11-B-34 - Series 2011A General Obligation Refunding BondsFINAL
ORDINANCE NO. l.I-B-34
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS AUTHORIZING THE ISSUANCE OF "CITY OF
SCHERTZ, TEXAS GENERAL OBLIGATION REFUNDING FONDS,
SERIES 2011A", LEVYING AN ANNUAL AD VALOREM TAX, WITHIN
THE LIMITATIONS PRESCRIBED BY LAW, FOR THE PAYMENT OF
THE BONDS; PRESCRIBING THE FORM, TERMS, CONDITIONS, AND
RESOLVING OTHER MATTERS INCIDENT AND RELATED TO THE
ISSUANCE, SALE, AND DELIVERY OF THE BONDS; AUTHORIZING ~-
THE EXECUTION OF A PAYING AGENTIREGISTRAR AGREEMENT,
A PURCHASE AND INVESTMENT LETTER, AND AN ESCROW AND
TRUST AGREEMENT; COMPLYING WITH THE PROVISIONS OF THE
DEPOSITORY TRUST COMPANY'S LETTER OF REPRESENTATIONS;
AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City Council (the City Cotrnci~ of the City of Schertz, Texas {the City}
has heretofore issued, sold, and delivered, and there are currently outstanding obligations in the
aggregate original principal amount of $2,610,000 being the obligations set forth on Schedule I
hereto which is incorporated by reference for all purposes to this ordinance {the Refinded
Obligations}; and
WHEREAS, the City Council intends to issue an aggregate principal amount of
$6,295,000 in limited tax refunding bonds {the l3oncls), the proceeds of which will be utilized to
provide for the (i} refunding of the Refunded Obligations and (ii} payment of the costs of
issua~lce of the Bonds; and
WHEREAS, pursuant to the provisions of Chapter 1207, as amended, Texas Government
Cade {the Act), the City Council is authorized to issue refunding bands and deposit the proceeds
of sale under an escrow agreement to provide for the payment of the Refunded Obligations, and
such deposit, when made in accordance ~vith the Act, shall constitute the making of fine banking
and financial arrangements for the discharge and final payment of the Refua~ded Obligations; and
WHEREAS, the Act permits that die deposit of the proceeds from the sale of the
refianding bonds be deposited directly with any designated escrow agent which is not the
depository bank of the City; and
WHEREAS, when firm banking ai~angements have been made for the payment of
principal of and interest to the stated maturity or redemption dates of the Refunded Obligations,
then die Refunded Obligations shall no longer be regarded as outstanding except foc the purpose
of receivi~ig payment from the funds provided for such purpose and may not be included in or
considered to be an indebtedness of the City for the purpose of a limitation on outstanding
indebtedness or taxation (if appropriate) or for any other purpose; and
95304339.3
WHEREAS, Wells Fargo Bank, National Association, Dallas cun•ently serves as the
paying agent for the Refunded Obligations; and
WHEREAS, BOKF, NA dba Bank of Texas, Austin, Texas (which is not the depository
bank of the City) is hereby appointed as the Escrow Agent (hereinafter defined} for the Bonds;
and
WHEREAS, Compass Bank, Houston, Texas is hereby appointed as Paying
Agent/Registrar (hereafter defined} for the Bonds; and
WHEREAS, the City Council also hereby finds and determines that the Refunded
Obligations are scheduled to mature or are subject to being redeemed, not more than twenty (20}
years fiom the date of the refunding bonds herein authorized and being issued to restructure the
City's debt service and associated tax rates in the coming years, and such refunding will result in
a net present value savings of $505,543.18 (8.D30896%} and a gross savings of approximately
$593,798.75, including the City's contribution of $35,810.39; and
WHEREAS, the City Council hereby finds and determines that the issuance of the Bonds
is in the best interests of the citizens of the City, now, therefore,
THAT:
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS
SECTION 1: Authorization -Designation - Pr7ncipal Amount -Purpose. General
obligation refunding bands of the City shall be and are hereby authorized to be issued in the
aggregate principal amount of SIX MILLION SEVEN HUNDRED FORTY FIVE THOUSAND
AND NO/100 DOLLARS ($6,745,000}, to be designated and bear the title of "CITY OF
SCHERTZ, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2011A" (the
Borrcds}, for the purpose of providing funds far the {i) discharge and final payment of the
Refunded Obligations and (ii) payment of the costs of issuance of the Bonds, all in conformity
with the laws of the State of Texas, particularly Chapter 1207, as amended, Texas Govenunent
Code, the City's Home Rule Charter, and an ordinance adopted by the City Council on
November 1 S, 2411.
SECTION 2: Fully Registered Obligations - Authorized Denominations - Stated
Maturities -Interest Rates -Dated Date. The Bonds shall be issued as fully registered
obligations, without coupons, shall be dated December 1, 2011 (the Dated Dale), and shall be
issued in denominations of $100,000 or any integral multiple of $5,000 in excess thereof (within
a Stated Maturity) thereof, and the Bonds shall become due and payable on September 1 in each
of the years and in principal amounts (the Stated li~Iataa•ilies) and bear interest on the unpaid
principal amounts from the Closing Date, or from the most recent Interest Payment Date
{hereinafter defined) to which interest has been paid or duly provided for, to Stated Matw•ity, at
the per annwn rates, while Outstanding, in accordance with the following schedule:
Years of Principal Interest
Stated Maturity Amounts ($) Rates
2D 12 l 40,000 2.33
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Years of Principal Interest
Stated Maturity Amounts ($) Rates
2013 70,000 2.33
2014 615,000 2.33
201 S 610,000 2.33
2016 605,000 2.33
2017 620,000 2.33
2018 63 5,000 2.3 3
2019 485,000 2.33
2020 475,000 2.33
2021 485,000 2.33
2022 670,000 2.33
2023 675,000 2.33
2024 660,000 2.33
The Bonds shall bear interest on the unpaid principal amounts fiom the Closing Date, or
fiom the most recent Interest Payment Date to ~vhich interest has been paid or duly provided for,
to the earlier of redemption or Stated Maturity, while Outstanding, at the rates per am~um shown
in the above schedule (calculated on the basis of a 360-day year of twelve 30-day months).
Interest on the Bonds shall be payable on February 1 and August 1 in each year, commencing
February 1, 2012 {the Interest Pctynrent Date), while the Bonds are Outstanding.
SECTION 3: Payment of Bonds -Paying Agent/Registrar.
The principal of, premium, if any, and the interest on the Bonds, due and payable by
reason of Stated Maturity, redemption, or otherwise, shall be payable in any coin or currency of
the United States of America which at the time of payment is legal tender for the payment of
public and private debts, and such payment of principal of, premium, if any, and interest on the
Bonds shall be without exchange or collection charges to the Holder (as hereinafter defined) of
the Bonds.
The selection and appointment of Compass Bank, Houston, Texas (the Payi~rg
flgent/Registrm•) to serve as the initial Paying Ageut/Registrar for the Bonds is hereby approved
and confrmed, and the City agrees and covenants to cause to be kept and maintained at the
corporate trust office of the Paying Agent/Registrar books and records (the Secin•rly Registej•) for
the registration, payment, and transfer of the Bonds, all as provided herein, in accordance with
the terms and provisions of a Paying Agent/Registrar Agreement, attached, in substantially final
form, as Exhibit A hereto, and such reasonable rules and regulations as the Paying
Age~it/Registrar and the City may prescribe. The City covenants to maintain and provide a
Paying AgentlRegistrar at all times while the Bonds are Outstanding, and any successor Paying
Agent/Registrar shall be (i) a national or state banking institution or (ii) an association or a
corporation organized and doing business wider the laws of the United States of America or of
any state, authorized under such laws to exercise gust powers. Such Paying Agent/Registrar
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shall be subject to supervision or examination 6y federal or state authority and authorized by law
to serve as a Paying Agent/Registrar.
The City reserves the i7glrt to appoint a successor Paying AgentlRegistrar upon providing
the previous Paying Agent/Registrar with a cez-tified copy of a resolution or ordinance
terminating such agency. Additionally, the City agrees to promptly cause a written notice of this
substitution to be sent to each Holder of the Bonds by United States mail, first-class postage
prepaid, which notice shall also give the address of the new Paying AgentlRegishar.
Both principal of, premium, if any, and interest on the Bonds, due and payable by reason
of Stated Maturity, redemption, or otherwise, shall be payable only to the registered owner of the
Bonds appearing on the Security Register (the Holde~• or Holder's) maintained on behalf of the
City by the Paying Agent/Registrar as hereinafter provided (i} on the Record Date {hereinafter
defined) for purposes of payment of interest on the Bonds, (ii} on the date of surrender of the
Bonds for purposes of receiving payment of principal thereof at the Boards' Stated Maturity or
upon redemption of the Bonds, and (iii) on any other date for any other purpose. The City and
the Paying Agent/Registrar, and any agent of either, shall heat the Holder as the owner of a Bond
for purposes of receiving payment and all other purposes whatsoever, and neither the City nor
the Paying Agent/itegistrar, or any agent of Dither, shall be affected by notice to the contrary.
