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HomeMy WebLinkAboutRES 96-25 No. 17 RESOLUTION AUTHORIZING CERTIFICATE PURCHASE CONTRACT REGARDING THE CITY OF BEAUMONT, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1996 THE STATE OF TEXAS § COUNTY OF JEFFERSON § THE CITY OF BEAUMONT § WHEREAS, the City Council of The City of Beaumont, Texas (the "City" ) , deems it advisable to issue Certificates of Obligation of the City in accordance with the terms of a Certificate Purchase Contract hereinafter authorized; Now, Therefore BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT, TEXAS : Section 1 . The facts and recitations contained in the preamble of this resolution are hereby found and declared to be true and correct. Section 2 . In connection with the proposed issuance of the City' s Combination Tax and Revenue Certificates of Obligation, Series 1996 (the "Certificates" ) , the City is hereby authorized to enter into a Certificate Purchase Contract with First Southwest Company, Southwest Securities, Inc. , Apex Securities, Inc . , Masterson Moreland Sauer Whisman, Inc. , and Texas Commerce Bank National Association (the "Underwriters" ) in substantially the form attached hereto as Exhibit "A" (the "Certificate Purchase Contract" ) . Section 3 . The Certificate Purchase Contract and the City' s obligation thereunder shall be conditioned upon and subject to the passage of an appropriate ordinance by the City authorizing the issuance of the Certificates . Section 4 . The Mayor and other officers of the City are hereby authorized and directed to do any and all things necessary or desirable to carry out the provisions of this resolution. Section 5 . This resolution shall take effect immediately upon its passage. $16,000,000 THE CITY OF BEAUMONT, TEXAS COMBINATION TAX-AND REVENUE CERTIFICATES OF OBLIGATION SERIES 1996 BOND PURCHASE AGREEMENT January 23, 1996 Mayor and City Council The City of Beaumont, Texas P. O. Box 3827 Beaumont, Texas 77704-3827 Ladies and Gentlemen: The undersigned(the"Underwriter")offers to enter into this Bond Purchase Agreement(the"Bond Purchase Agreement") with The City of Beaumont, Texas (the "Issuer") which, upon acceptance of this offer by the Issuer, shall be binding upon the Issuer and upon the Underwriter. This offer is made subject to its acceptance by the execution of this Bond Purchase Agreement on or before 10:00 p.m.,central standard time,on the date set out above, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Issuer at any time prior to its acceptance hereof. The Underwriter has heretofore authorized First Southwest Company to execute this Bond Purchase Agreement on their behalf. 1. Purchase Price; Purpose of Issue. Upon the terms and conditions and upon the basis of the representations,warranties and covenants set forth herein,the Underwriter hereby agrees to purchase from the Issuer, and the Issuer hereby agrees to sell to the Underwriter, all (but not less than all) of the Issuer's $16,000,000 Combination Tax and Revenue Certificates of Obligation, Series 1996, (the "Certificates"), which Certificates have the terms and features(including those with respect to redemption)set forth in the Official Statement(as hereinafter defined in Paragraph 3 hereof), and as shown on Exhibit "A" hereto. The purchase price for the Certificates will be $ (which reflects the par amount of the Certificates, less an original issue discount of $ and less an underwriting discount of$ ). The purchase price for the Certificates will also include accrued interest on the Certificates, calculated on the basis of a 360-day year of twelve 30-day months from January 1, 1996, to the date of closing (as defined in Paragraph 5 hereof). The Certificates shall be as described in,and shall be issued pursuant to,the ordinance adopted by the Issuer (the "Ordinance") authorizing the issuance of the Certificates and containing other matters. The Certificates shall be issued in accordance with the provisions of the Ordinance and secured as provided therein and as described in the Official Statement. Delivered to the Issuer herewith is the Underwriter's good-faith corporate check payable to the order of the Issuer in the amount of$160,000 (the "Check"), which is 1% of the par value of the Certificates. In the event the Issuer does not accept this offer, the Check shall be promptly returned to the Underwriter. Upon the Issuer's acceptance of this offer by the execution hereof, the Check (i) shall not be cashed or negotiated but shall be held and retained in safekeeping by the Issuer as security for the performance by the Underwriter of its obligations, subject to the terms and conditions herein set forth,to purchase and accept delivery of the Certificates