HomeMy WebLinkAboutORD 13-071A.3
ORDINANCE NO. 13 -071
ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT,
TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2013; LEVYING
TAXES TO PROVIDE FOR PAYMENT THEREOF; AUTHORIZING THE CALL AND
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, General Obligation Refunding Bonds, Series 2004 (the "Refunded Obligations "),
and now desires to refund certain maturities of the Refunded Obligations in advance of their
maturities in order to provide 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), and Sections 1 and 2 of Article H of the
Charter of the City, most recently amended on September 16, 2003, authorize 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 any
of the Refunded Obligations or an escrow agent permitted by law 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 which are
those which mature on or after March 1, 2015 and are callable on March 1, 2014 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 redeem the Refunded
Obligations on the first date they are subject to call, namely March 1, 2014; 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
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Refunded Obligations shall be discharged, terminated and defeased;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF BEAUMONT:
1. Consideration and Findings. The matters and facts contained in the preamble to this
Ordinance are hereby found to be true and correct. Pursuant to Section 1207.008 of the Government
Code of Texas, the City Council as the governing body of the City of Beaumont, Texas, in these
proceedings authorizing the issuance of the Bonds, hereby finds that the issuance of the Bonds is in
the best interest of the City by providing a savings in gross debt service equal to $341,028.35 with a
net present value of $333,810.01. The benefit so found 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 2013 Bonds" shall mean The City of Beaumont, Texas,
General Obligation Refunding Bonds, Series 2013 authorized in this Ordinance, unless the context
clearly indicates otherwise. The plural is used for convenience even though only a single bond is to
be issued to represent the entire series.
The term "City" shall mean The City of Beaumont, Texas.
The term "Closing Date" shall be December 19, 2013 or such other date as may be agreed
upon by the City acting through any of its officers and the Purchaser.
The term "Code" shall mean the Internal Revenue Code of 1986, as amended.
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, 2014, and each September 1 and March 1 thereafter until maturity of such Bond.
The term "Obligations" shall mean the Bonds.
The term "Ordinance" as used herein and in the Bonds shall mean this ordinance
authorizing the Bonds.
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 "Paying Agent of the Refunded Obligations" shall mean Wells Fargo Bank, N.A.
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The term "Purchaser" (whether one or more) shall mean Wells Fargo Bank, N.A.
The term "Purchase Contract" shall mean the Bid Form submitted by the Purchaser to the
City for purchase of the Bonds.
The term "Record Date" shall mean, for any mandatory redemption date or Interest
Payment Date, as applicable, the fifteenth (15th) calendar day of the month next preceding each
mandatory redemption date or Interest Payment Date, as applicable.
The term "Refunded Obligations" or "Series 2004 Bonds" shall mean: all of the City's
outstanding General Obligation Refunding Bonds, Series 2004, maturing on March 1 in the years
2015 -2017 in the amounts of $1,530,000, $1,610,000, and $1,695,000, respectively. All of such
Refunded Obligations are currently callable on March 1, 2014.
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 Wells Fargo Bank, N.A., 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 redemption of the Refunded Obligations.
The term "SEC" shall mean the United States Securities and Exchange Commission, and its
successors.
3. Authorization and Findings. The Bonds shall be issued in fully registered form,
without coupons, in the total authorized amount of FIVE MILLION TEN THOUSAND and
NO/ 100 Dollars ($5,010,000) 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
"CITY OF BEAUMONT, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES
2013 ", and shall be dated the Closing Date. The Bonds shall bear interest from the later of the
Closing Date, 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, 2014, and semiannually thereafter on September 1 and March 1 of each year
until maturity or earlier redemption.
5. Initial Bond, Numbers, Principal Amount, and Interest Rates. The Initial Bond shall
be issued in the total principal amount of $5,010,000.00 and shall be issued in the name of the
Purchaser. The Bond shall mature and be payable in the principal amount on March 1, 2017, and
shall bear interest at the rate set forth herein and may be transferred and exchanged as set out in this
Ordinance. The Initial Bond shall bear the number R -1 for the full authorized amount. The Initial
Bond shall be the Bond submitted to the Office of the Attorney General of the State of Texas for
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approval, certified and registered by the Office of the Comptroller of Public Accounts of the State
of Texas and delivered to the Purchaser. Any time after the delivery of the Initial Bond, the Paying
Agent/Registrar, pursuant to written instructions from the Purchaser, shall cancel the Initial Bond
delivered hereunder and exchange therefor a single definitive Bond of like kind with the same
maturity, principal amount and bearing applicable interest rate for transfer and delivery to the
holder named at the addresses identified therefor; all pursuant to and in accordance with such
written instructions from the Purchaser, or the designee thereof, and such other information and
documentation as the Paying Agent/Registrar may reasonably require.
6. Mandatory Redemption; Defeasance.
The Bond maturing in the year 2017 (the "Term Bond ") is subject to mandatory
redemption prior to scheduled maturity, in the amounts, on the dates, and on the terms set out in
the form of Bonds in this Ordinance, at a price of par plus accrued interest to the date fixed for
redemption.
Bonds may be redeemed only in integral multiples of $5,000. If a Bond subject to
redemption is in a denomination larger than $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 13 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.
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.
The City may defease the provisions of this Ordinance and discharge its obligation to the
Owners of any portion or all of the Bond to pay principal, interest, thereon in any manner permitted
by law, including by depositing with the Paying Agent/Registrar, or if authorized by Texas law,
with any national or state bank having trust powers and having combined capital and surplus of at
least $50 million, or with the State Treasurer of the State of Texas either: (a) cash in an amount
equal to the principal amount and redemption premium, if any, of such Series 2013 Bonds plus
interest thereon to the date of maturity or redemption; or (b) pursuant to an escrow or trust
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agreement, cash and/or direct obligations of, or obligations the principal of and interest on which
are guaranteed by or secured by the pledge of direct obligations of the United States of America, in
principal amounts and maturities and bearing interest at rates sufficient to provide for the timely
payment of the principal amount of such Bonds plus interest thereon to the date of maturity. Upon
such deposit, such Bonds shall no longer be regarded to be Outstanding or unpaid. Any surplus
amounts not required to accomplish such defeasance shall be returned to the City.
7. Execution of Bonds; Seal. The Bonds shall be signed by the Mayor or Mayor Pro
Tem of the City and countersigned by the City Clerk or Deputy 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 and interest on 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 legal tender for the payment of debts due the United States of America, at the principal
corporate trust office of the Registrar. The principal of and interest on each Bond shall be payable
by automatic debit from a Registrar's account maintained for such purpose payable on the
mandatory redemption date or Interest Payment Date, as applicable, on or before each mandatory
redemption date or Interest Payment Date, as applicable, to the Owner of record as of the Record
Date, to the address of such Owner as shown on the Register. Payment at final maturity shall be
upon presentation and surrender of the Bond at the principal corporate trust office of the Registrar.
The City Manager and Chief Financial Officer of the City, or either acting alone, are authorized to
execute and deliver to the Registrar from time to time as requested authorization for the Registrar to
make the automatic debit payments.
If interest on any Bond is not paid on any Interest Payment Date and continues unpaid for
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thirty (30) days thereafter, the Registrar shall establish a new record date for the payment of such
interest, to be known as a Special Record Date. The Registrar shall establish a Special Record Date
when funds to make such interest payment are received from or on behalf of the City. Such Special
Record Date shall be fifteen (15) days prior to the date fixed for payment of such past due interest,
and notice of the date of payment and the Special Record Date shall be sent by United States mail,
first class, postage prepaid, not later than five (5) business days prior to the Special Record Date, to
each affected Owner of record as of the close of business on the day prior to the mailing of such
notice.
If the date for payment of the principal of or interest on any Bond is not a Business Day,
then the date for such payment shall be the next succeeding Business Day, and payment on such
date shall have the same force and effect as if made on the original date payment was due.
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 I 1 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 and Transfer. The Bonds will be initially registered to the Purchaser.
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.
The Bonds shall be transferable, in whole but not in part, 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 the Bonds for
transfer, the Registrar shall authenticate and deliver in exchange therefor, within three business days
after such presentation, a new Bond, registered in the name of the transferee or transferees in like
form with the same maturities, principal amounts and bearing interest at the same rates as the Bond
so presented.
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
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paid by the City.
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The Bonds may only be transferred in whole to (x) an affiliate of the Purchaser, (y) a trust
or custodial arrangement established by the Purchaser or one of its affiliates, the owners of the
beneficial interests in which are limited to qualified institutional buyers, as defined in Rule 144A
promulgated under the Securities Act of 1933, as amended (the "1933 Act "), or (z) a Person that
is qualified institutional buyer that is a commercial bank having a combined capital and surplus,
determined as of the date of any transfer pursuant to this Section, of $5,000,000,000 or more that
has executed and delivered to the City a Private Placement Letter in the form of Exhibit C,
substituting the Person's name as the Purchaser.
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
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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 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. Book -Entry System. The Bonds shall not be subject to a system of book entry
payment and transfer.
16. Form. '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 not prohibited by this
Ordinance:
FORM OF BOND
THE TRANSFER OF THIS BOND IS SUBJECT TO THE
RESTRICTIONS SET FORTH IN SECTION 12 OF THE ORDINANCE
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF JEFFERSON
NUMBER
R-
REGISTERED
THE CITY OF BEAUMONT, TEXAS
GENERAL OBLIGATION REFUNDING BOND
SERIES 2013
INTEREST RATE:
REGISTERED OWNER:
PRINCIPAL AMOUNT:
MATURITY DATE:
rV
DENOMINATION
REGISTERED
DATED DATE:
DOLLARS
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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 or before the maturity date
stated above, the principal amount stated above at the designated corporate trust office of Wells
Fargo Bank, N.A. (the "Registrar "), 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.
The Bond (the "Term Bond ") is subject to mandatory redemption prior to maturity in the
amounts and on the dates set out below, at a price equal to the principal amount to be redeemed
plus accrued interest to the redemption date:
TERM BOND
Date Principal Amount
to be Redeemed
03/01/2014
$195,000.00
03/01/2015
$1,585,000.00
03/01/2016
$1,610,000.00
03/01/2017 (Final Maturity Date)
$1,620,000.00
Payments of principal on mandatory redemption dates shall be paid by automatic debit from
a Registrar's account maintained for such purpose to the registered owner of record as of the
previous February 15 as shown on the books of registration kept by the Registrar. The principal
amount of the Term Bond shall be reduced by the principal amount of Term Bond which shall have
been redeemed.
