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07/28/2020 PACKET
BEAUMONT TEXAS REGULAR MEETING OF THE CITY COUNCIL COUNCIL CHAMBERS CITY HALL 801 MAIN STREET TUESDAY, DULY 28, 2020 1:30 PM. CONSENT AGENDA * Approval of minutes — July 21, 2020 Confirmation of board and commission member appointments Sandy Pate would fill the unexpired term of Cory Crenshaw as an Alternate to the Planning -and Zoning Commission. The term would commence July 28, 2020 and expire September 30, 2021 (Mayor Becky Ames) A) Approve the renewal of an annual support.agreement with Creative Switching Designs, Inc. for the City's phone system B) Approve the settlement of the claim of Bertha Jackson . C) Authorize the City Manager to execute Change Order No. 5; accept maintenance, and authorize final payment to Excavation & Construction, LLC RESOLUTION NO. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT Sandy Pate is appointed to the Planning and Zoning Commission to fill the unexpired term of Cory Crenshaw. The term will commence July 28, 2020 and expire September 30, 2021. The meeting at which this resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. - Mayor Becky Ames - A ... BEAUMONT TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Bart Bartkowiak, Director of Public Works and Technology Services MEETING DATE: July 28, 2020 REQUESTED ACTION: Council consider a resolution approving the renewal of an annual support agreement with Creative Switching Designs, Inc. for the City's phone system. BACKGROUND The Mitel phone system is in use in a large number of City facilities. The system provides telephone communications, voice mail and four -digit dialing. The purchase is exempt from competitive bidding since it is available from only one (1) source having exclusive rights to maintain -the Mitel infrastructure. The annual cost is $91,41 L.77. FUNDING SOURCE General Fund. RECOMMENDATION Approval of the resolution. May 27, 2020 Terry LaFleur City of Beaumont 801 Main St. Suite 330 Beaumont, Texas 77704-3827 Dear Mr. LaFleur: The current Mitel Support Agreement on the Mitel Phone System expires on 08/29/2020 If you are interested in extending this agreement, all you need to do is fill out the bottom with the Type of Service you want and sign. If you use a Purchase Order please attach this form to the Purchase Order. A 30% re -instatement fee will apply if payment is not received prior to expiration of existing agreement. Type of Service Bronze Silver Gold Description of Advanced Everything listed on Everything listed coverage: Replacement/Exchange Bronze plus Remote for Bronze and of all Hardware. Phone MAC's (Moves, adds Silver plus labor support/on-site trouble and changes) apply on software shooting and software only to the system upgrades. upgrades. (Labor on configuration at time software upgrade of service contract. Phones are not install not covered) (Does not include re- covered. Phones are not installation of current covered. system.) Phones are not covered. Price for a year: 08/30/20 to $54,741.23 $80,882.19 $91,411.77 08/29/21 Type of Service: PO Referenced: Signature: If you should choose not to participate in an annual agreement, service could be rendered on an as needed basis. Labor costs are $160.00 per hour. Parts prices are per manufacturers published price. Each service call would also be charged travel time but no mileage charge. Phone coverage quotes upon request. RESOLUTION NO. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Council hereby approves the renewal of an annual support agreement for the Mitel phone systems from Creative Switching Designs, Inc., of Houston, Texas, as the sole source having exclusive rights to maintain the Mitel infrastructure, in the amount of $91,411.77 for use by all City departments; and, BE IT FURTHER RESOLVED THAT the City Manager be and he is hereby authorized to execute an annual support agreement with Creative Switching Designs, Inc., of Houston, Texas, for the purposes described herein. The meeting at which this resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. - Mayor Becky Ames - BEAU-MONT TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Tyrone E. Cooper, City Attorney MEETING DATE: July 28, 2020 REQUESTED ACTION: Council consider a resolution authorizing the settlement of the claim of Bertha Jackson. BACKGROUND This matter was presented and discussed in Executive Session held on July 21, 2020. The City Attorney is requesting authority to settle this claim in the amount of $21,886.08. FUNDING SOURCE General Liability Fund. RECOMMENDATION Approval of resolution. RESOLUTION NO. WHEREAS, the claim of Bertha Jackson was discussed in Executive Session properly called and held Tuesday, July 21, 2020; and, WHEREAS, the City Attorney is requesting authority to settle this claim; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this resolution are hereby, in all things, approved and adopted; and, THAT the City Attorney be, and he is hereby, authorized to settle the claim of Bertha Jackson for the sum of Twenty -One Thousand Eight Hundred Eighty -Six and 08/100 Dollars ($21,886.08); and, BE IT FURTHER RESOLVED THAT the City Manager be and he is hereby authorized to execute all documents related to settlement of the claim. The meeting at which this resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. - Mayor Becky Ames - c BEAUMONT TEXAS TO: FROM: PREPARED BY: MEETING DATE: City Council Kyle Hayes, City Manager Bart Bartkowiak, Director of Public Works & Technology Services July 28, 2020 REQUESTED ACTION: Council consider a resolution authorizing the City Manager to execute Change Order No. 5, accept maintenance, and authorize final payment to Excavation & Construction, LLC. BACKGROUND On September 18, 2018, by Resolution No. 18-229, City Council awarded a contract to Excavation & Construction, LLC, of Port Arthur, in the amount of $1,099,759.98, for the Chlorination Contact Chamber Rehabilitation Project. Change Order Nos. 1-4, in the amount of $75,526.00, are attached for your review. Proposed'Change Order No. 5, in the amount of $18,367.45, is required to adjust estimated quantities in the contract to reflect the actual quantities used in the completion of the project. If approved, the adjustment in quantities would result in a final contract amount of $1,193,653.43. The project has been inspected by the Engineering Division and found to be complete in accordance with the provisions and terms set forth in the contract. Acceptance of Change Order No. 5, maintenance, and final payment in the amount of $143,362.46 is recommended. FUNDING SOURCE Capital Program RECOMMENDATION Approval of the resolution. RESOLUTION NO. 19-284 WHEREAS, on September 18, 2018, the City Council of the City of Beaumont, Texas passed Resolution No. 18-229 awarding a contract in the amount of $1,099,759.98 to Excavation & Construction, LLC, of Port Arthur, Texas, for the Chlorination Contact Chamber Rehabilitation Project; and, WHEREAS, on April 16, 2019, the City Manager executed Change Order No. 1, in the amount of $3,000.00, for the installation of higher strength Class A concrete and the reduction in quantities of concrete used for the project, thereby increasing the total contract amount to $1,102,759.98; and, WHEREAS, on August 6, 2019, the City Manager executed Change Order No. 2, in the amount of $19,862.00.00, was required to order and replace four (4) gates due to their unrepairable condition per the manufacturer and to sod the surrounding area of the Chlorination Contact Chamber to establish vegetation, thereby increasing the total contract amount•to $1,122,621.98; and, WHEREAS, on September 17, 2019, the City Council of the City of Beaumont, Texas passed Resolution No. 19-197 authorizing the City Manager to execute Change Order No. 3, in the amount of $18,000,00, for necessary repairs to two (2) abandoned 42-inch stormwater lines 'that are undermining the existing slope walls and discharging water into the Chlorination Contact Chamber, thereby increasing the total contract amount to $1,140,621.98; and,, WHEREAS, Change Order No. 4, in the amount of $34,664.00, is required to perform additional repairs to the Chlorine Contact Chamber walls and purchase four (4) actuators for the chamber gates, and the addition of thirty (30) calendar days which are needed for the additional work, thereby increasing the total contract amount to $1,175,285.98; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this resolution are hereby, in all things, approved and adopted; and, THAT the City Manager be and he is hereby authorized to execute Change Order No. 4, in the amount of $34,664.00 for additional work described above, thereby increasing the total contract amount to $1,175,285.98 for the Chlorination Contact Chamber Rehabilitation Project; and, The meeting at which this resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551, PASSED BY THE CITY COUNCIL of the City of Beaumont this the 10th day of December, 2019. 1 I .Iwl�r' 1 l &JG/- � -- .:- CITY OF BEAUMONT Datr. May 14.I020. Project: Cblorinotion Contact Chamber Counry: JeB'erson Distrta: Bmumont - Contract Number. W110218-1SConma Chamber - Owoer. City orltaumout - Caatractcr. Exc—tion d: CRu ..ion. LLC. - - THE FOLLOWING CHANGES IN THE PLANS AND/OR SPEC FTCATIORS ARE REREEY-MADE: Quantities adjnmd to ream Bml fudd m—nmm - 'Item No. Item Code Description it. 0nf°tv entity Unit Price Tatal _ 412-A 6' Concme l.=m SY 300.00 17333 S U533 S .613.09 _ J32-B 6' Conte Rip Rap Rxi&—nmt ( ) SY 0.00 26.67 S 442.69 S 11.80654 . •9 lDrWn and Clan Chamber LS 2.00 3 S 20.173.99 S 20.173.99 . . 9991 002 Remove and R Lxe E%htig Gates E1 1 4.00 &00. S 2500.00 1 S 10,000.00 - _ TOTAL: S IU67AS O WORKING DAYS WILL EE ADDED TO THIS CHANGE ORDER ORIGINALCONTRACTAMOUN'll S 1.099.759.93 NET FROM PREVIOUS CHANGE ORDERS: S 1.175.785.9E TOTAL AMOUNT OF THIS CHANGE ORDER: S 1&267.45 PERCENT OF THIS GRANGE ORDER: : 1.67/ TOTAL PERCENT CHANGE ORDER TO, DATE: 9S4% " NEW CONTRACT AMOUNT. S 1.193.633.43 ACCEPTFD BY: .. PREP E��_ 7/z� 7-26 - 2v E\, STRUCTION. LLC- REP DATE DAVID LEPROJECT AGER DATE t►\B`E\VIE{My\E\p,By`\ \ (� ,, R Ll Dill /'�. z AMALIA VILLARREAL, P.E. CITY ENGINEER DATE DARTKO - DATE - - DIRECTOR OF PUBLIC WORKS AND TECHNOLOGY SERVICES APPROVED BY: ATTESTED BY.. KYLE HAYES. CITY MANAGER DATE TINA BROUSSARD, CITY CLERK DATE CITY OFBEAUMONT Det. November 19,2019 Prnjea: Chlorination Contact Chamber County: Jefferson District: Beaumont ContnaNumber: WU0218.15 Ccaiact Chamber Owner, City of Benum ant Contractor, Excavation 6t Construction, LLC. C.O. No.: 4 THE FOLLOWING CHANGES IN THE PLANS AND/OR SPECIFICATIONS ARE HEREBY MADE: Quantities added to adjust for a change in%York regarding Gates and additianal repair ofehomba tvalls.. Item No. Item Code - Description Unit Original Now Unit Price Total entity uantl 4 421 C-Crae Main - UnitR air Sy 25 100 S 264.00 S 19800.00 999 006 .FontaJnc Aquancoc Actuators(All Labm,Equiment and Materials) I EA. '..0 1 4.00 IS 3.716.00 IS... 14864.00 TUI'AIL S 34,664.90 30 WORKING DAYS WILL BE ADDED TO THIS CHANGE ORDER ORIGINAL CONTRACTAMOUNT: S 1,099,759.98 NETFROM PREVIOUS CHANGE ORDERS¢ S - 1,140,621.98 TOTALAMOUNT OFTHIS CHANGEORDER: S 34,664:00 PERCENT OF THIS CHANGE ORDER: 3.15:4 TOTAL PERCENT CHANGE ORDER TO DATE: 6.SP/. NEW CONT11ACTAMOUNT. 5 1.175.295.98 - �� %lei/y LICAVATION & CON CIION,LLC-REP. DATT ' PREP D IE D B REVIEWED BY: - -�41I1 Z7�� OLD E.0 O .,ROADWAYjDESIGNER III DATE D JOSE�' MAJDALANLP DA : _ APPROVED BY: ` A BY: r KYLE HAYES, CITY MANAGER DATE TI BROU RD, : ITV CLERK DATE Iz-i3-iy Dmet Project: County; District: Contract Numbers Owner. Canimetors C.O. Nat CITY Or BEAUMONT September3, 2019 Chlorination Conine? Chamber Jefferson Beaumont IYU0218.16 Contact Chnmber City orDcaumont Escnva0on & Construction, LLC. - 3 THE FOAMING CHANGES IN TH13PLANS AND/OR BPBOIFICATION9 ARE H$RSDY MADE: Quomlities added to adjust fora cbongo in arosk regardingOnlcs. him No. Item Code Description Unit Orlglnnl New Unit Price Total unntity unnth Demo two (2) 42-Inch RC.P to oulsidd limitsof Chlorine Chamber (Approx. 999 003 120-LFeach):Installeancrclgplugs (Not to,exceed 2A-inchesindeptl)ineach pipe. Bockfill will: C.S.S (2 sac) to reestablish slopes for chamber. Supply all 1.00 S 78,00Q00 S I8,000.00 - labor, equipment and materfalstocomplete item. 14 MIMING DAYS WILL DE ADDED TO THIS CHANGE ORDER ORIGINAL CONTRACTAIIIOVNTs $1,099.759.08 NET FROM PREVIOUS CHANGE ORDERS: S1.122,621.98 TOTAL MMOUNT OF THIS CHANGE ORDER: SIB ,ODD .00 PERCENT OF THIS CHANGE ORDERt 1.64%, TOTAL PERCENT CHANGE ORDER TO DATES 3.72% NEW CONTRACTA010UYTi $1.140,621.98 ACCEPTED'DYt EXCAVATION & W15!`RUCTION.LLC-REP. AT PRE \ E & RE E1Y DY .1 O- D E. CROCHE OADWAY DESIGNER 111 DATE APPROVED DYs L l� KYLE HAVES. CITY MANAGER DATE 5-1g-11 TOTALS S18,000.00 REVIEWED DY: NJ D JOSEPH' AJDALANI A STEDDYt' o`3r tA IMOUSSARD, CITY CLERK DATE CITY OF BEAUMONT Date: July22,2019 Project: Chlorinntton Contact Cluumber County: Jefferson District: Beaumont Contract Numbers AVU0218-15 Cosdact.Chnmber Owner: Cityorllenunsonl . Contractors Excavation & Construction, LLC. C.O. 110.6 2 Quantities added to ndjusl fora chmaga in work regnniing Gatos. Item No. Ilen> Code Dcscripliou Unit original Quantity New uniriil Unit Price Total 7 XXXX Weir Onto Seal Ra laccanonts EA 4 1 0.00 . S . 1200.00 S : (4,800.00) 999 XXXX Unforseen Wark as Directed by the Owner ALLOWANCE EA 1 0.00 S 50,000.00 S. 50 000.00 999 002 Remove and Replace Existing Gates EA '0 4.00 $ 2500.00 S 10 000.00 999 003 rontaino A uanox Water Contral Gates All Lnbor,E ui menl mad Materials EA 0 4.00 S '15,228.00 S GO 912.OD 999 004 Vegetative Eslablishment Sad andWalering) SY 0 750.00 S 5.00 $ 3750.00 TOTAL: S19,862.00 I'•yrg! Yr. , Yn�}yn.e•r�,,.4.,i�tgarF' .r�' . ArrNS'6,•, n� ..pw .:r, .-;•,:d ,., ;. • n•: 1,U,....d!ii�'..,1..s�1..,�i11�...E.r,.S�r�;.a:,,�u� .�rr�,t..17i•,S,Oj� ORIyy'��.,,,,���t�p�YSjl 1LAP�.,'}},,,,�� � '�l'�r pIB;C( II RbP�R Jtd ,t � `tiltj: pp� `tii� yliF3:;t �.�iin�it.� ORIGINAL CONTRACT AMOUNT. $1,099,759.99 NET FROM PREVIOUS CHANGE ORDERS: $1,102,759.99 TOTAL AMOUNT or THIS CHANGE ORDER: S19,862.00 PERCENT OIr.T111S.CHANGE ORDER: 1.80% TOTAL PERCENT CHANGE ORDER TO DATE: 2,08% NEW CONTRACT AMOUNTt $1,122,621.98 ACCEPTED BY: EXCAVATIO CONSTRUCTION,LLGREP. DATE PREP ED WARbUtEXROCHE RO A ESIGNER I DATE' APPROVEDBY: ICYLE HAYES, CITY MANAGER DATE d` !Z APPROVAL 017 CONTRACT CHANGF CHANGE ORDERNo. Ono (1) April 16, 2019 Page 1 of I PROJECT: City of Beaumont, Texas Chlorination Contact Chamber Rehabilitation OWNER: City of Beaumont, Texas 801 Main Street Beaumont, Texas 77704 - CONTRACTOR-_ Excavation 8c Construction, LLC 6601 Proctor Street Port Arthur, TX 77642 TO THE OWNER: Approval e f the following contract change is requested. Reason for Change: The Contract initially called for Class B concrete for the 6" rip rap replacement. Excavation and removal.of the existing concrete slopes revealed field conditions that require a higher strength design mix for, tho rip rap. Item 10 will allow for Class A concrete (higher strength) to be installed. ORIGINAL CONTRACT AMOUNT- $ 1,099,759.98 THIS CHANGE ORDER Description: Unit Price Oi=—Alty Net Change DD Item 10 6" Concrete Rip Rap Replacement, Clow A Concrete 5890.38/CY 600.00 $ 534,228.00 ADJU3T Itcm 2 Reduce the quantities from 800 CY to 200 CY S (531,228.00). . TOTAL AMOUNT OF THIS CHANGE ORDER: $ 3,000.00 TOTAL REVISED CONTRACT AMOUNT INCLUDING THIS CHANGE ORDER- S 1,102,759.98 CONTRACT TIME Original Contract Time: 150 Calendar Days Additional Time Requested: 0 Calendar Days Revised Contract Time per this Change Order: iso Calendar bays CONDITION OF CHANGE- "Contractor acknowledges and agrees that the ad)ustments in contract price and contact time stipulated in this Change Order represents full compensation for all increases and decreases in the cast ol, and tha time required to.perform the entire work under . the Contract arising directly or indirectly from this Change Order cad all. previous Change Orders, Accoptanee of this waiver. constitutes an agreement between Owner and Contractor that the Change Order represents at all inclusive, mutually agreed upon adjustment to the Contract,,and that Contractor will waivo all tights to file a claim on this Change Order after it is properly executed:' Recommended by: Approved b� Accepted by: Pty of eaumont City oftleaumout Excavation & Construction, LLC ublic Works Director - Owner Contractor f Date: Lf �� .�Q Date: f2-4 11 Date: L��1� City ot Beaumont- Estimate PROIECTt lChlorIng, Contact ChsmberRebld AWARDED CONTRACT AMOUNT: 1,099.759.98 PERCENT OF TIME USED: 100.00% CONTRACTOR: - Exeevstkm&CemlrucUan.LLt CONTRACT DATE: lama 7, 3039 PERCENT OF WORN COMPLETED: 300,00% MTHLY ESTIMATE: 30-Flml CURRENT CONTRACT AMOUNT $1,193,853.43 Peace ENDING: Ma 1,2020to Ma 142020 CONTRACT WORKING DAYS: 300 OIANGEOROEAst No. OS-Firtal CALENDAR DAYS USED:: 300' ITEM ITEM DESCRIPTION UNIT EST. PREVIOUS TO DATE TOTAL ESTIMATE UNIT TOTAL NO. CODE A. Base Unit Price. MEASURE CITY. ESTIMATE ESTIMATE TO DATE PRICE AMOUNT 1 500 Mobilhatlon IN.t to Exceed 3%af Total pose Unit Prices LS 1 1 0.00 1, $ 39,900.00 $ 28,900.00 a2 432-A• VC9nmtsFU1pRap Ra liremenl C.G. N6:0l Cy 173.33 173.33 0.00 173.33 885.38 $ 1S3A62.92 a2 432-e G'CenOota Rl Ra Ro lacemant Dama ad Rip Rap) C.O.No.01' CY 26.67 26.67, :.- 0.00 26.67 . $ - 442.67 $' 11,806.54 a2 432-C 6"Concrato Rip Rap Replacement ClauA C.O:NnA1. - CY 600 600.00 - p,pp 600.00' $ 690.39 1 534,228.00 3 - lWaterproolins Bondcoat SF 28,O80 28,080 0.00 28,O80 S 6.39 $ 179.43L20 4' 421 Concrete Mosortary Unit RepaIr Sy 100 100.. 0.00- 100 $ 260.00 $ 16,400.00 S 529 Curb Slop LF 600 600 0.00 900 $ 0.60 $ 4,880.00 6 Man Cleaning SF 78,080 29,080 0.00. 20,080 $ 2.71 $ 76,090.0D 7 WOIrGate Seal Replacement C.O. No.02 EA 0 0 0.00 _ 0 $ 11,200.00 $ - B' - Claanand Sealloinls LF 500 S00 0.00 Soo $ 4.80 $ 2,400.00 9 - Drain and Clean Chamber - L5 3 2.00 La0 3.00 ' $ 20;17399 5 60,52197 999 002 Remove and Replace Existing Galas C.O. Ne.02 EA a 0 8.00 0 $ 2,500.00 3 20,000.00 999 003 ' F.ntal.eAqusnox Water Central Gates (All Labor,Equlpment and Materials) CO. No.02' EA 4 2 '7.00 0 $ 15,2211A0 $ G0,912.00 999 004 Vegetative EstabOshmant (SOD and Watering) C.O. No.02 Sy 1 750 232 515.00 750 $ 5.00 $ 3,7SO.00 999 005 Demo I- (2) 42-inch RCP to outside Ilmlls afChlorine Chamber (Approx. 120-LF each). Install concrete plugs (Not to exceed 24.Inches In depth)In each pipe. Backgll with CSS(2 sac) to reestablish slopes for chambenSupply all labor, equipment and materials incomplete Item. LS 1 1 0.00 1 $ 18,000.00 $ 10,000.00 999. 006' FantaineAquanoxAclualors(All Labor,Equlpment and Materials) GO.EA 0.04 4 0 '4A0 4 $ 3,716.00 $ 34,660.00 .I7EM REM DESCRIPTION UNIT EST. PREVIOUS TO DATE TOTAL ESTIMATE UNIT TOTAL NO. CODE B.Allowama MEASURE CITY. ESTIMATE ESTIMATE' TO DATE PRICE AMOUNT 999 Unfoneen Work as Directed BY OwnerC.O. No.02 'Allow 0 0 0.00 0.00 $ 501000.00 -$ PREPARED BY: /� . 7�p� r0ACR0TBiGlE,PROIE AGER 0 APPROVEOGY: TEES VI P.E4 TY GIN R DATES *TIEOF ^ APPROVED BY:� WRKS . DATE ANDTECHNOLOGY SERVICES' 7.7-2-6 FKCA,An ISYRUcT,.N, LLC, REPRESENTATIVE DATE I'M*AN a0-kM A-%t-doh mxerdaP Iahk-ka Mva aeea-WeWo,dit edroa d-Wtaebmn[I/x,mmb. GRAND TOTAL AMOUNT OF WORK DONE: S 1,193,653A3 LESS'S%RETAINAGE: SUBTOTALI S 2,193,653.43 LESS PREVIOUS PAY ESTIMATE: $ 3.030,290.97 FINAL PAYMENT WITH RETAINAGE: $ 143;362.46 RESOLUTION NO. WHEREAS, on September 18, 2018, the City Council of the City of Beaumont, Texas passed Resolution No. 18-229 awarding a contract in the amount of $1,099,759.98 to Excavation & Construction, LLC, of Port Arthur, Texas, for the Chlorination Contact Chamber Rehabilitation Project; and, WHEREAS, on April 16, 2019, the City Manager executed Change Order No. 1, in the amount of $3,000.00, for the installation of higher strength Class A concrete and the reduction in quantities of concrete used for the project, thereby increasing the total contract amount to $1,102,759.98; and, WHEREAS, on August 6, 2019, the City Manager executed Change Order No. 2, in the amount of $19,862.00.00, was required to order and replace four (4) gates due to their unrepairable condition per the manufacturer and to sod the surrounding area of the Chlorination Contact Chamber to establish vegetation, thereby increasing the total contract amount to $1,122,621.98; and, WHEREAS, on September 17, 2019, the City Council of the City of Beaumont, Texas passed Resolution No. 19-197 authorizing the City Manager to execute Change Order No. 3, in the amount of $18,000.00, for necessary repairs to two (2) abandoned 42- inch stormwater lines that are undermining the existing slope walls and discharging water into the Chlorination Contact Chamber, thereby increasing the total contract amount to $1,140,621.98; and, WHEREAS, on December 10, 2019, the City Council of the City of Beaumont, Texas passed Resolution No. 19-284 authorizing the City Manager to execute Change Order No. 4, in the amount of $34,664.00, to perform additional repairs to the Chlorine Contact Chamber walls and purchase four (4) actuators for the chamber gates, and the addition of thirty (30) calendar days which are needed for the additional work, thereby increasing the total contract amount to $1,175,285.98; WHEREAS, Change Order No. 5, in the amount of $18,367.45, is required to adjust estimated quantities in the contract to reflect the actual quantities used in the completion of the project, thereby increasing the total contract amount to $1,193,653.43; WHEREAS, the project has been inspected by the Engineering Division and found to be complete in accordance with the provisions and terms set forth in the contract; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this resolution are hereby, in all things, approved and adopted; and, THAT the City Manager be and he is hereby authorized to execute Change Order No. 5, in the amount of $18,367.45 for additional work described above, thereby increasing the total contract amount to $1,193,653.43 for the Chlorination Contact Chamber Rehabilitation Project; and, THAT the Chlorination Contact Chamber Rehabilitation Project be and the same is hereby accepted; and, BE IT FURTHER RESOLVED THAT the City Manager is hereby authorized to make final payment in the amount of $143,362.46 to Excavation & Construction, LLC., of Port Arthur, Texas. The meeting at which this resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. - Mayor Becky Ames — BEAUMONT TEXAS REGULAR MEETING OF THE CITY COUNCIL COUNCIL CHAMBERS CITY HALL 801 MAIN STREET TUESDAY, JULY 28, 2020 1:30 PM AGENDA CALL TO ORDER * Invocation Pledge Roll Call Presentations and Recognitions * Public Comment: Persons may speak on scheduled agenda items 1, 4-10/Consent Agenda * Consent Agenda GENERAL BUSINESS 1. Consider amending Ordinance No. 20-028 related to the Public Health -Emergency Disaster Orders for the City of Beaumont and opening certain City facilities 2. Consider a request for an Amended Specific Use Permit to allow the expansion of an air conditioning supply warehouse in a GC -MD (General Commercial -- Multiple Family Dwelling) District located at 980 N Martin Luther King Parkway 3. Consider a request for a Specific Use Permit to allow an RV (Recreational Vehicle) Park in an LI (Light Industrial) District located at 5497 Fannett Road 4. Consider an ordinance authorizing the issuance of City of Beaumont, Waterworks and Sewer System Revenue and Refunding Bonds, Series 2020, and authorizing the Mayor or City Manager and Chief Financial Officer to approve the amounts, interest rates, prices, and terms thereof for both series and to execute all documents related to the sale of the Bonds 5. Consider an ordinance authorizing the issuance of City of Beaumont, General Obligation,Refunding Bonds, Series 2020A and City of Beaumont General Obligation Refunding Bonds, Taxable Series 2020B and authorizing the Mayor or City Manager and Chief Financial. Officer to approve the amounts, interest rates, prices, and terms thereof for the series and to execute all documents related to the sale of the Bonds 6. Consider a resolution providing for the reimbursement of capital expenditures incurred prior to the closing of financing 7. Consider a resolution approving a contract for the purchase of sodium hydroxide for use by the Water Utilities Department 8. Consider a resolution authorizing the City Manager to award a contract to Placo, Ltd., of Lumberton, for the Astor Street Lift Station Repairs 9. Consider a resolution approving a contract for the construction of a new fixed knot and ornamental fence at the Tyrrell Park Botanical Garden Center WORK SESSION * Review and discuss the findings of the Phase I Assessment of the Sewer System Review and discuss the operations of the Water Department Review and discuss making application to FEMA for Hurricane Harvey Direct Administrative Costs GENERAL BUSINESS 10. Consider a resolution authorizing the City Manager to make application to FEMA for Hurricane Harvey Direct Administrative Costs COMMENTS Public Comment (Persons are limited to 3 minutes) * Councilmembers/City Manager/City Attorney comment on various matters EXECUTIVE SESSION * Consider matters related to the deliberation of the purchase, exchange, lease or value of real property in accordance with Section 551.072 of the Government Code, to wit: Specifically city -owned property at 3455 Sarah Street Persons with disabilities who plan to attend this meeting and who may need auxiliary aids or services are requested to contact Kaltrina Minick at 880-3777. 1 July 28, 2020 Consider amending Ordinance No. 20-028 related to the Public Health Emergency Disaster Orders for the City of Beaumont and opening certain City facilities BEAUMONT TEXAS TO: City Council FROM: Kyle Hayes, City Manager MEETING DATE: July 28, 2020 REQUESTED ACTION: Council consider amending Ordinance No. 20-028 related to the Public Health Emergency Disaster Orders for the City of Beaumont and opening certain City facilities. BACKGROUND On June 23, 2020, the City Council amended the Emergency Disaster Orders for the City of Beaumont to allow for the opening of all previously closed City facilities on or before July 31, 2020, with the exception of the Lakeside Center. Mayor Ames and Mayor Pro -Tern Feldschau have requested that this item be placed on the agenda to reconsider the opening of certain facilities. ORDINANC&NO. 20-028 ENTITLED AN ORDINANCE OF THE CITY OF BEAUMONT AMENDING ORDINANCE 20-020 TO AMEND THE PUBLIC HEALTH EMERGENCY DISASTER ORDERS FOR THE CITY OF BEAUMONT; OPENING CERTAIN CITY FACILITIES; PROVIDING FOR SEVERABILITY; PROVIDING FOR A PENALTY AND PROVIDING FOR REPEAL. WHEREAS, on the 16th day of March 2020, the Mayor issued a Proclamation, as was amended March 19, 2020 and March 23, 2020, declaring a State of' Disaster for the City of Beaumont, Texas resulting from the imminent threat to the public health and the potential loss of life from the spread of COVID-19 in the City of Beaumont; and, WHEREAS, the City Council, on March 23, 2020, passed Ordinance No. 20-010 extending the Declaration of Local Disaster due to public health emergency until such time as the Declaration is terminated by Ordinance of the City Council; and, WHEREAS, Governor Abbott recently issued Executive Orders relating to the expanded reopening of services as part of a safe, strategic plan to Open Texas in response to the COVID-19 pandemic; and, WHEREAS, the Executive Orders suspend the applicable provisions of the Texas Government Code Chapter 418 and any other relevant statutes to the extent that local officials do not impose restrictions inconsistent with the Governor's Orders, provided that local officials may enforce the Executive Orders as well as local restrictions that are consistent with the Executive Orders; and, WHEREAS, the City Council, on May 5, 2020, passed Ordinance No. 20-018 amending Ordinance No. 20-010 to amend the Public Health Emergency Disaster Orders for the City of Beaumont deferring to the Executive Orders of the Governor and opening certain City facilities; and, WHEREAS, the City Council, on May 26, 2020, passed Ordinance No. 20-020 amending Ordinance No. 20-018 to amend the Public Health Emergency Disaster Orders for the City of Beaumont opening certain City facilities; and, WHEREAS, it is in the best interest of the citizens of Beaumont to further amend the City of Beaumont Declaration of Local Disaster Orders to address the opening of additional facilities in the City of Beaumont while minimizing the spread of COVID-19; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this ordinance are hereby, in all things, approved and adopted; and, Section 1. THAT Ordinance No. 20-018 amending Ordinance No. 20-010 extending the declared State of Local Disaster be amended to further amend the adopted Declaration Orders as follows: That the March 23, 2020 amendment to the Declaration, attached hereto as Exhibit "A," as amended, is hereby further amended to allow for the opening of all previously closed City facilities on or before July_ 31, 2020, with'the exception of the Lakeside Center. The operation of City facilities are to be in compliance with the minimum standard health protocols outlined by the Texas Department of State Health Services (DSHS) and the Center for Disease Control and Prevention (CDC) guidelines. Section 2. The City of Beaumont suspends the charging and collection of all fares for service for the Beaumont Municipal Transit System. Beaumont Municipal Transit shall enforce the social distancing requirements. Travel shall be limited to the essential travel as - outlined herein. ? - Section 3. Temporary Outdoor Restaurant Operations Permit: The City of Beaumont will allow the use of outdoor seating in parking lot areas of restaurants using tents, umbrellas or other covering upon application and the issuance of a permit. Section 4. That the proclaimed State of Public Health Disaster for the City of Beaumont shall continue in effect until terminated by the City Council. Section 5. That if any section, subsection, sentence, clause or phrase of this ordinance, or the application of same to a particular set of persons or circumstances should for any reason be held to be invalid, such invalidity shall not affect the remaining portions of this ordinance, and to such end the various portions and provisions of this ordinance are declared to be severable. Section 6. Any person who shall violate any provision of this ordinance shall be deemed guilty. of a misdemeanor and, upon conviction, shall be fined in an amount not to exceed $2,000.00. Each day of violation shall constitute a separate offense. Section 7. This ordinance is passed as an emergency measure and pursuant to local authority for emergency measures -and shall become effective immediately upon its approval. The meeting at which this ordinance was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 23rd day of June, 2020. - M11yor Becky Ames - CITY OF BEAUMONT SECOND AMENDED DECLARATION OF LOCAL DISASTER DUE TO PUBLIC HEALTH EMERGENCY WHEREAS, on March 16, 2020, pursuant to Texas Government Code, Section 418.108(b), the Mayor, as Emergency Management Director, declared for the City of Beaumont a local disaster due to public health emergency caused by the threat of the transmission and spread of COVID-19 In the City of Beaumont; and, WHEREAS, due to the ongoing threat of the spread of the COMD-19 virus and the need to update measures to reduce the potential of exposure and transmission .of the disease, it is necessary to amend the Declaration of Local Disaster; NOW, THEREFORE, BE IT PROCLAIMED BY THE MAYOR OF THE CITY OF BEAUMONT, TEXAS: THAT the March 16, 2020 Declaration of Local Disaster as amended March 19, 2020 be amended and supplemented as follows: Section 1. City Facilities. In keeping with the dire_ ctives of the CDC, the following City facilities will be closed to the public: City Hall, the Downtown Library, Tyrrell Historical Library, Civic Center, Event Centre, Julie Rogers Theatre, Jefferson Theatre, Lakeside Center, Sterling Pruitt Center, community centers, Athletic Complex, Tennis Center, the Municipal Court and the Convention and Visitors Bureau facift. The City Council will consider these closures at the Council meeting held Monday, March 23, 2020 In the City Council Chambers at 1:30 p.m. The following facilities will remain open to the public for normal operations: Henry Homberg Golf Course, Municipal Transit, City parks, Elmo Willard Library, Theodore Johns Library, and the Miller Library, No special events will be scheduled at these facilities. Section 2. That the operation of the competitive bidding requirements of the City of Beaumont are hereby suspended and removed for a period of ninety (90) days from and after March 23, 2020, unless the State of Disaster Is earlier terminated, provided however, that Insofar as practical bids, quotations, or estimates'of material, labor and other costs for purchases, goods, works, and the like described shall be diligently solicited and procured before entering Into contracts therefore and such contract, if awarded, shall be made to the lowest, best or expedient bid, quotation, or estimate received. The determination of the lowest, best, or expedient bid, quotation, or estimate shall be within the sole discretion of the City Manager or his designee and his decision shall be final.' ' Section 3. This amendment and supplement shall take effect Immediately upon signing. EXHIBIT "N' - � P 1 C ay of March, 2020. ORp'ER�p thisC��-- r B� pores City Clerk f►J July 28, 2020 Consider a request for an Amended Specific Use Permit to allow the expansion of an air conditioning supply warehouse in a GC -MD (General Commercial — Multiple Family Dwelling) District located at 980 N Martin Luther King Parkway BEAUMONT TEXAS TO: City Council FROM: Kyle Hayes, City Manager o (( PREPARED BY: Chris Boone, Planning & Community Development Director MEETING DATE: July 28, 2020 REQUESTED ACTION: Council consider a request for an Amended Specific Use Permit to allow the expansion of an air conditioning supply warehouse in a GC -MD (General Commercial — Multiple Family Dwelling) District located at 980 N Martin Luther King Parkway. BACKGROUND 'M.O. Kothawala, representing M & B Investments, L.P., is requesting an amended S.U.P. (Specific Use Permit) to allow the expansion of a wholesale heating and air conditioning supply business located at 980 N. M.L. King Pkwy. City Council approved an S.U.P. to allow the existing wholesale heating and air conditioning supply business in 2007. A Variance for setbacks along the north and east property lines was also approved by the Board of Adjustment. The new building will provide an additional 5,000 square feet of space. The previous Amended SUP was conditioned on a six (6) foot wide landscaping strip along the west side of the parking area. The additional parking was added, but the landscaping was not. In addition, staff has become aware of a possible issue with the south property line and therefore the required parking. This issue could be resolved by adjusting the site plan and if need be the parking lot, or by purchasing the lot to the south. At a Joint Public Hearing held on July 20, 2020, the Planning Commission recommended 5:0 to approve the request for an Amended Specific Use Permit to allow the expansion of an air conditioning supply warehouse in a GC -MD (General Commercial — Multiple Family Dwelling) District with the following conditions: 1. Provide a six (6) foot wide landscape strip along the west side of the parking lot between the two (2) driveways as per City of Beaumont Ordinance requirements. 2. Provide an eight (8) foot tall, wood or masonry screening fence along the east property line. 3. Show sidewalk on site plan. 4. Resolve issues with the property line to the south. FUNDING SOURCE Not applicable. RECOMMENDATION Approval of the ordinance with the following conditions: Provide a six (6) foot wide landscape strip along the west side of.the parking lot between the two (2) driveways as per City of Beaumont Ordinance requirements. 2. Provide an eight (8) foot tall, wood or masonry screening fence along the east property line. 3. Show sidewalk on site plan. 4. Resolve issues with the property line to the south. SPECIFIC USE PERMIT APPLICATION BE, AUMONT, TEXAS (Chapter 30, City Codes) TO: THE PLANNING COMMISSION AND .CITY COUNCIL, CITY OF BEAUMONT, TEXAS APPLICANT'S NAME:_ 0/3 "/1/(/c APPLICANT'S ADDRESS: 2 6�; S 9 APPLICANT'S PHONE #: `� a 9" 77 9 -- Q/ .3 %� FAX NAME OF ADDRESS OF J ? -3 /�Ls e�G�zc�z LOCATION OF PROPERTY: 78a A, l /W Z-4; zv�G� LEGAi, DESCRIPTION OF PROPERTY: LOTNiO. c �D7� �, �� %, �p°�y pR TRACT BLOCK N0, Z ��,, ADDITION -� #f 0 W h 107 770,;V NUMBER OF A.Q+�_ �j1G PLA' SURVEY NUMBER OF ACRES For properties not in a recorded subdivision, submit.a copy of a current survey or plat showing proposed for a specific use permit, and a complete legal field note description. PROPOSED M ZONE: ATTACH A LEWER describing all processes and activities involved with the, proposed uses. ATTACH A SITE PLAN drawn to scale with the information listed on the top back side of this sheet. ATTACH A REDUCED 8 %" X 11" PHOTOCOPY OF THE SITE PLAN. THE Ii1IGHT CONDITIONS listed on the back side of this sheet must be met before Ciiy Council can grant a permit. PLEASE ADDRI~1SS EACH CONDITION IN DETAIL. 0 ATTACH THE APPROPRIATE APPLICATION Ii'n: LESS THAN Yz ACRE.................................................................$250.00 r-- %z ACRE ORMORE AND LESS THAN 5 ACRES ........... :....... $450.00 5 ACRES OR MORE...................................................................$650.00 I, being the undersigned applicant, understand that all ofthe conditions, dimensions, building sizes, landscaping areas depicted on the site plan shall be adhered to as a ended and approved by City Council, . SIGNATURE OF APPLICANT:DATE -6 Q SIGNATURE OF OWNER: PLEASE TYPE OR PRINT AND SUBMIT TO: .� FILE NUMBER: IVV" ,p , CAn+suld Iq� NOT APPLICANT) DATE: 6"- - CITY OF BEAUMONT PLANNING DIVISION 801 MAIN STREET, ROOM 201 BEAUMONT, TX 77701 DATE RECEIVED: Phone - (409) 880-3764 PLEASE MAKE NOTE ON REVERSE SIDE OF CONDITIONS TO BE MET REGARDING THE SITE PLAN AND PROPOSED USES AND ACTIVITIES. 7, 7 ,7Q / properties use parking -2p20 ?R OF 6 23-2020 City of Beaumont Planning Division To Whom It May Concern: I built this warehouse, located at 980 N MILK PWI{Y, Beaumont, Texas in 1997 with the permission of the City of Beaumont. I received a specific use permit with the city council and the zoning was changed to GCMD. This property is now leased to'Winsupply, a wholesale HVAC company. They sell heating and air conditioning parts, supplies and equipment. They have been in the building since January of 2019. The business is doing very well and they need more warehouse space to have more inventory for their customers need. This means more sales tax dollars for the city. I have attached a proposed drawing of the expansion site on lot 4, being 1497 Long Street. This is right behind my building on 980 N MLK PWKY. The lot on Long Street can me combined with the property on N MLK PWI{Y and amend the specific use permit to include Long Street lot. Your attention to this matter, will be very appreciated. Thank you, M.O. Kothawala 409.749.9392 M&B Investments, LP 2659 Havens Rd. Vidor, Texas 77662 1 INCLUDE THE FOLLOWING INFORMATION ORA SITE, PLAN. THE PLAN MUST BE DRAWN TO SCALE. o Boundaries of the area covered by the site plan; o The location of each existing and proposed building and structure in the area covered by the site plan and the number of stories, height, roof line, gross floor area and location of building entrances and exits; o The location of existing and proposed drainage ways and significant natural features; o Proposed required landscaping and screening buffers (Section 30-31); o The location and dimensions of all curb cuts, public and private streets, required parking and loading areas, pedestrian walks, lighting facilities, and outside trash storage facilities (Section 30-27 and Section 30-31); o The location, height and type of each existing or required wall, fence, and all other types of screening (Section 30-31); o The location, height and size of all proposed signs (Section 30-28). SECTION 30-26.E TBE ZONING ORDINANCE REQUIRES THAT THESE Ti;IGHT CONDITIONS MUST BE MET BEFORE A SPECIFIC USE PERNIIT CAN BE ISSUED: o That the specific use will be compatible with and not injurious to the use and enjoyment of other property, nor significantly diminish or impair property values within the immediate vicinity; - o That the establishment of the specific use will not impede the normal and orderly development and improvement of surrounding vacant property; c20p-- o That adequate utilities, access roads, drainage and other necessary upporting facilities have been or will be provided; tJ � o4 a p, o The design, location and Arrangdmcnt of all driveways and parking spaces provides for the safe and convenient movement ofvehicular and pedestrian traffic without adversely affe�_tinng the general public or adjacent development; oi-Q. Tti7V-W o That adequate nuisance prevention measures have Peen or will betaken to pre ent or control offensive odor, fumes, d st, noise and vibration; 1 T" vutA e P� e- v✓�a d� DLS S'� " a ��� o That directional I' htingwillbe rov.deds as not to disturb or adversely affect neighboring properties; o That there are sufficient landscaping and screening to Jnsure harmony and compatibility with adjacent property; and Per tnh o That the proposed use is in accordance with the Comprehensive Plan. S o�.� G( (�'k �c ✓ate �C. ORDINANCE NO. ENTITLED AN ORDINANCE ISSUING AN AMENDED SPECIFIC USE PERMIT TO ALLOW THE EXPANSION OF AN AIR CONDITIONING SUPPLY WAREHOUSE IN A GC - MD (GENERAL COMMERCIAL -MULTIPLE FAMILY DWELLING) DISTRICT AT 980 N. MARTIN LUTHER KING, JR. PARKWAY IN THE CITY OF BEAUMONT, JEFFERSON COUNTY, TEXAS. WHEREAS, on May 20, 1997, City Council of the City of Beaumont, Texas adopted Ordinance No. 97-29 issuing a specific use permit to M.O. Kothawala to allow a wholesale heating and air conditioning supply company in a GC -MD (General Commercial -Multiple Family Dwelling) District for property located at the S.E. corner of Long and Martin Luther King, Jr. Parkway, Beaumont, Jefferson County, Texas; and, WHEREAS, on July 24, 2007, the City Council of the City of Beaumont, Texas adopted Ordinance No. 07-075 issuing an amended specific use permit to M.O. Kothawala, on behalf of M & B Investment, L.P. to allow the expansion of a wholesale heating and air conditioning supply company in a GC -MD (General Commercial -Multiple Family Dwelling) District for property located at 980 N. Martin Luther King, Jr. Parkway, Beaumont, Jefferson County, Texas, subject to the following conditions: • Reduce the size of the building to meet required setbacks or apply to the Board of Adjustment for variances to the building setback requirements along the north and east sides of the property; • Provide a 6' wide landscapes strip along the southwest 43' of the parking lot; and with a modification to the landscaping requirements along the northwest 120' of the parking lot and long the east side of the subject property (no landscape strip along the northwest 120' of the parking lot, a 6' wide landscape strip along the southwest 43' of the parking lot and a 0-5' wide landscape strip along the east property line); and, WHEREAS, M.O. Kothawala, on behalf of M & B Investments, L.P., wishes to amend the amended specific use permit to allow for the expansion of a heating and air conditioning supply warehouse in a GC -MD (General Commercial -Multiple Family Dwelling) District located at 980 N. Martin Luther King, Jr. Parkway, being the north 40' of Lots 7 & 8, Lots 4-6 and the adjacent alleyways, Block 12, Jirou Addition, Beaumont, Jefferson County, Texas, containing 0.631 acres, more or less, as shown on Exhibit "A," attached hereto and made a part hereof for all purposes; and, WHEREAS, the Planning and Zoning Commission of the City of Beaumont considered the request to amend a specific use permit as previously amended to allow the expansion of a heating and air conditioning supply warehouse in a GC -MD (General Commercial -Multiple Family Dwelling) District located at 980 N. Martin Luther King, Jr. Parkway, subject to the following additional conditions: • Provide a six (6) foot wide landscape strip along the west side of the parking lot between the two(2) driveways as per City of Beaumont ordinance requirements; • Provide an eight (8) foot tall wood or masonry screening fence along the east property line; • Show sidewalk on site plan; Resolve issues with the property line to the south and, WHEREAS, the City Council is of the opinion that the amendment of such amended specific use permit to allow the expansion of a heating and air conditioning supply warehouse is in the best interest of the City of Beaumont and its citizens; NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this ordinance are hereby, in all things, approved and adopted; and, Section 1. That Ordinance No. 07-075 be amended by amending the specific use permit granted to M & B Investments, L.P., its legal representatives, successors, and assigns for that certain tract shown on Exhibit "A" attached hereto and made a part hereof for all purposes, to allow the expansion of a heating and air conditioning supply warehouse in a GC -MD (General Commercial -Multiple Family Dwelling) District located at 980 N. Martin Luther King, Jr. Parkway, subject to the following additional conditions: • Provide a six (6) foot wide landscape strip along the west side of the parking lot between the two(2) driveways as per City of Beaumont ordinance requirements; • Provide an eight (8) foot tall wood or masonry screening fence along the east property line; • Show sidewalk on site plan; • Resolve issues with the property line to the south. Section 2. That the amendment to the amended specific use permit herein granted is expressly issued for and in accordance with each particular and detail of the site plan attached hereto as Exhibit "B" and made a part hereof for all purposes. Section 3. Notwithstanding the site plan attached hereto, the use of the property herein above described shall be in all other respects subject to all of the applicable regulations contained in Chapter 28 of the Code of Ordinances of Beaumont, Texas, as amended, as well as comply with any and all federal, state and local statutes, regulations or ordinances which may apply. The meeting at which this ordinance was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. - Mayor Becky Ames - 6=P: Request an Amended Specific Use Permit to allow the expansion of an air ditioning supply warehouse in a GC -MD (General Commercial — Multiple Family eIlinLY) District. .icant: M&B Investments, L.L.C. tion: 980 N Martin Luther King Parkway o 100 200 1 1 1 1 Feet EXHIBIT "A" 21 LEGEND 5-3— RLEOTRIC LENS Q CONCRETE SURFACE C. AM COMMOWNC UNIT = = c = WOOD FSNCR PL—PL— PIPSLTNE ® COVERED AREA • PP POWER POLE' CBAUO LIN% FENCE —T—T— TELEPHONE LINE ROCK OR GRA7RL ):� mGRT Fn7mw % BARBED WIRE FENCE LONG AVENUE (60' Rox..) F0u s 4' S 89,60,09" N 100.13' FOM0R1/8' (CALLED MSr 100.00') S 89.68,64" E 60.07' (CALG6D dd.4T 60.00') F0rn0°1NrDRWs• n -Y W lY W dlY cad ' B9 fr Z 14' 70.30' 60.00' ovziuz AD DOO t SCALE: 1 " = 40' :. {y 0; v g o JWALPROPOSED b . ~ •�' umn m SSUB I �rAL ON BEAR c . Op W • '•. b 7r BITGRr 16' 7.000 SQ Fr EA7d MORT fir 6,000 p g I SQ Fr p q LOT 6 LOT 5 LOT 4 O 0 O •; sir y y e' DOOR fE' Y 14, 071'RSEID DOOR Ol fEZ Raw DOOR WOOD FENCE ,��j :3 Can , , J' DOOR\ 6.14 '❑❑ atom w b v m 07ERDI�ID' �09 XLecrRTc o R 02 POUND • • E- E•$ E • • FRATE - \N 89'66' 04" if (CALLlD WiSr 00 94' 60.00 ) moN R CD pth j • , Nq�g y� "^"999 P ••G S . �'ti ,sar z' ' ly CONC WEST (MUND U4 100.01, r 100.00') a 1 i y WOOD FA'NCE O LOT 7 LOT 8 LOT 9 Eti w i O FOUND S 4' MON ROD PARE7NG REQUIRRKSNTS AMENDED SPECIFIC USE I PAR G GROUP B dRd7NC SPACE PER 1000 SQ FT SITE PLAN OF GROSS FLOOR STAGE FOR 12.000 SQ FT OF GROSS SPACE 1E PAMMG SPACES REQUIRED WITH 1 980 NORTH MARTIN LUTHER KING BOULEVARD HANDICAP SPACE PARTS OF LOTS 4,5,6,7,AND 8 BLOCK 12 OF JIROU ADDITION EXHIBIT "B" 3 July 28, 2020 Consider a request for a Specific Use Permit to allow an RV (Recreational Vehicle) Park in an LI (Light Industrial) District located at 5497 Fannett Road BEAUMONT TEXAS TO: City Council FROM: Kyle Hayes, City Manager GS� PREPARED BY: Chris Boone, Planning & Community Development Director MEETING DATE: July 28, 2020 REQUESTED ACTION: Council consider a request for a Specific Use Permit to allow an RV (Recreational Vehicle) Park in an LI (Light Industrial) District located at 5497 Fannett Road. R & P Brothers, L.L.C. has requested a Specific Use Permit to construct a Recreational Vehicle Resort at 5497 Fannett Road. The proposed RV (Recreational Vehicle) resort will provide 60 lots. An office/club house will provide laundry facilities, showers, and men's & women's restrooms. The site plan shows 20 visitor parking spaces and one ADA compliant parking space. At a Joint Public Hearing held on July 20, 2020, the Planning Commission recommended 5:0 to approve the request for a Specific Use Permit to allow an RV (Recreational Vehicle) Park in an LI (Light Industrial) District with the following condition: This project will require an approved drainage plan and will require an adequate detention basin per Drainage District #6 requirements. FUNDING SOURCE Not applicable. RECOMMENDATION Approval of the ordinance with the following condition: This project will require an approved drainage plan and will require an adequate detention basin per Drainage District #6 requirements. SPECIFIC USE PERMIT APPLICATION BEAUMONT, TEXAS (Chapter 28, City Codes) TO: THE PLANNING COMMISSION AND CITY COUNCIL, CITY OF BEAUMONT, TEXAS APPLICANT'S NAME: _ L APPLICANT'S ADDRESS: `i t {� � � ((� Ci-� ,� R �3G2� tlty) NT , TX :7-f 7,n7 APPLICANT'S PHONE #: SIC) G '72 9' -30 75 FAX NAME OF PROPERTY OWNER: A VA S H K U m ria s Rn)( R B Ro -T j-t c`R S t' t C ADDRESS OF PROPERTY OWNER: LOCATION OF PROPERTY: �{� �C17] �� ao-1, Rpc IN :1 `170 6? r 7 LEGAL DESCRIPTION OF PROPERTY: LOT NO. ICE BLOCK NO. Tf x(�l i �� �• (j_ ADDITION_ ) ][) � P ��� C��'�_ NUMBER OF ACRES7� OR TRACT PLAT, SURVEY NUMBER OF ACRES For properties not in a recorded subdivision, submit a copy of a current survey or plat showing the properties proposed for a specific use permit, and a complete legal field note description. m PROPOSED USE:y P ZONE: ATTACH A LETTER describing all processes and activities involved with the proposed uses. ATTACH A SITE PLAN dra%vn to scale with the information listed oil the top back side of this sheet. ATTACH A REDUCED 8'/" X 11" PHOTOCOPY OF THE SITE PLAN. THE EIGHT CONDITIONS listed on the back side of this sheet must be met before City Council can grant a specific use permit. PLEASE ADDRESS EACH CONDITION IN DETAIL. ATTACH THE APPROPRIATE APPLICATION FEE: LESS THAN V ACRE ....................................................... :......... $250.00 VACRE OR MORE AND LESS THAN 5 ACRES...................$450.00 5 ACRES OR MORE...................................................................$650.00 I, being the undersigned applicant, understand that all of the conditions, dimensions, building sizes, landscanina and narkinLr areas denieted nn the site plan shall be adhered to as [ SIGNATURE OF APPLICANT SIGNATURE OF PROPERTY PLEASE TYPE OR PRINT AND SUBMIT TO: CITY OF BEAUMONT PLANNING DIVISION 801 MAIN STREET, ROOM 201 p FILE NUMBER:BEAUMONT, TX 77701 ��,� � ` Phone - (409) 880-3764 Fax - (409) 880-3110 PLEASE MAKE NOTE ON REVERSE SIDE OF CONDITIONS TO BE MET REGARDING THE SITE PLAN AND LETTER OF PROPOSED USES AND ACTIVITIES. R 7 P BROTHERS, LLC 5497 Fannett Road Beaumont, 'texas 77705 June 26, 2020 The proposed RV Park project will have management staff available on the property 24 hours a day to assist travelers and maintain the property. Each RV pad will have a state of the art pedestal with utility connections, water, 50 AMP electric & internet via Wi-Fi at the location. There will be a 4" sewer connection for each RV at designated location within the 5' grass area. The site will have an 8' fence on all sides (except at Fannett Road) and provide cameras, lighting and security systems for monitoring and safety. All structures will be constructed with a minimum of 18" inches above the Base Flood elevation or be flood proofed to 18" inches above the Base Flood Elevation. In addition, all electrical hook- ups will be at least 18" inches above the Base Flood elevation: All sewer hook-ups will be designed so they can be completely sealed in the case of a flood. We would like to start the project in soon as August 2020 with ground breaking and construction. As a business owner next to the property and a long time resident of the City of Beaumont, I will ensure that the RV Park will be built in a manner that will improve the neighborhood's appearance and provide a comfortable and luxurious stay for our clients in order for them to come back to Beaumont and contribute to the City's and businesses revenue during their stay. Sincerely, Akashkumar S Ray R & P Brothers. LLC Owner R & P BROTHERS, LLC SECTION 28.04.001, ZONING ORDINANCE REQUIRES THAT THESE EIGHT CONDITIONS MUST BE MET BEFORE A SPECIFIC USE PERMIT CAN BE ISSUED. Please explain how the proposed project will comply with each of these conditions in your application: 1. That the specific use will be compatible with and not injurious to the use and enjoyment of other property, nor significantly diminish or impair property values within the immediate vicinity; The proposed RV Park will be managed on site by a management team, will be maintained on a daily basis and will provide superior services to ensure that travelers staying with us become repetitive clients. The RV Park will also have landscaping buffers to ensure the privacy of our clients and neighboring properties. I own a propertyand business in the immediate area and I will not jeopardize -their value. 2. That the establishment of the specific use will not impede the normal and .orderly development and improvement of surrounding vacant property; The proposed RV Park will be constructed to meet and/or exceed the Building Codes adopted by the City and all related City of Beaumont Ordinances. There will be an 8 foot high wood fence around the property. The site will provide access to a 3.0-acre which will include 0.52 acres of green area to add value to the customers stay. Management will ensure that the clients will comply with the City of Beaumont Noise Ordinance. There will be security cameras and lighting. All roadways will be concrete pavement with markings. The dumpster will be located by the entrance with landscape shrubs and enclosure doors. Except for the frontage on Fannett Road, the property will be completely hidden behind fences and landscaping buffers. 3. That adequate utilities, access roads, drainage and other necessary supporting facilities have been or will be provided; The proposed RV Park will be designed by license professional engineer in state of Texas which will provide adequate drainage calculations and designs to be submitted to the TXDOT for approval. All the private utilities will comply with the Plumbing Codes requirements and tie into existing water and sanitary sewer infrastructure owned. by the City of Beaumont. The RV Park will provide fire hydrants as per fire code. All roadways will be reinforced concrete pavement with drainage and grading design. 4. The design, location and arrangement of all driveways and RV Parldng spaces provides for . the safe and convenient movement of vehicular and pedestrian traffic without adversely affecting the general public or adjacent development; Access to the proposed RV Park will be designed as per TXDOT required design criteria and the driveway will be reviewed and approved by TXDOT. If required by TXDOT, a traffic study will be performed. There will be a stop sign at the exit prior to entering Fannett Road. All roadways will be designed for fire truck accessibility. There will be 20 guest parking spaces. 