15-MOVE TO ADOPT ORD AUTHORIZING ISSUANCE AND SALE OF COP GENERAL OBLIGATION REFUNDING BONDS SERIES 2012Submittal Date:
10-15-12
Council Date:
10-22-12
CITY COUNCIL AGENDA ITEM BRIEFING SHEET
Originating Department: I Presented By:
Finance
Gene Anderson
Agenda Item No.:
15.
RECOMMENDED MOTION:
Move to adopt an ordinance authorizing the issuance and sale of the City of Paris General
Obligation Refunding Bonds, Series 2012, appointing authorized representatives and
establishing parameters with respect thereto, and approving all other matters incident
thereto.
POLICY ISSUE�S�:
Fiscal Management
BACKGROUND:
Due to the current financial marketplace, the City of Paris can refund its Combination Tax
& Revenue Certificates of Obligation, Series 2002 and its General Obligation Refunding
Bonds, Series 2003 for savings without extending the maturity date of the original bonds. It
is estimated that gross savings will be $582,380 with net present value savings of $554,125.
This amounts to savings of approxirriately 12.00% of the current payment schedule.
The ordinance authorizes the refunding of the original certificates and bonds, authorizes the
city staff to sign related documents, establishes the parameters of the issue, authorizes use of
an escrow agreement and paying agent/registrar agreement, engages bond counsel, pledges
funds for the payment of the bonds, and authorizes other technical procedures.
BOARD�COMMISSION RECOMMENDATION:
N/A
EXHIBITS:
Ordinance
ACTION:
� Financial Report
❑ Department Report
❑ Presentation
❑ Public Hearing
FISCAL NOTES:
City of Paris
❑ Minute Order
❑ Resolution
� Ordinance
❑ Other
BUDGET INFO:
Budgeted Amt.
YTD Actual
Acct. Name
Acct. Number
5 �s
$
$
$
Revised 6/20/12
ORDINANCE OF THE CITY OF PARIS, TEXAS
AUTHORIZING THE ISSUANCE OF
CITY OF PARIS, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2012
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Table of Contents
Section 1. Recitals, Amount, Purpose and Designation of the Bonds ............................................3
Section 2. Delegation to Pricing Officer .........................................................................................3
Section 3. Characteristics of the Bonds ..........................................................................................5
Section4. Form of Bonds ...............................................................................................................9
Section 5. Interest and Sinking Fund ............................................................................................16
Section 6. Defeasance of Bonds ....................................................................................................17
Section 7. Damaged, Mutilated, Lost, Stolen, or Destroyed Bonds .............................................18
Section 8. Custody, Approval, and Registration of Bonds; Bond Counsel's Opinion and
Engagement of Bond Counsel; CUSIP Numbers; Contingent Insurance Provision,
if Obtained; Attorney General Fee .....................................................................................19
Section 9. Covenants Regarding Tax Exemption of Interest on the Bonds ..................................20
Section 10. Sale of Bonds and Approval of Official Statement; Further Procedures ...................22
Section 11. Compliance with Rule 15c2-12; Alternate Information ............................................23
Section 12. Method of Amendment ..............................................................................................27
Section 13. Default and Remedies ................................................................................................28
Section 14. Approval of Escrow Agreement and Transfer of Funds ............................................29
Section 15. Redemption of Refunded Obligations .......................................................................29
Section16. Appropriation .............................................................................................................30
Section17. Severability ................................................................................................................30
Section18. Effective Date ............................................................................................................30
Section 19. Written Procedures for Federal Tax Law Compliance ..............................................31
Schedule I Schedule of Eligible Refunded Obligations ............................................................. S-1
Exhibit A Notice of Redemption .............................................................................................. A-1
Exhibit B Written Procedures Relating to Continuing Compliance
with Federal Tax Covenants ............................................................................................B-1
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Ordinance
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS,
TEXAS AUTHORIZING THE ISSUANCE OF CITY OF PARIS,
TEXAS, GENERAL OBLIGATION REFUNDING BONDS;
ESTABLISHING PROCEDURES FOR THE SALE AND DELIVERY
OF THE BONDS; LEVYING AN ANNUAL AD VALOREM TAX FOR
THE PAYMENT OF SAID BONDS; PROVIDING AN EFFECTIVE
DATE; AND ENACTING OTHER PROVISIONS RELATING TO THE
SUBJECT
WHEREAS, there are presently the outstanding obligations of the City of Paris, Texas
(the "Issuer") described in Schedule I attached hereto, collectively, the "Eligible Refunded
Obligations";
WHEREAS, the Issuer now desires to refund all or part of the Eligible Refunded
Obligations, and those Eligible Refunded Obligations designated by the Pricing Officer in the
Pricing Certificate, each as defined below, to be refunded are herein referred to as the "Refunded
Obligations";
WHEREAS, Chapter 1207, Texas Government Code, authorizes the Issuer to issue
refunding bonds and to deposit the proceeds from the sale thereof, together with any other
available funds or resources, directly with a paying agent for any of the Refunded Obligations or
a trust company or commercial bank that does not act as a depository for the Issuer and is named
in these proceedings, and such deposit, if made before the payment dates of the Refunded
Obligations, shall constitute the making of firm banking and financial arrangements for the
discharge and final payment of the Refunded Obligations;
WHEREAS, Chapter 1207, Texas Government Code, further authorizes the Issuer to
enter into an escrow agreement with such paying agent for the Refunded Obligations or trust
company or commercial bank with respect to the safekeeping, investment, reinvestment,
administration and disposition of any such deposit, upon such terms and conditions as the Issuer
and such paying agent or trust company or commercial bank may agree;
WHEREAS, this City Council� hereby finds and determines that it is a public purpose
and in the best interests of the Issuer to refund the Refunded Obligations in order to achieve a
present value debt service savings from the refunding, with such savings, among other
information and terms to be included in a pricing certificate (the "Pricing Certificate") to be
executed by the Pricing Officer (hereinafter designated), all in accordance with the provisions of
Section 1207.007, Texas Government Code;
WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to
maturity within 20 years of the date of the bonds hereinafter authorized;
WHEREAS, the bonds hereafter authorized are being issued and delivered pursuant to
said Chapter 1207, Texas Government Code; and
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WHEREAS, It is officially found, determined, and declared that the meeting at which
this Ordinance has been adopted was open to the public and public notice of the time, place and
subject matter of the public business to be considered and acted upon at said meeting, including
this Ordinance, was given, all as required by the applicable provisions of Tex. Gov't Code Ann.
ch. 551; Now, Therefore
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF PARIS, TEXAS:
Section l. RECITALS, AMOUNT, PURPOSE AND DESIGNATION OF THE
BONDS.
(a) The recitals set forth in the preamble hereof are incorporated herein and shall have
the same force and effect as if set forth in this Section.
(b) The bonds of the City of Paris, Texas (the "Issuer") are hereby authorized to be
issued and delivered in the aggregate principal amount hereinafter provided for the public
purpose of providing funds to refund a portion of the Issuer's outstanding indebtedness and to
pay the costs incurred in connection with the issuance of the Bonds.
(c) Each bond issued pursuant to this Ordinance shall be designated (subject to the
exercise of the delegated powers provided in Section 3): "CITY OF PARIS, TEXAS,
GENERAL OBLIGATION REFUNDING BOND, SERIES 2012," and initially there shall be
issued, sold, and delivered hereunder fully registered Bonds, without interest coupons, payable to
the respective registered owners thereof (with the initial bonds being made payable to the initial
purchaser as described in Section 10 hereo�, or to the registered assignee or assignees of said
bonds or any portion or portions thereof (in each case, the "Registered Owner"). The Bonds
shall be in the respective denominations and principal amounts, shall be numbered, shall mature
and be payable on the date or dates in each of the years and in the principal amounts, and shall
bear interest to their respective dates of maturity or redemption prior to maturity at the rates per
annum, as set forth in the Pricing Certificate.
Section 2. DELEGATION TO PRICING OFFICER.
(a) As authorized by Section 1207.007, Texas Government Code, as amended, the City
Manager of the Issuer and the Finance Director of the Issuer are each individually hereby
authorized to act on behalf of the Issuer in selling and delivering the Bonds (of which officers,
the officer executing the Pricing Certificate shall be hereinafter referred to as, and shall for all
purposes be, the "Pricing Officer"), determining which of the Eligible Refunded Obligations
shall be refunded and carrying out the other procedures specified in this Ordinance, including,
determining the date of the Bonds, any additional or different designation or title by which the
Bonds shall be known, the price at which the Bonds will be sold, the years in which the Bonds
will mature, the principal amount to mature in each of such years, the rate of interest to be borne
by each such maturity, the interest payment and record dates, the price and terms upon and at
which the Bonds shall be subject to redemption prior to maturity at the option of the Issuer, as
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well as any mandatory sinking fund redemption provisions, and all other matters relating to the
issuance, sale, and delivery of the Bonds and the refunding of the Refunded Bonds, including
without limitation establishing the redemption date for and effecting the redemption of the
Refunded Obligations, and obtaining municipal bond insurance for all or any portion of the
Bonds and providing for the terms and provisions thereof applicable to the Bonds, if such
insurance is determined by the Pricing Officer acting with the advice of the Issuer's financial
advisor to be advantageous to the Issuer in selling the Bonds on the most favorable terms, all of
which shall be specified in the Pricing Certificate; provided that:
(i) the aggregate original principal amount of the Bonds shall not exceed
$4,750,000;
(ii) the refunding must produce debt service savings of at least 10% measured on
a present value basis as a percentage of the principal amount of the Refunded
Obligations, and with such savings to be net of any Issuer contribution to the
refunding;
(iii) the "true interest rate" far the Bonds shall not exceed 2.00%; and
(iv) the delegation made hereby shall expire if not exercised by the Pricing
Officer on or prior to the date that is six months after the adoption of this
Ordinance by the City Council.