Principal of and premium, if any, on the Bonds shall be payable only upon presentation
and surrender of the Bonds to the Paying AgentlRegistrar at its corporate trust office. Interest on
the Bonds shall be paid to the Holder whose name appears in the Security Register at the close of
business on the fifteenth day of the month next preceding an Interest Payment Date for the Bonds
(the Record Date) and shall be paid (i) by check sent by United States mail, first-class postage
prepaid, by the Paying Agent/Registrar, to the address of the Holder appearing in the Security
Register or (ii) by such other method, acceptable to the Paying AgentlRegistrar, requested in
writing by the Holder at the Holder's risk and expense.
If the date for the payment of the principal of, premium, if any, or interest on the Bonds
shall be a Saturday, a Sunday, a legal holiday, or a day on which banking institutions ii} the city
where the corporate trust office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which
is not such a day. The payment on such date shall have the same force and effect as if made on
the original date any such payment on the Bonds was due.
In the event of anon-payment of interest on a scheduled payment date, and for thirty (30)
days thereafter, a new record date far such interest payment {a Special Reco~°d Date) will be
established by the Paying AgentlRegistrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (the Special Payl~rent Dare -which shall be fifteen (1S)
days after the Special Record Date) shall be sent at least five {S} business days prior to the
Special Record Date by United States mail, first-class postage prepaid, to the address of each
Holder of a Boiici appearing on the Security Register at the close of business on the last business
day next preceding the date of mailing of such notice.
95304839.3 -4-
SECTION 4: Redemption.
A. OUtional Redemption. The Bands having Stated Maturities on and after
February 1, 2022 shall be subject to redemption prior to Stated Maturity, at the option of the
City, an February 1, 2021, or on any date thereafter, in whole or in part, in principal amounts of
$5,000 or any integral multiple thereof (and if within a Stated Maturity selected at random and
by lot by the Paying Agent/Registrar) at the redemption price of par plus accrued interest to the
date of redemption.
B. Exercise of Redemption Option. At least forty-five {45) days prior to a date set
far the redemption of Bonds (unless a shorter notification period shall be satisfactory to the
Paying AgentlRegistr~ar), the City shall notify the Paying Agent/Registrar of its decision to
exercise the right to redeem Bonds, the principal amount of each Stated Maturity to be redeemed,
and the date set for the redemption thereof. The decision of the City to exercise the right to
redeem Bonds shall be entered in the minutes of the governing body of the City.
C. Selection of Bonds for Redemption. If less than all Outstanding Bonds of the
same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall
select at random and 6y lot the Bonds to be redeemed, provided that if less than the entire
principal amount of a Bond is to be redeemed, the Paying Agent/Registrar shall treat such Bond
then subject to redemption as representing the number of Bonds Outstanding which is obtained
by dividing the principal amount of such Bond by $5,000.
D. Notice of Redemption. Not less than thirty {30) days prior to a redemption date
for the Bonds, a notice of redemption shall be sent by United States mail, first-class postage
prepaid, in the name of the City and at the City's expense, by the Paying Agent/Registrar to each
Holder of a Bond to be redeemed, in whole or in part, at the address of the Holder appearing on
the Security Register at the close of business on the business day next preceding the date of
mailing such notice, and any notice of redcrnption so mailed shall be conclusively presumed to
have beers duly given irrespective of whether received by the Holder.
All rlohces of redemption shall (i) specify the date of redemption for the Bonds,
{ii.} identify the Bonds to 6o redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii} state the redemption price, (iv) state
that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due
and payable on the redemption date specified, and the interest thereon, or on the portion of the
principal amount thereof to be redeemed, shall cease to accrue from and after the redemption
date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount
thereof to 6e redeemed, shall be made at the corporate trust office of the Paying Agent/Registrar
only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to
redemption and has been called far redemption and notice of redemption thereof has been duly
given or waived as heroin provided, such Bond (or the principal amount thereof to be redeemed)
so callod for redemption shall become due and payable, and if money sufficient for the payrrrent
of such Bonds {or' of the principal amount thereof to be redeemed) at the then applicable
redemption price is held for the purpose of such payment 6y the Paying Agent/Registrar, then on
the redemption date designated in such notice, interest on said Bonds {or the principal amount
thereof to be redeemed) called for redemption shall cease to acer•ue, and such Bonds shall not be
95304839.3 -5-
deemed to be Outstanding in accordance with the provisions of this Ordinance. This notice may
also be published once in a financial publication, journal, or rcporter of general circulation
among securities dealers in the City of New York, New York {including, but not limited to, The
Boyd Bcrye3• and The YYall St-•eet Journal), or in the State of Texas {including, but not limited to,
The Texas Borarl Reporter). Additionally, this notice may also be sent by the City to any
registered securities depository and to any national information service that disseminates
redemption notices.
E. TransferBxchan e of Bonds. Neither the City nor the Paying Agent/Registrar
shall be required to transfer or exchange any Bond during a period begizuling forty-five {45) days
prior to the date fixed for redemption of the Bonds or to transfer or exchange any Bond selected
for redemption; provided, however, such limitation of transfer shall not be applicable to an
exchange by the Holder of the unredeemed balance of a Bond which is subject to redemption in
part.
SECTION 5: Execution - Re~istratian. The Bonds shall be executed on behalf of the
City by its Mayor under the seal of the City reproduced or impressed thereon and attested by its
City Secretary. The signature of any of said officers on the Bonds may be manual or facsimile.
Bonds bearing the manual or facsimile signatures of individuals who were, at the time of the
Dated Date, the proper officers of the City shall bind the City, notwithstanding that such
individuals or either of them shall cease to hold such offices prior to the delivery of the Bonds to
the Purchasers (hereinafter defined), all as authorized and provided in Chapter 1201, as amended,
Texas Goverzunent Code.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatozy for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section SC, executed by the Comptroller of Public
Accounts of the State of Texas or his duly authorized agent by manual signature, or a certificate
of registration substantially in the form provided in Section SD, executed by the Paying
Agent/Registrar by manual signature, and either such certificate upon any Bond shall be
conclusive evidence, and the only evidence, that such Bond has been duly certified or registered
and delivered.
SECTION 6: Re istration -Transfer - Exchan e of Bonds -Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the naive and
address of every owner of the Bonds, or, if appropriate, the nominee thereof. Any Bond may, in
accordance with its terms and the terms hereof, be transferred or exchanged for Bands of other
authorized denominations upon the Security Register by the Holder, in person or by his duly
authorized agent, upon surrender of such Bond to the Paying Ageut/Registrar for cancellation,
accompanied by a ~vritten instrument of transfer or request for exchange duly executed by the
Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar.
Upon surrender for transfer of any Bond at the corporate trust office of the Paying
Agent/Registrar, the City shall execute and the Paying Agent/Registrar shall register and deliver,
in the name of the designated transferee or transferees, ane or more new Bonds of authorized
denomination and having the same Stated Maturity or its redemption, in whale or in pant, and of
alike interest rate and aggregate principal amount as the Bond or Bonds surz-eztdered for transfer.
95344339.3 -6-
At the option of the Holder, Bolds may be exchanged for other Bonds of authorized
denominations and having the same Stated Maturity, bearing the same rate of interest and of like
aggregate principal amount as the Bonds surrendered for exchange upon sunende~• of the Bonds
to be exchanged at the corporate trust office of the Paying Agent/Registrar. Whenever any
Bonds are so surrendered for exchange, the City shall execute, and the Paying Agent/Registrar
shall register and deliver, the Bonds to the Holder requesting the exchange.
All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the
corporate trust office of the Paying Agent/Registrar, or be sent by registered mail to the Holder at
his request, risk, and expense, and upon the delivery thereof, the same shall be the valid and
binding obligations of the City, evidencing the same obligation to pay, and entitled to the same
benefits wider this Ordinance, as the Bands surrendered upon such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that the
Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange
of any tax or other governmea~tal charges required to be paid with respect to such transfer or
exchange.
Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereof are
hereby defined to be Predecessor Bonds, evidencing all or a portion, as the case maybe, of the
same debt evidenced by the new Bond or Bands registered and delivered in the exchange or
transfer therefor. Additionally, the terjn Predecessor Bonds shall include any Bond registered
and delivered pursuant to Section i7 in lieu of a mutilated, lost, destroyed, or stolen Bond which
shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond.
SECTION 7: Initial Bonds. The Bonds herein authorized shall be initially issued as a
single fully registered Bond in the aggregate principal amount of $6,745,000 with principal
installments to become due and payable as provided in Section 2 hereof and numbered T-l (the
Ir~itia! Borr.ds), and the Initial Bonds shall be registered in the name of the Purchasers or the
designee thereof. The Initial Bonds shall be the Bonds submitted to the Office of the Attorney
General of the State of Texas for approval, certified and registered 6y the Office of the
Comptroller of Public Accowits of the State of Texas and delivered to the Pw•chasers. Any time
after the delivery of the Initial Bonds, the Paying Agent/Registrar, pursuant to written
instructions fiom the Purchasers, or the designee thereof, shall cancel the Initial Bonds delivered
hereunder and exchange therefor definitive Bonds of like kind and of authorized denominations,
Stated Maturities, principal amounts Dearing applicable interest rates, and shall be lettered "R"
and numbered consecutively fiom one (1) upward for transfer and delivery to the Holders Tamed
at the addresses identified therefor; all pursuant to and in accordance with such written
instructions fiom the Purchasers, or the designee thereof, and such other infoiniation and
documentation as the Paying Ageirt/Registrar may reasonably require.
SECTION 8: FORMS.