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 the 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.
Payment at final maturity shall be upon presentation and surrender of this Bond at the
principal corporate trust office of Wells Fargo Bank, N.A. (the "Registrar ").
The City promises to pay the Registered Owner interest on unpaid principal amount at the
rate shown above, calculated on the basis of a 360 day year of twelve 30 day months, from the later
of the date of delivery of the Bond, 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 automatic debit from a
Registrar's account maintained for such purpose payable on March 1 and September 1, beginning
on March 1, 2014, to the registered owner of record as of the previous February 15 and August 15,
respectively, as shown on the books of registration kept by the Registrar.
W
THIS BOND is a duly authorized issue of Bonds in the amount of $5,010,000 (the
"Bonds "), issued pursuant to an ordinance adopted by the City Council on November 26, 2013 (the
"Ordinance ") for the purpose of refunding the City's outstanding General Obligation Refunding
Bonds, Series 2004 maturing on March 1 in the years 2015 through 2017, in the amounts of
$1,530,000, $1,610,000, and $1,695,000, respectively.
THIS BOND may be defeased as provided in the Ordinance authorizing the Bonds.
THIS BOND is transferable, in whole but not in part, and 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.
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.
THE REGISTERED OWNER of this Bond, by acceptance hereof, acknowledges and
agrees to be bound by all the terms and. conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all times provide a legally
qualified registrar for the Bonds and will cause notice of any change of registrar to be mailed to
each registered owner.
THE BONDS HAVE NOT BEEN DESIGNATED AS QUALIFIED TAX - EXEMPT
OBLIGATIONS.
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 taking in consideration other funds available
to pay the same, 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
(DI
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(SEAL)
City Clerk
FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE
COMPTROLLER'S REGISTRATION BOND 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 .201
xxxxxxxxxxx
Comptroller of Public Accounts
(SEAL) of the State of Texas
FORM OF REGISTRAR'S AUTHENTICATION CERTIFICATE
REGISTRAR'S AUTHENTICATION CERTIFICATE
This bond is described in and delivered pursuant to the within- mentioned Ordinance.
as Registrar
Authorized Signature
Date of Authentication:
FORM OF ASSIGNMENT
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
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the within bond and hereby irrevocably constitutes and appoints
attorney to transfer said bond on the books kept for registration thereof,
substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: Signature must be
guaranteed by a member firm
of the New York Stock Exchange
or a commercial bank or trust
company.
Registered Owner
with full power of
NOTICE: The signature above
must correspond to the name
of the registered owner as shown
on the face of this Bond in every
particular, without any
alteration, enlargement or change
whatsoever.
END OF FORM OF BOND
17. Legal Opinions. The approving opinion of Orgain Bell & Tucker, LLP, Beaumont,
Texas, Bond Counsel may be printed on the Bonds, but errors or omissions in the printing of such
opinions shall have no effect on the validity of the Bonds.
18. Interest and Sinking Fund; Levy, Assessment and Collection of Taxes. There is
hereby established a separate fund of the City to be known as the "Series 2013 General Obligation
Refunding Bonds Interest and Sinking Fund" which shall be kept separate and apart from all other
funds of the City in an account held by the Paying Agent. 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, 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
is to be deposited in such fund. 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 debt service
coming due on the Bonds on March 1, 2014 and September 1, 2014, and such amount shall not be
used for any other purpose. A tax rate has been determined for 2014 and the City certifies that such
rate takes into account the Bonds being issued.
IT IS ORDERED AND DIRECTED that this Ordinance pledging ad valorem tax revenue
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of the City for the payment of the Bonds to the extent provided herein be filed and recorded in
the records of the City as necessary to cause the pledge to be valid under Section 1201.44 of the
Government Code of Texas. At any time while any of the Bonds are outstanding, it is
determined by the City or demanded by the holder of any Bonds that further action by the City is
required to make the pledge valid or maintain the validity of the pledge, the City covenants and
hereby directs the officers of the City to make such filings, including but not limited to
appropriate filings under Chapter 9 of the Business and Commerce Code of Texas as are
necessary to make the pledge valid or continue its validity.
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. In addition, the Mayor, the Mayor Pro Tem, the City
Clerk, the City Manager and other appropriate officials of the City are hereby authorized and
directed to do any and all things necessary or convenient to carry out the purposes of this
Ordinance, and each of such persons are authorized, acting alone and without the joinder of the
others, to execute any and all closing certificates, instruments and such other documents as may be
necessary or appropriate to carry out the purposes of this Ordinance.
20. Sale of Bonds. The Bonds are hereby sold and shall be delivered to the Purchaser at
a price of $5,010,000.00, representing the principal amount of Bonds of $5,010,000.00 less an
original issue discount of $N /A, plus a premium of $N /A, all 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. Each
of the Mayor and the Mayor Pro Tem and other appropriate officials of the City are hereby
authorized and directed to accept the Purchaser's Bid Form and execute such Purchase Contract on
behalf of the City, and the Mayor and the Mayor Pro Tem 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, and, if deemed
by the acting officer to be in the best interests of the City, to terminate the Purchase Contract as
permitted by the terms thereof.
The City funds that the net effective interest of the Bonds is .870000 %.
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
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
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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. In particular, the City
covenants and agrees to comply with each requirement of this Section 21; provided, however, that
the City shall not be required to comply with any particular requirement of this Section 21 if the
City has received an opinion of nationally recognized bond counsel (a "Counsel's Opinion ") that
such noncompliance will not adversely affect the exclusion from gross income for federal income
tax purposes of interest on the Bonds or cause the Bonds or any refunded, prior, or original bonds to
be arbitrage or hedge bonds, or if the City has received a Counsel's Opinion to the effect that
compliance with some other requirement set forth in this Section 21 will satisfy the applicable
requirements of the Code, in which case compliance with such other requirement specified in such
Counsel's Opinion shall constitute compliance with the corresponding requirement specified in this
Section 21.
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 ") or to deposit
cash 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). The City will cause the proceeds which are
to be escrowed to be irrevocably deposited upon the closing of the sale of the Bonds and
reasonably expects to pay the costs of issuing the Bonds within thirty days after issuance.
(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, if any) 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 or as "hedge bonds" within the meaning of Section 149 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
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necessary to prevent the Bonds from constituting "arbitrage bonds" or "hedge 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.
(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 Bonds and 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 or Refunded Obligations within the corresponding three -
year period beginning on the respective dates of the Bonds or the Refunded Obligations, and that
as to the Refunded Obligations it was so used.
(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. In addition, the City
agrees to pay timely to the United States all amounts required, including but not limited to
payments required by Section 149(f) of the Code, necessary to keep the Bonds and Refunded
Obligations from being treated as not being, and as never having been, tax exempt bonds.
(1) '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
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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.
0) 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 (1) 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 Closing Date and stating whether there are facts, estimates or
circumstances that would materially change the City's expectations. On or after the Closing 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.
(p) The City covenants that dispositions of personal property components of the
Project funded by the Refunded Obligations will occur in the ordinary course of an established
governmental program and will satisfy the following requirements:
i. The weighted average maturity of the portion of the Bonds financing
personal property is not greater than 120 percent of the reasonably expected actual
use of such personal property for governmental purposes;
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it. The reasonably expected fair market value of such personal property on
the date of disposition will be not greater than 25 percent of its cost,
M. Such personal property will no longer be suitable for its governmental
purposes on the date of disposition; and
iv. The City is required to deposit amounts received from such disposition in
a commingled fund with substantial tax or other governmental revenues and the
Issuer reasonably expect to spend such amounts on governmental programs within
6 months from the date of commingling.
The City warrants and represents that 85% of the spendable proceeds of each series of
bonds of which the Refunded Obligations were a part were used to carry out the governmental
purposes of such bonds within 3 years from the date each such series was issued, and not more
than 5017c of the proceeds of each series of bonds of which the Refunded Obligations were a part
were invested in non - purpose investments (as defined in Section 148(b)(6)(A) of the Code)
having a substantially guaranteed yield of 4 years or more.
The City represents and warrants that the Bonds are being issued exclusively to refund the
Refunded Obligations and that (1) less than 25% of the debt service on the Refunded Obligations
has been secured or derived, either directly or indirectly, by payments made with respect to
property used in the trade or business of any person other than the City, and no proceeds of any
such series of bonds have been used directly or indirectly to make or finance loans to any such
person, (ii) the Refunded Obligations which are redeemable are being called for redemption and
will be redeemed not later than the earliest date on which they may be redeemed, (iii) the Bonds
are being issued solely for the purposes stated in Section 1 of this Ordinance, and in issuance of
the Bonds the City has employed no "device" to obtain a material financial advantage (based on
arbitrage), within the meaning of Section 149(d)(4) of the Code, apart from benefit of the present
value debt service savings (determined without regard to administrative expenses) in connection
with the issuance of the Bonds, and (iv) there are no remaining unspent proceeds of the Refunded
Obligations.
The Refunded Obligations were a multi - purpose issue. Their separate purposes were to
refund certain outstanding obligations of the City, including a portion of the City's Combination
Tax and Revenue Certificates of Obligation, Series 1995 (the "Series 1995 Bonds "). The City
warrants and represents that it made all necessary allocations of the proceeds, investments, and
relative amounts of substantially identical portions of the Series 2004 Bonds to their separate
purposes including the current refunding of the Series 1995 Bonds. The City hereby allocates the
portions of the proceeds, investments, and relative amounts of substantially identical portions of
the Series 2013 Bonds to their separate purposes, including the relative amount necessary under
applicable US Treasury Regulations to redeem the relative portion of the Series 2004 Bonds
which represents the portion thereof allocated to the current refunding of the Series 1995 Bonds.
22. Application of Proceeds. The proceeds from the sale of the Bonds in the amount of
$5,010,000.00, including accrued interest, if any, shall, promptly upon receipt by the City or the
Paying Agent on behalf of the City, be applied as follows:
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(a) Accrued interest, if any, shall be deposited into the Interest and Sinking Fund for the
Bonds;
(b) To establish the escrow fund to refund and pay the Refunded Obligations,
$4,949,857.00 in Escrowed Securities and cash in the amount of $0.90 shall be deposited with the
Escrow Agent pursuant to and in compliance with Sections 24 and 25 below.