(b) In establishing the aggregate principal amount of the Bonds, the Pricing Officer shall
establish an amount not exceeding the amount authorized in Subsection (a) hereof, which shall
be sufficient in amount to provide for the purposes for which the Bonds are authorized and to
pay costs of issuing the Bonds. The Bonds shall be sold with and subject to such terms as set
forth in the Pricing Certificate.
(c) The Bonds may be sold by public offering (either through a negotiated or competitive
offering) or by private placement. If the Bonds are sold by private placement, the Pricing
Certificate shall so state, and the Pricing Certificate may make changes to this Ordinance to
effect such private placement, including the provisions hereof that pertain to the book-entry-only
procedures (including eliminating the book-entry-only system of registrations, payment and
transfers) and to the provisions of Section 11 hereof relating to the undertaking of the Issuer in
accordance with Rule 15c2-12 of the Securities and Exchange Commission (the "Rule")
(including eliminating or replacing such undertaking with an agreement to provide alternative
disclosure information).
(d) It is hereby found and determined that the refunding of the Refunded Obligations is
advisable and necessary in order to restructure the debt service requirements of the Issuer, and
that the debt service requirements on the Bonds will be less than those on the Refunded
Obligations, resulting in a reduction in the amount of principal and interest which otherwise
would be payable. The Refunded Obligations are subject to redemption, at the option of the
Issuer, and the Pricing Officer is hereby authorized to cause all of the Refunded Obligations to
be called for redemption on the respective date or dates consistent with the savings analysis set
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forth in Section 3(a)(ii) hereof, and the proper notices of such redemption to be given, and in
each case at a redemption price of par, plus accrued interest to the date fixed for redemption. In
furtherance of authority granted by Section 1207.007(b), Texas Government Code, the Pricing
Officer is further authorized to enter into and execute on behalf of the Issuer with the escrow
agent named therein, an escrow agreement, in substantially the form presented to the Board at
the meeting at which this Order was adopted and as shall be approved by the Pricing Officer,
which escrow agreement will provide for the payment in full of the Refunded Obligations (the
"Escrow Agreement"). In addition, the Pricing Officer is authorized to purchase such securities
with proceeds of the Bonds, including, but not limited to executing subscriptions for the purchase
of the United States Treasury Securities, State and Local Government Series, and to transfer and
deposit such cash from available funds, as may be necessary or appropriate for the escrow fund
described in the Escrow Agreement.
(� In satisfaction of Section 1201.022(a)(3)(B), Texas Government Code, the City
Council hereby determines that the delegation of the authority to the Pricing Officer to approve
the final terms of the Bonds set forth in this Order is, and the decisions made by the Pricing
Officer pursuant to such delegated authority and incorporated into the Pricing Certificate will be,
in the Issuer's best interests, and the Pricing Officer is hereby authorized to make and include in
the Pricing Certificate a finding to that effect.
Section 3. CHARACTERISTICS OF THE BONDS.
(a) Registration. The Issuer shall keep or cause to be kept at the corporate trust office of
the financial institution named as the Paying Agent/Registrar in the Pricing Certificate (the
"Paying Agent/Registrar"), books or records for the registration of the transfer, conversion and
exchange of the Bonds (the "Registration Books"), and the Issuer hereby appoints the Paying
Agent/Registrar as its registrar and transfer agent to keep such books or records and make such
registrations of transfers, conversions and exchanges under such reasonable regulations as the
Issuer and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make
such registrations, transfers, conversions and exchanges as herein provided within three days of
presentation in due and proper form. The Paying Agent/Registrar shall obtain and record in the
Registration Books the address of the registered owner of each Bond to which payments with
respect to the Bonds shall be mailed, as herein provided; but it shall be the duty of each
registered owner to notify the Paying Agent/Registrar in writing of the address to which
payrnents shall be mailed, and such interest payments shall not be mailed unless such notice has
been given. The Issuer shall have the right to inspect the Registration Books during regular
business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall
keep the Registration Books confidential and, unless otherwise required by law, shall not permit
their inspection by any other entity. The Issuer shall pay the Paying Agent/Registrar's standard
or customary fees and charges for making such registration, transfer, conversion, exchange and
delivery of a substitute Bond or Bonds. Registration of assignments, transfers, conversions and
exchanges of Bonds shall be made in the manner provided and with the effect stated in the
FORM OF BOND set forth in this Ordinance. Each substitute Bond shall bear a letter and/or
number to distinguish it from each other Bond.
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(b) Transfer, Conversion and Exchan�e. Except as provided in Section 3(d) of this
Ordinance, an authorized representative of the Paying Agent/Registrar shall, before the delivery
of any such Bond, date and manually sign said Bond, and no such Bond shall be deemed to be
issued or outstanding unless such Bond is so executed. The Paying Agent/Registrar promptly
shall cancel all paid Bonds and Bonds surrendered for conversion and exchange. No additional
ordinances, orders, or resolutions need be passed or adopted by the governing body of the Issuer
or any other body or person so as to accomplish the foregoing conversion and exchange of any
Bond or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution,
and delivery of the substitute Bonds in the manner prescribed herein. Pursuant to Chapter 1201,
Government Code, as amended, the duty of conversion and exchange of Bonds as aforesaid is
hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Bond, the
converted and exchanged Bond shall be valid, incontestable, and enforceable in the same manner
and with the same effect as the Bonds that initially were issued and delivered pursuant to this
Ordinance, approved by the Attorney General and registered by the Comptroller of Public
Accounts.
(c) Payrnent of Bonds and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds,
all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all
payrnents made by the Issuer and the Paying Agent/Registrar with respect to the Bonds, and of
all conversions and exchanges of Bonds, and all replacements of Bonds, as provided in this
Ordinance. However, in the event of a nonpayrnent of interest on a scheduled payment date, and
for thirty (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 Issuer. Notice of the Special Record Date and of the
scheduled payment date of the past due interest (which shall be 15 days after the Special Record
Date) shall be sent at least five (5) business days prior to the Special Record Date by United
States mail, first class postage prepaid, to the address of each registered owner appearing on the
Registration Books at the close of business on the last business day next preceding the date of
mailing of such notice.
(d) In General. The Bonds (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be payable only to the registered
owners thereof, (ii) shall be in the denominations, (iii) may be converted and exchanged for other
Bonds, (iv) may be transferred and assigned, (v) shall have the characteristics, (vi) shall be
signed, sealed, executed and authenticated, (vii) the principal of and interest on the Bonds shall
be payable, and (viii) shall be administered and the Paying Agent/Registrar and the Issuer shall
have certain duties and responsibilities with respect to the Bonds, all as provided, and in the
manner and to the effect as required or indicated, in the FORM OF BOND set forth in this
Ordinance. The Bond initially issued and delivered pursuant to this Ordinance is not required to
be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond
issued in conversion of and exchange for any Bond or Bonds issued under this Ordinance the
Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S
AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF BOND.
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(e) Payin�A�ent/Re�istrar. The Issuer covenants with the registered owners of the
Bonds that at all times while the Bonds are outstanding the Issuer will provide a competent and
legally qualified bank, trust company, financial institution, or other entity to act as and perform
the services of Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying
Agent/Registrar will be one entity. The Issuer reserves the right to, and may, at its option,
change the Paying Agent/Registrar upon not less than 50 days written notice to the Paying
Agent/Registrar, to be effective not later than 45 days prior to the next principal or interest
payment date after such notice. In the event that the entity at any time acting as Paying
Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or
otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and
legally qualified bank, trust company, financial institution, or other agency to act as Paying
Agent/Registrar under this Ordinance. Upon any change in the Paying Agent/Registrar, the
previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a
copy thereo fl, along with all other pertinent books and records relating to the Bonds, to the new
Paying Agent/Registrar designated and appointed by the Issuer. Upon any change in the Paying
Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new
Paying Agent/Registrar to each Registered Owner of the Bonds, by United States mail, first-class
postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By
accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to
have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be
delivered to each Paying Agent/Registrar.
( fl Authentication. Except as provided below, no Bond shall be valid or obligatory for
any purpose or be entitled to any security or benefit of this Ordinance unless and until there
appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided in
this Ordinance, duly authenticated by manual execution of the Paying Agent/Registrar. It shall
not be required that the same authorized representative of the Paying Agent/Registrar sign the
Certificate of Paying Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of
Paying Agent/Registrar described above, the Initial Bond delivered on the closing date shall have
attached thereto the Comptroller's Registration Certificate substantially in the form provided in
this Ordinance, 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 Initial Bond has been
duly approved by the Attorney General of the State of Texas and that it is a valid and binding
obligation of the Issuer, and has been registered by the Comptroller.
(g) Book-Entrv Onl� System. The Bonds issued in exchange for the Bond initially
issued to the initial purchaser specified herein 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 The
Depository Trust Company, New York, New York ("DTC"), and except as provided in
subsection ( fl hereof, all of the outstanding Bonds shall be registered in the name of Cede & Co.,
as nominee of DTC.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the
Issuer and the Paying Agent/Registrar shall have no responsibility or obligation to any securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organizations
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on whose behalf DTC was created ("DTC Participant") to hold securities to facilitate the
clearance and settlement of securities transactions among DTC Participants 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 Issuer and the Paying Agent/Registrar shall have no
responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or
any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any
DTC Participant or any other person, other than a Registered Owner of Bonds, as shown on the
Registration Books, of any notice with respect to the Bonds, or (iii) the payment to any DTC
Participant or any other person, other than a Registered Owner of Bonds, as shown in the
Registration Books of any amount with respect to principal of or interest on the Bonds.
