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Home My WebLink AboutORD 2014-50 - Bond IssueTHE STATE OF TEXAS 0 COUNTY OF O CITY OF GEORGETOWN We, the undersigned officers and members of the City of Georgetown, Texas (the "City"), hereby certify as follows, 1. The City Council of the City convened in SPECIAL MEETING ON THE 19TH DAY OF AUGUST, 2014, at Council Chambers, 101 E. 7th Street, Georgetown, Texas (the "Meeting"), and the roll was called of the duly constituted officers and members of the City, to -wit: Dale RoMayor Tommy•nzalez, Mayor ' • Tem, Councilmember Patty •, • #_ Keith Brainard, Councilmember District John Hesser, Councilmember Steve Fought, Councilmember a Councilmember District and all of the persons were present, except the following absentees: Keith Brainard and Jerry Hammerlun, thus constituting a quorum. Whereupon,• • other business,• • « was transacted at the Meeting: ! I 1 a 0 RI pop In malynael OKI] my ;I nal r was duly introduced for the consideration of the City Council. It was then duly moved and seconded that the Ordinance be passed on first reading-, and, after due discussion, said motion carrying with it the passage of the Ordinance, prevailed and carried by the following vote: 1 2. A true, fall • correct copyof - Ordinance passed at the Meetingdescribed the above and foregoing paragraphs is attached to and follows this Certificate-, that the Ordinan has been duly recorded in the City Council's minutes of the Meeting-, that the above a] GTO W N\U5 RB12614 A: Ordinance foregoing paragraphs are a true, full and correct excerpt from the City Council's minutes of the Meeting pertaining to the passage of the Ordinance-, that the persons named in the above and foregoing paragraphs are the duly chosen, qualified and acting officers and members of the City Council as indicated therein; that each of the officers and members of the City Council was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the Meeting, and that the Ordinance would be introduced and considered for passage at the Meeting' and each of the officers and members consented, in advance, to the holding of the Meetings for such purpose, and that the Meeting was open to the public and public notice of the time, place and purpose of the meeting was given, all as required by Chapter 551, Texas Government Code. 3. The Mayor of the City has approved and hereby approves the Ordinance; that t Mayor and the City Secretary of the City have duly signed the Ordinance; and that the May and the City Secretary of the City hereby declare that their signing of this Certificate sha a constitute the signing of the attached and following copy of the Ordinance for all purposes. I GTOWN\USRB\20 Nowng ml wam mum,l City e retary [CITY SEAL] GTGWN\USRB\2014A: ordinance f Mayor '...`OTOWN\USM2014k Ordinance- __ _ _. _. _......... �I • 1 a •; 1 i i� i 1' i l 'i' N gill" IMF Ctolify.111061 D03 my in, I 8611"iflizi Recitals............................................................................................................................................ I Section 1. DEFINITIONS .... .... ..... .............. ...... ......, .1 Section 2. AMOUNT AND PURPOSE OF THE BONDS ...................................................... I Section 3. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND MATURITIES OF THE BONDS...................:..................................... ..........2 Section4. INTEREST..............................................................................................................2 Section 5. CHARACTERISTICS OF THE BONDS............................................................... 3 (a) Registration, Transfer, and Exchange; Authentication..........................................3 (b) Payment of Bonds and Interest.............................................................. ..........3 (c) In General..,:.... ...... .......................................................................................4 (d) Substitute Paying Agent/Registrar ..........................................................................4 (e) Book -Entry System for Bonds.....................................................................4 (1) Successor Securities Depository, Transfers Outside Book -Entry Systems........... .......... ...................................................................................5 (g) Payments to Cede & Co .......................... .......................... ......... .. .6 (h) DTC Blanket Letter of Representations ... ................... ......... .......:....................6 (i) Cancellation of Initial Bond......................»...................»............................,............6 Section 6. FORM OF BOND....................................................................................................6 Section 7. PLEDGE OF PLEDGED REVENUES ..................................» .............; ..........6 Section 8. SPECIAL FUNDS.............................................................................. ..........7 Section 9. REVENUE FUND ................ ......................................................a...........-........7 Section 10. FLOW OF FUNDS..................................................................................................7 Section 11. INTEREST AND SINKING FUND....................................................................... S Section 12. RESERVE FUND ................ .........................................................................8 Section 13. EXCESS BOND PROCEEDS........................................................................11 Section 14. DEFICIENCIES - EXCESS PLEDGED OR NET REVENUES ........................ I 1 Section 15. INVESTMENT OF FUNDS - VALUATION - TRANSFER OF INVESTMENTINCOME.....................................................................................12 Section 16. PAYMENT OF PARITY OBLIGATIONS..........................................................12 Section 17. RATES AND CHARGES .............................................................................12 Section 18. GENERAL COVENANTS.....................................................:..................13 (a) Performance........................................................................................................13 (b) City's Legal Authority...........................................................................................13 (c) Title..............................................................................................................14 (d) Liens .........................................................................................................14 (e) Operation of System; No Free Service...........................................................14 GTOWN\USRB12014A: Ordinance- 1 i e ymma 0 i ri M IIARV. iMla f i i" i Ii U. •'r r. • r e - ;i •r r. - i r _ ' r • r i riiiiam • • r • ' •pill 1610IMMUR1119%' •''• ` r r r • • _. GTOWN\USRB\2014A:Ordinance,: _... _._ Il Section 39. INCONSISTENT PROVISIONS.......................................................................... 32 Section 40. INTERESTED PARTIES................................................,....................................32 Section 41. INCORPORATION OF RECITALS ..................................................... ...32 Section 42. SEVERABILITY.................................................................. .................:......... 33 Section 43. EFFECTIVE DATE .................... ................... ................. ...........................33 Section 44. PERFECTION..........................................................................................33 Section 45. PAYMENT OF ATTORNEY GENERAL FEE .................................................. 33 Exhibit A Definitions Exhibit B Form of Bond Exhibit C Description of Annual Financial Information GTOWMUSRS\2014A:.Ordinance. Ill 1111� i►/1►C ►�Ci i f "' r s r r i A l i ■ THE STATE OF COUNTYOF i CITY OF i '` i e - • - !• a • - t a• - • i F - •I a - Utility iGeorgetownPlant and any costsa Councilthe City deems it necessary and desirable to issue such a• • and WHEREAS, the Bonds (hereinafter defined) authorized by this Ordinance are being issu a delivered pursuant to the City Charterand Chapter 1502,- • - -Code, THEREFORE,amended, and any other applicable laws; and WHEREAS, it is hereby officially found and determined that the meeting at which this Ordinance to W illi, WWW jjacj WJ;M#,,iusejf BE IT ORDAINED BY THE CITY COUNCILOF GEORGETOWN, THAT: Section DEFINITIONS. • purposes • Ordinance, except as otherwise expresslyprovided • • otherwise requires,defined in Exhibitto this Ordinance have the meanings assigned to them in Exhibit "A". Section 2. AMOUNT 1 PURPOSE OF i The bond or bonds authorized to be issued and delivered in the aggregate principal amount of $5,350,000 FOR THE r.i PURPOSE OF PURCHASING THE TRAILCHISHOLM ► UTILITY DISTRICT'S INTERESTi t iTREATMENT PLANT 1 PAYING THE COSTSASSOCIATED WITH THE ISSUANCE OF BONDS. Vision #: hereby t. of *rdinance and issuance of Bonds t !lies with the Vision Statement of the City. -- GTOWN\USRB\2014A:Ordinance _- 11110 111! 1 1114 ffi! id i ----------- rarry�lofuorioryonions it�reoi�itieacri-case,Tne,-Aegister and the Bonds shall mature and be payable serially on August 15 in each of the years and in t principal amounts, respectively, as set forth in the following schedule - Year Principal Year princi al 2015 $245,000 2024 $320,000 2016 245,000 2025 330,000 2017 250,000 2026 345,000 2018 260,000 2027 355,000 2019 270,000 2028 370,000 2020 280,000 2029 380,000 2021 290,000 2030 395,000 2022 300,000 2031 405,000 2023 310,000 Section 4. INTEREST. The Bonds scheduled to mature during the years, respectivel set forth below shall bear interest from the Date of Initial Delivery specified in the FORM Year Rate Year Rate 2015 1.000% 2024 4.000% 2016 1.000 2025 3.000 2017 1.000 2026 3.000 2018 2.000 2027 3.000 2019 2.000 2028 3.000 2020 3.000 2029 3.000 2021 2.000 2030 3.100 2022 1.000 2031 3.200 2023 3.000 Said interest shall be payable in the manner provided and on the dates stated in the FORM OW MrOND set forth in Exhibit "B" to this Ordinance. toy 1161M HIM GTOWN\URB\2014A: Ordinance 2 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 payments shall be mailed, and such interest payments shall not be mailed unless such notice has been given. The City 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 Paying Agent/Registrar shall make a copy of the Registration Books available in the State of Texas. The City shall pay the Pavina Aaent/ReLyistrar's standard or customary fees and charges for making such registratioit. 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. Except as provided in (e) below, an authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date and manually sign the Paying Agent/Registrar's Authentication Certificate, and no such Bond shall be deemed to be issued or outstanding unless such certificate is so executed. The Paying Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered for transfer and exchange. No additional ordinances, orders or resolutions ift-vt 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, and the Bonds shall be of type composition printed on paper with lithographed or steel engraved borders of customary weight and strength. Pursuant to Chapter 1206, Texas Government Code, as amended, and particularly Subchapter B thereof, the duty of conversion and exchange of Bonds as aforesaid is hereby imposed upon the Paying Agent/Re&strar- and- upon the execution of the Bond., the converted and exchanged Bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Bonds which initially were issued and delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. (b) Pgyment of Bonds and Interest. The City 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 payments made by the City and the Paying Agent/Registrar with respect to the Bonds. (c) In General. The City 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 GTOWN\U"\2014A: Ordinance 3 Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the City 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 nonpayment 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 bx the PaNing Agent/Re istrar, if and when funds for the =iment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (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 •! ,•- ireiaid to the address of each Registered Owner annearing on the Registration Books at mr-K"Jamwe M6111,11ILimaus N KKX�g I I 11--.111 Uwe rq 1 Lwei a I I rg I I I I I I= ans L" I a I Lei I ur� �MMCMI Oil!I••N TX&TVWTM- T.. rum uummmoff =—, l - 111 1111 6 1' 1• 1 1k,814 1 Wt"—,-UL5-C-L . " Piro-Lrorl - services of Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying Agent/Registrar will be one entity. The City reserves the right to, and may, at its option change the Paying Agent/Registrar upon not less than 30 days written notice to the Paying Agent/Registrar, to be effective at such time which will not disrupt or delay payment on 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 ChUr, covenants that (*�ronrwll it will afgwint a cmwtent 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 thereof), along with all other pertinent books and records relating to the Bonds, to the new Paying Agent/Registrar designated and appointed by the City. Upon any change in the 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. 