at the Closing, and(ii) shall be applied and disposed of by the Issuer solely as provided in this Bond Purchase Agreement. In the event of the Underwriter's compliance with such obligations to purchase and accept delivery of the Certificates at the Closing, the Check shall be returned to the Underwriter at the Closing. In the event of the failure by the Issuer to deliver the Certificates at the Closing or if the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriter contained in this Bond Purchase Agreement, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Bond Purchase Agreement,the Check shall be returned promptly to the Underwriter. In the event that the Underwriter fails (other than for a reason permitted hereunder) to purchase and accept delivery of the Certificates at the Closing,then the Issuer shall notify the Underwriter thereof by written notice delivered to the Underwriter,First Southwest Company, 1100 Louisiana, Suite 3640, Houston, Texas 77002-5218, Attention: Joseph W. Morrow. At any time after 12:00 noon, central standard rime, on the second business day following the date on which the Issuer shall so notify the Underwriter, the Issuer shall become entitled to cash or to negotiate the Check, and the proceeds thereof shall be retained by the Issuer as and for full liquidated damages for such failure and for any and all defaults on the part of the Underwriter and such proceeds shall constitute a full release and discharge of all claims and damages for such failure and for any and all such defaults. 2. Public Offering. The Underwriter hereby agrees to make an initial bona fide public offering of all the Certificates at prices not in excess of the initial offering prices(or yields)set forth on Exhibit"A"hereto,plus accrued interest on the Certificates,reserving the right to change such prices or yields as the Underwriter shall deem necessary in connection with the offering of the Certificates without any requirement of prior notice. The Underwriter may offer and sell the Certificates to certain dealers (including dealers depositing Certificates into investment trusts)and others at prices lower than the public offering prices(or yields higher than the public offering yields) stated on Exhibit "A" hereto. 3. Ordinance;Official Statement. As a condition to the execution of this Bond Purchase Agreement, the Issuer agrees to deliver(or cause to be delivered)to the Underwriter one copy of the Ordinance,duly executed, approved and adopted and in full force and effect. The Issuer hereby authorizes the Underwriter to use the Ordinance in connection with the public offering and sale of the Certificates. The Issuer has heretofore delivered to the Underwriter copies of the Preliminary Official Statement related to the Certificates, dated December 19, 1995 (the 'Preliminary Official Statement"), deemed final by the Issuer as of its date except for such omissions as are permitted by Rule 15c2-12 (the "Rule")of the Securities and Exchange Commission, for the Underwriter's use in determining interest in the Certificates. The Issuer ratifies,confirms and approves the use by the Underwriter, prior to the date hereof, of the Preliminary Official Statement and the information contained therein in connection with the public offering of the Certificates under the circumstances and conditions contained therein and herein. On any date specified by the Underwriter following the date hereof, but in any event no more than seven (7)business days after the time of the Issuer's acceptance hereof,the Issuer shall deliver to the Underwriter copies of a final Official Statement related to the Certificates approved by duly authorized officials of the Issuer in sufficient number to permit the Underwriter to comply with the requirements of the Rule. Such final Official Statement shall be dated the date hereof and shall be substantially in the form of the most recent markup of the Preliminary Official Statement provided to the Underwriter on or before the date hereof(which Official Statement, including the cover page thereto, all exhibits, appendices, maps, pictures, diagrams, reports and statements included or incorporated therein or attached thereto, and all amendments and supplements that may be authorized for use with respect to the Certificates approved by duly authorized officials of the Issuer is herein called the "Official Statement"). The Issuer authorizes the preparation of the Official Statement and the information contained therein to be used in connection with the public offering and sale of the Certificates under the circumstances and conditions contained therein and herein. 