of this Agreement.
"Escrow Securities" means direct, noncallable obligations of the United States of
America, including noncallable obligations of which the full and timely payment of the principal
2
HOU:3649841.1
and interest are unconditionally guaranteed by the United States of America, that mature and
bear interest payable at times and in amounts sufficient without reinvestment to provide for the
scheduled payment of the principal of and interest on the Refunded Obligations.
"Verification Report" means the report of Grant Thornton LLP, Certified Public
Accountants verifying the sufficiency of the deposits made with the Escrow Agent for
defeasance of the Refunded Obligations.
Section 1.02 Other Definitions. The terms "Agreement," "Issuer," "Escrow Agent,"
"Refunded Obligations" and "Refunding Bonds," when they are used in this Agreement, shall
have the meanings assigned to them in the preamble to this Agreement.
Section 1.03 Interpretations. The titles and headings of the articles and sections of this
Agreement have been inserted for convenience and reference only and are not to be considered a
part hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all
of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth
herein and to achieve the intended purpose of providing for the refunding of the Refunded
Obligations in accordance with applicable law.
ARTICLE II
DEPOSIT OF FUNDS AND ESCROW SECURITIES
Section 2.01 Deposits in the Escrow Fund. Concurrently with the sale and delivery of
the Refunding Bonds, the Issuer shall deposit, or cause to be deposited, with the Escrow Agent,
for deposit in the Escrow Fund, the Beginning Cash Balance and the Escrow Securities described
in Exhibit C attached hereto and incorporated by reference as a part of this Agreement for all
purposes. The Escrow Agent shall, upon the receipt thereof, acknowledge such receipt to the
Issuer in writing.
ARTICLE III
Section 3.01 Escrow Fund. The Escrow Agent hereby creates on its books a special
trust and irrevocable escrow fund to be known as City of Lubbock, Texas, General Obligation
Refunding Bonds, Series 2016 Escrow Fund (the "Escrow Fund") for the purpose of paying the
principal of and interest on the Refunded Obligations, as described in Exhibit A, in order to make
firm banking arrangements therefor. The Escrow Agent hereby agrees that upon receipt thereof it
will deposit to the credit of the Escrow Fund the Beginning Cash Balance and the Escrow
Securities described in Exhibit C. Such deposit, all proceeds therefrom, and all cash balances
from time to time on deposit therein (a) shall be the property of the Escrow Fund, (b) shall be
applied only in strict conformity with the terms and conditions of this Agreement, and (c) to the
extent needed to pay the principal and interest requirements on the Refunded Obligations, are
hereby irrevocably pledged to the payment of the principal of and interest on the Refunded
Obligations, which payment shall be made by timely transfers of such amounts at such times as
are provided for in Section 3.02 hereof. When the final transfers have been made for the payment
3
HOU:3649841.1
of such principal of and interest on the Refunded Obligations, any balance remaining in the
Escrow Fund shall be transferred to the interest and sinking fund for the Refunding Bonds.
Section 3.02 Payment of Principal and Interest. The Escrow Agent is hereby
irrevocably instructed to transfer, from the cash balances from time to time on deposit in the
Escrow Fund, the amounts required to pay the principal of the Refunded Obligations at their
respective maturity date or dates as of which such Refunded Obligations have been called for
earlier redemption, and interest thereon when due, in the amounts and at the times shown in
Exhibit B.
Section 3.03 Sufficiency of Escrow Fund. The Issuer represents, based on the
Verification Report, that the successive receipts of the principal of and interest on the Escrow
Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will
be at all times sufficient to provide moneys for transfer to each place of payment for the
Refunded Obligations, at the times and in the amounts required to pay the interest on the
Refunded Obligations as such interest comes due and the principal of the Refunded Obligations
as such principal comes due, all as more fully set forth in Exhibit D attached hereto. If, for any
reason, at any time, the cash balances on deposit or scheduled to be on deposit in the Escrow
Fund shall be insufficient to transfer the amounts required by each place of payment for the
Refunded Obligations to make the payments set forth in Section 3.02 hereof, the Issuer shall
timely deposit in the Escrow Fund, from any funds that are lawfully available therefor, additional
moneys in the amounts required to make such payments. Notice of any such insufficiency shall
he given promptly as hereinafter provided, but the Escrow Agent shall not in any manner be
responsible for any insufficiency of fiends in the Escrow Fund, unless such insufficiency shall be
caused by the Escrow Agent's negligence or misconduct, or the Issuer's failure to make
additional deposits thereto.
