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HomeMy WebLinkAboutORD 06-075 ORDINANCE NO. 06-075 NO. 4 ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2006, AUTHORIZING THE REFUNDING OF CERTAIN BONDS AND OBLIGATIONS AND THE EXECUTION AND DELIVERY OF AN ESCROW AGREEMENT AND THE SUBSCRIPTION FOR AND PURCHASE OF CERTAIN ESCROWED SECURITES; AND CONTAINING OTHER MATTERS RELATED THERETO THE STATE OF TEXAS § COUNTY OF JEFFERSON § THE CITY OF BEAUMONT § WHEREAS, The City of Beaumont, Texas (the "City") has heretofore issued its City of Beaumont, Texas, Combination Tax & Revenue Certificates of Obligation, Series 1996, its City of Beaumont, Texas, Refunding Bonds, Series 1996, its City of Beaumont, Texas, Combination Tax & Revenue Certificates of Obligation, Series 1998, and its City of Beaumont, Texas, Certificates of Obligation, Series 1999 (collectively the "Refunded Obligations"), and now desires to refund certain maturities of the Refunded Obligations in advance of their maturities in order to provide a savings in debt service; and WHEREAS, Chapter 1207, Texas Government Code, as amended (formerly Article 717k of Vernon's Annotated Texas Civil Statutes, as amended), authorizes the City to issue refunding bonds for the purpose of refunding the Refunded Obligations in advance of their maturities, and to accomplish such refunding by depositing directly with any paying agent for the Refunded Obligations the proceeds of such refunding bonds,together with other available funds, in an amount sufficient to provide for the payment or redemption of the Refunded Obligations, and provides that such deposit shall constitute the making of firm banking and financial arrangements for the discharge and final payment or redemption of the Refunded Obligations; and WHEREAS, the City now desires to call certain of the Refunded Obligations for redemption prior to their maturities; and WHEREAS, the City also desires to authorize the execution of an escrow agreement in order to provide for the deposit of proceeds of the refunding bonds to pay and redeem the Refunded Obligations; and WHEREAS, upon issuance of the refunding bonds herein authorized and the deposit of funds referred to above, the Refunded Obligations shall no longer be regarded as being outstanding, except for the purpose of being paid pursuant to such deposits, and the pledges, liens, trusts and all other covenants, provisions, terms and conditions of the ordinances authorizing the issuance of the Refunded Obligations shall be discharged,terminated and defeased; NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF BEAUMONT: 1. Consideration. The matters and facts contained in the preamble to this Ordinance are hereby found to be true and correct, and it is hereby found and determined that issuance of the refunding bonds described herein will benefit the City by providing a savings in debt service equal to a net present value of$733,020.38 and a gross debt service savings equal to $778,339.31, and that such benefit is sufficient consideration for the refunding of the Refunded Obligations. 2. Definitions. Throughout this Ordinance, the following terms and expressions as used herein shall have the meanings set forth below: The term 'Bonds" or "Series 2006 Bonds" shall mean The City of Beaumont, Texas, General Obligation Refunding Bonds, Series 2006 authorized in this Ordinance, unless the context clearly indicates otherwise. The term "City" shall mean The City of Beaumont, Texas. The term "Code" shall mean the Internal Revenue Code of 1986, as amended. The term "DTC" shall mean The Depository Trust Company of New York, New York, or any successor securities depository. The term 'DTC Participant" shall mean brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. The term "Insurer" shall mean Financial Security Assurance Inc., a New York domiciled financial guaranty insurance company, or any successor thereto or assignee thereof, the issuer of the Municipal Bond Guaranty Insurance Policy. The term "Interest and Sinking Fund" shall mean the interest and sinking fund established by the City pursuant to Section 18 of this Ordinance. The term "Interest Payment Date", when used in connection with any Bond, shall mean March 1, 2007, and each September 1 and March 1 thereafter until maturity of such Bond. The term "Municipal Bond Guaranty Insurance Policy" shall mean the municipal bond guaranty insurance policy issued by the Insurer insuring the payment when due of the principal of and interest on the Bonds as provided therein. The term "Ordinance" as used herein and in the Bonds shall mean this ordinance authorizing the Bonds. -2- The term "Owner" shall mean any person or entity who shall be the registered owner of any outstanding Bonds. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean, for any Interest Payment Date, the fifteenth (15th) calendar day of the month next preceding each Interest Payment Date. The term "Refunded Obligations" shall mean: (a) the City's outstanding Combination Tax & Revenue Certificates of Obligation, Series 1996, maturing on March 1 in the years 2009 through 2014 in the principal amounts of $605,000, $675,000, $725,000, $770,000, $820,000 and $850,000, respectively; (b) the City's outstanding Refunding Bonds, Series 1996, maturing on March 1 in the years 2009 through 2010 in the principal amounts of $780,000 and $785,000, respectively; (c) the City's outstanding Combination Tax & Revenue Certificates of Obligation, Series 1998, maturing on March 1, 2018 in the principal amount of$2,225,000; and (d) the City's outstanding Certificates of Obligation, Series 1999, maturing on March 1 in the years 2011 through 2018 in the principal amounts of $1,375,000, $1,500,000, $1,600,000, $1,900,000, $2,000,000, $2,100,000, $2,200,000 and $2,325,000, respectively. The term "Register" shall mean the books of registration kept by the Registrar in which are maintained the names and addresses of and the principal amounts registered to each Owner. The term "Registrar" shall mean The Bank of New York Trust Company, N.A., Dallas, Texas, and its successors in that capacity. The term "Report" shall mean the report of Grant Thornton, L.L.P., Certified Public Accountants, certifying as to the mathematical accuracy of the program designed by RBC Capital Markets for the City with respect to the defeasance of the Refunded Obligations. The term "SEC" shall mean the United States Securities and Exchange Commission, and its successors. The term "Underwriters" shall mean Coastal Securities, UBS Investmetn Bank, Estrada Hinojosa& Co., Inc., First Southwest Company and Morgan Keegan & Co., Inc. 3. Authorization. The Bonds shall be issued in fully registered form, without coupons, in the total authorized aggregate amount of TWENTY THREE MILLION NINE HUNDRED SEVENTY-FIVE THOUSAND and NO/100 Dollars ($23,975,000.00) for the purpose of (i) refunding certain of the outstanding Refunded Obligations, and (ii) paying all costs of issuance of the Bonds. 4. Designation, Date and Interest Payment Date. The Bonds shall be designated as the "THE CITY OF BEAUMONT, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2006", and shall be dated December 1, 2006. The Bonds shall bear interest from the later -3- of December 1, 2006, or the most recent Interest Payment Date to which interest has been paid or duly provided for, calculated on the basis of a 360 day year of twelve 30 day months, with interest payable on March 1, 2007, and semiannually thereafter on September 1 and March 1 of each year until maturity or earlier redemption. 5. Initial Bonds, Numbers and Denominations. The Bonds shall be issued bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the following schedule, and may be transferred and exchanged as set out in this Ordinance. The Bonds shall mature, in accordance with this Ordinance, on March 1 in each of the years and in the amounts set out in such schedule. Bonds delivered in transfer of or in exchange for other Bonds shall be numbered in order of their authentication by the Registrar, shall be in the denomination of$5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are delivered. Bond Year of Principal Interest Number Maturi Amount Rate R-1 2008 $ 60,000 4.00% R-2 2009 $1,440,000 4.00% R-3 2010 $1,505,000 4.00% R-4 2011 $2,235,000 4.00% R-5 2012 $2,385,000 4.00% R-6 2013 $2,515,000 4.00% R-7 2014 $2,830,000 4.00% R-8 2015 $2,060,000 4.00% R-9 2016 $2,150,000 4.00% R-10 2017 $2,235,000 4.00% R-11 2018 $4,560,000 4.00% 6. Optional Redemption. The City reserves the right, at its option, to redeem Bonds having stated maturities on and after March 1, 2017, in whole or in part, on March 1, 2016, or any date thereafter, at a price of par plus accrued interest to the date fixed for redemption. If less than all of the Bonds are to be redeemed, the City shall determine the Bonds, or portions thereof, to be redeemed. Bonds may be redeemed only in integral multiples of $5,000. If a Bond subject to redemption is in a denomination larger that $5,000, a portion of such Bond may be redeemed, but only in integral multiples of $5,000. Upon surrender of any Bond for redemption in part, the Registrar, in accordance with Section 12 hereof, shall authenticate and deliver in exchange therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered. -4- Not less than thirty(30) days prior to a redemption date for the Bonds, the City shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to each Owner of each Bond to be redeemed in whole or in part, at the address of the Owner appearing on the Register at the close of business on the Business Day next preceding the date of the mailing of such notice. Such notice shall state the redemption date, the redemption price, the place at which Bonds are to be surrendered for payment and, if less than all the Bonds are to be redeemed, the numbers of the Bonds or portions thereof to be redeemed. Any notice of redemption so mailed shall be conclusively presumed to have been duly given whether or not the Owner receives such notice. By the date fixed for redemption, due provision shall be made with the Registrar for payment of the redemption price of the Bonds or portions thereof to be redeemed. When Bonds have been called for redemption in whole or in part and due provision made to redeem the same as herein provided, the Bonds or portions thereof so redeemed shall no longer be regarded as outstanding except for the purpose of being paid solely from the funds so provided for redemption, and the rights of the Owners to collect interest which would otherwise accrue after the redemption date on any Bond or portion thereof called for redemption shall terminate on the date fixed for redemption. 