4. Representations and Warranties. The Issuer represents and warrants to and agrees with the Underwriter (and it shall be a condition of the obligation of the Underwriter to purchase and accept delivery of the Certificates that the Issuer shall so represent, warrant and agree as of the date of the Closing) that: (a) Existence; Power; and Authoritv. The Issuer is a home-rule city operating as such under the Constitution and laws of the State of Texas and has full legal right, power and authority (i) to issue the Certificates, (ii) to authorize the preparation of the Preliminary Official 2 Statement and the Official Statement and to authorize their use and distribution by the Underwriter, (iii) to enter into this Bond Purchase Agreement and to sell and deliver the Certificates to the Underwriter as provided herein;(iv) to adopt the Ordinance and to carry out and consummate the actions contemplated thereby and (v) to carry out and consummate all other transactions contemplated by each of the aforesaid documents; (b) Due Authorization. By official action of the Issuer on January 30, 1996, the Issuer's City Council has duly adopted the Ordinance (which is unmodified from the date of its adoption and is in full force and effect at the time of the execution hereof)and has duly authorized and approved the execution and delivery of, and the performance by the Issuer of the obligations contained in, this Bond Purchase Agreement, the Official Statement and the Certificates; (c) No Adverse Actions. At the time of the Issuer's acceptance of this offer by the execution hereof,there is,and at the date of the Closing there will be,no action, suit,proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body, pending or known to be threatened against or affecting the existence of the Issuer or the title of its officials to their respective positions,nor to the best of the knowledge of the Issuer is there any basis therefor, wherein an unfavorable decision, ruling or finding would adversely affect the validity or enforceability of the Ordinance,the Certificates,this Bond Purchase Agreement or any agreement or instrument relating thereto,used or contemplated for use in the consummation of the transactions contemplated by the Ordinance, this Bond Purchase Agreement or the Official Statement; (d) No Defaults. Except as may be disclosed in the Official Statement, the Issuer is not, in any material respect which would adversely affect the validity or marketability of the Certificates, in breach of or default under any applicable law or administrative regulation of the State of Texas or any department, division, agency or instrumentality thereof, or of the United States or any agency or instrumentality thereof or any applicable judgment or decree or any loan agreement,note,resolution,certificate,agreement or other instrument to which the Issuer is a party or is otherwise subject;and the execution and delivery of the Official Statement and the execution and delivery of the this Bond Purchase Agreement, the Certificates and the Ordinance, and compliance with the provisions of each thereof, will not conflict with or constitute a material breach of or default under any applicable law or administrative regulation of the State of Texas or any department,division, agency or instrumentality thereof,or of the United States or any agency or instrumentality thereof or any applicable judgment or decree or any loan agreement, note, resolution,certificate,agreement or other instrument to which the Issuer is a party or is otherwise subject; (e) All Approvals. All approvals,consents and orders of any governmental authority or agency having jurisdiction of any matter that would constitute a condition precedent to the performance by the Issuer of its obligations to sell and deliver the Certificates will be obtained prior to Closing (as hereinafter defined); (f) Validity of the Certificates. The Certificates and the Ordinance conform to the descriptions thereof contained in the Official Statement; and the Certificates, when issued and delivered in accordance with the Ordinance and sold to the Underwriter,as provided in this Bond Purchase Agreement, will be duly authorized, validly issued and outstanding obligations of the Issuer secured in the manner provided in the Ordinance and described in the Official Statement and entitled to the benefits of the Ordinance, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights generally and subject, as to enforceability,to the general principles of equity(regardless of whether enforcement is sought in a proceeding in equity or at law); 3 (g) Financial Statements. The financial statements of the Issuer contained in Appendix B to the Official Statement present fairly the financial position of the Issuer as of September 30; 1995, and the results of its operations for its