HomeMy WebLinkAboutOrdinance - 2016-O0052 - Tax And Waterworks System Surplus Reveue Certificates Of Obligation - 03/24/2016Ordinance No. 2016 - 00052
ORDINANCE
relating to
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION,
SERIES 2016
Adopted: March 24, 2016
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TABLE OF CONTENTS
Page
Recitals............................................................................................................................................. l
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section1.01. Definitions................................................................................................................2
Section1.02. Findings....................................................................................................................5
Section 1.03. Table of Contents, Titles, and Headings..................................................................5
Section1.04. Interpretation............................................................................................................6
ARTICLE II
SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND;
PRIOR LIEN OBLIGATIONS
Section 2.01. Payment of the Certificates......................................................................................6
Section 2.02. Interest and Sinking Fund........................................................................................7
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE CERTIFICATES
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 Certificates............................................................10
Section3.05.
Ownership..............................................................................................................11
Section 3.06.
Registration, Transfer, and Exchange....................................................................1
l
Section3.07.
Cancellation...........................................................................................................12
Section 3.08.
Temporary Certificates..........................................................................................12
Section 3.09.
Replacement Certificates.......................................................................................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.........................................................................................15
ARTICLE IV
REDEMPTION OF CERTIFICATES BEFORE MATURITY
Section4.01. Redemption............................................................................................................15
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..........................................................................16
Section 4.06. Payment Upon Redemption...................................................................................17
Section 4.07. Effect of Redemption.............................................................................................17
Section4.08. Lapse of Payment...................................................................................................17
(i)
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ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01.
Appointment of Paying Agent/Registrar...............................................................17
Section 5.02.
Qualifications.........................................................................................................18
Section 5.03.
Maintaining Paying Agent/Registrar.....................................................................18
Section5.04.
Termination............................................................................................................18
Section 5.05.
Notice of Change to Owners..................................................................................18
Section 5.06.
Agreement to Perform Duties and Functions.........................................................18
Section 5.07.
Delivery of Records to Successor..........................................................................18
ARTICLE VI
FORM OF THE CERTIFICATES
Section 6.01.
Form Generally......................................................................................................18
Section 6.02.
CUSIP Registration................................................................................................19
Section6.03.
Legal Opinion........................................................................................................19
Section 6.04.
Statement of Insurance...........................................................................................19
ARTICLE VII
SALE AND DELIVERY OF CERTIFICATES; DEPOSIT OF PROCEEDS
Section 7.01. Sale of Certificates; Official Statement.................................................................19
Section 7.02. Control and Delivery of Certificates......................................................................21
Section 7.03. Deposit of Proceeds...............................................................................................22
ARTICLE VIII
INVESTMENTS
Section 8.01. Investments............................................................................................................22
Section 8.02. Investment Income.................................................................................................22
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01. Payment of the Certificates....................................................................................22
Section 9.02. Other Representations and Covenants...................................................................23
Section 9.03. Federal Income Tax Exclusion..............................................................................23
ARTICLE X
DEFAULT AND REMEDIES
Section 10.01. Events of Default...................................................................................................25
Section 10.02. Remedies for Default.............................................................................................26
Section 10.03. Remedies Not Exclusive........................................................................................26
ARTICLE XI
DISCHARGE
Section11.01. Discharge...............................................................................................................26
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ARTICLE XII
CONTINUING DISCLOSURE UNDERTAKING
Section 12.01. Annual Reports......................................................................................................26
Section 12.02. Event Notices.........................................................................................................27
Section 12.03. Identifying Information..........................................................................................28
Section 12.04. Limitations, Disclaimers and Amendments...........................................................28
ARTICLE XIII
AMENDMENTS; ATTORNEY GENERAL MODIFICATION
Section13.01. Amendments..........................................................................................................29
Section 13.02. Attorney General Modification..............................................................................30
ARTICLE XIV
EFFECTIVE IMMEDIATELY
Section 14.01. Effective Immediately............................................................................................30
Exhibit A - Description of Annual Disclosure of Financial Information ................................... A-1
ExhibitB - Sale Parameters.........................................................................................................B-1
Exhibit C - Form of the Certificates............................................................................................0-1
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AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY
OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2016; LEVYING A TAX AND PLEDGING SURPLUS
WATERWORKS SYSTEM REVENUES IN PAYMENT
THEREOF; 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, under the provisions of Subchapter C, Chapter 271, Texas Local
Government Code, as amended, the City of Lubbock, Texas (the "City"), after giving proper
notice, is authorized to issue and sell for cash its certificates of obligation (herein defined as the
"Certificates") that are secured by and payable from the ad valorem taxes and other revenues
specified in Article II of this Ordinance, and that are issued in the amount, for the purposes, and
with the provisions set forth in Section 3.01 of this Ordinance;
WHEREAS, pursuant to a resolution heretofore passed by the City Council, notice of
intention to issue the Certificates was published in a newspaper of general circulation in the City
in accordance with applicable law;
WHEREAS, no petition signed by at least five percent of the qualified electors of the
City has been filed with the City Secretary protesting the issuance of the Certificates;
WHEREAS, no bond proposition to authorize the issuance of bonds for the same purpose
as any of the projects being financed with the proceeds of the Certificates was submitted to the
voters of the City during the preceding three years and failed to be approved;
WHEREAS, the City Council is now authorized and empowered to proceed with the
issuance and sale of the Certificates, and hereby finds and determines that it is necessary and in
the best interests of the City and its citizens that it authorize the issuance of the Certificates in
accordance with the terms and provisions of this Ordinance at this time;
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, number of
series, the price and the other terms of the Certificates authorized hereby and to otherwise take
such actions as are necessary and appropriate to effect the sale of the Certificates;
WHEREAS, the meeting at which this Ordinance is considered is open to the public as
required by law, and 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:
"Authorized Officer" means each of the Mayor, the City Manager and the Executive
Director of Finance, acting individually.
"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.
"Certificate" means any of the Certificates.
"Certificate Date" means the date designated as the initial date of the Certificates by
Section 3.02(a) of this Ordinance.
"Certificates" means the certificates of obligation authorized to be issued by Section 3.01
of this Ordinance.
"City" means the City of Lubbock, Texas.
"Closing Date" means the date of the initial delivery of and payment for the Certificates.
"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.
"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.
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"Fiscal Year" means such fiscal year as shall from time to time be set by the City
Council.
"Gross Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Gross Revenues" means, with respect to any period, all income, revenues and receipts
received from the operation and ownership of the System.
"Initial Certificate" means the initial Certificate authorized by Section 3.04 of this
Ordinance.
"Interest and Sinking Fund" means the interest and sinking fund or funds established by
Section 2.02 of this Ordinance.
"Interest Payment Date" means the date or dates on which interest on the Certificates 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 Certificates or other obligations of the City is the
respective date on which such series of Certificates 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, with respect to any period,
after deducting the System's Operating and Maintenance Expenses during such period.
"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 7.01(c) prepared for
dissemination to potential investors in connection with the public offering and sale of
Certificates.
"Operating and Maintenance Expenses" means all reasonable and necessary expenses
directly related and attributable to the operation and maintenance of the System, including, but
not limited to, the costs of insurance, the purchase and carrying of stores, materials, and supplies,
the payment of salaries and labor, and other expenditures reasonably and properly charged, under
generally accepted accounting principles, to the operation and maintenance of the System or by
statute deemed to be a first lien against the Gross Revenues. Depreciation charges on equipment,
machinery, plants and other facilities comprising the System and expenditures classed under
generally accepted accounting principles as capital expenditures shall not be considered as
"Operating and Maintenance Expenses" for purposes of determining "Net Revenues."
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"Owner" means the person who is the registered owner of a Certificate or Certificates, 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 7.01(c)
prepared for dissemination to potential investors prior to the availability of the final Official
Statement.
"Pricing Certificate" means a certificate or certificates signed by an Authorized Officer
establishing the terms and features of each series of Certificates in accordance with Section 7.01
hereof.
"Prior Lien Obligations" means all bonds or other similar obligations of the City
presently outstanding or that may be hereafter issued, payable in whole or in part from and
secured by a first lien on and pledge of the Net Revenues of the System or by a lien on and
pledge of the Net Revenues subordinate to a first lien on and pledge of the Net Revenues but
superior to the lien on and pledge of the Surplus Revenues made for the Certificates.
"Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Project" means the purposes for which the Certificates are issued as set forth in
Section 3.01.
"Purchase Contract" means the purchase contract pursuant to which the Certificates are
sold to the Underwriters.
"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.
"Regulations" means the final or temporary Income Tax Regulations applicable to the
Certificates 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 Certificates.
"Representation Letter" means the Blanket Letter of Representations between the City
and DTC.
"Representative" means the representative for the Underwriters named in the Purchase
Contract.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
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"SEC" means the United States Securities and Exchange Commission.
"Series 2016 Bonds" means any of the City's General Obligation Refunding Bonds,
Series 2016, authorized to be issued in one or more series in accordance with the terms of an
ordinance of the City adopted concurrently with this Ordinance.
"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).