7. Execution of Bonds; Seal. The Bonds shall be signed by the Mayor of the City and countersigned by the City Clerk of the City, by their manual, lithographed, or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. If any officer of the City whose manual or facsimile signature shall appear on the Bonds shall cease to be such officer before the authentication of such Bonds or before the delivery of such Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office. 8. Approval by Attorney General; Registration by Comptroller. The Bonds to be initially issued shall be delivered to the Attorney General of Texas for approval and shall be registered by the Comptroller of Public Accounts of the State of Texas. The manually executed registration certificate of the Comptroller of Public Accounts substantially in the form provided in Section 16 of this Ordinance shall be attached or affixed to the Bonds to be initially issued. 9. Authentication. Except for the Bonds to be initially issued, which need not be authenticated by the Registrar, only such Bonds which bear thereon a certificate of authentication, substantially in the form provided in Section 16 of this Ordinance, manually executed by an authorized officer of the Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such duly executed certificates of authentication shall be conclusive evidence that the Bonds so authenticated were delivered by the Registrar hereunder. 10. Payment of Principal and Interest. The Registrar is hereby appointed as the paying agent for the Bonds. The principal of the Bonds shall be payable, without exchange or collection charges, in any coin or currency of the United States of America which, on the date of payment, is -5- legal tender for the payment of debts due the United States of America, upon their presentation and surrender as they become due and payable, at the principal corporate trust office of the Registrar. The interest on each Bond shall be payable by check payable on the Interest Payment Date, mailed by the Registrar on or before each Interest Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown on the Register. 11. Ownership; Unclaimed Principal and Interest. The City, the Registrar and any other person may treat the person in whose name any Bond is registered as the absolute owner of such Bond for the purpose of making and receiving payment of the principal thereof and for the further purpose of making and receiving payment of the interest thereon, and for all other purposes, whether or not such Bond is overdue, and neither the City nor the Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the Owner of any Bond in accordance with this Section 11 shall be valid and effectual and shall discharge the liability of the City and the Registrar upon such Bond to the extent of the sums paid. Amounts held by the Registrar which represent principal of and interest on the Bonds remaining unclaimed by the Owner after the expiration of 3 years from the date such amounts have become due and payable shall be reported and disposed of by the Registrar in accordance with the provisions of Texas law, including to the extent applicable, Title 6 of the Texas Property Code, as amended. 12. Registration, Transfer and Exchange. So long as any Bonds remain outstanding, the Registrar shall keep the Register at its principal corporate trust office in which, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and transfer of Bonds in accordance with the terms of this Ordinance. Each Bond shall be transferable only upon the presentation and surrender thereof at the principal corporate trust office of the Registrar, duly endorsed for transfer, or accompanied by an assignment duly executed by the registered Owner or his authorized representative in form satisfactory to the Registrar. Upon due presentation of any Bond for transfer, the Registrar shall authenticate and deliver in exchange therefor, within three business days after such presentation, a new Bond or Bonds, registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so presented. All Bonds shall be exchangeable upon presentation and surrender thereof at the principal corporate trust office of the Registrar for a Bond or Bonds of the same maturity and interest rate and in any authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this Section 12. Each Bond delivered in accordance with this Section 12 shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such Bond is delivered. -6- The City or the Registrar may require the Owner of any Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange of such Bond. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the City. 13. Cancellation of Bonds. All Bonds paid in accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance herewith, shall be cancelled and destroyed upon the making of proper records regarding such payment. The Registrar shall furnish the City with appropriate certificates of destruction of such Bonds. 14. Mutilated, Lost or Stolen Bonds. Upon the presentation and surrender to the Registrar of a mutilated Bond, the Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding. The City or the Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith and any other expenses connected therewith, including the fees and expenses of the Registrar. If any Bond is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall execute and the Registrar shall authenticate and deliver a replacement Bond of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner thereof shall have: (1) furnished to the City and the Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Bond; (2) furnished such security or indemnity as may be required by the Registrar and the City to save them harmless; (3) paid all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Registrar and any tax or other governmental charge that may be imposed; and (4) met any other reasonable requirements of the City and the Registrar. If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or -7- expense incurred by the City or the Registrar in connection therewith. If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the City in its discretion may, instead of issuing a replacement Bond, authorize the Registrar to pay such Bond. Each replacement Bond delivered in accordance with this Section 14 shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. 15. Special Election for Uncertificated Bonds. Notwithstanding any other provision hereof, upon initial issuance of the Bonds but at the sole election of the Underwriters, the ownership of the Bonds shall be registered in the name of Cede & Co., as nominee of DTC, and except as otherwise provided in this Section, all of the outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC. The definitive Bonds shall be initially issued in the form of a single separate certificate for each of the maturities thereof. If the purchaser shall elect to invoke the provisions of this Section, then the following provisions shall take effect with respect to the Bonds. With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City and the Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than an Owner of a Bond, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than an Owner of a Bond, as shown in the Register, of any amount with respect to principal of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute Owner of such Bond for the purpose of payment of principal of, premium, if any, and interest on the Bonds, for the purpose of all matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner as shown in the Register, shall receive a Bond certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co.,the word "Cede& Co." in this Ordinance shall refer to such new nominee of DTC. -8- In the event that the City or the Registrar determines that DTC is incapable of discharging its responsibilities described herein and in the Letter of Representations of the City to DTC, and that it is in the best interest of the beneficial Owners of the Bonds that they be able to obtain certificated Bonds, or if DTC Participants owning at least 50% of the Bonds outstanding based on current records of the DTC determine that continuation of the system of book-entry transfers through the DTC (or a successor securities depository) is not in the best interest of the beneficial Owners of the Bonds, or in the event DTC discontinues the services described herein, the City or the Registrar shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, and notify DTC of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or (ii) notify DTC of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Bondholders transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on the Bonds, and all notices with respect to the Bonds, shall be made and given, respectively, in the manner provided in the Letter of Representations from the City to DTC. 16. Form. (a) The Bonds shall be in substantially the following form, including the form of Registrar's Certificate of Authentication,the form of Assignment, the form of Statement of Insurance, and the form of Registration Statement of the Comptroller of Public Accounts, with such additions, deletions and variations as may be necessary or desirable and permitted by this Ordinance: United States of America State of Texas County of Jefferson NUMBER DENOMINATION R- $ REGISTERED REGISTERED -9- THE CITY OF BEAUMONT, TEXAS General Obligation Refunding Bond Series 2006 INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP: December 1, 2006 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The City of Beaumont, in the County of Jefferson, State of Texas (the "City"), promises to pay to the Registered Owner identified above, or registered assigns, on the date specified above, upon presentation and surrender of this bond at the principal corporate trust office of The Bank of New York Trust Company, N.A., Dallas, Texas (the "Registrar"), the principal amount identified above, payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due the United States of America, and to pay interest thereon at the rate shown above, calculated on the basis of a 360 day year of twelve 30 day months, from the later of December 1, 2006, or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this bond shall be paid by check payable on September 1 and March 1, beginning on March 1, 2007, mailed to the registered owner of record as of the previous August 15 and February 15 as shown on the books of registration kept by the Registrar. THIS BOND is one of a duly authorized issue of Bonds, aggregating $23,975,000 (the "Bonds"), issued pursuant to an ordinance adopted by the City Council on November 14, 2006 (the "Ordinance") for the purpose of refunding the following: (a) the City's outstanding Combination Tax & Revenue Certificates of Obligation, Series 1996, maturing on March 1 in the years 2009 through 2014 in the principal amounts of$605,000, $675,000, $725,000, $770,000, $820,000 and $850,000, respectively; (b) the City's outstanding Refunding Bonds, Series 1996, maturing on March 1 in the years 2009 through 2010 in the principal amounts of $780,000 and $785,000, respectively; (c) the City's outstanding Combination Tax & Revenue Certificates of Obligation, Series 1998, maturing on March 1, 2018 in the principal amount of$2,225,000; and (d) the City's outstanding Certificates of Obligation, Series 1999, maturing on March 1 in the years 2011 through 2018 in the principal amounts of $1,375,000, $1,500,000, $1,600,000, $1,900,000, $2,000,000, $2,100,000, $2,200,000 and $2,325,000, respectively. THE CITY RESERVES THE RIGHT, at its option, to redeem the Bonds having stated maturities on or after March 1, 2017, in whole or in part, on March 1, 2016, or any date thereafter, in integral multiples of $5,000, at a price of par plus accrued interest to the date fixed for redemption. Reference is made to the Ordinance for complete details concerning the manner of -10- redeeming the Bonds. NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior the date fixed for redemption by first class mail, addressed to the registered owner of each Bond to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar. When Bonds or portions thereof have been called for redemption and due provision has been made to redeem the same, the principal amounts so redeemed shall be payable solely from the funds provided for redemption and interest which would otherwise accrue on the amounts called for redemption shall terminate on the date fixed for redemption. THIS BOND is transferable only upon presentation and surrender at the principal corporate trust office of the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his authorized representative, subject to the terms and conditions of the Ordinance. THE BONDS are exchangeable at the principal corporate trust office of the Registrar for bonds in the principal amount of$5,000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance. THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordinance unless this Bond either (i) is registered by the Comptroller of Public Accounts of the State of Texas by registration certificate endorsed hereon or (ii) is authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly issued and delivered; that all acts, conditions and things required or proper to be performed, to exist and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist and have been done in accordance with law; and that annual ad valorem taxes within the limits prescribed by law sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the City and have been pledged irrevocably for such payment. IN WITNESS WHEREOF, this Bond has been signed with the manual or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signature of the City Clerk of the City, and the official seal of the City has been duly impressed, or placed in facsimile, on this Bond. THE CITY OF BEAUMONT, TEXAS Mayor -11- (SEAL) City Clerk (b) Bonds No. R-1 through R-11 shall be registered by the Comptroller of Public Accounts of the State of Texas, as provided by law. The registration certificate of the Comptroller of Public Accounts shall be printed on Bonds R-1 through R-11 and shall be in substantially the following form: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this bond has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this bond has been registered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL this , 2006. xxxxxxxxxxx Comptroller of Public Accounts of the State of Texas (SEAL) (c) Except for Bond Numbers R-1 through R-11, the following form of authentication certificate shall be printed on each of the Bonds: AUTHENTICATION CERTIFICATE This bond is one of the bonds described in and delivered pursuant to the within-mentioned Ordinance. The Bank of New York Trust Company,N.A., Registrar By Authorized Signature Date of Authentication: (d) The following form of assignment shall be printed on each of the Bonds: ASSIGNMENT For value received, the undersigned hereby sells, assigns, and transfers unto the within bond and hereby irrevocably constitutes -12- and appoints attorney to transfer said bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature Guaranteed: Registered Owner NOTICE: The signature above must correspond to the name of the registered NOTICE: Signature must be owner as shown on the face guaranteed by a member firm of this Bond in every of the New York Stock Exchange particular, without any or a commercial bank or trust alteration, enlargement or company. change whatsoever. (e) The following statement of insurance shall be printed on each of the Bonds: STATEMENT OF INSURANCE Financial Security Assurance Inc. ("Financial Security"), New York, New York, has delivered its municipal bond insurance policy with respect to the scheduled payments due of principal of and interest on this Bond to The Bank of New York Trust Company, N.A., Dallas, Texas, or its successor, as paying agent for the Bonds (the "Paying Agent"). Said Policy is on file and available for inspection at the principal office of the Paying Agent and a copy thereof may be obtained from Financial Security or the Paying Agent. 17. Legal Opinions; CUSIP. The approving opinion of Orgain, Bell & Tucker, L.L.P., Beaumont, Texas, Bond Counsel, and CUSIP Numbers may be printed on the Bonds, but errors or omissions in the printing of such opinions or such numbers shall have no effect on the validity of the Bonds. 18. Interest and Sinking Fund; Lew, Assessment and Collection of Taxes. There is hereby established a separate fund of the City to be known as the "Series 2006 General Obligation Refunding Bonds Interest and Sinking Fund" which shall be kept separate and apart from all other funds of the City. The proceeds from all taxes levied, assessed and collected for and on account of the Bonds authorized by this Ordinance shall be deposited, as collected, in the Interest and Sinking Fund. While the Bonds or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually assessed and collected in due time, form and manner, and at the same time other City taxes are assessed, levied and collected, in each year, beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property in said City sufficient to pay the current interest on said Bonds as the same becomes due, -13- and to create and provide a sinking fund of not less than two percent (2%) of the original principal amount of the Bonds or of not less than the amount required to pay each installment of the principal of said Bonds as the same matures, whichever is greater, full allowance being made for delinquencies and costs of collection, and said taxes when collected shall be applied to the payment of the interest on and principal of said Bonds and to no other purpose. In addition, interest accrued from the date of the Bonds until their delivery and premium, if any, is to be deposited in such fund. To pay the interest coming due on the Bonds on March 1, 2007, and the interest coming due on September 1, 2007, there is hereby appropriated from current funds on hand, which are certified to be on hand and available for such purpose, an amount sufficient to pay such interest, and such amount shall be used for no other purpose. 19. Further Proceedings. After the Bonds to be initially issued shall have been executed, it shall be the duty of the Mayor of the City to deliver the Bonds to be initially issued and all pertinent records and proceedings to the Attorney General of the State of Texas, for examination and approval by the Attorney General. After the Bonds to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comptroller of Public Accounts of the State of Texas for registration. Upon registration of the Bonds to be initially issued, the Comptroller of Public Accounts (or a deputy lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be printed and endorsed on the Bonds to be initially issued, and the seal of said Comptroller shall be impressed, or placed in facsimile, thereon. 