A. Forms Generally. The Bonds, the Regish•ation Certificate of Comptroller of
Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar,
and the form of Assigiunent to be printed on each of the Bonds shall be substantially in the forms
9530~i839.3 -7-
set forth in this Section with such appropriate insertions, omissions, substitutions, and other
variations as are permitted or required by this Ordinance and may have such letters, numbers, or
other marks of identification (including insurance legends in the event the Bonds, or any Stated
Maturities thereof, are insured and identifying numbers and letters of the Committee on Uniform
Securities Identification Procedures of the American Bankers Association) and such legends and
endorsements (including auy reproduction of an opinion of counsel) thereon as may, consistent
herewith, be established by the City or determined by the officers executing the Bonds as
evidenced by their execution thereof. Any portion of the text of any Band may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the Bond.
The definitive Bonds shall be printed, lithographed, or engraved, produced by any
combination of these methods, or produced in any other similar mamier, all as determined by the
officers executing the Bands as evidenced by their execution thereof, but tl~e Initial Bonds}
submitted to the Attorney General of Texas rmay be typewritten or photocopied or otherwise
reproduced.
~Tlre r•er~aai3zdei- of this page intentionally left blank.]
95344839.3 '~'
B. Form of Definitive Bond.
REGISTERED
REGISTERED PRINCIPAL AMOUNT
NO. ~
United States of America
State of Texas
Counties of Guadalupe, Corral, and Bexar
CITY OF SCHERTZ, TEXAS
GENERAL OBLIGATION REFUNDING BONDS,
SERIES 201 ] A
Dated Date: Interest Rate: Stated Maturity: CUSIP NO:
December 1, 2011
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The City of Schertz, Texas {the Ciry}, a body corporate and a municipal corporation in
the Counties of Guadalupe, Corral, and Bexar, State of Texas, for value received, acknowledges
itself indebted to and hereby promises to pay to the order of the Registered Owner specified
above, or the registered assigns thereof, on the Stated Maturity date specified above (or so much
thereof as shall not have been paid upon prior redemption), the Principal Amount specified
above and to pay interest on tl~e unpaid Principal Amount hereof from the Closing Date
(anticipated to occur on o~• about December 15, 2011) or from the most recent interest payment
date to which interest has been paid or duly provided for until such Principal Amount has
become due and payment thereof has been made or duly provided far, to the earlier of
redemption or Stated Maturity, while Outstanding, at the per annum rate of interest specified
above computed on the basis of a 360-day year of rivelve 30-day months; such interest being
payable ou February 1 and August 1 of each year, commencing February 1, 2012.
Principal on this Bond shall be payable ro the Registered Owner hereof (the Holder),
upon presentation and surrender at the corporate trust office of the Paying Agent/Registrar
executing the registration certificate appearing hereon or a successor thereof. Interest shall be
payable to the Holder of this Band (or one or snore Predecessor Bonds, as defined iu the
Ordinance hereinafter referenced) whose name appears on the Security Register maintained by
the Paying AgentlRegistrar at the close of business on the Record Date, which is the fifteenth
day of the month next preceding each interest payment date. A11 payments of principal of, and
interest on this Bond shall be in any coin or currency of the United States of America which at
the time of payment is legal tender for the payment of public and private debts. Interest shall be
paid by the Paying Agent/Registrar by check sent on or prior to the appropriate date of payment
by United States mail, first-class postage prcpaicl, to the Holder hereof at the address appearing
in the Security Register or by such other method, acceptable to the Paying AgentlRegistrar,
requested by the Holder hereof at the Holder's risk and expense.
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This Bond is one of the series specified in its title issued in the aggregate principal
amount of $b,7~5,000 {the Bonds) pursuant to an ordinance adopted by the governing body of
the City (the Ordinance}, for the purpose of providing funds for the {i) discharge and final
payment of the Refunded Obligations and {ii} payment of the costs of issuance of the general
obligation refunding bonds, under and in strict conformity with the laws of the State of Texas,
including Chapter 1207, as amended, Texas Government Code and the City's Home Rule
Charter.
As specified in the Ordinance, the Bonds having Stated Maturities on and after
February 1, 2022 shall be subject to redemption prior to Stated Maturity, at the option of the
City, on February 1, 2021, or on any date thereafter, in whole or in part in principal amounts of
$5,000 or any integral multiple thereof {and if within a Stated Maturity selected at random and
by lot by the Paying Agent/Registrar) at the redemption price of par, together with accrued
interest to the date of redemption, and upon thirty (30} days prior written notice being given by
United States mail, first-class postage prepaid, to the Holders of the Bonds to be redeemed, and
subject to the terms and provisions a~elating thereto contained in the Ordinance.
If this Bond is subject to redemption prior to Stated Maturity and is in a denomination in
excess of $5,000, portions of the principal Burn hereof in installments of $5,000 or any integral
multiple thereof may be redeemed, and, if less than all of the principal sum hereof is to be
redeemed, there shall be issued, without charge therefor, to the Holder hereof, upon the swrender
of this Bond to the Paying Agent/Registrar at its corporate gust office, a new Bond or Bonds of
like Stated Maturity, and interest rate in any authorized denominations provided in the Ordinance
for the then unredeemed balance of the principal sum hereof.
If this Bond (or any portion of the principal sum hereof) shall have been duly called for
redemption and notice of such redemption has been duly given, tl~en upon such redemption date
this Bond (or the portion of the principal sum hereof to be redeemed) shall become due and
payable, and, if money for the payment of the redemption price and the interest accrued on the
principal amount to be redeemed to the date of redemption is held for the purpose of such
payment by the Paying Agent/Registrar, interest shall cease to accrue and be payable hereon
from and after the redemption date on the principal amount hereof to be redeemed. If this Bond
is called for redemption, in whole or in part, the City or the Paying Agent/Registrar shall not be
required to issue, transfer, or exchange this Band within forty-five (45} days of the date fixed for
redemption; provided, however, such limitation of transfer shall not be applicable to an exchange
by the Holder of the mrredeemed balance hereof in the event of its redemption in part.
The Bonds of this series are payable from the proceeds of an annual ad valorem tax
levied upon all taxable property within the City within the limitations prescribed bylaw.
Reference is hereby made to the Ordinance, a copy of which is on file in the corporate
tt~ast office of 8ie Paying Agent/Registrar, a~~d to all of the provisions of which the Holder by his
acceptance hereof hereby assents, for definitions of terms; the description of and the nature and
extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the
transfer or exchange of the Bonds; the conditions upon which the Ordinance maybe amended or
supplemented with or without the consent of the Holders; the rights, duties, and obligations of
the City and the Paying Agent/Registrar; the teiYns and provisions upon which this Bond maybe
95301839.3 -~ 0-
redeemed or discharged at or prior to the Stated Maturity thereof, and deemed to be no longer
Outstanding thereunder; and for the other terms and provisions specified in the Ordinance.
Capitalized terms used herein have the same meanings assigned in the Ordinance.
This Bond, sub}ect to certain limitations contained in the Ordinance, may be transfei7•ed
on the Security Register upon presentation and surrender at the corporate trust office of the
Paying Agent/Registrar, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Paying Agent/Registrar duly executed by the Holder hereof, or his duly
authorized agent, and thereupon one or more new fially registered Bonds of the same Stated
Maturity, or its redemption, in whole or in part, of authorized denominations, bearing the same
rate of interest, and of the same aggregate principal amount will be issued to the designated
transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, shall treat the Holder
hereof whose name appears on the Security Register {i) on the Record Date as the owner hereof
for purposes of receiving payment of interest hereon, {ii} on the date of sui7-eixier of this Bond as
the owner hereof for purposes of receiving payment of principal hereof at its Stated Maturity or
its redemption, in whole or in past, and (iii) on any other date as the owner hereof for all other
purposes, and neither the City nor the Paying Agent/Registrar, or any such agent of either, shall
be affected by notice to the contrary. hi the event of anon-payment of interest on a scheduled
payment date, and for thirty (30} days thereafter, a new record date for such interest payment (a
Special Record Date) will be established by the Paying Agent/Registrar, if and when funds for
the payment of such interest have been received fio~n the City. Notice of the Special Record
Date and of the scheduled payment date of the past due interest {the Special Paynae~~t Date -
which shall be fifteen (l S) days after the Special Record Date) shall be sent at least five (5)
business days prior to the Special Record Date by United States mail, first-class postage prepaid,
to the address of each Holder appearing on the Security Register at flee close of business on the
last business day next preceding the date of mailing of such notice.
It is hereby certified, covenanted, and represented that all acts, conditions, and things
required to be performed, exist, and be done precedent to the issuance of this Bond in order to
render the same a legal, valid, and binding obligation of the City have been performed, exist, and
have been done, in regular and due time, form, and mamier, as required by law, and that issuance
of the Bonds does not exceed any constitutional or statutory limitation; and that due provision
has been made for the payment of the principal of, premium if any, and interest on the Bonds by
the levy of a tax as aforestated. In case any provision in this Bond or any application thereof
shall be deemed invalid, illegal, or unenforceable, the validity, legality, and enforceability of the
remaining provisions and applications shall not in any way be affected or impaired tl~creby. The
terms and provisions of this Bond and the Ordinance shall be construed in accordance with and
shall be governed by the laws of the State of Texas.
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95304839.3 -1 1-
IN WITNESS WHEREOF, the City has caused this Bond to be duly executed under its
official seal.