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 of New York ("DTC"), and except as provided in subsection (f) line Bonds shall be reizistered in the name of Cede & Co., as nominee of With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the Cilm and the Paying Agent/Registrar shall have no responsibility or obligation to any securities broke and dealers, banks, trust companies, clearing corporations and certain other organizations GTOWMLqW\2014A: Ordinance 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 4 T. -M or DTC determines to discontinue providing its services with respect to the Bonds, the City shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or (ii) notify DTC and DTC Participants of the availability r=4 we 9 M TI= M ITS HITMI M MEN M-4 rcjlbturuL III LIIU &e- 17-1:11F 01 CEO registered in the name of the successor securities depository, or its nominee, or in whatever name the provisions of this Ordinance. Whenever a successor securities depository has been appointed pursuant to this paragraph, the terms DTC and DTC Participant as used in this Ordinance shall refer to such successor securities depository and its participants, respectively. (g) P"ments to Cede & Co. Notwithstanding any other provision of this Ordinance to tis contrary, so long as any Bond is registered in the name of Cede & Co., as nominee for DTC, aM GTOWMURB\2014A: Ordinance 5 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 representation letter of the City to DTC. (h) DTC Blanket Letter of Representations. The City confirms execution of a Blanket Letter of Representations with DTC establishing the Book -Entry -Only System which will be utilized with respect to the Bonds. (i) 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 order of the purchaser of the Bonds or its designee set forth in Section 32 of this Ordinance, executed by manual or facsimile si nature of the Ma or or M P t an # DOM 101' CUCII JULtr 01 IrIaLUrILY 01 Lne j5onas, in tie aggreg principal amount or all ine i5oncts for such maturity. ky, oral A!TAI or-MIMNIMS) r a e1• or se To as are permitted or required by this Or#inance. or further act by the City, and the lien created hereby on the Pledged Revenues for the payment and securit-kj of the Parit DbJL,,yations., includin the establishment and maintenance of the st-Wecial funds created, established and maintained for the payment and security thereof, shall be superior to the lien on and pledge of the Pledged Revenues securing payment of any Subordinate Lien Obligations hereafter issued by the City. Section S. SPECIAL FUNDS. The City confirms the establishment and maintenance on the books of the City, so long as any of the Parity Obligations are outstanding and unpaid, of the below limited Special Funds - (a) City of Georgetown, Texas Utility System Revenue Fund, hereinafter called the "Revenue Fund." GTOWN\URB12014A: Ordinance 6 (b) City of Georgetown, Texas Utility System Revenue Bonds Interest and Sinking Fund, hereinafter called the "Interest and Sinking Fund." Though all of such funds may be subaccounts of the City's General Fund held by the CifAm ' I depository, and, as such, not held in separate bank accounts, such treatment shall not constitute commingling of the monies in such Funds or of such Funds and the City shall keep full a complete records indicating the monies and investments credited to each of such Funds. 041201 Mau= 11 1 A 110 Ili 11 i ! I onec *Iusituu anu crer==Mr, rMIM1,1177 rtnu Mviieciiateas ij! c ' I and received. All Maintenance and Operating Expenses are and shall be paid from such Gro. Revenues as a first charge against same. Section 10. FLOW OF FUNDS. All Gross Revenues deposited and credited to till Revenue Fund shall be pledged and appropriated to the extent required for the following uses in the order of priority shown: FIRST- to the payment of all necessary and reasonable Maintenance and Operatir17 r �xpenses as defined herein or required by statute, including, but not limited to. Chapter 1502 Texas Government Code ', as Anded, to be a e on and cla . Gross Revenues, includina a two (2) -month resery amount based upon the udgeted e-trC7 vwtc shall be retained in the Revenue Fund. SECOND- to the payment of the amounts required to be deposited and credited to the Interest and Sinking Fund created and established for the payment of the Bonds, the V'reviously Issued Parity Obligations and any Additional Parity Obligations issued by th-V City as the same become due and payable. THIRD - pro rata to the payment of the amounts requi ed to be deposited and credited (i) to the Reserve Fund created and established to maintain the Required Reserve Amount in accordance with the provisions of this Ordinance, including amounts owed with respect to MAW W - *A*00'a iol. "-- fro I sams of the ordinances relating to the issuance of any Additional Parity Obligations hereafter issued by the City. FIFTH. to the payment of the amounts required for any lawful purpose. Section 11. INTEREST AND SINKING FUND. For purposes of providing funds to p the principal of, premium, if any, and interest on the Parity Obligations as the same become d and payable, including any mandatory sinking fund redemption payments, the City agrees that shall maintain the Interest and SinkinR Fund. The City covenants to deposit and credit to I raTOWN\URB\2014A: Ordinance 7 L C L11C prilluilwal IFY 1=0 J=74T, =g M is LITUTT 7111111 V payable. The City shall make such deposits and credits to pay maturing principal, accrued interest, and mandatory sinking fund redemptions on the Parity Obligations in substantially equal semi- annual installments on or before each February 15 and August 15. The required semi-annual deposits and credits to the Interest and Sinking Fund sh continue to be made as hereinabove provided until such time as (i) the total amount on deposit W 'q=j j7e� i b Obligation) is equal to the amount required to fully pay and dischar e all Outstanding Parj 9 Obligations (principal, premium, if any, and interest) or (ii) the Parity Obligations are no long itutstandina. Accrued interest and capitalized interest, if any, received from the purchaser of any Par' Obligation shall be taken into consideration and reduce the amount of the semi-annual depos and credits hereinabove required into the Interest and Sinking Fund. Section 12. RESERVE FUND. (a) To accumulate and maintain a reserve for the payment of the Bonds and the Outstanding Parity Obligations equal to the Average Annual Debt Service Requirements of the Bonds and the Outstanding Parity Obligations (calculated by the City at the beginming of each Fiscal Year) (the "Required Reserve Amount"), the Reserve Fund has been established and shall be maintained by the City. Earnings and income derived from the investment of amounts held for the credit of the Reserve Fund shall be retained in the Reserve Fund until the Reserve Fund contains the Required Reserve Amount; thereafter, such earnings and income shall be deposited to the credit of the Revenue Fund. As provided in Section 10, the City shall deposit and credit to the Reserve Fund amounts required to maintain the balance in the Reserve Fund in anj PeSC17 TUY-M-07191IM&MIMIS Sit UVS1g11aL0t UJ-Ule CIL37ftil ILLIUS, 111TUSLUXULS UHU CQA,�%i Obligations on deposit and credited to the Reserve Fund shall be used solely for (1) the payment of the principal of and interest on the Bonds and the Outstanding Parity Obligations, when and to the extent other funds available for such purposes are insufficient, (ii) to make Reserve Fund Obligation Payments and (iii) to retire the last Stated Maturity or Stated Maturities of or interest on the Bonds and the Outstanding Parity Obligations. (b) When and for so long as the cash, investments and Reserve Fund Obligations in the Reserve Fund equal the Required Reserve Amount, no deposits need be made to the credit of the Reserve Fund; but, if and when the Reserve Fund at any time contains less than the Required Reserve Amount, the City covenants and agrees that the City shall cure the deficiency in the Reserve Fund by resuming the Required Reserve Fund Deposits to such Fund from the Pledged Revenues in accordance with Section 10 by monthly deposits and credits in amounts equal to not less than 1/60th of the Reauired Reserve Amount with my such deficiency nayments bei�*.qxtade NT, i Uvol I vVI r-�V 9 "' FwW§-rM# vm*w six month period beginning on August 15 and February 15 until there has been deposited in�o the GTOWN\U"\2014A: Ordinance 8 and credits to the Interest and Sinking Fund required to be made by the next following August 15 and February 15, as the case may be. The City further covenants and agrees that subject only to the 11rior deposits and credits to be made to the Interest and Sinkin - Fund, the Pledqed—Revenw,,-,- shall be applied and appropriated and used to establish and maintain the Required Reserve Amount, including by paying Reserve Fund Obligation Payments when due, and any reserve established for the benefit of any issue or series of Additional Parity Obligations and to cure any deficiency in such amounts as required by the terms of this Ordinance and any other ordinance pertaining to the issuance of Additional Parity Obligations. During such time as the Reserve Fund contains the Required Reserve Amount, the obligation to maintain the Required Reserve Amount has been suspended pursuant to subsection 4,04W, the C in the Interest and Sinking Fund or otherwise use such amount in any manner permitted by law. (c) A Reserve Fund Obligation issued in an amount equal to all or part of the Required Reserve Amount for the Bonds and the Outstanding Parity Obligations may be used in lieu of depositing cash into the Reserve Fund. In addition, a Reserve Fund Obligation may be substituted for monies and investments in the Reserve Fund if the substitution of the Reserve Fund Obliq . n ation 1V1U117,dL1?W11S U7 diij LU UU IU' the Reserve Fund Obligation for all or part of the Required Reserve Amount contains a finding that such su•sti ion is cost effective. (d) Notwithstanding anything to the contrary contained herein, the requirement set forth in subsection (a) above to maintain the Required Reserve Amount in the Reserve Fund shall be susU.,ended for such time as the Net Revenues for each Fiscal Year are e2tual to at least 1 .35 6"ies the Average Annual Debt Service Requirements. In the event that the Net Revenues for any Fiscal Year are less than 1.35 times the a: a+.- Annual Debt Service Requirements, the City will be required to commence making Required Reserve Fund Deposits, as provided in subsection (b) above and to continue such Required Reserve Fund Deposits until the earlier of (i) such time as the Reserve Fund contains the Required Reserve Amount or (ii) the Net Revenues in each of two consecutive years have been equal to not less than 1.35 times the Average Annual Debt Service Requirements. (e) A Reserve Fund Obligation permitted under (a) above, must be in the fonn of a surety bond or insurance policy meeting the requirements described below. (1) (1) A surety bond or insurance policy issued to the Paying Agent/Registrar, as agent of the Holders, by a company licensed to issue an insurance policy guaranteeing the timely GTOWN\URB\2014A: Ordinance 9 payment of debt service on the Parity Obligations (a "municipal bond insurer") if the claims paying ability of the issuer thereof shall be rated "AAA" or "Aaa�', respectively, by S&P or Moody's, or (fi) a surety bond or insurance policy issued to the Paying Agent/Registrar, as agent of the Holders, by an entity other than a municipal bond insurer, if the form and substance of such instrument and the issuer thereof shall be approved in writing by each Bond Insurer of record. 