fiscal year then ended, and such statements have been prepared accordance with the format described in Appendix B to the Official Statement; (h) Accuracy of Information in Official Statement. At the time of the Issuer's acceptance hereof and (unless the Official Statement is amended or supplemented pursuant to subparagraph 0) of this Paragraph 4) at all times subsequent thereto up to and including the date of the Closing, the Official Statement (including the financial statements and other financial and statistical data included therein)is and will be true and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (i) Accuracy of Information in Official Statement After Amendment or Supplement. If the Official Statement is amended or supplemented pursuant to subparagraph 0) of this Paragraph 4, at the time of each supplement or amendment thereto and at all times subsequent thereto up to and including the date of the Closing, the Official Statement, as so supplemented or amended(including the financial statements and other financial and statistical data included therein), will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; 6) Amending or Supplementing Official Statement. If between the date of this Bond Purchase Agreement and the 91st day following the date of the Closing an event occurs of which the Issuer has knowledge and which would cause the Official Statement to contain any untrue statement of a material fact or to omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Issuer shall notify the Underwriter, and if, in the opinion of the Issuer or the Underwriter, such event requires an amendment or supplement to the Official Statement, the Issuer will,at its expense, amend and supplement the Official Statement in a form and in a manner jointly approved by the Issuer and the Underwriter; (k) Prohibition Against Incurring Debt. Between the date of this Bond Purchase Agreement and the delivery of the Certificates,the Issuer will not,without the prior written consent of the Underwriter,issue bonds,certificates,notes or other obligations for borrowed money which are or would be payable from or constitute a charge on the taxes or revenues pledged to secure payment of the Certificates,and between the respective dates as of which information is given in the Official Statement and the date of the delivery of the Certificates, except as described in the Official Statement,the Issuer has not incurred and will not incur any material long-term liabilities (except that the Issuer may issue or incur,without the prior written consent of the Underwriter,any debt described in the Official Statement including the Issuer's Refunding Bonds, Series 1996 to be issued concurrently with the Certificates); (1) Application of Proceeds. The Issuer will apply the proceeds of the Certificates for the purposes, and in accordance with the description of the application of such proceeds, set forth in the Official Statement and the Ordinance; (m) Maintaining Tax-Exemption of Interest on the Certificates. The Issuer will not take or omit to take any action which will adversely affect the exclusion from income for federal income tax purposes of the interest on the Certificates; and 4 (n) Amendment or Supplement of Ordinance. The Issuer will cooperate with the Underwriter to amend or supplement the Ordinance as may be required by any rating agency in connection with obtaining or maintaining a rating for the Certificates. 5. Delivery of, and Payment for,the Certificates. At or before 10:00 a.m.,central standard time, on February 22, 1996,or on such other date as may be mutually agreed upon by the Issuer and the Underwriter,the Issuer will deliver the Certificates to the Underwriter and,as hereinafter provided,the Underwriter will accept such delivery and pay the purchase price of the Certificates as set forth in Paragraph 1 hereof plus accrued interest in immediately available funds. Delivery as aforesaid shall be made at the offices of Orgain, Bell & Tucker, L.L.P., Beaumont,Texas, or such other place as shall have been mutually agreed upon by the Issuer and Underwriter and such payment shall be made simultaneously therewith. The payment and delivery is hereinabove and hereafter called the "Closing." Time shall be of the essence and delivery of the Certificates and the documents and instruments to be delivered at Closing as provided herein is a further condition of the obligations of the Underwriter hereunder. 6. Survival of Representations and Warranties. Unless otherwise set forth herein, the representations and agreements in this Bond Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter and shall survive the delivery of the Certificates hereunder. 