Notwithstanding any other provision of this Ordinance to the contrary, the Issuer and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is
registered in the Registration Books as the absolute owner of such Bond for the purpose of
payment of principal and interest with respect to such Bond, for the purpose of registering
transfers with respect to such Bond, and for all other purposes whatsoever. The Paying
Agent/Registrar shall pay all principal of and interest on the Bonds only to or upon the order of
the Registered Owners, as shown in the Registration Books 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 Issuer's obligations with respect to payment of
principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other
than a Registered Owner, as shown in the Registration Books, shall receive a Bond evidencing
the obligation of the Issuer to make payments of principal and interest 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., and subject to the
provisions in this Ordinance with respect to interest checks being mailed to the Registered
Owner at the close of business on the Record date, the words "Cede & Co." in this Ordinance
shall refer to such new nominee of DTC.
The previous execution and delivery of the Blanket Letter of Representations with respect
to obligations of the Issuer is hereby ratified and confirmed; and the provisions thereof shall be
fully applicable to the Bonds.
(h) Successor Securities Depositor� Transfers Outside Book-Entrv Onlv Svstem. In the
event that the Issuer determines that DTC is incapable of discharging its responsibilities
described herein and in the representations letter of the Issuer to DTC or that it is in the best
interest of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the
Issuer shall (i) appoint a successor securities depository, qualified to act as such under Section
17A of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants
of the appointment of such successor securities depository and transfer one or more separate
Bonds to such successor securities depository or (ii) notify DTC and DTC Participants of the
availability through DTC of Bonds and transfer one or more separate certificated 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 Registration Books 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 Registered Owners transferring or exchanging Bonds
shall designate, in accordance with the provisions of this Ordinance.
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(i) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to
the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC,
all payments with respect to principal of and interest on such Bond and all notices with respect to
such Bond shall be made and given, respectively, in the manner provided in the representations
letter of the Issuer to DTC.
(j) Cancellation of Initial Bond. On the closing date, one initial Bond representing the
entire principal amount of the Bonds, payable in stated installments to the purchaser designated
in Section 10 or its designee, executed by manual or facsimile signature of the Mayor and City
Clerk of the Issuer, approved by the Attorney General of Texas, and registered and manually
signed by the Comptroller of Public Accounts of the State of Texas, will be delivered to such
purchaser or its designee. Upon payment for the initial Bond, the Paying Agent/Registrar shall
cancel the initial Bond and deliver to the Depository Trust Company on behalf of such purchaser
one registered definitive Bond for each year of maturity of the Bonds, in the aggregate principal
amount of all of the Bonds for such maturity. To the extent that the Paying Agent/Registrar is
eligible to participate in DTC's FAST System, pursuant to an agreement between the Paying
Agent/Registrar and DTC, the Paying Agent/Registrar shall hold the definitive Bonds in
safekeeping for DTC.
(k) Conditional Notice of Redemption. With respect to any optional redemption of the
Bonds, unless certain prerequisites to such redemption required by this Ordinance have been met
and moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to
be redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such
notice of redemption, such notice shall state that said redemption may, at the option of the Issuer,
be conditional upon the satisfaction of such prerequisites and receipt of such moneys by the
Paying Agent/Registrar on or prior to the date fixed for such redemption, or upon any
prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given
and such prerequisites to the redemption and sufficient moneys are not received, such notice
shall be of no force and effect, the Issuer shall not redeem such Bonds and the Paying
Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to
the effect that the Bonds have not been redeemed.
Section 4. FORM OF BONDS. The form of the Bonds, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the form of
Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be
attached to the Bonds initially issued and delivered pursuant to this Ordinance, shall be,
respectively, substantially as follows, with such appropriate variations, omissions or insertions as
are permitted or required by this Ordinance, and with the Bonds to be completed with
information set forth in the Pricing Certificate. The Form of Bond shall be completed with
information set forth in the Pricing Certificate and shall be attached to the Pricing Certificate as
an exhibit thereto.
(a) [Form of Bond]
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NO. R- UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF PARIS, TEXAS
GENERAL OBLIGATION REFUNDING BOND
SERIES 2012
INTEREST RATE
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DATE OF BONDS MATURITY
DATE
PRINCIPAL
AMOUNT
$
CUSIP NO.
DOLLARS
ON THE MATURITY DATE specified above, the City of Paris, in Lamar County, (the
"Issuer"), being a political subdivision and municipal corporation of the State of Texas, hereby
promises to pay to the Registered Owner specified above, or registered assigns (hereinafter
called the "Registered Owner"), on the Maturity Date specified above, the Principal Amount
specified above. The Issuer promises to pay interest on the unpaid principal amount hereof
(calculated on the basis of a 360-day year of twelve 30-day months) from ,
at the Interest Rate per annum specified above. Interest is payable on ,
and semiannually on each and thereafter to the Maturity Date
specified above, or the date of redemption prior to maturity; except, if this Bond is required to be
authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such principal amount shall bear interest from the interest payrnent date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear
interest from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of
the United States of America, without exchange or collection charges. The principal of this
Bond shall be paid to the registered owner hereof upon presentation and surrender of this Bond at
maturity, or upon the date fixed for its redemption prior to maturity, at the principal corporate
trust office of , , Texas, which is the "Paying Agent/Registrar"
for this Bond. The payment of interest on this Bond shall be made by the Paying
Agent/Registrar to the registered owner hereof on each interest payment date by check or draft,
dated as of such interest payrnent date, drawn by the Paying Agent/Registrar on, and payable
solely from, funds of the Issuer required by the ordinance authorizing the issuance of this Bond
(the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar far such purpose as
hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by
United States mail, first-class postage prepaid, on each such interest payment date, to the
9
• i
registered owner hereof, at its address as it appeared on the day of the month
preceding each such date (the "Record Date") on the Registration Books kept by the Paying
Agent/Registrar, as hereinafter described. In addition, interest may be paid by such other
method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of,
the registered owner. In the event of a non-payrnent 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 Issuer. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (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 United States mail, first-
class postage prepaid, to the address of each owner of a Bond appearing on the Registration
Books at the close of business on the last business day next preceding the date of mailing of such
notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Bond prior
to maturity as provided herein shall be paid to the registered owner upon presentation and
surrender of this Bond for payment or redemption at the principal corporate trust office of the
Paying Agent/Registrar. The Issuer covenants with the registered owner of this Bond that on or
before each principal payment date and interest payment date for this Bond it will make available
to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond
Ordinance, the amounts required to provide for the payment, in immediately available funds, of
all principal of and interest on the Bonds, when due.
IF THE DATE for any payrnent of the principal of or interest on this Bond shall be a
Saturday, Sunday, a legal holiday or a day on which banking institutions in the city where the
principal corporate trust office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day that is
not such a Saturday, Sunday, legal holiday or day on which banking institutions are 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 BOND is one of a series of Bonds dated , , authorized
in accordance with the Constitution and laws of the State of Texas in the principal amount of
$ for the public purposes of refunding certain outstanding obligations of the
Issuer, and to pay the costs incurred in connection with the issuance of the Bonds.
ON , or on any date thereafter, the Bonds of this series may be
redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived from
any available and lawful source, as a whole, or in part, and, if in part, the particular Bonds, or
portions thereof, to be redeemed shall be selected and designated by the Issuer (provided that a
portion of a Bond may be redeemed only in an integral multiple of $5,000), at a redemption price
equal to the principal amount to be redeemed plus accrued interest to the date fixed for
redemption.
IN ADDITION TO THE FOREGOING OPTIONAL REDEMPTION PROVISION, the
Bonds of this series scheduled to mature on in the years and ( the
10
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"Term Bonds") are subject to scheduled mandatory redemption by the Paying Agent/Registrar by
lot, or by any other customary method that results in a random selection, at a price equal to the
principal amount thereof, plus accrued interest to the redemption date, out of moneys available
for such purpose in the interest and sinking fund for the Bonds, on the dates and in the respective
principal amounts, set forth in the following schedule:
Bonds Maturing
�
Principal
Year Amount
Final maturity of Bond.
Bonds Maturing
�
Principal
Year Amount
Bonds Maturing
�
Principal
Year Amount
The principal amount of Term Bonds of a stated maturity required to be redeemed on any
mandatory redemption date pursuant to the operation of the mandatory sinking fund redemption
provisions shall be reduced, at the option of the City, by the principal amount of any Term Bonds
of the same maturity which, at least 45 days prior to a mandatory redemption date (1) shall have
been acquired by the City and delivered to the Paying Agent/Registrar for cancellation or (2)
shall have been redeemed pursuant to the optional redemption provisions and not theretofore
credited against a mandatory redemption requirement.
