HomeMy WebLinkAboutO-2014-3515 2014 Series Bond Ordinance,Bond Purchase Agreement,receive Plan of FinanceORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE, SALE
AND DELIVERY OF CITY OF LA PORTE, TEXAS, GENERAL
OBLIGATION REFUNDING BONDS, SERIES 2014, IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $10 MILLION; DELEGATING TO
AUTHORIZED REPRESENTATIVES THE AUTHORITY TO APPROVE THE
AMOUNT, INTEREST RATES, PRICE AND TERMS THEREOF AND
CERTAIN OTHER PROCEDURES AND PROVISIONS RELATED
THERETO; AUTHORIZING THE REDEMPTION PRIOR TO MATURITY OF
CERTAIN OUTSTANDING OBLIGATIONS; AND MAKING OTHER
PROVISIONS REGARDING SUCH BONDS AND MATTERS INCIDENT
THERETO
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS:
ARTICLE I.
FINDINGS AND DETERMINATIONS
Section 1.1.: Findings and Determinations. The City Council hereby officially finds and
determines that:
(a) The City of La Porte, Texas (the "City"), acting through its City Council, is
authorized by its Home Rule Charter and the Constitution and laws of the State of
Texas, particularly Chapter 1207, Texas Government Code, as amended (the
"Act"), to issue bonds for the purpose of refunding its outstanding obligations;
(b) The City, acting through its City Council, has heretofore issued and there remain
outstanding the obligations described in Schedule 1 attached hereto (the
"Refunding Candidates");
(c) The City desires to refund all or a portion of the Refunding Candidates in advance
of their maturities in order to achieve net present value debt service savings for
the City;
(d) The City desires, pursuant to Section 1207.007 of the Act, to delegate to two or
more of the Authorized Representatives named herein the authority to effect the
sale of the Bonds, including the selection of the Refunding Candidates to be
refunded (such selected Refunding Candidates to be known herein as the
"Refunded Obligations"), within certain parameters herein described; and
(e) The City is authorized by the Act to accomplish such refunding by depositing
with an escrow agent a portion of the proceeds from the sale of the refunding
bonds authorized herein, together with any other legally available funds, which
shall be sufficient to provide for the payment of the Refunded Obligations on their
date of redemption, and such deposit shall constitute the making of firm banking
and financial arrangements for the discharge and final payment of the Refunded
Obligations;
HOU:3189356.1
(f) The City desires to enter into an escrow agreement (the "Escrow Agreement")
with The Bank of New York Mellon Trust Company, National Association,
Dallas, Texas, as escrow agent, as authorized by the Act, pursuant to which a
portion of the proceeds of the refunding bonds herein authorized, and other
legally available funds of the City, if any, will be deposited and applied in a
manner sufficient to provide for the full and timely payment of all principal of,
premium, if any, and interest on the Refunded Obligations; and
(g) Upon the issuance of the refunding bonds herein authorized and the creation of
the escrow referred to above, the Refunded Obligations shall no longer be
regarded as being outstanding, except for the purpose of being paid pursuant to
such Escrow Agreement, and the pledges, liens, trusts and all other covenants,
provisions, terms and conditions of the ordinances authorizing the issuance of the
Refunded Obligations shall be, with respect to the Refunded Obligations,
discharged, terminated and defeased.
ARTICLE II.
DEFINITIONS AND INTERPRETATIONS
Section 2.1.: Definitions. As used herein, the following terms shall have the meanings
specified, unless the context clearly indicates otherwise:
"Act" shall mean Chapter 1207, Texas Government Code, as amended.
"Attorney General" shall mean the Attorney General of the State of Texas.
"Authorized Representatives" shall mean any two of the Mayor, the City Manager, the
Assistant City Manager and the Finance Director of the City.
"Bond" or "Bonds" shall mean any or all of the City of LaPorte, Texas, General
Obligation Refunding Bonds, Series 2014, authorized by this Ordinance.
"City" shall mean the City of La Porte, Texas, and, where appropriate, its City Council.
"City Council" shall mean the governing body of the City.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas.
"DTC" shall mean The Depository Trust Company, New York, New York, or any
successor securities depository.
2
HOU:3189356.1
"DTC Participant" shall mean 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.
"Debt Service Fund" shall mean the General Obligation Refunding Bonds, Series 2014,
Debt Service Fund established by the City and described in section 5.2 of this Ordinance.
"Escrow Agent" shall mean The Bank of New York Mellon Trust Company, National
Association, Dallas, Texas, and its successors in that capacity.
"Escrow Agreement" shall mean the agreement between the City and the Escrow Agent
relating to the deposit of funds to pay the Refunded Obligations.
"Fiscal Year" shall mean the City's then designated fiscal year, which currently is the
twelve-month period beginning on the first day of October of a calendar year and ending on the
last day of September of the next succeeding calendar year and each such period may be
designated with the number of the calendar year in which such period ends.
"Interest Payment Date," when used in connection with any Bond, shall mean September
15, 2014, and each March 15 and September 15 thereafter until maturity or earlier redemption of
such Bond, unless otherwise provided in the Officers' Pricing Certificate.
"Issuance Date" shall mean the date of initial delivery of the Bonds to the Underwriters
in exchange for payment of the purchase price therefor.
"Officers' Pricing Certificate" shall mean a certificate signed by the Authorized
Representatives and containing the information regarding the Bonds specified in Sections 3, 4
and 5 hereof and substantially in the form of Exhibit A hereto.
"Ordinance" shall mean this Ordinance and all amendments hereof and supplements
hereto.
"Outstanding," when used with reference to the Bonds, shall mean, as of a particular date,
all Bonds theretofore and thereupon delivered pursuant to this Ordinance except: (a) any Bonds
canceled by or on behalf of the City at or before such date; (b) any Bonds defeased pursuant to
the defeasance provisions of this Ordinance or otherwise defeased as permitted by applicable
law; and (c) any Bonds in lieu of or in substitution for which a replacement Bond shall have been
delivered pursuant to this Ordinance.
"Paying Agent/Registrar" shall mean The Bank of New York Mellon Trust Company,
National Association, Dallas, Texas, and its successors in that capacity.
"Record Date" shall mean the close of business on the last business day of the calendar
month immediately preceding the applicable Interest Payment Date.
3
HOU:3189356.1
"Refunded Obligations" shall mean those obligations described as such in the Officers'
Pricing Certificate.
"Register" shall mean the registration books for the Bonds kept by the Paying
Agent/Registrar in which are maintained the names and addresses of, and the principal amounts
registered to, each Registered Owner of Bonds.
"Registered Owner" shall mean the person or entity in whose name any Bond is
registered in the Register.