5. That adequate nuisance prevention measures have been or will be taken to prevent or control offensive odor, fumes, dust, noise and vibration; The proposed RV Park will be regulated by the property management team. Paid of their job description, will be monitoring the site for QA/QC of physical appearance and cleanliness. The dumpster provided will have enclosure doors and a fence surrounded with shrubs. There will be guideline and brochure for not littering and map of the site for dumpster location. Since there are no dirt roadways, dust will not be an issue. Management will immediately address any noise or vibrations with the clients and a warning will be issued. These nuisance items will be listed on the leasing agreement under the "Prohibited" section. 6. That directional lighting will be provided so as not to disturb or adversely affect neighboring properties; The electrical Engineer designing the electrical component of the proposed RV Park will ensure that the location and type of lighting does not impact neighboring properties or traffic. In addition, all the lighting system at the site will be LED with proper design luminous to not disturb or affect neighboring properties. 7. That there are sufficient landscaping and screening to insure harmony and compatibility with adjacent property; and The proposed RV Park will have the 6' landscape buffer in front of property as per the City of Beaumont ordinance. A 10 foot landscape buffer will be installed on the west side of the proposed site and adjacent neighborhood. A 15 foot buffer will be installed on the back side of the proposed site and the adjacent neighborhood. To increase the separation space between the proposed improvements and the neighborhoods, an additional 10 foot exclusive water line easement will be added adjacent to the landscaping buffers. 8. That the proposed use is in accordance with the Comprehensive Plan. The proposed RV Park will be designed as per all the City of Beaumont Ordinances, adopted Building Codes, TXDOT design criteria, as well as DD6 and County rules and regulations. ORDINANCE NO. ENTITLED AN ORDINANCE GRANTING A SPECIFIC USE PERMIT TO ALLOW A RECREATIONAL VEHICLE (RV) PARK IN AN LI (LIGHT INDUSTRIAL) DISTRICT AT 5497 FANNETT ROAD IN THE CITY OF BEAUMONT, JEFFERSON COUNTY, TEXAS. WHEREAS, R & P Brothers, L.L.C. has applied for a specific use permit to allow a recreational vehicle (RV) park in an LI (Light Industrial) District at 5497 Fannett Road, being Lot 10, Block A, Tyrrell Park Addition, Beaumont, Jefferson County, Texas, containing 3.194 acres, more or less, as shown on Exhibit "A," attached hereto; and, WHEREAS, the Planning and Zoning Commission of the City of Beaumont considered the request and is recommending approval of a specific use permit to allow a recreational vehicle (RV) park in an LI (Light Industrial) District at 5497 Fannett Road, subject to the following condition: ;and, • This project will require an approved drainage plan and will require an adequate detention basin per Drainage District #6 requirements WHEREAS, the City Council is of the opinion that the issuance of such specific use permit to allow a recreational vehicle (RV) park is in the best interest of the City of Beaumont and its citizens; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this ordinance are hereby, in all things, approved and adopted; and, Section 1. That a specific use permit to allow a recreational vehicle (RV) park in an LI (Light Industrial) District at 5497 Fannett Road, being Lot 10, Block A, Tyrrell Park Addition, Beaumont, Jefferson County, Texas, containing 3.194 acres, more or less, as shown on Exhibit 'A," attached hereto is hereby granted to R & P Brothers, L.L.C., its legal representatives, successors and assigns, as shown on Exhibit "B," attached hereto and made a part hereof for all purposes, subject to the following condition: • This project will require an approved drainage plan and will require an adequate detention basin per Drainage District #6 requirements. Section 2. That the specific use permit herein granted is expressly issued for and in accordance with each particular and detail of the site plan attached hereto as Exhibit "B" and made a part hereof for all purposes. Section 3. Notwithstanding the site plan attached hereto, the use of the property herein above described shall be in all other respects subject to all of the applicable regulations contained in Chapter 28 of the Code of Ordinances of Beaumont, Texas, as amended, as well as comply with any and all federal, state and local statutes, regulations or ordinances which may apply. The meeting at which this ordinance was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. - Mayor Becky Ames - 2417-P: Request for a Specific Use Permit to allow an RV (Recreational Vehicle) Park in �n LI (Light Industrial) District. Applicant: R & P Brothers, L.L.C. Location: 5497 Fannett Road I 0 100 200 300 400 1 1 1 1 1 I Feet .— .. \ , . �' •� "`p��'f.� _. '� Yy ''. ,. 1 , 11r•.�. •,•, r s' a '�cd' a Elf Legend • r� r�.f y `�. KA r�' ��r Lei tr ' I10,[� • � � ~. 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S 0 \_ ;;k Rai Y � 9 ,f��ipi p p RSp BROTHERS LLC I� � 5497 FANhlEIT RO BEAUMQPIT, TX 77705 gff EXHIBIT "B" �i July 28, 2020 Consider an ordinance authorizing the issuance of City of Beaumont, Waterworks and Sewer System Revenue and Refunding Bonds, Series 2020, and authorizing the Mayor or City Manager and Chief Financial Officer to approve the amounts, interest rates, prices, and terms thereof for both series and to execute all documents related to the sale of the Bonds RICH WITH OPPORTUNITY r T • E • x • A • S City Council Agenda Item TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Todd Simoneaux, Chief Financial. Officer MEETING DATE: July 28, 2020 REQUESTED ACTION: Council consider an ordinance authorizing the issuance of City of Beaumont, Texas, Waterworks and Sewer System Revenue and Refunding Bonds, Series 2020, and authorizing the Mayor or City Manager and Chief Financial Officer to approve the amounts, interest rates, prices, and terms thereof for both series and to execute all documents related to the sale of the Bonds. BACKGROUND As presented in a work session last week, the City plans to borrow $25 million to complete various water and sewer projects that are currently in the construction phase and to start new .projects identified in -the Capital Program. In addition, there is an estimated $32.3 million of outstanding revenue bonds that can be refunded to achieve a lower interest rate and savings. Historically, when the City issued or refunded revenue bonds, the sale would take place on a Monday to bring the transactions forward at the City Council meeting the following day. With the quickly changing financial markets, the most favorable time to enter :the market may not be the day before a City Council meeting. Instead the ability of a local government to time its entry into the financial markets .and thereby obtain the best borrowing terms can significantly impact the borrowing costs. Section 1207.007 Texas Government Code allows a City to enter the bond market at any time in accordance with parameters established and approved by the City: Council. Through a parameter bond ordinance, a Council delegates final pricing authority to a Pricing Officer, usually the Mayor or City Manager and/or City Manager's Designee, and establishes and approves bond sale parameters such as maximum interest rate, minimum savings threshold for refunding, maximum aggregate principal amount of issue, final maturity date and expiration of delegated authority which is normally six (6) months. The Pricing Officer can only approve the sale if all parameters are met.. This results in flexibility such that the bond issue may Water and Sewer Revenue Bonds, Series 2020 July 28, 2620 Page 2 be priced at any time and in an interest rate environment that is advantageous to the City rather than being. locked into pricing on the date of the Council meeting. The proposed parameters included in the proposed ordinance for Series 2020, as described above, includes: Delegated Pricing Officers: Mayor or City Manager and Chief Financial Officer Maximum Principal Amount Series 202OA: $44.5 million Maximum Principal Amount Series 202OB: $13.5 million Interest Rate: Not greater than 4.5% per annum Minimum Savings Threshold: 3% present value savings Expiration of Parameter Authority: January 1, 2021 Interest will be payable semiannually in March and September beginning March 1, 2021. FUNDING SOURCE Principal and interest are paid from the Water Utilities Fund which is supported by water and sewer revenues. RECOMMENDATION Approval of the ordinance. CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS § COUNTY OF JEFFERSON § I, the undersigned City Clerk of the City of Beaumont, Texas (the "City"), hereby certify as follows: 1. The City Council of the City convened in regular meeting on July , 2020, at the place stated in the notice of such meeting given as stated below, and the roll was called of the duly constituted official and members of said City Council, to wit: Becky Ames Mayor W.L. Pate, Jr. Councilmember Randy Feldschau Councilmember Taylor Neild Councilmember Mike Getz Councilmember Audwin Samuel Councilmember Robin Mouton Councilmember And all of said persons were present, thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE AND REFUNDING BONDS, SERIES 2020A IN ONE OR MORE SERIES OR SUBSERIES AS MAY BE FURTHER DESIGNATED; AUTHORIZING EACH OF THE MAYOR, THE CITY MANAGER AND THE CHIEF FINANCIAL OFFICER TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES, AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; PROVIDING FOR THE PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; AUTHORIZING THE DEFEASANCE, FINAL PAYMENT, AND DISCHARGE OF CERTAIN OUTSTANDING BONDS; AUTHORIZING THE EXECUTION AND 1 #75993075_v2 DELIVERY OF ONE OR MORE ESCROW AGREEMENTS; AUTHORIZING, THE PURCHASE OF AND SUBSCRIPTION FOR CERTAIN ESCROWED SECURITIES; AUTHORIZING ESCROW VERIFICATION AND ENGAGEMENT OF AN ESCROW AGENT; AUTHORIZING BOND INSURANCE; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT AND OTHER RELATED DOCUMENTS; AND MAKING OTHER PROVISIONS REGARDING SUCH BONDS 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, such motion, carrying with it the adoption of said ordinance, prevailed and carried by the following vote: AYES: All those present voted "aye" NOES: ABSTENTIONS: 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; that the above and foregoing paragraph is a true, full, and correct excerpt from the said City Council's minutes of said meeting pertaining to the adoption of said ordinance; 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 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 that public notice of the date, hour, place and subject of said meeting was given as required by the Texas Open Meetings Act. SIGNED AND SEALED this 2020. City Clerk City of Beaumont, Texas (SEAL) 0) #75993075_v2 ORDINANCE NO. ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE AND REFUNDING BONDS, SERIES 2020A IN ONE OR MORE SERIES OR SUBSERIES AS MAY BE FURTHER DESIGNATED; AUTHORIZING EACH OF THE MAYOR, THE CITY MANAGER AND THE CHIEF FINANCIAL OFFICER TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES, AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; PROVIDING FOR THE PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; AUTHORIZING THE DEFEASANCE, FINAL PAYMENT, AND DISCHARGE OF CERTAIN OUTSTANDING BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE ESCROW AGREEMENTS; AUTHORIZING THE PURCHASE OF AND SUBSCRIPTION FOR CERTAIN ESCROWED SECURITIES; AUTHORIZING ESCROW VERIFICATION AND ENGAGEMENT OF AN ESCROW AGENT; AUTHORIZING BOND INSURANCE; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT AND OTHER RELATED DOCUMENTS; AND MAKING OTHER PROVISIONS REGARDING SUCH BONDS THE STATE OF TEXAS § COUNTY OF JEFFERSON § THE CITY OF BEAUMONT § WHEREAS, The City of Beaumont, Texas (the "City") is authorized, pursuant to Chapters 1371 and 1502, Texas Government Code, as amended, to issue bonds, without election, payable from the net revenues of its waterworks and sewer system to provide money for acquisitions, purchases, expansions, extensions, construction, reconstruction, renovation, equipping, and improvement of such system; and WHEREAS, the City now desires to issue bonds in order to provide funds to finance the expansion, repair, renovation and related improvements to the City's waterworks and sewer system; and WHEREAS, the City has previously issued and there are presently outstanding certain obligations of the City; and WHEREAS, the City is authorized, pursuant to the general laws of the State of Texas, and particularly Chapter 1207, Texas Government Code, as amended, to issue its bonds for the purpose of refunding all or a portion of its outstanding obligations; and 3 #75993075_v2 WHEREAS, by this Ordinance the City Council of the City (the "City Council") is authorizing the issuance of its bonds in the principal amount not exceed $44,500,000 for the purpose of (1) acquisitions, purchases, expansions, extensions, construction, reconstruction, renovation, equipping, and improvement of such system and (2) refunding the City's outstanding obligations identified and described on Schedule I attached hereto and incorporated herein by reference for all purposes (the "Refunded Bonds"); and WHEREAS, the City shall by this Ordinance, in accordance with the provisions of Chapters 1207, 1371 and 1502, Texas Government Code, as amended, delegate to a Pricing Officer (hereinafter designated) the authority to determine the principal amount of Bonds to be issued and negotiate the terms of sale thereof and to select the specific maturities, in whole or in part, of the Refunded Bonds to be refunded; and; and WHEREAS, the City Council hereby finds and determines that it is a public purpose and in the best interests of the City to (1) issue the Bonds with such terms to be included in a pricing certificate (the "Pricing Certificate") to be executed by the Pricing Officer, and (2) refund the Refunded Bonds in order to achieve a net present value debt service savings and that such benefit is sufficient consideration for the refunding of the Refunded Bonds, with such savings, among other information and terms to be included in the Officer's Pricing Certificate, all in accordance with the provisions of Chapters 1207, 1371 and 1502, Texas Government Code, as amended; and WHEREAS, the City Council hereby finds that it may purchase a credit agreement in the form of a municipal bond insurance policy or policies with respect to the Bonds if it deems such purchase is cost effective; and WHEREAS, the bonds to be issued pursuant to the terms and provisions of this Ordinance will be secured by a pledge of and lien on the Net Revenues (as hereinafter defined); and WHEREAS, the City is a home -rule municipality that: (i) adopted its charter under Section 5, Article XI, Texas Constitution; (ii) has a population of more than 50,000 and (iii) has outstanding long-term indebtedness that is rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for a long-term obligation. Now, Therefore BE IT ORDAINED BY THE CITY OF BEAUMONT, TEXAS: 1. Findings and Determinations. It is hereby found and determined that 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 forth below: The term "Additional Parity Bonds" shall mean any credit agreement created pursuant to 4 #75993075_v2 Section 28 herein or additional bonds issued with the same priority lien as the Bonds. The term "Average Annual Debt Service Requirements" shall mean the average annual debt service for the Parity Bonds. The term "Blanket Issuer Letter of Representations" means the Blanket Issuer Letter of Representations between the City and DTC. The term "Bond Insurer" shall mean any third party financial institution that provides a credit agreement in the form of a municipal bond insurance policy as provided herein. The term "Bond Register" shall mean the books of registration kept by the Registrar in which are maintained the names and addresses of, and the principal amounts of the Bonds registered to, each Owner. The terms "Bonds" shall mean the City of Beaumont, Texas Waterworks and Sewer System Revenue and Refunding Bonds, Series 2020A The term "Business Day" shall mean any day which is not a Saturday, Sunday, a day on which banking institutions in the city where the principal corporate trust office of the Paying Agent/Registrar or Bond Insurer, if any, is located, are authorized or required by law or executive order to close, or a legal holiday. The term "City" shall mean The City of Beaumont, Texas. The term "Closing Date" means the date of the initial delivery of and payment for the I.40_0 The term "Code" means the Internal Revenue Code of 1986, as heretofore and hereafter amended and, with respect to a specific section thereof, such reference shall be deemed to include (a) the Regulations promulgated under such section, (b) any successor provision of similar import hereafter enacted, (c) any corresponding provision of any subsequent Internal Revenue Code, and (d) the Regulations promulgated under the provisions described in (b) and (c). The term "Comptroller" means the Comptroller of Public Accounts of the State of Texas. The term "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. The term "DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. The term "Gross Revenues" shall mean all revenues, income and receipts of every nature derived or received by the City from the operation and ownership of the System (but excluding any utility deposits) and the interest income from the investment or deposit of money in the E #75993075_v2 Revenue Fund, and the Interest and Sinking Fund. The term "Insurance Policy" shall have the meaning assigned to that term in Section 28 of this Ordinance. The term "Insured Bonds" shall mean the Bonds during the time period in which the payment of principal and interest in connection with such bonds is guaranteed by the Bond Insurer. The term "Interest Payment Date", when used in connection with any Bond, shall mean March 1 and September 1 of each year, beginning March 1, 2021 and continuing thereafter until maturity or earlier redemption of such Bond. The term "Issuer" shall mean the City. The term "Maintenance and Operation Expenses" shall mean the reasonable and necessary expenses of operation and maintenance of the System, including all salaries, labor, materials, repairs and extensions necessary to render efficient service, and all payments under contracts, now or hereafter defined as operating expenses by the Legislature of the State of Texas. Depreciation shall never be considered as a Maintenance and Operation Expense. The term "MSRB" shall mean the Municipal Securities Rulemaking Board. The term "Net Revenues" shall mean all Gross Revenues remaining after deducting the Maintenance and Operation Expenses. The term "Ordinance" as used herein and in the Bonds shall mean this ordinance authorizing the Bonds and all amendments and supplements hereto. The term "Outstanding" shall mean, in connection with the Bonds, any Bonds that remain outstanding until maturity, refunding or defeasance. The term "Owner" shall mean any person who shall be the registered owner of any Bonds. The term "Parity Bonds" shall mean the Bonds, the City's outstanding Waterworks and Sewer System Revenue Bonds, Series 2014A and 2014B, the City's Waterworks and Sewer System Revenue Refunding Bonds, Series 2015A, the City's Waterworks and Sewer System Revenue Bonds, Series 2017, the City's Waterworks and Sewer System Revenue Refunding Bonds, Taxable Series 2020B and any Additional Parity Bonds. The term "Paying Agent" for the Bonds shall mean the Registrar. The term "Pricing Certificate" shall mean a certificate or certificates to be signed by the Mayor, the City Manager or the Chief Financial Officer of the City pursuant to Section 5 hereof and delivered to the City Clerk, in substantially the form attached hereto as Exhibit A. 0 #75993075_v2 The term "Pricing Officer" shall mean the Mayor, City Manager, or Chief Financial Officer of the City. The term "Prior Lien Bonds" shall mean the City's outstanding Waterworks and Sewer System Revenue Refunding Bonds, Series 2010, and the City's outstanding Waterworks and Sewer Revenue, Series 2010A, and the City's outstanding Waterworks and Sewer Revenue Bonds, Taxable Series 2010B (Build America Bonds — Direct Payment to Issuer), and the City's outstanding Waterworks and Sewer System Revenue Bonds, Series 2012, but only to the extent such Prior Lien Bonds remain outstanding within the meaning of this Ordinance. The term "Record Date" shall mean, for any Interest Payment Date, the fifteenth (15th) calendar day of the month next preceding each Interest Payment Date. The term "Registrar" shall mean The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, and its successors in that capacity. The term "Regulations" means the applicable proposed, temporary or final Treasury Regulations promulgated under the Code or, to the extent applicable to the Code under the Internal Revenue Code of 1954, as such regulations may be amended or supplemented from time to time. The term "Reserve Fund Requirement" shall mean an amount equal to the average annual principal and interest requirement on the Parity Bonds, which may be determined and redetermined each year by the City but in no event less frequently than upon the issuance of each series of Parity Bonds. The term "Rule" shall mean SEC Rule 15c-12, as amended from time to time. The term "SEC" shall mean the United States Securities and Exchange Commission. The term "Special Project" shall mean, to the extent permitted by law, any property, improvement or facility declared by the City not to be part of the System and substantially all of the costs of the acquisition, construction and installation of which is paid from proceeds of a financing transaction other than the issuance of bonds payable from ad valorem taxes or Net Revenues of the System, and for which all maintenance and operation expenses are payable from sources other than revenues of the System, but only to the extent that and for so long as all or any part of the revenues or proceeds of which are or will be pledged to secure the payment or repayment of such costs of acquisition, construction and installation under such financing transaction. The term "System" shall mean all properties, facilities, improvements, equipment, interests and rights constituting the waterworks and sewer system of the City, including all future extensions, replacements, betterments, additions, improvements, enlargements, acquisitions, purchases and repairs to the System, but excluding all Special Projects. The term "Underwriter" shall mean the underwriting syndicate identified in the Officer's Pricing Certificate. 7 #75993075_v2 3. Authorization. The Bonds shall be issued in fully registered form in the total authorized aggregate principal amount not to exceed FORTY-FOUR MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($44,500,000) for the purpose of providing funds to (i) finance capital expenditures acquisition, purchase, construction, reconstruction, improvement, renovation, expansion, or equipping of property, buildings, structures, facilities, or related infrastructure for the City's waterworks and sewer system (the "Project"), (ii) refund the Refunded Bonds, and (iii) pay costs of issuance of the Bonds. 4. Designation, Date, and Interest Payment Dates. The Bonds shall be designated as "THE CITY OF BEAUMONT, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE AND REFUNDING BONDS, SERIES 2020A." The Bonds shall be dated, mature, bear interest from the dates and at the rates per annum, and be payable on the dates and in the principal amounts as set forth in the Officer's Pricing Certificate. 5. Sale of Bonds. As authorized by Chapters 1207, 1371 and 1502, Texas Government Code, as amended, the Pricing Officers are hereby authorized to act on behalf of the City in selling and delivering the Bonds and carrying out the other procedures specified in this Ordinance, including any additional designation or title by which the Bonds shall be known, the number of subseries of Bonds to be issued and the principal amount of each subseries, the price at which each series of the Bonds will be sold, the manner in which the Bonds should be delivered, the date or dates (which may be different dates for each series of the Bonds) on which the Bonds shall be sold, the form in which the Bonds shall be issued whether as current interest bonds, as compound interest bonds, or as a combination of current interest bonds and compound interest bonds, any additional designation or title by which the Bonds shall be known, the year or years in which each series of the Bonds will mature, the principal amount to mature in each of such years, the aggregate principal amount of each series of the Bonds, the rate of interest to be borne by each such maturity, the first interest payment date or compounding date, as the case may be, the dates, prices, and terms, if any, upon and at which each series of the Bonds shall be subject to redemption prior to maturity at the option of the City, as well as any mandatory sinking fund redemption provisions, or make -whole provisions, and such officers are also hereby authorized to act on behalf of the City in approving all other matters relating to the issuance, sale and delivery of the Bonds and the purchase of a bond insurance policy or policies for all or any portion of the Bonds, all in accordance with the terms below: (a) the price to be paid for each series of the Bonds shall not be less than 90% of the aggregate original principal amount of the current interest bonds plus accrued interest, if any, thereon from their date to their delivery; (b) none of the Bonds shall bear interest at a rate greater than 6% per annum or in excess of the maximum rate allowed by Chapter 1204, Texas Government Code; (c) the aggregate principal amount of each subseries of the Bonds shall not exceed the maximum amount authorized in Section 3, and the sum of the principal amount of each series, plus net premium generated, plus any available funds of the City, if any, shall equal an amount sufficient to provide for the redemption of the Refunded Bonds as identified in the #75993075_v2 Officer's Pricing Certificate, to pay costs of issuance of the Bonds, and (if necessary) a deposit to the reserve fund; (d) each series of the Bonds to be issued, prior to delivery, must have been rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for long-term obligations; (e) to the extent the City shall purchase any Insurance Policy (one or more) issued by one or more Bond Insurers such policy or policies shall be determined to be most cost effective to the City for the Bonds and shall result in a net interest rate savings to the City which is greater than the costs of the premium of such policy or policies, as may be certified in the Officer's Pricing Certificate; and (f) in connection with each series of Bonds issued in whole or in part for refunding purposes, the refunding of the Refunded Bonds shall produce a net present value debt service savings of at least 4.50% of the principal amount of the Refunded Bonds being refunded with such series of Bonds; and Any finding by the Mayor, City Manager or the Chief Financial Officer relating to the sale and delivery of the Bonds and the purchase of bond insurance shall have the same force and effect as a finding or determination made by the City Council. 6. Bond Numbers and Denominations. Each series of Bonds shall be numbered from R-1 and upward (except the Initial Bond, which shall each be numbered I-1), and may be transferred and exchanged as set out in this Ordinance. Such Bonds shall mature on September 1 in each of the years and in the amounts set forth in the Initial Bond. The Bonds delivered in transfer of or in exchange for other Bonds shall be numbered in order of their authentication by the Registrar, shall be in the denomination of $5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Bonds or Bonds in lieu of which they are delivered. 7. Execution of Bonds; Seal. The Bonds shall be signed by the Mayor or Mayor Pro Tem and countersigned by the City Clerk or Deputy City Clerk, 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 Bond of the Comptroller of Public Accounts substantially in the form provided in the I #75993075_v2 Pricing Certificate 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 19 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 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 premium, if any, 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, upon their presentation and surrender as they respectively become due and payable, whether at maturity or by prior redemption, at the principal corporate trust office of the Registrar. The interest on each Bond shall be payable by check 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 Bond Register. Any accrued interest payable at maturity on a Bond shall be paid upon presentation and surrender of such Bond at the principal corporate trust office of the Registrar. 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 such payment was due. 11. Successor Registrars. The City covenants that at all times while any Bonds are outstanding it will provide a legally qualified bank, trust company, financial institution or other agency to act as Registrar for the Bonds. The City reserves the right to change the Registrar for the Bonds on not less than 60 days written notice to the Registrar, so long as any such notice is effective not less than 60 days prior to the next succeeding principal or interest payment date on the Bonds. Promptly upon the appointment of any successor Registrar, the previous Registrar shall deliver the Bond 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. 12. Special Record Date. If interest on any Bond 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) 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. 10 #75993075_v2 13. 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 principal of and premium, if any, or interest on such Bond, 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 13 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 three years from the date such amounts have become due and payable shall be reported and disposed of by the Registrar in accordance with the applicable provisions of Texas law, including Title 6 of the Texas Property Code, as amended. 14. Registration, Transfer, and Exchange. So long as any Bonds rema'moutstanding, the Registrar shall keep the Bond 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 Bonds in accordance with the terms of this Ordinance. If the Registrar does not maintain its principal offices in the State of Texas, the City agrees to keep a Bond Register at its offices which is identical to the Bond Register maintained by the Registrar and the Registrar will notify the City as to any changes in the Bond Register within 1 business day. Each Bond shall be transferable only upon the presentation and surrender thereof at the principal corporate trust office of the Registrar, duly endorsed for transfer, or accompanied by an assignment duly executed by the registered Owner or his authorized representative in form satisfactory to the Registrar. Upon due presentation of any Bond in proper form for transfer, the Registrar shall authenticate and deliver in exchange therefor, within three (3) business days after such presentation, a new Bond or Bonds, registered in the name of the transferee or transferees, in authorized denominations and of the same type, maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so presented. All Bonds shall be exchangeable upon presentation and surrender thereof at the principal corporate trust office of the Registrar for a Bond or Bonds of the same type, maturity and interest rate and in any authorized denomination, in an aggregate amount equal to the unpaid principal amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this Section 14. Each 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 Bond is delivered. The City or the Registrar may require the Owner of any Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange of such Bond. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the City. 11 #75993075_v2 Neither the City nor the Registrar shall be required to transfer or exchange any Bond 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 Bond called for redemption in part. 15. 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. 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. The City or the Registrar may require the Owner of a mutilated 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. The City or the Registrar may require the Owner of a lost, apparently destroyed or wrongfully taken Bond, before any replacement Bond 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 Bond; (2) furnish such security or indemnity as may be 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 Bond, a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or 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. 12 #75993075_v2 16. 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 Bonds of destruction of such Bonds. 17. Book -Entry System. (a) Notwithstanding any other provision hereof, upon initial issuance of the Bonds but at the sole election of the Underwriter, the ownership of the Bonds shall be registered in the name of Cede & Co., as nominee of DTC, and except as otherwise provided in this Section, all of the Outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC. The definitive Bonds shall be initially issued in the form of a single separate Bond for each of the maturities thereof. If the Underwriter shall elect to invoke the provisions of this Section, then the following provisions shall take effect with respect to the Bonds. (b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City and the Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than an Owner of a Bond, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than an Owner of a Bond, as shown in the Register, of any amount with respect to principal of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute Owner of such Bond for the purpose of payment of principal of, premium, if any, and interest on the Bonds, for the purpose of all matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner as shown in the Register, shall receive a Bond 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. (c) In the event that the City in its sole discretion determines that the beneficial owners of the Bonds be able to obtain Bonds, or in the event DTC discontinues the services described herein, the City 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 and DTC Participants, as identified by DTC, of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or (ii) notify 13 #75993075_v2 DTC and DTC Participants, as identified by DTC, of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC , as identified by DTC. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. (d) The execution and delivery of the Blanket Letter of Representations is hereby ratified and approved and the Mayor is hereby authorized and directed to execute a new Blanket Letter of Representations, if required, with such changes as may be approved by the Mayor or City Manager of the City. (e) Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, in the manner provided in the Blanket Letter of Representations. 18. Redemption and Defeasance. (a) Optional Redemption. The Bonds shall be subject to redemption prior to the stated maturity, at the option of the City at such times, in such amounts, in such manner and at such redemption prices as may be designated and provided for in the Officer's Pricing Certificate. (b) Partial Redemption. If less than all of the Bonds are to be redeemed pursuant to this Section, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot the Bonds, or portions thereof, within such maturity or maturities and in such principal amounts for redemption at the close of business on the Business Day next preceding the date of mailing such notice. (c) Notice of Redem tp ion. Notice of any redemption shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, at least 30 days prior to the date fixed for any such redemption, to the registered owner of each Bond, or portion thereof to be redeemed, at its address as it appeared on the Register on the close of business on the business day next preceding the date of mailing such notice; provided, however, that the failure to send, mail, or receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond. By the date fixed for any such redemption, due provision shall be made by the City with the Paying Agent/Registrar for the payment of the required redemption price for this Bond or the portion hereof which is to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, this Bond, or the portion thereof which is to be so redeemed, thereby automatically shall be redeemed prior to its scheduled maturity, and shall not bear interest after 14 #75993075_v2 the date fixed for its redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption price plus accrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/ Registrar shall record in the Register all such redemptions of principal of this Bond or any portion hereof. If a portion of any Bond shall be redeemed, a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in the Ordinance. 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 14 hereof, shall authenticate and deliver in exchange therefor a Bond(s) of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond(s) so surrendered. The City, at least 45 days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Bonds to be redeemed. With respect to any optional redemption of the Bonds, unless moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to be redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice may state that said redemption is conditional upon the receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for such redemption, or upon the satisfaction of any prerequisites set forth in such notice of redemption; and, if sufficient moneys are not received, such notice shall be of no force and effect, the City shall not redeem such Bonds and the Paying Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to the effect that the Bonds have not been redeemed. (d) Conditional Redem tp ion. The City reserves the right in the case of an optional redemption to give notice of its election or direction to redeem Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected owners. Any Bonds subject to conditional redemption where redemption has been rescinded shall remain outstanding, and the rescission shall not constitute an Event of Default. Further, in the case of a conditional redemption, the failure of the City to 15 #75993075_v2 make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an Event of Default. (e) Defeasance. The City may defease the provisions of this Ordinance or any ordinance applicable to any Parity Bonds being defeased and discharge its obligation to the Owners of any or all of the Bonds, or any or all Parity Bonds to pay principal, interest and redemption premium, if any, 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 bonds being defeased plus interest thereon to the date of maturity or redemption; or (b) pursuant to an escrow or trust agreement, cash and/or direct bonds of, or bonds the principal of and interest on which are guaranteed by or secured by the pledge of direct bonds 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 and redemption premium, if any, of such bonds being defeased plus interest thereon to the date of maturity or redemption; provided, however, that if any of such bonds being defeased are to be redeemed prior to their respective dates of maturity, provision shall have been made for giving notice of redemption as provided in this Ordinance or ordinance applicable to the Parity Bonds being defeased. Upon such deposit, such bonds being defeased 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. 19. Form. The Form of Bond as set forth in the Officer's Pricing Certificate is hereby approved. The form of the Bonds, including the form of the Registrar's Authentication Certificate, the form of Assignment, and the form of Registration Bond of the Comptroller of Public Accounts of the State of Texas which shall be attached or affixed to the Bonds initially issued shall be, respectively, substantially as set forth in the Officer's Pricing Certificate, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance. 20. Legal Opinion; CUSIP Numbers. The approving opinion of Holland & Knight LLP, Houston, Texas, Bond Counsel, and CUSIP Numbers may be printed on the Bonds, but errors or omissions in the printing of such opinion or such numbers shall have no effect on the validity of the Bonds. 21. (a) Pledge and Source of PaM. The City hereby covenants and agrees that, subject only to the prior lien on and pledge of the Net Revenues of the System to the payment and security of the Prior Lien Bonds (including the establishment and maintenance of the special funds created for the payment and security thereof) under the terms and conditions of the ordinances and proceedings pertaining to their authorization, all Gross Revenues of the System shall, as collected and received by the City, be deposited and paid into the special funds established in this Ordinance, and shall be applied in the manner hereinafter set forth, in order to provide for (i) the payment of all Maintenance and Operation Expenses and (ii) the payment of principal, interest and any redemption premiums on the Bonds, and all expenses of paying, securing and insuring the same. The Bonds are special obligations of the City payable solely from and secured by a lien 16 #75993075_v2 on and pledge of the Net Revenues of the System, such lien and pledge, however,. being junior and subordinate only to the lien on and pledge of such Net Revenues to the payment and security of the Prior Lien Bonds, which Net Revenues shall, in the manner hereafter provided, be set aside for and are hereby pledged by the City to the payment of the Bonds and any Parity Bonds. The Bonds do not constitute a legal or equitable pledge, charge, lien or encumbrance upon any property of the City or the System, except with respect to the Net Revenues. THE HOLDER OF THIS OBLIGATION IS NOT ENTITLED TO DEMAND PAYMENT OF THIS OBLIGATION OUT OF ANY MONEY RAISED BY TAXATION. IT IS ORDERED AND DIRECTED that this Ordinance pledging Net Revenues 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, if 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. (b) Construction Fund. 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, Waterworks and Sewer System Revenue and Refunding Bonds, Series 2020A Construction Fund". Immediately after the sale and delivery of the Series 2020A Bonds, that portion of the proceeds of the Series 2020A Bonds to be used for the cost of the Project and the cost of issuance of the Series 2020A Bonds shall be deposited into such Construction Fund and disbursed for such purposes. Pending completion of construction of the Project, interest earned on such proceeds may be used, at the City's discretion, for the Project and shall be accounted for, maintained, deposited and expended as permitted by the provisions of Section 1201.043 of the Government Code of Texas, as from time to time in effect, or as otherwise required by applicable law. Thereafter, such interest shall be deposited in the Interest and Sinking Fund. Upon completion of the Project, the monies, if any, remaining in such Construction Fund shall be transferred and deposited by the City into the Interest and Sinking Fund. (c) Rates and Charges. So long as any Parity Bonds remain outstanding, there shall be fixed, charged and collected rates and charges for the use and services of the System, which may be fully sufficient at all times: (i) to pay all Maintenance and Operation Expenses; and (ii) to produce Net Revenues in each fiscal year at least equal to 110 percent of the principal and interest requirements scheduled to occur in such fiscal year on all Prior Lien Bonds (including the Reserve Fund Requirement) and Parity Bonds then outstanding, but in no event less than the amount required to establish and maintain the Interest and Sinking Fund, and, to the extent that funds for such purpose are not otherwise available, to pay all other outstanding obligations payable from the Net Revenues of the System as and when the same become due. 17 #75993075_v2 The City covenants that it will not grant or permit any free service from the System except for public buildings and institutions operated by the City. (d) Special Funds. The following special funds shall be maintained and accounted for as hereinafter provided so long as any of the Parity Bonds remain outstanding: (i) Waterworks and Sewer System Revenue Fund (the "Revenue Fund"); (ii) Waterworks and Sewer System Revenue Bond Interest and Sinking Fund (the "Interest and Sinking Fund"); (iii) Waterworks and Sewer System Bond Reserve Fund (the "Reserve Fund"); and (iv) Waterworks and Sewer System Prior Lien Bond Reserve Fund (the "Prior Lien Reserve Fund"). The Revenue Fund shall be maintained as a separate account on the books of the City. The Interest and Sinking Fund, the Reserve Fund and the Prior Lien Reserve Fund shall be maintained at an official depository bank of the City, separate and apart from all other funds and accounts of the City, and.shall constitute trust funds which shall be held in trust for the benefit of the holders of the Parity Bonds, and the proceeds of which (except for interest income, which shall be transferred to the Revenue Fund) shall be and are hereby pledged to the payment of the Parity Bonds. All of the funds named above shall be used solely as provided in this Ordinance so long as any Parity Bonds remain outstanding. (e) Flow of Funds. All Gross Revenues of the System shall be deposited as collected into the Revenue Fund. Moneys from time to time on deposit to the credit of the Revenue Fund shall be applied as follows in the following order of priority: (i) First, to pay Maintenance and Operation Expenses and to provide by encumbrance for the payment of all obligations incurred by the City for Maintenance and Operation Expenses which may include an operating reserve equal to one month's estimated Maintenance and Operation Expenses. (ii) Second, To the payment of the amounts required to be deposited in the Prior Lien Reserve Fund, special funds or accounts created and established for the payment and security of the Prior Lien Bonds in accordance with the ordinances authorizing the issuance thereof. (iii) Third, to make all deposits into the Interest and Sinking Fund required by this Ordinance and any ordinance authorizing the issuance of any outstanding Additional Parity Bonds. (iv) Fourth, to make all deposits into the Reserve Fund required by this Ordinance and any ordinance authorizing the issuance of Additional Parity Bonds. 18 #75993075_v2 (v) . Fifth, to pay any amounts due to any bond insurer of Parity Bonds not paid pursuant to subsections (ii) or (ii) above. (vi) Sixth, for any lawful purpose, including transfers to the General Fund as permitted by law. Such permitted transfers to the General Fund are hereby expressly authorized by this Ordinance and the purposes for which such surplus revenues may be used shall include, but not be limited to, payment of any other debt, expense, or obligation of the City. Whenever the total amounts on deposit to the credit of the Interest and Sinking Fund, Reserve Fund shall be equivalent to the sum of the aggregate principal amount of all outstanding Parity Bonds plus the aggregate amount of all interest accrued and to accrue thereon, no further payments need be made into the Interest and Sinking Fund, and the Reserve Fund. (f) Interest and Sinking Fund. On or before the last Business Day of each month so long as any Parity Bonds remain outstanding, after making all required payments and provision for payment of Maintenance and Operation Expenses, there shall be transferred into the Interest and Sinking Fund from the Revenue Fund the following amounts: (i) Such amounts, in approximately equal monthly installments, as will be sufficient to pay the interest scheduled to become due on the Parity Bonds on the next interest payment date; and (ii) Such amounts, in approximately equal monthly installments, as will be sufficient to pay the next maturing principal of the Parity Bonds, including the principal amounts of, and any redemption premiums on, any Parity Bonds payable as a result of the exercise or operation of any redemption provision contained in this Ordinance or in any ordinance authorizing the issuance of Parity Bonds. Moneys deposited to the credit of the Interest and Sinking Fund (except for interest income, which shall be transferred to the Revenue Fund) shall be used solely for the'purpose of paying principal (either at maturity or prior redemption or to purchase Parity Bonds in the open market to be credited against mandatory redemption requirements), interest and redemption premiums on the Parity Bonds, plus all bank charges and other costs and expenses relating to such payment, on a pro rata basis among all series of Parity Bonds. On or before each principal and/or interest payment date for the Parity Bonds, the City shall transfer from the Interest and Sinking Fund to the paying agents for the Parity Bonds an amount equal to the principal, interest and redemption premiums payable on the Parity Bonds on such date, together with an amount equal to all bank charges and other costs and expenses relating to such payment. The paying agents for the Parity Bonds shall totally destroy all paid Parity Bonds and coupons (if any) and shall provide the City with an appropriate Bond of destruction. (g) Reserve Fund. Unless the Reserve Fund is fully funded, on or before the last Business Day of each month so long as any Parity Bonds remain outstanding, after making all required payments and provision for payment of Maintenance and Operation Expenses, and after 19 #75993075_v2 making the transfers into the Interest and Sinking Fund required in the preceding Section, there shall be transferred into the Reserve Fund from the Revenue Fund an amount at least equal to one -sixtieth (1/60th) of the average annual principal and interest requirements on the Parity Bonds, so that the Reserve Fund shall contain, in no more than 60 months after the issuance of each such issue of Parity Bonds, money and investments in an aggregate amount at least equal to the average annual principal and interest requirements on all Parity Bonds then outstanding. After such amount has accumulated in the Reserve Fund and so long thereafter as such Fund contains such amount, no further deposits shall be required to be made into the Reserve Fund, and any excess amounts may be transferred to the Revenue Fund. But if and whenever the. balance in the Reserve Fund is reduced below such amount, monthly deposits into such fund shall be resumed and continued in amounts at least equal to one -sixtieth (1/601h) of the average annual principal and interest requirements on the Parity Bonds until the Reserve Fund has been restored to such amount; provided however, if a Reserve Fund Policy has been obtained by the City pursuant to the next paragraph below, then the provisions of such next paragraph shall govern and control with respect to replenishment of amounts drawn under the Reserve Fund Surety Policy. The Reserve Fund shall be used to pay the principal of and interest on the Parity Bonds at any time when there is not sufficient money available in the Interest and Sinking Fund for such purpose and it may be used finally to pay and retire the last Parity Bonds to mature or be redeemed. To the extent permitted by law, the City expressly reserves the right at any time to satisfy all or any part of the amounts required to be on deposit in the Reserve Fund (the "Reserve Fund Requirement") by obtaining for the benefit of the Reserve Fund one or more Reserve Fund Surety Policies (a "Reserve Fund Surety Policy"). The purchase of such Reserve Fund Surety Policy is approved, and the Mayor, Mayor Pro-Tem, City Manager, Chief Financial Officer, City Clerk, Deputy City Clerk, and all other appropriate officers and agents of the City are each authorized to execute such documents, including but not limited to a reimbursement agreement, to grant a subordinated pledge and lien on the Net Revenues as security for the payment of amounts due under the reimbursement agreement (which grant if made is hereby approved), and to do any and all things necessary or desirable to obtain such a Policy if in the discretion of the acting official deems its acquisition in the best interests of the City. In the event the City elects to substitute at any time a Reserve Fund Surety Policy for any funded amounts in the Reserve Fund, it may apply any bond proceeds thereby released, to the greatest extent permitted by law, to any purposes for which the bonds were issued, and if all such purposes have been satisfied, to the payment of debt service on such bonds, and it may apply any other funds thereby released to any of the purposes for which such funds may lawfully be applied including the payment of debt service on the Parity Bonds. A Reserve Fund Surety Policy shall be an insurance policy or other similar guarantee in a principal amount equal to the portion of the Reserve Fund Requirement to be satisfied which is issued by a financial institution or insurance company with a rating for its long term unsecured debt or claims paying ability of at least an investment grade category by two major municipal securities evaluation sources. The premium for any such policy shall be paid from bond proceeds or other funds of the City lawfully available for such purpose. The City reserves the right to fund any increase in the Reserve Fund Requirement caused by the issuance of Additional Parity Bonds by the purchase of a Reserve Fund Surety Policy in the amount of such increase or by making transfers from the Revenue Fund to the Reserve Fund, in approximately equal monthly installments, in amounts sufficient to accumulate the increase in 20 #75993075_v2 the Reserve Fund Requirement within sixty (60) months of the issuance of such Additional Parity Bonds. If the Reserve Fund contains only cash and the balance in the Reserve Fund is reduced below the Reserve Fund Requirement at any time, the City shall make monthly transfers from the Revenue Fund to the Reserve Fund, in approximately equal monthly installments, in amounts sufficient to restore the balance in the Reserve Fund to the Reserve Fund Requirement within twelve (12) months of the date on which the balance in the Reserve Fund was so reduced. If the Reserve Fund contains a Reserve Fund Surety Policy (and no cash) and a draw is made against such policy, the City shall make monthly transfers from the Revenue Fund, in approximately equal monthly installments, in amounts sufficient to reimburse the amount drawn under such policy within twelve (12) months. If the Reserve Fund contains a combination of cash and a Reserve Fund Surety Policy, and the balance in the Reserve Fund is reduced below the Reserve Fund Requirement by a combination of cash withdrawals and draws against the Reserve Fund Surety Policy, the City shall make monthly transfers from the Revenue Fund, in approximately equal monthly installments, in amounts sufficient to restore the cash balance in the Reserve Fund and reimburse the amount drawn under such policy within twelve (12) months, with reimbursement to be made for all amounts drawn under such policy before any cash deposits are made into the Reserve Fund. Any reimbursement of amounts drawn against a Reserve Fund Surety Policy shall be limited to the amounts actually paid under such policy, and the City shall have no obligation to make any reimbursement payment with respect to any such policy except as provided herein. Notwithstanding anything to the contrary contained herein, the requirement set forth above in this subsection to maintain the Reserve Fund Requirement in the Reserve Fund shall be suspended for such time as the Net Revenues for each Fiscal Year are equal to at least 1.30 times the Average Annual Debt Service Requirements. In the event that the Net Revenues for any Fiscal Year are less than 1.30 times the Average Annual Debt Service Requirements, the City will be required to commence making Required Reserve Fund Deposits, as provided above, and to continue such Required Reserve Fund Deposits until the earlier of (i) such time as the Reserve Fund contains the Reserve Fund Requirement or (ii) the Net Revenues in each of two consecutive years have been equal to not less than 1.30 times the Average Annual Debt Service Requirements. During such time as the Reserve Fund contains the Reserve Fund Requirement or the obligation to maintain the Reserve Fund Requirement has been suspended pursuant to the paragraph above, the City may, at its option, withdraw all surplus funds in the Reserve Fund and deposit such surplus in the Interest and Sinking Fund or otherwise use such amount in any manner permitted by law. (h) Prior Lien Reserve Fund. The City shall fully fund the reserve fund as provided in the ordinances in connection with the Prior Lien Bonds. (i) Deficiencies in Funds. If in any month there shall not be deposited into any Fund maintained pursuant to this Section 21 the full amounts required herein, amounts equivalent to such deficiency shall be set apart and paid into such Fund or Funds from the first available and unallocated money in the Revenue Fund, and such payment shall be in addition to the amounts otherwise required to be paid into such Funds during the succeeding month or months. To the 21 #75993075_v2 extent necessary, the rates and charges for the System shall be increased to make up for any such deficiencies. 