11
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AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions
thereof prior to maturity a written notice of such redemption shall be sent by the Paying
Agent/Registrar by United States mail, first-class postage prepaid, at least 30 days prior to the
date fixed for any such redemption, to the registered owner of each Bond to be redeemed at its
address as it appeared on the 45th day prior to such redemption date; provided, however, that the
failure of the registered owner to receive such notice, or any defect therein or in the sending or
mailing thereof, shall not affect the validity or effectiveness of the proceedings for the
redemption of any Bond. By the date fixed for any such redemption due provision shall be made
with the Paying Agent/Registrar for the payment of the required redemption price for the Bonds
or portions thereof that are to be so redeemed. If such written notice of redemption is sent and if
due provision for such payment is made, all as provided above, the Bonds or portions thereof that
are to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled
maturities, and they shall not bear interest after the date fixed for redemption, and they shall not
be regarded as being outstanding except for the right of the registered owner to receive the
redemption price from the Paying Agent/Registrar out of the funds provided for such payment.
If a portion of any Bond shall be redeemed, a substitute Bond or Bonds having the same maturity
date, bearing interest at the same rate, in any denomination or denominations in any integral
multiple of $5,000, at the written request of the registered owner, and in aggregate principal
amount equal to the unredeemed portion thereof, will be issued to the registered owner upon the
surrender thereof for cancellation, at the expense of the Issuer, all as provided in the Bond
Ordinance.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the
Bond Ordinance, this Bond may, at the request of the registered owner or the assignee or
assignees hereof, be assigned, transferred, converted into and exchanged for a like aggregate
principal amount of fully registered Bonds, without interest coupons, payable to the appropriate
registered owner, assignee or assignees, as the case may be, having the same denomination or
denominations in any integral multiple of $5,000 as requested in writing by the appropriate
registered owner, assignee or assignees, as the case may be, upon surrender of this Bond to the
Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth
in the Bond Ordinance. Among other requirements for such assignment and transfer, this Bond
must be presented and surrendered to the Paying Agent/Registrar, together with proper
instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof in any
integral multiple of $5,000 to the assignee or assignees in whose name or names this Bond or any
such portion or portions hereof is or are to be registered. The form of Assignment printed or
endorsed on this Bond may be executed by the registered owner to evidence the assignment
hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the
Paying Agent/Registrar may be used to evidence the assignment of this Bond or any portion or
portions hereof from time to time by the registered owner. The Paying Agent/Registrar's
reasonable standard or customary fees and charges for assigning, transferring, converting and
exchanging any Bond or portion thereof will be paid by the Issuer. In any circumstance, any
taxes or governmental charges required to be paid with respect thereto shall be paid by the one
requesting such assignment, transfer, conversion or exchange, as a condition precedent to the
12
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exercise of such privilege. The Paying Agent/Registrar shall not be required to make any such
transfer, conversion, or exchange (i) during the period commencing with the close of business on
any Record Date and ending with the opening of business on the next following principal or
interest payment date, or (ii) with respect to any Bond or any portion thereof called for
redemption prior to maturity, within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that
it promptly will appoint a competent and legally qualified substitute therefor, and cause written
notice thereof to be mailed to the registered owners of the Bonds.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper to be
performed, exist and be done precedent to or in the authorization, issuance and delivery of this
Bond have been performed, existed and been done in accordance with law; and that annual ad
valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond,
as such interest comes due and such principal matures, have been levied and ordered to be levied
against all taxable property in said Issuer, and have been pledged for such payment, within the
limit prescribed by law, all as provided in the Bond Ordinance.
THE ISSUER HAS RESERVED THE RIGHT to amend the Bond Ordinance as provided
therein, and under some (but not all) circumstances amendments thereto must be approved by the
registered owners of a majority in aggregate principal amount of the outstanding Bonds.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that
the terms and provisions of this Bond and the Bond Ordinance constitute a contract between each
registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual
or facsimile signature of the Mayor of the Issuer (or in the absence of the Mayor, by the Mayor
Pro-tem) and countersigned with the manual or facsimile signature of the City Clerk of the
Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile,
on this Bond.
(si�natur�
City Clerk
(SEAL)
(signature)
Mayor
(b) [Form of Paying Agent/Registrar's Authentication Certificate]
13
'7 3
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Registration
Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in the text of this Bond; and that this Bond has been issued in conversion or
replacement of, or in exchange for, a Bond, Bonds, or a portion of a Bond or Bonds of a series
that originally was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
Dated:
(c) [Form of Assignment]
, Texas
Paying Agent/Registrar
By:
Authorized Representative
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer ldentification Number of Transferee:
Please print or typewrite name and address, including zip code of Transferee:
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney, to register the
transfer of
the within Bond on the books kept for registration thereof, with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
14
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NOTICE: Signature(s) must be guaranteed by
an eligible guarantor institution participating
in a securities transfer association recognized
signature guarantee program.
NOTICE: The signature above must
correspond with the name of the registered
owner as it appears upon the front of this
Bond in every particular, without alteration or
enlargement or any change whatsoever.
(d) [Form of Registration Certificate of the Comptroller of Public Accounts]
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity and approved
by the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
(e) [Initial Bond Insertions]
(i) The initial Bond shall be in the form set forth is paragraph (a) of this Section,
except that:
A. immediately under the name of the Bond, the headings
"Interest Rate" and "Maturity Date" shall both be completed with the
words "As shown below" and "CUSIP No. " shall be deleted.
B. the first paragraph shall be deleted and the following
will be inserted:
"THE CITY OF PARIS, TEXAS, in Lamar County (the "Issuer"), being a political
subdivision and municipal corporation of the State of Texas, hereby promises to pay to the
Registered Owner specified above, or registered assigns (hereinafter called the "Registered
Owner"), on 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 Amount Interest Rates
(Information from Pricing Certificate to be inserted)
15
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The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the
basis of a 360-day year of twelve 30-day months) from , at the respective
Interest Rate per annum specified above. Interest is payable on , , and
semiannually on each and thereafter to the date of
payment of the principal installment specified above, or the date of redemption prior to maturity;
except, that if this Bond is required to be authenticated and the date of its authentication is later
than the first Record Date (hereinafter defined), such Principal Amount shall bear interest from
the interest payment date next preceding the date of authentication, unless such date of
authentication is after any Record Date but on or before the next following interest payment date,
in which case such principal amount shall bear interest from such next following interest
payrnent date; provided, however, that if on the date of authentication hereof the interest on the
Bond or Bonds, if any, for which this Bond is being exchanged is due but has not been paid, then
this Bond shall bear interest from the date to which such interest has been paid in full."
C. The Initial Bond shall be numbered "T-l."
Section 5. INTEREST AND SINKING FUND.
(a) A special "Interest and Sinking Fund" is hereby created and shall be established and
maintained by the Issuer at an official depository bank of said Issuer. Said Interest and Sinking
Fund shall be kept separate and apart from all other funds and accounts of said Issuer, and shall
be used only for paying the interest on and principal of said Bonds. All amounts received from
the sale of the Bonds as accrued interest shall be deposited upon receipt to the Interest and
Sinking Fund, and all ad valorem taxes levied and collected for and on account of said Bonds
shall be deposited, as collected, to the credit of said Interest and Sinking Fund. During each year
while any of said Bonds are outstanding and unpaid, the governing body of said Issuer shall
compute and ascertain a rate and amount of ad valorem tax that will be sufficient to raise and
produce the money required to pay the interest on said Bonds as such interest comes due, and to
provide and maintain a sinking fund adequate to pay the principal of said Bonds as such principal
matures (but never less than 2% of the original amount of said Bonds as a sinking fund each
year); and said tax shall be based on the latest approved tax rolls of said Issuer, with full
allowances being made for tax delinquencies and the cost of tax collection. Said rate and amount
of ad valarem tax is hereby levied, and is hereby ordered to be levied, against all taxable
property in said Issuer, for each year while any of said Bonds are outstanding and unpaid, and
said tax shall be assessed and collected each such year and deposited to the credit of the
aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment
of the interest on and principal of said Bonds, as such interest comes due and such principal
matures, are hereby pledged for such payment, within the limit prescribed by law. If lawfully
available moneys of the Issuer are actually on deposit in the Interest and Sinking Fund in
advance of the time when ad valorem taxes are scheduled to be levied for any year, then the
amount of taxes that otherwise would have been required to be levied pursuant to this Section
may be reduced to the extent and by the amount of the lawfully available funds then on deposit
in the Interest and Sinking Fund.
16
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(b) Article 1208, Government Code, applies to the issuance of the Bonds and the pledge
of the taxes granted by the Issuer under this Section and is therefore valid, effective, and
perfected. Should Texas law be amended at any time while the Bonds are outstanding and
unpaid, the result of such amendment being that the pledge of the taxes granted by the Issuer
under this Section is to be subject to the filing requirements of Chapter 9, Business & Commerce
Code, in order to preserve to the registered owners of the Bonds a security interest in said pledge,
the Issuer 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 of a security interest in said pledge to occur.
Section 6. DEFEASANCE OF BONDS.
