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HomeMy WebLinkAboutO-2019-3769 Authorizing and ordering the issuance, sale, and delivery of City of La Porte General Obligation Refunding Bonds, Series 2020ORDINANCE NO. 2019-3769 ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE, SALE AND DELIVERY OF CITY OF LA PORTE, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020; DELEGATING TO AUTHORIZED REPRESENTATIVES THE AUTHORITY TO APPROVE THE TERMS THEREOF AND CERTAIN OTHER PROCEDURES AND PROVISIONS RELATED THERETO; AUTHORIZING THE REDEMPTION PRIOR TO MATURITY OF CERTAIN OUTSTANDING OBLIGATIONS; AND MAKING OTHER PROVISIONS REGARDING THE BONDS AND MATTERS INCIDENT THERETO BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS: ARTICLE I. FINDINGS AND DETERMINATIONS Section 1.1.: Findings and Determinations. The City Council hereby officially finds and determines that: (a) The City of La Porte, Texas (the "City"), acting through its City Council, is authorized by its Home Rule Charter and the Constitution and laws of the State of Texas, particularly Chapter 1207, Texas Government Code, as amended (the "Act"), to issue bonds for the purpose of refunding its outstanding obligations; (b) The City, acting through its City Council, has heretofore issued and there remain outstanding the obligations described in Schedule 1 attached hereto (the "Refunding Candidates"); (c) The City desires to refund all or a portion of the Refunding Candidates in advance of their maturities in order to achieve net present value debt service savings for the City; (d) The City desires, pursuant to Section 1207.007 of the Act, to delegate to each of the Authorized Representatives named herein the authority to effect the sale of the Bonds, including the selection of the Refunding Candidates to be refunded (such selected Refunding Candidates to be known herein as the "Refunded Obligations"), within certain parameters herein described; and (e) The City is authorized by the Act to accomplish such refunding by depositing directly with any place of payment for the Refunded Obligations or a trust company or commercial bank the proceeds from the sale of such refunding bonds, together with any other legally available funds, which shall be sufficient to provide for the payment of the Refunded Obligations on their date of redemption, and such deposit shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; and (f) Upon the issuance of the refunding bonds herein and the deposit of moneys and investments herein authorized, the Refunded Obligations shall no longer be regarded as being outstanding, except for the purpose of being paid from such moneys and investments, and the pledges, liens, trusts and all other covenants, provisions, terms and conditions of the ordinances S-1 authorizing the issuance of the Refunded Obligations shall be, with respect to the Refunded Obligations, discharged, terminated and defeased. ARTICLE II. DEFINITIONS AND INTERPRETATIONS Section 2.1.: Definitions. As used herein, the following terms shall have the meanings specified, unless the context clearly indicates otherwise: "Act" shall mean Chapter 1207, Texas Government Code, as amended. "Attorney General" shall mean the Attorney General of the State of Texas. "Authorized Representatives" shall mean each of the Mayor, the City Manager, the Assistant City Manager and the Director of Finance of the City. "Bond" or "Bonds" shall mean any or all of the City of La Porte, Texas, General Obligation Refunding Bonds, Series 2020, authorized by this Ordinance. "City" shall mean the City of La Porte, Texas, and, where appropriate, its City Council. "City Council" shall mean the governing body of the City. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas. "DTC" shall mean The Depository Trust Company, New York, New York, or any successor securities depository. "DTC Participant" shall mean brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Debt Service Fund" shall mean the General Obligation Refunding Bonds, Series 2020, Debt Service Fund established by the City and described in section 5.2 of this Ordinance. "Escrow Agent" shall mean the place of payment for the Refunded Obligations or trust company or commercial bank identified in the Escrow Agreement, and its successors in such capacity. "Escrow Agreement" shall mean an agreement between the City and the Escrow Agent relating to the deposit of funds to pay the Refunded Obligations. "Fiscal Year" shall mean the City's then designated fiscal year, which currently is the twelve- month period beginning on the first day of October of a calendar year and ending on the last day of September of the next succeeding calendar year and each such period may be designated with the number of the calendar year in which such period ends. "Interest Payment Date," when used in connection with any Bond, shall mean September 15, 2020, and each March 15 and September 15 thereafter until maturity or earlier redemption of such Bond, unless otherwise provided in the Officers' Pricing Certificate. "Issuance Date" shall mean the date of initial delivery of the Bonds to the Underwriters in exchange for payment of the purchase price therefor. "Officers' Pricing Certificate" shall mean a certificate signed by the Authorized Representatives and containing the information regarding the Bonds specified in Sections 3, 4 and 5 hereof and substantially in the form of Exhibit A hereto. "Ordinance" shall mean this Ordinance and all amendments hereof and supplements hereto. "Outstanding," when used with reference to the Bonds, shall mean, as of a particular date, all Bonds theretofore and thereupon delivered pursuant to this Ordinance except: (a) any Bonds canceled by or on behalf of the City at or before such date; (b) any Bonds defeased pursuant to the defeasance provisions of this Ordinance or otherwise defeased as permitted by applicable law; and (c) any Bonds in lieu of or in substitution for which a replacement Bond shall have been delivered pursuant to this Ordinance. "Paying Agent/Registrar" shall mean the bank or trust company identified in the Paying Agent/Registrar Agreement referred to in Section 6.1 of this Ordinance and its successors in the capacities of paying agent and registrar for the Bonds. "Record Date" shall mean the close of business on the last business day of the calendar month immediately preceding the applicable Interest Payment Date. "Refunded Obligations" shall mean those obligations described as such in the Officers' Pricing Certificate. "Register" shall mean the registration books for the Bonds kept by the Paying Agent/Registrar in which are maintained the names and addresses of, and the principal amounts registered to, each Registered Owner of Bonds. "Registered Owner" shall mean the person or entity in whose name any Bond is registered in the Register. "Underwriters" shall mean the purchaser or purchasers of the Bonds identified in the Officer's Pricing Certificate. Section 2.2.: 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 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. This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of the Bonds and the validity of the levy of ad valorem taxes to pay the principal of and interest on the Bonds. ARTICLE III. TERMS OF THE BONDS Section 3.1.: Amount, Purpose and Authorization. (a) The Bonds shall be issued in fully registered form, without coupons, under and pursuant to the authority of the City's Home Rule Charter and the Act in the total authorized aggregate principal amount not to exceed TWO MILLION NINE HUNDRED TWENTY-FIVE THOUSAND AND NO/100 DOLLARS ($2,925,000) for the purpose of refunding the Refunded Obligations. Proceeds of the Bonds also will be used to pay the costs of issuing of the Bonds and refunding the Refunded Obligations. (b) It is hereby found and determined that the refunding of the Refunded Obligations and the issuance of the Bonds will benefit the City by reducing net present value debt service, and that such benefit is sufficient consideration for the issuance of the Bonds. Section 3.2.: Designation and Date. The Bonds shall be designated as the "City of LaPorte, Texas, General Obligation Refunding Bonds, Series 2020," shall be dated February 1, 2020, and shall bear interest from the Issuance Date, unless otherwise provided in the Officers' Pricing Certificate. Section 3.3.: Numbers, Denomination, Interest Rates and Maturities. Unless otherwise provided in the Officers' Pricing Certificate, the Bonds shall initially be issued bearing the numbers and shall mature on the dates, in the principal amounts and bearing interest at the rates set forth in the Officers' Pricing Certificate, and may be transferred and exchanged as set out in this Ordinance. Bonds delivered in transfer of or in exchange for other Bonds shall be numbered in 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. Section 3.4.: Sale and Delivery of Bonds. As authorized by Section 1207.007 of the Act, the Authorized Representatives 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, without limitation, determining the date on and price at which the Bonds will be sold, the Issuance Date and dated date, the dates on which the Bonds will mature, the aggregate principal amount of the Bonds, the principal amount to mature on each maturity date, the rate of interest to be borne by each such maturity, any optional and mandatory sinking fund redemption provisions, the aggregate principal amount of Refunded Obligations and the particular Refunding Candidates to be Refunded Bonds, and all other matters not expressly provided in this Ordinance relating to the issuance, sale and delivery of the Bonds, including the refunding of the Refunded Obligations, all of which shall be specified in the Officers' Pricing Certificate, substantially in the form attached hereto as Exhibit A; provided that: (a) the net effective interest rate on the Bonds shall not exceed 3.00%; (b) the sum of the principal amounts of the Bonds, which may not exceed the maximum principal amount authorized in Section 3.1 hereof, plus any net premium from the sale of the Bonds, must be sufficient to provide amounts necessary to fund the costs and expenses of refunding the Refunded Obligations and the estimated costs of issuance of the Bonds, including underwriters' discount; (c) the net present value savings to the City in debt service resulting from the issuance of the Bonds shall be at least 3.00% of the principal amount of the Refunded Obligations, as shown by a table of calculations prepared by the City's financial advisor and attached to the Officers' Pricing Certificate; and (d) the maximum maturity of the Bonds shall not exceed March 15, 2026. Any finding by the Authorized Representatives relating to the sale and delivery of the Bonds and the designation of Refunded Obligations shall have the same force and effect as a finding or determination made by the Council. The authority conferred by this Section shall expire at 11:59 p.m. on June 8, 2020. Section 3.5.: Redemption Prior to Maturity. (a) The Bonds shall be subject to optional redemption prior to maturity as provided in the Officers' Pricing Certificate. (b) The Bonds shall be subject to mandatory sinking fund redemption as provided in the Officers' Pricing Certificate. (c) Bonds may be redeemed in part 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. In selecting portions of Bonds for redemption, each Bond shall be treated as representing that number of Bonds of $5,000 denomination which is obtained by dividing the principal amount of such Bond by $5,000. Upon presentation and surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with the provisions of this Ordinance, shall authenticate and deliver in exchange therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered. (d) Notice of any redemption, identifying the Bonds or portions thereof to be redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered Owners thereof at their addresses as shown on the Register, not less than thirty (30) days before the date fixed for such redemption. By the date fixed for redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the redemption price of the Bonds called for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, the Bonds which are to be so redeemed thereby automatically shall be redeemed prior to their scheduled maturities, they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being Outstanding except for the purpose of being paid with the funds so provided for such payment. Section 3.6.: Manner of Payment, Characteristics, Execution and Authentication. The Bonds shall be payable, shall have the characteristics and shall be executed, sealed, registered and authenticated, all as provided and in the manner indicated in the Form of Bond set forth in Attachment A to Exhibit A hereto. 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 the Bonds or before the delivery of the Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office. The approving legal opinion of Hunton Andrews Kurth LLP, Houston, Texas, Bond Counsel, may be printed on the back of the Bonds over the certification of the City Secretary, which may be executed in facsimile. CUSIP numbers also may be printed on the Bonds, but errors or omissions in the printing of either the opinion or the numbers shall have no effect on the validity of the Bonds. Section 3.7.: 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 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 3.8.: Authentication. Except for the Bonds to be initially issued, which need not be authenticated by the Paying Agent/Registrar, only such Bonds as shall bear thereon a certificate of authentication, substantially in the form provided in Article IV of this Ordinance, manually executed by an authorized representative of the Paying Agent/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 Bond so authenticated was delivered by the Paying Agent/Registrar hereunder. Section 3.9.: Ownership. 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 and interest thereon and for all other purposes, 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. All payments made to the person deemed to be the Registered Owner of any Bond in accordance with this Section shall be valid and effective and shall discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent of the sums paid. Section 3.10.: Registration, Transfer and Exchange. So long as any Bond remains Outstanding, the Paying Agent/Registrar shall keep the Register at its corporate trust office and, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of the Bonds in accordance with the terms of this Ordinance. Each Bond shall be transferable only upon the presentation and surrender thereof at the office of the Paying Agent/Registrar, accompanied by an assignment duly executed by the Registered Owner or his authorized representative in form satisfactory to the Paying Agent/Registrar. To the extent possible, upon due presentation of any Bond for transfer, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor, within seventy-two (72) hours after such presentation, a new Bond or Bonds, registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so presented and surrendered. All Bonds shall be exchangeable upon the presentation and surrender thereof at the office of the Paying Agent/Registrar for a Bond or Bonds, maturity and interest rate and in any authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of the Bond or Bonds presented for exchange. The Paying Agent/Registrar shall be and is hereby authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this Section. Each Bond delivered by the Paying Agent/Registrar in accordance with this Section 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. All Bonds issued in transfer or exchange shall be delivered to the Registered Owners thereof at the office of the Paying Agent/Registrar or sent by United States mail, first class, postage prepaid. The City or the Paying Agent/Registrar may require the Registered 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 Paying Agent/Registrar for such transfer or exchange shall be paid by the City. The Paying Agent/Registrar shall not be required to transfer or exchange any Bond called for redemption in whole or in part during the forty-five (45) day period immediately prior to the date fixed for redemption; provided, however, that this restriction shall not apply to the transfer or exchange by the Registered Owner of the unredeemed portion of a Bond called for redemption in part. Section 3.11.: Book -Entry Only S.. stem. The definitive Bonds shall be initially issued in the form of a separate single fully registered Bond for each of the maturities thereof. Upon initial issuance, the ownership of each such Bond 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. 