"Report" shall mean the verification report prepared by Grant Thornton LLP, Certified
Public Accountants, verifying the accuracy of certain mathematical computations relating to the
Bonds and the refunding of the Refunded Obligations.
"Underwriters" shall mean, together, Coastal Securities and BOSC, Inc.
Section 2.2.: Interpretations. All terms defined herein and all pronouns used in this
Ordinance shall be deemed to apply equally to singular and plural and to all genders. The 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. This Ordinance and all the terms and provisions
hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the
validity of the Bonds and the validity of the levy of ad valorem taxes to pay the principal of and
interest on the Bonds.
ARTICLE III.
TERMS OF THE BONDS
Section 3.1.: Amount, Purpose and Authorization. (a) The Bonds shall be issued in fully
registered form, without coupons, under and pursuant to the authority of the City's Home Rule
Charter and the Act in the total authorized aggregate principal amount not to exceed TEN
MILLION AND NO/100 DOLLARS ($10,000,000) for the purpose of providing all or part of
the funds to refund the Refunded Obligations. Proceeds of the Bonds also will be used to pay
costs of issuing of the Bonds and refunding the Refunded Obligations.
(b) It is hereby found and determined that the refunding of the Refunded Obligations
and the issuance of the Bonds will benefit the City by reducing net present value debt service,
and that such benefit is sufficient consideration for the issuance of the Bonds.
Section 3.2.: Designation and Date. The Bonds shall be designated as the "City of La
Porte, Texas, General Obligation Refunding Bonds, Series 2014," shall be dated April 1, 2014,
and shall bear interest from the Issuance Date, unless otherwise provided in the Officers' Pricing
Certificate.
Section 3.3.: Numbers, Denomination, Interest Rates and Maturities. Unless otherwise
provided in the Officers' Pricing Certificate, the Bonds shall initially be issued bearing the
numbers and shall mature on March 15 in each of the years, principal amounts and bearing
interest at the rates set forth in the Officers' Pricing Certificate, and may be transferred and
0
HOU:3189356.1
exchanged as set out in this Ordinance. Bonds delivered in transfer of or in exchange for other
Bonds shall be numbered in order of their authentication by the Paying Agent/Registrar, shall be
in the denomination of $5,000 or integral multiples thereof and shall mature on the same date
and bear interest at the same rate as the Bond or Bonds in lieu of which they are delivered.
Section 3.4.: Sale and Delivery of Bonds. As authorized by Section 1207.007 of the Act,
the Authorized Representatives are hereby authorized to act on behalf of the City in selling and
delivering the Bonds and carrying out the other procedures specified in this Ordinance including,
without limitation, determining the date on and price at which the Bonds will be sold, the
Issuance Date and dated date, the years in which the Bonds will mature, the aggregate principal
amount of the Bonds, the principal amount to mature in each year of maturity, the rate of interest
to be borne by each such maturity, any optional and mandatory sinking fund redemption
provisions, the aggregate principal amount of Refunded Obligations and the particular Refunding
Candidates to be Refunded Bonds, and all other matters not expressly provided in this Ordinance
relating to the issuance, sale and delivery of the Bonds, including the refunding of the Refunded
Obligations, all of which shall be specified in the Officers' Pricing Certificate, substantially in
the form attached hereto as Exhibit A; provided that:
(a) the net effective interest rate on the Bonds shall not exceed the maximum rate
allowed by Chapter 1204, Texas Government Code, as amended;
(b) the sum of the principal amounts of the Bonds, which may not exceed the
maximum principal amount authorized in Section 3.1 hereof, plus any net
premium from the sale of the Bonds, must be sufficient to provide amounts
necessary to fund the costs and expenses of refunding the Refunded Obligations
and the estimated costs of issuance of the Bonds, including underwriters'
discount;
(c) the net present value savings to the City in debt service resulting from the
issuance of the Bonds shall be at least 4.00% of the principal amount of the
Refunded Obligations, as shown by a table of calculations prepared by the City's
financial advisor and attached to the Officers' Pricing Certificate;
(d) the maximum maturity of the Bonds shall not exceed March 15, 2025; and
(e) any finding by the Authorized Representatives relating to the sale and delivery of
the Bonds and the designation of Refunded Obligations shall have the same force
and effect as a finding or determination made by the Board.
The authority conferred by this Section shall expire at 5:00 p.m. on September 24, 2014.
Section 3.5.: Redemption Prior to Maturity. (a) The Bonds shall be subject to optional
redemption prior to maturity as provided in the Officers' Pricing Certificate.
(b) The Bonds shall be subject to mandatory sinking fund redemption as provided in
the Officers' Pricing Certificate.
HOU:3189356.1
(c) Bonds may be redeemed in part only in integral multiples of $5,000. If a Bond
subject to redemption is in a denomination larger than $5,000, a portion of such Bond may be
redeemed, but only in integral multiples of $5,000. In selecting portions of Bonds for
redemption, each Bond shall be treated as representing that number of Bonds of $5,000
denomination which is obtained by dividing the principal amount of such Bond by $5,000. Upon
presentation and surrender of any Bond for redemption in part, the Paying Agent/Registrar, in
accordance with the provisions of this Ordinance, shall authenticate and deliver in exchange
therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount
equal to the unredeemed portion of the Bond so surrendered.
(d) Notice of any redemption, identifying the Bonds or portions thereof to be
redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered
Owners thereof at their addresses as shown on the Register, not less than thirty (30) days before
the date fixed for such redemption. By the date fixed for redemption, due provision shall be
made with the Paying Agent/Registrar for the payment of the redemption price of the Bonds
called for redemption. If such notice of redemption is given, and if due provision for such
payment is made, all as provided above, the Bonds which are to be so redeemed thereby
automatically shall be redeemed prior to their scheduled maturities, they shall not bear interest
after the date fixed for redemption, and they shall not be regarded as being Outstanding except
for the purpose of being paid with the funds so provided for such payment.
Section 3.6.: Manner of Payment, Characteristics, Execution and Authentication. The
Paying Agent/Registrar is hereby appointed the paying agent for the Bonds. The Bonds shall be
payable, shall have the characteristics and shall be executed, sealed, registered and authenticated,
all as provided and in the manner indicated in the Form of Bond set forth in Attachment B to
Exhibit A hereto. If any officer of the City whose manual or facsimile signature shall appear on
the Bonds shall cease to be such officer before the authentication of the Bonds or before the
delivery of the Bonds, such manual or facsimile signature shall nevertheless be valid and
sufficient for all purposes as if such officer had remained in such office.