(c) $60,142.10 from the sale of the Bonds shall be used to pay the costs of issuing the
Bonds, not later than 90 days after such issuance; and
(d) The sum of $N /A 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 other 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- 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 obligations of the City (the Refunded Obligations) for redemption on the dates set forth
below, and authorizes and directs notice of such redemption to be given in substantially the form of
Exhibit A hereto or in such form and in such manner as the Mayor, Mayor Pro Tern, City Manager,
City Clerk or any other official of the City may approve:
Obligations To Be Redeemed Redemption Date
The City of Beaumont, Texas, General March 1, 2014
Obligation Refunding Bonds, Series
2004, maturing on March 1 in the years
2015 through 2017 in the amounts of
$1,530,000, $1,610,000, and $1,695,000,
respectively
Pursuant to the provisions of Sections 1207.061 and 1207.062 of the Government Code of
Texas, the City hereby orders the irrevocable deposit out of the proceeds of the issuance and sale of
the Series 2013 Bonds with the Escrow Agent (being a paying agent for some of the obligations)
pursuant to the Escrow Agreement authorized by this Ordinance of an amount of money sufficient
to provide for the redemption of the Refunded Obligations on the date indicated above.
The Bonds are not subordinated to the Refunded Obligations.
25. Escrow Agreement. The discharge and final payment or redemption, as applicable,
of the Refunded Obligations shall be effectuated by firm banking and financial arrangements
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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 Mellon Trust Company, N.A., Dallas, Texas, as Escrow Agent,
which shall be substantially in the form attached as Exhibit B hereto presented to the City Council,
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 redemptions and payments which have been
designed by 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 provide the City a savings in debt service,
(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 or
Mayor Pro Tem is hereby authorized to execute and deliver the Escrow Agreement on behalf of the
City in such final form as approved by the signing official in multiple counterparts and the City
Clerk or an Assistant City Clerk is hereby authorized to attest thereto and affix the City's seal.
The deposit of $4,949,857.90 of the proceeds of the Series 2013 Bonds with the Escrow
Agent, which is hereby authorized and directed, and transfer of all funds held by the Escrow Agent
to the Paying Agents of the Refunded Obligations pursuant to the Escrow Agreement. shall effect
the discharge and final payment, as applicable, of the Refunded Obligations.
26. Source of Funds Used in Refunding. No money of the City other than proceeds of
the Bonds and funds on hand in the Interest and Sinking Funds for the Refunded Obligations, if any
(the transfer and use of which is hereby authorized and directed) 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, Mayor Pro Tem, 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, if any, 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. OMITTED.
30. Re istrar. 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.
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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. Severabilitv. 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.
35. Continuing Disclosure Undertaking. The Bonds are being sold pursuant to a private
placement with the Purchaser, in one single bond payable in installments to less than thirty -five
sophisticated investors, and therefore SEC Rule 15c2 -12 is not applicable to the offering of the
Bonds. The City shall, however, provide for the benefit of the holder of the Bonds, the City's most
current audited financial information within 180 days after the end of each fiscal year while the
Bonds are outstanding.
36. Amendment of Ordinance.
(a) If and to the extent permitted by this Ordinance, the owners of the Series 2013
Bonds aggregating in the principal amount of 51% of the aggregate principal amount of
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the outstanding Series 2013 Bonds shall have the right from time to time to approve any
amendment to this Ordinance which may be deemed necessary or desirable by the City
provided, however, that without the consent of the owners of all of the Series 2013 Bonds
at the time outstanding, nothing herein contained shall permit or be construed to permit
the amendment of the terms and conditions in this Ordinance or in the Bonds so as to:
(1) Make any change in the maturity of the outstanding Series 2013
Bonds;
(2) Reduce the rate of interest borne by any of the outstanding Series
2013 Bonds;
(3) Reduce the amount of the principal payable on the outstanding
Series 2013 Bonds;
(4) Modify the terms of payment of principal of or interest on the
outstanding Series 2013 Bonds, or impose any conditions with respect to such
payment;
(5) Affect the owners of less than all of the outstanding Series 2013
Bonds then outstanding;
(6) Change the percentage of the principal amount of outstanding
Series 2013 Bonds, necessary for consent to such amendment.
(b) If at any time the City shall desire to amend this Ordinance under this
Section, the City shall cause notice of the proposed amendment to be published in a
financial newspaper or journal published in the City of New York, New York, once
during each calendar week for at least two successive calendar weeks. Such notice shall
briefly set forth the nature of the proposed amendment and shall state that a copy thereof
is on file at the principal office of the Paying Agent for inspection by all owners of Series
2013 Bonds. Such publication is not required, however, if notice in writing is given to
each owner of the outstanding Series 2013 Bonds. Not less than thirty (30) days' notice
of the proposed amendment shall also be given by the City to the Purchaser.
(c) Whenever at any time not less than thirty (30) days, and within one (1)
year, from the date of the publication of said notice or other service of written notice the
City shall receive an instrument or instruments executed by the owners of at least 51 % in
aggregate principal amount of Series 2013 Bonds then outstanding, which instrument or
instruments shall refer to the proposed amendment described in said notice and which
specifically consent to and approve such amendment in substantially the form of the copy
thereof on file with the Paying Agent, the City Council may adopt the amendatory
resolution in substantially the same form.
(d) Upon adoption of any amendatory resolution pursuant to the provision of
this Section, this Ordinance shall be deemed to be amended in accordance with such
amendatory resolution, and the respective rights, duties and obligations under this
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Ordinance of the City and all the owners of then outstanding Series 2013 Bonds shall
thereafter be determined, exercised and enforced hereunder, subject in all respect to such
amendments.
(e) Any consent given by the owner of outstanding Series 2013 Bonds,
pursuant to the provisions of this Section shall be irrevocable for a period of six months
from the date of the first publication of the notice provided for in this Section, and shall
be conclusive and binding upon all future owners of the same Series 2013 Bonds during
such period. Such consent may be revoked at any time after six months from the date of
the first publication of such notice by the owner who gave such consent, or by a successor
in title, by filing notice thereof with the Paying Agent and the City, but such revocation
shall not be effective if the owners of 51 % in aggregate principal amount of the then
outstanding Series 2013 Bonds as in this Section defined have, prior to the attempted
revocation, consented to and approved the amendment.
(f) For the purpose of this Section, the fact of the owning of Series 2013
Bonds by any owner of Series 2013 Bonds and the amount and number of such Series
2013 Bonds and the date of their owning same shall be determined by the Registration
Books of the Paying Agent /Registrar.
(g) The foregoing provisions of this Section notwithstanding, the City by
action of the City Council (or as item (2) by the City Council or by the Mayor or Mayor
Pro -Tem and the City Clerk as to changes prior to issuance to comply with requirements
by the Attorney General of Texas or Purchaser) may amend this Ordinance for any one or
more of the following purposes:
(1) To add to the covenants and agreements of the City in this
Ordinance contained, other covenants and agreements thereafter to be observed,
grant additional rights or remedies to the owners of bonds or to surrender, restrict
or limit any right or power herein reserved to or conferred upon the City.
(2) To make such provisions for the purpose of clarifying matters or
questions arising under this Ordinance, as are required by the Attorney General of
Texas to obtain the Attorney General's approval of the issuance of the Series 2013
Bonds or required by the Purchaser before their issuance or for the purpose of
curing any ambiguity, or curing, correcting or supplementing any defective
provision contained in this Ordinance, or at any time before or after issuance as
are necessary or desirable and not contrary to or inconsistent with this Ordinance,
and in all events which shall not adversely affect the interests of the owners of the
Series 2013 Bonds.
(3) To modify any of the provisions of this Ordinance in any other
respect whatever, provided that: (i) such modification shall be, and be expressed
to be, effective only after all Series 2013 Bonds outstanding at the date of the
adoption of such modification shall cease to be outstanding, and (ii) such
modification shall be specifically referred to in the text of all Series 2013 Bonds
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issued after the date of the adoption of such modification.
37. [OMITTED]
[The remainder of this page has intentionally been left blank.
Signature page follows.]
23
PASSED AND APPROVED this 26`h day of November, 2013.
ATTEST:
CITY CLERK
THE CITY OF BEAUMONT, TEXAS
�EPUN►O/h� ®1
CF ,11
U
uj
MAYOR
THE CITY OF BEAUMONT, TEXAS
24
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EXHIBIT A
NOTICE OF REDEMPTION
THE CITY OF BEAUMONT, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2004
Dated: November 1, 2004
Redemption Date: March 1, 2014
Redemption Reason /Source of Funds: Optional Redemption
Total Redemption Amount: $4,835,000.00
CUSIP Nos.
Maturity
Rate
Amount
Price
074509ZV5
03/01/2015
3.75%
$1,530,000
100%
074509ZW 3
03/01/2016
5.25c7c,
$1,610,000
100%
074509ZX 1
03/01/2017
5.25 (7c
$1,695,000
100%
NOTICE IS HEREBY GIVEN that the securities described herein have been called for
redemption at the applicable redemption price plus accrued interest, if any, to the redemption date. On
the redemption date, each security shall become due and payable, and interest shall cease to accrue. In
the event less than the entire principal amount of a security is to be redeemed, a new security for the
unredeemed portion will be issued in your name without charge. Payment of the redemption proceeds
will be made on or after the redemption date upon presentation and surrender of the securities to:
Re eistered/Certified Mail:
Wells Fargo Bank, N.A.
Corporate Trust Operations
P. O. Box 1517
Minneapolis, MN 55480 -1517
Air Courier:
Wells Fargo Bank, N.A.
Corporate Trust Operations
N9303 -121
6th & Marquette Avenue
Minneapolis, MN 55479
25
In ep rson:
Wells Fargo Bank, N.A.
Northstar East Building
6082 d Avenue So., 12`h Floor
Minneapolis, MN
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IMPORTANT NOTICE
Under section 3406(a)(1) of the Internal Revenue Code, the Paying Agent making payment of
interest or principal on securities may be obligated to withhold a percentage of the payment to a holder
who has failed to furnish the Registrar with a valid taxpayer identification number, certification that the
number supplied is correct, and that the holder is not subject to backup withholding. Holders of the
bonds who wish to avoid the application of these provisions should submit either a completed IRS
(Internal Revenue Service) Form W -9 (use only if the holder is a U.S. person, including a resident alien),
or the appropriate farm W -8 (use only if you are neither a U.S. person or a resident alien), when
presenting the bonds for payment. See IRS Publication 515, Withholding of'Tax on Nonresident Aliens
and Foreign Entities. Publication 515 and W -8 forms and instructions are available through the IRS via
their, web site at n icki.rr-, .;r) .