20. Sale of Bonds and Bond Insurance. The Bonds are hereby sold and shall be delivered to the Underwriters at a price of $24,102,567.41, representing the principal amount of Bonds of$23,975,000.00, plus accrued interest of$34,630.56, plus a premium of$269,385.55, less an original issue discount of $20,611.20, and less an underwriter's discount of $155,837.50, in accordance with the terms of the Purchase Contract presented to and hereby approved by the City Council, which price and terms are hereby found and determined to be the most advantageous reasonably obtainable by the City. The Mayor and other appropriate officials of the City are hereby authorized and directed to do any and all things necessary or desirable to satisfy the conditions set out herein and to provide for the issuance and delivery of the Bonds. The purchase of and payment of the premium for the Municipal Bond Guaranty Insurance Policy in accordance with the terms of the commitment for such insurance presented to the City Council are hereby approved and authorized. All officials and representatives of the City are authorized and directed to execute such documents and to do any and all things necessary, desirable or appropriate to obtain the Municipal Bond Guaranty Insurance Policy, and the printing on the Bonds covered by the Municipal Bond Guaranty Insurance Policy of an appropriate legend regarding such insurance is hereby approved and authorized. 21. Tax Exemption. The City intends that the interest on the Bonds shall be excludable from gross income of the owners thereof for federal income tax purposes pursuant to Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended, (the "Code") and all applicable temporary, proposed and final regulations (the "Regulations") and -14- procedures promulgated thereunder and applicable to the Bonds. For this purpose, the City covenants that it will monitor and control the receipt, investment, expenditure and use of all gross proceeds of the Bonds and take or omit to take such other and further actions as may be required by Sections 103 and 141 through 150 of the Code and the Regulations to cause the interest on the Bonds to be and remain excludable from the gross income, as defined in Section 61 of the Code, of the owners of the Bonds for federal income tax purposes. Without limiting the generality of the foregoing, the City shall comply with each of the following covenants: (a) The City will use all of the proceeds of the Bonds to (i) acquire non- callable obligations of the United States of America (the "Escrowed Securities") sufficient to pay the principal of, premium, if any, and interest on the Refunded Obligations and (ii) to pay the costs of issuing the Bonds except for amounts, if any, described in the Report (as defined in the Escrow Agreement) as the rounding amount and the ending cash balance in the Escrow Fund (as defined in the Escrow Agreement). (b) The City will not directly or indirectly take any action or omit to take any action, which action or omission would cause the Bonds or the Refunded Obligations to constitute "private activity bonds" within the meaning of Section 141(a) of the Code. (c) Principal of and interest on the Bonds will be paid solely from ad valorem taxes collected by the City, investment earnings on such collections, and as available, proceeds of the Bonds. (d) Based upon all facts and estimates now known or reasonably expected to be in existence on the date the Bonds are delivered, the City reasonably expects that the proceeds of the Bonds and the Refunded Obligations (to the extent any of such proceeds remain unexpended) will not be used in a manner that would cause the Bonds or the Refunded Obligations or any portion thereof to be "arbitrage bonds" within the meaning of Section 148 of the Code. (e) At all times while the Bonds are outstanding, the City will identify and properly account for all amounts constituting gross proceeds of the Bonds in accordance with the Regulations. The City will monitor the yield on the investments of the proceeds of the Bonds and, to the extent required by the Code and the Regulations, will restrict the yield on such investments to a yield which is not materially higher than the yield on the Bonds. To the extent necessary to prevent the Bonds from constituting "arbitrage bonds," the City will make such payments as are necessary to cause the yield on all yield-restricted nonpurpose investments allocable to the Bonds to be less than the yield that is materially higher than the yield on the Bonds. (f) The City will not take any action or knowingly omit to take any action, if taken or omitted, would cause the Bonds to be treated as "federally guaranteed" obligations for purposes of Section 149(b) of the Code. -15- (g) The City represents that not more than fifty percent (50%) of the proceeds of any new money portion of the Bonds or any new money issue refunded by, the Refunded Obligations was invested in nonpurpose investments (as defined in Section 148(f)(b)(A) of the Code) having a substantially guaranteed yield for four years or more within the meaning of Section 149(g)(3)(A)(ii) of the Code, and the City reasonably expected at the time each issue of the Refunded Obligations was issued that at least eighty-five percent (85%) of the spendable proceeds of the Bonds or the Refunded Obligations would be used to carry out the governmental purpose of such Bonds within the corresponding three-year period beginning on the respective dates of the Bonds or the Refunded Obligations. (h) The City will take all necessary steps to comply with the requirement that certain amounts earned by the City on the investment of the gross proceeds of the Bonds, if any, be rebated to the federal government. Specifically, the City will (i) maintain records regarding the receipt, investment and expenditure of the gross proceeds of the Bonds as may be required to calculate such excess arbitrage profits separately from records of amounts on deposit in the funds and accounts of the City allocable to other obligations of the City or moneys which do not represent gross proceeds of any obligations of the City and retain such records for at least six years after the day on which the last outstanding Bond is discharged, (ii) account for all gross proceeds under a reasonable, consistently applied method of accounting, not employed as an artifice or device to avoid, in whole or in part, the requirements of Section 148 of the Code, including any specified method of accounting required by applicable Regulations to be used for all or a portion of the gross proceeds, (iii) calculate, at such times as are required by applicable Regulations, the amount of excess arbitrage profits, if any, earned from the investment of the gross proceeds of the Bonds and (iv) timely pay, as required by applicable Regulations, all amounts required to be rebated to the federal government. In addition, the City will exercise reasonable diligence to assure that no errors are made in the calculations required by the preceding sentence and, if such an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter, including payment to the federal government of any delinquent amounts owed to it, including interest thereon and penalty. (i) The City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in smaller profit or a larger loss than would have resulted if such arrangement had been at arm's length and had the yield on the issue not been relevant to either party. -16- (j) The City will timely file or cause to be filed with the Secretary of the Treasury of the United States the information required by Section 149(e) of the Code with respect to the Bonds on such form and in such place as the Secretary may prescribe. (k) The City will not issue or use the Bonds as part of an "abusive arbitrage device" (as defined in Section 1.148-10(a) of the Regulations). Without limiting the foregoing, the Bonds are not and will not be a part of a transaction or series of transactions that attempts to circumvent the provisions of Section 148 of the Code and the Regulations, by (i) enabling the City to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage, or (ii) increasing the burden on the market for tax-exempt obligations. (1) Proper officers of the City charged with the responsibility for issuing the Bonds are hereby directed to make, execute and deliver certifications as to facts, estimates or circumstances in existence as of the Issue Date and stating whether there are facts, estimates or circumstances that would materially change the City's expectations. On or after the Issue Date, the City will take such actions as are necessary and appropriate to assure the continuous accuracy of the representations contained in such certificates. (m) The covenants and representations made or required by this Section are for the benefit of the Bond holders and any subsequent Bond holder, and may be relied upon by the Bondholder and any subsequent Bondholder and bond counsel to the City. (n) In complying with the foregoing covenants, the City may rely upon an unqualified opinion issued to the City by nationally recognized bond counsel that any action by the City or reliance upon any interpretation of the Code or Regulations contained in such opinion will not cause interest on the Bonds to be includable in gross income for federal income tax purposes under existing law. (o) Notwithstanding any other provision of this Ordinance, the City's representations and obligations under the covenants and provisions of this Section shall survive the defeasance and discharge of the Bonds for as long as such matters are relevant to the exclusion of interest on the Bonds from the gross income of the owners for federal income tax purposes. 22. Application of Proceeds. The proceeds from the sale of the Bonds in the amount of $24,102,567.41, shall, promptly upon receipt by the City, be applied as follows: (a) Accrued interest in the amount of$34,630.56 shall be deposited into the Interest and Sinking Fund for the Bonds; (b) To establish the escrow fund to refund the Refunded Obligations, $23,873,026.18 from the sale of the Bonds shall be deposited with the Escrow Agent pursuant to Section 25 below. -17- c $192 154.30 from the sale of the Bonds shall( ) a be used to pay the costs of issuing the Bonds, including the premium of$62,154.30 for the Municipal Bond Guaranty Insurance Policy, not later than 90 days after such issuance; and (d) The sum of $2,756.37 from the sale of the Bonds shall be used as a rounding amount and shall be deposited in the Interest and Sinking Fund for the Bonds; and (e) Any proceeds from the Bonds remaining after making all such deposits and payments shall be deposited into the Interest and Sinking Fund. 23. Transfer of Money in Interest and Sinking Funds Maintained for the Refunded Obligations. On the date of delivery of the Bonds, the sum of$0.00 contained in the Interest and Sinking Funds for the Refunded Obligations shall be transferred to the Escrow Agent and shall be applied as herein provided. 