1111111111111 111111111 4i, 11�11 Fund Obligation Payment) shall be made from the deposits made to the Reserve Fund as provided in this Section and in Section 10. The Reserve Fund Obligation shalt provide for 10 "V 0 W W'W CAUCHL 014117 EC1111MLESCHIMIL 01 UIMTS Of URRILLS ffUIU. 11 LUC fUT-1117111p, ICUL11xic Is stspic or terminated for any reason, the right of the issuer of the Reserve Fund Obligation to reimbursement will be subordinated to the cash replenishment of the Reserve Fund to an amount equal to the difference between the full original amount available under the Reserve Fund 0 and the amount then available for fii draws or claims. In the "oil AMILI PLOSOWC riL1M--VW1#41?,UU*11 (LCIULILS ILI ILS Plilit-J111011L *D11;UL1+11S-ar1 M-CRUMS paying ability of the issuer of the insurance policy or surety bond falls below "AAA" or S&P and Moody's, respectively, the obligation to reimburse the issuer of the Reserve Fund Obligation shall be subordinated to the cash replenishment of the Reserve Fund. (3) In the event (a) the revolving reinstatement feature described in the preceding paragraph is suspended or terminated, or (b) the rating of the claims paying ability of the issuer of the surety bond or insurance policy falls below "AAA" or "Aaa", by S&P and M4*4 with this Section and Section 10, an amount sufficient to cause the cash or investments tjX6p3 L such instrument with a surety bond or insurance policy meeting the requirements of 1 and 2 above, within six months of such occurrence. In the event (a) the rating of the claims - SIM Ell 11 SUM the City shall either (i) deposit into the Reserve Fund, in accordance with this Section, amounts sufficient to cause the cash or investments on deposit in the Reserve Fund to bond or insurance policy meeting the requirements of 1 and 2 above within six months of such occurrence. (4) The Paying Agent/Registrar shall ascertain the necessity for a claim or draw upon any Reserve Fund Obligation and provide notice to the issuer of the Reserve Fund Obligation in accordance with its terms not later than three days (or such appropriate time period as GTOWN\URB\2014A: Ordinance 10 will, when combined with the tirming of required payment under the Reserve Fund Obligation, ensure payment under the Reserve Fund Obligation on or before the interest payment date) prior to each date upon which the principal of or interest on the Parity Obligations will be due. It is recognized that a Reserve Fund Obligation may be issued which is payable only with respect to a part of the Bonds and the Outstanding Parity Obligations with the remainder of the W - upon the Reserve Fund will have to be made on a pro -rata basis to ensure that every Parity Obligation enjoys an equal amount of security. Therefore, (i) draws upon one or more such Reserve Fund Obligations shall be made on a pro -rata basis with cash and investments available in the Reserve Fund and (ii) deposits and credits to the Reserve Fund to restore it to the Required Reserve Amount shall be utzed on a y-ro-rata bv-.sis to gay An. * f*O -- reimburse the issuers of the Reserve Fund Obliaations, thus restoring that part of the Required Reserve Amount, and to restore with cash and investments the balance of the Required Reserve Amount. 011i- "M -WIM" 10111,11 I I I I IN III IRWIN depposits and credits to the Interest and Sinkinu Fund from the Pledged Revenues or used to redeem or purchase the Parity Obligations from which such excess proceeds are related. FW • were siluff 710C ue SUMM=1 MMM P&TIMMI MIMI IWMI 177 such deposits and credits shall be in addition to the amounts otherwise required to be deposited and credited to these Funds. (b) Subject to making the deposits and credits required by this Ordinance, or any ordinances authorizing the issuance of Additional Parity Obligations, or the payments and credits required by the provisions of the ordinances authorizing the issuance of Subordinate Lien Obligations hereafter issued by the City, the excess Net Revenues may be used for any lawful purpose. HUY 119MUM GTOWN\URB\2014A: Ordinance I 1 Fiscal Year, except that any direct obligations of the United States of America - State and Local Government Series shall be continuously valued at their par value or principal face amount. Any obligation in which money is so invested shall be kept and held at the Depository, except as otherwise permitted by the laws applicable to the City. For purposes of maximizing investment returns, money in such funds may be invested, together with money in other funds or with other money of the City, in common investments of the kind described above, or in a common pool of such investments held by the City or its designated agent, which shall not be deemed to be or constitute a comminalina of such monev or funds nrovided that safekeening receii3ts or certificates 1 11 1•i I 1=17M 111IMSML all? lc I-Crutil .41Lrulluseu 7TIL11 Stull 11111mr-J, Or Uwllce�-Vj Stull I'Llia. zixu licit 111, U on behalf of each such fund. If necessary, such investments shall be promptly sold to prevent any default. (b) All interest and income derived from such investments (other than interest and income derived from amounts credited to the Reserve Fund if the Reserve Fund does not contain the Required Reserve Amount) shall be credited to the Revenue Fund semi-annually and shall constitute Gross Revenues. I IN FIN 1111114 VQ11122 F&fa=f&= IS F� NMI VQj'.&'4A�PIkT& L of redemption of the Parity Obligations; such transfer of funds must be made in such manner as� Section 17. RATES AND CHARGES. For the benefit of the Holders of the Parity Obligations and in addition to all provisions and covenants in the laws of the State of Texas and in this Ordinance, the City hereby expressly stipulates and agrees, while any of the Parity afforded by the System that are reasonably expected, on the basis of available information and experience and with due allowance for contingencies, to produce Gross Revenues in each Fiscal Year reasonably anticipated to be sufficient- M�� B. to produce Pledged Revenues at least equal to the greater of 1.25 times the Average cl- Annual Debt Service Requirements or 1. 10 times the Maximum Annual Debt Service Requirements, C. to produce Pledged Revenues in amounts sufficient to enable the City to make the deposits and credits, if any, from Pledged Revenues (i) to the Reserve Fund to restore the Required GTOWN\URB\2014A: Ordinance 12 D. to produce Pledged Revenues, together with any other lawfully available funds (including the proceeds of Debt which the City expects will be utilized to pay all or part of the principal of and/or interest on any obligations described in this subsection D), sufficient to pay the princigal of and interest on my Subordinate Lien 0 1 ions issued bv the CLt,� and the amounts 40.0 -ma- WM.-.WM- 10 1. M..'U'll- W - -ss -6 -e7 91 L11C OLTIT&MULC U11 -L U11,1 41L11Cf Ivullp 9xilucs V. 11111(-JOILVITIC -I'S K I or incurred that are payable from, in whole or in part, a subordinate lien on and pledge of the Pledged Revenues; and E. to pay any other Debt payable from the Pledged Revenues and/or secured by a lien on the Pledged Revenues. Should the annual audit report required by Section 19 hereof reflect that the Pledged Revenues for the Fiscal Year covered thereby were less than necessary to meet the requirements .14 for services provided, and the City Council will make the necessary adjustments or revisions, if any, in order that the Pledged Revenues for the succeeding year will be sufficient to satisfy the foregoing coverage requirements. Section 18. GENERAL COVENANTS. The City further covenants and agrees that in accordance with and to the extent required or permitted by law: (a) Performance.. It will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in any ordinance authorizing the issuance of Parity Obligations, including this Ordinance, and in each and every Parity Obligation; it will promptly pay or cause to be paid the principal of and interest on every Parity Obligation on the dates and in the places and manner prescribed in such ordinances and obligations; and it will, at the times and in the manner rescribed deiosit and credit or cause to be de osited and credited the amounts I go Ll I I gle a (OR or -al L! SM I wo w I I L41 IM Uyle I I r -le a KIN4 a Imp I I I Xg Ogn & 10 to W.2 I I IA I I us al I no w 11 (c) Title. It has or will obtain lawful title to the lands, buildings, structures and facilities constituting the System, that it warrants that it will defend the title to all the aforesaid lands, buildings, structures and facilities, and every part thereof, for the benefit of the Holders of the Bonds, the Previously Issued Parity Obligations and Additional Parity Obligations, against the claims and demands of all persons whomsoever, that it is lawfully qualified to pledge the Pledged GTOWN\ , URB \2014A. Or d , inanc e 13 I I to I I 16- a I I a 0 0 trig I i I a N a U 30" 11 gGis I v Fil F" I @ N F. I U47 a i F 9 a I U) W-14 V-1 I F, I I a 6 1 --1111 C (d) Liens. It will from time to time and before the same become delinquent pay and dischar e all taxes- assessmenAs and overnmental chuges, if an -1L which shall beJawfully imposed upon it, or the System-, it will pay all lawful claims for rents, royalties, labor, materials and supplies which if aid mil b-, law become a lien or charge thereon. the lien of which would be -,trior to or interfe the liens hereof, so that the priority of the liens granted hereunder shall be fully preserved in the manner provided herein, and it will not create or suffer to be created any mechanic's, laborer's, materialman's or other lien or charge which might or could be prior to the liens hereof, or do or suffer any matter or thing whereby the liens hereof might or could be in i lit be used as the basis of a mechanic's laborees, materialman's or other lien or charge shall ig be required to be paid so long as the validity of the same shall be contested in good faith by the city. (e) Operation of System-, No Free Service. It will, while the Parity Obligations are outstanding and unpaid, continuously and efficiently operate the System, and shall maintain the System in good condition, repair and working order, all at reasonable cost. No free service of the SKAstem shall be allowed, and should the CiftA5 or an,�*, of its agencies or instrumentalities make use of the services and facilities of the System, payment of the reasonable value shall be made by the City out of funds from sources other than the Gross Revenues of the System, unless made from surplus or excess Pledged Revenues as permitted in Section 14. (f) Further Encumbrance. While the Parity Obligations are outstanding and unpaid, it will not additionally encumber the Pledged Revenues in any manner, except as permitted in this Ordinance in connection with Additional Parity Obligations, unless said encumbrance is made junior and subordinate in all respects to the liens, pledges, covenants and agreements of this Ordinance-, but the right of the City to issue or incur obligations payable from a subordinate lien on the Pledged Revenues is speccally recognized and retained. (g) Sale or Disposal of PropeLty. While the Parity Obligations are outstanding and unpaid, it will not sell, convey, mortgage, encumber, lease or in any manner transfer title to, or otherwise dispose of the System, or any signifficant or substantial part thereof; provided that whenever the Cii deems it necessa" to disnose of an,% other progeLj%, machiaer�, fixtures or eguinmt' ntt I- 'ILI of the System if (i) the City Manager delivers a certificate to the City Council to the effect