The approving legal opinion of Andrews Kurth LLP, Houston, Texas, Bond Counsel,
may be printed on the back of the Bonds over the certification of the City Secretary, which may
be executed in facsimile. CUSIP numbers also may be printed on the Bonds, but errors or
omissions in the printing of either the opinion or the numbers shall have no effect on the validity
of the Bonds.
Section 3.7.: Special Record Date. If interest on any Bond is not paid on any Interest
Payment Date and continues unpaid for thirty (30) days thereafter, the Paying Agent/Registrar
shall establish a new record date for the payment of such interest, to be known as a Special
Record Date. The Paying Agent/Registrar shall establish a Special Record Date when funds to
make such interest payment are received from or on behalf of the City. Such Special Record
Date shall be fifteen (15) days prior to the date fixed for payment of such past due interest, and
notice of the date of payment and the Special Record Date shall be sent by United States mail,
first class, postage prepaid, not later than five (5) days prior to the Special Record Date, to each
affected Registered Owner as of the close of business on the day prior to mailing of such notice.
n
HOU:3189356.1
Section 3.8.: Authentication. Except for the Bonds to be initially issued, which need not
be authenticated by the Paying Agent/Registrar, only such Bonds as shall bear thereon a
certificate of authentication, substantially in the form provided in Article IV of this Ordinance,
manually executed by an authorized representative of the Paying Agent/Registrar, shall be
entitled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such
duly executed certificate of authentication shall be conclusive evidence that the Bond so
authenticated was delivered by the Paying Agent/Registrar hereunder.
Section 3.9.: Ownership. The City, the Paying Agent/Registrar and any other person
may treat the person in whose name any Bond is registered as the absolute owner of such Bond
for the purpose of making and receiving payment of the principal thereof and interest thereon
and for all other purposes, whether or not such Bond is overdue, and neither the City nor the
Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. All
payments made to the person deemed to be the Registered Owner of any Bond in accordance
with this Section shall be valid and effective and shall discharge the liability of the City and the
Paying Agent/Registrar upon such Bond to the extent of the sums paid.
Section 3.10.: Registration, Transfer and Exchange. The Paying Agent/Registrar is
hereby appointed the registrar for the Bonds. So long as any Bond remains Outstanding, the
Paying Agent/Registrar shall keep the Register at its office in Houston, Texas in which, subject
to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for
the registration and transfer of the Bonds in accordance with the terms of this Ordinance.
Each Bond shall be transferable only upon the presentation and surrender thereof at the
office of the Paying Agent/Registrar, accompanied by an assignment duly executed by the
Registered Owner or his authorized representative in form satisfactory to the Paying
Agent/Registrar. To the extent possible, upon due presentation of any Bond for transfer, the
Paying Agent/Registrar shall authenticate and deliver in exchange therefor, within seventy-two
(72) hours after such presentation, a new Bond or Bonds, registered in the name of the transferee
or transferees, in authorized denominations and of the same maturity and aggregate principal
amount and bearing interest at the same rate as the Bond or Bonds so presented and surrendered.
All Bonds shall be exchangeable upon the presentation and surrender thereof at the office
of the Paying Agent/Registrar for a Bond or Bonds, maturity and interest rate and in any
authorized denomination, in an aggregate principal amount equal to the unpaid principal amount
of the Bond or Bonds presented for exchange. The Paying Agent/Registrar shall be and is
hereby authorized to authenticate and deliver exchange Bonds in accordance with the provisions
of this Section. Each Bond delivered by the Paying Agent/Registrar in accordance with this
Section shall be entitled to the benefits and security of this Ordinance to the same extent as the
Bond or Bonds in lieu of which such Bond is delivered.
All Bonds issued in transfer or exchange shall be delivered to the Registered Owners
thereof at the office of the Paying Agent/Registrar or sent by United States mail, first class,
postage prepaid.
HOU:3189356.1
The City or the Paying Agent/Registrar may require the Registered Owner of any Bond to
pay a sum sufficient to cover any tax or other governmental charge that may be imposed in
connection with the transfer or exchange of such Bond. Any fee or charge of the Paying
Agent/Registrar for such transfer or exchange shall be paid by the City.
The Paying Agent/Registrar shall not be required to transfer or exchange any Bond called
for redemption in whole or in part during the forty-five (45) day period immediately prior to the
date fixed for redemption; provided, however, that this restriction shall not apply to the transfer
or exchange by the Registered Owner of the unredeemed portion of a Bond called for redemption
in part.
Section 3.11.: Book -Entry OnlySystem. The definitive Bonds shall be initially issued in
the form of a separate single fully registered Bond for each of the maturities thereof. Upon
initial issuance, the ownership of each such Bond shall be registered in the name of Cede & Co.,
as nominee of DTC, and except as provided in Section 3.11 hereof, all of the Outstanding Bonds
shall be registered in the name of Cede & Co., as nominee of DTC. Upon delivery by DTC to
the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a
new nominee in place of Cede & Co., and subject to the provisions in this Ordinance with
respect to interest checks being mailed to the Owner at the close of business on the Record Date,
the word "Cede & Co." in this Ordinance shall refer to such new nominee of DTC.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the
City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC
Participant or to any person on behalf of whom such a DTC Participant holds an interest in the
Bonds. Without limiting the immediately preceding sentence, the City and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (a) the accuracy of the
records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in
the Bonds, (b) the delivery to any DTC Participant or any other person, other than a Bondholder,
as shown on the Register, of any notice with respect to the Bonds, including any notice of
redemption or (c) the payment to any DTC Participant or any other person, other than a
Bondholder as shown in the Register, of any amount with respect to principal of Bonds,
premium, if any, or interest on the Bonds.
Except as provided in Section 3.10 of this Ordinance, the City and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is
registered in the Register as the absolute owner of such Bond for the purpose of payment of
principal of, premium, if any, and interest on Bonds, for the purpose of giving notices of
redemption and other matters with respect to such Bond, for the purpose of registering transfer
with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar
shall pay all principal of Bonds, premium, if any, and interest on the Bonds only to or upon the
order of the respective owners, as shown in the Register as provided in this Ordinance, or their
respective attorneys duly authorized in writing, and all such payments shall be valid and
effective to fully satisfy and discharge the City's obligations with respect to payment of principal
of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No
person other than an owner shall receive a Bond evidencing the obligation of the City to make
payments of amounts due pursuant to this Ordinance.
HOU:3189356.1
Section 3.12.: Payments and Notices to Cede & Co. Notwithstanding any other
provision of this Ordinance to the contrary, as long as any Bonds are registered in the name of
Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and
interest on the Bonds, and all notices with respect to such Bonds shall be made and given,
respectively, in the manner provided in the representation letter of the City to DTC.
