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HomeMy WebLinkAboutORD 95-26 - No. 4 ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $6, 000, 000 CITY OF BEAUMONT, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1995; LEVYING TAXES TO PROVIDE FOR PAYMENT THEREOF; AND CONTAINING OTHER MATTERS RELATED THERETO THE STATE OF TEXAS § COUNTY OF JEFFERSON § CITY OF BEAUMONT § WHEREAS, the City Council of the City of Beaumont, Texas (the "City" ) , has heretofore authorized the publication of a notice of intention to issue certificates of obligation to the effect that the City Council would meet on April 18, 1995, the date tentatively set for passage of an ordinance and such other action as may be deemed necessary to authorize the issuance of certificates of obligation payable from City ad valorem taxes and a pledge of certain revenues of the City' s waterworks and sewer system, or as soon thereafter as may be practicable, for the purpose of evidencing the indebtedness of the City for all of the cost of construction of authorized street improvements in the City and the cost of professional services incurred in connection therewith; and WHEREAS, such notice was published at the times and in the manner required by the Constitution and the laws of the State of Texas and the United States of America, respectively, particularly Chapter 271, Texas Local Government Code, as amended; and WHEREAS, no petition or other request has been filed with or presented to any official of the City requesting that any of the proceedings authorizing such certificates of obligation be submitted to a referendum or other election; and WHEREAS, the City Council of the City has determined to authorize such certificates of obligation for the purposes set out in this Ordinance; NOW, THEREFORE, BE IT ORDERED BY THE CITY OF BEAUMONT, TEXAS: 1 . Preamble. The matters and facts contained in the preamble to this Ordinance are hereby found to be true and correct. 2 . Definitions . Throughout this Ordinance, the following terms and expressions as used herein shall have the meanings set r ar No. 4 CERTIFICATE OF ORDINANCE THE STATE OF TEXAS COUNTY OF JEFFERSON We, the undersigned officers of the City Council of the City of Beaumont, Texas, hereby certify as follows : 1 . The City Council of the City of Beaumont, Texas, convened in regular meeting on the 18th day of April, 1995, at the regular meeting place thereof, within said City, and the roll was called of the duly constituted officers and members of said City Council and the City Clerk, to wit: David W. Moore Mayor John K. Davis Mayor Pro Tem and Councilman, Ward III Andrew P. Cokinos Councilman at Large Becky Ames Councilman at Large Lulu L. Smith Councilman Ward I Guy N. Goodson Councilman Ward II Calvin Williams Councilman Ward IV Rosemarie Chiappetta City Clerk and all of said persons were present, except the following absentees : Calvin Williams , Councilman Ward IV , thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF $6, 000,000 CITY OF BEAUMONT, TEXAS, COMBINATION TAX AND CERTIFICATES OF OBLIGATION, SERIES 1995; LEVYING TAXES TO PROVIDE FOR PAYMENT THEREOF; AND CONTAINING OTHER PROVISIONS RELATED THERETO was duly introduced for the consideration of said City Council and read in full . It was then duly moved and seconded that said ordinance be adopted; and, after due discussion, said motion, carrying with it the adoption of said ordinance, prevailed and carried by the following vote AYES : All members of the City Council shown present above voted "Aye" . NOES : None. 2 . That a true, full and correct copy of the aforesaid ordinance adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that said ordinance has been duly recorded in said City Council ' s minutes of said meeting pertaining to the adoption of said ordinance; that the above and foregoing paragraph is a true, full and correct excerpt from said City Council ' s minutes of said meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said City Council ' s minutes as indicated therein; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of said City Council as indicated therein; that each of the officers and members of said City Council was duly and sufficiently notified officially and personally, in advance, of the date, hour, place and purpose of the aforesaid meeting, and that said ordinance would be introduced and considered for adoption at said meeting, and each of said officers and members consented, in advance, to the holding of said meeting for such purpose; that said meeting was open to the public as required by law; and the public as required by law; and that public notice of the date, hour, place and subject of said meeting was given as required by Chapter 551 of the Texas Government Code Annotated, Vernon' s 1994, as amended. SIGNED AND SEALED this 18th day of A rill 1995 . City C1 rk Mayor (S E� forth below: The term "Business Day" shall mean any day which is not a Saturday, Sunday, a legal holiday, or a day on which the Registrar is authorized by law or executive order to close. The term "Certificates" or "Series 1995 Certificates" shall mean the Certificates of Obligation, Series 1995, authorized in this Ordinance, unless the context clearly indicates otherwise. The term "Certificates Insurance Policy" shall mean the municipal bond guarantee insurance policy issued by the Insurer insuring the payment when due of the principal of and interest on the Certificates maturing in years 2007 through 2014 , inclusive. The term "City" shall mean the City of Beaumont, Texas . The term "Code" shall mean the Internal Revenue Code of 1986, as amended. The term "Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas . The term "Construction Fund" shall mean the construction fund established by the City pursuant to Section 20 of this Ordinance. The term "DTC" shall mean The Depository Trust Company of New York, New York, or any successor securities depository. The term "DTC Participant" shall mean brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among the DTC Participants . The term "Insurer" shall mean Municipal Bond Investors Assurance Corporation, the issuer of the Certificates Insurance Policy. The term "Interest and Sinking Fund" shall mean the interest and sinking fund established by the City pursuant to Section 20 of this Ordinance. The term "Interest Payment Date" , when used in connection with any Certificate, shall mean March 1, 1996 , and each September 1 and March 1 thereafter until maturity or earlier redemption. The term "Letter of Representation" shall mean the Letter of Representation delivered by the City to DTC. -2- Y o t The term "Net Revenues" shall mean the revenues of the System remaining after deduction of the reasonable and necessary expenses of operation and maintenance of the System. The term "Ordinance" as used herein and in the Certificates shall mean this Ordinance authorizing the Certificates . The term "Owner" or "Registered Owner" , when used with respect to any Certificate, shall mean the person or entity in whose name such Certificate is registered in the Register. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean, for any Interest Payment Date, the 15th day of the month next preceding such Interest Payment Date. 