Publication Date: .2014
THE CITY OF BEAUMONT, TEXAS
By: WELLS FARGO BANK, N.A.
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EXHIBIT B
SEE DOCUMENT NO. A.6
ESCROW AGREEMENT
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ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement ") dated for convenience
November 26, 2013, but effective on the Escrow Funding Date described herein, is made and
entered into by and between THE CITY OF BEAUMONT, TEXAS, a home rule city organized
and existing under the Constitution and laws of the State of Texas (the "City "), and THE BANK
OF NEW YORK MELLON TRUST COMPANY, N.A., having a principal corporate trust office
in Dallas, Texas, as escrow agent (together with any successor or assign in such capacity, the
"Escrow Agent ").
WHEREAS, the City has heretofore issued and there remains outstanding the City's
General Refunding Obligations, Series 2004, and the City desires to provide for the refunding of
certain maturities of such outstanding obligations; and
WHEREAS, Chapter 1207, Texas Government Code, as amended (formerly Article 717k,
Vernon's Annotated 'Texas Civil Statutes, as amended), authorizes and empowers the City to issue,
sell and deliver refunding bonds and to deposit the proceeds of such bonds, together with other
available funds or resources, with any place of payment for the Refunded Obligations in an amount
which is sufficient to provide for the payment or redemption of the principal of and interest on the
Refunded Obligations; and
WHEREAS, the City Council of the City has adopted an ordinance dated November 26,
2013, authorizing the issuance of the City's General Obligation Refunding Bonds, Series 2013,
in the principal amount of $5,010,000.00 (the "Refunding Bonds "), for the purpose, among other
things, of providing the funds necessary to pay and refund the Refunded Obligations, and
WHEREAS, the City has provided pursuant to this Escrow Agreement for the application of
the proceeds of the Refunding Bonds to provide for the payment of the Refunded Obligations; and
WHEREAS, the City Council of the City has further determined to effectuate the refunding
of the Refunded Obligations pursuant to this Escrow Agreement, under which provision is made for
the safekeeping, investment, reinvestment, administration and disposition of the proceeds of the
Refunding Bonds, so as to provide firm banking and financial arrangements for the discharge and
final payment or redemption of the Refunded Obligations;
NOW, THEREFORE, in consideration of the mutual undertakings, promises and
agreements herein contained, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in ordinance to secure the full and timely payment of the
principal of and the interest on the Refunded Obligations, the City and the Escrow Agent contract
and agree as follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATIONS
1.01 Definitions. Unless otherwise expressly provided or unless the context clearly
requires otherwise, the following terms shall have the respective meanings specified below for all
purposes of this Escrow Agreement:
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the applicable
regulations thereunder and under the Internal Revenue Code of 1954.
"City" shall mean THE CITY OF BEAUMONT, TEXAS, and any successor to its duties
and functions.
"Escrow Agent" shall mean THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., in its capacity as escrow agent hereunder, and any successor or assign in such
capacity.
"Escrow Agreement" shall mean this escrow agreement by and between the City and the
Escrow Agent, as it may be amended or supplemented from time to time.
"Escrow Fund" shall mean the fund created in Section 3.01 of this Escrow Agreement to be
administered by the Escrow Agent pursuant to the provisions of this Escrow Agreement.
"Escrow Funding Date" shall mean the date on which the City deposits with the Escrow
Agent the cash and Escrowed Securities described in Section 2.01.
"Escrowed Securities" shall mean the Restricted Acquired Obligations and the Other
Acquired Obligations purchased with the funds deposited into the Escrow Fund, all as more fully
described in the Report.
The term "Paying Agent of the Refunded Obligations" shall mean Wells Fargo Bank, N.A.
"Refunded Obligation Ordinance" shall mean the City's ordinance authorizing the issuance,
sale and delivery of the Refunded Obligations.
The term "Refunded Obligations" shall mean: the City's outstanding General Obligation
Refunding Bonds, Series 2004, maturing on March 1 in the years 2015 -2017 and in the amounts of
$1,530,000, $1,610,000, and $1,695,000, respectively.
"Refunding Bonds" shall mean the City's General Obligation Refunding Bonds, Series
2013, dated December 19, 2013, in the principal amount of $5,010,000.00.
"Refunding Bond Ordinance" shall mean the City's Ordinance adopted November 26, 2013,
authorizing the issuance, sale and delivery of the Refunding Bonds.
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"Report" shall mean the verification report prepared by Grant Thornton LLP, relating to
the refunding of the Refunded Obligations, a copy of which is attached hereto as Exhibit "B ".
"Restricted Acquired Obligations" shall mean the United States Treasury Notes and
STRIPS, initially purchased with the proceeds of the Bonds, and United States Treasury Securities -
State and Local Government Series at various Interest Rates ( "SLGS "), all as more fully described
in the Report.
1.02 Interpretations. The titles and headings of the articles and sections of this Escrow
Agreement have been inserted for convenience of reference only and are not to be considered a part
hereof and shall not in any way modify or restrict the terms hereof. This Escrow Agreement and all
of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth
herein and to achieve the intended purpose of providing for the refunding of the Refunded
Obligations in accordance with applicable law.
ARTICLE II
DEPOSIT OF FUNDS AND ESCROWED SECURITIES
2.01 Deposits with Escrow Agent; Acquisition of Escrowed Securities. On the Escrow
Funding Date, the City will deposit, or cause to be deposited, with the Escrow Agent the following:
(a) Restricted Acquired Obligations in the principal amount of $4,949,857.00,
purchased with a portion of the proceeds of the Refunding Bonds; and
(b) A beginning cash balance of $0.90.
ARTICLE III
CREATION AND OPERATION OF ESCROW FUND
3.01 Escrow Fund. On the Escrow Funding Date, the Escrow Agent will create on its
books a special fund and irrevocable escrow to be known as "City of Beaumont, Texas, General
Obligation Refunding Bonds, Series 2013 Escrow Fund ", into which will be deposited the cash
and/or Escrowed Securities described in Section 2.01. The Escrowed Securities, all proceeds
therefrom and all cash balances from time to time on deposit in the Escrow Fund shall be the
property of the Escrow Fund, and shall be applied only in strict conformity with the terms and
conditions hereof. The Escrowed Securities, all proceeds therefrom and all cash balances from time
to time on deposit in the Escrow Fund are hereby irrevocably pledged to the payment of the
principal of and interest on the Refunded Obligations, which payment shall be made by timely
transfers to the Paying Agent for the Refunded Obligations of such amounts at such times as are
provided in Section 3.02 hereof. When the final transfers have been made to the Paying Agent for
the Refunded Obligations for the payment of such principal of and interest on the Refunded
Obligations, any balance then remaining in the Escrow Fund shall be transferred to the City, and the
Escrow Agent shall thereupon be discharged from any further duties hereunder.
3.02 Payment of Principal of and Interest on Refunded Obligations.
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(a) The Escrow Agent is hereby irrevocably instructed to transfer to the Paying
Agent for the Refunded Obligations from the cash balance from time to time on deposit in the
Escrow Fund the amounts required to pay the principal of and interest on the Refunded Obligations
as the same becomes due and payable on the redemption date, all as provided in the Report.
(b) Money transferred to and held by the Paying Agent for the Refunded
Obligations in accordance with the provisions hereof shall be held by the Paying Agent for the
Refunded Obligations as a segregated account for the respective holders of the Refunded
Obligations in connection with which such money is held; provided, however, subject to the
provisions of Title 6 of the Texas Property Code regarding Unclaimed Property, that money so held
remaining unclaimed by the owners of such Refunded Obligations for three (3) years after the dates
on which payment thereon was due, payable and available for payment shall be paid to the City to
be used for any lawful purpose. Thereafter, neither the City, the Escrow Agent, the Paying Agent
for the Refunded Obligations nor any other person shall be liable or responsible to any holders of
such Refunded Obligations for any further payment of such unclaimed money or on account of any
such Refunded Obligations.
(c) Except as provided in Article N hereof, the City hereby covenants and
agrees that it will not exercise any right that it may have to redeem any of the Refunded Obligations
prior to their scheduled maturities.
3.03 Sufficiency of Escrow Fund. The City represents (based solely upon the Report)
that the successive receipts of the principal of and interest on the Escrowed Securities and/or cash
will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all
times sufficient to provide money for transfer to the Paying Agent for the Refunded Obligations at
the times and in the amounts required to pay the interest on the Refunded Obligations as such
interest comes due and to pay the principal of the Refunded Obligations as the Refunded
Obligations are redeemed. If any deficiency results from any error in the calculation of the report,
the City shall transfer to the Escrow Agent for deposit to the Escrow Fund to be held pursuant to
this Escrow Agreement an additional amount of cash or securities sufficient to provide for such
deficiency.
3.04 Escrow Fund. The Escrow Agent at all times shall hold the Escrow Fund, the
Escrowed Securities and all other assets of the Escrow Fund wholly segregated from all other funds
and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities or
any other assets of the Escrow Fund t:o be commingled with any other funds or securities of the
Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth
herein. The Escrowed Securities and other assets of the Escrow Fund always shall be maintained
by the Escrow Agent for the benefit of the holders of the Refunded Obligations; and a special
account therefor evidencing such fact shall be maintained at all times on the books of the Escrow
Agent. The holders of the Refunded Obligations shall be entitled to the same preferred claim and
first lien upon the Escrowed Securities, the proceeds thereof and all other assets of the Escrow Fund
as are enjoyed by other beneficiaries of similar accounts. The amounts received by the Escrow
Agent under this Escrow Agreement shall not be considered as a banking deposit by the City, and
the Escrow Agent shall have no right or title with respect thereto except as escrow agent under the
terms hereof. The amounts received by the Escrow Agent hereunder shall not be subject to
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warrants, drafts or checks drawn by the City.