Section 3.04 Trust Funds. The Escrow Agent shall hold at all times the Escrow Fund,
the Escrow Securities and all other assets of the Escrow Fund wholly segregated from all other
funds and securities on deposit with the Escrow Agent; it shall never allow the Escrow Securities
or any other assets of the Escrow Fund to be commingled with any other funds or securities of
the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth
herein. The Escrow Securities and other assets of the Escrow Fund shall always be maintained by
the Escrow Agent as trust funds for the benefit of the owners of the Refunded Obligations, and a
special account thereof shall at all times be maintained on the books of the Escrow Agent. The
owners of the Refunded Obligations shall be entitled to a preferred claim and first lien upon the
Escrow Securities, the proceeds thereof, and all other assets of the Escrow Fund. The amounts
received by the Escrow Agent under this Agreement shall not be considered as a banking deposit
by the Issuer, and the Escrow Agent shall have no right or title with respect thereto except as a
trustee and Escrow Agent under the terms of this Agreement. The amounts received by the
Escrow Agent under this Agreement shall not be subject to warrants, drafts or checks drawn by
the Issuer or, except to the extent expressly herein provided, by a place of payment for the
Refunded Obligations.
Section 3.05 Security for Cash Balances. Cash balances from time to time on deposit in
the Escrow Fund shall, to the extent not insured by the Federal Deposit Insurance Corporation or
its successor, be continuously secured by a pledge of direct noncallable obligations of, or
4
HOU:3649841. l
noncallable obligations unconditionally guaranteed by, the United States of America, having a
market value at least equal to such cash balances.
ARTICLE IV
SUBSTITUTION OF ESCROW SECURITIES
Section 4.01 In General. Except as provided in Section 4.02 and 4.03 hereof, the
Escrow Agent shall not have any power or duty to make substitutions for the Escrow Securities
described in Exhibit C, or to sell, transfer, or otherwise dispose of such Escrow Securities.
Section 4.02 Substitution of Escrow Securities at Bond Closing. Concurrently with the
sale and delivery of the Refunding Bonds, the Issuer, at its option, may substitute cash or Escrow
Securities for the Escrow Securities listed in part III of Exhibit C, but only if such cash and/or
Escrow Securities:
(a) are in an amount, and/or mature in an amount, which, together with any
cash substituted for such obligations, is equal to or greater than the amount payable on the
maturity date of the obligation listed in part III of Exhibit C for which such obligation is
substituted, and
(b) mature on or before the maturity date of the obligation listed in part III of
Exhibit C for which such obligation is substituted.
The Issuer may at any time substitute the Escrow Securities listed in part III of Exhibit C which,
as permitted by the preceding sentence, were not deposited to the credit of the Escrow Fund, for
the cash and/or obligations that were substituted concurrently with the sale and delivery of the
Refunding Bonds for such Escrow Securities, provided, that upon any such substitution the
Escrow Agent receives (i) a verification report from a firm of independent certified public
accountants as to the sufficiency of the Escrow Securities to provide for the payment of the
Refunded Obligations (assuming such substitution has been made and assuming a zero percent
reinvestment rate), (ii) an opinion of bond counsel or tax counsel to the effect that such
substitution shall not affect the tax-exempt status of interest on the Refunded Obligations or the
Refunding Bonds and (iii) that such transaction complies with the Constitution and laws of the
State of Texas.
Section 4.03 Substitution of Escrow Securities following Bond Closing. At the written
request of the Issuer, and upon compliance with the conditions hereinafter stated, the Escrow
Agent shall sell, transfer, otherwise dispose of or request the redemption of all or any portion of
the Escrow Securities and apply the proceeds therefrom to purchase Refunded Obligations or
other Escrow Securities. Any such transaction may be effected by the Escrow Agent only if (i)
the Escrow Agent shall have received a written opinion from a firm of independent certified
public accountants that such transaction will not cause the amount of money and securities in the
Escrow Fund to be reduced below an amount which will be sufficient, when added to the interest
to accrue thereon and assuming a zero percent reinvestment rate, to provide for the payment of
principal of and interest on the remaining Refunded Obligations as they become due, and (ii) the
Escrow Agent shall have received the unqualified written legal opinion of nationally recognized
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HOU:3649841.1
bond counsel or tax counsel acceptable to the Issuer and the Escrow Agent to the effect that (A)
such transaction will not cause any of the Refunding Bonds to be an "arbitrage bond" within the
meaning of the Code or otherwise adversely affect the tax-exempt status of the Refunded
Obligations or the Refunding Bonds, and (B) that such transaction complies with the
Constitution and laws of the State of Texas. The foregoing provisions of substitution
notwithstanding, the Escrow Agent shall be under no obligation to effect the substitution of the
Escrow Securities in the manner contemplated by Subsection 4.03(a) if the Issuer fails to deliver
or cause to be delivered to the Escrow Agent no later than three Business Days prior to the
proposed date such substitution is to be effected a written certificate setting forth in reasonable
detail the maturity dates and maturity amounts of the Escrow Securities to be substituted and the
proposed date such substitution is to occur.