that, following such action by the City, the System is expected to produce Gross Revenues in amounts ac III iij jj�.j r if"i"It"16i wi"-Aw"i Wimit'7"NI, i _ Whwwiiii 0, mawi ITILTI Tue 0011gdLIVIIS 01 UK; kALJ QUIMMICU III U11S Z MILHULIZIw'; Itle im. tow. - go GTOWN\URB\2014A: Ordinance 14 that such sale, conveyance, mortgage, encumbrance, lease or other disposition will not cause the Rating Agency to withdraw or lower the rating then in effect. Proceeds from any sale hereunder not used to replace or provide for substitution of such property sold, shall be used for improvements to the System or to purchase or redeem Parity Obligations. (h) Insurance. (1) It shall cause to be insured such parts of the System as would usually be insured by municipal corporations operating like properties, with a responsible insurance company or companies, against risks, accidents or casualties against which and to the extent insurance is usually carried by municipal corporations operating like properties, including, to the extent reasonabl obtainable fire and extended coverage insurance insuranc a ainst d # (i) for the redemption prior to maturity of the Parity Obligations, ratably in the proportion that the Outstanding principal of each series of Parity Obligations bears to the total Outstanding principal of all Parity Obligations, provided that if on any such occasion the principal of any such series is not subject to redemption, it shall not be regarded as Outstanding in making the foregoing computation; or (11) if none of the Outstanding Parity Obligations is subject to rede tion, then for Mp the purchase on the open market and retirement of said Parity Obligations in the same (iii) to the extent that the foregoing clauses (1) and (ii) cannot be complied with at the time, the insurance proceeds, or the remainder thereof, shall be deposited in a special and separate trust fund, at an official depository of the City, to be designated the Insurance Account. The Insurance Account shall be held until such time as the foregoing clauses (i) and/or can be complied with, or until other funds become available which, together GTOWN\URB12014A: Ordinance 15 with the Insurance Account, will be sufficient to make the repairs or replacements originally required, whichever of said events occurs first. (2) The foregoing provisions of (1) above notwithstanding, the City shall have authority to enter into coinsurance or similar plans where risk of • is shared in whole or in •. by the City. (3) The annual audit hereinafter required shall contain a section commenting on whether or not the City has complied with the requirements of this Section with respect to the maintenance of insurance, and listing all policies carried, and whether or not all insurance premiums upon the insurance policies to which reference is hereinbefore made have been paid. (4) The payment of premiums for all insurance policies required under the provisions I - WN a -m- all cq jjnuV-ut-�A-.LLy-ToLe-xpenct-any-nlmn--,--�-,n are-ClerIvej-1 Iron -1 Sol I rc, e s OT I er than the operation of the System, but nothing herein shall be construed as preventing the City • doing so. (i) Governmental Agencies. it will comply with all of the terms and conditions of any and all franchises, •- and authorizations applicable to or necessary with respect to the System, and which have been obtained from anj governmental jjencv- and the Citv has or will tain and • the System. 0) No Competition. It will not grant any franchise or permit for the acquisition, construction or operation of any competing facilities which might be used as a substitute for the System's facilities and, to the extent that it legally may, the City will prohibit any such competing facilities. Notwithstandin the florevo nL, i the Citv retains the right. however. to "oDt in" to I tr* MS ULM& Sj SLORIS 11 �1) L11C k-ILJ 1T1MUj;Cf UC11 Me I Council to the effect that, following such action by the City, the remaining System is expected to produce Gross Revenues in amounts sufficient in each Fiscal Year while any of the Parity Obligations are to be outstanding to comply with the obligations of the City contained in this Ordinance and in the ordinances authorizing the Previously Issued Parity Obligations and the Kelm GTOWN\M\2014k Ordinance 16 V.."Irs IMP INIM"I"ri mail a separate and complete system of records and accounts pertaining to the operations of the System in which full, complete, true, proper, and correct entries shall be made of all dealings, transactions, business and affairs relating thereto, or which in any way affect or pertain to the System or the Gross Revenues or the Net Revenues thereof, as provided by generally accepted accounting principles, consistently applied, and by Sections 1502.067 and 1502.068, Texas Government Code, as amended, or other applicable law. The Holders of the Parity Obligations or any duIX authorized aggirt _®r agg �tsof �ch Holders shall have the right to insQect the �Xstem arL4. low- 'IM9 a- 1-1 IMMITUMM-1 MW 7 Copies of each annual audit shall be made available for public inspection during normal business hours at the City's principal office and the City Secretary's office and may be furnished to, upon written request, any Holder upon payment of the reasonable copying and mailing charges. Expenses incurred in making the annual audit of the operations of the System shall be considered as Maintenance and Operating Expenses. Section 20. COVENANTS RIEGARDING TAX EXEMPTION OF INTERIEST ON THE BONDS. (a) Covenants. The City covenants to take any action necessary to assure, or refrain from any action which would adversely affect, the treatment of the Bonds as obliaations 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 City covenants as follows: (1) to take any action to assure that no more than 10 percent of the proceeds of the W 100106 INC, 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 Refunded QiJitalifrts or 23 U I im UIS�tTUPUMOIIULU, TTILIIIII L11r, 111CUITUg VI SCUL101 of the Code, to the governmental use; (3) to take any action to assure- that no amount which is greater than the lesser of GTOWN\LMB\2014A: Ordinance 17 (4) to refrain from taking any action which would otherwise result in the Bonds being treated as "private activity bonds" within the meaning of section 141 (b) of the Code-, (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-, (B) amounts invested in a bona fide debt service fund, within the meaning of section 1. 148- 1 (b) of the Treasury Regulations, and (7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as Zoeceds *f t7te Bo7i lwea-,rv, s �$ 4I iik ai & ro MCW14110111IMMMKIM (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(f) of the Code and to in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code. owners of the Bonds. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. (c) Proceeds. The City understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred Droceeds (if anv) and Droceeds of the refunded bonds ex-Dended -orior to the date of issuance of the GTOWNWRIM2014k Ordinance Bonds. It is the understanding of the City that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. De artment of the Treas U ursuant thereto. In the event that re ulations or rulings are hereafter (d) Allocation Of� and Limitation On, Expenditures for the Project. The City covenants described in Section 2 of this Ordinance (the "Project") on its books and records in accordance with the requirements of the Code. The City recognizes that in order for the proceeds to be considered used for the reimbursement of costs, the proceeds must be allocated to expenditures within 18 months of the later of the date that (1) the expenditure is made, or (2) the Project is completed; but in no event later than three years after the date on which the original expenditure is paid. The foregoing notwithstanding, the City recognizes that in order for proceeds to be expended under the Code, the sale proceeds or investment earnings must be expended no more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Bonds, or (2) the date the Bonds are retired. The City agrees to obtain the advice of nationally -recognized bond 'MWItA tu- ranswdfnc;§-e�enii-�= not adversely affect the tax-exempt status of the Bonds. For purposes of this subsection, the City shall tb4e i44ligatet t+ c*melyviithrthis citNeina.-it if it;14taiAs ahi e t tf iiatitrip.11y-recitgaizei bond counsel to the effect that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. (e) Disposition of Project The City covenants that the property constituting the Project ill --t-ot lic si Ila or otitex-Eise disnosed *f iTf a tra-tqactig W W41 I such sale or other disposition will not adversely affect the tax-exempt status of the Bonds. For imui,sei iit �ijijii of Vt e nrnigt v jivri" jid dis tsed Ill L11C WFURIUry CUIUSC SIM11 110L U0 VOULCU US d Lrd[ISUCL1011 1(Z*,bL1L111g Ill Mr, IULXI,#IL U1 CUSH Ur AN Flu compensation. For purposes of this subsection, the City shall not be obligated to comply with this covenant if it obtains an opinion of nationally-recogmized bond counsel to the effect that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. r,TOWN\URB\2014A: Ordinance 19 (f) Reimbursement. This ordinance is intended to satisfy the official intent requirem set forth in section 1. 150-2 of the Treasury Regulations. 1 # 11;1111iirii V within six months after the end of any fiscal year, financial information and operating data Wil respect to the City of the general type included in the final Official Statement authorized • Section 34 of this Ordinance, being the information described in Exhibit "C" hereto. Any financi,. statements to be so provided shall be (1) prepared in accordance with the accounting principt described in Exhibit "C" hereto, or such other accounting principles as the City may be requir a to employ from time to time pursuant to state law or regulation, and (2) audited, if the Cil thev must be i rovided. If the audit of such financial statementj ij. jA joijiii i statements for the applicable fiscal year to the MSRB, when and if the audit report on su statements become available. If the City changes its fiscal year, it will notify the MSRB of the change (and of the date Ig M'A to V -D it I I go I I mgy a I I Im I I I r! 14 tu I w; 4 14 1F3#V-j F 111 s 11111101111111111 tot a 101111 F56171"Ifel I M The financial information and operating data to be provided pursuant to this Section m III be set forth in full in one or more documents or may be included by specific reference to a iocurnent that is available to the public on the MSRB's internet web site or filed with the SE information as prescribed by the MSRB. (b) Event Notices. The City shall notify the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner no in excess of ten business days after the occurrence of the eventof any of the following events with respect to the Bonds - A. Principal and interest payment delinquencies; B. Non-payment related defaults, if material within the meaning of the federal securities laws; C. Unscheduled draws on debt service reserves reflecting financial difficulties; D. Unscheduled draws on credit enhancements reflecting financial difficulties; E. Substitution of credit or liquidity providers, or their failure to perforin; F. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue GTOWNWRM2014A: Ordinance 20 • the Bonds, G. Modifications to rights of holders of the Bonds, if material within th* meaning • the federal securities law, H. Bond calls, if material within the meaning of the federal securities laws ani tender offers-, J. Release, substitution, • sale of property securing repayment of the Bonds, if material within the meaning of the federal securities laws-, L. Bankruptcy, insolvency, receivership or similar event of the City; M. The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material within the meaning of the federal securities laws; and N. Appointment of a successor or additional trustee or the change of name a trustee, if material within the meaning • the federal securities laws. I The City shall notify the MSRB, in an electronic format as prescribed by the MSRB, in timely manner, of any failure by the City to provide financial information or operating data accordance with subsection (a) • this Section by the time required by such subsection. documents provided to the MSRB pursuant to this Section shall be accompanied by identifyi infonnation as prescribed by the MSRB. I (c) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section for so long as, but only for so long as, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give notice of any deposit made in accordance with Section 29 of this Ordinance that causes the Bonds no longer to be outstanding. The provisions of this Section are for the sole benefit of the holders and beneficial owne lif the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal equitable right, remedy, or claim hereunder to any other person. The City undertakes to pro i - *nly the financial information, operating data, financial statements and notices which it h LI GTOWN\M\2014A: Ordinance 21 WIN results, condition, or prospects or hereby undertake to update any information provided in accordance Section or otherwise,• as expressly provided - The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. No default by the City in observing or its obligations under this Section sh comprise ! • • default•t.forypurposes • other provision of Ordinance. Should the Rule be amended to obligate the City to make filings with Or provide notices entities other than the MSRB, the City hereby agrees to undertake such obligation with respect the Bonds in accordanceRule as amended. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. jr i of this Section, it shall include with any amended financial information or operating data next provided in accordance with paragraph (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 City may also amend or repeal the provisions of this continuing • • t •• • • • • _ . • r • -:: GTOWN\URB\2414A:Ordinance _ _ 22 _.. the extent that the provisions of this sentence would not prevent an underwriter from lawful purchasing or selling Bonds in the primary offering of the Bonds. i 41 on and pledge of the Pledged Revenues herein granted. (b) The Interest and Sinking Fund shall secure and be used to pay all Parity Obligations. Each ordinance under which Additional Parity Obligations are issued shall provide and require that, in addition to the amounts required by the provisions of this Ordinance and the provisions of any other ordinance or ordinances authorizing the Previously issued Parity Obligations and Additional Parity Obligations to be deposited to the credit of the Interest and Sinking Fund, the City shallteXo6it t,#,+me creiit *f the Interest ant Sir&ng Exnt at least s'ycli am*wnts as are re,�-tiret for the payment of all principal of and interest on said Additional Parity Obligations then being issued, as the same come due. (c) The City may create and establish a reserve fund pursuant to the provisions of any ordinance authorizing the issuance of Additional Parity Obligations for the purpose of securing Obligations and the amounts once deposited or credited to said reserve funds shall no longer constitute Net Revenues and shall be held solely for the benefit of the Holders of the particular Parity Obligations for which such reserve fund was established. Each such reserve fund shall be designated in such manner as is necessary to identify the Parity Obligations it secures and to distinguish such reserve fund from the Res�rve Fund and thA of other Parity Obligations. 1111.0,411 Sol", (a) The City Manager and the City Secretary of the City sign a written certificate to the effect that the City is not in default as to any covenant, condition or obligation in connection with Fax (VCSC1-1-C7f FU I U, r 0:KUfffg ly' *L11 Obligations each contains the amount then required to be therein. GTO WN\URB\2014A: Ordinance (b) An Accountant signs and delivers to the City a written certificate to the effect that, during either the next preceding Fiscal Year, or any twelve consecutive calendar month period ending not more than ninety days prior to the date of the then proposed Additional Parity Obligations, the Net Earnings were, in the opinion thereof, at least equal to the sum of 1.25 times the Average Annual Debt Service Requirements (computed on a Fiscal Year basis), including Amortization Installments, of the Parity Obligations and the Additional Parity Obligations to be ro� outstandiner after the issuance of the then i. *osed Additional 1tr M -- the average annual debt service requirement (computed in the same manner as for Parity Obligations) of the Subordinate Lien Obligations to be outstanding after the issuance of the then proposed Additional Parity Obligations. (c) In making a determination of Net Earnings for any of the purposes described in this Section, the Accountant may take into consideration a change in the rates and charges for services and facilities afforded 6 the Sistern thi J - tests described above, make a pro forma determination of the Net Earnings of the System for the awwohm? 10, Wii. WWA-6`614 As used in this Section, the terni "Net Earnings" shall mean the Gross Revenues of the System after deducting the Maintenance and Operating Expenses of the System but not exf-t ing f�xactice , should be char ed to cai-w - e ,,enditures which- under standard account -�dtal . Section 24. ISSUANCE OF SUBORDINATE LIEN OBLIGATIONS. The City hereby reserves the night to issue, at any time, obligations including, but not limited to, Subordinate Lien Obligations, payable from and equally and ratably secured, in whole or in part, by a lien on and pledge of the Net Revenues, subordinate and inferior in rank and dignity to the lien on and pledge laws of the State • Texas. iii i 11i 11751ii,11 11 011 itself, the right to issue Special Project obligations secured by liens on and pledges of revenues and proceeds derived from Special Projects. ions in s • be raised through taxation • the City. Section 27. SECURITY FOR FUNDS. All money on deposit in the Funds for whi I this Ordinance makes provision (except any portion thereof as may be at any time proper invested as provided herein) shall be secured in the manner and to the fullest extent required GTOWN\URB12014A: Ordinance 24 the laws • Texas for the security of public funds, and money on deposit in such Funds shall used only for the purposes permitted �y this Ordinance. i (a) Events of Default. Each of the following occurrences or events for the purpose of thi Ordinance is hereby declared to be an Event • Default - (1) the failure to make payment of the principal of or interest on any of the Bonds when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement or 11>' obligation of the Cit!�I-the-failure toytetfo *ch mi. �erk- 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 .............. (1) U -Pon the happening •: any Event of Default, then and in every case, any Registered Owne:r- or an authorized t trustee or trustees therefor, may proceed against the City, or any official, officer or emi�*:IoNe of the Cik in their official ca*acit�� - --ose of (-Pir --4 the rights of the Registered Owners u�der this Ordinance, by mandamus or other suit, • or special proceeding in equity or at law, in any court • 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. =-'= T-4 - M -R • (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 • any remedy herein conferred or reserved shall not be deemed a waiver • any • available remedy. GTOWN\URB\2014A: Ordinance (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 renresentations co - � I City • the City Council. (iv) None • the members of the City Council, nor any other • or • agent, or employee of the City, shall be charged personally by the Registered Owners with any liability, or be held personally liable to the Registered Owners under any term or nirovision of this Ordinance. or because of anp Event of Default or alleged Event of Default • this Ordinance. Sri! N I 113B I I no longer be secured by, payable from, or entitled to the benefits of, the Pledged Revenues as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Defeasance Securities and thereafter the City will have no further responsibility with respect to amounts available to such Paying Agent/Registrar (or other financial institution jermitted bv agglicable law) for the javmint oj juch Difej ej ill i W V * T d IPA- ji by law) to receive payment when due on the Defeasance Securities. (b) The deposit under clause (ii) of subsection (a) shall be deemed a payment of a Bo as aforesaid when proper notice of redemption of such Bonds shall have been given or upon establishment of irrevocable provisions for the giving of such notice, in accordance with Ordinance. Any money so deposited with the Paying Agent/Registrar or an eligible trust comp or commercial bank as provided in this Section may at the discretion of the City also be invest in Defeasance Securities, maturing in the amounts and at the times as hereinbefore set forth, all income from all Defeasance Securities in possession of the Paying Agent/Registrar or eligible trust company or commercial bank pursuant to this Section which is not required for GTOWN\M\2014A: Ordinance 26 has been so deposited, shall be remitted to the City. (c) Notwithstanding any provision of any other Section of this Ordinance which may be t f (d) Notwithstanding anything elsewhere in this Ordinance, if money or Deleasan e bee7t deDosited or set aside with the Pavin A ent/Reeisstrar or an eligible trul (e) Notwithstanding the provisions of subsection (a) immediately above, to the extent thal upon the defeasance of any Defeased Bond to be paid at its maturity, the City retains the ni RIM acco"un in aeternmung Me suniciency ol Ine provisions macie Tor Me payment o Me 1,77-771 Bond. #i I=) I I I (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 �-:nd to the P g Agent/Registrar �uch 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 City 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 for cancellation the Bond so damaged or mutilated. GTOWN\U"\2014A: Ordinance 27 the payment of the principal of, redemption premium, if any, or interest on the Bond, the City 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. (d) Charge for issuing 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 City whether or not the lost, stolen or destroyed Bond shall be found at am7,time- or be enforceable by ank-1 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) Authorijy for Issuing Replacement Bonds. In accordance with Subehapter D of Chapter 1201, Texas Government Code, this Section of this Ordinance shall constitute authority for the issuance of an such re•lacement bori d with•ut necessit of further actio b th IIIIA-0111611 RIM effected Parity Obligations at the time outstanding, nothing herein contained shall permit or be construed to permit the amendment of the terms and conditions in this Ordinance or in the Parity Obligations so as to: 01111liffill 1 � l t�rlll��Ig;g� IF: (5) Affect the rights of the holders of less than all of the Parity Obligations then Outstanding; GTOWN\URB\2014A: Ordinance 28 (6) Change the minimum percentage of the principal amount of Parity Obligations necessary for consent to such amendment. (b) if at any time the City shall desire to amend this Ordinance under this Section, the Ci shall cause notice of the proposed amendment to be delivered to the Bond Insurer and publis s Ci h in a financial newspaper or journal of general circulation in The City of New York, New Yor once during each calendar week for at least two successive calendar weeks. Such notice s1h for inspection by all registered owners of Parity Obligations at the designated trust office of t registrar for the Parity Obligations. Such publication is not required, however, if notice in writi is given to each registered owner of the Parity Obligations. (c) Whenever at any time not less than thirty days, and within one year, from the date of the first publication of said notice or other service of written notice the City shall receive an instrument or instruments execute by the Iders of at least a majori in aggreg pnncipa amount of all Parity Obligations then outstanding, which instrument or instruments shall refer to the proposed amendment described in said notice and which specifically consent to and approve such amendment in substantially the form of the copy thereof on file with the Paying Agent/Registrar, the City Council may pass the amendatory ordinance in substantially the same form. (d) Upon the passage of any amendatory ordinance pursuant to the provisions of t Section, this Ordinance shall be deemed to be amended in accordance with such amendato 'o ordinance, and the respective rights, duties and obligations under this Ordinance of the City I all the holders of then outstandin&t-Paritm Obligations shall thereafter be determined, exercisedall. 