0) Investment of Funds; Transfer of Investment Income. Money in each Fund maintained pursuant to this Section of this Ordinance may, at the option of the City, be invested as permitted by law, provided that all such deposits and investments shall be made in such manner that the money required to be expended from any Fund will be available at the proper time or times. Any obligation in which money is so invested shall be kept and held in the Fund from which the investment was made. All such investments shall be promptly sold when necessary to prevent any default in connection with the Parity Bonds. All interest and income derived from such deposits and investments shall be transferred or credited as received to the Revenue Fund, and shall constitute Gross Revenues of the System; provided, however, to the extent such interest and income is derived from bond proceeds, such interest and income shall not constitute Gross Revenues of the System and shall only be used for the purposes for which the bond proceeds may be used. 22. Additional Bonds. (a) No Additional Obligations to be Issued on a Parity with the Prior Lien Bonds. The City shall not hereafter issue any additional obligations on a parity with the Prior Lien Bonds or create or issue evidences of indebtedness for any purpose possessing a lien on the Net Revenues of the System superior to that to be possessed by the Parity Bonds. (b) Additional Parity Bonds. In addition to the right to issue bonds of inferior lien as authorized by law, the City reserves the right to issue, for any lawful purpose, including the refunding of any previously issued Prior Lien Bonds, Parity Bonds or any other bonds or obligations of the City issued in connection with the System, one or more series of Additional Parity Bonds payable from, and secured by a lien on and pledge of, the Net Revenues of the System, on a parity with the Bonds and any other Additional Parity Bonds then outstanding; provided, however, that no Additional Parity Bonds may be issued unless: (i) The Additional Parity Bonds mature on September 1, and interest is payable on March 1 and September 1; (ii) The Interest and Sinking Fund contain the amount of money then required to be on deposit therein; (iii) For either the preceding Fiscal Year or any consecutive 12-month calendar period ending no more than 90 days prior to adoption of the ordinance authorizing such Additional Parity Bonds, Net Revenues were equal to at least 125% of the average annual principal and interest requirements on all Prior Lien Bonds and Parity Bonds that will be outstanding after the issuance of the series of Additional Parity Bonds then proposed to be issued, as certified by the City's Finance Officer or by an independent certified public accountant or firm of independent certified public accountants; or (iv) If the City cannot meet the test described in (iii) above, but a change in the rates and charges applicable to the System becomes effective at least sixty (60) days prior 22 #75993075_v2 to the adoption of the ordinance authorizing Additional Parity Bonds and the City's Finance Officer certifies that, had such change in rates and charges been effective for the preceding fiscal year or 12 consecutive calendar month period ending no more than 90 days prior to adoption of said ordinance, the Net Revenues for such period would have met the test described in (iii) above. (c) Subordinate Lien Obligations. The City reserves the right to issue, for any lawful purpose, bonds, notes or other obligations (including but not limited to reimbursement agreements undertaken to obtain reserve fund security policies) secured in whole or in part by liens on and pledges of the Net Revenues that are junior and subordinate to the lien on and pledge of Net Revenues securing payment of the Parity Bonds. Such subordinate lien obligations may be further secured by any other source of payment lawfully available for such purposes. (d) Special Project Bonds. The City reserves the right to issue revenue bonds secured by liens on and pledges of revenues and proceeds derived from Special Projects. 23. Covenants and Provisions Relating to all Parity Bonds. (a) Punctual Payment of Parity Bonds. The City will punctually pay or cause to be paid the interest on and principal of all Parity Bonds according to the terms thereof and will faithfully do and perform, and at all times fully observe, any and all covenants, undertakings, stipulations and provisions contained in this Ordinance and in any ordinance authorizing the issuance of Additional Parity Bonds. (b) Maintenance of System. So long as any Parity Bonds remain outstanding, the City covenants that it will at all times maintain the System, or within the limits of its authority cause the same to be maintained, in good condition and working order and will operate the same, or cause the same to be operated, in an efficient and economical manner at a reasonable cost and in accordance with sound business principles. In operating and maintaining the System, the City will comply with all contractual provisions and agreements entered into by it and with all valid rules, regulations, directions or order of any governmental, administrative or judicial body promulgating same, noncompliance with which would materially and adversely affect the operation of the System. (c) Sale or Encumbrance of System. So long as any Parity Bond remains outstanding, the City will not sell, dispose of or, except as permitted in this Ordinance, further encumber the System; provided, however, that this provision shall not prevent the City from disposing of any portion of the System which is being replaced or is deemed by the City to be obsolete, worn out, surplus or no longer needed for the proper operation of the System. Any agreement pursuant to which the City contracts with a person, corporation, municipal corporation or political subdivision to operate the System or to lease and/or operate all or part of the System shall not be considered as an encumbrance of the System. (d) Insurance. The City further covenants and agrees that it will keep the System insured with insurers of good standing against risks, accidents or casualties against which and to 23 #75993075_v2 the extent insurance is customarily carried by political subdivisions of the State of Texas operating similar properties, to the extent that such insurance is available. The cost of all such insurance, together with any additional insurance, shall be a part of the Maintenance and Operation Expenses. All net proceeds of such insurance shall be applied to repair or replace the insured property that is damaged or destroyed, or to make other capital improvements to the System, or to redeem Parity Bonds. (e) Accounts, Records and Audits. So long as any Parity Bonds remain outstanding, the City covenants and agrees that it will maintain a proper and complete system of records and accounts pertaining to the operation of the System in which full, true and proper entries will be made of all dealings, transactions, business and affairs which in any way affect or pertain to the System or the Gross Revenues or the Net Revenues thereof. The City shall after the close of each of its Fiscal Years cause an audit report of such records and accounts to be prepared by an independent certified public accountant or independent firm of certified public accountants. Each year promptly after such audit report is prepared, the City shall furnish a copy thereof without cost to the Municipal Advisory Council of Texas and any holders of Parity Bonds who shall request same. All expenses incurred in preparing such audits shall be Maintenance and Operation Expenses. (f) Competition. To the extent it legally may, the City will not grant any franchise or allow for the acquisition, construction or operation of any competing facilities which might be used as a substitute for the System and will prohibit the operation of any such competing facilities. (g) Pledge and Encumbrance of Net Revenues. The City covenants and represents that it has the lawful power to pledge the Net Revenues to the payment of the Parity Bonds and has lawfully exercised such power under the Constitution and laws of the State of Texas. The City further covenants and represents that, other than to the payment of the Parity Bonds, the Net Revenues are not and will not be pledged to the payment of any debt or obligation of the City, or in any other manner encumbered unless such pledge or encumbrance is junior and subordinate to the lien and pledge securing payment of the Parity Bonds. (h) Remedies. This Ordinance shall constitute a contract between the City and the holders of the Parity Bonds from time to time outstanding, and shall remain in effect until the Parity Bonds and the interest thereon shall be fully paid or discharged or provision therefor shall have been made as provided herein. In the event of a default in the payment of the principal of or interest on any of the Parity Bonds or a default in the performance of any duty or covenant provided by law or in this Ordinance, the holder or holders of any of the Parity Bonds, as appropriate, may pursue all legal remedies afforded by the Constitution and laws of the State of Texas to compel the City to remedy such default and to prevent further default or defaults. Without in any way limiting the generality of the foregoing, it is expressly provided that any holder of any of the Parity Bonds may at law or in equity, by suit, action, mandamus, or other proceedings, enforce and compel performance of all duties required to be performed by the City under this Ordinance, including the making and collection of reasonable and sufficient rates and charges for the use and services of the System, the deposit of the Gross Revenues thereof into the special funds as herein provided, and the application of such Gross Revenues and Net Revenues 24 #75993075_v2 in the manner required in this Ordinance. Acceleration of payment of principal of or interest on the Parity Bonds shall not be a remedy of default. (i) Legal Holidays. In any case where the date fixed for payment of interest on or principal of the Parity Bonds or the date fixed for redemption of any Parity Bonds shall be a legal holiday or a day on which a paying agent for the Parity Bonds is authorized by law to close, then payment of interest or principal by such paying agent need not be made on such date but may be made on the next succeeding business day with the same force and effect as if made on the date fixed for such payment and no interest shall accrue for the period from such date to the date of actual payment. 0) Unavailability of Authorized Publication. If, because of the temporary or permanent suspension of any newspaper, journal or other publication, or, for any reason, publication of notice cannot be made meeting any requirements herein established, any notice required to be published by the provisions of this Ordinance shall be given in such other manner and at such time or times as in the judgment of the City shall most effectively approximate such required publication and the giving of such notice in such manner shall for all purposes of this Ordinance be deemed to be in compliance with the requirements for publication thereof. 24. Further Proceedings. After the Bonds to be initially issued shall have been executed, it shall be the duty of the Mayor and other appropriate officials and agents 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. 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 the Comptroller's bond clerk or an assistant bond clerk lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein and the seal of said Comptroller shall be impressed or placed in facsimile, thereon.. 25. Federal Income Tax Exclusion. (a) General. The City intends that the interest on the Bonds be excludable from gross income for federal income tax purposes pursuant to sections 103 and 141 through 150, inclusive, of the Code. 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 (i) cause the interest on the Bonds to be includable in gross income, as defined in section 61 of the Code, for federal income tax purposes, or (ii) result in the violation of or failure to satisfy any provision of section 103 and 141 through 150, inclusive, of the Code. In particular, the City covenants and agrees to comply with each requirement of this Section 25; provided, however, that the City will not be required to comply with any particular requirement of this Section 25 if the City has received an opinion of nationally recognized bond counsel ("Counsel's Opinion") that (i) such noncompliance will not adversely affect the excludability of interest on the Bonds from gross income for federal income tax purposes or (ii) compliance with some other requirement will satisfy the applicable requirements of the Code, in which case compliance with such other 25 #75993075_v2 requirement specified in such Counsel's Opinion will constitute compliance with the corresponding requirement specified in this Section 25. (b) No Private Use or Payment and No Private Loan Financing. The City covenants and agrees that it will make such use of the proceeds of the Bonds, including interest or other investment income derived from Bond proceeds, regulate the use of property financed or refinanced, directly or indirectly, with such proceeds, and take such other and further action as may be required so that the Bonds will not be "private activity bonds" within the meaning of section 141 of the Code. Moreover, the City will 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 Bonds are delivered, the proceeds of the Refunded Bonds have not been and the proceeds of the Bonds will not be used, in a manner that would cause the Bonds to be "private activity bonds" within the meaning of section 141 of the Code. (c) No Federal Guarantee. 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 Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code, except as permitted by section 149(b)(3) of the Code. (d) No Hedge Bonds. 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 Bonds to be "hedge bonds" within the meaning of section 149(g) of the Code. Moreover, the City will 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 Bonds are delivered, the proceeds of the Refunded Bonds have not been used in a manner that would cause the Refunded Bonds or the Bonds to be "hedge bonds" within the meaning of section 149(g) of the Code. (e) No Arbitrage. The City covenants and agrees that it will make such use of the proceeds of the Bonds including interest or other investment income derived from Bond proceeds, regulate investments of proceeds of the Bonds, and take such other and further action as may be required so that the Bonds will not be "arbitrage bonds" within the meaning of section 148(a) of the Code. Moreover, the City will 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 Bonds are delivered, the proceeds of the Refunded Bonds have not been and the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of section 148(a) of the Code. (f) Arbitrage Rebate. If the City does not qualify for an exception to the requirements of section 148(f) of the Code relating to the required rebate to the United States, the City will take all steps necessary to comply with the requirement that certain amounts earned by the City on the investment of the "gross proceeds" of the Bonds (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 Bonds as may be required to calculate the amount earned on the investment of the gross proceeds of the Bonds separately from records of amounts on deposit in the funds and accounts of the City allocable to #75993075_v2 other bond issues of the City or moneys that do not represent gross proceeds of any bonds of the City, (ii) determine at such times as are required by applicable Regulations, the amount earned from the investment of the gross proceeds of the Bonds that is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Bonds or on such other dates as may be permitted under applicable Regulations, 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 Bonds 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 a 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. (g) Information Reporting. 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 Bonds are issued, an information statement concerning the Bonds, all under and in accordance with section 149(e) of the Code. (h) Record Retention. The City will retain all pertinent and material records relating to the use and expenditure of the proceeds of the Refunded Bonds and the Bonds until three years after the last Bond is redeemed or paid at maturity, or such shorter period as authorized by subsequent guidance issued by the Department of the Treasury, if applicable. All records will be kept in a manner that ensures their complete access throughout the retention period. For this purpose, it is acceptable that such records are kept either as hardcopy books and records or in an electronic storage and retrieval system, provided that such electronic system includes reasonable controls and quality assurance programs that assure the ability of the City to retrieve and reproduce such books and records in the event of an examination of the Bonds by the Internal Revenue Service. (i) Registration. The Bonds will be issued in registered form. 0) Deliberate Actions. The City will not take a deliberate action (as defined in section 1.141-2(d)(3) of the Regulations) that causes the Bonds to fail to meet any requirement of section 141 of the Code after the issue date of the Bonds unless an appropriate remedial action is permitted by section 1.141-12 of the Regulations, the City takes such remedial action, and the City receives a Counsel's Opinion that such remedial action cures any failure to meet the requirements of section 141 of the Code. (k) Continuing Obligation. Notwithstanding any other provision of this Order, the City's obligations under the covenants and provisions of this Section 25 will survive the defeasance and discharge of the Bonds for as long as such matters are relevant to the excludability of interest on the Bonds from gross income for federal income tax purposes. 26. Engagement of Professionals. The City Council hereby (i) confirms the engagement of RBC Capital Markets, LLC, as Municipal Advisor, to the City and (ii) confirms the engagement of Holland & Knight LLP, as bond counsel to the City, and (iii) the underwriting 27 #75993075_v2 syndicate as identified in the Pricing Certificate. 27. Proceeds of Sale. Proceeds from the sale of the Bonds, together with other funds of the City, if any, shall, promptly upon receipt by the City, be applied as set forth in the Pricing Certificate. Any proceeds remaining after the accomplishment of such purposes, including interest earnings on the investment of such proceeds, shall be deposited to the Interest and Sinking Fund. 28. Bond Insurance. (a) In order to obtain the lowest attainable interest rates on the Bonds, the Pricing Officers are authorized to enter into a credit agreement with one or more Bond Insurers to obtain one or more bond insurance policies with respect to all or a portion of the Bonds as set forth in the Pricing Certificate. The Pricing Officers are authorized to execute and the City Clerk is authorized to attest and affix the City's seal to any documents required in connection with the purchase of any such policy or policies. The City hereby agrees to provisions set forth in the Pricing Certificate. 29. Paving Agent/Registrar Agreement. The paying agent/registrar agreement (the "Paying Agent Agreement") by and between the City and the Paying Agent, a form of which is attached to the Pricing Certificate, is hereby approved, together with such changes or revisions as may be necessary to accomplish the refunding or benefit the City, an is hereby authorized to be executed by the Mayor or Mayor Pro Tern and City Clerk for and on behalf of the City. 30. Official Statement. The Preliminary Official Statement and the Official Statement prepared in the initial offering and sale of the Bonds have been and are hereby authorized, approved and ratified as to form and content. The use of the Preliminary Official Statement and the Official Statement in the reoffering of the Bonds by the Underwriter is hereby approved, authorized and ratified. The proper officials of the City are hereby authorized to execute and deliver a Bond pertaining to the Preliminary Official Statement and the Official Statement as prescribed therein, dated as of the date set forth herein. 31. No Personal Liability. No recourse shall be had for payment of the principal of 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. 32. Continuing Disclosure Undertaking. (a) Annual Reports. The City undertakes and agrees for the benefit of the Bond holders to provide annually to the MSRB, within six months after the end of each fiscal year, financial information and operating data with respect to the City of the general type included in the final Official Statement authorized in this Ordinance (i) under the headings "CITY WATERWORKS AND SEWER SYSTEM REVENUE DEBT," "ADMINISTRATION OF THE CITY," "THE SYSTEM -WATER AND SEWER RATES" and in APPENDIX B. The information to be provided shall include the financial statements of the City prepared in accordance with the accounting principles the City may be required to employ from time to time pursuant to State law or regulation and audited, if the audit is completed within the period during which they must be provided. If the audit of such financial statements is not completed within such period, then the City shall provide unaudited financial statements for the applicable fiscal year to the MSRB within such six month period, and audited financial statements ►: #75993075_v2 when the audit report on such statement becomes available. If the City changes its fiscal year, it will notify the MSRB of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to the MSRB or filed with the SEC. (a) Material Event Notices. The City shall notify the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: i. Principal and interest payment delinquencies; ii. Non-payment related defaults, if material; iii. Unscheduled draws on debt service reserves reflecting financial difficulties; iv. Unscheduled draws on credit enhancements reflecting financial difficulties; V. Substitution of credit or liquidity providers, or their failure to perform; vi. Adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determination of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; vii. Modifications to rights of Bondholders, if material; viii. Bond calls, if material, and tender offers; ix. Defeasances; X. Release, substitution or sale of property securing repayment of the securities, if material; xi. Rating changes; Note to paragraph (xi): For the purposes of the event identified in paragraph (k) of this section, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a 29 #75993075_v2 court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. xii. Bankruptcy, insolvency, or receivership, or similar event of the obligated person; xiii. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement or undertake such action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; xiv. Appointment of a successor or additional trustee or the change of name of a trustee, if material: xv. Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material; and xvi. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City any of which reflect financial difficulties. The City shall notify the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with section (a) above. All documents provided to the MSRB shall be accompanied by identifying information as prescribed by the MSRB. The City reserves the right to file all information and notices required under this Article through the facilities of DisclosureUSA or any other central post office approved by the SEC for such purpose. (b) Limitations, Disclaimers and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section for so long as, but only for so long as, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give notice of any deposit made in accordance with Texas law that causes Bonds no longer to be outstanding. The provisions of this Section are for the sole benefit of the holders and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete 30 #75993075_v2 presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION OR FROM ANY STATEMENT MADE PURSUANT TO THIS SECTION. HOLDERS OR BENEFICIAL OWNERS OF BONDS MAY SEEK AS THEIR SOLE REMEDY A WRIT OF MANDAMUS TO COMPEL THE CITY TO COMPLY WITH ITS AGREEMENT. No default by the City with respect to its continuing disclosure agreement shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status or type of operations of the City, if (i) the agreement, as amended, would have permitted the Underwriter to purchase or sell the Bonds in the initial primary offering in compliance with the Rule, taking into account any amendments or interpretations of such rule to the date of such amendment, as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the outstanding Bonds consent to such amendment, or (b) any person unaffiliated with the City (such as nationally recognized bond counsel) determines the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds. The City may also amend or repeal the obligations and agreement in this Section if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, and the City may amend the agreement in its discretion in any other circumstance or manner, but in either case only to the extent that its right to do so would not prevent an underwriter from lawfully purchasing or reselling the Bonds in the primary offering of the Bonds in compliance with the Rule. If the City amends its agreement, it must include with the next financial information and operating data provided in accordance with its agreement an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of information and operating data so provided. 33. Appointment of Escrow Agent; Approval of Escrow Agreement. The escrow agent identified in the Pricing Certificate is hereby appointed Escrow Agent for the purpose of refunding the Refunded Bonds. The Mayor and the City Clerk are hereby authorized and directed to execute the Escrow Agreement on behalf of the City, the term and provisions of which are hereby approved. 31 #75993075_v2 34. Redemption of Refunded Bonds, Verification Agent. The Refunded Bonds are hereby called for redemption prior to maturity on the dates and at the redemption prices set forth in Schedule I. The City Clerk is hereby authorized and directed to cause to be delivered to the paying agent/registrar for the Refunded Bonds a certified copy of this Ordinance calling the Refunded Bonds for redemption. The delivery of this Ordinance to the paying agent/registrar for the Refunded Bonds shall constitute the giving of notice of redemption to the paying agent/registrar for the Refunded Bonds, and such paying agent/registrar is hereby authorized and directed to give notice of redemption to the owners of the Refunded Bonds in accordance with the requirements of the respective ordinances authorizing the issuance thereof. Following the deposit to the Escrow Fund, the Refunded Bonds shall be payable solely from and secured by the cash and securities on deposit in the Escrow Fund for the purpose of refunding the Refunded Bonds and shall case to be payable from any other source. If necessary a verification agent shall be appointed as described in the Pricing Certificate. 36. Bond Insurance. In order to obtain the lowest attainable interest rates on the Bonds, the Mayor is authorized to enter into a credit agreement with one or more Insurers to obtain one or more bond insurance policies with respect to all or a portion of the Bonds. The Mayor is authorized to execute and the City Clerk or City Clerk is authorized to attest and affix the City's seal to any documents required in connection with the purchase of any such policy or policies. The City hereby agrees to the following: (a) "Insurance Policy" shall be defined as follows: "the insurance policy issued by the Insurer guaranteeing the scheduled payment of principal of and interest on the Bonds when due". "Insurer" shall be defined as follows: "Assured Guaranty Municipal Corp., a New York stock insurance company, or any successor thereto or assignee thereof'. (b) The prior written consent of the Insurer shall be a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the Debt Service Reserve Fund, if any. Notwithstanding anything to the contrary set forth in the Ordinance, amounts on deposit in the Debt Service Reserve Fund shall be applied solely to the payment of debt service due on the Bonds. (c) The Insurer shall be deemed to be the sole holder of the Insured Bonds for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the holders of the Bonds insured by it are entitled to take pursuant to the section or article of the Ordinance pertaining to (i) defaults and remedies and (ii) the duties and obligations of the Paying Agent. In furtherance thereof and as a term of the Ordinance and each Bond, the Paying Agent and each Bondholder appoint the Insurer as their agent and attorney -in -fact and agree that the Insurer may at any time during the continuation of any proceeding by or against the Issuer under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding") direct all matters relating to 32 #75993075_v2 such Insolvency Proceeding, including without limitation, (A) all matters relating to any claim or enforcement proceeding in connection with an Insolvency Proceeding (a "Claim"), (B) the direction of any appeal of any order relating to any Claim, (C) the posting of any surety, supersedeas or performance bond pending any such appeal, and (D) the right to vote to accept or reject any plan of adjustment. In addition, the Paying Agent and each Bondholder delegate and assign to the Insurer, to the fullest extent permitted by law, the rights of the Paying Agent and each Bondholder in the conduct of any Insolvency Proceeding, including, without limitation, all rights of any party to an adversary proceeding or action with respect to any court order issued in connection with any such Insolvency Proceeding. Remedies granted to the Bondholders shall expressly include mandamus. (d) The security for the Bonds shall include a pledge of any agreement with any underlying obligor that is a source of payment for the Bonds and a default under any such agreement shall constitute an Event of Default under the Ordinance. If acceleration is permitted under the Ordinance, the maturity of Bonds insured by the Insurer shall not be accelerated without the consent of the Insurer and in the event the maturity of the Bonds is accelerated, the Insurer may elect, in its sole discretion, to pay accelerated principal and interest accrued on such principal to the date of acceleration (to the extent unpaid by the Issuer) and the Paying Agent shall be required to accept such amounts. Upon payment of such accelerated principal and interest accrued to the acceleration date as provided above, the Insurer's obligations under the Insurance Policy with respect to such Bonds shall be fully discharged. No grace period for a covenant default shall exceed 30 days or be extended for more than 60 days, without the prior written consent of the Insurer. No grace period shall be permitted for payment defaults. (e) The Insurer shall be included as a third party beneficiary to the Ordinance. Upon the occurrence of an extraordinary optional, special or extraordinary mandatory redemption in part, the selection of Bonds to be redeemed shall be subject to the approval of the Insurer. The exercise of any provision of the Ordinance which permits the purchase of Bonds in lieu of redemption shall require the prior written approval of the Insurer if any Bond so 1 purchased is not cancelled upon purchase. Any amendment, supplement, modification to, or waiver of, the Ordinance or any other transaction document, including any underlying security agreement (each a "Related Document"), that requires the consent of Bondowners or adversely affects the rights and interests of the Insurer shall be subject to the prior written consent of the Insurer. (f) Unless the Insurer otherwise directs, upon the occurrence and continuance of an Event of Default or an event which with notice or lapse of time would constitute an Event of Default, amounts on deposit in the Construction Fund shall not be disbursed, but shall instead be applied to the payment of debt service or redemption price of the Bonds. The rights granted to the Insurer under the Ordinance or any other Related Document to request, consent to or direct any action are rights granted to the Insurer in consideration of its issuance of the Insurance Policy. Any exercise by the Insurer of such rights is merely an exercise of the Insurer's contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the Bondholders and such action does 33 #75993075 v2 not evidence any position of the Insurer, affirmative or negative, as to whether the consent of the Bondowners or any other person is required in addition to the consent of the Insurer. (g) Only (1) cash, (2) non -callable direct obligations of the United States of America ("Treasuries"), (3) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (4) subject to the prior written consent of the Insurer, pre -refunded municipal obligations rated "AAA" and "Aaa" by S&P and Moody's, respectively, or (5) subject to the prior written consent of the Insurer, securities eligible for "AAA" defeasance under then existing criteria of S&P or any combination thereof, shall be used to effect defeasance of the Bonds unless the Insurer otherwise approves. Any obligations or securities deposited as provided in this paragraph, shall qualify under Section 1207.062(b) of the Local Government Code, as amended. To accomplish defeasance, the Issuer shall cause to be delivered (i) a report of an independent firm of nationally recognized certified public accountants or such other accountant as shall be acceptable to the Insurer ("Accountant") verifying the sufficiency of the escrow established to pay the Bonds in full on the maturity or redemption date ("Verification"), (ii) an Escrow Deposit Agreement (which shall be acceptable in form and substance to the Insurer), (iii) an opinion of nationally recognized bond counsel to the effect that the Bonds are no longer "Outstanding" under the Ordinance and (iv) a certificate of discharge of the Paying Agent with respect to the Bonds; each Verification and defeasance opinion shall be acceptable in form and substance, and addressed, to the Issuer, Paying Agent and Insurer. The Insurer shall be provided with final drafts of the above -referenced documentation not less than five business days prior to the funding of the escrow. Bonds shall be deemed Outstanding under the Ordinance unless and until they are in fact paid and retired or the above criteria are met. Notwithstanding the above, in the event any provisions in this Section 30(1) conflict with Section 1207.033 of the Texas Government Code, as amended ("Section 1207.033"), the provisions of Section 1207.033 shall prevail. (h) Amounts paid by the Insurer under the Insurance Policy shall not be deemed paid for purposes of the Ordinance and the Bonds relating to such payments shall remain Outstanding and continue to be due and owing until paid by the Issuer in accordance with the Ordinance. The Ordinance shall not be discharged unless all amounts due or to become due to the Insurer have been paid in fall or duly provided for. (i) Each of the Issuer and Paying Agent covenant and agree to take such action (including, as applicable, filing of UCC financing statements and continuations thereof) as is necessary from time to time to preserve the priority of the pledge of the Trust Estate under applicable law. Claims Upon the Insurance Policy and Payments by 34 #75993075_v2 and to the Insurer. If, on the third Business Day prior to the related scheduled interest payment date or principal payment date ("Payment Date") there is not on deposit with the Paying Agent, after making all transfers and deposits required under the Ordinance, moneys sufficient to pay the principal of and interest on the Bonds due on such Payment Date, the Paying Agent shall give notice to the Insurer and to its designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on such Business Day. If, on the second Business Day prior to the related Payment Date, there continues to be a deficiency in the amount available to pay the principal of and interest on the Bonds due on such Payment Date, the Paying Agent shall make a claim under the Insurance Policy and give notice to the Insurer and the Insurer's Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay interest on the Bonds and the amount required to pay principal of the Bonds, confirmed in writing to the Insurer and the Insurer's Fiscal Agent by 12:00 noon, New York City time, on such second Business Day by filling in the form of Notice of Claim and Certificate delivered with the Insurance Policy. The Paying Agent shall designate any portion of payment of principal on Bonds paid by the Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Bonds registered to the then current Bondholder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Insurer, registered in the name of Assured Guaranty Municipal Corp., in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Paying Agent's failure to so designate any payment or issue any replacement Bond shall have no effect on the amount of principal or interest payable by the Issuer on any Bond or the subrogation rights of the Insurer. The Paying Agent shall keep a complete and accurate record of all funds deposited by the Insurer into the Policy Payments Account (defined below) and the allocation of such funds to payment of interest on and principal of any Bond. The Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Paying Agent. Upon payment of a claim under the Insurance Policy, the Paying Agent shall establish a separate special purpose trust account for the benefit of Bondholders referred to herein as the "Policy Payments Account" and over which the Paying Agent shall have exclusive control and sole right of withdrawal. The Paying Agent shall receive any amount paid under the Insurance Policy in trust on behalf of Bondholders and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Paying Agent to Bondholders in the same manner as principal and interest payments are to be made with respect to the Bonds under the sections hereof regarding payment of Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments. Notwithstanding anything herein to the contrary, the Issuer agrees to pay to the Insurer (i) a sum equal to the total of all amounts paid by the Insurer under the Insurance Policy (the "Insurer Advances"); and (ii) to the extent permitted by law and subject to annual appropriation, interest on such Insurer Advances 35 #75993075_v2 from the date paid by the Insurer until payment thereof in full, payable to the Insurer at the Late Payment Rate per annum (collectively, the "Insurer Reimbursement Amounts"). "Late Payment Rate" means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in The City of New York, as its prime or base lending rate (any change in such rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest rate of interest on the Bonds and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual, number of days elapsed over a year of 360 days. The Issuer hereby covenants and agrees that the Insurer Advances are secured by a lien on and pledge of the Net Revenues and payable from such Net Revenues on a parity with debt service due on the Bonds. Funds held in the Policy Payments Account shall not be invested by the Paying Agent and may not be applied to satisfy any costs, expenses or liabilities of the Paying Agent. Any funds remaining in the Policy Payments Account following a Bond payment date shall promptly be remitted to the Insurer. 0) The Insurer shall, to the extent it makes any payment 'of principal of or interest on the Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Insurance Policy (which subrogation rights shall also include the rights of any such recipients in connection with any Insolvency Proceeding). Each obligation of the Issuer to the Insurer under the Related Documents shall survive discharge or termination of such Related Documents. The Issuer shall pay or reimburse the Insurer any and all charges, fees, costs and expenses that the Insurer may reasonably pay or incur in connection with (i) the administration, enforcement, defense or preservation of any rights or security in any Related Document; (ii) the pursuit of any remedies under the Ordinance or any other Related Document or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to, the Ordinance or any other Related Document whether or not executed or completed, or (iv) any litigation or other dispute in connection with the Ordinance or any other Related Document or the transactions contemplated thereby, other than costs resulting from the failure of the Insurer to honor its obligations under the Insurance Policy. The Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Ordinance or any other Related Document. After payment of reasonable expenses of the Paying Agent, the application of funds realized upon default shall be applied to the payment of expenses of the Issuer or rebate only after the payment of past due and current debt service on the Bonds and amounts required to restore the Debt Service Reserve Fund to the Debt Service Reserve Requirement. The Insurer shall be entitled to pay principal or interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Insurance Policy) and any amounts due on the Bonds as a result of acceleration of the maturity thereof in accordance with the Ordinance, whether or not the Insurer has received a Notice of Nonpayment (as such terms are defined in the Insurance Policy) or a claim upon the Insurance Policy. The notice address of the Insurer is: Assured Guaranty Municipal Corp., 31 West 52nd Street, New York, New York 10019, Attention: Managing Director — Surveillance, Re: 36 #75993075_v2 Policy No. 216211-N, Telephone: (212) 826-0100; Telecopier: (212) 339-3556. In each case in which notice or other communication refers to an Event of Default, then a copy of such notice or other communication shall also be sent to the attention of the General Counsel and shall be marked to indicate "URGENT MATERIAL ENCLOSED." (k) The Insurer shall be provided with the following information by the Issuer or Paying Agent, as the case may be: (i) Annual audited financial statements within 180 days (or such longer period agreed to by AGM) after the end of the Issuer's fiscal year (together with a certification of the Issuer that it is not aware of any default or Event of Default under the Ordinance), and the Issuer's annual budget within 30 days after the approval thereof together with such other information, data or reports as the Insurer shall reasonably request from time to time; (ii) Notice of any draw upon the Debt Service Reserve Fund within two Business Days after knowledge thereof other than (i) withdrawals of amounts in excess of the Debt Service Reserve Requirement and (ii) withdrawals in connection with a refunding of Bonds; (iii) Notice of any default known to the Paying Agent or Issuer within five Business Days after knowledge thereof; (iv) Prior notice of the advance refunding or redemption of any of the Bonds, including the principal amount, maturities and CUSIP numbers thereof, (v) Notice of the resignation or removal of the Paying Agent and Bond Registrar and the appointment of, and acceptance of duties by, any successor thereto; (vi) Notice of the commencement of any proceeding by or against the Issuer or Obligor commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding"); (vii) Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest on, the Bonds; (viii) A full original transcript of all proceedings relating to the execution of any amendment, supplement, or waiver to the Related Documents; and (ix) All reports, notices and correspondence to be delivered to Bondholders under the terms of the Related Documents. 37 #75993075_v2 In addition, to the extent that the Issuer has entered into a continuing disclosure agreement, covenant or undertaking with respect to the Bonds, all information furnished pursuant to such agreements shall also be provided to the Insurer, simultaneously with the furnishing of such information. The Insurer shall have the right to receive such additional information as it may reasonably request. The Issuer will permit the Insurer to discuss the affairs, finances and accounts of the Issuer or any information the Insurer may reasonably request regarding the security for the Bonds with appropriate officers of the Issuer and will use commercially reasonable efforts to enable the Insurer to have access to the facilities, books and records of the Issuer on any business day upon reasonable prior notice. The Issuer shall notify the Insurer of any failure of the Issuer to provide notices, certificates and other information under the transaction documents. Notwithstanding satisfaction of the other conditions to the issuance of Additional Bonds set forth in the Ordinance, no such issuance may occur (1) if an Event of Default (or any event which, once all notice or grace periods have passed, would constitute an Event of Default) exists unless such default shall be cured upon such issuance and (2) unless the Debt Service Reserve Fund is fully funded at the Debt Service Reserve Requirement (including the proposed issue) upon the issuance of such Additional Bonds, in either case unless otherwise permitted by the Insurer. In determining whether any amendment, consent, waiver or other action to be taken, or any failure to take action, under the Ordinance would adversely affect the security for the Bonds or the rights of the Bondholders, the Paying Agent shall consider the effect of any such amendment, consent, waiver, action or inaction as if there were no Insurance Policy. No contract shall be entered into or any action taken by which the rights of the Insurer or security for or sources of payment of the Bonds may be impaired or prejudiced in any material respect except upon obtaining the prior written consent of the Insurer. If the Bonds are issued for refunding purposes, there shall be delivered an opinion of Bond Counsel addressed to the Insurer (or a reliance letter relating thereto), or a certificate of discharge of the Paying Agent for the Refunded Bonds, to the effect that, upon the making of the required deposit to the escrow, the legal defeasance of the Refunded Bonds shall have occurred. If the Refunded Bonds are insured by Assured Guaranty Municipal Corp., at least three business days prior to the proposed date for delivery of the Policy with respect to the Refunding Bonds, the Insurer shall also receive (i) the verification letter, of which the Insurer shall be an addressee, by an independent firm of certified public accountants which is either nationally recognized or otherwise acceptable to the Insurer, of the adequacy of the escrow established to provide for the payment of the Refunded Bonds in accordance with the terms and provisions of the Escrow Deposit Agreement, and (ii) the form of an opinion of Bond Counsel addressed to the Insurer (or a reliance letter relating thereto) to the effect that the Escrow Deposit Agreement is a valid and binding obligation of the parties thereto, enforceable in accordance with its terms (such Escrow Deposit Agreement shall provide that no amendments are permitted without the prior written consent of the Insurer). An executed copy of each of such opinion and reliance letter, if applicable, or Paying Agent's discharge certificate, as the case may be, shall be forwarded to the Insurer prior to delivery of the Bonds. Any interest rate exchange agreement ("Swap Agreement") entered into by the Issuer shall meet the following conditions: (i) the Swap Agreement must be entered into to manage interest costs related to, or a hedge against (a) assets then held, or (b) debt then outstanding, or (iii) debt reasonably expected to be issued within the next twelve (12) months, and (ii) the Swap Agreement shall not contain any leverage element or multiplier component greater than 1.Ox unless there is a matching hedge 38 #75993075_v2 arrangement which effectively off -sets the exposure from any such element or component. Unless otherwise consented to in writing by the Insurer, any uninsured net settlement, breakage or other termination amount then in effect shall be subordinate to debt service on the Bonds and on any debt on parity with the Bonds. The Issuer shall not terminate a Swap Agreement unless it demonstrates to the satisfaction of the Insurer prior to the payment of any such termination amount that such payment will not cause the Issuer to be in default under the Related Documents, including but not limited to, any monetary obligations thereunder. All counterparties or guarantors to any Swap Agreement must have a rating of at least "A-" and "A3" by Standard & Poor's ('S&P") and Moody's Investors Service ("Moody's"). If the counterparty or guarantor's rating falls below "A-" or "A3" by either S&P or Moody's, the counterparty or guarantor shall execute a credit support annex to the Swap Agreement, which credit support annex shall be acceptable to the Insurer. If the counterparty or the guarantor's long term unsecured rating falls below "Baal" or "BBB+" by either Moody's or S&P, a replacement counterparty or guarantor, acceptable to the Insurer, shall be required. Any consent, approval or permit required herein by the Insurer shall not be unreasonably withheld. 37. Repealer. All orders, resolutions, and ordinances, and parts thereof inconsistent herewith are hereby repealed to the extent of such inconsistency. 38. Effective Date. This Ordinance shall be in force and effect from and after its final passage, and it is so ordered. 39. Amendment of Ordinance. (a) If and to the extent permitted by this Ordinance, the owners of the Bonds aggregating in the principal amount of 51 % of the aggregate principal amount of the outstanding 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 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 Bonds; (2) Reduce the rate of interest borne by any of the outstanding Bonds; (3) Reduce the amount of the principal payable on the outstanding Bonds; (4) Modify the terms of payment of principal of or interest on the outstanding Bonds, or impose any conditions with respect to such payment; (5) Affect the owners of less than all of the outstanding Bonds then outstanding; (6) Change the percentage of the principal amount of outstanding Bonds, necessary for consent to such amendment. 39 #75993075_v2 (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 the Bonds. Such publication is not required, however, if notice in writing is given to each owner of the outstanding Bonds. Not less than thirty (30) days' notice of the proposed amendment shall also be given by the City to the Underwriter. (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 the 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 Bonds under this Ordinance of the City and all the owners of then outstanding Bonds, shall thereafter be determined, exercised and enforced hereunder, subject in all respect to such amendments. (e) Any consent given by the owner of the outstanding 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 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 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 Bonds, by any owner of Bonds, and the amount and number of such 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, Mayor Pro Tem, City Manager or Chief Financial Officer as to changes prior to issuance to comply with requirements by the Attorney General of Texas or Underwriter) 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, #75993075 v2 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 Bonds or required by the Underwriter 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 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 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 Bonds issued after the date of the adoption of such modification. 40. Related Matters. To satisfy in a timely manner all of the City's obligations under this Ordinance, the Mayor or Mayor Pro Tem, City Manager, Chief Financial Officer, City Clerk or any Deputy 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 the issuance of the Bonds, including without limitation, executing and delivering on behalf of the City all Bonds, 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 of this Ordinance. 41. 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. 42. Interpretations. All terms defined herein and all pronouns used in this Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles and headings of the sections of this Ordinance 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 any of the terms or provisions hereof. This Ordinance and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of the Parity Bonds and the validity of the lien on and pledge of the Net Revenues to secure the payment of the Parity Bonds. 43. 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, 41 #75993075_v2 clause or provision shall not affect any of the remaining provisions of this Ordinance. [The remainder of this page has intentionally been left blank.] FIX #75993075_v2 PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. ATTEST: City Clerk 43 - Mayor Becky Ames - #75993075_v2 SCHEDULE "I" REFUNDED BONDS City of Beaumont, Texas Waterworks and Sewer Revenue Bonds, Taxable Series 2010B (Build America Bonds — Direct Payment to Issuer) #5442898.3 Schedule I EXHIBIT "A" FORM OF PRICING CERTIFICATE #5442898.3 Schedule I CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS § COUNTY OF JEFFERSON § I, the undersigned City Clerk of the City of Beaumont, Texas (the "City"), hereby certify as follows: 1. The City Council of the City convened in regular meeting on July _, 2020, at the place stated in the notice of such meeting given as stated below, and the roll was called of the duly constituted official and members of said City Council, to wit: Becky Ames Mayor W.L. Pate, Jr. Councilmember Randy Feldschau Councilmember Taylor Neild Councilmember Mike Getz Councilmember Audwin Samuel Councilmember Robin Mouton . Councilmember And all of said persons were present, thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE AND REFUNDING BONDS, SERIES 2020B IN ONE OR MORE SERIES OR SUBSERIES AS MAY BE FURTHER DESIGNATED; AUTHORIZING EACH OF THE MAYOR, THE CITY MANAGER AND THE CHIEF FINANCIAL OFFICER TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES, AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; PROVIDING FOR THE PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; AUTHORIZING THE DEFEASANCE, FINAL PAYMENT, AND DISCHARGE OF CERTAIN OUTSTANDING BONDS; AUTHORIZING THE EXECUTION AND 1 #76026798_vl DELIVERY OF ONE OR MORE ESCROW AGREEMENTS; AUTHORIZING THE PURCHASE OF AND SUBSCRIPTION FOR CERTAIN ESCROWED SECURITIES; AUTHORIZING ESCROW VERIFICATION AND ENGAGEMENT OF AN ESCROW AGENT; AUTHORIZING BOND INSURANCE; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT AND OTHER RELATED DOCUMENTS; AND MAKING OTHER PROVISIONS REGARDING SUCH BONDS 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, such motion, carrying with it the adoption of said ordinance, prevailed and carried by the following vote: AYES: All those present voted "aye" NOES: ABSTENTIONS: 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; that the above and foregoing paragraph is a true, full, and correct excerpt from the said City Council's minutes of said meeting pertaining to the adoption of said ordinance; 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 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 that public notice of the date, hour, place and subject of said meeting was given as required by the Texas Open Meetings Act. SIGNED AND SEALED this .2020. City Clerk City of Beaumont, Texas (SEAL) 2 #76026798_vl ORDINANCE NO. ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, TAXABLE SERIES 2020B IN ONE OR MORE SERIES OR SUBSERIES AS MAY BE FURTHER DESIGNATED; AUTHORIZING EACH OF THE MAYOR, THE CITY MANAGER AND THE CHIEF FINANCIAL OFFICER TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES, AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; PROVIDING FOR THE PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE- BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; AUTHORIZING THE DEFEASANCE, FINAL PAYMENT, AND DISCHARGE OF CERTAIN OUTSTANDING BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE ESCROW AGREEMENTS; AUTHORIZING THE PURCHASE OF AND SUBSCRIPTION FOR CERTAIN ESCROWED SECURITIES; AUTHORIZING ESCROW VERIFICATION AND ENGAGEMENT OF AN ESCROW AGENT; AUTHORIZING BOND INSURANCE; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT AND OTHER RELATED DOCUMENTS; AND MAKING OTHER PROVISIONS REGARDING SUCH BONDS THE STATE OF TEXAS § COUNTY OF JEFFERSON § THE CITY OF BEAUMONT § WHEREAS, The City of Beaumont, Texas (the "City") is authorized, pursuant to Chapters 1371 and 1502, Texas Government Code, as amended, to issue bonds, without election, payable from the net revenues of its waterworks and sewer system to provide money for acquisitions, purchases, expansions, extensions, construction, reconstruction, renovation, equipping, and improvement of such system; and WHEREAS, the City has previously issued and there are presently outstanding certain obligations of the City; and WHEREAS, the City is authorized, pursuant to the general laws of the State of Texas, and particularly Chapter 1207, Texas Government Code, as amended, to issue its bonds for the purpose of refunding all or a portion of its outstanding obligations; and WHEREAS, by this Ordinance the City Council of the City (the "City Council") is authorizing the issuance of its bonds in the principal amount not exceed $13,500,000 for the purpose of refunding the City's outstanding obligations identified and described on Schedule I 3 #76026798_vl attached hereto and incorporated herein by reference for all purposes (the "Refunded Bonds"); and WHEREAS, the City shall by this Ordinance, in accordance with the provisions of Chapters 1207, 1371 and 1502, Texas Government Code, as amended, delegate to a Pricing Officer (hereinafter designated) the authority to determine the principal amount of Bonds to be issued and negotiate the terms of sale thereof and to select the specific maturities, in whole or in part, of the Refunded Bonds to be refunded; and; and WHEREAS, the City Council hereby finds and determines that it is a public purpose and in the best interests of the City to (1) issue the Bonds with such terms to be included in a pricing certificate (the "Pricing Certificate") to be executed by the Pricing Officer, and (2) the manner in which the refunding is being executed does not make it practicable to make the determination described by Section 1207.008(a)(2) of Chapter 1207, Texas Government Code, as amended, all in accordance with the provisions of Chapters 1207, 1371 and 1502, Texas Government Code, as amended; and WHEREAS, the City Council hereby finds that it may purchase a credit agreement in the form of a municipal bond insurance policy or policies with respect to the Bonds if it deem such purchase is cost effective; and WHEREAS, the bonds to be issued pursuant to the terms and provisions of this Ordinance will be secured by a pledge of and lien on the Net Revenues (as hereinafter defined); and WHEREAS, the City is a home -rule municipality that: (i) adopted its charter under Section 5, Article XI, Texas Constitution; (ii) has a population of more than 50,000 and (iii) has outstanding long-term indebtedness that is rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for a long-term obligation. Now, Therefore BE IT ORDAINED BY THE CITY OF BEAUMONT, TEXAS: 1. Findings and Determinations. It is hereby found and determined that 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 forth below: The term "Additional Parity Bonds" shall mean any credit agreement created pursuant to Section 28 herein or additional bonds issued with the same priority lien as the Bonds. The term "Average Annual Debt Service Requirements" shall mean the average annual debt service for the Parity Bonds. 0 #76026798_vl The term `Blanket Issuer Letter of Representations" means the Blanket Issuer Letter of Representations between the City and DTC. The term "Bond Insurer" shall mean any third party financial institution that provides a credit agreement in the form of a municipal bond insurance policy as provided herein. The term "Bond Register" shall mean the books of registration kept by the Registrar in which are maintained the names and addresses of, and the principal amounts of the Bonds registered to, each Owner. The terms "Bonds" shall mean the City of Beaumont, Texas Waterworks and Sewer System Revenue Refunding Bonds, Taxable Series 2020B The term "Business Day" shall mean any day which is not a Saturday, Sunday, a day on which banking institutions in the city where the principal corporate trust office of the Paying Agent/Registrar or Bond Insurer, if any, is located, are authorized or required by law or executive order to close, or a legal holiday. The term "City" shall mean The City of Beaumont, Texas. The term "Closing Date" means the date of the initial delivery of and payment for the Bonds. The term "Code" means the Internal Revenue Code of 1986, as heretofore and hereafter amended and, with respect to a specific section thereof, such reference shall be deemed to include (a) the Regulations promulgated under such section, (b) any successor provision of similar import hereafter enacted, (c) any corresponding provision of any subsequent Internal Revenue Code, and (d) the Regulations promulgated under the provisions described in (b) and (c). The term "Comptroller" means the Comptroller of Public Accounts of the State of Texas. The term "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. The term "DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. The term "Gross Revenues" shall mean all revenues, income and receipts of every nature derived or received by the City from the operation and ownership of the System (but excluding any utility deposits) and the interest income from the investment or deposit of money in the Revenue Fund, and the Interest and Sinking Fund. The term "Insurance Policy" shall have the meaning assigned to that term in Section 28 of this Ordinance. #76026798_vl The term "Insured Bonds" shall mean the Bonds during the time period in which the payment of principal and interest in connection with such bonds is guaranteed by the Bond Insurer. The term "Interest Payment Date", when used in connection with any Bond, shall mean March 1 and September 1 of each year, beginning March 1, 2021 and continuing thereafter until maturity or earlier redemption of such Bond. The term "Issuer" shall mean the City. The term "Maintenance and Operation Expenses" shall mean - the reasonable and necessary expenses of operation and maintenance of the System, including all salaries, labor, materials, repairs and extensions necessary to render efficient service, and all payments under contracts, now or hereafter defined as operating expenses by the Legislature of the State of Texas. Depreciation shall never be considered as a Maintenance and Operation Expense. The term "MSRB" shall mean the Municipal Securities Rulemaking Board. The term "Net Revenues" shall mean all Gross Revenues remaining after deducting the Maintenance and Operation Expenses. The term "Ordinance" as used herein and in the Bonds shall mean this ordinance authorizing the Bonds and all amendments and supplements hereto. The term "Outstanding" shall mean, in connection with the Bonds, any Bonds that remain outstanding until maturity, refunding or defeasance. The term "Owner" shall mean any person who shall be the registered owner of any :•0_413 The term "Parity Bonds" shall mean the Bonds, the City's outstanding Waterworks and Sewer System Revenue Bonds, Series 2014A and 2014B, the City's Waterworks and Sewer System Revenue Refunding Bonds, Series 2015A, the City's Waterworks and Sewer System Revenue Bonds, Series 2017, the City's Waterworks and Sewer System Revenue and Refunding Bonds, Series 2020A and any Additional Parity Bonds. The term "Paying Agent" for the Bonds shall mean the Registrar. The term "Pricing Certificate" shall mean a certificate or certificates to be signed by the Mayor, the City Manager or the Chief Financial Officer of the City pursuant to Section 5 hereof and delivered to the City Clerk, in substantially the form attached hereto as Exhibit A. The term "Pricing Officer" shall mean the Mayor, City Manager, or Chief Financial Officer of the City. The term "Prior Lien Bonds" shall mean the City's outstanding Waterworks and Sewer System Revenue Refunding Bonds, Series 2010, and the City's outstanding Waterworks and Cel #76026798_vl Sewer Revenue, Series 2010A, and the City's outstanding Waterworks and Sewer Revenue Bonds, Taxable Series 2010B (Build America Bonds — Direct Payment to Issuer), and the City's outstanding Waterworks and Sewer System Revenue Bonds, Series 2012, but only to the extent such Prior Lien Bonds remain outstanding within the meaning of this Ordinance. The term "Record Date" shall mean, for any Interest Payment Date, the fifteenth (15th) calendar day of the month next preceding each Interest Payment Date. The term "Registrar" shall mean The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, and its successors in that capacity. The term "Regulations" means the applicable proposed, temporary or final Treasury Regulations promulgated under the Code or, to the extent applicable to the Code under the Internal Revenue Code of 1954, as such regulations may be amended or supplemented from time to time. The term "Reserve Fund Requirement" shall mean an amount equal to the average annual principal and interest requirement on the Parity Bonds, which may be determined and redetermined each year by the City but in no event less frequently than upon the issuance of each series of Parity Bonds. The term "Rule" shall mean SEC Rule 15c-12, as amended from time to time. The term "SEC" shall mean the United States Securities and Exchange Commission. The term "Special Project" shall mean, to the extent permitted by law, any property, improvement or facility declared by the City not to be part of the System and substantially all of the costs of the acquisition, construction and installation of which is paid from proceeds of a financing transaction other than the issuance of bonds payable from ad valorem taxes or Net Revenues of the System, and for which all maintenance and operation expenses are payable from sources other than revenues of the System, but only to the extent that and for so long as all or any part of the revenues or proceeds of which are or will be pledged to secure the payment or repayment of such costs of acquisition, construction and installation under such financing transaction. The term "System" shall mean all properties, facilities, improvements, equipment, interests and rights constituting the waterworks and sewer system of the City, including all future extensions, replacements, betterments, additions, improvements, enlargements, acquisitions, purchases and repairs to the System, but excluding all Special Projects. The term "Underwriter" shall mean the underwriting syndicate identified in the Pricing Certificate. 3. Authorization. The Bonds shall be issued in fully registered form in the total authorized aggregate principal amount not to exceed THIRTEEN MILLION FIVE HUNDRED THOUSAND AND N0/100 DOLLARS ($13,500,000) for the purpose of providing funds to (i) 7 #76026798_vl refund the Refunded Bonds, and (ii) pay costs of issuance of the Bonds. 4. Designation, Date, and Interest Payment Dates. The Bonds shall be designated as "THE CITY OF BEAUMONT, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, TAXABLE SERIES 2020B." The Bonds shall be dated, mature, bear interest from the dates and at the rates per annum, and be payable on the dates and in the principal amounts as set forth in the Pricing Certificate. 5. Sale of Bonds. As authorized by Chapters 1207, 1371 and 1502, Texas Government Code, as amended, the Pricing Officers are hereby authorized to act on behalf of the City in selling and delivering the Bonds and carrying out the other procedures specified in this Ordinance, including any additional designation or title by which the Bonds shall be known, the number of subseries of Bonds to be issued and the principal amount of each subseries, the price at which each series of the Bonds will be sold, the manner in which the Bonds should be delivered, the date or dates (which may be different dates for each series of the Bonds) on which the Bonds shall be sold, the form in which the Bonds shall be issued whether as current interest bonds, as compound interest bonds, or as a combination of current interest bonds and compound interest bonds, any additional designation or title by which the Bonds shall be known, the year or years in which each series of the Bonds will mature, the principal amount to mature in each of such years, the aggregate principal amount of each series of the Bonds, the rate of interest to be borne by each such maturity, the first interest payment date or compounding date, as the case may be, the dates, prices, and terms, if any, upon and at which each series of the Bonds shall be subject to redemption prior to maturity at the option of the City, as well as any mandatory sinking fund redemption provisions, or make -whole provisions, and such officers are also hereby authorized to act on behalf of the City in approving all other matters relating to the issuance, sale and delivery of the Bonds and the purchase of a bond insurance policy or policies for all or any portion of the Bonds, all in accordance with the terms below: (a) the price to be paid for each series of the Bonds shall not be less than 90% of the aggregate original principal amount of the current interest bonds plus accrued interest, if any, thereon from their date to their delivery; (b) none of the Bonds shall bear interest at a rate greater than 6% per annum or in excess of the maximum rate allowed by Chapter 1204, Texas Government Code; (c) the aggregate principal amount of each subseries of the Bonds shall not exceed the maximum amount authorized in Section 3, and the sum of the principal amount of each series, plus net premium generated, plus any available funds of the City, if any, shall equal an amount sufficient to provide for the redemption of the Refunded Bonds as identified on the Pricing Certificate, to pay costs of issuance of the Bonds, and (if necessary) a deposit to the reserve fund; (d) each series of the Bonds to be issued, prior to delivery, must have been rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for long-term obligations; and �9- #76026798_vl (e) to the extent the City shall purchase any Insurance Policy (one or more) issued by one or more Bond Insurers such policy or policies shall be determined to be most cost effective to the City for the Bonds and shall result in a net interest rate savings to the City which is greater than the costs of the premium of such policy or policies, as may be certified in the Pricing Certificate. Any finding by the Mayor, City Manager or the Chief Financial Officer relating to the sale and delivery of the Bonds and the purchase of bond insurance shall have the same force and effect as a finding or determination made by the City Council. 6. Bond Numbers and Denominations. Each series of Bonds shall be numbered from R-1 and upward (except the Initial Bond, which shall each be numbered I-1), and may be transferred and exchanged as set out in this Ordinance. Such Bonds shall mature on September 1 in each of the years and in the amounts set forth in the Initial Bond. The Bonds delivered in transfer of or in exchange for other Bonds shall be numbered in order of their authentication by the Registrar, shall be in the denomination of $5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Bonds or Bonds in lieu of which they are delivered. . 7. Execution of Bonds; Seal. The Bonds shall be signed by the Mayor or Mayor Pro Tem and countersigned by the City Clerk or Deputy City Clerk, 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 Bond of the Comptroller of Public Accounts substantially in the form provided in the Pricing Certificate 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 19 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 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 premium, if any, on the Bonds shall be E #76026798_vl 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 respectively become due and payable, whether at maturity or by prior redemption, at the principal corporate trust office of the Registrar. The interest on each Bond shall be payable by check 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 Bond Register. Any accrued interest payable at maturity on a Bond shall be paid upon presentation and surrender of such Bond at the principal corporate trust office of the Registrar. 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 such payment was due. 11. Successor Registrars. The City covenants that at all times while any Bonds are outstanding it will provide a legally qualified bank, trust company, financial institution or other agency to act as Registrar for the Bonds. The City reserves the right to change the Registrar for the Bonds on not less than 60 days written notice to the Registrar, so long as any such notice is effective not less than 60 days prior to the next succeeding principal or interest payment date on the Bonds. Promptly upon the appointment of any successor Registrar, the previous Registrar shall deliver the Bond 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. 12. Special Record Date. If interest on any Bond 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) 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. 13. 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 principal of and premium, if any, or interest on such Bond, 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 13 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 three years from the date such 10 #76026798_vl amounts have become due and payable shall be reported and disposed of by the Registrar in accordance with the applicable provisions of Texas law, including Title 6 of the Texas Property Code, as amended. 14. Registration, Transfer, and Exchange. So long as any Bonds remain outstanding, the Registrar shall keep the Bond 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 Bonds in accordance with the terms of this Ordinance. If the Registrar does not maintain its principal offices in the State of Texas, the City agrees to keep a Bond Register at its offices which is identical to the Bond Register maintained by the Registrar and the Registrar will notify the City as to any changes in the Bond Register within 1 business day. Each Bond shall be transferable only upon the presentation and surrender thereof at the principal corporate trust office of the Registrar, duly endorsed for transfer, or accompanied by an assignment duly executed by the registered Owner or his authorized representative in form satisfactory to the Registrar. Upon due presentation of any Bond in proper form for transfer, the Registrar shall authenticate and deliver in exchange therefor, within three (3) business days after such presentation, a new Bond or Bonds, registered in the name of the transferee or transferees, in authorized denominations and of the same type, maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so presented. All Bonds shall be exchangeable upon presentation and surrender thereof at the principal corporate trust office of the Registrar for a Bond or Bonds of the same type, maturity and interest rate and in any authorized denomination, in an aggregate amount equal to the unpaid principal amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this Section 14. Each 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 Bond is delivered. The City or the Registrar may require the Owner of any Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange of such Bond. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the City. Neither the City nor the Registrar shall be required to transfer or exchange any Bond 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 Bond called for redemption in part. 15. 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. 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 11 #76026798_vl Registrar shall authenticate and deliver 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 a mutilated 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. The City or the Registrar may require the Owner of a lost, apparently destroyed or wrongfully taken Bond, before any replacement Bond 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 Bond; (2) furnish such security or indemnity as may be 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 Bond, a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or 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. 16. 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 Bonds of destruction of such Bonds. 17. Book-Entryystem. (a) Notwithstanding any other provision hereof, upon initial issuance of the Bonds but at the sole election of the Underwriter, the ownership of the Bonds shall be registered in the name of Cede & Co., as nominee of DTC, and except as otherwise provided in this Section, all of the Outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC. The definitive Bonds shall be initially issued in the form of a single separate Bond for each 12 #76026798 vl of the maturities thereof. If the Underwriter shall elect to invoke the provisions of this Section, then the following provisions shall take effect with respect to the Bonds. (b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City and the Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than an Owner of a Bond, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than an Owner of a Bond, as shown in the Register, of any amount with respect to principal of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute Owner of such Bond for the purpose of payment of principal of, premium, if any, and interest on the Bonds, for the purpose of all matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner as shown in the Register, shall receive a Bond 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. (c) In the event that the City in its sole discretion determines that the beneficial owners of the Bonds be able to obtain Bonds, or in the event DTC discontinues the services described herein, the City 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 and DTC Participants, as identified by DTC, of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or (ii) notify DTC and DTC Participants, as identified by DTC, of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC , as identified by DTC. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. (d) The execution and delivery of the Blanket Letter of Representations is hereby ratified and approved and the Mayor is hereby authorized and directed to execute a new Blanket Letter 13 #76026798_vl of Representations, if required, with such changes as may be approved by the Mayor or City Manager of the City. (e) Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, in the manner provided in the Blanket Letter of Representations. 18. Redemption and Defeasance. (a) Optional Redemption. The Bonds shall be subject to redemption prior to the stated maturity, at the option of the City at such times, in such amounts; in such manner and at such redemption prices as may be designated and provided for in the Pricing Certificate. (b) Partial Redemption. If less than all of the Bonds are to be redeemed pursuant to this Section, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot the Bonds, or portions thereof, within such maturity or maturities and in such principal amounts for redemption at the close of business on the Business Day next preceding the date of mailing such notice. (c) Notice of Redemption. Notice of any redemption shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, at least 30 days prior to the date fixed for any such redemption, to the registered owner of each Bond, or portion thereof to be redeemed, at its address as it appeared on the Register on the close of business on the business day next preceding the date of mailing such notice; provided, however, that the failure to send, mail, or receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond. By the date fixed for any such redemption, due provision shall be made by the City with the Paying Agent/Registrar for the payment of the required redemption price for this Bond or the portion hereof which is to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, this Bond, or the portion thereof which is to be so redeemed, thereby automatically shall be redeemed prior to its scheduled maturity, and shall not bear interest after the date fixed for its redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption price plus accrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/ Registrar shall record in the Register all such redemptions of principal of this Bond or any portion hereof. If a portion of any Bond shall be redeemed, a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in the Ordinance. 14 #76026798_vl 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 14 hereof, shall authenticate and deliver in exchange therefor a Bond(s) of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond(s) so surrendered. The City, at least 45 days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Bonds to be redeemed. With respect to any optional redemption of the Bonds, unless moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to be redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice may state that said redemption is conditional upon the receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for such redemption, or upon the satisfaction of any prerequisites set forth in such notice of redemption; and, if sufficient moneys are not received, such notice shall be of no force and effect, the City shall not redeem such Bonds and the Paying Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to the effect that the Bonds have not been redeemed. (d) Conditional Redemption. The City reserves the right in the case of an optional redemption to give notice of its election or direction to redeem Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no. effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected owners. Any Bonds subject to conditional redemption where redemption has been rescinded shall remain outstanding, and the rescission shall not constitute an Event of Default. Further, in the case of a conditional redemption, the failure of the City to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an Event of Default. (e) Defeasance. The City may defease the provisions of this Ordinance or any ordinance applicable to any Parity Bonds being defeased and discharge its obligation to the Owners of any or all of the Bonds, or any or all Parity Bonds to pay principal, interest and redemption premium, if any, 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 bonds being defeased plus interest thereon to the date of maturity or redemption; or 15 #76026798_vl (b) pursuant to an escrow or trust agreement, cash and/or direct bonds of, or bonds the principal of and interest on which are guaranteed by or secured by the pledge of direct bonds 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 and redemption premium, if any, of such bonds being defeased plus interest thereon to the date of maturity or redemption; provided, however, that if any of such bonds being defeased are to be redeemed prior to their respective dates of maturity, provision shall have been made for giving notice of redemption as provided in this Ordinance or ordinance applicable to the Parity Bonds being defeased. Upon such deposit, such bonds being defeased 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. 19. Form. The Form of Bond as set forth in the Officer's Pricing Certificate is hereby approved. The form of the Bonds, including the form of the Registrar's Authentication Certificate, the form of Assignment, and the form of Registration Bond of the Comptroller of Public Accounts of the State of Texas which shall be attached or affixed to the Bonds initially issued shall be, respectively, substantially as set forth in the Pricing Certificate, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance. 20. Legal Opinion; CUSIP Numbers. The approving opinion of Holland & Knight LLP, Houston, Texas, Bond Counsel, and CUSIP Numbers may be printed on the Bonds, but errors or omissions in the printing of such opinion or such numbers shall have no effect on the validity of the Bonds. 21. (a) Pledge and Source of Payment. The City hereby covenants and agrees that, subject only to the prior lien on and pledge of the Net Revenues of the System to the payment and security of the Prior Lien Bonds (including the establishment and maintenance of the special funds created for the payment and security thereof) under the terms and conditions of the ordinances and proceedings pertaining to their authorization, all Gross Revenues of the System shall, as collected and received by the City, be deposited and paid into the special funds established in this Ordinance, and shall be applied in the manner hereinafter set forth, in order to provide for (i) the payment of all Maintenance and Operation Expenses and (ii) the payment of principal, interest and any redemption premiums on the Bonds, and all expenses of paying, securing and insuring the same. The Bonds are special obligations of the City payable solely from and secured by a lien on and pledge of the Net Revenues of the System, such lien and pledge, however, being junior and subordinate only to the lien on and pledge of such Net Revenues to the payment and security of the Prior Lien Bonds, which Net Revenues shall, in the manner hereafter provided, be set aside for and are hereby pledged by the City to the payment of the Bonds and any Parity Bonds. The Bonds do not constitute a legal or equitable pledge, charge, lien or encumbrance upon any property of the City or the System, except with respect to the Net Revenues. THE HOLDER OF THIS OBLIGATION IS NOT ENTITLED TO DEMAND PAYMENT OF THIS OBLIGATION OUT OF ANY MONEY RAISED BY TAXATION. IT IS ORDERED AND DIRECTED that this Ordinance pledging Net Revenues for the payment of the Bonds to the extent provided herein be filed and recorded in the records of the Wei #76026798_vl 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, if 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. (b) Rates and Charges. So long as any Parity Bonds remain outstanding, there shall be fixed, charged and collected rates and charges for the use and services of the System, which may be fully sufficient at all times: (i) to pay all Maintenance and Operation Expenses; and (ii) to produce Net Revenues in each fiscal year at least equal to 110 percent of the principal and interest requirements scheduled to occur in such fiscal year on all Prior Lien Bonds (including the Reserve Fund Requirement) and Parity Bonds then outstanding, but in no event less than the amount required to establish and maintain the Interest and Sinking Fund, and, to the extent that funds for such purpose are not otherwise available, to pay all other outstanding obligations payable from the Net Revenues of the System as and when the same become due. The City covenants that it will not grant or permit any free service from the System except for public buildings and institutions operated by the City. (d) Special Funds. The following special funds shall be maintained and accounted for as hereinafter provided so long as any of the Parity Bonds remain outstanding: (i) Waterworks and Sewer System Revenue Fund (the "Revenue Fund"); (ii) Waterworks and Sewer System Revenue Bond Interest and Sinking Fund (the "Interest and Sinking Fund"); (iii) Waterworks and Sewer System Bond Reserve Fund (the "Reserve Fund"); (iv) Waterworks and Sewer System Prior Lien Bond Reserve Fund (the "Prior Lien Reserve Fund"). The Revenue Fund shall be maintained as a separate account on the books of the City. The Interest and Sinking Fund, the Reserve Fund and the Prior Lien Reserve Fund shall be maintained at an official depository bank of the City, separate and apart from all other funds and accounts of the City, and shall constitute trust funds which shall be held in trust for the benefit of the holders of the Parity Bonds, and the proceeds of which (except for interest income, which shall be transferred to the Revenue Fund) shall be and are hereby pledged to the payment of the Parity Bonds. All of the funds named above shall be used solely as provided in this Ordinance so long as any Parity Bonds remain outstanding. 17 #76026798_vl (e) Flow of Funds. All Gross Revenues of the System shall be deposited as collected into the Revenue Fund. Moneys from time to time on deposit to the credit of the Revenue Fund shall be applied as follows in the following order of priority: (i) First, to pay Maintenance and Operation Expenses and to provide by encumbrance for the payment of all obligations incurred by the City for Maintenance and Operation Expenses which may include an operating reserve equal to one month's estimated Maintenance and Operation Expenses. (ii) Second, To the payment of the amounts required to be deposited in the Prior Lien Reserve Fund, special funds or accounts created and established for the payment and security of the Prior Lien Bonds in accordance with the ordinances authorizing the issuance thereof. (iii) Third, to make all deposits into the Interest and Sinking Fund required by this Ordinance and any ordinance authorizing the issuance of any outstanding Additional Parity Bonds. (iv) Fourth, to make all deposits into the Reserve Fund required by this Ordinance and any ordinance authorizing the issuance of Additional Parity Bonds. (v) Fifth, to pay any amounts due to any bond insurer of Parity Bonds not paid pursuant to subsections (ii) or (ii) above. (vi) Sixth, for any lawful purpose, including transfers to the General Fund as permitted by law. Such permitted transfers to the General Fund are hereby expressly authorized by this Ordinance and the purposes for which such surplus revenues may be used shall include, but not be limited to, payment of any other debt, expense, or obligation of the City. Whenever the total amounts on deposit to the credit of the Interest and Sinking Fund, Reserve Fund shall be equivalent to the sum of the aggregate principal amount of all outstanding Parity Bonds plus the aggregate amount of all interest accrued and to accrue thereon, no further payments need be made into the Interest and Sinking Fund, and the Reserve Fund. (f) Interest and Sinking Fund. On or before the last Business Day of each month so long as any Parity Bonds remain outstanding, after making all required payments and provision for payment of Maintenance and Operation Expenses, there shall be transferred into the Interest and Sinking Fund from the Revenue Fund the following amounts: (i) Such amounts, in approximately equal monthly installments, as will be sufficient to pay the interest scheduled to become due on the Parity Bonds on the next interest payment date; and (ii) Such amounts, in approximately equal monthly installments, as will be sufficient to pay the next maturing principal of the Parity Bonds, including the principal amounts of, and any redemption premiums on, any Parity Bonds payable as a result of the 18 #76026798_vl exercise or operation of any redemption provision contained in this Ordinance or in any ordinance authorizing the issuance of Parity Bonds. Moneys deposited to the credit of the Interest and Sinking Fund (except for interest income, which shall be transferred to the Revenue Fund) shall be used solely for the purpose of paying principal (either at maturity or prior redemption or to purchase Parity Bonds in the open market to be credited against mandatory redemption requirements), interest and redemption premiums on the Parity Bonds, plus all bank charges and other costs and expenses relating to such payment, on a pro rata basis among all series of Parity Bonds. On or before each principal and/or interest payment date for the Parity Bonds, the City shall transfer from the Interest and Sinking Fund to the paying agents for the Parity Bonds an amount equal to the principal, interest and redemption premiums payable on the Parity Bonds on such date, together with an amount equal to all bank charges and other costs and expenses relating to such payment. The paying agents for the Parity Bonds shall totally destroy all paid Parity Bonds and coupons (if any) and shall provide the City with an appropriate Bond of destruction. (g) Reserve Fund. Unless the Reserve Fund is fully funded, on or before the last Business Day of each month so long as any Parity Bonds remain outstanding, after making all required payments and provision for payment of Maintenance and Operation Expenses, and after making the transfers into the Interest and Sinking Fund required in the preceding Section, there shall be transferred into the Reserve Fund from the Revenue Fund an amount at least equal to one -sixtieth (1/60") of the average annual principal and interest requirements on the Parity Bonds, so that the Reserve Fund shall contain, in no more than 60 months after the issuance of each such issue of Parity Bonds, money and investments in an aggregate amount at least equal to the average annual principal and interest requirements on all Parity Bonds then outstanding. After such amount has accumulated in the Reserve Fund and so long thereafter as such Fund contains such amount, no further deposits shall be required to be made into the Reserve Fund, and any excess amounts may be transferred to the Revenue Fund. But if and whenever the balance in the Reserve Fund is reduced below such amount, monthly deposits into such fund shall be resumed and continued in amounts at least equal to one -sixtieth (1/60th) of the average annual principal and interest requirements on the Parity Bonds until the Reserve Fund has been restored to such amount; provided however, if a Reserve Fund Policy has been obtained by the City pursuant to the next paragraph below, then the provisions of such next paragraph shall govern and control with respect to replenishment of amounts drawn under the Reserve Fund Surety Policy. The Reserve Fund shall be used to pay the principal of and interest on the Parity Bonds at any time when there is not sufficient money available in the Interest and Sinking Fund for such purpose and it may be used finally to pay and retire the last Parity Bonds to mature or be redeemed. To the extent permitted by law, the City expressly reserves the right at any time to satisfy all or any part of the amounts required to be on deposit in the Reserve Fund (the "Reserve Fund Requirement") by obtaining for the benefit of the Reserve Fund one or more Reserve Fund Surety Policies (a "Reserve Fund Surety Policy"). The purchase of such Reserve Fund Surety Policy is approved, and the Mayor, Mayor Pro-Tem, City Manager, Chief Financial Officer, City Clerk, Deputy City Clerk, and all other appropriate officers and agents of the City are each authorized to execute such documents, including but not limited to a reimbursement agreement, 19 #76026798_vl to grant a subordinated pledge and lien on the Net Revenues as security for the payment of amounts due under the reimbursement agreement (which grant if made is hereby approved), and to do any and all things necessary or desirable to obtain such a Policy if in the discretion of the acting official deems its acquisition in the best interests of the City. In the event the City elects to substitute at any time a Reserve Fund Surety Policy for any funded amounts in the Reserve Fund, it may apply any bond proceeds thereby released, to the greatest extent permitted by law, to any purposes for which the bonds were issued, and if all such purposes have been satisfied, to the payment of debt service on such bonds, and it may apply any other funds thereby released to any of the purposes for which such funds may lawfully be applied including the payment of debt service on the Parity Bonds. A Reserve Fund Surety Policy shall be an insurance policy or other similar guarantee in a principal amount equal to the portion of the Reserve Fund Requirement to be satisfied which is issued by a financial institution or insurance company with a rating for its long term unsecured debt or claims paying ability of at least an investment grade category by two major municipal securities evaluation sources. The premium for any such policy shall be paid from bond proceeds or other funds of the City lawfully available for such purpose. The City reserves the right to fund any increase in the Reserve Fund Requirement caused by the issuance of Additional Parity Bonds by the purchase of a Reserve Fund Surety Policy in the amount of such increase or by making transfers from the Revenue Fund to the Reserve Fund, in approximately equal monthly installments, in amounts sufficient to accumulate the increase in the Reserve Fund Requirement within sixty (60) months of the issuance of such Additional Parity Bonds. If the Reserve Fund contains only cash and the balance in the Reserve Fund is reduced below the Reserve Fund Requirement at any time, the City shall make monthly transfers from the Revenue Fund to the Reserve Fund, in approximately equal monthly installments, in amounts sufficient to restore the balance in the Reserve Fund to the Reserve Fund Requirement within twelve (12) months of the date on which the balance in the Reserve Fund was so reduced. If the Reserve Fund contains a Reserve Fund Surety Policy (and no cash) and a draw is made against such policy, the City shall make monthly transfers from the Revenue Fund, in approximately equal monthly installments, in amounts sufficient to reimburse the amount drawn under such policy within twelve (12) months. If the Reserve Fund contains a combination of cash and a Reserve Fund Surety Policy, and the balance in the Reserve Fund is reduced below the Reserve Fund Requirement by a combination of cash withdrawals and draws against the Reserve Fund Surety Policy, the City shall make monthly transfers from the Revenue Fund, in approximately equal monthly installments, in amounts sufficient to restore the cash balance in the Reserve Fund and reimburse the amount drawn under such policy within twelve (12) months, with reimbursement to be made for all amounts drawn under such policy before any cash deposits are made into the Reserve Fund. Any reimbursement of amounts drawn against a Reserve Fund Surety Policy shall be limited to the amounts actually paid under such policy, and the City shall have no obligation to make any reimbursement payment with respect to any such policy except as provided herein. Notwithstanding anything to the contrary contained herein, the requirement set forth above in this subsection to maintain the Reserve Fund Requirement in the Reserve Fund shall be suspended for such time as the Net Revenues for each Fiscal Year are equal to at least 1.30 times the Average Annual Debt Service Requirements. In the event that the Net Revenues for any Fiscal Year are less than 1.30 times the Average Annual Debt Service Requirements, the City will be required to commence making Required Reserve Fund 20 #76026798_vl Deposits, as provided above, and to continue such Required Reserve Fund Deposits until the earlier of (i) such time as the Reserve Fund contains the Reserve Fund Requirement or (ii) the Net Revenues in each of two consecutive years have been equal to not less than 1.30 times the Average Annual Debt Service Requirements. During such time as the Reserve Fund contains the Reserve Fund Requirement or the obligation to maintain the Reserve Fund Requirement has been suspended pursuant to the paragraph above, the City may, at its option, withdraw all surplus funds in the Reserve Fund and deposit such surplus in the Interest and Sinking Fund or otherwise use such amount in any manner permitted by law. (h) Prior Lien Reserve Fund. The City shall fully fund the reserve fund as provided in the ordinances in connection with the Prior Lien Bonds. (i) Deficiencies in Funds. If in any month there shall not be deposited into any Fund maintained pursuant to this Section 21 the full amounts required herein, amounts equivalent to such deficiency shall be set apart and paid into such Fund or Funds from the first available and unallocated money in the Revenue Fund, and such payment shall be in addition to the amounts otherwise required to be paid into such Funds during the succeeding month or months. To the extent necessary, the rates and charges for the System shall be increased to make up for any such deficiencies. 0) Investment of Funds; Transfer of Investment Income. Money in each Fund maintained pursuant to this Section of this Ordinance may, at the option of the City, be invested as permitted by law, provided that all such deposits and investments shall be made in such manner that the money required to be expended from any Fund will be available at the proper time or times. Any obligation in which money is so invested shall be kept and held in the Fund from which the investment was made. All such investments shall be promptly sold when necessary to prevent any default in connection with the Parity Bonds. All interest and income derived from such deposits and investments shall be transferred or credited as received to the Revenue Fund, and shall constitute Gross Revenues of the System; provided, however, to the extent such interest and income is derived from bond proceeds, such interest and income shall not constitute Gross Revenues of the System and shall only be used for the purposes for which the bond proceeds may be used. 22. Additional Bonds. (a) No Additional Obligations to be Issued on a Parity with the Prior Lien Bonds. The City shall not hereafter issue any additional obligations on a parity with the Prior Lien Bonds or create or issue evidences of indebtedness for any purpose possessing a lien on the Net Revenues of the System superior to that to be possessed by the Parity Bonds. (b) Additional Parity Bonds. In addition to the right to issue bonds of inferior lien as authorized by law, the City reserves the right to issue, for any lawful purpose, including the refunding of any previously issued Prior Lien Bonds, Parity Bonds or any other bonds or obligations of the City issued in connection with the System, one or more series of Additional 21 976026798_vl Parity Bonds payable from, and secured by a lien on and pledge of, the Net Revenues of the System, on a parity with the Bonds and any other Additional Parity Bonds then outstanding; provided, however, that no Additional Parity Bonds may be issued unless: (i) The Additional Parity Bonds mature on September 1, and interest is payable on March 1 and September 1; (ii) The Interest and Sinking Fund contain the amount of money then required to be on deposit therein; (iii) For either the preceding Fiscal Year or any consecutive 12-month calendar period ending no more than 90 days prior to adoption of the ordinance authorizing such Additional Parity Bonds, Net Revenues were equal to at least 125% of the average annual principal and interest requirements on all Prior Lien Bonds and Parity Bonds that will be outstanding after the issuance of the series of Additional Parity Bonds then proposed to be issued, as certified by the City's Finance Officer or by an independent certified public accountant or firm of independent certified public accountants; or (iv) If the City cannot meet the test described in (iii) above, but a change in the rates and charges applicable to the System becomes effective at least sixty (60) days prior to the adoption of the ordinance authorizing Additional Parity Bonds and the City's Finance Officer certifies that, had such change in rates and charges been effective for the preceding fiscal year or 12 consecutive calendar month period ending no more than 90 days prior to adoption of said ordinance, the Net Revenues for such period would have met the test described in (iii) above. (c) Subordinate Lien Obligations. The City reserves the right to issue, for any lawful purpose, bonds, notes or other obligations (including but not limited to reimbursement agreements undertaken to obtain reserve fund security policies) secured in whole or in part by liens on and pledges of the Net Revenues that are junior and subordinate to the lien on and pledge of Net Revenues securing payment of the Parity Bonds. Such subordinate lien obligations may be further secured by any other source of payment lawfully available for such purposes. (d) Special Project Bonds. The City reserves the right to issue revenue bonds secured by liens on and pledges of revenues and proceeds derived from Special Projects. 23. Covenants and Provisions Relating to all Parily Bonds. (a) Punctual Payment of Parfty Bonds. The City will punctually pay or cause to be paid the interest on and principal of all Parity Bonds according to the terms thereof and will faithfully do and perform, and at all times fully observe, any and all covenants, undertakings, stipulations and provisions contained in this Ordinance and in any ordinance authorizing the issuance of Additional Parity Bonds. (b) Maintenance of System. So long as any Parity Bonds remain outstanding, the City covenants that it will at all times maintain the System, or within the limits of its authority 22 #76026798_vl cause the same to be maintained, in good condition and working order and will operate the same, or cause the same to be operated, in an efficient and economical manner at a reasonable cost and in accordance with sound business principles. In operating and maintaining the System, the City will comply with all contractual provisions and agreements entered into by it and with all valid rules, regulations, directions or order of any governmental, administrative or judicial body promulgating same, noncompliance with which would materially and adversely affect the operation of the System. (c) Sale or Encumbrance of System. So long as any Parity Bond remains outstanding, the City will not sell, dispose of or, except as permitted in this Ordinance, further encumber the System; provided, however, that this provision shall not prevent the City from disposing of any portion of the System which is being replaced or is deemed by the City to be obsolete, worn out, surplus or no longer needed for the proper operation of the System. Any agreement pursuant to which the City contracts with a person, corporation, municipal corporation or political subdivision to operate the System or to lease and/or operate all or part of the System shall not be considered as an encumbrance of the System. (d) Insurance. The City further covenants and agrees that it will keep the System insured with insurers of good standing against risks, accidents or casualties against which and to the extent insurance is customarily carried by political subdivisions of the State of Texas operating similar properties, to the extent that such insurance is available. The cost of all such insurance, together with any additional insurance, shall be a part of the Maintenance and Operation Expenses. All net proceeds of such insurance shall be applied to repair or replace the insured property that is damaged or destroyed, or to make other capital improvements to the System, or to redeem Parity Bonds. (e) Accounts, Records and Audits. So long as any Parity Bonds remain outstanding, the City covenants and agrees that it will maintain a proper and complete system of records and accounts pertaining to the operation of the System in which full, true and proper entries will be made of all dealings, transactions, business and affairs which in any way affect or pertain to the System or the Gross Revenues or the Net Revenues thereof. The City shall after the close of each of its Fiscal Years cause an audit report of such records and accounts to be prepared by an independent certified public accountant or independent firm of certified public accountants. Each year promptly after such audit report is prepared, the City shall furnish a copy thereof without cost to the Municipal Advisory Council of Texas and any holders of Parity Bonds who shall, request same. All expenses incurred in preparing such audits shall be Maintenance and Operation Expenses. (f) Competition. To the extent it legally may, the City will not grant any franchise or allow for the. acquisition, construction or operation of any competing facilities which might be used as a substitute for the System and will prohibit the operation of any such competing facilities. (g) Pledge and Encumbrance of Net Revenues. The City covenants and represents that it has the lawful power to pledge the Net Revenues to the payment of the Parity Bonds and has lawfully exercised such power under the Constitution and laws of the State of Texas. The 23 #76026798_vl City further covenants and represents that, other than to the payment of the Parity Bonds, the Net Revenues are not and will not be pledged to the payment of any debt or obligation of the City, or in any other manner encumbered unless such pledge or encumbrance is junior and subordinate to the lien and pledge securing payment of the Parity Bonds. (h) Remedies. This Ordinance shall constitute a contract between the City and the holders of the Parity Bonds from time to time outstanding, and shall remain in effect until the Parity Bonds and the interest thereon shall be fully paid or discharged or provision therefor shall have been made as provided herein. In the event of a default in the payment of the principal of or interest on any of the Parity Bonds or a default in the performance of any duty or covenant provided by law or in this Ordinance, the holder or holders of any of the Parity Bonds, as appropriate, may pursue all legal remedies afforded by the Constitution and laws of the State of Texas to compel the City to remedy such default and to prevent further default or defaults. Without in any way limiting the generality of the foregoing, it is expressly provided that any holder of any of the Parity Bonds may at law or in equity, by suit, action, mandamus, or other proceedings, enforce and compel performance of all duties required to be performed by the City under this Ordinance, including the making and collection of reasonable and sufficient rates and charges for the use and services of the System, the deposit of the Gross Revenues thereof into the special funds as herein provided, and the application of such Gross Revenues and Net Revenues in the manner required in this Ordinance. Acceleration of payment of principal of or interest on the Parity Bonds shall not be a remedy of default. (i) Legal Holidays. In any case where the date fixed for payment of interest on or principal of the Parity Bonds or the date fixed for redemption of any Parity Bonds shall be a legal holiday or a day on which a paying agent for the Parity Bonds is authorized by law to close, then payment of interest or principal by such paying agent need not be made on such date but may be made on the next succeeding business day with the same force and effect as if made on the date fixed for such payment and no interest shall accrue for the period from such date to the date of actual payment. 