(a) Any Bond and the interest thereon shall be deemed to be paid, retired and no longer
outstanding (a "Defeased Bond") within the meaning of this Ordinance, except to the extent
provided in subsection (d) of this Section, when payment of the principal of such Bond, plus
interest thereon to the due date (whether such due date be by reason of maturity or otherwise)
either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii)
shall have been provided for on or before such due date by irrevocably depositing with or
making available to the Paying Agent/Registrar in accordance with an escrow agreement or other
instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the United
States of America sufficient to make such payment or (2) Defeasance Securities that mature as to
principal and interest in such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money to provide for such payment, and when proper arrangements
have been made by the Issuer with the Paying Agent/Registrar for the payment of its services
until all Defeased Bonds shall have become due and payable. At such time as a Bond shall be
deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall
no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein
levied and pledged as provided in this Ordinance, and such principal and interest shall be payable
solely from such money or Defeasance Securities. Notwithstanding any other provision of this
Ordinance to the contrary, it is hereby provided that any determination not to redeem Defeased
Bonds that is made in conjunction with the payrnent arrangements specified in subsection (a)(i)
or (ii) of this Section shall not be irrevocable, provided that: (1) in the proceedings providing for
such payment arrangements, the Issuer expressly reserves the right to call the Defeased Bonds
for redemption; (2) gives notice of the reservation of that right to the owners of the Defeased
Bonds immediately following the making of the payment arrangements; and (3) directs that
notice of the reservation be included in any redemption notices that it authorizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written
direction of the Issuer be invested in Defeasance Securities, maturing in the amounts and times
as hereinbefore set forth, and all income from such Defeasance Securities received by the Paying
Agent/Registrar that is not required for the payment of the Bonds and interest thereon, with
respect to which such money has been so deposited, shall be turned over to the Issuer, or
deposited as directed in writing by the Issuer. Any Future Escrow Agreement pursuant to which
17
��
the money and/or Defeasance Securities are held for the payment of Defeased Bonds may
contain provisions permitting the investment or reinvestment of such moneys in Defeasance
Securities or the substitution of other Defeasance Securities upon the satisfaction of the
requirements specified in subsection (a)(i) or (ii) of this Section. All income from such
Defeasance Securities received by the Paying Agent/Registrar which is not required for the
payment of the Defeased Bonds, with respect to which such money has been so deposited, shall
be remitted to the Issuer or deposited as directed in writing by the Issuer.
(c) The term "Defeasance Securities" means any securities and obligations now or
hereafter authorized by State law that are eligible to refund, retire ar otherwise discharge
obligations such as the Bonds.
(d) Until all Defeased Bonds shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Bonds
the same as if they had not been defeased, and the Issuer shall make proper arrangements to
provide and pay for such services as required by this Ordinance.
(e) In the event that the Issuer elects to defease less than all of the principal amount of
Bonds of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such
amount of Bonds by such random method as it deems fair and appropriate.
Section 7. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost,
stolen or destroyed, the Paying Agent/Registrar shall cause to be printed, executed and delivered,
a new Bond of the same principal amount, maturity and interest rate, as the damaged, mutilated,
lost, stolen or destroyed Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,
mutilated, lost, stolen or destroyed Bonds shall be made by the registered owner thereof to the
Paying Agent/Registrar. In every case of loss, theft or destruction of a Bond, the registered
owner applying for a replacement Bond shall furnish to the Issuer and to the Paying
Agent/Registrar such security or indemnity as may be required by them to save each of them
harmless from any loss or damage with respect thereto. Also, in every case of loss, theft or
destruction of a Bond, the registered owner shall furnish to the Issuer and to the Paying
Agent/Registrar evidence to their satisfaction of the loss, theft or destruction of such Bond, as the
case may be. In every case of damage or mutilation of a Bond, the registered owner shall
surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this , in the event
any such Bond shall have matured, and no default has occurred that is then continuing in the
payment of the principal of, redemption premium, if any, or interest on the Bond, the Issuer may
authorize the payment of the same (without surrender thereof except in the case of a damaged or
mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is
furnished as above provided in this Section.
18
�•
(d) Charge for Issuin� Replacement Bonds. Prior to the issuance of any replacement
Bond, the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal,
printing, and other expenses in connection therewith. Every replacement Bond issued pursuant
to the provisions of this Section by virtue of the fact that any Bond is lost, stolen or destroyed
shall constitute a contractual obligation of the Issuer whether or not the lost, stolen or destroyed
Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the
benefits of this Ordinance equally and proportionately with any and all other Bonds duly issued
under this Ordinance.
(e) Authoritv for Issuing Replacement Bonds. In accordance with Sec. 1206.022,
Government Code, this Section 7 of this Ordinance shall constitute authority for the issuance of
any such replacement Bond without necessity of further action by the governing body of the
Issuer or any other body or person, and the duty of the replacement of such Bonds is hereby
authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall
authenticate and deliver such Bonds in the form and manner and with the effect, as provided in
Section 3(a) of this Ordinance for Bonds issued in conversion and exchange for other Bonds.
Section 8. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION AND ENGAGEMENT OF BOND COUNSEL; CUSIP NUMBERS;
CONTINGENT INSURANCE PROVISION, IF OBTAINED; ATTORNEY GENERAL FEE.
(a) The Mayor of the Issuer is hereby authorized to have control of the Bonds initially
issued and delivered hereunder and all necessary records and proceedings pertaining to the
Bonds pending their delivery and their investigation, examination, and approval by the Attorney
General of the State of Texas, and their registration by the Comptroller of Public Accounts of the
State of Texas. Upon registration of the Bonds said Comptroller of Public Accounts (or a deputy
designated in writing to act for said Comptroller) shall manually sign the Comptroller's
Registration Certificate attached to such Bonds, and the seal of said Comptroller shall be
impressed, or placed in facsimile, on such Bond. The approving legal opinion of the Issuer's
Bond Counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on
the Bonds issued and delivered under this Ordinance, but neither shall have any legal effect, and
shall be solely for the convenience and information of the registered owners of the Bonds. In
addition, if bond insurance is obtained, the Bonds may bear an appropriate legend as provided by
the insurer.
(b) The obligation of the initial purchaser to accept delivery of the Bonds is subject to
the initial purchaser being furnished with the final, approving opinion of McCall, Parkhurst &
Horton L.L.P., bond counsel to the Issuer, which opinion shall be dated as of and delivered on
the date of initial delivery of the Bonds to the initial purchaser. The engagement of such firm as
bond counsel to the Issuer in connection with issuance, sale and delivery of the Bonds is hereby
approved and confirmed. The execution and delivery of an engagement letter between the Issuer
and such firm, with respect to such services as bond counsel, is hereby authorized in such form
as may be approved by the Mayor, and the Mayor is hereby authorized to execute such
engagement letter.
19
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(c) In accordance with the provisions of Section 1202.004, Tex. Gov't Code Ann., in
connection with the submission of the Bond by the Attorney General of Texas for review and
approval, a statutory fee (an amount equal to 0.1% principal amount of the Bond, subject to a
minimum of $750 and a maximum of $9,500) is required to be paid to the Attorney General upon
the submission of the transcript of proceedings for the Bonds. The Issuer hereby authorizes and
directs that a check in the amount of the Attorney General filing fee for the Bond, made payable
to the "Texas Attorney General," be promptly furnished to the Issuer's Bond Counsel, for
payment to the Attorney General in connection with his review of the Bonds.
Section 9. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
BONDS.
(a) Covenants. The Issuer covenants to take any action necessary to assure, or refrain
from any action that would adversely affect, the treatment of the Bonds as Obligation described
in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on
which is not includable in the "gross income" of the holder for purposes of federal income
taxation. In furtherance thereof, the Issuer covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of
the Bonds (less amounts deposited to a reserve fund, if any) are used for any "private
business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of
the proceeds or the projects financed or refinanced therewith (the "Projects") are so used,
such amounts, whether or not received by the Issuer, with respect to such private business
use, do not, under the terms of this Ordinance or any underlying arrangement, directly or
indirectly, secure or provide for the payment of more than 10 percent of the debt service
on the Bonds, in contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a"private business use" that is "related" and not
"disproportionate," within the meaning of section 141(b)(3) of the Code, to the
governmental use;
(3) to take any action to assure that no amount that is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action that would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(b) of the
Code;
20
, � 80
(5) to refrain from taking any action that would result in the Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) that produces a
materially higher yield over the term of the Bonds, other than investment property
acquired with —
(A) proceeds of the Bonds invested for a reasonable temporary period of
3 years or less or, in the case of an advance refunding bond, for a period of 30
days or less until such proceeds are needed for the purpose for which the bonds
are issued, and in the case of a current refunding bond, for a period of 90 days or
less,
(B) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148-1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated
as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the
extent applicable, section 149(d) of the Code (relating to advance refundings); and
(8) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to
90 percent of the "Excess Earnings," within the meaning of section 148( fl of the Code
and to pay to the United States of America, not later than 60 days after the Bonds have
been paid in full, 100 percent of the amount then required to be paid as a result of Excess
Earnings under section 148(� of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a
"Rebate Fund" is hereby established by the Issuer for the sole benefit of the United States of
America, and such Fund shall not be subject to the claim of any other person, including without
limitation the Bondholders. The Rebate Fund is established for the additional purpose of
compliance with section 148 of the Code.
(c) Use of Proceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), the
Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in the
Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and
proceeds of the Refunded Obligations expended prior to the date of issuance of the Bonds. It is
the understanding of the Issuer that the covenants contained herein are intended to assure
21
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compliance with the Code and any regulations or rulings promulgated by the U.S. Department of
the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated
that modify or expand provisions of the Code, as applicable to the Bonds, the Issuer will not be
required to comply with any covenant contained herein to the extent that such failure to comply,
in the opinion of nationally recognized bond counsel, will not adversely affect the exemption
from federal income taxation of interest on the Bonds under section 103 of the Code. In the
event that regulations or rulings are hereafter promulgated that impose additional requirements
applicable to the Bonds, the Issuer agrees to comply with the additional requirements to the
extent necessary, in the opinion of nationally recognized bond counsel, to preserve the
exemption from federal income taxation of interest on the Bonds under section 103 of the Code.
In furtherance of such intention, the Issuer hereby authorizes and directs the Mayor or Pricing
Officer to execute any documents, certificates or reports required by the Code and to make such
elections, on behalf of the Issuer, that may be permitted by the Code as are consistent with the
purpose for the issuance of the Bonds.