M
ARTICLE IV
REDEMPTION OF REFUNDED OBLIGATIONS
4.01 Optional Redemption of Refunded Obligations. The City has irrevocably exercised
its option to call for redemption the Refunded Obligations as set forth below. Such optional
redemption shall be carried out in accordance with the Ordinance authorizing the issuance of the
Refunded Obligations. The Escrow Agent is hereby authorized and directed to provide funds
therefor as set forth in Section 3.02(a) hereof.
Obligations To Be Redeemed Redemption Date
The City of Beaumont, Texas, General March 1, 2014
Obligation Refunding Bonds, Series
2004, maturing on March 1 in the years
2015 through 2017 in the amounts of
$1,530,000, $1.610,000 and $1,695,000,
respectively
ARTICLE V
LIMITATION ON INVESTMENTS
5.01 General. Except as herein otherwise expressly provided, the Escrow Agent shall not
have any power or duty to invest any money held hereunder; or to make substitutions of the
Escrowed Securities; or to sell, transfer or otherwise dispose of the Escrowed Securities, except for
the purchase of the SLGS as described in the Report.
5.02 Substitution of Securities. At the written request of the City, and upon compliance
with the conditions hereinafter stated, the Escrow Agent shall sell, transfer, otherwise dispose of or
request the redemption of all or any portion of the Escrowed Securities and apply the proceeds
therefrom to purchase Refunded Obligations or direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the United States of America and which
do not permit the redemption thereof at the option of the obligor. Any such transaction may be
effected by the Escrow Agent only if (1) the Escrow Agent shall have received a new verification
report together with a written opinion from a nationally recognized firm of certified public
accountants acceptable to the City and the Escrow Agent that such transaction will not cause the
amount of money and securities in the Escrow Fund to be reduced below an amount which will be
sufficient, when added to the interest to accrue thereon, to provide for the payment of principal and
interest on the remaining Refunded Obligations as they become due, and (2) the Escrow Agent shall
have received the unqualified written legal opinion of nationally recognized bond counsel or tax
counsel acceptable to the City and the Escrow Agent to the effect that such transaction will not
cause any of the Refunding Bonds to be an "arbitrage bond" within the meaning of the Code, and
that such transaction will not result in a violation of the laws of the State of Texas.
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ARTICLE VI
RECORDS AND REPORTS
6.01 Records. The Escrow Agent shall keep books of record and account in which
complete and correct entries shall be made of all transactions relating to the receipts, disbursements,
allocations and application of the money and Escrowed Securities deposited to the Escrow Fund
and all proceeds thereof, and such books shall be available for inspection at reasonable hours and
under reasonable conditions by the City and the holders of the Refunded Obligations.
6.02 Reports. For the period beginning on the Escrow Funding Date and ending on
December 31, 2013, and for each twelve (12) month period thereafter while this Agreement
remains in effect, the Escrow Agent shall prepare and send to the City, at the City's request, within
thirty (30) days following the end of such period a written report summarizing all transactions
relating to the Escrow Fund during such period, including, without limitation, credits to the Escrow
Fund as a result of interest payments on or maturities of the Escrowed Securities and transfers from
the Escrow Fund to the Paying Agent for the Refunded Obligations or otherwise, together with a
detailed statement of all Escrowed Securities and the cash balance on deposit in the Escrow Fund as
of the end of such period.
6.03 Notification. The Escrow Agent shall notify the City immediately if at any time
during the term of this agreement it. determines that there is insufficient cash and Escrowed
Securities in the Escrow Fund to provide for the transfer to the Paying Agent for the Refunded
Obligations for timely payment of all interest on and principal of the Refunded Obligations.
ARTICLE VII
CONCERNING THE ESCROW AGENT
7.01 Representations. The Escrow Agent hereby represents that it has all necessary
power and authority to enter into this Escrow Agreement and undertake the obligations and
responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder.
7.02 Limitation on Liability. The Escrow Agent shall not be liable for the performance
of any duties, except such duties as are specifically set forth in this Escrow Agreement, and no
implied covenants or obligations shall be read into this Escrow Agreement. Nothing herein
contained shall relieve the Escrow Agent from liability for its own negligent action, negligent
failure to act or willful misconduct, except that this sentence shall not be construed to limit the
effect of the immediately preceding sentence. The Escrow Agent shall not incur any liability for
any error of judgment made in good faith by a responsible officer thereof, unless it shall be proved
that it was negligent in ascertaining the pertinent facts. The Escrow Agent shall be protected in
acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other
paper or document believed by it to be genuine, and to have been signed or presented by the proper
party or parties. The Escrow Agent may consult with counsel, and the opinion of such counsel shall
be full and complete authorization and protection in respect of any action taken or suffered by it in
good faith and in accordance therewith.
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The Escrow Agent is not a principal, participant or beneficiary of the underlying transaction
to which this Escrow Agreement relates.
The liability of the Escrow Agent to transfer funds to the Paying Agent for the Refunded
Obligations for the payments of the principal of and interest on the Refunded Obligations shall be
limited to the proceeds of the Escrowed Securities and the cash balances from time to time on
deposit in the Escrow Fund. Notwithstanding any provision contained herein to the contrary, the
Escrow Agent shall have no liability whatsoever for the insufficiency of funds from time to time in
the Escrow Fund or any failure of the obligor of the Escrowed Securities to make timely payment
thereon, except for the obligation to notify the City promptly of any such occurrence.
The recitals herein and in the proceedings authorizing the Refunding Bonds shall be taken
as the statements of the City and shall not be considered as made by, or imposing any obligation or
liability upon, the Escrow Agent. In its capacity as Escrow Agent, it is agreed that the Escrow
Agent need look only to the terms and provisions of this Escrow Agreement.
The Escrow Agent makes no representation as to the value, condition or sufficiency of the
Escrow Fund, or any part thereof, or as to the title of the City thereto, or as to the security afforded
thereby or hereby, and the Escrow Agent shall incur no liability or responsibility with respect to any
of such matters.
It is the intention of the City and the Escrow Agent that the Escrow Agent shall never be
required to use or advance its own funds or otherwise incur personal financial liability in the
performance of any of its duties or the exercise of any of its rights and powers hereunder.
Unless it is specifically provided otherwise herein, the Escrow Agent has no duty to
determine or inquire into the happening or occurrence of any event or contingency or the
performance or failure of performance of the City with respect to arrangements or contracts with
others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund and to
dispose of and deliver the same in accordance with this Escrow Agreement. In determining the
occurrence of any such event or contingency the Escrow Agent may request from the City or any
other person such reasonable additional evidence as the Escrow Agent in its discretion may deem
necessary to determine any fact relating to the occurrence of such event or contingency, and in this
connection may make inquiries of, and consult with the City, among others, at any time.
In the absence of bad faith, the Escrow Agent may rely conclusively upon the truth,
completeness and accuracy of the statements, certificates, opinions, resolutions and other
documents conforming to the requirements of this Escrow Agreement, and shall not be obligated to
make any independent investigation with respect thereto.
To the full extent permitted by law, the parties agree to indemnify, defend and hold the
Escrow Agent harmless from and against any and all loss, damage, tax, liability and expense that
may be incurred by the Escrow Agent arising out of or in connection with its acceptance or
appointment as Escrow Agent hereunder, including attorneys' fees and expenses of defending itself
against any claim or liability in connection with its performance hereunder except that the Escrow
Agent shall not be indemnified for any loss, damage, tax, liability or expense resulting from its own
negligence or willful misconduct. The Escrow Agent's right to indemnification shall survive its
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resignation or removal and the termination of this Agreement.
The Escrow Agent shall have only those duties as are specifically provided herein, which
shall be deemed purely ministerial in nature, and shall under no circumstance be deemed a
fiduciary for any of the parties to this Agreement. The Escrow Agent shall neither be responsible
for, nor chargeable with, knowledge of the terms and conditions of any other agreement,
instrument or document between the other parties hereto, in connection herewith. This
Agreement sets forth all matters pertinent to the escrow contemplated hereunder, and no
additional obligations of the Escrow Agent shall be inferred from the terms of this Agreement or
any other Agreement.. IN NO EVENT SHALL THE ESCROW AGENT BE LIABLE,
DIRECTLY OR INDIRECTLY, FOR ANY (1) DAMAGES OR EXPENSES ARISING OUT OF
THE SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES WHICH RESULT
FROM THE ESCROW AGENT'S FAILURE TO ACT IN ACCORDANCE WITH THE
STANDARDS SET FORTH IN THIS AGREEMENT, OR (ii) SPECIAL OR
CONSEQUENTIAL DAMAGES, EVEN IF THE ESCROW AGENT HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.
In the event that any escrow property shall be attached, garnished or levied upon by any
court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any
order, judgment or decree shall be made or entered by any court order affecting the property
deposited under this Agreement, the Escrow Agent is hereby expressly authorized, in its sole
discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is
advised by legal counsel of its own choosing is binding upon it, whether with or without
jurisdiction, and in the event that the Escrow Agent obeys or complies with any such writ, order
or decree it shall not be liable to any of the parties hereto or to any other person, firm or
corporation, by reason of such compliance notwithstanding such writ, order or decree be
subsequently reversed, modified, annulled, set aside or vacated.
Any banking association or corporation into which the Escrow Agent may be merged,
converted or with which the Escrow Agent may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Escrow Agent shall be a party, or any
banking association or corporation to which all or substantially all of the corporate trust business
of the Escrow Agent shall be transferred, shall succeed to all the Escrow Agent's rights,
obligations and immunities hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
The Escrow Agent shall have the right, but not the obligation, to consult with counsel of
choice and shall not be liable for action taken or omitted to be taken by Escrow Agent either in
accordance with the advice of such counsel or in accordance with any opinion of counsel to the
Issuer addressed and delivered to the Escrow Agent.
The Escrow Agent has the right to perform any of its duties hereunder through agents,
attorneys, custodians or nominees.
7.03 Compensation.
(a) On the Escrow Funding Date, the City will pay the Escrow Agent, as a fee
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for performing the services hereunder and for all expenses incurred or to be incurred by the Escrow
Agent in the administration of this Escrow Agreement, the amounts stated in Exhibit A hereto. This
sum does not include the cost of publication, printing costs or reasonable out -of- pocket expenses of
the Escrow Agent. If the Escrow Agent incurs any out -of- pocket expenses or is requested to
perform any extraordinary services hereunder, the City hereby agrees to reimburse the Escrow
Agent for such out -of- pocket expenses and to pay reasonable fees to the Escrow Agent for such
extraordinary services and to reimburse the Escrow Agent for all expenses incurred by the Escrow
Agent in performing, such extraordinary services. It is expressly provided that the Escrow Agent
shall look only to the City for the reimbursement of such out -of- pocket expenses and for the
payment of such additional fees and reimbursement of such additional expenses. The Escrow
Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund
for any fees for its services, whether regular, additional or extraordinary, as Escrow Agent, or in any
other capacity, or for reimbursement for any of its expenses.