CITY OF SCHERTZ, TEXAS
Mayor
ATTEST:
City Secretary
(CITY SEAL)
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95304839.3 _ ] 2..
C. ~`Fonn of Re istration Certificate of Com troller of Public Accounts to A eaa~ on
Initial Bonds Only
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER OF
PUBLIC ACCOUNTS
REGISTER NO.
THE STATE OF TEXAS
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the AttoiYiey General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
{SEAL)
'NOTE TO PRINTER: DO NOT PRINT ON DEFINITIVE BONDS.
D. *Form of Certificate of Pa in A ent/Re istrar to A ear on Definitive Bonds
Only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Band has been duly issued under the provisions of the within-mentioned Ordinance;
the Bond or Bonds of the above-entitled and designated series originally delivered having been
approved by the Attorney General of the State of Texas and registered by the Comptroller of
Public Accounts, as shown by the records of the Paying Agent/Registrar.
Registered this date: COMPASS BANK, an Alabama State-
chartered bank, Houston, Texas, as Paying
Agent/Registrar
By:
Authorized Signature
XNOTE TO PRINTER: PRINT ON DEFINITIVE BONDS.
953Q4$39.3 -I 3-
E. Forin of Assi mg Went.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
{Print or typewrite name, address, and zip code of transferee):
(Social Security or other identifying number}:
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration
thereof, with full power of substitution in the premises.
DATED:
NOTICE: The signature on this assigiunent must
correspond with the name of the registered owner as it
appears on the face of the within Bond in every particular.
Signature guaranteed:
F. Tlie Initial Bonds shall be in the respective forms set forth in paragraph B of this
Section exce t that the form of a sin le full re istered Initial Bond shall be modified as
follows:
(i} immediately under the name of the Bond(s) the headings "Interest Rate"
and "Stated Maturity" shall both be completed "as shown below";
(ii} the first two paragraphs shall read as follows:
Registered Owner:
Principal Amount:
The City of Schertz, Texas (the City}, a body corporate and municipal corporation i~} the
Counties of Guadalupe, Corral, and Bexar, State of Texas, for value received, acknowledges
itself indebted to and hereby promises to pay to the order of the Registered Owner named above,
or the registered assigns thereof, the Principal Amount specified above on the first day of
February in each of the years and in principal amounts and bearing interest at per annum rates in
accordance with the following schedule:
95344339.3 -1 q--
Years of Principal Interest
Stated Maturity Amounts {$) Rates
(hifoi7nation to be inserted from
schedule in Section 2 hereof).
(or as much thereof shall not have been paid upon prior redemption) and to pay interest on the
unpaid Principal Amount hereof fiom the Closing Date (anticipated to occur on or about
December 1S, 2011}, or fiom the most recent interest payment date to which interest has been
paid or duly provided for until the Principal Amount has become due and payment thereof has
been made or duly provided for, at the per aimum rates of interest specified above computed on
the basis of a 360-day year of twelve 30-day months; such interest being payable on February 1
and August 1 of each year, conunencing February 1, 2012.
Principal of this Bond shall be payable to the Registered Owner hereof (the Hol~e1'),
upon its presentation and surrender, at the corporate trust office of Compass Bank, Houston,
Texas (the Paying AgentllZegistl•a~•). hiterest shall be payable to the Holder of this Bond whose
name appears on the Security Register maintained by the Paying Agent/Regista~ar at the close of
business on the Record Date, which is the fifteenth day of the month next preceding each interest
payment date. All payments of principal of and interest on this Bond shall be in any coin or
cuiiency of the United States of America which at the time of payment is legal tender for the
payment of public and private debts. Interest shall be paid by the Paying Agent/Registrar by
check sent on or prior to the appropriate date of payment by United States mail, first-class
postage prepaid, to the Holder hereof at the address appearing in the Security Register ar by such
other method, acceptable to the Paying AgentlRegistrar, requested by, and at the risk and
expense of, the Holder hereof.
G. Insurance Legend. If bond insurance is obtained by the City or the Purchasers for
the Bonds, the Definitive Bonds and the Initial Bonds shall bear a~~ appropriate legend as
provided by the insurer.
SECTION 9: Definitions. For all pui~oses of this Ordinance (as defined below), except
as otherwise expressly provided or unless the context otherwise requires: (i) the terms defined in
this Section have the meanings assigned to them in this Section, and certain terms used in
Sections 21 and 38 of this Ordinance have the meanings assigned to them in such Sections, and
all such terms include the plural as well as the singular; (ii) all references in this Ordinance to
designated "Sections" and other subdivisions are to the designated Sections and other
subdivisions of this Ordinance as originally adopted; and (iii) the words "herein", "hereof', and
"hereunder" and other words of similar import refer to this Ordinance as a whole and not to any
particular Section or otl~er subdivision.
A. The terjn Autltol•ized Officials shall mean the Mayor, City Manager, Director of
Finance, and/or City Secretary.
B. The teen Bond Frrrzd shall mean the special Fund created and established by the
provisions of Section l 0 of this Ordinance.
95344339.3 -15 -
C. The term Bo~ids shall mean the X6,745,000 "CITY OF SCHERTZ, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2011A" authorized by this
Ordinance.
D. The tei7n City shall mean City of Schertz, located in the Counties of Guadalupe,
Corral, and Bexar, Texas and, where appropriate, the City Council of the City.
E. The term CJosif~g Dare shall mean the date of physical delivery of the Initial
Bonds in exchange for the payment in full by the Purchasers.
F. The term Debt Service Regarirenaerits shall mean, as of any particular date of
computation, with respect to any obligations and with respect to any period, the aggregate of the
amounts to be paid or set aside by the City as of such date or in such period far the payment of
the principal of, premium, if any, and interest (to the extent not capitalized) on such obligations;
assuming, in the case of obligations without a fixed numerical rate, that such obligations bear
interest at the maximum rate pei7nitted by the terms thereof and further assuming in the case of
obligations required to be redeemed or prepaid as to principal prior to Stated Maturity, the
principal amounts thereof will be redeemed prior to Stated Maturity in accordance with the
mandatory redemption provisions applicable thereto.
G. The term Depository shall mean an official depository bank of the City.
H. The teen Governj~re~it Securities, as used herein, shall mean (i) direct noncallable
obligations of the United States, including obligations that are unconditionally guaranteed by, the
United States of America; (ii) noncallable obligations of an agency or instrumentality of the
United States, including obligations that are unconditionally guaranteed or insured by the agency
or insti~zmentality and that, on the date the governing body of the issuer adopts or approves the
proceedings authorizing the issuance of refunding bonds, are rated as to inveshnent quality by a
nationally recognized investment rating firm not less than AAA or its equivalent;
(iii) noncallable obligations of a state or au agency or a county, municipality, or other political
subdivision of a state that have been refunded and that, on the date the govenning body of the
issuer adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated
as to investment quality by a nationally recognized investment rating firm not less than AAA or
its equivalent, or (iv) any additional securities and obligations hereafter authorized by the laws of
the State of Texas as eligible for use to accomplish the discharge of obligations such as the
Bands.
I. The term Holder or Holders shall mean the registered owner, whose name
appears in the Security Register, for any Bond.
J. The term I-iteresl Paynrefit Date shall mean the date interest is payable ou the
Bonds, being February 1 and August 1 of each year, commencing February 1, 2012, while any of
the Bonds remain Outstanding.
K. The teiYn Oj-dinarrce shall mean this ordinance adopted by the City Council of the
City on November 15, 2011.
95344839.3 -16-
L. The term Orrtstafr.dirrg when used in this Ordinance with respect to Bonds shall
mean, as of the date of determination, all Bonds issued and delivered under fl~is Ordinance,
except:
(1) those Bonds canceled by the Paying AgentlRegistrar or delivered to the
Paying Agent/Registrar for cancellation;
(2) those Bonds for which payment has been duly provided by the City in
accordance with the provisions of Section 23 of this Ordinance; and
(3) those Bonds that have been mutilated, destroyed, lost, or stolen and
replacement Bonds have been registered and delivered in lieu thereof as provided in
Section 17 of this Ordinance.
M. The term Prrrclraser•s shall mean the initial purchasers of the Bonds named in
Section 18 of this Ordinance.
N. The term Stated Mcctar3•ity shall mean the annual principal payments of the Bonds
payable on February 1 of each year, as set forth in Sectio~~ 2 of this Ordinance.
SECTION 10: Bond Fmid; Investments. Far the purpose of paying the interest on and to
provide a sinking fiand for the payment, redemption, and retirement of the Bonds, there shall 6e
and is hereby created a special fund to be designated "GENERAL OBLIGATION REFUNDING
BONDS, SERIES 2011A INTEREST AND SINKING FUND" (the Bond Fund), which Fund
shall be kept and maintained at the Depository, and money deposited iji such Fund shall be used
for no other purpose and shall be maintained as provided in Section 21. Authorized Officials of
the City are hereby authorized and directed to make withdrawals from the Bond Fund sufficient
to pay the principal of, premium, if any, and interest on the Bonds as the same become due and
payable and shall cause to be transfen-ed to the Paying Agent/Registrar from money on deposit in
the Bond Fund an amount sufficient to pay the amount of principal and/or interest stated to
mature on the Bonds, such transfer of funds to the Paying Agent/Itegistrar to be made in such
manner as will cause innnediately available funds to be deposited with the Paying
Agent/Registrar on or before the business day next preceding each interest and principal payment
date for the Bonds.