"Surplus Revenues" means the Net Revenues of the System in an amount not to exceed
$1,000 remaining after payment of all debt service, reserve and other requirements in connection
with the City's Prior Lien Obligations.
"System" means the City's Waterworks System, being all properties, facilities and plants
currently owned, operated and maintained by the City for the supply, treatment, transmission and
distribution of treated, potable water, together with all future extensions, improvements,
replacements and additions thereto.
"Term Certificates" has the meaning set forth in Section 4.03 hereof.
"Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the
payment of principal of or interest on the Certificates as the same come due and payable and
remaining unclaimed by the Owners of such Certificates after the applicable payment or
redemption date.
"Underwriters" means the underwriters named in the 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. Findings.
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.
Section 1.03. Table of Contents, Titles, and Headings.
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
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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.
(e) Should Series 2016 Bonds not be sold pursuant to the ordinance authorizing their
issuance, references in this Ordinance thereto shall be deemed surplusage.
ARTICLE II
SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND;
PRIOR LIEN OBLIGATIONS
Section 2.01. Payment of the Certificates.
(a) Pursuant to the authority granted by the Texas Constitution and the laws of the
State of Texas, there shall be levied and there is hereby levied for the current year and for each
succeeding year thereafter while any of the Certificates or any interest thereon is outstanding and
unpaid, an ad valorem tax on each one hundred dollars valuation of taxable property within the
City, at a rate sufficient, within the limit prescribed by law, to pay the debt service requirements
of the Certificates, being (i) the interest on the Certificates, and (ii) a sinking fund for their
redemption at maturity or a sinking fund of two percent (2%) per annum (whichever amount is
the greater), when due and payable, full allowance being made for delinquencies and costs of
collection.
(b) The ad valorem tax thus levied shall be assessed and collected each year against
all property appearing on the tax rolls of the City most recently approved in accordance with law,
and the money thus collected shall be deposited as collected to the Interest and Sinking Fund.
(c) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or
required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and
committed irrevocably to the payment of the principal of and interest on the Certificates when
and as due and payable in accordance with their terms and this Ordinance.
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(d) The City hereby covenants and agrees that the Surplus Revenues are hereby
irrevocably pledged equally and ratably to the payment of the principal of and interest on the
Certificates. The City reserves the right to issue Prior Lien Obligations for any lawful purpose,
at any time, in one or more installments.
(e) The amount of taxes to be assessed annually for the payment of debt service on
the Certificates shall be determined in the following manner:
(i) The City's annual budget shall reflect (A) the amount of debt service
requirements to become due on the Certificates in the next ensuing Fiscal Year and (B)
the amount on deposit and budgeted for deposit in the Interest and Sinking Fund on the
date such budget is approved.
(ii) The amount required to be provided in the next succeeding Fiscal Year
from ad valorem taxes shall be the amount, if any, that the debt service requirements on
the Certificates to be paid during the next Fiscal Year exceeds the amount then on deposit
and budgeted for deposit in the Interest and Sinking Fund prior to the levy of such ad
valorem taxes.
(iii) Following approval of the City's annual budget, the City Council shall, by
ordinance, establish a tax rate that is sufficient to produce taxes in an amount which,
when added to the amount then on deposit or budgeted for deposit in the Interest and
Sinking Fund, will be sufficient to pay debt service on the Certificates when due during
the next Fiscal Year.
(f) If the liens and provisions of this Ordinance shall be released in a manner
permitted by Article XI hereof, then the collection of such ad valorem tax may be suspended or
appropriately reduced, as the facts may permit, and further deposits to the Interest and Sinking
Fund may be suspended or appropriately reduced, as the facts may permit. In determining the
aggregate principal amount of outstanding Certificates, there shall be subtracted the amount of
any Certificates that have been duly called for redemption and for which money has been
deposited with the Paying Agent/Registrar for such redemption.
Section 2.02. Interest and Sinking Fund.
(a) The City hereby establishes a special fund or account to be designated the "City
of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation,
Series 2016, Interest and Sinking Fund," or such other designation as is set forth in the Pricing
Certificate, said fund to be maintained at an official depository bank of the City separate and
apart from all other funds and accounts of the City.
(b) Money on deposit in or required by this Ordinance to be deposited to the Interest
and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of
the Certificates when and as due and payable in accordance with their terms and this Ordinance.
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ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE CERTIFICATES
Section 3.01. Authorization.
The City's certificates of obligation to be designated "City of Lubbock, Texas, Tax and
Waterworks System Surplus Revenue Certificates of Obligation, Series 2016" (the
"Certificates"), 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, specifically Subchapter C, Chapter 271, Texas Local Government Code, as
amended, Chapter 1371 and Article VIII of the City's Home -Rule Charter. The Certificates may
be issued in one or more series, on the dates and in the aggregate principal amount designated in
the Pricing Certificate therefor for the purpose of paying contractual obligations to be incurred
for the following purposes, to wit: (i) construction, renovations, improvements, upgrades,
equipment and acquisition of land, buildings and other facilities related to (a) a new City Hall
and (b) a new police facility; (ii) construction, renovations, improvements, upgrades, and
equipment of facilities at Municipal Hill; (iii) renovations and improvements to the Lubbock
Preston Smith International Airport facilities, including terminal building remodeling and
runway improvements; (iv) design, relocation and upgrading of public utility infrastructure and
construction of gateways and green spaces in the Central Business District; (v) upgrading of
public safety radio communication systems; (vi) construction of public improvements and
infrastructure renovations in North Overton; (vii) construction, improvement and equipment of a
new emergency operations center; (viii) renovations, improvements and extensions to City
streets, including sidewalks, street lighting, traffic signals/controllers and traffic signal
communication systems, signage, landscaping, utility improvements, extensions, relocations and
acquisition of land and rights-of-way in connection therewith; (ix) renovation, improvement and
expansion of Solid Waste Department facilities; (x) improvements, renovations, replacements,
relocations and extensions to the City's Wastewater System, including the Northwest Water
Reclamation Plant; (xi) improvements, renovations, replacements, relocations and extensions to
the City's Waterworks System (collectively, with items (i) -(x), the "Project"); and (xvii)
payment of professional services of attorneys, financial advisors, engineers and other
professionals in connection with the Project and the issuance of the Certificates. The aggregate
principal amount of all Certificates issued pursuant to this Ordinance shall not exceed
$126,000,000.
Section 3.02. Date, Denomination, Maturities, and Interest.
(a) The Certificates shall be dated the date set forth in the Pricing Certificate (the
"Certificate Date"). The Certificates 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, except the Initial Certificate, which shall be numbered T-1 or in such other manner
provided in the Pricing Certificate.
(b) The Certificates 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
Certificates shall not exceed the number of years set forth in Exhibit B.
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(c) Interest shall accrue and be paid on each Certificate respectively until its maturity
or prior redemption, from the later of the Certificate Date 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 Certificates 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.
Section 3.03. Medium, Method, and Place of Pam
(a) The principal of and interest on the Certificates shall be paid in lawful money of
the United States of America.
(b) Interest on the Certificates shall be payable to the Owners 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 fifteen (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 Certificate 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
United States mail, first class postage prepaid, by the Paying Agent/Registrar to each Owner, at
the address thereof as it appears in the Register, or by such other customary banking arrangement
acceptable to the Paying Agent/Registrar and the Owner; provided, however, that 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 Certificates, 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 Certificate 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 Certificate at the Designated Payment/Transfer Office of the Paying
Agent/Registrar.
(e) If the date for the payment of the principal of or interest on the Certificates shall
be a Saturday, Sunday, legal holiday, or 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, then 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 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.
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(f) Unclaimed Payments shall be segregated in a special escrow account and held in
trust, uninvested by the Paying Agent/Registrar, for the account of the Owners of the Certificates
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 (3) years
after the applicable payment or redemption date shall be applied to the next payment on the
Certificates thereafter coming due; to the extent any such moneys remain three (3) years after the
retirement of all outstanding Certificates, such moneys 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 Certificates for any further payment
of such unclaimed moneys or on account of any such Certificates, subject to Title 6 of the Texas
Property Code.
Section 3.04. Execution and Registration of Certificates.
(a) The Certificates 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 Certificates shall
have the same effect as if each of the Certificates had been signed manually and in person by
each of said officers, and such facsimile seal on the Certificates shall have the same effect as if
the official seal of the City had been manually impressed upon each of the Certificates.
(b) In the event that any officer of the City whose manual or facsimile signature
appears on the Certificates ceases to be such officer before the authentication of such Certificates
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 Certificate 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 herein, 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 Certificates.
In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial
Certificate delivered at the Closing Date shall have attached thereto the Comptroller's
Registration Certificate substantially in the form provided herein, 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 Certificate 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 Certificate of each series reflecting the terms set
forth in the Pricing Certificate and representing the entire principal amount of all Certificates,
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 Certificate, the
Paying Agent/Registrar shall cancel the Initial Certificate and deliver a single registered,
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definitive Certificate 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 Certificate is registered as the absolute owner of such Certificate for the
purpose of making and receiving payment as herein provided (except interest shall be paid to the
person in whose name such Certificate is registered on the Record Date or Special Record Date,
as applicable), and for all other purposes, whether or not such Certificate is overdue, and neither
the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the
contrary.