Section 3.13.: Successor Securities Depository; Transfer Outside Book -Entry Only
System. In the event that the City or the Paying Agent/Registrar determines that DTC is
incapable of discharging its responsibilities described herein and in the representation letter of
the City to DTC, and that it is in the best interest of the beneficial owners of the Bonds that they
be able to obtain certificated Bonds, the City or the Paying Agent/Registrar shall (a) 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 of the appointment of such successor securities
depository and transfer one or more separate Bonds to such successor securities depository or (b)
notify DTC of the availability through DTC of Bonds and transfer one or more separate Bonds to
DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall
no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee
of DTC, but may be registered in the name of the successor securities depository, or its nominee,
or in whatever name or names Bondholders transferring or exchanging Bonds shall designate, in
accordance with the provisions of this Ordinance.
Section 3.14.: Replacement Bonds. Upon the presentation and surrender to the Paying
Agent/Registrar of a damaged or mutilated Bond, the Paying Agent/Registrar shall authenticate
and deliver in exchange therefor a replacement Bond, of the same maturity, interest rate and
principal amount, bearing a number not contemporaneously outstanding. The City or the Paying
Agent/Registrar may require the Registered Owner of such Bond to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection therewith and any other
expenses connected therewith, including the fees and expenses of the Paying Agent/Registrar
and the City.
If any Bond is lost, apparently destroyed or wrongfully taken, the City, pursuant to the
applicable laws of the State of Texas and ordinances of the City, and in the absence of notice or
knowledge that such Bond has been acquired by a bona fide purchaser, shall execute, and the
Paying Agent/Registrar shall authenticate and deliver, a replacement Bond of the same maturity,
interest rate and principal amount, bearing a number not contemporaneously outstanding,
provided that the Registered Owner thereof shall have:
(a) furnished to the City and the Paying Agent/Registrar satisfactory evidence of the
ownership of and the circumstances of the loss, destruction or theft of such Bond;
(b) furnished such security or indemnity as may be required by the Paying
Agent/Registrar and the City to save and hold them harmless;
9
HOU:3189356.1
(c) paid 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 may be imposed; and
(d) met any other reasonable requirements of the City and the Paying
Agent/Registrar.
If, after the delivery of such replacement Bond, a bona fide purchaser of the original
Bond in lieu of which such replacement Bond was issued presents for payment such original
Bond, the City and the Paying Agent/Registrar shall be entitled to recover such replacement
Bond from the person to whom it was delivered or any person taking therefrom, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor
to the extent of any loss, damage, cost or expense incurred by the City or the Paying
Agent/Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or
is about to become due and payable, the City in its discretion may, instead of issuing a
replacement Bond, authorize the Paying Agent/Registrar to pay such Bond.
Each replacement Bond delivered in accordance with this Section shall be entitled to the
benefits and security of this Ordinance to the salve extent as the Bond or Bonds in lieu of which
such replacement Bond is delivered.
Section 3.15.: Cancellation. All Bonds paid or redeemed in accordance with this
Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are
authenticated and delivered in accordance herewith, shall be canceled and destroyed upon the
making of proper records regarding such payment or redemption. The Paying Agent/Registrar
shall periodically furnish the City with certificates of destruction of such Bonds.
ARTICLE IV.
FORM OF BONDS
The Bonds, including the Form of Comptroller's Registration Certificate, Form of Paying
Agent/Registrar's Authentication Certificate, and Form of Assignment shall be in substantially
the form attached hereto as Attachment B to Exhibit A, with such omissions, insertions and
variations as may be necessary or desirable, and not prohibited by this Ordinance.
10
HOU:3189356.1
ARTICLE V.
SECURITY FOR THE BONDS
Section 5.1.: Pledge and Lew of Taxes. (a) To provide for the payment of principal of
and interest on the Bonds, there is hereby levied, within the limits prescribed by law, for the
current year and each succeeding year thereafter, while the Bonds or any part of the principal
thereof and the interest thereon remain outstanding and unpaid, an ad valorem tax upon all
taxable property within the City sufficient to pay the interest on the Bonds and to create and
provide a sinking fund of not less than 2% of the principal amount of the Bonds or not less than
the principal payable out of such tax, whichever is greater, with full allowance being made for
tax delinquencies and the costs of tax collection, and such taxes, when collected, shall be applied
to the payment of principal of and interest on the Bonds by deposit to the Debt Service Fund and
to no other purpose.
(b) The City hereby declares its purpose and intent to provide and levy a tax legally
sufficient to pay the principal of and interest on the Bonds, it having been determined that the
existing and available taxing authority of the City for such purpose is adequate to permit a
legally sufficient tax. As long as any Bonds remain outstanding, all moneys on deposit in, or
credited to, the Debt Service Fund shall be secured by a pledge of security, as provided by law
for cities in the State of Texas.
Section 5.2.: Debt Service Fund. The General Obligation Refunding Bonds, Series 2014,
Debt Service Fund (the "Debt Service Fund") is hereby created as a special fund solely for the
benefit of the Bonds. The City shall establish and maintain such fund at an official City
depository and shall keep such fund separate and apart from all other funds and accounts of the
City. Any amount on deposit in the Debt Service Fund shall be maintained by the City in trust
for the Registered Owners of the Bonds. Such amount, plus any other amounts deposited by the
City into such fund and any and all investment earnings on amounts on deposit in such fund,
shall be used only to pay the principal of, premium, if any, and interest on the Bonds.
Section 5.3.: Further Proceedings. After the Bonds to be initially issued have been
executed, it shall be the duty of the Mayor to deliver the Bonds to be initially issued and all
pertinent records and proceedings to the Attorney General for examination and approval. After
the Bonds to be initially issued shall have been approved by the Attorney General, they shall be
delivered to the Comptroller for registration. Upon registration of the Bonds to be initially
issued, the Comptroller (or a deputy lawfully designated in writing to act for the Comptroller)
shall manually sign the Comptroller's registration certificate prescribed herein to be affixed or
attached to the Bonds to be initially issued, and the seal of said Comptroller shall be impressed,
or placed in facsimile, thereon.
11
HOU:3189356.1
ARTICLE VI.
CONCERNING THE PAYING AGENT/REGISTRAR
Section 6.1.: Acceptance. The Bank of New York Mellon Trust Company, National
Association, Dallas, Texas, is hereby appointed as the initial Paying Agent/Registrar for the
Bonds pursuant to the terms and provisions of the Paying Agent/Registrar Agreement by and
between the City and the Paying Agent/Registrar. The Paying Agent/Registrar Agreement shall
be substantially in the form presented to City Council with this Ordinance, the terms and
provisions of which are hereby approved, and the Mayor is hereby authorized to execute and
deliver such Paying Agent/Registrar Agreement on behalf of the City in multiple counterparts
and the City Secretary is hereby authorized to attest thereto and affix the City's seal. Such initial
Paying Agent/Registrar and any successor Paying Agent/Registrar, by undertaking the
performance of the duties of the Paying Agent/Registrar hereunder, and in consideration of the
payment of any fees pursuant to the terms of any contract between the Paying Agent/Registrar
and the City and/or the deposits of money pursuant to this Ordinance, shall be deemed to accept
and agree to abide by the terms of this Ordinance.