Pending the transfer of funds to the Paying Agent/Registrar, money in any fund created
and established by this Ordinance, at the option of the City, may be placed in time deposits,
certificates of deposit, guaranteed investment contracts, or similar contractual agreements as
permitted by the provisions of the Public Funds Investment Act, as amended, Chapter 2256,
Texas Govei~unent Code, secured (to the extent not insured by the Federal Deposit Insurance
Corporation) by obligations of the type hereinafter described, or be invested, as authorized by
any law, including investments held in book-entry form, in securities including, but not limited
to, direct obligations of the United States of America, obligations guaranteed or insured by the
United States of Amea~ica, which, in the opinion of the Attorney General of the United States, are
backed by its full faith and credit or represent its general obligations, or invested in indirect
obligations of the U~~ited States of America, including, but not limited to, evidences of
indebtedness issued, insured or guaranteed by such governmental agencies as the Federal Land
953043393 -17-
Banks, Federal Intei-~nediate Credit Banks, Banks for Cooperatives, Federal Hame Loan Banks,
Govei-~iment National Mortgage Association, Faianers Home Administration, Federal Hame
Loan Mortgage Association, Small Business Administration, or Federal Housing Association;
provided that all such deposits and investments shall 6e made in such a manner that the money
required to be expended from such fund will be available at the proper time or times. All interest
and income derived from deposits and investments in such Fund shall be credited to, and any
losses debited ta, such fund. All such investments shall Ue sold promptly when necessary to
prevent any default in connection with the Bonds.
SECTION 11: Tax Levy. To provide for the payment of the Debt Service Requirements
on the Bonds being {i) the interthe interest on the Bonds and (ii} a sinking fund for their redemption at
Stated Maturity or a sinking fund of 2% (whichever amount shall be the greater), there shall be
and tliea~e is hereby levied for the current year and each succeeding year thereafter while the
Bonds or any interest thereon shall remain Outstanding, a sufficient tax, within the limitations
prescribed by law, on each one hundred dollars' valuation of taxable property in the City,
adequate to pay such Debt Service Requirements, full allowance being made for delinquencies
and costs of collection; said tax shall be assessed and collected each year and applied to the
payment of the Debt Service Requirements, and the same shall not be diverted to any other
purpose. The taxes so levied and collected shall be paid into the Bond Fund and are thereafter
pledged to the payment of the Bonds. The City Council hereby declares its purpose and intent to
provide and levy a tax legally and fully sufficient to pay such Debt Service Requirements, it
having been determined that the existing and available taxing authority of the City for such
purpose is adequate to peiYnit a legally sufficient tax in consideration of all other outstanding
indebtedness and other obligations of the City.
SECTION 12: Deposits to Bond Fund; Surplus Bond Proceeds. The City hereby
covenants and agrees to cause to be deposited in the Bond Fund prior to a principal and interest
payment date for the Bonds, from the annual levy of an ad valorem tax or fiom other lawfully
available funds, amounts sufficient to fully pay and discharge promptly each installment of
interest and principal of tl~e Bonds as the same accrues or matures or comes due by reason of
Stated Maturity.
Accrued interest received from the Purchasers of the Bonds, along with any taxes
collected (if applicable) pertaining to the Refunded Obligations, after the Closing Date, shall be
deposited to the Bond Fund. In addition, any surplus proceeds from the sale of the Bonds,
including investment income thereon, not expended for authorized purposes shall be deposited in
the Bond Fund, and such amounts so deposited shall reduce the sums otherwise required to be
deposited in said Fund from ad valorem taxes.
SECTION 13: Security of Funds. All money on deposit in the Funds for which this
Ordinance makes provision {except any portion thereof as may be at any time properly invested
as provided herein) shall 6e secured in the manner and to the fullest extent required by the laws
of the State of Texas for the security of public funds, and money an deposit in such Funds shall
be used only for the purposes peYYnitted by this Ordinance.
SECTION 14: Remedies in Event of Default. In addition to all the rights and remedies
provided by the laws of the State of Texas, the City covenants and agrees particularly that in the
95344339.3 -1 g-
event the City (a) defaults in the payments to be made to the Bond Fwid or (b) defaults in the
obsezvaz~ce or performance of any other of the covenants, conditions, or obligations set forth in
this Ordinance, the Holders of any of the Bonds shall be entitled to seek a writ of mandamus
issued by a court of proper jurisdiction compelling and requiring the governing body of the City
and other officers of the City to obsezve and perform any covenant, condition, or obligation
prescribed in this Ordinance.
No delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power or shall be cozistz-ued to 6e a waiver of any such default or
acquiescence therein, and every such right and power may be exercised from time to time and as
often as maybe deemed expedient. The specific remedies herein provided shall be cumulative of
all other existing remedies and the specification of such remedies shall not be deemed to be
exclusive,
SECTION 15: Notices to Holders- Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States mail, first-class postage prepaid, to
the address of each Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect izt any notice so mailed, shalt affect the
sufficiency of such notice with respect to all other Holders. Where this Ordinance provides for
notice in any mazuzer, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION If; Cancellation. All Bonds surrendered fez- payment, redemption, transfer,
exchange, or replacement, if surrendered to the Paying Agezzt/Registrar, shall be promptly
canceled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar
and, if not already canceled, shall be promptly canceled by the Paying Agent/Regish•ar. The City
may at any tune deliver to the Paying Agent/Registrar for cancellation any Bonds previously
certified or registered and delivered which the City may have acquired in any manner
whatsoever, and all Bonds so delivered shall be promptly canceled by the Paying
Agent/Registrar. All canceled Bonds held by the Paying Agent/Registrar shall be destroyed as
directed by the City.
SECTION 17: Mutilated, Destroyed, Lost, and Stolen Bonds. If (1 }any mutilated Bond
is surrendered to the Paying Agent/Registrar, or the City and the Paying Agent/Registrar receive
evidence to their satisfaction of the destruction, loss, or theft of any Bond, and (2) there is
delivered to the City and the Paying Agent/Registrar such security or indemnity as may be
required to save each of them harmless, then, in the absence of notice to the City or the Paying
Agent/Registrar that such Bond has been acquired by a bona fide purchaser, the City shall
execute and, upon its request, the Paying Agent/Registrar shall register and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost, or stolen Bond, a new Band of the same
95304839.3 -1 ~-
Stated Maturity and interest rate and of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
Li case any such mutilated, destroyed, lost, or stolen Bond has become or is about to
become due and payable, the City i~~ its discretion may, instead of issuing a new Bond, pay such
Bond.
Upon the issuance of any new Band or payment in lieu thereof, under this Section, the
City may require payment by the Holder of a sum sufficient to cover any tax or other
governmental charge imposed in relation thereto and any other expenses and charges (including
attorney's fees and the fees and expenses of the Paying AgentlRegistrar) comiected therewith.
Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost,
or stolen Bond shall constitute a replacement of the prior obligation of the City, whether or not
the mutilated, destroyed, lost, or stolen Bond shall Ue at any time enforceable by anyone, and
shall be entitled to all the benefits of this Ordinance equally and ratably with all other
Outstanding Bonds.
The provisions of this Section are exclusive and shall preclude (to the extent lawfial) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost, or stolen Bonds.
SECTION 18: Sale of Bonds Authorization of Purchase Contract. The Bonds
authorized by this Ordinance are hereby sold by the City to Compass Mortgage Corporation, an
Alabama Corporation, Houston, Texas (the Ptr,•claase~s, having all the rights, benefits, and
obligations of a Holder), in accordance with the provisions of a Purchase and Investment Letter
(the P,r,•chase Co,rtracd}, dated November 1 S, 2011, attached hereto as Exhibit B and
incorporated herein by reference as a part of this Order for all purposes. The Initial Bonds shall
be registered in the name of Compass Mortgage Corporation. The pricing and teens of the sale
of the Bonds is hereby found and determined to be the most advantageous reasonably obtainable
by the City. The Mayor or City Manager is hereby authorized and directed to execute the
Purchase Contract for and on behalf of the City and as the act and deed of this City Council, and
in regard ro the approval and execution of the Purchase Contract, the City Council hereby finds,
determines and declares that the representations, warranties, and agreements of the City
contained in the Purchase Contract are ti-oe and correct in all material respects and shall be
honored and performed by the City. Delivery of the Bonds to the Purchasers shall occur as soon
as practicable after the adoption of this Ordinance, upon payment therefor in accordance with the
terms of the Purchase Contract.
SECTION I9: Escrow and Trust Agreement Approval and Execution; Proceeds of Sale;
Contribution b Cit The Escrow and Trust Agreement dated as of November 15, 20I 1 to be
effective upon the initial delivery of the Bonds to the Purcl~asers {the Ag,•ee„~e,2t} between the
City and BOKF, NA dba Bank of Texas, Austin, Texas (the Escrow Agent), attached hereto as
Exhibit C and incorporated herein by reference as a part of this Ordinance for all purposes, is
l~ea~eby approved as to foi7n and content, and such Agreement in substantially the foiYn and
substance attached hereto, together with such changes or revisions as may be necessary to
accomplish the refunding or benefit the City, is hereby authorized to be executed by the Mayor
95304839.3 -20-
and City Secretary and on behalf of the City and as the act and deed of this City Council; and
such Agreement as executed by said officials shall be deemed approved by the City Council and
constitute the Agreement herein approved.