24. Redemption of Refunded Obligations. The City hereby irrevocably calls the following bonds of the City for redemption on the date set forth below, and authorizes and directs notice of such redemption to be given in such form and in such manner as the Mayor, City Manager, City Clerk or any other official of the City may approve: Obligations To Be Redeemed Redemption Date The City of Beaumont, Texas, Combination Tax & Revenue Certificates of Obligation, Series 1996 Maturities 2009 through 2014, in the principal amounts of$605,000, $675,000, $725,000, $770,000, $820,000, and 850,000, respectively March 1, 2007 The City of Beaumont, Texas, Refunding Bonds, Series 1996, Maturities 2009 and 2010 in the principal amounts of$780,000 and $785,000, respectively March 1, 2007 The City of Beaumont, Texas Combination Tax &Revenue Certificates of Obligation, Series 1998, Maturing on March 1, 2018 in the principal amount of$2,225,000 March 1, 2008 The City of Beaumont, Texas, Certificates of Obligation, Series 1999, Maturities 2011 through 2018 in the principal -18- amounts of$1,375,000, $1,500,000, $1,600,000, $1,900,000, $2,000,000, $2,100,000, $2,200,000 and$2,325,000, respectively March 1, 2009 25. Escrow Agreement. The discharge and defeasance of the Refunded Obligations shall be effectuated pursuant to the terms and provisions of an Escrow Agreement to be entered into by and between the City and The Bank of New York Trust Company, N.A., Dallas, Texas, as Escrow Agent, which shall be substantially in the form attached hereto as Exhibit "A", the terms and provisions of which are hereby approved, subject to such insertions, additions and modifications as shall be necessary (a) to carry out the program which has been designed for the City by RBC Capital Markets, and which shall be certified as to mathematical accuracy by Grant Thornton, L.L.P., in the Report, (b) to maximize the City's present value savings and minimize the City's costs of refunding, (c) to comply with all applicable laws and regulations relating to the refunding of the Refunded Obligations and (d) to carry out the other intents and purposes of this Ordinance, and the Mayor is hereby authorized to execute and deliver the Escrow Agreement on behalf of the City in multiple counterparts and the City Clerk or an Assistant City Clerk is hereby authorized to attest thereto and affix the City's seal. 26. Source of Funds Used in Refunding. No money of the City other than proceeds of the Bonds shall be used to refund the Refunded Obligations. 27. Purchase of Escrowed Securities. To assure the purchase of the Escrowed Securities as described in the Report and in the Escrow Agreement, the Mayor, the City's Finance Officer, and the Escrow Agent are hereby authorized to subscribe for, agree to purchase, and purchase such Escrowed Securities in such amounts and maturities and bearing interest at such rates as may be provided for in the Report, and to execute any and all subscriptions, purchase agreements, commitments, letters of authorization and other documents necessary to effectuate the foregoing, and any actions heretofore taken for such purpose are hereby ratified and approved. 28. Open Meeting. It is hereby officially found and determined that the meeting at which this Ordinance was adopted was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551 of the Texas Government Code Annotated, Vernon's 1994, as amended. 29. Official Statement. The Preliminary Official Statement and the Official Statement prepared in the initial offering and sale of the Bonds have been and are hereby authorized, approved and ratified as to form and content. The use of the Preliminary Official Statement and the Official Statement in the reoffering of the Bonds by the Underwriters is hereby approved, authorized and ratified. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to the Preliminary Official Statement and the Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Bonds. -19- 30. Registrar. The Registrar, by undertaking the performance of the duties of the Registrar and in consideration of the payment of fees or deposits of money pursuant to this Ordinance and a Paying Agent/Registrar's Agreement, accepts and agrees to abide by the terms of this Ordinance and such Agreement. The City hereby approves the form of the Paying Agent/Registrar's Agreement presented to the City Council and hereby authorizes the Mayor or any other official of the City to execute such agreement on behalf of the City, with such changes and revisions thereto as may be approved by the official executing such agreement. The City covenants that at all times while any Bonds are outstanding, it will provide a bank, trust company, financial institution or other entity duly qualified and authorized to act as Registrar for the Bonds. The City reserves the right to replace the Registrar or its successor at any time on not less than sixty (60) days' written notice to the Registrar, so long as any such notice is effective not less than sixty (60) days prior to the next succeeding principal or interest payment date on the Bonds. If the Registrar is replaced by the City, the new Registrar shall accept the previous Registrar's records and act in the same capacity as the previous Registrar, and the new Registrar shall notify each Owner, by United States Mail, first class postage prepaid, of such change and of the address of the new Registrar. Any successor Registrar shall be either a national or state banking institution and a corporation or association organized and doing business under the laws of the United States of America or any State authorized under such laws to exercise trust powers and subject to supervision or examination by Federal or State authority. Each Registrar hereunder, by acting in that capacity, shall be deemed to have agreed to the provisions of this Section. 31. Related Matters. To satisfy in a timely manner all of the City's obligations under this Ordinance, the Mayor, the Mayor Pro Tem, the City Manager, the City Clerk, or Assistant City Clerk, and all other appropriate officers and agents of the City are hereby authorized and directed to take all other actions that are reasonably necessary to provide for issuance of the Bonds, including, without limitation, executing and delivering on behalf of the City all certificates, consents, receipts, requests and other documents as may be reasonably necessary to satisfy the City's obligations under this Ordinance and to direct the application of funds of the City consistent with the provisions hereof. 32. No Personal Liability. No recourse shall be had for payment of the principal of or premium, if any, or interest on any Bonds, or for any claim based thereon, or on this Ordinance, against any official or employee of the City or any person executing any Bonds. 33. Severability. If any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. 34. Repealer. All orders, resolutions, and ordinances, and parts thereof inconsistent herewith are hereby repealed to the extent of such inconsistency. -20- 35. Additional Obligations. The City undertakes and agrees for the benefit of the holders of the Bonds to provide directly, on or before six months after the end of the City's fiscal year, which fiscal year presently ends on September 30: a. to each nationally recognized municipal securities information repository and to the appropriate state information depository, if any, annual financial information (which may be unaudited) and operating data regarding the City for fiscal years ending on or after January 1, 2006 which annual financial information and operating data shall be of the type included in the following listed sections contained in the Final Official Statement: SELECTED FINANCIAL DATA DEBT STATEMENT TAX DATA SELECTED FINANCIAL DATA ADMINISTRATION OF THE CITY Appendix B b. to each nationally recognized municipal securities information repository and to the appropriate state information depository, if any, audited financial statements for the City for fiscal years ending on or after January 1, 2006, when available, if the City commissions an audit and it is completed by the required time; provided that if audited statements are not commissioned or are not available by the required time, the City will provide unaudited statements when and if they become available; C. in a timely manner, to each nationally recognized municipal securities information repository or to the Municipal Securities Rulemaking Board, and to the appropriate state information depository, if any, notice of any of the following events with respect to the Bonds, if material within the meaning of the federal securities laws to a decision to purchase or sell Bonds: i. Principal and interest payment delinquencies; ii. Non-payment related defaults; iii. Unscheduled draws on debt service reserves reflecting financial difficulties; iv. Unscheduled draws on credit enhancements reflecting financial difficulties; -21- V. Substitution of credit or liquidity providers, or their failure to perform; vi. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; vii. Modifications to rights of Bondholders; viii. Bond calls; ix. Defeasances; X. Release, substitution or sale of property securing repayment of the securities; xi. Rating changes; and d. in a timely manner, to each nationally recognized municipal securities information repository or to the Municipal Securities Rulemaking Board, and to the appropriate state information depository, if any, notice of a failure of the City to provide required annual financial information and operating data, on or before six months after the end of the City's fiscal year. These undertakings and agreements are subject to appropriation of necessary funds and to applicable legal restrictions, if any. The accounting principles pursuant to which the City's financial statements are currently prepared are generally accepted accounting principles set out by the Government Accounting Standards Board, and, subject to changes in applicable law or regulation, such principles will be applied in the future. If the City changes its fiscal year, it will notify each nationally recognized municipal securities information repository and the appropriate state information depository of the change (and of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide annual financial information. The City's obligation to update information and to provide notices of material events shall be limited to the agreements herein. The City shall not be obligated to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, prospects and shall not be obligated to update any information that is provided, except as described herein. The City makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. THE CITY DISCLAIMS ANY CONTRACTUAL OR TORT LIABILITY FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ITS CONTINUING DISCLOSURE AGREEMENT OR FROM ANY STATEMENT MADE PURSUANT TO ITS AGREEMENT. HOLDERS OR BENEFICIAL OWNERS OF BONDS MAY SEEK AS THEIR SOLE REMEDY A WRIT OF MANDAMUS TO COMPEL THE CITY TO COMPLY WITH ITS AGREEMENT. No default by the City with respect to its continuing disclosure agreement shall constitute a breach of or default under this -22- Ordinance for purposes of any other provision of this Ordinance. Nothing in this paragraph is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The City may amend its continuing disclosure obligations and agreement in this Section to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status or type of operations of the City, if the agreement, as amended, would have permitted the Underwriters to purchase or sell the Bonds in compliance with SEC Rule 15c2-12, taking into account any amendments or interpretations of such rule to the date of such amendment, as well as such changed circumstances, and either the holders of a majority in aggregate principal amount of the outstanding Bonds consent or any person unaffiliated with the City (such as nationally recognized bond counsel) determines the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds. The City may also amend or repeal the obligations and agreement in this Section if the SEC amends or repeals the applicable provisions of Rule 15c2-12 or a court of final jurisdiction determines that such provisions are invalid, and the City may amend the agreement in its discretion in any other circumstance or manner, but in either case only to the extent that its right to do so would not prevent the Underwriters from lawfully purchasing or reselling the Bonds in the primary offering of the Bonds in compliance with Rule 15c2-12. If the City amends its agreement, it must include with the next financial information and operating data provided in accordance with its agreement an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of information and operating data so provided. The City's continuing obligation to provide annual financial information and operating data and notices of events will terminate if and when the City no longer remains an "obligated person" (as such term is defined in SEC Rule 15c2-12)with respect to the Bonds. [The remainder of this page has intentionally been left blank. Signature page follows.] -23- City of Beaumont-General Obligation Debt Current Refunding of Series 1996 and Advance Refunding of Series 1998 81999 Bonds Dated Date=01101/1996 Series 1996 Tax Exempt Bonds to Refund Delivery Date=02122/1996 Term Bond Bond Coupon Interest Total Fiscal Year Debt Service Dates Maturities Redemptions Proceeds Rate Yield Price Amount Debt Service Debt Service to Call 03/01/2007 4.900 5.500000 95.087000 39,907.50 39,907.50 - 1,604,907.50 09/01/2007 - - - 39,907.50 39,907.50 79,815.00 03/01/2008 5.000 5.000000 100.000000 39,907.50 39,907.50 - 09/01/2008 - - - - 39,907.50 39,907.50 79,815.00 03/01/2009 780,000.00 ' 786,536.40 5.100 5.000000 100.838000 39,907.50 819,907.50 - 09/01/2009 - - - - - 20,017.50 20,017.50 839,925.00 03/01/2010 785,000.00 ' 791,578.30 5.100 5.000000 100.838000 20,017.50 805,017.50 - 09/01/2010 - - - - - - - 805,017.50 03/01/2011 - 5.100 5.100000 100.000000 - 09/01/2011 - - - 03/01/2012 - - 5.200 5.200000 100.000000 09/01/2012 - - - - 03/01/2013 5.200 5.200000 100.000000 - - 09/01/2013 - - - - - - 03/01/2014 5.200 5.200000 100.000000 - - - Total 1,565,000.00 1,578,114.70 239,572.50 1,804,572.50 1,804,572.50 1,604,907.50 Acc Int -11,307.13 -11,307.13 rand Totals 1,565,000.00 1,578,114.70 228 265.37 1,793,265.37 1,804,572.50 1 604 907.50 Bonds callable... 03/01/2007 @ 100.000 TIC(Incl.all expenses)....5.01185104% Average Coupon.......5.10000000% Net Eff.Int.Rate(Texas Vernon's)= 5.038690%(with Adjstmnt of$0.00). TIC(Arbitrage TIC).........5.01185104% Average Life(yrs)... 13.67 IRS Form 8038-G NIC =4.996180%(with Adjstmnt of$0.00). Bond Years.................. 21,390.83 WAM rs)............. 13.526597 NIC= 5.038690%(with Adjstmnt of$0.00). 3 BEAUMONT CITY GO:OLD1996REF R Prepared by:RBC Capital Markets--Houston, Texas 1111312006 @ 11:41 v7.66 Page-12 City of Beaumont-General Obligation Debt Current Refunding of Series 1996 and Advance Refunding of Series 1998&1999 Bonds Dated Date=05/01/1999 C/O Bonds Series1999 to Refund Delivery Date=05/27/1999 Term Bond Bond Coupon Interest Total Fiscal Year Debt Service Dates Maturities Redemptions Proceeds Rate Yield Price Amount Debt Service Debt Service to Call 03/01/2007 6.500 6.500000 100.000000 358,568.75 358,568.75 - 358,568.75 09/01/2007 - - - 358,568.75 358,568.75 717,137.50 358,568.75 03/01/2008 - 6.400 6.400000 100.000000 358,568.75 358,568.75 - 358,568.75 09/01/2008 - - - - 358,568.75 358,568.75 717,137.50 358,568.75 03/01/2009 - 4.500 4.500000 100.000000 358,568.75 358,568.75 - 15,358,568.75 09/01/2009 - - - 358,568.75 358,568.75 717,137.50 03/01/2010 4.500 4.500000 100.000000 358,568.75 358,568.75 - - 09/01/2010 - - - - 358,568.75 358,568.75 717,137.50 03/01/2011 1,375,000.00 ` 1,375,000.00 4.600 4.600000 100.000000 358,568.75 1,733,568.75 - 09/01/2011 - - - - 326,943.75 326,943.75 2,060,512.50 03/01/2012 - 1,500,000.00 ` 1,500,000.00 5.250 5.250000 100.000000 326,943.75 1,826,943.75 09/01/2012 - - - - 287,568.75 287,568.75 2,114,512.50 03/01/2013 - 1,600,000.00 ` 1,600,000.00 4.700 4.700000 100.000000 287,568.75 1,887,568.75 09/01/2013 - - - - 249,968.75 249,968.75 2,137,537.50 03/01/2014 - 1,900,000.00 ` 1,900,000.00 4.750 4.750000 100.000000 249,968.75 2,149,968.75 09/01/2014 - - - - 204,843.75 204,843.75 2,354,812.50 - 03/01/2015 - 2,000,000.00 ` 2,000,000.00 4.750 4.750000 100.000000 204,843.75 2,204,843.75 09101/2015 - - - - 157,343.75 157,343.75 2,362,187.50 03/01/2016 - 2,100,000.00 ` 2,100,000.00 4.750 4.750000 100.000000 157,343.75 2,257,343.75 09/01/2016 - - - - - - 107,468.75 107,468.75 2,364,812.50 03/01/2017 - 2,200,000.00 ` 2,200,000.00 4.750 4.750000 100.000000 107,468.75 2,307,468.75 09101/2017 - - - - 55,218.75 55,218.75 2,362,687.50 03/01/2018 - 2,325,000.00 ` 2,325,000.00 4.750 4.750000 100.000000 55,218.75 2,380,218.75 2,380,218.75 Total - 15,000,000.00 15,000,000.00 6,005,831.25 21,005,831.25 21,005,831.25 16,792,843.75 Acc Int - -51,793.26 -51,793.26 rand Totals 15,000,000.00 15,000 000.00 5,954 037.99 20,954 037.99 21,005,831.25 16,792,843.75 Bonds callable... 03/01/2009 @ 100.000 TIC(Incl.all expenses)....4.77423895% Average Coupon.......4.77576665% Net Eff.Int.Rate(Texas Vernon's)= 4.775767%(with Adjstmnt of$0.00). TIC(Arbitrage TIC).........4.77423895% Average Life(yrs)... 15.73 IRS Form 8038-G NIC =4.775743%(with Adjstmnt of$0.00). Bond Years.................. 235,875.00 WAM rs)............. 15.652778 NIC= 4.775767% with Adjstmnt of$0.00). BEAUMONT CITY GO:OLD1999R Prepared by:RBC Capital Markets-Houston,Texas 1111312006 @ 11:41 v7.66 Page-13 City of Beaumont-General Obligation Debt Current Refunding of Series 1996 and Advance Refunding of Series 1998&1999 Bonds Dated Date=04/0111998 Series 1998 Tax&Revenue Bonds to Refund Delivery Date=04/28/1998 Term Bond Bond Coupon Interest Total Fiscal Year Debt Service Dates Maturities Redemptions Proceeds Rate Yield Price Amount Debt Service Debt Service to Call 03/01/2007 6.500 6.500000 100.000000 50,062.50 50,062.50 - 50,062.50 09/01/2007 - - - 50,062.50 50,062.50 100,125.00 50,062.50 03/01/2008 6.500 6.500000 100.000000 50,062.50 50,062.50 - 2,275,062.50 09/01/2008 - - - 50,062.50 50,062.50 100,125.00 03/01/2009 6.500 6.500000 100.000000 50,062.50 50,062.50 - 09/01/2009 - - - 50,062.50 50,062.50 100,125.00 03/01/2010 4.700 4.700000 100.000000 50,062.50 50,062.50 - 09/01/2010 - - - 50,062.50 50,062.50 100,125.00 03/01/2011 4.800 4.800000 100.000000 50,062.50 50,062.50 - 09/01/2011 - - - 50,062.50 50,062.50 100,125.00 03/01/2012 5.000 5.000000 100.000000 50,062.50 50,062.50 - 09/01/2012 - - - 50,062.50 50,062.50 100,125.00 03/01/2013 5.000 5.000000 100.000000 50,062.50 50,062.50 - 09/01/2013 - - - 50,062.50 50,062.50 100,125.00 03/01/2014 5.000 5.000000 100.000000 50,062.50 50,062.50 - 09/01/2014 - - - - 50,062.50 50,062.50 100,125.00 - 03/01/2015 5.000 5.000000 100.000000 50,062.50 50,062.50 - - 09/0112015 - - - 50,062.50 50,062.50 100,125.00 03/01/2016 - 5.000 5.000000 100.000000 50,062.50 50,062.50 - - 09/01/2016 - - - - 50,062.50 50,062.50 100,125.00 03/01/2017 - 5.000 5.000000 100.000000 50,062.50 50,062.50 - - 09/01/2017 - - - 50,062.50 50,062.50 100,125.00 - 03/01/2018 2,225,000.00 ' 2,225,000.00 4.500 4.500000 100.000000 50,062.50 2,275,062.50 2,275,062.50 - Total 2,225,000.00 2,225,000.00 1,151,437.50 3,376,437.50 3,376,437.50 2,375,187.50 '. Acc Int -7,509.38 -7,509.38 rand Totals 2,225,000.00 2,225,000.00 1,143,928.12 3,368,928.12 3,376,437.50 2,375,187.50 '-Bonds callable... 03/01/2008 @ 100.000 TIC(Incl.all expenses)....4.49690383% Average Coupon.......4.50000000% Net Eff.Int.Rate(Texas Vernon's)= 4.500000%(with Adjstmnt of$0.00). TIC(Arbitrage TIC).........4.49690383% Average Life(yrs)... 