Section 4.04 Allocation of Certain Escrow Securities. The maturing principal of and
interest on the Escrow Securities may be applied to the payment of any Refunded Obligations
and no allocation or segregation of the receipts of principal or interest from such Escrow
Securities is required.
Section 4.05 Arbitrage. The Issuer hereby covenants and agrees that it shall never
request the Escrow Agent to exercise any power hereunder or permit any part of the money in
the Escrow Fund or proceeds from the sale of Escrow Securities to be used directly or indirectly
to acquire any securities or obligations if the exercise of such power or the acquisition of such
securities or obligations would cause any Refunding Bonds or Refunded Obligations to be an
"arbitrage bond" within the meaning of Section 148 of the Code.
ARTICLE V
APPLICATION OF CASH BALANCES
Section 5.01 In General. Except as provided in Sections 5.02 and 5.03 hereof, neither
the Issuer nor the Escrow Agent shall reinvest any moneys deposited to or held as part of the
Escrow Fund.
Section 5.02 Reinvestment in SLGS. Cash balances in the Escrow Fund shall be
reinvested as set forth on Exhibit E attached hereto.
Section 5.03 Reinvestment of Cash Balances. At the written request of the Issuer, and
upon compliance with the conditions hereinafter stated, the Escrow Agent shall permit or cause
the reinvestment of cash balances in the Escrow Fund, pending the use thereof to pay when due
the principal of and interest on the Refunded Obligations, in Escrow Securities which obligations
must mature on or before the respective dates needed for payment of the Refunded Obligations.
Any such modification must include (a) an opinion of nationally recognized bond counsel or tax
counsel that such transaction (i) does not adversely affect the tax-exempt nature of the Refunding
Bonds or the Refunded Obligations and (ii) complies with the Constitution and laws of the State
of Texas and (b) a verification report by a firm of independent certified public accountants
verifying the sufficiency of the Escrow Fund and the yield on the investment thereof.
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ARTICLE VI
RECORDS, REPORTS AND NOTICES
Section 6.01 Records. The Escrow Agent will keep books of record and account in
which complete and correct entries shall be made of all transactions relating to the receipts,
disbursements, allocations and application of the money and Escrow Securities deposited to the
Escrow Fund and all proceeds thereof, and such books shall be available for inspection at
reasonable hours and under reasonable conditions by the Issuer and the owners of the Refunded
Obligations.
Section 6.02 Reports. While this Agreement remains in effect, the Escrow Agent at
least annually shall prepare and send to the Issuer a written report summarizing all transactions
relating to the Escrow Fund during the preceding year, including, without limitation, credits to
the Escrow Fund as a result of interest payments on or maturities of the Escrow Securities and
transfers from the Escrow Fund for payments on the Refunded Obligations or otherwise, together
with a detailed statement of all Escrow Securities and the cash balance on deposit in the Escrow
Fund as of the end of such period.
ARTICLE VII
CONCERNING THE PAYING AGENTS AND ESCROW AGENT
Section 7.01 Representations. The Escrow Agent hereby represents that it has all
necessary power and authority to enter into this Agreement and undertake the obligations and
responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder.
Section 7.02 Limitation on Liability. The liability of the Escrow Agent to transfer funds
for the payment of the principal of and interest on the Refunded Obligations shall be limited to
the proceeds of the Escrow Securities and the cash balances from time to time on deposit in the
Escrow Fund. Notwithstanding any provision contained herein to the contrary, neither the
Escrow Agent nor any place of payment for the Refunded Obligations shall have any liability
whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any failure of
the obligors of the Escrow Securities to make timely payment thereon, except for the obligation
to notify the Issuer promptly of any such occurrence.