Section 62.: Trust Funds. All money transferred to the Paying Agent/Registrar in its
capacity as Paying Agent/Registrar for the Bonds under this Ordinance (except any sums
representing Paying Agent/Registrar's fees) shall be held in trust for the benefit of the City, shall
be the property of the City and shall be disbursed in accordance with this Ordinance.
Section 6.3.: Bonds Presented. Subject to the provisions of Section 6.4, all matured
Bonds presented to the Paying Agent/Registrar for payment shall be paid without the necessity of
further instructions from the City. Such Bonds shall be canceled as provided herein.
Section 6.4.: Unclaimed Funds Held by the Paying Agent/Registrar. Funds held by the
Paying Agent/Registrar that represent principal of and interest on the Bonds remaining
unclaimed by the Registered Owner thereof after the expiration of three years from the date such
funds have become due and payable (a) shall be reported and disposed of by the Paying
Agent/Registrar in accordance with the provisions of Title 6 of the Texas Property Code, as
amended, to the extent such provisions are applicable to such funds, or (b) to the extent such
provisions do not apply to the funds, such funds shall be paid by the Paying Agent/Registrar to
the City upon receipt by the Paying Agent/Registrar of a written request therefor from the City.
The Paying Agent/Registrar shall have no liability to the Registered Owners of the Bonds
by virtue of actions taken in compliance with this Section.
Section 6.5.: Paying Agent/Registrar May Own Bonds. The Paying Agent/Registrar in
its individual or any other capacity, may become the owner or pledgee of Bonds with the same
rights it would have if it were not the Paying Agent/Registrar.
Section 6.6.: Successor Paying Agents/Registrars. The City covenants that at all times
while any Bonds are Outstanding it will provide a legally qualified bank, trust company,
financial institution or other agency to act as Paying Agent/Registrar for the Bonds. The City
12
HOU:3189356.1
reserves the right to change the Paying Agent/Registrar for the Bonds on not less than sixty (60)
days' written notice to the Paying Agent/Registrar, as long as any such notice is effective not less
than 60 days prior to the next succeeding principal or interest payment date on the Bonds.
Promptly upon the appointment of any successor Paying Agent/Registrar, the previous Paying
Agent/Registrar shall deliver the Register or a copy thereof to the new Paying Agent/Registrar,
and the new Paying Agent/Registrar shall notify each Registered Owner, by United States mail,
first class, postage prepaid, of such change and of the address of the new Paying Agent/Registrar.
Each Paying Agent/Registrar hereunder, by acting in that capacity, shall be deemed to have
agreed to the provisions of this Ordinance.
ARTICLE VII.
PROVISIONS CONCERNING SALE AND
APPLICATION OF PROCEEDS OF BONDS
Section 7.1.: Sale of Bonds, Insurance. The Bonds shall be sold and delivered to the
Underwriters at a price to be set forth in the Officers' Pricing Certificate and in accordance with
the terms of the Bond Purchase Agreement, substantially in the form presented to City Council
with this Ordinance. Upon completion of the terms of the Officers' Pricing Certificate, the
Authorized Representatives are hereby authorized and directed to execute the Bond Purchase
Agreement on behalf of the City, and the Authorized Representatives and all other officers,
agents and representatives of the City are hereby authorized to do any and all things necessary or
desirable to satisfy the conditions set out therein and to provide for the issuance and delivery of
the Bonds.
Section 7.2.: Approval, Registration and Delivery. The Mayor is hereby authorized to
have control and custody of the Bonds and all necessary records and proceedings pertaining
thereto pending their delivery, and the Mayor and other officers and employees of the City are
hereby authorized and directed to make such certifications and to execute such instruments as
may be necessary to accomplish the delivery of the Bonds and to assure the investigation,
examination and approval thereof by the Attorney General and the registration of the initial
Bonds by the Comptroller. Upon registration of the Bonds, the Comptroller (or the
Comptroller's certificates clerk or an assistant certificates clerk lawfully designated in writing to
act for the Comptroller) shall manually sign the Comptroller's Registration Certificates
prescribed herein to be attached or affixed to each Bond initially delivered and the seal of the
Comptroller shall be impressed or printed or lithographed thereon.
Section 7.3.: Offering Documents, Ratings. The City hereby authorizes the preparation
of a Preliminary Official Statement and final Official Statement, in substantially the form of the
Preliminary Official Statement, with such modifications as shall be necessary to describe the
final terms of the Bonds, dated as of the sale date, relating to the Bonds, and any addenda,
supplement or amendment thereto, and approves the distribution of such Preliminary Official
Statement and Official Statement in the offer and sale of the Bonds and in the reoffering of the
Bonds by the Underwriters, with such changes therein or additions thereto as the officials
executing same may deem advisable, such determination to be conclusively evidenced by their
13
HOU:3189356.1
execution thereof. The Mayor is hereby authorized and directed to execute, and the City
Secretary is hereby authorized and directed to attest, the final Official Statement. The
Authorized Representatives are hereby authorized to deem the Preliminary Official Statement
"final" for purposes of Rule 15c2-12 of the Securities Exchange Commission at such time as
such document omits no more than the information permitted by Subsection (b)(1) of Rule 15c2-
12.
Further, the City Council hereby ratifies, authorizes and approves the actions of the
Mayor, the City's financial advisor and other consultants in seeking ratings on the Bonds from
Standard & Poor's Ratings Services and such actions are hereby ratified and confirmed.
Section 7.4.: Application of Proceeds of Bonds. Proceeds from the sale of the Bonds
shall, promptly upon receipt by the City, be applied as follows:
(a) A portion of the proceeds shall be applied to pay expenses arising in connection
with the issuance of the Bonds and the refunding of the Refunded Obligations;
(b) A portion of the proceeds shall be used to establish an escrow fund to refund the
Refunded Obligations, as more fully provided in the Escrow Agreement; and
(c) any remaining proceeds shall be transferred to the Debt Service Fund.
Section 7.5.:Covenants to Maintain Tax Exemption.
(a) Definitions. When used in this Section, the following terms have the
following meanings:
"Code" means the Internal Revenue Code of 1986, as amended by all legislation,
if any, effective on or before the Issue Date.
"Computation Date" has the meaning stated in section 1.148-1(b) of the
Regulations.