7. Certain Conditions to Underwriter's Obligations. The Underwriter's obligation hereunder to purchase and pay for the Certificates shall be subject to the performance by the Issuer of its obligations hereunder in all material respects at or prior to the Closing and the accuracy in all material respects of the Issuer's representations and warranties contained herein and shall also be subject to the following conditions,any one or more of which may be waived by the Underwriter: (a) Continued Full Force and Effect of Documents. That at the time of the Closing, the Ordinance,the Official Statement and all related actions of the Issuer with respect to the issuance of the Certificates shall be in full force and effect and shall not have been amended, modified or supplemented, except as may have been agreed to by the Underwriter; (b) Termination of Bond Purchase Agreement by the Underwriter. That the Underwriter may terminate this Bond Purchase Agreement by notification in writing or by telegram or telecopy to the Issuer if at any time subsequent to the date hereof and at or prior to the Closing: (i) in the Congress of the United States, legislation shall be enacted, a bill shall be favorably reported out of committee to either house or a bill to amend the Internal Revenue Code of 1986, as amended (which, if enacted, would take effect in whole or in part as of a date prior to the Closing or be applied to the Certificates), shall be filed in either house, or a decision by a court of the United States shall be rendered,or a regulation or ruling shall be issued or proposed by or on behalf of the Department of Treasury or the Internal Revenue Service of the United States,or any other agency of the federal government, or a release or official statement shall be issued by the President,the Department of Treasury or the Internal Revenue Service,with respect to federal taxation of interest received on obligations of the same character as the Certificate,which, in the reasonable opinion of the Underwriter, materially adversely affects the market price for the Certificates or the sale,at the contemplated offering price,by the Underwriter of the Certificates; or (ii) a stop order, ruling, regulation, proposed regulation or statement by or on behalf of the Securities and Exchange Commission shall be issued or made to the effect that the issuance, offering or sale of the Certificates without registration thereof or obligations of the general character of the Certificates are in violation of any provision of the Securities Act of 1933; or (iii) in the Congress of the United States, legislation shall be enacted or a bill shall be favorably reported out of committee of either house, or a decision by a court of the United States shall be rendered,or a ruling,regulation,proposed regulation or statement by or on behalf of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter 5 shall be made, to the effect that securities of the Issuer or of any similar public body are not exempt from the registration,qualification or other requirements of the Securities Act of 1933,as amended,or that the Ordinance or similar documents authorizing the issuance of the Certificates or debt instruments of the general character of the Certificates are required to be qualified under the Trust Indenture Act of 1939,as amended,or(iv) the United States shall have become engaged in hostilities which have resulted in a declaration of war or a national emergency or other unforeseen natural or international calamity shall have occurred or accelerated to such an extent as, in the reasonable judgment of the Underwriter, shall materially adversely affect the marketability of the Certificates or the market price thereof; or (v) there shall have occurred a general suspension of trading on the New York Stock Exchange, Inc. or there shall be imposed upon trading in securities generally by any governmental authority or by any national securities exchange any material restrictions(other than a limitation on the hours of trading)not in force on the date hereof, or (vi) a general banking moratorium shall have been declared by the United States, State of Texas or State of New York authorities; or (vii) an event shall have occurred which, in the opinion of the Underwriter, requires an amendment or supplement to the Official Statement and which, in the reasonable judgment of the Underwriter,materially adversely affects the marketability of the Certificates or the market price thereof; or(viii) any other material event has occurred which,in the reasonable judgment of the Underwriter,would materially and adversely affect the market for the Certificates or the market price of the Certificates or the ability of the Underwriter to enforce contracts for the sale of the Certificates; (c) No