Fucthei7nore, the Mayor, City Manager, Director of Finance, City Attorney, or City
Secretary, or any one or more of said officials, and Bond Counsel in cooperation with the Escrow
Agent ace hereby authorized and directed to make the necessary ai7angements for the purchase of
the Federal Securities referenced in the Agreement and the initial delivery thereof to flee Escrow
Agent on the day of delivery of the Bonds to the Purchasers for deposit to the credit of the
"CITY OF SCHERTZ, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES
201 lA ESCROW FUND" (the Escj•o~h~ Fund), including the execution of the subscription forms
for the purchase and issua~ice of the "United States Treasury Securities -State and Local
Government Series", if any, for deposit to the Escrow Fund; all as contemplated and provided by
the provisions of the Act, this Ordinance, and the Agreement.
Immediately follotiving the delivery of the Bonds, the proceeds of sale along with a cash
contribution, if any, from the City (less certain costs of issuance, and accrued interest, if any,
received from the Purchasers of the Bonds) shall be deposited with the Escrow Agent for
application and disbursement in accordance with the provisions of the Agreement. The proceeds
of sale of the Bands not so deposited with the Escrow Agent for the refianding of the Refunded
Obligations shall be disbursed for payment of costs of issuance and deposited with the place of
payment (of the Refunded Obligations) in an account in the name of the City and applied for the
purposes of providing for the payment of the costs and expenses incui7•ed in coiuiection therewith
or deposited in the Bond Fund for the Bonds, all in accordance with written instructions fi•om the
Mayor.
SECTION 20: Redemption of Refunded Obligations. The Refunded Obligations
referenced in the preamble hereof become subject to redemption prior to their stated maturities at
the price of par, premium, if auy, and accrued interest to the date of redemption. The Mayor
shall give written notice to the paying agendregisri-ar for the Refunded Obligations and the
Escrow Agent that all of the Refunded Obligations have been called for redemption, and the City
Council orders that such obligations are called for redemption on the date set forth on Schedule I
attached to this Ordinance, and such order to redeem the Refunded Obligations on such date shall
be irrevocable upon tl~e delivery of the Bonds. Copies of the notices of redemption pertaining to
the Refunded Obligations are attached to this Ordinance as Exhibit D and are incorporated herein
by reference for all purposes. The paying agent for the Refunded Obligations is autlorized and
instil~cted to provide notice of these redemptions to the holders of the Refunded Obligations in
the form and manner described in the ordinances authorizing the issuance of the Refunded
Obligations.
SECTION 21: Covenants to Maintain Tax-Exempt Status.
A. Definitions. When used in this Section, the following terms have the follo~ving
meanings:
Code means the Internal Revenue Code of 1986, as amended by all legislation, if
any, effective on or before t13e Closing Date.
953Q~839.3 -21-
Corrrpa~tcrlion Date has the meaning set forth in Section 1,148-1 {b) of the
Regulations.
G~•oss Proceeds means any proceeds as defined in Section 1.148-1{b) of the
Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the
Regulations, of the Bonds.
Investment has the meaning set forth in Section 1.14$-1(b) of the Regulations.
Nonprrfpose Investment means any investment property, as defined in
section 148{b) of the Code, in which Gross Proceeds of the Bonds are invested and which
is not acquired to carry out the governmej~tal purposes of the Bonds.
Rebate ~Inrorr3rt has the meaning set forth in Section 1.148-1(b) of the
Regulations.
Regrrlatioa7s means any proposed, temporary, or final Income Tax Regulations
issued pursuant to Sections 103 and 141 through 150 of the Cocle, and 103 of the Internal
Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific
Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax
Regulation designed to suppleanent, amend or replace the specific Regulation referenced.
Yield of
(1) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations; and
{2) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations.
B. Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
constnzction or improvement of which is to be financed or refinanced directly or indirectly with
Gross Proceeds} in a manner which if made or omitted, respectively, would cause the interest on
any Bond to become includable iu the gross income, as defined in section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel natioj~ally recognized in the field
of municipal bond law to the effect that failw•e to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Sectioal.
C. No Private Use or Private Payments, Except to the extent that it will not cause the
Bonds to become "private activity bonds" within the meaning of section 141 of the Code and the
Regulations and rulings thereunder, the City shall at all tunes prior to the last Stated Maturity of
Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds (including propea~ty financed with Gross
953Q4839.3 -22-
Proceeds of the Refunded Obligations), and not use or permit the use of such Gross
Proceeds {including all contractual arrangements with teens different than those
applicable to the general public) or any property acquired, constructed or improved with
such Gross Proceeds in any activity carried on by any person or entity (including the
United States or any agency, department and instrumentality thereof) other than a state or
local goveniment, unless such use is solely as a member of the general public; and
(2) not directly or indirectly impose or accept any charge or other payment by
any person or entity who is treated as using Gross Proceeds of the Bonds or any property
the acquisition, construction or improvement of which is to be financed or refinanced
directly or indirectly with such Gross Proceeds (including property financed with Gross
Proceeds of the Refunded Obligations), other than taxes of general application within the
City or interest earned on investments acquired with such Gross Proceeds pending
application for their intended purposes.
D. No Private Loan. Except to the extent that it will not cause the Bonds to become
"private activity bonds" within the meaning of section 141 of the Code and the Regulations and
~•ulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans
to any person or entity other than a state or local govenunent. For purposes of the foregoing
covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if:
(1) property acquired, constructed or improved with such Grass Proceeds is sold or leased to
such person or entity in a transaction which creates a debt for federal income tax purposes;
(2) capacity in or service from such property is committed to such person or entity under atake-
or-pay, output or similar contract or arrangement; or (3}indirect benefits, or burdens and benefits
of ownership, of such Gz~oss Proceeds or any property acquired, constructed or improved with
such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent
of a loan.
E. Not to Invest at Higher Yield. Except to the extent that it will not cause the
Bonds to become "arbitrage bonds" within the meaning of section 148 of the Code and the
Regulations and rulings thereunder, the City shall not at any time prior to the final Stated
Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment, if as a
result of such investment the Yield of any Investment acquired with Gross Proceeds, whether
then held or previously disposed of, materially exceeds the Yield of the Bonds.
F. Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the
Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Bands to be federally guaranteed within the meaning of
section 149{b) of the Code and the Regulations and rulings thereunder.
G. Information Report. The City shall timely file the infoi-~nation required by
section 149{e) of the Code with the Secretary of the Treasury on FotYn 8038-G or such other
form and in such place as the Secretary may prescribe.
H. Rebate of Arbitra e Profits. Except to the extent otherwise provided in
section 148{f) of the Code and the Regulations and rulings thereunder:
95344339.3 -2 3 -
(l) The City shall account for ali Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and apart from
all other funds {and receipts, expenditures and investments kllereof) and shall retain all
records of accounting for at least six years after the day on which the last Outstanding
Band is discharged. However, to the extent permitted by law, the City may commingle
Gross Proceeds of the BOIldS with other money of the City, provided that the City
separately accounts for each receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
(2) Not less frequently than each Computation Date, the City shall calculate
the Rebate Amount in accordance with dales set forth in section 14S(fj of the Code and
the Regulations and rulings thereunder. The City shall maintain such calculations with its
official transcript of proceedings relating to the issuance of the Bonds ulltil six years after
the final Computation Date.
{3} As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby a11d in order to induce suc11
purchase by measures designed to insure the excludability of the interest thereon from the
gross income of the owners thereof for federal income tax purposes, the City shall pay to
the United States out of the Bond Fund or its general fund, as permitted by applicable
Texas statute, regulation or opinion of the Attorney General of the State of Texas, the
amount that when added to the future value of previous rebate payments made for the
Bonds equals (i) 111 the case of a Final Computation Date as defined in
Section 1.14$-3(e)(2) of the Regulations, one hundred percent (100%} of the Rebate
Amount on such date; and (ii} in the case of any othet• Computation Date, ninety percent
(90%) of the Rebate Amount on such date. In all cases, the rebate paylents shall be
made at the times, in the installments, to the place and in the manner as is or may be
required by section 14$(f} of the Code and the Regulations and palings thereunder, anti
shall be accompanied by Form 803$-T or such other forms and information as is or may
be required by section 148(f) of the Code and the Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to assure that no errors are
made in the calculations and paymelts required by paragraphs (2) alld {3}, and if an error
is made, to discover and promptly correct such error within a reasonable amount of time
thereafter (and in all events rvithitl one hundred eighty (180) days after discovery of the
error), including payment to the United States of any additional Rebate Amount owed to
it, interest tllereal, and any penalty imposed under Section 1.14$-3(h) of the Regulations.
1. Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that
reduces the amount required to be Maid to the United States pursuant to Subsection H of this
Sectioll because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Bonds not been
relevant to either party.
95304539.3 °24-
J. Bonds Not Hed e Bonds.
(1) At the time the original bonds refunded by the Bonds were issued, the City
reasonably expected to spend at least 8S% of the spendable proceeds of such bonds
within three years after such bonds were issued.
(2) Not more than SO% of the proceeds of the original bonds refunded by the
Bonds were invested in Nonpurpose Investments having a substantially guaranteed Yield
for a period of 4 years or more.