(b) All payments made to the Owner of a Certificate shall be valid and effectual and
shall discharge the liability of the City and the Paying Agent/Registrar upon such Certificate to
the extent of the sums paid.
Section 3.06. Reizistration, Transfer, and Exchange.
(a) So long as any Certificates 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 Certificates in accordance with this Ordinance.
(b) The ownership of a Certificate may be transferred only upon the presentation and
surrender of the Certificate 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 Certificate shall be effective until entered in the
Register.
(c) The Certificates shall be exchangeable upon the presentation and surrender
thereof at the Designated Payment/Transfer Office of the Paying Agent/Registrar for a
Certificate or Certificates of the same series, maturity and interest rate and in a denomination or
denominations of any integral multiple of $5,000, and in an aggregate principal amount equal to
the unpaid principal amount of the Certificates presented for exchange. The Paying
Agent/Registrar is hereby authorized to authenticate and deliver Certificates exchanged for other
Certificates in accordance with this Section.
(d) Each exchange Certificate 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 Certificate or
Certificates in lieu of which such exchange Certificate is delivered.
(e) No service charge shall be made to the Owner for the initial registration,
subsequent transfer, or exchange for a different denomination of any of the Certificates. 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 Certificate.
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(f) Neither the City nor the Paying Agent/Registrar shall be required to issue,
transfer, or exchange any Certificate 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 Certificate.
Section 3.07. Cancellation.
All Certificates paid or redeemed before scheduled maturity in accordance with this
Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates
are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper
records made regarding such payment, redemption, exchange, or replacement. The Paying
Agent/Registrar shall then return such cancelled Certificates to the City or may in accordance
with law destroy such cancelled Certificates and periodically furnish the City with certificates of
destruction of such Certificates.
Section 3.08. Temporary Certificates.
(a) Following the delivery and registration of the Initial Certificate and pending the
preparation of definitive Certificates, the City may execute and, upon the City's request, the
Paying Agent/Registrar shall authenticate and deliver, one or more temporary Certificates that
are printed, lithographed, typewritten, mimeographed, or otherwise produced, in any
denomination, substantially of the tenor of the definitive Certificates 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 Certificates may determine,
as evidenced by their signing of such temporary Certificates.
(b) Until exchanged for Certificates in definitive form, such Certificates 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 Certificates in definitive form; thereupon, upon the presentation and
surrender of the Certificate or Certificates in temporary form to the Paying Agent/Registrar, the
Paying Agent/Registrar shall cancel the Certificates in temporary form and shall authenticate and
deliver in exchange therefor a Certificate or Certificates of the same maturity and series, in
definitive form, in the authorized denomination, and in the same aggregate principal amount, as
the Certificate or Certificates in temporary form surrendered. Such exchange shall be made
without the making of any charge therefor to any Owner.
Section 3.09. Replacement Certificates.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated
Certificate, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a
replacement Certificate 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 Certificate 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.
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(b) In the event that any Certificate 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 Certificate has been acquired by a bona fide purchaser,
shall authenticate and deliver a replacement Certificate 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 Certificate;
(ii) furnishes such security or indemnity as may be required by the Paying
Agent/Registrar to save it and the City harmless;
(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 Certificate, a bona fide purchaser of the
original Certificate in lieu of which such replacement Certificate was issued presents for
payment such original Certificate, the City and the Paying Agent/Registrar shall be entitled to
recover such replacement Certificate 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 Certificate has become or is about to become due and payable, the Paying Agent/Registrar,
in its discretion, instead of issuing a replacement Certificate, may pay such Certificate when it
becomes due and payable.
(e) Each replacement Certificate 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 Certificate or Certificates in lieu
of which such replacement Certificate is delivered.
Section 3.10. Book-Entry-OnlySystem.
(a) Notwithstanding any other provision hereof, upon initial issuance of the
Certificates, the Certificates shall be registered in the name of Cede & Co., as nominee of DTC.
The definitive Certificates shall be initially issued in the form of a single separate certificate for
each of the maturities thereof.
(b) With respect to Certificates 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
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the Certificates. 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 Certificates, (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 Certificates, including any
notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than
an Owner, as shown in the Register of any amount with respect to principal of or interest on the
Certificates. 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
Certificate is registered in the Register as the absolute owner of such Certificate for the purpose
of payment of principal of and interest on Certificates, for the purpose of giving notices of
redemption and other matters with respect to such Certificate, for the purpose of registering
transfer with respect to such Certificate, and for all other purposes whatsoever. The Paying
Agent/Registrar shall pay all principal of and interest on the Certificates 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 interest
on the Certificates 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 Certificates.
Section 3.11. Successor Securities Depository; Transfer Outside Book -Entry -Only
System.
In the event that the City determines that it is in the best interest of the City and the
beneficial owners of the Certificates that they be able to obtain certificated Certificates, or in the
event DTC discontinues the services described herein, the City 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 Certificates to such successor
securities depository; or (ii) notify DTC and DTC Participants of the availability through DTC of
certificated Certificates and cause the Paying Agent/Registrar to transfer one or more separate
registered Certificates to DTC Participants having Certificates credited to their DTC accounts.
In such event, the Certificates 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 Certificates shall designate, in accordance with the provisions of this Ordinance.
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Section 3.12. Payments to Cede & Co.
Notwithstanding any other provision of this Ordinance to the contrary, so long as the
Certificates are registered in the name of Cede & Co., as nominee of DTC, all payments with
respect to principal of and interest on such Certificates, and all notices with respect to such
Certificates shall be made and given, respectively, in the manner provided in the Representation
Letter of the City to DTC.
ARTICLE IV
REDEMPTION OF CERTIFICATES BEFORE MATURITY
Section 4.01. Redemption.
The Certificates are subject to redemption before their scheduled maturity only as
provided in this Article IV.
Section 4.02. Optional Redemption.
(a) The City reserves the option to redeem Certificates in the manner provided in the
Form of Certificate attached hereto as Exhibit C, with such changes as are required by the
Pricing Certificate.
(b) If less than all of the Certificates 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 Certificates, 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 Certificates to be
redeemed.
Section 4.03. Mandatory Sinking Fund Redemption.
Certificates designated as "Term Certificates," 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 Certificate attached hereto as Exhibit C, with such changes as are required by the Pricing
Certificate. Term Certificates 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 Certificate 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 Certificate is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000
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portion of the Certificate as though it were a single Certificate for purposes of selection for
redemption.
(b) Upon surrender of any Certificate for redemption in part, the Paying
Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate and
deliver an exchange Certificate or Certificates in an aggregate principal amount equal to the
unredeemed portion of the Certificate 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 Certificate 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 Certificates 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 Certificate (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.
(b) The notice shall state the redemption date, the redemption price, the place at
which the Certificates are to be surrendered for payment, and, if less than all the Certificates
outstanding are to be redeemed, an identification of the Certificates or portions thereof to be
redeemed.
(c) The City reserves the right to give notice of its election or direction to redeem
Certificates 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
Certificates 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.
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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 Certificates 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 Certificates being redeemed.
(b) Upon presentation and surrender of any Certificate 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 Certificate 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
Certificates 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 Certificates or portions thereof
shall cease to bear interest from and after the date fixed for redemption, whether or not such
Certificates are presented and surrendered for payment on such date.
(b) If the City shall fail to make provision for payment of all sums due on a
redemption date, then any Certificate or portion thereof called for redemption shall remain
outstanding and continue to bear interest at the rate stated on the Certificate 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 Certificates and remaining unclaimed by the
Owners of such Certificates 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.
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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 other entity duly qualified and legally authorized to serve
as and perform the duties and services of paying agent and registrar for the Certificates.
Section 5.03. Maintaining Paying Agent/Registrar.
(a) At all times while any Certificates 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.
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 thereof in the Register, 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 Certificates to the successor Paying Agent/Registrar.
ARTICLE VI
FORM OF THE CERTIFICATES
Section 6.01. Form Generally.
(a) The Certificates, 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 Certificates, (i) shall be generally in the form set forth
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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 Certificates, as evidenced by their execution thereof.
(b) Any portion of the text of any Certificates may be set forth on the reverse side
thereof, with an appropriate reference thereto on the face of the Certificates.
(c) The definitive Certificates, if any, 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
Certificates, as evidenced by their execution thereof.
(d) The Initial Certificate submitted to the Attorney General of the State of Texas
may be typewritten and photocopied or otherwise reproduced.
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 LLC, and may authorize the printing of such numbers on the face of the
Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers
on the Certificates shall be of no significance or effect in regard to the legality thereof and
neither the City nor the attorneys approving said Certificates as to legality are to be held
responsible for CUSIP numbers incorrectly printed on the Certificates.
Section 6.03. Legal Opinion.
The approving legal opinion of Andrews Kurth LLP, Bond Counsel, may be attached to
or printed on the reverse side of each Certificate 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, to be issued for any
Certificate or Certificates may be printed on or attached to each such Certificate.