"Gross Proceeds" has the meaning stated in section 1.148-1(b) of the Regulations.
"Investment" has the meaning stated in section 1.148-1(b) of the Regulations.
"Issue Date" for the Bonds or other obligations of the City is the respective date
on which such obligations of the City are first delivered against payment therefor.
"Nonpurpose Investment" has the meaning stated in section 1.148-1(b) of the
Regulations.
"Proceeds" has the meaning stated in section 1.148-1(b) of the Regulations.
"Rebate Amount" has the meaning stated in section 1.148-3 of the Regulations.
14
HOU:3189356.1
"Regulations" means the temporary or final Income Tax Regulations applicable to
the Series 2014 Bonds issued pursuant to sections 141 through 150 of the Code. Any
reference to a section of the Regulations shall also refer to any successor provision to
such section hereafter promulgated by the Internal Revenue Service pursuant to
sections 141 through 150 of the Code and applicable to the Bonds.
"Yield of
(1) any Investment shall be computed in accordance with
section 1.148-5 of the Regulations, and
(2) the Bonds shall be computed in accordance with section 1.148-4 of
the Regulations.
(b) 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 Bonds to become includable in the gross income, as defined in
section 61 of the Code, of the owner thereof for federal income tax purposes. Without
limiting the generality of the foregoing, unless and until the City shall have received a
written opinion of counsel nationally recognized in the field of municipal bond law to the
effect that failure to comply with such covenant will not adversely affect the exemption
from federal income tax of the interest on any Bond, the City shall comply with each of
the specific covenants in this Section.
(c) 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 prior to
the last stated maturity of the Bonds,
(1) exclusively own, operate, and possess all property the acquisition,
construction, or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds (including property financed or
refinanced with Gross Proceeds of the Refunded Bonds) 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
(2) not directly or indirectly impose or accept any charge or other
payment for use of Gross Proceeds of the Bonds or any property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with such Gross Proceeds (including property financed or refinanced
with Gross Proceeds of the Refunded Bonds) other than taxes of general
application and interest earned on investments acquired with such Gross Proceeds
pending application for their intended purposes.
15
HOU:3189356.1
(d) 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
the Bonds 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 (including property financed or refinanced with Gross Proceeds of the
Refunded Bonds) 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.
(e) 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 the Bonds,
directly or indirectly invest Gross Proceeds of such Bonds in any Investment (or use such
Gross Proceeds to replace money so invested), if as a result of such investment the Yield
of all Investments allocated to such Gross Proceeds whether then held or previously
disposed of, exceeds the Yield on the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted by
section 149(b) of the Code and the regulations and rulings thereunder, the City shall not
take or omit to take any action which would cause the Bonds to be federally guaranteed
within the meaning of section 149(b) of the Code and the regulations and rulings
thereunder.
(g) Infonnation Report. The City shall timely file with the Secretary of the
Treasury the information required by section 149(e) of the Code with respect to the
Bonds on such forms and in such place as such Secretary may prescribe.
(h) 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:
(1) account for all Gross Proceeds (including all receipts, expenditures
and investments thereof) on its books of account separately and apart from all
other funds (and receipts, expenditures and investments thereof) and shall retain
all records of such accounting for at least six years after the final Computation
Date. The City may, however, to the extent permitted by law, commingle Gross
Proceeds of the Bonds with other money of the City, provided that the City
separately accounts for each receipt and expenditure of such Gross Proceeds and
the obligations acquired therewith,
(2) calculate the Rebate Amount with respect to the Bonds, not less
frequently than each Computation Date, in accordance with rules set forth in
section 148(f) of the Code, section 1.148-3 of the Regulations, and the rulings
V
HOU:3189356.1
thereunder. The City shall maintain a copy of such calculations for at least six
years after the final Computation Date,
(3) as additional consideration for the purchase of the Bonds by the
initial purchaser thereof and the loan of the money represented thereby, and in
order to induce such purchase by measures designed to ensure the excludability of
the interest thereon from the gross income of the owners thereof for federal
income tax purposes, pay to the United States the amount described in
paragraph (2) 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
(4) exercise reasonable diligence to assure that no errors are made in
the calculations and payments required by paragraphs (2) and (3), and, if such
error is made, to discover and promptly correct such error within a reasonable
amount of time thereafter (and in all events within one hundred eighty (180) days
after discovery of the error), including payment to the United States of any
additional Rebate Amount owed to it, interest thereon and any penalty required by
the Regulations.
(i) 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, at
any time prior to the earlier of the final stated maturity or final payment of the Bonds,
enter into any transaction that reduces the amount required to be paid to the United States
pursuant to Subsection (h) of this Section because such transaction results in a smaller
profit or a larger loss than would have resulted if the transaction had been at arm's length
and had the Yield of the Bonds, not been relevant to either party.
0) Not Hedge Bonds. The City did not invest more than 50 percent of the
Proceeds of the original bonds refunded by the Bonds in Nonpurpose Investments having
a guaranteed yield for four years or more. On the Issue Date of each series of the original
bonds refunded by the Bonds, the City reasonably expected that at least 85 percent of the
spendable proceeds of such bonds would be used to carry out the governmental purpose
of such bonds within three years after the respective Issue Date of such bonds.
Section 7.6.: Qualified Tax -Exempt Obligations. The City hereby designates the Bonds
as "qualified tax-exempt obligations" as defined in Section 265(b)(3) of the Code. With respect
to such designation, the City represents the following: (a) that during the calendar year 2014, the
City (including all entities which issue obligations on behalf of the City), has not designated nor
will designate obligations, which when aggregated with the Bonds will result in more than
$10,000,000 of "qualified tax-exempt obligations" being issued and (b) that the City has
examined its financing needs for the calendar year 2014, and reasonably anticipates that the
amount of bonds, leases, loans or other obligations, together with the Bonds and any other tax-
exempt obligations heretofore issued by the City (plus those of all entities which issue
obligations on behalf of the City) during the calendar year 2014, when the higher of the face
amount or the issue price of each such tax-exempt obligation issued for the calendar year 2014
by the City is taken into account, will not exceed $10,000,000.
17
HOU:3189356.1
Section 7.7.: Escrow Agreement. The discharge and defeasance of the Refunded
Obligations shall be effectuated pursuant to the terms and provisions of the Escrow Agreement to
be entered into by and between the City and the Escrow Agent, which shall be substantially in
the form presented to City Council with this Ordinance, the terms and provisions of which are
hereby approved, subject to such insertions, additions and modifications as shall be necessary (a)
to carry out the program designed for the City by the Underwriters and the City's Financial
Advisor, (b) to minimize the City's costs of refunding, (c) to comply with all applicable laws and
regulations relating to the refunding of the Refunded Obligations, and (d) to carry out the other
intents and purposes of this Ordinance, and the Mayor is hereby authorized to execute and
deliver such Escrow Agreement on behalf of the City in multiple counterparts and the City
Secretary is hereby authorized to attest thereto and affix the City's seal.