(d) Disposition of Project. The Issuer covenants that the Project will not be sold or
otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or other
compensation, unless the Issuer obtains an opinion of nationally-recognized bond counsel that
such sale or other disposition will not adversely affect the tax-exempt status of the Bonds. For
purposes of the foregoing, the portion of the property comprising personal property and disposed
in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other
compensation. For purposes hereof, the Issuer shall not be obligated to comply with this
covenant if it obtains a legal opinion that such failure to comply will not adversely affect the
excludability for federal income tax proposes from gross income of the interest.
(e) Desi�nation as Qualified Tax-Exempt Obli at�. The Issuer hereby designates
the Bonds as "qualified tax-exempt obligations" as defined in section 265(b)(3) of the Code. In
furtherance of such designation, the Issuer represents, covenants and warrants the following: (a)
that during the calendar year in which the Bonds are issued, the Issuer (including any subordinate
entities) has not designated nor will designate obligations, which when aggregated with the
Bonds, will result in more than $10,000,000 (or such higher amount permitted by such section
265 of the Code) of "qualified tax-exempt obligations" being issued; (b) that the Issuer
reasonably anticipates that the amount of tax-exempt obligations issued, during the calendar year
in which the Bonds are issued, by the Issuer (or any subordinate entities) will not exceed
$10,000,000 (or such higher amount permitted by such section 265 of the Code); and, (c) that the
Issuer will take such action or refrain from such action as necessary, and as more particularly set
forth in this Section, in order that the Bonds will not be considered "private activity bonds"
within the meaning of section 141 of the Code.
Section 10. SALE OF BONDS AND APPROVAL OF OFFICIAL STATEMENT;
FURTHER PROCEDURES.
(a) The Bonds shall be sold and delivered subject to the provisions of Section 1 and
Section 3 and pursuant to the terms and provisions of a bond purchase agreement, notice of sale
and bidding instructions or private placement agreement (collectively, the "Purchase
22
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Agreement") which the Pricing Officer is hereby authorized to execute and deliver and in which
the purchaser or purchasers (the "Purchaser") of the Bonds shall be designated. The Bonds shall
initially be registered in the name of the purchaser thereof as set forth in the Pricing Certificate.
(b) The Pricing Officer is hereby authorized, in the name and on behalf of the Issuer, to
approve, distribute, and deliver a preliminary official statement and a final official statement
relating to the Bonds to be used by the Purchaser in the marketing of the Bonds.
(c) The Pricing Officer is authorized, in connection with effecting the sale of the Bonds,
to obtain from a municipal bond insurance company so designated in the Pricing Certificate (the
"Insurer") a municipal bond insurance policy (the "Insurance Policy") in support of the Bonds.
To that end, should the Pricing Officer exercise such authority and commit the Issuer to obtain a
municipal bond insurance policy, for so long as the Insurance Policy is in effect, the
requirements of the Insurer relating to the issuance of the Insurance Policy as set forth in the
Pricing Certificate are incorporated by reference into this Ordinance and made a part hereof for
all purposes, notwithstanding any other provision of this Ordinance to the contrary. The Pricing
Officer shall have the authority to execute any documents to effect the issuance of the Insurance
Policy by the Insurer.
(d) The Mayor and Mayor Pro Tem, the City Clerk, the Pricing Officer and all other
officers, employees and agents of the Issuer, and each of them, shall be and they are hereby
expressly authorized, empowered and directed from time to time and at any time to do and
perform all such acts and things and to execute, acknowledge and deliver in the name and under
the corporate seal and on behalf of the Issuer the Paying Agent/Registrar Agreement with the
Paying Agent/Registrar in substantially the form presented to the Council at the meeting at which
this Ordinance was adopted and the Pricing Certificate, the Bonds, the Official Statement and all
other instruments, whether or not herein mentioned, as may be necessary or desirable in order to
carry out the terms and provisions of this Ordinance, the DTC Letter of Representations, the
Bonds, the sale of the Bonds and the Official Statement. Notwithstanding anything to the
contrary contained herein, while the Bonds are subject to DTC's Book-Entry Only System and to
the extent permitted by law, the Letter of Representations is hereby incorporated herein and its
provisions shall prevail over any other provisions of this Order in the event of conflict. In case
any officer whose signature shall appear on any Bond shall cease to be such officer before the
delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes
the same as if such officer had remained in office until such delivery.
Section 11. COMPLIANCE WITH RULE 15c2-12; ALTERNATE INFORMATION.
(a) If the Bonds are sold by public offering, and are subject to the Rule, the following
provisions shall apply:
(i) Annual Reports. (A) The Issuer shall provide annually to the MSRB, within six
months after the end of each fiscal year ending in or after 2012, financial information and
operating data with respect to the Issuer of the general type included in the final Official
Statement authorized by this Order, being the information described in the Pricing Certificate.
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Any financial statements so to be provided shall be (1) prepared in accordance with the
accounting principles described in the Pricing Certificate, or such other accounting principles as
the Issuer may be required to employ from time to time pursuant to state law or regulation, and
(2) audited, if the Issuer commissions an audit of such 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 such period, then the Issuer shall provide unaudited financial information by
the required time and will provide audited financial statements for the applicable fiscal year to
the MSRB, when and if the audit report on such statements become available. Such information
shall be transmitted electronically to the MSRB, in such format and accompanied by such
identifying information as prescribed by the MSRB.
(B) If the Issuer 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 Issuer 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.
(ii) Event Notices.
(A) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB,
in a timely manner (but not in excess of ten business days after the occurrence of the
event) of any of the following events with respect to the Bonds, if such event is material
within the meaning of the federal securities laws:
1. Non-payment related defaults;
2. Modifications to rights of Bondholders;
3. Bond calls;
4. Release, substitution, or sale of property securing repayment of the
Bonds;
S. The consummation of a merger, consolidation, or acquisition
involving an obligated person or the sale of all or substantially all
of the assets of the obligated person, 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; �
6. Appointment of a successor or additional trustee or the change of
name of a trustee.
(B) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB,
in a timely manner (but not in excess of ten business days after the occurrence of the
event) of any of the following events with respect to the Bonds, without regard to
24
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whether such event is considered material within the meaning of the federal securities
laws:
1. Principal and interest payment delinquencies;
2. Unscheduled draws on debt service reserves reflecting financial
difficulties;
3. Unscheduled draws on credit enhancements reflecting financial
difficulties;
4. Substitution of credit or liquidity providers, or their failure to
perform;
5. Adverse tax opinions or 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 events affecting the tax status of the Bonds;
6. tender offers;
7. Defeasances;
8. Rating changes;
9. Bankruptcy, insolvency, receivership or similar event of an
obligated person (which is considered to occur when any of the
following occur: the appointment of a receiver, fiscal agent, or
similar officer for the Issuer in a proceeding under the United
States 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 Issuer, or if such jurisdiction has been assumed by leaving
the existing governing body and officials or officers 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 Issuer).
(C) The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer to
provide financial information or operating data in accordance with subsection (b) of this
Section by the time required by such subsection.
(iii) Limitations, Disclaimers, and Amendments. (A) The Issuer shall be obligated to
observe and perform the covenants specified in this Section for so long as, but only for so long
as, the Issuer remains an "obligated person" with respect to the Bonds within the meaning of the
Rule, except that the Issuer iri any event will give the notice required by Subsection (b) hereof of
any Bond calls and defeasance that cause the Issuer to no longer be such an "obligated person".
(B) The provisions of this Section are for the sole benefit of the registered owners and
beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any
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benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The
Issuer undertakes to provide only the financial information, operating data, financial statements,
and notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the Issuer's financial results, condition, or prospects or hereby undertake to
update any information provided in accordance with this Section or otherwise, except as
expressly provided herein. The Issuer 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.
(C) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR 1N
PART FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT
FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, 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.
(D) No default by the Issuer in observing or performing its obligations under this Section
shall comprise a breach of or default under the Order for purposes of any other provision of this
Order. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Issuer under federal and state securities laws.
(E) The provisions of this Section may be amended by the Issuer 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 Issuer, but only if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule since such offering as well as such changed
circumstances and (2) either (a) the registered owners of a majority in aggregate principal
amount (or any greater amount required by any other provision of this Order that authorizes such
an amendment) of the outstanding Bonds consent to such amendment or (b) a person that is
unaffiliated with the Issuer (such as nationally recognized bond counsel) determined that such
amendment will not materially impair the interest of the registered owners and beneficial owners
of the Bonds. If the Issuer so amends the provisions of this Section, it shall include with any
amended financial information or operating data next provided in accordance with subsection (a)
of this Section an explanation, in narrative form, of the reason for the amendment and of the
impact of any change in the type of financial information or operating data so provided. The
Issuer may also amend or repeal the provisions of this continuing disclosure agreement if the
SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction enters
judgment that such provisions of the Rule are invalid, but only if and to the extent that the
provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling
Bonds in the primary offering of the Bonds.
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(iv) Definitions. As used in this Section, the following terms have the meanings ascribed
to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board or any successor to
its functions under the Rule.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) If the Bonds are sold by private placement, the Pricing Officer may agree to provide
for an undertaking in accordance with the Rule or may agree to provide other public information
to the purchaser as may be necessary for the sale of the Bonds on the most favorable terms to the
Issuer.