ARTICLE VII
SALE AND DELIVERY OF CERTIFICATES; DEPOSIT OF PROCEEDS
Section 7.01. Sale of Certificates, Official Statement.
(a) The Certificates shall be sold at negotiated sale to the Underwriters in accordance
with the terms of this Ordinance, including this Section 7.01(a) and Exhibit B hereto, provided
that all of the conditions set forth in Exhibit B can be satisfied. As authorized by Chapter 1371,
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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 the Certificates 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 Certificates, (ii) the date(s) on which
the Certificates of each series will be sold and delivered, (iii) whether to acquire bond insurance
for the Certificates, (iv) the price at which the Certificates will be sold, (v) the number and any
additional or different title or designation for the Certificates to be issued, (vi) the form in which
the Certificates shall be issued, (vii) the dates on which the Certificates will mature, the principal
amount to mature in each year, the rate(s) of interest to be borne by each such maturity, the
interest payment dates, and the initial date from which interest will accrue, (viii) the dates, prices
and other terms upon and at which the Certificates shall be subject to redemption prior to
maturity (including terms for optional and mandatory sinking fund redemption), and (ix) 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.
The Authorized Officer may approve modifications to this Ordinance to conform to the
terms of the Certificates, 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 Certificates pursuant to this Ordinance.
The authority granted to the Authorized Officer under this Section 7.01(a) shall expire at
11:59 p.m., on the 180th day following the date of this Ordinance (the "Expiration Date"), unless
otherwise extended by the City Council by separate action. Certificates sold pursuant to a
Purchase Contract executed on or before the Expiration Date may be delivered after such date.
In satisfaction of Section 1201.022(a)(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 Certificates 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 Certificates and the execution of the 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 (the "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 Certificates. At the direction of the
Authorized Officer, Certificates and Series 2016 Bonds may be sold, but are not required to be
sold, pursuant to the terms of a common Purchase Contract.
(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
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connection with the public offering and sale of each series of Certificates, 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 Certificates, 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 Certificates. The use and distribution of the Preliminary Official
Statement, and the preliminary public offering of the Certificates by the Underwriters, is hereby
ratified, approved and confirmed. The Authorized Officer may direct the preparation of a
common Official Statement for any series of Certificates and Series 2016 Bonds.
(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 Certificates in accordance with the terms of sale therefor including, without limitation, the
Purchase Contract.
(e) The obligation of the Underwriters to accept delivery of the Certificates is subject
to the closing conditions set forth in the Purchase Contract being satisfied, 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.
Section 7.02. Control and Delivery of Certificates.
(a) The Authorized Officer of the City is hereby authorized to have control of the
Initial Certificate 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
Certificates 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 Tem 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 Tem 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.
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Section 7.03. Deposit of Proceeds.
Proceeds from the sale of the Certificates shall be applied in accordance with the
provisions set forth in the Pricing Certificate, which may provide for the creation of any special
accounts deemed necessary or appropriate by the Authorized Officer.
ARTICLE VIII
INVESTMENTS
Section 8.01. Investments.
(a) Money in the Interest and Sinking Fund created by this Ordinance and any special
accounts provided for in the Pricing Certificate pursuant to Section 7.03, at the City's option,
may be invested in such securities or obligations as permitted under applicable law. The
Authorized Officer, and any other officer of the City authorized to make investments on behalf
of the City, are hereby authorized and directed to execute and deliver, on behalf of the City, any
and all investment agreements, guaranteed investment contracts or repurchase agreements in
connection with the investment of moneys on deposit in the Interest and Sinking Fund and the
special account provided for in the Pricing Certificate pursuant to Section 7.03, but only to the
extent such investment agreements, guaranteed investment contracts or repurchase agreements
are authorized investments under applicable law.
(b) Any securities or obligations in which money in the Interest and Sinking Fund is
so invested shall be kept and held in trust for the benefit of the Owners and shall be sold and the
proceeds of sale shall be timely applied to the making of all payments required to be made from
the fund from which the investment was made.
Section 8.02. Investment Income.
(a) Interest and income derived from investment of the Interest and Sinking Fund
shall be credited to such fund.
(b) Interest and income derived from investment of the other funds to be deposited
pursuant to Section 7.03 hereof shall be credited to the fund or account where deposited until the
acquisition or construction of said projects is completed or shall be transferred to the Interest and
Sinking Fund as shall be determined by the City Council. Upon completion of the authorized
projects, to the extent such interest and income are present, such interest and income shall be
deposited to the Interest and Sinking Fund.
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01. Payment of the Certificates.
On or before each Interest Payment Date for the Certificates and while any of the
Certificates are outstanding and unpaid, there shall be made available to the Paying
Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such interest on
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and principal of the Certificates as will accrue or mature on the applicable Interest Payment Date,
maturity date or date of prior redemption.
Section 9.02. 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 and in each Certificate; the City will
promptly pay or cause to be paid the principal of and interest on each Certificate on the dates and
at the places and manner prescribed in such Certificate; 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
Certificates; all action on its part for the creation and issuance of the Certificates has been duly
and effectively taken; and the Certificates in the hands of the Owners thereof are and will be
valid and enforceable obligations of the City in accordance with their terms.
Section 9.03. 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 any
Certificate 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 Certificate, 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 Certificate and prior to the last stated maturity of the Certificates
(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 Certificate 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 Certificate 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.
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(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 Certificate
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
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 Certificate, directly or indirectly
invest Gross Proceeds of such Certificate 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 Certificates.
(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 Certificates 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 Certificates 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 Certificates
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 Certificates 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 Certificates by the
initial purchaser thereof and the loan of the money represented thereby, and in order to
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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
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 Certificates, not been
relevant to either party.
(i) Not Hedge Bonds. The City will not invest more than 50 percent of the Proceeds
of the Certificates in Nonpurpose Investments having a guaranteed yield for four years or more.
On the Issue Date of the Certificates, the City reasonably expects that at least 85 percent of the
Net Sale Proceeds of the Certificates will be used to carry out the governmental purpose of such
series within three years after the Issue Date.
0) Airport Facilities. The City will not spend more than 10 percent of the Proceeds
of the Certificates for the purposes described in clause (iii) of Section 3.01 of this Ordinance if
the resulting expenditures would cause the Certificates to be treated as "private activity bonds"
under the Code.
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:
(i) the failure to make payment of the principal of or interest on any of the
Certificates when the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant,
agreement, or obligation of the City, which default materially and adversely affects the
rights of the Owners, including but not limited to their prospect or ability to be repaid in
accordance with this Ordinance, and the continuation thereof for a period of sixty (60)
days after notice of such default is given by any Owner to the City.
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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 by mandamus or other suit, action or special proceeding in equity or at law in any
court of competent jurisdiction for any relief permitted by law, including the specific
performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing
that may be unlawful or in violation of any right of the Owners hereunder or any combination of
such remedies.
(b) It is provided that all such proceedings shall be instituted and maintained for the
equal benefit of all Owners of Certificates 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, but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or under the Certificates 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 Certificates 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.
ARTICLE XI
DISCHARGE
Section 11.01. Discharge.
Except as otherwise provided in the Pricing Certificate, the Certificates 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 7.01 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
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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 financial
statements becomes available.
(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 or 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 Certificates:
(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
Certificates, or other material events affecting the tax status of the Certificates;
(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
Certificates, if material;
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(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
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 Certificates within the meaning of the Rule, except that the City in any event will give
notice of any Certificate 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 Certificates, 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
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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 Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM
ANY BREACH BY 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 Certificates in the primary offering of the Certificates 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 Certificates 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 Certificates. 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 Certificate 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
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omission herein. In addition, the City may, with the written consent of the Owners of the
Certificates holding a majority in aggregate principal amount of the Certificates then
outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that,
without the consent of all Owners of outstanding Certificates, no such amendment, addition, or
rescission shall (i) extend the time or times of payment of the principal of and interest on the
Certificates, 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 or interest on the
Certificates, (ii) give any preference to any Certificate over any other Certificate, or (iii) reduce
the aggregate principal amount of Certificates 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 Certificates 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 Certificates 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.]
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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 C. ROBERTSON, Mayor
ATTEST:
REBECCA GARZA, City Secretary
[SEAL]
APPROVED AS TO CONTENT:
LINDA CUELLAR, Acting Executive Director of Finance
APPROVED AS TO FORM:
JERRY V. KYLE, Jr., Bond Counsel
Signature Page for Ordinance
HOU:3645845.1
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. 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.
2. Statistical and financial data set forth in the Official Statement in
"APPENDIX A - FINANCIAL INFORMATION REGARDING THE CITY" (Tables 1-5 and 7-
17).
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in Paragraph 1 above.
* Subject to any changes prescribed by the Pricing Certificate.