Section 7.8.: Redemption Prior to Maturity of Refunded Obligations. To minimize the
City's costs of refunding, the City hereby authorizes and directs that certain of the Refunded
Obligations shall be called for redemption prior to maturity in the amounts, at the dates and at the
redemption prices set forth in the Officers' Pricing Certificate, and the Authorized
Representatives are hereby authorized and directed to take all necessary and appropriate action to
give or cause to be given a notice of redemption and/or a notice of defeasance to the holders or
paying agent/ registrars, as appropriate, of such obligationss, and, if required, to publish such
notices, all in the manner required by the documents authorizing the issuance of such Refunded
Obligations.
Section 7.9.: Purchase of Securities. The Authorized Representatives and the Escrow
Agent are hereby authorized (a) to subscribe for, agree to purchase, and purchase securities that
are permitted investments for a defeasance escrow established to defease the Refunded
Obligations, and to execute any and all subscriptions, purchase agreements, commitments, letters
of authorization and other documents necessary to effectuate the foregoing, and any actions
heretofore taken for such purpose are hereby ratified and approved, and (b) to direct and provide
for such contributions to the escrow fund as are provided in the Escrow Agreement and the
Report.
Section 7.10.: Related Matters. In order that the City shall satisfy in a timely manner all
of its obligations under this Ordinance, the Mayor, City Secretary and all other appropriate
officers, agents, representatives and employees of the City are hereby authorized and directed to
take all other actions that are reasonably necessary to provide for the issuance and delivery of the
Bonds, including, without limitation, executing and delivering on behalf of the City all
certificates, consents, receipts, requests, notices, and other documents as may be reasonably
necessary to satisfy the City's obligations under this Ordinance and to direct the transfer and
application of funds of the City consistent with the provisions of this Ordinance.
ARTICLE VIII.
CONTINUING DISCLOSURE UNDERTAKING
Section 8.1.: Annual Reports. The City shall provide annually to the MSRB in an
electronic format prescribed by the MSRB, within six months after the end of each fiscal year,
financial information and operating data with respect to the City of the general type included in
KV
HOU:3189356.1
the final Official Statement authorized by Section 7.3 of this Ordinance, being the financial
information and operating data described in the Officers' Pricing Certificate. Any financial
statements so to be provided shall be (1) prepared in accordance with the accounting principles
described in Appendix B to the Official Statement and (2) audited, if the City commissions an
audit of such statements and the audit is completed within the period during which they must be
provided. If audited financial statements are not so provided, then the City shall provide audited
financial statements for the applicable fiscal year to the MSRB, when and if audited financial
statements become available.
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.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (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 8.2.: Certain Event Notices. The City shall notify the MSRB, in a timely manner
not to exceed ten (10) business days, of any of the following events with respect to the Bonds or
the City:
(a) Principal and interest payment delinquencies;
(b) Non-payment related defaults, if material;
(c) Unscheduled draws on debt service reserves reflecting financial difficulties;
(d) Unscheduled draws on credit enhancements reflecting financial difficulties;
(e) Substitution of credit or liquidity providers, or their failure to perform;
(f) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-
TEB) or other material notices or determinations with respect to the tax status of
the Bonds, or other material events affecting the tax status of the Bonds;
(g) Modifications to rights of holders of the Bonds, if material;
(h) Bond calls, if material, and tender offers;
(i) Defeasances;
(j) Release, substitution, or sale of property securing repayment of the Bonds, if
material;
19
HOU:3189356.1
(k) Rating changes;
(1) Bankruptcy, insolvency, receivership or similar event of the City;
(m) 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
(n) Appointment of a successor or additional Paying Agent/Registrar or the change of
name of Paying Agent/Registrar, if material.
As used in clause (1) 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 or governmental authority has assumed jurisdiction over substantially all of the
assets or business of the City, or if jurisdiction has been assumed by leaving Council and
officials 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.
The City shall notify the MSRB in an electronic format prescribed by the MSRB, in a
timely manner, of any failure by the City to provide financial information or operating data in
accordance with Section 8.1 of this Ordinance by the time required by such Section.
Section 8.3.: Limitations. Disclaimers and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Article for so long as, but only for so long as,
the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule,
except that the City in any event will give the notice required by Section 8.2 of any Bond calls
and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Article are for the sole benefit of the holders and beneficial owners
of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any legal
or equitable right, remedy, or claim hereunder to any other person. The City undertakes to
provide only the financial information, operating data, financial statements, and notices which it
has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide
any other information that may be relevant or material to a complete presentation of the City's
financial results, condition, or prospects or hereby undertake to update any information provided
in accordance with this Article or otherwise, except as expressly provided herein. The City does
not make any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
20
HOU:3189356.1
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.
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 provision of this
Ordinance.
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.
The provisions of this Article may be amended by the City from time to time to adapt the
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 (1) the
provisions of this Article, as so amended, would have permitted an underwriter to purchase or
sell the Bonds in the primary offering of the Bonds in compliance with the Rule, taking into
account any amendments or interpretations of the Rule to the date of such amendment, as well as
such changed circumstances, and (2) either (a) the holders of a majority in aggregate principal
amount (or any greater amount required by any other provision of this Ordinance that authorizes
such an amendment) of the outstanding Bonds consent to such amendment or (b) a person that is
unaffiliated with the City (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interests of the holder and beneficial owners of the
Bonds. If the City so amends the provisions of this Article, it shall include with any amended
financial information or operating data next provided in accordance with Section 8.1 an
explanation, in narrative form, of the reasons for the amendment and of the impact of any change
in the type of financial information or operating data so provided. The City may also amend or
repeal the provisions of this Article if the SEC amends or repeals the applicable provisions of the
Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid,
and the City also may amend the provisions of this Article in its discretion in any other manner
or circumstance, but in either case only if and to the extent that the provisions of this sentence
would not have prevented an underwriter from lawfully purchasing or selling Bonds in the
primary offering of the Bonds.
Section 8.4.: Definitions. As used in this Article, the following terms have the meanings
ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
ARTICLE IX.