19.92 IRS Form 8038-G NIC =4.500000%(with Adjstmnt of$0.00). Bond Years.................. 44,314.58 WAM(y s)............. 19.841667 NIC= 4.500000%(with Adjstmnt of$0.00). BEAUMONT CITY GO:OLD1998R Prepared by:RBC Capital Markets--Houston, Texas 1111312006 @ 11:41 v7.66 Page-14 PASSED AND APPROVED this 14th day of No vemb 006. Mayor THE CITY OF BEAUMONT, TEXAS ATTEST: uMoM' City Clerk THE CITY OF BEAU ONT, TEXAS % E= •^° (CITY SEAL) -24- EXHIBIT "A" ESCROW AGREEMENT City of Beaumont-General Obligation Debt Refunding Effects Current Refunding of Series 1996 and Advance Refunding of Series 1998&1999 Bonds Less:Debt Service Plus:Series 2006 Refunding Bonds Year Ending Current Total on Refunded Current Interest Bonds Capital Post Rfndg Post Rfnd 09130 Debt Service Bonds(l) Principal Interest Appr Bonds Debt Service Savings 2 2007 13,118,524 1,124,933 719,250 12,712,841 440,313 2008 9,028,880 1,124,933 60,000 957,800 8,921,748 107,133 2009 9,029,421 2,474,918 1,440,000 927,800 8,922,304 107,118 2010 9,029,489 2,478,010 1,505,000 868,900 8,925,379 104,110 2011 8,305,599 3,031,005 2,235,000 794,100 8,303,694 1,905 2012 8,301,358 3,091,498 2,385,000 701,700 8,296,560 4,798 2013 8,303,986 3,123,183 2,515,000 603,700 8,299,504 4,482 2014 8,304,781 3,327,038 2,830,000 496,800 8,304,544 237 2015 8,299,943 2,462,313 2,060,000 399,000 8,296,630 3,313 2016 8,299,108 2,464,938 2,150,000 314,800 8,298,970 138 2017 8,295,511 2,462,813 2,235,000 227,100 8,294,799 713 2018 8,294,151 4,655,281 4,560,000 91,200 8,290,070 4,081 2019 2,298,938 2,298,938 2020 2,244,313 2,244,313 2021 2,204,644 2,204,644 2022 2,169,850 2,169,850 2023 2,147,825 2,147,825 2024 2,124,513 2,124,513 2025 2,126,425 2,126,425 Totals $121,927,259 $31,820,863 $23,975,000 $7,102,150 $121,183,551 $778,339 (1)-This column only reflects debt payments scheduled after the closing date of 12/14/2006. (2)-First year savings include$34,630.56 of accrued interest received at delivery. i BEAUMONT CITY GO:RUN2006 AGGOLD AGGREFUND NEW2006 Prepared by.RBC Capital Markets--Houston,Texas 1111312006 @ 11:41 v7.66 Page-1 City of Beaumont-General Obligation Debt Sources&Uses Report Current Refunding of Series 1996 and Advance Refunding of Series 1998 81999 Bonds Sources of Funds: Principal Amount of Current Interest Bonds(CIBs) 23,975,000.00 CIB Premium 269,385.55 CIB Discount -20,611.20 Accrued Interest 34,630.56 Total SOURCES of Funds $24,258,404.91 Uses of Funds: SLG Escrow Cost 23,873,026.18 Bond Insurance 62,154.30 Accrued Interest Deposit to D/S Fund 34,630.56 Issuance Expenses: ($285,837.50) Underwriter's Discount 155,837.50 Rating Agency 12,200.00 Bond Counsel 38,000.00 Accountant/CPA 3,500.00 Printing 8,000.00 Trustee 3,950.00 Financial Advisor Fee 43,950.00 Miscellaneous 10,900.00 Attorney General 9,500.00 Rounding Amount 2,756.37 Total USES of Funds $24,258,404.91 Miscellaneous Bond Issuance Information: Delivery Date: 12/14/2006 Principal Amount of Bonds Being Refunded 23,235,000.00 Principal Amount of the Refunding Bonds 23,975,000.00 Proceeds of"The new Bonds" 24,223,774.35 Rate/Yield on the Refunded Bonds 4.95153316% "All Costs Included"TIC on the New Issue is 4.06744755% Federal Arbitrage Yield on the New Issue is 3.87578613% Yield on Escrow 3.87577260% Total Debt Service Savings 778,339.31 Present Value Savings @ 4.06744755% 733,020.38 Total Debt Service Savings as a Percent of Total Debt Service of Refunded Bonds 2.44600347% Present Value Savings as a Percent of Principal Amount of Bonds Being Refunded 3.15481115% BEAUMONT CITY GO:RUN2006 NEW2006 AGGREFUND Prepared by:RBC Capital Markets--Houston,Texas 1111312006 @ 11:41 v7.66 Page-2 City of Beaumont-General Obligation Debt Current Refunding of Series 1996 and Advance Refunding of Series 1998 81999 Bonds Dated Date=12101/2006 Series 2006 Refunding Bonds Delivery Date=12/14/2006 Term Bond Bond Coupon Interest Total Fiscal Year Debt Service Dates Maturities Redemptions Proceeds Rate Yield Price Amount Debt Service Debt Service to Call 03/01/2007 - 239,750.00 239,750.00 - 239,750.00 09/01/2007 - - - - - 479,500.00 479,500.00 719,250.00 479,500.00 03/01/2008 60,000.00 60,322.20 4.000 3.540000 100.537000 479,500.00 539,500.00 - 539,500.00 09/01/2008 - - - - - - 478,300.00 478,300.00 1,017,800.00 478,300.00 03/01/2009 - 1,440,000.00 1,453,608.00 4.000 3.550000 100.945000 478,300.00 1,918,300.00 - 1,918,300.00 09/01/2009 - - - - 449,500.00 449,500.00 2,367,800.00 449,500.00 03/01/2010 - 1,505,000.00 1,523,496.45 4.000 3.590000 101.229000 449,500.00 1,954,500.00 - 1,954,500.00 09/01/2010 - - - - 419,400.00 419,400.00 2,373,900.00 419,400.00 03/01/2011 - 2,235,000.00 2,267,809.80 4.000 3.620000 101.468000 419,400.00 2,654,400.00 - 2,654,400.00 09/01/2011 - - - - 374,700.00 374,700.00 3,029,100.00 374,700.00 03/01/2012 - 2,385,000.00 2,425,330.35 4.000 3.640000 101.691000 374,700.00 2,759,700.00 - 2,759,700.00 09/01/2012 - - - - - 327,000.00 327,000.00 3,086,700.00 327,000.00 ". 03/01/2013 - 2,515,000.00 2,556,422.05 4.000 3.700000 101.647000 327,000.00 2,842,000.00 - 2,842,000.00 09/01/2013 - - - - 276,700.00 276,700.00 3,118,700.00 276,700.00 03/01/2014 - 2,830,000.00 2,877,798.70 4.000 3.730000 101.689000 276,700.00 3,106,700.00 - 3,106,700.00 09/01/2014 - - - - - 220,100.00 220,100.00 3,326,800.00 220,100.00 03/01/2015 - 2,060,000.00 2,093,104.20 4.000 3.770000 101.607000 220,100.00 2,280,100.00 - 2,280,100.00 09/01/2015 - - - - - 178,900.00 178,900.00 2,459,000.00 178,900.00 , 03/01/2016 - 2,150,000.00 2,183,045.50 4.000 3.800000 101.537000 178,900.00 2,328,900.00 - 9,123,900.00 09/01/2016 - - - - 135,900.00 135,900.00 2,464,800.00 - 03/01/2017 - 2,235,000.00 ` 2,243,448.30 4.000 3.950000 100.378000 135,900.00 2,370,900.00 - 09/01/2017 - - - - 91,200.00 91,200.00 2,462,100.00 03/01/2018 - 4,560,000.00 - 4,539,388.80 4.000 4.050000 99.548000 91,200.00 4,651,200.00 4,651,200.00 Total 23,975,000.00 24,223,774.35 7,102,150.00 31,077,150.00 31,077,150.00 30,622,950.00 Acc Int -34,630.56 -34,630.56 rand Totals 23 975,000.00 24,223,774.35 7,067,519.44 31,042,519.44 31 077,150.00 30 622 950.00 '-Bonds callable... 03/01/2016 @ 100.000 TIC(Incl.all expenses)....4.06744755% Average Coupon.......4.00000000% Net Eff.Int.Rate(Texas Vernon's)= 3.859888%(with Adjstmnt of$0.00). ". TIC(Arbitrage TIC).........3.87578613% Average Life(yrs)... 7.41 IRS Form 8038-G NIC =3.827310%(with Adjstmnt of$0.00). Bond Years.................. 177,553.75 WAM(yrs)............. 7.354768 NIC= 3.859888%(with Adjstmnt of$0.00). BEAUMONT CITY GO:NEW2006 Prepared by:RBC Capital Markets--Houston,Texas 1111312006 @ 11:41 v7.66 Page-3 City of Beaumont-General Obligation Debt Refunding Analysis Savings Report Current Refunding of Series 1996 and Advance Refunding of Series 1998&1999 Bonds Maturing Proceeds @ Interest Total Escrowed FY Begins Cumulative Pv of Savings Dates Amount Issue Date Coupon Yield Amount Debt Service Debt 10101 Savings 4.06744755% Savings 2007 719,250.00 719,250.00 1,124,932.50 405,682.50 405,682.50 400,564.06 2008 60,000 60,322.20 4.000 3.540000 957,800.00 1,017,800.00 1,124,932.50 107,132.50 512,815.00 100,424.33 2009 1,440,000 1,453,608.00 4.000 3.550000 927,800.00 2,367,800.00 2,474,917.50 107,117.50 619,932.50 96,560.53 2010 1,505,000 1,523,496.45 4.000 3.590000 868,900.00 2,373,900.00 2,478,010.00 104,110.00 724,042.50 90,226.15 2011 2,235,000 2,267,809.80 4.000 3.620000 794,100.00 3,029,100.00 3,031,005.00 1,905.00 725,947.50 501.76 2012 2,385,000 2,425,330.35 4.000 3.640000 701,700.00 3,086,700.00 3,091,497.50 4,797.50 730,745.00 3,015.67 2013 2,515,000 2,556,422.05 4.000 3.700000 603,700.00 3,118,700.00 3,123,182.50 4,482.50 735,227.50 2,785.16 2014 2,830,000 2,877,798.70 4.000 3.730000 496,800.00 3,326,800.00 3,327,037.50 237.50 735,465.00 -341.23 2015 2,060,000 2,093,104.20 4.000 3.770000 399,000.00 2,459,000.00 2,462,312.50 3,312.50 738,777.50 1,971.49 2016 2,150,000 2,183,045.50 4.000 3.800000 314,800.00 2,464,800.00 2,464,937.50 137.50 738,915.00 -202.63 2017 2,235,000 2,243,448.30 4.000 3.950000 227,100.00 2,462,100.00 2,462,812.50 712.50 739,627.50 286.22 2018 4,560,000 4,539,388.80 4.000 4.050000 91,200.00 4,651,200.00 4,655,281.25 4,081.25 743,708.75 2,598.31 $23,975,000 $24,223,774.35 $7,102,150.00 $31,077,150.00 $31,820,858.75 $743,708.75 $698,389.82 Acc Int -34,630.56 -34,630.56 $34,630.56 $34,630.56 Grnd Total $23,975,000 $24,223,774.35 $7,067,519.44 $31,042,519.44 $31,820,858.75 $778,339.31 $733,020.38 BEAUMONT CITY GO:RUN2006 NEW2006 AGGREFUND Prepared by:RBC Capital Markets--Houston, Texas 1111312006 @ 11:41 v7.66 Page-4 City of Beaumont-General Obligation Debt Form 8038-G Report Current Refunding of Series 1996 and Advance Refunding of Series 1998 81999 Bonds Dated Date=12/01/2006 Series 2006 Refunding Bonds Delivery Date=12/14/2006 Part III Description of Obligations. (Complete for the entire issue for which this form is being filed.) (a)Final maturity date (b)Issue price (c)Stated redemption (d)Weighted (e)Yield price at maturity average maturity 21 03/01/2018 $24,223,774.35 $23,975,000.00 7.355 years 3.875786% i Part IV Uses of Proceeds of Bond Issue(including underwriters'discount) 22 Proceeds used for accrued interest 22 34,630.56 23 Issue price of entire issue enter amount from line 21,column b 23 24,223,774.35 24 Proceeds used for bond issuance costs(including underwriters'discount) 24 285,837.50 ## 25 Proceeds used for credit enhancement 25 62,154.30 ## 26 Proceeds allocated to reasonably required reserve or replacement fund 26 0.00 ## 27 Proceeds used to currently refund prior issues 27 6,113,433.88 ## 28 Proceeds used to advance refund prior issues 28 17,759,592.30 ## 29 Total add lines 24 through 28 29 24,221,017.98 30 Nonrefunding proceeds of the issue(subtract line 29 from line 23 and enter amount here) 30 2,756.37 Part V Description of Refunded Bonds (Complete this part only for refunding bonds.) 