(b) Wells Fargo Bank, N.A., Minneapolis, MN, as Paying Agent as to the City's
General Obligation Refunding Bonds, 2004, by execution of the Consent to Escrow Agreement
attached hereto, agrees to continue to serve as Paying Agent for the life of the Refunded Obligations
for which it is now serving as Paying Agent, and it will serve as Paying Agent for the Refunded
Obligations for the compensation provided under the fee schedule currently in effect and it will
look to the City directly for payment of its fees; and, in the event of nonpayment of such fees, the
sole remedy of the Paying Agent shall be an action against the City for recovery of the fees owing
under the paying agency agreement for which it serves.
7.04 Successor Escrow Agents. If at any time the Escrow Agent or its legal successor or
successors should cease to be the Escrow Agent hereunder, a vacancy shall forthwith exist
hereunder in the office of the Escrow Agent. Any successor Escrow Agent appointed by the City
shall succeed, without further act, to all the rights, immunities, powers and trusts of the predecessor
Escrow Agent hereunder. Any successor Escrow Agent must be qualified under the laws of the
State of Texas to serve as an escrow agent and must be authorized to exercise corporate trust
powers. No resignation or removal of the Escrow Agent and no early termination of this
Agreement shall occur until a successor Escrow Agent has been appointed who is qualified to serve
as Escrow Agent hereunder and who has accepted such appointment. Upon the request of any such
successor Escrow Agent, the City shall execute any and all instruments in writing for more fully
and certainly vesting in and confirming to such successor Escrow Agent all such immunities, rights,
powers and duties. The Escrow Agent: shall pay over to its successor Escrow Agent a proportional
part of the Escrow Agent's fee hereunder equal to the portion of such fee attributable to duties to be
performed after the date of succession.
ARTICLE VIII
MISCELLANEOUS
8.01 Notices. Any notice, authorization, request, or demand required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given when mailed by
registered or certified mail, postage prepaid addressed as follows:
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To the Escrow Agent:
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The Bank of New York Mellon Trust Company, N.A.
2001 Bryan, 11`h Floor
Dallas, TX 75201
To the City:
City of Beaumont, Texas
801 Main Street
Beaumont, TX 77701
ATTENTION: City Manager
The United States Post Office registered or certified mail receipt showing delivery of the
aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may
change the address to which notices are to be delivered by giving to the other parties not less than
ten days prior notice thereof.
8.02 Termination of Escrow Agent's Obligations. Upon the taking by the Escrow Agent
of all the actions as described herein, the Escrow Agent shall have no further obligations or
responsibilities hereunder to the City, the holders of the Refunded Obligations or to any other
person or persons in connection with this Escrow Agreement.
8.03 Binding Agreement. This Escrow Agreement shall be binding upon the City, and
the Escrow Agent and their respective successors and legal representatives, and shall inure solely to
the benefit of the holders of the Refunded Obligations, the City, the Escrow Agent and their
respective successors and legal representatives. This Escrow Agreement may not be modified
except with the prior consent of the holders of all of the Refunded Obligations.
8.04 Severability. In case any one or more of the provisions contained in this Escrow
Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions of this Escrow
Agreement, but this Escrow Agreement shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein.
8.05 Governing. This Escrow Agreement shall be governed exclusively by the
provisions hereof and by the applicable laws of the State of Texas.
8.06 Time of Essence. Time shall be of the essence in the performance of obligations
from time to time imposed upon the Escrow Agent by this Escrow Agreement.
Executed as of November 26, 2013, but effective as set forth herein.
THE CITY OF BEAUMONT, TEXAS ATTEST:
By:
Title
(SEAL)
Mayor
By:
Title
City Clerk
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THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Escrow Agent
By:
Title:
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CONSENT TO ESCROW AGREEMENT
Upon receipt of sufficient funds from the Escrow Agent, WELLS FARGO BANK, N.A.,
as paying agent for one or more series of the Refunded Obligations (as defined in the foregoing
Escrow Agreement), consisting of the City of Beaumont, Texas, General Obligation Refunding
Bonds, Series 2004 (maturing on March 1 of the years 2015 through 2017), hereby acknowledges
and consents to provide for the full and timely payment of the principal of and interest on such
series of Refunded Obligations. The undersigned further consents to the management of the
Escrow Fund by the Escrow Agent in accordance with the terms and conditions of the Escrow
Agreement and agrees to be bound by the terms of the Escrow Agreement with respect to its
obligations as a paying agent. The undersigned agrees to continue to serve as Paying Agent for
which it is now serving as Paying Agent, and it will serve as Paying Agent for such Refunded
Obligations for the compensation provided under the fee schedule currently in effect and it will
look to the City directly for payment of its fees; and, in the event of nonpayment of such fees, the
sole remedy of the Paying Agent shall be an action against the City for recovery of the fees owing
under the paying agency agreement for which it serves.
WELLS FARGO BANK, N. A.
By: _
Name:
Title:
Contact information:
Regina A. Velasquez
Wells Fargo Corporate Trust Services
N9303 -121
6082 d Avenue South, 12`h Floor East
Minneapolis, MN 55479
Toll Free: 1- 855 -411 -2654
Fax: 1- 855 -579 -4534
Wiring Instructions:
Wells Fargo Bank
ABA 121000248
A/C 0001038377
BNF: "Corporate Trust Clearing'
FFC: SEI99990909
City of Beaumont (Series 2004)
- 13 -
A.6
A.6
EXHIBIT "A"
The City of Beaumont General Obligation Refunding
Bonds, Series 201:3
November 15, 2013
BNY MELLON
A.6
Y NY Mellon Corporate rust
=ae ` .f,edule for The City of Beaumont General Obligation Refunding Bon 7s Sees 201
�MITM
Suhjec. to the ,elms and C1isciosures below, upon appointment of The Bank of %Ev,, York Mellon r u,;t Company, N.A. {''BNYM° or
s" or "affiliates" or "subsidiaries ") in the roles as outlined within this Fee Schedule (this "Fee Scheduler, City of Beaumont,
`exa- _.rstc =rrer "y sha�l be responsible for the payment of the fees, expenses and charges as set fortn !-�erein Fees are payable or
yccrue at the time of the execution of the governing documents (the "+ransaction Documents ") it) c, w,nec ion w fa-, the closing of
e tr a,� >acY�c� (the "Tr ansactic ) which is the sui7ject:�fth s Fee Schedule
General Fees
''l?e Transaction Acceptance Fee is payable at the time of the execution of the governing documents in connection with the closing
the ansartion whic�r is the subject of this Agreement (the "Transaction "), and compensates BNYM for the follu ir;g: review of
4 f "ctrtrr g rl,c user r,, 'ni ^_., establishrrrent of the required acccn,ints r rr. Cu>tomer ;becks
An annual charge covering the normal paying agent duties related to account administration and bondholder services. Our pricing
r,�ase� on U,e assumptior or that the bonds are DTC- eligible /book -entry only This fee is payable arn7,,ally 1t � advance.
A charge covering the normal duties and responsibilities related to account administration. For a full year or partial year escrow
.
rl ^e fee is 5750 per year. Should the escrow account or depository accar.uir be :,pen for les; than two montia, then r.ve. will reduce
fe, to 55C'G This fee is payable annually, in advance.
'he charges for performing extraordinary or other services not contemplated at the time of the execution of the Transaction
ocun-ents r: r not specifically covered elsewhere in this schedule will be comrrersurate with the service to he provided and may
I),., c -arged ,i BNY Mellon'; soie discretion. If it is contemplated that ;NY Mellor, r,old /ar)d or value collateral, additional
.I-ep ance, administration at d counsel review fees will be applicable to the agreement governing such services. If ,he bonds are
__jweitea to e,tificated f.>rrn. additional annual fees will be charge,' for anv app icalp e tender agent a �.;;or registrar /paying
jgerrt r wig. s_ Additional information will be provided a- such tune. if all �.utstanding bonds of a -cries area defeased or
deer-ed. c.r BNY Melon 's removed as paying agent prior to the ma o= the bonds a termination fee �nav i e assessed at
.;,. 1, -,e,
v` ellaneous fees and expenses may inciucie, but are not necessarily limited tc supplemental agreements, tender processing, the
°epar tir� +�r and distribotioi cfsink;ng fund redemption notices, optional redemptions, failed remarketing processing, preparation
spe is cfr interim repo CS UC'C filing fees, auditor confirrrfatior� tees, wire transfer fees, Letter of o-.(Jr drawdown fees,
t =ansa ton * *ees tc settle third -party trades, and reconcilement fees to balance account balances to rid- Crarty investment
,r wider statements. Course, accountants, special agents and others will be charged at the actual amount of fees anti expenses
ed r r >IC or r, .)ther governmental charges will be passed along as incurred, ReiMbWrsemernt will be required t<r any out -of- pocket
e ,per r aryl will be. invo'-.ed tc the Customer at cost.
Ast.cmer agre r s to rernbc:rs,, BNYM for extraordinary expenses incurred by r': it connection w th the T- ar�sdcnon tc the extent
r�.r,rrnit'P.d by a4V,
isles >pe�-if'i; ally li,,tec if, rhis, Fee Schedule, the fees, expenses anti disbursemo—s of BNYM legal co.,* e n t i-c :Aed in the
,hl ges'ist:erl above.
PRIVILEGED AND CONFIDENTIAL
The information in this fee schedule is confidential and is intended for the sole use of the addressee only. This information shall not be intentionally disclosed.
reproduced, copied. published, distributed or displayed in any form to any third party without BN YM's prior written approval.