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., and subject to the provisions in this Ordinance with respect to interest checks being mailed to the Owner at the close of business on the Record Date, the word "Cede & Co." in this Ordinance shall refer to such new 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 (a) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (b) 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 (c) 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 Bonds, premium, if any, or interest on the Bonds. Except as provided in Section 3.10 of this Ordinance, 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, premium, if any, and interest on Bonds, for the purpose of giving notices of redemption and other 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 Bonds, 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 shall receive a Bond evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Section 3.12.: Payments and Notices to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, as long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on the Bonds, and all notices with respect to such Bonds shall be made and given, respectively, in the manner provided in the representation letter of the City to DTC. Section 3.13.: 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, the City or the Paying Agent/Registrar shall (a) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or (b) notify DTC of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Bondholders transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. Section 3.14.: Replacement Bonds. Upon the presentation and surrender to the Paying Agent/Registrar of a damaged or mutilated Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Bond, of the same maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Registered Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith and any other expenses connected therewith, including the fees and expenses of the Paying Agent/Registrar and the City. If any Bond is lost, apparently destroyed or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and ordinances of the City, and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall execute, and the Paying Agent/Registrar shall authenticate and deliver, a replacement Bond of the same maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding, provided that the Registered Owner thereof shall have: (a) furnished to the City and the Paying Agent/Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Bond; (b) furnished such security or indemnity as may be required by the Paying Agent/Registrar and the City to save and hold them harmless; (c) paid 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 may be imposed; and (d) met any other reasonable requirements of the City and the Paying Agent/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 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 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 Paying Agent/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 Paying Agent/Registrar to pay such Bond. Each replacement Bond delivered in accordance with this Section 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. Section 3.15.: Cancellation. All Bonds paid or redeemed 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 canceled and destroyed upon the making of proper records regarding such payment or redemption. The Paying Agent/Registrar shall periodically furnish the City with certificates of destruction of such Bonds. ARTICLE IV. FORM OF BONDS The Bonds, including the Form of Comptroller's Registration Certificate, Form of Paying Agent/Registrar's Authentication Certificate, and Form of Assignment shall be in substantially the form attached hereto as Attachment A to Exhibit A, with such omissions, insertions and variations as may be necessary or desirable, and not prohibited by this ordinance. ARTICLE V. SECURITY FOR THE BONDS Section 5.1.: Pledge and Levy of Taxes. (a) To provide for the payment of principal of and interest on the Bonds, there is hereby levied, within the limits prescribed by law, for the current year and each succeeding year thereafter, while the Bonds or any part of the principal thereof and the interest thereon remain outstanding and unpaid, an ad valorem tax upon all taxable property within the City sufficient to pay the interest on the Bonds and to create and provide a sinking fund of not less than 2% of the principal amount of the Bonds or not less than the principal payable out of such tax, whichever is greater, with full allowance being made for tax delinquencies and the costs of tax collection, and such taxes, when collected, shall be applied to the payment of principal of and interest on the Bonds by deposit to the Debt Service Fund and to no other purpose. (b) The City hereby declares its purpose and intent to provide and levy a tax legally sufficient to pay the principal of and interest on the Bonds, it having been determined that the existing and available taxing authority of the City for such purpose is adequate to permit a legally sufficient tax. Section 5.2.: Debt Service Fund. The General Obligation Refunding Bonds, Series 2020, Debt Service Fund (the "Debt Service Fund") is hereby created as a special fund solely for the benefit of the Bonds. The City shall establish and maintain such fund at an official City depository. Any amount on deposit in the Debt Service Fund shall be maintained by the City in trust for the Registered Owners of the Bonds. Such amount, plus any other amounts deposited by the City into such fund and any and all investment earnings on amounts on deposit in such fund, shall be used only to pay the principal of, premium, if any, and interest on the Bonds. Section 5.3.: Further Proceediny-s. After the Bonds to be initially issued have been executed, it shall be the duty of the Mayor to deliver the Bonds to be initially issued and all pertinent records and proceedings to the Attorney General 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 for registration. Upon registration of the Bonds to be initially issued, the Comptroller (or a deputy lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's registration certificate prescribed herein to be affixed or attached to the Bonds to be initially issued, and the seal of said Comptroller shall be impressed, or placed in facsimile, thereon. ARTICLE VI. CONCERNING THE PAYING AGENT/REGISTRAR Section 6.1.: Acceptance. The Paying Agent/Registrar hereby appointed as the initial paying agent and registrar for the Bonds pursuant to the terms and provisions of the Paying Agent/Registrar Agreement by and between the City and the Paying Agent/Registrar. The Paying Agent/Registrar Agreement shall be substantially in the form presented to City Council with this Ordinance, the terms and provisions of which are hereby approved, and the Mayor is hereby authorized to execute and deliver such Paying Agent/Registrar 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. Such initial Paying Agent/Registrar and any successor Paying Agent/Registrar, by undertaking the performance of the duties of the Paying Agent/Registrar hereunder, and in consideration of the payment of any fees pursuant to the terms of any contract between the Paying Agent/Registrar and the City and/or the deposits of money pursuant to this Ordinance, shall be deemed to accept and agree to abide by the terms of this Ordinance. Section 6.2.: Trust Funds. All money transferred to the Paying Agent/Registrar in its capacity as Paying Agent/Registrar for the Bonds under this Ordinance (except any sums representing Paying Agent/Registrar's fees) shall be held in trust for the benefit of the City, shall be the property of the City and shall be disbursed in accordance with this Ordinance. Section 6.3.: Bonds Presented. Subject to the provisions of Section 6.4, all matured Bonds presented to the Paying Agent/Registrar for payment shall be paid without the necessity of further instructions from the City. Such Bonds shall be canceled as provided herein. Section 6.4.: Unclaimed Funds Held by the Paying Agent/Registrar. Funds held by the Paying Agent/Registrar that represent principal of and interest on the Bonds remaining unclaimed by the Registered Owner thereof after the expiration of three years from the date such funds have become due and payable (a) shall be reported and disposed of by the Paying Agent/Registrar in accordance with the provisions of Title 6 of the Texas Property Code, as amended, to the extent such provisions are applicable to such funds, or (b) to the extent such provisions do not apply to the funds, such funds shall be paid by the Paying Agent/Registrar to the City upon receipt by the Paying Agent/Registrar of a written request therefor from the City. The Paying Agent/Registrar shall have no liability to the Registered Owners of the Bonds by virtue of actions taken in compliance with this Section. Section 6.5.: Paying Agent/Registrar May Own Bonds. The Paying Agent/Registrar in its individual or any other capacity, may become the owner or pledgee of Bonds with the same rights it would have if it were not the Paying Agent/Registrar. Section 6.6.: Successor Paying Agents/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 Paying Agent/Registrar for the Bonds. The City reserves the right to change the Paying Agent/Registrar for the Bonds on not less than sixty (60) days' written notice to the Paying Agent/Registrar, as 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 Paying Agent/Registrar, the previous Paying Agent/Registrar shall deliver the Register or a copy thereof to the new Paying Agent/Registrar, and the new Paying Agent/Registrar shall notify each Registered Owner, by United States mail, first class, postage prepaid, of such change and of the address of the new Paying Agent/Registrar. Each Paying Agent/Registrar hereunder, by acting in that capacity, shall be deemed to have agreed to the provisions of this Ordinance. ARTICLE VII. PROVISIONS CONCERNING SALE AND APPLICATION OF PROCEEDS OF BONDS Section 7.1.: Sale of Bonds. The Bonds shall be sold and delivered to the Underwriters at a price to be set forth in the Officers' Pricing Certificate and in accordance with the terms of a Bond Purchase Agreement. Upon completion of the terms of the Officers' Pricing Certificate, the Authorized Representatives are hereby authorized and directed to execute the Bond Purchase Agreement on behalf of the City, and the Authorized Representatives and all other officers, agents and representatives of the City are hereby authorized to do any and all things necessary or desirable to satisfy the conditions set out therein and to provide for the issuance and delivery of the Bonds. Section 7.2.: Approval, Registration and Delivery. The Mayor is hereby authorized to have control and custody of the Bonds and all necessary records and proceedings pertaining thereto pending their delivery, and the Mayor and other officers and employees of the City are hereby authorized and directed to make such certifications and to execute such instruments as may be necessary to accomplish the delivery of the Bonds and to assure the investigation, examination and approval thereof by the Attorney General and the registration of the initial Bonds by the Comptroller. Upon registration of the Bonds, the Comptroller (or the Comptroller's certificates clerk or an assistant certificates clerk lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificates prescribed herein to be attached or affixed to each Bond initially delivered and the seal of the Comptroller shall be impressed or printed or lithographed thereon. Section 7.3.: Offering Documents; Ratings. The City hereby authorizes the preparation of a Preliminary Official Statement and final Official Statement, in substantially the form of the Preliminary Official Statement, with such modifications as shall be necessary to describe the final terms of the Bonds, dated as of the sale date, relating to the Bonds, and any addenda, supplement or amendment thereto, and approves the distribution of such Preliminary Official Statement and Official Statement in the offer and sale of the Bonds and in the reoffering of the Bonds by the Underwriters, with such changes therein or additions thereto as the officials executing same may deem advisable, such determination to be conclusively evidenced by their execution thereof. The Mayor is hereby authorized and directed to execute, and the City Secretary is hereby authorized and directed to attest, the final Official Statement. The Authorized Representatives are hereby authorized to deem the Preliminary Official Statement "final" for purposes of Rule 15c2-12 of the Securities Exchange Commission at such time as such document omits no more than the information permitted by Subsection (b)(1) of Rule 15c2- 12. Section 7.4.: Application of Proceeds of Bonds. Proceeds from the sale of the Bonds shall, promptly upon receipt by the City, be applied as follows: (a) A portion of the proceeds shall be applied to pay expenses arising in connection with the issuance of the Bonds and the refunding of the Refunded Obligations; (b) A portion of the proceeds shall be used to refund the Refunded Obligations; and (c) any remaining proceeds shall be transferred to the Debt Service Fund. Section 7.5.:Covenants to Maintain Tax Exemption. (a) Definitions. When used in this Section, the following terms have the following meanings: "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Issue Date. "Computation Date" has the meaning stated in section 1.148-1(b) of the Regulations. "Gross Proceeds" has the meaning stated in section 1.148-1(b) of the Regulations. "Investment" has the meaning stated in section 1.148-1(b) of the Regulations. "Issue Date" for the Bonds or other obligations of the City is the respective date on which such obligations of the City are first delivered against payment therefor. "Nonpurpose Investment" has the meaning stated in section 1.148-1(b) of the Regulations. "Proceeds" has the meaning stated in section 1.148-1(b) of the Regulations. "Rebate Amount" has the meaning stated in section 1.148-3 of the Regulations. "Regulations" means the temporary or final Income Tax Regulations applicable to the Series 2020 Bonds issued pursuant to sections 141 through 150 of the Code. Any reference to a section of the Regulations shall also refer to any successor provision to such section hereafter promulgated by the Internal Revenue Service pursuant to sections 141 through 150 of the Code and applicable to the Bonds. "Yield of (1) any Investment shall be computed in accordance with section 1.148-5 of the Regulations, and (2) the Bonds shall be computed in accordance with section 1.148-4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which, if made or omitted, respectively, would cause the interest on any Bonds to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City shall have received a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as permitted by section 141 of the Code and the regulations and rulings thereunder, the City shall, at all times prior to the last stated maturity of the Bonds, (1) exclusively own, operate, and possess all property the acquisition, construction, or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds (including property financed or refinanced with Gross Proceeds of the Refunded Bonds) and not use or permit the use of such Gross Proceeds or any property acquired, constructed, or improved with such Gross Proceeds in any activity carried on by any person or entity other than a state or local government, unless such use is solely as a member of the general public, or (2) not directly or indirectly impose or accept any charge or other payment for use of Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds (including property financed or refinanced with Gross Proceeds of the Refunded Bonds) other than taxes of general application and interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except to the extent permitted by section 141 of the Code and the regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, Gross Proceeds are considered to be "loaned" to a person or entity if (1) property acquired, constructed or improved with Gross Proceeds (including property financed or refinanced with Gross Proceeds of the Refunded Bonds) is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes, (2) capacity in or service from such property is committed to such person or entity under a take -or -pay, output, or similar contract or arrangement, or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or such property are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. 