Default in Payment of Debt Service. That the Issuer shall not have failed to pay principal of or interest on,when due,any of its outstanding obligations for borrowed money; (d) Agreement to Provide Continuing Disclosure of Information. That the Issuer shall have agreed in the Ordinance to provide certain periodic information and notices of material events in accordance with Securities and Exchange Commission Rule 15c2-12 as described in the Preliminary Official Statement under"CONTINUING DISCLOSURE OF INFORMATION." The Underwriter's obligation to accept and pay for the Bonds is conditioned upon delivery to the Underwriter of a certified copy of the Ordinance containing the agreement described under such heading; (e) Documents to be Received by the Underwriter. That, at the Closing, the Underwriter shall receive a copy of the transcript of proceedings relating to the authorization and issuance of the Certificates, including each of the following documents: (1) Official Statement and Ordinance. The Official Statement of the Issuer and the Ordinance executed or certified on behalf of the Issuer,with such amendments,modifications or supplements thereto as may have been agreed to by the Underwriter; (2) Issuer's Certificate. A certificate of a duly authorized official of the Issuer that the Ordinance,the Escrow Agreement and this Bond Purchase Agreement have not been amended,modified,supplemented or repealed,except as contemplated hereby or as may have been agreed to by the Underwriter,and are in full force and effect, (3) Bond Counsel and Co-Bond Counsel's Opinions. The opinions of the Issuer's Bond Counsel,Orgain,Bell&Tucker,L.L.P.,Beaumont, Texas ("Bond Counsel") and of the Issuer's Co-Bond Counsel, Heard, Goggan, Blair & Williams, Beaumont, Texas ("Co-Bond Counsel"), in substantially the form set forth in Appendix C to the Official Statement; 6 (4) Bond Counsel and Co-Bond Counsel's Supplemental Opinions. The supplemental opinions of the Issuer's Bond Counsel and Co- Bond Counsel,addressed to the Issuer and the Underwriter,to the effect that the offering and sale of the Certificates are not required to be registered under the Securities Act of 1933,as amended,the Ordinance is not required to be qualified under the Trust Indenture Act of 1939,as amended,and further that the Issuer's Bond Counsel and Co-Bond Counsel have reviewed the information appearing in the Official Statement under the captions "THE CERTIFICATES," "LEGISLATION AND REGULATION," "LEGAL MATTERS" (other than the section entitled"No-Litigation Certificate")and"CONTINUING DISCLOSURE OF INFORMATION" solely to determine whether such information relating to the Certificates and the Ordinance contained under such captions is a fair and accurate summary of the information purported to be shown therein; however, such opinions shall not address or opine as to any statistical and financial information contained therein; and further such opinions also shall contain a provision to the effect that the opinion referred to in subparagraph(3) above may be relied upon by the Underwriter to the same extent as if such opinions were addressed to them; (5) Counsel to the Underwriter's Opinion. An opinion,dated as of the date of the delivery of the Bonds, and addressed to the Underwriter, of Mayor, Day, Caldwell & Keeton, L.L.P., Houston, Texas, and Wickliff & Hall, P.C., Houston,Texas ("Counsel to the Underwriter"), to the effect that the offer and sale of the Certificates are not required to be registered under the Securities Act of 1933, as amended,and that the Ordinance is not required to be qualified under the Trust Indenture Act of 1939,as amended. In addition,such firms shall state that without having undertaken to determine independently the accuracy or completeness of the statements contained in the Official Statement, nothing has come to such counsels' attention which gives such counsels reason to believe that the Official Statement as of the date of the Bond Purchase Agreement and as of the date of the closing (except for financial statements and other financial statistical data as to which no view need be expressed)contained or contains any untrue statement of a material fact or omitted or omits to state any material fact required to be stated therein or necessary to make the statements therein,in light of the circumstances under which they were made, not misleading; (6) No-Litigation Certificate. A certificate dated the date of Closing from the City Attorney and Mayor of the Issuer stating to the effect that, based on such inquiry and investigation as they have deemed sufficient, no litigation is pending (or,to their knowledge,threatened)against the Issuer in any court (other than as described in the Official