Section 12. METHOD OF AMENDMENT. The Issuer hereby reserves the right to
amend this Ordinance subject to the following terms and conditions, to-wit:
(a) The Issuer may from time to time, without the consent of any holder, except as
otherwise required by paragraph (b) below, amend or supplement this Ordinance in order to (i)
cure any ambiguity, defect or omission in this Ordinance that does not materially adversely
affect the interests of the holders, (ii) grant additional rights or security for the benefit of the
holders, (iii) add events of default as shall not be inconsistent with the provisions of this
Ordinance and that shall not materially adversely affect the interests of the holders, (iv) qualify
this Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions
of federal laws from time to time in effect, or (v) make such other provisions in regard to matters
or questions arising under this Ordinance as shall not be inconsistent with the provisions of this
Ordinance and that shall not in the opinion of nationally recognized bond counsel materially
adversely affect the interests of the holders.
(b) Except as provided in paragraph (a) above, the holders of Bonds aggregating in
principal amount 51 % of the aggregate principal amount of then outstanding Bonds that are the
subject of a proposed amendment shall have the right from time to time to approve any
amendment hereto that may be deemed necessary or desirable by the Issuer; provided, however,
that without the consent of 100% of the holders in aggregate principal amount of the then
outstanding Bonds, nothing herein contained shall permit or be construed to permit amendment
of the terms and conditions of this Ordinance or in any of the Bonds so as to:
(1) Make any change in the maturity of any of the outstanding Bonds;
(2) Reduce the rate of interest borne by any of the outstanding Bonds;
(3) Reduce the amount of the principal of, or redemption premium, if any,
payable on any outstanding Bonds;
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(4) Modify the terms of payment of principal or of interest ar redemption
premium on outstanding Bonds or any of them or impose any condition with
respect to such payment; or
(5) Change the minimum percentage of the principal amount of the Bonds
necessary for consent to such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the
Issuer shall send by U.S. mail to each registered owner of the affected Bonds a copy of the
proposed amendment. Such published notice shall briefly set forth the nature of the proposed
amendment and shall state that a copy thereof is on file at the office of the Issuer for inspection
by all holders of such Bonds.
(d) Whenever at any time within one year from the date of mailing of such notice the
Issuer shall receive an instrument or instruments executed by the holders of at least 51 % in
aggregate principal amount of all of the Bonds then outstanding that are required for the
amendment, which instrument or instruments shall consent to and approve such amendment, the
Issuer may adopt the amendment in substantially the same form.
(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be modified and amended in accordance with such
amendatory Ordinance, and the respective rights, duties, and obligations of the Issuer and all
holders of such affected Bonds shall thereafter be determined, exercised, and enforced, subject in
all respects to such amendment.
( fl Any consent given by the holder of a Bond pursuant to the provisions of this Section
shall be irrevocable for a period of six months from the date of such consent, and shall be
conclusive and binding upon all future holders of the same Bond during such period. Such
consent may be revoked at any time after six months from the date of such consent by the holder
who gave such consent, or by a successor in title, by filing notice with the Issuer, but such
revocation shall not be effective if the holders of 51 % in aggregate principal amount of the
affected Bonds then outstanding, have, prior to the attempted revocation, consented to and
approved the amendment.
For the purposes of establishing ownership of the Bonds, the Issuer shall rely solely upon
the registration of the ownership of such Bonds on the registration books kept by the Paying
Agent/Registrar.
Section 13. DEFAULT AND REMEDIES.
(a) 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 payrnent of the principal of or interest on any of the Bonds when
the same becomes due and payable; or
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(ii) default in the performance or observance of any other covenant, agreement or
obligation of the Issuer, the failure to perform which materially, adversely affects the
rights of the Registered Owners of the Bonds, 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 60 days after notice of such default is given by any Registered Owner to the
Issuer.
(b) Remedies for Default.
(i) Upon the happening of any Event of Default, then and in every case, any Registered
Owner or an authorized representative thereof, including, but not limited to, a trustee or
trustees therefor, may proceed against the Issuer for the purpose of protecting and
enforcing the rights of the Registered 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 Registered Owners hereunder or any
combination of such remedies.
(ii) It is provided that all such proceedings shall be instituted and maintained for the
equal benefit of all Registered Owners of Bonds then outstanding.
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or under the Bonds or now or
hereafter existing at law or in equity; provided, however, that notwithstanding any other
provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall
not be available as a remedy under this Ordinance.
(ii) The exercise of any remedy herein conferred or reserved shall not be deemed a
waiver of any other available remedy.
(iii) By accepting the delivery of a Bond authorized under this Ordinance, such
Registered Owner agrees that the certifications required to effectuate any covenants or
representations contained in this Ordinance do not and shall never constitute or give rise
to a personal or pecuniary liability or charge against the officers, employees or trustees of
the Issuer or the Board of Trustees.
Section 14. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FLTNDS.
In furtherance of authority granted by Section 1207.007(b), Texas Government Code, the Mayar
or the Pricing Officer is further authorized to enter into and execute on behalf of the Issuer with
the escrow agent named therein, an escrow or similar agreement, in the form and substance as
29
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shall be approved by the Pricing Officer, which agreement will provide for the payment in full of
the Refunded Obligations. In addition, the Mayor or the Pricing Officer is authorized to
purchase such securities, to execute such subscriptions for the purchase of the Escrowed
Securities (as defined in the agreement), if any, and to authorize such contributions for the
escrow fund as provided in the agreement.
Section 15. REDEMPTION OF REFLTNDED OBLIGATIONS.
(a) Subject to execution and delivery of the Purchase Agreement with the Underwriters,
the Issuer hereby directs that the Refunded Obligations be called for redemption on the dates and
at such prices as set forth in the Pricing Certificate. The Pricing Officer is hereby authorized and
directed to issue or cause to be issued Notice of Redemption of the Refunded Obligations in
substantially the form set forth in Exhibit A attached hereto, completed with information from
the Pricing Certificate, to the paying agents for the Refunded Obligations.
(b) In addition, the paying agents for the Refunded Obligations are hereby directed to
provide the appropriate notices of redemption and defeasance as specified by the ordinances
authorizing the issuance of Refunded Obligations and are hereby directed to make appropriate
arrangements so that the Refunded Obligations may be redeemed on their redemption dates. The
Refunded Obligations shall be presented for redemption at the paying agents therefor, and shall
not bear interest after the date fixed for redemption.
(c) If the redemption of the Refunded Obligations results in the partial refunding of any
maturity of the Refunded Obligations, the Pricing Officer shall direct the paying agendregistrar
for the Refunded Obligations to designate at random and by lot which of the Refunded
Obligations will be payable from and secured solely from ad valorem taxes of the Issuer pursuant
to the ordinance of the Issuer authorizing the issuance of such Refunded Obligations (the
"Refunded Bond Ordinance"). The paying agent/registrar shall notify by first-class mail all
registered owners of all affected bonds of such maturities that: (i) a portion of such bonds have
been refunded and are secured until final maturity solely with cash and investments maintained
by the Escrow Agent in the Escrow Fund, (ii) the principal amount of all affected bonds of such
maturities registered in the name of such registered owner that have been refunded and are
payable solely from cash and investments in the Escrow Fund and the remaining principal
amount of all affected bonds of such maturities registered in the name of such registered owner,
if any, have not been refunded and are payable and secured solely from ad valorem taxes of the
Issuer described in the Refunded Obligation Ordinance, (iii) the registered owner is required to
submit his or her Refunded Obligations to the paying agent/registrar, for the purposes of re-
registering such registered owner's bonds and assigning new CUSIP numbers in order to
distinguish the source of payment for the principal and interest on such bonds, and (iv) payment
of principal of and interest on such bonds may, in some circumstances, be delayed until such
bonds have been re-registered and new CUSIP numbers have been assigned as required by (iii)
above.
(d) The source of funds for payment of the principal of and interest on the Refunded
Obligations on their respective maturity or redemption dates shall be from the funds deposited
30
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with the Escrow Agent pursuant to the Escrow Agreement approved in Section 14 of this
Ordinance.
Section 16. APPROPRIATION. To pay the debt service coming due on the Bonds, if
any (as determined by the Pricing Certificate) prior to receipt of the taxes levied to pay such debt
service, there is hereby appropriated from current funds on hand, which are hereby certified to be
on hand and available for such purpose, an amount sufficient to pay such debt service, and such
amount shall be used for no other purpose.
Section 17. SEVERABILITY. If any section, article, paragraph, sentence, clause, phrase
or word in this Ordinance, or application thereof to any persons or circumstances is held invalid
or unconstitutional by a court of competent jurisdiction, such holding shall not affect the validity
of the remaining portion of this Ordinance, despite such invalidity, which remaining portions
shall remain in full force and effect.
Section 18. EFFECTIVE DATE. In accordance with the provisions of V.T.C.A.,
Government Code, Section 1201.028, this Ordinance shall be effective immediately upon its
adoption by the City Council.
Section 19. WRITTEN PROCEDURES FOR FEDERAL TAX LAW COMPLIANCE.
Unless superseded by another action of the Issuer, to ensure compliance with the covenants
contained herein regarding private business use, remedial actions, arbitrage and rebate, the Issuer
hereby adopts and establishes the instructions attached hereto as Exhibit B as its written
procedures.
PASSED AND ADOPTED on first and final reading this the 22nd day of October, 2012.
ATTEST
Janice Ellis, City Clerk
APPROVED AS TO FORM
W. Kent McIlyar, City Attorney
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Richard Grossnickle, M.D.,
Mayor Pro-Tem
SCHEDULE I
Schedule of Eligible Refunded Obligations
Description
City of Paris, Combination Tax and Revenue
Certificates of Obligation, Series 2002
December 15 in each of the years shown.