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, directly or indirectly invest Gross Proceeds of such Bonds in any Investment (or use such Gross Proceeds to replace money so invested), if as a result of such investment the Yield of all Investments allocated to such Gross Proceeds whether then held or previously disposed of, exceeds the Yield on the Bonds. (f) Not Federally, Guaranteed. Except to the extent permitted by section 149(b) of the Code and the regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the regulations and rulings thereunder. (g) Information Resort. The City shall timely file with the Secretary of the Treasury the information required by section 149I of the Code with respect to the Bonds on such forms and in such place as such Secretary may prescribe. (h) Payment of Rebate Amount. Except to the extent otherwise provided in section 148(f) of the Code and the regulations and rulings thereunder, the City shall: (1) account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of such accounting for at least six years after the final Computation Date. The City may, however, to the extent permitted by law, commingle Gross Proceeds of the Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of such Gross Proceeds and the obligations acquired therewith, (2) calculate the Rebate Amount with respect to the Bonds, not less frequently than each Computation Date, in accordance with rules set forth in section 148(f) of the Code, section 1.148-3 of the Regulations, and the rulings thereunder. The City shall maintain a copy of such calculations for at least six years after the final Computation Date, (3) as additional consideration for the purchase of the Bonds by the initial purchaser thereof and the loan of the money represented thereby, and in order to induce such purchase by measures designed to ensure the excludability of the interest thereon from the gross income of the owners thereof for federal 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 Bonds are hereby designated or deemed designated as "qualified tax-exempt obligations" as defined in Section 265(b)(3) of the Code. In connection therewith, the City represents (a) that the aggregate amount of tax-exempt obligations issued by the City during calendar year 2020, including the Bonds, which have been designated as "qualified tax-exempt obligations" under section 265(b)(3)(D) of the Code does not exceed $10,000,000, and (b) that the reasonably anticipated amount of tax-exempt obligations that will be issued by the City during calendar year 2020 (other than obligations not taken into account under section 265(b)(C)(ii)) will not exceed $10,000,000. For purposes of this Section, the term "tax-exempt obligation" does not include "private activity bonds" within the meaning of section 141 of the Code, other than "qualified 501(c)(3) bonds" within the meaning of section 145 of the Code. In addition, for purposes of this Section, the City includes all entities which are aggregated with the City under the Code. 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 instrument on behalf of the City in multiple counterparts and the City Secretary is hereby authorized to attest thereto and affix the City's seal. Section 7.8.: Redemption Prior to Maturity of Refunded Obligations. To minimize the City's costs of refunding, the City hereby authorizes and directs that certain of the Refunded Obligations shall be called for redemption prior to maturity in the amounts, at the dates and at the redemption prices set forth in the Officers' Pricing Certificate, and the Authorized Representatives are hereby authorized and directed to take all necessary and appropriate action to give or cause to be given a notice of redemption and/or a notice of defeasance to the holders or paying agent/ registrars, as appropriate, of such obligations, and, if required, to publish such notices, all in the manner required by the documents authorizing the issuance of such Refunded Obligations. Section 7.9.: Purchase of Securities. The Authorized Representatives and the Escrow Agent are hereby authorized (a) to subscribe for, agree to purchase, and purchase securities that are permitted investments for a defeasance escrow established to defease the Refunded Obligations, and to execute any and all subscriptions, purchase agreements, commitments, letters of authorization and other documents necessary to effectuate the foregoing, and any actions heretofore taken for such purpose are hereby ratified and approved, and (b) to direct and provide for such contributions to the escrow fund as are provided in the Escrow Agreement. Section 7.10.: Related Matters. In order that the City shall satisfy in a timely manner all of its obligations under this Ordinance, the Mayor, City Secretary and all other appropriate officers, agents, representatives and employees of the City are hereby authorized and directed to take all other actions that are reasonably necessary to provide for the issuance and delivery of the Bonds, including, without limitation, executing and delivering on behalf of the City all certificates, consents, receipts, requests, notices, and other documents as may be reasonably necessary to satisfy the City's obligations under this Ordinance and to direct the transfer and application of funds of the City consistent with the provisions of this Ordinance. ARTICLE VIII. CONTINUING DISCLOSURE UNDERTAKING Section 8.1.: Definitions. As used in this Article, the following terms have the meanings ascribed to such terms below: "Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of a debt obligation or any such derivative instrument; provided that "financial obligation" shall not include municipal securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule. "MSRB" means the Municipal Securities Rulemaking Board. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. Section 8.2.: Annual Reports. The City shall provide annually to the MSRB in an electronic format prescribed by 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 by Section 7.3 of this Ordinance, being the financial information and operating data described in the Officers' Pricing Certificate. Any financial statements so to be provided shall be (1) prepared in accordance with the accounting principles described in Appendix B to the Official Statement and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within 12 months after any such fiscal year end, then the City shall file unaudited financial statements within such 12 -month period and audited financial statements for the applicable fiscal year, when and if the audit report on such statements 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. Section 8.3.: Certain Event Notices. The City shall notify the MSRB, in a timely manner not to exceed ten (10) business days, of any of the following events with respect to the Bonds or the City: (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, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (g) Modifications to rights of holders of the Bonds, if material; (h) Bond calls, if material, and tender offers; (i) Defeasances; 0) Release, substitution, or sale of property securing repayment of the Bonds, if material; (k) Rating changes; (1) Bankruptcy, insolvency, receivership or similar event of the City; (m)The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City other than in the ordinary course of business, the entry into a definitive agreement to undertake such an 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 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. For these purposes, (a) in clause (1) above, the phrase "bankruptcy, insolvency, receivership or similar event" means 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 jurisdiction has been assumed by leaving Council and officials or officers of the City 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 and (b) the City intends the words used in the immediately preceding paragraphs (o) and (p) and the definition of Financial Obligation in this Section to have the same meanings as when they are used in the Rule, as evidenced by SEC Release No. 34-83885, dated August 20, 2018. The City shall notify the MSRB in an electronic format prescribed by the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with Section 8.2 of this Ordinance by the time required by such Section. Section 8.4.: Limitations, Disclaimers and Amendments. 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 the notice required by Section 8.2 of any Bond calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Article are for the sole benefit of the holders 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 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 BY THE CITY, WHETHER NEGLIGENT OR 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. No default by the City in observing or performing its obligations under this Article shall constitute a breach of or default under the Ordinance for purposes of any other provision of this Ordinance. 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. The provisions of this Article may be amended by the City from time to time to adapt the 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 (1) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell the 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 (2) either (a) the holders of a majority in aggregate principal amount (or any greater amount required by any other provision 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 holder and beneficial owners of the Bonds. 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 8.2 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. The City may also amend or repeal the provisions of this Article if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, and the City also may amend the provisions of this Article in its discretion in any other manner or circumstance, but in either case only if and to the extent that the provisions of this sentence would not have prevented an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. ARTICLE IX. MISCELLANEOUS Section 9.1.: Defeasance. The City may defease the provisions of this Ordinance and discharge its obligations to the Registered Owners of any or all of the Bonds to pay the principal of and interest thereon in any manner now or hereafter permitted by law, including by depositing with the Paying Agent/Registrar or with the Comptroller either: (a) cash in an amount equal to the principal amount of such Bonds plus interest thereon to the date of maturity or redemption; or (b) pursuant to an escrow or trust agreement, cash and/or (i) direct noncallable obligations of United States of America, including obligations that are unconditionally guaranteed by the United States of America; (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent; or (iii) 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 are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, which, in the case of (i), (ii) or (iii), may be in book -entry form, and the principal of and interest on which will, when due or redeemable at the option of the holder, without further investment or reinvestment of either the principal amount thereof or the interest earnings thereon, provide money in an amount which, together with other moneys, if any, held in such escrow at the same time and available for such purpose, shall be sufficient to provide for the timely payment of the principal of and interest thereon to the date of maturity or earlier redemption; provided, however, that if any of the Bonds 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. Upon such deposit, such Bonds shall no longer be regarded to be Outstanding or unpaid. Any surplus amounts not required to accomplish such defeasance shall be returned to the City. Section 9.2.: Application of Chapter 1208, Government Code. Chapter 1208, Government Code, applies to the issuance of the Bonds and the pledge of the taxes granted by the City under Section 5.1 of this Ordinance, and such pledge is therefore valid, effective and perfected. If Texas law is amended at any time while the Bonds are outstanding and unpaid such that the pledge of the taxes granted by the City under Section 5.1 of this Ordinance is to be subject to the filing requirements of Chapter 9, Business & Commerce Code, then in order to preserve to the Registered Owners of the Bonds the perfection of the security interest in said pledge, the City agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security interest in said pledge to occur. Section 9.3.: Ordinance a Contract — Amendments. This Ordinance shall constitute a contract with the Registered Owners from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains Outstanding except as permitted in this Section. The City may, without the consent of or notice to any Registered Owners, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Registered Owners, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Registered Owners who own in the aggregate 51 % of the principal amount of the Bond then Outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Registered Owners of Outstanding Bonds, no such amendment, addition, or rescission shall (i) extend the time or times of payment of the principal of and interest on the Bonds, reduce the principal amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of or interest on the Bonds, (ii) give any preference to any Bond over any other Bond, or (iii) reduce the aggregate principal amount of Bonds required to be held by Registered Owners for consent to any such amendment, addition, or rescission. Section 9.4.: Legal Holidays. In any case where the date interest accrues and becomes payable on the Bonds or principal of the Bonds matures or the date fixed for redemption of any Bonds or a Record Date shall be in the City a Saturday, Sunday, legal holiday or a day on which banking institutions are authorized by law to close, then payment of interest or principal need not be made on such date, or the Record Date shall not occur on such date, but payment may be made or the Record Date shall occur on the next succeeding day which is not in the City a Saturday, Sunday, legal holiday or a day on which banking institutions are authorized by law to close with the same force and effect as if (i) made on the date of maturity or the date fixed for redemption and no interest shall accrue for the period from the date of maturity or redemption to the date of actual payment or (ii) the Record Date had occurred on the fifteenth day of that calendar month. Section 9.5.: No Recourse Against City Officials. No recourse shall be had for the payment of principal of or interest on any Bonds or for any claim based thereon or on this Ordinance against any official of the City or any person executing any Bonds. Section 9.6.: Power to Revise Form of Documents. Notwithstanding any other provision of this Ordinance, the Mayor is hereby authorized to make or approve such revisions, additions, deletions, and variations to this Ordinance and in the form of the documents attached hereto as exhibits as, in the judgment of the Mayor, and in the opinion of Bond Counsel to the City, may be necessary or convenient to carry out or assist in carrying out the purposes of this Ordinance, or as may be required for approval of the Bonds by the Attorney General of Texas; provided, however, that any changes to such documents resulting in substantive amendments to the terms and conditions of the Bonds or such documents shall be subject to the prior approval of the City Council. Section 9.7.: Further Proceedinas. The Mayor, City Secretary and other appropriate officials of the City are hereby authorized and directed to do any and all things necessary and/or convenient to carry out the terms of this Ordinance. Section 9.8.: Severability. If any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. Section 9.9.: Open Meeting. 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 Ordinance was adopted was posted at a place convenient and readily accessible at all times to the general public at City Hall for the time required by law preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government Code, and that this meeting has been open to the public as required by law at all times during which this Ordinance 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 9.10.: Repealer. All orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency. Section 9.11.: Effective Date. This Ordinance shall be in force and effect from and after its passage on the date shown below. PASSED AND ADOPTED this December 9, 2019. ATTEST: Lee oodward, Cit ary APPROVE AS TO FORM: Clark T. Askins, Assistant City Attorney ATTACHMENT B TO OFFICERS' PRICING CERTIFICATE DESCRIPTION OF REFUNDED OBLIGATIONS ATTACHMENT C TO OFFICERS' PRICING CERTIFICATE PRESENT VALUE SAVINGS CALCULATION RBC Robert V. Henderson Capital 01, :,Markets Mana(ing)hector, Phone: 210 805-1118 Facsimile: (210) 805-1119 Issue: robert.henderson@rbccm.com CITY OF LA PORTE, TEXAS PRELIMINAR Y PLAN OF FINANCE DATED: NOVEMBER 15, 2019 INTRODUCTION: As the City's Financial Advisor, RBC Capital Markets has updated its analysis of the City's outstanding debt to identify refunding opportunities, given current interest rate market conditions. There is such an opportunity. The purpose of this report is to provide the background and analysis of that opportunity. FINANCIAL BACKGROUND: The City of La Porte currently has seven ad valorem property tax secured debt obligations outstanding: Three important notes about this debt. First, it is very modest; with a City tax base of $3.5 billion, and over '/z of this debt being serviced by enterprise funds, the net debt to tax base ratio is less than 0.4%. Second, the debt is very short in duration; almost 70% pays off in just over 6 years; over 88.5% of it pays off in just over 10 years (rating agencies look for 50% in 10 years). Third, due to aggressive debt management, the maximum interest rate the City is paying on any portion of the debt is 4% and in ten years, the only debt outstanding will be paying interest rates between 1.52% and 1.82%. The City has no revenue bonds or contract revenue bonds outstanding. REFUNDING ANALYSIS: The Tax Reform Act of 2017 eliminated the ability to "advance refund" debt; advance meaning substantially in advance of the debt issue's established call date, the date on which the debt can be prepaid. So, the first criteria examined is whether the debt will become callable in the intermediate future. Of the above debt; the Series 2010 Certificates of Obligation includes $2,925,000 in maturities that become "callable" on March 15, 2020. This debt bears interest at rates ranging from 3.625% to 4.0%. Our refunding analysis, attached, estimates this debt can be refunded at an interest rate of approximately 2.25%, producing gross dollar and net present value savings of approximately $181,034.65 and $172,800 respectively, or 5.90% of the refunded amount. Because of subsequent lowering of interest rates, this represents an increase in savings of approximately $55,000 over what was estimated in September of this year. The industry rule of thumb for savings is generally considered to be 3%. 