Statement) (i) to restrain or enjoin the sale or delivery of the Certificates, or (ii) in any manner questioning the authority of the Issuer to issue,or the issuance, validity or payment of principal of or interest on,the Certificates,or(iii)questioning the constitutionality of any statute, or the validity of any proceedings, authorizing the issuance of the Certificates, or(iv) affecting the provision made for the payment or security of the Certificates, or (v) contesting in any way the completeness, accuracy or fairness of the Preliminary Official Statement or the Official Statement, or (vi) contesting the titles of any officials of the Issuer, or (vii) which might in any material respect adversely affect the transaction contemplated herein; 7 (7) Issuer's Closing Certificate. A certificate dated the Closing Date from the Issuer,executed by the Mayor or other duly authorized official of the Issuer, acting in his official capacity, to the effect that (a) the descriptions and statements of the Certificates and the Ordinance contained in the Official Statement and any addenda, supplement or amendment thereto, on the date of such Official Statement,on the date of sale of the Certificates to the Underwriter and on the date of delivery,were and are true and correct in all material respects; (b) insofar as the Issuer and its affairs, including its financial affairs, are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (c) insofar as the descriptions, statements and activities, including financial data, of or pertaining to entities other than the Issuer contained in such Official Statement are concerned,such statements and data have been obtained from sources which the Issuer believes to be reliable and the Issuer has no reason to believe that they are untrue in any material respect; (d)there has been no material adverse change in the financial condition of the Issuer(financial or otherwise)since the date of the Official statement;(e)the Ordinance and this Bond Purchase Agreement have not been amended, modified, supplemented or repealed, except as contemplated hereby or as may have been agreed to by the Underwriter, and are in full force and effect, and the representations and warranties of the Issuer contained in the Bond Purchase Agreement are true and correct in all material respects on and as of the date of Closing as if made on such date;and the Issuer has complied with all the agreements and satisfied all the conditions on its part to be complied with or satisfied at or prior to the date hereof pursuant to this Bond Purchase Agreement and the Ordinance; (8) Certificate as to Tax Exemption. A certificate of the Mayor or another authorized official or representative of the Issuer that (i) sets forth facts, estimates and circumstances in existence on the date of Closing, which facts,estimates and circumstances shall be sufficiently set forth therein to support the conclusion that it is not expected that the proceeds of the Certificates will be used in a manner which would cause the Certificates to be "arbitrage bonds", within the meaning of the Internal Revenue Code of 1986, as amended, (the "Code") and the regulations, temporary regulations and proposed regulations promulgated under the Code,and(ii) states that to the best of the knowledge and belief of such official there are no other facts,estimates or circumstances which would materially affect such expectations; (9) Attorney General's Opinion. The approving opinion of the Attorney General of the State of Texas in respect of the Certificates; (10) Comptroller's Registration Certificate. The registration certificate of the Comptroller of Public Accounts of the State of Texas (the "Comptroller") in respect of the Certificates; (11) Rating Letters. Evidence of the rating of Moody's Investors Service, Inc. and Standard & Poor's Ratings Group of "Aaa" and "AA" respectively, on the Certificates, in a form acceptable to the Underwriter; 8 (12) Bond Insurance. A municipal bond guaranty insurance policy issued by MBIA Insurance Corporation ("MBIA") with respect to the Certificates, together with the customary opinion of its legal counsel as to the validity and enforceability of such policy and the fairness and accuracy of the language in the Official Statement describing MBIA and such policy; and (13) Additional Certificates, Instruments and Opinions. Such additional certificates, instruments or opinions as Bond Counsel and Co-Bond Counsel or Counsel to the Underwriter may deem necessary or desirable; and (f) Issuer's Performance of Obligations. That the Issuer shall perform or have performed in all material respects at or prior to the Closing all of the Issuer's obligations required under or specified in this Bond Purchase Agreement to be performed at or prior to the Closing. All certificates, instruments, opinions and documents referred to above shall be in form and substance satisfactory to Bond Counsel, Co-Bond Counsel and Counsel to the Underwriter. If the Issuer should be unable to satisfy the conditions to the obligation of the Underwriter to pay for the Certificates contained in this Bond Purchase Agreement or if the obligations of the Underwriter shall be terminated for any reason permitted hereby, neither the Underwriter nor the Issuer shall be under further obligation hereunder. 