The recitals herein and in the proceedings authorizing the Refunding Bonds shall be
taken as the statements of the Issuer and shall not be considered as made by, or imposing any
obligation or liability upon, the Escrow Agent. The Escrow Agent is not a party to the
proceedings authorizing the Refunding Bonds or the Refunded Obligations and is not responsible
for nor bound by any of the provisions thereof (except as a place of payment or a paying
agent/registrar therefor). In its capacity as Escrow Agent, it is agreed that the Escrow Agent need
look only to the terms and provisions of this Agreement.
The Escrow Agent makes no representations as to the value, conditions or sufficiency of
the Escrow Fund, or any part thereof, or as to the title of the Issuer thereto, or as to the security
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afforded thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in
respect to any of such matters.
It is the intention of the parties hereto that the Escrow Agent shall never be required to
use or advance its own funds or otherwise incur personal financial liability in the performance of
any of its duties or the exercise of any of its rights and powers hereunder.
The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in
good faith in any exercise of reasonable care and believed by it to be within the discretion or
power conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the
consequences of any error of judgment; and the Escrow Agent shall not be answerable for any
loss unless the same shall have been through its negligence or want of good faith.
The Escrow Agent may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, written investment direction, statement, instrument, opinion,
notice or other paper or document believed by it to be genuine and to have been signed or
presented by the proper party. The Escrow Agent need not investigate any fact or matter stated in
the document.
The Escrow Agent may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through its agents or attorneys and may in all cases pay
reasonable compensation to any agent or attorney retained or employed by it in connection
therewith.
Unless it is specifically otherwise provided herein, the Escrow Agent has no duty to
determine or inquire into the happening or occurrence of any event or contingency or the
performance or failure of performance of the Issuer with respect to arrangements or contracts
with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund, to
dispose of and deliver the same in accordance with this Agreement. If, however, the Escrow
Agent is called upon by the terms of this Agreement to determine the occurrence of any event or
contingency, the Escrow Agent shall be obligated, in making such determination, only to
exercise reasonable care and diligence, and in event of error in making such determination the
Escrow Agent shall be liable only for its own misconduct or its negligence. In determining the
occurrence of any such event or contingency the Escrow Agent may request from the Issuer or
any other person such reasonable additional evidence as the Escrow Agent in its discretion may
deem necessary to determine any fact relating to the occurrence of such event or contingency,
and in this connection may make inquiries of, and consult with counsel, among others, the Issuer
at any time.
Section 7.03 Compensation. (a) Concurrently with the sale and delivery of the
Refunding Bonds, the Issuer shall pay to the Escrow Agent the sum of $750, the sufficiency of
which is hereby acknowledged by the Escrow Agent to pay its fee for performing the services of
Escrow Agent hereunder and for all expenses incurred or to be incurred by it as Escrow Agent in
the administration of this Agreement. In the event that the Escrow Agent is requested to perform
any extraordinary services hereunder, the Issuer hereby agrees to pay reasonable fees to the
Escrow Agent for such extraordinary services and to reimburse the Escrow Agent for all
expenses incurred by the Escrow Agent in performing such extraordinary services, and the
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Escrow Agent hereby agrees to look only to the Issuer for the payment of such fees and
reimbursement of such expenses. The Escrow Agent hereby agrees that in no event shall it ever
assert any claim or lien against the Escrow Fund for any fees for its services, whether regular or
extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its
expenses.
(b) Concurrently with the sale and delivery of the Refunding Bonds, the Issuer
shall pay to the Escrow Agent the sum of $300 per call notice, the sufficiency of which is hereby
acknowledged by the Escrow Agent, for all future reasonable fees and expenses for paying
agency services relating to the Refunded Obligations for which it serves as the paying agent. The
Escrow Agent shall be obligated to make available for the Refunded Obligations amounts from
the Escrow Fund sufficient to pay when due the principal of and interest on any Refunded
Obligations presented for payment. The Escrow Agent hereby agrees that in no event shall it ever
assert any claim or lien against the Escrow Fund for any fees for its services, whether regular or
extraordinary, as paying agent for any of the Refunded Obligations or for reimbursement for any
of its expenses.