303 Pearl Parkway, Suite 220 (210) 805-1118 RBC Capital Markets San Antonio, TX 78215 Member NYSE/SIPC Original Currently Final Issue: Amount: Outstanding: Maturity: Certificates of Obligation, Series 2010 $6,265,000 $ 3,350,000 3/15/2026 General Obligation Ref. Bonds, Series 2010 4,295,000 325,000 3/15/2020 General Obligation Ref. Bonds, Series 2012 9,435,000 7,840,000 3/15/2025 General Obligation Ref. Bonds, Series 2014 9,300,000 5,795,000 3/15/2025 Certificates of Obligation, Series 2015 7,770,000 6,345,000 3/15/2030 General Obligation Ref, Bonds, Series 2016 3,165,000 2,465,000 3/15/2029 Certificates of Obligation, Series 2017 10,635,000 9,710,000 3/15/2037 $35,830,000 Three important notes about this debt. First, it is very modest; with a City tax base of $3.5 billion, and over '/z of this debt being serviced by enterprise funds, the net debt to tax base ratio is less than 0.4%. Second, the debt is very short in duration; almost 70% pays off in just over 6 years; over 88.5% of it pays off in just over 10 years (rating agencies look for 50% in 10 years). Third, due to aggressive debt management, the maximum interest rate the City is paying on any portion of the debt is 4% and in ten years, the only debt outstanding will be paying interest rates between 1.52% and 1.82%. The City has no revenue bonds or contract revenue bonds outstanding. REFUNDING ANALYSIS: The Tax Reform Act of 2017 eliminated the ability to "advance refund" debt; advance meaning substantially in advance of the debt issue's established call date, the date on which the debt can be prepaid. So, the first criteria examined is whether the debt will become callable in the intermediate future. Of the above debt; the Series 2010 Certificates of Obligation includes $2,925,000 in maturities that become "callable" on March 15, 2020. This debt bears interest at rates ranging from 3.625% to 4.0%. Our refunding analysis, attached, estimates this debt can be refunded at an interest rate of approximately 2.25%, producing gross dollar and net present value savings of approximately $181,034.65 and $172,800 respectively, or 5.90% of the refunded amount. Because of subsequent lowering of interest rates, this represents an increase in savings of approximately $55,000 over what was estimated in September of this year. The industry rule of thumb for savings is generally considered to be 3%. 303 Pearl Parkway, Suite 220 (210) 805-1118 RBC Capital Markets San Antonio, TX 78215 Member NYSE/SIPC City of LaPorte, Texas November 15, 2019 Page 2 ,SELLING THE REFUNDING DEBT: If the City elects to move forward with a refunding of the Series 2010 COs, there are three generally prescribed methods for selling public debt; Selling by competitive bid, selling on a negotiated sale basis and conducting a private placement. The first two methods involve sales to the general public, obtaining bond ratings, preparing offering documents and involving underwriters. The private placement method entails presenting the debt to a number of commercial banks (both locally and on a regional basis) and requesting bids. We would then present the City with a bond purchase agreement between the winning bidder and the City reflecting those terms. Given the refunding nature of the issue, which is timing and interest rate sensitive, we recommend the debt be sold on a negotiated sale basis. Given the modest size of the issue, it is our recommendation that the City utilize a single underwriting firm for maximum focus on distribution. The primary underwriting firm the City has historically used has been sold and is largely being staffed by people unfamiliar with the City. City Administration has been impressed with another firm who has actively covered the City, Loop Capital, and has indicated a desire to utilize Loop Capital as the sole underwriter. We concur with that recommendation. Refunding Bonds do not require any special notices or public hearings. There are two methods for handling council approval. The first, more traditional method, is that the Council approves a plan of finance and authorizes the Director of Finance, working with the Financial Advisor, to proceed with rating presentations, document preparation and set a predetermined date to sell the bonds and bring to the Council an ordinance complete with interest rates for Council approval. The second method, the "parameters" resolution method, has become popular in the past 7-8 years. In this method, an ordinance authorizing the issuance of the debt is presented to council that does not set out the final interest rates of the issue but instead delegates the authority to negotiate such final terms to one or more City officials; typically the City Manager and/or the Director of Finance, SO LONG AS CERTAIN PARAMETERS APPROVED BY THE COUNCIL ARE MET. The parameters set out in the ordinance include a maximum amount of debt to be issued, the maximum level of interest rates that can be approved, a maximum maturity of the debt and a minimum level of savings that must be achieved and puts a time limit on the authorization. In this manner, City administration has the latitude to monitor the market as preparations are made and to choose the market conditions in which to enter rather than being forced to accept whatever market conditions exist at the time of a predetermined sale date. Given the flexibility of timing considerations and that the City has used the parameters sale method in the past with success, is our recommendation to use that method. TIMING: As the COs become callable on March 15, 2020 and the City must give at least 30 days' notice to exercise its call option, it would be desirable to close the issue by February 15th. To close by that date, the City would need to consider a parameters resolution at its December 91h regular council meeting. ,SUMMARY: The City of La Porte has developed a strong history of actively monitoring and managing its debt portfolio to lock in substantial savings as opportunities arise. As always, we cannot be sure of final savings until the debt is rated and sold. However, based on these estimates, RBC Capital Markets recommends moving forward with this proposed refunding. 303 Pearl Parkway, Suite 220 (210) 805-1118 RBC Capital Markets San Antonio, TX 78215 Member NYSE/SIPC Schedules and Exhibits: Schedule 1 — Schedule of Refunding Candidates Exhibit A — Form of Officers' Pricing Certificate SCHEDULE I SCHEDULE OF REFUNDING CANDIDATES City of La Porte, Texas, Certificates of Obligation, Series 2010 SCHEDULE 1 - Page 1 EXHIBIT A FORM OF OFFICERS' PRICING CERTIFICATE CITY OF LA PORTE, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020 THIS OFFICERS' PRICING CERTIFICATE is executed as of , 20209 by the [Mayor/City Manager/Assistant City Manager/Director of Finance] of the City of La Porte, Texas (the "City"), pursuant to the authorization contained in an ordinance of the City Council, acting as the governing body of the City, adopted on December 9, 2019 (the "Ordinance"), authorizing the issuance of the captioned series of bonds and delegating to the undersigned the authority to agree to and stipulate certain terms and provisions thereof, all of which are set forth herein. Capitalized terms used in this Officers' Pricing Certificate shall have the meanings assigned to them in the Ordinance. 1. Principal Amount, Maturity Amount, Numbers, Interest Rates and Maturities. The Bonds shall be dated , 2020, and shall bear interest from the [Dated/Issuance Date]. The Bonds shall be issued in the total authorized principal amount of $ [consisting of $ issued as serial bonds and $ issued as term bonds (the "Term Bonds")]. The Bonds shall mature on March 15 in each of the years and in the amounts set out in the following schedule: Bond Number Maturity 2. Redemption. Principal Amount Interest Rate (a) Optional. The Bonds maturing on and after March 15, 20 , are subject to optional redemption, in whole or, from time to time, in part on any date on or after March 15, 20 , at a redemption price of par plus accrued interest. (b) Mandatory. The Bonds maturing in the year will be issued as term bonds and shall be subject to the following mandatory redemption requirements: A-1 TERM BONDS MATURING MARCH 15, Mandatory Redemption Date Principal Redemption (March 15) Amount Price 100% 100 100 100 To the extent that such Term Bonds have been previously called for redemption or purchased and retired in part and otherwise than from scheduled mandatory redemption payments, future mandatory redemption payments may be reduced by the principal amount of such Term Bonds so redeemed or purchased. In lieu of mandatorily redeeming the Term Bonds, the City reserves the right to purchase for cancellation Term Bonds of the same maturity at a price no greater than the applicable redemption price of such Term Bonds. The Paying Agent/Registrar will select by lot the specific Term Bonds (or with respect to Term Bonds having a denomination in excess of $5,000, each $5,000 portion thereof) to be redeemed by mandatory redemption. The principal amount of Term Bonds required to be redeemed on any redemption date pursuant to the foregoing mandatory redemption provisions shall be reduced, at the option of the City, by the principal amount of any Bonds having the same maturity which have been purchased or redeemed by the City as follows, at least 45 days prior to the mandatory redemption date: (i) if the City directs the Paying Agent to purchase Bonds with money in the debt service fund for the Bonds (at a price not greater than par plus accrued interest to the date of purchase), then a credit of 100% of the principal amount of such Bonds purchased will be made against the next mandatory redemption installment due, or (ii) if the City purchases or redeems Bonds with other available moneys, then the principal amount of such Bonds will be credited against future mandatory redemption installments in any order, and in any annual amount, that the City may direct. 3. Purchase Price. The sale of the Bonds is authorized pursuant to the form of Bond Purchase Agreement approved in the Ordinance at the following price: PRINCIPAL AMOUNT [Plus/Less] Original Issue [Premium/Discount] Less Underwriters' Discount PURCHASE PRICE $ It is hereby found and declared that the sale of the Bonds pursuant to the Bond Purchase Agreement at such price is on the best terms and at the best prices reasonably obtainable by the City. Escrow Agreement and Deposit. The Escrow Agreement between the City and , as Escrow Agent, is hereby approved. Pursuant to Sections 7.6 and A-2 7.8 of the Ordinance, $ from the proceeds of the Bonds shall be deposited into the Escrow Fund created pursuant to the Escrow Agreement and applied to purchase the escrowed securities. 6. Form of Bond. Pursuant to Article IV of the Ordinance, the Form of Bond as set forth in Attachment A hereto is hereby approved and supersedes the Form of Bond set forth in the Ordinance. 7. The Refunded Obligations shall be those bonds identified in Attachment B hereto. 8. Pursuant to Section 8.2 of the Ordinance, the City shall provide annually to the MSRB, (A) within six months after the end of each fiscal year of the City, financial information and operating data with respect to the City of the general type included in the final Official Statement, being the financial information and operating data described in the Official Statement in Appendix A (Tables __), and (B) if not provided as part such financial information and operating data, audited financial statements of the City, when and if available. 9. Pursuant to Section 3.4 of the Ordinance, we hereby further find and determine that: a. The net effective interest rate on the Bonds does not exceed 4.00%; b. The aggregate principal amount of the Bonds does not exceed the maximum amount authorized in Section 3.1 of the Ordinance and, when added to any net premium, is equal to an amount sufficient to provide for the costs and expenses of refunding the Refunded Obligations and the estimated costs of issuance of the Bonds, including underwriters' discount. c. The net present value savings to the City is at least 4.00% of the principal amount of the Refunded Obligations, as shown on Attachment C hereto; and d. The final maturity date of the Bonds does not exceed March 15, 2026. 10. The undersigned hereby find, determine and declare, that in accordance with the requirements of the Ordinance, this Officers' Pricing Certificate complies with and satisfies the terms and provisions of the Ordinance in accordance with the delegation contained therein. WITNESS MY HAND this , 2020. [M yor/ ity Man ' er/ ssistant City Manager/Director of Finance] Cit a Porte, I exas A-3 ATTACHMENT A TO OFFICERS' PRICING CERTIFICATE FORM OF BOND UNITED STATES OF AMERICA STATE OF TEXAS CITY OF LA PORTE, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2020 NUMBER R-_' REGISTERED INTEREST RATE' DATED DATE: REGISTERED OWNER: PRINCIPAL AMOUNT: DENOMINATION REGISTERED ISSUANCE DATE: MATURITY DATE': CUSIP': March 15, DOLLARS THE CITY OF LA PORTE, TEXAS, a home rule municipality of the State of Texas (the "City"), for value received, hereby promises to pay to the Registered Owner identified above or its registered assigns, on the maturity date specified above (or on earlier redemption as herein provided), upon presentation and surrender of this Bond at the principal payment office of , or its successor (the "Paying Agent/Registrar"), the principal amount identified above (or so much thereof as shall not have been paid or deemed to have been paid upon prior redemption) payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due to the United States of America, and to pay interest thereon at the rate shown above, calculated on a basis of a 360 -day year composed of twelve 30 -day months, from the later of the Issuance Date identified above or the most recent interest payment date to which interest has been paid or duly provided for.3 Interest on this Bond is payable on ' Initial Bond shall be numbered T-1. 2 Omitted from initial Bond. 3 The first sentence of the initial Bond shall read as follows: THE CITY OF LA PORTE, TEXAS, a home rule municipality of the State of Texas (the "City"), for value received, hereby promises to pay to the Registered Owner identified above or its registered assigns, on March 15 of each of the years and in the principal amounts set forth in the following schedule: [Insert information regarding years of maturity, principal amounts and interest rates from Officers' Pricing Certificate] upon presentation and surrender of this Bond at the principal payment office of , or its successor (the "Paying Agent/Registrar"), payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due to the United States of America, and to pay interest thereon at the rate shown above, calculated on a basis of a 360 -day year composed of A-4 ,20 — 4 , and each March 15 and September 15 thereafter until maturity or earlier redemption of this Bond, by check sent by United States mail, first class, postage prepaid, by the Paying Agent/Registrar to the Registered Owner of record as of the close of business on the last business day of the calendar month immediately preceding the applicable interest payment date, as shown on the registration books kept by the Paying Agent/Registrar. Any accrued interest payable at maturity or earlier redemption shall be paid upon presentation and surrender of this Bond at the office of the Paying Agent/Registrar. THIS BOND IS ONE OF A DULY AUTHORIZED SERIES OF BONDS (the "Bonds") in the aggregate principal amount of $ 4 issued pursuant to an ordinance adopted by the City Council of the City on December 9, 2019 (the "Ordinance"), for the purpose of refunding certain outstanding obligations of the City (the "Refunded Obligations"), under and pursuant to the authority of Chapter 1207, Texas Government Code, as amended, and the City's Home Rule Charter. Proceeds of the Bonds will also be used to pay costs of issuing the Bonds and refunding the Refunded Obligations. THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordinance unless this Bond is authenticated by the Paying Agent/Registrar by due execution of the authentication certificate endorsed hereon.5 THE CITY RESERVES THE RIGHT, at its option, to redeem, prior to their maturity, Bonds maturing on and after March 15, 20_4, in whole or in part, on March 15, 20_4, or any date thereafter, at par plus accrued interest to the date fixed for redemption. THE BONDS maturing on March 15, 20_" (the "Term Bonds") are subject to mandatory sinking fund redemption in the following amounts (subject to reduction as hereinafter provided), on the following dates, in each case at a redemption price equal to the principal amount of the Bonds or the portions thereof so called for redemption plus accrued interest to the date fixed for redemption: Mandatory Redemption Dates Princinal Amounts Term Bonds Maturing March 15, 20_4 THE PARTICULAR TERM BONDS to be redeemed shall be selected by the Registrar by lot or other customary random selection method, on or before February 1 of each year in which Term Bonds are to be mandatorily redeemed. The principal amount of Term Bonds to be mandatorily redeemed in each year shall be reduced by the principal amount of such Term Bonds that have been optionally redeemed on or before February 1 of such year and which have not been made the basis for a previous reduction. twelve 30 -day months, from the later of the Issuance Date identified above or the most recent interest payment date to which interest has been paid or duly provided for. 4 To be completed in accordance with the Officers' Pricing Certificate. 