0) Unavailability of Authorized Publication. If, because of the temporary or permanent suspension of any newspaper, journal or other publication, or, for any reason, publication of notice cannot be made meeting any requirements herein established, any notice required to be published by the provisions of this Ordinance shall be given in such other manner and at such time or times as in the judgment of the City shall most effectively approximate such required publication and the giving of such notice in such manner shall for all purposes of this Ordinance be deemed to be in compliance with the requirements for publication thereof. 24. Further Proceedings. After the Bonds to be initially issued shall have been executed, it shall be the duty of the Mayor and other appropriate officials and agents 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. 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 the Comptroller's bond clerk or an assistant bond clerk lawfully designated in writing to act for the Comptroller) shall 24 976026798_vl manually sign the Comptroller's Registration Certificate prescribed herein and the seal of said Comptroller shall be impressed or placed in facsimile, thereon. 25. Tax Exemption. (a) General. The City intends that the interest on the Bonds NOT be excludable from gross income for federal income tax purposes. (b) Registration. The Bonds will be issued in registered form. 26. Engagement of Professionals. The City Council hereby (i) confirms the engagement of RBC Capital Markets, LLC, as Municipal Advisor, to the City and (ii) confirms the engagement of Holland & Knight LLP, as bond counsel to the City, and (iii) the underwriting syndicate as identified in the Pricing Certificate. 27. Proceeds of Sale. Proceeds from the sale of the Bonds, together with other funds of the City, if any, shall, promptly upon receipt by the City, be applied as set forth in the Pricing Certificate. Any proceeds remaining after the accomplishment of such purposes, including interest earnings on the investment of such proceeds, shall be deposited to the Interest and Sinking Fund. 28. Bond Insurance. (a) In order to obtain the lowest attainable interest rates on the Bonds, the Pricing Officers are authorized to enter into a credit agreement with one or more Bond Insurers to obtain one or more bond insurance policies with respect to all or a portion of the Bonds as set forth in the Pricing Certificate. The Pricing Officers are authorized to execute and the City Clerk is authorized to attest and affix the City's seal to any documents required in connection with the purchase of any such policy or policies. The City hereby agrees to provisions set forth in the Pricing Certificate. 29. Paying Agent/Registrar Agreement. The paying agent/registrar agreement (the "Paying Agent Agreement") by and between the City and the Paying Agent, a form of which is attached to the Pricing Certificate, is hereby approved, together with such changes or revisions as may be necessary to accomplish the refunding or benefit the City, an is hereby authorized to be executed by the Mayor or Mayor Pro Tem and City Clerk for and on behalf of the City. 30. Official Statement. The Preliminary Official Statement and the Official Statement prepared in the initial offering and sale of the Bonds have been and are hereby authorized, approved and ratified as to form and content. The use of the Preliminary Official Statement and the Official Statement in the reoffering of the Bonds by the Underwriter is hereby approved, authorized and ratified. The proper officials of the City are hereby authorized to execute and deliver a Bond pertaining to the Preliminary Official Statement and the Official Statement as prescribed therein, dated as of the date set forth herein. 31. No Personal Liability. No recourse shall be had for payment of the principal of or interest on any Bonds or for any claim based thereon, or on this Ordinance, against any official 25 #76026798_vl or employee of the City or any person executing any Bonds. 32. Continuing Disclosure Undertaking. (a) Annual Reports. The City undertakes and agrees for the benefit of the Bond holders to provide annually to the MSRB, within six months after the end of each fiscal year, financial information and operating data with respect to the City of the general type included in the final Official Statement authorized in this Ordinance (i) under the headings "CITY WATERWORKS AND SEWER SYSTEM REVENUE DEBT," "ADMINISTRATION OF THE CITY," "THE SYSTEM -WATER AND SEWER RATES" and in APPENDIX B. The information to be provided shall include the financial statements of the City prepared in accordance with the accounting principles the City may be required to employ from time to time pursuant to State law or regulation and audited, if the audit is completed within the period during which they must be provided. If the audit of such financial statements is not completed within such period, then the City shall provide unaudited financial statements for the applicable fiscal year to the MSRB within such six month period, and audited financial statements when the audit report on such statement becomes available. If the City changes its fiscal year, it will notify the MSRB of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to the MSRB or filed with the SEC. (a) Material Event Notices. The City shall notify the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: i. Principal and interest payment delinquencies; ii. Non-payment related defaults, if material; iii. Unscheduled draws on debt service reserves reflecting financial difficulties; iv. Unscheduled draws on credit enhancements reflecting financial difficulties; V. Substitution of credit or liquidity providers, or their failure to perform; vi. Adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determination of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or detemunations with respect to the tax status of the security, or other material events affecting the tax status of the security; vii. Modifications to rights of Bondholders, if material; viii. Bond calls, if material, and tender offers; Ile #76026798_vl ix. Defeasances; X. Release, substitution or sale of property securing repayment of the securities, if material; xi. Rating changes; Note to paragraph (xi): For the purposes of the event identified in paragraph (k) of this section, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan.of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. xii. Bankruptcy, insolvency, or receivership, or similar event of the obligated person; xiii. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement or undertake such action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; xiv. Appointment of a successor or additional trustee or the change of name of a trustee, if material: xv. Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material; and xvi. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City any of which reflect financial difficulties. The City shall notify the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with section (a) above. All documents provided to the MSRB shall be accompanied by identifying information as prescribed by the MSRB. 27 #76026798_vl The City reserves the right to file all information and notices required under this Article through the facilities of DisclosureUSA or any other central post office approved by the SEC for such purpose. (b) Limitations, Disclaimers and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section for so long as, but only for so long as, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give notice of any deposit made in accordance with Texas law that causes Bonds no longer to be outstanding. The provisions of this Section are for the sole benefit of the holders and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION OR FROM ANY STATEMENT MADE PURSUANT TO THIS SECTION. HOLDERS OR BENEFICIAL OWNERS OF BONDS MAY SEEK AS THEIR SOLE REMEDY A WRIT OF MANDAMUS TO COMPEL THE CITY TO COMPLY WITH ITS AGREEMENT. No default by the City with respect to its continuing disclosure agreement shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status or type of operations of the City, if (i) the agreement, as amended, would have permitted the Underwriter to purchase or sell the Bonds in the initial primary offering in compliance with the Rule, taking into account any amendments or interpretations of such rule to the date of such amendment, as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the outstanding Bonds consent to such amendment, or (b) any person unaffiliated with the City (such as nationally recognized bond counsel) determines the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds. The City may also amend or repeal NX #76026798_vl the obligations and agreement in this Section if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, and the City may amend the agreement in its discretion in any other circumstance or manner, but in either case only to the extent that its right to do so would not prevent an underwriter from lawfully purchasing or reselling the Bonds in the primary offering of the Bonds in compliance with the Rule. If the City amends its agreement, it must include with the next financial information and operating data provided in accordance with its agreement an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of information and operating data so provided. 33. Repealer. All orders, resolutions, and ordinances, and parts thereof inconsistent herewith are hereby repealed to the extent of such inconsistency. 34. Effective Date. This Ordinance shall be in force and effect from and after its final passage, and it is so ordered. 35. Amendment of Ordinance. (a) If and to the extent permitted by this Ordinance, the owners of the Bonds aggregating in the principal amount of 51 % of the aggregate principal amount of the outstanding 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 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 Bonds; (2) Reduce the rate of interest borne by any of the outstanding Bonds; (3) Reduce the amount of the principal payable on the outstanding Bonds; (4) Modify the terms of payment of principal of or interest on the outstanding Bonds, or impose any conditions with respect to such payment; (5) Affect the owners of less than all of the outstanding Bonds then outstanding; (6) Change the percentage of the principal amount of outstanding 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 the Bonds. Such publication is not required, 29 #76026798_vl however, if notice in writing is given to each owner of the outstanding Bonds. Not less than thirty (30) days' notice of the proposed amendment shall also be given by the City to the Underwriter. (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 the 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 Bonds under this Ordinance of the City and all the owners of then outstanding Bonds, shall thereafter be determined, exercised and enforced hereunder, subject in all respect to such amendments. (e) Any consent given by the owner of the outstanding 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 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 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 Bonds, by any owner of Bonds, and the amount and number of such 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, Mayor Pro Tem, City Manager or Chief Financial Officer as to changes prior to issuance to comply with requirements by the Attorney General of Texas or Underwriter) 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 Bonds or 30 #76026798_vl required by the Underwriter 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 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 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 Bonds issued after the date of the adoption of such modification. 36. Related Matters. To satisfy in a timely manner all of the City's obligations under this Ordinance, the Mayor or Mayor Pro Tem, City Manager, Chief Financial Officer, City Clerk or any Deputy 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 the issuance of the Bonds, including without limitation, executing and delivering on behalf of the City all Bonds, 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 of this Ordinance. 37. 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. 38. Interpretations. All terms defined herein and all pronouns used in this Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles and headings of the sections of this Ordinance 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 any of the terms or provisions hereof. This Ordinance and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of the Parity Bonds and the validity of the lien on and pledge of the Net Revenues to secure the payment of the Parity Bonds. 39. 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. 31 #76026798_vl PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. ATTEST: City Clerk 32 - Mayor Becky Ames - #76026798_vl MOV,_11711-M Ow 0 M Mmil\ t1 1 M. f] ki M City of Beaumont, Texas Waterworks and Sewer Revenue Bonds, Series 2012 #5442898.3 Schedule I EXHIBIT "A" FORM OF PRICING CERTIFICATE #5442898.3 Schedule I July 28, 2020 Consider an ordinance authorizing the issuance of City of Beaumont, General Obligation Refunding Bonds, Series 2020A and City of Beaumont General Obligation Refunding Bonds, Taxable Series 2020B and authorizing the Mayor or City Manager and Chief Financial Officer to approve the amounts, interest rates, prices, and terms thereof for the series and to execute all documents related to the sale of the Bonds REAUMONT TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Todd Simoneaux, Chief Financial Officer MEETING DATE: July 28, 2020 REQUESTED ACTION: Council consider an ordinance authorizing the issuance of City of Beaumont, Texas,:General Obligation Refunding Bonds,: Series 2020A and City of Beaumont General Obligation Refunding Bonds, Taxable Series 2020B and authorizing the Mayor or City Manager and Chief Financial Officer to approve the amounts, interest rates, prices, and terms thereof for the series and to execute all documents related to the sale of the Bonds. BACKGROUND As presented in a work session last week, there is an estimated $111.1 million'of outstanding general obligation and certificates of obligation bonds that can be refunded in order to achieve a lower interest rate and savings. Historically; when the City issued or refunded obligation bonds, the sale would take place on a Monday in order to bring the transactions forward at the City Council meeting the following day, With the: quickly changing financial markets, the most favorable time to enter -the market may not be the day before a City Council meeting. Instead -the ability of a local government to time its entry into the financial markets and thereby obtain the best borrowing terms can significantly impact the borrowing costs. Section 1207.007 Texas Government Code allows a City to enter into the bond market at any time in accordance with parameters established and approved by the City Council. Through a parameter bond ordinance, a Councildelegates.fmal pricing authority to a Pricing Officer, usually the Mayor -or City. Manager and/or City Manager's Designee, and establishes and approves bond sale parameters such as maximum interest rate, minimum savings threshold for refunding, maximum aggregate principal amount of issue, final maturity date and expiration, of delegated authority which is normally six (6) months. The Pricing Officer can only approve the sale if all parameters are met: This results in flexibility such that the bond issue may be priced at any time and in an interest rate environment that is advantageous to the City rather than being locked into pricing on the date of the. Council meeting. The proposed parameters included in the proposed ordinance for Series 2020 as described above, includes: Delegated Pricing Officers: Mayor or City Manager and Chief. Financial Officer . Est. Maximum Principal Amount Series 202OA: $32 million Interest Rate: Not greater than 4.5% per annum Minimum Savings Threshold: 4.5% present value savings Expiration of Parameter Authority: December 31, 2020 Interest will be payable semiannually in March and September beginning March 2021. Est. Maximum Principal Amount Taxable Series 2020B: $82 million Interest Rate: Not greater. than 4.5% per annum o _. Minimum Savings Threshold: 4.5% present value savings Expiration of Parameter Authority: December 31, 2020 Interest.will be payable semiannually in March and September beginning March 2021. FUNDING SOURCE Principal and interest are paid from the Debt Service Fund. RECOMMENDATION Approval of the ordinance. - CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS COUNTY OF JEFFERSON I, the undersigned City Clerk of the City of Beaumont, Texas (the "City"), hereby certify as follows: 1. The City Council of the City convened in regular meeting on July , 2020, at the place stated in the notice of such meeting given as stated below, and the roll was called of the duly constituted official and members of said City Council, to wit: Becky Ames Mayor W.L. Pate, Jr. Councilmember Randy Feldschau Councilmember Taylor Neild Councilmember Mike Getz Councilmember Audwin Samuel Councilmember Robin Mouton Councilmember And all of said persons were present, thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020A IN ONE OR MORE SERIES OR SUBSERIES AS MAY BE FURTHER DESIGNATED; AUTHORIZING THE MAYOR OR THE CITY MANAGER AND THE CITY CHIEF FINANCIAL OFFICER TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES, AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; PROVIDING FOR THE PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; AUTHORIZING THE DEFEASANCE, FINAL PAYMENT, AND DISCHARGE OF CERTAIN OUTSTANDING OBLIGATIONS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE ESCROW AGREEMENTS; AUTHORIZING THE PURCHASE OF AND SUBSCRIPTION FOR CERTAIN ESCROWED SECURITIES; AUTHORIZING ESCROW VERIFICATION AND ENGAGEMENT OF AN ESCROW AGENT; AUTHORIZING BOND INSURANCE; AUTHORIZING THE #76268511_vl EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT AND OTHER RELATED DOCUMENTS; AND MAKING OTHER PROVISIONS REGARDING SUCH BONDS 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, such motion, carrying with it the adoption of said ordinance, prevailed and carried by the following vote: AYES: All those present voted "aye" NOES: ABSTENTIONS: 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; that the above and foregoing paragraph is a true, full, and correct excerpt from the said City Council's minutes of said meeting pertaining to the adoption of said ordinance; 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 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 that public notice of the date, hour, place and subject of said meeting was given as required by the Texas Open Meetings Act. SIGNED AND SEALED this 2020. City Clerk City of Beaumont, Texas (SEAL) -2- #76268511_vl ORDINANCE NO. ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020A IN ONE OR MORE SERIES OR SUBSERIES AS MAY BE FURTHER DESIGNATED; AUTHORIZING EACH OF THE MAYOR, THE CITY MANAGER AND THE ACTING CHIEF FINANCIAL OFFICER TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES, AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; PROVIDING FOR THE PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; AUTHORIZING THE DEFEASANCE, FINAL. PAYMENT, AND DISCHARGE OF CERTAIN OUTSTANDING OBLIGATIONS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE ESCROW AGREEMENTS; AUTHORIZING THE PURCHASE OF AND SUBSCRIPTION FOR CERTAIN ESCROWED SECURITIES; AUTHORIZING ESCROW VERIFICATION AND ENGAGEMENT OF AN ESCROW AGENT; AUTHORIZING BOND INSURANCE; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT AND OTHER RELATED DOCUMENTS; AND MAKING OTHER PROVISIONS REGARDING SUCH BONDS AUTHORIZING THE ISSUANCE OF CITY OF BEAUMONT, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020A Adopted: July , 2020 -3- #76268511_vl TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS....................................................... 2 Section1.01. Definitions........................................................................................................ 2 Section1.02. Findings............................................................................................................ 5 Section 1.03. Table of Contents, Titles and Headings........................................................... 5 Section1.04. Interpretation.................................................................................................... 5 ARTICLE II SECURITY FOR THE BONDS; INTEREST AND SINKING FUND........................................6 Section2.01. Tax Levy.......................................................................................................... 6 Section 2.02. Interest and Sinking Fund................................................................................ 6 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS.........................................................................................................6 Section 3.01. Amount, Purpose, Sale and Authorization....................................................... 6 Section 3.02. Designation, Date and Interest Payment Dates ................................................ 7 Section3.03. Sale of Bonds................................................................................................... 7 Section 3.04. Numbers Denomination Interest Rates and Maturities .................................... 8 Section 3.05. Redemption Prior to Maturity.......................................................................... 9 Section 3.06. Medium, Method and Place of Payment........................................................11 Section 3.07. Execution and Registration of Bonds............................................................ 12 Section3.08. Ownership...................................................................................................... 13 Section 3.09. Registration, Transfer and Exchange.............................................................13 Section3.10. Cancellation................................................................................................... 14 Section 3.11. Temporary Bonds........................................................................................... 14 Section 3.12. Replacement Bonds....................................................................................... 15 Section 3.13. Book -Entry Only System...............................................................................16 Section 3.14. Successor Securities Depository; Transfer Outside Book -Entry Only System............................................................................................................16 Section 3.15. Payments to Cede & Co................................................................................. -i- 17 #76268511_vl TABLE OF CONTENTS (continued) Page ARTICLE IV PAYING AGENT/REGISTRAR.................................................................................................17 Section 4.01. Appointment of Initial Paying Agent/Registrar............................................. 17 Section4.02. Qualifications................................................................................................. 17 Section 4.03. Maintaining Paying Agent/Registrar............................................................. 17 Section4.04. Termination.................................................................................................... 18 Section 4.05. Notice of Change to Owners.......................................................................... 18 Section 4.06. Agreement to Perform Duties and Functions ................................................. 18 Section 4.07. Delivery of Records to Successor..................................................................18 ARTICLE V FORMOF THE BONDS.............................................................................................................18 Section 5.01. Form Generally.............................................................................................. 18 Section 5.02. Form of the Bonds......................................................................................... 19 Section 5.03. CUSIP Registration ........................................ Error! Bookmark not defined. Section 5.04. Legal Opinion ................................................ Error! Bookmark not defined. - Section 5.05. Statement of Insurance ................................... Error! Bookmark not defined. ARTICLE VI SALE AND DELIVERY OF BONDS, DEPOSIT OF PROCEEDS...........................................19 Section 6.01. Sale of Bonds, Official Statement..................................................................19 Section 6.02. Use of Proceeds.............................................................................................. 20 Section 6.03. Control and Delivery of Bonds...................................................................... 20 ARTICLE VII INVESTMENTS..........................................................................................................................21 Section7.01. Investments.................................................................................................... 21 Section 7.02. Investment Income......................................................................................... 21 #76268511_vl TABLE OF CONTENTS (continued) Page ARTICLE VIII PARTICULAR REPRESENTATIONS AND COVENANTS....................................................21 Section 8.01. Payment of the Bonds.................................................................................... 21 Section 8.02. Other Representations and Covenants........................................................... 21 Section 8.03. Federal Income Tax Exclusion...................................................................... 22 Section 8.04. Authority for Further Actions........................................................................ 24 ARTICLE IX DEFAULTAND REMEDIES..................................................................................................... 24 Section 9.01. Events of Default........................................................................................... 24 Section 9.02. Remedies for Default..................................................................................... 25 Section 9.03. Remedies Not Exclusive................................................................................ 25 ARTICLE X DISCHARGE............................................................................................................................... 25 Section10.01. Discharge....................................................................................................... 25 ARTICLE XI CONTINUING DISCLOSURE UNDERTAKING.....................................................................25 Section11.01. Annual Reports.............................................................................................. 25 Section 11.02. Material Event Notices.................................................................................. 26 Section 11.03. Limitations, Disclaimers and Amendments ................................................... 27 ARTICLE XII REDEMPTION OF REFUNDED OBLIGATIONS; APPROVAL OF ESCROW AGREEMENT; PURCHASE OF ESCROWED SECURITIES............................................................................29 Section 12.01. Appointment of Escrow Agent; Approval of Escrow Agreement ................. 29 #76268511_vl TABLE OF CONTENTS (continued) Page Section 12.02. Purchase of Securities for Escrow Fund ........................................................ 29 Section 12.03. Redemption of Refunded Obligations; Verification Agent ........................... 29 ARTICLE XIII EFFECTIVE IMMEDIATELY....................................................................................................30 Section 13.01. Effective Immediately.................................................................................... 30 ARTICLE XIV ENGAGEMENT OF PROFESSIONALS...................................................................................30 Section 14.01. Engagement of Professionals......................................................................... 30 ARTICLE XV BOND INSURANCE...................................................................................................................30 ARTICLE XVI MISCELLANEOUS..................................................................................................................... 37 Section 16.01. Changes to Ordinance.................................................................................... 37 Section 16.02. Related Matters.............................................................................................. 37 Section 16.03. Individuals Not Liable................................................................................... 38 Section 16.04. Severability and Savings................................................................................ 38 Section16.05. Repealer......................................................................................................... 38 Section 16.06. Force and Effect............................................................................................. 38 Schedule I — Schedule of Refunded Obligations Exhibit A — Form of Pricing Certificate -iv- #76268511 vl ORDINANCE NO. ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020A IN ONE OR MORE SERIES OR SUBSERIES AS MAY BE FURTHER DESIGNATED; AUTHORIZING EACH OF THE MAYOR, THE CITY MANAGER AND THE ACTING CHIEF FINANCIAL OFFICER TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES, AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; PROVIDING FOR THE PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; AUTHORIZING THE DEFEASANCE, FINAL PAYMENT, AND DISCHARGE OF CERTAIN OUTSTANDING OBLIGATIONS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE ESCROW AGREEMENTS; AUTHORIZING THE PURCHASE OF AND SUBSCRIPTION FOR CERTAIN ESCROWED SECURITIES; AUTHORIZING ESCROW VERIFICATION AND ENGAGEMENT OF AN ESCROW AGENT; AUTHORIZING BOND INSURANCE; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT AND OTHER RELATED DOCUMENTS; AND MAKING OTHER PROVISIONS REGARDING SUCH BONDS WHEREAS, the City of Beaumont, Texas (the "City") has previously issued and there are presently outstanding certain obligations of the City; and WHEREAS, the City is authorized, pursuant to the general laws of the State of Texas, and particularly Chapter 1207, Texas Government Code, as amended, to issue its bonds for the purpose of refunding all or a portion of its outstanding obligations; and WHEREAS, by this Ordinance the City Council of the City (the "City Council") is authorizing the issuance of its bonds in the principal amount not exceed $32,000,000 for the purpose of refunding the City's outstanding obligations identified and described on Schedule I attached hereto and incorporated herein by reference for all purposes (the "Refunded Obligations"); and WHEREAS, the City shall by this Ordinance, in accordance with the provisions of Chapters 1371 and 1207, Texas Government Code, as amended, delegate to a Pricing Officer #76268511_vl (hereinafter designated) the authority to determine the principal amount of Bonds to be issued and negotiate the terms of sale thereof, and WHEREAS, the City Council hereby finds and determines that it is a public purpose and in the best interests of the City to issue the Bonds with such terms to be included in a pricing certificate (the "Pricing Certificate") to be executed by the Pricing Officer all in accordance with the provisions of Chapters 1371 and 1207, Texas Government Code, as amended; and WHEREAS, the City Council hereby finds that it may purchase a credit agreement in the form of a municipal bond insurance policy or policies with respect to the Bonds if it deem such purchase is cost effective; and WHEREAS, the City Council hereby finds, determines and declares that the refunding of the Refunded Obligations will result in a debt service savings representing a net present value savings for the City and that the issuance of the bonds herein authorized is necessary in order to lower the overall annual debt service requirements of the City; and WHEREAS, the City Council has found and determined that it is necessary and in the best interest of the City and its citizens that it authorize by this Ordinance the issuance and delivery of its bonds in a single series at this time; and WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and the public notice of the time, place and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; now therefore; WHEREAS, the City is a home -rule municipality that: (i) adopted its charter under Section 5, Article XI, Texas Constitution; (ii) has a population of more than 50,000 and (iii) has outstanding long-term indebtedness that is rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for a long-term obligation. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT, TEXAS: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.01. Definitions. Unless otherwise expressly provided or unless the context clearly indicates otherwise in this Ordinance, the following terms shall have the meanings specified below: "Bond" means any of the Bonds. "Bonds" means any of the City's bonds authorized by this Ordinance and designated as "City of Beaumont, Texas, General Obligation Refunding Bonds, Series 2020A." -2- #76268511_vl "Bond Date" means the date designated as the date of the Bonds by Section 3.02 of this Ordinance. "Bond Purchase Contract" means the Purchase Contract between the City and the Underwriter pertaining to the Bonds. "Business Day" means any day which is not a Saturday, Sunday or legal holiday, or day on which banking institutions in the State of Texas or the city in which the Designated Payment/Transfer Office is located are generally authorized or obligated by law or executive order to close. "City" means the City of Beaumont, Texas. "Closing Date" means the date of the initial delivery of and payment for the Bonds. "Code" means the Internal Revenue Code of 1986, as amended, and, with respect to a specific section thereof, such reference shall be deemed to include (a)( the Regulations promulgated under such section (b) any successor provision of similar import hereafter enacted, (c) any corresponding provision of any subsequent Internal Revenue Code and (d) the regulations promulgated under the provisions described in (b) and (c). "Designated Payment/Transfer Office" means (i) with respect to the initial. Paying Agent/Registrar named herein, its office in Houston, Texas, or at such other location designated by the Paying Agent/Registrar and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the City and such successor. "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. "DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Escrow Agent" means the entity identified in the Pricing Certificate. "Escrow Agreement" means that certain Escrow Agreement, dated as of the Closing Date, between the City and the Escrow Agent. "Escrow Fund" means the fund or funds established by the Escrow Agreement to hold cash and securities for the payment of debt service on the Refunded Obligations. "Escrow Securities" means (1) direct noncallable obligations of the United States, including obligations that are unconditionally guaranteed by the United States; (2) noncallable obligations of any agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of hereof, are rated as to investment quality by a nationally recognized investment rating firm not -3- #76268511_vl less than "AAA" or its equivalent; and (3) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date hereof, are rated as to investment quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent. "Event of Default" means any event of default as set forth in Section 9.01 of this Ordinance. "Fiscal Year" means such fiscal year as shall from time to time be set by the City Council. "Initial Bond" means the Initial Bond authorized by Section 3.04 of this Ordinance. "Interest and Sinking Fund" means the interest and sinking fund established by Section 2.02 of this Ordinance. "Interest Payment Date" means the date or dates on which interest on the Bonds is scheduled to be paid until their respective dates of maturity or prior redemption, such dates being identified in the Pricing Certificate. "Issuance Date" means the date on which the Bonds are delivered to and paid for by the Underwriter. "MSRB" means the Municipal Securities Rulemaking Board. "Owner" means the person who is the registered owner of a Bond or Bonds, as shown in the Register. "Paying Agent/Registrar" means the entity identified in the Pricing Certificate. "Pricing Certificate" shall mean a certificate or certificates to be signed by the Mayor, the City Manager or the Chief Financial Officer of the City pursuant to Section 3.03 hereof and delivered to the City Clerk, in substantially the form attached hereto as Exhibit A. "Pricing Officer" shall mean the Mayor, City Manager, or Chief Financial Officer of the City. "Record Date" means the close of business on the last business day of the month preceding the applicable Interest Payment Date. "Refunded Obligations" means the bonds of the City being refunded with a portion of the proceeds of the Bonds as described on Schedule I. "Register" means the bond register specified in Section 3.08(a) of this Ordinance. "Regulations" means the applicable proposed, temporary or final Treasury Regulations promulgated under the Code or, to the extent applicable to the Code, under the Internal Revenue Code of 1954, as such regulations may be amended or supplemented from time to time. -4- #76268511_vl. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "Special Payment Date" means the Special Payment Date prescribed by Section 3.05(b) of this Ordinance. "Special Record Date" means the Special Record Date prescribed by Section 3.05(b) of this Ordinance. "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the payment of principal of, redemption premium, if any, or interest on the Bonds as the same come due and payable or money set aside for the payment of Bonds duly called for redemption prior to maturity. "Underwriter" mean the Underwriter named in Section 14.01 of this Ordinance. Section 1.02. Findings. The declarations, determinations and findings declared, made and found in the preamble to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof. Section 1.03. Table of Contents, Titles and Headings. The table of contents, titles and headings of the Articles and Sections of this Ordinance 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 any of the terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. Section 1.04. Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) Any action required to be taken on a date which is not a Business Day shall be taken on the next succeeding Business Day and have the same effect as if taken on the date so required. (c) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein to sustain the validity of this Ordinance. (d) Article and section references shall mean references to articles and sections of this Ordinance unless otherwise designated. -5- #76268511_vl ARTICLE II SECURITY FOR THE BONDS; INTEREST AND SINKING FUND Section 2.01. Tax Levy. (a) Pursuant to the authority granted by the Texas Constitution and the laws of the State of Texas, there shall be levied and there is hereby levied for the current year and for each succeeding year thereafter while any of the Bonds or any interest thereon is outstanding and unpaid, an ad valorem tax on each one hundred dollars valuation of taxable property within the City, at a rate sufficient, within the limit prescribed by law, to pay the debt service requirements of the Bonds, being (i) the interest on the Bonds, and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% per annum (whichever amount is greater), when due and payable, full allowance being made for delinquencies and costs of collection. (b) The ad valorem tax thus levied shall be assessed and collected each year against all property appearing on the tax rolls of the City most recently approved in accordance with law and the money thus collected shall be deposited as collected to the Interest and Sinking Fund. (c) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and committed irrevocably to the payment of the principal of and interest on the Bonds when and as due and payable in accordance with their terms and this Ordinance. Section 2.02. Interest and Sinking Fund. (a) The City hereby establishes a special fund or account, to be designated the "City of Beaumont, Texas, General Obligation Refunding Bonds, Series 2020A Interest and Sinking Fund," said fund to be maintained at an official depository bank of the City separate and apart from all other funds and accounts of the City. (b) Money on deposit in or required by this Ordinance to be deposited to the Interest and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of the Bonds when and as due and payable in accordance with their terms and this Ordinance. ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section 3.01. Amount, Purpose, Sale and Authorization. (a) The Bonds shall be issued in fully registered form, without coupons, under and pursuant to the authority of the Ordinance in the total authorized aggregate principal -6- #76268511 vl amount of $32,000,000 for the purpose of (1) refunding the Refunded Obligations, and (2) paying certain costs related to the issuance of the Bonds. (b) The issuance of the Bonds is hereby authorized under and in accordance with the provisions hereof, the officers of the City are each hereby authorized to execute, attest, and affix the City's seal to the Bonds and to deliver the Bonds to the Attorney General of the State of Texas for approval, the Comptroller of Public Accounts for registration and the Paying Agent/Registrar for authentication, and thereafter to deliver such Bonds to the Underwriter pursuant to the Bond Purchase Agreement authorized in Section 6.01 herein. Section 3.02. Designation, Date and Interest Payment Dates. Bonds shall be designated as the "City of Beaumont, Texas, General Obligation Refunding Bonds, Series 2020A," and shall be dated the date described in the Pricing Certificate. The Bonds shall bear interest at the rates set forth below, from the later of the Issuance 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, payable on the dates described in the Pricing Certificate. The Bonds shall mature on the dates described in the Pricing Certificate. If interest on any Bond is not paid on any Interest Payment Date and continues unpaid for thirty (30) days thereafter, the Paying Agent/Registrar shall establish a new record date for the payment of such interest, to be known as a Special Record Date. The Paying Agent/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) days prior to the Special Record Date, to each affected Registered Owner as of the close of business on the day prior to mailing of such notice. Section 3.03. Sale of Bonds. As authorized by Chapters 1371 and 1207, Texas Government Code, as amended, the Pricing Officers are hereby authorized to act on behalf of the City in selling and delivering the Bonds and carrying out the other procedures specified in this Ordinance, including any additional designation or title by which the Bonds shall be known, the number of subseries of Bonds to be issued and the principal amount of each subseries, the price at which each series of the Bonds will be sold, the manner in which the Bonds should be delivered, the date or dates (which may be different dates for each series of the Bonds) on which the Bonds shall be sold, the form in which the Bonds shall be issued whether as current interest bonds, as compound interest bonds, or as a combination of current interest bonds and compound interest bonds, any additional designation or title by which the Bonds shall be known, the year or years in which each series of the Bonds will mature, the principal amount to mature in each of such years, the aggregate principal amount of each series of the Bonds, the rate of interest to be borne by each such maturity, the first interest payment date or compounding date, as the case may be, the dates, prices, and terms, if -7- #76268511_vl any, upon and at which each series of the Bonds shall be subject to redemption prior to maturity at the option of the City, as well as any mandatory sinking fund redemption provisions, or make - whole provisions, and such officers are also hereby authorized to act on behalf of the City in approving all other matters relating to the issuance, sale and delivery of the Bonds and the purchase of a bond insurance policy or policies for all or any portion of the Bonds, all of which shall be specified in one or more bond purchase agreements (the "Bond Purchase Agreement") for the Bonds substantially in the form approved by the Pricing Officers, in accordance with the terms below: (a) the price to be paid for each series of the Bonds shall not be less than 90% of the aggregate original principal amount of the current interest bonds plus accrued interest, if any, thereon from their date to their delivery; (b) the true interest cost rate for any series of Bond issued under this Ordinance shall not exceed 4.50%, which rate is not in excess of the maximum rate allowed under Section 1204.006, Texas Government Code; (c) the aggregate principal amount of each subseries of the Bonds shall not exceed the maximum amount authorized in Section 3.01; (d) in connection with each series of Bonds issued in whole or in part for refunding purposes, the refunding of the Refunded Obligations shall produce a net present value debt service savings of at least 4.50% of the principal amount of the Refunded Obligations being refunded with such series of Bonds; (e) no Bond shall mature later than March 1, 2040; (f) each series of the Bonds to be issued, prior to delivery, must have been rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for long-term obligations; and (g) to the extent the City shall purchase any Insurance Policy (one or more) issued by one or more Bond Insurers such policy or policies shall be determined to be most cost effective to the City for the Bonds and shall result in a net interest rate savings to the City which is greater than the costs of the premium of such policy or policies, as may be certified in the Pricing Certificate. Any finding by the Mayor, City Manager or the Chief Financial Officer relating to the sale and delivery of the Bonds and the purchase of bond insurance shall have the same force and effect as a finding or determination made by the City Council. Section 3.04. Numbers Denomination Interest Rates and Maturities. The Bonds shall be initially issued bearing the numbers, in the principal amounts and bearing interest at the rates set forth in Section 3.02 herein and may be transferred and exchanged as set out in this Ordinance. The Bonds shall mature as described in the Pricing Certificate. Bonds delivered in transfer of or in exchange for other Bonds shall be numbered in In #76268511_vl order of their authentication by the Paying Agent/Registrar, shall be in the denomination of $5,000 or integral multiples thereof and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are delivered. The Bonds shall be numbered separately from one upward, except the Initial Bond, which shall be numbered I-1. Section 3.05. Redemption Prior to Maturity. (a) Optional Redemption. The City reserves the right and option to redeem the Bonds as described in the Pricing Certificate. (b) Mandatory Sinking Fund Redemption. (i) The Bonds designated as "Term Bonds" in the form of Bond contained in Section 5.02 ("Term Bonds"), are subject to scheduled mandatory redemption and will be redeemed by the City, in part at a price equal to the principal amount thereof, without premium, plus accrued interest to the redemption date, out of moneys available for such purpose in the Debt Service Fund, on the dates and in the respective principal amounts as set forth in the form of Bond contained in Section 5.02. (ii) Prior to each scheduled mandatory redemption date, the Paying Agent/Registrar shall select for redemption by lot, or by any other customary method that results in a random selection, a principal amount of Term Bonds equal to the aggregate principal amount of such Term Bonds to be redeemed, shall call such Term Bonds for redemption on such scheduled mandatory redemption date, and shall give notice of such redemption, as provided in Section 5.02. (iii) The principal amount of the Term Bonds required to be redeemed on any redemption date pursuant to subparagraph (a) of this Subsection (c) shall be reduced, at the option of the City, by the principal amount of any Term Bonds which, at least 45 days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption. Notice of Redemption. . Notice of any redemption shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, at least 30 days prior to the date fixed for any such redemption, to the registered owner of each Bond, or portion thereof to be redeemed, at its address as it appeared on the Register on the close of business on the business day next preceding the date of mailing such notice; provided, however, that the failure to send, mail, or receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond. By the date fixed for any such redemption, due provision shall be made by the City with the Paying Agent/Registrar for the payment of the required redemption price for this Bond or the portion hereof which is to be so -9- #76268511_vl redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, this Bond, or the portion thereof which is to be so redeemed, thereby automatically shall be redeemed prior to its scheduled maturity, and shall not bear interest after the date fixed for its redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption price plus accrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/ Registrar shall record in the Register all such redemptions of principal of this Bond or any portion hereof. If a portion of any Bond shall be redeemed, a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in the Ordinance. The City, at least 45 days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Bonds to be redeemed. (c) Conditional Redemption. The City reserves the right in the case of an optional redemption to give notice of its election or direction to redeem Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected owners. Any Bonds subject to conditional redemption where redemption has been rescinded shall remain outstanding, and the rescission shall not constitute an Event of Default. Further, in the case of a conditional redemption, the failure of the City to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an Event of Default. (d) De easance. The City may defease the provisions of this Ordinance or any ordinance applicable to any Parity Bonds being defeased and discharge its obligation to the Owners of any or all of the Bonds, or any or all Parity Bonds to pay principal, interest and redemption premium, if any, 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 bonds being defeased plus interest thereon to the date of maturity or redemption; or (b) pursuant to an escrow or trust agreement, cash and/or direct bonds of, or bonds the principal of and interest on which are guaranteed by or secured by the pledge of direct bonds of the United -10- #76268511_vl States of America, in principal amounts and maturities and bearing interest at rates sufficient to provide for the timely payment of the principal amount and redemption premium, if any, of such bonds being defeased plus interest thereon to the date of maturity or redemption; provided, however, that if any of such bonds being defeased are to be redeemed prior to their respective dates of maturity, provision shall have been made for giving notice of redemption as provided in this Ordinance or ordinance applicable to the Parity Bonds being defeased. Upon such deposit, such bonds being defeased 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. Section 3.06. Medium, Method and Place of Payment. (a) The principal of and interest on the Bonds shall be paid in lawful money of the United States of America. (b) Interest on the Bonds shall be payable to the Owners as shown in the Register at the close of business on the Record Date; provided, however, that in the event of nonpayment of interest on a scheduled Interest Payment Date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date," which date shall be fifteen (15) days after the Special Record Date) shall be sent at least five (5) Business Days prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of each Owner of a Bond appearing in the Register at the close of business on the last Business Day next preceding the date of mailing of such notice. (c) Interest on each Bond shall be paid by check, dated as of the Interest Payment Date, and mailed on or before such Interest Payment Date, by United States mail, first class, postage prepaid, by the Paying Agent/Registrar to each Owner at the address of each Owner as it appears in the Register, or by such other customary banking arrangements acceptable to the Paying Agent/Registrar and the Owner; provided, however, that such Owner shall bear all risk and expense of such other customary banking arrangements. (d) The principal of each Bond shall be paid to the Owner thereof on the due date (whether at the maturity date or the date of prior redemption thereof) upon presentation and surrender of such Bond at the Designated Payment/Transfer Office. (e) If the date for the payment of the principal of or interest on the Bonds is not a Business Day, 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 and no additional interest shall be due by reason of nonpayment on the date on which such payment is otherwise stated to be due and payable. (f) Unclaimed Payments of amounts due hereunder shall be segregated in a special account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owner of the Bonds to which such Unclaimed Payments pertain. Subject -11- #76268511_vl to Title 6 of the Texas Property Code, any Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be applied to the next payment or payments on the Bonds thereafter coming due and, to the extent any such money remains three years after the retirement of all outstanding Bonds, such money shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar nor any other person shall be liable or responsible to any holders of such Bonds for any further payment of such unclaimed moneys or on account of any such Bonds, subject to Title 6 of the Texas Property Code. Section 3.07. Execution and Registration of Bonds. (a) The Bonds shall be executed on behalf of the City by the Mayor and the City Clerk, by their manual 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. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Bonds ceases to be such officer before the authentication of such Bonds or before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below, no Bond shall be valid or. obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Bond delivered at the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided herein, manually executed by the Comptroller of Public Accounts of the State of Texas, or by her duly authorized agent, which certificate shall be evidence that the Initial Bond has been duly approved by the Attorney General of the State of Texas and that it is a valid and binding obligation of the City, and that it has been registered by the Comptroller of Public Accounts of the State of Texas. (d) On the Closing Date, one Initial Bond representing the entire principal amount of all Bonds, payable in stated installments to the representative of the Underwriter, or its designee, executed by the manual or facsimile signatures of the Mayor and City Clerk of the City, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts, will be delivered to the -12- #76268511_vl representative of the Underwriter or its designee. Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the Initial Bond and deliver to DTC on behalf of the representative of the Underwriter one registered definitive Bond for each year of maturity of the Bonds in the aggregate principal amount of all Bonds for such maturity, registered in the name of Cede & Co., as nominee of DTC. Section 3.08. Ownership. (a) The City, the Paying Agent/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, for the further purpose of making and receiving payment of the interest thereon, and for all other purposes (except interest will be paid to the person in whose name such bond is registered on the Record Date or Special Record Date, as applicable), whether or not such Bond is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. (b) All payments made to the Owner of a Bond shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent of the sums paid. Section 3.09. Registration, Transfer and Exchange. (a) So long as any Bonds remain outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register") in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Bonds in accordance with this Ordinance. (b) The ownership of a Bond may be transferred only upon the presentation and surrender of the Bond at the Designated Payment/Transfer Office with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Bond shall be effective until entered in the Register. (c) The Bonds shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/Transfer Office for a Bond or Bonds of the same maturity and interest rate and in any denomination or denominations of any integral multiple of $5,000 and in an aggregate principal amount equal to the unpaid principal amount of the Bonds presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver Bonds exchanged for other Bonds in accordance with this Section. (d) Each exchange Bond delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and 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 exchange Bond is delivered. -13- #76268511_vl (e) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for a different denomination of any of the Bonds. The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer or exchange of a Bond. (f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Bond called for redemption, in whole or in part, within forry- five (45) calendar days prior to the date fixed for redemption; provided, however, such limitation shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Bond. Section 3.10. Cancellation. All Bonds paid or redeemed before scheduled maturity in accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper records shall be made regarding such payment, redemption, exchange or replacement. The Paying Agent/Registrar shall dispose of cancelled Bonds in accordance with the Securities Exchange Act of 1934. Section 3.11. Temnorary Bonds. (a) Following the delivery and registration of the Initial Bond and pending the preparation of definitive Bonds, the proper officers of the City may execute and, upon the City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Bonds that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Bonds in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers of the City executing such temporary Bonds may determine, as evidenced by their signing of such temporary Bonds. (b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the benefit and security of this Ordinance. (c) The City, without unreasonable delay, shall prepare, execute and deliver to the Paying Agent/Registrar the Bonds in definitive form; thereupon, upon the presentation and surrender of the Bonds in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall cancel the Bonds in temporary form and shall authenticate and deliver in exchange therefor Bonds of the same maturity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount, as the Bonds in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. -14- #76268511_vl Section 3.12. Replacement Bonds. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar,, 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 Underwriter, shall authenticate and deliver a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner first: (i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction or theft of such Bond; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar to save it and the City harmless; (iii) pays all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental charge that is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar. (c) If, after the delivery of such replacement Bond, a bona fide Underwriter of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide Underwriter, 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 Paying Agent/Registrar in connection therewith. (d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and payable or may pay such Bond when it becomes due and payable. (e) Each replacement Bond delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to -15- #76268511_vl 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. Section 3.13. Book -Entry System. Upon issuance of the Initial Bonds, the ownership of each such Bond shall be registered in the name of the Underwriter, as nominee of DTC. The definitive Bonds shall be initially issued in the form of a separate typewritten fully registered Bond for each of the maturities thereof. After initial issuance, the ownership of such Bonds shall be registered in the name of Cede & Co., as nominee of DTC, and except as provided in Section 3.11 hereof, all of the outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC. With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a Bondholder, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption or (iii) the payment to any DTC Participant or any other person, other than a Bondholder, as shown in the Register of any amount with respect to principal of or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute owner of such Bond for the purpose of payment of principal of and interest on the Bonds, for the purpose of all matters with respect to such Bond, for the purpose of registering transfer with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and interest on the Bonds only to or upon the order of the respective owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an owner, as shown in the Register, shall receive a Bond certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/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. Section 3.14. Successor Securities Depository; Transfer Outside Book -Entry Only System. In the event that the City or the Paying Agent/Registrar determines that DTC is incapable of discharging its responsibilities described herein and in the representation letter of the City to DTC, and that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, or in the event DTC discontinues the services described herein, the City or the Paying Agent/Registrar shall (i) appoint a successor securities depository, qualified to -16- #76268511_vl act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. Section 3.15. Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, in the manner provided in the representation letter of the City to DTC. ARTICLE IV PAYING AGENT/REGISTRAR Section 4.01. Appointment of Initial Paving A en�t/Re istrar. The Paying Agent/Registrar shall be appointed as described in the Pricing Certificate. Section 4.02. Qualifications. Each Paying Agent/Registrar shall be a commercial bank, a trust company organized under the laws of the State of Texas, or any other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Bonds. Section 4.03. Maintaining Pang A end istrar. (a) At all times while any Bonds are outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 4.02 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying Agent/Registrar specifying the duties and responsibilities of the City and the Paying Agent/Registrar in substantially the form presented at this meeting, the form, terms and provisions of which are hereby approved. The signature of the Mayor shall be attested by the City Clerk. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement, provided no such resignation shall be effective until a successor Paying Agent/Registrar has accepted the duties of Paying Agent/Registrar for the Bonds. -17- #76268511_vl Section 4.04. Termination. The City, upon not less than sixty (60) days' notice, reserves the right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination, provided, that such termination shall not be effective until a successor Paying Agent/Registrar has been appointed and has accepted the duties of Paying Agent/Registrar for the Bonds. Section 4.05. Notice of Change to Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by United States mail, first class, postage prepaid, at the address in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. Section 4.06. Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar and executing the Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. Section 4.07. Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent books and records relating to the Bonds to the successor Paying Agent/Registrar. ARTICLE V FORM OF THE BONDS Section 5.01. Form Generally. (a) The Bonds, including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas to accompany the Initial Bond, the Certificate of the Paying Agent/Registrar, and the Assignment form to appear on each of the Bonds, (i) shall be substantially in the form set forth in this Article with such omissions, insertions and variations as may be required by this Ordinance, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Bonds, as evidenced by their execution thereof. (b) Any portion of the text of any Bonds may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Bonds. -18- #76268511_vl (c) The definitive Bonds shall be typewritten, printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Bonds, as evidenced by their execution thereof. (d) The Initial Bond submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 5.02. Form of the Bonds. The Form of Bond as set forth in the Pricing Certificate is hereby approved. The form of the Bonds, including the form of the Registrar's Authentication Certificate, the form of Assignment, and the form of Registration Bond of the Comptroller of Public Accounts of the State of Texas which shall be attached or affixed to the Bonds initially issued shall be, respectively, substantially as set forth in the Pricing Certificate, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance. ARTICLE VI SALE AND DELIVERY OF BONDS, DEPOSIT OF PROCEEDS Section 6.01. Sale of Bonds, Official Statement. (a) The Bonds are hereby officially sold and awarded to and shall be delivered to the Underwriter at the price and on the terms specified in the Bond Purchase Contract, as presented at this meeting. The Mayor and the City Manager are hereby authorized and directed to execute and deliver such Bond Purchase Contract upon completion of the terms thereof in accordance with this Ordinance. It is hereby officially found, determined and declared that the terms of this sale are the most advantageous reasonably obtainable. The Bonds shall initially be registered in the name of the representative of the Underwriter, or its designee. (b) The form and substance of the Preliminary Official Statement, and any addenda, supplement or amendment thereto, and the final Official Statement (the "Official Statement") presented to and considered at this meeting, are hereby in all respects approved and adopted, and the Preliminary Official Statement is hereby deemed final as of its date (except for the omission of pricing and related information) within the meaning and for the purposes of paragraph (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The Mayor and City Clerk of the City are hereby authorized and directed to execute the same and deliver appropriate numbers of copies thereof to the Underwriter. The Official Statement as thus approved and delivered, with such appropriate variations as shall be approved by the Mayor of the City and the Underwriter, may be used by the Underwriter in the public offering and sale thereof. The use and distribution of the Preliminary Official Statement in the public offering of the Bonds by the Underwriter is hereby ratified, approved and confirmed. The City Clerk is hereby authorized and directed to include and maintain a copy of the Official Statement -19- #76268511_vl and any addenda, supplement or amendment thereto thus approved among the permanent records of this meeting. The use and distribution of the Official Statement and the preliminary public offering of the Bonds by the Underwriter is hereby ratified, approved and confirmed. (c) All officers of the City are authorized to execute such documents, certificates and receipts, and to make such elections with respect to the tax-exempt status of the Bonds, as they may deem appropriate in order to consummate the delivery of the Bonds. (d) The obligation of the Underwriter to accept delivery of the Bonds is subject to the Underwriter being furnished with the final, approving opinion of Holland & Knight LLP, Bond Counsel for the City, which opinion shall be dated and delivered the Closing Date. Section 6.02. Use of Proceeds. (a) The Pricing Certificate shall identify the amount to be transferred to the Paying Agent for redemption of the Refunded Obligations. (b) The remaining balance shall be used to pay the costs of issuing the Bonds; provided that any amount representing a rounding or contingency amount shall be applied solely to pay costs of issuance of the Bonds. Amounts remaining after payment of costs of issuance shall be deposited to the Interest and Sinking Fund and applied to the payment of debt service on the Bonds. Section 6.03. Control and Delivery of Bonds. (a) The Mayor of the City is hereby authorized to have control of the Initial Bond and all necessary records and proceedings pertaining thereto pending investigation, examination and approval of the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State of Texas and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. (b) After registration by the Comptroller of Public Accounts of the State of Texas, delivery of the Bonds shall be made to the representative of the Underwriter thereof under and subject to the general supervision and direction of the Mayor, against receipt by the City of all amounts due to the City under the terms of sale. (c) In the event the Mayor or City Clerk is absent or otherwise unable to execute any document or take any action authorized herein, the Mayor Pro Tem and the Assistant City Clerk, respectively, shall be authorized to execute such documents and take such actions, and the performance of such duties by the Mayor Pro Tern and the Assistant City Clerk shall for the purposes of this Ordinance have the same force and effect as if such duties were performed by the Mayor and City Clerk, respectively. -20- #76268511_vl ARTICLE VII INVESTMENTS Section 7.01. Investments. (a) Money in the Interest and Sinking Fund created by this Ordinance, at the option of the City, may be invested in such securities or obligations as permitted under applicable law as in effect on the date of the investment. (b) Any securities or obligations in which money in the Interest and Sinking Fund is so invested shall be kept and held in trust for the benefit of the Owners and shall be sold and the proceeds of sale shall be timely applied to the making of all payments required to be made from the Interest and Sinking Fund. Section 7.02. Investment Income. (a) Interest and income derived from investment of the Interest and Sinking Fund shall be credited to such Fund. (b) Interest and income derived from the investment of funds deposited pursuant to the Escrow Agreement shall be applied as provided in the Escrow Agreement. ARTICLE VIII PARTICULAR REPRESENTATIONS AND COVENANTS Section 8.01. Payment of the Bonds. On or before each Interest Payment Date for the Bonds and while any of the Bonds are outstanding and unpaid, there shall be made available to the Paying Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such interest on and principal of the Bonds as will accrue or mature on the applicable Interest Payment Date, maturity date or date of prior redemption. Such transfer of funds shall be made in such manner as will cause immediately available funds to be deposited with the Paying Agent/Registrar not later than the close of business on the Business Day next preceding the date of payment for the Bonds. Section 8.02. Other Representations and Covenants. (a) The City will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance and in each Bond; the City will promptly pay or cause to be paid the principal of and interest on each Bond on the dates and at the places and manner prescribed in such Bond; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. -21- #76268511_vl (b) The City is duly authorized under the laws of the State of Texas to issue the Bonds; all action on its part for the creation and issuance of the Bonds has been duly and effectively taken; and the Bonds in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. Section 8.03. Federal Income Tax Exclusion. (a) General. The City intends that the interest on the Bonds be excludable from gross income for federal income tax purposes pursuant to sections 103 and 141 through 150 of the Code. 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 (i) cause the interest on the Bonds to be includable in gross income, as defined in section 61 of the Code, for federal income tax purposes or (ii) result in the violation of or failure to satisfy any provision of Section 103 and 141 through 150 of the Code. In particular, the City covenants and agrees to comply with each requirement of this Section 8.03; provided, however, that the City will not be required to comply with any particular requirement of this Section 8.03 if the City has received an opinion of nationally recognized bond counsel ("Counsel's Opinion") that (i) such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or (ii) compliance with some other requirement will satisfy the applicable requirements of the Code and the Regulations, in which case compliance with such other requirement specified in such Counsel's Opinion will constitute compliance with the corresponding requirement specified in this Section 8.03. (b) No Private Use or Payment and No Private Loan Financing. The City covenants and agrees that it will make such use of the proceeds of the Bonds including interest or other investment income derived from Bond proceeds, regulate the use of property financed or refinanced, directly or indirectly, with such proceeds, and take such other and further action as may be required so that the Bonds will not be "private activity bonds" within the meaning of section 141 of the Code. The City will 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 Bonds are delivered, the proceeds of the Refunded Obligations have not been used and the proceeds of the Bonds will not be used, in a manner that would cause the Bonds to be "private activity bonds" within the meaning of section 141 of the Code. (c) No Federal Guarantee. 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 Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code, except as permitted by section 149(b)(3) of the Code. (d) No Hedge Bonds. The City covenants and agrees that it has not and will not take any action, and has not knowingly omitted and will not knowingly omit to take any action, within its control, that, if taken or omitted, respectively, would cause the Bonds to be "hedge bonds" within the meaning of section 149(g) of the Code. Moreover, the City will certify, through an authorized officer, employee or agent, that, based upon -22- #76268511_vl all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, the proceeds of the Refunded Obligations have not been used in a manner that would cause the Refunded Obligations or the Bonds to be "hedge bonds" within the meaning of Section 149(g) of the Code. (e) No Arbitrage. The City covenants and agrees that it will make such use of the proceeds of the Bonds including interest or other investment income derived from Bond proceeds, regulate investments of proceeds of the Bonds, and take such other and further action as may be required so that the Bonds will not be "arbitrage bonds" within the meaning of section 148(a) of the Code. The City will 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 Bonds are delivered, the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of section 148(a) of the Code. (f) Arbitrage Rebate. If the City does not qualify for an exception to the requirements of section 148(f) of the Code relating to the required rebate to the United States, 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 (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 Bonds as may be required to calculate the amount earned on the investment of the gross proceeds of the Bonds 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 that do not represent gross proceeds of any bonds of the City, (ii) calculate at such times as are required by the Regulations, the amount earned from the investment of the gross proceeds of the Bonds that is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Bonds or on such other dates as may be permitted under the Regulations, 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 Bonds 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 a 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. (g) Information Reporting. 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 Bonds are issued, an information statement concerning the Bonds, all under and in accordance with section 149(e) of the Code. (h) Record Retention. The City will retain all pertinent and material records relating to the use and expenditure of the proceeds of the Bonds until three years after the -23- #76268511_vl last Bond is redeemed, or such shorter period as authorized by subsequent guidance issued by the Department of Treasury, if applicable. All records will be kept in a manner that ensures their complete access throughout the retention period. For this purpose, it is acceptable that such records are kept either as hardcopy books and records or in an electronic storage and retrieval system, provided that such electronic system includes reasonable controls and quality assurance programs that assure the ability of the City to retrieve and reproduce such books and records in the event of an examination of the Bonds by the Internal Revenue Service. (i) Registration. The Bonds will be issued in registered form. 0) Deliberate Actions. The City will not take a deliberate action (as defined in section 1.141-2(d)(3) of the Regulations) that causes the Bonds to fail to meet any requirement of Section 141 of the Code regarding the use of Bond proceeds after the issue date of the Bonds unless an appropriate remedial action is permitted by Section 1.141-12 of the Regulations, the City takes such remedial action and the City receives a Counsel's Opinion that such remedial action cures any failure to meet the requirements of Section 141 of the Code. (k) Continuing Obligation. Notwithstanding any other provision of this Order, the City's obligations under the covenants and provisions of this Section 8.03 will survive the defeasance and discharge of the Bonds for as long as such matters are relevant to the exclusion from gross income for federal income tax purposes of interest on the Bonds. Section 8.04. Authority for Further Actions. The Mayor of the City is hereby authorized to take such other action as may be necessary to make effective the designation herein. ARTICLE IX DEFAULT AND REMEDIES Section 9.01. Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of or interest on any of the Bonds when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement or obligation of the City, which default materially and adversely affects the rights of the Owners, including but not limited to, their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of sixty (60) days after notice of such default is given by any Owner to the City. -24- #76268511_vl Section 9.02. Remedies for Default. (a) Upon the happening of any Event of Default, then any Owner or an authorized representativethereof, including but not limited to, a trustee or trustees therefor, may proceed against the City for the purpose of protecting and enforcing the rights of the Owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Owners hereunder or any combination of such remedies. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of Bonds then outstanding. Section 9.03. Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. ARTICLE X DISCHARGE Section 10.01. Discharge. The Bonds may be refunded, discharged or defeased in any manner permitted by applicable law. ARTICLE XI CONTINUING DISCLOSURE UNDERTAKING Section 11.01. Annual Reports. (a) The City shall provide annually to the MSRB, (i) within 270 days after the end of each Fiscal Year of the City ending in or after 2020, financial information and operating data with respect to the City of the general type included in the Official Statement under the headings "TAX INFORMATION," FINANCIAL INFORMATION," and "DEBT INFORMATION," and including financial statements of the City if audited financial statements of the City are then available, and (ii) if not -25- #76268511_vl provided as part such financial information and operating data, audited financial statements of the City, when and if available. Any financial statements so to be provided shall be (i) prepared in accordance with the accounting principles described in the rules to the financial statements of the most recently concluded Fiscal Year, or such other accounting principles as the City may be required to employ, from time to time, by State law or regulation, and (ii) audited, if the City commissions an audit of such statements. (b) If the City changes its Fiscal Year, it will notify each the MSRB of the change (and of the date of the new Fiscal Year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. (c) The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document) that theretofore has been provided to the MSRB or filed with the SEC. Section 11.02. Material Event Notices. The City shall notify the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: (a) Principal and interest payment delinquencies; (b) Non-payment related defaults, if material; (c) Unscheduled draws on debt service reserves reflecting financial difficulties; (d) Unscheduled draws on credit enhancements reflecting financial difficulties; (e) Substitution of credit or liquidity providers, or their failure to perform; (f) Adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determination of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; (g) Modifications to rights of Bondholders, if material; (h) Bond calls, if material, and tender offers; (i) Defeasances; 0) Release, substitution or sale of property securing repayment of the securities, if material; -26- #76268511_vl (k) Rating changes; Note to paragraph (k): For the purposes of the event identified in paragraph (k) of this section, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. (1) Bankruptcy, insolvency, or receivership, or similar event of the obligated person; (m) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement or undertake such action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (n) Appointment of a successor or additional paying agent/registrar or the change of name of a paying agent/registrar, if material; (o) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material; and (p) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City any of which reflect financial difficulties. The City shall notify the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with Section 11.01 of this Ordinance by the time required by such Section. The City reserves the right to file all information and notices required under this Article through the facilities of DisclosureUSA or any other central post office approved by the SEC for such purpose. Section 11.03. Limitations, Disclaimers and Amendments. (a) The City shall be obligated to observe and perform the covenants specified in this Article for so long as, but only for so long as, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in -27- #76268511_vl any event will give notice of any deposit made in accordance with Article XI that causes Bonds no longer to be Outstanding. (b) The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Article or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITH/WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. (c) No default by the City in observing or performing its obligations under this Article shall comprise a breach of or default under the Ordinance for purposes of any other provisions of this Ordinance. (d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. (e) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (i) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (A) the Owners of a majority in aggregate principal amount (or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (B) a person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Owners and beneficial owners of the Bonds. The provisions of this Article may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that -28- #76268511_vl reservation of the City's right to do so would not prevent Underwriter of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If the City so amends the provisions of this Article, it shall include with any amended financial information or operating data next provided in accordance with Section 11.01 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. ARTICLE XII REDEMPTION OF REFUNDED OBLIGATIONS; APPROVAL OF ESCROW AGREEMENT; PURCHASE OF ESCROWED SECURITIES Section 12.01. Appointment of Escrow Agent; Approval of Escrow Agreement. The escrow agent identified in the Pricing Certificate is hereby appointed Escrow Agent for the purpose of refunding the Refunded Obligations. The Mayor and the City Clerk are hereby authorized and directed to execute the Escrow Agreement on behalf of the City, the term and provisions of which are hereby approved. Section 12.02. Purchase of Securities for Escrow Fund. Pursuant to Chapter 1207, the Mayor is hereby authorized to make necessary arrangements for the purchase of the Escrow Securities referenced in the Escrow Agreement, including, without limitation, the execution of such documents, certificates or instruments as may be necessary in connection therewith including the execution of subscriptions for the purchase of the Escrow Securities. All actions of the Mayor taken prior to the date of this Ordinance in connection with making arrangements for the purchase of such Escrow Securities are hereby ratified and affirmed. Section 12.03. Redemption of Refunded Obligations; Verification Agent. (a) The Refunded Obligations are hereby called for redemption prior to maturity on the dates and at the redemption prices set forth in Schedule I. The City Clerk is hereby authorized and directed to cause to be delivered to the paying agent/registrar for the Refunded Obligations a certified copy of this Ordinance calling the Refunded Obligations for redemption. The delivery of this Ordinance to the paying agent/registrar for the Refunded Obligations shall constitute the giving of notice of redemption to the paying agent/registrar for the Refunded Obligations, and such paying agent/registrar is hereby authorized and directed to give notice of redemption to the owners of the Refunded Obligations in accordance with the requirements of the respective ordinances authorizing the issuance thereof. Following the deposit to the Escrow Fund, the Refunded Obligations shall be payable solely from and secured by the cash and securities on deposit in the Escrow Fund for the purpose of refunding the Refunded Obligations and shall case to be payable from any other source. If necessary a verification agent shall be appointed as described in the Pricing Certificate. -29- #76268511_vl /.M.�II ceMNoil EFFECTIVE IMMEDIATELY Section 13.01. Effective Immediately. This Ordinance shall become effective immediately upon its adoption at this meeting pursuant to Section 1201.028, Texas Government Code. ARTICLE XIV ENGAGEMENT OF PROFESSIONALS Section 14.01. Engagement of Professionals. The City Council hereby (i) confirms the engagement of RBC Capital Markets, LLC, as Municipal Advisor, to the City and (ii) confirms the engagement of Holland & Knight LLP, as bond counsel to the City, and (iii) the underwriting syndicate as identified in the Pricing Certificate. ARTICLE XV BOND INSURANCE In order to obtain the lowest attainable interest rates on the Bonds, the Mayor is authorized to enter into a credit agreement with one or more Insurers to obtain one or more bond insurance policies with respect to all or a portion of the Bonds. The Mayor is authorized to execute and the City Clerk or City Clerk is authorized to attest and affix the City's seal to any documents required in connection with the purchase of any such policy or policies. The City hereby agrees to the following: (a) "Insurance Policy" shall be defined as follows: "the insurance policy issued by the Insurer guaranteeing the scheduled payment of principal of and interest on the Bonds when due". "Insurer" shall be defined as follows: "Assured Guaranty Municipal Corp., a New York stock insurance company, or any successor thereto or assignee thereof'. (b) The prior written consent of the Insurer shall be a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the Debt Service Reserve Fund, if any. Notwithstanding anything to the contrary set forth in the Ordinance, amounts on deposit in the Debt Service Reserve Fund shall be applied solely to the payment of debt service due on the Bonds. (c) The Insurer shall be deemed to be the sole holder of the Insured Bonds for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the holders of the Bonds insured by it are entitled to take pursuant to the section or article of the Ordinance pertaining to (i) defaults and remedies -30- #76268511_vl and (ii) the duties and obligations of the Paying Agent. In furtherance thereof and as a term of the Ordinance and each Bond, the Paying Agent and each Bondholder appoint the Insurer as their agent and attorney -in -fact and agree that the Insurer may at any time during the continuation of any proceeding by or against the Issuer under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding") direct all matters relating to such Insolvency Proceeding, including without limitation, (A) all matters relating to any claim or enforcement proceeding in connection with an Insolvency Proceeding (a "Claim"), (B) the direction of any appeal of any order relating to any Claim, (C) the posting of any surety, supersedeas or performance bond pending any such appeal, and (D) the right to vote to accept or reject any plan of adjustment. In addition, the Paying Agent and each Bondholder delegate and assign to the Insurer, to the fullest extent permitted by law, the rights of the Paying Agent and each Bondholder in the conduct of any Insolvency Proceeding, including, without limitation, all rights of any party to an adversary proceeding or action with respect to any court order issued in connection with any such Insolvency Proceeding. Remedies granted to the Bondholders shall expressly include mandamus. (d) The security for the Bonds shall include a pledge of any agreement with any underlying obligor that is a source of payment for the Bonds and a default under any such agreement shall constitute an Event of Default under the Ordinance. If acceleration is permitted under the Ordinance, the maturity of Bonds insured by the Insurer shall not be accelerated without the consent of the Insurer and in the event the maturity of the Bonds is accelerated, the Insurer may elect, in its sole discretion, to pay accelerated principal and interest accrued on such principal to the date of acceleration (to the extent unpaid by the Issuer) and the Paying Agent shall be required to accept such amounts. Upon payment of such accelerated principal and interest accrued to the acceleration date as provided above, the Insurer's obligations under the Insurance Policy with respect to such Bonds shall be fully discharged. No grace period for a covenant default shall exceed 30 days or be extended for more than 60 days, without the prior written consent of the Insurer. No grace period shall be permitted for payment defaults. (e) The Insurer shall be included as a third parry beneficiary to the Ordinance. Upon the occurrence of an extraordinary optional, special or extraordinary mandatory redemption in part, the selection of Bonds to be redeemed shall be subject to the approval of the Insurer. The exercise of any provision of the Ordinance which permits the purchase of Bonds in lieu of redemption shall require the prior written approval of the Insurer if any Bond so purchased is not cancelled upon purchase. Any amendment, supplement, modification to, or waiver of, the Ordinance or any other transaction document, including any underlying security agreement (each a "Related Document"), that requires the consent of Bondowners or adversely affects the rights and interests of the Insurer shall be subject to the prior written consent of the Insurer. (f) Unless the Insurer otherwise directs, upon the occurrence and continuance of an Event of Default or an event which with notice or lapse of time would constitute an Event of Default, amounts on deposit in the Construction Fund shall not be disbursed, but -31- #76268511_vl shall instead be applied to the payment of debt service or redemption price of the Bonds. The rights granted to the Insurer under the Ordinance or any other Related Document to request, consent to or direct any action are rights granted to the Insurer in consideration of its issuance of the Insurance Policy. Any exercise by the Insurer of such rights is merely an exercise of the Insurer's contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the Bondholders and such action does not evidence any position of the Insurer, affirmative or negative, as to whether the consent of the Bondowners or any other person is required in addition to the consent of the Insurer. (g) Only (1) cash, (2) non -callable direct obligations of the United States of America ("Treasuries"), (3) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (4) subject to the prior written consent of the Insurer, pre -refunded municipal obligations rated "AAA" and "Aaa" by S&P and Moody's, respectively, or (5) subject to the prior written consent of the Insurer, securities eligible for "AAA" defeasance under then existing criteria of S&P or any combination thereof, shall be used to effect defeasance of the Bonds unless the Insurer otherwise approves. Any obligations or securities deposited as provided in this paragraph, shall qualify under Section 1207.062(b) of .the Local Government Code, as amended. To accomplish defeasance, the Issuer shall cause to be delivered (i) a report of an independent firm of nationally recognized certified public accountants or such other accountant as shall be acceptable to the Insurer ("Accountant") verifying the sufficiency of the escrow established to pay the Bonds in full on the maturity or redemption date ("Verification"), (ii) an Escrow Deposit Agreement (which shall be acceptable in form and substance to the Insurer), (iii) an opinion of nationally recognized bond counsel to the effect that the Bonds are no longer "Outstanding" under the Ordinance and (iv) a certificate of discharge of the Paying Agent with respect to the Bonds; each Verification and defeasance opinion shall be acceptable in form and substance, and addressed, to the Issuer, Paying Agent and Insurer. The Insurer shall be provided with final drafts of the above -referenced documentation not less than five business days prior to the funding of the escrow. Bonds shall be deemed Outstanding under the Ordinance unless and until they are in fact paid and retired or the above criteria are met. Notwithstanding the above, in the event any provisions in this Section 30(1) conflict with Section 1207.033 of the Texas Government Code, as amended ("Section 1207.033"), the provisions of Section 1207.033 shall prevail. (h) Amounts paid by the Insurer under the Insurance Policy shall not be deemed paid for purposes of the Ordinance and the Bonds relating to such payments shall remain Outstanding and continue to be due and owing until paid by the Issuer in -32- #76268511_vl accordance with the Ordinance. The Ordinance shall not be discharged unless all amounts due or to become due to the Insurer have been paid in full or duly provided for. (i) Each of the Issuer and Paying Agent covenant and agree to take such action (including, as applicable, filing of UCC financing statements and continuations thereof) as is necessary from time to time to preserve the priority of the pledge of the Trust Estate under applicable law. Claims Upon the Insurance Policy and Payments by and to the Insurer. If, on the third Business Day prior to the related scheduled interest payment date or principal payment date ("Payment Date") there is not on deposit with the Paying Agent, after making all transfers and deposits required under the Ordinance, moneys sufficient to pay the principal of and interest on the Bonds due on such Payment Date, the Paying Agent shall give notice to the Insurer and to its designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on such Business Day. If, on the second Business Day prior to the related Payment Date, there continues to be a deficiency in the amount available to pay the principal of and interest on the Bonds due on such Payment Date, the Paying Agent shall make a claim under the Insurance Policy and give notice to the Insurer and the Insurer's Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay interest on the Bonds and the amount required to pay principal of the Bonds, confirmed in writing to the Insurer and the Insurer's Fiscal Agent by 12:00 noon, New York City time, on such second Business Day by filling in the form of Notice of Claim and Certificate delivered with the Insurance Policy. The Paying Agent shall designate any portion of payment of principal on Bonds paid by the Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Bonds registered to the then current Bondholder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Insurer, registered in the name of Assured Guaranty Municipal Corp., in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Paying Agent's failure to so designate any payment or issue any replacement Bond shall have no effect on the amount of principal or interest payable by the Issuer on any Bond or the subrogation rights of the Insurer. The Paying Agent shall keep a complete and accurate record of all funds deposited by the Insurer into the Policy Payments Account (defined below) and the allocation of such funds to payment of interest on and principal of any Bond. The Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Paying Agent. Upon payment of a claim under the Insurance Policy, the Paying Agent shall establish a separate special purpose trust account for the benefit of Bondholders referred to herein as the "Policy Payments Account" and over which the Paying Agent shall have exclusive control and sole right of withdrawal. The Paying Agent shall receive any amount paid under the Insurance Policy in trust on behalf of Bondholders and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Paying Agent to Bondholders -33- #76268511_vl in the same manner as principal and interest payments are to be made with respect to the Bonds under the sections hereof regarding payment of Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments. Notwithstanding anything herein to the contrary, the Issuer agrees to pay to the Insurer (i) a sum equal to the total of all amounts paid by the Insurer under the Insurance Policy (the "Insurer Advances"); and (ii) to the extent permitted by law and subject to annual appropriation, interest on such Insurer Advances from the date paid by the Insurer until payment thereof in full, payable to the Insurer at the Late Payment Rate per annum (collectively, the "Insurer Reimbursement Amounts"). "Late Payment Rate" means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in The City of New York, as its prime or base lending rate (any change in such rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest rate of interest on the Bonds and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. The Issuer hereby covenants and agrees that the Insurer Advances are secured by a lien on and pledge of the Net Revenues and payable from such Net Revenues on a parity with debt service due on the Bonds. Funds held in the Policy Payments Account shall not be invested by the Paying Agent and may not be applied to satisfy any costs, expenses or liabilities of the Paying Agent. Any funds remaining in the Policy Payments Account following a Bond payment date shall promptly be remitted to the Insurer. 0) The Insurer shall, to the extent it makes any payment of principal of or interest on the Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Insurance Policy (which subrogation rights shall also include the rights of any such recipients in connection with any Insolvency Proceeding). Each obligation of the Issuer to the Insurer under the Related Documents shall survive discharge or termination of such Related Documents. The Issuer shall pay or reimburse the Insurer any and all charges, fees, costs and expenses that the Insurer may reasonably pay or incur in connection with (i) the administration, enforcement, defense or preservation of any rights or security in any Related Document; (ii) the pursuit of any remedies under the Ordinance or any other Related Document or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to, the Ordinance or any other Related Document whether or not executed or completed, or (iv) any litigation or other dispute in connection with the Ordinance or any other Related Document or the transactions contemplated thereby, other than costs resulting from the failure of the Insurer to honor its obligations under the Insurance Policy. The Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Ordinance or any other Related Document. After payment of reasonable expenses of the Paying Agent, the application of funds realized upon default shall be applied to the payment of expenses of the Issuer or rebate only after the payment of past due and current debt service on the Bonds and amounts required to restore the Debt Service Reserve Fund to the Debt Service Reserve Requirement. The Insurer shall be entitled to pay principal or interest on the Bonds that -34- #76268511_vl shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Insurance Policy) and any amounts due on the Bonds as a result of acceleration of the maturity thereof in accordance with the Ordinance, whether or not the Insurer has received a Notice of Nonpayment (as such terms are defined in the Insurance Policy) or a claim upon the Insurance Policy. The notice address of the Insurer is: Assured Guaranty Municipal Corp., 31 West 52nd Street, New York, New York 10019, Attention: Managing Director — Surveillance, Re: Policy No. 216211-N, Telephone: (212) 826-0100; Telecopier: (212) 339-3556. In each case in which notice or other communication refers to an Event of Default, then a copy of such notice or other communication shall also be sent to the attention of the General Counsel and shall be marked to indicate "URGENT MATERIAL ENCLOSED." (k) The Insurer shall be provided with the following information by the Issuer or Paying Agent, as the case may be: (i) Annual audited financial statements within 180 days (or such longer period agreed to by AGM) after the end of the Issuer's fiscal year (together with a certification of the Issuer that it is not aware of any default or Event of Default under the Ordinance), and the Issuer's annual budget within 30 days after the approval thereof together with such other information, data or reports as the Insurer shall reasonably request from time to time; (ii) Notice of any draw upon the Debt Service Reserve Fund within two Business Days after knowledge thereof other than (i) withdrawals of amounts in excess of the Debt Service Reserve Requirement and (ii) withdrawals in connection with a refunding of Bonds; (iii) Notice of any default known to the Paying Agent or Issuer within five Business Days after knowledge thereof; (iv) Prior notice of the advance refunding or redemption of any of the Bonds, including the principal amount, maturities and CUSIP numbers thereof, (v) Notice of the resignation or removal of the Paying Agent and Bond Registrar and the appointment of, and acceptance of duties by, any successor thereto; (vi) Notice of the commencement of any proceeding by or against the Issuer or Obligor commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding"); (vii) Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest on, the Bonds; -35- #76268511_vl (viii) A full original transcript of all proceedings relating to the execution of any amendment, supplement, or waiver to the Related Documents; and (ix) All reports, notices and correspondence to be delivered to Bondholders under the terms of the Related Documents. In addition, to the extent that the Issuer has entered into a continuing disclosure agreement, covenant or undertaking with respect to the Bonds, all information furnished pursuant to such agreements shall also be provided to the Insurer, simultaneously with the furnishing of such information. (1) The Insurer shall have the right to receive such additional information as it may reasonably request. The Issuer will permit the Insurer to discuss the affairs, finances and accounts of the Issuer or any information the Insurer may reasonably request regarding the security for the Bonds with appropriate officers of the Issuer and will use commercially reasonable efforts to enable the Insurer to have access to the facilities, books and records of the Issuer on any business day upon reasonable prior notice. The Issuer shall notify the Insurer of any failure of the Issuer to provide notices, certificates and other information under the transaction documents. Notwithstanding satisfaction of the other conditions to the issuance of Additional Bonds set forth in the Ordinance, no such issuance may occur (1) if an Event of Default (or any event which, once all notice or grace periods have passed, would constitute an Event of Default) exists unless such default shall be cured upon such issuance and (2) unless the Debt Service Reserve Fund is fully funded at the Debt Service Reserve Requirement (including the proposed issue) upon the issuance of such Additional Bonds, in either case unless otherwise permitted by the Insurer. In determining whether any amendment, consent, waiver or other action to be taken, or any failure to take action, under the Ordinance would adversely affect the security for the Bonds or the rights of the Bondholders, the Paying Agent shall consider the effect of any such amendment, consent, waiver, action or inaction as if there were no Insurance Policy. No contract shall be entered into or any action taken by which the rights of the Insurer or security for or sources of payment of the Bonds may be impaired or prejudiced in any material respect except upon obtaining the prior written consent of the Insurer. If the Bonds are issued for refunding purposes, there shall be delivered an opinion of Bond Counsel addressed to the Insurer (or a reliance letter relating thereto), or a certificate of discharge of the Paying Agent for the Refunded Obligations, to the effect that, upon the making of the required deposit to the escrow, the legal defeasance of the Refunded Obligations shall have occurred. If the Refunded Obligations are insured by Assured Guaranty Municipal Corp., at least three business days prior to the proposed date for delivery of the Policy with respect to the Refunding Bonds, the Insurer shall also receive (i) the verification letter, of which the Insurer shall be an addressee, by an independent firm of certified public accountants which is either nationally recognized or otherwise acceptable to the Insurer, of the adequacy of the escrow established to provide for the payment of the Refunded Obligations in accordance with the terms and provisions of the Escrow Deposit Agreement, and (ii) the form of an opinion of Bond Counsel addressed to the Insurer (or a reliance letter relating thereto) to the effect that the Escrow -36- #76268511_vl Deposit Agreement is a valid and binding obligation of the parties thereto, enforceable in accordance with its terms (such Escrow Deposit Agreement shall provide that no amendments are permitted without the prior written consent of the Insurer). An executed copy of each of such opinion and reliance letter, if applicable, or Paying Agent's discharge certificate, as the case may be, shall be forwarded to the Insurer prior to delivery of the Bonds. Any interest rate exchange agreement ("Swap Agreement") entered into by the Issuer shall meet the following. conditions: (i) the Swap Agreement must be entered into to manage interest costs related to, or a hedge against (a) assets then held, or (b) debt then outstanding, or (iii) debt reasonably expected to be issued within the next twelve (12) months, and (ii) the Swap Agreement shall not contain any leverage element or multiplier component greater than 1.Ox unless there is a matching hedge arrangement which effectively off -sets the exposure from any such element or component. Unless otherwise consented to in writing by the Insurer, any uninsured net settlement, breakage or other termination amount then in effect shall be subordinate to debt service on the Bonds and on any debt on parity with the Bonds. The Issuer shall not terminate a Swap Agreement unless it demonstrates to the satisfaction of the Insurer prior to the payment of any such termination amount that such payment will not cause the Issuer to be in default under the Related Documents, including but not limited to, any monetary obligations thereunder. All counterparties or guarantors to any Swap Agreement must have a rating of at least "A-" and "A3" by Standard & Poor's (`S&P") and Moody's Investors Service ("Moody's"). If the counterparty or guarantor's rating falls below "A-" or "AT' by either S&P or Moody's, the counterparty or guarantor shall execute a credit support annex to the Swap Agreement, which credit support annex shall be acceptable to the Insurer. If the counterparty or the guarantor's long term unsecured rating falls below "Baal" or "BBB+" by either Moody's or S&P, a replacement counterparty or guarantor, acceptable to the Insurer, shall be required. Any consent, approval or permit required herein by the Insurer shall not be unreasonably withheld. ARTICLE XVI MISCELLANEOUS Section 16.01. Changes to Ordinance. Bond Counsel is hereby authorized to make changes to the terms of this Ordinance if necessary or desirable to carry out the purposes hereof or in connection with the approval of the issuance of the Bonds by the Attorney General of Texas. Section 16.02. Related Matters. To satisfy in a timely manner all of the City's obligations under this Ordinance, the Mayor, the City Clerk and all other appropriate officers and agents of the City are hereby authorized and directed to do any and all things necessary and/or convenient to carry out the terms and purposes of this Ordinance. -37- #76268511_vl Section 16.03. Individuals Not Liable. No covenant, stipulation, obligation or agreement herein contained shall be deemed to be a covenant, stipulation, obligation or agreement of any member of City Council or agent or employee of City Council or of the City in his or her individual capacity and neither the members of City Council nor any officer thereof, nor any agent or employee of City Council or of the City, shall be liable personally on the Bonds, or be subject to any personal liability or accountability by reason of the issuance thereof. Section 16.04. Severability and Savings. 