0 enforced hereunder, subject in all respects to such amendments. 0 (e) Any consent given by the registered owner of a Parity Obligation pursuant to t provisions of this Section shall be irrevocable for a period of six months from the date of the fir, publication of the notice provided for in this Section, and shall be conclusive and binding upon future holders of the same Parity Obligation during such period. Such consent may be revoked any time after six months from the date of the first publication of such notice by the holder w gave such consent, or by a successor in title, by filing notice thereof with the Paying Agent a aggregate principal amount of the then outstanding Parity Obligations as in this Section de6n] have, prior to the attempted revocation, consented to and approve the amendment. NOW GTOWN\M\2014A: Ordinance 29 (1) To add to the covenants and agreements of the City in this Ordinance contained, other covenants and agreements thereafter to be observed, grant additional rights or rwfr--&s--, t* *Vj* Q. -f 7*wskr, rz-strjiAt 4ir tkdtzn�� ri-,*tt *r �,iaf"r !-IN to or conferred upon the City, (2) To make such provisions for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained in this Ordinance, or in regard to clarifying matters or questions arising under this Ordinance, as are necessary an desirable and not contrary to or inconsistent with this Ordinance and which shall not adversely affect the interests of the holders of the Parity Obligations, (3) To make any changes or amendments requested by any Rating Agency, as in the judgment of the City, materially adversely affect the interests of the owners of the outstanding Parity Obligations, (4) To make such changes, modifications or amendments as- may be necessary or desirable, which shall not adversely affect the interests of the owners of the outstanding Parity Obligations, in order, to the extent permitted by law, to facilitate the econormic and r�.ractical utilization of credit agreements with respect to the Parity Obligations including. without limitation, supplementing the definition of "Annual Debt Service Requirements" to address the amortization of payments due and owing under a credit agreement-, once I S. TITTITTI-elfru-MUMM77 0"ITIMMI YJ IL 1 0 '0 subsection (b) of this Section; provided, however, that the publication of such notice shall njo constitute a condition precedent to the adoption of such amendatory ordinance and the failure 1 publish such notice shall not adversely affect the implementation of such amendment as adopt pursuant to such amendatory ordinance. GTONVN\U12B\2014A: Ordinance best interest of the City. The Bonds shall initially be registered in the name of Hutchinso Shockey, Erley & • i I wig under this Ordinance, but such additions or attachments shall not have any legal effect, and shall be solely for the convenience and information of the registered owners of the Bonds. deem advisable, such determination to be conclusively evidenced by his execution thereof. The distribution and use of the Preliminary Official Statement dated August 5, 2014, prior to the date hereof is ratified and confirmed. The City Council of the City hereby finds and determines that the Preliminary Official Statement and the Official Statement were and are "deemed final" (as that term is defined in 17 C.F.R. Section 240.15c-12) as • their respective dates. T to insert any necessary provisions requoirel Sy tre SoM Msurer and agreed to b the City and t e City I W11 1 4 es - wig GTOWN\I: Ordinance delivery of the Bonds, the Mayor, the City Manager or Assistant City Manager, the City AttomAl and Bond Counsel are hereby authorized and directed to approve any technical changes corrections to this Ordinance or to any of the instruments authorized and approved by th Ordinance necessary in order to (i) correct any ambiguity or mistake or properly or in o completely document the transactions contemplated and approved by this Ordinance and described in the Official Statement, (ii) obtain a rating from any of the national bond rati agencies or satisfy requirements of the Bond Insurer, or (iii) obtain the approval of the Bonds the Texas Attorney General's office. Section 38. INTERPRETATIONS. All terms defined herein and all pronouns used this Ordinance shall be deemed to apply equally to singular and plural and to all ggenders. T V I I I Tel'anciltj :17 Vie non TTi WIT the payment of the Bonds. t WIT -1 4 04' to I ji 'IS1111 IlCd l UITS -VF1-11r1WC al -C IICXC� Fdr repealed to the extent of such conflict and the provisions of this Ordinance shall be and rem a controlling as to the matters contained herein. Section 40. INTERESTED PARTIES. Nothina in this Ordinance expressed or impli I is intended or shall be construed to confer upon, or to give to, any person or entity, other than til - itv,7--id L1MjjVv* I erq igif -Ote BvtRs righjiLltedy - claivvnirlentr 1tv re ,h or 0 a Section 41. INCORPORATION OF RECITALS. The City hereby finds that tfs statements set forth in the recitals of this Ordinance are true and correct, and the City here] incorporates such recitals as a part of t is Ordinance. Section 42. SEVERABILITY. The provisions of this Ordinance are severable-, and in case any one or more of the provisions of this Ordinance or the application thereof to any person or circumstance should be held to be invalid, unconstitutional, or ineffective as to any person or circumstance, the remainder of this Ordinance nevertheless shall be valid, and the application of any such invalid provision to persons or circumstances other than those as to which it is held invalid shall not be affected thereby. GTOWN\URB\2014A: Ordinance 32 Section 43. EFFECTIVE DATE. This Ordinance shall become effect immedo ia el rl t yf and after its passage on first and final reading in accordance with Section 1201 .028 , Tex Government Code, as amended. Section 44. PERFECTION. Chapter 1208, Government Code, applies to the issuance of the Bonds and the pledge of revenues granted by the City under Section 7 of this Ordinance, and such pledge is therefore valid, effective and perfected. If Texas law is amended at any time while the Bonds are outstanding and unpaid such that the pledge of revenues granted by the City under Section 7 of this Ordinance is to be subject to the filing requirements of Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the Bonds the perfection of the security interest in said pledge, the City agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter SOT - Business & Commerce Code and enable a filing to perfect the security interest in said pledge to occur. RUIN I Ff Cf es -M W -UM -KI rM&MUIRTIf (S' as required by Section 1202.004 of the Texas Government Code. The appropriate member of the City's staff is hereby instructed to take the necessary measures to make this payment. The City is also authorized to reimburse the appropriate City funds for such payment from proceeds of the Bonds. GTOWN\U"\2014A: Ordinance 33 IN ACCORDANCE WITH SECTION 1201.028, Texas Government Code, passed and approved on the first and final reading on the 19th day of August, 2014. C— Dale Ross, Mayor City of Georgetown, Texas Jessica e City Stcretary By: L- C Bridgett Chapman, &ityorney GTOWN1URB\2014A: Ordinance URB Ordinance Sig Pg As used in this Ordinance, the following terms and expressions shall have the meanings set forth below, unless the text hereof specifically indicates otherwise: "Accountant" means an independent certified public accountant or accountants or a firm of an independent certified public accountants, in either case, with demonstrated expertise and competence in public accountancy. "Additional Parity Obligations" means bonds, notes, warrants, certificates of obligation, contractual obligations or other Debt which the City reserves the right to issue or enter into. as the of the Pledged Revenues on a parity with the outstanding Parity Obligations and the Bonds, "Amortization Installment" means, with respect to any Term Bonds of any series of Parity Obligations the amount of money which is required to be deposited into a mandatory redemption account for retirement of such T�rm Bonds (whether at maturitv or bi mandatowi redemDtion and Term Bonds. "Annual Debt Service Requirements" means, as of the date of calculation, the principal of and interest on all Parity Obligations coming due at Maturity or Stated Maturity (or that could. rvi "•:' default by the City on such Debt, or be payable in respect of any required purchase of such Debt by the City) in such Fiscal Year, and, for such purposes, any one or more of the following rules shall apply at the election of the City - W "AIM =77 411711T Debt taken into account during any Fiscal Year shall be equal to the debt service calculated using the original principal amount of such Balloon Debt amortized over the Term of Issue on a level debt service basis at an assumed interest rate equal to the rate borne by such Balloon Debt on the date of calculation-, (2) Consent Sinking Fund. In the case of Balloon Debt, if a Designated Financial Officer shall deliver to the City a certificate providing for the retirement of (and th* GTO WN\URB\2014A: Ordinance instrument creating such Balloon Debt shall permit the retirement of), or for the accumulation of a sinking fund for (and the instrument creating such Balloon Debt shall permit the accumulation of a sinking fund for), such Balloon Debt according to a fixed schedule stated in such certificate ending on or before the Fiscal Year in which such I V-49 or to the extent provided for by the sinking fund accumulation, the premium, if any,, and interest and other debt service charges on) such Balloon Debt shall be computed as if the same were due in accordance with such schedule rovided that this 6: 1 ise 2 shall (3) Prepaid Debt. Principal of and interest on Bonds and Additional Parity Obligations, or portions thereof, shall not be included in the computation of the Annual Debt Service Requirements for any Fiscal Year for which such principal or interest are payable from funds on deposit or set aside in trust for the pay, ment thereof at the time of such calculations (including without limitation capitalized interest and accrued interest so deposited or set such Debt; and for such Parity Obligations taken as a whole, such composite fixed rate shall be used *in determining the Annual Debt 4 Service Requirement with respect to such Parity Obligation 14) 1 rusiolic (I I M I I I' T 1=1 Ulm period shall be taken into account in making such calculation and, with respect to prospective calculations, only those payments reasonably expected to be made in the subject period shall be taken into account in making the calculation. GTOWN\URB\2014A: Ordinance A-2 (either at Stated Maturity or mandatory redemption) and derived by dividing the total of surffl- Annual Debt Service Requirements by the number of Fiscal Years then remaining before Stat Maturity of such Parity Obligations. For the purposes of this definition, a fractional period of Fiscal Year shall be treated as an entire Fiscal Year. Capitalized interest payments provided fro I bond proceeds, accrued interest on any Debt, and interest earnings thereon shall be excluded making such computation. I "Bond Insurer" means any entity that insures or guarantees the payment of principal interest on any Bonds or the provider of a Reserve Fund Obligation. 