5 In the initial Bond, this paragraph shall read: THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordinance unless this Bond is registered by the Comptroller of Public Accounts of the State of Texas by due execution of the registration certificate endorsed hereon A-5 BONDS MAY BE REDEEMED IN PART 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. In selecting portions of Bonds for redemption, each Bond shall be treated as representing that number of Bonds of $5,000 denomination which is obtained by dividing the principal amount of such Bond by $5,000. Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with the provisions of the Ordinance, shall authenticate and deliver in exchange therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered. NOTICE OF ANY SUCH REDEMPTION, identifying the Bonds or portions thereof to be redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered Owners thereof at their addresses as shown on the books of registration kept by the Paying Agent/Registrar, not less than thirty (30) days before the date fixed for such redemption. By the date fixed for redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the redemption price of the Bonds called for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, the Bonds which are to be so redeemed thereby automatically shall be redeemed prior to their scheduled maturities, they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being outstanding except for the purpose of being paid with the funds so provided for such payment. THIS BOND IS TRANSFERABLE only upon presentation and surrender at the office of the Paying Agent/Registrar, accompanied by an assignment duly executed by the Registered Owner or its authorized representative, subject to the terms and conditions of the Ordinance. THIS BOND IS EXCHANGEABLE at the office of the Paying Agent/Registrar for a Bond or Bonds of the same maturity and interest rate and in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance. THE PAYING AGENT/REGISTRAR is not required to accept for transfer or exchange any Bond called for redemption, in whole or in part, during the forty-five (45) day period immediately prior to the date fixed for redemption; provided, however, that such limitation shall not apply to the transfer or exchange by the Registered Owner of an unredeemed portion of a Bond called for redemption in part. THE CITY OR PAYING AGENT/REGISTRAR may require the Registered 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 a Bond. Any fee or charge of the Paying Agent/Registrar for a transfer or exchange shall be paid by the City. THE REGISTERED OWNER of this Bond by acceptance hereof, acknowledges and agrees to be bound by all the terms and conditions of the Ordinance. IT IS HEREBY DECLARED AND REPRESENTED that this Bond has been duly and validly issued and delivered; that all acts, conditions and things required or proper to be performed, exist and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist and have been done in accordance with law; that the Bonds do not exceed any constitutional or statutory limitation; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied, within the limits prescribed by law, against all taxable property in the City and have been irrevocably pledged for such payment. REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is filed with the Paying Agent/Registrar, for the full provisions thereof, to all of which the Registered Owners of the Bonds assent by acceptance of the Bonds. IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or placed in facsimile hereon and this Bond to be signed by the Mayor and countersigned by the City Secretary by their manual, lithographed or printed facsimile signatures. (SEAL) CITY OF LAC PORTE TEXAS R. Rigby, u1 COUNTERS NED: e Woo ward, City Secre LINTY=d= **** FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE The following form of Comptroller's Registration Certificate shall be attached or affixed to each of the Bonds initially delivered: OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO. THE STATE OF TEXAS I hereby certify that this bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and that this bond has been registered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL OF OFFICE this A-7 Comptroller of Public Accounts (SEAL) of the State of Texas FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE The following form of authentication certificate shall be printed on the face of each of the Bonds other than those initially delivered: AUTHENTICATION CERTIFICATE This Bond is one of the Bonds described in and delivered pursuant to the within -mentioned Ordinance; and, except for the Bonds initially delivered, this Bond has been issued in exchange for or replacement of a Bond, Bonds, or a portion of a Bond or Bonds of an issue which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. 1 1, as Paying Agent/Registrar By: Authorized Signature: Date of Authentication: A-8 FORM OF ASSIGNMENT The following form of assignment shall be printed on the back of each of the Bonds: ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto (Please print or type name, address, and zip code of Transferee) (Please insert Social Security or Taxpayer Identification Number of Transferee) the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer such bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature Guaranteed: name of the Registered NOTICE: Signature must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. Registered Owner NOTICE: The signature above must correspond to the Owner as shown on the face of this bond in every particular, without any alteration, enlargement or change whatsoever. A-9 CERTIFICATE FOR ORDINANCE STATE OF TEXAS § COUNTY OF HARRIS § I, the undersigned City Secretary of the City of LaPorte, Texas (the "City"), hereby certify as follows: 1. The City Council of the City (the "City Council") convened in a regular meeting on December 9, 2019, at the regular meeting place thereof, within the City, and the roll was called of the duly constituted officers and members of the City Council, to -wit: Louis R. Rigby Mayor Brandon Lunsford Commissioner -at -Large Steve Gillett Commissioner -at -Large Danny Earp Commissioner, District 1 Chuck Engelken Commissioner, District 2 Bill Bentley Commissioner, District 3 Thomas Garza Commissioner, District 4 Jay Martin Commissioner, District 5 Nancy Ojeda Commissioner, District 6 andof such persons were present except, the following absentee(s) 4A , thus constituting a quorum. Whereupon, among other business, the following was transacted at such meeting: a written ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE, SALE AND DELIVERY OF CITY OF LA PORTE, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020; DELEGATING TO AUTHORIZED REPRESENTATIVES THE AUTHORITY TO APPROVE THE TERMS THEREOF AND CERTAIN OTHER PROCEDURES AND PROVISIONS RELATED THERETO; AUTHORIZING THE REDEMPTION PRIOR TO MATURITY OF CERTAIN OUTSTANDING OBLIGATIONS; AND MAKING OTHER PROVISIONS REGARDING THE BONDS AND MATTERS INCIDENT THERETO was duly introduced for the consideration of the City Council. It was then duly moved and seconded that such Ordinance be adopted; and, after due discussion, such motion, carrying with it the adoption of such Ordinance, prevailed and carried by the following vote: AYES a NAYS 0 ABSTENTIONS HOU:3626075.1 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 such Ordinance has been duly recorded in the City Council's minutes of such meeting; that the above and foregoing paragraph is a true, full and correct excerpt from the City Council's minutes of such meeting pertaining to the adoption of such Ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of the City Council as indicated therein; that each of the officers and members of the City Council was duly and sufficiently notified officially and personally, in advance, of the date, hour, place and purpose of the aforesaid meeting, and that the Ordinance would be introduced and considered for adoption at such meeting, and each of such officers and members consented, in advance, to the holding of such meeting for such purpose; that such meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of such meeting was given as required by Chapter 551, Texas Government Code, as amended. SIGNED AND SEALED this 91h day of December, 2019. QCity t SecretarYOF (qPn�of La Porte, Texas i (SEAL) CLOSING CERTIFICATE Capitalized terms used in this certificate and not otherwise defined herein shall have the meanings assigned thereto in the Bond Purchase Agreement (the "Agreement") dated as of January _, 2020, by and between the Underwriter named therein and the City of La Porte, Texas (the "Issuer"). In accordance with Section 6(i)(8) of the Agreement in connection with the issuance of the Issuer's General Obligation Refunding Bonds, Series 2020 (the "Bonds"), I, the undersigned, Mayor, acting solely in my official capacity, hereby certify, as follows: (i) all official action of the Issuer relating to the Bonds, the Issuer Documents and the Official Statement have been duly taken by the Issuer, are in full force and effect, and have not been amended, modified, supplemented or repealed; (ii) the representations and warranties of the Issuer contained in the Agreement or are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (iii) except to the extent disclosed in the Official Statement, no litigation or proceeding against the Issuer is pending or, to the best of my knowledge after due inquiry, threatened in any court or administrative body, nor is there a basis for litigation which would (a) contest the right of the officials of the Issuer to hold and exercise their respective positions, (b) contest the due organization and valid existence of the Issuer, (c) contest the validity, due authorization and execution of the Bonds or the Issuer Documents, or (d) attempt to limit, enjoin or otherwise prevent the Issuer from functioning and collecting taxes and other income or levying and collecting the taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, (iv) to the best of my knowledge, no event affecting the Issuer has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein, in light of the circumstances under which made, not misleading in any material respect as of the time of Closing, and the information contained in the Official Statement is correct in all material respects and, as of the date of the Official Statement did not, and as of the date of the Closing does not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; and (v) there has been no material adverse change in the financial condition of the Issuer from the annual financial report included in Appendix C to the Official Statement. EXECUTED ON BEHALF OF THE CITY as of February 12, 2020. [Signature Page Follows] CITY OF LA PORTE, TEXAS GENERAL CERTIFICATE STATE OF TEXAS COUNTY OF HARRIS CITY OF LA PORTE We, the undersigned officers of the City of LaPorte, Texas (the "City"), do hereby make and execute this certificate for the benefit of the Attorney General of the State of Texas and all other persons interested in the City of La Porte, Texas, General Obligation Refunding Bonds, Series 2020, dated February 1, 2020 (the "Bonds"), now in the process of issuance. We certify as follows: (1) The City is a home rule municipality operating under its own charter, which has not been amended since the issuance of the City of La Porte, Texas, Certificates of Obligation Bonds, Series 2017, the last obligations issued by the City and approved by the Texas Attorney General. (2) The following individuals are the duly elected and qualified Mayor and City Council of the City holding the offices opposite their names: Louis R. Rigby Brandon Lunsford Steve Gillett Danny Earp Chuck Engelken Bill Bentley Thomas Garza Jay Martin Nancy Ojeda Mayor Commissioner -at -Large Commissioner -at -Large Commissioner, District 1 Commissioner, District 2 Commissioner, District 3 Commissioner, District 4 Commissioner, District 5 Commissioner, District 6 (3) Lee Woodward is the duly appointed and qualified City Secretary of the City. (4) Attached as Exhibit A is a true, full and correct debt service schedule for the Bonds. Attached as Exhibit B is a true, full and correct debt service schedule for all of the City's outstanding tax -supported debt, including the Bonds and excluding the refunded obligations. The total principal amount of all outstanding bonded indebtedness of the City payable from ad valorem taxes, including the Bonds and excluding the refunded obligations, is $[35,830,500]. (5) The 2019 certified taxable valuation of the City is $3,907,108,835. (6) None of the bonds being refunded by the Bonds (the "Refunded Bonds") have ever been held in or purchased for the account of any of the interest and sinking funds created and maintained for the payment and security of the Refunded Bonds, and none of the Refunded Bonds are currently owned by or have ever been purchased or held for any account or fund of the City. (7) With respect to the contracts executed in connection with the authorization and issuance of the Bonds, all disclosure filings and acknowledgments required by Section 2252.908, Texas Government Code, and the rules of the Texas Ethics Commission related to said provision, have been made. [signature page follows] EXHIBIT A DEBT SERVICE SCHEDULE FOR THE BONDS EXHIBIT B DEBT SERVICE SCHEDULE FOR TAX -SUPPORTED DEBT SIGNED this day of December, 2019. CITY OF LA PORTE, TEXAS Secretary CITY OF LA PORTE, TEXAS 604 West Fairmont Parkway La Porte, Texas 77571 December 9, 2019 Zions Bancorporation, National Association Attn: Corporate Trust and Escrow Department 1801 Main St., Suite 850 Houston, TX 77002 Ladies and Gentlemen: The bonds described on Exhibit A attached hereto have been called for redemption prior to scheduled maturities on the redemption date set out in Exhibit A and at the redemption price of par plus accrued interest to the date fixed for redemption, by the City of La Porte, Texas. As registrar for such bonds, you are hereby directed to give notice of redemption in accordance with the ordinances authorizing their issuance. Such notice is to be given at least thirty (30) days prior to the date fixed for redemption by first class mail, addressed to the registered owners of each bond to be redeemed in whole or in part at the address shown on the books of registration kept by the Registrar. The notice must identify the bond to be redeemed and must set out the following information: (A) Redemption Date (see attached Exhibit A). (B) Redemption Price (par plus accrued interest). (C) Place at which bonds are to be surrendered for payment (Zions Bancorporation). (D) The number of the bonds or portions thereof to be redeemed. Please acknowledge your receipt of this letter by signing in the space provided below. [Signature page follows] 011782.0000001 EMF_US 77761496v1 Receipt Acknowledged on this day of , 2020: ZIONS BANCORPORATION, NATIONAL ASSOCIATION By:_ Name: Title: 011782.0000001 EMF_US 77761496v1 F.XHIRIT A SCHEDULE OF REFUNDED BONDS Certificates of Obligation, Series 2010 Maturity Bond Date Interest Rate Par Amount Call Date Call Price C/O Ser 2010, 2010_1: SERIAL 03/15/2021 4.000% 445,000.00 03/15/2020 100.000 03/15/2022 3.625% 460,000.00 03/15/2020 100.000 03/15/2023 3.750% 475,000.00 03/15/2020 100.000 03/15/2024 3.875% 495,000.00 03/15/2020 100.000 03/15/2025 4.000% 515,000.00 03/15/2020 100.000 03/15/2026 4.000% 535,000.00 03/15/2020 100.000 