(c) Upon receipt of the aforesaid specific sums stated in subsections (a) and
(b) of this Section, the Escrow Agent shall acknowledge such receipt to the Issuer in writing.
Section 7.04 Successor Escrow Agents. (a) If at any time the Escrow Agent or its legal
successor or successors should become unable, through operation of law or otherwise, to act as
Escrow Agent hereunder, or if its property and affairs shall be taken under the control of any
state or federal court or administrative body because of insolvency or bankruptcy or for any other
reason, a vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event the
Issuer, by appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy. If no
successor Escrow Agent shall have been appointed by the Issuer within 60 days, a successor may
be appointed by the owners of a majority in principal amount of the Refunded Obligations then
outstanding by an instrument or instruments in writing filed with the Issuer, signed by such
owners or by their duly authorized attorneys -in -fact. If, in a proper case, no appointment of a
successor Escrow Agent shall be made pursuant to the foregoing provisions of this section within
three months after a vacancy shall have occurred, the owner of any Refunded Bond may apply to
any court of competent jurisdiction to appoint a successor Escrow Agent. Such court may
thereupon, after such notice, if any, as it may deem proper, prescribe and appoint a successor
Escrow Agent.
(b) The Escrow Agent may at any time resign and be discharged from the
trust hereby created by giving not less than 60 days' written notice to the Issuer; provided, that,
no such resignation shall take effect unless: (i) a successor Escrow Agent shall have been
appointed by the Issuer as herein provided; (ii) such successor Escrow Agent shall have accepted
such appointment; (iii) the successor Escrow Agent shall have agreed to accept the fees currently
in effect for the Escrow; and (iv) the Escrow Agent shall have paid over to the successor Escrow
Agent a proportional part of the Escrow Agent's fee hereunder. Such resignation shall take effect
immediately upon compliance with the foregoing requirements.
(c) Any successor Escrow Agent shall be: (i) a corporation organized and
doing business under the laws of the United States or the State of Texas; (ii) authorized under
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such laws to exercise corporate trust powers; (iii) have a combined capital and surplus of at least
$5,000,000; (iv) subject to the supervision or examination by Federal or State authority and (v)
qualified to serve as Escrow Agent under the provisions of Chapter 1207, Texas Government
Code, as amended.
(d) Any successor Escrow Agent shall execute, acknowledge and deliver to
the Issuer and the Escrow Agent an instrument accepting such appointment hereunder, and the
Escrow Agent shall execute and deliver an instrument transferring to such successor Escrow
Agent, subject to the terms of this Agreement, all the rights, powers and trusts of the Escrow
Agent hereunder. Upon the request of any such successor Escrow Agent, the Issuer shall execute
any and all instruments in writing for more fully and certainly vesting in and confirming to such
successor Escrow Agent all such rights, powers and duties. The Escrow Agent shall pay over to
its successor Escrow Agent a proportional part of the Escrow Agent's fee hereunder.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Notice. Except as provided in Sections 3.01 and 8.08 hereof, which
require actual receipt of notice or consent, as the case may be, any notice, authorization, request,
or demand required or permitted to be given hereunder, shall be in writing and shall be deemed
to have been duly given when mailed by registered or certified mail, postage prepaid, addressed
as follows:
To the Escrow Agent: The Bank of New York Mellon Trust Company, N.A.
2001 Bryan Street, 11 th Floor
Dallas, Texas 75201
To the Issuer: City of Lubbock, Texas
1625 13th Street
Lubbock, Texas 79457
Attention: Executive Director of Finance
To the Rating Agencies: Moody's Investors Service, Inc.
2200 Ross Avenue
Suite 4650 West
Dallas, Texas 75201
Attention: Public Finance Department
Standard & Poor's Rating Group
25 Broadway
New York, New York 10004
Fitch Investors Service, L.P.
4514 Cole Avenue, Suite 600
Dallas, Texas 75205
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HOU:3649841.1
The United States Post Office registered or certified mail receipt showing delivery of the
aforesaid shall be conclusive evidence of the date and fact of delivery.
Either party hereto may provide an electronic address to which notices are to be delivered
in lieu of the physical address provided above or change the physical address to which notices
are to be delivered by giving to the other party not less than ten (10) days prior notice thereof.
Section 8.02 Termination of Responsibilities. Upon the taking of all the actions as
described herein by the Escrow Agent, the Escrow Agent shall have no further obligations or
responsibilities hereunder to the Issuer, the owners of the Refunded Obligations or to any other
person or persons in connection with this Agreement.