1 "&nds" means, the City of Georgetown, Texas Utility System Revenue Bonds, Serl 2014A authorized by this Ordinance. "Book -Entry -Only System" means the book -entry system of bond registration provided Section 5, or any successor system of book -entry registration. i "Cede & Co. " means the designated nominee and its successors and assigns of TIN Depository Trust Company, New York. I (1) all indebtedness payable from Pledged Revenues and/or Net Revenues incurred or assumed by the City for borrowed money and all other financing obligations of the System payable from Pledged Revenues and/or Net Revenues that, in accordance with generally accepted accounting principles, are shown on the liability side of a balance sheet; and (2) all other indebtedness payable from Pledged Revenues and/or Net Revenues (other than indebtedness otherwise treated as Debt hereunder) for borrowed money or for the acquisition, construction or improvement of property or capitalized lease obligations pertaiming to the System that is guaranteed, directly or indirectly, in any manner by the e _CKWEVC contingent or otherwise, to purchase any such indebtedness or to advance or supply funds for the payment or purchase of any such indebtedness or to purchase property or services primarily for the purpose of enabling the debtor or seller to make payment of such indAbtedness. or to assure the owner ofthe indebtedness against loss funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether or not such property is delivered or such servic- a_ -it, deed)or otherwise. GTO WNWEL13\2014A: Ordinance such Debt deposited for cancellation; and thereafter it shall not be considered Debt. No item sh MW1111111oplill "Defeasance Securities" means (i) Federal Securities, (ii) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the City Council adopts or approves proceedings authorizing the issuance of refunding bonds or otherwise provide for the funding of an escrow to effect the defeasance of the Bonds are rated as to investment quality by a nationally recognized investment rating firm not less than "AAA" or its eiuivalent, iiiii, noncallable obligation--"- f st "t an-aIg r i - j "t nicinal -tv Sol Djr approyes prQceedinga-authaizing the issuance of refandin bonds or otherwise provide for the funding of an escrow to effect the defeasance of the Bonds, are rated as to investment quali by a ity � nationally recognized investment rating firm no less than "AAA" or its equivalent and (iv) any other then authorized securities or obligations under applicable State law that may be used to defease obligations such as the Bonds. "DTC" means The Depository Trust Company, New York, New York and its successors and assigns. "DTC Participant" means securities brokers and dealers, banks, trust companies, cleari� - comorations I and certain other orianizations on whose behalf DTC was createdto holde 1161BIM" 1 $1 r- 10A I I LT -XM L%- I V I I MiWg I I LOM R I U-0 0 V-) I IWO] I W I ggr- I I# Lei I I ---I VA = . I "Designated Financial Officer" means the chief financial officer of the City, or such oth financial or accounting official of the City so designated by the City Council. i "Federal Securities" as used herein means direct, noncallable obligations of the Unit States of America, including obligations that are unconditionally guaranteed by the United Stat] of America (including Interest Stri s of the Resolution Funding Corporation). ip "Fiscal Year" means the twelve-month accounting period used by the City in connecti 't with the operation of the System, currently ending on September 30 of each year, which ma anv twelve consecutive month period established b the Cii but in no event may the Fiscal YVj'e "Funded Debt" means all Parity Obligations created or assumed by the City that mature by their terms (in the absence of the exercise of any earlier right of demand), or that are renewable at the option of the City to a date, more than one year after the original creation or assumption of such Debt by the City. GTOWN\M\2014A: Ordinance A-4 "Gross Revenues" and "Gross Revenues of the City's System" mean all revenues, income and receipts of every nature derived or received by the City from the operation and ownership of tke Systea-,; iaclvtia?, tke laterestiActme fr,*rA iA,,,estr-.ent—,#riel,,iisit 4,f kmney ir, any Fvxi4 createii hereafter pledged to the payment of all Parity Obligations. "Holder" or "Holders" means the registered owner, whose name appears in the Security Register, for any Parity Obligation. "Independent Engineer" means an individual, firin or corporation engaged in the engineering profession, being a registered professional engineer under the laws of the State of Texas, having specific experience with respect to electric, water, wastewater, reuse water and/or stormwater drainage systems similar to the System. "Insurance Policy" means the *insurance policy issued by the Insurer guaranteeing qcheduled payment of principal of and interest on the Bonds when due. "Interest and Sinking Fund' means the special Fund maintained by the provisions of Q,ections 8 and 11 of this Ordinance. "Maintenance and Operating Expenses" means the reasonable and necessary expenses of operation and maintenance of the System as required by Section 1502.058, Texas Government Code, as amended, including all salaries, labor, materials, repairs and extensions necessary to render efficient service (but only such repairs and extensions as, in the judgment of the governing bo�y of the City, are necessary to keeD the System in oDeration and render adeauate service to the = ff an# Tall 41 1;-W11U1L1U11S'TTJ11U11 TTUUJAMTR"j&��,alf Tfief MCJ %W1#111gUU0nS), anualipaymenLS unuercontracts- now or hereafter defined as operating expenses by the Legislature of Texas. Depreciation shall never be considered as a Maintenance and Operating Expense. The definition includes a two- month reserve amount, as provided under Section 10 of this Ordinance. "Maturityn' means, when used with respect to any Debt, the date on which the principal of such Debt or anv installment thereof becomes due and ia-vable as therein rovided wb h h "Maximum Annual Debt Service Requirements " means the greatest requirements of Annual scheduled to occur in any future Fiscal Year or in the then current Fiscal Year for the particular obliaations for which such calculation is made. Capitalized interest payments provided from Debt proceeds, accrued interest on any Debt, and interest earnings thereon shall be excluded in making such computation. GTOWN\URB\2014A: Ordinance A-5 "Net Revenues" and "Net Revenues of the City's System" mean all Gross Revenu remaining after deducting the Maintenance and Operating Expenses. III o I I authorizing Additional Parity Obligations, except: (1) Parity Obligations theretofore cancelled and e ivere to t i or e vere to the Paying Agent/Registrar for cancellation; (2) Parity Obligations deemed paid pursuant to the provisions of Section 29 of this Ordinance or any comparable section of any ordinance authorizing Additional Parity Obligations-, (3) Parity Obligations upon transfer of or in exchange for and in lieu of which other Parity Obligations have been authenticated and delivered pursuant to this Ordinance and any ordinance authorizing Additional Parity Obligations; and (4) Parity Obligations under which the obligations of the City have been released, discharged or extinguished in accordance with the terms thereof "Parity Obligations" means the Bonds, the Previously Issued Parity Obligations and any Additional Parity Obligations hereafter issued by the City or obligations issued to refund any of the foregoing (as determined within the sole discretion of the City Council in accordance with 01 b A NO I pursuant to an agreement or otherwise, which hereafter are pledged by the City to the payment of the Parity Obligations, and excluding those revenues excluded from Gross Revenues. "Previously Issued Parity Obligations" means the Outstanding Parity Obligations of the City entitled "City of Georgetown, Texas Utility System Revenue Refunding Bonds, Taxable Series 1998B," "City of Georgetown, Texas Utility System Revenue Bonds, Series 2005," "City OTOWMM\2014A: Ordinance A-6 I lair ", Scrics 2-4 127 1 MITI•ls—,57 =04,• of Georgetown, Texas Utility System Revenue Refunding Bonds, Series 2014." "Prudent Utility Practice" means any of the practices, methods and acts, in the exercise of reasonable judgment, in the light of the facts, including but not limited to the practices, methods and acts engaged in or previously approved by a significant portion of the public utility industry, result at the lowest reasonable cost consistent with reliability, safety and expedition. It is recognized that Prudent Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather is a spectrum of possible practices, methods or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition. In the case of any facility included in the System which is operated in common with one or more other entities, the term Prudent Utility Practice, as applied to such facility, shall have the meaning set forth in the agreement governing the operation of such facility. "Rating Agen " means any nationally recognized securities rating agency which has CY assigned, at the request of the City, a rating to the Parity Obligations. "Record Date" means Record Date as defined in the Form of Bonds in Exhibit "B" to this Ordinance. "Required Reserve 4mount" means the amount required to be maintained in the Reserve Fund pursuant to the provisions of Section 12 of this Ordinance. "Required Reserve Fund Deposits' means the deposits and credits, if any, required to be made to the Reserve Fund pursuant to the provisions of Section 12 of this Ordinance. "Reserve Fund" means the special fund created, established and maintained by the provisions of Section 12 of this Ordinance. "Reserve Fund Obligation" means, to the extent permitted by law, as evidenced by an opinion of nationally recognized bond counsel, a surety bond or insurance policy deposited in the Reserve Fund to satisfy the Required Reserve Amount whereby the City is obligated to provide funds up to and including the maximum amount and under the conditions specified in such agreement or instrument. "Reserve Fund Obligation Payment" means any subrogation payment the City is obligated to make from Pledged Revenues deposited in the Reserve Fund with respect to a Reserve Fund Obligation. GTOWN\UIW\2014A: Ordinance A-7 "SEC" means the United States Securities and Exchange Commission. "Special Project" means, to the extent permitted by law, any electric, waterworks, sanitary sewer, wastewater reuse or municipal drainage system property, improvement or facility declared by the City not to be part of the System, for which the costs of acquisition, construction and installation are vaid ftom proceeds of a financing transaction other than the issuance of bonds ot, able from advalorem taxes- Pledgeid Revenues or which all maintenance -or Net Revenues and f d operation expenses are payable from sources other than ad valorem taxes, Pledged Revenues or Net Revenues, but only to the extent that and for so long as all or any part of the revenues or proceeds of which are or will be pledged to secure the payment or repayment of such costs of acquisition, construction and installation under such financig transaction. "Stated Maturity" means the annual princi IP al payments of the Parity Obligations a. .i# itin the respective dates set forth in the Ordinances which authorized the issuance of such Pari Obligations. I "Subordinate Lien Obligations" means (i) any bonds, notes, warrants, certificates of obligation, contractual obligations or other Debt issued by the City that are Davable, in whole or MITI "TINSTI be pledged to the payment of any Parity Obligations issued by the City, and (ii) obligations IBM "it "System�' means as currently comprised, the City's combined electric, waterworks and sewer system, which includes all properties, facilities, plants, improvements, equipment, interests and rights currently owned, operated and maintained by the City for the (i) generation, transmission, distribution or sale of electric power and energy, (ii) supply, treatment, and transmission and distribution of treated potable water and (iii) collection and treatment of wastewater, and for water reuse, together with all future extensions, improvements, purchases, repairs, replacements and additions thereto, whether situated within or without the limits of the City, and all water (in any form) owned by the City; provided, however, that the City expressly retains the rialit to W1 sale or disaiare,th in Sectin 18 of this Ordinance woro e the Sistern as set f ana kii) incorporate any o Lner tunity system as proviaea oy Tne Yaws oi Tne State or I exas as a part of the System. The System shall not include any Special Project or any disaggregated part of the System as provided in Section 18 of this Ordinance. MIMB6141110-1 GTOWN\URB12014A: Ordinance A "Term of Issue" means with respect to any Balloon Debt, a period of time equal to t1r, greater of (i) the period of time commencing on the date of issuance of such Balloon Debt ending on the final maturity date of such Balloon Debt or (ii) twenty-five years. i r,TOWN\URB\2014A: Ordinance A-9 Imu-11r : K- UNITED STATES OF AMERICA PRINCIP STATE OF TEXAS AMOUN CITY OF GEORGETOWN, TEXAS $ UTILITY SYSTEM REVENUE BOND, SERIES 2014A I INTEREST MATURITY DATEOF DATEOF CUSIP NO. RATE DATE SERIES INITIAL DELIVERY August 1, 2014 September 9 2014 PRINCIPAL AMOUNT: DOLLARS Mm"M T14 such interest has been paid in full. Notwithstanding the foregoing, during any period in which ownership of the Bonds is determined only by a book entry at a securities depository for the Bonds, any payment to the securities depository. or its nominee or registered assigns, shall be made in accordance with existing arrangements �e'tween the'City and the securities depository. 