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 First Interstate Bank of Texas, National Association, Houston, Texas, and its successors in that capacity. The term "System" shall mean the City' s waterworks and sewer system. The term "Underwriters" shall mean First Southwest Company and Stephens, Inc. , Joint Managers . 3 . Authorization. The Certificates shall be issued in fully registered form, without coupons, in the total authorized aggregate amount of Six Million Dollars ($6 , 000, 000) , for the purpose of evidencing the indebtedness of the City for the cost of authorized street improvements within the City and the cost of professional services incurred in connection therewith. 4 . Designation, Date, and Interest Payment Dates . The Certificates shall be designated as the "CITY OF BEAUMONT, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1995" , and shall be dated May 1, 1995 . The Certificates shall bear interest from the later of May 1, 1995, 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, interest payable on March 1, 1996 , and semiannually thereafter on September 1 and March 1 of each year until maturity or earlier redemption. 5 . Certificates, Numbers and Denominations . The Certificates shall be issued bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in -3- P e Y the following schedule, and may be transferred and exchanged as set out in this Ordinance. The Certificates shall mature, subject to prior redemption in accordance with this Ordinance, on March 1 in each of the years and in the amounts set out in such schedule. Certificates delivered upon transfer of or in exchange for other Certificates shall be numbered in order of their authentication by the Registrar, shall be in the denomination of $5, 000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Certificate or Certificates in lieu of which they are delivered. Certificate Principal Interest Number Year Amount Rate CR-1 1997 $130, 000 6 . 70% CR-2 1998 140,000 6 . 70% CR-3 1999 145,000 6 . 70% CR-4 2000 155,000 6 . 70% CR-5 2001 165, 000 6 . 70% CR-6 2002 175, 000 6 . 70% CR-7 2003 185, 000 6 . 70% CR-8 2004 195, 000 6 . 70% CR-9 2005 210, 000 6 .40% CR-10 2006 500,000 5 . 20% CR-11 2007 500,000 5 . 30% CR-12 2008 500,000 5 .40% CR-13 2009 500, 000 5 .50% CR-14 2010 500, 000 5 . 60% CR-15 2011 500,000 5 . 625% CR-16 2012 500,000 5 . 70% CR-17 2013 500, 000 5 . 75% CR-18 2014 500, 000 4 . 70% 6 . Execution of Certificates; Seal . The Certificates shall be signed by the Mayor of the City and countersigned by the City Clerk of the City, by their manual, lithographed, or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Certificates shall have the same effect as if each of the Certificates had been signed manually and in person by each of said officers, and such facsimile seal on the Certificates shall have the same effect as if the official seal of the City had been manually impressed upon each of the Certificates . If any officer of the City whose manual or facsimile signature shall appear on the Certificates shall cease to be such officer before the authentication of such Certificates or before the delivery of such Certificates, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office. 7 . Approval by Attorney General; Registration by Comptroller. The Certificates to be initially issued shall be -4- r delivered to the Attorney General of the State 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 17 of this Ordinance shall be attached or affixed to the initial Certificates . 8 . Authentication. Except for the Certificates to be initially issued, which need not be authenticated by the Registrar, only Certificates which bear thereon a certificate of authentication, substantially in the form provided in Section 17 of this Ordinance, manually executed by an authorized representative of the Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such duly executed certificate of authentication shall be conclusive evidence that the Certificates so authenticated were delivered by the Registrar hereunder. 9 . Payment of Principal and Interest. The Registrar is hereby appointed as the paying agent for the Certificates . The principal of the Certificates 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, upon their presentation and surrender as they become due and payable, at the designated corporate trust office of the Registrar. The interest on each Certificate shall be payable by check payable on the Interest Payment Date, mailed by the Registrar on or before each Interest Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown on the Register. At the request of the registered Owner of $1, 000, 000 or more in aggregate principal amount of Certificates, the Registrar shall pay interest thereon by wire transfer in immediately available funds to the account designated by such Owner to the Registrar in writing at least five (5) days before the Record Date for such payment. If the date for payment of the principal of or interest on any Certificate 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. 10 . Successor Registrars . The City covenants that at all times while any Certificates are outstanding it will provide a bank, trust company, financial institution or other entity duly qualified and duly authorized to act as Registrar for the Certificates . The City reserves the right to change the Registrar 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 -5- r interest payment date on the Certificates . Promptly upon the appointment of any successor Registrar, the previous Registrar shall deliver the Register or copies thereof to the new 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. Each Registrar hereunder, by acting in that capacity, shall be deemed to have agreed to the provisions of this Section. 11 . Special Record Date. If interest on any Certificate is not paid on any Interest Payment Date and continues unpaid for 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. 12 . Ownership; Unclaimed Principal and Interest. The City, the Registrar and any other person may treat the person in whose name any Certificate is registered as the absolute Owner of such Certificate for the purpose of making payment of principal or interest on such Certificate, and for all other purposes, whether or not such Certificate 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 Certificate in accordance with this Section 12 shall be valid and effectual and shall discharge the liability of the City and the Registrar upon such Certificate to the extent of the sums paid. Amounts held by the Registrar which represent principal of and interest on the Certificates remaining unclaimed by the Owner after the expiration of three ( 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. 