Section 8.03 Binding Agreement. This Agreement shall be binding upon the Issuer and
the Escrow Agent and their respective successors and legal representatives, and shall inure solely
to the benefit of the owners of the Refunded Obligations, the Issuer, the Escrow Agent and their
respective successors and legal representatives.
Section 8.04 Severability. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provisions of this
Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein. In the event any one or more provisions hereof are
held to be invalid, illegal or unenforceable the Issuer shall promptly notify each of the rating
agencies then maintaining a rating on the Refunded Obligations.
Section 8.05 Texas Law Governs. This Agreement shall be governed exclusively by the
provisions hereof and by the applicable laws of the State of Texas.
Section 8.06 Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Escrow Agent by this Agreement.
Section 8.07 Effective Date of Agreement. This Agreement shall be effective upon
receipt by the Escrow Agent of the funds described in Exhibit C and the Escrow Securities,
together with the specific sums stated in subsections (a) and (b) of Section 7.03 for Escrow
Agent and paying agency fees, expenses, and services.
Section 8.08 Modification of Agreement. This Agreement shall be binding upon the
Issuer and the Escrow Agent and their respective successors and legal representatives and shall
inure solely to the benefit of the owners of the Refunded Obligations, the Issuer, the Escrow
Agent and their respective successors and legal representatives. Furthermore, no alteration,
amendment or modification of any provision of this Agreement (a) shall alter the firm financial
arrangements made for the payment of the Refunded Obligations or (b) shall be effective unless
(i) prior written consent of such alteration, amendment or modification shall have been obtained
from the owners of all Refunded Obligations outstanding at the time of such alteration,
amendment or modification and (ii) such alteration, amendment or modification is in writing and
signed by the parties hereto; provided, however, the Issuer and the Escrow Agent may, without
the consent of owners of the Refunded Obligations, amend or modify the terms and provisions of
this Agreement to cure in a manner not adverse to the owners of the Refunded Obligations any
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ambiguity, formal defect or omission in this Agreement. Prior notice of any such modification
shall be given to each rating agency then maintaining a rating on the Refunded Obligations.
ARTICLE IX
ACKNOWLEDGMENT OF RECEIPT OF NOTICE
Section 9.01 Acknowledgment of Receipt of Notice of Defeasance and Redemption.
The Escrow Agent, by its execution hereof, as paying agent/registrar for the Refunded
Obligations set forth on Exhibit A, acknowledges receipt of the ordinance authorizing the
issuance of the Refunding Bonds constituting written notice of defeasance and redemption of the
Refunded Obligations, and agrees to provide or cause to be provided to the owners thereof notice
of defeasance and redemption of such Refunded Obligations as required by the respective
ordinances that authorized the issuance of such Refunded Obligations.
[Execution Page Follows]
1?
HOU:3649841.1
IN WITNESS WHEREOF, this Escrow Agreement has been executed in multiple
counterparts, each one of which shall constitute one and the same original Agreement, as of the
date and year appearing on the first page of this Agreement.
CITY OF LUBBOCK, TEXAS
ity anager
ATTEST:
City Se retary
Signature Page for Escrow Agreement
HOU:3649841.1
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
By:_
Title:
Signature Page for Escrow Agreement
HOU:3649841.1
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
HOU:3649841.1
INDEX TO EXHIBITS
Description of the Refunded Obligations
Schedule of Debt Service on Refunded Obligations
Description of Beginning Cash Balance and Escrow Securities
Escrow Fund Cash Flow
Reinvestments in Zero Interest Rate SLGS
IAA Mur -9-0 IM
DESCRIPTION OF THE REFUNDED OBLIGATIONS
A-1
HOU:3649841.1
M_"Q_M I::1
SCHEDULE OF DEBT SERVICE ON REFUNDED OBLIGATIONS
B-1
HOU:3649841.1
EXHIBIT C
DESCRIPTION OF BEGINNING CASH BALANCES AND ESCROW SECURITIES
I. Cash
II. State and Local Government Series Oblijzations
III. Open Market Securities
C-1
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EXHIBIT D
ESCROW FUND CASH FLOW
D-1
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EXHIBIT E
REINVESTMENTS IN ZERO INTEREST RATE SLGS
li'loli a
E-1
HOU:3649841. l