Exhibit A-1
HOU:3645845.1
EXHIBIT B
SALE PARAMETERS
In accordance with Section 7.01(a) of the Ordinance, the following conditions with
respect to the Certificates must be satisfied in order for the Authorized Officer to act on behalf of
the City in selling and delivering the Certificates to the Underwriters:
(a) the price to be paid for the Certificates shall not be less than 90% of the aggregate
principal amount of the Certificates;
(b) the Certificates 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 Certificates shall produce proceeds in an
amount sufficient, as determined by the Authorized Officer, 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 Certificates shall not exceed twenty-one (21) years
from the date of their delivery; and
(e) the Certificates 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:3645845. l
EXHIBIT C
FORM OF THE CERTIFICATES
The form of the Certificates, 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 Certificates, shall be generally as
follows, provided, however, that the substantially final form of the Certificates shall be set forth
in or attached to the Pricing Certificate and shall incorporate and reflect the final terms of the
Certificates set forth in the Pricing Certificate:
(a)
Form of Certificate.
REGISTERED
No.
United States of America
REGISTERED
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2016
CERTIFICATE
INTEREST RATE: MATURITY DATE: 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, on the Maturity Date specified above, the sum of
DOLLARS
unless this Certificate 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 Certificate 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 -day year of twelve 30 -day months, such interest to be paid semiannually on
1 Information to be inserted from Pricing Certificate.
Exhibit C-1
HOU:3645845.1
February 15 and August 15 of each year, commencing Z. All capitalized terms used
herein but not defined shall have the meaning assigned to them in the Ordinance (defined below).
The principal of this Certificate shall be payable without exchange or collection charges
in lawful money of the United States of America upon presentation and surrender of this
Certificate at the corporate trust 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 Certificate is payable by check dated as of the interest
payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the
address shown on the registration books kept by the Paying Agent/Registrar or by such other
customary banking arrangement acceptable to the Paying Agent/Registrar and the registered
owner; provided, however, such registered owner shall bear all risk and expenses of such
customary banking arrangement. At the option of an Owner of at least $1,000,000 principal
amount of the Certificates, interest may be paid by wire transfer to the bank account of such
Owner on file with the Paying Agent/Registrar. For the purpose of the payment of interest on
this Certificate, the registered owner shall be the person in whose name this Certificate is
registered at the close of business on the "Record Date," which shall be the last Business Day of
the month next preceding such interest payment date; provided, however, that in the event of
nonpayment of interest on a scheduled payment date and for 30 days thereafter, a new record
date for such interest payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the
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 Certificate appearing in the registration
books of the Paying Agent/Registrar at the close of business on the last Business Day next
preceding the date of mailing of such notice.
If the date for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, legal holiday, or 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, 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 have the same
force and effect as if made on the original date payment was due.
This Certificate is one of a series of fully registered certificates specified in the title
hereof issued in the aggregate principal amount of $ 3 (herein referred to as the
"Certificates"), issued pursuant to a certain ordinance of the City (the "Ordinance") for the
purpose of paying contractual obligations to be incurred for authorized public improvements
(collectively, the "Project"), as described in the Ordinance, and to pay the contractual obligations
for professional services of attorneys, financial advisors and other professionals in connection
with the Project and the issuance of the Certificates.
z Information to be inserted from Pricing Certificate.
3 Information to be inserted from Pricing Certificate.
Exhibit C-2
HOU:3645845. l
[The City has reserved the option to redeem the Certificates maturing on or after
February 15, 20_, in whole or in part, before their respective scheduled maturity dates, on
, 20, or on any date thereafter, at a price equal to the principal amount of the
Certificates so called for redemption plus accrued interest to the date fixed for redemption. If
less than all of the Certificates 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 or other customary method that results in a random selection the Certificates, or
portions thereof, within such maturity and in such principal amounts, for redemption .]4
[Certificates maturing on February 15 in each of the years through , inclusive
(the "Term Certificates"), 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 Certificates Maturing February 15, 20
Redemption Date Principal Amount
February 15, 20_
February 15, 20_
February 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 Certificates (or with respect to Term Certificates
having a denomination in excess of $5,000, each $5,000 portion thereof) to be redeemed by
mandatory redemption. The principal amount of Term Certificates 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 Certificates
which, at least forty-five (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 Certificates
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 thirty (30) days before the date fixed for redemption, to the registered
owner of each of the Certificates 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 Certificates 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
4 Insert optional redemption provisions, if any, and revise as necessary to conform to the Pricing Certificate.
5 Insert mandatory sinking fund redemption provisions, if any, and conform as necessary to the Pricing Certificate.
Exhibit C-3
HOU:3645845.1
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 Certificates 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
Certificate is transferable upon surrender of this Certificate for transfer at the designated 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 Certificates 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 Certificate called for redemption where such redemption is scheduled to occur
within forty five (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 Certificate.
The City, the Paying Agent/Registrar, and any other person may treat the person in whose
name this Certificate 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 Certificate is
registered on the Record Date or Special Record Date, as applicable) and for all other purposes,
whether or not this Certificate be overdue, and neither the City nor the Paying Agent/Registrar
shall be affected by notice to the contrary.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Certificate and the
series of which it is a part is duly authorized by law; that all acts, conditions, and things to be
done precedent to and in the issuance of the Certificates have been properly done and performed
and have happened in regular and due time, form, and manner as required by law; that ad
valorem taxes upon all taxable property in the City have been levied for and pledged to the
payment of the debt service requirements of the Certificates within the limit prescribed by law;
that, in addition to said taxes, further provisions have been made for the payment of the debt
service requirements of the Certificates by pledging to such purpose Surplus Revenues, as
defined in the Ordinance, derived by the City from the operation of the Waterworks System in an
amount limited to $1,000; that when so collected, such taxes and Surplus Revenues shall be
appropriated to such purposes; and that the total indebtedness of the City, including the
Certificates, does not exceed any constitutional or statutory limitation.
Exhibit C-4
HOU:3645845.1
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 C. ROBWSt)V, Mayor
ATTEST:
CCA GARZA, City
[SEAL]
APPROVED AS TO CONTENT:
By: 4, �11�
LINDA CUELLAR, Acting Executive Director of Finance
APPROVED AS TO FORM:
By:
L�
JE V. KYLE, Jr., Bond Counsel
Signature Page for Ordinance
HOU-3645845 I
CERTIFICATE OF PAYING AGENT/REGISTRAR
The records of the Paying Agent/Registrar show that the Initial Certificate of this series
of Certificates was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas, and that this is one of the Certificates
referred to in the within -mentioned Ordinance.
Dated:
(d) Form of Assignment.
as Paying Agent/Registrar
ASSIGNMENT
Authorized Signatory
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 Certificate
and all rights hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Certificate 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 Certificate in every particular and
must be guaranteed in a manner acceptable to
the Paying Agent/Registrar.
(e) The Initial Certificate shall be in the form set forth in paragraphs (a), (b) and (d)
of this Section, except for the following alterations:
(i) immediately under the name of the Certificate the headings "INTEREST
RATE" and "MATURITY DATE" shall both be completed with the words "As shown
below"; and
(ii) in the first paragraph of the Certificate, the words "on the Maturity Date
specified above" shall be deleted and the following will be inserted: "on February 15 in
Exhibit C-6
HOU:3645845.1
each of the years, in the principal installments and bearing interest at the per annum rates
set forth in the following schedule:
Years Principal Installments Interest Rate
(Information to be inserted from the Pricing Certificate
pursuant to Section 3.02 of this Ordinance)
Exhibit C-7
HOU:3645845.1
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
Whereupon, among other business, a written
introduced:
N/A , thus constituting a quorum.
Ordinance bearing the following caption was
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY
OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2016; LEVYING A TAX AND PLEDGING SURPLUS
WATERWORKS SYSTEM REVENUES IN PAYMENT
THEREOF; 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:3649259.1
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: 6 NOES: 1 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.
P-e-� JX7
Cit Secretary
Ci of Lubbock, Texas
[SEAL]
HOU:3649259 I
PRICING CERTIFICATE
City of Lubbock, Texas
Tax and Waterworks System Surplus Revenue
Certificates of Oblillation, Series 2016
Re: $ City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue
Certificates of Obligation, Series 2016 (the "Certificates")
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 Certificates. Capitalized
terms used in this Pricing Certificate shall have the meanings given such terms in the Ordinance.
1. As authorized by Section 7.01 of the Ordinance, I have acted on behalf of the City in
selling the Certificates to the Underwriters pursuant to the terms of a purchase contract in
substantially the form accepted, approved, and authorized pursuant to Section 7.01 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 7.01 of the Ordinance:
A. The Certificates shall be issued in the aggregate principal amount of
$ , shall be dated April 15, 2016 (the "Certificate Date") and bear interest from
their date of delivery, shall mature on February 15 in the years and in the principal amounts and
shall bear interest payable on February 15 and August 15 of each year, commencing
February 15, 2017, at the rates set forth in the following schedule:
B. The Certificates maturing on and after February 15, 2027 are subject to optional
redemption, in whole or from time to time, in part, in integral multiples of $5,000 on
February 15, 2026, or on any date thereafter, at a redemption price of par, plus accrued interest to
the date fixed for redemption.