8. Deliver of Names and Addresses of Holders of the Certificates. At the Closing, contemporaneously with the receipt of the Certificates by the Underwriter, the Underwriter will, if so requested, deliver to the Issuer a receipt therefor, in form satisfactory to Bond Counsel, signed by the Underwriter. 9. Reproduction of Bond Counsel and Co-Bond Counsel's Opinions on the Certificates. The opinions of Bond Counsel and Co-Bond Counsel as described in Paragraph 7(e)(3) may be reproduced on the Certificates. 10. Payment of Expenses. The Underwriter shall have no obligation to pay and the Issuer shall pay, from the proceeds of the sale of the Certificates or other available funds,upon or promptly after the Closing: (a) the cost of the preparation and printing of the Certificates,if any; (b) the costs of obtaining credit ratings; (c) the fees and disbursements of Bond Counsel,Co-Bond Counsel,the Financial Advisor to the Issuer and of any other counsel or consultants retained by the Issuer; (d) the costs of preparing, printing and mailing the Preliminary Official Statement and the Official Statement; (e) the fees and expenses of the Paying Agent/Registrar, (f) the cost of the premium for any municipal bond guaranty insurance policy; (g) the out-of-pocket expenses, including the cost of travel,of any officials of the Issuer;and(h)any other expenses mutually agreed to by the Issuer and the Underwriter to be reasonably considered expenses of the Issuer which are incident to the transactions contemplated hereby. The Underwriter shall pay its own fees and expenses hereunder, including the fees and disbursements of Counsel to the Underwriter. 11. Issuer's Cooperation. The Issuer covenants with the Underwriter that it will cooperate with the Underwriter in qualifying the Certificates for offer and sale,and as legal investments,under the securities"Blue Sky" laws of such jurisdictions as the Underwriter may request (except for any jurisdiction in which such qualification would require the Issuer to consent to service of process or to qualify to do business therein). 12. Notices. Any notice to be given to the Issuer under this Bond Purchase Agreement may be given by delivering the same to the Issuer, at the address indicated above, Attention: Mayor (with copies to the City Council), and any such notice to be given to the Underwriter may be given by delivering such notice to First Southwest Company, 1100 Louisiana, Suite 3640, Houston, Texas 77002, Attention: Joseph W. Morrow. 9 13. Benefit of Representations and Warranties. The agreements and all representations and warranties herein set forth have been and are made for the benefit of the Underwriter and the Issuer, and no other person shall acquire or-have any right under or by virtue of this Bond Purchase Agreement. 14. Governing Law. THIS BOND PURCHASE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS. 15. Counterparts. This Bond Purchase Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. 16. No Personal Liability. None of the members of the Issuer nor any officer, agent or employee of the Issuer shall be charged personally by the Underwriter with any liability, or be held liable to the Underwriter under any term or provision of this Bond Purchase Agreement,or because of its execution or attempted execution, or because of any breach, or attempted or alleged breach, of this Bond Purchase Agreement. 10 17. Entire Agreement. This Bond Purchase Agreement constitutes the entire agreement, understanding, representations, warranties and obligations of the parties hereto with respect to the transactions contemplated hereby and shall become effective upon the acceptance of this offer by the execution and the counterexecution hereof as provided, and shall be valid and enforceable as of the time of such acceptance. Very truly yours, FIRST SOUTHWEST COMPANY APEX SECURITIES, INC. MASTERSON MORELAND SAUER WHISMAN,INC. SOUTHWEST SECURITIES, INC. TEXAS COMMERCE BANK NATIONAL ASSOCIATION By: FIRST SOUTHWEST COMPANY APPROVED AND ACCEPTED AS By: OF THE DATE HEREOF: Title: THE CITY OF BEAUMONT, TEXAS Mayor Attest: City Secretary [Seal] APPROVED AS TO FORM: By: City Attomey 11