21
HOU:3189356.1
MISCELLANEOUS
Section 9.1.: Defeasance. The City may defease the provisions of this Ordinance and
discharge its obligations to the Registered Owners of any or all of the Bonds to pay the principal
of and interest thereon in any manner now or hereafter permitted by law, including by depositing
with the Paying Agent/Registrar or with the Comptroller either:
(a) cash in an amount equal to the principal amount of such Bonds plus interest
thereon to the date of maturity or redemption; or
(b) pursuant to an escrow or trust agreement, cash and/or (i) direct noncallable
obligations of United States of America, including obligations that are
unconditionally guaranteed by the United States of America; (ii) noncallable
obligations of an agency or instrumentality of the United States, including
obligations that are unconditionally guaranteed or insured by the agency or
instrumentality and that are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent; or (iii)
noncallable obligations of a state or an agency or a county, municipality, or other
political subdivision of a state that have been refunded and that are rated as to
investment quality by a nationally recognized investment rating firm not less than
AAA or its equivalent, which, in the case of (i), (ii) or (iii), may be in book -entry
form, and the principal of and interest on which will, when due or redeemable at
the option of the holder, without further investment or reinvestment of either the
principal amount thereof or the interest earnings thereon, provide money in an
amount which, together with other moneys, if any, held in such escrow at the
same time and available for such purpose, shall be sufficient to provide for the
timely payment of the principal of and interest thereon to the date of maturity or
earlier redemption;
provided, however, that if any of the Bonds are to be redeemed prior to their respective dates of
maturity, provision shall have been made for giving notice of redemption as provided in this
Ordinance. Upon such deposit, such Bonds shall no longer be regarded to be Outstanding or
unpaid. Any surplus amounts not required to accomplish such defeasance shall be returned to
the City.
Section 9.2.: Application of Chapter 1208, Government Code. Chapter 1208,
Government Code, applies to the issuance of the Bonds and the pledge of the taxes granted by
the City under Section 5.1 of this Ordinance, and such pledge is therefore valid, effective and
perfected. If Texas law is amended at any time while the Bonds are outstanding and unpaid such
that the pledge of the taxes granted by the City under Section 5.1 of this Ordinance is to be
subject to the filing requirements of Chapter 9, Business & Commerce Code, then in order to
preserve to the Registered Owners of the Bonds the perfection of the security interest in said
pledge, the City agrees to take such measures as it determines are reasonable and necessary
under Texas law to comply with the applicable provisions of Chapter 9, Business & Commerce
Code and enable a filing to perfect the security interest in said pledge to occur.
22
HOU:3189356.1
Section 9.3.: Ordinance a Contract - Amendments. This Ordinance shall constitute a
contract with the Registered Owners from time to time, be binding on the City, and shall not be
amended or repealed by the City so long as any Bond remains Outstanding except as permitted
in this Section. The City may, without the consent of or notice to any Registered Owners,
from time to time and at any time, amend this Ordinance in any manner not detrimental to the
interests of the Registered Owners, including the curing of any ambiguity, inconsistency, or
formal defect or omission herein. In addition, the City may, with the consent of Registered
Owners who own in the aggregate 51% of the principal amount of the Bond then Outstanding,
amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the
consent of all Registered Owners of Outstanding Bonds, no such amendment, addition, or
rescission shall (i) extend the time or times of payment of the principal of and interest on the
Bonds, reduce the principal amount thereof, the redemption price, or the rate of interest
thereon, or in any other way modify the terms of payment of the principal of or interest on the
Bonds, (ii) give any preference to any Bond over any other Bond, or (iii) reduce the aggregate
principal amount of Bonds required to be held by Registered Owners for consent to any such
amendment, addition, or rescission.
Section 9.4.: Legal Holidays. In any case where the date interest accrues and becomes
payable on the Bonds or principal of the Bonds matures or the date fixed for redemption of any
Bonds or a Record Date shall be in the City a Saturday, Sunday, legal holiday or a day on which
banking institutions are authorized by law to close, then payment of interest or principal need not
be made on such date, or the Record Date shall not occur on such date, but payment may be
made or the Record Date shall occur on the next succeeding day which is not in the City a
Saturday, Sunday, legal holiday or a day on which banking institutions are authorized by law to
close with the same force and effect as if (i) made on the date of maturity or the date fixed for
redemption and no interest shall accrue for the period from the date of maturity or redemption to
the date of actual payment or (ii) the Record Date had occurred on the fifteenth day of that
calendar month.
Section 9.5.: No Recourse Against City Officials. No recourse shall be had for the
payment of principal of or interest on any Bonds or for any claim based thereon or on this
Ordinance against any official of the City or any person executing any Bonds.
Section 9.6.: Power to Revise Form of Documents. Notwithstanding any other
provision of this Ordinance, the Mayor is hereby authorized to make or approve such revisions,
additions, deletions, and variations to this Ordinance and in the form of the documents attached
hereto as exhibits as, in the judgment of the Mayor, and in the opinion of Bond Counsel to the
City, may be necessary or convenient to carry out or assist in carrying out the purposes of this
Ordinance, or as may be required for approval of the Bonds by the Attorney General of Texas;
provided, however, that any changes to such documents resulting in substantive amendments to
the terms and conditions of the Bonds or such documents shall be subject to the prior approval of
the City Council.
Section 9.7.: Further Proceedings. The Mayor, City Secretary and other appropriate
officials of the City are hereby authorized and directed to do any and all things necessary and/or
convenient to carry out the terms of this Ordinance.
23
HOU:3189356.1
Section 9.8.: Severability. If any Section, paragraph, clause or provision of this
Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or
unenforceability of such Section, paragraph, clause or provision shall not affect any of the
remaining provisions of this Ordinance.
Section 9.9.: Open Meeting. It is hereby found, determined and declared that a sufficient
written notice of the date, hour, place and subject of the meeting of the City Council at which
this Ordinance was adopted was posted at a place convenient and readily accessible at all times
to the general public at City Hall for the time required by law preceding this meeting, as required
by the Open Meetings Law, Chapter 551, Texas Government Code, and that this meeting has
been open to the public as required by law at all times during which this Ordinance and the
subject matter thereof has been discussed, considered and formally acted upon. The City
Council further ratifies, approves and confirms such written notice and the contents and posting
thereof.
Section 9.10.: Repealer. All orders, resolutions and ordinances, or parts thereof,
inconsistent herewith are hereby repealed to the extent of such inconsistency.
Section 9.11.: Effective Date. This Ordinance shall be in force and effect from and after
its passage on the date shown below.
[The remainder of this page is intentionally left blank.]
24
HOU:3189356.1
PASSED AND ADOPTED this March 24, 2014.
CITY OF LA PORTE, TEXAS
ATTEST:
low�j �e- kqdzd44
City Secretary
(SEAL)
Schedules and Exhibits:
Schedule 1 — Schedule of Refunding Candidates
Exhibit A — Form of Officers' Pricing Certificate
S-1
HOU:3189356.1