HOU:3649821.1
Principal
Principal
Year
Installments Interest Rates
Year
Installments Interest Rates
2017
$ %
2027
$ %
2018
%
2028
%
2019
%
2029
%
2020
%
2030
%
2021
%
2031
%
2022
%
2032
%
2023
%
2033
%
2024
%
2034
%
2025
%
2035
°gyp
2026
%
2036
%
B. The Certificates maturing on and after February 15, 2027 are subject to optional
redemption, in whole or from time to time, in part, in integral multiples of $5,000 on
February 15, 2026, or on any date thereafter, at a redemption price of par, plus accrued interest to
the date fixed for redemption.
HOU:3649821.1
C. In accordance with the parameters contained in Section 7.01 and Exhibit B of the
Ordinance, the undersigned does hereby find, certify, and represent that the foregoing terms of
the Certificates satisfy the following requirements and parameters contained within such Section
7.01 and Exhibit B:
(i) the price to be paid for the Certificates is not less than 90% of the
aggregate principal amount of the Certificates;
(ii) the Certificates 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 Certificates produces proceeds
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 Certificates is February 15, 2036, which does not
exceed the maximum maturity of twenty-one (21) years from their date of delivery; and
(v) the Certificates 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. The proceeds of the Certificates shall be applied as follows:
A. premium in the amount of $ shall be used to pay costs of issuance;
and
B. proceeds from the sale of the Certificates in the amount of $
(representing $ of the principal amount of the Certificates, together with
$ of premium realized on the sale of the Certificates) shall be deposited to special
accounts of the City for the purposes of paying the costs of the Project described in Section 3.01
of the Ordinance.
3. The principal amount of the Certificates, together with the amount of premium (identified
in Paragraph 2.13.) to be used for the purpose of paying the costs of the Project described in
Section 3.01 of the Ordinance, does not exceed the maximum amount set forth in the notice of
intent to issue the Certificates published by the City.
4. The Certificates 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 Certificates
are in the best interest of the City and are the most advantageous reasonably available to the City.
[SIGNATURE PAGE FOLLOWS]
2
HOU:3649821 I
Executed as o:
HOU:3649821 I
2016.
f
Linda Cuellar
Acting Executive Director of Finance
City of Lubbock, Texas
[Signature Page for Pricing Certificate for Certificates of Obligation]
EXHIBIT A
The form of the Certificates, 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 Certificates, shall be generally as
follows:
(a) Form of Certificate.
REGISTERED
No.
United States of America
State of Texas
REGISTERED
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2016
CERTIFICATE
INTEREST RATE: MATURITY DATE: 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, on the Maturity Date specified above, the sum of
DOLLARS
unless this Certificate 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 April 27, 2016 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 February 15 and
August 15 of each year, commencing February 15, 2017. All capitalized terms used herein but
not defined shall have the meaning assigned to them in the Ordinance (defined below).
The principal of this Certificate shall be payable without exchange or collection
charges in lawful money of the United States of America upon presentation and surrender of this
Certificate at the corporate trust 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 Certificate is payable by check dated
A-1
FIOU:3649821.1
as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the
registered owner at the address shown on the registration books kept by the Paying
Agent/Registrar or by such other customary banking arrangement acceptable to the Paying
Agent/Registrar and the registered owner; provided, however, such registered owner shall bear
all risk and expenses of such customary banking arrangement. At the option of an Owner of at
least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the
bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the
payment of interest on this Certificate, the registered owner shall be the person in whose name
this Certificate is registered at the close of business on the "Record Date," which shall be the last
business day of the month next preceding such interest payment date; provided, however, that in
the event of nonpayment of interest on a scheduled payment date and for 30 days thereafter, a
new record date for such interest payment (a "Special Record Date") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the 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 Certificate appearing in the
registration books of the Paying Agent/Registrar at the close of business on the last business day
next preceding the date of mailing of such notice.
If the date for the payment of the principal of or interest on this Certificate shall
be a Saturday, Sunday, legal holiday, or 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, 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 have the same
force and effect as if made on the original date payment was due.
This Certificate is one of a series of fully registered certificates specified in the
title hereof issued in the aggregate principal amount of $ (herein referred to as the
"Certificates"), issued pursuant to a certain ordinance of the City (the "Ordinance") for the
purpose of paying contractual obligations to be incurred for authorized public improvements
(collectively, the "Project"), as described in the Ordinance, and to pay the contractual obligations
for professional services of attorneys, financial advisors and other professionals in connection
with the Project and the issuance of the Certificates.
The City has reserved the option to redeem the Certificates maturing on or after
February 15, 2027, in whole or in part, before their respective scheduled maturity dates, on
February 15, 2026, or on any date thereafter, at a price equal to the principal amount of the
Certificates so called for redemption plus accrued interest to the date fixed for redemption. If
less than all of the Certificates 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 or other customary method that results in a random selection the Certificates, or
portions thereof, within such maturity and in such principal amounts, for redemption.
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
A-2
HOU:3649821.1
registered owner of each of the Certificates 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 Certificates 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
Certificates 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 Certificate is transferable upon surrender of this Certificate for transfer at the designated
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
Certificates 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 Certificate called for redemption where such redemption is scheduled to occur
within forty five (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 Certificate.
The City, the Paying Agent/Registrar, and any other person may treat the person
in whose name this Certificate 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
Certificate is registered on the Record Date or Special Record Date, as applicable) and for all
other purposes, whether or not this Certificate be overdue, and neither the City nor the Paying
Agent/Registrar shall be affected by notice to the contrary.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Certificate
and the series of which it is a part is duly authorized by law; that all acts, conditions, and things
to be done precedent to and in the issuance of the Certificates have been properly done and
performed and have happened in regular and due time, form, and manner as required by law; that
ad valorem taxes upon all taxable property in the City have been levied for and pledged to the
payment of the debt service requirements of the Certificates within the limit prescribed by law;
that, in addition to said taxes, further provisions have been made for the payment of the debt
service requirements of the Certificates by pledging to such purpose Surplus Revenues, as
A-3
HOU:3649821.1
defined in the Ordinance, derived by the City from the operation of the Waterworks System in an
amount limited to $1,000; that when so collected, such taxes and Surplus Revenues shall be
appropriated to such purposes; and that the total indebtedness of the City, including the
Certificates, does not exceed any constitutional or statutory limitation.
IN WITNESS WHEREOF, the City has caused this Certificate to be executed 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 Certificate.
Mayor o ock, Texas
City ecretary,
City o ubbock, Texas
[SEAL]
(b) Form of Comptroller's Registration Certificate. The following Comptroller's
Registration Certificate may be deleted from the definitive Certificates if such certificate on the
Initial Certificate 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 Certificate 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 obligation of the City of
Lubbock, Texas; and that this Certificate has this day been registered by me.
[SEAL]
Witness my hand and seal of office at Austin, Texas,
Comptroller of Public Accounts
of the State of Texas
(c) Form of Certificate of Pgying Agent/Registrar. The following Certificate of
Paying Agent/Registrar may be deleted from the Initial Certificate if the Comptroller's
Registration Certificate appears thereon.
A-4
HOU:3649821 I
CERTIFICATE OF PAYING AGENT/REGISTRAR
The records of the Paying Agent/Registrar show that the Initial Certificate of this
series of Certificates was approved by the Attorney General of the State of Texas and registered
by the Comptroller of Public Accounts of the State of Texas, and that this is one of the
Certificates referred to in the within -mentioned Ordinance.
Dated:
(d) Form of Assignment.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.,
as Paying Agent/Registrar
ASSIGNMENT
Authorized Signatory
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 Certificate
and all rights hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Certificate 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 Certificate in every particular and
must be guaranteed in a manner acceptable to
the Paying Agent/Registrar.
(e) The Initial Certificate shall be in the form set forth in paragraphs (a), (b) and (d)
of this Section, except for the following alterations:
(i) immediately under the name of the Certificate the headings "INTEREST
RATE" and "MATURITY DATE" shall both be completed with the words "As shown
below" and the heading "CUSIP NUMBER" shall be deleted; and
(ii) in the first paragraph of the Certificate, the words "on the Maturity Date
specified above, the sum of DOLLARS" shall be deleted and the
A-5
HOU:3649821.1
following will be inserted: "on February 15 in each of the years, in the principal
installments and bearing interest at the per annum rates set forth in the following
schedule:
Years Principal Installments Interest Rate
(Information to be inserted from the Pricing Certificate
pursuant to Section 3.02 of this Ordinance)
A-6
HOU:3649821.1
PURCHASE CONTRACT
RELATING TO
$
CITY OF LUBBOCK, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2016
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION, 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
CITYOFLUBBOCK, TExAs (the "City") for the purchase by the Underwriters of the City's General
Obligation Refunding Bonds, Series 2016 (the "Bonds") and Tax and Waterworks System
Surplus Revenue Certificates of Obligation, Series 2016 (the "Certificates of Obligation", and
together with the Bonds, 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 to the
Underwriters the Bonds in an aggregate principal amount of $ (representing the
original aggregate principal amount of the Bonds). The Bonds 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 Bond Ordinance (as defined below).
(b) The purchase price for the Bonds shall be $ (representing the principal
amount of the Bonds, plus [an] [a net] original issue premium on the Bonds in the amount of
$ , and less an Underwriters' discount on the Bonds of $ ).