2,925,000.00 011782.0000001 EMF -US 77761496v1 CITY OF LA PORTE, TEXAS 011782.0000001 EMF US 77761496v1 PAYING AGENT/REGISTRAR AGREEMENT THIS AGREEMENT (this "Agreement"), is entered into as of January _, 2020, by and between City of La Porte, Texas (the "Issuer"), and Zions Bancorporation, National Association, (the "Bank"). RECITALS OF THE ISSUER The Issuer has duly authorized and provided for the issuance of its bonds, entitled "City of LaPorte, Texas General Obligation Refunding Bonds, Series 2020 (the "Bonds") to be issued as fully registered bonds; All things necessary to make the Bonds the valid obligations of the Issuer, in accordance with their terms, will be done upon the issuance and delivery thereof, The Issuer and the Bank wish to provide the terms under which the Bank will act as Paying Agent to pay the principal, redemption premium (if any) and interest on the Bonds, in accordance with the terms thereof, and under which the Bank will act as Registrar for the Bonds; The Issuer and the Bank have duly authorized the execution and delivery of this Agreement; and all things necessary to make this Agreement the valid agreement of the parties, in accordance with its terms, have been done. NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Bonds, to pay to the Registered Owners of the Bonds in accordance with the terms and provisions of this Agreement and the Bond Ordinance, the principal of, redemption premium (if any), and interest, on all or any of the Bonds. The Issuer hereby appoints the Bank as Registrar with respect to the Bonds. The Bank hereby accepts its appointment, and agrees to act as Paying Agent and Registrar. Section 1.02. Compensation. As compensation for the Bank's services as Paying Agent and Registrar, the Issuer hereby agrees to pay the Bank the fees set forth in the Bank's fee schedule attached as Annex A hereto. The Bank reserves the right to amend the fee schedule at any time, provided the Bank shall have System.Object[] furnished the Issuer with a written copy of such amended fee schedule at least 75 days prior to the date that the new fees are to become effective. ARTICLE TWO DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Bank" means Zions Bancorporation, National Association, a national bank duly organized and existing under the laws of the United States of America. "Bond" or "Bonds" means any one or all of the "City of La Porte, Texas General Obligation Refunding Bonds, Series 2020." "Bond Ordinance" means the ordinance of the Issuer approved July 22, 2019, pursuant to which the Bonds are issued. "Financial Advisor" means RBC Capital Markets, LLC, and its successors. "Issuer" means the City of LaPorte, Texas. "Paying Agent" means the Bank when it is performing the function of paying agent. "Person" means any individual, corporation, partnership, joint venture, associations, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government or any entity whatsoever. "Registrar" means the Bank when it is performing the function of registrar. All other capitalized terms shall have the meanings assigned in the Bond Ordinance. ARTICLE THREE DUTIES OF THE BANK Section 3.01. Initial Delivery of Bonds. The Bonds will be initially registered and delivered to the purchaser designated by the Issuer as set forth in the Bond Ordinance. If such purchaser delivers a written request to the Bank not later than five business days prior to the date of initial delivery, the Bank will, on the date of initial delivery, exchange the Bonds initially delivered for Bonds of authorized denominations, registered in accordance with the instructions in such request and the Bond Ordinance. -2- System.Object[] Section 3.02. Duties of Paying Agent. As Paying Agent, the Bank shall, provided adequate funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of, redemption premium, if any, and interest, on each Bond in accordance with the provisions of the Bond Ordinance. Section 3.03. Duties of Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. The Bank is authorized to receive the purchase price of and, if applicable, accrued interest on the Bonds from the underwriter of the Bonds and to transfer said funds relating to the closing and initial delivery of the Bonds in the manner disclosed in the closing memorandum approved by the Issuer as prepared by the Issuer's financial advisor or other agent. The Bank may act on a facsimile or electronic mail transmission of the closing memorandum acknowledged by the Issuer or the Issuer's financial advisor as the final closing memorandum to be followed by an original of the closing memorandum signed by the financial advisor or the Issuer. The Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Bank's reliance upon and compliance with such instructions. Section 3.04. Duties of Registrar. The Bank shall provide for the proper registration of the Bonds and the exchange, replacement and registration of transfer of the Bonds, in accordance with the provisions of the Bond Ordinance. The Bank will maintain the books of registration in accordance with the Bank's general practices and procedures in effect from time to time. Section 3.05. Unauthenticated Bonds. The Issuer shall provide an adequate inventory of unauthenticated Bonds to facilitate transfers. The Bank covenants that it will maintain such unauthenticated Bonds in safekeeping and will use reasonable care in maintaining such Bonds in safekeeping, which shall be not less than the care it maintains for debt securities of other government entities or corporations for which it serves as registrar, or which it maintains for its own bonds. Section 3.06. Reports. The Bank will provide the Issuer reports upon request, which reports will describe in reasonable detail all transactions pertaining to the Bonds and the books of registration. The Issuer may also inspect and make copies of the information in the books of registration at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. -3- System.Object[] The Bank will not release or disclose the content of the books of registration to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a subpoena, court order or as otherwise required by law. Upon receipt of a subpoena, court order or other lawful request, the Bank will notify the Issuer immediately so that the Issuer may contest the subpoena, court order or other request provided Bank is not prohibited from providing such notice. Section 3.07. Cancelled Bonds. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Bank, shall be promptly cancelled by it and, if surrendered to the Issuer, shall be delivered to the Bank and, if not already cancelled, shall be promptly cancelled by the Bank. The Issuer may at any time deliver to the Bank for cancellation any Bonds previously authenticated and delivered which the Issuer may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Bank. All cancelled Bonds held by the Bank shall be destroyed and evidence of such destruction furnished to the Issuer. Section 3.08. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank by the Issuer. (b) The Bank shall not be liable to the Issuer for actions taken under this Agreement so long as it acts in good faith and exercises due diligence, reasonableness and care, as prescribed by law, with regard to its duties hereunder. (c) This Agreement is not intended to require the Bank to expend its own funds for performance of any of its duties hereunder. (d) The Bank may rely and shall be protected by the Issuer against any claim by the Issuer or any other Person in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Bond, but is protected in acting upon receipt of a Bond containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the holder or an agent of the holder. The Bank shall not be bound to make any investigation into the acts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document supplied by Issuer. (e) The Bank may consult with legal counsel, and the written advise of such counsel or any opinion shall be full and complete authorization and protection with respect to any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; provided that any such written advice or opinion is supplied to the Issuer by the Bank. 13 System.Object[] (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys. Section 3.09. Money Held by Bank. Money held by the Bank hereunder shall be held in trust for the benefit of the Registered Owners of the Bonds. The Bank shall be under no obligation to pay interest on any money received by it hereunder. All money deposited with the Bank hereunder shall be secured in the manner and to the fullest extent required by law for the security of funds of the Issuer. Any money deposited with the Bank for the payment of the principal, redemption premium (if any) or interest on any Bond and remaining unclaimed by the Registered Owner after the expiration of three years from the date such funds have become due and payable shall be reported and disposed of by the Bank in accordance with the provisions of Texas law including, to the extent applicable, Title 6 of the Texas Property Code, as amended. The Bank shall have not liability to the Registered Owners of the Bonds by virtue of actions taken in compliance with the foregoing provision. The Bank shall deposit all moneys received from the Issuer into a trust account to be held in a fiduciary capacity for the payment of the Bonds, with such moneys in the account that exceed the deposit insurance available by the Federal Deposit Insurance Corporation to be fully collateralized with securities or obligations that are eligible under the laws of the State of Texas to secure and be pledged as collateral for trust accounts until the principal and interest on such Bonds have been presented for payment and paid to the Registered Owners. Section 3.10. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank for, and hold it harmless against, any loss, liability or expense incurred by the Bank without negligence or bad faith on the Bank's part, arising out of or in connection with its acceptance or administration of the Bank's duties hereunder, including the cost and expense (including the Bank's counsel fees) of defending against any claim or liability in connection with the exercise or performance of any of the Bank's powers or duties under this Agreement. Section 3.11. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand or controversy over its person as well as funds on deposits, in any Federal or State Court located in the State and County where the administrative offices of the Issuer is located, and agree that service of process by registered mail, return receipt requested, to the address referred to in Section 4.04 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction in the State of Texas to determine the rights of any Person claiming any interest herein. -5- System.Object[] Section 3.12. Merger, Conversion, Consolidation or Succession. Any corporation into which the Bank may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion, or consolidation to which the Bank shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Bank shall be the successor of the Bank hereunder without the execution or filing of any paper or any further act on the part of either of the parties hereto. In case any Bond shall have been registered, but not delivered, by the Bank then in office, any successor by merger, conversion, or consolidation to such authenticating Bank may adopt such registration and deliver the Bond so registered with the same effect as if such successor Bank had itself registered such Bond. Section 3.13. Deposit of Bond Proceeds. The net proceeds of the sale of the Bonds shall deposited with the Paying Agent via wire transfer of immediately available funds. The Paying Agent shall deposit such funds in such accounts as are necessary to be established in accordance with the closing memorandum approved by the Issuer and provided to the Paying Agent by the Issuer, its financial advisor or other agent, or as directed in writing by the Issuer. Such funds shall not be invested. Moneys on deposit with the Paying Agent shall be disbursed upon written request of the Issuer. ARTICLE FOUR MISCELLANEOUS PROVISIONS Section 4.01. May Own Bonds. The Bank, in its individual or any other capacity, may become the owner or pledgee of Bonds with the same rights it would have if it were not the Paying Agent and Registrar for the Bonds. Section 4.02. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereof. Section 4.03. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 4.04. Notices. Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown herein, or such other address as may have been given by one party to the other by 15 days written notice. I in system.Object[] Section 4.05. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 4.06. Successors and Assigns. All covenants and agreements herein by the Issuer and the Bank shall bind their successors and assigns, whether so expressed or not. Section 4.07. Severability. If any provision of this Agreement shall be invalid or unenforceable, the validity and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. Section 4.08. Benefits of Agreement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim hereunder. Section 4.09. Bond Ordinance Governs Conflicts. This Agreement and the Bond Ordinance constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent and Registrar and if any conflict exists between this Agreement and the Bond Ordinance, the Bond Ordinance shall govern. Section 4.10. Term and Termination. This Agreement shall be effective from and after its date and may be terminated for any reason by the Issuer or the Bank at any time upon 30 days written notice; provided, however, that no such termination shall be effective until a successor has been appointed and has accepted the duties of the Bank hereunder. In the event of early termination regardless of circumstances, the Bank shall deliver to the Issuer or its designee all funds, Bonds and all books and records pertaining to the Bank's role as Paying Agent and Registrar with respect to the Bonds, including, but not limited to, the books of registration. Section 4.11. Governing Law. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of Texas. -7- System.Object[] Section 4.12. Anti -Boycott Verification. The Bank represents that, to the extent this Agreement constitutes a contract for goods or services within the meaning of Section 2271.002 of the Texas Government Code, as amended, solely for purposes of compliance with Chapter 2271 of the Texas Government Code, and subject to applicable Federal law including without limitation, 50 U.S.C. Section 4607, neither the Bank, nor any wholly owned subsidiary, majority-owned subsidiary, parent company or affiliate of the Bank (i) boycotts Israel or (ii) will boycott Israel through the term of this Agreement. The terms "boycotts Israel" and "boycott Israel" as used in this paragraph have the meanings assigned to the term "boycott Israel" in Section 808.001 of the Texas Government Code, as amended. Section 4.13. Iran, Sudan and Foreign Terrorist Organizations. The Bank represents that, to the extent this Agreement constitutes a governmental contract within the meaning of Section 2252.151 of the Texas Government Code, as amended, solely for purposes of compliance with Chapter 2252 of the Texas Government Code, and except to the extent otherwise required by applicable federal law, neither the Bank, nor any wholly owned subsidiary, majority-owned subsidiary, parent company or affiliate of the Bank is a company listed by the Texas Comptroller of Public Accounts under Sections 806.051, 807.051, or 2252.153 of the Texas Government Code. [signature page follows] -8- System.Object[] ZIONS BANCORPORATION, NATIONAL ASSOCIATION By Title: Vice President & Trust Officer Amegy Bank Division Address: 1801 Main Street, Suite 850 -10- System.Object[] Houston, Texas 77002 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. ATTEST: COIJN���= 10 System.Object[] CITY OF LA PORTE, TEXAS 19 Address: 604 W. Fairmont Parkway LaPorte, TX 77571 CITY OF LA PORTE, TEXAS December 9, 2019 Attorney General of Texas Attention: Public Finance Division William P. Clements Building, 7th Floor 300 W. 15th Street Austin, TX 78701 Texas State Comptroller of Public Accounts Cash and Securities Management Division Thomas Jefferson Rusk Building 208 East 10th Street, 4th Floor, Room 448 Austin, Texas 78701-2407 Re: City of La Porte, Texas, General Obligation Refunding Bonds, Series 2020 Ladies and Gentlemen: TO THE ATTORNEY GENERAL The Bonds described in the above caption, hereinafter called the "Bonds", will be sent to you for approval and we enclose one executed but undated SIGNATURE IDENTIFICATION AND NO -LITIGATION CERTIFICATE. Upon approval of the Bonds, you are authorized and respectfully requested to insert the date in such certificate, which date is to be the same as your approval date. If any litigation should develop before you have approved the Bonds, we will notify you at once both by telephone and fax. With this assurance you can rely upon the absence of litigation at the time that you approve the Bonds unless we advise