13 . Registration, Transfer, and Exchange; Special Election for Uncertificated Certificates . So long as any Certificates remain outstanding, the Registrar shall keep the Register at its principal corporate trust office and, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and transfer of Certificates in accordance with the terms of this Ordinance. -6- 7 Each Certificate shall be transferable only upon the presentation and surrender thereof at the principal corporate trust office of the Registrar, duly endorsed for transfer, or accompanied by an assignment duly executed by the registered Owner or his authorized representative in form satisfactory to the Registrar. Upon due presentation of any Certificate for transfer, the Registrar shall authenticate and deliver in exchange therefor, within three ( 3) Business Days after such presentation, a new Certificate or Certificates, registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Certificate or Certificates so presented. All Certificates shall be exchangeable upon presentation and surrender thereof at the principal corporate trust office of the Registrar for a Certificate or Certificates of the same maturity and interest rate in any authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of the Certificate or Certificates presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Certificates in accordance with the provisions of this Section 13 . Each Certificate delivered in accordance with this Section 13 shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such Certificate is delivered. The City or the Registrar may require the Owner of any Certificate 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 Certificate. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the City. Neither the City nor the Registrar shall be required to transfer or exchange any Certificate called for redemption, in whole or in part, within forty-five (45) days of the date fixed for redemption; provided, however, such limitation on transfer shall not be applicable to an exchange by the Owner of the unredeemed balance of a Certificate called for redemption in part. Notwithstanding any other provision hereof, upon initial issuance of the Certificates but at the sole election of the Underwriters, the ownership of the Certificates shall be registered in the name of Cede & Co. , as nominee of DTC, and except as otherwise provided in this Section, all of the outstanding Certificates shall be registered in the name of Cede & Co. , as nominee of DTC. The definitive Certificates shall be initially issued in the form of a single separate certificate for each of the maturities thereof. If the Underwriters shall elect to invoke the provisions of this Section, then the following -7- 0 4 provisions shall take effect with respect to the Certificates . With respect to Certificates registered in the name of Cede & Co. , as nominee of DTC, the City and the Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Certificates . Without limiting the immediately preceding sentence, the City and the Registrar shall have no responsibility or obligation with respect to ( i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Certificates, ( ii) the delivery to any DTC Participant or any other person, other than an Owner of a Certificate, as shown on the Register, of any notice with respect to the Certificates, including any notice of redemption, or ( iii) the payment to any DTC Participant or any other person, other than an Owner of a Certificate, as shown in the Register, of any amount with respect to principal of, premium, if any, or interest on the Certificates . Notwithstanding any other provision of this Ordinance to the contrary, the City and the Registrar shall be entitled to treat and consider the person in whose name each Certificate is registered in the Register as the absolute Owner of such Certificate for the purpose of payment of principal of, premium, if any, and interest on the Certificates, for the purpose of all matters with respect to such Certificates, for the purpose of registering transfers with respect to such Certificates, and for all other purposes whatsoever. The Registrar shall pay all principal of, premium, if any, and interest on the Certificates only to or upon the order of the respective Owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City' s obligations with respect to payment of principal of, premium, if any, and interest on the Certificates to the extent of the sum or sums so paid. No person other than an Owner as shown in the Register, shall receive a certificate for a Certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co. , the word "Cede & Co. " in this Ordinance shall refer to such new nominee of DTC. In the event that the City or the Registrar determines that DTC is incapable of discharging its responsibilities described herein and in the Letter of Representation and that it is in the best interest of the beneficial Owners of the Certificates that they be able to obtain certificated Certificates, or if DTC Participants owning at least 50% of the Certificates outstanding based on current records of the DTC determine that continuation of the system of book-entry transfers through the DTC (or a successor securities depository) is not in the best interest of such beneficial Owners of the Certificates, or in the event DTC -8- discontinues the services described herein, the City or the Registrar shall ( i ) appoint a successor securities depository, qualified to act as such under Section 17 (a) of the Securities and Exchange Act of 1934, as amended, and notify DTC of the appointment of such successor securities depository and transfer one or more separate Certificates to such successor securities depository or ( ii) notify DTC of the availability through DTC of Certificates and transfer one or more separate Certificates to DTC Participants having Certificates credited to their DTC accounts . In such event, the Certificates shall no longer be restricted to being registered in the Register in the name of Cede & Co. , as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Certificates shall designate, in accordance with the provisions of this Ordinance. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Certificates are registered in the name of Cede & Co. , as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on the Certificates, and all notices with respect thereto, shall be made and given in the manner provided in the Letter of Representation. 14 . Mutilated, Lost, or Stolen Certificates . Upon the presentation and surrender to the Registrar of a mutilated Certificate, the Registrar shall authenticate and deliver in exchange therefor a replacement Certificate of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding. If any Certificate 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 Certificate has been acquired by a bona fide purchaser, shall execute and the Registrar shall authenticate and deliver a replacement Certificate of like amount, bearing a number not contemporaneously outstanding. The City or the Registrar may require the Owner of a mutilated Certificate to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith and any other associated expenses, including the fees and expenses of the Registrar. The City or the Registrar may require the Owner of a lost, apparently destroyed or wrongfully taken Certificate, before any replacement Certificate is issued, to: ( 1) furnish to the City and the Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Certificate; (2 ) furnish such security or indemnity as may be -9- required by the Registrar and the City to save them harmless; ( 3) pay 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 ) meet any other reasonable requirements of the City and the Registrar. If, after the delivery of such replacement Certificate, a bona fide purchaser of the original Certificate in lieu of which such replacement Certificate was issued presents for payment such original Certificate, the City and the Registrar shall be entitled to recover such replacement Certificate from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Registrar in connection therewith. If any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has become or is about to become due and payable, the City in its discretion may, instead of issuing a replacement Certificate, authorize the Registrar to pay such Certificate. Each replacement Certificate delivered in accordance with this Section 14 shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such replacement Certificate is delivered. 