(c) 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 to the Underwriters the Certificates of Obligation in an
aggregate principal amount of $ (representing the original aggregate principal
amount of the Certificates of Obligation). The Certificates of Obligation 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 Certificate
Ordinance (as defined below).
(d) The purchase price for the Certificates of Obligation shall be $
(representing the principal amount of the Certificates of Obligation, plus [an] [a net] original
issue premium on the Certificates of Obligation in the amount of $ and less an
Underwriters' discount on the Certificates of Obligation of $ ).
(e) CITxROUP 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. Ordinances. The Bonds 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 Bonds (the "Bond Ordinance"). The Certificates of Obligation 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 Certificates of Obligation
(the "Certificate Ordinance", and together with the Bond Ordinance, the "Ordinances"). In the
Ordinances, 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 each series of the Securities through the execution of separate Pricing Certificates dated
the date hereof (collectively, the "Pricing Certificate"), within the respective parameters set forth
in each Ordinance. The respective series of Securities shall be secured and payable as provided
in the Ordinance authorizing their issuance and the related 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 Ordinances 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 prices 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
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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
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 Ordinances 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
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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
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 Ordinances, 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 Ordinances
(including the Undertaking defined below in Section 8(e)(2)), the Pricing Certificate, the
Escrow Agreement (as defined below) and this Purchase Contract and all documents
required hereunder and thereunder to be executed and delivered by the City (this
Purchase Contract, the Ordinances, the Undertaking, the Escrow Agreement and the
Pricing Certificate and the other documents referred to in this clause are hereinafter
referred to as the "City Documents");
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(b) By official action of the City prior to or concurrently with the acceptance
hereof, the City has duly adopted the Ordinances, 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, the Escrow Agreement and this Purchase
Contract and has duly authorized and approved the performance by the City of its
obligations contained in the Ordinances, 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 Ordinances 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 each issue 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)(7)
hereof, but subject to the discretion of the Attorney General with respect to the issuance
of his approving opinion;
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(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 ad
valorem taxes or 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 Preliminary Official Statement and 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, affecting or seeking to prohibit, restrain or enjoin the collection of ad valorem
taxes pledged to the payment of the principal of and interest on the Securities or
application of the surplus net revenues (the "Pledged Revenues") of the City's
Waterworks System (the "System") pledged or to be pledged to pay the principal of and
interest on the Certificates of Obligation, 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 Ordinances, 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 Ordinances contained in the
Preliminary Official Statement and the Official Statement accurately summarize certain
0
provisions of such instruments, and the Securities, when validly executed, authenticated
and delivered in accordance with the Ordinances 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 Ordinances;
(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 Preliminary Official Statement
and the Official Statement present fairly the financial position of the City 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 Ordinances authorizing their issuance or
that would cause the interest of the Securities to be includable in gross income of the
holders thereof for federal income tax purposes;
(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 of each series (as provided for
in the Ordinances) to the Underwriters and the City shall take appropriate steps to provide The
Depository Trust Company ("DTC") with one definitive securities certificate for each date 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
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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 each issue 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 Bond 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
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 Ordinances shall be in full force and
effect, and the Ordinances 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
Ordinances;
s
(c) At the time of the Closing, all official action of the City related to the
Ordinances 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;
(2) The Ordinances, 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
Ordinances 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 (with respect to each or
both series of the Securities), 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) The Escrow Agreement (with respect to the obligations to be
refunded with the proceeds of the Bonds), having been duly executed on behalf of
the City and The Bank of New York Mellon Trust Company, National
Association, as Escrow Agent, evidencing that all "Escrowed Securities" and cash
to be deposited with the Escrow Agent on the date of Closing have been
purchased by or delivered to the Escrow Agent, all as described in the Official
Statement, together with a certificate, dated as of the date of Closing, executed by
an appropriate official of the Escrow Agent, to the effect that the Escrow
Agreements have been duly authorized, executed and entered into by the Escrow
Agent;
(6) The opinions pertaining to the issuance of the Securities, dated the
date of Closing, of Andrews Kurth LLP ("Bond Counsel") in substantially the
forms and substance set forth in Appendix C to the Official Statement;
(7) With respect to each series of the Securities, opinions dated on or
prior to the date of Closing of the Attorney General, approving the Securities as
required by law, and the related registration certificates of the Comptroller;
(8) 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 opinions of Bond Counsel delivered in
accordance with the provisions of Section 8(e)(6) 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 OBLIGATIONS", "TAX MATTERS", "REGISTRATION
AND QUALIFICATION OF THE OBLIGATIONS FOR SALE", "LEGAL
INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN
TEXAS", "LEGAL MATTERS", "CONTINUING DISCLOSURE OF
INFORMATION" (except for the subcaption "Compliance with Prior
Undertakings"), the first paragraph under the caption "EFFECTS OF
SEQUESTRATION ON CERTAIN OBLIGATIONS" and "APPENDIX C -
FORMS OF BOND COUNSEL OPINIONS", 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 such information conforms to the
Ordinances; and (c) the Securities are exempt from registration pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), and the Ordinances are
exempt from qualification as an indenture pursuant to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act");
(9) 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;
(10) 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 the ad valorem taxes
or, in the case of the Certificates of Obligation, the 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 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,
10
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, 2014, the latest date
as to which audited financial information is available;
(11) The opinion of the City Attorney addressed to the Underwriters
and dated the date of the Closing, substantially in the form and substance of
Exhibit C hereto;
(12) 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 either series 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;
(13) The delivery by Grant Thornton LLP of a report (the "Verification
Report") verifying the mathematical accuracy of the schedules that demonstrate
that the Escrowed Securities will mature and pay interest in such amounts which,
together with uninvested funds, if any, in the Escrow Fund, will be sufficient to
pay when due, the principal of and interest on the Refunded Obligations;
(14) Evidence of the rating on the Securities, which shall be "_" by
Moody's Investors Service, Inc. ("Moody's"), "_" by Standard and Poor's
Ratings Services, 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
(15) 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.
The City further agrees to provide the Underwriters with the advance refunding
documents (as defined in MSRB Rule G-32) in a word -searchable PDF format as described in
MSRB Rule G-32 and shall provide the Representative such electronic copy of the word -
searchable PDF format of the advance refunding documents no later than four (4) business days
after the date of the Closing, to enable the Underwriters to comply with MSRB Rule G-32.
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.
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
12
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
13
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.
(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 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)(14) 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 any series of 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
Securites, 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
14
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. The City shall pay any expenses (included in the expense component of the
Underwriters' discount) incurred by the Underwriters on behalf of the City in connection with
the marketing, issuance and delivery of the Securities, including, but not limited to, meals,
transportation, lodging, and entertainment of the City's employees and representatives.
(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,
Parkhurst & Horton L.L.P., Underwriters' Counsel, for such firm's opinion required by Section
8(e)(9) 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 CITxROUP GLOBAL
MARKETS INC., 300 Crescent Court, Suite 940, Dallas, Texas 75201, Attention: Mr. Mario R.
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
15
financial and other interests that differ from those of the Issuer, (iii) the Underwriters are acting
solely as principals and are not acting as municipal advisors, financial advisors or fiduciaries to the
Issuer, (iv) the Underwriters have not assumed any advisory or fiduciary responsibility to the Issuer
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 Issuer on other matters and (v) the only obligations the Underwriters
have to the Issuer 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 Ordinances.
15. Choice of Law. This Purchase Contract shall be governed by and construed in
accordance with the laws of the State of Texas.
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]
16
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.
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.
Authorized Representative
By:
Name:
Title:
ACCEPTANCE
Authorized Officer
City of Lubbock, Texas
— day of , 2016.
[Signature Page to the Series 2016 Purchase Contract]
17
EXHIBIT A
Schedule of Maturities, Interest Rates, Yields and Redemption Provisions
$
City of Lubbock, Texas
General Obligation Refunding Bonds, Series 2016
Maturity
Date
August 15, 2016
February 15, 2020
February 15, 2021
February 15, 2022
February 15, 2023
February 15, 2024
February 15, 2025
February 15, 2026
February 15, 2027
February 15, 2028
February 15, 2029
February 15, 2030
February 15, 2031
February 15, 2032
February 15, 2033
February 15, 2034
Principal Interest Rate Yield
Amount ($) (%) (%)(a)
(a) Yield on maturities on and after 2027 is shown to first call date, February 15, 2026.
Optional Redemption. The City reserves the right, at its option, to redeem Bonds having stated maturities
on and after February 15, 2027, in whole or in part in principal amounts of $5,000 or any integral multiple
thereof, on February 15, 2026, or any date thereafter, at par plus accrued interest to the date of
redemption.
Maturity
(2/15)
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
$
City of Lubbock, Texas
Tax and Waterworks System Surplus
Revenue Certificates of Obligation, Series 2016
Principal Interest Rate Yield
Amount ($) (%) (%)(a)
(a) Yield for maturities on and after 2027 is shown to first call date, February 15, 2026.