you to the contrary. After you have approved the Bonds, please deliver them to the Comptroller of Public Accounts of Texas for registration. TO THE COMPTROLLER After the Bonds have been registered, they will be picked up by Hunton Andrews Kurth LLP. Encl. to Attorney General 011782.0000001 EMF US 77761424v1 ESCROW AGREEMENT THIS ESCROW AGREEMENT (this "Escrow Agreement"), dated for convenience as of January _, 2020, but effective on the Escrow Funding Date described herein, is made and entered into by and between the City of La Porte, Texas, a home rule municipality and political subdivision of the State of Texas (the "City"), and Zions Bancorporation, National Association, as escrow agent (together with any successor or assign in such capacity, the "Escrow Agent"). WHEREAS, the City has heretofore issued certain obligations (hereinafter defined as the "Refunded Obligations") that it desires to refund in advance of their maturities; WHEREAS, Chapter 1207, Texas Government Code (the "Act"), authorizes and empowers the City to sell bonds in an amount sufficient, together with other available funds or resources, to provide for the payment of obligations which are to be discharged, deposit the proceeds of such refunding bonds with an escrow agent and enter into an escrow or similar agreement with such escrow agent for the safekeeping, investment, reinvestment, administration, and disposition of such deposit of proceeds, upon such terms and conditions as the parties may agree, to provide for the scheduled payment of such discharged bonds; WHEREAS, the City Council of the City has adopted an ordinance (the "Refunding Bond Ordinance") authorizing the issuance, sale and delivery of the City's General Obligation Refunding Bonds, Series 2020 (the "Refunding Bonds"), for the purpose, among other things, of providing the funds necessary to refund the Refunded Obligations; WHEREAS, to provide for the payment of the Refunded Obligations, the City has provided for the transfer to the Escrow Agent pursuant to this Escrow Agreement of proceeds of the Refunding Bonds together with any other legally available funds, if any; and WHEREAS, the City Council of the City has further determined to effectuate the refunding of the Refunded Obligations pursuant to this Escrow Agreement, under which provision is made for the safekeeping, investment, reinvestment, administration and disposition of proceeds of the Refunding Bonds so as to provide firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, and in order to secure the full and timely payment of the principal of and interest on the Refunded Obligations, the City and the Escrow Agent contract and agree as follows: ARTICLE I. DEFINITIONS AND INTERPRETATIONS Section 1.1. Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise, the following terms shall have the respective meanings specified below for all purposes of this Escrow Agreement: "Code" shall mean the Internal Revenue Code of 1986, as amended, and the applicable regulations thereunder and under the Internal Revenue Code of 1954. "City" shall mean the City of La Porte, Texas and, where appropriate, its City Council. "Escrow Agent" shall mean Zions Bancorporation, National Association, in its capacity as escrow agent hereunder, and any successor or assign in such capacity. "Escrow Agreement" shall mean this escrow agreement. "Escrow Deposit" shall mean the initial deposit into the Escrow Fund, as more particularly described in Section 2.1. "Escrow Fund" shall mean the fund created in Section 3.1 of this Escrow Agreement to be administered by the Escrow Agent pursuant to the provisions of this Escrow Agreement. "Escrow Funding Date" shall mean the date on which the City deposits with the Escrow Agent the cash and Escrowed Securities described in Section 2.1, expected to be February 12, 2020. "Escrowed Securities" shall mean the Limited Yield Securities and the Open Market Securities. "Limited Yield Securities" shall mean the noncallable United States Treasury Obligations - State and Local Government Series, if any, to be initially purchased with proceeds of the Refunding Bonds, as more fully described in the Report attached hereto, together with all reinvestments of the proceeds thereof as may be directed in Section 4.2 or permitted in Section 4.3(b). "Open Market Securities" shall mean the eligible escrow investments under Section 1207.062, Texas Government Code, to be purchased in the open market with cash and the proceeds of the Refunding Bonds, as more fully described in the Report attached hereto, together with all reinvestments of the proceeds thereof as may be directed in Section 4.2 or permitted in Section 4.3(b), or cash or obligations substituted therefor pursuant to Section 4.3(a). "Paying Agent for the Refunded Obligations" shall mean the Escrow Agent, it its capacity as paying agent for the Refunded Obligations. "Refunded Obligation Ordinances" shall mean the City's ordinances authorizing the issuance, sale and delivery of the Refunded Obligations. 2 "Refunded Obligations" shall mean the City's outstanding bonds listed on Schedule I hereto. "Refunding Bond Ordinance" shall mean the City's ordinance adopted December 9, 2020 authorizing the issuance, sale and delivery of the Refunding Bonds. "Refunding Bonds" shall mean the City's General Obligation Refunding Bonds, Series 2020, dated February 1, 2020. "Report" shall mean the verification report prepared by , independent certified public accountants, relating to the advance refunding of the Refunded Obligations, and any subsequent verification report required by Section 4.3. Section 1.2. Interpretations. The titles and headings of the articles and sections of this Escrow Agreement have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Escrow Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the refunding of the Refunded Obligations in accordance with applicable law. ARTICLE II. DEPOSIT OF FUNDS AND ESCROWED SECURITIES Section 2.1. Deposits to Escrow Fund. On the Escrow Funding Date, the City shall deposit, or cause to be deposited, into the Escrow Fund the Escrow Deposit, consisting of the following: (a) Escrowed Securities more fully described in the Report; and (b) A beginning cash balance as provided in the Report. ARTICLE III. CREATION AND OPERATION OF ESCROW FUND Section 3.1. Escrow Fund. On the Escrow Funding Date, the Escrow Agent will create in its books a special fund and irrevocable escrow to be known as the "City of La Porte, Texas General Obligation Refunding Bonds, Series 2020, Escrow Fund" (the "Escrow Fund"). On the Escrow Funding Date, the Escrow Deposit described in Section 2.1 will be deposited to the credit of the Escrow Fund. The Escrow Deposit and all proceeds therefrom shall be the property of the Escrow Fund and shall be applied only in strict conformity with the terms and conditions hereof. All Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund are hereby irrevocably pledged to the payment of the principal of, redemption premium, if any, and interest on the Refunded Obligations, which payment shall be made by timely transfers to the Paying Agent for the Refunded Obligations of such amounts at such times as are provided in Section 3.2. When the final transfers have been made to the Paying Agent for the 3 Refunded Obligations for the payment of such principal of, redemption premium, if any, and interest on the Refunded Obligations, any balance then remaining in the Escrow Fund shall be transferred to the City, and the Escrow Agent shall thereupon be discharged from any further duties hereunder. Section 3.2. Payment of Principal, Redemption Premium, if any, and Interest; Redemption of Certain Refunded Obligations. (a) The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent for the Refunded Obligations from the cash balance from time to time on deposit in the Escrow Fund the amounts required to pay the principal of, redemption premium, if any, and interest on the Refunded Obligations in the amounts and at the times shown in the Report; provided, however, that funds transferred to the Escrow Fund from the interest and sinking funds for the Refunded Obligations, if any, and all investment earnings thereon be used for the payment of the principal of, redemption premium, if any, and interest on the Refunded Obligations prior to the use of proceeds of the Refunding Bonds for such purpose. (b) Except for amounts transferred to the Paying Agent for the Refunded Obligations pursuant to Section 3.2(a) and to the City pursuant to Section 4.2, the Escrow Agent agrees that it shall never make any withdrawals from the Escrow Fund or assert any claims, liens or charges against the Escrow Fund. Section 3.3. Sufficiency of Escrow Fund. The City represents (based upon the Report) that the successive receipts of the principal of and interest on the Escrowed Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide money for transfer to the Paying Agent for the Refunded Obligations at the times and in the amounts required to pay the interest on the Refunded Obligations as such interest comes due and to pay the principal of, redemption premium, if any, and interest on the Refunded Obligations as the Refunded Obligations mature or are called for redemption, all is more fully set forth in the Report. If, for any reason, at any time, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund shall be insufficient to transfer the amounts required by the Paying Agent for the Refunded Obligations to make the payments set forth in Section 3.2, the City shall timely deposit into the Escrow Fund, from lawfully available funds, additional funds in the amounts required to make such payments. Notice of any such insufficiency shall be given promptly by the Escrow Agent to the City as hereinafter provided, but the Escrow Agent shall not in any manner be responsible for any insufficiency of funds in the Escrow Fund or the City's failure to make additional deposits thereto. Section 3.4. Trust Fund. The Escrow Agent at all times shall hold the Escrow Fund, the Escrowed Securities and all other assets of the Escrow Fund wholly segregated from all other funds and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities or any other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and other assets of the Escrow Fund always shall be maintained by the Escrow Agent for the benefit of the holders of the Refunded Obligations; and a special account evidencing such fact shall be maintained at all times on the books of the Escrow Agent. The holders of the Refunded Obligations shall be entitled to the same preferred claim and first lien upon the Escrowed Securities, the proceeds thereof and all other assets of the Escrow Fund to which they are entitled as holders of the Refunded Obligations. The amounts received by the al Escrow Agent under this Escrow Agreement shall not be considered as a banking deposit by the City, and the Escrow Agent shall have no right or title with respect thereto except as escrow agent under the terms hereof. The amounts received by the Escrow Agent hereunder shall not be subject to warrants, drafts or checks drawn by the City or, except to the extent expressly herein provided, by the Paying Agent for the Refunded Obligations. Section 3.5. Security for Cash Balances. Cash balances from time to time on deposit in the Escrow Fund, to the extent not insured by the Federal Deposit Insurance City or its successor, shall be continuously secured by a pledge of direct obligations of, or obligations unconditionally guaranteed by, the United States of America, having a market value at least equal to such cash balances. Section 3.6 Grant of Security Interest. In order to secure payment when due of the principal of and interest on the Refunded Obligations, the City hereby pledges and grants to the Escrow Agent, for the account of the holders or owners of the Refunded Obligations and of any appurtenant coupons, a security interest in all of its right, title, and interest, if any, in and to all funds held hereunder and all investments thereof and agrees that the Escrow Agent shall have and may exercise all of the rights of a secured party granted by the Texas Uniform Commercial Code in respect thereof to the same extent as if such Code applied to such security interest. ARTICLE IV. LIMITATION ON INVESTMENTS Section 4.1. General. Except as herein otherwise expressly provided, the Escrow Agent shall not have any power or duty to invest any money held hereunder, to make substitutions of the Escrowed Securities or to sell, transfer or otherwise dispose of the Escrowed Securities. Section 4.2. Reinvestment of Proceeds of Open Market Securities. The Escrow Agent is hereby authorized and directed to reinvest proceeds of the Open Market Securities, if any, which are attributable to amounts received as principal of or interest on the Open Market Securities and which are not immediately needed to pay the Refunded Obligations in direct obligations of the United States of America, i.e., United States Treasury Bonds, Bills and Notes, in the amounts, and maturing and bearing interest, all as set out in the Report. The City hereby designates and appoints the Escrow Agent as its agent and duly authorized representative for purposes of subscribing for and purchasing such obligations, all of which shall constitute Escrowed Securities. Any income or increment earned from such reinvestment remaining after final payment of the Refunded Obligations, shall be promptly transferred to the City. Section 4.3. Substitution of Securities. (a) Concurrently with the sale and delivery of the Refunding Bonds, the City may, upon compliance with the conditions stated in subsection (c) of this Section 4.3, at its option, substitute cash or non-interest bearing obligations of the United States Treasury (i.e., Treasury obligations which mature and are payable in a stated amount on the maturity date thereof and for which there are no payments other than the payment made on the maturity date) for non-interest bearing Open Market Securities listed in the Report, but only if such cash and/or substituted non-interest bearing direct obligations of the United States Treasury: (i) are in an amount, and/or mature in an amount, which, together with any cash substituted for such obligations, is equal to or greater than the amount payable on the maturity date of the obligation listed in the Report for which such obligation is substituted, and (ii) mature on or before the maturity date of the obligation listed in the Report for which such obligation is substituted. The City may at any time substitute any Open Market Securities which, as permitted by the preceding sentence, were not deposited to the credit of the Escrow Fund, for the cash and/or obligations that were substituted concurrently with the sale and delivery of the Refunding Bonds for such Open Market Securities. (b) At the written request of the City, and upon compliance with the conditions hereinafter stated in subsection (c) of this Section 4.3, the Escrow Agent shall sell, transfer, otherwise dispose of or request the redemption of all or any portion of the Escrowed Securities and apply the proceeds therefrom to purchase Refunded Obligations or direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America which do not permit the redemption thereof at the option of the obligor. (c) Any such transaction described in subsections (a) and (b) of this Section 4.3 may be affected by the Escrow Agent only if (1) the Escrow Agent shall have received a written opinion from a recognized firm of certified public accountants that such transaction will not cause the amount of money and securities in the Escrow Fund to be reduced below an amount which will be sufficient, when added to the interest to accrue thereon, to provide for the payment of principal of, redemption premium, if any, and interest on the remaining Refunded Obligations as they become due, and (2) the Escrow Agent shall have received the unqualified written legal opinion of nationally recognized bond counsel or tax counsel acceptable to the City and the Escrow Agent to the effect that (a) such transaction will not cause any of the Refunded Obligations or Refunding Bonds to be an "arbitrage bond" within the meaning of the Code and (b) that such transaction complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Refunded Obligations and the Refunding Bonds. Section 4.4. Arbitrage. The City hereby covenants and agrees that it shall never request the Escrow Agent to exercise any power hereunder or permit any part of the money in the Escrow Fund or proceeds from the sale of Escrowed Securities to be used directly or indirectly to acquire any securities or obligations if the exercise of such power or the acquisition of such securities or obligations would cause any Refunding Bonds to be an "arbitrage bond" within the meaning of the Code. ARTICLE V. RECORDS AND REPORTS Section 5.1. Records. The Escrow Agent shall keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipt, disbursement, 2 allocation and application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds thereof, and such books shall be available for inspection at reasonable hours and under reasonable conditions by the City and the holders of the Refunded Obligations. Section 5.2. Reports. For the period beginning on the Escrow Funding Date and ending on September 30, 2020, and for each twelve (12) month period thereafter while this Agreement remains in effect, the Escrow Agent shall prepare and send to the City within thirty (30) days following the end of such period a written report summarizing all transactions relating to the Escrow Fund during such period, including, without limitation, credits to the Escrow Fund as a result of interest payments on or maturities of the Escrowed Securities and transfers from the Escrow Fund to the Paying Agent for the Refunded Obligations or otherwise, together with a detailed statement of all Escrowed Securities and the cash balance on deposit in the Escrow Fund as of the end of such period. ARTICLE VI. CONCERNING THE ESCROW AGENT Section 6.1. Representations of Escrow Agent. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Escrow Agreement and undertake the obligations and responsibilities imposed upon it herein and that it will carry out all of its obligations hereunder. Section 6.2. Limitation on Liability. The liability of the Escrow Agent to transfer funds to the Paying Agent for the Refunded Obligations for the payments of the principal of, redemption premium, if any, and interest on the Refunded Obligations shall be limited to the proceeds of the Escrowed Securities and the cash balances from time to time on deposit in the Escrow Fund. Notwithstanding any provision contained herein to the contrary, the Escrow Agent shall have no liability whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any failure of the obligor of the Escrowed Securities to make timely payment thereon, except for its obligation to notify the City promptly of any such occurrence. The recitals herein and in the proceedings authorizing the Refunding Bonds shall be taken as the statements of the City and shall not be considered as made by, or imposing any obligation or liability upon, the Escrow Agent. The Escrow Agent is not a party to the Refunding Bond Ordinance or the Refunded Obligation Ordinances and in its capacity as Escrow Agent is not responsible for or bound by any of the provisions thereof. In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and provisions of this Escrow Agreement. The Escrow Agent makes no representation as to the value, condition or sufficiency of the Escrow Fund, or any part thereof, or as to the title of the City thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall incur no liability or responsibility with respect to any of such matters. 7 It is the intention of the City and the Escrow Agent that the Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. The Escrow Agent shall not be liable for the performance of any duties, except such duties as are specifically set forth in this Escrow Agreement, and no implied covenants or obligations shall be read into this Escrow Agreement. Nothing herein contained shall relieve the Escrow Agent from liability for its own negligent action, negligent failure to act or willful misconduct, except that this sentence shall not be construed to limit the effect of the immediately preceding sentence. The Escrow Agent shall not incur any liability for any error of judgment made in good faith by a responsible officer thereof, unless it shall be proved that it was negligent in ascertaining the pertinent facts. The Escrow Agent shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine, and to have been signed or presented by the proper party or parties. The Escrow Agent may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it in good faith and in accordance therewith. Unless it is specifically provided otherwise herein, the Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency or the performance or failure of performance of the City with respect to arrangements or contracts with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund and to dispose of and deliver the same in accordance with this Escrow Agreement. If, however, the Escrow Agent is called upon by the terms of this Escrow Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise reasonable care and diligence, and in the event of error in making such determination the Escrow Agent shall be liable only for its own misconduct or its negligence. In determining the occurrence of any such event or contingency the Escrow Agent may request from the City or any other person such reasonable additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency, and in this connection may make inquiries of, and consult with the City, among others, at any time. The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in good faith in the exercise of reasonable care and believed by it to be within the discretion or power conferred upon it by this Escrow Agreement, nor shall the Escrow Agent be responsible for the consequences of any error of judgment; and the Escrow Agent shall not be answerable except for its own neglect or default, nor for any loss unless the same shall have been through its negligence or want of good faith. 8 In the absence of bad faith, the Escrow Agent may rely conclusively upon the truth, completeness and accuracy of the statements, certificates, opinions, resolutions and other documents conforming to the requirements of this Escrow Agreement, and shall not be obligated to make any independent investigation with respect thereto. To the full extent permitted by law, the parties agree to indemnify, defend and hold the Escrow Agent harmless from and against any and all loss, damage, tax, liability and expense that may be incurred by the Escrow Agent arising out of or in connection with its acceptance or appointment as Escrow Agent hereunder, including attorneys' fees and expenses of defending itself against any claim or liability in connection with its performance hereunder except that the Escrow Agent shall not be indemnified for any loss, damage, tax, liability, or expense resulting from its own negligence or willful misconduct. The foregoing indemnification shall survive the resignation or removal of the Escrow Agent and the defeasance of the Bonds. Section 6.3. Compensation. On the Escrow Funding Date, the City will pay the Escrow Agent, as a fee for performing the services hereunder and for all expenses incurred or to be incurred by the Escrow Agent in the administration of this Escrow Agreement the fees set out in Exhibit A. This sum does not include the costs of publication, printing costs, or reasonable out-of-pocket expenses of the Escrow Agent. If the Escrow Agent is requested to perform any extraordinary services hereunder, the City hereby agrees to pay reasonable fees to the Escrow Agent for such extraordinary services and to reimburse the Escrow Agent for all expenses incurred by the Escrow Agent in performing such extraordinary services. It is expressly provided that the Escrow Agent shall look only to the City for the payment of such additional fees and reimbursement of such additional expenses. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether regular, additional or extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses. The Escrow Agent acknowledges that it also acts as the paying agent for the Refunded Obligations. The Escrow Agent, in such capacity, agrees that it shall continue to provide the services of paying agent for the Refunded Obligations (including providing notices of redemption of the Refunded Obligations in accordance with the Refunded Obligation Ordinances) so long as the principal of and interest on the Refunded Obligations is being paid pursuant to the terms of this Agreement, that it shall continue to be paid for such services as paying agent pursuant to the terms of the paying agent agreements currently in effect for such Refunded Obligations, and that the sole remedy for nonpayment by the City of any fees due to the paying agent will be an action for amounts owed under such paying agent agreements. Section 6.4. Successor Escrow Agents. If at any time the Escrow Agent or its legal successor or successors should become unable, through operation of law or otherwise, to act as escrow agent hereunder, or if its property and affairs shall be taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy or for any other reason, a vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event the City, by appropriate action, shall promptly appoint an Escrow Agent to fill such vacancy. If no successor Escrow Agent shall have been appointed by the City within 60 days, a successor may be appointed by the holders of a majority in aggregate principal amount of the Refunded Obligations 6 then outstanding by an instrument or instruments in writing filed with the City, signed by such holders or by their duly authorized attorneys. If, in a proper case, no appointment of a successor Escrow Agent shall be made pursuant to the foregoing provisions of this section within three months after a vacancy shall have occurred, the holder of any Refunded Bond then out -standing may apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if any, as it may deem proper, prescribe and appoint a successor Escrow Agent. Any successor Escrow Agent shall be qualified to act in such capacity under Chapter 1207, Texas Government Code, as amended, and shall be a corporation organized and doing business under the laws of the United States or the State of Texas, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authority. Any successor Escrow Agent shall execute, acknowledge and deliver to the City and the Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall execute and deliver an instrument transferring to such successor Escrow Agent, subject to the terms of this Agreement, all the rights, powers and trusts of the Escrow Agent hereunder. Upon the request of any such successor Escrow Agent, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such rights, powers and duties. The Escrow Agent shall pay over to its successor Escrow Agent a proportional part of the Escrow Agent's fee paid hereunder. The Escrow Agent at the time acting hereunder may at any time resign and be discharged from the escrow hereby created by giving not less than sixty (60) days' written notice to the City specifying the date when such resignation will take effect. No such resignation shall take effect unless a successor Escrow Agent shall have been appointed by the holders of the Refunded Obligations or by the City as herein provided and such successor Escrow Agent shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance of a successor Escrow Agent. The Escrow Agent may be removed at any time by an instrument or concurrent instruments in writing delivered to the Escrow Agent and to the City and signed by the holders of a majority in aggregate principal amount of the Refunded Obligations then outstanding. ARTICLE VII. MISCELLANEOUS Section 7.1. Notices. Any notice, authorization, request or demand required or permitted to be given hereunder shall be made or given in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid, addressed as follows: 10 To the Escrow Agent: Zions Bancorporation, National Association 1801 Main Street, Suite 850 Houston, Texas 77002 Attention: Corporate Trust Department To the City: City of La Porte, Texas 604 W. Fairmont Parkway LaPorte, Texas 77571 Attention: Finance Director The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Either party hereto may change the address to which notices are to be delivered by giving to the other party not less than ten days' prior written notice thereof. Section 7.2. Termination of Responsibilities. Upon the taking by the Escrow Agent of all the actions as described herein, the Escrow Agent shall have no further obligations or responsibilities hereunder to the City, the holders of the Refunded Obligations or to any other person or persons in connection with this Escrow Agreement. Section 7.3. Binding Agreement; Amendment. This Escrow Agreement shall be binding upon the City and the Escrow Agent and their respective successors and legal representatives and shall inure solely to the benefit of the holders of the Refunded Obligations, the City, the Escrow Agent and their respective successors and legal representatives. This Escrow Agreement shall not be subject to amendment without the written consent of the holders of all Refunded Obligations then outstanding. Section 7.4. Severability. If any one or more of the provisions contained in this Escrow Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Escrow Agreement, but this Escrow Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. Section 7.5. Governing Law. This Escrow Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Texas. Section 7.6. Time of Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Escrow Agreement. Section 7.7. Anti -Boycott Verification. The Escrow Agent represents that, to the extent this Escrow Agreement constitutes a contract for goods or services within the meaning of Section 2271.002 of the Texas Government Code, as amended, solely for purposes of compliance with Chapter 2271 of the Texas Government Code, and subject to applicable Federal law including without limitation, 50 U.S.C. Section 4607, neither the Escrow Agent, nor any wholly owned 11 subsidiary, majority-owned subsidiary, parent company or affiliate of the Escrow Agent (i) boycotts Israel or (ii) will boycott Israel through the term of this Escrow Agreement. The terms "boycotts Israel" and "boycott Israel" as used in this paragraph mean refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations specifically with Israel, or with a person or entity doing business in Israel or in an Israeli -controlled territory, but does not include an action made for ordinary business purposes. Section 7.8. Iran, Sudan and Foreign Terrorist Organizations. The Escrow Agent represents that, to the extent this Escrow Agreement constitutes a governmental contract within the meaning of Section 2252.151 of the Texas Government Code, as amended, solely for purposes of compliance with Subchapter F of Chapter 2252 of the Texas Government Code, and except to the extent otherwise required by applicable federal law, neither the Escrow Agent, nor any wholly owned subsidiary, majority-owned subsidiary, parent company or affiliate of the Escrow Agent engages in business with Iran, Sudan, or any foreign terrorist organization. For purposes of this section, the phrase "foreign terrorist organization" means an organization designated as a foreign terrorist organization by the United States Secretary of State as authorized by 8 U.S.C. Section 1189. [Signature Page Follows] 12 ZIONS BANCORPORATION, NATIONAL ASSOCIATION By_ Title Vice President & Trust Officer Amegy Bank Division Address: 1801 Main Street, Suite 850 Houston, Texas 77002 S-1 EXECUTED as of the date first written above, but effective as set forth herein. ATTEST: CITY S-1 SCHEDULEI SCHEDULE OF REFUNDED BONDS EXHIBIT A FEESCHEDULE RECEIPT AND NO -LITIGATION CERTIFICATE THE STATE OF TEXAS § COUNTY OF HARRIS § We, the undersigned officers of City of La Porte, Texas (the "City"), do hereby certify, as of the date set forth below, the following: 1. On February 12, 2020, we delivered, or caused to be delivered, to the Underwriter thereof the following Bonds (the "Bonds"): CITY OF LA PORTE, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2020, dated February 1, 2020, in the principal amount of $2,800,000*. 2. At the time of such delivery, the City received from the Purchaser full payment for the Bonds in keeping with the ordinance authorizing the issuance and awarding the sale thereof. 3. At the time of delivery of the Bonds, (a) no litigation of any nature has been filed or is now pending which contests or attacks the validity of the Bonds, which would restrain or enjoin the issuance or delivery of the Bonds; which would restrain or enjoin the collection or pledge of funds from which the Bonds are payable or would in any other manner affect the provision made for their payment or security; or which in any manner questions the proceedings or authority concerning the issuance of the Bonds; and so far as we know and believe no such litigation is threatened; (b) neither the corporate existence nor the boundaries of the City are being contested; no litigation has been filed or is now pending which would affect the authority of the officers of the City to issue, execute and deliver the Bonds or would affect the title of the undersigned to their respective offices; and no authority or proceedings for the issuance, execution or delivery of the Bonds have been repealed, rescinded or revoked; and (c) no additional bonds, warrants or other indebtedness payable from the same source as the Bonds have been issued since the date of the General Certificate submitted to the Attorney General of Texas in connection with the approval of the Bonds. [signature page follows] 011782.0000001 EMF_US 77781078v1 SIGNED as of, and delivered on, the date of delivery of the Bonds set forth above. I C, n i y Secretaty L_ ity of LaPorte, Texas 011782.0000001 EMF -US 77781078v1