Description
Maturity
Date�' �
2013
2014
2015
2016
2017
2018
2019
2020
2021
Total
Maturity
Date� i �
City of Paris, Texas General Obligation Refunding
Bonds, Series 2003
� cember 15 of the years shown.
Total
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92
2013
2014
Principal
Amount
$310,000
325,000
345,000
360,000
380,000
400,000
420,000
440,000
460,000
$3.440,000
Principal
Amount
$800,000
410,000
$1,210,000
EXHIBIT A
NOTICE OF REDEMPTION
CUSIP Prefix No.
NOTICE IS HEREBY GIVEN that the City of Paris, Texas has called for redemption the
outstanding Bonds of the City described as follows (the "Refunded Obligations"):
City of Paris, Texas [Bonds/Certificates of Obligation],
Series , dated , maturing
through , in the aggregate principal amount of $ (the
"Series Refunded Obligations"), to the call date of the Series
Refunded Obligations so called for redemption at . Call
date: . On , interest on the Series Refunded
Obligations shall cease to accrue and be payable.
THE REFUNDED BONDS shall be redeemed in whole at The Bank of New York
Mellon Trust Company, N.A., as the Paying Agent/Registrar for said Series Refunded
Obligations. Upon presentation of the Series Refunded Obligations at the Paying
Agent/Registrar on the aforementioned redemption date, the holder thereof shall be entitled to
receive the redemption price equal to par and accrued interest to the redemption date.
NOTICE IS GIVEN that due and proper arrangements have been made for providing the
place of payment of said Series Refunded Obligations called for redemption with funds
sufficient to pay the principal amount of said Series Refunded Obligations and the interest
thereon to the redemption date. In the event said Refunded Obligations, or any of them are not
presented for redemption by the date fixed for their redemption, they shall not thereafter bear
interest.
THIS NOTICE is issued and given pursuant to the redemption provisions in the
proceedings authorizing the issuance of the aforementioned Series Refunded Obligations
and in accordance with the recitals and provisions of said Series Refunded Obligations.
NOTICE IS FURTHER GIVEN that the Series Refunded Obligations should be
submitted to the following address:
First Class/Registered/
Certified Mail Express Delivery Hand Delivery
33
93
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
P.O. Box 396
East Syracuse, New York 13057
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
111 Sanders Creek Parkway
East Syracuse, New York 13057
CITY OF PARIS, TEXAS
A-1
94
The Bank of New York Mellon
Trust Company, N.A.
Global Corporate Trust
Corporate Trust Window
101 Barclay Street
1 ST Floor East
New York, New Yark 10286
EXHIBIT B
WRITTEN PROCEDURES
RELATING TO CONTINUING COMPLIANCE
WITH FEDERAL TAX COVENANTS
These procedures, together with any federal tax certifications, provisions included in the
authorizing document with respect to the issuance and sale of Obligations (as defined below),
letters of instructions and/or memoranda from bond counsel and any attachments thereto (the
"Closing Documents"), are intended to assist the Issuer in complying with federal guidelines
related to the issuance of any tax-exempt debt such as the Bonds (the "Obligations").
A. Arbitra e� Compliance. Federal income tax laws generally restrict the ability to earn
arbitrage in connection with the Obligations. The Responsible Person (as defined below) will
review the Closing Documents periodically (at least once a year) to ascertain if an exception to
arbitrage compliance applies.
Procedures ap�licable to Obli�ations issued for construction and acquisition purposes.
With respect to the investment and expenditure of the proceeds of the Obligations that are issued
to finance public improvements or to acquire land or personal property, the Issuer's City
Manager (such officer, together with other employees of the Issuer who report to such officer, is
collectively, the "Responsible Person") will:
1. Instruct the appropriate person who is primarily responsible for the construction,
renovation or acquisition of the facilities financed with the Obligations (the
"Project") that (i) binding contracts for the expenditure of at least 5% of the
proceeds of the Obligations are entered into within 6 months of the date of closing
of the Obligations (the "Issue Date") and that (ii) the Project must proceed with
due diligence;
2. Monitor that at least 85% of the proceeds of the Obligations to be used for the
construction, renovation or acquisition of the Project are expended within 3 years
of the Issue Date;
3. Monitor the yield on the investments purchased with proceeds of the Obligations
and restrict the yield of such investments to the yield on the Obligations after 3
years of the Issue Date;
4. Monitor all amounts deposited into a sinking fund or funds pledged (directly or
indirectly) to the payment of the Obligations, such as the Interest and Sinking
Fund, to assure that the maximum amount invested within such applicable fund at
a yield higher than the yield on the Obligations does not exceed an amount equal
to the debt service on the Obligations in the succeeding 12 month period plus a
carryover amount equal to one-twelfth of the principal and interest payable on the
Obligations for the immediately preceding 12-month period; and
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5. Ensure that no more than 50% of the proceeds of the Obligations are invested in
an investment with a guaranteed yield for 4 years or more.
Procedures applicable to Obligations with a debt service reserve fund. In addition to the
foregoing, if the Issuer issues Obligations that are secured by a debt service reserve fund, the
Responsible Person will:
1. Assure that the maximum amount of any reserve fund for the Obligations invested
at a yield higher than the yield on the Obligations will not exceed the lesser of (1)
10% of the principal amount of the Obligations, (2) 125% of the average annual
debt service on the Obligations measured as of the Issue Date, or (3) 100% of the
maximum annual debt service on the Obligations as of the Issue Date.
Procedures applicable to Escrow Accounts for Refundin� Issues. In addition to the
foregoing, if the Issuer issues Obligations and proceeds are deposited to an escrow fund to be
administered pursuant to the terms of an escrow agreement, the Responsible Person will:
1. Monitor the actions of the escrow agent to ensure compliance with the applicable
provisions of the escrow agreement, including with respect to reinvestment of
cash balances;
2. Contact the escrow agent on the date of redemption of obligations being refunded
to ensure that they were redeemed; and
3. Monitor any unspent proceeds of the refunded obligations to ensure that the yield
on any investments applicable to such proceeds are invested at the yield on the
applicable obligations or otherwise applied (see Closing Documents).
Procedures applicable to all Tax-exempt Obligation Issues. For all issuances of
Obligations, the Responsible Person will:
1. Maintain any official action of the Issuer (such as a reimbursement resolution)
stating the Issuer's intent to reimburse with the proceeds of the Obligations any
amount expended prior to the Issue Date for the acquisition, renovation or
construction of the facilities;
2. Ensure that the applicable information return (e.g., IRS Form 8038-G, 8038-GC,
or any successor forms) is timely filed with the IRS; and
3. Assure that, unless excepted from rebate and yield restriction under section 148(�
of the Code, excess investment earnings are computed and paid to the U.S.
government at such time and in such manner as directed by the IRS (i) at least
every 5 years after the Issue Date and (ii) within 30 days after the date the
Obligations are retired.
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B. Private Business Use. Generally, to be tax-exempt, only an insignificant amount of the
proceeds of each issue of Obligations can benefit (directly or indirectly) private businesses. The
Responsible Persons will review the Closing Documents periodically (at least once a year) for
the purpose of determining that the use of the facilities financed or refinanced with the proceeds
of the Obligations (the "Project") do not violate provisions of federal tax law that pertain to
private business use. In addition, the Responsible Persons will:
1. Develop procedures or a"tracking system" to identify all property financed with
tax-exempt debt;
2. Monitor and record the date on which the Project is substantially complete and
available to be used for the purpose intended;
3. Monitor and record whether, at any time the Obligations are outstanding, any
person, other than the Issuer, the employees of the Issuer, the agents of the Issuer
or members of the general public has any contractual right (such as a lease,
purchase, management or other service agreement) with respect to any portion of
the facilities;
4. Monitor and record whether, at any time the Obligations are outstanding, any
person, other than the Issuer, the employees of the Issuer, the agents of the Issuer
or members of the general public has a right to use the output of the facilities
(e.g., water, gas, electricity);
5. Monitor and record whether, at any time the Obligations are outstanding, any
person, other than the Issuer, the employees of the Issuer, the agents of the Issuer
or members of the general public has a right to use the facilities to conduct or to
direct the conduct of research;
6. Monitor and record whether, at any time the Obligations are outstanding, any
person, other than the Issuer, has a naming right for the facilities or any other
contractual right granting an intangible benefit;
7. Monitor and record whether, at any time the Obligations are outstanding, the
facilities are sold or otherwise disposed of; and
8. Take such action as is necessary to remediate any failure to maintain compliance
with the covenants contained in the Order related to the public use of the Project.
C. Record Retention. The Responsible Person will maintain or cause to be maintained all
records relating to the investment and expenditure of the proceeds of the Obligations and the use
of the facilities financed or refinanced thereby for a period ending three (3) years after the
complete extinguishment of the Obligations. If any portion of the Obligations is refunded with
the proceeds of another series of tax-exempt Obligations, such records shall be maintained until
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the three (3) years after the refunding Obligations are completely extinguished. Such records can
be maintained in paper or electronic format.
D. Responsible Persons. Each Responsible Person shall receive appropriate training
regarding the Issuer's accounting system, contract intake system, facilities management and other
systems necessary to track the investment and expenditure of the proceeds and the use of the
Project financed or refinanced with the proceeds of the Obligations. The foregoing
notwithstanding, each Responsible Person shall report to the Board whenever experienced
advisors and agents may be necessary to carry out the purposes of these instructions for the
purpose of seeking Board approval to engage or utilize existing advisors and agents for such
purposes.
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