O-2016-3621 Authorizing and Ordering the Issuance, Sale and Delivery of City of La Porte, Texas, General Obligation Refunding Bonds, Series 2016

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income tax purposes, pay to the United States the amount described in paragraph (2) above at the times, in the installments, to the place, in the manner and accompanied by such forms or other information as is or may be required by section 148(f) of the Code and the regulations and rulings thereunder, and (4) exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and, if such error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon and any penalty required by the Regulations. (i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the final stated maturity or final payment of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection (h) of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds, not been relevant to either party. 0) Not Hedge Bonds. The City did not invest more than 50 percent of the Proceeds of the original bonds refunded by the Bonds in Nonpurpose Investments having a guaranteed yield for four years or more. On the Issue Date of each series of the original bonds refunded by the Bonds, the City reasonably expected that at least 85 percent of the spendable proceeds of such bonds would be used to carry out the governmental purpose of such bonds within three years after the respective Issue Date of such bonds. Section 7.6.: Qualified Tax -Exempt Obligations. The City has determined that the Bonds will be deemed designated as "qualified tax-exempt obligations" as defined in Section 265(b)(3) of the Code. With respect to such designation, the City represents the following: (i) the Bonds are a current refunding of the Refunded Obligations, (ii) the Refunded Obligations were designated as "qualified tax-exempt obligations", (iii) the weighted average maturity of the Bonds shall not exceed the remaining weighted average maturity of the Refunded Obligations, (iv) the amount of the Bonds does not exceed $10,000,000, and (v) the maturity date of the Bonds is not later than 30 years after the date of the original "qualified tax-exempt obligations" were issued. Section 7.7.: Defeasance of Refunded Obligations. The discharge and defeasance of the Refunded Obligations may be effectuated pursuant to the terms and provisions of an escrow agreement, a deposit agreement or a similar agreement, a letter of instructions or any other instrument relating to the safekeeping, investment, administration and disposition of moneys deposited to effect the defeasance of the Refunded Obligations in such form and subject to such terms and conditions as the Pricing Officer determines may be necessary or convenient to carry out the intent and purpose of this Order. The Mayor is hereby authorized to execute and deliver such Escrow Agreement on behalf of the City in multiple counterparts and the City Secretary is hereby authorized to attest thereto and affix the City's seal. 17 HOU:3622910.1