15 . Cancellation of Certificates . All Certificates paid in accordance with this Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates 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 Certificates . 16 . Optional Redemption. The City reserves the right, at its option, to redeem Certificates having stated maturities on and after March 1, 2006 , in whole or in part, on March 1, 2005, or any date thereafter, at a price of par plus accrued interest to the date fixed for redemption. If less than all of the Certificates are to be redeemed, the City shall determine the Certificates, or portions thereof, to be redeemed. Certificates may be redeemed only in integral multiples of -10- � L $5, 000 . If a Certificate subject to redemption is in a denomination larger that $5, 000, a portion of such Certificate may be redeemed, but only in integral multiples of $5, 000 . Upon surrender of any Certificate for redemption in part, the Registrar, in accordance with Section 13 hereof, shall authenticate and deliver in exchange therefor a Certificate or Certificates of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Certificate so surrendered. Not less than thirty ( 30 ) days prior to a redemption date for the Certificates, the City shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to each Owner of each Certificate 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 Certificates are to be surrendered for payment and, if less than all the Certificates are to be redeemed, the numbers of the Certificates 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 Certificates or portions thereof to be redeemed. When Certificates have been called for redemption in whole or in part and due provision made to redeem the same as herein provided, the Certificates 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 Certificate or portion thereof called for redemption shall terminate on the date fixed for redemption. 17 . Forms . The form of the Certificates, including the form of the Registrar' s Authentication Certificate, the form of Assignment, and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas which shall be attached or affixed to the Certificates initially issued shall be, respectively, substantially as follows, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance: (Face of Certificate) UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF JEFFERSON NUMBER DENOMINATION CR- $ REGISTERED REGISTERED -11- CITY OF BEAUMONT, TEXAS COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION, SERIES 1995 INTEREST RATE : MATURITY DATE: ISSUE DATE : May 1, 1995 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS THE CITY OF BEAUMONT, TEXAS (the "City" ) , promises to pay to the registered owner identified above, or registered assigns, on the date specified above, upon presentation and surrender of this certificate at the designated corporate trust office of First Interstate Bank of Texas, National Association, in Houston, Texas (the "Registrar" ) , the principal amount identified above, payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due the United States of America, and to pay interest thereon at the rate shown above, calculated on the basis of a 360-day year of twelve 30-day months, from the later of the Issue Date specified above, or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this Certificate is payable by check on March 1, 1996 , and semiannually thereafter on each September 1 and March 1, mailed to the registered owner as shown on the books of registration kept by the Registrar as of the 15th day of the month next preceding each interest payment date. At the request of the registered owner of $1, 000,000 or more in aggregate principal amount of Certificates, the Registrar shall pay interest on such Certificates by wire transfer in immediately available funds to the account designated by such owner to the Registrar in writing at least five (5) days before the Record Date for such payment. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS CERTIFICATE SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE. IN WITNESS WHEREOF, this Certificate 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 Certificate. -12- (AUTHENTICATION CERTIFICATE) ( SEAL) CITY OF BEAUMONT, TEXAS Mayor City Clerk (Back Panel of Certificate) THIS CERTIFICATE is one of a duly authorized issue of Combination Tax and Revenue Certificates of Obligation, aggregating $6,000,000 (the "Certificates" ) , issued in accordance with the Constitution and the laws of the State of Texas, particularly Chapter 271, Texas Local Government Code, as amended, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of authorized street improvements within the City and the cost of professional services incurred in connection therewith, pursuant to an ordinance duly adopted by the City Council of the City (the "Ordinance" ) , which Ordinance is of record in the official minutes of the City Council . THE CITY RESERVES THE RIGHT, at its option, to redeem the Certificates having stated maturities on or after March 1, 2006, in whole or in part, on March 1, 2005, or any date thereafter, in integral multiples of $5, 000, at a price of par plus accrued interest to the date fixed for redemption. Reference is made to the Ordinance for complete details concerning the manner of redeeming the Certificates . NOTICE OF ANY REDEMPTION shall be given at least thirty ( 30) days prior the date fixed for redemption by first class mail, addressed to the registered owner of each Certificate to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar. When Certificates or portions thereof have been called for redemption and due provision has been made to redeem the same, the principal amounts so redeemed shall be payable solely from the funds provided for redemption and interest which would otherwise accrue on the amounts called for redemption shall terminate on the date fixed for redemption. THIS CERTIFICATE is transferable only upon presentation and surrender at the principal corporate trust office of the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his authorized representative, subject to the terms and conditions of the Ordinance. THE CERTIFICATES are exchangeable at the principal corporate -13- trust office of the Registrar for Certificates in the principal amount of $5, 000 or any integral multiple thereof, subject to the terms and conditions of this Ordinance. NEITHER THE CITY NOR THE REGISTRAR shall be required to transfer or exchange any Certificate called for redemption, in whole or in part, within forty-five ( 45) days of the date fixed for redemption; provided, however, such limitation on transfer shall not be applicable to an exchange by the Owner of the unredeemed balance of a Certificate called for redemption in part. THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordinance unless this Certificate either (i ) is registered by the Comptroller of Public Accounts of the State of Texas by registration certificate attached or affixed hereto or ( ii) authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. THE REGISTERED OWNER of this Certificate, 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 Certificates and will cause notice of any change of registrar to be mailed to each registered owner. IT IS HEREBY certified, recited and covenanted that this Certificate 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 Certificate have been performed, exist and have been done in accordance with law; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal matures, have been levied, within the limits prescribed by law, against all taxable property in the City, and have been pledged irrevocably for such payment. IT IS FURTHER certified, recited and represented that the net revenues (the "Net Revenues" ) to be derived from the operation of the City' s waterworks and sewer system (the "System" ) , but only to the extent of and in an amount not to exceed Ten Thousand Dollars ($10, 000 . 