2
BmYNtlnUnn Corporate Trus,
�-ee S-chedule, for The Cty o� Beaumont Gener a I Obligation Refunding Bonds -`�Eries 201"'
Default Administration
aa:ew,ntcxdefau|t oczvr�unga the TmnsacdonDwcumerts. the services of each employee o^BNYmadminis, e,inB such default
ww uacha/§ed at the prema3i*ghour|v rate for defauita6mi^isuabon sewicesa^ set out from time to hm, * addition' all of
BNnm cost, and rx;eoes including but not |imitrd to a,)* /rgn| costs, travel cn�ts a"d ap»|kab/e' ravr, sxaU be charged or
Torms and Disclosures
General
8NYV 1 `na. acceptarcc o+ /11- appointment pursuart to the lransacttoo Documents is subject tn the fuU,*vmvvanuappmv|ofall
e/areu Jcsu'nenmho^ ano sla"uad u"n�,vYour cusmme, prccedure�, m mo ems^c �^a� �hb r�na^chon 6oe` n'� n,we*o yx/h
BmYrv` ^ the 'o|e^conopmc|aled uy this Fee Schrdu|e and me Transacliur Documents'[vstmme,vvU|be for payment
c/a,vevte:ra| coonoa| 'ee�and expenses and nm*f-pocket expenses which 8mnm mov hamp inm,nao vp tcard /nc|ud|ng the
�ha./be'ospom�b� kx5|in8any^pp|�sb|omknmat�n.eu/,mvxd`d`eu�S U~pa,rmen/n+T�ayon. /n�rna|Reveowe
5ewce i^-onne�.tion *,tl- aavmrnts made by 8NYN to vendors °mo have not penmmed services -x 8Nne's u000fh under the
va,.nu� n ,cop or other ond�.,rtakinEscontamp:ate«bvth/, Fe, `�,"euv|e,
rkeBa'.kn+m,vv,nrk NlpU.m-urmationi`a global financial orgpmzocion that, operates nand provides sew/ce,an(i y,*Juct,to
u�e^� ,1)wogt` its arrfxitesancl subsidiaries located in multiple jurisdictions (che 'amvmeoo^ Group"). r^* �wv Mellor Group
mav (i) comra|ue in ooe :4 mne affiliates and subsidiaries cenain activines (me ^(enna|oed -unctions"}' mdu*inp- audit,
acuunuoE_ "uminiStrato". /iok 'nanagemeru. |ega|, comy|iave' oa|es, product communimduv. relationship ~aoagemeot and
h`cronpi|auc!� and analysis ot'nfovmation and data reigard/ngCustome, (w»i(h' for- nu'posesofthispum/,ton, inc/uuesthe name
ard busi^,as tau *hz"rarion for (usuzmeremp|uy+e^ and /,p,een�ad,e*and tl�)e accounts pstaWid`ed pu,mam/othe
,ansaclioo .)ocument, (`[vmome, Information") and (ii; use third party service p,ovideo to store, maintain and process
�a»nT,+r m+ormazin, i'0,.tuooz'ed pvmct ons^). Notwithstanding anything u, the contrary contained e|sewherp ip this Fee
Sched"/e m me Tiaosacduo Dx'momsard solely inconoeoionwim [entm|ized Fumhunsvnu/u/ Outsn"r(eo Functions,
[us^v�r,"oosenoto the d/,c|*ore of, and authorizes BNY Mellon to. disclose, u`ozmr,/nhonnauon'-.U>c«he, members nfthe
BNY Mehon 1,-roup lanc4 tlbei'respective officers, directors Find ernployees) and to (F) third party service providers (but solely in
conrerbun */m 'Dutsovxe6 pun�tiom$ who are required to nnaintain rhecovfidenUa|ity of[ustome' Information In addition,
me 9wy mei|on Group may ugg�egpte Customer info,mahon with other daca noU^y»ed a^d!o, ca|cu|a�o uv me 8NY Mellon
a,ouc' ind t»e am° me '|on G,uun�U| ownaU such ag�rga*ec data, provided that the BNY Mellon
Gm^ps^a|/ nccu|str/uuoe the
ag&,e*a^ed gaw /" o f"mal that WevuUa� Customer Information w+h Cvstom~, speJfka|w. Customer represents that it is
n covna�uo �/d` �h� [�mm|iz�d oxtho,.^*o o e foregoing or uc cosurc nustomenonxannn
r� run'tionsdoe, not violate uov relevant data vn,temon legislation. (u,uomo' a|so coa»,�s to the
u�doyure n� cu�mmn, mf)/moVon no governmental and -epx|atory ay,ho,w*s in i"ricdicdnns where z^r 8wv meUoo Group
operale'andom*nui`eas,eno/�ecj bv/aw
agrees. that 8WvKxmao have no obligation to expend u, risk 'T.Sow","naso,ct6omvi,etoincu.anvonb�/itv. financial n,
th, per�o'm^n,-r c/ any of :s dutie.y as paying agent o' regfst,a' in connection eid` ,hr !-ansa(.tiun' or in the
of a^vn+ hs ,|ghtsw poweo in connection therewith, if uohao have reasonable ground, for hc|icving tnat repayment of
�uck rm`dom no,a`m,+d an 'z �"`uor^er aFxevsur n,imbu/`,e 8Nnw f(-,,r exoa",o/oawexoe",e,(^c :nev hy /,v` 'nn^euionwiMh
m, �m"sactun t,,- the extent �noitted by law,
n/caa,^ze 'he fees «cmyu:n/i�is Fee Schedule are based upootheinhvmalxmavaU^b4a/thevfesemhmr,purthe,4uotes
mavLepmv/veoonce the 'S�',i�tvreof the deal has been #na|bed.Annual Fees cover apell-iodof one yea! anu any pmt�onthereof
arJ ^,p `cusvNect ozn`o'ran)n reemay brsuN�s��oa�otmrn u.irg the /ned the- engpcemenT
PRIVILEGED AND CONFIDENTIAL
The information m this fee schedule is confidential and m intended for the sole use m the addressee only. This information shall nor *. intentionally disclosed.
reproduced, copied, published. distributed or displayed in aM, form to anythird party without SNYM's priorwritten approval.
A.6
BHY Mellon Corporate Tnisl
Fee Sc}-edule for -iie City of 3e@Un-tont General Obligation Refunding Bonds Series 201
Advance Fees
bNvtV, reqjuite'. that r'jisirornet agree to the fees quote(I in, this Fee Schedule prior to the cor)rnencernew of any work or the
provision :,f a-)y se.,,rvice', by EMYV, In relation to the Transaction. In the even, that BNYM provides any services , ,
,o, ' .ustor ne, prior
to vcu, agreetnert to the ir,-es quoted herein, the cornmencernent of such work or the provision or suc,i services shall not be
deemed! emecl to cc,nst;tLlte a wailoer of the fees !fisted in this Fee Sicneduie BNYM reserves the right to cease proviriing, srervices until
-,ucii li,ite as Cristorner agrees tc the fees quoted herein. BNYM reserver the right to request that any and all fee-,, die and payable
pi I; S(, a r 1 C, Fee Skriedu It, end °e I ate d in any way to the ? "ransactior a paid it) a dvarxe (either in wh,:)ie oi ire prior to the
r' ( ^l) i'jc a V r V i r_ e L�
Revocation of Offer
BN"dk,1 riay re,,)k.,- the ��f rhos Fee Schedule if he Tran,,a(.-ion does not nose within three inor,O)s flr, il)o- (.iatp iof tiltis Fee
"chedwe Sncmld the r..Yact:on 'ail to close for any reaso,). .3 te,rniilarion fee equa t,-- BNYM. -ert--e iel. 91)y external
:o:'.�n3e -ee aod di,,rur,,,ernents alid A _:uof pocket eXpe.e, wil: 1410 V
Confidential Informaticin
A, infoi!nal:cr l-1!'-Jv;deC1 -'o C'ustolrter by BNYM niust remar collfiden*iai dr-ld t lav ni:J De reproduceo,
^ aivfcrrrr to any third party without BNYM'sp,ior vrilte:-approval
Customer Notice Required By the USA Patriot Act
c help -lte I ,overlitnen." f ghi the funding of terrorism anc money laundering activities. J Fe dera, ilnw eqlui,es, ail financial
wis-'irzjt : )s tc, -,bTain, ve7 itv and rc ,cord information that identifies ea--I- person. (whether an Individual or orga-i,,atior) for which a
Wl)er Custorner establishes a relationship with BNYM, We Will ask CUStOMe- tc: [,r,�vi6- certain
in'r)ti-natio, (sand docu,rien!I tha* will help ,is to identity Customer \Me will ash , for your organization's name, physical address,
tax -)r Other government registration number and other it rcrrnation that will help us ideWify -Listotner. We may
aisl, 1'• to! & . 'e tificdlt- or 11-o,roration or similar docup'ent o! otl'er pert -)E,,,,*,. identifying do(_vr,',1erla1J )r fcr your type of
PRIVILEGED AND CONFIDENTIAL
The information in this fee schedule is confidential and is intended for the sole use of the addressee only. This information shall not be intentionally disclosed,
reproduced. ropied, published. distributed or displayed in any form to any third party without BN YM's prior written approval.
4
A.6
EXHIBIT "B"
Grant Thornton, LLP Verification Report
A.3
EXHIBIT C
SEE DOCUMENT NO. A.1
PRIVATE PLACEMENT LETTER
A.1
PRIVATE PLACEMENT LETTER
November 26, 2013
City of Beaumont, Texas
801 Main Street
Beaumont, Texas 77701
Re: $5,010,000 principal amount of the City of Beaumont, Texas, General
Obligation Refunding Bonds, Series 2013
Ladies and Gentlemen:
Wells Fargo Bank, N.A. ( "Purchaser ") has agreed to purchase the
above - referenced bonds (the "Bonds ") in the amount of $5,010,000 which were issued in
the original aggregate principal amount of $5,010,000 by the City of Beaumont, Texas
(the "Issuer ") bearing the interest rate as set forth in the City's Ordinance dated
November 26, 2013 (the "Ordinance "). All capitalized terms used herein, but not defined
herein, shall have the respective meanings set forth in the Ordinance. The undersigned,
an authorized representative of the Purchaser, hereby represents to you that:
1. The Purchaser has sufficient knowledge and experience in financial and
business matters., including purchase and ownership of municipal and other tax- exempt
obligations, to be able to evaluate the risks and merits of the investment represented by
the purchase of the Bonds.
2. The Purchaser has authority to purchase the Bonds and to execute this
letter and any other instruments and documents required to be executed by the Purchaser
in connection with the purchase of the Bonds.