K. Qualified Advance Refunding. The Bonds are issued, 111 part, to refund the
Refunded Obligations, and the Bonds will be issued more than 90 days before the redemption of
the Refunded Obligations. The City represents as follows:
(1) The Bonds are the "first advance refi~nding" of any original bonds issued
after 1985 and are the "first or second advance refunding" of any original bonds issued
before 1986, both within the meaning of section 149(d){3) of the Code.
(2) The Refunded Obligations are being called for redemption, and will be
redeemed: {i) ill the case of Refunded Obligations issued after 1985, not later than the
earliest date on which such bonds may be redeemed and on which the City will realize
present value debt service savings (detellnined without regard to administrative expenses}
in connection with the issuance of the Bonds; and (ii) in the case of Refunded Obligations
issued before 1986, not later than the earliest date on which such issue maybe redeemed
at par or at a premium of 3 percent or less and on which the City will realize present
value debt service savings (determined without regard to administrative expenses) in
connection with the issua~lce of the Bonds.
(3) The initial telnpora~y period under section 118{c) of the Code will end: (i)
with respect to the proceeds of the Bonds used to refund the Refunded Obligations not
later than 30 days after the date of issue of such Bonds; and (ii} with respect to proceeds
of the Refunded Obligations on the Closing Date if not ended prior thereto.
(4~} On and after the date of issue of the Bonds, llo proceeds of the Refunded
Obligations will be invested in Nonpurpose Investments having a Yield in excess of the
Yield on such Refunded Obligations.
{S} The Bonds are being issued for the purposes stated in the preamble of this
Ordinance. There is a present value savings associated with the refunding. In the
issuance of the Bonds the City has: (i) neither issued more bands, nor issued bonds
earlier, and will not allow bonds to remain outstanding longer, than reasonably necessary
to accomplish the governmental purposes for which the Bonds were issued; {ii} not
employed an "abusive arbitrage device" within the meaning of Section 1.118-10(a) of the
Regulations; and (iii} not employed a "device" to obtain a material financial advantage
based on arbitrage, within the meaning of section 149(d}(4) of the Code, apart from
savings attributable to lower interest rates.
4530~l839.3 -Z S-
L. Elections. The City hereby directs and authorizes the Mayor, City Manager,
Director of Finance, City Secretary, or City Attolney, either or any combination of the foregoing,
to make such elections in the Certificate as to Tax Exemption or similar or other appropriate
certificate, form, or document permitted or required pursuant to the provisions of the Code or the
Regulations, as they deem necessary ol- appropriate in connection with the Bonds. Such
elections shall be deemed to be made on the Closing Date.
SECTION 22: Control and Custody of Bonds. The Mayor shall be and is hereby
authorized to take and have charge of all necessary orders and records pending investigation by
the Attorney General of the State of Texas and shall take and have charge and control of the
Bonds pending their approval by the Attorney General, the registration thereof by the
Comptroller of Public Accowzts and the delivery of the Bonds to the Purchasers.
Furthermore, the Mayor, Mayor Pro Teln, City Manager, Director of Finance, City
Secretary, or City Attorney, either or ali, are hereby authorized and directed to fulnisll and
execute such documents relating to the City and its financial affairs as may be necessary for the
issuance of the Bonds, the approval of the Attolney General and their registration by the
Comph•oller of Public Accounts and, together with the City's financial advisors, Bond Counsel,
and the Paying AgentlRegistrar, make the necessary arrangements for the delivery of the Initial
Bonds to the Purchasers and the initial exchange thereof for definitive Bonds.
SECTION 23: Satisfaction of Obligation of City. If the City shall pay or cause to be
paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and
interest on the Bonds, at the times and in the rnaluier stipulated in this Ordinance, then the pledge
of taxes levied and the lien on and pledge of the Net Revenues under this Ordinance and all
covenants, agl•eements, and other obligations of the City to the Holders shall thereupon cease,
terminate, and be discharged and satisfied.
Bonds, or any principal amount(s) thereof, shall be deemed to have been paid within the
meaning and with the effect expressed above in this Section when (i) money sufficient to pay in
full such Bonds or the principal amount(s) thereof at Stated Maturity or the redemption date
therefor, together with all interest due thereon, shall have been irrevocably deposited with and
held In trust by the Paying Ageclt/Registrar, or an authorized escrow agent, and/or
(ii) Government Securities shall Dave been irrevocably deposited in trust with the Paying
Agent/Registrar, or an authorized escrow agent, which Government Securities, iu the case of a
net defeasance, have been certified by an independent accounting fi1n1 to mature as to principal
and interest in such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money, together with any money deposited therewith, if any, to pay
when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and
prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or
if irrevocable arrangements therefor acceptable to the Paying AgentlRegistrar have been made)
the redemption date thereof. h1 the event of a gross defeasance of the Bonds, the City shall
deliver a certificate from its fi~~aucial advisor, the Paying Agent/Registrar, or another qualified
third party concerning the deposit of cash andlor Govenunent Securities to pay, when due, the
principal of, redemption premium (if any}, and interest due on any defeased Bands. The City
covenants that no deposit of money or Government Securities will be made under this Section
95304839.3 _26_
and no use made of any such deposit which would cause the Bonds to be treated as arbitrage
bonds within the meaning of section 1 X18 of the Code (as defined in Section 21 hereof).
Any money so deposited with the Paying AgentlRegistrar, and all income from
Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow
agent, pursuant to this Section which is not required far the payment of the Bonds, or any
principal amount(s) thereof, or interest thereon with respect to which such money has been so
deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any
money held by the Paying AgentlRegistrar far the payment of the principal of and interest on the
Bonds and remaining unclaimed for a period of three (3) years after the Stated Maturity or
applicable redemption date of the Bonds such money was deposited and is held iii t~•ust to pay
shall upon the request of the City be remitted to the Ciry against a written receipt flierefor,
subject to the unclaimed property laws of the State of Texas.
Notwithstanding any other provision of this Ordinance to the contrary, it is hereby
provided that any determination not to redeem defeased Bonds that is made in conjunction with
the payment arrangements specified in subsection {i} or {ii} above shall not be irrevocable,
provided that: (1) in the proceedings providing for such defeasance, the City expressly reserves
the right to call the defeased Bonds for redemption; (2} gives notice of the resewation of that
right to the owners of the defeased Bonds immediately fallowing the defeasance; (3) directs that
notice of the reservation be included in any redemption notices that it authorizes; and (4} at the
time of the redemption, satisfies the conditions of {i) or (ii) above with respect to such defeased
debt as though it was being defeased at the time of the exercise of the option to redeem the
defeased Bonds, after taking the redemption into account in determining the sufficiency of the
provisions made for the payment of the defeased Bonds.
SECTION 24: Printed Opinion. The Purchasers' obligation to accept delivery of the
Bonds is subject to its being furnished a final opinion of Fulbright & Jaworski L.L.P., as Bond
Counsel, approving certain legal matters as to the Bonds, said opinion to be dated and delivered
as of the date of initial delivery and payment for such Bonds. Printing of a true and coi7ect copy
of said opinion on the reverse side of each of the Bonds, tivith appropriate certificate pertaiui~~g
thereto executed by facsimile signature of the City Secretary of the City is hereby approved and
authorized.
SECTION 25: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Bonds shall be of no significance or effect as regards the legality
thereof, and neither the City nor attorneys approving said Bonds as to legality are to be held
responsible for CUSIP numbers incorrectly prinked or typed on the definitive Bonds.
SECTION 26: Effect of Headings. The Section headings herein are for convenience only
and shall not affect the co~~stauction hereof.
SECTION 27: Ordinance a Contract• Amendments - Outstandin Bonds. The City
acknowledges that the covenants and obligations of the City herein contained are a material
inducement to the purchase of the Bonds. This Ordinance shall constitute a contract with the
Holders from time to time, shall be binding on the City and its successors and assigns, and shall
95304339.3 -27
not be amended or repealed by the City so long as any Bond remains Outstanding except as
permitted in this Section. The City may, without the consent of or notice to any Holders, from
time to time and at any tithe, amend this Ordinance in any manner not detrimental to the interests
of tl;e Holders, including the curing of any ambiguity, inconsistency, or fortxtal defect or
omission herein. In addition, the City may, with the written consent of Holders holding a
majority in aggregate principal amount of the Bonds then Outstanding affected thereby, amend,
add to, or rescind any of the provisions of this Ordinance; provided; however, that, without the
consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall
(1) extend the time or times of payment of the principal of, the redemption price therefor, and
interest on the Bonds, reduce the principal amount thereof, or the rate of interest thereon, or in
any other tivay modify the terms of payment of the principal of or interest on the Bonds, (2) give
any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of
Bonds required for consent to any such amendment, addition, or rescission.
SECTION 28: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is
intended or shall be construed to confer upon any person other than the City, Bond Counsel,
Paying AgentlRegistrar, and the Holders, any right, remedy, or claim, legal or equitable, under or
by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being
intended to be and being for the sole and exclusive benefit of the City, Bond Counsel, the paying
Agent/Registrar, and the Holders.
SECTION 29: Inconsistent Provisions. All ordinances and resolutions, or pat•ts thereof,
which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to
the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling
as to the matters ordained herein.
SECTION 34: Constt~.tction of Tertns. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural
number shall be considered to include the singular, and words of the masculine, feminine or
neuter gender shall be considered to include the other genders.