31 Enter the remaining weighted average maturity of the bonds to be currently refunded => 4.3318 years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded => 8.5071 years 33 Enter the last date on which the refunded bonds will be called => 03/01/2009 34 Enter the date(s)the refunded bonds were issued See each Issue's O/S BEAUMONT CITY GO:RUN2006 NEW2006 Prepared by:RBC Capital Markets--Houston,Texas 1111312006 @ 11:41 v7.66 Page-5 City of Beaumont-General Obligation Debt Proof of Federal Arbitrage Yield Current Refunding of Series 1996 and Advance Refunding of Series 1998 81999 Bonds Dated Date 12/01/2006 Series 2006 Refunding Bonds Delivery Date 12/14/2006 Proceeds to: Interest to: Disc Term Total PV of Adj D/S Face Bondholder(+) Maturing Bondholder(+) Recoverable Total Bond Adjusted to 12/14/2006 o Dates Amounts Issuer(-) Amounts Issuer(-) Fees Recurring Debt Service for Yld Calc Adjustments Cash Flow @ 3.87578613/o 12/14/2006 0.00 -24,223,774.35 0.00 -34,630.56 0.00 0.00 0.00 -24,258,404.91 -24,258,404.91 03/01/2007 0.00 0.00 0.00 239,750.00 0.00 239,750.00 0.00 239,750.00 237,789.57 09/01/2007 0.00 0.00 0.00 479,500.00 0.00 479,500.00 0.00 479,500.00 466,538.14 03/0112008 60,000.00 60,322.20 60,000.00 479,500.00 0.00 539,500.00 0.00 539,500.00 514,937.28 09/01/2008 0.00 0.00 0.00 478,300.00 0.00 478,300.00 0.00 478,300.00 447,844.88 03/01/2009 1,440,000.00 1,453,608.00 1,440,000.00 478,300.00 0.00 1,918,300.00 0.00 1,918,300.00 1,762,008.94 09/01/2009 0.00 0.00 0.00 449,500.00 0.00 449,500.00 0.00 449,500.00 405,028.54 03/01/2010 1,505,000.00 1,523,496.45 1,505,000.00 449,500.00 0.00 1,954,500.00 0.00 1,954,500.00 1,727,650.74 09/01/2010 0.00 0.00 0.00 419,400.00 0.00 419,400.00 0.00 419,400.00 363,674.67 P 03/01/2011 2,235,000.00 2,267,809.80 2,235,000.00 419,400.00 0.00 2,654,400.00 0.00 2,654,400.00 2,257,955.29 09/01/2011 0.00 0.00 0.00 374,700.00 0.00 374,700.00 0.00 374,700.00 312,677.77 03/01/2012 2,385,000.00 2,425,330.35 2,385,000.00 374,700.00 0.00 2,759,700.00 0.00 2,759,700.00 2,259,121.23 09/01/2012 0.00 0.00 0.00 327,000.00 0.00 327,000.00 0.00 327,000.00 262,597.00 03/01/2013 2,515,000.00 2,556,422.05 2,515,000.00 327,000.00 0.00 2,842,000.00 0.00 2,842,000.00 2,238,878.01 09/01/2013 0.00 0.00 0.00 276,700.00 0.00 276,700.00 0.00 276,700.00 213,835.53 03/01/2014 2,830,000.00 2,877,798.70 2,830,000.00 276,700.00 0.00 3,106,700.00 0.00 3,106,700.00 2,355,235.66 09/01/2014 0.00 0.00 0.00 220,100.00 0.00 220,100.00 0.00 220,100.00 163,688.98 03/01/2015 2,060,000.00 2,093,104.20 2,060,000.00 220,100.00 0.00 2,280,100.00 0.00 2,280,100.00 1,663,480.21 09/01/2015 0.00 0.00 0.00 178,900.00 0.00 178,900.00 0.00 178,900.00 128,037.87 03/01/2016 2,150,000.00 2,183,045.50 2,150,000.00 178,900.00 0.00 2,328,900.00 0.00 2,328,900.00 1,635,096.09 09/01/2016 0.00 0.00 0.00 135,900.00 0.00 135,900.00 0.00 135,900.00 93,600.08 03/01/2017 2,235,000.00 2,243,448.30 2,235,000.00 135,900.00 0.00 2,370,900.00 0.00 2,370,900.00 1,601,896.19 09/01/2017 0.00 0.00 0.00 91,200.00 0.00 91,200.00 0.00 91,200.00 60,447.77 03/01/2018 4,560,000.00 4,539,388.80 4,560,000.00 91,200.00 0.00 4,651,200.00 0.00 4,651,200.00 3,024,230.17 Totals 23,975,000.00 0.00 23,975,000.00 7,067,519.44 0.00 31,077,150.00 0.00 6,818,745.09 -62,154.30 Plus PV of Bond Insurance.......... 62,154.30 0.00 BEAUMONT CITY GO:NEW2006 Prepared by:RBC Capital Markets-Houston, Texas 1111312006 @ 11:41 v7.66 Page-6 City of Beaumont-General Obligation Debt Issuance Expenses for NEW2006 Current Refunding of Series 1996 and Advance Refunding of Series 1998&1999 Bonds Expenses for NEW2006 Expense Raises Exp has no Expense Title Type Units Arb Yield Affect Total on Arb Yield Underwriter's Discount V 6.500000 0.00 155,837.50 155,837.50 Rating Agency F 12,200.00 0.00 12,200.00 12,200.00 Bond Counsel F 38,000.00 0.00 38,000.00 38,000.00 Accountant/CPA F 3,500.00 0.00 3,500.00 3,500.00 Printing F 8,000.00 0.00 8,000.00 8,000.00 Trustee F 3,950.00 0.00 3,950.00 3,950.00 Bond Insurance D 2.000000 62,154.30 0.00 62,154.30 Financial Advisor Fee F 43,950.00 0.00 43,950.00 43,950.00 Miscellaneous F 10,900.00 0.00 10,900.00 10,900.00 Attorney General F 9,500.00 0.00 9,500.00 9,500.00 Totals $62,154.30 $285,837.50 $347,991.80 Type: F-Fixed Expense V-Variable Expense Based on Issue Size D-Variable Expense Based on Total Debt Service E-Variable Expense Based on Total Debt Service Less Accrued Interest R-Variable Expense Based on Reserve Fund Requirement E BEAUMONT CITY GO:EXP2006 Prepared by:RBC Capital Markets--Houston, Texas 1111312006 @ 11:41 v7.66 Page-7 City of Beaumont-General Obligation Debt Escrow Sufficiency& Balance Report Current Refunding of Series 1996 and Advance Refunding of Series 1998&1999 Bonds Escrow Settlement Date Is 12/14/2006 Proceeds from Less Amts to Plus Maturing Adjusted Proceeds from Original be Invested Amts Invested Proceeds from Present Value 'Other' Old D/S Escrow Escrow tric Dates ResEscted in 0%SLGs in 0%SLGs Rstrct'd Esc @ 3.87577260% Investments Requirement New Balance Old Balance 12/14/2006 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.18 1.18 03/01/2007 6,572,466.65 0.00 0.00 6,572,466.65 6,518,724.04 0.00 6,572,466.25 1.58 1.58 09/01/2007 408,631.55 0.00 0.00 408,631.55 397,585.44 0.00 408,631.25 1.88 1.88 03/01/2008 2,633,630.50 0.00 0.00 2,633,630.50 2,513,725.21 0.00 2,633,631.25 1.13 1.13 09/01/2008 358,569.17 0.00 0.00 358,569.17 335,737.83 0.00 358,568.75 1.55 1.55 03/01/2009 15,358,568.20 0.00 0.00 15,358,568.20 14,107,252.48 0.00 15,358,568.75 1.00 1.00 Totals $25,331,866.07 $0.00 $0.00 $25,331,866.07 $23,873,025.00 $0.00 $25,331,866.25 Cost of SLG Securities $23,873,025.00 Escrow Arbitrage YLD after Reinvestment in 0%SLGs=3.87577260% Cost of'Other'Restricted Investments $0.00 Escrow Starting Balance $1.18 Total Escrow Cost... $23,873,026.18 SLG Rates Were Taken From SLG Table Dated 1111312006 r BEAUMONT CITY GO:RUN2006 AGGREFUND Prepared by:RBC Capital Markets--Houston, Texas 1111312006 @ 11:41 v7.66 Page-8 City of Beaumont-General Obligation Debt U. S.Treasury SLG Investments Current Refunding of Series 1996 and Advance Refunding of Series 1998 81999 Bonds Escrow Settlement Date Is 12114/2006 Payment SLG SLG Rates Total Receipts PV'd SLG Rates Dates Principal Subscribed Interest SLG Receipts 3.87577260% From Table 03/01/2007 6,359,415 5.100000 213,051.65 6,572,466.65 6,518,724.04 5.100000 09/01/2007 66,243 5.090000 342,388.55 408,631.55 397,585.44 5.090000 03/01/2008 2,293,653 5.000000 339,977.50 2,633,630.50 2,513,725.21 5.000000 09/01/2008 75,933 4.870000 282,636.17 358,569.17 335,737.83 4.870000 03/01/2009 11,847,561 4.740000 280,787.20 12,128,348.20 11,140,209.69 4.740000 03/01/2009 3,230,220 0.000000 0.00 3,230,220.00 2,967,042.79 4.740000 Totals $23,873,025 $1,458,841.07 $25,331,866.07 $23,873,025.00 SLG Rates were taken from a SLG table dated 11/13/2006 BEAUMONT CITY GO:RUN2006 AGGREFUND Prepared by:RBC Capital Markets—Houston, Texas 1111312006 @ 11:41 v7.66 Page-9 City of Beaumont-General Obligation Debt Aggregation Spreadsheet Report Current Refunding of Series 1996 and Advance Refunding of Series 1998 81999 Bonds Data are Principal Amounts Bonds to Refund Data are to Maturity FY 10/01 Dates Totals OLD1996R OLD1996REF R OLD1998R OLD1999R 2007 0.00 2008 0.00 2009 1,385,000.00 605,000.00 780,000.00 2010 1,460,000.00 675,000.00 785,000.00 2011 2,100,000.00 725,000.00 1,375,000.00 2012 2,270,000.00 770,000.00 1,500,000.00 2013 2,420,000.00 820,000.00 1,600,000.00 2014 2,750,000.00 850,000.00 1,900,000.00 2015 2,000,000.00 2,000,000.00 2016 2,100,000.00 2,100,000.00 2017 2,200,000.00 2,200,000.00 2018 4,550,000.00 2,225,000.00 2,325,000.00 Totals $23 235 000.00 $4,445,000.00 $1,565,000.00 $2 225 000.00 $15,000,000.00 Component Face Amt —Title-- From To OLD1996R $4,445,000.00 Tax and Revenue Series 1996 to Refund OLD1996REF_R $1,565,000.00 Series 1996 Tax Exempt Bonds to Refund OLD1998R $2,225,000.00 Series 1998 Tax&Revenue Bonds to Refund OLD1999R $15,000,000.00 C/O Bonds Seriesl999 to Refund BEAUMONT CITY GO:AGGREFUND Prepared by:RBC Capital Markets--Houston, Texas 1111312006 @ 11:41 v7.66 Page-10 City of Beaumont-General Obligation Debt Current Refunding of Series 1996 and Advance Refunding of Series 1998&1999 Bonds Dated Date=01/01/1996 Tax and Revenue Series 1996 to Refund Delivery Date=02/2211996 Term Bond Bond Coupon Interest Total Fiscal Year Debt Service Dates Maturities Redemptions Proceeds Rate Yield Price Amount Debt Service Debt Service to Call 03/01/2007 - 5.500 5.500000 100.000000 113,927.50 113,927.50 - 4,558,927.50 09/01/2007 - - - 113,927.50 113,927.50 227,855.00 03/01/2008 5.000 5.000000 100.000000 113,927.50 113,927.50 09/01/2008 - - - - 113,927.50 113,927.50 227,855.00 03/01/2009 605,000.00 * 605,000.00 5.000 5.000000 100.000000 113,927.50 718,927.50 - - 09/01/2009 - - - - - 98,802.50 98,802.50 817,730.00 03/01/2010 675,000.00 * 675,000.00 5.000 5.000000 100.000000 98,802.50 773,802.50 - 09/01/2010 - - - - - 81,927.50 81,927.50 855,730.00 03101/2011 - 725,000.00 * 725,000.00 5.100 5.100000 100.000000 81,927.50 806,927.50 - - 09/01/2011 - - - - - - 63,440.00 63,440.00 870,367.50 03101/2012 - 770,000.00 * 770,000.00 5.200 5.200000 100.000000 63,440.00 833,440.00 - 09/01/2012 - - - - - - 43,420.00 43,420.00 876,860.00 03/0112013 - 820,000.00 * 820,000.00 5.200 5.200000 100.000000 43,420.00 863,420.00 - - 09/01/2013 - - - - - - 22,100.00 22,100.00 885,520.00 03/01/2014 - 850,000.00 * 850,000.00 5.200 5.200000 100.000000 22,100.00 872,100.00 872,100.00 Total - 4,445,000.00 4,445,000.00 1,189,017.50 5,634,017.50 5,634,017.50 4,558,927.50 Acc Int -32,279.46 -32,279.46 rand Totals - 4,445,000.00 4,445,000.00 1,156,738.04 5,601 738.04 5,634,017.50 4,558,927.50 *-Bonds callable... 03/01/2007 @ 100.000 TIC(Incl.all expenses)....5.12992726% Average Coupon.......5.13466881% Net Eff.Int.Rate(Texas Vernon's)= 5.134669%(with Adjstmnt of$0.00). TIC(Arbitrage TIC).........5.12992726% Average Life(yrs)... 15.86 IRS Form 8038-G NIC =5.134746%(with Adjstmnt of$0.00). Bond Years.................. 70,490.83 WAM(yrs)............. 15.716789 NIC= 5.134669%(with Adjstmnt of$0.00). i BEAUMONT CITY GO:OLD1996R Prepared by.RBC Capital Markets--Houston,Texas 1111312006 @ 11:41 v7.66 Page-11