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. Section 16.05. Repealer. All ordinances or resolutions, or parts thereof, heretofore adopted by the City and inconsistent with the provisions of this Ordinance are hereby repealed to the extent of such conflict. Section 16.06. Force and Effect. This Ordinance shall be in full force and effect from and after its final passage, and it is so ordained. -38- #76268511_vl PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. ATTEST: City Clerk Signature Page - Mayor Becky Ames - #76268511 vl SCHEDULEI REFUNDED OBLIGATIONS City of Beaumont, Texas Certificates of Obligation, Series 2011 City of Beaumont, Texas General Obligation Refunding Bonds, Series 2011 Schedule I-1 #76268511_vl EXHIBIT A FORM OF PRICING CERTIFICATE [See Attached] Exhibit A-1 #76268511_vl CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS COUNTY OF JEFFERSON I, the undersigned City Clerk of the City of Beaumont, Texas (the "City"), hereby certify as follows: 1. The City Council of the City convened in regular meeting on July _, 2020, at the place stated in the notice of such meeting given as stated below, and the roll was called of the duly constituted official and members of said City Council, to wit: Becky Ames Mayor W.L. Pate, Jr. Councilmember Randy Feldschau Councilmember Taylor Neild Councilmember Mike Getz Councilmember Audwin Samuel Councilmember Robin Mouton Councilmember And all of said persons were present, thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020B IN ONE OR MORE SERIES OR SUBSERIES AS MAY BE FURTHER DESIGNATED; AUTHORIZING THE MAYOR OR THE CITY MANAGER AND THE CITY CHIEF FINANCIAL OFFICER TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES, AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; PROVIDING FOR THE PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; AUTHORIZING THE DEFEASANCE, FINAL PAYMENT, AND DISCHARGE OF CERTAIN OUTSTANDING OBLIGATIONS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE ESCROW AGREEMENTS; AUTHORIZING THE PURCHASE OF AND SUBSCRIPTION FOR CERTAIN ESCROWED SECURITIES; AUTHORIZING ESCROW VERIFICATION AND ENGAGEMENT OF AN ESCROW AGENT; AUTHORIZING BOND INSURANCE; AUTHORIZING THE #76342462_vl EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT AND OTHER RELATED DOCUMENTS; AND MAKING OTHER PROVISIONS REGARDING SUCH BONDS 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, such motion, carrying with it the adoption of said ordinance, prevailed and carried by the following vote: AYES: All those present voted "aye" NOES: ABSTENTIONS: 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; that the above and foregoing paragraph is a true, full, and correct excerpt from the said City Council's minutes of said meeting pertaining to the adoption of said ordinance; 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 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 that public notice of the date, hour, place and subject of said meeting was given as required by the Texas Open Meetings Act. SIGNED AND SEALED this .2020. City Clerk City of Beaumont, Texas (SEAL) -2- #76342462_vl ORDINANCE NO. ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020B IN ONE OR MORE SERIES OR SUBSERIES AS MAY BE FURTHER DESIGNATED; AUTHORIZING EACH OF THE MAYOR, THE CITY MANAGER AND THE ACTING CHIEF FINANCIAL OFFICER TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES, AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; PROVIDING FOR THE PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; AUTHORIZING THE DEFEASANCE, FINAL PAYMENT, AND DISCHARGE OF CERTAIN OUTSTANDING OBLIGATIONS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE ESCROW AGREEMENTS; AUTHORIZING THE PURCHASE OF AND SUBSCRIPTION FOR CERTAIN ESCROWED SECURITIES; AUTHORIZING ESCROW VERIFICATION AND ENGAGEMENT OF AN ESCROW AGENT; AUTHORIZING BOND INSURANCE; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT AND OTHER RELATED DOCUMENTS; AND MAKING OTHER PROVISIONS REGARDING SUCH BONDS AUTHORIZING THE ISSUANCE OF CITY OF BEAUMONT, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020B Adopted: July , 2020 -3- #76342462_vl TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS....................................................... 2 Section1.01. Definitions........................................................................................................ 2 Section1.02. Findings............................................................................................................ 5 Section 1.03. Table of Contents, Titles and Headings........................................................... 5 Section1.04. Interpretation.................................................................................................... 5 ARTICLE II SECURITY FOR THE BONDS; INTEREST AND SINKING FUND........................................6 Section2.01. Tax Levy.......................................................................................................... 6 Section 2.02. Interest and Sinking Fund................................................................................ 6 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDINGTHE BONDS......................................................................................................... 6 Section 3.01. Amount, Purpose, Sale and Authorization....................................................... 6 Section 3.02. Designation, Date and Interest Payment Dates ................................................ 7 Section3.03. Sale of Bonds................................................................................................... 7 Section 3.04. Numbers Denomination Interest Rates and Maturities .................................... 8 Section 3.05. Redemption Prior to Maturity.......................................................................... 9 Section 3.06. Medium, Method and Place of Payment........................................................ 11 Section 3.07. Execution and Registration of Bonds............................................................ 12 Section3.08. Ownership...................................................................................................... 13 Section 3.09. Registration, Transfer and Exchange............................................................. 13 Section3.10. Cancellation................................................................................................... 14 Section 3.11. Temporary Bonds........................................................................................... 14 Section 3.12. Replacement Bonds....................................................................................... 15 Section 3.13. Book -Entry Only System............................................................................... 16 Section 3.14. Successor Securities Depository; Transfer Outside Book -Entry Only System............................................................................................................16 Section 3.15. Payments to Cede & Co.................................................................................17 -i- #76342462_vl TABLE OF CONTENTS (continued) Page ARTICLE IV PAYING AGENT/REGISTRAR.................................................................................................17 Section 4.01. Appointment of Initial Paying Agent/Registrar............................................. 17 Section 4.02. Qualifications.................................................................................................17 Section 4.03. Maintaining Paying Agent/Registrar............................................................. 17 Section4.04. Termination.................................................................................................... 18 Section 4.05. Notice of Change to Owners.......................................................................... 18 Section 4.06. Agreement to Perform Duties and Functions ................................................. 18 Section 4.07. Delivery of Records to Successor.................................................................. 18 ARTICLE V FORMOF THE BONDS.............................................................................................................18 Section5.01. Form Generally.............................................................................................. 18 Section 5.02. Form of the Bonds.........................................................................................19 Section 5.03. CUSIP Registration ........................................ Error! Bookmark not defined. Section 5.04. Legal Opinion ................................................ Error! Bookmark not defined. Section 5.05. Statement of Insurance ................................... Error! Bookmark not defined. ARTICLE VI SALE AND DELIVERY OF BONDS, DEPOSIT OF PROCEEDS...........................................19 Section 6.01. Sale of Bonds, Official Statement..................................................................19 Section 6.02. Use of Proceeds.............................................................................................. 20 Section 6.03. Control and Delivery of Bonds...................................................................... 20 ARTICLE VII INVESTMENTS..........................................................................................................................21 Section7.01. Investments.................................................................................................... 21 Section 7.02. Investment Income......................................................................................... 21 #76342462_vl TABLE OF CONTENTS (continued) Page ARTICLE VIII PARTICULAR REPRESENTATIONS AND COVENANTS....................................................21 Section 8.01. Payment of the Bonds.................................................................................... 21 Section 8.02. Other Representations and Covenants........................................................... 21 Section 8.03. Federal Income Tax Exclusion...................................................................... 22 Section 8.04. Authority for Further Actions........................................................................ 22 ARTICLE IX DEFAULT AND REMEDIES.....................................................................................................22 Section 9.01. Events of Default........................................................................................... 22 Section 9.02. Remedies for Default..................................................................................... 22 Section 9.03. Remedies Not Exclusive................................................................................ 23 ARTICLE X DISCHARGE............................................................................................................................... 23 Section10.01. Discharge....................................................................................................... 23 ARTICLE XI CONTINUING DISCLOSURE UNDERTAKING.....................................................................23 Section 11.01. Annual Reports............................................................................................. 23 Section 11.02. Material Event Notices.................................................................................. 24 Section 11.03. Limitations, Disclaimers and Amendments ................................................... 25 ARTICLE XII REDEMPTION OF REFUNDED OBLIGATIONS; APPROVAL OF ESCROW AGREEMENT; PURCHASE OF ESCROWED SECURITIES............................................................................26 Section 12.01. Appointment of Escrow Agent; Approval of Escrow Agreement ................. 26 #76342462_vl TABLE OF CONTENTS (continued) Page Section 12.02. Purchase of Securities for Escrow Fund ........................................................ 27 Section 12.03. Redemption of Refunded Obligations; Verification Agent ........................... 27 ARTICLE XIII EFFECTIVE IMMEDIATELY....................................................................................................27 Section 13.01. Effective Immediately.................................................................................... 27 ARTICLE XIV ENGAGEMENT OF PROFESSIONALS...................................................................................28 Section 14.01. Engagement of Professionals......................................................................... 28 ARTICLE XV BONDINSURANCE...................................................................................................................28 ARTICLE XVI MISCELLANEOUS..................................................................................................................... 35 Section 16.01. Changes to Ordinance.................................................................................... 35 Section 16.02. Related Matters.............................................................................................. 35 Section 16.03. Individuals Not Liable................................................................................... 35 Section 16.04. Severability and Savings................................................................................ 35 Section16.05. Repealer......................................................................................................... 36 Section 16.06. Force and Effect............................................................................................. 36 Schedule I — Schedule of Refunded Obligations Exhibit A — Form of Pricing Certificate #76342462_vl [IM77 WEVE"013 ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF BEAUMONT, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020B IN ONE OR MORE SERIES OR SUBSERIES AS MAY BE FURTHER DESIGNATED; AUTHORIZING EACH OF THE MAYOR, THE CITY MANAGER AND THE ACTING CHIEF FINANCIAL OFFICER TO APPROVE THE AMOUNTS, INTEREST RATES, PRICES, AND TERMS THEREOF AND CERTAIN OTHER MATTERS RELATING THERETO; PROVIDING FOR THE PAYMENT THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS INCLUDING AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; AUTHORIZING THE DEFEASANCE, FINAL PAYMENT, AND DISCHARGE OF CERTAIN OUTSTANDING OBLIGATIONS; AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE ESCROW AGREEMENTS; AUTHORIZING THE PURCHASE OF AND SUBSCRIPTION FOR CERTAIN ESCROWED SECURITIES; AUTHORIZING ESCROW VERIFICATION AND ENGAGEMENT OF AN ESCROW AGENT; AUTHORIZING BOND INSURANCE; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT AND OTHER RELATED DOCUMENTS; AND MAKING OTHER PROVISIONS REGARDING SUCH BONDS WHEREAS, the City of Beaumont, Texas (the "City") has previously issued and there are presently outstanding certain obligations of the City; and WHEREAS, the City is authorized, pursuant to the general laws of the State of Texas, and particularly Chapter 1207, Texas Government Code, as amended, to issue its bonds for the purpose of refunding all or a portion of its outstanding obligations; and WHEREAS, by this Ordinance the City Council of the City (the "City Council") is authorizing the issuance of its bonds in the principal amount not exceed $82,000,000 for the purpose of refunding the City's outstanding obligations identified and described on Schedule I attached hereto and incorporated herein by reference for all purposes (the "Refunded Obligations"); and WHEREAS, the City shall by this Ordinance, in accordance with the provisions of Chapters 1371 and 1207, Texas Government Code, as amended, delegate to a Pricing Officer #76342462_vl (hereinafter designated) the authority to determine the principal amount of Bonds to be issued and negotiate the terms of sale thereof; and WHEREAS, the City Council hereby finds and determines that it is a public purpose and in the best interests of the City to issue the Bonds with such terms to be included in a pricing certificate (the "Pricing Certificate") to be executed by the Pricing Officer all in accordance with the provisions of Chapters 1371 and 1207, Texas Government Code, as amended; and WHEREAS, the City Council hereby finds that it may purchase a credit agreement in the form of a municipal bond insurance policy or policies with respect to the Bonds if it deem such purchase is cost effective; and WHEREAS, the City Council hereby finds, determines and declares that the refunding of the Refunded Obligations will result in a debt service savings representing a net present value savings for the City and that the issuance of the bonds herein authorized is necessary in order to lower the overall annual debt service requirements of the City; and WHEREAS, the City Council has found and determined that it is necessary and in the best interest of the City and its citizens that it authorize by this Ordinance the issuance and delivery of its bonds in a single series at this time; and WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and the public notice of the time, place and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; now therefore; WHEREAS, the City is a home -rule municipality that: (i) adopted its charter under Section 5, Article XI, Texas Constitution; (ii) has a population of more than 50,000 and (iii) has outstanding long-term indebtedness that is rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for a long-term obligation. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT, TEXAS: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.01. Definitions. Unless otherwise expressly provided or unless the context clearly indicates otherwise in this Ordinance, the following terms shall have the meanings specified below: "Bond" means any of the Bonds. "Bonds" means any of the City's bonds authorized by this Ordinance and designated as "City of Beaumont, Texas, General Obligation Refunding Bonds, Series 2020B." -2- #76342462_vl "Bond Date" means the date designated as the date of the Bonds by Section 3.02 of this Ordinance. "Bond Purchase Contract" means the Purchase Contract between the City and the Underwriter pertaining to the Bonds. "Business Day" means any day which is not a Saturday, Sunday or legal holiday, or day on which banking institutions in the State of Texas or the city in which the Designated Payment/Transfer Office is located are generally authorized or obligated by law or executive order to close. "City" means the City of Beaumont, Texas. "Closing Date" means the date of the initial delivery of and payment for the Bonds. "Code" means the Internal Revenue Code of 1986, as amended, and, with respect to a specific section thereof, such reference shall be deemed to include (a)( the Regulations promulgated under such section (b) any successor provision of similar import hereafter enacted, (c) any corresponding provision of any subsequent Internal Revenue Code and (d) the regulations promulgated under the provisions described in (b) and (c). "Designated Payment/Transfer Office" means (i) with respect to the initial Paying Agent/Registrar named herein, its office in Houston, Texas, or at such other location designated by the Paying Agent/Registrar and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the City and such successor. "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. "DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Escrow Agent" means the entity identified in the Pricing Certificate. "Escrow Agreement" means that certain Escrow Agreement, dated as of the Closing Date, between the City and the Escrow Agent. "Escrow Fund" means the fund or funds established by the Escrow Agreement to hold cash and securities for the payment of debt service on the Refunded Obligations. "Escrow Securities" means (1) direct noncallable obligations of the United States, including obligations that are unconditionally guaranteed by the United States; (2) noncallable obligations of any agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of hereof, are rated as to investment quality by a nationally recognized investment rating firm not -3- #76342462_vl less than "AAA" or its equivalent; and (3) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date hereof, are rated as to investment quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent. "Event of Default" means any event of default as set forth in Section 9.01 of this Ordinance. "Fiscal Year" means such fiscal year as shall from time to time be set by the City Council. "Initial Bond" means the Initial Bond authorized by Section 3.04 of this Ordinance. "Interest and Sinking Fund" means the interest and sinking fund established by Section 2.02 of this Ordinance. "Interest Payment Date" means the date or dates on which interest on the Bonds is scheduled to be paid until their respective dates of maturity or prior redemption, such dates being identified in the Pricing Certificate. "Issuance Date" means the date on which the Bonds are delivered to and paid for by the Underwriter. "MSRB" means the Municipal Securities Rulemaking Board. "Owner" means the person who is the registered owner of a Bond or Bonds, as shown in the Register. "Paying Agent/Registrar" means the entity identified in the Pricing Certificate. "Pricing Certificate" shall mean a certificate or certificates to be signed by the Mayor, the City Manager or the Chief Financial Officer of the City pursuant to Section 3.03 hereof and delivered to the City Clerk, in substantially the form attached hereto as Exhibit A. "Pricing Officer" shall mean the Mayor, City Manager, or Chief Financial Officer of the City. "Record Date" means the close of business on the last business day of the month preceding the applicable Interest Payment Date. "Refunded Obligations" means the bonds of the City being refunded with a portion of the proceeds of the Bonds as described on Schedule I. "Register" means the bond register specified in Section 3.08(a) of this Ordinance. "Regulations" means the applicable proposed, temporary or final Treasury Regulations promulgated under the Code or, to the extent applicable to the Code, under the Internal Revenue Code of 1954, as such regulations may be amended or supplemented from time to time. -4- #76342462_vl "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "Special Payment Date" means the Special Payment Date prescribed by Section 3.05(b) of this Ordinance. "Special Record Date" means the Special Record Date prescribed by Section 3.05(b) of this Ordinance. "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the payment of principal of, redemption premium, if any, or interest on the Bonds as the same come due and payable or money set aside for the payment of Bonds duly called for redemption prior to maturity. "Underwriter" mean the Underwriter named in Section 14.01 of this Ordinance. Section 1.02. Findings. The declarations, determinations and findings declared, made and found in the preamble to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof. Section 1.03. Table of Contents, Titles and Headings. The table of contents, titles and headings of the Articles and Sections of this Ordinance 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 any of the terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. Section 1.04. Interpretation (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) Any action required to be taken on a date which is not a Business Day shall be taken on the next succeeding Business Day and have the same effect as if taken on the date so required. (c) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein to sustain the validity of this Ordinance. (d) Article and section references shall mean references to articles and sections of this Ordinance unless otherwise designated. -5- #76342462_vl ARTICLE II SECURITY FOR THE BONDS; INTEREST AND SINKING FUND Section 2.01. Tax Levy. (a) Pursuant to the authority granted by the Texas Constitution and the laws of the State of Texas, there shall be levied and there is hereby levied for the current year and for each succeeding year thereafter while any of the Bonds or any interest thereon is outstanding and unpaid, an ad valorem tax on each one hundred dollars valuation of taxable property within the City, at a rate sufficient, within the limit prescribed by law, to pay the debt service requirements of the Bonds, being (i) the interest on the Bonds, and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% per annum (whichever amount is greater), when due and payable, full allowance being made for delinquencies and costs of collection. (b) The ad valorem tax thus levied shall be assessed and collected each year against all property appearing on the tax rolls of the City most recently approved in accordance with law and the money thus collected shall be deposited as collected to the Interest and Sinking Fund. (c) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and committed irrevocably to the payment of the principal of and interest on the Bonds when and as due and payable in accordance with their terms and this Ordinance. Section 2.02. Interest and Sinking Fund. (a) The City hereby establishes a special fund or account, to be designated the "City of Beaumont, Texas, General Obligation Refunding Bonds, Series 2020B Interest and Sinking Fund," said fund to be maintained at an official depository bank of the City separate and apart from all other funds and accounts of the City. (b) Money on deposit in or required by this Ordinance to be deposited to the Interest and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of the Bonds when and as due and payable in accordance with their terms and this Ordinance. ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section 3.01. Amount, Purpose, Sale and Authorization. (a) The Bonds shall be issued in fully registered form, without coupons, under and pursuant to the authority of the Ordinance in the total authorized aggregate principal -6- #76342462_vl amount of $82,000,000 for the purpose of (1) refunding the Refunded Obligations, and (2) paying certain costs related to the issuance of the Bonds. (b) The issuance of the Bonds is hereby authorized under and in accordance with the provisions hereof, the officers of the City are each hereby authorized to execute, attest, and affix the City's seal to the Bonds and to deliver the Bonds to the Attorney General of the State of Texas for approval, the Comptroller of Public Accounts for registration and the Paying Agent/Registrar for authentication, and thereafter to deliver such Bonds to the Underwriter pursuant to the Bond Purchase Agreement authorized in Section 6.01 herein. Section 3.02. Designation, Date and Interest Payment Dates. Bonds shall be designated as the "City of Beaumont, Texas, General Obligation Refunding Bonds, Series 2020B," and shall be dated the date described in the Pricing Certificate. The Bonds shall bear interest at the rates set forth below, from the later of the Issuance 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; payable on the dates described in the Pricing Certificate. The Bonds shall mature on the dates described in the Pricing Certificate. If interest on any Bond is not paid on any Interest Payment Date and continues unpaid for thirty (30) days thereafter, the Paying Agent/Registrar shall establish a new record date for the payment of such interest, to be known as a Special Record Date. The Paying Agent/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) days prior to the Special Record Date, to each affected Registered Owner as of the close of business on the day prior to mailing of such notice. Section 3.03. Sale of Bonds. As authorized by Chapters 1371 and 1207, Texas Government Code, as amended, the Pricing Officers are hereby authorized to act on behalf of the City in selling and delivering the Bonds and carrying out the other procedures specified in this Ordinance, including any additional designation or title by which the Bonds shall be known, the number of subseries of Bonds to be issued and the principal amount of each subseries, the price at which each series of the Bonds will be sold, the manner in which the Bonds should be delivered, the date or dates (which may be different dates for each series of the Bonds) on which the Bonds shall be sold, the form in which the Bonds shall be issued whether as current interest bonds, as compound interest bonds, or as a combination of current interest bonds and compound interest bonds, any additional designation or title by which the Bonds shall be known, the year or years in which each series of the Bonds will mature, the principal amount to mature in each of such years, the aggregate principal amount of each series of the Bonds, the rate of interest to be borne by each such maturity, the first interest payment date or compounding date, as the case may be, the dates, prices, and terms, if -7- #76342462_vl any, upon and at which each series of the Bonds shall be subject to redemption prior to maturity at the option of the City, as well as any mandatory sinking fund redemption provisions, or make - whole provisions, and such officers are also hereby authorized to act on behalf of the City in approving all other matters relating to the issuance, sale and delivery of the Bonds and the purchase of a bond insurance policy or policies for all or any portion of the Bonds, all of which shall be specified in one or more bond purchase agreements (the "Bond Purchase Agreement") for the Bonds substantially in the form approved by the Pricing Officers, in accordance with the terms below: (a) the price to be paid for each series of the Bonds shall not be less than 90% of the aggregate original principal amount of the current interest bonds plus accrued interest, if any, thereon from their date to their delivery; (b) the true interest cost rate for any series of Bond issued under this Ordinance shall not exceed 4.50%, which rate is not in excess of the maximum rate allowed under Section 1204.006, Texas Government Code; (c) the aggregate principal amount of each subseries of the Bonds shall not exceed the maximum amount authorized in Section 3.01; (d) in connection with each series of Bonds issued in whole or in part for refunding purposes, the refunding of the Refunded Obligations shall produce a net present value debt service savings of at least 4.50% of the principal amount of the Refunded Obligations being refunded with such series of Bonds; (e) no Bond shall mature later than March 1, 2038; (f) each series of the Bonds to be issued, prior to delivery, must have been rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for long-term obligations; and (g) to the extent the City shall purchase any Insurance Policy (one or more) issued by one or more Bond Insurers such policy or policies shall be determined to be most cost effective to the City for the Bonds and shall result in a net interest rate savings to the City which is greater than the costs of the premium of such policy or policies, as may be certified in the Pricing Certificate. Any finding by the Mayor, City Manager or the Chief Financial Officer relating to the sale and delivery of the Bonds and the purchase of bond insurance shall have the same force and effect as a finding or determination made by the City Council. Section 3.04. Numbers Denomination Interest Rates and Maturities. The Bonds shall be initially issued bearing the numbers, in the principal amounts and bearing interest at the rates set forth in Section 3.02 herein and may be transferred and exchanged as set out in this Ordinance. The Bonds shall mature as described in the Pricing Certificate. Bonds delivered in transfer of or in exchange for other Bonds shall be numbered in #76342462_vl order of their authentication by the Paying Agent/Registrar, shall be in the denomination of $5,000 or integral multiples thereof and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are delivered. The Bonds shall be numbered separately from one upward, except the Initial Bond, which shall be numbered I-1. Section 3.05. Redemption Prior to Maturity. (a) Optional Redemption. The City reserves the right and option to redeem the Bonds as described in the Pricing Certificate. (b) Mandatory Sinking Fund Redemption. (i) The Bonds designated as "Term Bonds" in the form of Bond contained in Section 5.02 ("Term Bonds"), are subject. to scheduled mandatory redemption and will be redeemed by the City, in part at a price equal to the principal amount thereof, without premium, plus accrued interest to the redemption date, out of moneys available for such purpose in the Debt Service Fund, on the dates and in the respective principal amounts as set forth in the form of Bond contained in Section 5.02. (ii) Prior to each scheduled mandatory redemption date, ' the Paying Agent/Registrar shall select for redemption by lot, or by any other customary method that results in a random selection, a principal amount of Term Bonds equal to the aggregate principal amount of such Term Bonds to be redeemed, shall call such Term Bonds for redemption on such scheduled mandatory redemption date, and shall give notice of such redemption, as provided in Section 5.02. (iii) The principal amount of the Term Bonds required to be redeemed on any redemption date pursuant to subparagraph (a) of this Subsection (c) shall be reduced, at the option of the City, by the principal amount of any Term Bonds which, at least 45 days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption. Notice of Redemption. Notice of any redemption shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, at least 30 days prior to the date fixed for any such redemption, to the registered owner of each Bond, or portion thereof to be redeemed, at its address as it appeared on the Register on the close of business on the business day next preceding the date of mailing such notice; provided, however, that the failure to send, mail, or receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond. By the date fixed for any such redemption, due provision shall be made by the City with the Paying Agent/Registrar for the payment of the required redemption price for this Bond or the portion hereof which is to be so -9- #76342462_vl redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, this Bond, or the portion thereof which is to be so redeemed, thereby automatically shall be redeemed prior to its scheduled maturity, and shall not bear interest after the date fixed for its redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption price plus accrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/ Registrar shall record in the Register all such redemptions of principal of this Bond or any portion hereof. If a portion of any Bond shall be redeemed, a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in the Ordinance. The City, at least 45 days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Bonds to be redeemed. (c) Conditional Redemption. The City reserves the right in the case of an optional redemption to give notice of its election or direction to redeem Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected owners. Any Bonds subject to conditional redemption where redemption has been rescinded shall remain outstanding, and the rescission shall not constitute an Event of Default. Further, in the case of a conditional redemption, the failure of the City to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an Event of Default. (d) De easance. The City may defease the provisions of this Ordinance or any ordinance applicable to any Parity Bonds being defeased and discharge its obligation to the Owners of any or all of the Bonds, or any or all Parity Bonds to pay principal, interest and redemption premium, if any, 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 bonds being defeased plus interest thereon to the date of maturity or redemption; or (b) pursuant to an escrow or trust agreement, cash and/or direct bonds of, or bonds the principal of and interest on which are guaranteed by or secured by the pledge of direct bonds of the United -10- #76342462_vl States of America, in principal amounts and maturities and bearing interest at rates sufficient to provide for the timely payment of the principal amount and redemption premium, if any, of such bonds being defeased plus interest thereon to the date of maturity or redemption; provided, however, that if any of such bonds being defeased are to be redeemed prior to their respective dates of maturity, provision shall have been made for giving notice of redemption as provided in this Ordinance or ordinance applicable to the Parity Bonds being defeased. Upon such deposit, such bonds being defeased 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. Section 3.06. Medium, Method and Place of Pam. (a) The principal of and interest on the Bonds shall be paid in lawful money of the United States of America. (b) Interest on the Bonds shall be payable to the Owners as shown in the Register at the close of business on the Record Date; provided, however, that in the event of nonpayment of interest on a scheduled Interest Payment Date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date," which date shall be fifteen (15) days after the Special Record Date) shall be sent at least five (5) Business Days prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of each Owner of a Bond appearing in the Register at the close of business on the last Business Day next preceding the date of mailing of such notice. (c) Interest on each Bond shall be paid by check, dated as of the Interest Payment Date, and mailed on or before such Interest Payment Date, by United States mail, first class, postage prepaid, by the Paying Agent/Registrar to each Owner at the address of each Owner as it appears in the Register, or by such other customary banking arrangements acceptable to the Paying Agent/Registrar and the Owner; provided, however, that such Owner shall bear all risk and expense of such other customary banking arrangements. (d) The principal of each Bond shall be paid to the Owner thereof on the due date (whether at the maturity date or the date of prior redemption thereof) upon presentation and surrender of such Bond at the Designated Payment/Transfer Office. (e) If the date for the payment of the principal of or interest on the Bonds is not a Business Day, 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 and no additional interest shall be due by reason of nonpayment on the date on which such payment is otherwise stated to be due and payable. (f) Unclaimed Payments of amounts due hereunder shall be segregated in a special account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owner of the Bonds to which such Unclaimed Payments pertain. Subject -11- #76342462_vt to Title 6 of the Texas Property Code, any Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be applied to the next payment or payments on the Bonds thereafter coming due and, to the extent any such money remains three years after the retirement of all outstanding Bonds, such money shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar nor any other person shall be liable or responsible to any holders of such Bonds for any further payment of such unclaimed moneys or on account of any such Bonds, subject to Title 6 of the Texas Property Code. Section 3.07. Execution and Registration of Bonds. (a) The Bonds shall be executed on behalf of the City by the Mayor and the City Clerk, by their manual 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. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Bonds ceases to be such officer before the authentication of such Bonds or before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Bond delivered at the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided herein, manually executed by the Comptroller of Public Accounts of the State of Texas, or by her duly authorized agent, which certificate shall be evidence that the Initial Bond has been duly approved by the Attorney General of the State of Texas and that it is a valid and binding obligation of the City, and that it has been registered by the Comptroller of Public Accounts of the State of Texas. (d) On the Closing Date, one Initial Bond representing the entire principal amount of all Bonds, payable in stated installments to the representative of the Underwriter, or its designee, executed by the manual or facsimile signatures of the Mayor and City Clerk of the City, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts, will be delivered to the -12- #76342462_vl representative of the Underwriter or its designee. Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the Initial Bond and deliver to DTC on behalf of the representative of the Underwriter one registered definitive Bond for each year of maturity of the Bonds in the aggregate principal amount of all Bonds for such maturity, registered in the name of Cede & Co., as nominee of DTC. Section 3.08. Ownership. (a) The City, the Paying Agent/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, for the further purpose of making and receiving payment of the interest thereon, and for all other purposes (except interest will be paid to the person in whose name such bond is registered on the Record Date or Special Record Date, as applicable), whether or not such Bond is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. (b) All payments made to the Owner of a Bond shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent of the sums paid. Section 3.09. Registration, Transfer and Exchange. (a) So long as any Bonds remain outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register") in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Bonds in accordance with this Ordinance. (b) The ownership of a Bond may be transferred only upon the presentation and surrender of the Bond at the Designated Payment/Transfer Office with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Bond shall be effective until entered in the Register. (c) The Bonds shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/Transfer Office for a Bond or Bonds of the same maturity and interest rate and in any denomination or denominations of any integral multiple of $5,000 and in an aggregate principal amount equal to the unpaid principal amount of the Bonds presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver Bonds exchanged for other Bonds in accordance with this Section. (d) Each exchange Bond delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and 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 exchange Bond is delivered. -13- #76342462_vl (e) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for a different denomination of any of the Bonds. The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer or exchange of a Bond. (f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Bond called for redemption, in whole or in part, within forty- five (45) calendar days prior to the date fixed for redemption; provided, however, such limitation shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Bond. Section 3.10. Cancellation. All Bonds paid or redeemed before scheduled maturity in accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper records shall be made regarding such payment, redemption, exchange or replacement. The Paying Agent/Registrar shall dispose of cancelled Bonds in accordance with the Securities Exchange Act of 1934. Section 3.11. Tem-Dorary Bonds. (a) Following the delivery and registration of the Initial Bond and pending the preparation of definitive Bonds, the proper officers of the City may execute and, upon the City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Bonds that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Bonds in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers of the City executing such temporary Bonds may determine, as evidenced by their signing of such temporary Bonds. (b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the benefit and security of this Ordinance. (c) The City, without unreasonable delay, shall prepare, execute and deliver to the Paying Agent/Registrar the Bonds in definitive form; thereupon, upon the presentation and surrender of the Bonds in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall cancel the Bonds in temporary form and shall authenticate and deliver in exchange therefor Bonds of the same maturity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount, as the Bonds in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. -14- #76342462_vl Section 3.12. Replacement Bonds. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar, 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 Underwriter, shall authenticate and deliver a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner first: (i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction or theft of such Bond; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar to save it and the City harmless; (iii) pays all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental charge that is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar. (c) If, after the delivery of such replacement Bond, a bona fide Underwriter of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide Underwriter, 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 Paying Agent/Registrar in connection therewith. (d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and payable or may pay such Bond when it becomes due and payable. (e) Each replacement Bond delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to -15- #76342462_vl 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. Section 3.13. Book -Entry OnlySystem. Upon issuance of the Initial Bonds, the ownership of each such Bond shall be registered in the name of the Underwriter, as nominee of DTC. The definitive Bonds shall be initially issued in the form of a separate typewritten fully registered Bond for each of the maturities thereof. After initial issuance, the ownership of such Bonds shall be registered in the name of Cede & Co., as nominee of DTC, and except as provided in Section 3.11 hereof, all of the outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC. With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a Bondholder, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption or (iii) the payment to any DTC Participant or any other person, other than a Bondholder, as shown in the Register of any amount with respect to principal of or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute owner of such Bond for the purpose of payment of principal of and interest on the Bonds, for the purpose of all matters with respect to such Bond, for the purpose of registering transfer with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and interest on the Bonds only to or upon the order of the respective owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an owner, as shown in the Register, shall receive a Bond certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/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. Section 3.14. Successor Securities Depository; Transfer Outside Book -Entry Only System. In the event that the City or the Paying Agent/Registrar determines that DTC is incapable of discharging its responsibilities described herein and in the representation letter of the City to DTC, and that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, or in the event DTC discontinues the services described herein, the City or the Paying Agent/Registrar shall (i) appoint a successor securities depository, qualified to -16- #76342462_vl act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. Section 3.15. Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, in the manner provided in the representation letter of the City to DTC. ARTICLE IV PAYING AGENT/REGISTRAR Section 4.01. Appointment of Initial Paving A e� ig stray. The Paying Agent/Registrar shall be appointed as described in the Pricing Certificate. Section 4.02. Qualifications. Each Paying Agent/Registrar shall be a commercial bank, a trust company organized under the laws of the State of Texas, or any other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Bonds. Section 4.03. Maintaining Paving A eng t/Re isg tray. (a) At all times while any Bonds are outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 4.02 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying Agent/Registrar specifying the duties and responsibilities of the City and the Paying Agent/Registrar in substantially the form presented at this meeting, the form, terms and provisions of which are hereby approved. The signature of the Mayor shall be attested by the City Clerk. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement, provided no such resignation shall be effective until a successor Paying Agent/Registrar has accepted the duties of Paying Agent/Registrar for the Bonds. -17- #76342462_vl Section 4.04. Termination. The City, upon not less than sixty (60) days' notice, reserves the right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination, provided, that such termination shall not be effective until a successor Paying Agent/Registrar has been appointed and has accepted the duties of Paying Agent/Registrar for the Bonds. Section 4.05. Notice of Change to Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by United States mail, first class, postage prepaid, at the address in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. Section 4.06. Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar and executing the Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. Section 4.07. Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent books and records relating to the Bonds to the successor Paying Agent/Registrar. ARTICLE V FORM OF THE BONDS Section 5.01. Form Generally. (a) The Bonds, including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas to accompany the Initial Bond, the Certificate of the Paying Agent/Registrar, and the Assignment form to appear on each of the Bonds, (i) shall be substantially in the form set forth in this Article with such omissions, insertions and variations as may be required by this Ordinance, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Bonds, as evidenced by their execution thereof. (b) Any portion of the text of any Bonds may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Bonds. -18- #76342462_vl (c) The definitive Bonds shall be typewritten, printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Bonds, as evidenced by their execution thereof. (d) The Initial Bond submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 5.02. Form of the Bonds. The Form of Bond as set forth in the Pricing Certificate is hereby approved. The form of the Bonds, including the form of the Registrar's Authentication Certificate, the form of Assignment, and the form of Registration Bond of the Comptroller of Public Accounts of the State of Texas which shall be attached or affixed to the Bonds initially issued shall be, respectively, substantially as set forth in the Pricing Certificate, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance. ARTICLE VI SALE AND DELIVERY OF BONDS, DEPOSIT OF PROCEEDS Section 6.01. Sale of Bonds, Official Statement. (a) The Bonds are hereby officially sold and awarded to and shall be delivered to the Underwriter at the price and on the terms specified in the Bond Purchase Contract, as presented at this meeting. The Mayor and the City Manager are hereby authorized and directed to execute and deliver such Bond Purchase Contract upon completion of the terms thereof in accordance with this Ordinance. It is hereby officially found, determined and declared that the terms of this sale are the most advantageous reasonably obtainable. The Bonds shall initially be registered in the name of the representative of the Underwriter, or its designee. (b) The form and substance of the Preliminary Official Statement, and any addenda, supplement or amendment thereto, and the final Official Statement (the "Official Statement") presented to and considered at this meeting, are hereby in all respects approved and adopted, and the Preliminary Official Statement is hereby deemed final as of its date (except for the omission of pricing and related information) within the meaning and for the purposes of paragraph (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The Mayor and City Clerk of the City are hereby authorized and directed to execute the same and deliver appropriate numbers of copies thereof to the Underwriter. The Official Statement as thus approved and delivered, with such appropriate variations as shall be approved by the Mayor of the City and the Underwriter, may be used by the Underwriter in the public offering and sale thereof. The use and distribution of the Preliminary Official Statement in the public offering of the Bonds by the Underwriter is hereby ratified, approved and confirmed. The City Clerk is hereby authorized and directed to include and maintain a copy of the Official Statement -19- #76342462_vl and any addenda, supplement or amendment thereto thus approved among the permanent records of this meeting. The use and distribution of the Official Statement and the preliminary public offering of the Bonds by the Underwriter is hereby ratified, approved and confirmed. (c) All officers of the City are authorized to execute such documents, certificates and receipts, and to make such elections with respect to the tax-exempt status of the Bonds, as they may deem appropriate in order to consummate the delivery of the Bonds. (d) The obligation of the Underwriter to accept delivery of the Bonds is subject to the Underwriter being furnished with the final, approving opinion of Holland & Knight LLP, Bond Counsel for the City, which opinion shall be dated and delivered the Closing Date. Section 6.02. Use of Proceeds. (a) The Pricing Certificate shall identify the amount to be transferred to the Paying Agent for redemption of the Refunded Obligations. (b) The remaining balance shall be used to pay the costs of issuing the Bonds; provided that any amount representing a rounding or contingency amount shall be applied solely to pay costs of issuance of the Bonds. Amounts remaining after payment of costs of issuance shall be deposited to the Interest and Sinking Fund and applied to the payment of debt service on the Bonds. Section 6.03. Control and Delivery of Bonds. (a) The Mayor of the City is hereby authorized to have control of the Initial Bond and all necessary records and proceedings pertaining thereto pending investigation, examination and approval of the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State of Texas and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. (b) After registration by the Comptroller of Public Accounts of the State of Texas, delivery of the Bonds shall be made to the representative of the Underwriter thereof under and subject to the general supervision and direction of the Mayor, against receipt by the City of all amounts due to the City under the terms of sale. (c) In the event the Mayor or City Clerk is absent or otherwise unable to execute any document or take any action authorized herein, the Mayor Pro Tern and the Assistant City Clerk, respectively, shall be authorized to execute such documents and take such actions, and the performance of such duties by the Mayor Pro Tern and the Assistant City Clerk shall for the purposes of this Ordinance have the same force and effect as if such duties were performed by the Mayor and City Clerk, respectively. -20- #76342462_vl ARTICLE VII INVESTMENTS Section 7.01. Investments. (a) Money in the Interest and Sinking Fund created by this Ordinance, at the option of the City, may be invested in such securities or obligations as permitted under applicable law as in effect on the date of the investment. (b) Any securities or obligations in which money in the Interest and Sinking Fund is so invested shall be kept and held in trust for the benefit of the Owners and shall be sold and the proceeds of sale shall be timely applied to the making of all payments required to be made from the Interest and Sinking Fund. Section 7.02. Investment Income. (a) Interest and income derived from investment of the Interest and Sinking Fund shall be credited to such Fund. (b) Interest and income derived from the investment of funds deposited pursuant to the Escrow Agreement shall be applied as provided in the Escrow Agreement. ARTICLE VIII PARTICULAR REPRESENTATIONS AND COVENANTS Section 8.01. Payment of the Bonds. On or before each Interest Payment Date for the Bonds and while any of the Bonds are outstanding and unpaid, there shall be made available to the Paying Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such interest on and principal of the Bonds as will accrue or mature on the applicable Interest Payment Date, maturity date or date of prior redemption. Such transfer of funds shall be made in such manner as will cause immediately available funds to be deposited with the Paying Agent/Registrar not later than the close of business on the Business Day next preceding the date of payment for the Bonds. Section 8.02. Other Representations and Covenants. (a) The City will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance and in each Bond; the City will promptly pay or cause to be paid the principal of and interest on each Bond on the dates and at the places and manner prescribed in such Bond; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. -21- #76342462_vl (b) The City is duly authorized under the laws of the State of Texas to issue the Bonds; all action on its part for the creation and issuance of the Bonds has been duly and effectively taken; and the Bonds in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. Section 8.03. Federal Income Tax Exclusion. (a) General. The City intends that the interest on the Bonds be NOT excludable from gross income for federal income tax purposes. (b) Registration. The Bonds will be issued in registered form. Section 8.04. Authority for Further Actions. ARTICLE IX DEFAULT AND REMEDIES Section 9.01. Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of or interest on any of the Bonds when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement or obligation of the City, which default materially and adversely affects the rights of the Owners, including but not limited to, their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of sixty (60) days after notice of such default is given by any Owner to the City. Section 9.02. Remedies for Default. (a) Upon the happening of any Event of Default, then any Owner or an authorized representative thereof, including but not limited to, a trustee or trustees therefor, may proceed against the City for the purpose of protecting and enforcing the rights of the Owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Owners hereunder or any combination of such remedies. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of Bonds then outstanding. -22- #76342462_vl Section 9.03. Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. ARTICLE X DISCHARGE Section 10.01. Discharge. The Bonds may be refunded, discharged or defeased in any manner permitted by applicable law. ARTICLE XI CONTINUING DISCLOSURE UNDERTAKING Section 11.01. Annual Reports. (a) The City shall provide annually to the MSRB, (i) within 270 days after the end of each Fiscal Year of the City ending in or after 2020, financial information and operating data with respect to the City of the general type included in the Official Statement under the headings "TAX INFORMATION," FINANCIAL INFORMATION," and "DEBT INFORMATION," and including financial statements of the City if audited financial statements of the City are then available, and (ii) if not provided as part such financial information and operating data, audited financial statements of the City, when and if available. Any financial statements so to be provided shall be (i) prepared in accordance with the accounting principles described in the rules to the financial statements of the most recently concluded Fiscal Year, or such other accounting principles as the City may be required to employ, from time to time, by State law or regulation, and (ii) audited, if the City commissions an audit of such statements. (b) If the City changes its Fiscal Year, it will notify each the MSRB of the change (and of the date of the new Fiscal Year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. (c) The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by -23- #76342462_vl specific reference to any document (including an official statement or other offering document) that theretofore has been provided to the MSRB or filed with the SEC. Section 11.02. Material Event Notices. The City shall notify the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: (a) Principal and interest payment delinquencies; (b) Non-payment related defaults, if material; (c) Unscheduled draws on debt service reserves reflecting financial difficulties; (d) Unscheduled draws on credit enhancements reflecting financial difficulties; (e) Substitution of credit or liquidity providers, or their failure to perform; (f) Adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determination of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; (g) Modifications to rights of Bondholders, if material; (h) Bond calls, if material, and tender offers; (i) Defeasances; 0) Release, substitution or sale of property securing repayment of the securities, if material; (k) Rating changes; Note to paragraph (k): For the purposes of the event identified in paragraph (k) of this section, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. -24- #76342462_vl (1) Bankruptcy, insolvency, or receivership, or similar event of the obligated person; (m) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement or undertake such action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (n) Appointment of a successor or additional paying agent/registrar or the change of name of a paying agent/registrar, if material; (o) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material; and (p) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City any of which reflect financial difficulties. The City shall notify the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with Section 11.01 of this Ordinance by the time required by such Section. The City reserves the right to file all information and notices required under this Article through the facilities of DisclosureUSA or any other central post office approved by the SEC for such purpose. Section 11.03. Limitations, Disclaimers and Amendments. (a) The City shall be obligated to observe and perform the covenants specified in this Article for so long as, but only for so long as, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give notice of any deposit made in accordance with Article XI that causes Bonds no longer to be Outstanding. (b) The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Article or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. -25- #76342462_vl UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITH/WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. (c) No default by the City in observing or performing its obligations under this Article shall comprise a breach of or default under the Ordinance for purposes of any other provisions of this Ordinance. (d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. (e) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (i) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (A) the Owners of a majority in aggregate principal amount (or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (B) a person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Owners and beneficial owners of the Bonds. The provisions of this Article may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent Underwriter of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If the City so amends the provisions of this Article, it shall include with any amended financial information or operating data next provided in accordance with Section 11.01 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. ARTICLE XII REDEMPTION OF REFUNDED OBLIGATIONS; APPROVAL OF ESCROW AGREEMENT; PURCHASE OF ESCROWED SECURITIES Section 12.01. Appointment of Escrow Agent; Approval of Escrow Agreement. The escrow agent identified in the Pricing Certificate is hereby appointed Escrow Agent for the purpose of refunding the Refunded Obligations. The Mayor and the City Clerk are hereby -26- #76342462_vl authorized and directed to execute the Escrow Agreement on behalf of the City, the term and provisions of which are hereby approved. Section 12.02. Purchase of Securities for Escrow Fund. Pursuant to Chapter 1207, the Mayor is hereby authorized to make necessary arrangements for the purchase of the Escrow Securities referenced in the Escrow Agreement, including, without limitation, the execution of such documents, certificates or instruments as may be necessary in connection therewith including the execution of subscriptions for the purchase of the Escrow Securities. All actions of the Mayor taken prior to the date of this Ordinance in connection with making arrangements for the purchase of such Escrow Securities are hereby ratified and affirmed. Section 12.03. Redemption of Refunded Obligations; Verification Agent. (a) The Refunded Obligations are hereby called for redemption prior to maturity on the dates and at the redemption prices set forth in Schedule I. The City Clerk is hereby authorized and directed to cause to be delivered to the paying agent/registrar for the Refunded Obligations a certified copy of this Ordinance calling the Refunded Obligations for redemption. The delivery of this Ordinance to the paying agent/registrar for the Refunded Obligations shall constitute the giving of notice of redemption to the paying agent/registrar for the Refunded Obligations, and such paying agent/registrar is hereby authorized and directed to give notice of redemption to the owners of the Refunded Obligations in accordance with the requirements of the respective ordinances authorizing the issuance thereof. Following the deposit to the Escrow Fund, the Refunded Obligations shall be payable solely from and secured by the cash and securities on deposit in the Escrow Fund for the purpose of refunding the Refunded Obligations and shall case to be payable from any other source. If necessary a verification agent shall be appointed as described in the Pricing Certificate. ARTICLE XIII EFFECTIVE IMMEDIATELY Section 13.01. Effective Immediately. This Ordinance shall become effective immediately upon its adoption at this meeting pursuant to Section 1201.028, Texas Government Code. -27- #76342462_vl ARTICLE XIV ENGAGEMENT OF PROFESSIONALS Section 14.01. Engagement of Professionals. The City Council hereby (i) confirms the engagement of RBC Capital Markets, LLC, as Municipal Advisor, to the City and (ii) confirms the engagement of Holland & Knight LLP, as bond counsel to the City, and (iii) the underwriting syndicate as identified in the Pricing Certificate. ARTICLE XV BOND INSURANCE In order to obtain the lowest attainable interest rates on the Bonds, the Mayor is authorized to enter into a credit agreement with one or more Insurers to obtain one or more bond insurance policies with respect to all or a portion of the Bonds. The Mayor is authorized to execute and the City Clerk or City Clerk is authorized to attest and affix the City's seal to any documents required in connection with the purchase of any such policy or policies. The City hereby agrees to the following: (a) "Insurance Policy" shall be defined as follows: "the insurance policy issued by the Insurer guaranteeing the scheduled payment of principal of and interest on the Bonds when due". "Insurer" shall be defined as follows: "Assured Guaranty Municipal Corp., a New York stock insurance company, or any successor thereto or assignee thereof". (b) The prior written consent of the Insurer shall be a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the Debt Service Reserve Fund, if any. Notwithstanding anything to the contrary set forth in the Ordinance, amounts on deposit in the Debt Service Reserve Fund shall be applied solely to the payment of debt service due on the Bonds. (c) The Insurer shall be deemed to be the sole holder of the Insured Bonds for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the holders of the Bonds insured by it are entitled to take pursuant to the section or article of the Ordinance pertaining to (i) defaults and remedies and (ii) the duties and obligations of the Paying Agent. In furtherance thereof and as a term of the Ordinance and each Bond, the Paying Agent and each Bondholder appoint the Insurer as their agent and attorney -in -fact and agree that the Insurer may at any time during the continuation of any proceeding by or against the Issuer under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding") direct all matters relating to such Insolvency Proceeding, including without limitation, (A) all matters relating to any claim or enforcement proceeding in connection with an Insolvency Proceeding (a "Claim"), (B) the direction of any appeal of any order relating to any Claim, (C) the -28- #76342462_vl posting of any surety, supersedeas or performance bond pending any such appeal, and (D) the right to vote to accept or reject any plan of adjustment. In addition, the Paying Agent and each Bondholder delegate and assign to the Insurer, to the fullest extent permitted by law, the rights of the Paying Agent and each Bondholder in the conduct of any Insolvency Proceeding, including, without limitation, all rights of any party to an adversary proceeding or action with respect to any court order issued in connection with any such Insolvency Proceeding. Remedies granted to the Bondholders shall expressly include mandamus. (d) The security for the Bonds shall include a pledge of any agreement with any underlying obligor that is a source of payment for the Bonds and a default under any such agreement shall constitute an Event of Default under the Ordinance. If acceleration is permitted under the Ordinance, the maturity of Bonds insured by the Insurer shall not be accelerated without the consent of the Insurer and in the event the maturity of the Bonds is accelerated, the Insurer may elect, in its sole discretion, to pay accelerated principal and interest accrued on such principal to the date of acceleration (to the extent unpaid by the Issuer) and the Paying Agent shall be required to accept such amounts. Upon payment of such accelerated principal and interest accrued to the acceleration date as provided above, the Insurer's obligations under the Insurance Policy with respect to such Bonds shall be fully discharged. No grace period for a covenant default shall exceed 30 days or be extended for more than 60 days, without the prior written consent of the Insurer. No grace period shall be permitted for payment defaults. (e) The Insurer shall be included as a third party beneficiary to the Ordinance. Upon the occurrence of an extraordinary optional, special or extraordinary mandatory redemption in part, the selection of Bonds to be redeemed shall be subject to the approval of the Insurer. The exercise of any provision of the Ordinance which permits the purchase of Bonds in lieu of redemption shall require the prior written approval of the Insurer if any Bond so purchased is not cancelled upon purchase. Any amendment, supplement, modification to, or waiver of, the Ordinance or any other transaction document, including any underlying security agreement (each a "Related Document"), that requires the consent of Bondowners or adversely affects the rights and interests of the Insurer shall be subject to the prior written consent of the Insurer. (f) Unless the Insurer otherwise directs, upon the occurrence and continuance of an Event of Default or an event which with notice or lapse of time would constitute an Event of Default, amounts on deposit in the Construction Fund shall not be disbursed, but shall instead be applied to the payment of debt service or redemption price of the Bonds. The rights granted to the Insurer under the Ordinance or any other Related Document to request, consent to or direct any action are rights granted to the Insurer in consideration of its issuance of the Insurance Policy. Any exercise by the Insurer of such rights is merely an exercise of the Insurer's contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the Bondholders and such action does not evidence any position of the Insurer, affirmative or negative, as to whether the consent of the Bondowners or any other person is required in addition to the consent of the Insurer. -29- #76342462_vl (g) Only (1) cash, (2) non -callable direct obligations of the United States of America ("Treasuries"), (3) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (4) subject to the prior written consent of the Insurer, pre -refunded municipal obligations rated "AAA" and "Aaa" by S&P and Moody's, respectively, or (5) subject to the prior written consent of the Insurer, securities eligible for "AAA" defeasance under then existing criteria of S&P or any combination thereof, shall be used to effect defeasance of the Bonds unless the Insurer otherwise approves. Any obligations or securities deposited as provided in this paragraph, shall qualify under Section 1207.062(b) of the Local Government Code, as amended. To accomplish defeasance, the Issuer shall cause to be delivered (i) a report of an independent firm of nationally recognized certified public accountants or such other accountant as shall be acceptable to the Insurer ("Accountant") verifying the sufficiency of the escrow established to pay the Bonds in full on the maturity or redemption date ("Verification"), (ii) an Escrow Deposit Agreement (which shall be acceptable in form and substance to the Insurer), (iii) an opinion of nationally recognized bond counsel to the effect that the Bonds are no longer "Outstanding" under the Ordinance and (iv) a certificate of discharge of the Paying Agent with respect to the Bonds; each Verification and defeasance opinion shall be acceptable in form and substance, and addressed, to the Issuer, Paying Agent and Insurer. The Insurer shall be provided with final drafts of the above -referenced documentation not less than five business days prior to the funding of the escrow. Bonds shall be deemed Outstanding under the Ordinance unless and until they are in fact paid and retired or the above criteria are met. Notwithstanding the above, in the event any provisions in this Section 30(1) conflict with Section 1207.033 of the Texas Government Code, as amended ("Section 1207.033"), the provisions of Section 1207.033 shall prevail. (h) Amounts paid by the Insurer under the Insurance Policy shall not be deemed paid for purposes of the Ordinance and the Bonds relating to such payments shall remain Outstanding and continue to be due and owing until paid by the Issuer in accordance with the Ordinance. The Ordinance shall not be discharged unless all amounts due or to become due to the Insurer have been paid in full or duly provided for. (i) Each of the Issuer and Paying Agent covenant and agree to take such action (including, as applicable, filing of UCC financing statements and continuations thereof) as is necessary from time to time to preserve the priority of the pledge of the Trust Estate under applicable law. Claims Upon the Insurance Policy and Payments by and to the Insurer. If, on the third Business Day prior to the related scheduled interest payment date or principal payment date ("Payment Date") there is not on deposit with the Paying Agent, after making all transfers and deposits required under the Ordinance, moneys sufficient to pay the principal of and interest on the Bonds due on such Payment -30- #76342462_vl Date, the Paying Agent shall give notice to the Insurer and to its designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on such Business Day. If, on the second Business Day prior to the related Payment Date, there continues to be a deficiency in the amount available to pay the principal of and interest on the Bonds due on such Payment Date, the Paying Agent shall make a claim under the Insurance Policy and give notice to the Insurer and the Insurer's Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay interest on the Bonds and the amount required to pay principal of the Bonds, confirmed in writing to the Insurer and the Insurer's Fiscal Agent by 12:00 noon, New York City time, on such second Business Day by filling in the form of Notice of Claim and Certificate delivered with the Insurance Policy. The Paying Agent shall designate any portion of payment of principal on Bonds paid by the Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Bonds registered to the then current Bondholder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Insurer, registered in the name of Assured Guaranty Municipal Corp., in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Paying Agent's failure to so designate any payment or issue any replacement Bond shall have no effect on the amount of principal or interest payable by the Issuer on any Bond or the subrogation rights of the Insurer. The Paying Agent shall keep a complete and accurate record of all funds deposited by the Insurer into the Policy Payments Account (defined below) and the allocation of such funds to payment of interest on and principal of any Bond. The Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Paying Agent. Upon payment of a claim under the Insurance Policy, the Paying Agent shall establish a separate special purpose trust account for the benefit of Bondholders referred to herein as the "Policy Payments Account" and over which the Paying Agent shall have exclusive control and sole right of withdrawal. The Paying Agent shall receive any amount paid under the Insurance Policy in trust on behalf of Bondholders and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Paying Agent to Bondholders in the same manner as principal and interest payments are to be made with respect to the Bonds under the sections hereof regarding payment of Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments. Notwithstanding anything herein to the contrary, the Issuer agrees to pay to the Insurer (i) a sum equal to the total of all amounts paid by the Insurer under the Insurance Policy (the "Insurer Advances"); and (ii) to the extent permitted by law and subject to annual appropriation, interest on such Insurer Advances from the date paid by the Insurer until payment thereof in full, payable to the Insurer at the Late Payment Rate per annum (collectively, the "Insurer Reimbursement Amounts"). "Late Payment Rate" means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in The City of New York, as -31- #76342462_vl its prime or base lending rate (any change in such rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest rate of interest on the Bonds and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. The Issuer hereby covenants and agrees that the Insurer Advances are secured by a lien on and pledge of the Net Revenues and payable from such Net Revenues on a parity with debt service due on the Bonds. Funds held in the Policy Payments Account shall not be invested by the Paying Agent and may not be applied to satisfy any costs, expenses or liabilities of the Paying Agent. Any funds remaining in the Policy Payments Account following a Bond payment date shall promptly be remitted to the Insurer. 0) The Insurer shall, to the extent it makes any payment of principal of or interest on the Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Insurance Policy (which subrogation rights shall also include the rights of any such recipients in connection with any Insolvency Proceeding). Each obligation of the Issuer to the Insurer under the Related Documents shall survive discharge or termination of such Related Documents. The Issuer shall pay or reimburse the Insurer any and all charges, fees, costs and expenses that the Insurer may reasonably pay or incur in connection with (i) the administration, enforcement, defense or preservation of any rights or security in any Related Document; (ii) the pursuit of any remedies under the Ordinance or any other Related Document or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to, the Ordinance or any other Related Document whether or not executed or completed, or (iv) any litigation or other dispute in connection with the Ordinance or any other Related Document or the transactions contemplated thereby, other than costs resulting from the failure of the Insurer to honor its obligations under the Insurance Policy. The Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Ordinance or any other Related Document. After payment of reasonable expenses of the Paying Agent, the application of funds realized upon default shall be applied to the payment of expenses of the Issuer or rebate only after the payment of past due and current debt service on the Bonds and amounts required to restore the Debt Service Reserve Fund to the Debt Service Reserve Requirement. The Insurer shall be entitled to pay principal or interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Insurance Policy) and any amounts due on the Bonds as a result of acceleration of the maturity thereof in accordance with the Ordinance, whether or not the Insurer has received a Notice of Nonpayment (as such terms are defined in the Insurance Policy) or a claim upon the Insurance Policy. The notice address of the Insurer is: Assured Guaranty Municipal Corp., 31 West 52nd Street, New York, New York 10019, Attention: Managing Director — Surveillance, Re: Policy No. 216211-N, Telephone: (212) 826-0100; Telecopier: (212) 339-3556. In each case in which notice or other communication refers to an Event of Default, then a copy of such notice or other communication shall also be sent to the attention of the General Counsel and shall be marked to indicate "URGENT MATERIAL ENCLOSED." -32- #76342462_vl (k) The Insurer shall be provided with the following information by the Issuer or Paying Agent, as the case may be: (i) Annual audited financial statements within 180 days (or such longer period agreed to by AGM) after the end of the Issuer's fiscal year (together with a certification of the Issuer that it is not aware of any default or Event of Default under the Ordinance), and the Issuer's annual budget within 30 days after the approval thereof together with such other information, data or reports as the Insurer shall reasonably request from time to time; (ii) Notice of any draw upon the Debt Service Reserve Fund within two Business Days after knowledge thereof other than (i) withdrawals of amounts in excess of the Debt Service Reserve Requirement and (ii) withdrawals in connection with a refunding of Bonds; (iii) Notice of any default known to the Paying Agent or Issuer within five Business Days after knowledge thereof; (iv) Prior notice of the advance refunding or redemption of any of the Bonds, including the principal amount, maturities and CUSIP numbers thereof, (v) Notice of the resignation or removal of the Paying Agent and Bond Registrar and the appointment of, and acceptance of duties by, any successor thereto; (vi) Notice of the commencement of any proceeding by or against the Issuer or Obligor commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding"); (vii) Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest on, the Bonds; (viii) A full original transcript of all proceedings relating to the execution of any amendment, supplement, or waiver to the Related Documents; and (ix) All reports, notices and correspondence to be delivered to Bondholders under the terms of the Related Documents. In addition, to the extent that the Issuer has entered into a continuing disclosure agreement, covenant or undertaking with respect to the Bonds, all information furnished pursuant to such agreements shall also be provided to the Insurer, simultaneously with the furnishing of such information. -33- #76342462_vl (1) The Insurer shall have the right to receive such additional information as it may reasonably request. The Issuer will permit the Insurer to discuss the affairs, finances and accounts of the Issuer or any information the Insurer may reasonably request regarding the security for the Bonds with appropriate officers of the Issuer and will use commercially reasonable efforts to enable the Insurer to have access to the facilities, books and records of the Issuer on any business day upon reasonable prior notice. The Issuer shall notify the Insurer of any failure of the Issuer to provide notices, certificates and other information under the transaction documents. Notwithstanding satisfaction of the other conditions to the issuance of Additional Bonds set forth in the Ordinance, no such issuance may occur (1) if an Event of Default (or any event which, once all notice or grace periods have passed, would constitute an Event of Default) exists unless such default shall be cured upon such issuance and (2) unless the Debt Service Reserve Fund is fully funded at the Debt Service Reserve Requirement (including the proposed issue) upon the issuance of such Additional Bonds, in either case unless otherwise permitted by the Insurer. In determining whether any amendment, consent, waiver or other action to be taken, or any failure to take action, under the Ordinance would adversely affect the security for the Bonds or the rights of the Bondholders, the Paying Agent shall consider the effect of any such amendment, consent, waiver, action or inaction as if there were no Insurance Policy. No contract shall be entered into or any action taken by which the rights of the Insurer or security for or sources of payment of the Bonds may be impaired or prejudiced in any material respect except upon obtaining the prior written consent of the Insurer. If the Bonds are issued for refunding purposes, there shall be delivered an opinion of Bond Counsel addressed to the Insurer (or a reliance letter relating thereto), or a certificate of discharge of the Paying Agent for the Refunded Obligations, to the effect that, upon the making of the required deposit to the escrow, the legal defeasance of the Refunded Obligations shall have occurred. If the Refunded Obligations are insured by Assured Guaranty Municipal Corp., at least three business days prior to the proposed date for delivery of the Policy with respect to the Refunding Bonds, the Insurer shall also receive (i) the verification letter, of which the Insurer shall be an addressee, by an independent firm of certified public accountants which is either nationally recognized or otherwise acceptable to the Insurer, of the adequacy of the escrow established to provide for the payment of the Refunded Obligations in accordance with the terms and provisions of the Escrow Deposit Agreement, and (ii) the form of an opinion of Bond Counsel addressed to the Insurer (or a reliance letter relating thereto) to the effect that the Escrow Deposit Agreement is a valid and binding obligation of the parties thereto, enforceable in accordance with its terms (such Escrow Deposit Agreement shall provide that no amendments are permitted without the prior written consent of the Insurer). An executed copy of each of such opinion and reliance letter, if applicable, or Paying Agent's discharge certificate, as the case may be, shall be forwarded to the Insurer prior to delivery of the Bonds. Any interest rate exchange agreement ("Swap Agreement") entered into by the Issuer shall meet the following conditions: (i) the Swap Agreement must be entered into to manage interest costs related to, or a hedge against (a) assets then held, or (b) debt then outstanding, or (iii) debt reasonably expected to be issued within the next twelve (12) months, and (ii) the Swap Agreement shall not contain any leverage element or multiplier component greater than 1.0x unless there is a matching hedge arrangement which effectively off -sets the exposure from any such element or -34- #76342462_vl component. Unless otherwise .consented to in writing by the Insurer, any uninsured net settlement, breakage or other termination amount then in effect shall be subordinate to debt service on the Bonds and on any debt on parity with the Bonds. The Issuer shall not terminate a Swap Agreement unless it demonstrates to the satisfaction of the Insurer prior to the payment of any such termination amount that such payment will not cause the Issuer to be in default under the Related Documents, including but not limited to, any monetary obligations thereunder. All counterparties or guarantors to any Swap Agreement must have a rating of at least "A-" and "AT' by Standard & Poor's (`S&P") and Moody's Investors Service ("Moody's"). If the counterparty or guarantor's rating falls below "A-" or "AT' by either S&P or Moody's, the counterparty or guarantor shall execute a credit support annex to the Swap Agreement, which credit support annex shall be acceptable to the Insurer. If the counterparty or the guarantor's long term unsecured rating falls below "Baal" or "BBB+" by either Moody's or S&P, a replacement counterparty or guarantor, acceptable to the Insurer, shall be required. Any consent, approval or permit required herein by the Insurer shall not be unreasonably withheld. ARTICLE XVI MISCELLANEOUS Section 16.01. Changes to Ordinance. Bond Counsel is hereby authorized to make changes to the terms of this Ordinance if necessary or desirable to carry out the purposes hereof or in connection with the approval of the issuance of the Bonds by the Attorney General of Texas. Section 16.02. Related Matters. To satisfy in a timely manner all of the City's obligations under this Ordinance, the Mayor, the City Clerk and all other appropriate officers and agents of the City are hereby authorized and directed to do any and all things necessary and/or convenient to carry out the terms and purposes of this Ordinance. Section 16.03. Individuals Not Liable. No covenant, stipulation, obligation or agreement herein contained shall be deemed to be a covenant, stipulation, obligation or agreement of any member of City Council or agent or employee of City Council or of the City in his or her individual capacity and neither the members of City Council nor any officer thereof, nor any agent or employee of City Council or of the City, shall be liable personally on the Bonds, or be subject to any personal liability or accountability by reason of the issuance thereof. Section 16.04. Severability and Savings. 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. -35- #76342462_vl Section 16.05. Repealer. All ordinances or resolutions, or parts thereof, heretofore adopted by the City and inconsistent with the provisions of this Ordinance are hereby repealed to the extent of such conflict. Section 16.06. Force and Effect. This Ordinance shall be in full force and effect from and after its final passage, and it is so ordained. -36- #76342462_vl PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. ATTEST: City Clerk Signature Page - Mayor Becky Ames - #76342462_vl SCHEDULEI REFUNDED OBLIGATIONS City of Beaumont, Texas Certificates of Obligation, Series 2012 City of Beaumont, Texas General Obligation Refunding Bonds, Series 2012 City of Beaumont, Texas Certificates of Obligation, Series 2013 Schedule I-1 #76342462_vl EXHIBIT A FORM OF PRICING CERTIFICATE [See Attached] Exhibit A-1 #76342462_vl M July 28, 2020 Consider a resolution providing for the reimbursement of capital expenditures incurred prior to the closing of financing BEAUMONT TEXAS TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Todd Simoneaux, Chief Financial Officer MEETING DATE: July 28, 2020 REQUESTED ACTION: Council consider a resolution providing for the reimbursement of capital expenditures incurred prior to the closing of financing. BACKGROUND The 2020 Capital Program Budget includes ongoing water and sewer infrastructure improvements that will continue into FY 2021. As of June 30, 2020, the Water Utilities Improvement Fund has a cash balance of just over $550,000. Bond proceeds in the amount of $25 million is being requested to fund those ongoing infrastructure improvements for fiscal years 2021 and 2022. The proceeds from this bond issue will not be received until early October of 2020 and it is expected that the Water Utilities Fund will have depleted the remaining cash balance prior to receiving those funds. A reimbursement resolution is warranted to allow the City to reimburse itself out of the proceeds of the financing. FUNDING SOURCE The debt proceeds related to this financing will be recorded in the Water Utilities Improvement Fund. RECOMMENDATION Approval of the resolution. RESOLUTION NO. RESOLUTION DECLARING AN INTENT TO REIMBURSE THE CITY OF BEAUMONT FOR CERTAIN FUNDS EXPENDED IN CONNECTION WITH THE CITY'S FUNDING OF WATER AND SEWER INFRASTRUCTURE IMPROVEMENTS FROM PROCEEDS OF WATERWORKS AND SEWER SYSTEM REVENUE BONDS TO BE ISSUED BY THE CITY WITHIN ONE YEAR. WHEREAS, the City as permitted by Section 1.150-2 of the Treasury Regulations, desires reimbursement from proceeds from the issuance of certain certificates of obligation and any other expenses in connection with the City making Water and Sewer infrastructure improvements (the "Improvements") within the City limits, not to exceed $10,000,000; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: Section 1. The City Council hereby finds and adopts the recitals set forth above. Section 2. The City hereby declares its intention to issue its Waterworks and Sewer System Revenue bonds to reimburse itself, plus any additional expenses in connection with the Improvements, not to exceed $10,000,000 for the expenditures described in the recitals hereof. Section 3. If any Section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or enforceability of such section, paragraph, clause, or provision shall not affect any of the remaining provisions of this Resolution. Section 4. It is hereby found, determined and declared that a sufficient written notice of the date, hour, place and subject of the meeting of the City Council at which this Resolution was adopted was posted at a place convenient and readily accessible at all times to the general public at the City for the time required by law preceding this meeting, as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended, and that this meeting has been open to the public as required by law at all times during which this Resolution and the subject matter thereof has been discussed, considered and formally acted upon. The City Council further ratifies, approves and confirms such written notice and the contents and posting thereof. Section 5. All prior orders, resolutions, and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency. The meeting at which this resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. - Mayor Becky Ames — ATTEST: City Clerk July 28, 2020 Consider a resolution approving a contract for the purchase of sodium hydroxide for use by the Water Utilities Department BEAUMONT TEXAS TO: FROM: PREPARED BY: MEETING DATE: REQUESTED ACTION: 1 i :Ty ►1CO ZII10 rC City Council Kyle Hayes, City Manager Todd Simoneaux, Chief Financial Officer ./ 41 July 28, 2020 Council consider a resolution approving a contract for the purchase of sodium hydroxide for use by the Water Utilities Department. Sodium hydroxide is used to purify the City's water supply. The Water Utilities Department expects to purchase approximately five hundred thirty two (532) dry tons of this material during the term of this contract. Formal bids were requested from nine vendors; four responded. DXI Industries, Inc. responded with a bid of $428.42 per ton and a total estimated amount of $227,919.44. This represents an $18.42/ton or (4.5%) increase in the price of this material over the last contract. Specifications allow for a six month contract with the option of two renewals of six month terms at the same pricing as the awarded contract. DXI Industries, Inc., has previously held this contract. There are no local vendors of this commodity. Bid tabulation is attached. FUNDING SOURCE Water Utilities Fund. RECOMMENDATION Approval of the resolution. City of Beaumont Texas BEAUM©NY Purchasing Division Bid Tabulation TEXAS Bid Name: Six (6) Month contract for Sodium Hydroxide Bid Number: TF0620-33 Bid Opening: Thursday, July 16, 2020 Contact Person: Terry Welch, Senior Buyer terry.welch(c)beau monttexas. q ov Phone 409-880-3107 DXI Industries, Inc Brenntag Southwest, Inc TDC, LLC Vendor City / State Houston, Tx Houston, Tx Houston, Tx Phone or Fax No. 281-457-4807 713-450-4699 318-242-5299 ITEM DESC (TONS) Unit Price Extended Price Unit Price Extended Price Unit Price Extended Price 1 Sodium Hydroxide 532 $428.42 $227,919.44 $469.00 $249,508.00 $490.00 $260,680.00 TOTAL BID $227,919.44 $249,508.00 $260,680.00 Vendor PENNCO, Inc City / State San Felipe, Tx Phone or Fax No. ITEM DESC QTY (TONS) Unit Price Extended Price 1 Sodium Hydroxide 532 TOTAL BID I NO BID Qualified low bidder is DXI Industries, Inc. as Hilighted in Bold. RESOLUTION NO. WHEREAS, bids were solicited for a six (6) month contract, with the option of two (2) renewals of six (6) month terms at the same pricing as the awarded contract, for the purchase of Sodium Hydroxide for use by the Water Utilities Department; and, WHEREAS, DXI Industries, Inc., of Houston, Texas, submitted a bid for an estimated total expenditure of $227,919.44 in the unit amounts shown below: VENDOR UNIT PRICE PER ESTIMATED COST TON 532 TONS DXI Industries, Inc. $428.42 $227,919.44 Houston, TX ; and, WHEREAS, the City Council is of the opinion that the bid submitted by DXI Industries, Inc., of Houston, Texas, is the lowest responsible bidder providing the best value to the City and should be accepted; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this resolution are hereby, in all things, approved and adopted; and, THAT the bid submitted by DIX Industries, Inc., of Houston, Texas, for a six (6) month contract, with the option of two (2) renewals of six (6) month terms at the same pricing as the awarded contract, for the purchase of Sodium Hydroxide in the unit prices shown above for an estimated total expenditure of $227,919.44 be accepted by the City of Beaumont; and, BE IT FURTHER RESOLVED THAT the City Manager be and he is hereby authorized to execute a contract with DXI Industries, Inc., of Houston, Texas, for the purposes described herein. The meeting at which this resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. - Mayor Becky Ames - 0 July 28, 2020 Consider a resolution authorizing the City Manager to award a contract to Placo, Ltd., of Lumberton, for the Astor Street Lift Station Repairs TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Bart Bartkowiak, Director of Public.Works & Technology Services MEETING DATE: July 28, 2020 REQUESTED ACTION: Council consider a resolution authorizing the City Manager to award a contract. to Placo, Ltd., of Lumberton, for the Astor Street Lift Station Repairs. BACKGROUND The contract shall provide for the removal of the existing electrical panel and installation of a, new elevated. platform, and new electrical equipment to the Astor Street Lift Station due to damages from Tropical Storm Harvey. On July 8, 2020, three (3) bids were received for furnishing all labor, materials, equipment, and supplies for the project. The bid totals are indicated in the table below: Contractor Contractor Location Total Award Amount Placo, Ltd. Lumberton, Texas $151,546.39- - BDS Constructors LLS dba MK Constructors Vidor, Texas .$153,587.00 ALLCO Beaumont, Texas J $203,851.00 Engineer's Estimate $112,000.00 Based on a review of the bids and required documents received, the Water Utilities -Department agrees with Schaumburg & Polk, Inc., and recommends awarding the project to the lowest - bidder, Placo, Ltd., in the amount of $151,546.39. A total of 120 calendar days are allocated for the completion of this project. FUNDING SOURCE $101,647.43 from FEMA and $49,898.96 from the Harvey Fund. RECOMMENDATION Approval of the resolution. July 14, 2020 Ms. Amelia Villarreal, P; E. City Engineer City of Beaumont 801 Main Street Beaumont, Texas 77701 Re: City of Beaumont Lift Station & WWTP Repairs Tropical Storm Harvey Astor Street Lift Station Bid No. W00620-09 /FEMA Project #13476 Dear Ms. Villarreal, SCHAUMBURG cS. POUF, irre. Based on a review of the -bids received July 8, 2020, and qualifications of the low bidder and his subcontractor, Electrical Specialties, Inc. it is our recommendation that. the above referenced. project be awarded for Base Bid Items 1 thru 5 to Placo; Ltd. in the amount of $151,546..39. See attached Bid Tabulation. Sincerely, SCHAUMBURG & POLK, INC. Jeffrey G. aver, P.E. Chief Operating Officer t$IU TAI3ULAIIUN CITY OF BEAUMONT, TEXAS LIFT STATION & WWTP REPAIR TROPICAL STORM HARVEY ASTOR STREET LIFT STATION WU0620-09 J FEMA PROJECT #13476 Bin OPFNINA DATFe Thurcrrav- Anly 9- 9n9n r1 9-nn PM Placo, Ltd. BDS Constructors LLS ALLCO Item Qty Unit Description 1.1939 Latherwood Dr. dba MK Constructors p0 Box 1208 6720 College St Lumberton, TX 77657 Victor, TX 77662 t, TX 77707 Beaumon Unit Price Item Total Unit Price Item Total Unit Price Item.Total BASE BID ITEMS Mobilization, including payment bond, performance. bond, insurance, moving equipment.to project, 1. 1 LS and demobilization, all in strict conformance with plans and specifications; 'NOT TO EXCEED 3% OF $4,546.39 $4,546.39 $5,062.00 $5,062.00 : $6.500.00 $6,600.00 TOTAL PROJECT BID for,. . Existing ElectricaL Furnish all labor, equipment and material to disconnect and remove:all existing electrical equipment and salvage for Owner including coordinating with Entergy to 2 1 LS disable power at the site, removing the existing, electrical rack, all in strict accordance with V-3,000.00 $23.000.00 S16,875.00 $16,875.00 $16.000.00 $16,000.00 the plans and specifications for, Site. improvements. Furnish all labor, equipment and materials to construct a new concrete 3. 1 LS slab, and remove and replace a portion of the site chain link fence, all in strict accordance S21,000.00 $21,000.00 SI6,600.00 $16.600.00 $14,053:10 $14.053.t0 with plans and specifications for, Elevated Platform. Fumish all labor, equipment and materials to construct a new elevated 4; 1 EA galvanized steel platform including structural steel; galvanized grating, fasteners, and S25,000.00 $25,000.00 S43,550.00 S43,550.00 $59,818.22 $59.818.22 reinforced concrete foundations, all in strict accordance with plans and specifications for, Proposed Electrical. Fumish all labor, equipment and materials to install all new electrical equipment on the new elevated platform including, a new pump control panel, climate control unit, remove existing pumps and install new Owner provided pumps, 25kva 5. 1 LS transformer, manual transfer switch, float junction box, pump junction box, installing and S78,000.00 $78,000.00 S71,500.00 $71,500.00 $107,479.68 $107,479.68 reconnecting the existing Fleet Zoom equipment, reconnecting existing ultrasonic transducer; service pole, meter, generator receptacle, disconnect panel, conduits and conductors, grounding, and start-up, all in strict accordance with plans and specifications for, BASE BID TOTAL pTEMS 1-14 $151,546.39 $153,587.00 $203.851.00 Required Forms Checklist y Y y Bid y y y Bid Summary y y y Corporate Resolution y y y Bid Bond y y y Information Required of Bidder y y y Conflict of Interest Questionnaire ` y y y Statement of City Charter Provisions on Conlict of Interst y y y Insurance Verifration Affidavit y y y MBE Schedule C y y y FEMA.Clauses for Construction Projects y y y I ne nia P'roposais SUDmlttea nave been reviewed, ana to the best Ot my Knowledge this is. an accurate tabulation Ot the bids received. o`3G 0F -rz- U� � , it .. �JEFFREY G. BEAVER Q ............................ 606.76. iv s^ GfST�-�-.e�$, � FJ�O:i ] AL ,'. Q• RESOLUTION NO. WHEREAS, the City of Beaumont solicited bids for furnishing all labor, materials, equipment, and supplies for the Astor Street Lift Station Repairs Project; and, WHEREAS, Placo, Ltd., of Lumberton, Texas, submitted a complete bid meeting specifications in the amount of $151,546.39; and, WHEREAS, the City Council is of the opinion that the bid submitted by Placo, Ltd., of Lumberton, Texas, is the lowest responsible bidder providing services at the best value to the City and should be accepted; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this resolution are hereby, in all things, approved and adopted; and, THAT the City Council hereby approves the award of a contract to Placo, Ltd., of Lumberton, Texas, in the amount of $151,546.39, for the Astor Street Lift Station Repairs Project; and, BE IT FURTHER RESOLVED THAT the City Manager be and he is hereby authorized to execute a contract with Placo, Ltd., of Lumberton, Texas, for the purposes described herein. The meeting at which this resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. - Mayor Becky Ames - July 28, 2020 Consider a resolution approving a contract for the construction of a new fixed knot and ornamental fence at the Tyrrell Park Botanical Garden Center BEAUMONT TEXAS TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Todd Simoneaux, Chief Financial Officer MEETING DATE: July 28, 2020 REQUESTED ACTION: Council consider a resolution to approve a contract for the construction of a new fixed knot and ornamental fence at the Tyrrell Park Botanical Garden Center. BACKGROUND The City requested proposals for a new fixed knot and ornamental fence system to enclose the Tyrrell Park Botanical Garden Center complex to mitigate damage to the property by feral hogs. Bids were requested from twelve (12) vendors and two responses were received. The low qualified bid to complete the base bid was received from Al Maida of Beaumont in the amount of $65,500 with an alternate bid of $5,500 for the installation of approximately 1,643 linear feet of below grade hog barrier. The contractor will complete the base bid in 30 calendar days or a total of 45 calendar days if the alternate bid is awarded. Bid tabulation is attached. FUNDING SOURCE Capital Reserve Fund. RECOMMENDATION Approval of the resolution. BEAUMONT TEXAS CITY OF BEAUMONT — PURCHASING DIVISION Terry Welch — Senior Buyer 409-880-3107 terrv.welch0bbeaumonttexas.gov Contract to Construct a New Fixed Knot and Ornamental Fence at The BID TABULATION: Tyrell Park Garden Center Located at 6088 Babe Zaharlas Dv, Beaumont, Tx BID No. TF0620-35 OPENING DATE: Thursday, July 16, 2020 Vendor Al Maida Fence U.S. Fence & Gate, Inc. City / State Beaumont, Tx Orange, Tx Description Bid Price Bid Price Base Bid for Scope as Specified (Per $65,500.00 $119,646.00 Dwgs & Specifications Completion time for Base Bid: 30 Calendar Days 60 Calendar Days Alternate # 1-Additional Cost for Installing appoximately 1,643 lineal feet $5,500.00 $19,716.00 +/- of below grade hog barrier as specified . Completion Time Base Bid Including 45 Calendar Days 20 Calendar Days Alternate #1 bid. Low quallfied bidder as HI lighted Is Al Malda Fence. RESOLUTION NO. WHEREAS, bids were solicited for the construction of a new fixed knot and ornamental fence at Tyrrell Park Botanical Garden Center; and, WHEREAS, Al Maida, -of Beaumont, Texas, submitted a bid in the amount of $65,500.00, with an alternate bid of $5,500.00 for the installation of approximately 1,643 linear feet of below grade hog barrier; and, WHEREAS, the City Council is of the opinion that the bid submitted by Al Maida, of Beaumont, Texas, is the lowest responsible bidder providing the best value to the City and should be accepted; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this resolution are hereby, in all things, approved and adopted; and, THAT the bid submitted by Al Maida, of Beaumont, Texas, in the amount of $65,500.00 for the installation of a new fixed knot and ornamental fence at Tyrrell Park Botanical Garden Center, with an alternate bid of $5,500.00 for the installation of approximately 1, 643 linear feet of below grade hog barrier be accepted by the City of Beaumont; and, BE IT FURTHER RESOLVED THAT the City Manager is authorized to execute a contract with Al Maida, of Beaumont, Texas, for the purposes described herein. The meeting at which this resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. - Mayor Becky Ames - WORK SESSION Review and discuss the findings of the Phase I Assessment of the Sewer System WORK SESSION Review and discuss the operations of the Water Department WORK SESSION Review and discuss making application to FEMA for Hurricane Harvey Direct Administrative Costs 10 July 28, 2020 Consider a resolution authorizing the City Manager to make application to FEMA for Hurricane Harvey Direct Administrative Costs BEAUMONT TEXAS TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Bart Bartkowiak, Director of Public Works & Technology Services MEETING DATE: July 28, 2020 REQUESTED ACTION: Council consider a resolution authorizing the City Manager to make application to FEMA for Hurricane Harvey Direct Administrative Costs During certain federally declared disasters, administrative costs directly involving recovery efforts by employees are eligible for reimbursement. Normally, this time is calculated separately for each project. However, following "Superstorm" Sandy's impact on the Northeast portion of the country, FEMA established a pilot program to simplify and reduce the administrative burden on all parties by allocating 4% of total federal funding awarded to the jurisdiction as an additional allocation to cover administrative costs. Upon completion of the project repairs, an additional 1 % of the total allocation is awarded. This option was offered for Hurricane Harvey for Direct Administrative Costs (DAC), which covers payroll time for working directly on Harvey related projects. Beaumont has 69 projects ongoing with FEMA, currently obligating about $68.8M. Several projects have not been obligated yet and some additional funding is likely. At this time, approximately $2.7M is available. Staff would like to apply for DAC funding for the following projects to the extent DAC is available: 1. Approximately $276,330 would for an Atlas 14 update to the Master Drainage plan to comply with latest rainfall projections. 2. Approximately $110,000 for Payroll reimbursement for administrative costs in processing Harvey projects over the past three years. 3. Approximately $10,000 for a sandbagging machine that would reduce personnel requirementsfor filling sandbags. 4. Approximately $37,000 for Personal Flotation Devices (PFDs) to mitigate hazards for first responders conducting search and rescue operations in high water and flooded areas. 5. Approximately $500,000 for two additional caustic storage tanks at the Pine Street water plant needed for maintaining water production when it is difficult to get additional chemical shipments. 6. Approximately $200,000 for a "mixer" for the Dishman Water Storage Tank to mitigate water stagnation during off-peak usage. 7. Approximately $250,000 to upgrade the SCADA system at Loeb Water Treatment Facility to enhance reliability and enable remote monitoring and control. 8. Approximately $400,000 for rehabilitation of the Loeb water storage tanks to mitigate leakage and protect the water integrity. FUNDING. SOURCE FEMA Direct Administrative Costs. RECOMMENDATION Approval of the resolution. Page 2 of 2 RESOLUTION NO. WHEREAS, during certain federally declared disasters, administrative costs directly involving recovery efforts by employees are eligible for reimbursement; and, WHEREAS, normally, this time is calculated separately for each project; and, WHEREAS, following "Superstorm" Sandy's impact on the Northeast portion of the country, FEMA established a pilot program to simplify and reduce the administrative burden on all parties by allocating 4% of total federal funding awarded to the jurisdiction as an additional allocation to cover administrative costs; and, WHEREAS, upon completion of the project repairs, an additional 1 % of the total allocation is awarded; and, WHEREAS, this option was offered for Hurricane Harvey for Direct Administrative Costs (DAC), which covers payroll time for working directly on Harvey related projects; and, WHEREAS, Beaumont has 69 projects ongoing with FEMA, currently obligating about $68.8M; and, WHEREAS, several projects have not been obligated yet and some additional funding is likely; and, WHEREAS, at this time, approximately $2.7M is available; and, WHEREAS, the City Council is of the opinion that it is in the best interest of the citizens of Beaumont to authorize the City Manager to apply to FEMA for Hurricane Harvey Direct Administrative Costs; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this resolution are hereby, in all things, approved and adopted; and, THAT the City Manager be and he is hereby authorized to apply to FEMA for Hurricane Harvey Direct Administrative Costs. The meeting at which this resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 28th day of July, 2020. - Mayor Becky Ames -