SECTION 31: Goveniin Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 32: Severability. If any provision of this Ordinance or the application thereof
to any person or circumstance shall be held ro be invalid, the remainder of this Ordinance and the
application of such provision to other persons and circumstances shall nevertheless be valid, and
the City Council hereby declares that this Ordinance would have been enacted without such
invalid provision.
SECTION 33: Incorporation of Preamble Recitals. The recitals contained in the
preamble hereof are hereby found to be tt-ue, and such recitals are hereby made a part of this
Ordinance for all purposes and are adopted as a part of the judgment and findings of the City
Council.
SECTION 34: Authorization of Paying A e~~nt/Registrar Ag-•eement. The City Council of
the City hereby finds and determines that it is in the best interest of the City to authorize the
95304339.3 -2c~-
execution of a Paying Agent/Registrar Agreement concerning the payment, exchange, and
transferability of the Bonds. A copy of the Paying Agent/Registrar Agreement is attached
hereto, in substantially final farm, as Exhibit A and is incorporated by reference to the provisions
of t1}is Ordinance.
SECTION 35: Public Meeting. it is officially found, detennined, and declared that the
meeting at which this Ordinance is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to 6e considered at such meeting, including this
Ordinance, was given, all as required by Chapter 551, as amended, Texas Government Code.
SECTION 36: Unavailability of Authorized Publication. if, because of the temporary or
permanent suspension of any newspaper, jow•nal, or other publication, or, for any reason,
publication of notice cannot be made meeting any requirements herein established, any notice
required to be published by the provisions of this Ordinance shall be given in such other manner
and at such time or times as in the judgment of the City or of the Paying Agent/Registrar shall
most effectively approximate such required publication and the giving of such notice in such
ma~urer shall for all purposes of this Ordinance be deemed to be in compliance with the
requirements for publication thereof.
SECTION 37: No Recourse A ainst Cit Officials. No recourse shall be had for the
payment of principal of, premium, if any, or interest on any Bond or for any claim based thereon
or on this Ordinance against any official of the City or any person executing any Bond.
SECTION 38: Continuin Disclosure Under•takin .
Defiitilions. As used in this Section, the following terms have the meanings ascribed to
such teens below:
IZrrle means SEC Rule 1 Sc2-12, as amended from time to time.
SEC means the United States Securities and Exchange Commission.
The Certificates are being sold pursuant to a private placement with the Purchasers, in
denominations of generally $100,000 or any integral multiple of $1,000 in excess thereof, to less
than thirty-five sophisticated investors, and tl~erefore SEC Rule 15c2-12 is not applicable to the
offering of the Bonds. Accordingly, no contract to provide continuing disclosure information
after the issuance of the Certificates has been made by the City with investors.
SECTION 39: Book-Errtr Or>I S stem.
The Bonds initially may he registered so as to participate iv a securities depository
system (the DTC Systefii) with the Depository Trust Company, New York, Ne~v York, or any
successor entity thereto (DTC}, as set forth herein. Each Stated Maturity of the Bonds shall be
issued {following cancellation of the Initial Bonds described in Section 7} in the form of a
separate single definitive Bond. Upon issuance, the ownership of each such Bond shall be
registered in the came of Cede & Co., as the nominee of DTC, and all of the Outstanding Bonds
shall be registered in the name of Cede & Co., as the nominee of DTC. The City and the Paying
Agent/Registrar are authorized to execute, deliver, and take the actions set forth in such letters to
95304339.3 -2g_
or agreements with DTC as shall be necessary to effectuate the DTC System, including the Letter
of Representations attached hereto as Exhibit E {the Represeratatiorr Letter).
With respect to the Bonds registered in the name of Cede & Co., as nominee of DTC, the
City and the Paying Agent/Registrar shall have no responsibility or obligation to any broker-
dealer, bank, or other financial institution for which DTC holds the Bonds from time to time as
secm7ties depository (a Depository Par°ticipant} or to any person on behalf of whom such a
Depository Participant holds an interest in the Bonds {an Indirect Participant). Without limiting
the immediately preceding sentence, the City and the Paying AgentlRegistrar shall have no
responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co.,
or any Depository Participant with respect to any ownership interest in the Bonds, {ii) the
delivery to any Depository Participant or any other person, other than a registered owner of the
Bonds, as shown on the Security Register, of any notice with respect to the Bonds, including any
notice of redemption, or (iii) the delivery to any Depository Participant or any Indirect
Participant or any other Person, other than a Holder of a Band, of any amount with respect to
principal of, premium, if any, or interest on the Bonds. While in the DTC System, no person
other than Cede & Co., or any successor thereto, as nominee for DTC, shall receive a Bond
evidencing the obligation of the City to make payments of principal, premium, if any, and
interest pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registraz- of
written notice to the effect that DTC has determined to substitute a new nominee in place of
Cede & Co., and subject to the provisions in this Ordinance with respect to interest checks or
drafts being mailed to the Holder, the word "Cede & Co." in this Ordinance shall refer to such
new nominee of DTC.
In the event that (a) the City determines that DTC is incapable of discharging its
responsibilities described herein and in the Representation Letter, {b} the Representation Letter
shall be tez•minated for any reason, or {c) DTC or the City determines that it is in the best interest
of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the City shall
notify the Paying Agent/Itegistrar, DTC, and the Depository Participants of the availability
within a reasonable period of tune through DTC of bond certificates, and the Bonds shall no
longer be restricted to being registered in the name of Cede & Co., as nominee of DTC. At that
time, the City may determine that the Bonds shall be registered in the ziazne of and deposited
with a successor depository operating a securities depository system, as may be acceptable to the
City, or such depositozy's agent or designee, and if the City and the Paying AgeutlRegistrar do
not select such altenlate securities depository system then the Bonds may be registered in
whatever Hanle or Haines the Holders of Bonds hansfer-ing or exchanging the Bonds shall
designate, in accordance with the provisions hereof.
Notwithstanding any other provision of this Ordinance to the contrary, so long as any
Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to
principal of, premium, if any, 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.
SECTION 40: Further Procedures. The officers and employees of the City are hereby
authorized, empowered and directed from time to time and at any time to do and perform all such
acts and things and to execute, acknowledge and deliver in the name and under the corporate seal
and on behalf of the City all such instruments, whether or not herein mentiotsed, as may be
95304839.3 -3 ~"'
necessary or desirable in order to carry out the terms and provisions of this Ordinance, the initial
sale and delivery of the Bonds, the Paying Agent/Registrar Agreement, the Purchase Contract,
and the Agreement. In addition, prior to the initial delivery of the Bonds, the Mayor, the City
Manager, or the City Secretary and Bond Counsel are hereby authorized and directed to approve
any technical changes or corrections to this Ordinance or to any of the instruments authorized
and approved by this Ordinance necessary in order to (i) correct any ambiguity or mistake or
properly or more completely document the transactions contemplated and approved by this
Ordinance, (ii) obtain a rating from any of the national bond rating agencies, or (iii} obtain the
approval of the Bonds by the Texas Attai~zey General's office. In case any officer of the City
whose signature shall appear on any certificate shall cease to be such officer before the delivery
of such certificate, such signature shall nevertheless be valid and sufficient for all purposes the
same as if such officer had remained in office until such delivery.
SECTION 41: Effective Date. Pursuant ro the provisions of Section 1201.028, as
amended, Texas Govez•nment Code, this Ordinance shall be effective immediately upon
adoption, notwithstanding any provision in the City's to the contrary concerning a multiple
reading requirement for the adoption of ordinances.
The r-emaindej- of this page intenfioazally left blcc~~Ie.]
95344339.3 -31-
PASSED, APPROVED AND ADOPTED on the 1 S"' day of November, 2011.
ATTEST:
City Secretary
(CIfY SEAL)
Schedule I Refunded Obligations
Exhibit A -Paying AgeiftlRegistrar Agreement
Exhibit B -Purchase Contract
Exhibit C -Escrow and Trust Agreement
Exhibit D -Notices of Redemption
Exhibit F - DTC Letter of Representations
9530~l839.3 S- ~
Schedule I
Refwided Obligations
1. City of Schertz, Texas Combination Tax and Limited Pledge Revenue Certificates of
Obligation, Series 2003, dated March 1, 2003, in the original principal amount of $3,360,000
stated to mature on February 1 in each of the years 2014 through 2018, in the aggregate principal
amount of $1,145,000, to be redeemed a1 February 1, 2013.
2. City of Schertz, Texas Combination Tax and Limited Pledge Revenue Certificates of
Obligation, Series 2004, dated May 15, 2004, in the original principal amount of $7,754,000
stated to mature on February 1 in each of the years 2414 through 2022, and February 1, 2024, in
the aggregate principal amount of $5,150,400, to be redeemed on February I, 2413.
95301839.3 Schedule-I
EXHIBIT A
Paying AgentlRegistrar Agreement
See Tab No.
95304839.3 A-1
1•;XHIBIT B
P~~rchase Conh•act
See Tab No.
953Q48393 B-1
EXHIBIT C
Escrow and Trust Agreement
See Tab No.
9534~l339.3 C-1
EXHIBIT D
Notices of Redemption
See Tab No.
95343393 D- i
EXHIBIT 1;
DTC Letter of Representations
See Tab No.
95344339,3 E_ ]