Optional Redemption. The City reserves the right, at its option, to redeem Certificates of Obligation
having stated maturities on and after February 15, 2027, in whole or in part in principal amounts of
$5,000 or any integral multiple thereof, on February 15, 2026, or 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: $ City of Lubbock, Texas General Obligation Refunding Bonds,
Series 2016
$ City of Lubbock, Texas Tax and Waterworks System Surplus
Revenue Certificates of Obligation, 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 ordinances (the "Ordinances") 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 Ordinances are 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", "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",
"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,
19141$1.1311.1[*
Opinion of the City Attorney
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: $ City of Lubbock, Texas General Obligation Refunding Bonds,
Series 2016
$ City of Lubbock, Texas Tax and Waterworks System Surplus
Revenue Certificates of Obligation, 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 the
ordinances (the "Ordinances") 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:
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 Ordinances
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 ad valorem taxes or, in the case of the Certificates of Obligation,
Pledged Revenues pledged or to be pledged to pay the principal of and interest on the
Certificates of Obligation; (c) contesting or affecting the validity or enforceability of the
Securities, the Ordinances, 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 Ordinances; 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
Tax and Waterworks System Surplus Revenue Certificates of Obligation
Series 2016
Dated as of March 24, 2016
HOU:3649837.1
TABLE OF CONTENTS
Page
ARTICLE I APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR .................1
Section1.01. Appointment...................................................................................................1
Section1.02. Compensation.................................................................................................1
ARTICLE II DEFINITIONS...........................................................................................................2
Section2.01. Definitions.......................................................................................................2
ARTICLE III 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
ARTICLE IV REGISTRAR............................................................................................................4
Section 4.01.
Transfer and Exchange...................................................................................4
Section 4.02.
The Certificates...............................................................................................4
Section 4.03.
Form of Register.............................................................................................5
Section 4.04.
List of Owners.................................................................................................5
Section 4.05.
Cancellation of Certificates.............................................................................5
Section 4.06.
Mutilated, Destroyed, Lost, or Stolen Certificates.........................................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.............................................................................................8
Section 5.04.
May Hold Certificates.....................................................................................8
Section 5.05.
Money Held by Bank......................................................................................8
Section 5.06.
Indemnification...............................................................................................8
Section5.07.
Interpleader.....................................................................................................9
ARTICLE VI MISCELLANEOUS PROVISIONS........................................................................9
Section6.01.
Amendment.....................................................................................................9
Section 6.02.
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..................................................................................10
Section 6.08.
Entire Agreement..........................................................................................10
Section 6.09.
Counterparts..................................................................................................10
Section6.10.
Termination...................................................................................................10
Section6.11.
Governing Law.............................................................................................10
(i)
HOU:3649837.1
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 Tax and
Waterworks System Surplus Revenue Certificates of Obligation, Series 2016 (the "Certificates"),
dated April 15, 2016, to be issued as registered securities without coupons; and
WHEREAS, all things necessary to make the Certificates 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 Certificates, in accordance
with the terms thereof, and that the Bank act as Registrar for the Certificates; 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
Certificates in paying to the Owners of the Certificates the principal, redemption premium, if
any, and interest on all or any of the Certificates.
(b) The Issuer hereby appoints the Bank as Registrar with respect to the Certificates.
(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:3649837.1
(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.
"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.
"Certificate" or "Certificates" means any or all of the Issuer's Tax and Waterworks
System Surplus Revenue Certificates of Obligation, Series 2016, dated April 15, 2016.
"Certificate Ordinance" means the ordinance of the City Council of the Issuer authorizing
the issuance and delivery of the Certificates.
"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 Certificate is registered in the Register.
"Paying Agent" means the Bank when it is performing the functions associated with the
terms in this Agreement.
-2-
HOU:3649837.1
"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 Certificates" of any particular Certificate means every previous Certificate
evidencing all or a portion of the same obligation as that evidenced by such particular Certificate
(and, for the purposes of this definition, any Certificate registered and delivered under Section
4.06 in lieu of a mutilated, lost, destroyed or stolen Certificate shall be deemed to evidence the
same obligation as the mutilated, lost, destroyed or stolen Certificate).
"Record Date" means the last Business Day of the month next preceding an interest
payment date established by the Certificate Ordinance.
"Register" means a register in which the Issuer shall provide for the registration and
transfer of Certificates.
"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 Certificate Ordinance as the
fixed date on which the principal of the Certificates is due and payable or the date fixed in
accordance with the terms of the Certificate Ordinance for redemption of the Certificates, or any
portion thereof, prior to the fixed maturity date.
ARTICLE III
PAYING AGENT
Section 3.01. Duties of Pang 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 Certificate or Certificates so maturing at the
Bank Office, the principal amount of the Certificate or Certificates 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 Certificates to each Owner of the Certificates (or their Predecessor Certificates) 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
1
HOU:3649837.1
the checks, 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 Certificates at the dates specified in the
Certificate 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
REGISTRAR
Section 4.01. Transfer and Exchange.
(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 Certificates. The Bank is hereby appointed "Registrar" for the
purpose of registering and transferring the Certificates 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 Certificate is
outstanding, the Owner may deliver such Certificate 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
Certificate 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 Certificate or Certificates
as provided in such instructions. The provisions of the Certificate 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 Certificate Ordinance.
(c) Every Certificate 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 Certificates. The Issuer shall provide an adequate inventory of
unregistered Certificates to facilitate transfers. The Bank covenants that it will maintain the
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unregistered Certificates in safekeeping and will use reasonable care in maintaining such
unregistered Certificates 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 Register.
(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 Certificates. All Certificates 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 Certificates previously certified or registered and delivered which the
Issuer may have acquired in any manner whatsoever, and all Certificates so delivered shall be
promptly cancelled by the Bank. All cancelled Certificates 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 Certificates.
(a) Subject to the provisions of this Section 4.06, the Issuer hereby instructs the Bank
to deliver fully registered Certificates in exchange for or in lieu of mutilated, destroyed, lost, or
stolen Certificates as long as the same does not result in an over -issuance.
(b) If (i) any mutilated Certificate is surrendered to the Bank, or the Issuer and the
Bank receives evidence to their satisfaction of the destruction, loss, or theft of any Certificate,
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
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Issuer or the Bank that such Certificate 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 Certificate, a new Certificate of the same stated
maturity and of like tenor and principal amount bearing a number not contemporaneously
outstanding.
(c) Every new Certificate issued pursuant to this Section in lieu of any mutilated,
destroyed, lost, or stolen Certificate shall constitute a replacement of the prior obligation of the
Issuer, whether or not the mutilated, destroyed, lost, or stolen Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of the Certificate Ordinance
equally and ratably with all other outstanding Certificates.
(d) Upon the satisfaction of the Bank and the Issuer that a Certificate 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 Certificate number on the
Certificate registered with a notation in the Register that said Certificate has been mutilated,
destroyed, lost, or stolen; and a new Certificate 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 Certificate in lieu of or exchange for a mutilated, destroyed, lost, or stolen
Certificate.
(f) The Issuer hereby accepts the Bank's current blanket Certificate for lost, stolen, or
destroyed Certificates and any future substitute blanket Certificate for lost, stolen, or destroyed
Certificates that the Bank may arrange, and agrees that the coverage under any such blanket
Certificate 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
Certificate or the terms of any such Certificate, provided that the amount of such Certificate is
not reduced below the amount of the Certificate on the date of execution of this Agreement. The
blanket Certificate then utilized by the Bank for lost, stolen, or destroyed Certificates 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
Certificates it has paid pursuant to Section 3.01; Certificates it has delivered upon the transfer or
exchange of any Certificates pursuant to Section 4.01; and Certificates it has delivered in
exchange for or in lieu of mutilated, destroyed, lost, or stolen Certificates 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 Certificate Ordinance and agrees to use reasonable care in the
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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 Certificates to pay the
Certificates 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.
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
Certificates, but is protected in acting upon receipt of Certificates 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 Certificates 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.
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Section 5.03. Recitals of Issuer.
(a) The recitals contained herein and in the Certificates shall be taken as the
statements of the Issuer, and the Bank assumes no responsibility for their correctness.
(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 Certificate 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 Certificates. The Bank, in its individual or any other capacity,
may become the Owner or pledgee of Certificates 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 Certificate and remaining unclaimed for three years after final maturity of the Certificate
has become due and payable will be paid by the Bank to the Issuer, and the Owner of such
Certificate 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 Certificates, 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 Certificates 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 Certificates 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 Certificate Ordinance, including the cost and expense
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(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
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. Separability. 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.
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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 Certificate Ordinance
constitute the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent/Registrar, and if any conflict exists between this Agreement and the Certificate Ordinance,
the Certificate 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
Certificates.
(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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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 C. obertson, Mayor
ATTEST:
Re cca Garza, City Secr t y
[Signature page for Paying AgentRegistrar Agreement for
Tay and Waterworks System Surplus Revenue Certificates of Obligation]
IIOU 3649837
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
By:
Title:
[Signature page for Paying Agent/Registrar Agreement for
Tax and Waterworks System Surplus Revenue Certificates of Obligation]
HOU:3649837.1
SCHEDULE OF FEES FOR SERVICE AS PAYING AGENT/REGISTRAR
HOU:3649837.1