00) per annum, are also pledged to the payment of the principal of and interest on this Certificate and the series of Certificates of which it is a part to the extent that taxes may ever be insufficient or unavailable for said purpose, all as set forth in the Ordinance to which reference is made for all particulars; provided, however, that such pledge of Net Revenues is and shall be junior and -14- subordinate in all respects to the pledge of such Net Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of such Net Revenues to the payment of this Certificate and that series of Certificates of which it is a part, and the City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Net Revenues of the System, secured by a pledge of the Net Revenues of the System that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing this Certificate and the series of Certificates of which it is a part. Form of Registration Certificate of Comptroller of Public Accounts COMPTROLLER' S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this certificate has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this certificate has been registered by the Comptroller of Public Accounts of the State of Texas . WITNESS MY SIGNATURE AND SEAL this day of , 1995 . xxxxxxxxx Comptroller of Public Accounts (Seal) of the State of Texas Form of Registrar' s Authentication Certificate AUTHENTICATION CERTIFICATE It is hereby certified that this Certificate has been delivered pursuant to the Ordinance described in the text of this Certificate. First Interstate Bank of Texas, National Association, Houston, Texas By: Authorized Signature Date of Authentication -15- 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) the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said certificate on the books kept for registration thereof, with full power of substitution in the premises . DATED: Signature Guaranteed: Registered Owner NOTICE: The signature above must correspond to the name of the registered NOTICE: Signature must be owner as shown on the face guaranteed by a member firm of this Certificate in of the New York Stock Exchange every particular, without or a commercial bank or trust any alteration, enlargement company. or change whatsoever. 18 . Form of Statement of Insurance. The following statement of insurance shall be printed on the back of or attached to each of the Certificates : STATEMENT OF INSURANCE The Municipal Bond Investors Assurance Corporation (the "Insurer" ) has issued a policy containing the following provisions, such policy being on file at the principal corporate trust office of First Interstate Bank of Texas, N.A. , Houston, Texas . The Insurer, in consideration of the payment of the premium and subject to the terms of this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following described obligations, the full and complete payment required to be made by or on behalf of the Issuer to -16- First Interstate Bank of Texas , N.A. , Houston, Texas, or its successor (the "Paying Agent" ) of an amount equal to ( i ) the principal of ( either at the stated maturity or by an advancement of maturity pursuant to a mandatory or by an advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Obligations (as that term is defined below) as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration) ; and ( ii) the reimbursement of any such payment which is subsequently recovered from any owner pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law. The amount referred to in clauses (i ) and ( ii) of the preceding sentence shall be referred to herein collectively as the "Insured Amounts" . "Obligations" shall mean: $6,000,000 City of Beaumont, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1995, Maturing in the Years 2007 Through 2014, Inclusive. Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an Insured Amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with Citibank, N.A. , in New York, New York, or its successor, sufficient for the payment of any such Insured Amounts which are then due. Upon presentment and surrender of such Obligations or presentment of such other proof of ownership of the Obligations, together with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the Obligations as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such instruments being in a form satisfactory to Citibank, N.A. , New York, New York, shall disburse to such owners or the Paying Agent payment of the Insured Amounts due on such Obligations, less any amount held by the Paying Agent for the payment of such Insured Amounts and -17- v f r legally available therefor. This Policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Obligation. As used herein, the term "owner" shall mean the registered owner of any Obligation as indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer for such purpose. The term owner shall not include the Issuer or any party whose agreement with the Issuer constitutes the underlying security for the Obligation. Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King Street, Armonk, New York 10504 . This policy is non-cancellable for any reason. The premium on this policy is not refundable for any reason including the payment prior to maturity of the Obligations . DISCLOSURE OF GUARANTY FUND NONPARTICIPATION: In the event the Insurer is unable to fulfill its contractual obligation under this policy or contract or application or certificate of other evidence of coverage, the policyholder or certificateholder is not protected by an insurance guaranty fund or other solvency protection arrangement. MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION 19 . Legal Opinion; Cusip Numbers . The approving opinion of Orgain, Bell & Tucker, L.L.P. , Beaumont, Texas, and CUSIP Numbers may be printed on the Certificates, but errors or omissions in the printing of such opinion or such numbers shall have no effect on the validity of the Certificates . 