3. The undersigned is a duly appointed, qualified and acting representative of
the Purchaser and is authorized to cause the Purchaser to make the certifications,
representations and warranties contained herein by execution of this letter on behalf of
the Purchaser.
4. The Purchaser is a "qualified institutional buyer" as defined in Rule 144A
promulgated under the Securities Act of 1933, as amended (the "1933 Act ") and is able to
bear the economic risks of such investment.
City of Beaumont, Texas
November 26, 2013
Page 2
5. The Purchaser understands that no official statement, prospectus, offering
circular, or other comprehensive offering statement is being provided with respect to the
Bonds. The Purchaser has made its own inquiry and analysis with respect to the Issuer,
the Bonds and the security therefor, and other material factors affecting the security for
and payment of the Bonds.
6. The Purchaser acknowledges that it has either been supplied with or been
given access to information, including financial statements and other financial
information, regarding the Borrower, to which a reasonable investor would attach
significance in making investment decisions, and has had the opportunity to ask questions
and receive answers from knowledgeable individuals concerning the Issuer, the
Borrower, the Project, the Bonds and the security therefor, so that as a reasonable
investor, it has been able to make its decision to purchase the Bonds.
7. The Purchaser understands that the Bonds (i) are not registered under the
1933 Act and are not registered or otherwise qualified for sale under the "Blue Sky" laws
and regulations of any state, (ii) are not listed on any stock or other securities exchange,
and (iii) carry no rating from any credit rating agency.
8. The Bonds are being acquired by the Purchaser for investment for its own
account and not with a present view toward resale or distribution; provided, however, that
the Purchaser reserves the right to sell, transfer or redistribute the Bonds, but agrees that
any such sale, transfer or distribution by the Purchaser shall be to a Person:
(a) that is an affiliate of the Purchaser;
(b) that is a trust or other custodial arrangement established by the
Purchaser or one of its affiliates, the owners of any beneficial interest in which are
limited to qualified institutional buyers; or
(c) that is a qualified institutional buyer that is a commercial bank
having a combined capital and surplus, determined as of the date of such sale,
transfer or distribution, of $5,000,000,000 or more who executes an investor letter
substantially in the form of this letter.
A.1
City of Beaumont, Texas
November 26, 2013
Page 3
WELLS FARGO BANK, N.A.
Name:
Title:
PURCHASER
A.1
November 22, 2013
R. Dustin Traylor
RBC Capital Markets, LLC
303 Pearl Parkway, Suite 220
San Antonio, TX 78215
Summary of Proposed Terms and Conditions
BORROWER: City of Beaumont, Texas (the "City")
PURCHASER: Wells Fargo Bank, National Association ( "Wells Fargo" or the
"Bank" or "WFB ")
CREDIT FACILITY: Up to $5,01o,000 General Obligation Bonds, Series 2013 (the
"Bonds ")
PURPOSE: Proceeds from the sale of the Bonds will be used to:
i. Refund a portion of the City's currently outstanding general
obligation bonds;
ii. Pay the costs of issuing the Bonds.
INTEREST: Interest on the Bonds shall accrue from the date of delivery,
currently anticipated to occur on or about December 19, 2013.
AMORTIZATION: The principal of the Bonds will mature and be payable on March 1,
2014 and in each of the years 2015 through 2017, with semi-
annual interest payments beginning March 1, 2014 and on each
March 1 and September 1 thereafter until maturity or prior
redemption.
RATE: .87%% fixed to the final maturity of the Bonds
Rate includes a o.25% discount for automatic payment from a
Wells Fargo Bank, N.A. account.
SECURITY: The Bonds will constitute a direct obligation of the City payable
from a continuing ad valorem tax levied, within the limits
prescribed by law, on taxable property within the City as provided
in the Ordinance.
PREPAYMENT: The Bonds will not be callable prior to state maturity.
Page i Wells Fargo Business Banking
CREDIT APPROVAL: The Bank's senior credit management has APPROVED the
purchase of the Bonds.
CONDITIONS
PRECEDENT
TO CLOSING: Usual and customary for transactions of this nature including but
not limited to:
1) Ordinance adopted by the City Council containing all
relevant provisions governing the financing (rate, term,
amortization, security and all other conditions, warranties
and covenants as are usual and customary for transactions
of the same general type)
2) Opinion of Bond Counsel to the City as to Tax Exemption
3) No material adverse change in the business, assets,
operations, condition (financial or otherwise) or prospects
of the City, nor in the facts and information regarding such
entities as represented to date prior to Closing.
4) This borrowing is subject to the City being qualified as a
governmental entity or "political subdivision" within the
meaning of Section 103(a) of the Internal Revenue Code of
1986 as amended. The City agrees to cooperate with the
Bank in providing evidence as deemed necessary or
desirable by the Bank to substantiate the City and this
transaction's tax - exempt status. It is understood the Bonds
will not be designated "bank - qualified" under the $10
million small issuer exemption as defined in the Tax
Reform Act of 1986.
5) Receipt of the approving opinion of the Texas Attorney
General
6) Other conditions deemed appropriate
BANK DOCUMENTS: Subject to the negotiation, execution and delivery of an Ordinance
authorizing the issuance of the Bonds, and other documents,
which will contain conditions to borrowings, representations and
warranties, covenants, events of default, and other provisions that
are customary for similar financing by Wells, including without
limitation those indicated below.
REPORTING
REQUIREMENTS:: The City shall provide CPA audited financial statements within
18o days of fiscal year end.
POSTING ON EMMA: To maintain transparency with its existing Bond holders, the City
shall consider posting the documentation on the MSRBs EMMA
site following the closing of the transaction, provided that pricing
and certain other information contained therein, as directed by the
Bank, shall be redacted prior to such posting.
Page 2 Wells Fargo Business Banldng
REPRESENTATIONS
AND WARRANTIES: Usual and customary for transactions of this type, to include
without limitation: (i) no declaration of bankruptcy within the past
7 years; (ii) Bond documents not violating laws or existing
agreements or requiring governmental, regulatory or other
approvals; (iii) no material litigation; (iv) compliance with other
laws and regulations; (v) no adverse agreements, existing defaults
or non - permitted liens; and (vi) financial statements true and
correct.
TRANSFER PROVISIONS: While the Bank is purchasing the Bonds for its own account
without a current intention to transfer them, the Bank reserves the
right in its sole discretion to assign, sell, pledge or participate
interests in the Bonds without the consent of the City.
PAYING AGENT:
The Bank will serve as Paying Agent /Registrar on the Bonds.
CLOSING FEE:
$0.00
FEES, EXPENSES AND
INDEMNIFICATION:
Wells Fargo Bank, N.A. will pay Bank Counsel legal fees related to
the transaction. Whether or not the financing is closed, Obligor
will indemnify the Bank and its respective directors, officers,
employees, agents and affiliates against all claims asserted and
losses, liabilities and expenses incurred in connection with the
Financing Documents (excluding acts of gross negligence or willful
misconduct of an indemnified party as determined by a court of
competent jurisdiction).
CONFIDENTIALITY:
This document is confidential and proprietary and shall not be
disclosed.
Page 3 Wells Fargo Business Banking
This Commitment Letter is not intended to be, and should not be construed as, an attempt to
establish all of the terms and conditions relating to the Bonds. I t is intended only to be indicative
of certain terms and conditions around which the documents will be structured, and not to
preclude negotiations within the general scope of these terms and conditions. The documents
containing final terms and conditions will be subject to approval by Borrower and Wells Fargo.
Sincerely,
Vice President
Wells Fargo Bank„ N.A.
PaF4
W
ACKNOWLEDGMENT BY THE CITY:
The undersigned hereby confirms its interest in pursuing further discussion of the above
preliminary credit proposal.
City of Beaumont, Texas
By: — (signature)
Name: Becky Ames
Title: Mayor
Date: November 26, 2013
As these materials include information related to a bank - purchased Bond transaction ( "Direct Purchase "), please be
advised that Direct Purchase is a product offering of Wells Fargo Bank, N.A. or a subsidiary thereof ( "Purchaser'') as
purchaser / investor. Wells Fargo Securities will not participate in any manner in any Direct Purchase transaction between
you and Purchaser, and Wells Fargo employees involved with a Direct Purchase transaction are not acting on behalf of or
as representatives of Wells Fargo Securities. Information contained in this document regarding Direct Purchase is for
discussion purposes only in anticipation of engaging in arm's length commercial transactions with you in which Purchaser
would be acting solely as a principal to purchase securities from you or a conduit issuer, and not as a municipal advisor,
financial advisor or fiduciary to you or any other person or entity regardless of whether Purchaser or an affiliate has or is
currently acting as such on a separate transaction. Additionally, Purchaser, as purchaser / investor, has financial and other
interests that differ from your interests. In its capacity as purchaser / investor, Purchaser's sole role would be to purchase
securities from you (or the issuer in the case of a conduit transaction). Purchaser will not have any duty or liability to any
person or entity in connection with the information provided herein. The information provided is not intended to be and
should not be construed as "advice" within the meaning of Section 15B of the Securities Exchange Act of 1934•
Page 5 Wells Fargo Business Banking
City of Beaumont, Texas
General Obligation Refunding Bonds, Series 2013
Bid Form
NameofBank: 'Wella Fargo Bank, N.A.
Contact: Steve Stearns Phone: 512 -344 -8143
$5,010 ®000
*Principal amount is subject to change.
Annual cost to serve as Paying Agent/Register: $ 0
Other costs requested to be paid by City: $! 0
November 22, 2013
Date
Please reply to R. Dustin Traylor with RBC Capital Markets, LLC by Friday, November
22, 2013 no later than 12:00 P.M. C.S.T., with your proposal, by fax 210405 -1119 or email
at robert.d.trayto_r@, b� ccm.com .
Interest
Maturity Date
Principal*
Rate
3/112014
$ 195,000
.87%
3/1/2015
1,585,000
.87%
3/1/2016
1,610,000
. 8 7 %
3/1/2017
1,620,000
.87%
$5,010 ®000
*Principal amount is subject to change.
Annual cost to serve as Paying Agent/Register: $ 0
Other costs requested to be paid by City: $! 0
November 22, 2013
Date
Please reply to R. Dustin Traylor with RBC Capital Markets, LLC by Friday, November
22, 2013 no later than 12:00 P.M. C.S.T., with your proposal, by fax 210405 -1119 or email
at robert.d.trayto_r@, b� ccm.com .