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 designated office for raTOWMURB\2014A: Ordinance B-1 payment of The Bank of New York Mellon Trust Company, N.A., Dallas, Texas which is t "Paying Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made the Paying Agent/Registrar to the Registered Owner hereof on each interest payment date check, dated as of such interest payment date, drawn by the Paying Agent/Registrar on, payable solely from, funds of the City required by the Ordinance authorizing the issuance of th Bond (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such purpo as hereinafter provided; and such check shall be sent by the Paying Agent/Registrar by Unit States mail, first-class postage prepaid, on each such interest payment date, to the Registe Owner hereof, at its address as it appeared on the last business day of the month next precedi each such date t e "Record Date") on the Re istration Books ke t bv the, P lu ini Aje the regular manner described above). The City covenants with the Registered Owner of this Bo that on or before each principal payment date, interest payment date, and accrued interest paym date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest Sinking Fund" referred to in and maintained by the Bond Ordinance, the amounts required provide for the payment, in immediately available funds, of all principal of and interest on Bonds, when due. Terms used in this Bond and not otherwise defined shall have the meard given in the Bond Ordinance. IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the principal office for payment of the Paying Agent/Registrar is located are authorized by law or executive order to close. or the United States Postal Service is not o -Den for business (eact- a Volt - U. - Mat '=-i- a -ma, 000MUM-61-5- "M "Mame, the original date payment was due. THIS BOND is one of a series of Bonds dated August 1, 2014, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $5,350,000 FOR THE PURPOSE OF (1) PURPOSE OF PURCHASING THE CHISHOLM TRAIL SPECIAL UTILITY DISTRICT'S INTEREST IN THE LAKE GEORGETOWN TREATMENT PLANT AND (11) PAYING THE COSTS ASSOCIATED WITH THE ISSUANCE OF THE BONDS. GTOWN\LTRB\2014A: Ordinance B-2 ON AUGUST 15, 2024 OR ON ANY DATE THEREAFTER, the Bonds maturing on and after August 15, 2025 may be redeemed prior to their scheduled maturities, at the option of the City, with funds derived from any available and lawful source, at a redemption price equal to the principal amount to be redeemed plus accrued interest to the date fixed for redemption as a whole or from time to time in j2art. and. if in patt the 1 vio7ts t1tereof. to be 2articular Bonds,_qLiQo Ig It r! W. -T 4 NUU11 IIIUL- 1LJ M *C rUIUCCHIMI 1,111TOTIUCU LIM U PIOR1011 01 Ll DODU 111dj UU ICUUMHULL %MY multiples of $5,000 of principal amount). on the Registration Books maintained by the Paying Agent/Registrar on the day such notice of redemption is mailed. 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 which are to be so redeemed. If such written notice of redemption is mailed and if due -nrovi * n for such payment which 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 d te fixed for redenintiin, and thev 1"IM"k WgUXUCU US *U1Hg OUSLULIUMg 0AkX,#)L WE L11t;.r1g11L 01 L11C7j,eg1SLCR;U VITHUr LO rCCt;]VC j"'Gatg amount equ e unr eeme portion ereo , wi e issue to t e e stere 1 fwnner surrender thereof for cancellation, at the expense of the City, all as provided in the Bond Ordinance. UILM MWWWWC the princi al of and premium, if any and interest on the Bonds to be redeemed shall have been ip 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 City, 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 9' 1 Su 66A GTONMUR]352014A: Ordinance and bearing the same interest rate are to be redeemed, the particular Bonds of such maturity bearing such interest rate shall be selected in accordance with the arrangements between the Ci and the securities depository. 11 # M -a•• i. tlintre"14108 5xstere(cl M. 7 Tfuence LIIU assigi, Lucia 77 cut, other instruments of assignment satisfactory to the Paying Agent/Registrar may be used evidence the assignment of this Bond or any portion orportions hereof from time to time by t Registered Owner. The Paying Agent/Registrar's reasonable standard or customary fees charges for transferring and exchanging any Bond or portion thereof shall be paid byv the City, b cmAy taxes *r_Mvemmiezital charges re,�viret t* 4c lialt wit' k restect theretit shall_�c �,titAjy the *- requesting such assignment, transfer or exchange as a condition precedent to the exercise of su privilege. The Paying Agent/Registrar shall not be required to make any such transfer or exchan 'D IM 11, 0111111N.1 IN 1 10 IFUSPICUL LIF UIIj DUIILL Of ULIJ ff(ITLIUII LI wy�"TTIL1111 fLtrior to its redemption date-, provided, however, such limitation of transfer shall not be licab WHENEVER the beneficial ownership of this Bond is determined by a book entry at a securities depository for the Bonds, the foregoing requirements of holding, delivering or transferring this Bond shall be modified to require the appropriate person or entity to meet the -i-CjI4Sk*vy as -t* pvtme the same effect. Mrs M - IGUINSIM to be mailed to the Registered Owners of the Bonds. GTOWN\UPB\2014A: Ordinance B-4 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; that this Bond is a Ug e c i al ob I ig -ali t o f 6 e C ill an1J3r2tflrr--�1, mq�u WROGF-11 Me 0-10411 and secured by a lien on and pledge of the "Pledged Revenues" of the "System" (which is generally described as the City's combined electric, waterworks and sewer system), all as provided in the Bond Orf,inance. THE CITY also has reserved the right, subject to restrictions stated in the Ordinance, to •" .•' secured by a first lien on and pledge of, the Pledged Revenues of the System in the same manner and to the same extent as this series of Bonds. THE CITY also has reserved the night, subject to restrictions stated in the Bond Ordinance to issue Subordinate Lien Obligations payable from and equally and ratably secured, in whole or in part, by a lien on and pledge of the Net Revenues (as defined in the Bond Ordinance), subordinate and inferior in rank and dignity to the lien on and pledge of such Net Revenues securing payment of the Bonds, the Previously Issued Parity Obligations or any Additional Parity Obligations. THE OWNER HEREOF shall never have the right to demand payment of this Bond out of any funds raised or to be raised by taxation. i1sx, aw 72077"TIcs an oi Vie terins ana pirolisions UY Me Dom 10,ruiriance, agrees to oe o5unct oy su ternis and provisions, acknowledges that the Bond Ordinance is duly recorded and available inspection in the official minutes and records of the governing body of the City and agrees that t terms and provisions of this Bond and the Bond Ordinance constitute a contract between ea Registered Owner hereof and the City. IN WITNESS WHEREOF, the City has caused this Bond to be signed with the manu: or facsimile signature of the Mayor of the City, and countersigned with the manual or facsimi aignature of the CitfSecretary of the Cit,!p and the official seal of the has been dulp imyrAi or placed in facsimile, on this Bond. i City Secretary Mayor HEUMM GTOWN\LRB12014A: Ordinance B-5 COMPTROLLEWS REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Bond has been examined, certified as to • and approved • 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'S SEAL) Comptroller of Public Accounts of the State of Texas 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 -• certified that this Bond has been issued under the provisions • the Bond Ordinance described in the text of this Bond-, and that this Bond has been issued in exchange for a bond • bonds, • a portion of a bond or bonds of a series which • was approved • the •, General • the State • Texas and registered by the Comptroller • Public Accounts • the State of Texas. Dated: THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Paying Agent/Registrar LM mr-_ x GTOWN\M\2014A: Ordinance B-6 FOR VALUE RECEIVED, the undersigned Registered Owner of this Bond, or du]U, authorized representative or attorney thereof, hereby sells, assigns and transfers this Bond and rights hereunder I (Assignee's Social Security or (Please print or typewrite Assignee's name and addres Taxpayer Identification Number) including zip code) I and hereby irrevocably constitutes and appoints attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books with full power of substitution in the premises. Dated: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange a commercial bank • trust company. i NOTICE: The signature above must correspond with the name of the Registered Owner as it appears upon the front • this Bond in every • without alteration or •- or any change whatsoever. The initial Bond shall be in the form set forth in this Exhibit, except that: A. immediately under the name of the Bond, the headings "INTEREST RATE" and "MATURITY DATE" shall •• be completed with the words "As shown below" and t0CUSIP NO." shall be deleted. "ON THE MATURITY DATE SPECIFIED BELOW, the City of Georgetown, Tex. (the Tity"), being a political subdivision, hereby promises to pay to the Registered Ownn specified above, or registered assigns (hereinafter called the "Registered Owner"), on August in each of the years, in the principal installments and bearing interest at the per annum rates s 6orth in the following schedule Year Principal Rate (Information from Sections 3 and 4 to be inserted) GTOWUM2014k, Ordinance B-7 The City 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 the Date of Initial Delivery of the Bonds at the respective Interest Rate per annum specified above. Interest is payable on February 15, 2015 and semiannually on each August 15 and February 15 thereafter to the date of payment of the principal installment specified above- except, that if this Bond is required to be authenticated and the date f GTOWN\UU\2014A: Ordinance B-8 1 *114 a* I I: I" - The financial information and operating data with respect to the City to be provid(M annually in accordance with such Section are as specified (and included in the Appendix or und the headings of the Official Statement referred to) below- i 1 . The annual audited financial statements of the City of Georgetown, Texas or the unaudited financial statements of the City of Georgetown, Texas in the event audited financial statements are not completed within six months after the end of any Fiscal Year. 2. All quantitative financial information and operating data with respect to the City of t general type included in the Official Statement under Tables 1 through 11 and 13 and in Append I Accounting Principles The accounting principles - referred to in such Section are the accounting principil -iescribed in the notes to the financ I statements referred to i paragraph I above. la in GTOWN\URB\2014A: Ordinance C-