20 . Interest and Sinking Fund; Tax Levy; Pledge of Revenues; Construction Fund. The proceeds from all taxes levied, assessed and collected for and on account of the Certificates authorized by this Ordinance are hereby irrevocably pledged and shall be deposited, as collected, in a special fund to be designated "City of Beaumont, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1995, Interest and Sinking Fund" . While the Certificates or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually levied, assessed and collected in due time, form and manner within the limits prescribed by law, and at the same time other City taxes are levied, assessed and collected, in each year, beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property in the City sufficient to pay the current interest on the Certificates as the same becomes due, and to provide and maintain a sinking fund adequate to pay the principal of the Certificates as such principal matures but in each year -18- never less than 2% of the original principal amount of the Certificates, 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 the Certificates and to no other purpose. The Net Revenues of the System, but only to the extent of and in an amount not to exceed $10, 000 per annum, are hereby irrevocably pledged to the payment of the principal of and interest on the Certificates as the same come due, to the extent that the taxes described in this Section of the Ordinance may ever be insufficient or unavailable for said purpose; provided, however, that such pledge of Net Revenues is and shall be junior and subordinate in all respects to the pledge of the Net Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of such Net Revenues to the payment of the Certificates; and the City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Net Revenues of the System that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing this series of Certificates . There is hereby created and there shall be established on the books of the City a separate account to be entitled the "City of Beaumont, Texas , Combination Tax and Revenue Certificates of Obligation, Series 1995, Construction Fund" . Immediately after the sale and delivery of the Certificates, that portion of the proceeds of the Certificates to be used for paying all or any part of the cost of authorized street improvements within the City, the cost of professional services incurred in connection therewith, and the issuance costs of the Certificates shall be deposited into the Construction Fund and disbursed for such purposes . Upon completion of such street improvements, the monies, if any, remaining in the Construction Fund shall be transferred and deposited by the City into the Interest and Sinking Fund. 21 . Further Proceedings . After the Certificates shall have been executed, it shall be the duty of the Mayor of the City to deliver the Certificates to be initially issued and all pertinent records and proceedings to the Attorney General of the State of Texas for examination and approval . After the Certificates to be initially issued shall have been approved by the Attorney General of the State of Texas, the Certificates shall be delivered to the Comptroller of Public Accounts of the State of Texas for registration. Upon registration of the Certificates 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 -19- prescribed herein to be affixed or attached to the Certificates to be initially issued, and the seal of the Comptroller shall be impressed, or placed in facsimile, thereon. In addition, the Mayor, the City Clerk 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. 22 . Sale of Certificates ; Certificates Insurance Policy. The City hereby accepts the Official Bid Form of and hereby awards sale of the Certificates to the Underwriters at a price equal to the principal amount of the Certificates plus a premium of $309 . 65 and accrued interest to the date of delivery, all in accordance with the Official Bid Form of the Underwriters, which price and terms are hereby found and determined to be the most advantageous reasonably obtainable by the City. The Mayor and other appropriate officials of the City are hereby authorized and directed to do any and all things necessary or desirable to satisfy the conditions set out herein and to provide for the issuance and delivery of the Certificates . The purchase of and payment of the premium for the Certificates Insurance Policy in accordance with the terms of the commitment for such insurance presented to the City Council are hereby approved and authorized. All officials and representatives of the City are authorized and directed to execute such documents and to do any and all things necessary or desirable to obtain the Certificates Insurance Policy, and the printing on the Certificates covered by the Certificates Insurance Policy of an appropriate legend regarding such insurance is hereby approved. 23 . Tax Exemption. (a) The City intends that the interest on the Certificates shall be excludable from gross income for purposes of federal income taxation pursuant to Sections 103 and 141 through 150 of the Code, and applicable regulations . The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respectively, would cause the interest on the Certificates to be includable in gross income, as defined in Section 61 of the Code, of the holders thereof for purposes of federal income taxation. In particular, the City covenants and agrees to comply with each requirement of this Section 23; provided, however, that the City shall not be required to comply with any particular requirement of this Section 23 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 Certificates or if the City has received a Counsel ' s Opinion to the effect that compliance with some other requirement set forth in this Section 23 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 -20- specified in this Section 23 . (b) The City covenants and agrees that its use of Net Proceeds of the Certificates will at all times satisfy the following requirements : ( i) The City will use all of the Net Proceeds of the Certificates for the authorized street improvements and professional fees described in Section 3 and for payment of the costs of issuing the Certificates . The City has limited and will limit with respect to the Certificates the amount of original or investment proceeds thereof to be used (other than use as a member of the general public) in the trade or business of any person other than a governmental unit to an amount aggregating no more than 10% of the Net Proceeds of the Certificates ( "private-use proceeds" ) . For purposes of this Section, the term "person" includes any individual, corporation, partnership, unincorporated association, or any other entity capable of carrying on a trade or business; and the term "trade or business" means, with respect to any natural person, any activity regularly carried on for profit and, with respect to persons other than natural persons, any activity other than an activity carried on by a governmental unit. Any use of proceeds of the Certificates in any manner contrary to the guidelines set forth in Revenue Procedure 93-19 , including any revisions or amendments thereto, shall constitute the use of such proceeds in the trade or business of one who is not a governmental unit; ( ii) The City has not permitted and will not permit more than 5% of the Net Proceeds of the Certificates to be used in the trade or business of any person other than a governmental unit if such use is unrelated to the governmental purpose of the Certificates . Further, the amount of private-use proceeds of the Certificates in excess of 5% of the Net Proceeds thereof ( "excess private-use proceeds" ) did not and will not exceed the proceeds of the Certificates expended for the governmental purpose of the Certificates to which such excess private-use proceeds relate; (iii) Principal of and interest on the Certificates shall be paid solely from ad valorem tax receipts collected by the City and from the Net Revenues of the System to the extent pledged hereunder. Further, no person using more than 10% of the Net Proceeds of the Certificates in a trade or business, other than a governmental unit, has made or shall make payments (other than as a member of the general public) , directly or indirectly, accounting for more than 10% of such receipts; (iv) The City has not permitted and will not permit -21- with respect to the Certificates an amount of proceeds thereof exceeding the lesser of (a) $5, 000, 000 or (b) 5% of the Net Proceeds of the Certificates to be used, directly or indirectly, to finance loans to persons other than a governmental unit; and (v) The City will use $99 , 000 of the Net Proceeds of the Certificates to pay the costs of issuance of the Certificates . When used in this Section 23 , the term "Net Proceeds" of the Certificates shall mean the proceeds from the sale thereof to the Underwriters, including investment earnings on such proceeds, less accrued interest with respect to such issue. (c) The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that, if taken or omitted, respectively, would cause the Certificates to be "federally guaranteed" within the meaning of Section 149 (b) of the Code and applicable regulations thereunder, except as permitted by Section 149 (b) ( 3) of the Code and such regulations . (d) The City shall certify, through an authorized officer, employee or agent, that based upon all facts and estimates known or reasonably expected to be in existence on the date the Certificates are delivered, the City will reasonably expect that the proceeds of the Certificates will not be used in a manner that would cause the Certificates to be "arbitrage bonds" within the meaning of Section 148 (a) of the Code and applicable regulations thereunder. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Certificates, including interest or other investment income derived from the proceeds of the Certificates, regulate investments of such proceeds and amounts, and take such other and further action as may be required so that the Certificates will not be "arbitrage bonds" within the meaning of Section 148 (a) of the Code and applicable regulations thereunder. (e) . 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 Certificates (within the meaning of Section 148( f) ( 6) (B) of the Code) , be rebated to the federal government. Specifically, the City will ( i) maintain records regarding the investment of the gross proceeds of the Certificates as may be required to calculate the amount earned on the investment of the gross proceeds of the Certificates separately from records of amounts on deposit in the funds and accounts of the City allocable to other bond issues of the City or moneys which do not represent gross proceeds of any bonds of the City, (ii) calculate at such times as are required by applicable regulations, the amount earned from the investment of the gross proceeds of the Certificates which is required to be _22_ rebated to the federal government, and ( iii) pay, not less often than every 5th anniversary date of the delivery of the Certificates, and within sixty ( 60) days after retirement of the Certificates, all amounts required to be rebated to the federal government. Further, 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 Certificates that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or larger loss than would have resulted if the arrangement had been at arm' s length and had the yield on the issue not been relevant to either party. ( f) The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Certificates are issued, an information statement concerning the Certificates, all under and in accordance with Section 149 (e) of the Code and applicable regulations thereunder. Section 24 . Application of Proceeds . Proceeds from the sale of the Certificates shall, promptly upon receipt by the City, be applied as follows : (a) Accrued interest shall be deposited into the Series 1995 Certificates of Obligation Interest and Sinking Fund; (b) $99 , 000 from the sale of the Certificates shall be used to pay the costs of issuing the Certificates not later than 90 days after such issuance; and (c) The remaining proceeds from the sale of the Certificates, together with investment earnings thereof, shall be deposited into the Series 1995 Certificates of Obligation Construction Fund and used for the purposes set out in Section 3 of this Ordinance, with any remainder constituting a reserve to be deposited into the Series 1995 Certificates of Obligation Interest and Sinking Fund. 25 . Qualified Tax-Exempt Obligations . The City hereby designates the Certificates as "qualified tax-exempt obligations" for purposes of Section 265(b) of the Code. In connection therewith, the City represents that (a) the aggregate amount of tax-exempt obligations issued by the City during calendar year 1995, including the Certificates, which have been designated as "qualified tax-exempt obligations" under Section 265(b) ( 3) of the Code, does not exceed $10,000, 000, and (b) the reasonably -23- anticipated amount of tax-exempt obligations which will be issued by the City during calendar year 1995, including the Certificates, will not exceed $10, 000, 000 . For purposes of this Section 25, the term "tax-exempt obligation" does not include "private activity bonds" within the meaning of Section 141 of the Code, other than "qualified 501 (c) ( 3 ) bonds" within the meaning of Section 145 of the Code. In addition, for purposes of this Section 25, the City includes all governmental units which are "subordinate entities" of the City, within the meaning of Section 265(b) of the Code. 26 . Open Meeting. 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, and such notice as given is hereby authorized, approved, adopted and ratified. 27 . Registrar. The form of agreement setting forth the duties of the Registrar is hereby approved, and the appropriate officials of the City are hereby authorized to execute such agreement for and on behalf of the City. 28 . Official Statement. The Preliminary Official Statement and the Official Statement prepared in the initial offering and sale of the Certificates have been and are hereby authorized, approved and ratified as to form and content. The use of the Preliminary Official Statement and the Official Statement in the reoffering of the Certificates by the Underwriters is hereby approved, authorized and ratified. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to the Preliminary Official Statement and the Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Certificates . 29 . Partial Invalidity. 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. 30 . Related Matters . To satisfy in a timely manner all of the City' s obligations under this Ordinance, the Mayor, the City Clerk, the City Treasurer, 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 Certificates, 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. -24- 31 . No Personal Liability. No recourse shall be had for payment of the principal of or premium, if any, or interest on Certificate, or for any claim based thereon, or under this Ordinance, against any official or employee of the City or any person executing any Certificate. 32 . Payments Pursuant to Certificates Insurance Policy. As long as the Certificates Insurance Policy shall be in full force and effect, the City and the Registrar shall agree to comply with the following provisions : (a) If payment of principal or interest due on the insured Certificates has not been made to the Registrar, the Registrar or any Owner to whom such payment is due, shall so notify the Insurer by telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail . Such notice shall specify the amount of the anticipated deficiency, the insured Certificates to which such deficiency is applicable and whether such insured Certificates will be deficient as to principal or interest, or both. The Insurer, on the later of the due date for payment or within one Business Day after receipt of notice of nonpayment, will deposit sufficient moneys with Citibank, N.A. , as insurance trustee for the Insurer or any successor insurance trustee (the "Insurance Trustee" ) . (b) The Registrar shall, after giving notice to the Insurer as provided in (a) above, make available to the Insurer and, at the Insurer' s direction, to the Insurance Trustee, the Register and all records relating to the funds and accounts maintained under this Ordinance for the Certificates . (c) The Registrar shall provide the Insurer and the Insurance Trustee with a list of registered Owners of Certificates entitled to receive principal or interest payments from the Insurer under the terms of the applicable Municipal Bond Guaranty Insurance Policy, and shall make arrangements with the Insurance Trustee ( i) to mail checks or drafts to the registered Owners of Certificates entitled to receive full or partial interest payments from the Insurer and ( ii) to pay principal upon Certificates surrendered to the Insurance Trustee by the registered Owners of Certificates entitled to receive full or partial principal payments from the Insurer. (d) The Registrar shall, at the time it provides notice to the Insurer pursuant to (a) above, notify registered Owners of Certificates entitled to receive the payment of principal or interest thereon from the Insurer ( i) as to the fact of such entitlement, ( ii) that the -25- . 8 Insurer will remit to them all or a part of the interest payments next coming due, ( iii) that should they be entitled to receive full payment of principal from the Insurer, they must present and surrender their Certificates together with any appropriate instrument of assignment for payment to the Insurance . Trustee and not the Registrar, and ( iv) that should they be entitled to receive partial payment of principal from the Insurer, they must present and surrender their Certificates for payment thereon first to the Registrar, who shall note on such Certificates the portion of the principal paid by the Registrar, and then, along with an appropriate instrument of assignment, to the Insurance Trustee, which will then pay the unpaid portion of principal . The Insurance Trustee shall disburse to registered Owners of Certificates or the Registrar, the payment due less any amount held by the Registrar for payment of principal of or interest on Certificates and legally available therefor. (e) In the event that the Registrar has notice that any payment of principal of or interest on a Certificate which has become due for payment and which is made to an Owner by and on behalf of the City has been deemed a preferential transfer and theretofore recovered from its registered Owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Registrar shall, at the time the Insurer is notified pursuant to (a) above, notify all registered Owners that in the event that any registered Owner' s payment is so recovered, such registered Owner will be entitled to payment from the Insurer to the extent of such recovery if sufficient funds are not otherwise available, and the Registrar shall furnish to the Insurer its records evidencing the payments of principal of and interest on the Certificates which have been made by the Registrar and subsequently recovered from registered Owners and the dates on which such payments were made. ( f) In addition to those rights granted the Insurer under this Ordinance, the Insurer shall, upon remittance and transfer of Certificates and appropriate instruments of assignment, become the Owner thereof, and to evidence such ownership ( i) in the case of claims for past due interest, the Registrar shall note the Insurer' s right as Owner on the Register upon receipt from the Insurer of proof of the payment of interest thereon to the registered Owners of the Certificates and (ii) in the case of claims for past due principal, the Registrar shall note the Insurer' s rights as Owner on the Register upon surrender of the Certificates by the registered Owners thereof together with proof of the payment of principal thereof. -26- • c a t a 33 . Insurer' s Consent. Any provision of this Ordinance expressly recognizing or granting rights in or to the Insurer may not be amended in any manner which affects the rights of the Insurer hereunder without the prior written consent of the Insurer (which consent shall not be unreasonably withheld) . 34 . Insurer' s Subrogation. In the event that the principal or interest due on the Certificates shall be paid by the Insurer pursuant to the Certificates Insurance Policy, the Certificates shall remain outstanding for all purposes, shall not be defeased or otherwise satisfied and shall not be considered paid by the City and all covenants, agreements and other obligations of the City to the Owners thereof shall continue to exist and shall run to the benefit of the Insurer, and the Insurer shall be subrogated to the rights of such Owners . 35 . Notices and Reports . The City covenants that it will provide the Insurer with the following: (a) a copy of the City' s annual audited financial statement for each fiscal year and the City' s budget for the following fiscal year, within 180 days of the end of each of the City' s fiscal years; (b) notice of any issue of debt obligations by the City and a copy of any disclosure document prepared in connection therewith, within 30 days after the issuance of such obligations; (c) such other information as the Insurer may reasonably request; and (d) copies of all notices which the City provides or is obligated to provide hereunder at the same time and in the same manner as each such notice is given hereunder. In addition, the City agrees that any amendment of or modification to this Ordinance or to any document executed in connection with the issuance of the Certificates shall be sent to Standard & Poor' s Corporation, Inc. , Moody' s Investors Service, Inc. , and any other rating agency reasonably designated by the Insurer. For purposes of this Ordinance, the City shall provide the Insurer with all notices and reports required hereunder at the following address unless and until the Insurer notifies the City in writing as to a different address : The Municipal Bond Investors Assurance Corporation 113 King Street Armonk, New York 10504 Attention: Surveillance Department _27_ E 36 . Repealer. All orders, resolutions, and ordinances , and parts thereof inconsistent herewith are hereby repealed to the extent of such inconsistency. 37 . Effective Date. This Ordinance shall be in force and effect from and after its final passage, and it is so ordered. PASSED AND APPROVED this 18th d of Apr' 1995 . Mayor, City of Beaumont, Texas AT ST: r v City Cl rk, City ot Beaumont, Texas (SEAL) I A' s ' ,5 -28_